Inventory Optimization and Cost Discipline Drive Free Cash Flow, Restore Target Leverage and Strengthen Balance Sheet
TSX Symbol: WJX
TORONTO, March 2, 2026 /CNW/ - Wajax Corporation ("Wajax" or the "Corporation") today announced its 2025 fourth quarter and annual results. All monetary amounts are in Canadian dollars unless otherwise noted.
Selected Highlights for the Fourth Quarter and Full Year
- Fourth quarter revenue of $560.0 million remained relatively flat over the prior year, and full year revenue of $2,145.3 million was up 2.3% over 2024;
- Adjusted basic earnings per share of $0.71 for the fourth quarter and $2.90 for the full year, up from $0.35 and $2.44, respectively, over 2024;(1)
- Fourth quarter gross profit margin of 18.0% up 100 basis points ("bps") year-over-year, driven by margin improvement activities. Full year gross profit margin of 19.2% down 50 bps over 2024, reflecting more competitive market dynamics in the first half of 2025 versus the first half of 2024;(1)
- Selling and administrative expenses decreased by $6.4 million for the fourth quarter, and by $14.7 million for the full year, compared to 2024, reflecting management's continued focus on cost discipline;
- Inventory of $547.6 million decreased from $605.7 million at September 30, 2025, and was down $126.4 million from December 31, 2024, reflecting improved year-over-year inventory turns and optimization;
- Cash generated from operating activities was $81.5 million for the fourth quarter and $194.0 million for the full year, reflecting prudent management of working capital; and
- Leverage ratio improved to 1.62 times from 2.28 times at September 30, 2025, and 2.61 times at December 31, 2024, returning to management's target leverage range of 1.5 to 2.0 times.(1)
"Throughout the year, our leadership team remained firmly focused on disciplined cost control, inventory optimization and margin improvement to strengthen profitability, enhance cash flow and reduce leverage," said Iggy Domagalski, President and Chief Executive Officer. "Inventory has decreased by $202.7 million from its peak in March 2024, significantly improving cash flow from operating activities and supporting a meaningful reduction in leverage, returning us to our target leverage range of 1.5 to 2.0 times. These results reflect disciplined execution and a stronger, more resilient balance sheet as we enter 2026."(1)
Mr. Domagalski continued, "We delivered solid earnings growth in 2025, with adjusted basic earnings per share of $0.71 in the fourth quarter and $2.90 for the full year, up 104.1% and 19.2%, respectively, over the same periods in the prior year. Gross margin improved 100 basis points in the quarter to 18.0%, reflecting improved execution, while full-year gross margin of 19.2% was modestly lower compared to prior year due to more competitive market conditions, particularly in the first half of the year compared to the first half of 2024. Despite the year-over-year margin decline, we saw meaningful improvement in product support margins versus 2024, and improved industrial parts and ERS margins in the latter half of 2025 versus the latter half of 2024. We remain focused on margin improvement initiatives to strengthen our margin profile, mitigate ongoing market pressures and drive continued earnings performance."(1)
(dollars in millions, except per share data) |
Three Months Ended |
Twelve Months Ended |
||||
2025 |
2024 |
change |
2025 |
2024 |
change |
|
CONSOLIDATED RESULTS |
||||||
Revenue |
$ 560.0 |
$ 565.9 |
(1.0) % |
$ 2,145.3 |
$ 2,097.6 |
2.3 % |
Equipment sales |
$ 205.8 |
$ 208.4 |
(1.2) % |
$ 684.7 |
$ 618.6 |
10.7 % |
Product support |
$ 124.3 |
$ 132.8 |
(6.4) % |
$ 527.1 |
$ 535.0 |
(1.5) % |
Industrial parts |
$ 130.6 |
$ 133.6 |
(2.3) % |
$ 552.7 |
$ 572.0 |
(3.4) % |
Engineered repair services ("ERS") |
$ 87.8 |
$ 79.1 |
11.1 % |
$ 334.3 |
$ 326.5 |
2.4 % |
Equipment rental |
$ 11.5 |
$ 12.1 |
(4.7) % |
$ 46.5 |
$ 45.5 |
2.1 % |
Net earnings |
$ 12.1 |
$ 1.0 |
1,073.7 % |
$ 57.5 |
$ 42.8 |
34.3 % |
Basic earnings per share(2) |
$ 0.56 |
$ 0.05 |
1,073.7 % |
$ 2.64 |
$ 1.97 |
34.0 % |
Adjusted net earnings(1)(3) |
$ 15.4 |
$ 7.5 |
104.1 % |
$ 63.2 |
$ 52.9 |
19.5 % |
Adjusted basic earnings per share(1)(2)(3) |
$ 0.71 |
$ 0.35 |
104.1 % |
$ 2.90 |
$ 2.44 |
19.2 % |
Adjusted EBIT(1) |
$ 28.1 |
$ 19.3 |
45.6 % |
$ 114.1 |
$ 105.8 |
7.8 % |
Adjusted EBITDA(1) |
$ 44.0 |
$ 35.1 |
25.2 % |
$ 176.7 |
$ 168.0 |
5.2 % |
Adjusted EBIT margin(1) |
5.0 % |
3.4 % |
160 bps |
5.3 % |
5.0 % |
30 bps |
Adjusted EBITDA margin(1) |
7.9 % |
6.2 % |
170 bps |
8.2 % |
8.0 % |
20 bps |
Cash generated from operating activities |
$ 81.5 |
$ 81.4 |
$ 0.1 |
$ 194.0 |
$ 75.1 |
$ 118.8 |
Outlook
In 2026, management will continue to focus on disciplined cost control, inventory optimization and margin improvement, supported by prudent capital allocation and effective execution, to enhance efficiency, strengthen cash flow and support sustainable performance.
