Stella-Jones Announces Third Quarter Results

Sales of $958 million, up 5% from Q3 2024 Operating income of $135 million, up 4% from Q3 2024 EBITDA(1) of $171 million, or 17.8% margin(1), up 6% from Q3 2024 Available liquidity of almost $800 million Normal Course Issuer Bid announced for 2025-2026 Post-quarter acquisition of Brooks, a crossarm manufacturer MONTREAL, Nov. 05, 2025 (GLOBE NEWSWIRE) -- Stella-Jones Inc. (TSX: SJ) (“Stella-Jones” or the “Company”) today announced financial results for its third quarter ended September 30, 2025. “Stella-Jones achieved another solid performance in the third quarter, supported by volume improvements, robust margins, improved cash flow and a strong balance sheet,” said Eric Vachon, President and Chief Executive Officer of Stella-Jones. “Our team’s unwavering focus on supporting our customers has been critical in driving consistent results. We remain confident in the long-term growth trajectory of our core businesses and in our continued ability to deliver strong profitability.” “Alongside our resilient performance, we advanced our growth strategy with the acquisition of Brooks. This investment aligns with our strategic priorities—broadening our portfolio of solutions, strengthening our position in the utility sector, and creating a more robust platform to capture rising demand and accelerate future growth. We remain well-capitalized to continue investing in our business and seize emerging opportunities that support long-term growth,” he concluded. Financial Highlights (in millions of Canadian dollars, except ratios and per share data) Three-month periods ended September 30, Nine-month periods ended September 30, 2025   2024   2025   2024   Sales 958   915   2,765   2,739   Gross profit(1) 188   188   562   586   Gross profit margin(1) 19.6%   20.5%   20.3%   21.4%   Operating income 135   130   433   422   Operating income margin(1) 14.1%   14.2%   15.7%   15.4%   EBITDA(1) 171   162   539   518   EBITDA margin(1) 17.8%   17.7%   19.5%   18.9%   Net income 88   80   287   267   Earnings per share (“EPS”) - basic & diluted 1.59   1.42   5.17   4.72     As at September 30, 2025 December 31, 2024 Net debt-to-EBITDA(1) 2.2x 2.6x           (1) These indicated terms have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. For more information, please refer to the section entitled “Non-GAAP and Other Financial Measures” of this press release for an explanation of the non-GAAP and other financial measures used and presented by the Company and a reconciliation of non-GAAP financial measures to the most directly comparable GAAP measures.   Third Quarter Results Sales for the third quarter of 2025 were $958 million, up $43 million, versus sales of $915 million for the corresponding period last year. Excluding the contribution from the acquisition of Locweld inc. (“Locweld”) of $22 million and the currency conversion of six million dollars, pressure-treated wood sales increased by $29 million, or 3%. The increase in pressure-treated wood sales resulted from an increase in utility poles and industrial products volumes and higher pricing for railway ties and residential lumber. This was partially offset by lower pricing for utility poles. Logs and lumber sales decreased by $14 million or 47%, mainly driven by lower logs activity. Pressure-treated wood products: Utility poles (50% of Q3-25 sales): Utility poles sales increased to $480 million in the third quarter of 2025, compared to sales of $448 million in the corresponding period last year. Excluding the contribution from the acquisition of Locweld and the currency conversion effect, utility poles sales increased by six million dollars, or 1% versus the same period last year. The increase resulted from a mid single-digit volume growth, mostly driven by newly secured contractual commitments, offset in part by lower spot market pricing when compared to the same period last year. Railway ties (22% of Q3-25 sales): Railway ties sales increased by six million dollars to $211 million in the third quarter of 2025, compared to sales of $205 million in the same period last year. Excluding the currency conversion effect, sales of railway ties increased by four million dollars, or 2%, all attributable to an improvement in sales price. Volumes in the quarter were relatively stable compared to the same period last year as lower sales volumes for Class 1 customers, resulting from a Class 1 railroad’s shift to treating railway ties in-house, were largely offset by higher non-Class 1 volumes. Residential lumber (21% of Q3-25 sales): Sales in residential lumber increased to $201 million in the third quarter of 2025, compared to sales of $191 million in the corresponding period last year. While demand remained relatively unchanged, when compared to the same period last year, the increase was driven by higher pricing. Even as the market softened, current year pricing remained relatively stable, supported by the higher average cost of inventory procured earlier in the year. Industrial products (5% of Q3-25 sales): Industrial products sales increased by nine million dollars to $50 million in the third quarter of 2025, compared to $41 million in the corresponding period last year, driven by higher project-driven demand. Logs and lumber: Logs and lumber (2% of Q3-25 sales): Sales in the logs and lumber product category were $16 million in the third quarter of 2025, compared to $30 million in the corresponding period last year. The decrease in sales compared to