WAJAX ANNOUNCES 2026 SECOND QUARTER RESULTS

TSX Symbol:  WJX

Focus on Operational Excellence Continues to Drive Improved Margins, Strong Operating Cash Flow and Lower Leverage

TORONTO, August 6, 2026 /CNW/ - Wajax Corporation ("Wajax" or the "Corporation") today announced its 2026 second quarter results. All monetary amounts are in Canadian dollars unless otherwise noted.

Selected Highlights for the Second Quarter

• Strong balance sheet supported by $36.2 million of cash generated from operations, an improved leverage ratio of 1.38 times (March 31, 2026 - 1.51 times), and improved working capital efficiency of 24.3% (March 31, 2026 - 24.6%);⁽¹⁾
• Solid backlog of $546.6 million up from $521.7 million at March 31, 2026;⁽¹⁾
• Revenue of $515.7 million was down from $547.1 million in the second quarter of the prior year, due primarily to lower equipment volumes, including the delivery of one large mining shovel in the second quarter of 2025 with no comparable delivery in the current quarter; product support and engineered repair services ("ERS") revenue increased 6.9% and 2.9%, respectively, compared to the second quarter of the prior year;
• Gross profit margin of 20.9% increased 180 basis points ("bps") from 19.1% in the second quarter of 2025, reflecting margin improvement initiatives and sales mix;⁽¹⁾
• Selling and administrative expenses, excluding the $0.6 million unrealized loss on total return swaps (2025 – $2.2 million unrealized gain), remained relatively flat compared with the same quarter in the prior year;
• Adjusted basic earnings per share of $0.84 increased from $0.77 in the same quarter of the prior year, and basic earnings per share of $0.87 increased from $0.71 in the same quarter of the prior year;⁽¹⁾ and
• Adjusted EBITDA margin of 8.9% increased 70 bps year-over-year.⁽¹⁾

"Our second quarter results demonstrate the continued benefits of our operational initiatives, with improved margins, strong operating cash flow and a healthy balance sheet, despite lower year-over-year equipment sales. We also saw growth in product support and ERS sales," said George McClean, President and Chief Executive Officer. "Our disciplined approach to margin management, working capital and capital allocation continues to strengthen the business and support our financial flexibility."

Mr. McClean continued, "Market conditions remain mixed, with customers continuing to exercise caution in certain end markets. We continue to prioritize disciplined execution on cost control and margin improvement, supported by prudent capital allocation. This positions us well to navigate current market conditions while continuing to create long-term value for our stakeholders."

Mr. McClean also commented on his first several months with Wajax and the strategic planning process currently underway at the Corporation, "Since joining Wajax in March 2026, I have had the opportunity to visit many of our locations across the country, meeting hundreds of our team members and nearly all of our key supplier partners. These visits and conversations have given me a deep appreciation for Wajax's history and strengths, and the opportunities we have going forward."

He continued, "While Wajax's core strengths provide a solid foundation, we have commenced a strategic planning process to identify the investments, capabilities and operational priorities that will support profitable growth and strengthen our competitive position. Through a dedicated Strategy Working Group comprised of senior leaders from across the corporation, we are undertaking a broad review of opportunities across all of our businesses, regions and areas of operational excellence. Particular areas of focus include our sales force and technicians, as well as go-to-market initiatives. As part of our work, we are also evaluating the organizational and talent capabilities needed to support this growth. This process will inform our 2027 priorities and capital allocation decisions and serve as a platform for longer-term planning. We look forward to sharing additional details on our priorities and investment focus as that work progresses."

Outlook

Looking ahead, Wajax continues to see solid customer demand in the mining and energy sectors. Mining demand continues to be supported by a backlog that includes two large mining shovels scheduled for delivery over the next two quarters, and sustained strength in quoting activity. Market conditions in other sectors remain mixed across regions, with ongoing macroeconomic uncertainty.

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 positions 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 third quarter of 2026, payable on October 2, 2026, to shareholders of record on September 15, 2026.

Second Quarter Highlights

• Revenue in the second quarter of 2026 decreased $31.5 million, or 5.7%, to $515.7 million, from $547.1 million in the second quarter of 2025. Regionally:
  
  
  • Revenue in western Canada of $222.7 million decreased 10.7% from the same period in the prior year due primarily to lower mining equipment sales, including the delivery of a large mining shovel in the second quarter of the prior year, with no comparable delivery in the second quarter of the current year. This decrease was partially offset by higher product support sales in the mining category.
    
