Bri-Chem Announces 2025 Second Quarter Financial Results

Executive Summary

• Bri-Chem Corp. reported its financial results for the second quarter and first half of 2025, showing a 7% year-over-year increase in Q2 sales driven by the USA Rockies region, while the six-month period remained flat.
• The company reported a significant improvement in profitability metrics for Q2 2025, with Adjusted EBITDA rising 48% to $1.0 million and Adjusted Net Earnings turning positive at $60,000 compared to a loss in the prior year period.
• Management anticipates a challenging second half of 2025 with flat or declining rig activity in Canada and the US, though U.S. fluid distribution sales are expected to remain stable due to sustained activity in key basins.

Key Details

• Q2 2025 Financial Performance (Three Months Ended June 30, 2025):
  • Sales: $20.5 million, an increase of 7% ($1.4 million) from $19.1 million in Q2 2024.
  • Adjusted EBITDA: $1.0 million, up 48% from $706 thousand in Q2 2024; margin increased to 5% from 4%.
  • Operating Earnings: $772 thousand, up 24% from $620 thousand in Q2 2024, driven by a decrease in bad debt expense.
  • Adjusted Net Earnings: $60 thousand, compared to a loss of $(584) thousand in Q2 2024.
  • Net Earnings: $157 thousand, compared to a loss of $(488) thousand in Q2 2024.
  • Per Diluted Share Metrics:
    • Adjusted EBITDA: $0.04 (up from $0.03).
    • Adjusted Net Earnings: $0.01 (up from $(0.02)).
    • Net Earnings: $0.02 (up from $(0.02)).
• Six Months 2025 Financial Performance (Six Months Ended June 30, 2025):
  • Sales: $40.4 million, essentially flat (0% change) compared to $40.5 million in the prior year.
  • Adjusted EBITDA: $1.5 million, up 474% from $264 thousand in the prior year period.
  • Operating Earnings: $748 thousand, up 57% from $476 thousand.
  • Adjusted Net Loss: $(558) thousand, compared to a loss of $(2.4) million in the prior year.
  • Net Loss: $(255) thousand, compared to a loss of $(2.0) million.
• Segment Performance (Q2 2025):
  • Canadian Drilling Fluids Distribution: Sales of $1.7 million (up $611 thousand). Active Canadian land rigs averaged 127 (down ~5% from 133).
  • US Drilling Fluids Distribution: Sales of $12.3 million (up 7% from $11.4 million). Active US land rigs averaged 556 (down ~4% from 582).
  • Canadian Blending and Packaging: Sales of $3.9 million (down $358 thousand from $4.3 million), attributed to lower cementing and stimulation activities in Western Canada.
  • US Blending and Packaging: Sales of $2.5 million (up $332 thousand from $2.2 million), driven by increased cementing activities in California.
• Financial Position (as of June 30, 2025):
  • Total Assets: $53.4 million (down 10% from $59.2 million).
  • Working Capital: $11.1 million (down 21% from $14.1 million), due to decreases in accounts receivable and inventory, partially offset by decreased bank indebtedness.
  • Long-term Debt: $6.4 million (down 3% from $6.6 million).
  • Shareholders' Equity: $19.4 million (down 10% from $21.6 million).
• Outlook:
  • Rig activity in Canada and the US is expected to remain flat or slightly decline through the remainder of 2026.
  • Canadian drilling fluids demand expected to remain soft in Q3 2025, with potential recovery in Q4.
  • US fluid distribution sales expected to remain stable, supported by activity in the Permian Basin, California, and the Rockies.

Notable Quotes

• "Consolidated sales for the three months ended June 30, 2025 were $20.5 million, representing a 7% increase from the prior year. The increase is primarily due to increased sales in the fluid distribution division in the USA Rockies region."
• "As Bri-Chem enters the second half of 2025, the Company continues to navigate a challenging operating environment shaped by ongoing commodity price volatility, cautious capital spending by customers, and evolving political and regulatory developments in both Canada and the United States."