TERRAVEST ANNOUNCES FIRST QUARTER RESULTS FOR FISCAL 2026 AND DIVIDEND DECLARATION

TORONTO, Feb. 11, 2026 /CNW/ - TerraVest Industries Inc., (TSX: TVK) ("TerraVest" or the "Company") announces its results for the first quarter ended December 31, 2025 and the declaration of its quarterly dividend.

FIRST QUARTER REVIEW AND OUTLOOK 

Business Performance

Management believes that there are certain non‐IFRS financial measures that can be used to assist shareholders in analyzing the performance of TerraVest. The table below highlights certain financial results and reconciles net income to Adjusted earnings before interests, income taxes, depreciation and amortization ("Adjusted EBITDA") for the first quarter ended December 31, 2025 and the comparative period in fiscal 2025.

Sales for the first quarter ended December 31, 2025 were $408,350 versus $234,585 for the prior comparable period. This represents an increase of 74%. The net change in sales is explained by organic growth in TerraVest base portfolio of $21,888 and the impact of the 2025 business combinations explains the remaining $151,877. TerraVest acquired all the issued and outstanding shares of Tankcon FRP Inc. ("Tankcon") in May 2025, of Simplex, Inc. ("Simplex") and L.B.T., Inc. ("LBT") in April 2025 and of EnTrans Holding, Inc. ("Entrans") in March 2025. In addition, TerraVest acquired all the Canadian assets of New Wave Energy Services Ltd. ("Wave") in September 2025 and of Aureus Energy Services Inc. ("Aureus") in January 2025. The organic growth represents an increase of 9% for TerraVest's base portfolio (excluding Tankcon, Simplex, LBT and Entrans). Wave and Aureus results can't be excluded from TerraVest results as Wave and Aureus activities have been fully integrated into one of TerraVest's existing subsidiaries whose operations are similar in nature.

The increase in sales for TerraVest base portfolio businesses versus the prior comparable period is a result of higher demand in the Service and the Processing Equipment segments. The Compressed Gas Equipment segment sales are also higher due to an increase in demand for service trucks, domestic tanks and storage tanks.

Net income for the first quarter ended December 31, 2025 was $35,231 versus $30,431 for the prior comparable period. This represents an increase of 16%. For the first quarter ended December 31, 2025, the increased revenues from TerraVest base portfolio businesses are partially offset by an unfavorable product mix.

These increases along with a favorable change in fair value of contingent considerations due to the Entrans acquisition were offset by additional depreciation and amortization expenses and financing costs as a result of business acquisitions, an unfavorable change in fair value of investment in equity instruments and a loss on foreign exchange. Other variances are also highlighted in the table above.

Adjusted EBITDA for the first quarter ended December 31, 2025 was $67,786 versus $48,900 for the prior comparable period. This represents an increase of 39%, which is the result of the reasons explained above.

The table below reconciles cash flow from operating activities to Cash Available for Distribution for the first quarter ended December 31, 2025 and the comparative period in fiscal 2025.

Cash flow from operating activities for the first quarter ended December 31, 2025 was $96,548 versus $36,603 for the prior comparable period. This represents an increase of 164%. The increase is attributable to additional net income and a favorable change in non-cash working capital items compared to the prior period, mainly explained by a decrease in accounts receivable and an increase in customer deposits, partially offset by a decrease in accounts payable.

Maintenance Capital Expenditures were $8,743 for the first quarter ended December 31, 2025 versus $5,702 for the prior comparable period representing an increase of 53%, which is primarily explained by the timing of such expenditures as well as TerraVest's portfolio growth following the 2025 business combinations. During the first quarter ended December 31, 2025, TerraVest's total purchase of property, plant and equipment ("PP&E") paid was $21,997 of which $13,254 is considered growth capital. The growth capital incurred during the first quarter was mainly used to invest in new manufacturing product lines and increase the asset base in one of its service businesses.

Cash Available for Distribution for the first quarter ended December 31, 2025 increased by 34% versus the prior comparable period. The increase is a result of reasons explained above and elsewhere in this press release.

