WAJAX ANNOUNCES 2025 FIRST QUARTER RESULTS

May 05 2025 22:44 BST

Improved Cash Flow, Adjusted EPS and Leverage due to Focus on Inventory, Costs and Margin Improvement

TSX Symbol: WJX

TORONTO , May 5, 2025 /CNW/ - Wajax Corporation ("Wajax" or the "Corporation") today announced its 2025 first quarter results. All monetary amounts are in Canadian dollars unless otherwise noted.

Selected Highlights for the First Quarter

Revenue of $555.0 million and adjusted basic earnings per share of $0.69, up from $482.3 million and $0.59, respectively, in the same quarter of the prior year;⁽¹⁾
Gross profit margin decreased to 19.1% from 22.0% in the same period of 2024, and increased sequentially from 17.1% in the fourth quarter of 2024;⁽¹⁾
Selling and administrative expenses as a percentage of revenue decreased to 14.1% from 16.7% in the same period of 2024, excluding the unrealized loss/gain on total return swaps in both periods;⁽¹⁾
Inventory of $658.1 million, which included one additional large mining shovel compared to December 31, 2024, decreased by $15.2 million over the prior quarter and by $91.5 million from peak levels at March 31, 2024;
Cash flow generated from operations of $31.4 million compared to cash used of $7.3 million in the first quarter of 2024; and
Leverage ratio decreased to 2.53 times compared to 2.61 times at December 31, 2024, due primarily to lower debt as at March 31, 2025.⁽¹⁾

"First quarter revenue increased 15.1% year over year, driven by higher construction and forestry equipment sales, and the delivery of two large mining shovels," said Iggy Domagalski, President and Chief Executive Officer. "Gross profit margin increased 200 basis points sequentially, from 17.1% in the fourth quarter of 2024 to 19.1% in the first quarter of 2025, as we remained focused on margin improvements. While business and economic uncertainty remains high, particularly around tariffs and counter-tariffs on Canada-U.S. trade, management is closely monitoring changes to tariff policies and continues to make proactive adjustments to mitigate their effects."⁽¹⁾

He continued, "Working capital management and cost controls generated strong first quarter cash flows of $31.4 million and a reduction in our leverage ratio. In addition, ongoing inventory reduction initiatives have decreased inventory by $91.5 million from peak levels at March 31, 2024. Looking ahead, in addition to advancing our six strategic priorities, management is continuing to execute initiatives to right-size inventory, reduce costs and drive margin improvement."

(dollars in millions, except per share data)	Three Months Ended March 31
	2025	2024	% change
CONSOLIDATED RESULTS
Revenue	$555.0	$482.3	15.1 %
Equipment sales	$170.9	$98.1	74.2 %
Product support	$146.4	$134.3	9.0 %
Industrial parts	$144.7	$154.9	(6.6) %
Engineered repair services (ERS)	$81.6	$84.2	(3.2) %
Equipment rental	$11.4	$10.8	6.3 %

Net earnings	$13.1	$14.7	(10.9) %
Basic earnings per share⁽²⁾	$0.60	$0.68	(11.4) %

Adjusted net earnings⁽¹⁾⁽³⁾	$14.9	$12.8	16.3 %
Adjusted basic earnings per share^(1)(2)(3)	$0.69	$0.59	15.7 %

Adjusted EBIT⁽¹⁾	$28.0	$25.6	9.3 %
Adjusted EBITDA⁽¹⁾	$43.2	$40.7	6.2 %

*Adjusted EBIT margin⁽¹⁾*	5.0 %	5.3 %	(5.0) %
*Adjusted EBITDA margin⁽¹⁾*	7.8 %	8.4 %	(7.7) %

Outlook

Looking ahead to the balance of 2025, Wajax continues to see strong customer demand in the mining and energy sectors, with the former supported by robust backlog. Headwinds are expected to persist, with broader market conditions remaining soft and continued uncertainty surrounding tariffs and counter-tariffs on Canada-U.S. trade, and management is closely monitoring changes to tariff policies. Amid this backdrop, management remains focused on advancing the Corporation's six strategic priorities, which will continue to position the business for future success. As additional focus areas, management is continuing to execute initiatives to reduce inventory, lower costs and improve margins.

