TSX Symbol:  WJX

Backlog Grows 18% Year-Over-Year Amid Mixed Markets; Strong Balance Sheet and Extended Credit Facility Support Execution of 2027 Strategy Roadmap

TORONTO, November 2, 2026 /CNW/ -- Wajax Corporation ("Wajax" or the "Corporation") today announced its 2026 third quarter results. All monetary amounts are in Canadian dollars unless otherwise noted. Certain totals, subtotals and percentages may not add or recalculate due to rounding.

Selected Highlights for the Third Quarter

• Adjusted basic earnings per share was $0.60, compared with $0.75, and basic earnings per share was $0.55, compared with $0.77, in the prior-year quarter;⁽¹⁾
• Revenue of $477.8 million decreased 1.1% from the third quarter of 2025, primarily reflecting the delivery of one large mining shovel in the prior-year quarter and no comparable delivery in the current quarter, while product support and engineered repair services ("ERS") revenue increased 6.3% and 5.3%, respectively;
• Gross profit margin of 20.1% decreased 70 basis points ("bps") from 20.8% in the third quarter of 2025, primarily reflecting lower margins in product support, industrial products and ERS, partially offset by higher margins on equipment sales;⁽¹⁾
• Adjusted EBITDA margin of 8.1% decreased 120 bps from 9.3%, reflecting lower sales volume and gross profit margins;⁽¹⁾
• Near-record backlog of $598.6 million increased 18.2% year-over-year and 9.5% from June 30, 2026, including two large mining shovels scheduled for delivery in the fourth quarter of 2026.⁽¹⁾ Backlog at September 30, 2026 was $0.6 million below the record of $599.2 million reached in the third quarter of 2023;⁽¹⁾
• The Corporation used $23.1 million of cash in operating activities during the quarter, and generated $59.9 million during the year to date, compared with cash generated of $18.5 million in the prior-year quarter and $112.5 million in the prior year to date. Working capital efficiency improved modestly to 24.1% from 24.3% at June 30, 2026;⁽¹⁾
• The Corporation maintained a strong balance sheet, with a leverage ratio of 1.82 times, remaining within its target range of 1.5 to 2.0 times;⁽¹⁾
• Subsequent to quarter end, Wajax extended the maturity of its $500.0 million bank credit facility to October 2031, providing continued financial flexibility; and
• Wajax announced its 2027 Strategy Roadmap, setting out the initial priorities, investments and initiatives intended to support profitable growth and the Corporation's long-term vision, as well as planned organizational changes intended to strengthen execution and accountability.

"Our third quarter results reflected mixed market conditions and variability in customer demand and project timing. While revenue and margins were below the prior year, backlog increased 18% year-over-year, product support and ERS revenue continued to grow, and we generated $59.9 million of cash from operating activities during the first nine months of 2026," said George McClean, President and Chief Executive Officer. "Our balance sheet remained strong, with leverage of 1.82 times within our target range, and the extension of our $500 million credit facility to 2031 further enhances the financial flexibility available to support our operating and strategic priorities."

Mr. McClean continued, "As we prepare to enter 2027, our priorities are clear and our focus is on executing our Strategy Roadmap and implementing our announced organizational changes. This includes discipline on margin performance, costs and working capital, and increasing operating leverage. At the same time, we will make targeted investments in our people and the commercial, digital and operational capabilities required to grow. Together with greater accountability and a stronger focus on our customers and supplier partners, we believe these actions will strengthen Wajax's competitive position and support sustainable, profitable growth over the long term."

Outlook

Looking ahead, market conditions are expected to remain mixed across certain end markets and regions, with continued variability in customer demand and project timing. Broader macroeconomic uncertainty is likely to continue to weigh on customer confidence and investment decisions. Wajax's diversified exposure across equipment, product support, industrial products and engineered repair services, together with its national footprint and supplier relationships, provides a broad platform from which to navigate these conditions and pursue opportunities for growth.

During the quarter, Wajax completed its strategic planning process, which involved a team of 18 senior leaders from across the business to identify the investments, capabilities and operational priorities required to support profitable growth and strengthen the Corporation's competitive position. On October 8, 2026, Wajax announced its 2027 Strategy Roadmap, organized around four priorities: Building the Best Team, Customer and Supplier Partner Focus, Supporting Our Communities and Delivering on Our Commitments.

Wajax also announced planned organizational changes intended to provide greater role clarity and accountability and strengthen its focus on profitable sales growth and customer and supplier partner relationships.

