Thank you, Vincent, and good morning, everyone. Earlier this morning, we issued a press release reporting our results for the first quarter of 2026, along with our MD&A, that can be found in the Investor Relations section of our website at www.stella-jones.com, as well as on SEDAR+.

As a reminder, all figures expressed on today's call are in Canadian dollars, unless otherwise stated. Please note that the comments made on today's call may contain forward-looking information, and this information, by its nature, is subject to risks and uncertainties.

Actual results may differ materially from the views expressed today. For further information on these risks and uncertainties, please consult the company's relevant filings on SEDAR+.

These documents are also available in the Investor Relations section of Stella-Jones' website at www.stella-jones.com. Additionally, during this conference call, the company may refer to non-GAAP measures, which have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers.

For more information, please refer to the company's latest MD&A available on Stella-Jones' website and on SEDAR+. Lastly, we have prepared a corresponding presentation, which we encourage you to follow along with during this call.

I'll now hand the call over to Éric Vachon, President and Chief Executive Officer of Stella-Jones for strategic business update, followed by Silvana Travaglini, Senior Vice President and Chief Financial Officer of Stella-Jones, who will provide a more detailed financial overview. Éric, over to you.

Thank you, David. Good morning, everyone, and thank you for joining us today.

2026 is off to a solid start, with results that highlight both the fundamental resilience of our business and our progress on key strategic priorities. The market dynamics we outlined in our Q4 call remains largely unchanged, and our first quarter performance is consistent with those expectations.

Our utility products business continues to be the primary growth driver, delivering over 10% growth. This was fueled by strong demand for wood utility poles and a profitable contribution of our steel structures and crossarms businesses.

Meanwhile, our railway tie division demonstrated notable stability this quarter, effectively navigating a complex competitive landscape. While railway ties continue to deliver profitable sales, we are taking actions to further strengthen this business by optimizing our production network and aligning capacity with demand to ensure railway ties remains a cornerstone of our success.

We are also advancing our growth initiatives with good momentum. The acquisition of Locweld has provided us with an immediate platform for growth, and our expected capacity expansion in Canada is well on its way to be fully allocated until the end of 2027.

Our investments to double steel structure production capacity remains on schedule for completion by mid-2026, with a full ramp-up expected in the second half of the year. In the US, we have taken a significant step forward in building our manufacturing footprint for steel lattice towers by selecting Fayetteville, Tennessee as a site for our new facility.

This site has an existing newly constructed building that is suitable for our operations, which will help mitigate project risk. Its strategic location also offers access to a skilled labor pool and favorable proximity to key galvanizing partners.

This approximately $500 million US dollar investment will add roughly 20,000 tons to our total production capacity. We continue to expect commissioning by late 2027, with a full production capacity by the end of 2028.

Let's turn to a performance overview of our main product categories. Starting with utility products, we are encouraged by the business's continued strength, which remains a cornerstone of our growth.

The purchasing momentum that began in the third quarter of last year carried into the first quarter of 2026, supporting double-digit volume growth for wood utility poles. Importantly, growth continued to be anchored in our contract-based business, which we have deliberately strengthened by partnering with customers who value long-term supply security.

In terms of pricing, it was tempered this quarter by product mix fluctuations and continued pressures in the spot market. While spot pricing was below the levels realized in the first quarter of 2025, it remained broadly in line with pricing realized in the second half of 2025.

Competition in the spot market remains intense, and we expect that dynamic to continue as additional capacity comes online later this year. Despite lower pricing, the strength of our volume performance helped offset these near-term pricing pressures while we maintain our focus on long-term profitability.

Turning to railway ties, results in the quarter were broadly in line with the market conditions we expected. While Class 1 volumes remained under pressure from industry consolidation and a more competitive landscape, we maintained relatively stable sales by growing our commercial business.

Combined with disciplined execution, this allowed us to preserve margins. At the same time, as part of our continuous improvement strategy, we're consolidating our production footprint by idling a treating plant and a procurement yard and reallocating volume to our most efficient facilities, ensuring our network remains aligned with the evolving needs of our customers.

This strategic review work is ongoing, and we continue to evaluate network performance to optimize returns and position the railway tie business as a high-performing contributor to our infrastructure platform for years to come. In parallel with the network optimization work, we remain focused on growth.

