Good afternoon, ladies and gentlemen, welcome to Richelieu Hardware third quarter results conference call. At this time, all lines are in a listen-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 needed assistance, please press star 0 for the operator. Note that this call is being recorded on October 7th, 2021. [Non-English content]. [Non-English content]. Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richelieu's conference call for the third quarter and nine-month period ended August 31st, 2021. With me is Antoine Auclair, CFO. As usual, note that some of today's issues include forward-looking information, which is provided with the usual disclaimer, as reported in our financial filings. In nine previous period this year, we had a strong third quarter, and our first nine months show solid growth. In Q3, sales grew to CAD 273 million, a 20% increase, EBITDA margin reached 17.1%. Our total sales were over CAD 1 billion, EBITDA reached CAD 163 million. We have made every effort to provide our customers with the most effective support, especially in this challenging environment. Our business model is very supportive in challenging situations. We are supported by highly efficient logistics, well adapted to our customer needs, our multi-channel approach, and our one-stop shop and interconnected North American network. All this provides our customers with quick and easy access to our products. With our focus on maintaining right inventories and our continuous innovation strategy, we have been able to offer our customers a unique diversity of products, including many alternatives in a wide variety of categories. Furthermore, thanks to our website, our customers can configure many product specifications according to specific needs, which is also very valuable in the circumstances. Our manufacturers market performed very well and drove growth in the quarter with internal sales up 23.9%. In Canada, a considerable growth of 35.3% in the U.S. Meanwhile, hardware retailers and renovation superstores are now normalized to the pre-pandemic business level. This strong performance was reflected in our EBITDA margin and net earnings, and we ended the first nine months with a further strengthened financial position. We remained focused on our acquisition strategy, which is a key component to our short and long-term growth strategy. We closed two acquisitions in the Q3, Uscan Industrial Fasteners and ENCOCO Division 10, as previously announced, followed by two more after the quarter, Cook Fasteners, a screw and bolt distributor operating one distribution center in Mississauga, Ontario, serving industrial markets customer. Industrial Plywood, a panel distributor operating two centers in Reading and Lewistown in Pennsylvania. Far this year, we completed five acquisitions that will be adding CAD 75 million of potential annual sales. In addition, we have opened two additional distribution centers in the U.S. since the beginning of the year. One in Rochester, Upstate N.Y., which is our fifth center in the state. During the third quarter, we added one in Reading, Pennsylvania, taking our network to 97 strategically located locations. Now turn to Antoine for the financial review for the period. Thanks, Richard. Q3 sales reached CAD 373.3 million, up by 20%, of which 14.1% from internal growth and 5.9% from acquisitions. At comparable exchange rates to last year, sales increase would have been 23.2%. In Canada, sales amounted to CAD 246.2 million, up by 21.2%, of which 12.9% from internal growth and 8.4% from acquisitions. Our sales to manufacturers reached CAD 205.3 million, up by 32.5%, of which 23.9% from internal growth and 8.6% from acquisitions. As for the hardware retailers, sales stood at CAD 40.9 million, down 14.8%, returning to pre-pandemic business level. In the U.S., sales grew to $102.1 million, up 26.7%, 25.3% from internal growth and 1.4% from acquisitions. Sales to manufacturers reached $91 million, up 36.7%, 35.3% from internal growth and 1.4% from acquisitions. The hardware retailers and renovation superstores market, sales were down 21.6%. Total sales in the U.S. reached CAD 127.1 million, an increase of 17.5% and representing 34% of total sales. For the first nine months, sales reached CAD 1.042 billion, up 28.9%, of which 25.1% from internal growth and 3.8% from acquisitions. In Canada, sales reached CAD 687.5 million, up by CAD 172.6 million or 33.5%, of which 29% from internal growth and 4.5% from acquisitions. Sales to manufacturers reached CAD 562.6 million, up by CAD 155.1 million or 38.1%. Sales to hardware retailers and renovation superstores reached CAD 124.9 million compared to CAD 107.4 million, up 16.3%. In the U.S., sales amounted to $283.4 million, up 30.4%, of which 27.6% from internal growth and 2.8% from acquisition. They reached CAD 354.8 million, up by 20.7%, accounting for 34% of total sales. Sales to manufacturers totaled CAD 247.3 million, an increase of CAD 63 million or 34.2%, of which 30.9% from internal growth and 3.2% from acquisitions. Sales to hardware retailers and renovation superstores were up 9.4% compared to last year. Third quarter EBITDA reached CAD 63.9 million, up CAD 14.9 million or 30.3% over last year, resulting from