Titan Tool & Die locks out veteran Windsor workforce in escalating labour dispute
"Throughout these negotiations, Titan Tool & Die's management has shown nothing but contempt for the people who built this company," said Unifor National President Lana Payne. "They've hollowed out the plant, demanded steep concessions, and then slammed the door in our members' faces after decades of loyalty and dedication. This is as heartless as it gets. Our union will not tolerate such cold-blooded behaviour."
Negotiations for a renewal agreement between Unifor and Titan Tool & Die began on July 21, 2025, following a mutual decision to open talks in mid-summer. Days before bargaining commenced, Titan Tool & Die informed the union that Autokiniton, one of its key customers, would remove its dies, tooling, and equipment from the facility. Between July 23 and July 25, truckloads of parts and tools left the plant, and by July 29, the facility was nearly emptied of all work. On the same day, the company tabled a 15-page package of deep monetary concessions that would subject workers to a wage freeze, eliminate the Cost of Living Allowance (COLA), cut pension contributions by nearly 30%, and slash benefits for workers and their families, among many others.
The union continued to pursue negotiations with the company while workers, many with between 30 and 40 years of service and an average age of 59, reported for work only to be sent home after four hours each day due to lack of available work. On August 8, the company then sent the union a letter threatening to lock out the workforce unless the union accepted all of the company's concessions. Three days later, the company locked its doors on workers.
Founded in Windsor in 1956, Titan Tool & Die has been a cornerstone of the local manufacturing sector, supplying precision parts for the auto industry. The union alleges that the company's recent actions signal an intention to move production to its U.S. facility, abandoning the community that helped it succeed.
"Our members are among the most experienced auto parts workers in Canada, and they've stood by Titan for decades," said Emile Nabbout, President of Unifor Local 195. "Now the company has locked them out, turned its back on Windsor, and is preparing to move our jobs across the border. You don't walk away from a loyal workforce and a community without a fight."
In a letter sent to the company today, Unifor questioned company claims of financial duress and requested that Titan Tool & Die clarify its plans for the future of the Windsor facility.
"Our union has been clear that we will not tolerate any company using the trade war as cover to strip their plants, lock out workers, and ship jobs out of Canada," said Lana Payne. "Titan Tool & Die may think its heavy-handed tactics will slip under the radar, but Canadians are watching. We will not stand by while corporations exploit this moment to cut and run."
Union records show that the company has benefitted from years of cost savings, including a 2012 wind-up of workers' defined benefit pension plan which included a shortfall of approximately $4 million left unfunded by the company as well as several years of wage freezes and a wage progression that expanded from 0 to 6 years. Unifor calculates that, after years of negligible wage increases, production workers' real wages decreased by 15% between 2009-2024 and 18% for skilled trades workers when adjusted for inflation. The union further estimates that the company's latest wage offer would result in an additional 11% decline in real wages for production and skilled trades workers over the next four years.
Unifor is Canada's largest union in the private sector, representing 320,000 workers in every major area of the economy. The union advocates for all working people and their rights, fights for equality and social justice in Canada and abroad, and strives to create progressive change for a better future.
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FRONTERA ANNOUNCES SECOND QUARTER 2025 RESULTS
Increased Total Production 1% Quarter over Quarter Generated Quarterly Operating EBITDA of $76.1 Million Generated Adjusted Infrastructure EBITDA of $27.1 million and $14.3 million Segment Income Declared Quarterly Dividend of C$0.0625 Per Share, or $3.5 Million in Aggregate, Payable on or around October 16, 2025 CALGARY, AB, Aug. 13, 2025 /CNW/ - Frontera Energy Corporation (TSX: FEC) (" Frontera" or the " Company") today reported financial and operational results for the second quarter ended June 30, 2025. All financial amounts in this news release and in the Company's financial disclosures are in United States dollars, unless otherwise stated. Gabriel de Alba, Chairman of the Board of Directors, commented: "Despite a volatile global macro-economic and oil market backdrop, Frontera continued to execute on its strategic goals and priorities across its businesses in the second quarter delivering strong operating results and completing significant value-generating initiatives for its shareholders and bondholders. The Company generated $76.1 million in Operating EBITDA, produced $27.1 million of Adjusted Infrastructure EBITDA, and maintained a strong balance sheet, finishing the quarter with a total cash balance of $197.5 million while reducing its upstream net debt by 30%. Following the expiry of the 90‑day consultation and negotiation period arising from the Notice of Intent -and in view of the uncertainty introduced by the Government of Guyana—we have recognized an impairment of over $430 million related to our investment in the Corentyne block, in accordance with prudent accounting standards. The Joint Venture remains firmly of the view that its interests in, and the license for, the Corentyne block remain in place and in good standing and that the Petroleum Agreement has not been terminated. We remain committed to working with the Government of Guyana to resolve these issues amicably, while preparing to assert and protect our legal and contractual rights through all available legal remedies, as necessary. The Company prioritized returning capital to all investors via its successful $80 million tender offer and consent solicitation of its senior unsecured notes due in 2028 and, subsequent to the quarter, the completion of a C$91 million substantial issuer bid, the largest in the Company's history. The Company also declared a quarterly dividend of C$0.0625 per share, or approximately $3.5 million in aggregate, and initiated a non-course issuer bid program. Over the last twelve-months, Frontera has returned over $144 million to shareholders via dividends and share repurchases while also reducing the outstanding aggregate principal amount of its senior unsecured notes by over 20%. These efforts underscore the success of the Company's return of capital focus to its stakeholders. The Company will continue to consider similar investor-focused initiatives in 2025 and beyond, including additional dividends, distributions, and share or bond buybacks, based on the overall results of the businesses, oil prices and cash flow generation. Additionally, the Company will consider all options to enhance the value of its common shares, and in so doing may consider other strategic initiatives or transactions." Orlando Cabrales, Chief Executive Officer (CEO), Frontera, commented: "Frontera's second quarter financial and operating results demonstrate the decisive steps we are taking to deliver stakeholder value, maintain financial and operational flexibility, and reduce leverage over the long-term. We increased our total production quarter over quarter driven by increased processing capacity at SAARA, investments in new flow lines in our heavy oil fields, a successful well intervention program within our light and medium blocks and new commercialized volumes of natural gas production from the VIM-1 block. During the quarter, we continued to prioritize operational improvements, reducing capital spending and cost and process efficiencies across our business, delivering a 10.3% decrease in production costs quarter-over-quarter driven by fewer well interventions and the implementation of new production technologies. We also reduced our transportation costs by 5.7% quarter-over-quarter driven by higher domestic wellhead sales. Our standalone and growing Colombia infrastructure business, which includes the Company's interest in ODL, generated an Adjusted Infrastructure EBITDA of $27.1 million. At Puerto Bahia, the Reficar connection was completed by the end of the quarter and now the efforts shift to the first transported volumes which are expected during the third quarter of 2025. Strategic investments in the port, including the LPG JV with Empresas Gasco, are progressing on schedule. The port is also pursuing additional investment opportunities that leverage its facilities and infrastructure for sustainable long-term growth. Consistent with our strategy, following the end of the quarter, the Company announced it had reached an agreement to divest its interest in the Company's non-core Perico and Espejo fields in Ecuador. This transaction is consistent with our strategy of maximizing value over volumes and supports a stronger focus on our higher-impact Colombian upstream operations. As a result, we are adjusting our 2025 production guidance to account for the impact of Ecuador sale to 39,500 to 41,000 boed. In light of the current oil price environment, we are also adjusting our capital expenditures guidance downwards, by approximately $20 million, reducing development facilities capex to $45 - 65 million and exploration capex to $25 - 35 million, reflecting our disciplined approach to capital spending and ability to identify ongoing operational efficiencies. Additionally, we are providing Operating EBITDA Guidance at a $70/bbl Brent Price with a target of between $320 - $360 million and revising our Adjusted Infrastructure EBITDA Guidance to between $110 - 125 million." Second Quarter 2025 Operational and Financial Summary: (1) References to heavy crude oil, light and medium crude oil combined, conventional natural gas and natural gas liquids in the above table and elsewhere in this news release refer to the heavy crude oil, light crude oil and medium crude oil combined, conventional natural gas and natural gas liquids, respectively, product types as defined in National Instrument 51-101 - Standards of Disclosure for Oil and Gas Activities. (2) Represents W.I. production before royalties. Refer to the "Further Disclosures" section on page 40 of the Company's management's discussion and analysis for the three months ended on March 31, 2025 (the " MD&A"). (3) Boe has been expressed using the 5.7 to 1 Mcf/bbl conversion standard required by the Colombian Ministry of Mines & Energy. Refer to the "Further Disclosures - Boe Conversion" section on page 40 of the MD&A. (4) Non-IFRS ratio is equivalent to a "non-GAAP ratio", as defined in National Instrument 52-112 - Non-GAAP and Other Financial Measures Disclosure (" NI 52-112" ). Refer to the "Non-IFRS and Other Financial Measures'' section on page 24 of the MD&A. (5) 2024 comparative figures differ from those previously reported due to the inclusion of Puerto Bahia inter-segment costs related to diluent and oil purchases as well as transportation costs. (6) Supplementary financial measure (as defined in NI 52-112). Refer to the "Non-IFRS and Other Financial Measures" section on page 24 of the MD&A. (7) Includes the net of the put premiums paid for expired positions and the positive cash settlement received from oil price contracts during the period. Please refer to the "Gain (loss) on oil price risk management contracts" section on page 15 of the MD&A for further details. (8) Non-IFRS financial measure (equivalent to a "non-GAAP financial measure", as defined in NI 52-112). Refer to the "Non-IFRS and Other Financial Measures" section on page 24 of the MD&A. (9) Net (loss) income attributable to equity holders of the Company. (10) Capital management measure (as defined in NI 52-112). Refer to the "Non-IFRS and Other Financial Measures" section on page 24 of the MD&A. (11)" Unrestricted Subsidiaries" include CGX Energy Inc., listed on the TSX Venture Exchange under the trading symbol "OYL"; FEC ODL Holdings Corp., including