Exchange Income Corporation Posts All Time Record Results in the Third Quarter Driven by the Diversification of its Business Model and Announces a Dividend Increase

Executive Summary

• Exchange Income Corp. reported record Q3 2025 results: Revenue $960 M (+35% YoY), Adjusted EBITDA $231 M (+20%), Net Earnings $69 M (+23%) and Free Cash Flow $171 M (+26%).
• The company completed redemption of its remaining convertible debentures, eliminating all such debt from its capital structure.
• Declared an increased annual dividend of $0.12 per share to $2.76 (5% increase).

Key Details

• Financial Highlights – Q3 2025 vs. Q3 2024
• Revenue: $959,744 K → $709,856 K (+35%)
• Adjusted EBITDA: $230,569 K → $192,914 K (+20%)
• Net Earnings: $68,737 K → $55,885 K (+23%) – basic EPS $1.32 vs. $1.18
• Adjusted Net Earnings: $75,674 K → $61,372 K (+23%) – basic EPS $1.46 vs. $1.29
• Free Cash Flow: $171,441 K → $136,116 K (+26%) – per share $3.30 vs. $2.86

• Free Cash Flow less Maintenance CapEx: $88,163 K → $81,201 K (+9%) – per share $1.70 vs. $1.71

• Year‑to‑Date (nine months) Highlights – all metrics up 19–26% versus 2024.

• Capital Structure Update

• Completed redemption of 7‑year 5.25 % convertible unsecured subordinated debentures due July 31 2028, issuing ~2.6 M common shares.
• Announced early redemption of the remaining 7‑year 5.25 % convertible debentures due Jan 15 2029 (Series M).

• Post‑redemption, no convertible debentures will remain outstanding, simplifying balance sheet and preserving ~C$1.2 B liquidity for acquisitions and growth.

• Dividend Increase – annual cash dividend raised by $0.12 to $2.76 per share (5% increase), reflecting a modest portion of earnings growth while maintaining payout ratio discipline.

• Segment Performance

• Aerospace & Aviation: Revenue +57% to $680 M; Adjusted EBITDA +30% to $202 M, driven by Canadian North integration and higher load factors.

• Manufacturing: Revenue up $3 M to $279 M; Adjusted EBITDA down $6 M to $45 M due to aluminum tariffs and project delays, partially offset by strong U.S. matting business.

• Acquisition & Integration – Canadian North acquisition (closed July 1) integrated successfully; expected first‑year Free Cash Flow less Maintenance CapEx below typical threshold because of elevated maintenance spend, but cost‑saving opportunities identified.

• Guidance Outlook

• FY 2026 Adjusted EBITDA forecast: $825–$875 M (excluding undisclosed M&A or major capex).

• FY 2025 guidance reaffirmed: Adjusted EBITDA $725–$765 M, midpoint bias.

• Conference Call – Management to discuss Q3 results on Friday, 7 Nov 2025 at 8:30 a.m. ET (dial‑in details provided).

Notable Quotes

“Our diversification and investment philosophy continues to show itself in consistent record‑setting financial performance… I am extremely confident in our future as we have strong short, medium and longer‑term opportunities for growth.” – Mike Pyle, CEO

“The redemption of our convertible debentures simplifies our capital structure and positions us to fund the next stage of growth with non‑dilutive capital.” – Richard Wowryk, CFO