Vertex Resource Group Ltd. Reports Second Quarter 2025 Results

SHERWOOD PARK, AB, Aug. 14, 2025 /CNW/ - (TSXV: VTX) - Vertex Resource Group Ltd. ("Vertex" or the "Company") reports its financial and operational results for the second quarter ended June 30, 2025.  The following should be read in conjunction with the Management Discussion and Analysis ("MD&A") and the unaudited condensed consolidated interim financial statements of Vertex for the period ended June 30, 2025, which are available on SEDAR+ at www.sedarplus.ca.

Vertex operates within a dynamic North American landscape, marked by trade fluctuations and tariff uncertainties that have created challenges for several of the industries we operate in. Throughout the quarter, extensive forest fires and evacuations affected the execution of maintenance projects. Nevertheless, Vertex has demonstrated strategic resilience, as Environmental Consulting exceeded expectations and helped offset the impact on sectors within Environmental Services that are more susceptible to global volatility.

Key financial results for the three and six months June 30, 2025, and 2024 are as follows:  

HIGHLIGHTS
	Three Months ended		Six Months ended
	June 30,		June 30,
(in thousands of Canadian Dollars)	2025	2024	2025	2024
Gross revenue	54,160	57,159	110,662	116,990
Less flow through subcontractor costs	3,930	460	9,310	1,782
Net revenue	50,230	56,699	101,352	115,208
Profit margin	12,225	16,521	22,942	29,867
Profit margin %	24 %	29 %	23 %	26 %
Adjusted EBITDA ^(1)	6,371	10,047	11,592	16,947
Adjusted EBITDA %	13 %	18 %	11 %	15 %
Free cash flow ^(1)	1,258	1,742	2,787	2,179
Adjusted EBITDA per share, basic and diluted ^(1)	0.06	0.09	0.10	0.15
Earnings per share, basic and diluted	(0.03)	0.00	(0.05)	(0.01)

(1) See "Non-IFRS Financial Measures"

HIGHLIGHTS FOR THE THREE MONTHS ENDED JUNE 30, 2025

• Environmental Consulting net revenue increased by 13% compared to 2024.
• Environmental Consulting adjusted EBITDA⁽¹⁾ increased by 57% compared to 2024.
• G&A expenses were reduced by 10% compared to Q2 2024.
• Finance costs were reduced by 28% year-over-year due to reduced debt levels.
• Reduced loans and borrowings and lease liabilities by $2.9 million during the quarter.

HIGHLIGHTS FOR THE SIX MONTHS ENDED JUNE 30, 2025

• Environmental Consulting net revenue increased by 5% compared to H1 2024.
• Environmental Consulting adjusted EBITDA⁽¹⁾ increased by 37% compared to 2024.
• G&A expenses were reduced by 12% compared to H1 2024.
• Finance costs were reduced by 23% year-over-year due to reduced debt levels.
• Reduced loans and borrowings and lease liabilities by $5.9 million during H1 2025.

OUTLOOK

The first half of 2025 has presented macroeconomic challenges that continue to pressure commodity prices, capital investment, and broader market sentiment. These factors have contributed to increased customer uncertainty, resulting in deferred investment decisions, subdued activity levels across key regions, and a shift in focus toward cash flow preservation and operational efficiency. While these factors have impacted Vertex, we remain resilient with a focused view of the evolving landscape.

We remain committed to core objectives and have proactively adjusted our execution strategy to navigate current conditions. Cost management remains a top priority, and we are actively pursuing strategic adjustments to enhance our efficiency and strengthen our corporate framework. By reducing capital expenditures for the remainder of 2025, we are preserving liquidity and maintaining the flexibility needed to respond to emerging opportunities while continuing to reduce debt levels.

When market conditions stabilize, Vertex is well-positioned to capitalize on new opportunities and deliver long-term value. Our cautious optimism reflects both the realities of the current environment and our confidence in the company's ability to thrive through disciplined execution and strategic agility.

ABOUT VERTEX

Since 1962, Vertex has been a leading North American provider of environmental services. Headquartered in Sherwood Park, Alberta, Vertex employs a staff of approximately 1,000 employees and lease operators that provide services to help clients achieve their developmental and operational goals. From initial site selection, consultation and regulatory approval, through construction, operation and maintenance, to conclusion and environmental cleanup, Vertex provides a wide array of services to customers operating in industries such as energy, mining, utilities, private development, public infrastructure, construction, telecommunications, forestry, agriculture and government.

Vertex principally operates in Canada with select locations in the United States.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

NON-IFRS FINANCIAL MEASURES

This release includes certain terms or performance measures that are not defined under International Financial Reporting Standards ("IFRS"), including "Adjusted EBITDA". The data presented is intended to provide additional information that should not be considered in isolation or as a substitute measure of performance prepared in accordance with IFRS. The non-IFRS measures should be read in conjunction with the Company's financial statements and accompanying notes.