Looking ahead, Wajax continues to see strong customer demand in the mining and energy sectors, with mining demand reflected in a backlog of two large mining shovels for delivery over the next five quarters. Market conditions in other sectors remain mixed across regions with continued macroeconomic softness and uncertainty related to Canada–U.S. tariff and trade dynamics.
Wajax enters 2026 with a strengthened balance sheet, a solid backlog and improved operating performance. Inventory levels are within a normal operating range, margin and cost control remain a focus, and leverage is within the Corporation's target range. While demand visibility varies across end markets, the Corporation's diversified exposure and approach to capital allocation and execution supports its ability to manage current conditions.
Management believes that continued execution of its priorities, underpinned by prudent capital allocation and balance sheet strength, will support sustainable long-term value creation.
Dividend
The Corporation has declared a dividend of $0.35 per share for the first quarter of 2026, payable on April 2, 2026, to shareholders of record on March 16, 2026.
Fourth Quarter Highlights
- Revenue in the fourth quarter of 2025 decreased $5.9 million, or 1.0%, to $560.0 million, from $565.9 million in the fourth quarter of 2024. Regionally:
- Revenue in western Canada of $261.4 million decreased 4.9% from the same period in the prior year due primarily to lower construction and forestry sales, partially offset by higher equipment sales in the mining category and higher ERS sales.
- Revenue in central Canada of $95.3 million decreased 4.4% from the same period in the prior year due primarily to lower equipment sales in the material handling category and lower industrial parts sales. These decreases were partially offset by higher equipment sales in the construction and forestry category and higher ERS sales.
- Revenue in eastern Canada of $203.3 million increased 6.2% from the same period in the prior year due primarily to higher ERS sales and higher equipment sales in the power systems, and construction and forestry categories. These increases were partially offset by lower equipment sales in the material handling category.
- Gross profit margin of 18.0% in the fourth quarter of 2025 increased 100 bps compared with gross profit margin of 17.1% in the same period of 2024.(1) This increase in margin was driven primarily by higher margins realized on industrial parts, product support and equipment revenue, reflecting management's focus on margin improvement initiatives in these areas of the business. The increase in margin was also driven by a higher proportion of ERS sales from a sales mix perspective.
- Selling and administrative expenses in the fourth quarter of 2025 decreased $6.4 million compared with the fourth quarter of 2024. Excluding the $1.2 million contingent consideration revaluation recovery (2024 – $2.3 million expense), the $1.3 million unrealized gain on total return swaps (2024 – $1.8 million unrealized loss), and the $1.3 million loss on settlement of defined benefit pension obligations under the Wajax Limited Supplemental Executive Retirement Plan (the "SERP") (2024 – nil), selling and administrative expenses decreased $1.2 million compared with the same period in the prior year. Cost reductions from management's continued focus on cost discipline were partially offset by higher incentive accruals driven by improved financial results compared to the prior year. Selling and administrative expenses as a percentage of revenue decreased to 13.1% in the fourth quarter of 2025 from 14.1% in the same period of 2024.(1) Excluding the contingent consideration revaluation recovery/expense and the unrealized gain/loss on total return swaps in both periods, and the loss on settlement of obligations under the SERP in 2025, selling and administrative expenses as a percentage of revenue decreased to 13.3% in the fourth quarter of 2025, from 13.4% in the same quarter of 2024.(1)
- During the quarter, the Corporation recognized $4.3 million of restructuring and other related costs, relating primarily to executive separation benefits.