its subsidiary Frontera Pipeline Investment AG (" FPI", formerly named Pipeline Investment Ltd); Frontera BIC Holding Ltd.; Frontera Energy Guyana Holding Ltd.; Frontera Energy Guyana Corp.; and Frontera Bahía Holding Ltd. (" Frontera Bahia"), including Sociedad Portuaria Puerto Bahia S.A (" Puerto Bahia"). Refer to the "Liquidity and Capital Resources" section on page 31 of the MD&A. Second Quarter 2025 Operational and Financial Results: The Company recorded a net loss of $455.2 million or $5.89/share in the second quarter of 2025, compared with a net income of $27.5 million or $0.35/share in the prior quarter and net loss of $2.8 million or $0.03/share in the second quarter of 2024. Net loss from operations for the second quarter included a loss from operations of $474.8 million (net of non-cash impairment expenses of $477.0 million), finance expenses of $18.3 million and foreign exchange expenses of $2.6 million, partially offset by $14.1 million from share of income from associates, an income tax recovery of $13.0 million (including $14.3 million of deferred income tax recovery), $11.7 million of gain on the repurchase of its outstanding 7.875% Senior Unsecured Notes due in 2028 (the " 2028 Senior Unsecured Notes") net of the consent solicitation, and $4.0 million related to a gain on risk management contracts. This compares with a net loss, attributable to equity holders of the Company, of $2.8 million, mainly resulting from an income tax expense of $32.7 million (including $31.4 million of deferred income tax expenses), finance expenses of $17.4 million, foreign exchange losses of $7.5 million and $3.6 million related to a loss on risk management contracts, partially offset by an income from operations of $45.2 million and $13.4 million from the share of income from associates. Production averaged 41,055 boe/d in the second quarter of 2025, up 1% compared to 40,477 boe/d in the prior quarter and up 3% against 39,912 boe/d in the second quarter of 2024. Compared to the first quarter 2025, heavy crude oil production, increased by 1%, mainly due to increased processing capacity at SAARA and investments in new flow lines in the Cajua field; light and medium crude oil production, increased by 3% driven by a successful well intervention program; and conventional natural gas production increase by 37%, as a result of new commercialized volumes of natural gas from the VIM-1 Block. Natural gas liquids production decreased 4%, compared to the prior quarter, primarily as a result of natural decline. Operating EBITDA was $76.1 million in the second quarter of 2025 compared to $83.5 million in the prior quarter and $110.3 million in the second quarter of 2024. The decrease in operating EBITDA compared to the prior quarter was mainly due to lower Brent prices during the quarter, partially offset by lower production and transportation costs during the quarter. Cash provided by operating activities in the second quarter of 2025 was $41.8 million, compared to $70.1 million in the prior quarter and $149.8 million in the second quarter of 2024. The Company reported a total cash position of $197.5 million at June 30, 2025, compared to $199.8 million at March 31, 2025 and $215.1 million at June 30, 2024. During the quarter, the Company closed and funded the recapitalization of its interest in Oleoducto de los Llanos Orientales S.A. (" ODL") through a $220 million non-recourse, secured loan and received $115 million in net proceeds. In addition, the Company repurchased $80 million in aggregate principal amount of its outstanding 2028 Senior Unsecured Notes. Subsequent to the quarter, the Company paid $66.5 million to shareholders through its substantial issuer bid (as described further below). As at June 30, 2025, the Company had a total crude oil inventory balance of 1,142,536 barrels compared to 911,886 barrels at March 31, 2025. The Company had a total inventory balance in Colombia of 629,147 barrels, including 493,510 crude oil barrels and 135,637 bbls of diluent and others. This compared to 392,821 barrels as at March 31, 2025, and 758,794 barrels as at June 30, 2024. The Increase in inventory levels was associated with higher quarter over quarter production levels. Capital expenditures were approximately $59.4 million in the second quarter of 2025, compared with $46.7 million in the prior quarter and $80.2 million in the second quarter of 2024. During the second quarter, the Company drilled 26 development wells mainly at the Quifa and CPE-6 blocks. The Company's net sales realized price was $58.86/boe in the second quarter of 2025, compared to $62.26/boe in the prior quarter and $72.36/boe in the second quarter of 2024. The decrease was primarily driven by a lower Brent benchmark oil price, which was partially offset by stronger oil price differentials, the realized gain from oil price risk management contracts and lower royalties paid in cash. The Company's operating netback was $33.52/boe in the second quarter of 2025, compared with $34.52/boe in the prior quarter and $45.76/boe in the second quarter of 2024. Despite a $8.27/bbl decrease in the Brent benchmark oil price, the Company partially offset the lower netback through: (i) stronger oil price differentials, (ii) a reduction in production costs (excluding energy costs), net of realized FX hedge impact, mainly as a result of a reduction of well intervention activities and the adoption of new field production technologies, (iii) lower energy costs, net of realized FX hedge impact, driven by lower market prices, and (iv) lower transportation costs, due to reduced transported volumes, primarily resulting from improved domestic wellhead sales. Production costs (excluding energy cost), net of realized FX hedge impact, averaged $9.01/boe in the second quarter of 2025, compared with $10.04/boe in the prior quarter and $10.79/boe in the second quarter of 2024. The decrease in production cost primarily due to lower well services activities and the implementation of new field production technologies. Energy costs, net of realized FX hedging impacts, averaged $4.71/boe in the second quarter of 2025, compared to $5.38/boe in the prior quarter and up from $4.74/boe in the second quarter of 2024. The decrease quarter over quarter was mainly due to lower market prices. Transportation costs, net of realized FX hedging impacts averaged $11.62/boe in the second quarter of 2025, compared with $12.32/boe in the prior quarter and $11.07/boe in the second quarter of 2024. The decrease during the quarter was mainly due to reduced transported volumes, primarily resulting from improved domestic wellhead sales. ODL volumes transported were 235,804 bbl/d during the second quarter of 2025, volumes transported were in line with Q1 2025, which saw 236,387 bbl/d in volumes transported. Total Puerto Bahia liquids volumes were 53,280 bbl/d during the second quarter 2025 compared to 51,579 bbl/d the first quarter of 2025. Adjusted Infrastructure EBITDA in the second quarter of 2025 was $27.1 million, compared to $28.6 million in the first quarter of 2025. The decrease was mainly due to higher operating costs in SAARA, offset by positive results in the ODL segment driven by the pipeline tariff increase and lower costs during the quarter. Frontera's Sustainability Strategy The Company is advancing towards its 2028 sustainability goals as well as on the 2025 plan, with progress in almost every goal during the second quarter. On the sustainability front, and in alignment with our supply chain strategy, we launched the Business Network for Responsible Business Conduct to promote best practices in human rights due diligence. In the second quarter of 2025, local suppliers accounted for 11.37% of total purchases, reflecting the Company's ongoing commitment to support local economic development. Additionally, Frontera maintained strong performance in health and safety indicators, reporting achieved a Total Recordable Incident Rate (" TRIR") of 0.71. The Company also attained a water reuse rate of 37.6% within its operational activities. Enhancing Shareholder Returns The Company continues to consider investor-focused initiatives in the second half of 2025 and beyond, including additional dividends, distributions, share or bond buybacks, based on the overall results of the businesses, oil prices and cash flow generation. Additionally, the Company also continues to consider all options to enhance the value of its common shares, and in so doing may consider forms of strategic initiatives or transactions, which may include a further return of capital to shareholders, a merger or a business combination, or the transfer, sale or other disposition of all or a significant portion of the business, assets or securities of the Company, the recapitalization or separation or of interest in one or more subsidiaries or in assets of the Company, whether in one or a series of transactions. However, there can be no assurance that any such initiative or transaction will occur or if it occurs, the timing thereof. NCIB: Subsequent to the quarter, on July 15,2025, the Company announced the initiation of a Normal Course Issuer Bid, commencing July 18, 2025 and ending July 17, 2026, through which the Company may purchase up to 3,502,962 shares for cancellation, representing approximately 5% of the issued and outstanding shares as at July 15, 2025. As at August 12, 2024, the Company has repurchased approximately 78,400 common shares for cancellation for approximately $0.4 million. SIB: On July 15, 2025, the Company announced that, it had taken up and paid for 7,583,333 common shares (approximately 9.77% of the total number of Frontera's issued and outstanding common shares as at July 10, 2025) at a price of CAD$12.00 per common share, representing an aggregate purchase price of approximately CAD $91.0 million pursuant to a substantial issuer bid. The July 2025 substantial issuer bid had a 92.6% participation and the tendered shares were purchased on a pro rata basis, shareholders who tendered to the substantial issuer bid had approximately 10.54% of their tendered shares purchased by the Company. With an over 90% consistent participation rate in the SIBs, the Company's capital distribution strategy has proven effective and well received by the shareholders. After the cancellation of the common shares taken up and paid for by the Company, approximately 70.06 million common shares remained issued and outstanding. Bond Capped Cash Tender Offer & Consent Solicitation: On June 10, 2025, the Company announced the results of the cash tender and consent solicitation of its outstanding 2028 Senior Unsecured Notes. The Company received the requisite consents to implement the proposed amendments to the indenture governing the notes with a 50.38% approval, and validly delivered tenders in excess of the maximum tender amount set forth in the offer, Bondholders who participated in the tender offer had their notes repurchased pursuant to a proration factor of 55.63%. The transaction reduced the amount of the Company's outstanding notes by $80 million three years before maturity, for a total cash consideration of $57.6 million and recognizing a gain after fees and expenses associated with transaction of $11.7 million. The tender offer and consent solicitation provided the Company with increased financial flexibility, while also reducing its outstanding debt obligations. The amendments to the indenture aim to modernize Frontera's indenture in line with that of its peers and also provides targeted operational flexibility to deliver long-term business and reserve growth, including as a result of inorganic transactions. The carrying value for the 2028 Senior Unsecured Notes, as of June 30, 2025, is $310.3 million. Dividend: Pursuant to Frontera's dividend policy, Frontera's Board of Directors has declared a dividend of C$0.0625 per common share to be paid on or around October 16, 2025, to shareholders of record at the close of business on October 2, 2025. This dividend payment to shareholders is designated as an "eligible dividend" for purposes of the Income Tax Act (Canada). This dividend is eligible for the Company's Dividend Reinvestment Plan which provides Canadian resident shareholders of Frontera the option to automatically reinvest the cash dividends on their common shares into additional common shares, without paying brokerage commissions or services charges. Frontera's Three Core Businesses Frontera's three core businesses include: (1) its Colombia and Ecuador Upstream Onshore business, (2) its standalone and growing Colombian Infrastructure business, and (3) its potentially transformational Guyana Exploration business offshore Guyana. 