EcoSynthetix Reports 2026 Second Quarter Results

BURLINGTON, ON, July 28, 2026 /CNW/ -- EcoSynthetix Inc. (TSX: ECO) ("EcoSynthetix" or the "Company"), a renewable chemicals company that produces a portfolio of commercially proven bio-based products, today announced its financial and operational results for the three months (Q2 2026) and six months (YTD 2026) ended June 30, 2026. Financial references are in U.S. dollars unless otherwise indicated.

Highlights
(Comparison periods in each case are the three months ended June 30, 2025)

• Recorded net sales of $4.5 million, down 9%, primarily due to lower volumes.
• Recorded Adjusted EBITDA¹ loss of $0.2 million.
• Trial activity is encouraging across a range of top tier global pulp, tissue and packaging producers, including successful commercial trials at a global top five tissue producer which continue subsequent to the end of the quarter.
• Named one of the 2026 Best 50 Corporate Citizens in Canada by Corporate Knights, ranking 12^th overall in Corporate Knights' quantitative methodology.
• Purchased and cancelled 61,500 and 306,595 common shares in Q2 2026 and YTD 2026, respectively, under the normal course issuer bid for total consideration of $0.1 million and $0.7 million.
• Maintained a strong balance sheet with cash and term deposits of $29.1 million as at June 30, 2026.

"Macroeconomic conditions across our end markets continue to weigh on the pace at which our customers adopt our innovative biopolymers. While this has impacted our topline growth we continue to manage the business in a disciplined manner at a near breakeven level," said Jeff MacDonald, CEO of EcoSynthetix. "The fundamentals remain intact. Our biopolymers address large end markets. Their performance capabilities have been proven in market at commercial scale. We're commercially engaged with global leaders in each of our strategic end markets. Each of our biopolymers addresses a specific need in their respective end market. The demand our biopolymers meet is durable; the economic pressures slowing its adoption are not. We continue to expand and deepen our pipeline of trial activity with prospects and our channel partners. The commercial relationships we have today represent more than enough addressable demand to return the business to meaningful growth as adoption accelerates."

Financial Summary

Net Sales

Net sales were $4.5 million and $8.3 million for Q2 2026 and YTD 2026, respectively, compared to $5.0 million and $9.0 million for the corresponding periods in 2025. The $0.5 million decrease, or 9% change in the quarterly period was due to lower sales volumes as a result of challenging macroeconomic conditions in end markets. The lower sales volumes in key end markets reflect temporary market conditions. In wood composites, the key strategic account is prioritizing manufacturing efficiency during a period of softer end-market demand. In pulp, the unusually narrow price spread between hardwood and softwood pulp has reduced the economic incentive for premium products despite high trial success rates. The $0.7 million decrease, or 8% change, in the YTD period was primarily due to lower sales volumes as a result of challenging macroeconomic conditions in end markets referenced above, partially offset by a higher average selling price driven by foreign exchange fluctuations and product mix.

Gross Profit

Gross profit was $1.3 million and $2.2 million for Q2 2026 and YTD 2026, respectively, compared to $1.4 million and $2.3 million for the corresponding periods in 2025. The change in the quarterly period was primarily due to lower sales volumes, while the YTD period was relatively unchanged.

Gross profit as a percentage of sales was 28.6% and 26.8% for Q2 2026 and YTD 2026, respectively, compared to 28.4% and 25.3% in the corresponding periods last year. Gross profit as a percentage of sales adjusted for manufacturing depreciation was 34.0% and 32.5% for Q2 2026 and YTD 2026, respectively, compared to 33.0% and 30.4% for the corresponding periods in 2025. The improvement in the quarterly period was primarily due lower manufacturing costs while the YTD improvement reflected higher average selling prices partially offset by higher manufacturing costs.  

Selling, General and Administrative

Selling, general and administrative expenses (SG&A) were $1.7 million and $3.3 million for Q2 2026 and YTD 2026, respectively, compared to $1.2 million and $2.7 million for the corresponding periods in 2025. The change in the quarterly period was primarily due to a change in foreign exchange gains and losses of $0.2 million, higher salaries and benefits of $0.1 million and increased repairs and maintenance of $0.1 million. The change in the YTD period was primarily due to a change in foreign exchange gains and losses of $0.2 million, higher salaries and benefits of $0.2 million and other miscellaneous cost increases.

Research and Development

Research and development (R&D) costs were $0.3 million and $0.5 million for Q2 2026 and YTD 2026, respectively, compared to $0.4 million and $0.8 million in the corresponding periods in 2025. The change in both periods was primarily attributable to refundable SR&ED tax credits. R&D expenses as a percentage of sales were 7% and 6%, respectively, compared to 9% in both prior-year periods. The Company's R&D efforts continue to focus on further enhancing value for its existing products and expanding its addressable opportunities.

Adjusted EBITDA¹

Adjusted EBITDA loss was $0.2 million and $0.5 million for Q2 2026 and YTD 2026, respectively, compared to positive Adjusted EBITDA of $0.2 million and an Adjusted EBITDA loss of $0.3 million in the corresponding periods last year. The change in both periods was primarily due to lower gross profit and higher operating costs adjusted for non-cash items. 

