Improved Margins, Strong Operating Cash Flow and Lower Leverage Reflect Continued Operational Progress
TORONTO, May 4, 2026 /CNW/ - Wajax Corporation ("Wajax" or the "Corporation") today announced its 2026 first quarter results. All monetary amounts are in Canadian dollars unless otherwise noted.
Selected Highlights for the First Quarter
Strong balance sheet supported by $46.8 million of cash generated from operations, an improved leverage ratio of 1.51 times (December 31, 2025 - 1.62 times), and improved working capital efficiency of 24.6% (December 31, 2025 - 25.1%);(1)
Solid backlog of $521.7 million up from $516.6 million at December 31, 2025, and inventory of $593.6 million increased from $547.6 million at December 31, 2025, reflecting targeted equipment inventory purchases in the construction and forestry category to support anticipated seasonal demand;(1)
Revenue of $502.1 million was down from $555.0 million in the first quarter of the prior year, due primarily to lower equipment volumes, including the delivery of one large mining shovel versus two in the prior year period;
Gross profit margin of 20.6% increased 150 basis points ("bps") from 19.1% in the first quarter of 2025, reflecting margin improvement initiatives and sales mix;(1)
Adjusted basic earnings per share of $0.67, compared to $0.69 in the same quarter of the prior year, and basic earnings per share of $0.82, compared to $0.60 in the same quarter of the prior year;(1) and
Adjusted EBITDA margin of 8.1% increased 30 bps year-over-year.(1)
"Our first quarter results reflect continued progress against our operational priorities, with improved margins, strong operating cash flow and further reduced leverage, despite lower year-over-year revenue," said George McClean, President and Chief Executive Officer. "We maintained a strong balance sheet and delivered meaningful improvements in gross profit margin and working capital efficiency, reflecting the benefits of our ongoing operational focus."
Mr. McClean continued, "While customer uncertainty persists, with increased caution across certain sectors, our focus remains on disciplined execution. We continue to prioritize cost control and margin improvement, supported by prudent capital allocation. These efforts position us to manage near-term market variability while continuing to strengthen our foundation for long-term performance."
(dollars in millions, except per share data)
Three Months EndedMarch 31
2026
2025
change
CONSOLIDATED RESULTS
Revenue
$ 502.1
$ 555.0
(9.5) %
Equipment sales
$ 131.1
$ 170.9
(23.3) %
Product support
$ 136.1
$ 146.4
(7.0) %
Industrial parts
$ 137.6
$ 144.7
(4.9) %
Engineered repair services ("ERS")
$ 86.7
$ 81.6
6.3 %
Equipment rental
$ 10.6
$ 11.4
(7.7) %
Net earnings
$ 17.8
$ 13.1
35.9 %
Basic earnings per share(2)
$ 0.82
$ 0.60
35.8 %
Adjusted net earnings(1)(3)
$ 14.6
$ 14.9
(2.3) %
Adjusted basic earnings per share(1)(2)(3)
$ 0.67
$ 0.69
(2.4) %
Adjusted EBIT(1)
$ 25.4
$ 28.0
(9.2) %
Adjusted EBITDA(1)
$ 40.5
$ 43.2
(6.3) %
Adjusted EBIT margin(1)
5.1 %
5.0 %
10 bps
Adjusted EBITDA margin(1)
8.1 %
7.8 %
30 bps
Cash generated from operating activities
$ 46.8
$ 25.7
$ 21.1
Outlook
Looking ahead, Wajax continues to see solid customer demand in the mining and energy sectors. Mining demand is supported by a backlog that includes one large mining shovel scheduled for delivery within the next four quarters. Market conditions in other sectors remain mixed across regions, with ongoing macroeconomic softness and uncertainty related to Canada–U.S. tariff and trade dynamics.
Wajax continues to maintain a strong balance sheet and a solid backlog. Inventory levels are within a normal operating range, while margin improvement and cost control remain key focus areas. Although demand visibility varies across end markets, the Corporation's diversified exposure and focused execution position it to manage current market conditions effectively.
Management believes that continued execution of its strategic priorities, supported by balance sheet strength and prudent capital allocation, will enable the Corporation to deliver sustainable long-term value.
Dividend
The Corporation has declared a dividend of $0.35 per share for the second quarter of 2026, payable on July 3, 2026, to shareholders of record on June 15, 2026.
