Earnings call transcript: GDI Integrated Q1 2025 misses revenue forecasts

GDI Integrated Facility Services Inc., a facility services company with a market capitalization of $237.31 million, reported its first-quarter results for fiscal year 2025, revealing a miss on revenue expectations but surpassing earnings per share (EPS) forecasts. According to InvestingPro data, the company maintains strong financial health with liquid assets exceeding short-term obligations. The company’s revenue came in at $616 million, below the anticipated $649.15 million, marking a 4% decrease from the same period last year. However, EPS stood at $0.26, exceeding the forecasted $0.2158. Following the earnings release, GDI’s stock experienced a decline of 1.13% in after-hours trading.

Key Takeaways

• GDI Integrated’s revenue fell short of expectations, decreasing by 4% year-over-year.
• The company achieved an EPS of $0.26, beating the forecast by nearly 21%.
• Adjusted EBITDA increased by 21%, reflecting improved operational efficiency.
• GDI’s stock dropped 1.13% in after-hours trading.
• The company remains focused on margin improvements and core segment growth.

Company Performance

GDI Integrated’s first-quarter performance highlighted both challenges and strengths. While revenue saw a decline compared to Q1 FY2024, the company managed to improve its adjusted EBITDA by 21%, reaching $34 million. InvestingPro analysis shows the company’s impressive last twelve-month revenue growth of 20.42% and a healthy current ratio of 1.26, indicating strong operational efficiency. InvestingPro subscribers have access to over 30 additional financial metrics and insights about GDI. This increase is attributed to the company’s strategic focus on operational efficiency and cost management. The adjusted EBITDA margin also rose by 2%, suggesting effective margin management despite the revenue shortfall.

Financial Highlights

• Revenue: $616 million, down 4% year-over-year
• Earnings per share: $0.26, exceeding the forecast of $0.2158
• Adjusted EBITDA: $34 million, up 21% from the previous year
• Adjusted EBITDA Margin: 6%, an increase of 2%
• Long-term Debt Reduction: $14 million

Earnings vs. Forecast

GDI Integrated’s EPS of $0.26 surpassed the forecasted $0.2158 by 20.4%, marking a positive deviation from expectations. However, revenue fell short by approximately 5.1%, as the company reported $616 million against a forecast of $649.15 million. This revenue miss contrasts with the EPS beat, indicating mixed results for the quarter.

Market Reaction

Following the earnings announcement, GDI Integrated’s stock declined by 1.13% in after-hours trading. The stock closed at $32.5 prior to the earnings release, and the decline positions it closer to its 52-week low of $29.39. Based on InvestingPro’s Fair Value analysis, the stock appears undervalued at current levels. For a comprehensive list of undervalued stocks, visit our Most Undervalued Stocks page. The market reaction reflects investor concerns over the revenue miss, despite the positive EPS surprise.

Outlook & Guidance

Looking ahead, GDI Integrated expects organic growth to return to historical levels by the fourth quarter of 2025. Analysts maintain a Strong Buy consensus on the stock, reflecting confidence in the company’s growth trajectory. Unlock the full potential of your investment decisions with InvestingPro’s comprehensive research reports, available for over 1,400 US stocks, including GDI Integrated. The company is targeting margin improvements in its technical services segment and plans to continue optimizing its balance sheet. A healthy M&A pipeline and a focus on core business development are also part of the strategic outlook.

Executive Commentary

Claude Biquirard, CEO of GDI Integrated, emphasized the company’s commitment to returning to normal growth trends by the end of the year. He stated, "Everything trends to go back to our normal growth trend by the end of the year." Biquirard also highlighted the company’s disciplined approach to market expansion and restructuring efforts, noting, "Simpler is better," when discussing corporate restructuring.

Risks and Challenges

• Seasonal impacts on service call volumes, particularly in technical services
• Potential for reduced M&A activity in the post-COVID market
• Market saturation and competition in core segments
• Macroeconomic pressures affecting client demand and service volumes

Q&A

During the earnings call, analysts inquired about the seasonal impacts on service calls and the rationale behind segment reorganization. The company clarified that the reallocation of IT costs and simplification of corporate overhead are part of ongoing efforts to enhance operational efficiency. Additionally, the ERP unification process remains on track, aiming to streamline operations across business segments.