- EBIT of $23.3 million in the fourth quarter of 2025 increased $12.2 million, or 109.5%, from $11.1 million in the same period of 2024. The year-over-year increase in EBIT resulted primarily from higher gross profit margin. Adjusted EBIT increased $8.8 million, or 45.6%, to $28.1 million in the fourth quarter of 2025 from $19.3 million in the fourth quarter of 2024, and adjusted EBIT margin increased to 5.0% in the fourth quarter of 2025 from 3.4% in the same quarter of 2024.(1)
- Finance costs of $6.9 million in the fourth quarter of 2025 decreased $1.5 million compared with the same quarter last year. Excluding the unrealized loss on interest rate derivatives of less than $0.1 million in the quarter and the unrealized gain of $0.2 million in the same period of the prior year, finance costs decreased $1.8 million compared with the same quarter of 2024 due primarily to lower interest rates and lower average borrowings when considering both Wajax's bank credit facility and any outstanding debentures combined. Wajax repaid its senior unsecured debentures on January 15, 2025.
- The Corporation generated net earnings of $12.1 million, or $0.56 per share, in the fourth quarter of 2025 versus $1.0 million, or $0.05 per share, in the same period of 2024. The Corporation generated adjusted net earnings of $15.4 million, or $0.71 per share, in the fourth quarter of 2025 versus $7.5 million, or $0.35 per share, in the same period of 2024.(1) Adjusted net earnings for the fourth quarter of 2025 excludes facility closure, restructuring and other related costs of $3.2 million after tax, or $0.15 per share (2024 - $4.3 million after tax, or $0.20 per share), gains on the change in fair value of contingent consideration of $1.2 million after tax, or $0.06 per share (2024 - losses of $2.3 million after tax, or $0.10 per share), non-cash losses on mark to market of derivative instruments of $0.5 million after tax, or $0.02 per share (2024 – gains of less than $0.1 million after tax, or less than $0.01 per share), gains recorded on sale of properties of $0.3 million after tax, or $0.01 per share (2024 - nil), and loss on settlement of obligations under the SERP of $1.0 million after tax, or $0.04 per share (2024 - nil).(1)
- Adjusted EBITDA margin increased to 7.9% in the fourth quarter of 2025 from 6.2% in the fourth quarter of 2024 due primarily to higher gross profit margin.(1)
- Cash flows generated from operating activities amounted to $81.5 million in the fourth quarter of 2025, compared with cash generated of $81.4 million in the same quarter of the prior year. The increase in cash generated of $0.1 million was driven primarily by a decrease in trade and other receivables of $7.8 million in the quarter compared to an increase of $36.0 million in the same quarter of the prior year, a decrease in inventory of $58.2 million in the quarter compared to a decrease of $48.4 million in the same quarter of the prior year, and an increase in net earnings excluding items not affecting cash flow of $8.0 million. These increases in cash generated were mostly offset by a decrease in accounts payable and accrued liabilities of $13.8 million during the quarter, compared to an increase of $43.0 million in the same quarter of the prior year.
- Backlog of $516.6 million at December 31, 2025 increased $10.1 million, or 2.0%, compared to September 30, 2025 backlog of $506.5 million due to an increase in power systems backlog, driven by a subcontract (the "RCD Subcontract") with Irving Shipbuilding Inc. ("ISI"), pursuant to which the Corporation will supply diesel generator sets for the first batch of three River Class Destroyers to be delivered to the Royal Canadian Navy.(1) This increase was partially offset by lower backlog in all other categories, most notably in mining, driven largely by the delivery of two large mining shovels in the quarter which were in backlog at September 30, 2025. Backlog at December 31, 2025 included two large mining shovels (September 30, 2025 - four large mining shovels).
- Working capital of $498.6 million at December 31, 2025 decreased $51.7 million from $550.2 million at September 30, 2025, due primarily to lower inventory.(1) Working capital efficiency was 25.1% at December 31, 2025, compared to 25.4% at September 30, 2025, due to the lower trailing four quarter average working capital, largely resulting from lower average inventory levels.(1) Excluding the Corporation's debentures, which were repaid on January 15, 2025, working capital efficiency of 25.1% at year-end represented an improvement of 100 bps from 26.1% at September 30, 2025.(1) See the Bank and Other Credit Facilities and Debentures section for further details on the repayment of the debentures.
- The Corporation's leverage ratio improved to 1.62 times at December 31, 2025 from 2.28 times at September 30, 2025.(1) The improvement in leverage ratio was primarily due to the lower debt level driven by cash generated from operating activities during the quarter.
