Richelieu Hardware : 2024 Q1 Quarterly Report

Q1

Quarterly Report

Three-month period ended February 29, 2024

MESSAGE TO SHAREHOLDERS

Richelieu began fiscal 2024 with sales equivalent to those of the first quarter of 2023 - a good result since sales in the comparable period of 2023 continued to benefit from favorable market conditions. It should also be noted that the first quarter is historically the weakest period of the year. The impact of recent acquisitions and market development initiatives, supported by our value- added service, innovation, and customer segment diversification strategies made good contributions to the quarter. In terms of our acquisition strategy, the year started strongly with three new acquisitions, one of which was completed after the end of the first quarter. These three acquisitions together will add approximately $60 million in sales on an annual basis.

For the first quarter of 2024, sales totalled $406.9 million, up 1% from the corresponding period of 2023. This slight increase is the result of the performance of the manufacturers' market, where sales reached $349.6 million, up 1.6% from the first quarter of 2023 largely attributed to the contribution of acquisitions, while sales to retailers and the renovation superstores market were down 2.7% to $57.3 million. In Canada, the Corporation achieved sales of $232.1 million, compared with $230.9 million in the first quarter of 2023. In the U.S., sales reached US$ 129.9 million, up 1.7%, representing 43% of total sales for the quarter.

EBITDA was $40.4 million, down 17.7% from the first quarter of 2023. Despite the significant reduction in our inventories in 2023, we still have some products purchased at higher than current cost. Selling these inventories at market prices has had a negative impact on gross margin. This situation will gradually be resolved as those products are reordered. We completed several expansion and modernization projects over the past year and also launched our brand-new Calgary centre last December. The start-up and development of these centres, in addition to being impacted by current market conditions, also affected the EBITDA margin downwards. As a result the EBITDA margin was 9.9% compared to 12.2% in the first quarter of 2023. Net earnings attributable to shareholders was $0.27 per diluted share, compared to $0.40 in the corresponding first quarter of 2023.

THREE NEW ACQUISITIONS SINCE THE BEGINNING OF THE FISCAL YEAR, INCLUDING ONE SUBSEQUENT TO THE FIRST QUARTER

During the first quarter, Richelieu concluded the acquisition of Olympic Forest, a distributor of specialized lumber and panel products operating from a distribution centre located in Erin, Ontario. Subsequently, Richelieu acquired Rapid Start, a specialty hardware distributor that serves a manufacturing customer base from its distribution centre in Rittman, Ohio. On March 27, 2024, Richelieu finalized the acquisition of the main net assets of Allegheny Plywood, a distributor of specialty panels and decorative surfaces, which operates distribution centres in Pittsburgh and Allentown, Pennsylvania, as well as in Cleveland, Ohio. These three transactions will not only contribute approximately $60 million to annual sales, but will also add new customers, complementary products and expertise, and strengthen the Corporation's presence in these markets.

In the forthcoming periods, all energies will be mobilized to maximize market penetration and acquisition initiatives, take advantage of synergies, and pursue effective strategies with creativity and rigour for profitable growth.

NEXT DIVIDEND PAYMENT

On April 11, 2024, the Board of Directors approved a quarterly dividend of $0.15 per share. This dividend will be paid on May 9, 2024, to shareholders of record as at April 25, 2024.

RICHELIEU HARDWARE LTD.

Management's discussion and analysis

First quarter ended February 29, 2024

PRESENTATION BASIS

This Management's Discussion and Analysis ("MD&A") relates to Richelieu Hardware Ltd.'s consolidated operating results and cash flows for the first quarter ended February 29, 2024, in comparison with the first quarter ended February 28, 2023, as well as the Corporation's financial position as at February 29, 2024, compared with that of November 30, 2023. This report should be read in conjunction with the unaudited interim consolidated financial statements and accompanying notes for the first quarter of 2024 as well as the Corporation's fiscal 2023 MD&A and audited consolidated financial statements available on the website SEDAR+ at www.sedarplus.com and on the Corporation's website at www.richelieu.com. In this MD&A, "Richelieu" or the "Corporation" refers to, as the case may be, Richelieu Hardware Ltd. and its subsidiaries and divisions, or one of its subsidiaries or divisions. Supplementary information, including certificates for the interim period ended February 29, 2024, signed by the Corporation's President and Chief Executive Officer and the Vice-President and Chief Financial Officer, is available on SEDAR+. The information contained in this MD&A accounts for any major event that occurred prior to April 11, 2024, on which date the unaudited interim consolidated financial statements and interim MD&A were approved by the Corporation's Board of Directors. Unless otherwise indicated, the financial information presented below, including amounts shown in tables, is expressed in Canadian dollars and prepared in accordance with International Financial Reporting Standards ("IFRS"). The consolidated financial statements for the first quarter ended February 29, 2024, have not been audited or reviewed by the Corporation's auditors.