Full transcript - GDI Integrated (GDI) Q1 2025:

Conference Operator: Good morning, ladies and gentlemen, and welcome to the GTI Integrated Facility Services Inc. First Quarter twenty twenty five 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. If at any time during this call you require immediate assistance, please press 0 for the operator.

This call is being recorded on Friday, 05/09/2025. I would now like to turn the conference over to Charles Etienne Giroir, Executive Vice President of Finance. Please go ahead.

Charles Saint Gerard, Executive Vice President of Finance, GDI: Thank you, operator. Good morning all. Welcome to JDI’s conference call to discuss our results for the first quarter of fiscal twenty twenty five. My name is Charlize Saint Gerard. I am Executive Vice President, Finance at VDI.

I am with Phil Bigra, President and CEO of VDI and David Inchy, Executive Vice President of Corporate Development. Before we begin, I would like to make you aware that this call contains forward looking information, and we ask listeners to refer to the full description of the forward looking safe harbor provision that is fully described at the beginning of the MD and A filed on SEDAR last night. I will begin the call with an overview of GDI’s financial results for the first quarter of fiscal twenty twenty five, and we’ll then invite Flo to provide his comments on the business. In the first quarter, TDI recorded revenue of 616,000,000, a decrease of 28,000,000 or 4% over Q1 twenty twenty four. This is mostly due to an organic decline of 7%, partially offset by an increase from the foreign currency translation of 3%.

GBI recorded adjusted EBITDA of $34,000,000 in the quarter, representing an adjusted EBITDA margin of 6%, an increase of $6,000,000 and 2%, respectively, over Q1 of last year. In the first quarter, VDI reported a net operating working capital reduction of $9,000,000 VDI has also reduced its long term debt net of cash by 14,000,000 over before 2024. Before moving to our business segment results, I would like to discuss some housekeeping changes that we made in the first quarter. First, we allocate certain IT costs from our corporate and other segments into our operating segments based on usage. The exercise move cost of about $1,000,000 per quarter into our Business Service Canada segment and about $2,000,000 per quarter in our Technical Service segment.

We feel this is more accurately the fixed profitability in operating segments. Secondly, we have moved reporting for our ISS business unit from corporate and other to technical services as we feel that this is a more appropriate home for this business. The reclass represents about $25,000,000 in revenue and $1,000,000 in adjusted EBITDA annually. Now the only operating segment business that reside in corporate and other is our chemical manufacturing business. Q1 fiscal twenty twenty four results have been restated to reflect these changes as well future financial reports.

Our Business Service Canada segment recorded revenue of $147,000,000 in the first quarter while generating $11,000,000 in adjusted EBITDA, up $1,000,000 compared to Q1 twenty twenty four. The adjusted EBITDA margin of 7% was in line with Q1 of last year following the adjustment of the IT cost allocation. Our Business Service USA segment recorded revenue of $217,000,000 in Q1, a decrease of four percent over Q1 twenty twenty four. The segment experienced an expected organic decline in Q1 twenty twenty five due to the loss of the segment’s largest client at the end of Q1 twenty twenty four and a reduction of low margin contracts obtained in the Italian acquisition. The organic decline was partially compensated by an increase from foreign currency translation of 6% and by growth from acquisition of 5%.

This segment reported adjusted EBITDA of $16,000,000 representing an adjusted EBITDA of 7%, an increase of $1,000,000 and 1%, respectively, over Q1 of last year. The Technical Service segment recorded revenue of $246,000,000 compared to $260,000,000 in Q1 last year, mainly due to organic decline of 5% attributable to lower service call levels and to the timing of project revenues. The segment generated adjusted EBITDA of $12,000,000 which is $6,000,000 higher than Q1 last year as last year was negatively affected by crossover run on three projects in its U. S. Operation.

The adjusted EBITDA margin of 5% this quarter increased by 3% over Q1 twenty twenty four. Finally, our Corporate and Other segment reported revenues of $6,000,000 compared to $14,000,000 last year, mainly due to the sale of our superior distribution and retail business at the beginning of q two twenty twenty four. I would like to turn the call to Claude, who will provide further comments on the year performance during the quarter.