- Effective October 24, 2025, the Corporation amended its $500.0 million senior secured bank credit facility, extending its maturity date from October 1, 2027 to October 24, 2029. There was no change to the credit limit. As of the amendment date, the margins ranged between 1.5% and 3.3% for Canadian dollar term CORRA loans and U.S. dollar SOFR borrowings, and between 0.5% and 2.3% for prime rate borrowings.
- As noted above, during the fourth quarter of 2025, the Corporation entered into the RCD Subcontract. Pursuant to the terms of the subcontract, the generator sets are expected to be delivered and commissioned over the next ten years. The estimated value of the subcontract is approximately $114.0 million.
- Subsequent to year end, in January 2026, the Corporation made lump sum payments totaling $1.7 million to settle defined benefit pension obligations related to remaining participants under the SERP. Following the settlement of obligations under the Pension Plan for Executive Employees of Wajax Limited earlier in 2025 and the settlement of the remaining SERP obligations in January 2026, the Corporation has no outstanding defined benefit pension obligations.
- Subsequent to year end and effective February 6, 2026, Andre Dube resigned from his role as Senior Vice President, Sales and Operations.
- Subsequent to year end, on February 12, 2026, the Corporation announced the appointment of George J. McClean as President and Chief Executive Officer, effective March 3, 2026. Mr. McClean will also join the Corporation's Board of Directors.
Conference Call Details
Wajax will webcast its Fourth Quarter Financial Results Conference Call. You are invited to listen to the live webcast on Tuesday, March 3, 2026 at 2:00 p.m. EDT. To access the webcast, please visit our website wajax.com, under "Investor Relations", "Events and Presentations", "Q4 and Year-End 2025 Financial Results" and click on the "Listen to the Webcast" link. An archive of the webcast will be available following the live presentation.
About Wajax Corporation
Founded in 1858, Wajax (TSX: WJX) is one of Canada's longest-standing and most diversified industrial products and services providers. The Corporation operates an integrated distribution system providing sales, parts and services to a broad range of customers in diverse sectors of the Canadian economy, including: construction, forestry, mining, industrial and commercial, oil sands, transportation, metal processing, government and utilities, and oil and gas.
Notes: |
|||
(1) |
"Backlog", "Working capital", "Gross profit margin", "Selling and administrative expenses as a percentage of revenue", "Working capital efficiency", "Leverage ratio", "Adjusted net earnings", "Adjusted basic and diluted earnings per share", "Adjusted EBIT", "Adjusted EBIT margin", and "Adjusted EBITDA margin" do not have standardized meanings prescribed by generally accepted accounting principles ("GAAP"). See the Non-GAAP and Other Financial Measures section later in this press release. |
||
(2) |
Weighted average shares, net of shares held in trust, outstanding for calculation of basic and diluted earnings per share for the fourth quarter of 2025 were 21,774,775 (2024 – 21,774,451) and 22,334,282 (2024 – 22,210,260), respectively. |
||
(3) |
Net earnings excluding the following: |
||
a. |
after-tax facility closure, restructuring and other related costs of $3.2 million (2024 – $4.3 million), or basic and diluted loss per share of $0.15 and $0.14, respectively (2024 – basic and diluted loss per share of $0.20 and $0.19, respectively) for the fourth quarter of 2025. |
||
b. |
after-tax facility closure, restructuring, and other related costs of $6.1 million (2024 – $4.3 million), or basic and diluted loss per share of $0.28 and $0.27, respectively (2024 – basic and diluted loss per share of $0.20 and $0.19, respectively) for the year ended December 31, 2025. |
||
c. |
after-tax non-cash losses on mark to market of derivative instruments of $0.5 million (2024 – gains of less than $0.1 million), or basic and diluted loss per share of $0.02 (2024 – basic and diluted earnings per share of less than $0.01) for the fourth quarter of 2025. |
||
d. |
after-tax non-cash losses on mark to market of derivative instruments of $0.2 million (2024 – losses of $3.6 million), or basic and diluted loss per share of $0.01 (2024 – loss per share of $0.16) for the year ended December 31, 2025. |
||
e. |
after-tax gains on the change in fair value of contingent consideration of $1.2 million (2024 – losses of $2.3 million), or basic and diluted earnings per share of $0.06 and $0.05, respectively (2024 – loss per share of $0.10) for the fourth quarter of 2025 and for the year ended December 31, 2025. |
||
f. |
after-tax gains recorded on the sale of properties of $0.3 million (2024 – nil), or basic and diluted earnings per share of $0.01 (2024 – nil) for the fourth quarter of 2025 and for the year ended December 31, 2025. |
||
g. |
after-tax loss on settlement of obligations under the SERP of $1.0 million (2024 – nil), or basic and diluted loss per share of $0.04 (2024 – nil) for the fourth quarter of 2025 and for the year ended December 31, 2025. |
