Toronto, Ontario--(Newsfile Corp. - May 6, 2026) - Dexterra Group Inc. (TSX: DXT)
Highlights
Dexterra delivered a strong start to the year generating consolidated revenue of $275.5 million in Q1 2026, compared to $239.7 million for the same period in 2025, with the revenue increase driven by strong camp occupancy, organic growth, and new camp additions related to the acquisition of Right Choice Camps and Catering Ltd. ("Right Choice") in Q3 2025.
Adjusted EBITDA for the quarter was $33.3 million (2025 - $25.2 million), an increase of 32.3% compared to Q1 2025 reflecting profitable revenue growth, increased Asset Based Services margins due to business mix, and contributions from our investment in Pleasant Valley Corporation ("PVC") of $1.5 million.
Free Cash Flow ("FCF") for Q1 2026 was $1.0 million ($1.2 million in Q1 2025), including the payment of $6.7 million in Long-term incentive plan ("LTIP") amounts in Q1 2026 (Q1 2025 - $0.9 million).
Net earnings were $13.6 million in Q1 2026, compared to $8.6 million in Q1 2025, including insurance recoveries of $4.7 million after-tax related to a fire at one of the Corporation's camps. Adjusted net earnings were $12.1 million and Adjusted EPS was $0.19 in Q1 2026, compared to $11.0 million and $0.18, respectively, in Q1 2025. Our operations delivered a return on equity of 15.9% (Q1 2025 - 15.1%) on a trailing twelve month basis.
The Board has approved the extension of the NCIB program as of May 6, 2026, subject to TSX approval. This will allow the Corporation to opportunistically repurchase up to approximately 3 million shares in the period from May 23, 2026 to May 22, 2027.
Dexterra declared a dividend for Q2 2026 of $0.10 per share for shareholders of record at June 30, 2026, to be paid on July 15, 2026.
This news release contains certain measures and ratios, such as Adjusted EBITDA, Adjusted EBITDA as a % of revenue, Adjusted net earnings, Adjusted EPS, FCF, and Return on Equity that do not have any standardized meaning as prescribed by GAAP and, therefore, are considered non-GAAP measures. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. See "Non-GAAP measures" and "Reconciliation of Non-GAAP measures" of the Corporation's MD&A for the three months ended March 31, 2026 and 2025 details which is incorporated by reference herein.
First Quarter Financial Summary
| Three months ended March 31, | ||||||
| (000's except per share amounts) | 2026 | 2025 | ||||
| Revenue | $ | 275,466 | $ | 239,731 | ||
| Adjusted EBITDA(1) | 33,299 | 25,174 | ||||
| Adjusted EBITDA as a % of revenue(1) | 12.1% | 10.5% | ||||
| Net earnings | 13,604 | 8,622 | ||||
| Adjusted Net earnings(1) | 12,113 | 10,968 | ||||
| Net earnings per share, basic | 0.22 | 0.14 | ||||
| Net earnings per share, diluted | 0.21 | 0.14 | ||||
| Adjusted earnings per share(1) | 0.19 | 0.18 | ||||
| Total assets | 751,261 | 546,671 | ||||
| Total loans and borrowings ("Net Debt") | 224,636 | 81,506 | ||||
| Free Cash Flow(1) | 986 | 1,180 | ||||
(1) Please refer to the "Non-GAAP measures" section for the definition of Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue, Adjusted net earnings, Adjusted earnings per share, Free Cash Flow, and to the "Reconciliation of non-GAAP measures" section for the related calculations.