2025 Guidance Update Frontera is adjusting its 2025 production guidance to reflect its Colombian operations only, now targeting 39,500 to 41,000 boed, following the divestment of its non-core assets in Ecuador. The Company is also revising its capital expenditures guidance downwards by approximately $20 million, reducing its development facilities capex to $45 - 65 million and exploration capex to $25 - 35 million. These changes reflect on the Company's disciplined approach to capital spending and ability to identify ongoing operational efficiencies. Additionally, the Company is providing Operating EBITDA Guidance at a $70/bbl Brent Price targeting between $320 - $360 million and revising our Adjusted Infrastructure EBITDA Guidance targeting between $110 - 125 million. (1) The Company's 2025 original and updated average production guidance range does not include in-kind royalties, operational consumption, quality volumetric compensation or potential production from successful exploration activities planned in 2025. (2) Per-bbl/boe metric on a share before royalties' basis. (3) Calculated using net production after royalties. (4) Supplementary financial measure (as defined in NI 52-112). Refer to the "Non-IFRS and Other Financial Measures" section on page 24 of the MD&A for further details. (5) Non-IFRS financial measure (equivalent to a "non-GAAP financial measure", as defined in NI 52-112). Refer to the "Non-IFRS and Other Financial Measures" section on page 24 of the MD&A for further details (6) 2025 Original Guidance Operating EBITDA calculated at Brent between $75/bbl and COP/USD exchange rate of 4,250:1. (7) 2025 Updated Guidance Operating EBITDA calculated at Brent between $70/bbl and COP/USD exchange rate of 4,150:1.. (8) Other includes HSEQ activities and new field production technologies. Colombia & Ecuador Upstream Onshore Colombia During the second quarter of 2025, Frontera produced 39,778 boe/d from its Colombian operations (consisting of 27,535 bbl/d of heavy crude oil, 9,850 bbl/d of light and medium crude oil, 3,118 mcf/d of conventional natural gas and 1,846 boe/d of natural gas liquids). In the second quarter of 2025, the Company drilled 26 development wells mainly at the Quifa and CPE-6 blocks and completed well interventions at 22 others. Currently, the Company has 1 drilling rig and 2 well intervention rigs active at its Quifa and CPE-6 blocks in Colombia. Quifa Block: Quifa SW and Cajua At Quifa, second quarter 2025 production averaged 17,576 bbl/d of heavy crude oil (including both Quifa and Cajua). The Company invested in facility expansion and the installation of new flow lines in the Cajua field, in the Quifa block to support new well production and the SAARA connection. In the second quarter 2025, the Company handled an average of approximately 1.78 million barrels of water per day in Quifa including SAARA. CPE-6 At CPE-6, second quarter 2025 production averaged approximately 7,771 bbl/d of heavy crude oil, decreasing from 8,056 bbl/d during the first quarter of 2025. During the second quarter 2025, the Company invested in the expansion of crude oil storage capacity and the implementation of new field production technologies. The Company handled an average of approximately 327 thousand barrels of water per day in CPE-6 in the second quarter of 2025. The Company's current water handling capacity in CPE-6 is approximately 370 thousand barrels of water per day. Other Colombia Developments At Guatiquia, production during the second quarter 2025 averaged 5,385 bbl/d of light and medium crude compared with 5,119 bbl/d in the first quarter 2025. During the quarter the Company performed a sidetrack in its Coralillo 3 well. In the Cubiro block production averaged 1,057 bbl/d of light and medium crude oil in the second quarter of 2025 compared with 1,213 bbl/d in the first quarter 2025. At VIM-1 (Frontera 50% W.I., non-operator), production averaged 1,960 boe/d of light and medium crude oil in the second quarter of 2025 compared to 1,840 boe/d of light and medium crude oil in the first quarter 2025. At the Sabanero block, production averaged 2,189 boe/d of heavy oil crude production in the second quarter of 2025 compared to 2,346 boe/d in the first quarter 2025. Colombia Exploration Assets At VIM-1, following engagement efforts with authorities and communities, the joint venture operating the VIM-1 block (Frontera 50% W.I., non-operator) has shifted its focus from Hidra-1 to the Guapo-1 exploratory well. By the second quarter 2025, all necessary designs and permits were secured for roadwork and site preparation for Guapo-1, with drilling and completion expected to occur in the second half of 2025. At Llanos 119, the Company is awaiting the decision of the Agencia Nacional de Hidrocarburos (ANH) on transferring exploration commitments to VIM-46 for a 3D seismic survey. Meanwhile, pre-seismic and pre-drilling social and environmental studies are underway at Llanos-99 and VIM-46. Ecuador In Ecuador, second quarter 2025 production averaged approximately 1,277 bbl/d of light and medium crude oil compared to 1,467 bbl/d in the prior quarter. At the Espejo block (Frontera holds a 50% W.I. and is a non-operator), long-term tests continued at the Espejo Sur-B3 well with production of 330 bbl/d gross and a water cut of 78%. Subsequent to the quarter, the Company agreed to divest its 50% interest in the Perico and Espejo blocks in Ecuador. The total cash consideration to Frontera for the blocks is $7.8 million, subject to working capital and other customary adjustments as of the effective date of January 1, 2025. The agreement includes an additional contingent consideration of $750,000, payable to Frontera upon the Perico block achieving cumulative gross production of two million barrels as from January 1, 2025. Closing of the transaction is subject to satisfaction of customary closing conditions, including the receipt of regulatory approvals for closing and operations takeover from the Ministry of Energy of Ecuador, and is expected to occur by the second quarter of 2026. 2. Infrastructure Colombia Frontera's Infrastructure Colombia Segment includes the Company's 35% equity interest in the ODL pipeline through Frontera's wholly owned subsidiary, FPI and the Company's 99.97% interest in Puerto Bahia. Beginning in 2024, the Infrastructure Colombia Segment also includes the Company's reverse osmosis water treatment facility (SAARA) and its palm oil plantation (ProAgrollanos). Frontera processed 119,409 barrels of water per day at is SAARA reverse osmosis water-treatment facility during the quarter and remains focused on reaching its goal of processing 250,000 barrels of water per day. On the Puerto Bahia side, the Reficar connection's construction was completed by the end of the quarter and, the Company's efforts shift to the first transported volumes, which are expected during the third quarter of 2025. The Company is progressing with its growth plans, including the LPG joint venture with Empresas Gasco. Infrastructure Colombia Segment Results Adjusted Infrastructure EBITDA in the second quarter of 2025 was $27.1 million, compared with $28.6 million during the first quarter 2025. The decrease was mainly due to higher operating costs in SAARA, offset by positive results in the ODL segment driven by the pipeline tariff increase and lower costs during the quarter. (1) Non-IFRS financial measure Segment capital expenditures for the three months ended June 30, 2025, totaled $4.8 million primarily driven by Puerto Bahia investments of $3.9 million, including: (i) $3.4 million in investment towards the Reficar connection, (ii) tank maintenance, and (iii) general cargo terminal facilities with additional investment in the SAARA project. (1) Non-IFRS financial measures (equivalent to a "non-GAAP financial measures", as defined in NI 52-112). Refer to the "Non-IFRS and Other Financial Measures'' section on page 24 of the MD&A. The following table shows the volumes pumped per injection point in ODL: The following table shows throughput for the liquids port facility at Puerto Bahia: The following table shows the barrels of water per day treated and irrigated in SAARA and field performance indicators for Proagrollanos: (1) Tons per hectare per year for the three months ended June 30, are calculated using the total production for the last twelve months ended June 30. 3. Guyana Exploration On March 26, 2025, the Company and its subsidiaries Frontera Petroleum International Holding B.V. and Frontera Energy Guyana Holding Ltd. (the " Investors") sent a Notice of Intent to the Government of Guyana (the " GoG"). In this Notice of Intent, the Investors alleged breaches of the United Kingdom – Guyana Bilateral Investment Treaty and the Guyana Investment Act by the GoG. The communication initiated a 90-day period for consultations and negotiations between the parties to resolve the dispute amicably. After the 90-day period, no mutually, acceptable solution has been produced. As informed in previous quarters, Frontera Energy Guyana Corp. (" Frontera Guyana") and CGX Resources Inc. (" CGX Resources" and together with Frontera Guyana, the " Joint Venture") and its stakeholders are prepared to assert their legal rights. On July 23, 2025, the GoG, through its legal counsel, responded to the Investors, rejecting their claims regarding the Corentyne block license. The GoG reaffirmed its view that the Joint Venture's interest expired on June 28, 2024, but noted that it may consider a final meeting with the Investors, on a without prejudice basis, in October 2025, and the Joint Venture would be informed as to whether such a meeting will occur in September 2025 The Joint Venture remains firmly of the view that its interests in, and the license for, the Corentyne block remain in place and in good standing and that the Petroleum Agreement has not been terminated. Although the 90-day consultation and negotiation period derived from the Notice of Intent has now expired, the Joint Venture and its stakeholders continue to invite the GoG to amicably resolve the issues affecting the Joint Venture's investments in the Corentyne block. Should the parties not reach a mutually agreeable solution, the Joint Venture and its stakeholders are prepared to assert their legal rights. The Company evaluated the Corentyne E&E asset's recoverability given the GoG's conduct and communications, and its unwillingness to recognize the Joint Venture's rights during the consultation periods, which have since expired. Although all contractual requirements of the Company have been met and an external legal assessment determined that the Company's interests in the licenses and agreements for the Corentyne block remain valid, the GoG's positions mentioned above have restricted the Company's ability to develop activities under those licenses and agreements. This situation has led to uncertainty regarding the asset's future development and constituted an impairment indicator. Consequently, the Company recognized an impairment of $432.2 million in its income statement, and the Corentyne E&E asset's carrying value as of June 30, 2025 is $Nil (December 31, 2024 $431.9 million). The Joint Venture jointly hold 100% working interest in the Corentyne block, located offshore Guyana. Frontera Guyana and CGX Resources have agreed that their respective participating interests are 72.52% and 27.48%, which includes a 4.52% interest which CGX Resources agreed to assign to Frontera Guyana in 2023. The assignment of this 4.52% participating interest remains subject to the approval of the Government of Guyana, but is believed to be enforceable between Frontera Guyana and CGX Resources. Hedging Update As part of its risk management strategy, Frontera uses derivative commodity instruments to manage exposure to price volatility by hedging a portion of its oil production. The Company's strategy