NON-IFRS MEASURES

Richelieu uses earnings before interest, income taxes and amortization ("EBITDA") as we believe this measure enables management to assess the Corporation's operational performance. This measure is a widely accepted performance indicator of a corporation's ability to service and incur debt. However, EBITDA should not be considered by an investor as an alternative to operating income or net earnings attributable to shareholders of the Corporation, as an indicator of cash flows or as a measure of liquidity. Since EBITDA does not have a standardized meaning prescribed by IFRS, it may not be comparable to the EBITDA of other companies.

Richelieu also uses adjusted cash flows from operating activities and adjusted cash flows from operating activities per share. Adjusted cash flows from operating activities are based on net earnings plus the amortization of property, plant and equipment, intangible assets and right-of-use assets, deferred tax expense (or recovery), share-based compensation expense and financial costs. These additional measures do not consider the net change in non-cash working capital items in order to exclude seasonality effects and are used by management in its assessments of cash flows from long-term operations. Therefore, adjusted cash flows from operating activities may not be comparable to the cash flows from operating activities of other companies.

FORWARD-LOOKING STATEMENTS

Certain statements set forth in this MD&A, including statements relating to the expected adequacy of cash flows to cover contractual commitments, to maintain growth and to provide for financing and investing activities, growth outlook, Richelieu's competitive position in its industry, or ability to weather current economic conditions and access other external financing, close new acquisitions, and other statements not pertaining to past events, constitute forward-looking statements. In some cases, these statements are identified by the use of terms such as "may", "could", "might", "intend" "should", "expect", "project", "plan", "believe", "estimate" or the negative form of these expressions or other comparable variants. These statements are based on the information available at the time they are written, on assumptions made by management and on the expectations of management, acting in good faith regarding future events, including assumption that economic conditions and exchange rates will not significantly deteriorate, that operating costs will not increase significantly, that supplies will be sufficient to fulfil Richelieu's needs, that availability of credit will remain stable during the year and that no extraordinary events will require supplementary capital expenditures.

Although management believes these assumptions and expectations to be reasonable based on the information available at the time they were prepared, they could prove inaccurate. Forward-looking statements are also subject, by their very nature, to known and unknown risks and uncertainties set forth in the 2023 annual MD&A (see the "Risk Factors" section) available on SEDAR+ and on the Corporation's website.

Richelieu's actual results could differ materially from those indicated in or underlying these forward-looking statements. The reader is therefore cautioned not to place undue reliance on these forward-looking statements. Forward-looking statements do not reflect the potential impact of special items, any business combination or any other transaction that may be announced or occur subsequent to the date hereof. Richelieu undertakes no obligation to update or revise the forward-looking statements to account for new events or new circumstances, except as required by law.

Management's Discussion & Analysis Report Q1-2024	________	2	________

GENERAL BUSINESS OVERVIEW AS AT FEBRUARY 29, 2024

Richelieu is a leading North American importer, manufacturer and distributor of specialty hardware and related products.

Richelieu offers customers a broad mix of products sourced from manufacturers worldwide. The solid relationships Richelieu has built with the world's leading suppliers enable it to provide customers with the latest innovative products tailored to their business needs. The residential and commercial renovation industry is one of the Corporation's principal sources of growth.

