TERRAVEST ANNOUNCES THIRD QUARTER RESULTS FOR FISCAL 2026 AND DIVIDEND DECLARATION

TORONTO, Aug. 13, 2026 /CNW/ -- TerraVest Industries Inc., (TSX: TVK) ("TerraVest" or the "Company") announces its results for the third quarter ended June 30, 2026 and the declaration of its quarterly dividend.

THIRD QUARTER AND NINE MONTHS REVIEW AND OUTLOOK

Business Performance

Management believes that there are certain non‐IFRS financial measures that can be used to assist shareholders in analyzing the performance of TerraVest. The table below highlights certain financial results and reconciles net income to Adjusted earnings before interests, income taxes, depreciation and amortization ("Adjusted EBITDA") for the third quarter and nine months ended June 30, 2026 and the comparative periods in fiscal 2025.

		Third quarters ended			Nine months ended
		June 30, 2026	June 30, 2025		June 30, 2026	June 30, 2025
		$	$		$	$
	Sales	460,894	405,707		1,311,809	951,742
	Net Income	35,604	13,306		83,559	77,086
	Add (subtract):
	Income tax expense	3,723	1,106		23,474	17,545
	Financing costs	17,348	18,805		49,530	33,134
	Depreciation and amortization	40,033	38,449		117,306	71,986
	Change in fair value of derivative     financial instruments	877	(2,481)		136	474
	Change in fair value of investment in     equity instruments	(1,399)	(11,616)		14,187	(14,896)
	Change in fair value of investment in a     limited partnership	(496)	(114)		(439)	(190)
	Change in fair value of contingent     considerations	-	-		(48,307)	-
	(Gain) loss on foreign exchange	(4,395)	9,672		(5,025)	(1,009)
	(Gain) loss on disposal of other property, plant     and equipment	16	7		(445)	(117)
	(Gain) loss on disposal of property, plant and     equipment for rental	(91)	(23)		(280)	(452)
	(Gain) loss on derecognition of finance leases     receivable	(37)	-		(37)	-
	(Gain) loss on sale of business	-	-		-	(136)
	Gain on bargain purchase	(5,038)	-		(5,323)	(3,993)
	Acquisition‑related cost	819	987		1,917	3,253
	Adjusted EBITDA	86,964	68,098		230,253	182,685

Sales for the third quarter and nine months ended June 30, 2026 were $460,894 and $1,311,809 versus $405,707 and $951,742 for the prior comparable periods. This represents increases of 14% and 38% respectively. TerraVest acquired all the issued and outstanding shares of KBK Industries, LLC ("KBK") in January 2026, of Tankcon FRP Inc. ("Tankcon") in May 2025, of Simplex, Inc. ("Simplex") and L.B.T., Inc. ("LBT") in April 2025 and of EnTrans Holding, Inc. ("Entrans") in March 2025. In addition, TerraVest acquired the Canadian assets of Colter Energy LP and Colter Energy Services Canada Ltd. ("Colter") in May 2026, of New Wave Energy Services Ltd. ("Wave") in September 2025 and of Aureus Energy Services Inc. ("Aureus") in January 2025. Excluding Colter, KBK, Tankcon and Simplex, sales for the third quarter ended June 30, 2026 were $404,904 versus $387,183 for the prior comparable period and excluding the same acquisitions plus LBT and Entrans, sales for the nine months ended June 30, 2026 were $807,382 versus $750,566 for the prior comparable period.

This represents increases of 5% and 8% respectively for TerraVest's base portfolio. Wave and Aureus results can't be excluded from TerraVest results as their activities have been fully integrated into one of TerraVest's existing subsidiaries whose operations are similar in nature.

The increases in sales for TerraVest base portfolio businesses versus the prior comparable periods are mainly explained by the ramp-up of sales for large data center projects and growing demand for commercial and industrial storage tanks, partially offset by lower demand for tank trailers in the United States market. Additionally for the nine-month period, foreign exchange had an unfavorable impact of $7,568 on sales compared to the prior comparable period. Without this negative foreign exchange effect, the increase in sales would have been 9% on the base portfolio of businesses for the nine-month period ended June 30, 2026.

