Key Takeaways CNI moved 3.28M tonnes of Western Canada grain in November, setting a new monthly record.The record marks a third consecutive month of strong grain movement for CNI.CNI's Winter Plan outlines steps to boost reliability and minimize weather disruptions.Canadian National Railway (CNI) set a new record for grain movement in November 2025. The company has transported more than 3.28 million metric tonnes of grain from Western Canada in November 2025, marking an increase of 230,000 metric tonnes fro ...

Financial Data and Key Metrics Changes - Net sales for Q4 were $389.2 million, a 2.2% decline from $397.9 million in the same quarter last year [26] - Same-store sales decreased by 6.8% on a 13-week basis compared to the same period in fiscal year 2024 [27] - Adjusted EBITDA for Q4 increased to $45.2 million from $43 million in Q4 2024 [31] - Net loss for Q4 was $162.8 million, or $17.54 per diluted share, compared to a net loss of $9.9 million, or $1.07 per diluted share in the prior year [30] - Full year 2025 sales were approximately $1.24 billion, down from $1.33 billion in 2024 [32] Business Line Data and Key Metrics Changes - Chemicals category sales were down approximately 7.1%, and equipment category sales were down 7.6% on a 13-week comparable basis [27] - The company experienced a net loss of over 160,000 residential customers, with a decline in residential traffic of 8.6% in 2025 [6][10] Market Data and Key Metrics Changes - The company noted a significant price-value challenge leading to market share loss [5] - The competitive pricing environment in Q4 was influenced by excess supply and aggressive pricing from competitors [80] Company Strategy and Development Direction - The company is focusing on cost optimization, cash and capital management, and improving the price-value equation [4][6] - Plans to close 80 to 90 underperforming stores, which will impact annual sales by approximately $25 million to $35 million but improve net EBITDA by $4 million to $10 million [17][34] - The company aims to enhance its customer value proposition through targeted marketing and improved pricing strategies [8][10] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and its impact on consumer spending [38] - The company expects to generate the majority of its sales and earnings in the second half of the year due to the seasonal nature of the industry [38] - For fiscal 2026, the company anticipates sales between $1.1 billion and $1.25 billion and adjusted EBITDA of $55 million to $75 million [39] Other Important Information - The company is implementing a comprehensive expense reduction initiative and renegotiating contracts with vendors and suppliers [35] - Inventory levels were reduced by $26 million year-over-year, with a focus on improving in-stock percentages on core SKUs [29][32] Q&A Session Summary Question: Are supplier partners supporting the turnaround efforts? - Management confirmed that vendor partners have been supportive, allowing for better inventory forecasts and improved in-stock positions [49][51] Question: How much of the EBITDA guide is expected to convert into free cash flow? - The midpoint of the EBITDA guide assumes free cash flow positivity for the year [53] Question: Where do you see the most opportunity in pricing? - The focus is on key value items, particularly in the chemicals category, with a strategy to remain competitive against specialty and big box retailers [60][61] Question: What is the impact of store closures on revenue? - The closures are expected to have a $25 million to $35 million impact on revenue, but the majority of the stores being closed were unprofitable [70][72] Question: What is the plan to regain lost customers? - The company plans to target lost customers with customized marketing efforts based on their previous purchasing behavior [74][76] Question: Can you comment on competitive dynamics in Q4? - Management noted aggressive pricing in the marketplace and the need to remain competitive, which has led to sequential improvements in performance [80]

Financial Data and Key Metrics Changes - Net sales for Q4 were $389.2 million, a decline of 2.2% from $397.9 million in the same quarter last year [26] - Same-store sales decreased by 6.8% on a 13-week basis compared to the same period in fiscal year 2024 [27] - Gross margin for Q4 increased to 38.6% from 36% in the prior year, driven by favorable vendor rebates and freight costs [29] - Net loss for Q4 was $162.8 million, or $17.54 per diluted share, compared to a net loss of $9.9 million, or $1.07 per diluted share in the same quarter last year [30] - Adjusted EBITDA for Q4 increased to $45.2 million from $43 million in Q4 2024 [31] - Full year 2025 sales were approximately $1.24 billion, down from $1.33 billion in 2024 [31] Business Line Data and Key Metrics Changes - Chemicals sales were down approximately 7.1%, and equipment sales were down 7.6% on a 13-week comparable basis [27] - The company experienced a net loss of over 160,000 residential customers, with a decline in residential traffic of 8.6% in 2025 [6][10] Market Data and Key Metrics