Merci. Good morning and welcome to ADF's conference call covering the first quarter ended April 30th, 2026.

I am with Pierre Paschini, Chief Operating Officer of ADF, who will be available to answer your questions at the end of the call. We are currently an hour from hosting our 2026 annual shareholders meeting, which will take place here at our corporate office in Terrebonne.

I will now update you on our quarterly results, which were disclosed earlier this morning by press release. First, a word of caution.

Please note that some of the issues discussed today may include forward-looking statements. These are documented in ADF Group's management report for the first quarter ended April 30th, 2026, which were filed with SEDAR this morning.

Our fiscal 2027 is off to an excellent start. Even if we are dealing with the numerous and never-ending tariff changes, we are still keeping our focus and managing these challenges proactively.

Revenues during the three-month period ended April 30th, 2026 totaled $99.3 million, 78.8% higher than the $55.5 million for the same period ended a year ago. The increase comes from the recently signed contracts which are now in fabrication.

It is also worth mentioning that our first quarter revenues a year ago were negatively impacted by the then recently announced tariffs. The gross margin, at $24.0 million, almost double when compared to the same period of the previous fiscal year.

Gross margin as a percentage of revenues went from 22% during three-month period ended April 30th, 2025 to 24.2% during the same period ended April 30th, 2026. The increase in margin, both in dollars and as a percentage of revenues, is explained by the higher revenues, which improved the absorption of fixed costs, despite higher input prices, including the price of steel and the recent changes to tariffs.

The revenues and margin for the quarter ending April 30th, 2026 are now inclusive of the Goplap acquisition, which was finalized in September 2025. As such, our revenues and gross margin for the quarter ended April 30th, 2026 included $18.1 million and $1.3 million, respectively, coming from Goplap.

For the three-month period ended April 30th, 2026, selling and administrative expenses amounted to $7.6 million, posting a $4.2 million increase compared with the same period a year ago. This variation is mainly explained by the adjustment in the market value of deferred share units and in performance share units granted to external board of directors members and certain members of senior management in line with the variation in the corporation share price during the periods analyzed.

The acquisition of Goplap also had an upward impact on selling administrative expenses of $1.1 million million during the three-month period ended April 30th, 2026. We therefore closed our first quarter with net income of $12 million or 42 cents per share compared to $8.7 million or 30 cents per share for the same quarter a year ago.

Our balance sheet remains very strong. We closed our first quarter ended last April 30th with cash and cash equivalent of $62.1 million, only $0.6 million lower than our January 31st, 2026 ending balance.

Working capital stood at $111.9 million for a 2.2 to 1 ratio. Acquisition of property, plant, and equipment and intangible assets for the first quarter ended last April 30th totaled $9 million, including the modification of an existing fabrication bay in Terrebonne, the start of the expansion capex in Métabetchouan for Goplap, and the redesign of the corporation's integrated ERP software package.

We actually had the first shovel ceremony last week for our Larch expansion project. We expect full-year capex to be approximately $35 million.

Finally, we closed the quarter with a record-breaking backlog of $645.8 million. This backlog includes $266.5 million dollars coming from Goplap, which includes the multi-year contract announced last April.

Worth mentioning, the April 30th, 2026 backlog includes 72% of Canadian projects. As previously mentioned, we are very satisfied with the results of our first quarter, which is highlighted by the progress of our operating activities and the ongoing growth of our order backlog.

As announced this past April, we have finalized a long-term contract in the hydroelectric sector in Quebec for Goplap, which confirms our optimism expressed in our year-end reporting and communication and highlights the importance of the investments we will make in the coming quarters to not only increase the production capacity of Goplap's plant, but also outfit it with state-of-the-art equipments. Our financial position remains strong, and we are continuing our discussion with the goal of securing adequate financing for capital investment in Lake Saint-Jean.

As such, we were able to reach an agreement with the federal government for a $12.5 million loan, which, subject to certain conditions, would be 50% forgivable and 50% interest-free. We expect to have the full financing package confirmed before the end of the second quarter ending next July 31st.

Though our market remains active, US tariff policy remains a significant irritant and will continue to add pressure directly and indirectly to our cost structure. This being said, and as shown by our results for the first quarter, our proactive approach allows us to continue our orderly growth and minimize the risks associated with existing uncertainties.

Thank you for your interest and confidence in ADF. Pierre and I will now answer your questions.

Morning, gentlemen. Thanks for answering my questions and congrats on the quarter here.

It's really strong results.

Thanks, Nick.

I was wondering about the timeframe on the Larch capex plan. Is it kind of a phased approach, or how long do you think it'll take to get a meaningful revenue impact from that?

Construction actually, as I mentioned, we had the first shovel ceremony last week. We actually started construction on the site yesterday.

We plan to have the building closed out before winter, around November, December, finalize the setup during the winter, technically, April, May the plant should be up and running. Starting with the second quarter of next fiscal year, we should start to see some impact from the additional volume and the improved efficiency coming from the new equipment.

Great. Would you be able to tell us what Larch's capacity was prior to this, maybe just in dollars versus after, or maybe even just a percentage increase if that was easier?

Volume-wise with the mix of product they presently have, they were able to do about $100 million, maybe a bit more. The expansion will double the capacity.

Again, depending on mix, we should be able to double that on a revenue standpoint. It always depends on margins and the pricing of the projects, but basically the expansion should double the capacity.

Okay. That sounds good.

Then for JF, on the SG&A levels going forward, is this kind of the baseline what we saw in Q4 and Q1 before we exclude the stock-based compensation?

Yes. Yes, pretty much.