Wajax's six strategic priorities for 2025 are: continuing to build a people-first company; growing Wajax's existing business with a focus on parts, service and margin improvement; unlocking the potential of Wajax's enhanced direct relationship with Hitachi; acquiring and integrating industrial parts and ERS businesses; improving cost structure and processes; and continuing Wajax's ERP system roll-out and additional technology improvements.

Dividend

The Corporation has declared a dividend of $0.35 per share for the second quarter of 2025, payable on July 3, 2025, to shareholders of record on June 16, 2025.

First Quarter Highlights

Revenue in the first quarter of 2025 increased $72.6 million, or 15.1%, to $555.0 million, from $482.3 million in the first quarter of 2024. Regionally:
- Revenue in western Canada of $264.5 million increased 20.4% from the same period in the prior year due primarily to higher equipment sales in the construction and forestry category, driven largely by the competitive financing program introduced through Hitachi Construction Machinery Americas Inc. effective March 1, 2024 (the "Hitachi Financing Program"), as well as higher mining equipment sales, including the delivery of two large mining shovels in the first quarter of 2025 with no such deliveries in the first quarter of the prior year.
- Revenue in central Canada of $99.8 million increased 10.3% from the same period in the prior year due primarily to higher equipment sales in the construction and forestry category. This was driven largely by the competitive terms available under the Hitachi Financing Program.
- Revenue in eastern Canada of $190.7 million increased 10.8% from the same period in the prior year due primarily to higher equipment sales in the construction and forestry category, driven largely by the competitive terms available under the Hitachi Financing Program, as well as higher material handling equipment sales. These increases were partially offset by reduced industrial parts sales.
Gross profit margin of 19.1% in the first quarter of 2025 decreased 290 basis points ("bps") compared with gross profit margin of 22.0% in the same period of 2024.⁽¹⁾ This decrease in margin was driven primarily by lower margins realized on equipment, industrial parts and ERS revenue, as well as a higher proportion of equipment sales relative to industrial parts, ERS and product support sales. These decreases were offset partially by higher product support margins.
Selling and administrative expenses as a percentage of revenue decreased to 14.3% in the first quarter of 2025 from 16.4% in the same period of 2024.⁽¹⁾Excluding the $1.4 million unrealized loss on total return swaps (2024 – $1.0 million unrealized gain), selling and administrative expenses decreased $2.3 million compared with the same period in the prior year, due primarily to lower spending on personnel, travel and entertainment, and supplies and marketing, driven largely by cost saving initiatives. Excluding the unrealized loss/gain on total return swaps in both periods, selling and administrative expenses as a percentage of revenue decreased to 14.1% in the first quarter of 2025, from 16.7% in the same quarter of 2024.⁽¹⁾
EBIT of $26.7 million in the first quarter of 2025 was consistent with the same period of 2024, as higher sales volume and cost saving initiatives were offset by lower gross profit margin.⁽¹⁾ Adjusted EBIT increased $2.4 million, or 9.3%, to $28.0 million in the first quarter of 2025 from $25.6 million in the first quarter of 2024, and adjusted EBIT margin decreased to 5.0% in the first quarter of 2025 from 5.3% in the same quarter of 2024.⁽¹⁾
Finance costs of $9.1 million in the first quarter of 2025 increased $2.1 million compared with the same quarter last year due primarily to an unrealized loss on interest rate swaps of $1.2 million in the quarter compared to a gain of $1.4 million in the same period of the prior year. Excluding the unrealized gain/loss on interest rate swaps in both periods, finance costs decreased $0.6 million compared with the same quarter of 2024 due primarily to lower interest rates.