Net (Loss) Income

Net loss was $0.4 million, or $0.01 per common share, for Q2 2026 compared to net income of $0.1 million, or $0.01 per common share, for the same period last year. The change of $0.5 million was primarily due to a $0.4 million increase in loss from operations and $0.1 million lower interest income. Net loss was $1.0 million, or $0.02 per common share, for YTD 2026 compared to $0.5 million, or $0.01 per common share, for the same period in 2025. The change of $0.5 million was primarily attributable to a $0.3 million increase in loss from operations and $0.2 million lower interest income.

Liquidity

Cash on hand and term deposits were $29.1 million as at June 30, 2026, compared to $29.6 million as at December 31, 2025. The Company purchased and cancelled 61,500 and 306,595 common shares in Q2 2026 and YTD 2026, respectively, under the NCIB for total consideration of $0.1 million and $0.7 million.  

Notice of Conference Call

EcoSynthetix will host a conference call Wednesday July 29, at 8:30 am ET to discuss its financial results. Jeff MacDonald, CEO, and Robert Haire, CFO, will co-chair the call. All interested parties can instantly join the call by phone, by following the URL https://emportal.ink/4ax2VKP to easily register and be connected into the conference call automatically or the conventional method by dialling [phone] or [phone] with the conference identification of 33359#. Please dial in 15 minutes prior to the call to secure a line. A live audio webcast of the conference call will also be available at www.ecosynthetix.com or https://app.webinar.net/ZljgmNGeGVy. The presentation will be accompanied by slides, which will be available via the webcast link and the Company's website. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast.

¹Non-IFRS Financial Measures

This press release makes reference to certain non-IFRS measures. These non-IFRS measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing a further understanding of results of operations of EcoSynthetix from management's perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of the financial information of EcoSynthetix reported under IFRS. The Company uses non-IFRS measures such as Adjusted EBITDA to provide investors with a supplemental measure of operating performance and thus highlight trends in its core business that may not otherwise be apparent when relying solely on IFRS financial measures. Management also believes that securities analysts, investors and other interested parties frequently use non-IFRS measures in the evaluation of issuers. Management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period, prepare annual operating budgets and assess the Company's ability to meet its capital expenditure and working capital requirements.

Adjusted EBITDA is not a measure recognized under IFRS and does not have a standardized meaning prescribed by IFRS. See "IFRS and Non-IFRS Measures." The Company presents Adjusted EBITDA because the Company believes it facilitates investors' use of operating performance comparisons from period to period and company to company by backing out potential differences caused by variations in capital structures (affecting relative interest expense), the book amortization of intangibles (affecting relative amortization expense) and the age and book value of property and equipment (affecting relative depreciation expense). The Company also presents Adjusted EBITDA because it believes it is frequently used by securities analysts, investors and other interested parties as a measure of financial performance. Adjusted EBITDA as presented herein are not recognized measures under IFRS and should not be considered as an alternative to operating income or net income as measures of operating results or an alternative to cash flows as measures of liquidity. Adjusted EBITDA is defined as consolidated net income (loss) before net interest expense, income taxes, depreciation, amortization, gain or loss on disposals of property, plant and equipment and other non-cash expenses and charges deducted in determining consolidated net income (loss).

The following table reconciles net income (loss) to Adjusted EBITDA (loss) for the three and six months ended June 30, 2026, and June 30, 2025:

	Three months ended June 30, 2026	Three months ended June 30, 2025	Six months ended June 30, 2026	Six months ended June 30, 2025
Net (loss) income	(430,370)	111,004	(1,022,457)	(495,522)
Depreciation	312,447	275,783	609,335	546,186
Share-based compensation	235,243	210,780	455,036	415,442
Interest income	(271,846)	(359,356)	(537,508)	(728,906)
Adjusted EBITDA (loss)	(154,526)	238,211	(495,594)	(262,800)

About EcoSynthetix Inc. (www.ecosynthetix.com) 
EcoSynthetix offers a range of sustainable engineered biopolymers that allow customers to reduce their use of harmful materials, such as formaldehyde and styrene-based chemicals. The Company's flagship products, DuraBind™, Surflock™, Bioform™, and EcoSphere®, are used to manufacture wood composites, personal care, paper, tissue and packaging products, and enable performance improvements, economic benefits and carbon footprint reduction. The Company is publicly traded on the Toronto Stock Exchange (T:ECO).

Forward-Looking Statements
Certain statements in this Press Release constitute "forward-looking" statements that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance, objectives or achievements of the Company, or industry results, to be materially different from any future results, performance, objectives or achievements expressed or implied by such forward looking statements. The forward-looking statements in this Press Release include, but are not limited to, statements regarding the Company's plans to execute its commercial strategy, deliver meaningful growth across all three product categories, convert high-value strategic prospects into customers, and other statements regarding the Company's plans and expectations in 2026. These statements reflect our current views regarding future events and operating performance and are based on information currently available to us, and speak only as of the date of this Press Release. These forward-looking statements involve a number of risks, uncertainties and assumptions and should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such performance or results will be achieved. Those assumptions and risks include, but are not limited to, the Company's ability to successfully allocate capital as needed and to develop new products, as well as the fact that our results of operations and business outlook are subject to significant risk, volatility and uncertainty. Many factors could cause our actual results, performance or achievements to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including the factors identified in the "Risk Factors" section of the Company's Annual Information Form dated February 17, 2026. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described in this Press Release as intended, planned, anticipated, believed, estimated or expected. Unless required by applicable securities law, we do not intend and do not assume any obligation to update these forward-looking statements.

