Q3 2024 Richelieu Hardware Ltd Earnings Call

Speaker Change: Good afternoon ladies and gentlemen and welcome to Richardly Hardware, third quarter results conference call. At this time, all lines are in elicit only mode. Following the presentation, we will conduct a question and answer session, which will be restricted to analysts only. If at any time during this call you require me the assistance, please press the R0 for the operator.

Speaker Change: Also note that the scholars being recorded on October 10, 2024.

Speaker Change: Hello and welcome to the 3rd and 3rd of March, the 9th of May 2021, Richard the King King King King of Israel.

Speaker Change: President of the United Kingdom is in charge of the Salman. Following the presentation, we will proceed to the question and answer, which will be expressed in the Salman's analysis.

Speaker Change: Hello and welcome to the next episode of the PN, April 7, 2020. To take note that this role is in the history of the 2012, I would like to thank you for your support. Please subscribe to the channel and share the video with your friends.

Speaker Change: Thank you. Good afternoon, ladies and gentlemen. Welcome to Richard Use for France Call for the third quarter, and first nine months ended August 31st, 2024.

Speaker Change: with me is Antoine Auclair, CFO, as usual, no, that's some of the issues and the fuller of the King Information which is provided with the usual disclaimer as the portal of the National Fireings.

Speaker Change: We are the good-tell quarter where we achieve saved growth, saved growth, and maintain a healthy and solid financial position, considering the supplement in the Arna and the New Rosemarche.

Speaker Change: Total saves gold for the quarter, which 1.9%, partially fuel by our strong performance in the US manufacturer's market where sales increase by 7.5% in US dollar.

Speaker Change: Driven by the significant impact of our conditions.

Speaker Change: As for the retailer and your beloved Superstore market, we continue to see lower sales compared to last year mainly due to the price division and lower demand in this market.

Speaker Change: or Margins continue to be under pressure from top of our refactors as it was the case in previous quarters. Notably the charge of inventory approaches at higher than current costs.

Speaker Change: Lawyers and Inqurices for certain products, and Eucriting expenses related to our expansion projects.

Speaker Change: During the quarter, we pursued our network optimization initiative by consolidating two of our new centers of our centers in the New York area and on the west coast of Florida.

Speaker Change: And now I need to go to Antoine for the financial review of the quarrel.

Antoine Auclair: Thanks Richard. In the third quarter, sales reach 477 million off 1.9%.

Antoine Auclair: This growth was driven by a positive contribution from acquisition of 3.2% partially offset by an internal decrease of 1.3%.

Antoine Auclair: In Canada, sales total 265 million down 2%. If the client was mainly due to a 3.5% internal decrease, partially upset by a 1.5% positive contribution from acquisitions.

Antoine Auclair: Sales to manufacturers amounted to 222,000, up 0.5%, while sales to hardware retailers stood at 43,000, down 13.4%.

Antoine Auclair: In the US, sales grew to $148 million in US dollar, up 4.4.8%.

Antoine Auclair: Sales to manufacturers reach $141,000,000 up 7.5%.

Antoine Auclair: In the hardware, retailers and renovations superstar market sales reach 7.1 million down 3.1 million

Antoine Auclair: In Kennedy and Dollar, Tunnel sales in the U.S. reached 203 million and increase of 7.5%.

Antoine Auclair: For the first nine months, total sales reached 1.4 billion up 1.6% of which 0.8% resulted from internal decrease, offset by 2.4% contribution from acquisitions.

Antoine Auclair: In Canada, sales reached 773 million, slightly down by 1%.

Antoine Auclair: This was driven by a 2.7% internal decrease, partially upset by 1.7% contribution from the acquisitions.

Antoine Auclair: Sales to manufacturers total 642 million up 5.3 million are 0.8%.

Antoine Auclair: Sales to hardware retailers and renovations superstores were 131 million compared to 143.9 million down 9%.

Antoine Auclair: In the US, sales amounted to 429 million in US dollar, up 4.3% with 0.9% attributable to internal growth and 3.4% from acquisitions.

Antoine Auclair: The reach 580-83 million in kidney and dollar, up to 5.3% accounting for 43% of total sales.

Antoine Auclair: Anywhere's dollar sells to manufacturers total $405 million, an increase of 23.4 million or 6.1% driven by 2.5% internal growth and 3.6% from acquisitions.

Antoine Auclair: Sales hardware retailers and renovations of our stars were down 19.7% compared to last year.