The Corporation generated net earnings of $13.1 million, or $0.60 per share, in the first quarter of 2025 versus $14.7 million, or $0.68 per share, in the same period of 2024. The Corporation generated adjusted net earnings of $14.9 million, or $0.69 per share, in the first quarter of 2025 versus $12.8 million, or $0.59 per share, in the same period of 2024.⁽¹⁾ Adjusted net earnings in the first quarter of 2025 excludes non-cash losses on mark to market of derivative instruments of $1.8 million after tax, or $0.08 per share (2024 – gains of $1.9 million after tax, or $0.09 per share).⁽¹⁾
Adjusted EBITDA margin decreased to 7.8% in the first quarter of 2025 from 8.4% in the first quarter of 2024.⁽¹⁾
Cash flows generated from operating activities amounted to $31.4 million in the first quarter of 2025, compared with cash used of $7.3 million in the same quarter of the prior year. The increase in cash generated of $38.7 million was mainly attributable to a decrease in inventory of $15.2 million compared to an increase of $114.3 million in the same quarter of the prior year, and income taxes received of less than $0.1 million compared to income taxes paid of $10.0 million in the same quarter of the prior year. This increase in cash generated was offset partially by an increase in accounts payable and accrued liabilities of $1.8 million during the quarter compared to an increase of $54.8 million in the same quarter of the prior year, and an increase in accounts receivable of $11.3 million in the quarter compared to a decrease of $18.5 million in the same quarter of the previous year.
The Corporation's backlog of $561.3 million at March 31, 2025 decreased $3.2 million, or 0.6%, compared to December 31, 2024 backlog of $564.4 million due primarily to a lower number of mining units in backlog, driven by the sale of two large mining shovels in the quarter, one of which was in backlog at December 31, 2024.⁽¹⁾ This decrease was offset partially by higher construction and forestry orders. Backlog decreased $25.8 million, or 4.4%, compared to March 31, 2024 backlog of $587.1 million due primarily to lower material handling, ERS and industrial parts orders; this was offset partially by higher construction and forestry, and mining orders.⁽¹⁾Backlog at March 31, 2025 included six large mining shovels.
Working capital of $576.5 million at March 31, 2025 increased $44.1 million, from $532.4 million at December 31, 2024 due primarily to the repayment of the Corporation's senior unsecured debentures using borrowings under the Corporation's bank credit facility, offset partially by lower inventory levels.⁽¹⁾ Working capital efficiency was 25.5%, an improvement of 50 bps from 26.0% at December 31, 2024 due to higher trailing 12-month revenue.⁽¹⁾Excluding the Corporation's senior unsecured debentures, working capital of $576.5 million at March 31, 2025 decreased $12.9 million from $589.4 million at December 31, 2024, and working capital efficiency was 27.5%, an improvement of 120 bps from 28.7% at December 31, 2024.⁽¹⁾
The Corporation's leverage ratio decreased to 2.53 times at March 31, 2025, compared to 2.61 times at December 31, 2024.⁽¹⁾The decrease in leverage ratio was due to the lower debt level driven largely by cash generated from operating activities during the quarter, and a higher trailing 12-month pro-forma adjusted EBITDA.
As noted above, on January 15, 2025, Wajax announced the repayment in full of the $57.0 million in principal amount owed under its 6.00% senior unsecured debentures due January 15, 2025, along with accrued interest up to but excluding the maturity date. The Corporation's existing bank credit facility was used to complete the repayment.
Subsequent to quarter end and effective April 11, 2025, Andrew Tam was appointed Senior Vice President, General Counsel and Corporate Secretary. Prior to this, Mr. Tam had been serving as General Counsel and Corporate Secretary of Wajax since 2011.

Conference Call Details

Wajax will webcast its First Quarter Financial Results Conference Call. You are invited to listen to the live webcast on Tuesday, May 6, 2025 at 2:00 p.m. EDT. To access the webcast, please visit our website wajax.com, under "Investor Relations", "Events and Presentations", "Q1 2025 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, forestry, mining, industrial and commercial, oil sands, transportation, metal processing, government and utilities, and oil and gas.

