Vertex Resource Group Ltd. Reports First Quarter 2025 Results

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14-05-2025

Reports gross revenue of $56.5 million and adjusted EBITDA(1) of $5.2 million.
SHERWOOD PARK, AB, May 14, 2025 /CNW/ - (TSXV: VTX) - Vertex Resource Group Ltd. ("Vertex" or the "Company") reports its financial and operational results for the first quarter ended March 31, 2025. The following should be read in conjunction with the Management Discussion and Analysis ("MD&A") and the unaudited condensed consolidated interim financial statements of Vertex for the period ended March 31, 2025, which are available on SEDAR+ at www.sedarplus.ca.
Vertex continued to enhance its market position in Q1, supported by strong results in its Environmental Consulting segment and drilling-related services within the Environmental Services division. These outperforming areas exceeded expectations and helped mitigate broader macroeconomic pressures, reinforcing the company's competitive standing. In contrast, propane and butane cross-border hauling operations were negatively impacted by tariff uncertainties, underscoring the sensitivity of logistics to global trade dynamics.
Key financial results for the three months March 31, 2025, and 2024 are as follows:
HIGHLIGHTSThree months endedMarch 31,
(in thousands of Canadian Dollars)
2025
2024
Gross revenue
56,502
59,831
Less flow through subcontractor costs
5,380
1,322
Net revenue
51,122
58,509
Profit margin
10,717
13,346
Profit margin %
21 %
23 %
Adjusted EBITDA (1)
5,221
6,900
Adjusted EBITDA %
10 %
12 %
Free cash flow (1)
1,529
2,937
Adjusted EBITDA per share, basic and diluted (1)
0.05
0.06
Loss per share, basic and diluted
(0.02)
(0.01)
(1) See "Non-IFRS Financial Measures"
HIGHLIGHTS FOR THE THREE MONTHS ENDED MARCH 31, 2025
7% increase in gross revenue and consistent net revenue compared to Q4 2024.
G&A expenses were reduced by 15% compared to Q1 2024.
Finance costs were reduced by 18% year-over-year due to reduced debt levels.
Reduced loans and borrowings and lease liabilities by $3.1 million during the quarter.
OUTLOOK
The first quarter of 2025 has presented a complex operating environment for Vertex, as global trade tensions and tariff uncertainties have developed. These occurrences have introduced new headwinds that could negatively impact economic activity in the near term, prompting a cautious and measured approach to the remainder of the year. However, we are anticipating tariff-related uncertainty to ease by late 2025 or into early 2026, potentially improving the investment climate.
In response to these conditions, Vertex has made strategic adjustments to its 2025 plan. The company remains committed to its core objectives but has modified its execution strategy to reflect the evolving landscape. Cost management continues to be a top priority, with a renewed focus on operational efficiency and financial discipline. Capital investments are being closely monitored until there is greater clarity on the economic outlook, allowing the company to preserve liquidity and maintain flexibility. The company is taking a disciplined approach to capital deployment, especially in light of delayed or deferred client projects and remains dedicated to strengthening our balance sheet.
Looking ahead, Vertex remains vigilant yet cautiously optimistic. By maintaining a disciplined approach and leveraging its competitive strengths, the company is well-positioned to navigate near-term volatility and capitalize on emerging opportunities as market conditions stabilize. While tariffs are not directly affecting all service lines, they continue to influence capital project investment decisions, which in turn impact demand. The anticipated commencement of commercial operations at LNG Canada in Q2 or Q3 2025 is expected to support sector momentum. Vertex's diversified geographic footprint and industry exposure provide resilience and flexibility to adapt to evolving market dynamics
ABOUT VERTEX
Since 1962, Vertex has been a leading North American provider of environmental services. Headquartered in Sherwood Park, Alberta, Vertex employs a staff of approximately 1,000 employees and lease operators that provide services to help clients achieve their developmental and operational goals. From initial site selection, consultation and regulatory approval, through construction, operation and maintenance, to conclusion and environmental cleanup, Vertex provides a wide array of services to customers operating in industries such as energy, mining, utilities, private development, public infrastructure, construction, telecommunications, forestry, agriculture and government.
Vertex principally operates in Canada with select locations in the United States.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
NON-IFRS FINANCIAL MEASURES
This release includes certain terms or performance measures that are not defined under International Financial Reporting Standards ("IFRS"), including "Adjusted EBITDA". The data presented is intended to provide additional information that should not be considered in isolation or as a substitute measure of performance prepared in accordance with IFRS. The non-IFRS measures should be read in conjunction with the Company's financial statements and accompanying notes.
A) "Adjusted EBITDA" is a non-IFRS financial measure which is calculated by adjusting net income (loss) for the sum of income taxes, finance costs including interest accretion on lease liabilities, depreciation of property and equipment and right of use assets, amortization of intangible assets, share-based compensation, restructuring costs and impairment. The Company uses Adjusted EBITDA as an indicator of its principal business activities operational performance prior to consideration of how its activities are financed and the impact of taxation, non-cash depreciation and amortization, restructuring costs and other non-cash expenses such as impairments required under IFRS. Adjusted EBITDA does not have a standardized meaning prescribed by IFRS and is not necessarily comparable to similar measures provided by other companies. Adjusted EBITDA is used by many analysts as an important analytical tool and the management of Vertex believes it is useful for providing readers with additional clarity on Vertex's operational performance. This measure is also considered important by the Company's lenders in determining compliance by the Company with the financial covenants under its lending arrangements.