significant increase in sales and continued control on expenses. Gross margin also improved and the EBITDA margin stood at 17.1% compared to 15.8% last year. For the first nine months, EBITDA reached CAD 163.1 million, up 51.3%. As for the EBITDA margin, it stood at 15.6% compared to 13.3% last year. Q3 net earnings attributable to shareholders totaled CAD 38.7 million, up 35.2%. Net earnings per share were CAD 69 basic and diluted compared to CAD 51 basic and CAD 50 diluted last year, an increase of 35.3% and 38% respectively. For the first nine months, net earnings attributable to shareholders reached CAD 97.2 million, up 67.1%. Diluted net earnings per share stood at CAD 1.72 compared to CAD 1.03, up 67%. Third quarter cash flow from operating activities before net change in non-cash working cap amounted to CAD 48.6 million or CAD 0.86 per share, an increase of 27.7%, resulting primarily from the net earnings growth. Net change in non-cash working capital used cash flow of CAD 14.9 million, in part due to increased inventories resulting from higher demand and to a lesser extent, cost of products. For the first nine months, they were up 47.3%, totaling CAD 125 million or CAD 2.22 per share. For the Q3 of 2021, financing activities used cash flow of CAD 17.3 million compared to CAD 9.2 million last year. Dividends paid to shareholders of the corporation amounted to CAD 3.9 million compared to CAD 2.8 million in the same period of 2020. We also repurchased common share for an amount of CAD 9.8 million. For the first nine months, financing activities used cash flow of CAD 39.6 million compared to CAD 19.9 million in 2020. Dividends paid to shareholders amounted to CAD 15.5 million compared to CAD 7.5 million last year. The first quarter of 2021, a special dividend of CAD 0.0667 per share was paid in addition to a quarterly dividend of CAD 0.07 per share. We also repurchased common share for a total amount of CAD 13.1 million in the first nine months of 2021, while no share repurchased in 2020. During the Q3, we invested CAD 39.6 million and CAD 56.3 million in the first nine months, of which CAD 44.2 million for the business acquisition and CAD 12.1 million primarily for the purchase of equipment to maintain and improve operational efficiency, as well as further investment in IT infrastructure. We continue to benefit from a healthy and solid financial position. Cash balance of CAD 66.7 million, almost no debt, a working capital of CAD 416.9 million for a current ratio of 3.3:1, and an average return on equity of 21.2%. I now turn it over to Richard. Thank you, Antoine. In conclusion, we will continue to provide the best possible support to our North American customers by relying on our value-added multi-channel service and all the strengths that have contributed to the Richelieu leadership. As mentioned last quarter, we have ongoing expansion projects at some of our U.S. centers, such as Detroit, Dallas, Orlando, Austin, Atlanta, in anticipation of future growth in the U.S. and in order to better meet demand and provide the best service possible. We will continue to efficiently integrate our recent acquisition while developing potential synergies. We will seize new acquisition opportunities as long as they are consistent with our objectives. Maintaining strict cost control and making optimal use of our resources also remains a priority. We are confident that we will close this year with strong results, maintaining our successful strategies. Thanks, everyone. We'll now be happy to answer your questions. Thank you. Merci. Ladies and gentlemen, as stated, we will take questions from analysts only. Your first question will be from Hamir Patel at CIBC Capital Markets. Please go ahead. Hi, good afternoon. Hello. Richard, could you give us a sense as to how your sales fared in the month of September for manufacturers and retailers? As mentioned earlier, the sales of retailers are down because they normalize. They're getting more close to the pre-pandemic sales volume, and so which is normal in the circumstances, which is being confirmed at the point of sales report that we have from our main customers. Regarding the manufacturer sales are very strong. It continues to be very strong. What we hear from our sales force actually, is that our customers are still very busy and should continue to be busy for a few quarters because actually some projects have been postponed because of inflation, while many projects are still going on. Those projects that are postponed should take place after we will see more normal pricing. What we read also is that both in Canada and the U.S., the consumers have some money at the bank, and I think it is a smart way to spend their money in investing in the kitchen cabinet, the closet, and the project that our customers, the Richelieu customers can undertake. Thanks, Richard. That's helpful. I want to ask about supply chain, I guess two ways. It sounds like you're not seeing the supply chain issues that we're seeing globally affecting demand, at least from the manufacturer side. Could you comment on how it's affected your own ability to source product, and has that changed the geographic mix of where you're bringing product from? Maybe if you could just