Through Class 1 contract renewals, we see meaningful potential to strengthen our position and expand higher value offerings, such as bridge, crossings, and pre-plated products. Additional discussions with Class 1s are opening opportunities to offer treating services.

Beyond Class 1s, we continue to pursue growth in the commercial market with encouraging project opportunities ahead. Consistent with our long-term approach, we will also continue to evaluate selective organic and M&A opportunities that can further strengthen our network and reinforce our role as a trusted partner to the North American rail industry.

Overall, our priority in railway ties is clear: to reposition the business for stronger returns. Turning to residential lumber, the business faced softer demand this quarter.

Despite this near-term backdrop, our confidence in the business and its long-term strategy remains unchanged. We continue to manage the business with discipline, leveraging our national distribution network and value-added capabilities to maintain strong service levels for our customers.

We remain confident that residential lumber's value-added business model will continue to be a meaningful contributor to our profitability across market cycles. Overall, our first quarter performance reflects the strength of our infrastructure platform.

Utility products continued to drive growth, railway ties remained resilient as we undertake our optimization initiatives, and residential lumber continued to be managed with discipline through a softer market. Across our businesses, we remain focused on execution, customer service, and profitability.

With that, I would now ask Silvana to provide a more detailed overview of our first quarter financial results.

Thank you, Éric, and good morning, everyone. Sales for the first quarter increased by $18 million to $791 million, supported by higher volumes in wood utility poles and a full quarter contribution from our recent acquisitions.

On an organic basis, sales increased 1% as the strength in utility products was largely offset by lower residential lumber sales, while railway tie sales remained relatively stable. Utility product sales were $469 million in the quarter, up 12% from the $419 million in the same period last year.

This increase reflected the contribution from our 2025 acquisitions, Locweld and Brooks, as well as organic sales growth of 6%. This growth was entirely volume-driven, with volumes up 12% compared to the same quarter last year.

Volume gains were partially offset by lower pricing, which was down 6%, largely due to a less favorable product mix. Railway tie sales were $198 million, down 5% or $10 million from the prior year period, largely due to foreign exchange.

Excluding the currency impact, railway tie sales were relatively stable, as lower Class 1 volumes were largely offset by stronger commercial demand. As Éric noted, we have identified and initiated targeted actions within the railway tie business as part of our focus on continuous improvement.

These initiatives are expected to generate approximately $10 to $15 million in annualized cost savings starting in 2027. To implement these actions, we expect to incur one-time restructuring charges, the vast majority of which will be non-cash and recorded by the end of the second quarter.

By consolidating activity into our most efficient facilities, we are lowering our cost base, improving network efficiency, and positioning the business to better protect margins through volume fluctuations. Residential lumber sales were $76 million in the first quarter, down 14% from $88 million in the first quarter of last year.

Volumes were negatively impacted by softer demand, and pricing was also lower year-over-year as inventory costs average down throughout 2025. Before turning to profitability, I'd like to take a moment to discuss our approach to reporting.

Starting this quarter, we are introducing adjusted EBITDA and adjusted EPS as part of our financial disclosures. As we execute strategic initiatives, GAAP results may include non-routine items that do not reflect our ongoing day-to-day business.

This framework also allows for a more comparable year-over-year analysis by adjusting for the insurance settlement that impacted our 2025 results. It is important to note that for the current quarter, there were no adjustments to our EBITDA.

A full reconciliation of these adjustments has been provided in our financial filings. For the quarter, adjusted EBITDA was $136 million, reflecting a margin of 17.2%, compared to $141 million and a margin of 18.2% in the first quarter of 2025.

The decline was primarily attributable to two factors: First, we had a less favorable product mix for our wood utility poles. Q1 last year benefited from a greater proportion of higher-priced wrapped pole sales.

Second, we recorded a $5 million mark-to-market adjustment on our stock-based compensation expense resulting from the appreciation of the company's share price. While these factors impacted our quarterly margin profile, our cost discipline and operating execution remained solid.

When viewed in the context of the seasonal nature of our business, our Q1 margin remained well within our expected levels as we head into our peak demand season. Moving on to cash flows.

