Wajax Corporation

Thank you for attending Ray Jax Corporation's 2026 Third Quarter Financial Results Webcast. On today's webcast will be Mr. George McClean, President and Chief Executive Officer, Ms. Tania Casadinho, 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 Tania Casadinho.

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 2026 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 George.

Thank you, Tania. Thank you, everyone, for joining us today. Before we get into the quarter, I want to spend a moment on where we are as a company and where we're headed. WageAct is building from existing strengths and targeting investment where it will accelerate growth. We have a continued focus on operational excellence with a strong balance sheet and prudent capital allocation. We are proud of our longstanding customer relationships built over the decades, are established partnerships with leading equipment and product suppliers and our technical service capability and skilled technician base. Our areas of targeted investment include technician recruitment and development, leadership training, sales capabilities, digital and e-commerce tools, selected supply chain and facilities investments. These targeted investment priorities are expected to support profitable growth going forward. This slide provides an overview of Wayjax. The corporation has more than 167 years of Canadian operating history and operates across 104 branches with a team of about 3,000 employees. During the quarter, our heavy equipment categories and revenue sources made up approximately 56% of our total revenue, while industrial products and ERS generated approximately 44%. Turning to slide 5, 2027 Strategy Roadmap. This slide provides an overview of our 2027 Strategy Roadmap, which is new, and it was announced on October 8, 2026. Wayjax's long-term vision is, by 2031, Wayjax will be Canada's fastest-growing provider of industrial products, equipment, and services. We are seeking to advance this vision through our 2027 Strategy Roadmap and our Winning with Wayjax, Better, Smarter, Faster approach. And that defines how we bring our values to life and execute our strategies. Our ambition is to make Wayjax a great place to work, develop strong leaders and teams, help our customers and supplier partners succeed, contribute meaningfully to the communities in which we operate and support the continued growth and development of Canada while delivering sustainable, profitable growth and long-term shareholder value. As we enter into 2027, our strategy roadmap is organized around the four interconnected priorities that you see on the slide. Building the best team, customer and supplier partner focus, supporting our communities, and delivering on our commitments. Together, these priorities are intended to strengthen the capabilities and relationships required to support profitable growth and enhance Wajax's competitive position. The roadmap will guide our priorities, investments and organizational initiatives as we focus on our people and leadership, customer and supplier partnerships, communities, operational excellence and disciplined capital allocation. Turning to slide six, winning with Wajax. This slide provides an overview of our winning ways and how we work. To summarize, winning with Wage Act connects what we believe with how we work. Safety and well-being come first alongside developing our people and delivering an exceptional customer experience. We expect people to act with integrity and sound judgment. Doing the right thing consistently builds the trust that supports lasting relationships. We need to understand what our customers need, work together to solve their problems, and follow through on our commitments. Customers should experience that commitment in every interaction. Further, moving quickly means setting clear priorities, making decisions and adapting with purpose. Continuous improvement requires us to challenge existing practices and learn from our mistakes. Our strength comes from sharing knowledge across teams, building trusted partnerships and recognizing results. This is how we build on a legacy that began in 1858. Turning to slide seven, highlights third quarter. In the third quarter of 2026, Wajax continued to operate against a mixed economic backdrop with demand conditions varying by region and end market. Revenue of $477.8 million decreased 5.3 million or 1.1% in the quarter. The decrease was driven by the delivery of one large mining shovel primarily, in the third quarter of 2025 compared with no such delivery in the current quarter. Additionally, a year-over-year decrease in industrial product volume was more than offset by an improvement in product support and ERS revenues. Gross profit margin of 20.1% decreased 70 basis points compared to the same period of 2025. This decrease in margin was primarily due to lower margins realized on product support industrial products and ERS revenue, partially offset by higher margins on equipment sales. Selling and administrative expenses as a percentage of revenue increased to 15% in the third quarter of 2026 from 14.7% in the same period of 2025, driven by the year-over-year decline in revenue. Excluding the adjustments noted on the slide, adjusted selling and administrative expenses increased 2.3 million in the third quarter of 2026, compared with the same period in the prior year due primarily to higher personnel, travel and entertainment, and supplies and marketing costs. Management remains focused on gross profit discipline, effectively managing costs, and improving operating leverage while continuing to invest selectively in capabilities that support the long-term growth and competitiveness of the business. Adjusted EBITDA margin of 8.1% in the third quarter of 2026 decreased from 9.3% compared to the same period of 2025 and decreased from 8.9% in the second quarter of 2026. Adjusted EBITDA of $38.9 million decreased $5.9 million, or 13.2% from the third quarter of 2025, noting the adjustments recorded on this chart. The decrease reflects lower sales volume, lower gross profit margins, and $4.1 million in restructuring and other related costs in the third quarter of 2026. Adjusted net earnings of 60 cents per share decreased 19% or 15 cents per share from the third quarter of 2025, noting the adjustments recorded on this chart. Backlog reached a near record level of $598.6 million, up 18.2% year over year, and 9.5% from Q2, just below the record set in 2023. Sequential growth across construction and forestry, industrial products, and ERS provides a solid foundation for future revenue. Safety continues to be WageX's number one priority, and management is committed to continuously improving our safety programs to improve on this result. We thank everyone on the team for their ongoing dedication to workplace safety. Turning to slide eight, revenue by region. The revenue decrease of 1.1% in the third quarter resulted from lower revenue in Western and Central Canada. Western Canada sales of $206 million decreased 2.1% on the quarter due primarily to lower mining equipment sales, including the delivery of a large mining shovel in the third quarter of the prior year with no comparable delivery in the third quarter of the current year. This decrease was partially offset by higher product support sales in the mining category and higher construction and forestry equipment sales. Central Canada sales of $80 million decreased 12% in the quarter due to lower sales in all categories, but most notably in material handling, industrial products, and ERS. Eastern Canada sales of $191 million increased 5.5% in the quarter due primarily to higher equipment sales in the construction and forestry and power systems categories. Please turn to slide 9, equipment and product support revenue. An update on equipment and product support sales and year-over-year variances are shown on this page. Equipment sales of $126 million decreased 5.2 million or 4% compared to last year, due primarily to lower mining equipment sales in Western Canada, including the delivery of a large mining shovel in the third quarter of the prior year with no comparable delivery in the third quarter of the current year. This increase was partially offset by higher construction and forestry equipment sales in Western and Eastern Canada. Product support sales of $131 million increased $7.7 million or 6.3% compared to last year due primarily to strong mining revenue in Western Canada. Please turn to slide 10, industrial products and ERS revenue. An update on industrial products and ERS sales and year-over-year variances are shown on this page. Industrial products sales of approximately $127 million decreased $9.1 million or 6.7% compared to last year with lower sales in all regions driven by competitive and uncertain market conditions as customers continue to be impacted by tariff and macroeconomic uncertainty. ERS sales of approximately $85 million increased $4.3 million or 5.3% compared to the prior year due primarily to higher sales in Western and Eastern Canada driven largely by the timing of large projects. Turning to slide 11, revenue by category. The slide summarizes sales at category level for our company's overall groupings of heavy equipment and industrial products at ERS. In the third quarter, the heavy equipment categories decreased $0.6 million, or 0.2%. The industrial products at ERS categories decreased $4.8 million, or 2.2%, due to lower industrial product sales in all regions, offset partially by higher ERS sales in western and eastern Canada. I will now turn the call back over to Tania for commentary on backlog, inventory, and the ballot sheet.