remind us what that mix is today. The good news actually, you see while looking at our financial statement that our inventory is increasing. That's good news. That means that we can get more products coming in. Actually, I think the business, the Richelieu business model as mentioned at the beginning of the speech, is very strong, consisting of omnichannel, many ways for the customers to reach customers through the web. A quick connection with our sales rep, which are usually on the road. They're not on the road now, but they might be sitting at home because of the COVID. They answer Inside one minute, they can answer a call, whatever the customer has punched a button on the website or give a phone call. We also have a lot of people supporting our customers over the phone. Now all these people, they are product specialists. If customers have one difficulty is acquiring one product, let's say that one product is not available, our people will suggest to our customers an alternative product that will do exactly the same job. Because one of the strength of Richelieu is to have a plan A, B, and C, and sometimes D in terms of all the products that we sell. That gives many opportunities to our customers. Also all our warehouses are connected together, and we have what we call here an open bar policy actually to our customers. Wherever you are situated in North America, you need a product, the product is going to come from wherever the product is available to you at our own expense. This results in strong increase in sales and bottom line, as you can see. We're quite proud with that strategy, and we're also quite proud of the specialized team that we have and the quick response that we can give to our customers whatever the question is or the problem is. Richard, on that note, in the past, I think you'd previously sort of said 20% of the products come from Asia. Is that still a good number, or is that a lower number now just given some of the logistics issues? In terms of dollar, that's still a good number. Yeah. 20 Asia, 20 Europe, and 60 North America, and yeah. Okay, perfect. Thanks, Antoine. Just a last question from me. Antoine, as you start to plan for 2022, are there any larger capital projects that are worth noting? Not as we speak. Of course, we have ongoing expansion projects like we discussed in the last quarter, but we're not talking about material investments. As we speak, no, it's going to be mainly maintenance CapEx next year for now. If there's something else, I will tell you. Great. Thanks. That's all I had. I'll turn it over. Thanks. Thank you. Next question will be from Meaghan Annett at TD Securities. Please go ahead. Thank you. Good afternoon. Just looking at the EBITDA margin, very strong again this quarter. Can you just give some color maybe around the cost containment initiatives that might be contributing to that performance? Are there any costs you anticipate to maybe come back as we hopefully continue to manage through the pandemic, things like travel? Is there any color you can give us around your margin expectation for Q4? Yeah. The main contributor for the EBITDA, Meaghan, is definitely the sales volume. That's the main factor. We're still very rigid in terms of cost control, that's for sure. Yes, there's a certain portion of those costs that should come back Over time, like you just said, the travel and living expenses were still very rigid on those. It will come back. It will not come back at the same level of 2019, but some of these costs will come back. You might see a bit of pressure on the operation expenses, but nothing major there. When we're going to be coming back to a pre-pandemic level, the EBITDA could be anywhere between 13.5%-14%, something around that, 13.5%-14%. Okay, great. Thank you. Then just looking at the inventory position, it was a pretty sizable increase there. Can you maybe just talk about the rationale for the magnitude of the increase and just how you plan to manage that, assuming we continue to see sales at retail tapering off? With the pressure we have on the service level, for sure that we were expecting the inventory to increase. There's also the impact of the acquisitions as well. Those acquisition doesn't come without inventory, they increase the inventory levels. Also, the cost increase have an impact. Three major elements of volume, acquisition, and cost increase. Just to mention also that we're slowing down the purchase for the inventory for the retailers, but that only accounts for 18% of our sales. Many of the product that we sell to retailers, we also sell to the manufacturing side of the business. That will not be a very big material reduction of the inventory because of the retailers. Thank you. That's it for me. Thank you. As a reminder, ladies and gentlemen, if you are an analyst and would like to ask a question, please press star followed by one on your touch-tone phone. Your next question will be from Zachary Evershed at National Bank Financial. Good afternoon. Thanks for taking my question. Yeah. How long of a tail do you see on the professional market before it also pulls back to pre-pandemic levels? You mentioned a few quarters, given the cost inflation we've seen postponing some projects. Do you