the third quarter of 2024 was largely attributable to lower log activity. Gross profit remained stable at $188 million, representing a margin of 19.6% in the third quarter of 2025 and 20.5% in the corresponding period last year. Gross profit in the third quarter of 2025 benefited from increased volumes, but the positive impact was offset by lower pricing, particularly for utility poles, and increased input costs. Led by higher volumes, operating income increased by five million dollars to $135 million in the third quarter of 2025, compared to $130 million in the third quarter last year. Similarly, EBITDA increased by nine million dollars to $171 million and EBITDA margin remained strong at 17.8% versus 17.7% in the third quarter of last year. Net income for the third quarter of 2025 was $88 million, or $1.59 per share, versus net income of $80 million, or $1.42 per share, in the corresponding period of 2024. Nine-month Results For the first nine months of 2025, sales amounted to $2,765 million, versus $2,739 million for the corresponding period last year. Excluding the contribution from the Locweld acquisition of $40 million and the currency conversion of $53 million, pressure-treated wood sales decreased by $50 million, or 2%, mostly due to lower railway ties volumes. The decrease in logs and lumber sales compared to the corresponding period last year was largely attributable to less logs and lumber activity. Gross profit amounted to $562 million, or 20.3%, compared to $586 million, or 21.4% of sales, in the corresponding period last year. Operating income amounted to $433 million, versus $422 million a year ago, while EBITDA was $539 million, representing a margin of 19.5%, compared to $518 million, or a margin of 18.9% in the corresponding period last year. The insurance settlement gain recorded in the first nine months of 2025 increased EBITDA by $28 million and EBITDA margin by 1%. Net income in the first nine months of 2025 was $287 million, or $5.17 per share, which included the pre-tax gain on insurance settlement of $28 million. This compares to net income of $267 million, or $4.72 per share, in the same period last year. Liquidity and Capital Resources During the third quarter ended September 30, 2025, cash generated from operations of $198 million was used to invest in capital expenditures of $19 million, return $37 million to shareholders, through dividends and share repurchases, and reduce debt by $112 million. During the nine-month period ended September 30, 2025, 742,634 of the Company’s common shares were repurchased for cancellation in consideration of $55 million. Since the beginning of the Normal Course Issuer Bid (“NCIB”) on November 14, 2024, the Company repurchased a total of 883,133 common shares for cancellation in consideration of $65 million. As at September 30, 2025, the Company continued to maintain a solid financial position. It had available liquidity of $780 million and its net debt-to-EBITDA stood at 2.2x. Acquisition of Brooks Manufacturing Co. On September 30, 2025, the Company entered into a definitive agreement to acquire the assets of Brooks Manufacturing Co. (“Brooks”), a manufacturer of treated wood distribution crossarms and transmission framing components located in the United States, for approximately US$140 million plus customary working capital adjustments. The U.S. antitrust premerger notification waiting period requirements have been satisfied with respect to this transaction and the Company completed the acquisition on November 5, 2025. Announcement of Normal Course Issuer Bid On November 4, 2025, the TSX accepted the Company’s Notice of Intention to Make a NCIB to purchase for cancellation up to 1,500,000 common shares during the 12-month period from November 14, 2025 to November 13, 2026, representing approximately 2.7% of the common shares outstanding. Quarterly Dividend On November 4, 2025, the Board of Directors declared a quarterly dividend of $0.31 per common share payable on December 19, 2025 to shareholders of record at the close of business on December 1, 2025. This dividend is designated to be an eligible dividend. Conference Call Stella-Jones will hold a conference call to discuss these results on November 5, 2025, at 10:00 a.m. Eastern Standard Time (“EST”). Interested parties can join the call by dialing 1-800 990 2777 (Conference ID 43065). A live audio webcast of the conference call will be available on the Company’s website, on the Investor relations section’s home page or here: https://meetings.lumiconnect.com/400-700-172-835. This recording will be available on Wednesday, November 5, 2025, as of 1:00 p.m. EST until 11:59 p.m. EST on Wednesday, November 12, 2025. About Stella-Jones Stella-Jones Inc. (TSX: SJ) is a leading North American manufacturer of products focused on supporting infrastructure that are essential to the delivery of electrical distribution and transmission, and the operation and maintenance of railway transportation systems. It supplies the continent’s major electrical utilities companies with treated wood and steel utility poles and steel lattice towers, as well as North America’s Class 1, short line and commercial railroad operators with treated wood railway ties and timbers. It also supports infrastructure with industrial products, namely timbers for railway bridges, crossings and construction, marine and foundation pilings, and coal tar-based products. Additionally, the Company manufactures and distributes premium treated residential