Sales by market Q1-2024

14%

86%

Retailers

Manufacturers

Richelieu's offering		113 interconnected centres
Over 145,000 different items	50	DISTRIBUTION CENTRES IN CANADA
More than 120,000 active customers	60	DISTRIBUTION CENTRES IN THE UNITED STATES
5,100,000 sq.ft. of storage	3 MANUFACTURING PLANTS
	COVERAGE BY REPRESENTATIVES

	Main product categories
Furniture, glass and building decorative and functional hardware	Sliding door systems
Decorative and functional panels
Lighting systems		High pressure laminates
Finishing and decoration products		Baluster and railings
Ergonomic workstations components		Floor protection products
Kitchen and closet storage solutions		Power tools accessories

Those products are targeted to an extensive customer base of kitchen and bathroom cabinet, storage and closet, home furnishing and office furniture, door and window manufacturers, residential and commercial woodworkers, as well as hardware retailers including renovation superstores.

This offering is completed by the Corporation's three manufacturing subsidiaries, Les Industries Cedan Inc., Menuiserie des Pins Ltée and USIMM/UNIGRAV Inc., which manufacture a variety of veneer sheets and edge banding products, a broad selection of decorative mouldings and components for the window and door industry as well as custom products, including a 3D scanning centre.

The Corporation employs over 3,000 people at its head office and throughout its network, close to half of whom work in marketing, sales and customer service. Nearly 50% of the Corporation's employees are Richelieu shareholders.

MAIN TRADEMARKS

Management's Discussion & Analysis Report Q1-2024	________	3	________

MISSION AND STRATEGY

Richelieu's mission is to create shareholder value and contribute to its customers' growth and success, while favouring a business culture focused on quality of service and results, partnership and intrapreneurship.

To sustain its growth and remain leader in its specialty market, the Corporation continues to implement the strategy that has proved beneficial to date, with a particular focus on:

• strengthening its product offering by continuously introducing each year new diversified products that meet its market segment needs and position it as the specialist in functional and decorative hardware for manufacturers and retailers;
• further developing its current markets in Canada and the United States with the support of a specialized sales and marketing team capable of providing customers with personalized service, and
• pursuing its North American expansion by opening new distribution centres and through efficiently integrated, profitable acquisitions made at the right price, offering high growth potential and complementarity to its product mix and expertise.

Richelieu's solid and efficient organization, highly diversified product selection and long-term relationships with leading suppliers worldwide allows the Corporation to compete effectively in a fragmented market consisting mainly of a host of regional distributors offering a limited range of products.

FIRST QUARTER HIGHLIGHTS AND KEY FINANCIAL DATA

• Sales of $406.9M, up 1.0%.
• EBITDA1 of $40.4M; EBITDA margin of 9.9%.
• Net earnings attributable to shareholders of $15.2M, or $0.27 per diluted share.
• Expansion: two new acquisitions, one in Ontario and one in Ohio, followed by another acquisition in the United States on March 27, 2024, for a combined total of approximately $60M in sales on an annual basis.

NETWORK DEVELOPMENT

Since the start of fiscal year 2024, Richelieu concluded the following acquisitions:

Date

Company Name

Nature of operations

Locations

December 1, 2023	Olympic Forest Products	Distributor of specialized lumber and panel	Erin, ON
products
January 15, 2024	Rapid Start	Distributor of specialized hardware	Rittman, OH
March 27, 2024 *	Allegheny Plywood	Distributor of specialty panels and	Pittsburgh PA, Allentown, PA and
decorative surfaces	Cleveland, OH.

These three acquisitions together will add approximately $60M in sales on an annual basis. In December 2023, the Company also completed the expansion project in Calgary by consolidating two centres into a single 250,000 sq. ft. building, which will allow the Corporation to increase its service capacity in Western Canada.

• Refer to subsequent event section.

• This financial measure is not IFRS compliant. Refer to non-IFRS section.

