Good afternoon, ladies and gentlemen, and welcome to Richelieu Hardware Fourth 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 zero for the operator. Also note that this call is being recorded on January 20, 2022.[Foreign language] Merci. Thank you. Good afternoon, ladies and gentlemen, and welcome to Richelieu's conference call for the fourth quarter and 12-month period ended November 30, 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 line with previous periods, during the fourth quarter, we continued our growth strategy. Despite the procurement and logistics challenges, we did everything possible to provide reliable and on-time supply and services to our customers through our one-stop shop network and richelieu.com with a unique diversity of product, including many alternatives in a wide variety of categories, all supported by a multi-channel approach, including a reliable and competent team. We recorded strong growth in the fourth quarter, as shown by increases in sales of 24.8%, EBITDA of 52.7%, and net income of 64.6%. The last four strong quarters make 2021 our best year. We achieve our best financial performance ever with contribution from all our Market segments in Canada and in the U.S. We ended the year with an impeccable financial position. In addition, the North American context was and remains favorable to acquisition opportunities in our industry. We have successfully expanded by completing five acquisitions as announced during the year. Task Tools in British Columbia and Ontario, Uscan in Quebec, Inter-Co in Ontario, Arizona, Ohio, and Texas, Cook Fasteners in Ontario, and Industrial Plywood in Pennsylvania. These five distributors added approximately CAD 80 million in sales on an annual basis. Subsequent to November 30, three new acquisitions were added, namely, Compi Distributors operating four centers in Missouri and Illinois. HGH Hardware Supply also operating four centers in Alabama, Tennessee, and Georgia. National Builders Hardware operating from one center in Oregon. Together, these eight distributors add over $180 million in yearly sales. They diversify our offering, and centers with strong roots in their markets and resources with good knowledge of their customer base. Thus, we are strengthening our positioning where we already were and entering new territories. Including the two centers we opened during the year in Rochester, New York, and Reading, Pennsylvania, our network now includes 106 centers, 57 of which are located in the U.S. Also, we expanded some of our existing distribution centers, such as Detroit, Boston, Dallas, and Orlando. Considering the growth achieved in 2021, I'm pleased to announce that the board of directors approved this morning a significant rise of 85.7% in our quarterly dividends to CAD 0.13 per share, aligning the payout with Richelieu's performance. I will go now with Antoine for the financial review of the period. Thanks, Richard. Our fourth quarter sales reached CAD 398.2 million, up by 24.8%. Sales to manufacturers stood at CAD 338.7 million, up by 27.8%, of which 21.2% from internal growth and 6.6% from acquisition. In the hardware retailers and renovation superstores market, we achieved sales of CAD 59.5 million, up by 10.4%, of which 13.1% from acquisition and 2.7% from internal decrease. While the retailers market benefited from the strong demand in the renovation market in the context of the pandemic, the volume of business has normalized to pre-pandemic levels. In Canada, sales amounted to CAD 260 million, an increase of CAD 45.1 million or 21%. Our sales to manufacturers reached CAD 215 million, up by 23.6%. As for retail market, sales stood at CAD 45.1 million, up by 10%. In the U.S., sales totaled $109.9 million in U.S. dollars, up by 39.3% of which 30.5% resulting from internal growth and 8.8% from acquisitions. Sales to manufacturers reached $98.4 million in U.S. dollars, up by 42.4%. In the retail market, sales were up by $1.7 million or 17.3%. Total sales in the U.S. reached CAD 138 million in Canadian dollars, an increase of 32.8%, representing 34.7% of the total sales. Total sales in fiscal 2021 reached CAD 1.4 billion, up by 27.7%, of which 22.8% from internal growth and 4.9% from acquisitions. Sales to manufacturers reached CAD 1.2 billion, up by 30.9%, of which 26.9% from internal growth and 4% from acquisitions. Sales to hardware retailers grew by 13.7% or CAD 28.5 million to CAD 236.8 million, of which 4.9% from internal growth and 8.8% from acquisitions. In Canada, sales totaled CAD 945 million, up by 29.4%, of which 24.5% from internal growth and 4.9% from acquisitions. Our sales to manufacturers amounted to CAD 768 million, up 32.5%, of which 29.3% from internal growth and 3.2% from acquisitions. Sales to hardware retailers and renovation superstores were CAD 151 million, up 17.6%. In the U.S., sales amounted to $395.6 million, up 33.5%, of which 28.1% from internal growth and 5.4% from acquisitions. They reached CAD 495.6 million, up 24.6%, accounting for 34% of total sales. Sales to manufacturers reached $348.1 million in U.S. dollars, an increase of 37.3%, and sales to hardware retailers were up by 11% in U.S. dollars, mostly from internal growth. Fourth quarter EBITDA stood at CAD 71.3 million, compared with CAD 46.7 million last year, up 52.7%. The EBITDA