Larch is included, so as I mentioned, the impact of Larch alone in Q1 is $1.1. We can grow the revenues without really having to grow much of the SG&A, at least not significantly.

Besides inflation on salaries, SG&A should be pretty flat. There's always the PSUs and DSUs fluctuation based on market, just based on this morning's stock reaction, my SG&A just went up significantly, [laughter] but that's I guess that's good.

Besides that, it should be pretty stable.

Got it. Understood.

Then last one for me. If you guys have an update on more of kind of the growth sectors or growth projects, whether that's nuclear, data centers, are you seeing any more volume in areas like that?

It's Pierre Paschini. We got some volumes coming in the States also.

We look at some data centers and some other jobs, big jobs that we can do at Great Falls and all that. I think there's a lot of jobs bidding.

There's competition, there's niche work that we can do over there. In Canada, well there's a lot of work coming with Hydro-Québec and other places in Ontario, also some nuclear stuff.

We'll be busy in estimating. Basically so we grew our gang to do more estimates so we can pick up more work, but at decent prices.

For us, market is good. The reason why we're able to do what we're doing is that we can do jobs in the States.

Buy American Act is not an issue with the Great Falls plants, and some other stuff. Even with the tariffs, with the new equipment, we can be competitive here in Montreal.

Larch, well Larch I think is what an acquisition and they're going to do their work. There's enough clients and I think the volume is going to be there for next 5 years.

Very good. Thanks for answering my questions, and congrats again, guys.

Thanks, Nick.

Thanks.

Bon matin, messieurs. Félicitations pour le trimestre record.

Merci.

Merci.

My first question is regarding the gross margin. I think a very positive surprise this morning.

Last quarter, I believe the guidance or perhaps what we discussed was more in the lower 20% range, 20 to 22. It seems we're recovering towards that 24 and up despite the lower-margin contracts at Larch.

I'm just wondering what could explain this stronger performance in Q1? I think we were more expecting this in the second half of the year.

Has there been any project pull-forward, anything exceptional? Do you expect a second quarter a bit weaker?

I'd love to be more precise on the guidance, and that's why we don't provide specific guidance, but sometimes it's not a whole lot of things. It's just a project coming in sooner than expected, or one not coming in with lower margin as soon as expected.

It's really more a matter of the product mix. It's not a huge shift, but to your point, maybe a point or two higher than we might have expected.

I expect margins in the second quarter to be pretty similar considering the volume that we should be able to tackle in that second quarter. As we also mentioned at year-end, we're still working on the integration of Goplap.

In the second half of the year, we should start seeing some of the benefits from the synergies being driven by this. The step change will really be, as I mentioned on the first question, the step change will really be next year when the addition and the expansion in Goplap kicks in with the new equipment.

Again, we're obviously happy with the numbers and I guess it just shows that we've been able to execute the project, but as I said, sometimes it's not a whole lot, it's just timing of maybe a couple of weeks that might have pushed some of the margins up higher than expected.

Got it. That's helpful.

Apologies, I shouldn't have said guidance. Perhaps I should say you manage our expectations right.

That was a positive surprise. On the financing agreement news, that's great to see the Feds, le fédéral, coming in with this.

I was wondering, would it be crazy to expect the provincial level to maybe come in as well, especially in the Saguenay-Lac-Saint-Jean region?

It wouldn't, but still having discussions. Hopefully we'll be able to button down everything we're working on, but we're looking at obviously both levels of government, and we've always had a good relationship at both levels, we're pleased to be able to finalize on the federal side, and working for the rest of the package.

We'll have more to say in the coming weeks definitely unless something drastic happens, but as I said, we should be able to button down everything by the end of the quarter.

Got it. Maybe the last one for me.

I think we understand Larch is pretty much buckled up for the foreseeable future plus the expansion plan. If we focus back on Terrebonne and even Great Falls, can you comment on perhaps the capacity that's left there, maybe as a percentage or calendar-wise for 2026 and 2027?

Great Falls obviously with the the issues with tariffs the the tariffs, it's definitely much easier to sign con- US con- to con- sign contract for US projects being fabricated in Great Falls because obviously you you take the tariffs discussion out of the equation. As it stands now, our Great Falls plant is getting pretty pretty full for the year.

We've already have volume for next year. Terrebonne this year obviously in in normal circumstances, we do have good volume coming from the US.

As surprising as it may seem and even with the difficulties, we're still having projects US projects that are coming in Terrebonne, where we manage we manage the tariffs impact along with our clients. We're also because of the success we have and the the fact that the expansion in Larch at for Goplap is not in place, we're also doing volume that would have normally been done at the Goplap site.

We're helping out Larch, which fills some of the capacity here in Terrebonne. For next year, you saw the backlog, we're starting also to have good volume.

The the long-term contract gives us longer-term visibility, which is something new for ADF, which is also really nice to have, the longer-term visibility. As Pierre mentioned, the the markets are still In spite of everything, the market are still strong.

There's still a lot of projects out there. The the plan is to fill as much as possible the shops.

The initial the objective was really to put a put additional effort on Larch, and I think we've been pretty successful of doing that. Now it's just making sure that we fill the capacity here in Terrebonne for for the remainder of the year and next year.

We still have room. There's still capacity available.

Things are looking good and there's and there's always the possibility also in Great Falls, as we have mentioned in previous communication, to add capacity should should we get to that point. There's nothing on the table now, but we're obviously monitoring the the situation.

Got it. That's it for me.

Congrats again. Vraiment.

Thanks. Yep.

Again, we wish to thank you for your interest in ADF Group and remind you that we will hold our fiscal 2026 shareholders meeting in just a few minutes at 11:00 here at our corporate office in Terrebonne, Quebec. Thank you.

Thank you.