First Quarter Operational Analysis
| Three months ended March 31, | ||||||
| (000's) | 2026 | 2025 | ||||
| Revenue: | ||||||
| Support Services | $ | 234,020 | $ | 198,775 | ||
| Asset Based Services | 41,446 | 40,956 | ||||
| Total Revenue | $ | 275,466 | $ | 239,731 | ||
| Adjusted EBITDA: | ||||||
| Support Services | $ | 24,376 | $ | 18,879 | ||
| Asset Based Services | 15,830 | 13,458 | ||||
| Corporate expenses | (6,907 | ) | (7,163 | ) | ||
| Total Adjusted EBITDA | $ | 33,299 | $ | 25,174 | ||
| Adjusted EBITDA as a % of Revenue: | ||||||
| Support Services | 10.4 % | 9.5 % | ||||
| Asset Based Services | 38.2 % | 32.9 % | ||||
Support Services
Revenue for the three months ended March 31, 2026 was $234.0 million, an increase of 17.7% over Q1 2025, primarily driven by strong camp occupancy including the Right Choice camps acquired in Q3 2025, and organic growth related to new contracts.
Adjusted EBITDA for the three months ended March 31, 2026 was $24.4 million, an increase of 29.1% over Q1 2025, and is attributable to the same factors mentioned above as well as Adjusted EBITDA from PVC of $1.5 million (40% interest acquired in Q3 2025). Adjusted EBITDA margin for the three months ended March 31, 2026 was 10.4% compared to 9.5% in Q1 2025. Adjusted EBITDA margin excluding the equity accounted investment in PVC was 9.8%. Adjusted EBITDA margins are expected to exceed 9% over the long term.
Asset Based Services
| Three months ended March 31, | ||||||
| (000's) | 2026 | 2025 | ||||
| Revenue: | ||||||
| Rental and other | $ | 33,322 | $ | 29,891 | ||
| Camp installation and demobilization | 8,124 | 11,064 | ||||
| Total Asset Based Services revenue | $ | 41,446 | $ | 40,956 | ||
Revenue for the three months ended March 31, 2026 was $41.4 million, an increase of 1.2% over Q1 2025, driven by higher workforce structure revenue and utilization of equipment including the use of the Right Choice assets, partially offset by lower camp installation and demobilization activity which varies based on timing of projects.
Adjusted EBITDA for the three months ended March 31, 2026 was $15.8 million, an increase of 17.6% over Q1 2025. Adjusted EBITDA margin for Q1 2026 was 38.2% compared to 32.9% in Q1 2025. Adjusted EBITDA and margins were higher in Q1 2026 reflecting increased rental activity which generates higher margins compared to installation and demobilization activity. Adjusted EBITDA margins for this segment in the future are expected to remain between 30% and 40% depending on the mix of business.
Liquidity and Capital Resources
Net debt was $224.6 million at March 31, 2026 compared to $199.7 million at December 31, 2025. The increase in Net Debt was primarily driven by higher working capital requirements, income tax payments related to 2025 of $11.0 million, share based compensation liabilities of $6.7 million settled in Q1 2026, and the impact of the fire incident previously discussed, as equipment replacement and camp installation for the site commenced ahead of the receipt of insurance proceeds.
The Net Debt at March 31, 2026 was 1.7x Adjusted EBITDA, demonstrating our commitment to maintaining a strong balance sheet and financial flexibility. We expect to continue to maximize FCF conversion targeting greater than 50% of Adjusted EBITDA on an annual basis with Net Debt expected to further reduce in fiscal 2026, absent acquisitions.
Additional Information
A copy of Dexterra's Condensed Consolidated Interim Financial Statements ("Financial Statements") for the three months ended March 31, 2026 and 2025 and related Management's Discussion and Analysis ("MD&A") have been filed with the Canadian Securities Regulatory authorities and are available on SEDAR+ at sedarplus.ca and Dexterra's website at dexterra.com. The Financial Statements have been prepared in accordance with International Financial Reporting Standards and the reporting currency is in Canadian dollars.
Conference Call
Dexterra will host a conference call and webcast to begin promptly at 8:30 a.m. Eastern Time on May 7, 2026 to discuss the first quarter results.
To access the conference call by telephone the conference call dial in number is 1-800-715-9871.
