Stella-Jones Announces Third Quarter Results

Continued Execution to Expand Infrastructure Offering

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 dgalison@stella-jones.com	Media Stephanie Corrente Director, Corporate Communications Tel.: (514) 934-8666 communications@stella-jones.com

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

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