Antoine Auclair: 3.5 million, down 8 million, or 13.2% over last year.

Antoine Auclair: Gross inhibits the margin, remaining under pressure due to temporary factors, including inventories that higher than current purchasing costs, lower selling prices for certain products, primarily sourced from Asia, and the temporary impacts of consolidation and expansion initiatives.

Antoine Auclair: Consequently, David Damargen stood at 11.3% compared to 13.3 last year.

Antoine Auclair: For the first nine months, they did that to 147.2 million, down 14.2% with the AEDA margin at 10.9% compared to 12.9 last year.

Antoine Auclair: Networking is attributable to shareholders in the third quarter amounted to 22.7 million down 23.9% mainly due to amortization associated with new business acquisitions and expansion projects.

Antoine Auclair: Networking Spurshare, World 41 Sands compared to 53 last year, I think we solved 22.6%.

Antoine Auclair: For the first nine months, NETO earnings attribute a vote to shareholders, reach 61.4 million, down 26%.

Antoine Auclair: by Ltd. Ernings for shares to that one-door denying compared to $1.47 last year.

Antoine Auclair: Cash rule from operating activities before net change in uncastled capital were 42.7 million compared to 49.8 million last year.

Antoine Auclair: The Net Change and Nunk Cash Working Cap items generated cash rule of 7.5 million.

Antoine Auclair: As a result of breathing activities provided the cash inflow of 50.2 million in the quarter compared to a cash inflow of 104.8 million in 2023.

Antoine Auclair: For the first nine months cash flows from operating activities represented a cash inflow of 16.4 million compared to a cash inflow of 198 million last year.

Antoine Auclair: For the third quarter, financing activities was cash rule of 18.4 million compared to 18.2 million last year. During the quarter, we paid lease obligation of 10.5 million and distributed dividends of 8.4 million.

Antoine Auclair: For the first nine months, financing activities used cash flow of 76.1 million compared to 58 and 2023, with the various primarily attributable to common share repurchase amounted to 18.6 million this year compared to 800,000 last year.

Antoine Auclair: In the first nine months, we invested 42.2.4 million, including 17.6 million for three business acquisition, and 25.4 million primarily for investment related to our consolidation and expansion projects, including our new Calgary location, and the purchase of equipment to maintain an improved operational efficiency.

Antoine Auclair: We continue to maintain a solid financial position with 14632 million in a current ratio of 3.1 to 1 while we'll be almost no that.

Speaker Change: I now turn it over to Richard.

Richard: Thank you, Antoine We are pursuing our coalition strategy as we sign agreement in principle in the third quarter in view of view in view of four new acquisitions, two in Canada and two the US.

Richard: We feel confident about achieving good future performances considering that the current or the incorporation in Latin America is offering a great potential of growth of the sugar, and that the R&R market is expected to recover in the coming months. We are committed to seize these opportunities.

Richard: We benefit from a strong pollutioning with a robust network, unmatched offering, exporting, or sending website, a distinct service appreciated by customers in our diversified assignments.

Richard: And we have a solid innovative drive in all the growth sector of residential and commercial innovation. Thanks everyone. We'll now be happy to answer your questions.

Speaker Change: Thank you, Mercic.

Speaker Change: Ladies and gentlemen, if you are an analyst and would like to ask a question, you will have to press star followed by one on your touchstone phone.

Speaker Change: You will then hear a prompt that your hand has been raised, and if you would like to decline from the polling process, please press star followed by two. And if you're using a speakerphone, you will need to lift the hands at first before pressing any keys.

Speaker Change: Please go ahead and start one now if you have any questions.

Speaker Change: and your first question will be from hermate Patel at CIBC Capital Market. Please go ahead.

hermate Patel: Hi, yeah, good afternoon.

hermate Patel: Richard, if you're successful in completing those four acquisitions, would you expect that to be completed in the fourth fiscal quarter and what would be the total revenues associated with the four deals?

Speaker Change: Yes, it would be to be settled before the end of the third quarter and at one just to have the precise number of the end of the fourth quarter or slightly after that but definitely in 2024 and we're talking about hiding 40 million to the 60 million that we've already completed at the beginning of the year.

Speaker Change: Okay, great. Thanks. Thanks. And that would that be largely on the manufacturer's side.

Speaker Change: Yes.

Speaker Change: Okay.

Speaker Change: and Richard, you're able to do an indication of how sales spared in the month of September.