During the quarter, we generated $47 million of cash from operations, a significant improvement over the $16 million used in the first quarter of last year. This is a direct result of our disciplined working capital management.

The strength of our operating cash flow was underscored by the stability of our balance sheet. Despite the typical seasonal increase in working capital in the first quarter, our net debt was unchanged since the start of the quarter.

We ended Q1 with $646 million in available liquidity and a net-debt-to-adjusted-EBITDA ratio of 2.6 times. At 2.6, our leverage ratio remained in line with our capital allocation strategy, which provides flexibility to fund seasonal working capital needs.

In summary, our first quarter results underscore the strength of our cash generation and balance sheet. Solid operating cash flow, stable leverage, and ample liquidity give us the flexibility to support the needs of the business, fund strategic investments, and evaluate growth opportunities from a position of strength.

With that, I will turn the call back to Éric.

Thank you, Silvana. To close, we're encouraged by our start to 2026 and by the progress we are making against our strategic priorities.

We continue to build momentum in utility products, advance our steel growth initiatives, and optimize our railway tie business. Combined with disciplined management in residential lumber, these actions keep us on track to strengthen returns and create long-term value.

I want to thank our employees for their dedication and hard work, and our shareholders for their continued trust. We look forward to welcoming them at our annual general meeting later this morning.

This concludes our prepared remarks, and we will now open the line for questions.

Hi, good morning. Éric, on the railway tie side, are you still expecting flat sales there overall for the full year?

I know last quarter you mentioned you had four Class 1 contracts renewing this year. Have any of those been renewed yet?

Our views for the year are still flat sales year-over-year for 2026, and obviously, we hold our guidance for that low single-digit growth over the three-year guidance period. With regards to contracts, there's still ongoing discussions, very positive on discussions with several of our customers.

As I mentioned in my prepared notes, we're also entertaining discussions about moving to some treating services. That could impact top line, maybe more in '27 than in '26, but we'll provide more color when that time comes around.

Ultimately, the profitability and margin remains the same.

Great. Thanks.

Silvana, I think you referenced $10 to $15 million of cost savings by early '27. When's the earliest we'll start to see that the benefits there start to show up?

We don't expect any benefits this year. Most of the benefits will only start in 2027.

When we talk about the $10 to $15 million, that would be annualized starting in 2027.

Great. Just the last question I had on the res lumber side.

Silvana, how much of the 11% decline was weaker volumes versus softer pricing? How is your key customer there thinking about spring demand?

In terms of the percentage decrease, it's pretty much 50-50 in terms of volumes and pricing. I think we're starting to see a nice pick-up in demand, obviously the season was a little bit late to start this year, but I think we're starting to see some positive sign.

I'll let Éric chime in.

Just an additional comment, Hamir. Our key customer remains bullish on the year with some growth or market share gains, prepared for a strong season.

As Silvana said, a bit of a later start with a later spring starting, but the last few weeks have been actually very good on volume shipments. We'll see if we catch up by the end of the year, but the guidance still remains in that $600 to $650 million.

Great. Thanks.

I'll turn it over.

Thanks, Hamir.

Hey, good morning, and thanks for having me on. Hey, Éric, just on your utility poles, can you help us frame the cadence of the contracted backlog through the balance of '26?

Specifically, do you have line of sight to maintaining that strong volume growth that we saw in Q1 into Q2 and Q3? Then maybe if you can comment on how you expect the pricing backdrop there to evolve in the back half as some of this new capacity comes on?

Thank you, James. A quick reminder, first half of last year, if you remember, we had some softer volumes in utility poles, and the second half, we actually saw some better performance.

Definitely, I would say the comp is easier the first half of the year. Obviously, you're seeing the 12% volume growth, which I don't think it'll carry through into the Q3 and Q4 periods that are upcoming.

However, we still believe that we'll hit that mid-single-digit net for the business, and that would incorporate that pricing headwind. We think it'll remain relatively stable for now compared to what we saw here in Q1, and hopefully it holds that level, if you want, of pricing on the spot pricing market.

Net, we believe it'll be a mid-single digit, as we have in our three-year guidance.

