Wajax Corporation

Thank you for attending Wage Act Corporation's 2025 Fourth Quarter and Year-End Financial Results Webcast. On today's webcast will be Mr. Iggy Domogalski, President and Chief Executive Officer, Ms. Tanya Cassadino, 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 Cassadino.

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 2025 financial results. 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 fourth quarter before turning it back to Tanya to comment on inventory, backlog, and the balance sheet. This slide provides an overview of WageX. The corporation has more than 167 years of Canadian operating history and operates across 105 branches with a team of approximately 2,900 employees. During the quarter, our heavy equipment categories and revenue sources made up approximately 61% of our total revenue, while industrial parts and ERFs generated approximately 39%. Moving to slide five. This slide provides an overview of our purpose and values. Wage access 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. This slide provides an overview of our strategic priorities, which were refined for 2026. 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 wage acts to generate sustainable long-term value and capitalize on future opportunities. Turning to slide seven. Wage acts delivered steady performance in the fourth quarter of 2025, including gross profit margin growth, higher earnings, and improved leverage due to management's focus on inventory optimization and cost discipline to drive free cash flow and strengthen the balance sheet. Revenue of $560 million decreased to $5.9 million, or 1% in the quarter. The decrease resulted primarily from lower product support sales in Western and Eastern Canada, lower industrial parts sales in Central Canada, and lower equipment sales in all regions. These decreases were offset partially by higher ERS revenue in all regions, particularly in Eastern Canada. The first profit margin of 18% increased 100 basis points compared to the same period of 2024, reflecting improved execution. The increase was driven primarily by higher margins realized on industrial parts, product support, and equipment revenue, reflecting management's focus on margin improvement initiatives in these areas of business. The increase in margin was also driven by a higher proportion of ERS sales from a sales mix perspective. We remain focused on these margin improvement initiatives to strengthen our margin profile, mitigate ongoing market pressures, and drive continued earnings performance. Excluding the adjustments noted on the slide, selling and administrative expenses as a percentage of revenue decreased 13.3% in the fourth quarter of 2025 compared to 13.4% in the same period of 2024, primarily due to higher incentive accruals driven by improved financial results compared to the prior year. Adjusted EBITDA of $44 million increased $8.9 million or 25.2% from the fourth quarter of 2024, noting the adjustments recorded on this chart. The increase in adjusted EBITDA resulted primarily from higher gross profit margin and lower finance costs. Adjusted EBITDA margin of 7.9% in the fourth quarter of 2025 improved from 6.2% compared to the same period of 2024 and declined from 9.3% in the third quarter of 2025. Adjusted net earnings of 71 cents per share increased 104.1% or 36 cents per share from the fourth quarter of 2024, noting the adjustments recorded on this chart. At the end of Q4, the TRIF rate was 0.93, a decrease of 1% 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 this result. We thank everyone on our team for their ongoing dedication to workplace safety. Turning to slide 8, revenue decrease of 1% in the fourth quarter resulted from lower revenue in western and central regions offset partially by higher revenue in eastern Canada. Western Canada sales of $261 million decreased 4.9% in the quarter due primarily to lower equipment and forestry sales partially offset by higher equipment sales in the mining category and higher ERS sales. Central Canada sales of $95 million decreased 4.4% in the quarter due primarily to lower equipment sales in the material handling category and lower industrial parts sales. These decreases were partially offset by higher equipment sales in the construction and forestry category and higher ERS. Eastern Canada sales of 203 million increased 6.2% in the quarter due primarily to higher ERS sales and higher equipment sales in the power systems and construction and forestry categories. These increases were partially offset by lower equipment sales in the material handling 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 206 million decreased 2.6 million, or 1.2%, compared to last year, due primarily to lower material handling sales in central and eastern Canada and lower construction and forestry sales in western Canada. These decreases were offset partially by higher power system sales in eastern Canada, higher construction and forestry sales in central and eastern Canada, and higher mining sales in western Canada. Product support sales of $124 million decreased to $8.5 million, or 6.4% compared to last year, due primarily to lower power systems revenue in western and eastern Canada, and lower construction and forestry revenue in western Canada. Please turn to my tab. An update on industrial parts and ERS sales and year-over-year variances are shown on this page. Industrial parts sales of approximately $131 million decreased to $3 million, or 2.3% compared to last year, due primarily to lower sales in central Canada. ERS sales of approximately $88 million increased $9 million, or 11%, due to higher revenue in all regions, particularly in eastern Canada, due largely to timing of larger projects. Turning to slide 11. This slide summarizes sales at a category level for our company's overall groupings of heavy equipment and industrial parts in ERS. In the fourth quarter, the heavy equipment categories decreased $11.8 million, or 3.3%, due to lower sales in construction and forestry and material handling. offset partially by higher mining sales in Western Canada and higher power system sales in Eastern Canada. The industrial parts and ERS categories increased 5.7 million or 2.7%, driven by higher ERS sales in all regions, offset partially by lower industrial parts sales in Central Canada. I will now turn the call over to Tanya for commentary on backlog, inventory, and the balance sheet.