    
  • Revenue in central Canada of $83.1 million decreased 12.9% from the same period in the prior year due primarily to lower equipment sales in the construction and forestry category, and lower ERS revenue.
    
    
  • Revenue in eastern Canada of $209.9 million increased 3.7% from the same period in the prior year due primarily to higher equipment sales in the construction and forestry, and power systems categories, and higher product support revenue in most categories. These increases were partially offset by lower equipment sales in the material handling category.
    
    
• Gross profit margin of 20.9% in the second quarter of 2026 increased 180 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, reflecting margin improvement initiatives, and a lower proportion of equipment sales from a sales mix perspective.
  
  
• Selling and administrative expenses of $76.4 million in the second quarter of 2026 increased $3.0 million compared with the second quarter of 2025. Excluding the $0.6 million unrealized loss on total return swaps (2025 – $2.2 million unrealized gain), selling and administrative expenses increased $0.2 million compared with the same period in the prior year. Selling and administrative expenses as a percentage of revenue increased to 14.8% in the second quarter of 2026 from 13.4% in the same period of 2025.⁽¹⁾ Excluding the unrealized gain/loss on total return swaps in both periods, selling and administrative expenses as a percentage of revenue increased to 14.7% in the second quarter of 2026, from 13.8% in the same quarter of 2025, driven by the year-over-year decline in revenue.⁽¹⁾
  
  
• Earnings before finance costs and income taxes ("EBIT") of $31.2 million in the second quarter of 2026 increased $4.1 million, or 15.0%, from $27.1 million in the same period of 2025. The year-over-year increase in EBIT resulted primarily from sales mix, higher margins realized on industrial parts and ERS sales, and a $3.8 million restructuring cost in the second quarter of the prior year without a similar cost in the current quarter. These increases were partially offset by lower sales volume. Adjusted EBIT increased $0.9 million, or 3.2%, to $30.4 million in the second quarter of 2026 from $29.4 million in the second quarter of 2025, and adjusted EBIT margin increased to 5.9% in the second quarter of 2026 from 5.4% in the same quarter of 2025.⁽¹⁾
  
  
• Finance costs of $5.5 million in the second quarter of 2026 decreased $0.7 million compared with the same quarter last year. Excluding the unrealized loss on interest rate derivatives of less than $0.1 million in the quarter and the unrealized gain of $0.6 million in the same period of the prior year, finance costs decreased $1.4 million, due primarily to lower average borrowings under Wajax's bank credit facility.
  
  
• The Corporation generated net earnings of $18.9 million, or $0.87 per share, in the second quarter of 2026 versus $15.5 million, or $0.71 per share, in the same period of 2025. The Corporation generated adjusted net earnings of $18.3 million, or $0.84 per share, in the second quarter of 2026 versus $16.7 million, or $0.77 per share, in the same period of 2025.⁽¹⁾ Adjusted net earnings in the second quarter of 2026 excludes non-cash gains on mark to market of derivative instruments of $0.6 million after tax, or $0.03 per share (2025 – gains of $1.6 million after tax, or $0.07 per share).⁽¹⁾ Adjusted net earnings for the second quarter of the prior year also excluded facility closure, restructuring, and other related costs of $2.8 million after tax, or $0.13 per share.⁽¹⁾
  
  
• Adjusted EBITDA margin increased to 8.9% in the second quarter of 2026 from 8.2% in the second quarter of 2025.⁽¹⁾
  
  
• Cash flows generated from operating activities amounted to $36.2 million in the second quarter of 2026, compared with cash generated of $68.3 million in the same quarter of the prior year. The decrease in cash generated of $32.1 million was mainly attributable to a decrease in inventory of $3.7 million during the quarter, compared to a decrease of $56.0 million in the same quarter of the prior year. The decrease in cash generated was offset partially by an increase in contract liabilities of $7.4 million during the quarter, compared to a decrease of $4.6 million in the same quarter of the prior year.
  