Management's Discussion & Analysis Report Q1-2024	________	4	________

OPERATING AND CASH FLOW INFORMATION (unaudited)

Quarters ended February 29 and February 28	2024	2023	∆ %
(in millions of dollars, except margins and per share data)
Sales	406.9	403.0	1.0
EBITDA 1	40.4	49.1	(17.7)
EBITDA margin (%)	9.9	12.2
Net earnings attributable to shareholders of the Corporation	15.2	22.4	(32.1)
• basic per share ($)	0.27	0.40	(32.5)
• diluted per share ($)	0.27	0.40	(32.5)
Adjusted cash flows from operating activities 1	34.9	40.6	(14.0)
• diluted per share ($) 1	0.62	0.72	(13.9)
Dividends paid per share ($)	0.15	0.15	-
Weighted average number of shares outstanding (diluted) (in	56,530	56,147
thousands)

DATA ON THE FINANCIAL SITUATION

(in millions of dollars, except ratios)	As at February 29	November 30, 2023	∆ %
Total assets	1,344.8	1,315.0	2.3
Working capital	623.4	621.8	0.3
Current ratio	3.7:1	3.6:1
Equity attributable to shareholders	913.3	904.9	0.9
Average return on shareholders' equity (%)	11.9	12.9
Book value per share ($)	16.27	16.13	0.9
Total debt	6.6	5.3
Net cash and cash equivalents (net bank overdraft)	(10.2)	23.7

CA$ / US$ EXCHANGE RATES

The following table presents the average exchange rates applicable to the quarters ended February 29, 2024 and February 28, 2023, as well as the closing rates on February 29, 2024 and November 30, 2023. The average rates are used to convert income and expenses from foreign establishments for the periods covered while other items in the statements of financial position and earnings of Canadian entities are translated at the exchange rates in effect at the date of transaction. The closing rates are used to convert the assets and liabilities of foreign operations and the monetary assets and liabilities in foreign currencies of Canadian operations.

Average rates for the quarters ended	Closing rates
February 29 and February 28
2024	2023	As at February 29, 2024	As at November 30, 2023
1.345	1.349	1.357	1.358

• These financial measures are not IFRS compliant. Refer to non-IFRS section.

Management's Discussion & Analysis Report Q1-2024	________	5	________

ANALYSIS OF OPERATING RESULTS FOR THE FIRST QUARTER ENDED FEBRUARY 29, 2024, COMPARED WITH THE FIRST QUARTER ENDED FEBRUARY 28, 2023

Quarters ended February 29 and February 28	2024	2023	∆ %
(in millions of dollars, except per share data)
Sales	406.9	403.0	1.0
Operating expenses excluding amortization	366.4	353.9	3.5
EBITDA	40.4	49.1	(17.7)
Amortization of property, plant and equipment and right-of-use
assets	14.0	11.4	22.8
Amortization of intangible assets	2.6	2.7	(3.7)
Net financial costs	2.5	3.8	(34.2)
	19.2	17.9	7.3
Earnings before income taxes	21.2	31.2	(32.1)
Income taxes	5.7	8.6	(33.7)
Net earnings	15.5	22.6	(31.4)
Net earnings attributable to:
Shareholders of the Corporation	15.2	22.4	(32.1)
Non-controlling interests	0.3	0.2	50.0
Net earnings per share attributable to shareholders of the
Corporation
Basic	0.27	0.40	(32.5)
Diluted	0.27	0.40	(32.5)

Sales

The following table provides an overview of Richelieu's sales in its two main markets for the quarters ended February 29, 2024 and February 28 2023 :

Quarters ended February 29 and February 28	2024	2023		∆ %
(in millions of dollars, except exchange rates)	Total	Internal	Acquisitions
Consolidated	406.9	403.0	1.0	(0.4)	1.4
Manufacturers	349.6	344.1	1.6	(0.1)	1.7
Retailers	57.3	58.9	(2.7)	(2.7)	-
Canada	232.1	230.9	0.5	(1.5)	2.0
Manufacturers	187.6	185.5	1.1	(1.4)	2.5
Retailers	44.5	45.4	(2.0)	(2.0)	-
United States in US$	129.9	127.7	1.7	1.1	0.6
Manufacturers	120.3	117.7	2.2	1.7	0.5
Retailers	9.6	10.0	(4.0)	(4.0)	-
United States in CA$	174.8	172.1	1.6
Average exchange rates	1.345	1.349

For the first quarter ended February 29, 2024, consolidated sales amounted to $406.9M, compared to $403.0M for the first quarter of 2023, an increase of $3.9M, or 1.0%, including a 0.4% internal decrease offset by 1.4% growth through acquisitions. In comparable currency to the first quarter of 2023, the increase in consolidated sales for the quarter would have been very similar.