A)    "Adjusted EBITDA" is a non-IFRS financial measure which is calculated by adjusting net income (loss) for the sum of income taxes, finance costs including interest accretion on lease liabilities, depreciation of property and equipment and right of use assets, amortization of intangible assets, share-based compensation, restructuring costs and impairment.  The Company uses Adjusted EBITDA as an indicator of its principal business activities operational performance prior to consideration of how its activities are financed and the impact of taxation, non-cash depreciation and amortization, restructuring costs and other non-cash expenses such as impairments required under IFRS. Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures provided by other companies. Adjusted EBITDA is used by many analysts as an important analytical tool and the management of Vertex believes it is useful for providing readers with additional clarity on Vertex's operational performance. This measure is also considered important by the Company's lenders in determining compliance by the Company with the financial covenants under its lending arrangements.

B)     "Free cash flow" is a non-IFRS financial measure.  The most directly comparable GAAP measure for free cash flow is cash flow from operating activities.  A summary of the reconciliation of cash flow from operating activities to free cash flow is set forth in the table below.  Management uses the term "free cash flow" for its own performance measure and to provide shareholders and potential investors with a measurement of the Company's efficiency and its ability to generate the cash necessary to fund its future growth expenditures, to repay debt and provide shareholder returns.

C)    "Adjusted Working Capital" is a non-IFRS financial measure which is calculated by reducing current liablities by the current portion of loans and borrowings, lease liablities and other liabilities.  Adjusted working capital is used by Vertex to monitor its capital structure, liquidity, and it's ability to fund current operations.

D)    "Adjusted EBITDA per share, basic and diluted" is a non-financial measure which is calculated by dividing adjusted EBITDA by the weighted average shares outstanding – basic and diluted.

Reconciliations of adjusted EBITDA, free cash flow and adjusted working capital are provided in the following tables.

ADJUSTED EBITDA					Three months ended			Six months ended
					June 30,			June 30,
					2025	2024		2025	2024
Net (loss) income for the period					(3,254)	563		(5,627)	(808)
Add:
Depreciation and amortization					5,824	6,398		11,881	12,296
Finance costs					2,065	2,853		4,313	5,588
Impairment					2,707	-		2,707	-
Share-based compensation					17	60		35	119
Income tax (recovery) expense					(988)	173		(1,717)	(248)
Adjusted EBITDA					6,371	10,047		11,592	16,947

FREE CASH FLOW					Three months ended			Six months ended
					June 30,			June 30,
					2025	2024		2025	2024
Cash flows from operating activities					6,131	10,805		10,905	20,081
Changes in non-cash operating working capital items					55	(860)		670	(3,216)
Maintenance capex					(3,227)	(6,092)		(5,213)	(10,093)
Cash interest					(1,404)	(2,125)		(3,105)	(4,133)
Depreciation of right of use assets - real property					(690)	(1,001)		(1,678)	(1,903)
Proceeds from disposal of property and equipment					393	1,015		1,208	1,443
Free cash flow					1,258	1,742		2,787	2,179

ADJUSTED WORKING CAPITAL						June 30,	December 31,
						2025	2024
Current assets						54,925	64,767
Current liabilities, less						53,273	61,417
	Current portion of loans and borrowings					(11,240)	(12,096)
	Current portion of lease liabilities					(7,515)	(8,778)
	Current portion of other liabilities					(333)	(1,000)
Current liabilities (excluding current portion of loans and borrowings, lease liabilities, and other liabilities)						34,185	39,543
Adjusted working capital						20,740	25,224

Forward-Looking Information

This Press Release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable Canadian securities laws. The forward-looking statements contained in this Press Release are based on the expectations, estimates and projections of management of Vertex as of the date of this Press Release unless otherwise stated. The use of any of the words "believe", "expect", "anticipate", "contemplate", "target", "plan", "outlook", "potential", "estimated", "intends", "continue", "may", "will", "should" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this Press Release contains forward-looking statements concerning anticipated financial performance; the outlook for 2025; the Company's ability to grow profitably; sufficiency of working capital; and with respect to Vertex's ability to meet evolving customer demands.

Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the industries in which Vertex operates in general, such as:

• Ability to access sufficient capital from internal and external sources
• Ability to market to new customers
• Ability to obtain equipment in a timely and cost-efficient manner
• Ability to secure work
• Adjustments and cancellations of backlog
• Changes in legislation, including but not limited to tax laws and environmental regulations
• Collection of recognized revenue
• Commodity price, interest rate and exchange rate fluctuations
• Competition, ethics, and reputational risks
• Compliance with environmental laws risks
• Cyber-security risks
• Economy and cyclicality
• Geopolitical risks
• Global pandemics
• Health, safety and environmental risks
• Industry and inherent project delivery risks
• Insurance risk
• Joint venture risk
• Labour matters
• Litigation risk
• Loss of key management; ability to hire and retain qualified and capable personnel
• Maintaining safe worksites
• Operational risks
• Potential for non-payment and credit risk and ongoing financing availability
• Third party credit risk
• Unforeseen weather conditions
• Unanticipated shutdowns, work stoppages, and lockouts
• Volatility of market trading

Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of the parties, and the combined company are included in reports on file with applicable securities regulatory authorities, including but not limited to: Annual Information Form for the year ended December 31, 2024, which may be accessed on Vertex's SEDAR+ profile at www.sedarplus.ca.

The forward-looking statements contained in this Press Release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as, and to the extent required by applicable securities laws.

SOURCE Vertex Resource Group Ltd.

For further information please contact: Terry Stephenson, CEO, or Sherry Bielopotocky, CFO at 780-464-3295