The following is a summary of the Stella-Jones Inc. (STLJF) Q3 2024 Earnings Call Transcript:

Financial Performance:

• Stella-Jones reported a decrease in Q3 2024 sales to $915 million, a 4% year-over-year decline, attributed to lower volumes across all product categories.

• Despite the sales decline, Stella-Jones achieved an EBITDA margin of 17.7% for the quarter and expanded its year-to-date EBITDA margin to 18.9%.

• The company generated strong operating cash flows of $186 million in the quarter, contributing to a year-to-date total of $301 million.

Business Progress:

• Stella-Jones continues to focus on the long-term growth of its utility poles and has updated its 3-year sales target to approximately $3.6 billion by 2025.

• The company is actively pursuing acquisitions to grow its infrastructure customer base and enhance its North American distribution network.

Opportunities:

• Stella-Jones sees enduring demand for utility poles due to the need for replacing aging infrastructure and increasing grid resiliency, despite current deferrals in utility spending.

• The company has a positive outlook on the railway ties and residential lumber segments, expecting stable and increasing demand respectively.

Risks:

• The company noted a slower pace in utility pole purchases and project deferrals affecting sales momentum. Current utility capital expenditures are being impacted by inflation, supply chain constraints, and regulatory funding timing.

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