Stella-Jones Announces Third Quarter Results

Core Insights - Stella-Jones Inc. reported solid financial performance in Q3 2025, driven by volume improvements, robust margins, and a strong balance sheet [2][5] - The company acquired Brooks Manufacturing Co. to enhance its portfolio and strengthen its position in the utility sector [2][15] Financial Highlights - Q3 2025 sales reached CAD 958 million, a 5% increase from CAD 915 million in Q3 2024 [3][5] - Gross profit remained stable at CAD 188 million, with a gross profit margin of 19.6%, down from 20.5% in the previous year [3][6] - Operating income increased to CAD 135 million, up 4% from CAD 130 million in Q3 2024 [3][7] - EBITDA for Q3 2025 was CAD 171 million, representing a margin of 17.8%, an increase from 17.7% in Q3 2024 [3][7] - Net income for Q3 2025 was CAD 88 million, or CAD 1.59 per share, compared to CAD 80 million, or CAD 1.42 per share, in Q3 2024 [3][7] Sales Breakdown - Utility poles sales increased to CAD 480 million, a 7% rise from CAD 448 million in Q3 2024 [10] - Railway ties sales rose to CAD 211 million, up from CAD 205 million in the same period last year [10] - Residential lumber sales increased to CAD 201 million, compared to CAD 191 million in Q3 2024 [10] - Logs and lumber sales decreased significantly by 47% to CAD 16 million, primarily due to lower log activity [6][10] Nine-Month Results - For the first nine months of 2025, sales totaled CAD 2,765 million, compared to CAD 2,739 million in the same period last year [8][9] - Gross profit for the nine-month period was CAD 562 million, with a margin of 20.3%, down from 21.4% in the previous year [9] - Net income for the first nine months was CAD 287 million, or CAD 5.17 per share, compared to CAD 267 million, or CAD 4.72 per share, in the same period last year [11] Liquidity and Capital Resources - As of September 30, 2025, the company had available liquidity of CAD 780 million and a net debt-to-EBITDA ratio of 2.2x [14] - Cash generated from operations in Q3 2025 was CAD 198 million, which was used for capital expenditures, shareholder returns, and debt reduction [12] Shareholder Returns - The company announced a Normal Course Issuer Bid to repurchase up to 1,500,000 common shares from November 14, 2025, to November 13, 2026 [16] - A quarterly dividend of CAD 0.31 per common share was declared, payable on December 19, 2025 [17]