margin stood at 17.9% compared with 14.6% in 2020, resulting from increased sales and gross margin together with cost control measures in place. For the year, EBITDA was CAD 234.4 million, up 61.8%. EBITDA margin stood at 16.3% compared with 13.7%. Fourth quarter net earnings attributable to shareholders totaled CAD 44.6 million, compared with CAD 27.1 million last year. Net earnings per share reached CAD 0.79 diluted compared with CAD 0.48 in 2020, an increase of 64.6%. For the year, net earnings attributable to shareholders reached CAD 141.8 million, an increase of 66.3% compared to 2020. Net earnings per share were CAD 2.51 diluted, up 67.3%. Fourth quarter cash flow from operating activities before net change in non-cash working capital balances were up by 51.8% to CAD 55 million or CAD 0.97 per share. Net change in non-cash working capital balances used cash flow of CAD 41.6 million, mainly due to inventory increases. For the year, they were up 47.7%, totaling CAD 183 million or CAD 3.24 per share. Net change in non-cash working capital balances used cash flow of CAD 78.6 million, mainly from inventory and accounts receivable increases. During the year, we paid dividends of CAD 19.4 million, of which CAD 3.9 million were in the fourth quarter, and repurchased common share for CAD 13.1 million. We have thus distributed a total of CAD 22.5 million to our shareholders this year. We also invested CAD 66.5 million during the year, of which CAD 49.4 million was for business acquisitions and CAD 17.1 million for equipment to maintain and improve operational efficiencies as well as IT equipment. As of November 30, 2021, cash totaled CAD 58.7 million, and our working capital was CAD 456 million for a current ratio of 3.3 - 1. I now turn it over to Richard. Thank you, Antoine. Our two main growth drivers, innovation and acquisition strategies, should enable us to make further significant advances in 2022 while continuing our market penetration efforts. Product innovation is a sustained source of growth, and we still have room to grow by acquisition in North America. We have strong financial foundations to keep innovating and seize opportunity, meeting our criteria for growth and value creation in the short and long term. We offer a value-added service and a multi-channel concept that set us apart in our North American market. This is one of our key strength, along with our culture of innovation, our Diversified Market segment, a market coverage with a robust and extensive network, including top-notch showrooms and our website, which is valued by our customers. Maintaining cost control and making optimal use of our resources remain also a priority. We will continue to improve our processes to keep our business model fully adapted to our customers' need. Richelieu remains a customer and innovation-driven business. Thanks, everyone. We'll now be happy to answer your question. Thank you, Mr. Lord. Ladies and gentlemen, as stated, we will now take questions from analysts. If you would like to ask a question, please press star followed by one on your touchtone phone. You will then hear a three-tone prompt acknowledging your request. If you would like to withdraw your question, simply press star followed by two. If you're using a speakerphone, we do ask that you please lift the handset up before pressing any keys. Please go ahead and press star one now if you have any questions. Your first question will be from Hamir Patel at CIBC Capital Markets. Please go ahead. Hi. Good afternoon. Richard, the record high EBITDA margins in Q4, close to 18%. I was just wondering, how do you see the pace of margin normalization playing out over 2022? Where would you expect them to stabilize at? It's not that easy to answer that, but actually I think we can. Our EBITDA margin will remain strong. Actually, we have increased our pricing, you know, according to the prices increase that we had. I would say that our inventory is maybe not, you know, I would say capitalized with the full cost, the full new cost of the inventory coming in. Basically, that could be a small reduction of the gross margin. Our focus will be during the year to make sure that we manage that very carefully in order to stay as close as we've been, you know, during the current year. We should be successful in achieving that. Okay, great. Thanks, Richard. Kind of related to that, I was just wondering if you'd give us an update on how margins today in the U.S. business compare to your Canadian operations. As we continuously mention, actually the gross margin in the U.S. is growing. The EBITDA margin is improving as well at the same time. I think we have reached something like 80% of what they are in Canada, and that will continue to increase because we see the product mix continuing to increase as well as the volume per customers. So the sales per employees and the sales per square foot in the U.S. continue to improve. With the expansions that we've made in various distribution centers, we think that the cost of those expansions will be largely covered by increased sales because we have a business plan that should create very nice growth in the U.S. as well. We're very excited actually with the growth in the U.S., which is, correct me if I'm wrong, Antoine, around something like close to 30%. Yeah. For the