Notes:
(1)	"Backlog", "Working capital", "Gross profit margin", "Selling and administrative expenses as a percentage of revenue", "Working capital efficiency", "Leverage ratio", "Adjusted net earnings", "Adjusted basic and diluted earnings per share", "Adjusted EBIT", "Adjusted EBIT margin", and "Adjusted EBITDA margin" do not have standardized meanings prescribed by generally accepted accounting principles ("GAAP"). See the Non-GAAP and Other Financial Measures section later in this press release.
(2)	Weighted average shares, net of shares held in trust, outstanding for calculation of basic and diluted earnings per share for the first quarter of 2025 were 21,802,252 (2024 – 21,682,241) and 22,191,930 (2024 – 22,265,084), respectively.
(3)	Net earnings excluding the following:
	a.	after-tax non-cash losses on mark to market of derivative instruments of $1.8 million (2024 – gains of $1.9 million), or basic and diluted loss per share of $0.08 (2024 – earnings per share of $0.09 and $0.08, respectively) for the first quarter of 2025.

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:

(i)	these measures are commonly reported and widely used by investors and management;
(ii)	the non-GAAP measures are commonly used as an indicator of a company's cash operating performance, profitability and ability to raise and service debt;
(iii)	"Adjusted net earnings", "Adjusted basic earnings per share" and "Adjusted diluted earnings per share" provide indications of the results by the Corporation's principal business activities prior to recognizing non-recurring costs (recoveries) and non-cash losses (gains) on mark to market of derivative instruments. These adjustments to net earnings and basic and diluted earnings per share allow the Corporation's management to consistently compare periods by removing infrequent charges incurred outside of the Corporation's principal business activities and the impact of unrealized losses (gains) resulting from fluctuations in interest rates and the Corporation's share price;
(iv)	"Adjusted EBITDA" provides an indication of the results by the Corporation's principal business activities prior to recognizing non-recurring costs (recoveries) and non-cash losses (gains) on mark to market of derivative instruments. These adjustments to net earnings allow the Corporation's management to consistently compare periods by removing infrequent charges incurred outside of the Corporation's principal business activities, the impact of unrealized losses (gains) resulting from fluctuations in interest rates and the Corporation's share price, the impact of fluctuations in finance costs related to the Corporation's capital structure, the impact of tax rates, and the impact of depreciation and amortization of long-term assets; and
(v)	"Pro-forma adjusted EBITDA" provides the same utility as Adjusted EBITDA described above, however pursuant to the terms of the bank credit facility, is adjusted for the EBITDA of business acquisitions made during the period as if they were made at the beginning of the trailing 12-month period, and for the deduction of payments of lease liabilities. Pro-forma adjusted EBITDA is used in calculating the Leverage ratio and Senior secured leverage ratio.

Non-GAAP financial measures are identified and defined below:


Funded net debt	Funded net debt includes bank indebtedness, debentures and total long-term debt, net of cash. Funded net debt is relevant in calculating the Corporation's funded net debt to total capital, which is a non-GAAP ratio commonly used as an indicator of a company's ability to raise and service debt.

Debt	Debt is funded net debt plus letters of credit. Debt is relevant in calculating the Corporation's leverage ratio, which is a non-GAAP ratio commonly used as an indicator of a company's ability to raise and service debt.

Total capital	Total capital is shareholders' equity plus funded net debt.

EBITDA	Net earnings (loss) before finance costs, income tax expense, depreciation and amortization.

Adjusted net earnings (loss)	Net earnings (loss) before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Adjusted basic earnings (loss) per share and adjusted diluted earnings (loss) per share	Basic and diluted earnings (loss) per share before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Adjusted EBIT	EBIT before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Adjusted EBITDA	EBITDA before any facility closure, restructuring, and other related costs, gains/losses recorded on sale of properties, non-cash gains/losses on mark to market of derivative instruments, and change in fair value of contingent consideration.

Pro-forma adjusted EBITDA	Defined as adjusted EBITDA adjusted for the EBITDA of business acquisitions made during the period as if they were made at the beginning of the trailing 12-month period pursuant to the terms of the bank credit facility and the deduction of payments of lease liabilities. Pro-forma adjusted EBITDA is used in calculating the Leverage ratio and Senior secured leverage ratio.