Net income for the third quarter and nine months ended June 30, 2026 were $35,604 and $83,559 versus $13,306 and $77,086 for the prior comparable periods. This represents increases of 168% and 8% respectively. For the third quarter ended June 30, 2026, the increase is mainly explained by the addition of KBK, a gain on foreign exchange as well as a gain on bargain purchase, partially offset by a lower favorable change in fair value of investment in equity instruments in fiscal 2026. For the nine-month period ended June 30, 2026, the slight increase is explained by the positive contributions of the 2026 and 2025 business acquisitions and a favorable change in fair value of contingent considerations due to the Entrans acquisition recognized in the first quarter of 2026, partially offset by the additional depreciation and amortization expenses, income tax expense and financing costs as a result of business acquisitions as well as an unfavorable change in fair value of investment in equity instruments. Other variances are also highlighted in the table above.

Adjusted EBITDA for the third quarter and nine months ended June 30, 2026 were $86,964 and $230,253 versus $68,098 and $182,685 for the prior comparable periods. This represents increases of 28% and 26% respectively, which is the result of the reasons explained above. Foreign exchange had an unfavorable impact on Adjusted EBITDA of $2,418 for the nine-month period ended June 30, 2026.

The table below reconciles cash flow from operating activities to Cash Available for Distribution for the third quarter and nine months ended June 30, 2026 and the comparative periods in fiscal 2025.

		Third quarters ended			Nine months ended
		June 30, 2026	June 30, 2025		June 30, 2026	June 30, 2025
		$	$		$	$
	Cash Flow from Operating Activities	30,956	27,957		186,044	98,785
	Add (subtract):
	Change in non‑cash operating working     capital items	32,785	14,923		(31,689)	20,740
	Maintenance capital expenditures	(14,432)	(4,571)		(34,371)	(19,972)
	Repayment of lease liabilities	(4,137)	(3,733)		(11,917)	(8,813)
	Cash Available for Distribution	45,172	34,576		108,067	90,740
	Dividends Paid	4,337	3,413		12,469	9,751
	Dividend Payout Ratio	10 %	10 %		12 %	11 %

Cash flow from operating activities for the third quarter and nine months ended June 30, 2026 were $30,956 and $186,044 versus $27,957 and $98,785 for the prior comparable periods. This represents increases of 11% and 88% respectively. The increase for the third quarter is attributable to an increase in net income, partially offset by an unfavorable change in non-cash working capital items. The nine-month period increase is attributable to a favorable change in non-cash working capital items compared to the prior period, mainly explained by an increase in accounts payable and customer deposits, partially offset by an increase in inventories to support production ramp-up in many facilities.

Maintenance Capital Expenditures were $14,432 for the third quarter ended June 30, 2026 versus $4,571 for the prior comparable period representing an increase of 216%, mainly attributable to the Service segment as well as TerraVest's portfolio growth following the 2026 and 2025 business combinations. During the third quarter ended June 30, 2026, TerraVest's total purchase of property, plant and equipment ("PP&E") paid was $23,861 of which $9,429 is considered growth capital. The growth capital expenditures incurred during the third quarter were primarily used to expand fiberglass manufacturing capacity and grow TerraVest's leasing business.

Cash Available for Distribution for the third quarter and nine months ended June 30, 2026 increased by 31% and 19% respectively versus the prior comparable periods. The trend is a result of reasons explained above and elsewhere in this press release.

Outlook

In general, TerraVest's portfolio of businesses continues to perform in line with management expectations, with two notable exceptions. Similar to previous quarters, demand for tank trailers continues to be soft, especially in the US market, while demand for industrial steel tanks, primarily driven by large data center projects, continues to be stronger than expected. The Company expects both trends to continue in the near term. Recent acquisitions have made a meaningful contribution, and we expect this to continue throughout this fiscal year. Opportunities to enhance performance through synergies between recent acquisitions and the base portfolio of businesses continue to exist and are a focus for management.

Ever-changing tariff announcements continue to create an environment of uncertainty in North America's manufacturing sector. TerraVest does benefit from a diverse manufacturing footprint in North America that allows us to mitigate against direct tariff-related impacts. TerraVest continues to address the topic by leveraging both its footprint but also supply chain to minimize the impact on the company. TerraVest continues to monitor any potential tariffs support programs. However, the current context has resulted in softer demand for certain of TerraVest's businesses.

The Company continues to make targeted investments to improve its manufacturing efficiency and expand its product lines, particularly in end markets where it has a meaningful presence.

