Toromont Industries Ltd.

Good morning. Today is Wednesday, February 11, 2026. Welcome to the Torment Industries Limited 2025 Fourth Quarter and Full Year 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, Mr. Doolittle.

Thank you very much, Ludi. Morning, everyone. Thank you for joining us today to discuss Tormont's results for the fourth quarter and full year of 2025. Also on the call with me this morning is Mike McMillan, 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 and statements. After our prepared remarks, we'll be more than happy to answer questions, so let's get started and move to slide three. Over to you, Mike.

Great. Thanks very much, John. Good morning, everyone, and thanks for joining us this morning. Our team delivered solid results in the fourth quarter, closing out the year on a positive note despite persistent macroeconomic and trade uncertainty. We remain focused on long-term performance, continue to invest in our people and capabilities to support our customers, and drive sustainable growth over the long-term cycle. Earnings improved over the course of the year, although full-year earnings showed a modest decline due to factors such as investment in growth-related initiatives, lower net interest income, and short-term non-cash costs from the AVL acquisition, which John will expand upon shortly. The equipment group executed well, with solid activity in rentals, product support, and new equipment deliveries. However, activity levels still reflect the economic environment which continues to impact end customer demand. As expected, mining deliveries were lower due to the segment's inherent variability. However, we saw good order intake in Q4. Revenue increased with the inclusion of the acquired business along with higher rental product support revenue and higher total equipment sales. Rental revenue rose supported by a larger fleet and product support revenue also increased due to higher parts and service volumes. Operating income was 3% higher in the fourth quarter, as the higher revenue and gross profit margins were partly offset by the higher expense levels. Simcoe posted higher revenue and earnings, driven by good demand and disciplined execution in both Canada and the U.S. Growth in package revenue was supported by a stronger order backlog, while product support activity continued to improve, aided by our growing technician workforce. Operating income increased largely reflecting the higher revenue in solid execution, which more than offset higher expenses to support activity and growth. We continue to work closely with our new partners at AVL, focusing on this promising market. Production at AVL has been expanding since the date of acquisition and continues to build their healthy order backlog and new order demand. Hiring and development of production capacity continues. As noted in Q2, we acquired a facility in Charlotte, North Carolina to expand production capacity and better serve the eastern U.S. market. This facility commenced the first phase of production during the third quarter of 2025 and will ramp up throughout 2026. Revenue for the fourth quarter and full year of 2025 were $97.7 and $254.7 million respectively. As part of the accounting for the acquisition, the company recognized intangible assets related to order backlog and customer relationships, both of which are amortized over time. Certain other non-cash expenses are recorded as a result of the acquisition accounting related to the commitment for purchase of the remaining shares of AVL. Non-cash expenses recognized for these items amounted to $33.4 and $90.4 million respectively on a pre-tax basis for the fourth quarter and full year. Net income for AVL after consideration of amortization of intangibles recognized at acquisition was approximately negative $0.01 per share and a contribution of $0.01 per share for the fourth quarter and full year of 2025 respectively. Investment in non-cash, let's turn to slide four and we'll highlight some of our key financial metrics. Investment in non-cash working capital decreased 11% year over year. A net effect of lower inventory levels, higher accounts receivable balances, and lower accounts payable balances due to equipment delivery timing. Accounts receivable increased, primarily reflecting higher trailing revenues and receivables from AVL. offset by good collection activity. DSO decreased by one day to 39 days. Our team continues to manage receivables aging and customer credit metrics effectively. Inventory levels declined, primarily due to executed deliveries against order backlog, inventory management initiatives, slightly offset by Simcoe's higher work and process inventory levels, which reflects the timing of project construction and product support schedules. We ended the year with ample liquidity, including $1.3 billion in cash and an additional $453 million available under existing credit facilities. Our net debt to total capitalization ratio was negative 19%. Overall, our balance sheet is well positioned to support operations and navigate evolving economic and business conditions. We will continue to apply our operational financial discipline as we support customer needs and evaluate future investment opportunities. We purchased and canceled 337,500 common shares for $40.1 million in the year under our NCIB program. Our purchases are intended to practice good capital hygiene and to mitigate option exercise dilution. Foremont targets a return on equity of 18% over the business cycle. ROE was below this at 16.9%, reflecting slightly lower earnings and higher shareholders' equity. Return on capital employed was 23.4%, also lower year over year, reflecting our increased capital investment. It is worth noting that non-cash charges related to the ABL's backlog amortization, which will be effectively completed during the first half of 2026, impact these important metrics. Finally, as announced yesterday, the Board of Directors approved the increase of the quarterly dividend by $0.04 per share, or 7.7%, to $0.56 per share, or $2.24 per share annual. Toromon has paid dividends every year since 1968, and this is the 37th consecutive year of dividend increases. We continue to be proud of this track record and our disciplined approach to capital allocation. The next dividend will be payable on April 2, 2026, to shareholders of record at the close of business March 6, 2026. John, I'll turn it back over to you for more detailed commentary on the results.