Wajax Corporation

Thank you for attending Ray Jacks Corporation's 2025 Third Quarter Financial Results Webcast. During the presentation, all participants will be in listen-only mode. On today's webcast will be Iggy Domogalski, President and Chief Executive Officer, and Miss Tanya Cassadino, Chief Financial Officer. After the speaker's remarks, there will be a question and answer session. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session, and as a reminder, this conference is being recorded on October 4th, 2025. If at any time during this call you require immediate assistance, please press star zero for the operator. Please be advised that this webcast is being recorded, and 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.

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 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, Tanya. To start, I will provide highlights on our third quarter before turning it back to Tanya for commentary on backlog inventory and the balance sheet. This slide provides an overview of Wajax. The corporation has 167 years of Canadian operating history and operates across 107 branches with a team of approximately 2,900 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. 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 shareholders, customers, suppliers, our people, and the communities we serve. 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 focused on executing against these priorities, as well as optimizing inventory, managing costs, and improving margins. Between our purpose and values and these priorities, management believes this will enable WageX to generate sustainable long-term value and capitalize on future opportunities. Turning to slide seven. Wage Act delivered steady performance in the third quarter of 2025, including gross profit margin growth, higher earnings, and improved leverage. Revenue of $483.1 million increased 2.1 million, or 0.4% in the quarter. The increase resulted primarily from higher mining sales in Western Canada and higher industrial parts in ERS and higher construction and forestry sales in Central Canada. These increases were offset partially by lower construction and forestry and industrial parts sales in Eastern Canada. Gross profit margin of 20.8% increased 160 basis points compared to the same period of 2024, increased 170 basis points from 19.1% in the second quarter of 2025, and increased 370 basis points from 17.1% in the fourth quarter of 2024. The year-over-year increase was driven primarily by higher margins realized of product supports, industrial parts, and ERS sales, given management's focus on margin improvement initiatives in these areas of the business. These increases were partially offset by reduced equipment margins due to increased market pressures. Selling and administrative expenses as a percentage of revenue remained flat at 14.7% in both the third quarter of 2025 and the same period of 2024. Selling and administrative expenses in the third quarter of 2025 decreased $0.1 million compared to the third quarter of 2024 due primarily to lower spending on personnel and travel and entertainment driven by ongoing cost initiatives offset partially by higher incentive accruals linked primarily to improved financial performance. Adjusted EBITDA of $44.8 million increased $7.4 million or 19.7% from the third quarter of 2024, noting the adjustments recorded on this chart. The increase in adjusted EBITDA resulted primarily from higher gross profit margins. Adjusted EBITDA margin of 9.3% in the third quarter of 2025 improved from 8.2% in the second quarter of 2025 and 7.8% in the first quarter of 2025. Net earnings of 75 cents per share, 68.6%, or 31 cents per share in the third quarter of 2024, noting the adjustments recorded on this chart. At the end of Q3, our TRIF rate was 0.83, a decrease of 9% from the third quarter of 2024. The third quarter TRIF rate was down 19% from the second quarter of 2025. Safety continues to be wage act's number one priority, and management is committed to continuously improving our safety programs to improve on this result. Thank everyone on our team for their ongoing dedication to workplace safety. Turning to slide eight. Revenue increase of 0.4% in the third quarter resulted from higher revenue in western and central regions, offset partially by lower revenue in eastern Canada. Western Canada sales of 210 million increased 0.3% in the quarter due primarily to higher mining equipment sales, including the delivery of a large mining shovel in the third quarter of 2025, with no such delivery in the third quarter of the prior year. This increase was partially offset by lower ERS revenue, and reduced equipment sales in the construction and forestry and material handling categories. Central Canada sales of $91 million increased 3.3% in the quarter due primarily to stronger industrial parts and ERS revenue and higher equipment sales in the construction, forestry, and power systems categories. These increases were partially offset by lower material handling equipment sales. Eastern Canada sales of $181 million decreased 0.7% in the quarter due primarily to lower equipment sales in the construction and forestry category and reduced industrial park sales. These decreases were partially offset by higher material handling equipment sales and DRS revenue. 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 131 million decreased 0.3 million or 0.3% compared to last year due to lower sales in construction and forestry and material handling, offset partially by higher mining sales in Western Canada, driven by the delivery of a large mining shovel in the third quarter, with no such delivery in the third quarter of the prior year. Product support sales of $123 million decreased 0.2 million or 0.1% compared to last year. 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 were flat to the prior year. ERS sales of approximately 85% increased 3 million or 3% due to higher sales in the central This slide summarizes the sales at the category level for heavy equipment and industrial parts and ERS. Heavy equipment categories decreased 0.4 million or 0.1% due to lower sales in construction and forestry and material handling. The delivery of a large number in the third quarter of 2025 with no such delivery in the third quarter of the prior year. Industrial parts and ERS categories increased 2.7 million or 0. driven by higher ERF sales in Central and Eastern Canada. I'll now throw it back over to Tanya for commentary on backlog inventory.