Stella-Jones Bets Big on US Infrastructure with $50M Steel Plant

MONTREAL, QC – February 26, 2026 – Stella-Jones Inc. today underscored its confidence in a North American infrastructure overhaul, announcing a US$50 million investment in a new U.S. steel manufacturing facility on the heels of strong full-year 2025 financial results. The company, a critical supplier for railway and electrical utility networks, posted annual sales of $3.5 billion and boosted its quarterly dividend by 10%, signaling robust health and a clear strategy for future growth.

The move to build a greenfield steel lattice structure facility in the Southeastern United States positions Stella-Jones to directly capitalize on the wave of government and private-sector spending aimed at modernizing the continent's aging electrical grid.

“Our solid performance was enhanced by meaningful progress in our growth strategy, as we executed on new opportunities to strengthen our presence in the utility sector,” said Eric Vachon, President and Chief Executive Officer of Stella-Jones. “Entering 2026, we are building on this momentum with an investment to expand our steel lattice structure business in the U.S. with the construction of a greenfield manufacturing facility, enabling us to further capture growing market demand.”

A Tale of Two Markets

Stella-Jones's 2025 performance paints a picture of strategic resilience, with impressive growth in its core utility products division offsetting softness in other segments. For the full year, sales remained steady at $3.49 billion, while net income rose to $337 million, or $6.09 per share, up from $319 million, or $5.66 per share, in 2024. The results were bolstered by a one-time $28 million insurance settlement gain.

The star performer was the utility products segment, which now accounts for 52% of the company's annual sales. Sales in this category climbed to $1.82 billion for the year, driven by strong demand for wood utility poles and contributions from recent acquisitions. In the fourth quarter alone, organic sales for utility products, excluding acquisitions, jumped 9% on stronger volumes from new contractual commitments.

This strength provided a crucial buffer against headwinds in other areas. The railway ties segment saw annual sales decrease 10% on an organic basis to $821 million, attributed to a major customer shifting to in-house treating, project delays, and increased competition. Similarly, the residential lumber business, which represents 18% of sales, faced softer consumer demand amid a cooling housing market, with sales remaining flat at $615 million for the year. The company's ability to navigate these mixed conditions highlights the success of its diversification strategy, preventing downturns in one market from derailing its overall financial stability.

Building for the Infrastructure Boom

The centerpiece of the company's forward-looking strategy is the new US$50 million steel lattice facility. Slated for the Southeastern U.S. and expected to be fully commissioned by the end of 2027, the plant will have an annual capacity of approximately 20,000 tons. This investment is a direct response to a generational opportunity in American infrastructure.

The U.S. is in the early stages of a massive grid modernization effort, fueled by the Infrastructure Investment and Jobs Act (IIJA), which has allocated over $65 billion for power infrastructure. This funding is aimed at replacing decades-old equipment, hardening the grid against extreme weather, and expanding transmission capacity to accommodate renewable energy sources and rising electricity demand from electric vehicles.

By adding significant domestic steel structure manufacturing capacity, Stella-Jones is positioning itself as a key supplier for these large-scale, multi-year projects. Steel lattice towers are essential components for high-voltage transmission lines that form the backbone of the electrical grid. This move allows the company to capture a larger share of a market projected to see sustained growth for the next decade, reducing its reliance on more cyclical businesses like residential lumber.

From Timber to Towers: A Strategic Transformation

The new steel plant is the latest and most significant step in Stella-Jones's deliberate evolution from a traditional wood treatment company into a comprehensive infrastructure solutions provider. This transformation has been accelerated by strategic acquisitions.

In 2025, the company deployed $259 million to acquire two key businesses: Locweld Inc., a Quebec-based manufacturer of steel lattice transmission towers, and Brooks Manufacturing Co., a U.S.-based producer of treated wood crossarms. These acquisitions immediately broadened the company's product portfolio for utility customers. The purchase of Locweld marked its entry into the steel structures market, while the Brooks deal strengthened its offering of critical wood components for the distribution network.

Together, these moves enable Stella-Jones to offer a more complete package of products to major utilities, from the wood poles and crossarms that support local distribution lines to the massive steel towers required for long-haul transmission. This "one-stop-shop" approach strengthens its relationships with major utility clients and enhances its competitive standing. The company projects that these recent acquisitions, combined with its organic growth initiatives, will contribute approximately $225 million in additional sales by 2028.

Charting a Confident Course

With its 2023-2025 financial objectives met or exceeded, Stella-Jones has laid out an ambitious but disciplined plan for the next three years. The company is targeting annual sales of approximately $4 billion by 2028 and an EBITDA margin between 17.5% and 18.5%, a sustainable target that accounts for the one-time gain in 2025.

A key new metric is a target of greater than 10% annual growth in earnings per share (EPS), reflecting a sharpened focus on delivering shareholder value. This growth will be supported by a clear capital allocation plan that balances strategic investments, like the new steel plant, with consistent returns to shareholders. The company plans to maintain its dividend payout at 20% to 30% of the prior year's EPS and will continue to repurchase shares opportunistically.

This ambitious agenda is backed by a healthy balance sheet. The company ended 2025 with a net debt-to-EBITDA ratio of 2.4x, comfortably within its target range of 2.0x to 2.5x. This financial strength provides the flexibility to pursue its growth strategy while navigating the dynamic economic landscape, solidifying its role as an essential partner in building and maintaining North America's critical infrastructure.