Then in terms of margins, I know there was some impact from mix this year, and margins were down year-over-year. Should we be thinking about the cadence of margin improvement or margin deterioration for the full year kind of in line with what we saw in Q1 or anything we should be thinking about in Q2, Q3, Q4 that would change the trajectory of margins versus what we saw in the quarter?

Q1 and Q4 of every year are the lowest volume quarters. I'm not surprised to see the level of profitability we had this quarter.

I think it's pretty much in line with our expectations. You could expect better margins for Q2 and Q3, as obviously the volume helps us leverage better our network, and we're more efficient, and there's also more demand.

Definitely believe that we will be within our guidance range for the year. I think it's a bit of normalization we're seeing this quarter, as Silvana pointed out.

We had some product mix, essentially being some higher wrap pole volumes in Q1 '25, which sort of uplifted the margin profile for the quarter. Other than that, part for the course, I think we'll be within our guidance range for the year.

Appreciate it, and I'll turn the line over. Thank you.

Thank you.

Yes, good morning, Éric. Good morning, Silvana.

You've talked a little bit about the optimization of the railway ties production network. You gave great color about the initiatives, the opportunities, the benefits.

Do you see an opportunity to do the same for utility poles and residential lumber?

Great question, Benoit. It's been a year now that we've have added a COO to the organization, and he's got strategic improvements initiatives going on in the business and continuous improvement.

It's definitely something that we are, deploying throughout the organization. Obviously, there'll be different different impacts.

If I think about our utility pole business, it's been a a growth business now for several years. We're using capacity very well and increasing capacity.

I don't think, for example, restructuring and capacity, downward capacity adjustment, would be something we will see in utility poles. It doesn't mean that we're not working on other efficiency initiatives within within the division.

I would say the same for residential lumber. We're pretty happy with our footprint and our capacity usage there, but not to say that, we're not looking for other opportunities to improve our our our bottom line.

Okay. When I look at the organic growth for railway ties was just as slight thing it is, but how should we be thinking about Q2?

It looks like that you gonna still be facing a tough compare versus a year ago. Just wondering whether we could still see the railway ties organic growth in the negative territory.

Obviously, I want to call out FX because it was, as you can see in our MD&A, a big impact this quarter. If we exclude FX, we still see it flattish, Benoit.

It is a very dynamic market. As I mentioned, our team is adjusting very well, getting some extra business in the spot market or the commercial market.

There's lots of great opportunities there. That's how we sort of navigated Q1.

We compensated with that spot market. Not to say that as we're negotiating contracts with Class 1s, we might see certain things switch, but I don't think it'll be in Q2.

It'll be probably a bit later in the year. For now, my thoughts are what I expressed earlier, it should be flat through the year.

Perfect. Free cash flow, Silvana, very strong performance in Q1 in what is typically a seasonal weak quarter.

Any explanation? I see less working capital build.

Was it a call on the residential lumber inventory? Is it a impact from network optimization?

Any color behind the strong free cash flow performance in Q1?

Most of the favorable impact in the first quarter was us right-sizing some of the inventory, particularly in ties, as we're looking to, potentially, as Éric mentioned, opportunities for maybe TSO volumes, which is less capital intensive. We did make an effort already starting in Q1 to right-size that inventory.

That was most of the impact. The build of residential lumber, obviously, with a bit of a later season, was actually going the other way.

We definitely have poles in line with what we typically see in the first quarter, right? Also using the tools that we have with SAP, a lot more visibility into inventory management.

Definitely, that is also helping out as part of that optimization and being efficient with our working capital.

Okay. Maybe last one for me.

Could you maybe provide an update on the Brooks automation and the potential for selling crossarm in Canada, and maybe also with respect to the new location in Tennessee for steel lattice? Was curious to know how much of the upcoming capacity has been already sold.

Thank you.

Thank you, Benoit. The first part of your question with regards to Brooks, very happy with the progress in the integration.

I would say probably fully integrated by now, other than probably the IT systems that'll be completed by the end of the year. We've opened the door to a lot of new customer contacts to the Brooks team, including Canadian customers.

Can't divulge too much into the weeds, but yes, we're making inroads with Canadian utilities, we're very happy with the progress there. The second part of your question was, I believe, with regards to the selection of a Tennessee location for our steel lattice business.