||
Non-GAAP and Other Financial Measures
The press release contains certain non-GAAP and other financial measures that do not have a standardized meaning prescribed by GAAP. Therefore, these financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that these measures should not be construed as an alternative to net earnings or to cash flow from operating, investing and financing activities determined in accordance with GAAP as indicators of the Corporation's performance. The Corporation's management believes that:
(i) |
these measures are commonly reported and widely used by investors and management; |
(ii) |
the non-GAAP measures are commonly used as an indicator of a company's cash operating performance, profitability and ability to raise and service debt; |
(iii) |
"Adjusted net earnings", "Adjusted basic earnings per share" and "Adjusted diluted earnings per share" provide indications of the results by the Corporation's principal business activities prior to recognizing non-recurring costs (recoveries) and non-cash losses (gains) on mark to market of derivative instruments. These adjustments to net earnings and basic and diluted earnings per share allow the Corporation's management to consistently compare periods by removing infrequent charges incurred outside of the Corporation's principal business activities and the impact of unrealized losses (gains) resulting from fluctuations in interest rates and the Corporation's share price; |
(iv) |
"Adjusted EBITDA" provides an indication of the results by the Corporation's principal business activities prior to recognizing non-recurring costs (recoveries) and non-cash losses (gains) on mark to market of derivative instruments. These adjustments to net earnings allow the Corporation's management to consistently compare periods by removing infrequent charges incurred outside of the Corporation's principal business activities, the impact of unrealized losses (gains) resulting from fluctuations in interest rates and the Corporation's share price, the impact of fluctuations in finance costs related to the Corporation's capital structure, the impact of tax rates, and the impact of depreciation and amortization of long-term assets; and |
(v) |
"Pro-forma adjusted EBITDA" provides the same utility as Adjusted EBITDA described above, however pursuant to the terms of the bank credit facility, is adjusted for the EBITDA of business acquisitions made during the period as if they were made at the beginning of the trailing 12-month period, and for the deduction of payments of lease liabilities. Pro-forma adjusted EBITDA is used in calculating the Leverage ratio and Senior secured leverage ratio. |
Non-GAAP financial measures are identified and defined below:
Funded net debt |
Funded net debt includes bank indebtedness, debentures and total long-term debt, net of cash. Funded net debt is relevant in calculating the Corporation's funded net debt to total capital, which is a non-GAAP ratio commonly used as an indicator of a company's ability to raise and service debt. |
Debt |
Debt is funded net debt plus letters of credit. Debt is relevant in calculating the Corporation's leverage ratio, which is a non-GAAP ratio commonly used as an indicator of a company's ability to raise and service debt. |
Total capital |
Total capital is shareholders' equity plus funded net debt. |
EBITDA |
Net earnings (loss) before finance costs, income tax expense, depreciation and amortization. |
Adjusted net earnings (loss) |
Net earnings (loss) before any facility closure, restructuring and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, change in fair value of contingent consideration, and gain/loss on settlement of obligations under the SERP. |
Adjusted basic earnings |
Basic and diluted earnings (loss) per share before any facility closure, restructuring and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, change in fair value of contingent consideration, and gain/loss on settlement of obligations under the SERP. |
Adjusted EBIT |
EBIT before any facility closure, restructuring and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, change in fair value of contingent consideration, and gain/loss on settlement of obligations under the SERP. |
Adjusted EBITDA |
EBITDA before any facility closure, restructuring and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, change in fair value of contingent consideration, and gain/loss on settlement of obligations under the SERP. |
Pro-forma adjusted EBITDA |
Defined as adjusted EBITDA adjusted for the EBITDA of business acquisitions made during the period as if they were made at the beginning of the trailing 12-month period pursuant to the terms of the bank credit facility and the deduction of payments of lease liabilities. Pro-forma adjusted EBITDA is used in calculating the Leverage ratio and Senior secured leverage ratio. |
Working capital |
Defined as current assets less current liabilities, as presented in the consolidated statements of financial position. |
Other working capital |
Defined as working capital less trade and other receivables and inventory plus accounts payable and accrued liabilities and the current portion of debentures, as presented in the consolidated statements of financial position. |