have a number in mind? Will it ever come back to the pre-pandemic level? We don't know, but we see Richelieu's market share increasing. I'm quite proud to mention, actually, that our sales growth in Canada is 25%, it's 35% in U.S. dollars in the U.S. That means that we're capturing more market share and we also, actually, we gain many new customers. We don't refuse, let's say, but we bill some customer actually, that would like to join us, that currently would like to join us. We have to tell them, "Give us some more time to establish the right level of inventory, and we will back to you in three months or four months from now." I think the pandemic actually has been a springboard for Richelieu in order to gain new customers and increase its sales to the current customers. This is very positive. We also have the acquisition, as a matter of fact. If we come back to the essence of your question, actually, we expect the current quarter to be as strong as the one that you have just seen. The first quarter of this year, if you remember well, the growth was not that outstanding in the first quarter of last year, the growth should be strong. Afer that, what we should see is, I would say, the sales in dollar being at the level that we see now, plus inflation at least a month. That will be probably the second, the third, and the fourth quarter of this year. This is what we expect. While the sales to our retailers should be in the same pattern that we see now to the pre-pandemic level, which is still very good numbers. Basically, this is as far as we can see, what we can explain to you. That makes sense. Thank you. Your inventory's ticked up, which is good, but would you say that you're having any difficulty sourcing certain products, and is that constraining your organic growth in any areas? Well, we have the difficulties like anybody else, but I think we're successful. First of all, the first decision that we made at the beginning of the pandemic is not to slow down our purchasing neither our inventory. That's an advance compared to our competitors. In spite of the difficulties to get the products on time and the extra cost, we have not hesitated to pay extra cost for getting the merchandise here from Asia, for example, from Europe. We've paid containers up to CAD 25,000, and we've paid air freight. I would say most of our competitors would refuse to pay those amounts because they will say, "Hey, we can have a container that's CAD 12,000, but that will delay the delivery for three months." At Richelieu, we made the decision on the spot. We're going to pay the CAD 45 and the CAD 20,000, and we're going to get the inventory earlier. Those extra costs are not part of the cost of our products. We have not increased our selling price because of those, I would say, outstanding costs or out of annual cost for bringing the containers here and either the air freight. We have absorbed so far this year for CAD 5 million, which is included in our expenses and has not been counted as the cost of inventory and has not been considered for increasing our pricing because it does increase the cost of our product. These are decisions that we've made container per container in order to make sure that we have our products as early as we can in order to satisfy our customers. Got you. Thanks. Could you just compare and contrast, you have this open bar policy where no matter where it is in the country, your customers will get it and RCH will absorb that cost. You have RCH absorbing the cost for higher priced containers and air freight as well. You have these fantastic margins reported in the quarter from cost containment and higher gross margins. How long do you think you can drive that? As long as we have to do it, as long as we need to do it. I don't know what will happen in the months to come, but I don't want to make any philosophy here. What we see actually, we see when we read the report for Lowe's and Depot and whatnot in the U.S., I think their sales there is all back to the pre-pandemic level. Basically that should spare some containers and ship to get merchandise for other customers in North America. Hopefully that should happen, and that should happen probably after the Chinese New Year regarding Asia. Great, Colin. Thanks. Just one last one for me, the acquisition pipeline, how's it shaping up for the rest of the year and for 2022? With the Pennsylvania acquisition expanding your panel offering, do you see any major acquisition opportunities in similar markets? It's still very healthy. We've concluded five acquisitions this year. The pipeline is very interesting, either in Canada and the U.S., and the acquisition in Reading is a good one for us, and yes, it's going to open for other opportunities as well. We're working on very interesting opportunities. Thank you very much. I'll turn it over. Thank you. Thank you. At this time, Mr. Lord, we have no further questions. Please proceed. There's no more questions. Thanks again for attending. We'll be happy to talk to you if you need to. Have a nice day. Thank you. Ladies and gentlemen, this does indeed conclude your conference call for today. Once again, thank you for attending, and at this time, we ask that you please disconnect your lines.