Outlook

In general, TerraVest's portfolio of businesses is performing well. Recent acquisitions have made a meaningful contribution, and we expect this to continue throughout this fiscal year. Opportunities to enhance performance through synergies between recent acquisitions and the base portfolio of businesses continue to exist and are a focus for management.

Recent tariff announcements have created an environment of uncertainty in North America's manufacturing sector. TerraVest does benefit from a diverse manufacturing footprint in North America that allows it to mitigate against direct tariff related impacts. However, this uncertainty has resulted in softer demand for certain of TerraVest's businesses, particularly those that manufacture tank trailers. On a positive note, several of TerraVest's portfolio companies are seeing strong demand for products related to the data center build-out in North America.

The Company continues to make targeted investments to improve its manufacturing efficiency and expand its product lines, particularly in end-markets where it has a meaningful presence. With the new credit facility obtained in March 2025, TerraVest is very well-positioned to pursue its acquisition strategy.

Business Combinations

Subsequently to the end of the quarter, in January 2026, a subsidiary of TerraVest entered into a share purchase agreement to purchase all the issued and outstanding shares of KBK Industries, LLC ("KBK"). KBK is a U.S.-based manufacturer of aboveground and underground fiberglass tanks and steel storage tanks for the convenience store ("c-store"), agricultural, chemical, infrastructure and energy markets. The total consideration for the transaction was US$90,000 paid using the revolving operating credit facility.

CONSOLIDATED RESULTS OF OPERATIONS

The following section provides the financial results of TerraVest's operations for the first quarter ended December 31, 2025 and the comparative period in fiscal 2025.

Sales for the first quarter ended December 31, 2025 increased by 74% versus the prior comparable period. The reasons have been explained previously in this press release.

Gross profit for the first quarter ended December 31, 2025 increased by 45% versus the prior comparable period. This is primarily explained by the contribution of Tankcon, Simplex, LBT and Entrans.

Administration expenses for the first quarter ended December 31, 2025 increased by 119% versus the prior comparable period. The increase in administration expenses is mainly due to a higher value of amortization of intangible assets resulting from the acquisition of Tankcon, Entrans, LBT and Simplex.

Selling expenses for the first quarter ended December 31, 2025 increased by 35% versus the prior comparable period. The increase in selling expenses is explained by the addition of Tankcon, Entrans, LBT and Simplex. The selling expenses as a percentage of sales have decreased from 3.8% to 3.0% for the same comparable period.

Financing costs for the first quarter ended December 31, 2025 increased by 241% versus the prior comparable period. The increase is primarily explained by additional interest expense on long-term debt and on lease liabilities as a result of the acquisition of Entrans, LBT, Simplex and Tankcon.

Other (gains) losses variance for the first quarter ended December 31, 2025 reflect a favorable change in fair value of contingent considerations from the Entrans acquisition partially offset by a loss on foreign exchange and an unfavorable change in fair value of investment in equity instruments.

Income tax expense variance for the first quarter ended December 31, 2025 is the result of the variation in taxable earnings and the timing of income tax expense adjustments.

As a result of the above, net income attributable to common shareholders for the first quarter ended December 31, 2025 increased by 16% versus the prior comparable period.

DIVIDENDS

TerraVest is pleased to announce that The Board of Directors has declared a quarterly dividend of $0.20 per common share payable on April 10, 2026 to shareholders of record as at the close of business on March 31, 2026.

Additional information can be found in TerraVest's annual consolidated financial statements and MD&A which are available on SEDAR+ at www.sedarplus.ca.

NON‐IFRS FINANCIAL MEASURES

The Company uses measures (and ratios) that are not in accordance with IFRS to provide investors with supplemental metrics to assess and measure its operating performance and financial position from one period to the next. These metrics are presented as a complement to enhance the understanding of TerraVest's operating results but not in substitution of IFRS results.