As Wajax prepares to enter 2027, management's focus is on execution of the Strategy Roadmap and the planned organizational changes. Management believes that disciplined execution of the Strategy Roadmap and the planned organizational changes will strengthen Wajax's competitiveness, support profitable growth and create sustainable long-term value for shareholders.

Dividend

The Corporation has declared a dividend of $0.35 per share for the fourth quarter of 2026, payable on January 5, 2027, to shareholders of record on December 15, 2026.

Third Quarter Highlights

• Revenue in the third quarter of 2026 decreased $5.3 million, or 1.1%, to $477.8 million, from $483.1 million in the third quarter of 2025. Regionally:
  
  
  • Revenue in western Canada of $205.9 million decreased 2.1% 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 third quarter of the prior year, with no comparable delivery in the third quarter of the current year. This decrease was partially offset by higher product support sales in the mining category and higher construction and forestry equipment sales.
    
    
  • Revenue in central Canada of $80.4 million decreased 12.0% from the same period in the prior year due to lower sales in all categories, but most notably in material handling, industrial products and ERS.
    
    
  • Revenue in eastern Canada of $191.5 million increased 5.5% from the same period in the prior year due primarily to higher equipment sales in the construction and forestry, and power systems categories.
    
    
• Gross profit margin of 20.1% in the third quarter of 2026 decreased 70 bps compared with gross profit margin of 20.8% in the same period of 2025.⁽¹⁾ This decrease in margin was primarily due to lower margins realized on product support, industrial products and ERS revenue, partially offset by higher margins on equipment sales.
  
  
• Selling and administrative expenses of $71.5 million in the third quarter of 2026 increased $0.7 million compared with the third quarter of 2025. Excluding the $2.1 million unrealized gain on total return swaps (2025 – $0.6 million unrealized gain), selling and administrative expenses increased $2.3 million compared with the same period in the prior year, due primarily to higher personnel, travel and entertainment, and supplies and marketing costs. Selling and administrative expenses as a percentage of revenue increased to 15.0% in the third quarter of 2026 from 14.7% in the same period of 2025.⁽¹⁾ Excluding the unrealized gain on total return swaps in both periods, selling and administrative expenses as a percentage of revenue increased to 15.4% in the third quarter of 2026, from 14.8% in the same quarter of 2025.⁽¹⁾
  
  
• In the third quarter of 2026, the Corporation implemented a workforce reduction as part of a regular review of its cost structure. During the quarter, the Corporation recognized $4.1 million of restructuring and other related costs, relating primarily to severance costs and separation benefits.
  
  
• Earnings before finance costs and income taxes ("EBIT") of $20.4 million in the third quarter of 2026 decreased $9.1 million, or 31.0%, from $29.5 million in the same period of 2025. The year-over-year decrease in EBIT resulted primarily from lower sales volume, lower margins realized on product support, industrial products and ERS revenue, and $4.1 million in restructuring and other related costs in the third quarter without a similar cost in the third quarter of the prior year. These decreases were partially offset by higher margins on equipment sales. Adjusted EBIT decreased $5.4 million, or 19.0%, to $23.1 million in the third quarter of 2026 from $28.6 million in the third quarter of 2025, and adjusted EBIT margin decreased to 4.8% in the third quarter of 2026 from 5.9% in the same quarter of 2025.⁽¹⁾
  
  
• Finance costs of $4.0 million in the third quarter of 2026 decreased $2.8 million compared with the same quarter last year. Excluding the unrealized gain on interest rate derivatives of $1.3 million in the quarter and the unrealized loss of $0.3 million in the same period of the prior year, finance costs decreased $1.2 million, due primarily to lower interest rates and lower average borrowings under Wajax's bank credit facility.
  
  
• The Corporation generated net earnings of $12.0 million, or $0.55 per share, in the third quarter of 2026 versus $16.7 million, or $0.77 per share, in the same period of 2025. The Corporation generated adjusted net earnings of $13.1 million, or $0.60 per share, in the third quarter of 2026 versus $16.2 million, or $0.75 per share, in the same period of 2025.⁽¹⁾ Adjusted net earnings in the third quarter of 2026 excludes facility closure, restructuring, and other related costs of $3.0 million after tax, or $0.14 per share (2025 – nil), and non-cash gains on mark to market of derivative instruments of $1.9 million after tax, or $0.09 per share (2025 – gains of $0.5 million after tax, or $0.02 per share).⁽¹⁾
  
  
• Adjusted EBITDA margin decreased to 8.1% in the third quarter of 2026 from 9.3% in the third quarter of 2025.⁽¹⁾
  
  
• Cash flows used in operating activities amounted to $23.1 million in the third quarter of 2026, compared with cash generated of $18.5 million in the same quarter of the prior year. The decrease in cash generated of $41.6 million was mainly attributable to an increase in inventory of $18.4 million during the quarter, compared to an increase of $3.0 million in the same quarter of the prior year, an increase in trade and other receivables of $19.9 million during the quarter, compared to an increase of $7.5 million in the same period of the prior year, and a decrease in accounts payable and accrued liabilities of $12.9 million, compared to a decrease of $1.9 million in the same period of the prior year.
  