Changes - The company noted a competitive pricing environment in Q4, which affected sales performance [80] - The company is focusing on improving its price-value perception to regain market share lost due to pricing challenges [6][10] Company Strategy and Development Direction - The company is implementing immediate actions to improve operations and accelerate financial profitability, including closing 80-90 underperforming stores [7][17] - A restructuring of field teams is underway to enhance customer relationships and drive growth [11] - The company is focusing on a customer-centric approach, enhancing its value proposition through targeted marketing and pricing strategies [12][44] - Plans to optimize inventory and reduce SKU counts by over 2,000 are in place to improve operational efficiency [20][37] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the challenging macroeconomic environment and its impact on consumer spending, but expressed confidence in the company's strategic direction [38] - The company expects to generate the majority of its sales and earnings in the second half of the year, consistent with the seasonal nature of the industry [39] - Guidance for fiscal 2026 includes expected sales of $1.1 billion to $1.25 billion and adjusted EBITDA of $55 million to $75 million [39] Other Important Information - The company ended the fiscal year with no outstanding borrowings on its line of credit and $752 million of net long-term debt [32] - A $184 million impairment charge was recorded in Q4, primarily related to goodwill and the closure of underperforming stores [30] Q&A Session Summary Question: Are supplier partners supporting the turnaround efforts? - Management confirmed that vendor partners have been supportive, allowing for better inventory forecasts and improved in-stock positions [49][51] Question: What is the expected free cash flow conversion for this year? - The midpoint of the guidance assumes free cash flow positivity for the year [52] Question: Where do the most pricing opportunities lie? - The focus is on key value items, particularly in the chemicals category, with a strategy to remain competitive against other retailers [60] Question: What is the impact of store closures on revenue? - The closures are expected to impact annual sales by approximately $25-$35 million, but the majority of the stores being closed were unprofitable [70][72] Question: How does the company plan to regain lost customers? - Targeted marketing efforts will be employed to reach former customers, leveraging data from the Pool Perks Loyalty Program [74][76] Question: What are the competitive dynamics observed in Q4? - Management noted aggressive pricing in the marketplace and the need to remain competitive, which has led to sequential improvements in performance [80]

Financial Data and Key Metrics Changes - The company is targeting a reduction in capital spending for 2026, indicating a focus on cost savings in 2025 as well [6][14] - There is an expected mid-single-digit drop in demand for the second half of the year, influenced by trade dynamics and seasonality [12][15] - The company anticipates a utilization headwind of approximately $75 million to $100 million in the second half of the year due to inventory reduction efforts [13][16] Business Line Data and Key Metrics Changes - The Chemical Intermediates segment is expected to improve by over $30 million, while the Specialty and Fibers segments are projected to decline by a similar amount [70] - The AFP business saw a 4% year-over-year price increase primarily driven by cost pass-through contracts [54] - The Fibers business is facing a $20 million headwind due to tariffs and a $20 million asset utilization headwind, alongside higher energy costs [95][96] Market Data and Key Metrics Changes - The automotive market is expected to see a low single-digit decline in the back half of the year, with challenges stemming from tariff impacts and consumer behavior [50][51] - The textile market has slowed down significantly due to tariffs, impacting demand and leading to a cautious approach from customers [57][58] - The company is experiencing accelerated demand in certain areas, particularly in mechanical recycling for food-grade packaging applications [35] Company Strategy and Development Direction - The company is focusing on cash generation and cost management in response to current market uncertainties [13][16] - There is an emphasis on improving the structural strength of the business, particularly in the chemical and materials segments [21][22] - The company is exploring debottlenecking investments to enhance operational efficiency and profitability in its methanol system plant [30][31] Management's Comments on Operating Environment and Future Outlook - Management highlighted the chaotic nature of the current operating environment, driven by trade dynamics and consumer caution [12][14] - There is a belief that stability may return in 2026, contingent on resolving trade issues and improving economic conditions [15][16] - The management remains cautious about predicting demand due to ongoing