Wajax Corporation

Thank you for attending Wajax Corporation's 2024 Third Quarter Financial Results Webcast. On today's webcast will be Mr. Iggy Domogalski, President and Chief Executive Officer, Mr. Stuart Ault, Chief Financial Officer, and Ms. Tanya Cassadino, 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 Tanya Cassadino.

Thank you, operator. Good afternoon, and thank you for participating in our third quarter results call. This afternoon, we will be following a webcast, which includes a summary presentation of Wage Access Q3 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, Tanya. I will provide highlights on our third quarter before turning it over to Sue for commentary on backlog, inventory, and the balance sheet. This slide provides an overview of WAJAX. The corporation has 166 years of Canadian operating history and operates across 116 branches with a team of more than 3,100 employees. During the quarter, our heavy equipment categories and revenue sources made up approximately 55% of our total revenue, while industrial parts and ERS generated approximately 45%. Turning to slide five. Slide provides an overview of our purpose and values. WeJAC'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'll 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 third quarter, WCAG saw lower revenues and gross profit margins, which were offset partially by lower selling and administrative expenses. Revenue of $481 million decreased $28.7 million in the quarter. The decrease resulted primarily from lower mining equipment sales in Western Canada, driven largely by the sale of a large mining shovel in the third quarter of the prior year, with no such sale in the current year. lower product support sales in Western Canada, lower ERS sales in Eastern Canada, and lower industrial parts sales in all regions. These decreases were offset partially by higher equipment sales in construction and forestry category in Western and Eastern Canada. Gross profit margin of 19.2% decreased 300 basis points compared to the same period of 2023, driven primarily by a higher proportion of equipment sales relative to product support, industrial parts, and ERS sales. In addition, increased market pressures resulted in lower margins realized on product support and industrial parts sales. These decreases were partially offset by higher margins on ERS sales. Selling and administrative expenses as a percentage of revenue decreased to 14.7% in the third quarter of 2024 from 14.9% in the third quarter of 2023. Selling and administrative expenses in the third quarter of 2024 decreased $5 million, or 6.6%, compared to the third quarter of 2023, due primarily to lower personnel costs driven largely by cost-saving initiatives implemented in the quarter. Adjusted EBITDA of $37.4 million decreased $12.6 million, or 25.3% from the third quarter of 2023, noting the adjustments recorded on this chart. Decrease resulted primarily from lower sales volumes and lower gross profit margins, offset partially by lower selling and administrative expenses. Adjusted net earnings of $0.44 per share decreased 54.2% or $0.52 per share from the third quarter of 2023, noting the adjustments recorded on this chart. At the end of Q3, the TRIF rate was 0.91, a decrease of 13% from the third quarter of 2023. The third quarter TRIF rate was up 12% from the second quarter of 2024. Safety continues to be Wage Act's number one priority, and management is committed to continuously improving our safety program to improve on this result. We thank everyone on our team for their ongoing dedication to workplace safety. Returning to slide 8. Revenue decrease of 5.6% in the third quarter resulted from lower revenue in all regions. Western Canada sales of $210 million decreased 10% in the quarter due primarily to lower mining equipment sales driven largely by the sale of a large mining shovel in the third quarter of the prior year with no such sale in the current year, lower industrial parts sales, and lower product support sales. These decreases were partially offset by higher equipment sales in the construction and forestry category. Central Canada sales of $88 million decreased 3.9% in the quarter due primarily to lower industrial parts sales. Eastern Canada sales of $183 million decreased 1.1% in the quarter due primarily to lower industrial parts and ERS sales partially offset by higher equipment sales in the construction and forestry category. Please turn to slide 9. An update on equipment and product support sales and year-over-year variances are shown on this page. Equipment sales of 132 million increased 6 million, or 5%, compared to last year, due primarily to higher construction and forestry equipment sales in western and eastern Canada and higher material handling sales in central Canada. These increases were partially offset by lower mining sales in western Canada, driven largely by the sale of a large mining shovel in the third quarter of the prior year, with no such sale in the current year. Product support of 123 million decreased 12 million, or 9%, compared to last year, due to lower sales in most categories and regions. 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 136 million decreased 25 million, or 15%, due to market conditions that were less favorable than expected. Moving to slide 11. This slide summarizes sales at category level for our company's overall groupings of heavy equipment and industrial parts and services. In the third quarter, the heavy equipment categories decreased 6 million, or 2%, driven primarily by lower mining equipment sales in Western Canada, driven largely by the sale of a large mining shovel in the third quarter of the prior year, with no such sale in the current year. The decrease was offset partially by higher construction and forestry equipment sales in Western Canada and Eastern Canada, and higher material handling sales in Central Canada. Industrial parts and service categories decreased 23 million, or 10%, driven by lower industrial parts sales in all regions due to market conditions that were less favorable than expected. These less cyclical categories remain a core element of our broader growth strategy. I'll now turn the call over to Stu.