Adjusted EBITDA, Cash Available for Distribution, Dividend Payout Ratio, Maintenance Capital Expenditures and Working Capital are not recognized measures under IFRS and do not have standardized meanings prescribed by IFRS. TerraVest's definitions may differ from those of other issuers and therefore may not be comparable to similarly titled measures used by other issuers.

Adjusted EBITDA: is defined as net income adjusted for income tax expense, financing costs, depreciation, amortization, change in fair value of derivative financial instruments, change in fair value of investment in equity instruments and investment in a limited partnership, change in fair value of contingent considerations, gains or losses on foreign exchange, gains or losses on disposal of other property, plant and equipment and property, plant and equipment for rental, gains or losses on disposal of intangible assets, gains or losses on lease modification, gains or losses on remeasurement of equity interest, gain on bargain purchase, gains or losses on sale of business, non‑recurring acquisition‑related costs, impairment charges and other non‑recurring and/or non‑operations related items that do not reflect the current ongoing operations of TerraVest. Management believes this is a useful metric in evaluating the ongoing operating performance of TerraVest. Readers are cautioned that Adjusted EBITDA should not be construed as an alternative to net income determined in accordance with IFRS as an indicator of TerraVest's performance.

Cash Available for Distribution: is defined as cash flow from operating activities adjusted for changes in non-cash operating working capital, maintenance capital expenditures and repayment of lease liabilities. Management believes that cash available for distribution, as a liquidity measure, is a useful metric that provides an indication of the cash available from ongoing operations that can be distributed to shareholders as a dividend. Readers are cautioned that Cash Available for Distribution should not be construed as an alternative to cash flow from operating activities determined in accordance with IFRS as an indicator of TerraVest's liquidity and cash flows.

Dividend Payout Ratio: is defined as dividends paid in cash during the period divided by Cash Available for Distribution for the period. Management believes that Dividend Payout Ratio is a useful metric as it provides an indication of TerraVest's ability to sustain its current dividend policy. There is no directly comparable IFRS measure for Dividend Payout Ratio.

Maintenance Capital Expenditures: is defined as capital expenditures made to sustain the operations of TerraVest's operating businesses and to maintain the productive capacity of the businesses over an economic cycle, whether or not they yield significant cost or production efficiencies. Management believes that Maintenance Capital Expenditures should be funded by cash flow from existing operating activities and, therefore, deducted in determining Cash Available for Distribution. There is no directly comparable IFRS measure for Maintenance Capital Expenditures.

Working Capital: is calculated by subtracting current liabilities from current assets. Management uses Working Capital as a measure for assessing overall liquidity. There is no directly comparable IFRS measure for Working Capital.

Caution Regarding Forward-Looking Statements

This news release contains forward-looking statements. All statements other than statements of historical fact contained in this news release are forward-looking statements, including, without limitation, statements regarding our strategic direction and evaluation of the business segments and TerraVest as a whole, and other plans and objectives of or involving TerraVest. Readers can identify many of these statements by looking for words such as "expects" and "will" or similar terms or variations of these words. Although management believes that the expectations represented in such forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

By their nature, forward-looking statements require us to make assumptions and, accordingly, forward looking statements are subject to inherent risks and uncertainties. There is significant risk that the forward-looking statements will not prove to be accurate. We caution readers of this news release not to place undue reliance on our forward-looking statements because a number of factors may cause actual future circumstances, results, conditions, actions or events to differ materially from the plans, expectations, estimates or intentions expressed in the forward-looking statements and the assumptions underlying the forward-looking statements. 

Assumptions and analysis about the performance of TerraVest as a whole and its business segments, the markets in which the business segments compete and the prospects and values of the business segments are considered in setting the business plan for TerraVest, plans and/or ability to pay dividends, outlook for operations, financial position, results and cash flows, other plans and objectives and in making related forward-looking statements. Such assumptions include, without limitation, demand for products and services of the business segments in respect of the Canadian and other markets in which the businesses are active will be stable, and that input costs to business segments do not vary significantly from levels experienced historically. Should any of these factors or assumptions vary, actual results may differ materially from the forward-looking statements.

SOURCE TerraVest Industries Inc.

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