  
• The Corporation's backlog of $598.6 million at September 30, 2026 increased $52.0 million, or 9.5%, compared to June 30, 2026 backlog of $546.6 million due primarily to higher construction and forestry backlog, and higher industrial products and ERS backlog.⁽¹⁾ Backlog at September 30, 2026 increased $92.1 million, or 18.2%, compared to September 30, 2025 backlog of $506.5 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, and ERS backlog. These increases were partially offset by lower mining backlog, driven largely by the delivery of three large mining shovels since September 30, 2025. Backlog at September 30, 2026 included two large mining shovels (September 30, 2025 - four large mining shovels).
  
  
• Working capital of $524.1 million at September 30, 2026 increased $48.6 million, from $475.5 million at June 30, 2026, due primarily to higher trade and other receivables, higher inventory, and lower accounts payable and accrued liabilities.⁽¹⁾ Working capital efficiency was 24.1%, an improvement in efficiency of 20 bps from 24.3% at June 30, 2026 due to the lower trailing four quarter average working capital.⁽¹⁾
  
  
• The Corporation's leverage ratio increased to 1.82 times at September 30, 2026, from 1.38 times at June 30, 2026.⁽¹⁾ The increase in leverage ratio was due to the higher debt level from working capital timing and the lower trailing 12-month pro-forma adjusted EBITDA.
  
  
• As discussed above, subsequent to quarter end, on October 8, 2026, Wajax announced its 2027 Strategy Roadmap.
  
  
• Subsequent to quarter end, effective October 22, 2026, the Corporation extended the maturity of its $500.0 million bank credit facility from October 24, 2029 to October 22, 2031. There were no changes to the credit limit of the facility or the interest rate terms.

Conference Call Details

Wajax will webcast its Third Quarter Financial Results Conference Call. You are invited to listen to the live webcast on Tuesday, November 3, 2026 at 2:00 p.m. EDT. To access the webcast, please visit our website wajax.com, under "Investor Relations", "Events and Presentations", "Wajax Corporation - Q3 2026 Financial 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, oil sands, mining, oil and gas, forestry, metal processing, industrial and commercial, transportation, and government and utilities.

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: the Corporation's 2027 Strategy Roadmap, including the identified strategic priorities, anticipated investments and initiatives described therein; the planned organizational changes and the anticipated benefits of those changes, including greater role clarity and accountability and a stronger focus on profitable sales growth and customer and supplier partner relationships; the Corporation's plans to make targeted investments in its people and the commercial, digital and operational capabilities required to support growth; management's expectations regarding margin performance, costs, working capital and operating leverage; management's expectations regarding the financial flexibility available to support its operating and strategic priorities; management's expectations regarding the Corporation's ability to strengthen its competitive position, support sustainable, profitable growth and create long-term shareholder value through execution of the Strategy Roadmap and implementation of the planned organizational changes; the Corporation's vision of becoming Canada's fastest growing provider of industrial products, equipment and services by 2031; market conditions across the Corporation's end markets and regions, including expectations regarding variability in customer demand and project timing and the potential effects of broader macroeconomic uncertainty on customer confidence and investment decisions; the anticipated delivery in the fourth quarter of 2026 of two large mining shovels included in backlog at September 30, 2026; management's expectations regarding the Corporation's ability to navigate prevailing market conditions and pursue opportunities for growth; 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; our continued ability to execute our strategic priorities, including our ability to execute on our organic growth priorities, successfully pursue, complete and integrate acquisitions, including in our industrial products and ERS businesses, and successfully implement new information technology platforms, systems and software, such as our ERP system; our ability to successfully implement the planned organizational changes and the strategic priorities, investments and initiatives described in the 2027 Strategy Roadmap, and realize the anticipated benefits associated with them; 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 to successfully implement the planned organizational changes or the strategic priorities, investments and initiatives described in the 2027 Strategy Roadmap, or to realize the anticipated benefits expected from them; a decrease in levels of customer confidence and spending, or delays in customer investment decisions and the timing of capital projects; 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