TERRAVEST ANNOUNCES FIRST QUARTER RESULTS FOR FISCAL 2026 AND DIVIDEND DECLARATION

Executive Summary

• TerraVest reported Q1 FY 2026 sales of $408.35 M, a 74% increase versus the prior year, driven by organic growth and multiple 2025 acquisitions.
• Net income rose 16% to $35.23 M; Adjusted EBITDA increased 39% to $67.79 M, reflecting stronger operating performance despite higher financing costs and depreciation.
• The Board declared a quarterly cash dividend of $0.20 per common share (payable April 10 2026), with a payout ratio of 11%, indicating continued capacity to return capital to shareholders.

Key Details

• Financial Highlights – Q1 FY 2026 vs. Q1 FY 2025
• Sales: $408,350 K → $234,585 K (+74%)
• Net Income: $35,231 K → $30,431 K (+16%)
• Adjusted EBITDA: $67,786 K → $48,900 K (+39%)
• Cash Flow from Operations: $96,548 K → $36,603 K (+164%)
• Cash Available for Distribution: $33,187 K → $24,698 K (+34%)

• Dividend Payout Ratio: 11% (down from 12%)

• Acquisition Impact – FY 2025 acquisitions (Tankcon, Simplex, LBT, EnTrans, Wave, Aureus) contributed $151.9 M of the sales increase; organic growth added $21.9 M.

• Cost Structure

• Cost of Sales: $305,665 K vs. $163,960 K (+86%)
• Gross Profit: $102,685 K vs. $70,625 K (+45%)
• Administration Expenses: $59,704 K vs. $27,203 K (+119%) – mainly amortization of intangibles from acquisitions.
• Selling Expenses: $12,188 K vs. $9,019 K (+35%); expense ratio fell to 3.0% of sales (from 3.8%).

• Financing Costs: $15,607 K vs. $4,576 K (+241%) – higher interest from new debt and lease liabilities tied to acquisitions.

• Capital Expenditures

• Maintenance CapEx: $8,743 K vs. $5,702 K (+53%).

• Total PP&E purchases: $21,997 K (including $13,254 K growth capital for new product lines).

• Dividend Declaration – Board approved $0.20 per common share payable 10 Apr 2026 to shareholders of record 31 Mar 2026.

• Post‑Quarter Business Combination – In Jan 2026, TerraVest subsidiary signed a share purchase agreement to acquire KBK Industries, LLC for US$90 K funded via the revolving credit facility.

• Outlook Highlights

• Management expects continued contribution from recent acquisitions and synergies throughout FY 2026.
• Tariff‑related uncertainty may soften demand in certain segments (e.g., tank trailers), while data‑center build‑out drives strong demand for other product lines.
• New credit facility obtained Mar 2025 positions the company to pursue further acquisitions.

Notable Quotes

• “Our portfolio is performing well, and recent acquisitions have made a meaningful contribution. We remain well‑positioned to continue our growth strategy while delivering sustainable dividends to shareholders.” – Dustin Haw, CEO, TerraVest Industries Inc.