EcoSynthetix Inc.
Consolidated Balance Sheets
(expressed in US dollars)
	June 30, 2026	December 31, 2025
Assets
Current assets
Cash	7,546,288	8,420,285
Term deposits	21,556,354	21,161,145
Accounts receivable	2,467,354	3,234,911
Inventory	3,225,358	3,767,661
Prepaid expenses	290,769	204,272
	35,086,123	36,788,274
Non-current assets
Property, plant and equipment	5,901,555	5,943,242
Total assets	40,987,678	42,731,516
Liabilities
Current liabilities
Trade accounts payables and accrued liabilities	1,515,376	2,355,358
Non-current liabilities
Lease liability	1,520,276	1,786,798
Total liabilities	3,035,652	4,142,156
Shareholders' Equity
Common shares	489,305,417	488,725,570
Contributed surplus	11,017,086	11,211,810
Accumulated deficit	(462,370,477)	(461,348,020)
Total shareholders' equity	37,952,026	38,589,360
Total liabilities and shareholders' equity	40,987,678	42,731,516

EcoSynthetix Inc.
Consolidated Statements of Operations and Comprehensive (Loss) Income
For the three and six months ended June 30, 2026 and 2025
(expressed in US dollars)
	Three months ended June 30,			Six months ended June 30,
	2026	2025		2026	2025
Net sales	4,540,723	5,004,511		8,315,162	9,046,672
Cost of sales	3,243,774	3,581,675		6,088,260	6,755,797
Gross profit on sales	1,296,949	1,422,836		2,226,902	2,290,875
Expenses
Selling, general and administrative	1,662,424	1,242,610		3,258,171	2,702,157
Research and development	336,741	428,578		528,696	813,146
	1,999,165	1,671,188		3,786,867	3,515,303
Loss from operations	(702,216)	(248,352)		(1,559,965)	(1,224,428)
Net interest income	271,846	359,356		537,508	728,906
Net (loss) income and comprehensive (loss) income	(430,370)	111,004		(1,022,457)	(495,522)
Basic and diluted (loss) income per common share	(0.01)	0.00		(0.02)	(0.01)
Weighted average number of common shares outstanding	58,820,064	58,576,242		58,909,217	58,554,124

EcoSynthetix Inc.
Consolidated Statements of Cash Flows
For the three and six months ended June 30, 2026 and 2025
(expressed in US dollars)
	Three months ended June 30,			Six months ended June 30,
	2026	2025		2026	2025
Cash provided by (used in)
Operating activities
Net (loss) income and comprehensive (loss) income	(430,370)	111,004		(1,022,457)	(495,522)
Items not affecting cash
Depreciation	312,447	275,783		609,335	546,186
Share-based compensation	235,243	210,780		455,036	415,442
Other	47,392	(117,945)		64,805	(152,827)
Changes in non-cash working capital
Accounts receivable	(705,052)	(226,351)		767,557	(263,725)
Inventory	760,206	182,361		572,808	(452,407)
Prepaid expenses	(45,381)	(102,692)		(86,497)	(115,475)
Trade accounts payables and accrued liabilities	(67,426)	(584,734)		(747,890)	(139,646)
Interest on term deposits
Interest received on term deposits	155,600	200,055		800,823	1,041,849
Accrued interest on term deposits	(227,802)	(307,663)		(459,542)	(621,738)
	34,857	(359,402)		953,978	(237,863)
Investing activities
Purchase of property, plant and equipment	(447,245)	(142,123)		(686,492)	(165,288)
Receipts on matured term deposits	3,175,500	3,000,000		20,527,774	19,550,000
Purchase of term deposits	(3,331,100)	(3,175,500)		(21,264,264)	(20,455,500)
	(602,845)	(317,623)		(1,422,982)	(1,070,788)
Financing activities
Payments made on lease liability	(100,904)	(81,433)		(200,621)	(160,875)
Common shares repurchased	(147,203)	(355,517)		(733,667)	(689,359)
Exercise of common share options	-	-		663,754	43,238
	(248,107)	(436,950)		(270,534)	(806,996)
Effect of exchange rate changes on cash	(84,641)	124,605		(134,459)	161,664
Change in cash during the period	(900,736)	(989,370)		(873,997)	(1,953,983)
Cash - Beginning of period	8,447,024	6,756,790		8,420,285	7,721,403
Cash - End of period	7,546,288	5,767,420		7,546,288	5,767,420

SOURCE EcoSynthetix Inc.

For further information, please contact: Investor Relations, Ross Marshall, Phone: [phone], E-mail: [email protected]