Non-GAAP ratios are identified and defined below:
Adjusted EBIT margin |
Defined as adjusted EBIT (defined above) divided by revenue, as presented in the consolidated statements of earnings. |
||
EBITDA margin |
Defined as EBITDA (defined above) divided by revenue, as presented in the consolidated statements of earnings. |
||
Adjusted EBITDA margin |
Defined as adjusted EBITDA (defined above) divided by revenue, as presented in the consolidated statements of earnings. |
||
Leverage ratio |
The leverage ratio is defined as debt (defined above) at the end of a particular quarter divided by trailing 12-month pro-forma adjusted EBITDA (defined above). The Corporation's objective is to maintain this ratio between 1.5 times and 2.0 times. |
||
Senior secured leverage |
The senior secured leverage ratio is defined as debt (defined above) excluding debentures at the end of a particular quarter divided by trailing 12-month pro-forma adjusted EBITDA (defined above). |
||
Funded net debt to total |
Defined as funded net debt (defined above) divided by total capital (defined above). |
||
Working capital efficiency |
Defined as trailing four-quarter average working capital (defined above) as a percentage of the trailing 12-month revenue. |
Supplementary financial measures are identified and defined below:
EBIT margin |
Defined as EBIT divided by revenue, as presented in the consolidated statements of earnings. |
||
Backlog |
Backlog is a management measure which includes the total sales value of customer purchase commitments for future delivery or commissioning of equipment, parts and related services, including ERS projects. There is no directly comparable GAAP financial measure for Backlog. |
||
Gross profit margin |
Defined as gross profit divided by revenue, as presented in the consolidated statements of earnings. |
||
Selling and administrative |
Defined as selling and administrative expenses divided by revenue, as presented in the consolidated statements of earnings. |
Reconciliation of the Corporation's net earnings to adjusted net earnings, adjusted basic earnings per share and adjusted diluted earnings per share is as follows:
Three months ended |
Year ended |
|||
December 31 |
December 31 |
|||
2025 |
2024 |
2025 |
2024 |
|
Net earnings |
$ 12.1 |
$ 1.0 |
$ 57.5 |
$ 42.8 |
Facility closure, restructuring and other related costs, after tax |
3.2 |
4.3 |
6.1 |
4.3 |
Gain recorded on the sale of properties, after tax |
(0.3) |
-- |
(0.3) |
-- |
Non-cash losses on mark to market of derivative instruments, after tax |
0.5 |
-- |
0.2 |
3.6 |
Change in fair value of contingent consideration, after tax |
(1.2) |
2.3 |
(1.2) |
2.3 |
Loss on settlement of obligations under the SERP, after tax |
1.0 |
-- |
1.0 |
-- |
Adjusted net earnings |
$ 15.4 |
$ 7.5 |
$ 63.2 |
$ 52.9 |
Adjusted basic earnings per share(1) |
$ 0.71 |
$ 0.35 |
$ 2.90 |
$ 2.44 |
Adjusted diluted earnings per share(1) |
$ 0.69 |
$ 0.34 |
$ 2.84 |
$ 2.38 |
(1) |
For the three months ended December 31, 2025, the number of weighted average basic and diluted shares outstanding were 21,774,775 and 22,334,282, respectively (2024 - 21,774,451 and 22,210,260, respectively). |
For the year ended December 31, 2025, the number of weighted average basic and diluted shares outstanding were 21,769,553 and 22,239,538, respectively (2024 - 21,719,568 and 22,188,628, respectively). |
Reconciliation of the Corporation's EBIT to EBITDA, Adjusted EBIT, Adjusted EBITDA and Pro-forma adjusted EBITDA is as follows:
Three months ended |
Year ended |
|||
December 31 |
December 31 |
December 31 |
December 31 |
|
EBIT |
$ 23.3 |
$ 11.1 |
$ 106.7 |
$ 96.5 |
Depreciation and amortization |
15.9 |
15.8 |
62.6 |
62.2 |
EBITDA |
$ 39.2 |
$ 27.0 |
$ 169.3 |
$ 158.7 |
EBIT |
$ 23.3 |
$ 11.1 |
$ 106.7 |
$ 96.5 |
Facility closure, restructuring and other related costs(1) |
4.3 |
5.8 |
8.2 |
5.8 |
Gain recorded on the sale of properties |
(0.3) |
-- |
(0.3) |
-- |
Non-cash losses (gains) on mark to market of derivative instruments, |
0.7 |
0.1 |
(0.6) |
1.3 |
Change in fair value of contingent consideration(3) |
(1.2) |
2.3 |
(1.2) |
2.3 |
Loss on settlement of obligations under the SERP(4) |
1.3 |
-- |
1.3 |
-- |
Adjusted EBIT |
$ 28.1 |
$ 19.3 |
$ 114.1 |
$ 105.8 |
Depreciation and amortization |
15.9 |
15.8 |
62.6 |
62.2 |
Adjusted EBITDA |
$ 44.0 |
$ 35.1 |
$ 176.7 |
$ 168.0 |
Payment of lease liabilities(5) |
(44.1) |
(39.2) |
||
Pro-forma adjusted EBITDA |
$ 132.5 |
$ 128.7 |
||
(1) |
Facility closure, restructuring and other related costs consists of costs relating to workforce reductions in response to economic conditions, incurred in both 2025 and 2024 and relating primarily to severance costs, as well as executive separation benefits incurred in 2025. |
(2) |
Non-cash losses (gains) on mark to market of derivative instruments that are not effectively designated as hedging instruments under International Financial Reporting Standards ("IFRS"), excluding interest rate derivatives as their fair value fluctuations impact finance costs, and excluding cross currency swaps as their fair value fluctuations offset against any foreign exchange gains and losses on the revolving credit facility. |