Breakdown of sales by major markets (in Canadian dollars)

	Q1-2024		Q1-2023
Canada,	United States,		United States,
43%	Canada,	43%
57%
	57%

Management's Discussion & Analysis Report Q1-2024	________	6	________

Operating expenses excluding amortization

For the three months ended February 29, 2024, operating expenses excluding amortization totalled $366.4M, or 90.1% of sales, compared to $353.9M, or 87.8% of sales, for the corresponding period in fiscal 2023. The increase in monetary terms reflects higher costs of goods sold of certain product categories, as well as operating expenses related to the expansion projects completed over the past year, which are currently in the start-up phase

Earnings before income taxes, interest and amortization (EBITDA)

EBITDA for 2024 first quarter was $40.4M, down $8.7M or 17.7% from the corresponding quarter of 2023, mainly as a result of lower gross margin and increase in certain temporary operating expenses resulting from expansion projects . As a result, the EBITDA margin was 9.9%, compared with 12.2% for the corresponding quarter of 2023.

Amortization and net financial costs

Amortization expense for the first quarter of 2024 amounted to $16.7M, up $2.6M over the corresponding period of 2023, mainly due to an increase in property, plant and equipment and right-of-use assets related to expansion and modernization projects completed in the past year. Net financial costs were $2.5M for the three months of 2024 compared to $3.8M, down $1.3M resulting from the decrease in lines of credit which were primarily used to finance acquisitions, expansion projects and the temporary increase in inventories during the previous fiscal year.

Income taxes

Income tax expense was $5.7M, representing an effective tax rate of 26.7%, in Q1 2024, compared to an expense of $8.6M, representing a rate of 27.5%, in Q1 2023.

Net earnings and comprehensive income

Net earnings for Q1 were $15.5M, down 31.4% from the prior year. Including non-controlling interests, net earnings attributable to the Corporation's shareholders were $15.2M, down 32.1% from Q1 2023. Net earnings per share were $0.27 basic and diluted, compared to $0.40 basic and diluted for Q1 2023, down 32.5%.

Comprehensive income amounted to $15.2M, reflecting a negative adjustment of $0.3M on translation of the financial statements of the subsidiary in the United States, compared to $24.6M for the same period in 2023, which reflected a positive adjustment of $2.0M on translation of the financial statements of the subsidiary in the United States.

Quarterly data

(in millions of dollars, except per share data)
2024	Q1	Q2	Q3	Q4
Sales	406.9
EBITDA	40.4
Net earnings attributable to shareholders of the Corporation	15.2
• basic per share ($)	0.27
• diluted per share ($)	0.27
2023	Q1	Q2	Q3	Q4
Sales	403.0	472.1	459.0	453.7
EBITDA	49.1	61.5	61.0	58.8
Net earnings attributable to shareholders of the Corporation	22.4	30.7	29.8	28.5
• basic per share ($)	0.40	0.55	0.53	0.51
• diluted per share ($)	0.40	0.55	0.53	0.51
2022	Q1	Q2	Q3	Q4
Sales	384.5	487.9	472.9	457.5
EBITDA	53.7	77.9	79.2	76.7
Net earnings attributable to shareholders of the Corporation	30.1	47.0	46.4	44.9
• basic per share ($)	0.54	0.84	0.83	0.80
• diluted per share ($)	0.53	0.83	0.82	0.80

Quarterly variations in earnings - The first quarter closing at the end of February is generally the year's weakest for Richelieu in light of fewer number of business days due to the end-of-year holiday period and the wintertime slowdown in renovation and construction work. The third quarter ending August 31 also includes fewer business days due to the summer holidays, which can be reflected in the period's financial results. The second and fourth quarters ending May 31 and November 30, respectively, generally represent the year's most active periods.