B) "Free cash flow" is a non-IFRS financial measure. The most directly comparable GAAP measure for free cash flow is cash flow from operating activities. A summary of the reconciliation of cash flow from operating activities to free cash flow is set forth in the table below. Management uses the term "free cash flow" for its own performance measure and to provide shareholders and potential investors with a measurement of the Company's efficiency and its ability to generate the cash necessary to fund its future growth expenditures, to repay debt and provide shareholder returns.
C) "Adjusted Working Capital" is a non-IFRS financial measure which is calculated by reducing current liablities by the current portion of loans and borrowings, lease liablities and other liabilities. Adjusted working capital is used by Vertex to monitor its capital structure, liquidity, and it's ability to fund current operations.
D) "Adjusted EBITDA per share, basic and diluted" is a non-financial measure which is calculated by dividing adjusted EBITDA by the weighted average shares outstanding – basic and diluted.
Reconciliations of adjusted EBITDA, free cash flow and adjusted working capital are provided in the following tables.
ADJUSTED EBITDA
Three months ended March 31,2025
2024
Net loss for the period
(2,373)
(1,371)
Add:
Depreciation and amortization
6,057
5,898
Finance costs
2,248
2,735
Share-based compensation
18
59
Income tax recovery
(729)
(421)
Adjusted EBITDA
5,221
6,900
FREE CASH FLOW
Three months ended March 31,2025
2024
Cash provided by operating activities
4,774
9,276
Changes in non-cash operating working capital items
615
(2,356)
Maintenance capex
(1,986)
(1,501)
Cash interest
(1,701)
(2,008)
Depreciation of right of use assets - real property
(988)
(902)
Proceeds from disposal of property and equipment
815
428
Free cash flow
1,529
2,937
ADJUSTED WORKING CAPITAL
March 31,
December 31,2025
2024
Current assets
51,823
64,767Current liabilities, less
49,599
61,417
Current portion of loans and borrowings
(11,557)
(12,096)
Current portion of lease liabilities
(8,505)
(8,778)
Current portion of other liabilities
(667)
(1,000)
Current liabilities (excluding current portion of loans and borrowings, lease liabilities, and other liabilities)
28,870
39,543
Adjusted working capital
22,953
25,224
Forward-Looking Information
This Press Release contains forward-looking statements and information ("forward-looking statements") within the meaning of applicable Canadian securities laws. The forward-looking statements contained in this Press Release are based on the expectations, estimates and projections of management of Vertex as of the date of this Press Release unless otherwise stated. The use of any of the words "believe", "expect", "anticipate", "contemplate", "target", "plan", "outlook", "potential", "estimated", "intends", "continue", "may", "will", "should" and similar expressions are intended to identify forward-looking statements. More particularly and without limitation, this Press Release contains forward-looking statements concerning anticipated financial performance; the outlook for 2025; the Company's ability to grow profitably; sufficiency of working capital; and with respect to Vertex's ability to meet evolving customer demands.
Since forward-looking statements address future events and conditions, by their very nature they involve inherent risks and uncertainties. Investors are cautioned that forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and actual results could differ materially from those currently anticipated due to a number of factors and risks. These include, but are not limited to the risks associated with the industries in which Vertex operates in general, such as:
Ability to access sufficient capital from internal and external sources
Ability to market to new customers
Ability to obtain equipment in a timely and cost-efficient manner
Ability to secure work
Adjustments and cancellations of backlog
Changes in legislation, including but not limited to tax laws and environmental regulations
Collection of recognized revenue
Commodity price, interest rate and exchange rate fluctuations
Competition, ethics, and reputational risks
Compliance with environmental laws risks
Cyber-security risks
Economy and cyclicality
Geopolitical risks
Global pandemics
Health, safety and environmental risks
Industry and inherent project delivery risks
Insurance risk
Joint venture risk
Labour matters
Litigation risk
Loss of key management; ability to hire and retain qualified and capable personnel
Maintaining safe worksites
Operational risks
Potential for non-payment and credit risk and ongoing financing availability
Third party credit risk
Unforeseen weather conditions
Unanticipated shutdowns, work stoppages, and lockouts
Volatility of market trading
Readers are cautioned that the foregoing list of factors is not exhaustive. Additional information on other factors that could affect the operations or financial results of the parties, and the combined company are included in reports on file with applicable securities regulatory authorities, including but not limited to: Annual Information Form for the year ended December 31, 2024, which may be accessed on Vertex's SEDAR+ profile at www.sedarplus.ca.
The forward-looking statements contained in this Press Release are made as of the date hereof and the Company undertakes no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as, and to the extent required by applicable securities laws.
SOURCE Vertex Resource Group Ltd.
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