uncertainties in the market [40][81] Other Important Information - The company is targeting additional cost cuts of $75 million to $100 million, which will be detailed in plans for the second half of the year [103] - The methanol system plant is performing well, with expectations for increased profitability as operational efficiencies are realized [30][31] Q&A Session Summary Question: Can you help us understand how representative the second half should be when thinking about trough earnings levels? - Management indicated that the second half is heavily impacted by trade situations, making it a poor measure of overall company performance [7][10] Question: How far along is the investment in the Metapasys unit, and what gives confidence in profitability? - Management discussed ongoing challenges in the chemical and materials business but expressed optimism about improving profitability through strategic investments [20][24] Question: What triggered the change in customer dialogue in July? - Management noted that the trade pause allowed customers to reassess their inventory and demand, leading to a more cautious approach [41][42] Question: Can you provide more color on the weakness in the automotive end markets? - Management confirmed that while the aftermarket performed well, the interlayer business faced challenges due to production moderation in response to tariffs [49] Question: What is the outlook for the Fibers business next year? - Management indicated that the Fibers business is facing headwinds this year but expects stabilization and potential recovery in the following year [94][100]

Financial Data and Key Metrics Changes - Rental revenue reached a quarterly record of $38.9 million, a 15% increase year-over-year and a 2% sequential increase [6][20] - Adjusted EBITDA for the quarter was $19.3 million, marking a 14% increase compared to the first quarter of the previous year and a 7% sequential increase [7][22] - Net income for the quarter was $4.9 million, or $0.38 per diluted share, compared to $5.1 million, or $0.41 per diluted share in the prior year [21] - Total revenue for Q1 2025 was $41.4 million, a 12% increase from $36.9 million in Q1 2024 [20] Business Line Data and Key Metrics Changes - Adjusted rental gross margin was 61.9%, an increase of 80 basis points year-over-year and 150 basis points sequentially [21] - Rented adjusted gross margin reached 61.9%, marking one of the highest levels achieved in the past decade [21] Market Data and Key Metrics Changes - Natural gas prices are currently hovering in the mid-threes after peaking above four, with forecasts showing potential upside due to LNG export growth and new pipeline projects [10] - The company has observed modest CapEx reductions from customers, but these have not materially impacted its business [9] Company Strategy and Development Direction - The company is focusing on three growth and value drivers: asset utilization, fleet expansion, and mergers and acquisitions [11] - There is a strong emphasis on customer diversification, with the largest customer accounting for 46% of revenue, down from 54% in the previous fiscal year [15] - The company is maintaining its growth CapEx guidance of $95 million to $120 million, heavily weighted towards the second half of the year [29] Management's Comments on Operating Environment and Future Outlook - Management remains confident in the ability to perform despite market volatility and has not seen significant changes in the demand environment [35] - The company is cautiously optimistic about the future, with ongoing discussions about growth in 2026 and a strong pipeline of contracted units [5][9] - Management is closely monitoring macroeconomic conditions and their potential impact on the business [28] Other Important Information - The company ended the quarter with $168 million outstanding on its revolving credit facility, with a leverage ratio of 2.18 times [23] - Significant progress has been made in monetizing an $11 million income tax receivable, which is expected to be collected in the near future [12] Q&A Session Summary Question: Current demand environment and volatility - Management indicated that there has not been a significant change in the demand environment, with 2025 contracts essentially locked in and ongoing discussions for 2026 growth [35] Question: Gross margins and unusual factors - Management explained that the increase in gross margins is consistent with the mix of high horsepower units and that some natural volatility is expected [38][40] Question: Plans for monetization of assets - Proceeds from monetization efforts will primarily be used to pay down debt and fund organic growth initiatives [47] Question: Impact of crude oil volatility on smaller compression providers - Management noted that while crude oil prices primarily affect large horsepower, there are modest positive trends for small horsepower driven by natural gas prices [54] Question: Lead times for engines and frames - Lead times remain unchanged, with engines taking approximately six to nine months and compressor frames taking up to twelve months [58]