Stella-Jones Announces First Quarter Results

Financial Performance - Stella-Jones reported sales of CAD 773 million for Q1 2025, a slight decrease from CAD 775 million in Q1 2024, with pressure-treated wood sales down by CAD 36 million or 5% due to lower volumes across most product categories [4][6] - Gross profit for the quarter was CAD 168 million, resulting in a gross profit margin of 21.7%, down from 22.2% in the previous year [3][7] - Operating income increased to CAD 143 million, up from CAD 124 million in Q1 2024, aided by an insurance settlement of CAD 38 million [8][9] - EBITDA rose to CAD 179 million, with an EBITDA margin of 23.2%, compared to CAD 156 million and a margin of 20.1% in the same period last year [8][9] Acquisition Strategy - The company announced a definitive agreement to acquire Locweld Inc. for CAD 58 million, enhancing its infrastructure offerings in the steel transmission structure industry [2][14] - The acquisition is expected to unlock investment opportunities and create more value for customers and shareholders [2][14] Liquidity and Capital Resources - Stella-Jones maintained robust liquidity of CAD 691 million at the end of the quarter and a net debt-to-EBITDA ratio of 2.6x [10][32] - The company utilized its liquidity to support seasonal working capital needs, repurchase CAD 15 million of shares, and declared a dividend of CAD 17 million [10][13] Segment Performance - Utility poles sales increased to CAD 419 million, while railway ties sales decreased to CAD 208 million, reflecting a 14% decline in volumes [12] - Residential lumber sales remained stable at CAD 88 million, and industrial product sales increased to CAD 39 million [12]