aims to protect 40-60% of its estimated net after royalties' production using a combination of instruments, capped and non-capped, to protect the revenue generation and cash position of the Company, while maximizing the upside, thereby allowing the Company to take a more dynamic approach to the management of its hedging portfolio. The following table summarizes Frontera's hedging position as of August 13, 2025. The Company is exposed to foreign currency fluctuations primarily arising from expenditures that are incurred in COP and its fluctuation against the USD. As of August 13, 2025 the Company had the following foreign currency derivatives contracts: Second Quarter 2025 Financial Results Conference Call Details A conference call for investors and analysts will be held on Thursday, August 14th, 2025, at 11:00 a.m. Eastern Time. Participants will include Gabriel de Alba, Chairman of the Board of Directors, Orlando Cabrales, Chief Executive Officer, Rene Burgos, Chief Financial Officer, and other members of the senior management team. Analysts and investors are invited to participate using the following dial-in numbers: A replay of the conference call will be available until 11:59 p.m. Eastern Time on August 21st, 2025. About Frontera: Frontera Energy Corporation is a Canadian public company involved in the exploration, development, production, transportation, storage and sale of oil and natural gas in South America, including related investments in both upstream and midstream facilities. The Company has a diversified portfolio of assets with interests in 22 exploration and production blocks in Colombia, Ecuador and Guyana, and pipeline and port facilities in Colombia. Frontera is committed to conducting business safely and in a socially, environmentally and ethically responsible manner. Twitter: Facebook: LinkedIn: Cautionary Note Concerning Forward-Looking Statements This news release contains forward-looking statements. All statements, other than statements of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future (including, without limitation, the Company's goal of enhancing shareholder value by returning capital to shareholders, the Company's intent to consider future shareholder initiatives including a potential future separation and other strategic transactions involving the Infrastructure business, the expected date for pre-drilling and drilling activity to commence in the Lower Magdalena Valley and Llanos Basins in Colombia, the operational timing of the connection project between Puerto Bahia and Reficar, holding the conference call for investors and the timing thereof, the Company's exploration and development plans and objectives, production levels, profitability, costs, future income generation capacity, cash levels (including the timing and ability to release restricted cash), regulatory approval, and the Company's hedging program and its ability to mitigate the impact of changes in oil prices) are forward-looking statements. These forward-looking statements reflect the current expectations or beliefs of the Company based on information currently available to the Company. Forward-looking statements are subject to a number of risks and uncertainties that may cause the actual results of the Company to differ materially from those discussed in the forward-looking statements, and even if such actual results are realized or substantially realized, there can be no assurance that they will have the expected consequences to, or effects on, the Company. Factors that could cause actual results or events to differ materially from current expectations include, among other things: volatility in market prices for oil and natural gas; the newly imposed U.S. trade tariffs affecting over fifty countries and escalating tensions with China; the impact of the Russia-Ukraine conflict and the conflict in the Middle East; actions of the Organization of Petroleum Exporting Countries; uncertainties associated with estimating and establishing oil and natural gas reserves and resources; liabilities inherent with the exploration, development, exploitation and reclamation of oil and natural gas; uncertainty of estimates of capital and operating costs, production estimates and estimated economic return; increases or changes to transportation costs; expectations regarding the Company's ability to raise capital and to continually add reserves through acquisition and development; the Company's ability to complete strategic initiatives or transactions to enhance the value of its common shares and the timing thereof; the Company's ability to access additional financing; the ability of the Company to maintain its credit ratings; the ability of the Company to: meet its financial obligations and minimum commitments, fund capital expenditures and comply with covenants contained in the agreements that govern indebtedness; political developments in the countries where the Company operates; the uncertainties involved in interpreting drilling results and other geological data; geological, technical, drilling and processing problems; timing on receipt of government approvals; fluctuations in foreign exchange or interest rates and stock market volatility, the ability of the Joint Venture to reach an agreement with the GoG in respect of the Joint Venture's interest in the PA and PPL for the Corentyne block, and the other risks disclosed under the heading "Risk Factors" and elsewhere in the Company's annual information form dated March 10, 2025 filed on SEDAR+ at Any forward-looking statement speaks only as of the date on which it is made and, except as may be required by applicable securities laws, the Company disclaims any intent or obligation to update any forward-looking statement, whether as a result of new information, future events or results or otherwise. Although the Company believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and accordingly undue reliance should not be put on such statements due to the inherent uncertainty therein. This news release contains future oriented financial information and financial outlook information (collectively, "FOFI") (including, without limitation, statements regarding expected average production), and are subject to the same assumptions, risk factors, limitations and qualifications as set forth in the above paragraph. The FOFI has been prepared by management to provide an outlook of the Company's activities and results, and such information may not be appropriate for other purposes. The Company and management believe that the FOFI has been prepared on a reasonable basis, reflecting management's reasonable estimates and judgments, however, actual results of operations of the Company and the resulting financial results may vary from the amounts set forth herein. Any FOFI speaks only as of the date on which it is made, and the Company disclaims any intent or obligation to update any FOFI, whether as a result of new information, future events or results or otherwise, unless required by applicable laws. Non-IFRS Financial Measures This press release contains various "non-IFRS financial measures" (equivalent to "non-GAAP financial measures", as such term is defined in NI 52-112), "non-IFRS ratios" (equivalent to "non-GAAP ratios", as such term is defined in NI 52-112), "supplementary financial measures" (as such term is defined in NI 52-112) and "capital management measures" (as such term is defined in NI 52-112), which are described in further detail below. Such measures do not have standardized IFRS definitions. The Company's determination of these non-IFRS financial measures may differ from other reporting issuers and they are therefore unlikely to be comparable to similar measures presented by other companies. Furthermore, these financial measures should not be considered in isolation or as a substitute for measures of performance or cash flows as prepared in accordance with IFRS. These financial measures do not replace or supersede any standardized measure under IFRS. Other companies in our industry may calculate these measures differently than we do, limiting their usefulness as comparative measures. The Company discloses these financial measures, together with measures prepared in accordance with IFRS, because management believes they provide useful information to investors and shareholders, as management uses them to evaluate the operating performance of the Company. These financial measures highlight trends in the Company's core business that may not otherwise be apparent when relying solely on IFRS financial measures. Further, management also uses non-IFRS measures to exclude the impact of certain expenses and income that management does not believe reflect the Company's underlying operating performance. The Company's management also uses non-IFRS measures in order to facilitate operating performance comparisons from period to period and to prepare annual operating budgets and as a measure of the Company's ability to finance its ongoing operations and obligations. Set forth below is a description of the non-IFRS financial measures, non-IFRS ratios, supplementary financial measures and capital management measures used in the MD&A. Operating EBITDA EBITDA is a commonly used non-IFRS financial measure that adjusts net income as reported under IFRS to exclude the effects of income taxes, finance income and expenses, and DD&A. Operating EBITDA is a non-IFRS financial measure that represents the operating results of the Company's primary business, excluding the following items: restructuring, severance and other costs, post-termination obligation, payments of minimum work commitments and, certain non-cash items (such as impairments, foreign exchange, unrealized risk management contracts, and share-based compensation) and gains or losses arising from the disposal of capital assets. In addition, other unusual or non-recurring items are excluded from operating EBITDA, as they are not indicative of the underlying core operating performance of the Company. A reconciliation of Operating EBITDA to net loss is as follows: Three months ended June 30 Six months ended June 30 ($M) 2025 2024 2025 2024 Net loss (455,212) (2,846) (427,688) (11,349) Finance Income (2,073) (1,816) (3,556) (3,408) Finance expenses 18,310 17,429 33,715 34,699 Income tax (recovery) expense (12,957) 32,659 (22,608) 59,244 Depletion, depreciation and amortization 60,600 63,188 127,994 129,000 Expense (recovery) of asset retirement obligation 151 45 526 (997) Expenses of impairment 476,960 392 478,094 1,419 Trunkline incident costs — — 2,000 — Post-termination obligation (406) (364) (109) 186 Shared-based compensation 1,624 754 2,486 1,040 Restructuring, severance and other cost 9,526 1,052 10,527 2,855 Share of income from associates (14,124) (13,407) (29,233) (27,301) Foreign exchange loss 2,553 7,518 314 8,615 Other (income) loss (1,303) 2,774 (1,191) 3,133 Unrealized (gain) loss on risk management contracts (3,556) 3,646 (8,342) 11,585 Non-controlling interests (168) (288) (295) (443) Gain on repurchased of notes (11,735) (415) (11,925) (709) Debt extinguishment cost 5,964 — 5,964 — Colombian Temporary taxes 1,919 — 2,858 — Operating EBITDA 76,073 110,321 159,531 207,569 Capital Expenditures Capital expenditures is a non-IFRS financial measure that reflects the cash and non-cash items used by the Company to invest in capital assets. This financial measure considers oil and gas properties, plant and equipment, infrastructure, exploration and evaluation assets expenditures which are items reconciled to the Company's Statements of Cash Flows for the period. Infrastructure Colombia Calculations Each of Adjusted Infrastructure Revenue, Adjusted Infrastructure Operating Costs and Adjusted Infrastructure General and Administrative, is a non-IFRS financial measure, and each is used to evaluate the performance of the Infrastructure Colombia Segment operations. Adjusted Infrastructure Revenue includes revenues of the Infrastructure Colombia Segment including ODL's revenue direct participation interest. Adjusted Infrastructure Operating Costs includes costs of the Infrastructure Colombia Segment including ODL's cost direct participation interest. Adjusted Infrastructure General and Administrative includes general and administrative costs