Wajax Corporation

Thank you for attending Wajax Corporation's 2025 First Quarter Financial Results webcast. On today's webcast will be Mr. Iggy Domogalski, President and Chief Executive Officer. Ms. Tanya Casadino, Chief Financial Officer. 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 Casadino.

Thank you, operator. Good afternoon, and thank you for participating in our first quarter results call. This afternoon, we will be following a webcast, which includes a summary presentation of Wage Access Q1 2025 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 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, Tonya. To start, I will provide highlights of our first quarter before turning it back to Tonya for commentary on backlog, inventory, and the balance sheet. This slide provides an overview of wage acts. The corporation has 167 years of Canadian operating history and operates across 111 branches with a team of approximately 3,000 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%. Turning to slide five. This slide provides an overview of our purpose and values. Wayjax'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 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, the slide provides an overview of our strategic priorities, which have been refined for 2025. 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 first quarter, WCAG saw higher revenues and improved cost efficiency, which were offset partially by lower gross profit margins. Revenue of $555 million increased 72.6 million, or 15.1% in the quarter. The increase resulted primarily from higher equipment sales in the construction and forestry category in all regions, driven largely by the competitive financing program introduced through Hitachi Construction Machinery America, which was effective March 1, 2024. And higher mining equipment sales in Western Canada, including the delivery of two large mining shovels in the first quarter of 2025, with no such deliveries in the first quarter of the prior year. Gross profit margin of 19.1% decreased 290 basis points compared to the same period of 2024, and increased 200 basis points sequentially from the fourth quarter of 2024. The year-over-year decrease was driven primarily by lower margins realized on equipment, industrial parts, and ERS revenue, as well as a higher proportion of equipment sales relative to industrial parts, ERS, and product support. The decreases were offset partially by higher product support margins. Selling and administrative expenses as a percentage of revenue decreased to 14.1% in the first quarter of 2025 from 16.7% in the first quarter of 2024 excluding the unrealized loss or gain on total return swaps in both periods. Excluding the $1.4 million unrealized loss on total return swaps, selling and administrative expenses in the first quarter of 2025 decreased $2.3 million compared to the first quarter of 2024, due primarily to lower spending on personnel, travel and entertainment, and supplies and marketing, driven largely by cost savings initiatives. Adjusted EBITDA of $43.2 million increased $2.5 million or 6.2% from the first quarter in 2024, noting the adjustments recorded on this chart. The increase resulted primarily from higher sales volumes and cost savings initiatives, offset partially by lower gross profit margins. Adjusted net earnings of $0.69 per share increased 15.7% or $0.10 per share from the first quarter of 2024, noting the adjustments recorded on this slide. At the end of Q1, the TRIF rate was 1.30%, an increase of 141% from the first quarter of 2024. The first quarter TRIF rate was up 38% from the fourth quarter of 2024. Safety continues to be Wajax's number one priority, and management is committed to continuously improving our safety programs to improve on the results. We thank everyone on our team for their ongoing dedication to workplace safety. Turning to slide eight. Revenue increase of 15.1% in the first quarter resulted from higher revenue in all regions. Western Canada sales of $264 million increased 20.4% in the quarter, due primarily to higher equipment sales in the construction and forestry category, driven largely by the competitive financing program introduced by HCMA, effective March 1, 2024, and higher mining equipment sales, including the delivery of two large mining shovels in the first quarter of 2025, with no such deliveries in the first quarter of the prior year. Central Canada sales of $100 million increased increased 10.3% in the quarter due primarily to higher equipment sales in the construction and forestry category, driven largely by the competitive financing program introduced by HCMA effective March 1, 2024. And Eastern Canada sales of $191 million increased 10.8% in the quarter due primarily to higher equipment sales in the construction and forestry category, driven largely by the competitive financing program introduced by HCMA effective March 1, 2024, and higher material handling equipment sales. These increases were partially offset by reduced industrial parts sales. 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 171 million increased 73 million, or 74%, compared to last year, due primarily to higher construction and forestry sales in all regions, due largely to the competitive terms available under the Hitachi financing program, as well as higher mining sales in Western Canada, including the delivery of two large mining shovels in the first quarter of 2025, with no such deliveries in the first quarter of the prior year. Product support sales of $146 million increased 12 million, or 9% compared to last year, due primarily to higher construction and forestry and mining sales in Western Canada, higher power system sales in Eastern Canada, and higher material handling revenue in all 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 $145 million decreased 10 million, or 7%, due primarily to lower sales in Western and Eastern Canada. ERS sales of approximately 82 million decreased 3 million, or 3%. 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 first quarter, the heavy equipment categories increased 86 million, or 35%, driven primarily by higher construction and forestry sales in all regions, due largely to the competitive financing program introduced by HCMA, effective March 1, 2024, and due to higher mining sales in Western Canada, including the delivery of two large mining shovels in the first quarter of 2025, with no such deliveries in the first quarter of the prior year. The industrial parts and services categories decreased 13 million, or 5%, driven by lower industrial parts sales in Western and Eastern Canada. I'll now turn the call over to Tanya for commentary on backlog, inventory, and the balance sheet.