Business Combinations

In May 2026, a partially-owned subsidiary of TerraVest, Green Energy Services Inc. ("GES"), entered into an acquisition agreement to acquire the Canadian assets of Colter. The acquisition was completed through Colter Energy Inc., a partially-owned new company formed by GES. Headquartered in Grande Prairie, Alberta, Colter provides well testing and production flowback services to the Western Canadian energy industry.

In January 2026, a wholly-owned subsidiary of TerraVest entered into a share purchase agreement to purchase all the issued and outstanding shares of KBK. Headquartered in Woodlands, Texas, KBK is a manufacturer of aboveground and underground fiberglass tanks and steel storage tanks for the convenience store ("c-store"), agricultural, chemical, infrastructure and energy markets.

TerraVest also acquired three other businesses that were not individually significant.

Subsequent event

In July 2026, TerraVest entered into an agreement to purchase all the issued and outstanding shares of Superior Pressure Vessels Inc. ("SPV"). SPV is a Canada-based manufacturer of storage tanks and transport trailers for liquid propane gas ("LPG") and anhydrous ammonia ("NH3"), sold to propane and fertilizer distributors, and also provides truck and trailer service, repair and inspection. The total consideration for the transaction was $23,375 paid using the revolving operating credit facility.

CONSOLIDATED RESULTS OF OPERATIONS

The following section provides the financial results of TerraVest's operations for the third quarter and nine months ended June 30, 2026 and the comparative periods in fiscal 2025.

		Third quarters ended			Nine months ended
		June 30, 2026	June 30, 2025		June 30, 2026	June 30, 2025
		$	$		$	$
	Sales	460,894	405,707		1,311,809	951,742
	Cost of sales	342,266	300,235		981,054	684,860
	Gross profit	118,628	105,472		330,755	266,882
	Administration expenses	61,292	65,154		183,601	128,940
	Selling expenses	11,224	11,640		36,061	30,492
	Financing costs	17,348	18,805		49,530	33,134
	Other (gains) losses	(10,563)	(4,539)		(45,470)	(20,315)
		79,301	91,060		223,722	172,251
	Earnings before income taxes	39,327	14,412		107,033	94,631
	Income tax expense	3,723	1,106		23,474	17,545
	Net Income	35,604	13,306		83,559	77,086
	Allocated to non‐controlling interests	4,739	2,056		9,443	8,914
	Net income attributable to common     shareholders	30,865	11,250		74,116	68,172
	Weighted average shares outstanding – Basic	21,637,035	20,421,384		21,669,475	19,808,083
	Weighted average shares outstanding – Diluted	22,115,563	21,121,141		22,158,148	20,559,889
	Net income per share – Basic	$1.43	$0.55		$3.42	$3.44
	Net income per share – Diluted	$1.40	$0.53		$3.34	$3.32

Sales for the third quarter and nine months ended June 30, 2026 increased by 14% and 38% respectively versus the prior comparable periods. The reasons have been explained previously in this press release.

Gross profit for the third quarter and nine months ended June 30, 2026 increased by 12% and 24% respectively versus the prior comparable periods. This is primarily explained by the contribution of KBK, Tankcon, Simplex, LBT and Entrans, and the the ramp-up of sales for large data center projects, partially offset by a lower demand for tank trailers in the US market, a less favorable product mix and reduced activity levels in some of TerraVest's base portfolio businesses.

Administration expenses for the third quarter and nine months ended June 30, 2026 decreased by 6% and increased by 42% respectively versus the prior comparable periods. The increase for the nine-month period was primarily driven by the addition of KBK, Tankcon, Simplex, LBT and Entrans. The decrease for the third quarter is attributable to lower amortization of acquisition-related intangible assets versus the comparable quarter.

Selling expenses for the third quarter and nine months ended June 30, 2026 decreased by 4% and increased by 18% respectively versus the prior comparable periods. The increase for the nine-month period is explained by the addition of KBK, Tankcon, Simplex, LBT and Entrans. Selling expenses are basically flat versus the comparable quarter.

Financing costs for the third quarter and nine months ended June 30, 2026 decreased by 8% and increased by 49% respectively versus the prior comparable periods. The increase is primarily explained by the additional interest expense on long-term debt and on lease liabilities as a result of the acquisition of KBK, Tankcon, Simplex, LBT and Entrans for the nine months ended June 30, 2026.