manufacturer's market, which is amazing in the circumstances. Even though we have a good business plan, we have managed well through the challenges of the inventory shortage, that type of thing, because of our product mix. You know, we see that continue to improve in the future as well. Great. Thanks. That's helpful. Just a last question from me. I was just curious here in the first quarter, are you seeing labor issues with you know, employee absences, either at your own DCs or at your manufacturer customers that could be affecting sales pace? I'm very pleased with that question because again, I can put some more emphasis on the Richelieu concept, the Richelieu business model, which include, you know, the connectivity of our warehouses all together. Wherever the customer is, the product can be shipped for wherever it is available and wherever the employees are available in order to ship those products. Same thing applies to the phone calls as well. You know, our phone system allow us, you know, if you have to close a customer service or a phone in an area, for example, in Mississauga, but Montreal can take over in five seconds. Montreal will take over, and the business continue on. The phone from Mississauga or Montreal can even be taken by Chicago or New York. I think we have a good system which has been built in order to achieve those purpose. Fair enough. Thanks, Richard and Antoine. That's all I had. I'll turn it over. Thank you. Next question will be from Zachary Evershed at National Bank. Please go ahead. Afternoon, everyone. Congrats on the great quarter. Thank you. You started the year off with a bang here, and looking at the larger average size of the recent targets, do you think that signals a step change in the deals you're looking at, or is it a rare exception? Really, how's the pipeline looking? No, we keep on seeing what is available in the market. Actually, we still have many targets. The pipeline is quite healthy. Maybe Antoine, you can comment on that and-- No, I agree with that, with that statement. Either in Canada or in the U.S., Zach, the pipeline is still healthy. Those acquisitions were targets since a long time. We've been maintaining those relationships. It's those three. We're very pleased with the last three acquisitions. Yeah, the three that we've done, Antoine, we have to tell you that we've been, you know, I would say closing these guys since about 15 years. It's a long time established relationship. When these guys have decided to sell at the end of the year, they have contacted Richelieu because we have the relationship, we have their trust, and we made a deal. You know, we had a short period of time to make the deal. It has to be done before December 30, so Christmas vacation for Antoine was not available. Those acquisitions had been made on time before the new year because of the whatever income tax situation that those sellers had. Basically, we're very happy with those acquisitions because it continued to establish the footprint of Richelieu to strongly position Richelieu in other geographic market in the U.S. Also, you know, the teams that are managing those businesses actually have a long experience in the market. They are knowledgeable employees, sales managers and sales reps, and top management people. Basically, we are reinforcing still our Richelieu team in the U.S. with those acquisitions. Well, I'm sorry to hear that, Antoine, but very glad you guys got it done. Could you give us an idea of how manufacturer and retailer demand evolved in December and January versus Q4? Yeah. The manufacturer side is still strong. We talk with our other customers. They're still very busy. The strength is maintained. On the retailer side, you need to keep in mind, Zach, that we're comparing ourselves with very strong quarters last year. We're slightly down on the retailer side, and we expect to come back to a more reasonable comparable in the second half of the year. You know, though, to give you a little bit more color, Zach, you know, the kitchen manufacturer business, you know, in Canada increased by 20% during the last quarter, while in the U.S. I am in Canadian dollar here, though, but it's a 25% increase in the U.S. We see the growth being stronger and stronger in the U.S. The commercial renovation, 18% increase in Canada and 22% increase in the U.S. We had the door and window market, which is increasing by 16%, which is mainly due to acquisition that we've made in that particular market. Residential furniture increased by 18%. Office furniture, 37% sales increase in Canada. Basically, we see that in those markets, I remember we are invested in the last months, that does bring some very good benefits. Excellent. Do you view that current strength in manufacturer demand as a temporary tailwind associated with the pandemic? We don't think so because, what we see actually is that first of all, the housing market seems to remain healthy. The renovation market is still very strong. The only maybe cloud would be the inflation, but don't forget that people, they have a lot of cash since the beginning of the COVID. Also, the best information that we can get at Richelieu is from our sales reps. We have something like 260 sales reps that are constantly in contact with our manufacturing customers in North America. They're confirming that