(3) |
The change in fair value of contingent consideration relates to changes in the estimated fair value of future performance-based earnout payments relating to business acquisitions. |
(4) |
During 2025, the Corporation made lump sum payments to settle defined benefit pension obligations under the SERP relating to the majority of participants. As a result of the settlement of obligations under the SERP, the Corporation recognized a loss. |
(5) |
Effective with the reporting period beginning on January 1, 2019 and the adoption of IFRS 16, the Corporation amended the definition of Funded net debt to exclude lease liabilities not considered part of debt. As a result, the corresponding lease costs must also be deducted from EBITDA for the purpose of calculating the leverage ratio. |
Calculation of the Corporation's funded net debt, debt, leverage ratio and senior secured leverage ratio is as follows:
December 31 |
December 31 |
||
Cash |
$ (8.3) |
$ (7.4) |
|
Debentures |
-- |
57.0 |
|
Long-term debt |
222.1 |
283.0 |
|
Funded net debt |
$ 213.8 |
$ 332.7 |
|
Letters of credit |
1.2 |
3.7 |
|
Debt |
$ 215.0 |
$ 336.3 |
|
Pro-forma adjusted EBITDA(1) |
$ 132.5 |
$ 128.7 |
|
Leverage ratio(2) |
1.62 |
2.61 |
|
Senior secured leverage ratio(3) |
1.62 |
2.17 |
(1) |
For the year ended December 31, 2025 and December 31, 2024. |
(2) |
Calculation uses debt divided by the trailing four-quarter Pro-forma adjusted EBITDA. This leverage ratio is calculated for purposes of monitoring against the Corporation's target leverage ratio of between 1.5 times and 2.0 times and is different from the leverage ratio calculated under the Corporation's bank credit facility agreement. |
(3) |
Calculation uses debt excluding debentures divided by the trailing four-quarter Pro-forma adjusted EBITDA. While the calculation contains some differences from the leverage ratio calculated under the Corporation's bank credit facility agreement, the resulting leverage ratio under the bank credit facility agreement is not significantly different. See the Liquidity and Capital Resources section. |
Calculation of total capital and funded net debt to total capital is as follows:
December 31 |
December 31 |
||
Shareholders' equity |
$ 537.5 |
$ 512.3 |
|
Funded net debt |
213.8 |
332.7 |
|
Total capital |
$ 751.3 |
$ 844.9 |
|
Funded net debt to total capital |
28.5 % |
39.4 % |
Calculation of the Corporation's working capital and other working capital amounts is as follows:
December 31 |
December 31 |
|
Total current assets |
$ 935.5 |
$ 1,094.3 |
Total current liabilities |
436.9 |
561.9 |
Working capital |
$ 498.6 |
$ 532.4 |
Trade and other receivables |
(279.3) |
(303.5) |
Inventory |
(547.6) |
(673.1) |
Debentures - current |
-- |
57.0 |
Accounts payable and accrued liabilities |
351.4 |
421.5 |
Other working capital amounts |
$ 23.2 |
$ 34.3 |
Cautionary Statement Regarding Forward-Looking Information
This news release contains certain forward-looking statements and forward-looking information, as defined in applicable securities laws (collectively, "forward-looking statements"). These forward-looking statements relate to future events or the Corporation's future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward looking statements can be identified by the use of words such as "plans", "anticipates", "intends", "predicts", "expects", "is expected", "scheduled", "believes", "estimates", "projects" or "forecasts", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors beyond the Corporation's ability to predict or control which may cause actual results, performance and achievements to differ materially from those anticipated or implied in such forward-looking statements. To the extent any forward-looking information in this news release constitutes future-oriented financial information or financial outlook within the meaning of applicable securities law, such information is being provided to demonstrate the potential of the Corporation and readers are cautioned that this information may not be appropriate for any other purpose. There can be no assurance that any forward-looking statement will materialize. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this news release, reflect management's current beliefs and are based on information currently available to management. Although management believes that the expectations represented in such forward-looking statements are reasonable, there is no assurance that such expectations will prove to be correct. Specifically, this news release includes forward-looking statements regarding, among other things: management's continued focus on margin improvement to strengthen our margin profile, mitigate ongoing market pressures and drive continued earnings performance; management's use of prudent capital allocation and effective execution to support cost control, inventory optimization and margin improvement, and to enhance efficiency, strengthen cash flow and support sustainable performance; anticipated customer demand in the mining and energy sectors, the timing of deliveries of two large mining shovels currently in backlog