Claude Biquirard, President and CEO, GDI: Thank you, Charlotte Tiete. Good morning, and thank you for participating in our conference call to discuss GDI’s results for the first quarter of twenty twenty five. I was very pleased with the results of GDI’s this quarter. These business segments delivered an increase in adjusted EBITDA over the prior year. On a consolidated basis, GDI delivered a 21% increase in adjusted EBITDA and a 6% adjusted EBITDA margin during Q1, which is typically our slowest quarter due to some seasonal factors.

Our Business Service Canada segment recorded its fifth quarter in a row with a 7% adjusted EBITDA margin after adjusting its historic results for the IT cost reallocation. This business has been very stable. In 2025, we have been seeing a higher amount of clients going to market, which has increased our churns to less likely. However, we have also been successful in winning new clients. That being said, we are expecting to deliver our historic GDP level, organic growth in this segment depending on the timing of replacing losses with new wins.

Our Business Service U. S. Segment had a solid quarter, returning to its historic adjusted EBITDA margin range as the work to improve profitability of the Italian contracts has now been completed. As previously announced, organic growth in Q1 was impacted by the loss of GDI’s largest client in Q1 twenty twenty four at the end of twenty twenty three. We have replaced most of the lost business and expect organic growth to progressively return to our historic level by Q4 of this year.

Apart to the large client plus and the Italian restructuring, our core business is very healthy and has been growing quite well. Our technical services segment had an outstanding quarter with $246,000,000 in revenue and a 5% EBITDA margin. Q1 is traditionally events worth seasonally weakest quarter. To put this in perspective, adjusted EBITDA in Q1 has ranged between 2% to 4% adjusted for the RT recharge since we acquired Endsworth at the end of twenty fifteen. Much of the strong performance has resulted in our initiative to increase margin in Ensworth’s project that will begin in Q3 twenty twenty three.

The outlook for Ensworth for the remainder of 2025 remains positive. I’m also pleased to report that GBI continues to successfully execute on its balance sheet improvement initiatives during Q1. We reduced net operating working capital by $9,000,000 which brings the total reduction to $53,000,000 since we launched our initiative in Q3 of twenty twenty three. Additionally, the working capital reduction along solid cash flow from operation enabled us to reduce GDI long term debt by 14,000,000 over Q4 of twenty twenty four. This debt reduction coupled with the strong growth in adjusted EBITDA during Q1 have brought GDI’s leverage ratio in the mid twos, which is well below our comfort zone of three to three and a half percent at time.

In summary, all of GDI’s business segments performed well during the quarter, and our outlook for each is positive for the remainder of 2025. We have been actively evaluating a number of M and A opportunities, and the pipeline is healthy. Our balance sheet is strong. Our leverage ratio is low, and we are in a good position to continue to execute on our growth strategy. I would also like to share that effective today, Charles Chen is now officially our new SVP and chief financial officer.

I would like to congratulate him, and I’m very, very, very excited to see him working and and going forward. Thank you, I would like to thank you for participating in our conference call in for q one two thousand twenty five, and would now ask the operator to open the line for questions.

Conference Operator: Thank you. Ladies and gentlemen, we will now begin the question and answer session. If you have a question, please press star followed by the one on your touch tone phone. You will hear a prompt that your hand has been raised. Should you wish to decline for the polling process, please press star followed by the two.

If you are using a speakerphone, please press the handset before pressing any keys. Your first question comes from Derek Lessard with TD Cowen. Your line is now open.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Yeah. Good morning, everybody, and congrats, Shalit, then on the on the promotion.

Claude Biquirard, President and CEO, GDI: Good morning, Derek. Good morning. Good morning, Derek. Guess, I just maybe only a few questions for me. I just wanted

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: to hit on the the organic growth in in technical services. I guess, is it fair to say that the, you know, the guardrails that you put in place to protect profitability are holding back a little bit on the revenue growth temporarily? And if so, when can we, I guess, expect that organic growth to return?

Claude Biquirard, President and CEO, GDI: Well, listen, Derek, I would maybe take it the other side. You know what? The organic growth compared if you remember, we had a lot of growth the year before in revenue with some of that some of it has caused us to have some some road bumps the last year. So I’m seeing the I’m seeing it as a very positive. Now we are very clear.

We are, you know, we have as you know, I don’t wanna repeat myself on other calls, but we have reorganized our structure. We have reorganized our validation revalidating team. We have also re refocused on margin improvements of the backlog. So all of the above, but coupled with also the organic growth that we had the last the year before was not the the healthier, if you allow me to say this.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Yeah. That’s fair, Stephane. And and I guess maybe just as as a follow-up to that, could you just maybe comment on the on your backlog?