First Quarter Highlights
Revenue in the first quarter of 2026 decreased $52.9 million, or 9.5%, to $502.1 million, from $555.0 million in the first quarter of 2025. Regionally:
Revenue in western Canada of $227.4 million decreased 14.0% from the same period in the prior year due primarily to lower construction and forestry equipment sales and lower mining sales, reflecting the delivery of one large mining shovel in the first quarter of 2026 compared to two in the first quarter of the prior year.
Revenue in central Canada of $90.3 million decreased 9.5% from the same period in the prior year due primarily to lower revenue in the material handling and industrial parts categories.
Revenue in eastern Canada of $184.4 million decreased 3.3% from the same period in the prior year due primarily to lower equipment sales in the construction and forestry, and material handling categories, and lower industrial parts sales. These decreases were partially offset by higher ERS revenue and higher equipment sales in the power systems category.
Gross profit margin of 20.6% in the first quarter of 2026 increased 150 bps compared with gross profit margin of 19.1% in the same period of 2025.(1) This increase in margin was primarily due to higher margins realized on industrial parts and ERS sales, and a lower proportion of equipment sales from a sales mix perspective. These increases were partially offset by lower margins realized on product support revenue.
Selling and administrative expenses of $74.2 million in the first quarter of 2026 decreased $5.1 million compared with the first quarter of 2025. Excluding the $2.2 million unrealized gain on total return swaps (2025, $1.4 million unrealized loss), selling and administrative expenses decreased $1.5 million compared with the same period in the prior year, due primarily to ongoing discipline in cost control and operational efficiency. Selling and administrative expenses as a percentage of revenue increased to 14.8% in the first quarter of 2026 from 14.3% in the same period of 2025, driven by the year-over-year decline in revenue.(1)
Earnings before finance costs and income taxes ("EBIT") of $29.3 million in the first quarter of 2026 increased $2.6 million, or 9.6%, from $26.7 million in the same period of 2025. The year-over-year increase in EBIT resulted primarily from higher margins realized on industrial parts and ERS sales, cost discipline, and a $2.2 million unrealized gain on total return swaps in the first quarter of 2026 versus a $1.4 million unrealized loss in the same period of 2025. These increases were partially offset by lower sales volume. Adjusted EBIT decreased $2.6 million, or 9.2%, to $25.4 million in the first quarter of 2026 from $28.0 million in the first quarter of 2025, and adjusted EBIT margin increased to 5.1% in the first quarter of 2026 from 5.0% in the same quarter of 2025.(1)
Finance costs of $5.1 million in the first quarter of 2026 decreased $3.9 million compared with the same quarter last year. Excluding the unrealized gain on interest rate derivatives of $0.5 million in the quarter and the unrealized loss of $1.2 million in the same period of the prior year, finance costs decreased $2.2 million, due primarily to lower average borrowings under Wajax's bank credit facility.
The Corporation generated net earnings of $17.8 million, or $0.82 per share, in the first quarter of 2026 versus $13.1 million, or $0.60 per share, in the same period of 2025. The Corporation generated adjusted net earnings of $14.6 million, or $0.67 per share, in the first quarter of 2026 versus $14.9 million, or $0.69 per share, in the same period of 2025.(1) Adjusted net earnings in the first quarter of 2026 excludes non-cash gains on mark to market of derivative instruments of $3.2 million after tax, or $0.15 per share (2025, losses of $1.8 million after tax, or $0.08 per share).(1)
Adjusted EBITDA margin increased to 8.1% in the first quarter of 2026 from 7.8% in the first quarter of 2025.(1)
Cash flows generated from operating activities amounted to $46.8 million in the first quarter of 2026, compared with cash generated of $25.7 million in the same quarter of the prior year. The increase in cash generated of $21.1 million was mainly attributable to an increase in accounts payable and accrued liabilities of $98.4 million during the quarter, compared to a decrease of $3.9 million in the same quarter of the prior year. This increase in cash generated was offset partially by a targeted increase in inventory of $44.0 million during the quarter to support anticipated seasonal demand, compared to a decrease of $15.2 million in the same quarter of the prior year, and an increase in trade and other receivables of $29.7 million in the quarter compared to an increase of $11.3 million in the same quarter of the previous year.
The Corporation's backlog of $521.7 million at March 31, 2026 increased $5.1 million, or 1.0%, compared to December 31, 2025 backlog of $516.6 million. This was due primarily to higher construction and forestry, and material handling backlog, offset partially by lower mining backlog, driven largely by the delivery of a large mining shovel in the quarter which was in backlog at December 31, 2025.(1) Backlog at March 31, 2026 decreased $39.6 million, or 7.0%, compared to March 31, 2025 backlog of $561.3 ...
