FOURTH QUARTER AND YEAR END REVIEW AND OUTLOOK
Business Performance
Management believes that there are certain non‐IFRS financial measures that can be used to assist shareholders in analyzing the performance of TerraVest. The table below highlights certain financial results and reconciles net income to Adjusted earnings before interests, income taxes, depreciation and amortization ("Adjusted EBITDA") for the fourth quarter and year ended September 30, 2025 and the comparative periods in fiscal 2024.
Fourth quarters ended
Years ended
Sept. 30, 2025
Sept. 30, 2024
Sept. 30, 2025
Sept. 30, 2024
$
$
$
$
Sales
419,409
230,654
1,371,151
911,816
Net Income
21,277
13,825
98,363
73,244
Add (subtract):
Income tax expense
6,030
4,814
23,575
23,488
Financing costs
16,651
5,525
49,785
25,138
Depreciation and amortization
49,514
21,271
121,500
69,347
Change in fair value of derivative financial instruments
(148)
253
326
631
Change in fair value of investment in equity instruments
4,298
(641)
(10,598)
(615)
Change in fair value of investment in a limited partnership
1,367
1,067
1,177
1,425
Change in fair value of contingent
considerations
(8,300)
-
(8,300)
-
(Gain) loss on foreign exchange
(3,959)
2,125
(4,968)
453
(Gain) loss on disposal of other property, plant and equipment
(135)
(505)
(252)
(2,958)
(Gain) loss on disposal of property, plant and equipment for rental
-
(377)
(452)
(1,199)
(Gain) loss on lease modification
(9)
-
(9)
-
(Gain) loss on sale of business
(256)
-
(392)
(444)
Gain on bargain purchase
(4,687)
-
(8,680)
-
Acquisition‑related cost
259
190
3,512
1,089
Adjusted EBITDA
81,902
47,547
264,587
189,599
Sales for the fourth quarter and year ended September 30, 2025 were $419,409 and $1,371,151 versus $230,654 and $911,816 for the prior comparable periods. This represents increases of 82% and 50% respectively. However, TerraVest acquired all the issued and outstanding shares of Tankcon FRP Inc. ("Tankcon") in May 2025, of Simplex, Inc. ("Simplex") and L.B.T., Inc. ("LBT") in April 2025, of EnTrans Holding, Inc. ("Entrans") in March 2025 and of Advance Engineered Products Ltd. ("Advance") in April 2024. In addition, TerraVest acquired all the Canadian assets of New Wave Energy Services Ltd. ("Wave") in September 2025 and of Aureus Energy Services Inc. ("Aureus") in January 2025 and all the operating assets of the subsidiaries of Highland Tank Holdings LLC ("Highland") in November 2023, of which only Highland and Advance partially contributed to the prior comparable twelve-month period. Excluding Tankcon, Simplex, LBT and Entrans, sales for the fourth quarter ended September 30, 2025 were $246,912 versus $230,654 for the prior comparable period and excluding the same acquisitions plus Highland and Advance, sales for the year ended September 30, 2025 were $725,592 versus $717,402 for the prior comparable period.
This represents increases of 7% and 1% respectively for TerraVest's base portfolio (excluding Tankcon, Simplex, LBT, Entrans, Advance and Highland). Wave and Aureus results can't be excluded from TerraVest results as Wave and Aureus activities have been fully integrated into one of TerraVest's existing subsidiaries whose operations are similar in nature.
The increases in sales for TerraVest base portfolio businesses versus prior comparable periods are a result of higher demand in the Service and the HVAC and Containment Equipment segments and for domestic compressed gas tanks, partially offset by softer demand for storage tanks, for certain compressed gas transportation equipment product lines and for energy processing equipment.
Net income for the fourth quarter and year ended September 30, 2025 were $21,277 and $98,363 versus $13,825 and $73,244 for the prior comparable periods. This represents increases of 54% and 34% respectively. The addition of Entrans, LBT, Tankcon, Simplex, Aureus, Advance and Highland positively contributed to net income for the fourth quarter and year ended September 30, 2025, as well as increased revenues for some of TerraVest's base portfolio businesses, a favorable change ...