That is also progressing very well. Obviously, we've selected the site.

It has a building, as I mentioned, it sorts of de-risks a lot of the project. We're already done, and probably in the coming weeks, we will be finalizing the purchase of all the equipment to be delivered in about a year from now.

We're on track to commission the facility at the end of '27. Things are working well.

We've aligned our resources internally to be able to support that project. Obviously, again, under COO, we've developed an engineering team.

Now we have actually employees that are well versed in this type of project and are dedicated to it. Like my VP of sales likes to say, we have someone that goes to bed and wakes up in the morning thinking about these projects, really focused on the success of the project.

Looking forward to commission it. I also think you were inquiring about having some purchase orders there.

No firm purchase orders, a lot of discussions with customers, a lot of increased visits in our Canadian facility from US customers to understand our quality control, our processes, to certify the facility. Ultimately, once we have a US facility fully functional, the opportunity will be, of course, servicing US customers.

We'll be able to move some production from Canada into the US, freeing up some capacity in Canada for Canadian projects. We have a lot of Canadian utilities that are looking to source Canadian content, and we will be very well positioned to answer their requirements.

All in all, very very positive and upbeat on my part on what's going on there.

That's great. Great color.

Thank you.

Thank you, Benoit.

Thank you. Good morning.

Good morning, Michael.

Good morning, Éric, Silvana. Question on the restructuring within the ties business.

You mentioned two two sites that are going to be idled. Is it specifically those two that gets you to this $10 to $15 million of savings, or are there additional opportunities or additional restructuring options contemplated as well?

The saving Silvana mentioned, the 10 to 15, is associated to those two facilities, a treating plant and a raw material green tie consolidation yard. As I also mentioned in my remarks, it's an ongoing process.

We're evaluating other opportunities, but for the time being, this is the adjustment we deemed necessary. We have enough depth in our network to be able to accommodate the production or even the spike in demand if that would come in the coming years.

We've seen the industry go up to 24 million ties, and today it's maybe sitting around, I want to say, the high 19s. If there would be a spike at one point in the future, we definitely have the capacity, even though we're idling these facilities, within our network to be able to address the demand.

Obviously, with that information, you can understand that it's not an easy decision to make, obviously, because it impacts our employees and impacts people that work for us. From an operational and financial perspective, it made a lot of sense.

No, that makes sense. Thank you.

Then just as far as the restructuring charge, I realize it's largely non-cash, but did you quantify what we should expect that to be in the second quarter, Silvana?

No, we are still working on those numbers. When we talk about the non-cash, it's really the write-down of the assets.

We're just trying to figure out which assets basically we can reuse in the network, there's still some work to be done there.

Got it. As far as the pricing headwind in the poles business, you mentioned it was largely mix.

What happens as far as the prior comp from a mix perspective as we move into Q2 and then through the balance of the year? Is that dynamic still at play from a mix perspective, or is it more just the industry headwinds on the pricing side?

Just trying to understand how we think about pricing and the composition of pricing, particularly or inclusive of the year-over-year comp as we move through the year.

For Q1 of '25, it was a very unique situation with a unusual revenue stream for utility wrap poles. That does not come into play following Q1, it's back to a normal comparison.

We would have that mix effect to explain the delta between profitability year-over-year for the balance of the year.

Okay. I guess though, as we move through the year, so that goes away, that part of the headwind.

At the same time, you mentioned that from a volume perspective, the comps get tougher, there's sort of an offset there.

Exactly.

Okay. Also wondering if you can just, I don't think it's been asked yet, just talk a little bit about M&A opportunities.

Obviously, you've got a lot on your plate with the Locweld expansion, the US lattice expansion, closing facilities in ties, but just are you still focused on potential M&A opportunities? What does the landscape look like?

Is there anything that we should be thinking about on that front?

Thank you for recognizing that we've got a lot going on, and we do. Fortunately, we also have a Vice President of Business Development, he is dedicated to the pursuit of M&A and finding new opportunities.

We still have a lot of interest. We have a, I would say, healthy pipeline of projects ahead of us in our traditional wood treating, railway ties, and utility poles, and as well on the steel transmission side, I would qualify it in that broader market, which if you remember at our Investor Day, we had talked about an addressable market of a total of $5 billion Canadian annual.