our customers are still very busy, and they will be busy probably for the rest of the year. This is the information that we have so far. We expect this market to remain strong in the months to come. That's great. Thank you. With that kind of inflationary environment, interest rate hikes are top of mind. How do you and your customers perform in that environment? We don't see that as a problem so far. I think as far as the people, they have cash at the bank, so they will spend that cash. The interest rate certainly might affect the house resale, you know, the new housing sales. We don't see that as a big problem so far. Antoine, I don't know if you want to add to that? I agree. I agree with you. Thank you very much. Just one last one for me, and more of an abstract question. What are your thoughts on renting versus owning your distribution centers? This is a good question in the circumstances because this is one of the area where our costs will increase. Fortunately, most of our leases are still signed for a couple of years, and more. For all the leases that we renew, you know, we see increases of 10%-25%. There's no doubt. It's only a small percentage of our cost, the cost of our sales. I think to continue renting I think is the best option for us, considering the fabulous amount of cash flow that will be needed to be the owner of those buildings. The flexibility. The renting gives us a lot of flexibility. Like we just mentioned a few moves that we've done. We've moved our distribution center in Detroit. We've done the same recently in Orlando. We're gonna do the same with other centers. It really gives us the flexibility to adjust our network to the current sales volume. Yeah. Antoine is right. I think this is the most important aspect, the flexibility. That's great color, guys. Thank you very much. I'll turn it over. Thank you. Once again, as a reminder to all analysts, if you would like to ask a question, please press star followed by one on your touch-tone phone. Your next question will be from Meaghen Annett at TD Securities. Please go ahead. Thank you. Good afternoon. Just building on some of the conversation here so far. We've been talking about strength in manufacturers for quite a while now, but can you talk about how the sentiment among that industrial customer has changed relative to, say, six months ago? Like, are you seeing more confidence there for the year ahead? No, we see the confidence that's been there for the whole year in 2021, and it's continuing to be there now. We haven't seen any change. Just on the margin, so looking back at 2021, can you talk about the benefit of price increases to the EBITDA margin? In light of some of the inflationary headwinds, for 2022, can you talk about how you're thinking about price increases right now? First of all, we have a very flexible pricing system, so we can change pricing overnight for maybe close to 70% of our business. We've been able to adjust pricing with those cost increase. That's for sure. In terms of impact on the margin, we've been increasing the price, and we've done two increases in 2021. It of course benefited the EBITDA margin. The other element that's benefiting the EBITDA margin is the sales volume. That's why you're seeing those levels of EBITDA margin, because we're generating 25% sales growth at the consolidated level. It goes directly to the bottom line. We try to increase our pricing before the additional costs reach our inventory. Because as soon as we know that the suppliers or the freight is increasing, we process the price increases. We sometimes have to increase our gross margin temporarily, sometimes for a while before the increases are just reaching our inventory. That's all for me. Thank you. Thank you. Next is a follow-up from Hamir Patel. Please go ahead. Thanks. Antoine, I was just wondering if you could clarify, you know, just with respect to the EBITDA margins. If I look back over the last three years and realize 2021 was unusually strong, they average around 14%. You know, Richard made the comment that the U.S. business margins have continued to narrow the gap with Canada. Where do you see the long-term EBITDA margins for the business? If you could also comment just on Q1 specifically. If I look back over the last two years, there's been about a 200 basis point dips quarter-over-quarter decrease Q1 versus Q4. What sort of margin contraction would you expect for Q1 versus Q4 this year? Yeah. The same for Q1 versus Q4, I would expect the same kind of variances versus historical data, I mean. If we look at the overall EBITDA margin in the past, so if you take 2017, we were around 12%, 2018 12%, 2019 11.9%, 2020 13.7%. Last time we spoke, I said that a post-pandemic EBITDA margin would be around high 13%-14%. I'm still there. Now, it's when will we get to post-pandemic sales levels? It's still like we said, it's still strong on the industrial, and it's back to more normal on the retailer side. Okay, great. Thanks, Antoine. That's all I have. I'll turn it over. Thank you. At this time, Mr. Lord, it appears we have no further questions. Please proceed. If there's no more questions, thank you very much for attending this call, and you're welcome to call us anytime you wish. Thank you very much. Thank you, sir. 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.