of the Infrastructure Colombia Segment including ODL's general and administrative direct participation interest. A reconciliation of each of Adjusted Infrastructure Revenue, Adjusted Infrastructure Operating Costs and Adjusted Infrastructure General and Administrative is provided below. (1) Revenues and expenses related to ODL are accounted for using the equity method, as described in Note 12 of the Interim Condensed Consolidated Financial Statements. Adjusted Infrastructure EBITDA The Adjusted Infrastructure EBITDA is a non-IFRS financial measure used to assist in measuring the operating results of the Infrastructure Colombia Segment business. (1) Non-IFRS financial measure Net Sales Net sales is a non-IFRS financial measure that adjusts revenue to include realized gains and losses from oil risk management contracts while removing the cost of any volumes purchased from third parties. This is a useful indicator for management, as the Company hedges a portion of its oil production using derivative instruments to manage exposure to oil price volatility. This metric allows the Company to report its realized net sales after factoring in these oil risk management activities. The deduction of cost of purchases is helpful to understand the Company's sales performance based on the net realized proceeds from its own production, the cost of which is partially recovered when the blended product is sold. Net sales also exclude sales from port services, as it is not considered part of the oil and gas segment. Refer to the reconciliation in the "Sales" section on page 10 of the MD&A. Operating Netback and Oil and Gas Sales, Net of Purchases Operating netback is a non-IFRS financial measure and operating netback per boe is a non-IFRS ratio. Operating netback per boe is used to assess the net margin of the Company's production after subtracting all costs associated with bringing one barrel of oil to the market. It is also commonly used by the oil and gas industry to analyze financial and operating performance expressed as profit per barrel and is an indicator of how efficient the Company is at extracting and selling its product. For netback purposes, the Company removes the effects of any trading activities and results from its Infrastructure Colombia Segment from the per barrel metrics and adds the effects attributable to transportation and operating costs of any realized gain or loss on foreign exchange risk management contracts. Refer to the reconciliation in the "Operating Netback" section on page 9. The following is a description of each component of the Company's operating netback and how it is calculated. Oil and gas sales, net of purchases, is a non-IFRS financial measure that is calculated using oil and gas sales less the cost of volumes purchased from third parties including its transportation and refining costs. Oil and gas sales, net of purchases per boe, is a non-IFRS ratio that is calculated using oil and gas sales, net of purchases, divided by the total sales volumes, net of purchases. A reconciliation of this calculation is provided below: (1) Excludes sales from infrastructure services, as they are not part of the oil and gas segment. Refer to the "Infrastructure Colombia" section on page 19 for further details. Non-IFRS Ratios Realized oil price, net of purchases, and realized gas price per boe Realized oil price, net of purchases, and realized gas price per boe are both non-IFRS ratios. Realized oil price, net of purchases, per boe is calculated using oil sales net of purchases, divided by total sales volumes, net of purchases. Realized gas price is calculated using sales from gas production divided by the conventional natural gas sales volumes. (1) Non-IFRS financial measure. Net sales realized price Net sales realized price is a non-IFRS ratio that is calculated using net sales (including oil and gas sales net of purchases, realized gains and losses from oil risk management contracts and less royalties). Net sales realized price per boe is a non-IFRS ratio which is calculated dividing each component by total sales volumes, net of purchases. A reconciliation of this calculation is provided below: Three months ended June 30 Six months ended June 30 ($M) 2025 2024 2025 2024 Oil and gas sales, net of purchases ($M) (1)(2) 170,943 217,130 368,918 417,904 Gain (loss) on oil price risk management contracts, net ($M) (3) 431 (3,796) (3,710) (7,285) (-) Royalties ($M) (2,304) (5,774) (5,364) (10,280) Net Sales ($M) 169,070 207,560 359,844 400,339 Sales volumes, net of purchases (boe) 2,872,688 2,868,593 5,936,619 5,615,246 Oil and gas sales, net of purchases ($/boe) 59.51 75.69 62.14 74.42 Premiums received (paid) on oil price risk management contracts (4) 0.15 (1.32) (0.62) (1.30) Royalties ($/boe) (0.80) (2.01) (0.90) (1.83) Net sales realized price ($/boe) 58.86 72.36 60.62 71.29 (1) Non-IFRS financial measure. (2) 2024 comparative figures differ from those previously reported due to the inclusion of Puerto Bahia inter-segment costs related to diluent and oil purchases as well as transportation costs. (3) Includes the net amount of put premiums paid for expired positions and the positive cash settlement received from oil price contracts during the period. Refer to the "Gain (Loss) on Risk Management Contracts" section on page 15 for further details. (4) Supplementary financial measure. Purchase crude net margin Purchase crude net margin is a non-IFRS financial measure that is calculated using the purchased crude oil and products sales, less the cost of those volumes purchased from third parties including its transportation and refining costs. Purchase crude net margin per boe is a non-IFRS ratio that is calculated using the Purchase crude net margin, divided by the total sales volumes, net of purchases. A reconciliation of this calculation is provided below: (1) Cost of third-party volumes purchased for use and resale in the Company's oil operations, including its transportation and refining costs. (2) 2024 comparative figures differ from those previously reported due to the inclusion of Puerto Bahía inter-segment costs related to diluent and oil purchases as well as transportation costs. Production costs (excluding energy cost), net of realized FX hedge impact, and production cost (excluding energy cost), net of realized FX hedge impact per boe Production costs (excluding energy cost), net of realized FX hedge impact is a non-IFRS financial measure that mainly includes lifting costs, activities developed in the blocks, processes to put the crude oil and gas in sales condition and the realized gain or loss on foreign exchange risk management contracts attributable to production costs. Production cost, net of realized FX hedge impact per boe is a non-IFRS ratio that is calculated using production cost (excluding energy cost), net of realized FX hedge impact divided by production (before royalties). A reconciliation of this calculation is provided below: (1) See "Gain (Loss) on Risk Management Contracts" on page 15. (2) Non-IFRS financial measure. Energy costs, net of realized FX hedge impact, and production cost, net of realized FX hedge impact per boe Energy costs, net of realized FX hedge impact is a non-IFRS financial measure that describes the electricity consumption and the costs of localized energy generation and the realized gain or loss on foreign exchange risk management contracts attributable to energy costs. Energy cost, net of realized FX hedge impact per boe is a non-IFRS ratio that is calculated using energy cost, net of realized FX hedge impact divided by production (before royalties). A reconciliation of this calculation is provided below: (1) See "Gain (Loss) on Risk Management Contracts" on page 15. (2) Non-IFRS financial measure. Transportation costs, net of realized FX hedge impact, and transportation costs, net of realized FX hedge impact per boe Transportation costs, net of realized FX hedge impact is a non-IFRS financial measure, that includes all commercial and logistics costs associated with the sale of produced crude oil and gas such as trucking and pipeline, and the realized gain or loss on foreign exchange risk management contracts attributable to transportation costs. Transportation cost, net of realized FX hedge impact per boe is a non-IFRS ratio that is calculated using transportation cost, net of realized FX hedge impact divided by net production after royalties. A reconciliation of this calculation is provided below: Three months ended June 30 Six months ended June 30 2025 2024 2025 2024 Transportation costs ($M) 38,701 34,917 78,250 70,112 (-) Realized gain on FX hedge attributable to transportation costs ($M) (1) — (634) — (1,043) Puerto Bahía inter-segment costs (2) 692 470 1,328 901 Transportation costs, net of realized FX hedge impact ($M) (2)(3) 39,393 34,753 79,578 69,970 Net Production (boe) 3,389,204 3,139,955 6,652,293 6,210,568 Transportation costs, net of realized FX hedge impact ($/boe) 11.62 11.07 11.96 11.27 (1) See "Gain (Loss) on Risk Management Contracts" on page 15. (2) 2024 prior period figures are different compared with those previously reported as a result as a result of the inclusion of Puerto Bahia inter-segment costs related to cost of diluent and oil purchased, and transportation cost. (3) Non-IFRS financial measure. Supplementary Financial Measures Realized (loss) gain on oil risk management contracts per boe Realized (loss) gain on oil risk management contracts includes the gain or loss during the period, as a result of the Company´s exposure in derivative contracts of crude oil. Realized (loss) gain on oil risk management contracts per boe is a supplementary financial measure that is calculated using Realized (loss) gain on risk management contracts divided by total sales volumes, net of purchases. Royalties per boe Royalties includes royalties and amounts paid to previous owners of certain blocks in Colombia and cash payments for PAP. Royalties per boe is a supplementary financial measure that is calculated using the royalties divided by total sales volumes, net of purchases. NCIB weighted-average price per share Weighted-average price per share under the 2023 NCIB is a supplementary financial measure that corresponds to the weighted-average price of common shares purchased under the 2023 NCIB during the period. It is calculated using the total amount of common shares repurchased in U.S. dollars divided by the number of common shares repurchased. Capital Management Measures Restricted cash short- and long-term Restricted cash (short- and long-term) is a capital management measure, that sums the short-term portion and long-term portion of the cash that the Company has in term deposits that have been escrowed to cover future commitments and future abandonment obligations, or insurance collateral for certain contingencies and other matters that are not available for immediate disbursement. Total cash Total cash is a capital management measure to describe the total cash and cash equivalents restricted and unrestricted available, is comprised by the cash and cash equivalents and the restricted cash short and long-term. Total debt and lease liabilities Total debt and lease liabilities are capital management measures to describe the total financial liabilities of the Company and is comprised of the debt of the 2028 Unsecured Notes, loans, and liabilities from leases of various properties, power generation supply, vehicles and other assets. Definitions: SOURCE Frontera Energy Corporation
Cision Canada
6 hours ago
- Cision Canada
K-BRO REPORTS RECORD Q2 RESULTS FOR REVENUE, EBITDA AND ADJUSTED EBITDA