Claude Biquirard, President and CEO, GDI: Okay. Well, listen, my it’s Claude, by the way. But I I don’t don’t get it posted, but I don’t know. I’m joking.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: I’m sorry, Float. It’s been you’re you’re our seventh in two days in of reporting. My my

Claude Biquirard, President and CEO, GDI: I understand. I see you guys published it. So it’s very nice. So on the back side, you know what? It’s very healthy.

Margin has improved in the area of 10%, not 10% on the revenue, 10% increments in the percentage. So I’m telling you that but we cannot deliver results if the backlog and margins have not been improved in the sense that it’s I’m very, very happy. In The US, we are still working a little bit on some areas where we have a little bit of weakness. It should be behind us very soon. So I’m very, very comfortable with our backlog.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Awesome. Thanks for that quote. And and maybe one final one. Charlie, Stan, I’m getting your name right, I think. But good progress good good progress on on the working cap initiatives.

Is there any more do you see any more work to be done in in this area? And and I guess you did say leverage did come down below your three to three and a half times comfort level. Just just curious where you actually fell in the quarter.

Charles Saint Gerard, Executive Vice President of Finance, GDI: The quarter, we did we did a big portion of the working cap decrease came from a change in our other financial assets where we changed the investment strategy that we have in some place with another with an intercompany loan that we put in place. We feel that there is maybe more room. Now we are present with the current economics. We know that q two, we have, like, the bonus that we’re gonna pay out, but we’ll we’ll do our best to to maximize our balance sheet.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Okay. And and on leverage?

Charles Saint Gerard, Executive Vice President of Finance, GDI: Well, our yeah. The it’s still at the it’s lower comfort level. We’re still actively looking for potential m and a.

Claude Biquirard, President and CEO, GDI: We are looking at

Charles Saint Gerard, Executive Vice President of Finance, GDI: various strategic on that front.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Okay. Thanks. Thanks, gentlemen.

Conference Operator: Your next question comes from Sadeh Kabi with Desjardins Bank. Your line is now open.

Charles Saint Gerard, Executive Vice President of Finance, GDI: Thank you. Good morning. Good morning, Fadi.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: I wanted to start with technical services as well. I I noticed that one of the points you you mentioned was lower service call. Is that just a matter of of timing or is there anything in the market structurally with, you know, economic environment that’s slowing down a little bit there?

Claude Biquirard, President and CEO, GDI: No. It’s because it’s the winter. You know, the q one is usually our weakest and and break fix and maintenance is our weakest quarter during the winter. You know? So now, you know what, I don’t expect any changes actually.

If I’m looking at the last quarters, we have been we have been seeing an increase in break fix and service calls. So it’s just I don’t wanna say seasonality because it’s not that critical, but for sure, the q ’1 is always our weakness in that particular area of the business.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Okay. Great. That’s helpful. Thanks for that. Maybe just switching to the m and a pipeline or your your appetite for m and a.

I’m just curious if you’re still thinking about, you know, the same types of activities in dental and technical services, or if you’re also looking at options in in something else that would be adjacent to what you’re currently offering.

Claude Biquirard, President and CEO, GDI: Okay. First of all is we’re always very active in our m and e approach to things. Allow me to comment this way. What we’re seeing in the market is there was a lot of activities in M and A, you know, in COVID and early after COVID. Unfortunately, but but fortunately for us, to start with, is we see those those activities with other companies that we’re doing m and e in our sector.

They’re experiencing very heavy bumps as maybe the price they pay too much for it for the businesses. So we still remain very prudent, and we still remain very disciplined in our approach. So that’s one thing to start with. Secondly, you know, it’s we have plenty of opportunity in our, you know, two or two of our two main segments, which is, say, you know, business service and technical. At this time, you know, and with the the economic, I would say, not uncertainty, but with the general condition, I would be prudent in order to explore something new to learn.

I think we focused on what was strong, and we can we will still develop our density. There’s still a lot to do in The US. So, no, I don’t think we will do anything sexy going forward. You know, I think we focus on what we do well.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Yeah. Sounds good. Last question for me, you know, nice margin stability in in Business Services Canada. Can you talk about the margin outlook or margin opportunities in the other segments, Business Services USA and Technical Services? Do you see is there opportunities in one more than the other to improve margins going forward in your opinion?