Working capital	Defined as current assets less current liabilities, as presented in the condensed consolidated interim statements of financial position.

Other working capital amounts	Defined as working capital less trade and other receivables and inventory plus accounts payable and accrued liabilities and the current portion of debentures, as presented in the condensed consolidated interim statements of financial position.

Non-GAAP ratios are identified and defined below:

Adjusted EBIT margin	Defined as adjusted EBIT (defined above) divided by revenue, as presented in the condensed consolidated interim statements of earnings.

EBITDA margin	Defined as EBITDA (defined above) divided by revenue, as presented in the condensed consolidated interim statements of earnings.

Adjusted EBITDA margin	Defined as adjusted EBITDA (defined above) divided by revenue, as presented in the condensed consolidated interim statements of earnings.

Leverage ratio	The leverage ratio is defined as debt (defined above) at the end of a particular quarter divided by trailing 12-month pro-forma adjusted EBITDA (defined above). The Corporation's objective is to maintain this ratio between 1.5 times and 2.0 times.

Senior secured leverage ratio	The senior secured leverage ratio is defined as debt (defined above) excluding debentures at the end of a particular quarter divided by trailing 12-month pro-forma adjusted EBITDA (defined above).

Funded net debt to total capital	Defined as funded net debt (defined above) divided by total capital (defined above).

Working capital efficiency	Defined as trailing four-quarter average working capital (defined above) as a percentage of the trailing 12-month revenue.

Supplementary financial measures are identified and defined below:

EBIT margin	Defined as EBIT divided by revenue, as presented in the condensed consolidated interim statements of earnings.

Backlog	Backlog is a management measure which includes the total sales value of customer purchase commitments for future delivery or commissioning of equipment, parts and related services, including ERS projects. There is no directly comparable GAAP financial measure for Backlog.

Gross profit margin	Defined as gross profit divided by revenue, as presented in the condensed consolidated interim statements of earnings.

Selling and administrative expenses as a percentage of revenue	Defined as selling and administrative expenses divided by revenue, as presented in the condensed consolidated interim statements of earnings.

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:

	Three months ended
	March 31
	2025	2024
Net earnings	$ 13.1	$ 14.7
Non-cash losses (gains) on mark to market of derivative instruments, after tax	1.8	(1.9)
Adjusted net earnings	$ 14.9	$ 12.8
Adjusted basic earnings per share ⁽¹⁾	$ 0.69	$ 0.59
Adjusted diluted earnings per share ⁽¹⁾	$ 0.67	$ 0.58

(1)	For the three months ended March 31, 2025, the number of weighted average basic and diluted shares outstanding were 21,802,252 and 22,191,930, respectively (2024 - 21,682,241 and 22,265,084, respectively).

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

	Three months ended		Twelve months ended
	March 31 2025	March 31 2024	March 31 2025	December 31 2024
EBIT	$ 26.7	$ 26.7	$ 96.5	$ 96.5
Depreciation and amortization	15.2	15.1	62.3	62.2
EBITDA	$ 42.0	$ 41.8	$ 158.8	$ 158.7

EBIT	$ 26.7	$ 26.7	$ 96.5	$ 96.5
Facility closure, restructuring, and other related costs⁽¹⁾	—	—	5.8	5.8
Non-cash losses (gains) on mark to market of derivative instruments, excluding interest rate swaps⁽²⁾	1.2	(1.1)	3.6	1.3
Change in fair value of contingent consideration⁽³⁾	—	—	2.3	2.3
Adjusted EBIT	$ 28.0	$ 25.6	$ 108.2	$ 105.8
Depreciation and amortization	15.2	15.1	62.3	62.2
Adjusted EBITDA	$ 43.2	$ 40.7	$ 170.5	$ 168.0
Payment of lease liabilities⁽⁴⁾			(40.5)	(39.2)
Pro-forma adjusted EBITDA			$ 130.0	$ 128.7

(1)	Facility closure, restructuring, and other related costs consists of costs relating to workforce reductions in response to market conditions, incurred during the fourth quarter of 2024.
(2)	Non-cash losses (gains) on mark to market of derivative instruments that are not effectively designated as hedging instruments under IFRS, excluding interest rate swaps as their fair value fluctuations impact finance costs.
(3)	The change in fair value of contingent consideration relates to changes in the estimated fair value of future performance-based earnout payments relating to business acquisitions.
(4)	Effective with the reporting period beginning on January 1, 2019 and the adoption of IFRS 16, the Corporation amended the definition of Funded net debt to exclude lease liabilities not considered part of debt. As a result, the corresponding lease costs must also be deducted from EBITDA for the purpose of calculating the leverage ratio.

