Velan Inc.

Good morning, my name is Joelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the conference call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star, then the number one on your telephone keypad. If you would like to withdraw your question, please press star, then the number two. Thank you, Mr. Rishi Sharma, Chief Financial Officer, you may now begin your conference.

Thank you, Operator. Good morning, and thank you for joining us for our conference call. Let's start by discussing the disclaimer from our related IR presentation, which is available on our website in the Investor Relations section. As usual, the first section mentions that the presentation provides analysis of our consolidated results for the second quarter ended August 31, 2024. The Board of Directors approved these results yesterday, October 10th, 2024. The second paragraph refers to non-IFRS and supplementary financial measures that are defined and reconciled at the end of the presentation. The last paragraph refers to Oregon D information, which are subject to risks and uncertainties that are not guaranteed to occur. Oregon D statements contained in this presentation are expressly qualified by this cautionary statement. Finally, all amounts are expressed in U.S. dollars unless indicated otherwise. I now turn the call over to Mr. Jim Matabak, Chairman of the Board and CEO of Bell.

Thank you, Rishi, and good morning, everyone. Please turn to page four for a general overview of the second quarter. Bond's strong momentum continued in the second quarter of fiscal 2025 with a robust financial performance across the board. Bookings and sales grew by more than 60% and 20% year-over-year, respectively, driven by solid contributions from multiple sectors, including nuclear power defense and oil and gas, levering our diversified portfolio, global reach, and sustained differentiation in key market segments to deliver remarkable growth. In terms of bottom line, the quarter marked a significant improvement with net income of $100,000 compared to a loss a year ago of $2.1 million. Equally important, we reported cash flow from operations of $10.1 million in the quarter and $15 million after six months into the fiscal year. I'm sure you'll recall we had pledged to improve cash flow generation by taking advantage of the global scale of our business, maximizing our strategic procurement possibilities and optimizing working capital around the world. Clearly, we're encouraged by this heightened quality of execution across the organizations. I'll turn to slide five, please. When asked last month a main services agreement with GEH SMR Technologies Canada Limited for the provisioning of high-quality proprietary products and services to supply a standalone small modular reactor SMR for Ontario power generation. Under the terms of the agreement, the line will provide GEH with the development of unique advanced technology, engineering support, and leading-edge valves essential to the safe and efficient operation of its first SMR. The initial order has a provision for three additional units to be deployed, with completion expected by 2034. In short, Belon has established a first-mover advantage to supply future SMRs with proprietary valve technology and technical expertise in Canada, the United States, and, indeed, Gulf countries. We're very well positioned to support this landmark project, as well as those of all solution providers around the world, to help shape the future of nuclear energy landscape through the new SMR technology. The latest announcement comes on the heels of a 50 million Canadian 10-year alliance agreement with Bruce Power last quarter for asset management and life extension of nuclear projects in Ontario. In addition, we've signed a memorandum of understanding with Westinghouse to support nuclear new-build projects in Canada and around the world. Westinghouse, as many of you know, is a significant player in the nuclear power market with roughly 50% of the global reactor fleet. It's also actively developing the SMR and micro-reactor niches based on its proven technology. offers Belon significant growth opportunities for its valves and flow control equipment through this important strategic partnership. Finally, we publicly stated our full support behind Canadians for CanDo, a campaign to promote the deployment of CanDo nuclear technology at home and abroad in support of Canadian and global efforts to reach net zero emissions. Valon is proud to have its products installed in every CanDo product, power plant, and operation and will continue to support its development. Our Made in Canada nuclear valves remain a reference in the industry. We intend to remain a significant player during this new super cycle of nuclear power growth. The recent events involving Valon confirm growing momentum within the nuclear power sector. energy source is increasingly being relied upon as a viable alternative to fossil fuels. Certainly clean energy sources like nuclear power will be part of the mix of renewables, helping customers worldwide reach their net zero objectives. Moreover, related electrification goals around the world cannot be met without a rapidly growing role for nuclear technology. Moving to slide six, Our order backlog reached $548 million at the end of the second quarter, up 11.5% from the beginning of the fiscal year on the strength of solid bookings. At quarter end, just over 72% of the backlog representing orders of nearly $396 million are deliverable within the next 12 months. Consequently, we are in an excellent position at the halfway mark of the fiscal year to achieve our sales growth objective for the full year. Importantly, bookings improved 63% year-over-year, up to $117 million in Q2. The substantial increase reflects higher bookings in North America, driven by new projects in the nuclear sector, as previously mentioned, such as the agreement with GEH, and orders for our MRO business as well. We also benefited from higher bookings for oil refinery projects in Germany, as well as for nuclear power and defense markets in France. These factors were partially offset by reduced oil and gas orders in Italy, which had recorded large orders, as you'll recall, in the second quarter of the prior year. Given that bookings continue to outpace sales, our book-to-bill ratio rose to 1.18 at the end of the quarter and 1.29 for the first six months. To wrap up, the line's strong momentum continued into the second fiscal quarter of 2025. Most, if not all, of our key performance indicators are flashing green on our management dashboard. Our backlog, booking, sales, EBITDA, cash flow, all key metrics are up year over year. So we're entering the second half teaming with confidence to further improve on our financial and operating performance. Before turning the call back over to Rishi, I want to add that I'm very proud of our team's achievements during the past 12 months. We were a bit distracted by external forces a year ago, We've made great efforts building our strong heritage to regain our strategic impetus that's resulted in robust bookings and backlog growth. The enhanced quality of execution in turn is now filtering down to our financial performance, as I've just commented on. A sincere congratulations to my colleagues at Vilon throughout the world for their confidence in our company and unwavering dedication to our customers. Similarly, we've witnessed a sharp improvement in our share price, which, as you know, has gained more than 50% since the beginning of the calendar year. Granted, we are still far removed from the last all-time highs, and we're not satisfied at this point. But more than ever, we're pulling in the same direction for all the benefit of all of our shareholders. I appreciate it. I'll turn the call back over to you for comments on the financial review and performance of this quarter.