Or are they both kind of trending in the right direction?

Claude Biquirard, President and CEO, GDI: Look. Well, listen. Actually, Frederica had a discussion with my colleagues earlier on. For sure is now we have targets, but the the targets are not the end by itself. Those targets is alignment.

For sure, my wish midterm midterm to the outlook, you know, for technical, I think we can still achieve the we can achieve more where I don’t know how to say that in business, but we I hold I’m working to surpass our targets. On the business segments on the business service segments, you agree with me that it has been a roller coaster since 1920. I think to be stable, I think it’s already a good thing. But, yes, again, as we grow I don’t know if I can say that, but I will say it. You know, we have been focusing heavily on acquiring market, you know, through, you know, sec sector segments, you know, such as data centers and life science and, you know, and food processing, which are traditionally delivering stronger results.

So this is where we are focusing is increasing the EBITDA through an improvement of the margin. And I’ll shrink my weight to greatness and not a big strong deliver. There’s always improvements to do on our overhead. But I think that pursuing activity sectors and developing our sales track, I think, is the way to go in business service.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Great. That’s all I have. Have

Claude Biquirard, President and CEO, GDI: a good day, Derek.

Conference Operator: Ladies and gentlemen, as a reminder, should you have a question, please press 1. Your next question comes from Zachary Evershed with National Bank Financial.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Congrats on the quarter, and congrats to Charlotte Chen. So looking at that Amsworth organic decline, it did mention project timing. Do you expect any catch up in the quarters ahead? And what do you think a good piece of organic growth to expect from Amsworth in 2025 is?

Claude Biquirard, President and CEO, GDI: Listen. You know what? Everything trends to for us to be to go back to our normal growth trend by the end of the year. You know, I’m giving you the the conclusion of our analysis analysis. But towards the end of the year, we should resume to our normal growth.

After the twenty twenty three, twenty four bump in revenue and technical, the loss of the clients in 2024, I think with the sales now, our sales structure being there and and our backlog, I think that you can expect the next couple of quarters to resume back to our normal organic growth globally and in both our segments.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: That’s helpful. Thanks. And then looking at the reorganization, broadly speaking, what drove it in general? And do you see any specific synergies between Amesworth and the integrated facility services?

Claude Biquirard, President and CEO, GDI: K. Actually, this is one of the reason we made this change is you know what? I’m happy to report that we had both we we acquired another very large North American client in ISS. So that’s a very good very good win in q one. We realized that well, there is two parts.

The first part is we came to realize or we came to a conclusion that, you know, the most the most appealing service in our IFS segment is the technical service segment. And we we also have defined that engineering energy is all all services that are actually a good friend in our IFS. So so we moved we moved it into our technical segment because that’s the right place to for IFS to be. And secondly, and it goes along also with our IT is, I want to I want to have the most, you know, clear clear clear corporate overhead lined up. You know what?

I don’t wanna use it pure, but in the sense that I want a pure corporate overhead in this part. So it’s easier to trend, and I don’t want you know, I’m trying to, you know, avoid any noise that could mislead. And it’s the same thing for IT. You know what? Those guys are not in the business unit, so they need to revolve into their original number including that expense.

This will also increase our profitability. So those changes are done to optimize our operations and and clarify our numbers.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: That’s clear. Thanks. Then the last one for me. Does the reorganization affect your plans for ERP unification in any way?

Claude Biquirard, President and CEO, GDI: You know what, Zachary? I I missed the first couple of words. What did you say?

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Does the reorganization affect your plans for ERP unification?

Claude Biquirard, President and CEO, GDI: No. Actually, it simplifies it. No. No. No.

Certainly not. You know what? No. The the DRP program is advancing well. We’re doing whatever we have to do.

There’s already a segment that has been put in place in corporate, and simpler is better.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Thank you very much. I’ll turn

Charles Saint Gerard, Executive Vice President of Finance, GDI: it over.

Conference Operator: Your next question comes from Jonathan Goldman Your line is now open.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Hi. Good morning, team, and thanks for taking my questions.