Management's Discussion & Analysis Report Q1-2024	________	7	________

Analysis of principal cash flows for the first quarter ended February 29, 2024

Quarters ended February 29 and February 28	2024	2023
(in millions of dollars)
Cash flows provided by (used in):
Operating activities	0.5	18.8
Financing activities	(19.1)	(22.0)
Investing activities	(15.5)	(22.3)
Effect of exchange rate changes on cash and cash equivalents	0.1	(0.2)
Net change in cash and cash equivalents (bank overdraft)	(33.9)	(25.7)
Cash and cash equivalents (bank overdraft), beginning of period	23.7	(112.0)
Cash and cash equivalents (bank overdraft), end of period	(10.2)	(137.7)

Reconciliation of cash flow from operating activities to adjusted cash flow from operating activities :

Quarters ended February 29 and February 28	2024	2023
(in millions of dollars)
Cash flow from operating activities	0.5	18.8
Net change in non-cash working capital balances (inflow)	34.4	21.8
Adjusted cash flows from operating activities	34.9	40.6

Operating activities

First quarter cash flow from operating activities, before net change in non-cash working capital balances, was $34.9M or $0.62 per diluted share compared to $40.6M or $0.72 per diluted share for the first quarter of 2023. This 13.9% decrease primarily reflects the decrease in net earnings. The net change in non-cash working capital items used cash flows of $34.4M, mainly reflecting the increase in inventories and the decrease in accounts payable and accrued liabilities, including income taxes, while accounts receivable and other items represented a cash inflow of $1.2M. As a result, operating activities provided a cash inflow of $0.5M, compared to a cash inflow of $18.8M in Q1 2023.

Financing activities

Financing activities in Q1 required a cash outflow of $19.1M compared to $22.0M in Q1 2023. During the quarter, the Corporation paid $9.7M in lease obligations, $8.4M in dividends to shareholders and repaid $1.7M in long-term debt, compared to a lease obligation payment of $7.1M, a dividend payment of $8.4M in Q1 2023 and a $4.5M repayment of long-term debt. The Corporation also repurchased $0.8M of common shares during Q1 2023.

Investing activities

Investing activities amounted to $15.5M, including $7.4M for the two business acquisitions made during Q1, and $8.0M mainly for the purchase of rolling stock, investments related to the consolidation of our Calgary location and for other equipment to maintain and improve operational efficiency.

Sources of financing

As at February 29, 2024, the bank overdraft, net of cash and cash equivalents, was $10.2M, compared to net cash of $23.7M as at November 30, 2023. The Corporation had working capital of $623.4M with a ratio of 3.7:1, compared to $621.8M (ratio of 3.6:1) as at November 30, 2023.

Richelieu believes it has the capital resources to fulfill its ongoing commitments and obligations and to assume the funding requirements needed for its growth and the financing and investing activities between now and the end of 2024. The Corporation continues to have access to an authorized line of credit of $85M [$150M as at November 30, 2023] as well as a line of credit of US$56M [US$56M as at November 30, 2023] renewable annually and bearing interest at the bank's prime and the BSBY rate plus 1.05%, respectively. In addition, Richelieu considers it could access other outside financing if necessary.

Management's Discussion & Analysis Report Q1-2024	________	8	________

ANALYSIS OF FINANCIAL POSITION

	As at February 29,	As at November 30,	∆ %
(in millions of dollars)	2024	2023
Current assets	857.5	859.5	(0.2)
Non-current assets	487.3	455.5	7.0
Total	1,344.8	1,315.0	2.3
Current liabilities	234.2	237.7	(1.5)
Non-current liabilities	194.2	169.1	14.8
Equity attributable to shareholders	913.3	904.9	0.9
Non-controlling interests	3.1	3.3	(6.1)
Total	1,344.8	1,315.0	2.3

Assets

Total assets were $1.34B as at February 29, 2024, compared to $1.31B as at November 30, 2023, an increase of 2.3%. Current assets were down 0.2% or $1.9M from November 30, 2023. Non-current assets increased by 7.0% mainly due to the addition of right-of- use assets.

Liabilities

Current liabilities amounted to $234.2M as at February 29, 2024, down 1.5% from $237.7M as at November 30, 2023. Non-current liabilities totalled $194.2M as at February 29, 2024 compared to $169.1M as at November 30, 2023, reflecting the increase in lease obligations. Long-term debt, including the current portion, was $6.6M as at February 29, 2024 and primarily represents balances payable on acquisitions.