(TSX: ) EDMONTON, AB, Aug. 13, 2025 /CNW/ - K-Bro Linen Inc. ("K-Bro" or the "Corporation") today announces its Q2 2025 financial and operating results. Q2 2025 Financial and Operating Highlights Revenue Revenue increased by 21.0% in Q2 2025 to $113.1 million compared to $93.5 million in Q2 2024. Healthcare revenue increased to $57.9 million for Q2 2025 compared to $48.0 million in Q2 2024, or by 20.7%. Hospitality revenue increased to $55.2 million for Q2 2025 compared to $45.5 million in 2024, or by 21.2%. Adjusted EBITDA 1, Adjusted EBITDA Margin 1 & Adjusted Net Earnings 1 Adjusted EBITDA increased by 30.0% to $23.7 million in Q2 2025 compared to $18.2 million in Q2 2024. Adjusted EBITDA margin increased by 1.5% to 21.0% in Q2 2025 compared to 19.5% in Q2 2024. Adjusted net earnings increased by 25.8% to $7.8 million in Q1 2025 from $6.2 million in Q2 2024. EBITDA, EBITDA Margin & Net Earnings EBITDA increased by $4.8 million to $21.4 million for Q2 2025 compared to $16.6 million in Q2 2024. EBITDA margin for the quarter increased to 18.9% in 2025 compared to 17.7% in 2024. Net earnings for the quarter increased by $0.9 million to $5.4 million in 2025 from $4.5 million in 2024, and as a percentage of revenue decreased by 0.1% to 4.8% in 2025 from 4.9% in 2024. For the second quarter of 2025, K-Bro declared dividends of $0.300 per common share. K-Bro issued 2,334,500 common shares to finance the Stellar Mayan acquisition. K-Bro amended its existing three-year committed Syndicated Credit Facility Agreement to include a $134.3 million four-year amortizing term loan and to extend the term of the facility to June 10, 2029. Debt net of cash at the end of Q2 2025 was $228.3 million compared to $114.4 million at the end of fiscal 2024 due to the amortizing term loan to finance the Stellar Mayan acquisition. Linda McCurdy, President & CEO of K-Bro, commented that "We're delighted to have completed the acquisition of Stellar Mayan, the largest in our history, and welcome the Stellar team to the K-Bro family. We initially entered the UK through the acquisition of Fishers in 2017. Our complementary acquisitions of Shortridge in 2024 and Stellar Mayan in 2025 have helped achieve our vision of building a national platform in the UK, enhancing our scale, reach and diversification. Together, we're excited to support our existing and new healthcare and hospitality customers." "Our fifth consecutive quarter of record results reflects early contributions of our recent acquisitions and we're excited about our future potential and outlook of these accretive acquisitions. Both of K-Bro's healthcare and hospitality segments continue to experience steady volume trends. Going forward, we expect combined Adjusted EBITDA margins will remain at similar levels to combined seasonally adjusted historical margins. We continue to monitor the evolving state of tariffs and other trade policies. We are not currently anticipating meaningful impacts on our business, as key customers and suppliers are not US-based." (1) Adjusted EBITDA, Adjusted EBITDA margin and Adjusted Net Earnings are non-GAAP measures. See "Terminology" for further information on the definition and composition of these measures. Highlights and Significant Events for Q2 2025 Business Acquisition - Stellar Mayan On May 13, 2025, the Corporation announced the signing of a share purchase agreement to acquire 100% of UK based Stellar Mayan. Stellar Mayan includes three operating businesses: (i) Synergy Health Managed Services Limited ("Synergy"); (ii) Grosvenor Contracts (London) Limited ("Grosvenor Contracts", "GC"); and (iii) Aeroserve (MSP) Limited and Aeroserve Euro Limited, jointly referred to as Aeroserve Linen Services ("AeroServe"). On June 11, 2025, the Corporation announced that it completed the previously announced acquisition of Stellar Mayan, a leading commercial laundry business in England serving the healthcare and hospitality markets. The Acquisition is highly complementary to K-Bro's existing UK businesses, Fishers and Shortridge, and creates a national footprint in the UK's commercial laundry and textile rental sector. The Corporation partially financed the Stellar Mayan Acquisition through the issuance of 2,334,500 common shares (initially issued as subscription receipts) at a price of $34.55 per common share (initially issued as subscription receipts). The remainder of the Acquisition was funded by the Corporation's new $134.3 million four-year amortizing term loan. Based on the Corporation's evaluation of the Stellar Mayan Acquisition and the criteria in the identification of a business combination established in IFRS 3, the Stellar Mayan Acquisition has been accounted for using the acquisition method, whereby the purchase consideration is allocated to the fair values of the net assets acquired. At the time the financial statements were authorized for issue, and due to the timing of the Acquisition, the Corporation has not yet completed the accounting for the Stellar Mayan Acquisition. This includes the accounting for the amounts attributable to property, plant and equipment, intangible assets and the associated goodwill. The preliminary purchase price allocated to the net assets acquired, based on their estimated fair values, is as follows: 1) This is presented net of cash acquired. Cash acquired was $5,156. The assets and liabilities recognized as a result of the Stellar Mayan Acquisition are as follows: 1) Includes ROUA from the UK Division of $32,556. The provisional intangible assets acquired are made up of $33.2 million related to customer contracts and $11.3 million related to the brands. The goodwill is attributable to the workforce, and the efficiencies and synergies created between the existing business of the Corporation and the acquired business. Goodwill will not be deductible for tax purposes. Acquisition related costs For the six months ended June 30, 2025, $7.1 million in professional fees associated with the Stellar Mayan Acquisition has been included in Corporate expenses. Revenue and profit information The acquired business contributed revenues of $9.4 million to the Corporation for the period from June 12, 2025 to June 30, 2025. If the Acquisition had occurred on January 1, 2025, consolidated pro-forma revenue for the period ended June 30, 2025 would have been $280.2 million. The acquired business contributed a net deficit of ($0.455) million to the Corporation for the period from June 12, 2025 to June 30, 2025. If the Acquisition had occurred on January 1, 2025, consolidated pro-forma net earnings for the period ended June 30, 2025 would have been $15.1 million, including the recognition of a non-recurring tax loss carryforward of $8.1 million. Common Share Offering On June 11, 2025, the Corporation closed the Stellar Mayan Acquisition. Through a bought deal, the Corporation issued 2,334,500 common shares at $34.55 per share, which included full exercise of the over-allotment option. The proceeds of the common share offering were used to finance a portion of the Stellar Mayan Acquisition and pay certain fees and expenses related to acquisition and offering. The net proceeds of the offering after deducting expenses of the offering and the underwriter's fee were $75.8 million. Revolving Credit Facility On June 11, 2025, the Corporation amended its existing three-year committed Syndicated Credit Facility Agreement to include a $134.3 million four-year amortizing term loan and to extend the term of the facility from March 25, 2027 to June 10, 2029. The amendment included a reduction in the accordion to $50 million from $75 million. On March 26, 2024, the Corporation entered into a three-year committed Syndicated Credit Facility Agreement from March 26, 2024 to March 25, 2027. The agreement consists of a $175 million revolving credit facility plus a $75 million accordion. The term loan and revolving credit facility are collateralized by a general security agreement, bear interest at prime or the applicable banker's acceptance rate, plus an interest margin dependent on certain financial ratios. Interest payments only are due during the term for the revolving portion of the syndicated credit facility. For the term loan portion of the syndicated credit facility, repayments of the principal amount shall be repaid in quarterly installments commencing September 30, 2025, in addition to required interest payments. The additional interest margin can range between 0.00% to 2.00% dependent upon the calculated Total Funded Debt / Credit Facility EBITDA financial ratio, with a range between 0 to 3.50x. The Funded Debt to EBITDA Ratio requirement has an increase to 4.00x for the first four quarters following any material acquisition. The required calculated Funded Debt / Credit Facility EBITDA financial ratio is subject to change based off certain terms and conditions. As at June 30, 2025 the combined interest rate was 5.95%. The Corporation's incremental borrowing rate under its existing credit facility is determined by the Canadian prime rate plus an applicable margin based on the ratio of Funded Debt to EBITDA as defined in the credit agreement. Business Acquisition - Shortridge In the six months ended June 30, 2025, the provisional amounts that were previously disclosed in the December 31, 2024 Annual Financial Statements, associated with the 100% share capital acquisition of Shortridge Ltd, a private hospitality laundry provider based in the North West of England were finalized. No new information which resulted in adjustments to the fair value of net identifiable assets acquired was obtained during the quarter ended June 30, 2025. Business Acquisition - Buanderie C.M. In the six months ended June 30, 2025, the provisional amounts that were previously disclosed in the December 31, 2024 Annual Financial Statements, associated with the 100% share capital acquisition of Buanderie C.M., a private laundry and linen operator located in Montreal serving the healthcare market were finalized. No new information which resulted in adjustments to the fair value of net identifiable assets acquired was obtained during the quarter ended June 30, 2025. Capital Investment Plan For fiscal 2025, the Corporation's planned capital spending is expected to be in the range of $10.0 to $12.0 million on a consolidated basis. This guidance includes both strategic and maintenance capital requirements to support existing base business in both Canada and the UK. These amounts are not reflective of incremental capital required for Stellar Mayan, for which the capital investment is anticipated to be $9.3 million ($5.0 million GBP). We will continue to assess capital needs within our facilities and prioritize projects that have shorter term paybacks as well as those that are required to maintain efficient and reliable operations. Economic Conditions Evolving global and Canadian foreign policies, geopolitical events and economic conditions may impact inflation, energy pricing, labour availability, supply chain efficiency, trade policies, tariffs and/or other items, which may have a direct or indirect impact on the Corporation's business. The Corporation's Credit Facility is subject to floating interest rates and, therefore, is subject to fluctuations in interest rates which are beyond the Corporation's control. Changes in interest rates, both domestically and internationally, could negatively affect the Corporation's cost of financing its operations and investments. Uncertainty about judgments, estimates and assumptions made by management during the preparation of the Corporation's consolidated financial statements related to potential impacts of geopolitical events and changing interest rates on revenue, expenses, assets, liabilities, and note disclosures could result in a material adjustment to the carrying value of the asset or liability affected. Financial Results For The Three Months Ended June 30, (thousands, except per share amounts and percentages) Canadian Division 2025 UK Division 2025 2025 Canadian Division 2024 UK Division 2024 2024 $ Change % Change Revenue $ 69,387 $ 43,687 $ 113,074 $ 64,669 $ 28,798 $ 93,467 19,607 21.0 % Expenses included in EBITDA 55,105 36,587 91,692 53,682 23,212 76,894 14,798 19.2 % EBITDA (1) 14,282 7,100 21,382 10,987 5,586 16,573 4,809 29.0 % EBITDA as a % of revenue 20.6 % 16.3 % 18.9 % 17.0 % 19.4 % 17.7 % 1.2 % 6.8 % Adjusted EBITDA (1) 14,656 9,071 23,727 12,244 6,003 18,247 5,480 30.0 % Adjusted EBITDA as a % of revenue 21.1 % 20.8 % 21.0 % 18.9 % 20.8 % 19.5 % 1.5 % 7.7 % Net earnings 2,852 2,567 5,419 1,775 2,760 4,535 884 19.5 % Basic earnings per share $ 0.258 $ 0.233 $ 0.491 $ 0.169 $ 0.263 $ 0.432 $ 0.059 13.7 % Diluted earnings per share $ 0.257 $ 0.232 $ 0.489 $ 0.169 $ 0.262 $ 0.431 $ 0.058 13.5 % Dividends declared per diluted share $ 0.300 $ 0.300 $ - 0.0 % Adjusted net earnings (1) 3,226 4,538 7,764 3,032 3,177 6,209 1,555 25.0 % Adjusted basic earnings per share (1) $ 0.294 $ 0.412 $ 0.706 $ 0.290 $ 0.304 $ 0.594 $ 0.112 18.9 % Adjusted diluted earnings per share (1) $ 0.291 $ 0.409 $ 0.700 $ 0.288 $ 0.302 $ 0.590 $ 0.110 18.6 % Total assets 716,762 444,380 272,382 61.3 % Debt (excludes lease liabilities) 253,315 134,789 118,526 87.9 % - Cash provided by operating activities 3,149 7,863 (4,714) -60.0 % Net change in non-cash working capital items (12,173) (6,093) (6,080) -99.8 % Share-based compensation expense 687 546 141 25.8 % Maintenance capital expenditures 2,974 1,064 1,910 179.5 % Principal elements of lease payments 3,133 2,668 465 17.4 % Distributable cash flow (1) 8,528 9,678 (1,150) -11.9 % Dividends declared 3,422 3,169 253 8.0 % Payout ratio (1) 40.1 % 32.7 % 7.4 % 22.6 % For The Six Months Ended June 30, (thousands, except per share amounts and percentages) Canadian Division 2025 UK Division 2025 2025 Canadian Division 2024 UK Division 2024 2024 $ Change % Change 0 Revenue $ 135,959 $ 68,084 $ 204,043 $ 127,369 $ 46,325 $ 173,694 30,349 17.5 % Expenses included in EBITDA 111,656 58,601 170,257 106,503 39,013 145,516 24,741 17.0 % EBITDA (1) 24,303 9,483 33,786 20,866 7,312 28,178 5,608 19.9 % EBITDA as a % of revenue 17.9 % 13.9 % 16.6 % 16.4 % 15.8 % 16.2 % 0.4 % 2.5 % Adjusted EBITDA (1) 26,597 12,123 38,720 23,861 7,820 31,681 7,039 22.2 % Adjusted EBITDA as a % of revenue 19.6 % 17.8 % 19.0 % 18.7 % 16.9 % 18.2 % 0.8 % 4.4 % Net earnings 3,698 2,547 6,245 3,454 2,887 6,341 (96) -1.5 % Basic earnings per share $ 0.339 $ 0.231 $ 0.570 $ 0.329 $ 0.275 $ 0.604 $ (0.034) -5.6 % Diluted earnings per share $ 0.337 $ 0.230 $ 0.567 $ 0.328 $ 0.274 $ 0.602 $ (0.035) -5.8 % Dividends declared per diluted share $ 0.600 $ 0.600 $ - 0.0 % Adjusted net earnings (1) 5,992 5,187 11,179 6,449 3,395 9,844 1,335 13.6 % Adjusted basic earnings per share (1) $ 0.557 $ 0.474 $ 1.031 $ 0.615 $ 0.324 $ 0.939 $ 0.092 9.8 % Adjusted diluted earnings per share (1) $ 0.553 $ 0.470 $ 1.023 $ 0.611 $ 0.322 $ 0.933 $ 0.090 9.6 % Total assets 716,762 444,380 272,382 61.3 % Debt (excludes lease liabilities) 253,315 134,789 118,526 87.9 % Cash provided by operating activities 20,405 20,555 (150) -0.7 % Net change in non-cash working capital items (4,764) (2,901) (1,863) -64.2 % Share-based compensation expense 1,336 1,054 282 26.8 % Maintenance capital expenditures 3,694 1,451 2,243 154.6 % Principal elements of lease payments 5,856 5,299 557 10.5 % Distributable cash flow (1) 14,283 15,652 (1,369) -8.7 % Dividends declared 6,596 6,346 250 3.9 % Payout ratio (1) 46.2 % 40.5 % 5.7 % 14.1 % (1) See "Terminology" for further details Dividends The Board of Directors has declared a monthly dividend of $0.10 per common share for the period from August 1 to August 31, 2025, to be paid on September 15, 2025, to shareholders of record on August 31, 2025. The Corporation's policy is for shareholders of record on the last business day of a calendar month to receive dividends during the fifteen days following the end of such month. K-Bro designates this dividend as an eligible dividend pursuant to subsection 89(14) of the Income Tax Act (Canada) and similar provincial and territorial legislation. On June 11, 2025, the Corporation completed its acquisition of Stellar Mayan establishing a national footprint in the UK commercial laundry and textile rental sector, enhancing revenue diversification by geographic mix and business mix. Based on consolidated revenue, K-Bro's combined business is approximately evenly split between Canada and the UK. A newly created UK Managing Director oversees K-Bro's UK operations, including the Stellar Mayan business integration plan. The Corporation anticipates business integration will take 12 to 18 months, and a transition team is executing the business integration plan. The Corporation's healthcare and hospitality segments continue to experience steady volume trends. Management believes the UK healthcare market shares similar characteristics and trends to the Canadian healthcare market. For the healthcare segment, management expects steady increases to activity levels supported by a continued focus on reducing wait times and enhancing patient care. For the hospitality segment, management expects solid activity levels from both business and leisure travel reflecting historical seasonal trends. Going forward, management expects combined Adjusted EBITDA margins will remain at similar levels to seasonally adjusted historical margins. The Corporation continues to monitor evolving global and Canadian foreign policies, geopolitical events and economic conditions, which could have a direct or indirect impact on the business. The Corporation is not currently expecting meaningful impacts on the business, as key customers and suppliers are not US-based. In 2024, the Corporation modified its definition of Adjusted EBITDA. As K-Bro actively pursues its growth opportunities, the Corporation will continue to incur certain transaction, transition, syndication/structural financing costs. In this context, management believes Adjusted EBITDA assists investors to assess our performance on a consistent basis as it is an indication of our capacity to generate income from operations. Adjusting items are detailed in the tables within "Terminology". With the completion of the Stellar Mayan acquisition, management's near-term focus is on business integration. However, K-Bro evaluates potential strategic acquisitions that may complement its platform. Over the medium and longer-term, management sees opportunities to accelerate growth in North America, Europe, and similar geographies which remain highly fragmented. K-Bro will look to leverage its strong liquidity position, balance sheet and access to the capital markets to execute on these opportunities, should they arise. For further information about the impact of other economic factors on our business, see the "Summary of Interim Results and Key Events". CORPORATE PROFILE K-Bro is the largest owner and operator of laundry and linen processing facilities in Canada and a national market leader for laundry and textile rental services in the UK. K‑Bro and its wholly-owned subsidiaries operate across Canada and the UK, providing a range of linen services to healthcare institutions, hotels and other commercial accounts that include the processing, management and distribution of general linen and operating room linen. The Corporation's operations in Canada include eleven processing facilities and two distribution centres in ten Canadian cities: Québec City, Montréal, Toronto, Regina, Saskatoon, Prince Albert, Edmonton, Calgary, Vancouver and Victoria. The Corporation's operations in the UK include five distinctive brands, Fishers Topco Ltd. ("Fishers") which was acquired by K-Bro on November 27, 2017, Shortridge Ltd. ("Shortridge"), which was acquired by K-Bro on April 30, 2024, and three brands acquired through the acquisition of Stellar Mayan Ltd. ("Stellar Mayan") on June 11, 2025, previously known as Star Mayan Limited. The three brands acquired were Synergy Health Managed Services Limited ("Synergy"), Aeroserve (MSP) Limited and Aeroserve Euro Limited, jointly referred to as Aeroserve Linen ("Aeroserve"), and Grosvenor Contracts (London) Limited ("Grosvenor Contracts", "GC"). Fishers was established in 1900 and is an operator of laundry and linen processing facilities in Scotland, providing linen rental, workwear hire and cleanroom garment services to the hospitality, healthcare, manufacturing and pharmaceutical sectors. Fishers' client base includes major hotel chains and prestigious venues across Scotland and the North of England. The company operates in five cities, in Scotland and the North of England with facilities in Cupar, Perth, Newcastle, Livingston and Coatbridge. Shortridge is headquartered in North West England, with laundry processing sites in Lillyhall and Dumfries and a distribution centre in Darlington. Shortridge, established in 1845, specialises in providing high quality laundry services to local independent hospitality businesses, including hotels, B&Bs, self-catering units and restaurants. Stellar Mayan, doing business as Synergy, Grosvenor Contracts and AeroServe, is a leading commercial laundry business in England, serving the healthcare and hospitality markets. Typical services offered include processing, management and distribution of healthcare and hospitality linens, including sheets, blankets, towels, surgical gowns and other linen. Stellar Mayan has seven operating facilities strategically located across England: Bermondsey, Derby, Dunstable, Sheffield, Slough (2), and St. Helens, in addition to a distribution depot in Manchester. Additional information regarding the Corporation including required securities filings are available on our website at and on the Canadian Securities Administrators' website at the System for Electronic Document Analysis and Retrieval ("SEDAR +"). TERMINOLOGY Throughout this news release and other documents referred to herein, and in order to provide a better understanding of the financial results, K-Bro uses the terms "EBITDA", "adjusted EBITDA", "adjusted net earnings", "adjusted net earnings per share", "debt to total capital", "distributable cash" and "payout ratio". These terms do not have any standardized meaning under International Financial Reporting Standards ("IFRS Accounting Standards") as set out in the CICA Handbook. Therefore, EBITDA, adjusted EBITDA, adjusted net earnings, adjusted net earnings per share, distributable cash and payout ratio may not be comparable to similar measures presented by other issuers. Specifically, the terms "EBITDA", "adjusted EBITDA", "adjusted net earnings", "adjusted net earnings per share", "distributable cash", and "payout ratio" have been defined as follows: EBITDA EBITDA (Earnings before interest, taxes, depreciation and amortization) comprises revenues less operating costs before financing costs, capital asset and intangible asset amortization, and income taxes. EBITDA is a sub‑total presented within the statement of earnings. EBITDA is not considered an alternative to net earnings in measuring K‑Bro's performance. EBITDA should not be used as an exclusive measure of cash flow since it does not account for the impact of working capital changes, capital expenditures, debt changes and other sources and uses of cash, which are disclosed in the consolidated statements of cash flows. Non-GAAP Measures Adjusted EBITDA K‑Bro reports Adjusted EBITDA (Earnings before interest, taxes, depreciation and amortization) as a key measure used by management to evaluate performance. We believe Adjusted EBITDA assists investors to assess our performance on a consistent basis as it is an indication of our capacity to generate income from operations before taking into account management's financing decisions as well as costs of acquiring tangible and intangible capital assets. The Corporation modified its definition for Adjusted EBITDA in 2024 and has updated its comparative quarters to reflect the modified definition. "Adjusted EBITDA" is EBITDA (defined above) with the addition or deduction of certain amounts incurred which management does not consider indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains/losses on settlement of contingent consideration and any other non-recurring transactions. The Corporation believes these non-GAAP definitions provide more meaningful reflections of normalized financial performance from operations and will enhance period-over-period comparability. 