Wajax Corporation

Thank you for attending Wagex Corporation's 2024 Second Quarter Financial Results Webcast. On today's webcast will be Mr. Iggy Domogalski, President and Chief Executive Officer, Mr. Stuart Old, 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'll now turn the call over to Tanya Cassadino. Please go ahead.

Thank you, operator. Good afternoon, and thank you for participating in our second quarter results call. This afternoon, we will be following a webcast which includes a summary presentation of Wage Access Q2 2024 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'll turn the call over to Iggy.

Thank you very much, Tonya. I will provide highlights on our second quarter before turning it over to Stu for commentary on backlog, inventory, and the balance sheet. This slide provides an overview of WageX. The corporation has 166 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 59% of our total revenue, while industrial parts and ERS generated approximately 41%. Returning to slide five. Slide provides an overview of our purpose and values. WageX'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 for our people, customers, suppliers, and the communities we serve. By living our purpose and values, we will continue to build the 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. Slide provides an overview of our strategic priorities, which were refreshed and enhanced in 2023. Management is completely focused on executing against these priorities. 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 second quarter, Wayjack saw higher gross profit margins, which helped offset the decline in revenue. Revenue of $568.3 million decreased $17.9 million in the quarter. The decrease resulted primarily from lower construction and forestry equipment sales in Western Canada and Central Canada and lower mining sales in Western Canada and due primarily to the delivery of a large mining shovel in Q2 of 2023, with no such delivery in Q2 of 2024. These decreases were offset partially by higher equipment sales in the construction and forestry category and higher overall sales in the power systems category in eastern Canada. Gross profit margin of 20.9% increased 100 basis points compared to the same period of 2023, driven primarily by higher margins on ERS sales and a higher proportion of and higher margins on product support sales. Selling and administrative expenses as a percentage of revenue increased to 14.4% in the second quarter of 2024 from 12.8% in the second quarter of 2023. And selling and administrative expenses in the second quarter of 2024 increased 6.8 million or 9.1% compared to the second quarter of 2023 due primarily to higher personnel costs. Adjusted EBITDA. of 54.7 million decreased 2.5 million, or 4.3%, from the second quarter of 2023, noting the adjustments recorded on this chart. The decrease resulted primarily from lower sales volumes and higher personnel expenses, offset partially by an improved gross profit margin. Adjusted net earnings of $1.06 per share decreased 16.3%, or 20 cents per share, from the second quarter of 2023, noting the adjustments recorded on this chart. At the end of Q2, the TRIF rate was 0.81, a decrease of 28% from the second quarter of 2023. The second quarter TRIF rate was up 50% from the first quarter of 2024. Safety continues to be WAJAC'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 decrease of 3.1% in the second quarter resulted from lower revenue in the western and central regions. Western Canada sales of $240 million decreased 10.8% in the quarter due primarily to lower construction and forestry equipment sales and lower mining equipment sales driven largely by the delivery of a large mining shovel in the second quarter of the prior year with no such delivery in the current year. Central Canada sales of $97 million decreased 6.4% in the quarter due due primarily to lower equipment sales in the construction and forestry category and lower industrial parts sales. And Eastern Canada sales of $231 million increased 8.3% in the quarter, due primarily to higher equipment sales in the construction and forestry category and higher overall sales in the power systems category, partially offset by lower industrial parts 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 $180 million decreased $10 million, or 5%, compared to last year, due primarily to lower construction and forestry equipment sales in Western Canada and lower mining equipment sales in Western Canada, driven by the previously mentioned large mining shovel. The decreases were offset partially by higher construction and forestry sales in Eastern Canada. Please turn to slide 10. An update on industrial parts and ERS sales and year-over-year variances are shown on this page. Industrial parts sales of approximately 147 million decreased 8 million, or 5%, primarily due to lower sales in Central and Eastern Canada, offset partially by higher sales 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 second quarter, the heavy equipment categories decreased 6 million, or 2%, driven primarily by lower mining equipment sales in Western Canada. In the industrial parts and services categories, lower industrial parts sales in Central and Eastern Canada were partially offset by higher industrial parts sales in Western Canada. These less cyclical categories remain a core element of our broader growth strategy. I will now turn the call over to Stu.