A live webcast of the conference call will be accessible on Dexterra's website at https://ir.dexterra.com/events-presentations by selecting the Q1 2026 Results webcast link.
An archived recording of the conference call will be available approximately one hour after the completion of the call until June 6, 2026 by dialing 1-800-770-2030, passcode 1141346.
About Dexterra
Dexterra employs more than 9,000 people, delivering a range of support services for the creation, management, and operation of infrastructure across Canada and the U.S.
Powered by people, Dexterra brings best-in-class regional expertise to every challenge and delivers innovative solutions, giving clients confidence in their day-to-day operations. Activities include a comprehensive range of integrated facilities management services, industry-leading workforce accommodation solutions, and other support services for diverse clients in the public and private sectors.
For further information contact:
Denise Achonu, CFO
Head office: Airway Centre, 5925 Airport Rd., Suite 1000
Mississauga, Ontario L4V 1W1
Telephone: (905) 270-1964
You can also visit our website at dexterra.com.
Reconciliation of non-GAAP measures
The following provides a reconciliation of non-GAAP measures to the nearest measure under GAAP for items presented throughout the news release:
Adjusted EBITDA
| Three months ended March 31, | ||||||
| (000's) | 2026 | 2025 | ||||
| Net earnings | $ | 13,604 | $ | 8,622 | ||
| Add: | ||||||
| Share based compensation | 2,555 | 1,978 | ||||
| Depreciation & amortization | 13,169 | 9,577 | ||||
| Equity investment depreciation, amortization and income taxes | 1,361 | 151 | ||||
| Finance costs | 4,071 | 2,059 | ||||
| Loss on disposal of property, plant and equipment | 223 | 29 | ||||
| Income tax expense | 4,564 | 2,758 | ||||
| Insurance recovery, net(1) | (6,248 | ) | - | |||
| Adjusted EBITDA | $ | 33,299 | $ | 25,174 | ||
(1) Impact of one-time insurance claim includes insurance recovery amounts for the three months ended March 31, 2026 discussed above related to the fire.
Adjusted net earnings and Adjusted EPS
| Adjusted net earnings | Adjusted EPS | |||||||||||
| Three months ended March 31, | Three months ended March 31, | |||||||||||
| (000's except per share amounts) | 2026 | 2025 | 2026 | 2025 | ||||||||
| Net earnings | $ | 13,604 | $ | 8,622 | $ | 0.22 | $ | 0.14 | ||||
| Amortization of intangible assets related to acquisitions | 1,486 | 1,162 | 0.02 | 0.02 | ||||||||
| Share based compensation | 2,555 | 1,978 | 0.04 | 0.03 | ||||||||
| Net insurance claim(1) | (6,248 | ) | - | (0.10 | ) | - | ||||||
| Income tax on adjustments | 716 | (794 | ) | 0.01 | (0.01 | ) | ||||||
| Adjusted net earnings/Adjusted EPS | $ | 12,113 | $ | 10,968 | $ | 0.19 | $ | 0.18 | ||||
(1) Impact of one-time net insurance claim includes insurance recovery income for the three months ended March 31, 2026 related to the fire.
Free Cash Flow
| Three months ended March 31, | ||||||
| (000's) | 2026 | 2025 | ||||
| Net cash flows from operating activities | $ | (3,110 | ) | $ | 5,643 | |
| Sustaining capital expenditures, net of proceeds from the sale of property, plant and equipment and intangible assets | (5,601 | ) | (470 | ) | ||
| Finance costs paid | (3,542 | ) | (1,903 | ) | ||
| Lease payments | (3,618 | ) | (2,090 | ) | ||
| Income tax payments related to prior periods(1) | 10,956 | - | ||||
| Net insurance claim(2) | 5,901 | - | ||||
| Free Cash Flow | $ | 986 | $ | 1,180 | ||
(1) Following the utilization of most of the Corporation's tax loss carryforwards in 2024, a portion of the Corporation's 2025 tax liability was deferred and paid in Q1 2026, which, when combined with 2026 tax installment payments, results in two years of cash tax payments occurring in 2026.