  
• The Corporation's backlog of $546.6 million at June 30, 2026 increased $24.9 million, or 4.8%, compared to March 31, 2026 backlog of $521.7 million due primarily to higher mining backlog with the addition of a large mining shovel, higher construction and forestry backlog, and higher ERS backlog.⁽¹⁾ Backlog at June 30, 2026 increased $22.4 million, or 4.3%, compared to June 30, 2025 backlog of $524.3 million due primarily to an increase in power systems backlog, driven by the River Class Destroyer subcontract entered into with Irving Shipbuilding Inc. during the fourth quarter of 2025, and higher construction and forestry backlog. These increases were partially offset by lower mining backlog, driven largely by the delivery of four large mining shovels since June 30, 2025. Backlog at June 30, 2026 included two large mining shovels (June 30, 2025 - five large mining shovels).
  
  
• Working capital of $475.5 million at June 30, 2026 decreased $4.1 million, from $479.6 million at March 31, 2026, due primarily to lower trade and other receivables and higher contract liabilities, offset partially by lower accounts payable and accrued liabilities.⁽¹⁾ Working capital efficiency was 24.3%, an improvement in efficiency of 30 bps from 24.6% at March 31, 2026 due to the lower trailing four quarter average working capital.⁽¹⁾
  
  
• The Corporation's leverage ratio improved to 1.38 times at June 30, 2026, from 1.51 times at March 31, 2026.⁽¹⁾ The improvement in leverage ratio was due to the lower debt level driven largely by cash generated from operating activities and management's continued focus on disciplined capital allocation.⁽¹⁾
  
  
• Effective July 9, 2026, Michael Hachey ceased to serve as Chief Operating Officer of the Corporation. In the interim, his responsibilities have been reassigned among members of senior management. The Corporation's focus on operational improvement and execution remains unchanged and management continues to advance related initiatives across the business. The Corporation sincerely thanks Mr. Hachey for his contributions and wishes him well in his future endeavours.

Conference Call Details

Wajax will webcast its Second Quarter Financial Results Conference Call. You are invited to listen to the live webcast on Friday, August 7, 2026 at 12:30 p.m. EDT. To access the webcast, please visit our website wajax.com, under "Investor Relations", "Events and Presentations", "Wajax Corporation - Q2 2026Financial Results" and click on the "Listen to the Webcast" link. An archive of the webcast will be available following the live presentation.

About Wajax Corporation

Founded in 1858, Wajax (TSX: WJX) is one of Canada's longest-standing and most diversified industrial products and services providers. The Corporation operates an integrated distribution system providing sales, parts and services to a broad range of customers in diverse sectors of the Canadian economy, including: construction, forestry, mining, industrial and commercial, oil sands, transportation, metal processing, government and utilities, and oil and gas.

Non-GAAP and Other Financial Measures

The press release contains certain non-GAAP and other financial measures that do not have a standardized meaning prescribed by GAAP. Therefore, these financial measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that these measures should not be construed as an alternative to net earnings or to cash flow from operating, investing and financing activities determined in accordance with GAAP as indicators of the Corporation's performance. The Corporation's management believes that:

Non-GAAP financial measures are identified and defined below:

Non-GAAP ratios are identified and defined below:

Supplementary financial measures are identified and defined below:

Reconciliation of the Corporation's net earnings to adjusted net earnings, adjusted basic earnings per share and adjusted diluted earnings per share is as follows:

Reconciliation of the Corporation's EBIT to EBITDA, Adjusted EBIT, Adjusted EBITDA and Pro-forma adjusted EBITDA is as follows:

Calculation of the Corporation's funded net debt, debt and leverage ratio is as follows:

Calculation of total capital and funded net debt to total capital is as follows:

Calculation of the Corporation's working capital and other working capital amounts is as follows:

Cautionary Statement Regarding Forward-Looking Information

This news release contains certain forward-looking statements and forward-looking information, as defined in applicable securities laws (collectively, "forward-looking statements"). These forward-looking statements relate to future events or the Corporation's future performance. All statements other than statements of historical fact are forward-looking statements. Often, but not always, forward looking statements can be identified by the use of words such as "plans", "anticipates", "intends", "predicts", "expects", "is expected", "scheduled", "believes", "estimates", "projects" or "forecasts", or variations of, or the negatives of, such words and phrases, or state that certain actions, events or results "may", "could", "would", "should", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors beyond the Corporation's ability to predict or control which may cause actual results, performance and achievements to differ materially from those anticipated or implied in such forward-looking statements. To the extent any forward-looking information in this news release constitutes future-oriented financial information or financial outlook within the meaning of applicable securities law, such information is being provided to demonstrate the potential of the Corporation and readers are cautioned that this information may not be appropriate for any other purpose. There can be no assurance that any forward-looking statement will materialize. Accordingly, readers should not place undue reliance on forward-looking statements. The forward-looking statements in this news release are made as of the date of this news release, reflect management's current beliefs and are based on information currently available to management. Although management believes that the expectations represented in such forward-looking statements are reasonable, there is no assurance that such expectations will prove to be correct. Specifically, this news release includes forward-looking statements regarding, among other things: management's belief that disciplined execution on cost control and margin improvement, supported by prudent capital allocation, positions Wajax to navigate current market conditions and create long-term value for stakeholders; our strategic planning process, including the identification of investments, capabilities and operational priorities intended to support profitable growth and strengthen our competitive position, the evaluation of organizational and talent capabilities needed to support growth, and the expected influence of this process on 2027 priorities, capital allocation decisions and longer-term planning; anticipated customer demand in the mining and energy sectors, the delivery of two large mining shovels currently included in backlog over the next two quarters, and management's outlook that market conditions in other sectors will remain mixed across regions due to continued macroeconomic uncertainty; management's belief that the Corporation's diversified exposure and focused execution position it to manage current market conditions, and 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; and our objective of maintaining our leverage within a target range of 1.5 – 2.0 times. These statements are based on a number of assumptions which may prove to be incorrect, including, but not limited to, assumptions regarding: the absence of significant negative changes to general business and economic conditions; our ability to manage our business through ongoing uncertainty related to Canada-U.S. trade dynamics, including the imposition of new or changing trade tariffs; limited negative fluctuations in the supply and demand for, and the level and volatility of prices for, oil, natural gas and other commodities; the stability of financial market conditions, including interest rates; the ability of Hitachi Construction Machinery Americas Inc. ("Hitachi") and Wajax to develop and execute successful sales, marketing and other plans related to the enhanced direct distribution relationship which took effect on March 1, 2022; our continued ability to execute our strategic priorities, including our ability to execute on our organic growth priorities, complete and effectively integrate industrial parts and ERS acquisitions, and successfully implement new information technology platforms, systems and software, such as our ERP system; the future financial performance of the Corporation; limited fluctuations in our costs; the level of market competition; our continued ability to attract and retain skilled staff; our continued ability to procure quality products and inventory; and our ongoing maintenance of strong relationships with suppliers, employees and customers. The foregoing list of assumptions is not exhaustive. Factors that may cause actual results to vary materially include, but are not limited to: a continued or prolonged deterioration in general business and economic conditions; continued or prolonged uncertainty related to Canada-U.S. trade dynamics; new tariffs and/or counter-tariffs imposed on cross-border trade, particularly between Canada and the U.S.; negative fluctuations in the supply and demand for, and the level of prices for, oil, natural gas and other commodities; a continued or prolonged decrease in the price of oil or natural gas; the inability of Hitachi and Wajax to develop and execute successful sales, marketing and other plans related to the enhanced direct distribution relationship which took effect on March 1, 2022; a decrease in levels of customer confidence and spending; supply chain disruptions and shortages; fluctuations in financial market conditions, including interest rates; the level of demand for, and prices of, the products and services we offer; decreased market acceptance of the products we offer; the termination of distribution or original equipment manufacturer agreements; unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, our inability to reduce costs in response to slow-downs in market activity, unavailability of quality products or inventory, supply disruptions, job action and unanticipated events related to health, safety and environmental matters); our inability to attract and retain skilled staff and our inability to maintain strong relationships with our suppliers, employees and customers. The foregoing list of factors is not exhaustive.

Further information concerning the risks and uncertainties associated with these forward-looking statements and the Corporation's business may be found in our Management's Discussion and Analysis for the year-ended December 31, 2025 (the "2025 MD&A"), which has been filed under the Corporation's profile on SEDAR+ at www.sedarplus.ca, under the heading "Risk Management and Uncertainties". The forward-looking statements contained in this news release are expressly qualified in their entirety by this cautionary statement. The Corporation does not undertake any obligation to publicly update such forward-looking statements to reflect new information, subsequent events or otherwise unless so required by applicable securities laws.

Readers are cautioned that the risks described in the 2025 MD&A are not the only risks that could impact the Corporation. Risks and uncertainties not currently known to the Corporation, or currently deemed to be immaterial, may have a material effect on the Corporation's business, financial condition or results of operations.

Additional information, including Wajax's 2025 Annual Report, is available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

SOURCE Wajax Corporation

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