lumber and accessories to Canadian and American retailers for outdoor applications, with a significant portion of the business devoted to servicing Canadian customers through its national manufacturing and distribution network. Caution Regarding Forward-Looking Information Except for historical information provided herein, this press release may contain information and statements of a forward-looking nature concerning the future performance of the Company. These statements are based on suppositions and uncertainties as well as on management's best possible evaluation of future events. Such items include, among others: general political, economic and business conditions, evolution in customer demand for the Company's products and services, product selling prices, availability and cost of raw materials, operational disruption, climate change, failure to recruit and retain qualified workforce, information security breaches or other cyber-security threats, changes in foreign currency rates, the ability of the Company to raise capital, regulatory and environmental compliance and factors and assumptions referenced herein and in the Company’s continuous disclosure filings. As a result, readers are advised that actual results may differ from expected results. Unless required to do so under applicable securities legislation, the Company does not assume any obligation to update or revise forward-looking statements to reflect new information, future events or other changes after the date hereof. Note to readers: Condensed interim unaudited consolidated financial statements for the third quarter ended September 30, 2025 as well as management’s discussion and analysis are available on Stella-Jones’ website at www.stella-jones.com. Contact Investor Relations David Galison Vice-President, Investor Relations Tel.: (647) 618-2709 [email protected] Media Stephanie Corrente Director, Corporate Communications Tel.: (514) 934-8666 [email protected]     Stella-Jones – Head Office 3100 de la Côte-Vertu Blvd., # 300 Saint-Laurent, Québec H4R 2J8 Tel.: (514) 934-8666   Stella-Jones Inc. Condensed Interim Consolidated Statements of Income (Unaudited)         (in millions of Canadian dollars, except earnings per common share)           For the three-month periods ended September 30,   For the nine-month periods ended September 30,   2025   2024   2025   2024             Sales 958   915   2,765   2,739             Expenses                       Cost of sales (including depreciation and amortization (3 770   727   2,203   2,153 months - $32 (2024 - $29) and 9 months - $95 (2024 -               $85))               Selling and administrative (including depreciation and               amortization (3 months - $4 (2024 - $3) and 9 months                - $11 (2024 - $11)) 51   53   156   156 Other losses, net 2   5   1   8 Gain on insurance settlement —   —   (28 ) —   823   785   2,332   2,317             Operating income 135   130   433   422             Financial expenses 18   23   52   65             Income before income taxes 117   107   381   357             Income tax expense           Current 32   24   85   84 Deferred (3 ) 3   9   6   29   27   94   90             Net income 88   80   287   267             Basic and diluted earnings per common share 1.59   1.42   5.17   4.72 Stella-Jones Inc. Condensed Interim Consolidated Statements of Financial Position (Unaudited)       (in millions of Canadian dollars)         As at As at   September 30, 2025 December 31, 2024 Assets     Current assets     Cash and cash equivalents 69 50 Accounts receivable 398 277 Inventories 1,563 1,759 Income taxes receivable 7 11 Other current assets 51 42   2,088 2,139 Non-current assets     Property, plant and equipment 1,084 1,048 Right-of-use assets 296 311 Intangible assets 168 170 Goodwill 394 406 Derivative financial instruments 12 21 Other non-current assets 6 8   4,048 4,103 Liabilities and Shareholders’ Equity     Current liabilities     Accounts payable and accrued liabilities 172 180 Income taxes payable 3 — Deferred revenue — 17 Current portion of long-term debt 24 1 Current portion of lease liabilities 62 64 Current portion of provisions and other long-term liabilities 27 24   288 286 Non-current liabilities     Long-term debt 1,198 1,379 Lease liabilities 247 259 Deferred income taxes 207 197 Provisions and other long-term liabilities 36 37 Employee future benefits 4 4   1,980 2,162 Shareholders’ equity     Capital stock 188 188 Contributed surplus 4 — Retained earnings 1,680 1,498 Accumulated other comprehensive income 196 255   2,068 1,941   4,048 4,103 Stella-Jones Inc. Condensed Interim Consolidated Statements of Cash Flows (Unaudited)         (in millions of Canadian dollars)           For the three-month periods ended September 30,   For the nine-month periods ended September 30,   2025   2024     2025   2024   Cash flows from (used in)           Operating activities           Net income 88   80     287   267   Adjustments for           Depreciation of property, plant and equipment 14   11     41   34   Depreciation of right-of-use assets 17   17     51   49   Amortization of intangible assets 5   4     14   13   Financial expenses 18   23     52   65   Income tax expense 29   27     94   90   Gain on insurance settlement —   —     (28 ) —   Other —   5     (10 ) 5     171   167     501   523   Changes in non-cash working capital components           Accounts receivable 14   70     (111 ) (68 ) Inventories 71   27     172   (14 ) Other current assets (1 ) —     (5 ) (6 ) Accounts payable and accrued liabilities (4 ) (34 )   (15 ) (13 )   80   63     41   (101 ) Interest paid (23 ) (25 )   (57 ) (67 ) Income taxes paid (30 ) (19 )   (79 ) (54 )   198   186     406   301   Financing activities           Net change in revolving credit facilities (64 ) (83 )   14   (117 ) Proceeds from long-term debt —   —     —   168   Repayment of long-term debt (48 ) (1 )   (143 ) (103 ) Repayment of lease liabilities (16 ) (16 )   (49 ) (46 ) Dividends on common shares (17 ) (15 )   (51 ) (47 ) Repurchase of common shares (20 ) (30 )   (55 ) (65 ) Other 1   1     1   1     (164 ) (144 )   (283 ) (209 ) Investing activities           Business combinations (10 ) (4 )   (58 ) (4 ) Purchase of property, plant and equipment (19 ) (35 )   (73 ) (91 ) Property insurance proceeds —   —     26   10   Additions of intangible assets (2 ) (3 )   (6 ) (7 ) Other 1   —     7   —     (30 ) (42 )   (104 ) (92 ) Net change in cash and cash equivalents during the period 4   —     19   —   Cash and cash equivalents – Beginning of period 65   —     50   —   Cash and cash equivalents – End of period 69   —     69   —                       Non-GAAP and Other Financial Measures This section includes information required by National Instrument 52-112 – Non-GAAP and Other Financial Measures Disclosure in respect of “specified financial measures” (as defined therein). The below-described non-GAAP financial measures, non-GAAP ratios and other financial measures have no standardized meaning under GAAP and are not likely to be comparable to similar measures presented by other issuers. The Company’s method of calculating these measures may differ from the methods used by others, and, accordingly, the definition of these measures may not be comparable to similar measures presented by other issuers. In addition, non-GAAP financial measures, non-GAAP ratios and other financial measures should not be viewed as a substitute for the related financial information prepared in accordance with GAAP. Non-GAAP financial measures include: Organic sales growth: Sales of a given period compared to sales of the comparative period, excluding the effect of acquisitions and foreign currency changes Gross profit: Sales less cost of sales EBITDA: Operating income before depreciation of property, plant and equipment, depreciation of right-of-use assets and amortization of intangible assets (also referred to as earnings before interest, taxes, depreciation and amortization) Net debt: Sum of long-term debt and lease liabilities (including the current portion) less cash and cash equivalents Non-GAAP ratios include: Organic sales growth percentage: Organic sales growth divided by sales for the corresponding period Gross profit margin: Gross profit divided by sales for the corresponding period EBITDA margin: EBITDA divided by sales for the corresponding period Net debt-to-EBITDA: Net debt divided by trailing 12-month (“TTM”) EBITDA Other financial measures include: Operating income margin: Operating income divided by sales for the corresponding period Management considers these non-GAAP and specified financial measures to be useful information to assist knowledgeable investors to understand the Company’s financial position, operating results and cash flows as they provide a supplemental measure of its performance. Management uses non-GAAP and other financial measures in order to facilitate operating and financial performance comparisons from period to period, to prepare annual budgets, to assess the Company’s ability to meet future debt service, capital expenditure and working capital requirements, and to evaluate senior management’s performance. More specifically: Organic sales growth and organic sales growth percentage: The Company uses these measures to analyze the level of activity excluding the effect of acquisitions and the impact of foreign exchange fluctuations, in order to facilitate period-to-period comparisons. Management believes these measures are used by investors and analysts to evaluate the Company's performance. Gross profit and gross profit margin: The Company uses these financial measures to evaluate its ongoing operational performance. EBITDA and EBITDA margin: The Company believes these measures provide investors with useful information because they are common industry measures used by investors and analysts to measure a company’s ability to service debt and to meet other payment obligations, or as a common valuation measurement. These measures are also key metrics of the Company's operational and financial performance and are used to evaluate senior management’s performance. Net debt and net debt-to-EBITDA: The Company believes these measures are indicators of the financial leverage of the Company. The following tables present the reconciliations of non-GAAP financial measures to their most comparable GAAP measures. Reconciliation of Operating Income to EBITDA (in millions of dollars) Three-month periods ended September 30, Nine-month periods ended September 30,   2025 2024 2025 2024 Operating income 135 130 433 422 Depreciation and amortization 36 32 106 96 EBITDA 171 162 539 518 Reconciliation of Long-Term Debt to Net Debt (in millions of dollars) As at September 30, 2025 As at December 31, 2024 Long-term debt, including current portion 1,222 1,380 Add:     Lease liabilities, including current portion 309 323 Less:     Cash and cash equivalents 69 50 Net Debt 1,462 1,653 EBITDA (TTM) 654 633 Net Debt-to-EBITDA 2.2x 2.6x