(2) Includes the net impact of one-time insurance claim related to the fire.
Return on Equity
| Trailing twelve months ended March 31, | ||||||
| (000's) | 2026 | 2025 | ||||
| Net earnings from continuing operations | $ | 45,784 | $ | 41,727 | ||
| Average total shareholders' equity(1) | 287,760 | 276,477 | ||||
| Return on Equity | 15.9 % | 15.1 % | ||||
(1) Average total shareholders' equity is calculated as the average of beginning total shareholders' equity and ending total shareholders' equity over the period from March 31, 2025 to March 31, 2026.
Forward-Looking Information
Certain statements contained in this news release may constitute forward-looking information under applicable securities law. Forward-looking information may relate to Dexterra's future outlook and anticipated events, business, operations, financial performance, financial condition or results and, in some cases, can be identified by terminology such as "continue"; "forecast"; "may"; "will"; "project"; "could"; "should"; "expect"; "plan"; "anticipate"; "believe"; "outlook"; "target"; "intend"; "estimate"; "predict"; "might"; "potential"; "continue"; "foresee"; "ensure" or other similar expressions concerning matters that are not historical facts. In particular, statements regarding Dexterra's future operating results and economic performance, including return on equity and Adjusted EBITDA margins; capital allocation priorities, acquisition strategy; its capital light model, market and inflationary environment expectations, including energy price fluctuations, asset utilization, camp occupancy levels, its leverage, FCF, wildfire activity expectations, expected benefits from the Right Choice and PVC acquisitions, investments in technology, US tariff impacts, and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions, including expected growth, market recovery, supply chain mitigation efforts, results of operations, performance and business prospects and opportunities regarding Dexterra. While management considers these assumptions to be reasonable based on information currently available to Dexterra, they may prove to be incorrect. Forward-looking information is also subject to certain known and unknown risks, uncertainties and other factors that could cause Dexterra's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information, including, but not limited to: the ability to retain clients, renew existing contracts and obtain new business; an outbreak of contagious disease that could disrupt its business; the highly competitive nature of the industries in which Dexterra operates; outsourcing of services trends; reliance on suppliers and subcontractors; cost inflation; including energy pricing, US tariff impacts; US government shutdown, volatility of industry conditions could impact demand for its services; a reduction in the availability of credit could reduce demand for Dexterra's products and services; Dexterra's significant shareholder may substantially influence its direction and operations and its interests may not align with other shareholders; its significant shareholder's approximate 50% ownership interest may impact the liquidity of the common shares; cash flow may not be sufficient to fund its ongoing activities at all times; loss of key personnel; the failure to receive or renew permits or security clearances; significant legal proceedings or regulatory proceedings/changes; environmental damage and liability is an operating risk in the industries in which Dexterra operates; climate changes could increase Dexterra's operating costs and reduce demand for its services; liabilities for failure to comply with public procurement laws and regulations; any deterioration in safety performance could result in a decline in the demand for its products and services; failure to realize anticipated benefits of acquisitions and dispositions; inability to develop and maintain relationships with Indigenous communities; the seasonality of Dexterra's business; inability to restore or replace critical capacity in a timely manner; reputational, competitive and financial risk related to cyber-attacks and breaches; failure to effectively identify and manage disruptive technology; economic downturns can reduce demand for Dexterra's services; its insurance program may not fully cover losses. Additional risks and uncertainties are described in Note 23 to the Financial Statements contained in its most recent Annual Report filed with securities regulatory authorities in Canada and available on SEDAR at sedarplus.ca. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. Dexterra is under no obligation and does not undertake to update or alter this information at any time, except as may be required by applicable securities law.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/296341
Source: Dexterra Group Inc.