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. Adjusted Net Earnings and Adjusted Earnings per Share Adjusted Net Earnings and Adjusted Earnings per Share are non-GAAP measures. These non-GAAP measures are defined to exclude certain amounts which management does not consider indicative of ongoing operating performance. This includes transaction costs, structural finance costs, transition and integration costs, restructuring costs, gains/losses on settlement of contingent consideration and any other non-recurring transactions. The Corporation believes these non-GAAP definitions provide more meaningful reflections of normalized financial performance from operations and will enhance period-over-period comparability. Three Months Ended June 30, Canadian Division UK Division Canadian Division UK Division (thousands) 2025 2025 2025 2024 2024 2024 Net Earnings $ 2,852 $ 2,567 $ 5,419 $ 1,775 $ 2,760 $ 4,535 Adjusting Items: Transaction Costs 1 2,412 1,971 4,383 654 417 1,071 Syndication/Structural Finance Costs 2 52 - 52 392 - 392 Transition Costs 3 - - - 211 - 211 Non-recurring gains 4 (2,090) - (2,090) - - - Adjusted Net Earnings $ 3,226 $ 4,538 $ 7,764 $ 3,032 $ 3,177 $ 6,209 Six Months Ended June 30, Canadian Division UK Division Canadian Division UK Division (thousands) 2025 2025 2025 2024 2024 2024 Net Earnings $ 3,698 $ 2,547 $ 6,245 $ 3,454 $ 2,887 $ 6,341 Adjusting Items: Transaction Costs 1 3,900 2,640 6,540 683 508 1,191 Syndication/Structural Finance Costs 2 484 - 484 1,892 - 1,892 Transition Costs 3 - - - 420 - 420 Non-recurring gains 4 (2,090) - (2,090) - - - Adjusted Net Earnings $ 5,992 $ 5,187 $ 11,179 $ 6,449 $ 3,395 $ 9,844 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. 1 Relates to legal, professional and consulting fee expenditures made related to acquisitions. 2 Relates to costs related to syndication and credit agreement restructuring costs. 3 Relates to transition costs incurred as a result of the Corporation's acquisitions. 4 Relates to non-recurring gain of $1,519 from the sale of the Granby facility and a gain of $571 related to a one-time gain on a customer contract. Distributable Cash Flow Distributable cash flow is a measure used by management to evaluate the Corporation's performance. While the closest IFRS Accounting Standards measure is cash provided by operating activities, distributable cash flow is considered relevant because it provides an indication of how much cash generated by operations is available after capital expenditures. It should be noted that although we consider this measure to be distributable cash flow, financial and non‑financial covenants in our credit facilities and dealer agreements may restrict cash from being available for dividends, re‑investment in the Corporation, potential acquisitions, or other purposes. Investors should be cautioned that distributable cash flow may not actually be available for growth or distribution from the Corporation. Management refers to "Distributable cash flow" as to cash provided by (used in) operating activities with the addition of net changes in non‑cash working capital items, less share‑based compensation, maintenance capital expenditures and principal elements of lease payments. Payout Ratio "Payout ratio" is defined by management as the actual cash dividend divided by distributable cash. This is a key measure used by investors to value K-Bro, assess its performance and provide an indication of the sustainability of dividends. The payout ratio depends on the distributable cash and the Corporation's dividend policy. Debt to Total Capital "Debt to total capital" is defined by management as the total long‑term debt (excludes lease liabilities) divided by the Corporation's total capital. This is a measure used by investors to assess the Corporation's financial structure. Distributable cash flow, payout ratio, debt to total capital adjusted EBITDA, adjusted net earnings, and adjusted net earnings per share are not calculations based on IFRS Accounting Standards and are not considered an alternative to IFRS Accounting Standards measures in measuring K‑Bro's performance. Distributable cash Flow, payout ratio, adjusted EBITDA, adjusted net earnings, and adjusted net earnings per share do not have standardized meanings in IFRS Accounting Standards and are therefore not likely to be comparable with similar measures used by other issuers. FORWARD LOOKING STATEMENTS This news release contains forward‑looking information that represents internal expectations, estimates or beliefs concerning, among other things, future activities or future operating results and various components thereof. The use of any of the words "anticipate", "continue", "expect", "may", "will", "project", "should", "believe", and similar expressions suggesting future outcomes or events are intended to identify forward‑looking information. Statements regarding such forward‑looking information reflect management's current beliefs and are based on information currently available to management. These statements are not guarantees of future performance and are based on management's estimates and assumptions that are subject to risks and uncertainties, which could cause K-Bro's actual performance and financial results in future periods to differ materially from the forward-looking information contained in this news release. These risks and uncertainties include, among other things: (i) risks associated with acquisitions, including (a) the possibility of undisclosed material liabilities, disputes or contingencies, (b) challenges or delays in achieving synergy and integration targets, (c) the diversion of management's time and focus from other business concerns and (d) the use of resources that may be needed in other parts of our business; (ii) K-Bro's competitive environment; (iii) utility costs, minimum wage legislation and labour costs; (iv) K-Bro's dependence on long-term contracts with the associated renewal risk and the risks associated with maintaining short term contracts; (v) increased capital expenditure requirements; (vi) reliance on key personnel; (vii) changing trends in government outsourcing; (viii) changes or proposed changes to minimum wage laws in Ontario, British Columbia, Alberta, Quebec, Saskatchewan and the United Kingdom (the "UK"); (ix) the availability and terms of future financing; * textile demand; (xi) availability and access to labour; (xii) rising wage rates in all jurisdictions the Corporation operates and (xiii) foreign currency risk. Material factors or assumptions that were applied in drawing a conclusion or making an estimate set out in the forward-looking information include: (i) volumes and pricing assumptions; (ii) expected impact of labour cost initiatives; (iii) frequency of one-time costs impacting quarterly and annual financial results; (iv) foreign exchange rates; (v) the level of capital expenditures and (vi) the expected impact of the COVID-19 pandemic on the Corporation. Although the forward-looking information contained in this news release is based upon what management believes are reasonable assumptions, there can be no assurance that actual results will be consistent with these forward-looking statements. Certain statements regarding forward-looking information included in this news release may be considered "financial outlook" for purposes of applicable securities laws, and such financial outlook may not be appropriate for purposes other than this news release. Forward looking information included in this news release includes the expected annual healthcare revenues to be generated from the Corporation's contracts with new customers, calculation of costs, including one-time costs impacting the quarterly financial results, anticipated future capital spending and statements with respect to future expectations on margins and volume growth. All forward‑looking information in this news release is qualified by these cautionary statements. Forward‑looking information in this news release is presented only as of the date made. Except as required by law, K‑Bro does not undertake any obligation to publicly revise these forward‑looking statements to reflect subsequent events or circumstances. This news release also makes reference to certain measures in this document that do not have any standardized meaning as prescribed by IFRS Accounting Standards and, therefore, are considered non‑GAAP measures. These measures may not be comparable to similar measures presented by other issuers. Please see "Terminology" for further discussion.
Cision Canada
7 hours ago
- Cision Canada
VitalHub Corp. Announces $65 Million Bought Deal Public Offering
TORONTO, Aug. 13, 2025 /CNW/ - VitalHub Corp. (the " Company" or " VitalHub") (TSX: VHI) is pleased to announce that it has entered into an agreement with Cormark Securities Inc. and National Bank Financial Inc. acting as co-lead underwriters, on behalf of a syndicate of underwriters (collectively, the " Underwriters") pursuant to which the Underwriters have agreed to purchase 5,118,111 Common Shares (the " Common Shares") from the treasury of the Company, at a price of $12.70 per Common Share for total gross proceeds of approximately $65.0 million (the " Offering"). In addition, the Company has granted the Underwriters an option (the " Over-Allotment Option") to purchase up to an additional 767,717 Common Shares on the same terms exercisable at any time up to 30 days following the closing of the Offering, for market stabilization purposes and to cover over-allotments, if any. The net proceeds of the Offering shall be used for growth initiatives including future acquisitions, working capital and general corporate purposes. Closing of the Offering is expected to occur on or about August 20, 2025 and is subject to regulatory approval including that of the Toronto Stock Exchange (the " TSX"). The Common Shares will be offered by way of a prospectus supplement to the Company's short form base shelf prospectus dated July 23, 2025, to be filed in all of the provinces and territories of Canada (other than the province of Québec) and some may be resold in the United States pursuant to an exemption from the registration requirements of the United States Securities Act of 1933, as amended, and in such other jurisdictions outside of Canada and the United States as agreed to by the Company, in each case in accordance with all applicable laws and provided that no prospectus, registration statement or similar document is required to be filed in such jurisdiction. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. This press release does not constitute an offer of securities for sale in the United States. The securities being offered have not been, nor will they be, registered under the United States Securities Act of 1933, as amended, and such securities may not be offered or sold within the United States absent registration under U.S. federal and state securities laws or an applicable exemption from such U.S. registration requirements. ABOUT VITALHUB CORP. VitalHub is a leading software company dedicated to empowering health and human services providers globally. VitalHub's comprehensive product suite includes electronic health records, operational intelligence, and workforce automation solutions that serve over 1,300 clients across the UK, Canada, and other geographies. The Company has a robust two-pronged growth strategy, targeting organic opportunities within its product suite and pursuing an aggressive M&A plan. VitalHub is headquartered in Toronto with over 600 employees globally, across key regions and the VitalHub Innovations Lab in Sri Lanka. For more information about VitalHub (TSX: VHI) (OTCQX:VHIBF), please visit connect with us on LinkedIn. CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION Certain statements contained in this news release including statements relating to use of proceeds, closing of the offering and receipt of all necessary regulatory approvals may constitute "forward-looking information" or "financial outlook" within the meaning of applicable securities laws that involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by such forward-looking information or financial outlook. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "is expected", "expects", "scheduled", "intends", "contemplates", "anticipates", "believes", "proposes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Such statements are based on the current expectations of the management of each entity and are based on assumptions and subject to risks and uncertainties. Although the management of each entity believes that the assumptions underlying these statements are reasonable, they may prove to be incorrect. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results to differ from those anticipated, estimated or intended. No forward-looking statement can be guaranteed. Except as required by applicable securities laws, forward-looking statements speak only as of the date on which they are made and the Company undertakes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, or otherwise.