Definitely, that's part of our strategic priorities, as we were discussing here earlier in our prepared remarks. Definitely, our VP of Business Development has all of those three in the line of sight and working on some projects.

Then obviously, can't promise the timing on those. Each project has its own cadence, but I would be very very happy if we could execute on some of these in the next 12 months.

All right, thank you. I will leave it there.

Thank you, Michael.

Hi, good morning. Éric, I was wondering if it's possible to get a bit more color on the state of the lattice market in the US and, I guess, any incremental data points you can point to, and if it's still the case that sort of all the imported is coming offshore still?

Thank you very much.

A lot of articles have been published, and they keep, on a regular basis, about the effervescence in the electrical grid in North America. I think, from our standpoint, we still see that market being very dynamic.

We keep having discussions with our customers that are looking to invest and execute on large CapEx projects, a lot of transmission projects in there. I was mentioning earlier in another question, we have seen an increase in visits or certification visits from customers at our facility here in Quebec.

A lot of interest from North American utilities to buy a bit more, well, Canadian for Canada, but on the continent for our US customers. A lot of interest for our US business or our US facility that's getting built as well, I think that is also prompting the interest in how we're operating.

To your point, you were asking about the offshore, they remain in play. We know the players.

We keep having discussions with them. We share some notes to make sure we understand what they're up to, and I think they appreciate that we have a bit of a unique service proposal, product offering in North America having a footprint closer to the projects, and that's what our customers appreciate.

I guess that's about our thoughts at this point, Maxim.

No, that's super helpful. Then one quick clarification.

Is there any pinch point around preservatives given sort of all the geopolitical issues and kind of input costs, or it's just immaterial? Thank you.

Not necessarily pinch point. The only thing I guess I want to point to, since you're bringing it up, is there could be a bit of headwinds because of fuel cost increases.

Obviously, our oil-borne preservative would have a bit of an impact, and also on fuel could impact our carrying costs, our distribution costs. Nothing material for now.

All built into pass-throughs we have in our contracts with our customers. Nothing of great concern at this point, but obviously, we're monitoring the oil price situation in North America because it's closer to home, but it's a global impact, I guess.

That would be my thoughts there on your question.

That's great. Thank you for clarifying.

That's it for me.

Thank you, Maxim.

Hey, good morning, team. Thanks for taking my questions.

Just a few qualifying ones on my end. I think you called out the mark-to-market item on stock-based compensation this quarter being a $5 million headwind.

I just want to know what was it last year, and just to be sure, you're not adjusting either of those amounts out of adjusted EBITDA?

Thank you for the question, Jonathan. I'll let Silvana answer the question.

To the second part of your question, Jonathan, is that no, we are not adjusting any of the mark-to-market items. Last year, it was actually a small negative amount under a million

dollars. So $5 million this year, $1 million-ish last year.

Going the other way.

Sorry?

The Q1 last year was a net negative.

Exactly. Then another one, not to beat a dead horse here on the pricing decline in poles, but of that 6%, how much of it was due to mix versus competitive dynamics?

If we're thinking about pricing for the rest of the year, if we back into the competitive element in Q1, is it the expectation that that's going to accelerate and get worse through the balance of the year as more capacity comes online?

The Q1 impact is all mix. Excluding that factor, I think we see the pricing pressures being relatively stable year-over-year.

Maybe there will be some headwinds for sure, a couple of percentage points, but no more than that, and not as significant as the first quarter.

That's good color. Then maybe one more for you, Silvana.

I think you talked about it earlier in the call on working capital, it was specific to Q1. For the full year, how should we think about investment in working capital?

I've said in the past kind of, our rule of thumb is always that, for every incremental sales dollar, we need to invest 40 cents on that dollar to support those sales. That said, as I mentioned, with perhaps more opportunity to do TSO, that might be lower, because obviously that is less capital intensive.

For the year, I still think there will be a net investment, but probably less than $50 million.

Thank you for the color. I'll get back in queue.

Thank you.

Thank you, Vincent, and thank you, everyone, for joining us today. We look forward to updating you when we release our second quarter results.

Until then, have a safe and enjoyable summer.