and management's outlook that market conditions in other sectors will remain mixed across regions with macroeconomic softness and uncertainty related to Canada–U.S. tariff and trade dynamics; management's belief that the Corporation's diversified exposure and approach to capital allocation and execution support its ability to manage current conditions, and that continued execution of its priorities, underpinned by prudent capital allocation and balance sheet strength, will support sustainable long-term value creation; the expected timing for the delivery and commissioning of diesel generator sets for the first batch of three River Class Destroyers to be delivered by ISI to the Royal Canadian Navy, together with the estimated value of our subcontract to supply same; and our objective of maintaining our leverage within a target range of 1.5 – 2.0 times. These statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions regarding: the absence of significant negative changes to general business and economic conditions; our ability to manage our business through ongoing uncertainty related to Canada-U.S. trade dynamics, including the imposition of new or changing trade tariffs; limited negative fluctuations in the supply and demand for, and the level and volatility of prices for, oil, natural gas and other commodities; the stability of financial market conditions, including interest rates; the ability of Hitachi Construction Machinery Americas Inc. ("Hitachi") and Wajax to develop and execute successful sales, marketing and other plans related to the enhanced direct distribution relationship which took effect on March 1, 2022; our continued ability to execute our strategic priorities, including our ability to execute on our organic growth priorities, complete and effectively integrate industrial parts and ERS acquisitions, and successfully implement new information technology platforms, systems and software, such as our ERP system; the future financial performance of the Corporation; limited fluctuations in our costs; the level of market competition; our continued ability to attract and retain skilled staff; our continued ability to procure quality products and inventory; and our ongoing maintenance of strong relationships with suppliers, employees and customers. The foregoing list of assumptions is not exhaustive. Factors that may cause actual results to vary materially include, but are not limited to: a continued or prolonged deterioration in general business and economic conditions; continued or prolonged uncertainty related to Canada-U.S. trade dynamics; new tariffs and/or counter-tariffs imposed on cross-border trade, particularly between Canada and the U.S.; negative fluctuations in the supply and demand for, and the level of prices for, oil, natural gas and other commodities; a continued or prolonged decrease in the price of oil or natural gas; the inability of Hitachi and Wajax to develop and execute successful sales, marketing and other plans related to the enhanced direct distribution relationship which took effect on March 1, 2022; a decrease in levels of customer confidence and spending; supply chain disruptions and shortages; fluctuations in financial market conditions, including interest rates; the level of demand for, and prices of, the products and services we offer; decreased market acceptance of the products we offer; the termination of distribution or original equipment manufacturer agreements; unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, our inability to reduce costs in response to slow-downs in market activity, unavailability of quality products or inventory, supply disruptions, job action and unanticipated events related to health, safety and environmental matters); our inability to attract and retain skilled staff and our inability to maintain strong relationships with our suppliers, employees and customers. The foregoing list of factors is not exhaustive.
Further information concerning the risks and uncertainties associated with these forward-looking statements and the Corporation's business may be found in our MD&A for the year-ended December 31, 2025 (the "2025 MD&A"), which has been filed under the Corporation's profile on SEDAR+ at www.sedarplus.ca, under the heading "Risk Management and Uncertainties". The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. The Corporation does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.
Readers are cautioned that the risks described in the 2025 MD&A are not the only risks that could impact the Corporation. Risks and uncertainties not currently known to the Corporation, or currently deemed to be immaterial, may have a material effect on the Corporation's business, financial condition or results of operations.
Additional information, including Wajax's 2025 Annual Report, is available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.
SOURCE Wajax Corporation
For further information, please contact: Iggy Domagalski, President and Chief Executive Officer, Email: [email protected]; Tania Casadinho, Chief Financial Officer, Email: [email protected], Telephone #: (905) 212-3300
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