Claude Biquirard, President and CEO, GDI: No problem, Jonathan. Good morning.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Well, my thing is just maybe a couple of housekeeping ones to start. What would segment margins have been under the old disclosures for each segment?

Claude Biquirard, President and CEO, GDI: What? Okay. What okay. Tell me that again. Okay.

Just repeat the last part.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: So if we were to go to the old disclosures before the reclassification, what would the margins be in each segment in this quarter?

Claude Biquirard, President and CEO, GDI: Oh, okay. So I think that

Charles Saint Gerard, Executive Vice President of Finance, GDI: Yeah. We we have restated for your information twenty twenty four q one. The impact to adjust it would be about, like, a million per quarter in Business Service Canada and about 2,000,000 in technical service per quarter.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Okay. And with the revenue was affected too, right, for each of those?

Charles Saint Gerard, Executive Vice President of Finance, GDI: Yeah. So the revenue was affected between corporate and other and technical services. So annually, the IFS business that was transferred between the two segments, it’s about 25,000,000 annually in revenue and and about a million annually in in terms of EBITDA.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Okay. Perfect. And how much did the one fewer working day contribute to Canada and USA margins improvement both year on year?

Charles Saint Gerard, Executive Vice President of Finance, GDI: Before working day? It’s about 3,000,000 per working day. Sales or EBITDA? EBITDA. Okay.

And then, Claude, could

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: you just clarify the comment you made earlier, the 10% increment improvements in backlog? Was that the technical backlog? And you’re talking about, I guess, quarter on quarter margin improvement? I just wasn’t clear on on what you were referring to.

Claude Biquirard, President and CEO, GDI: Okay. Well, the one thing is when we initiate the initiatives, we were at the, you know, at the what we call the set margin. And this margin has improved by 10% up to today. So let’s say example, we had a set margin of 19.5. Now we’re around 22% margin.

So we have increased our margin. It’s the set margin by about 10%. And the good news is all our empirical analytics, excluding the, you know, the premium apps, is very close to set my our results. You know, end result is really in line with our set margin and the backlog. So for us, it’s very encouraging.

So we have we have improved our margin by 10% over the overall in our backlog. So at you know? And consequently,

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: we are improving our margin of operation and the execution. What’s the the base to refer to this 10%? Is it q one? Is it 2024? Is it LPN?

Claude Biquirard, President and CEO, GDI: You know what? I would say q one twenty twenty four, more or less. It took us two, three quarters to really because don’t forget, backlog and executions are maybe two quarters in advance. So we start improving margin, I would say q q two, q ’3, q ’4, we saw the improve improvement as the backlog gets executed and new business comes in. So I would say it’s about a year.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Perfect. Got it.

Claude Biquirard, President and CEO, GDI: And it was a plan that we had a year ago. We said that we would improve our margin.

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Oh, definitely. And maybe one more for me. Do you have a update on the timing of the real estate? Is that true?

Claude Biquirard, President and CEO, GDI: Well, listen. I would I can tell you is that we have some there’s two properties in the market. One is well underway. Can I put it this way? I’m not I I had never know exactly what to say to to not be illegal, but, yes, one of the properties is well underway, and the other property is on the market.

We have some actions, but we, you know, we don’t have anything to come up with the second one. But I expect that within the next couple of quarters that

Various Analysts, Financial Analysts, TD Cowen, Desjardins Bank, National Bank Financial: Okay. Perfect. Thanks for the color.

Conference Operator: There are no further questions at this time. I will now turn the call over to Claude Biquirard, President and CEO of GDI, for closing remarks.

Claude Biquirard, President and CEO, GDI: Well, thank you very much, operator. Well, in conclusion, and, you know, I think that we discussed heavily on the effort that the team is doing. You know, we’re talking about it, but there’s a lot of work behind the scenes with the teams. I would like to take the time to say, kudos because people are all focused to deliver the strongest results to, you know, keep the business in the best possible shape as possible. Again, it’s a marathon.

So what I can tell you is all these efforts are done, but also in conjunction with making sure the business is on top of its game, that we’re efficient, that we’re well staffed to execute. There’s no there’s no there’s no I would say no game shows. So we are improving. You know what? It’s a work in progress, but we don’t do it at the detriment of making the business not as strong or as efficient as it So I would like again to congratulate the teams on being very, very focused and prudent.

Thank you.

Conference Operator: Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.

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