Wajax Corporation

Thank you for attending Wagex Corporation's 2023 Fourth Quarter and Year-End Financial Results Webcast. On today's webcast will be Mr. Iggy Domogalski, President and Chief Executive Officer, Mr. Stuart Auld, Chief Financial Officer, and Ms. Tanya Casadino, VP Corporate Controller. Please be advised that this webcast is being recorded. Please note that this webcast contains forward-looking statements. Actual future results may differ from expected results. I will now turn the call over to Ms. Tanya Casadino. Thank you. Please go ahead.

Thank you, Operator. Good afternoon, and thank you for participating in our fourth quarter results call. This afternoon, we will be following a webcast, which includes a summary presentation of Wage Access Q4 2023 financial results. The presentation can be found on our website under Investor Relations, Events, and Presentations. To begin, I would like to draw your attention to our cautionary statement regarding forward-looking information on slide two and the non-GAAP and other financial measures on slide three. Please turn to slide four, and at this point, I will turn the call over to Iggy.

Thank you, Tanya. I will provide highlights on our fourth quarter before turning it over to Stu for commentary on backlog, inventory, and the balance sheet. This slide provides an overview of wage acts. The corporation has 165 years of Canadian operating history and operates across 119 branches with a team of more than 3,250 employees. During the quarter, our heavy equipment categories and revenue sources made up approximately 56% of our total revenue, while industrial products and ERS generated approximately 44%. Turning to slide five. This slide provides an overview of our purpose and values. Wajax's purpose statement is empowering people to build a better tomorrow. which we strive to achieve by living our values and delivering an exceptional experience to our people, customers, suppliers, and the communities we serve. By living our purpose and values, we will continue to build a people-first company that is strong, resilient, and profitable. Our purpose and values guide our decision-making and allow us to execute on our strategic priorities. Turning to slide six, this slide provides an overview of our strategic priorities, which are refreshed and enhanced in 2023. Management is completely focused on executing against these priorities, and between our purpose and values and these six priorities, we have the foundation to continue growing our company for many years to come. Turning to slide seven. In the fourth quarter, Wayjack saw strong adjusted EBITDA performance. Revenue of $542.6 million increased $1.3 million during the quarter. The increase resulted from higher construction and forestry sales in central and eastern Canada, and higher ERS sales in all regions offset partially by lower mining and construction and forestry equipment sales in Western Canada. Gross profit margin of 21.2% increased 310 basis points compared to the same period of 2022, due primarily to higher margins across all revenue types and a higher proportion of ERS and product support sales as compared to equipment sales. Selling and administrative expenses as a percent of revenue increased to 17.1% in the fourth quarter of 2023 from 13.2% in the fourth quarter of 2022. Excluding the $5.5 million loss on interest rate swaps and the $1.5 million facility closure, restructuring, and other related costs, selling and administrative expenses as a percent of revenue was 15.7% in the fourth quarter of 2023. Selling and administrative expenses in the fourth quarter of 2023 increased 21.2 million or 29.6% compared to the fourth quarter of 2022, due primarily to higher personnel costs as the volume of ERS and product support business increased over the prior year. An unrealized loss of interest rate swaps of 5.5 million in the quarter compared to a loss of less than 0.1 million in the same quarter of the prior year. and a facility closure, restructuring, and other related costs of $1.9 million in the quarter without a comparable cost in the same quarter of the prior year. Adjusted EBITDA of $47.2 million increased $3.4 million, or 12.1% from the fourth quarter of 2022, noting the adjustments recorded on this chart. The increase resulted from higher selling and administrative expenses offset partially by higher margins and a higher proportion of ERS and product support sales. Adjusted net earnings of 83 cents per share were unchanged from the fourth quarter of 2022, noting the adjustments recorded on this chart. At the end of Q4, the TRIF rate was 1.01, an increase of 20% from the fourth quarter of 2022. The fourth quarter TRIF rate was down 3% from the third quarter of 2023. Safety continues to be WageX's number one priority, and management is committed to continuously improving our safety programs to improve on this result. We thank everyone on our team for their ongoing dedication to workplace safety. Turning to slide eight. Revenue increase of 0.2% in the fourth quarter resulted from growth in the central and eastern regions. Western Canada sales of $236 million decreased 16% in the quarter, mainly due to the timing of mining equipment sales, as well as lower equipment sales in the construction and forestry category, offset partially by strong ERS sales. Central Canada sales of $105 million increased 21.3% in the quarter due primarily to strong ERS sales, higher equipment sales in the construction and forestry category, and higher product support revenues across all categories. Eastern Canada sales of $202 million increased 15% in the quarter due primarily to higher equipment and product support sales in the construction and forestry category and strong industrial parts and ERS sales. Please turn to slide nine. An update on equipment and product support sales and year-over-year variances are shown on this page. Equipment sales of $158 million decreased $44 million, or 22%, compared to last year, due primarily to lower mining and construction and forestry sales in western Canada, offset partially by higher construction and forestry sales in central and eastern Canada. Product support sales of $133 million increased $15 million, or 12%, due primarily to higher mining revenue in Western Canada and higher construction and forestry revenue sales in Eastern Canada. Please turn to slide 10. An update on industrial parks and ERS sales and year-over-year variances are shown on this page. Industrial sales of approximately $136 million decreased 2 million, or 1%, due to lower sales in Western Canada, offset partially by higher sales in Eastern Canada. ERS sales of 104 million increased 31 million, or 43%, due to higher sales in all regions, particularly in Western Canada. Turning to slide 11, this slide summarizes sales at a category level for our company's overall groupings of heavy equipment and industrial parts and services in the fourth quarter. The heavy equipment categories decreased 28 million, or 8%, driven primarily by lower mining sales in Western Canada, offset partially by higher construction and forestry sales in Central and Eastern Canada. In the fourth quarter of 2022, the corporation sold several large mining shovels, resulting in particularly strong revenue in the quarter. Total growth in industrial parts and services categories of approximately 29 million, or 14%, was driven by an increase in ERS across all regions. we continue to see growth in these less cyclical categories, and they remain a core element of our broader growth strategy. I will now turn the call over to Stu.