Other (gains) losses variance for the third quarter and nine months ended June 30, 2026 was mainly driven by a favorable change in fair value of contingent considerations from the Entrans acquisition (only for the nine-month period) and a gain on foreign exchange, partially offset by an unfavorable change in fair value of investment in equity instruments. In addition, the timing of the gain on bargain purchase realized in fiscal 2025 also explained the variance for the third quarter period.

Income tax expense variance for the third quarter and nine months ended June 30, 2026 is the result of the variation in taxable earnings and the timing of income tax expense adjustments.

As a result of the above, net income attributable to common shareholders for the third quarter and nine months ended June 30, 2026 increased by 174% and 9% respectively versus the prior comparable periods.

DIVIDENDS

TerraVest is pleased to announce that the Board of Directors has declared a quarterly dividend of $0.20 per common share payable on October 9, 2026 to shareholders of record as at the close of business on September 30, 2026.

Additional information can be found in TerraVest's annual consolidated financial statements and MD&A which are available on SEDAR+ at www.sedarplus.ca.

NON‐IFRS FINANCIAL MEASURES

The Company uses measures (and ratios) that are not in accordance with IFRS to provide investors with supplemental metrics to assess and measure its operating performance and financial position from one period to the next. These metrics are presented as a complement to enhance the understanding of TerraVest's operating results but not in substitution of IFRS results.

Adjusted EBITDA, Cash Available for Distribution, Dividend Payout Ratio, Maintenance Capital Expenditures and Working Capital are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. TerraVest's definitions may differ from those of other issuers and therefore may not be comparable to similarly titled measures used by other issuers.

Adjusted EBITDA: is defined as net income adjusted for income tax expense, financing costs, depreciation, amortization, change in fair value of derivative financial instruments, change in fair value of investment in equity instruments and investment in a limited partnership, change in fair value of contingent considerations, gains or losses on foreign exchange, gains or losses on disposal of other property, plant and equipment and property, plant and equipment for rental, gains or losses on disposal of intangible assets, gains or losses on lease modification, gains or losses on derecognition of finance leases receivable, gains or losses on remeasurement of equity interest, gain on bargain purchase, gains or losses on sale of business, non‑recurring acquisition‑related costs, impairment charges and other non‑recurring and/or non‑operations related items that do not reflect the current ongoing operations of TerraVest. Management believes this is a useful metric in evaluating the ongoing operating performance of TerraVest. Readers are cautioned that Adjusted EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of TerraVest's performance.

Cash Available for Distribution: is defined as cash flow from operating activities adjusted for changes in non-cash operating working capital, maintenance capital expenditures and repayment of lease liabilities. Management believes that cash available for distribution, as a liquidity measure, is a useful metric that provides an indication of the cash available from ongoing operations that can be distributed to shareholders as a dividend. Readers are cautioned that Cash Available for Distribution should not be construed as an alternative to cash flow from operating activities determined in accordance with IFRS as an indicator of TerraVest's liquidity and cash flows.

Dividend Payout Ratio: is defined as dividends paid in cash during the period divided by Cash Available for Distribution for the period. Management believes that Dividend Payout Ratio is a useful metric as it provides an indication of TerraVest's ability to sustain its current dividend policy. There is no directly comparable IFRS measure for Dividend Payout Ratio.

Maintenance Capital Expenditures: is defined as capital expenditures made to sustain the operations of TerraVest's operating businesses and to maintain the productive capacity of the businesses over an economic cycle, whether or not they yield significant cost or production efficiencies. Management believes that Maintenance Capital Expenditures should be funded by cash flow from existing operating activities and, therefore, deducted in determining Cash Available for Distribution. There is no directly comparable IFRS measure for Maintenance Capital Expenditures.

Working Capital: is calculated by subtracting current liabilities from current assets. Management uses Working Capital as a measure for assessing overall liquidity. There is no directly comparable IFRS measure for Working Capital.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements. All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" or similar terms or variations of these words. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements.

Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flows, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

SOURCE TerraVest Industries Inc.

FOR FURTHER INFORMATION PLEASE CONTACT: Dustin Haw, TerraVest Industries Inc., Chief Executive Officer, [email protected]