Speaker Change: Yes, there were some timers, as we already had this course in England, that's been things in the country of basically the mother of timers has been in the same trend that we've seen in the past.

Speaker Change: and we see the trend, for example, over the country, the multicultural to be a sliding increase in this market, the commercial that we're working in, is doing well with that increase of 6%.

Speaker Change: and we have other specialized market, which is anything else, an increase of 1% and all the other market have a slight decrease of something like a 2.5 to 3%. So basically, we don't say any sign of recovery yet, but we should shorten that in the coming months, the market will certainly improve, and Richard Lord is now working with this thing to make it a budget for the next year. And many of our people are very positive about what will happen in the market, we just...

Speaker Change: We just hope that this thing will materialize but there is no doubt in our mind the market will have to improve. The question is only when.

Speaker Change: Fair enough and Richard I don't the margins kind of trough to keep on yet

Speaker Change: Implement in Q2 and Q3, how do we think about just giving...

Speaker Change: Sounds like near-term things are still a bit sluggish. Would you expect?

Speaker Change: Any Margin Improvement in Q4.

Speaker Change: and how do you think about maybe where fully your margins could go in 25?

Speaker Change: Yeah, it's Antoine's slight improvement to change the margin materially. We would need to see a recovery in the market. So we're in distribution, so top line addition and sales goes down the bottom line very quickly. Same thing if there's a play, there's a reduction in sales, but in a better market, you will see the margin improving. If not, there are a expansion projects, and those projects we have ongoing. So this will improve the EBITDA, but not materially if the margin, if the market does not recover.

Speaker Change: Okay, I'm fair enough, but I'll play it for now, I'll get back in the queue.

Speaker Change: Thank you. Next question will be from Zachary Everschit at National Bank Financial. Please go ahead.

Speaker Change: Good afternoon everyone and thanks for taking my questions.

Zachary Everschit: How consistently, how consistently do you think you've been adding $100 million dollars in?

Zachary Everschit: Run Rate Revenue Through Acquisition.

Zachary Everschit: It's, do you think that's an average target or an annual minimum glyph?

Zachary Everschit: in forward.

Speaker Change: and good color thanks.

Speaker Change: and then the U.S. customer lost in.

Speaker Change: and Q2 has going on back selling those volumes.

Speaker Change: We were getting some sales from other customers, just to explain that it was low, we were supplying them with injuries and slide with the issues and bloom names. For example, have this decided to add their own grand names and putting them from China.

Speaker Change: I don't think it's a good move for them because the people when they replace the engines or slides into the kitchen cabinet, it's already printed bloom of Richard Lord on to the slide because we both together, I think we have something like it is in the center of the market.

Speaker Change: So, but the decision we have to respect that and we have to find says in other customers which we're doing with customers like factors to apply for example that we have a good commitment from them and we're going to see our sales increasing for the next in the next quarter of the world Basically, we should get that business back from other customers and and we have to show more to the retailer market in the US We have to refine our plan. We have to we would like to make an acquisition in this packet as well Eventually that will happen

Speaker Change: And understood thanks and on the top of Bloom you mentioned that they were pushing for it.

Speaker Change: Price High Class Quarter, how well is that flowing through so far and are you seeing?

Speaker Change: Dean, others suppliers start to follow suit.

Speaker Change: and I understood, thanks, then just the last one for me. When do you think we start to get out from under the modernization and expansion costs?

Speaker Change: I would say early in the early next year, Doug.

Speaker Change: That's it for me, thanks a whole hundred o'er.

Speaker Change: Building.

Speaker Change: Once again, ladies and gentlemen, if you're an alumnus, and would like to ask a question, please press star follow by one.

Speaker Change: and at the time of Shilal we have no other questions registered, please proceed.

Speaker Change: I hope you have a good time everyone, who will be happy to answer your question.

Speaker Change: Hello.

Operator: Hello, Mr. Law. Yes.

Speaker Change: Hello

Mr. Law: We have no other questions at this time, sir. Sorry, no, that's fine, and thanks.

Operator: Thanks a lot for attending, and if you have any questions, you can give us a call.

Unnamed Speaker: I have to have a guy that received a phone call. So I had to answer him immediately. It took ten seconds, but the timing wasn't good for you. So I apologize yet.

Unnamed Speaker: Thank you, gentlemen.

Operator: Ladies and gentlemen, ladies and gentlemen, this does conclude your conference call for today. Once again, thank you for attending, and at this time we do ask that you please disconnect your lines.