Shareholders' equity

The Corporation's shareholders' equity was $913.3M as at February 29, 2024, compared to $904.9M as at November 30, 2023, an increase of $8.4M mainly due to an increase of $6.9M in retained earnings and $1.9M in capital stock and contributed surplus, while accumulated other comprehensive income was down by $0.3M. As at February 29, 2024, the book value per share was $16.27, up 0.9% from November 30, 2023.

Share capital and stock options

As at February 29, 2024, the Corporation's share capital consisted of 56,139,140 common shares [56,088,365 shares as at November 30, 2023]. For the three-month period ended February 29, 2024, the weighted average number of diluted shares outstanding was 56,530,470 [56,147,410 in 2023]. In addition, 1,854,525 stock options were outstanding as at February 29, 2024 [November 30, 2023 - 1,620,925].

The following table presents the changes in outstanding share capital and stock options for the three-month period ended February 29, 2024:

Number of shares		Number of options
Outstanding, November 30, 2023	56,088,365	Outstanding, November 30, 2023	1,620,925
Issued upon exercise of options	50,775	Exercised	(50,775)
Repurchased	-	Granted	289,000
Other	-	Cancelled	(4,625)
Outstanding, February 29, 2024	56,139,140	Outstanding, February 29, 2024	1,854,525

SUBSEQUENT EVENT

On March 27, 2024, the Corporation acquired the principal net assets of Allegheny Plywood, a distributor of specialty panels and decorative surfaces, operating three distribution centres, located in Pittsburgh and Allentown, PA, and in Cleveland, OH.

FINANCIAL INSTRUMENTS

Richelieu periodically enters into forward exchange contracts to fully or partially hedge the effects of foreign currency fluctuations related to foreign-currency denominated payables or to hedge forecasted purchase transactions. The Corporation has a policy of not entering into derivatives for speculative or trading purposes and to enter into such contracts only with major financial institutions. Richelieu also uses equity swaps to reduce the effect of fluctuations in its share price on net earnings in connection with its deferred share unit plan.

Management's Discussion & Analysis Report Q1-2024	________	9	________

INTERNAL CONTROL OVER FINANCIAL REPORTING

As indicated in the 2023 annual MD&A, available on SEDAR+, management has designed and evaluated internal controls over financial reporting ("ICFR") and disclosure controls and procedures ("DC&P") to provide reasonable assurance that the Corporation's financial reporting is reliable and that its publicly disclosed financial statements are prepared in accordance with IFRS. The President and Chief Executive Officer and the Vice-President and Chief Financial Officer have assessed, within the meaning of National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings, the design and the effectiveness of internal controls over financial reporting as at November 30, 2023. In light of this assessment, they concluded that the design and the effectiveness of internal controls over financial reporting ("ICFR and DC&P") were effective. During the quarter ended February 29, 2024, management ensured that there were no material changes in the Corporation's procedures that were reasonably likely to have a material impact on its internal control over financial reporting. No such changes were identified.

Due to their intrinsic limits, internal controls over financial reporting only provide reasonable assurance and may not prevent or detect misstatements. In addition, projections of an assessment of effectiveness in future periods carry the risk that controls will become inappropriate as a result of changes in conditions or if the degree of conformity with standards and methods should deteriorate.

SIGNIFICANT ACCOUNTING POLICIES

The Corporation's interim consolidated financial statements for the quarter ended February 29, 2024, have been prepared by management in accordance with IFRS.

The interim consolidated financial statements were prepared in accordance with the accounting policies that the Corporation applied when preparing its consolidated financial statements as at November 30, 2023 and for the year then ended, which require management to make estimates and assumptions that affect the amounts reported in the interim consolidated financial statements and appearing in the accompanying notes, which could be modified. The estimates are based on management's knowledge of current events, on the measures the Corporation could take in the future and on other factors deemed relevant and reasonable.

Risk factors are described in the "Risk Factors" section of Richelieu's 2023 annual report available on SEDAR+ and on the Corporation's website.

SUPPLEMENTARY INFORMATION

Further information about Richelieu, including its latest Annual Information Form, is available on SEDAR+ at www.sedarplus.com and on the Corporation's website at www.richelieu.com.

President and Chief Executive Officer,

Vice-President and Chief Financial Officer,

Richard Lord

Antoine Auclair

April 11, 2024

Management's Discussion & Analysis Report Q1-2024	________	10	________