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

	March 31 2025	December 31 2024
Cash	$ —	$ (7.4)
Debentures	—	57.0
Long-term debt	324.4	283.0
Funded net debt	$ 324.5	$ 332.7
Letters of credit	3.9	3.7
Debt	$ 328.3	$ 336.3
Pro-forma adjusted EBITDA⁽¹⁾	$ 130.0	$ 128.7
Leverage ratio⁽²⁾	2.53	2.61
Senior secured leverage ratio⁽³⁾	2.53	2.17

(1)	For the twelve months ended March 31, 2025 and December 31, 2024.
(2)	Calculation uses debt divided by the trailing four-quarter Pro-forma adjusted EBITDA. This leverage ratio is calculated for purposes of monitoring against the Corporation's target leverage ratio of between 1.5 times and 2.0 times, and is different from the leverage ratio calculated under the Corporation's bank credit facility agreement.
(3)	Calculation uses debt excluding debentures divided by the trailing four-quarter Pro-forma adjusted EBITDA. While the calculation contains some differences from the leverage ratio calculated under the Corporation's bank credit facility agreement, the resulting leverage ratio under the bank credit facility agreement is not significantly different. See the Liquidity and Capital Resources section.

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

	March 31 2025	December 31 2024
Shareholders' equity	$ 514.9	$ 512.3
Funded net debt	324.5	332.7
Total capital	$ 839.3	$ 844.9
Funded net debt to total capital	38.7 %	39.4 %

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

	March 31 2025	December 31 2024
Total current assets	$ 1,074.4	$ 1,090.7
Total current liabilities	497.8	558.3
Working capital	$ 576.5	$ 532.4
Trade and other receivables	(313.9)	(303.5)
Inventory	(658.1)	(673.1)
Debentures - current	—	57.0
Accounts payable and accrued liabilities	415.9	417.8
Other working capital amounts	$ 20.5	$ 30.6

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: our intention and ability to make proactive adjustments to our business to mitigate the effects of prevailing business and economic uncertainty, particularly around tariffs and counter-tariffs on Canada-U.S. trade; our continued execution of initiatives to right-size inventory, reduce costs and drive margin improvement, in addition to advancing our six strategic priorities for 2025; our outlook for the balance of 2025, including (i) our expectation of strong customer demand in the mining and energy sectors, and our belief that our expectation for the former is supported by robust backlog, (ii) our expectation that headwinds will persist, with broader market conditions remaining soft and continued uncertainty surrounding tariffs and counter-tariffs on Canada-U.S. trade; our focus on advancing our six strategic priorities, together with our belief such priorities will continue to position our business for future success; our six strategic priorities for 2025: continuing to build a people-first company, growing Wajax's existing business with a focus on parts, service and margin improvement, unlocking the potential of Wajax's enhanced direct relationship with Hitachi Construction Machinery Americas Inc. ("Hitachi"), acquiring and integrating industrial parts and ERS businesses, improving cost structure and processes, and continuing Wajax's ERP system roll-out and additional technology improvements; and our objective of managing our working capital and normal-course capital investment programs within a leverage 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 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 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 new 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; new tariffs and 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 MD&A for the year-ended December 31, 2024 (the "2024 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 2024 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 2024 Annual Report, is available under the Corporation's profile on SEDAR+ at www.sedarplus.ca.

SOURCE Wajax Corporation

Company Announcements

WAJAX ANNOUNCES 2025 FIRST QUARTER RESULTS