ACT Energy Technologies Reports Fourth Quarter and Annual 2025 Results
ACT Energy Technologies Reports Fourth Quarter and Annual 2025 Results |
| [25-March-2026] |
/NOT FOR DISSEMINATION IN THE UNITED STATES OF AMERICA/ CALGARY, AB, March 25, 2026 /CNW/ - (TSX: ACX) ACT Energy Technologies Ltd, formerly Cathedral Energy Services Ltd., (the "Company" or "ACT") news release contains "forward-looking statements" within the meaning of applicable Canadian securities laws. For a full disclosure of forward-looking statements and the risks to which they are subject, see the "Forward-Looking Statements" section in this news release. This news release contains references to Adjusted gross margin, Adjusted gross margin %, Adjusted EBITDAS, Adjusted EBITDAS margin %, Free cash flow, Working capital, Net debt and Net capital expenditures. These terms do not have standardized meanings prescribed under International Financial Reporting Standards as issued by the International Accounting Standards Board ("IFRS Accounting Standards") and may not be comparable to similar measures used by other companies. See the "Non-GAAP Measures" section in this news release for definitions and tabular calculations. 2025 KEY HIGHLIGHTS The Company achieved the following 2025 results and highlights:
PRESIDENT'S MESSAGE To my fellow Shareholders: "The resiliency in our business model was on full display in the fourth quarter, as we delivered 4Q 2025 Adjusted EBITDAS(1) of $17.4mm - nearly in line with the fourth quarter of 2024 - despite 15% lower revenue from reduced activity levels. Continued progress in our organic build out and deployment of MWD(2) technology, together with higher Rotary Steerable ("RSS") utilization, also supported the business, driving significantly higher Adjusted gross margin(1) and Adjusted EBITDAS margin percentages(1) versus the fourth quarter one year ago." "In Canada, we increased revenue per operating day in the fourth quarter as we continued to expand our footprint in higher-value RSS work for customers. As is typical for the season, activity tapered near year-end due to the holiday shutdown and, for some customers, budget exhaustion." "While activity in the U.S. slowed during 2025, we exited the year with our U.S. business strategically positioned for future growth. Our experience drilling longer laterals and increasingly complex wellbores drove higher demand for advanced solutions, with rotary steerable activity representing more than 20% of total operating days in the fourth quarter. We believe our breadth of capabilities, particularly our ability to service the higher-value segment of the market, positions us well to benefit as customers increasingly focus on improved drilling performance, greater efficiencies, and more complex well designs." "As we enter 2026, our capital allocation strategy remains centered on long-term value creation and strengthening business resilience. Our plan is to:
"With this disciplined and balanced approach to capital allocation, we believe we will continue to build an increasingly durable business model - one that optimizes shareholder returns over the long term," stated Tom Connors, ACT President and Chief Executive Officer.
FINANCIAL HIGHLIGHTS
RESULTS OF OPERATIONS Financial
Operational
Summary The Company improved gross margin and Adjusted gross margin percentages(1) despite a 19% and 15% decline in the Company's operating days(2) in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to prior periods, respectively. The reduction in operating days(2), particularly in the U.S., was the primary contributing factor to the decline in the Company's revenues for the three months ended December 31, 2025 and the year ended December 31, 2025, compared to prior periods. The Company improved the resiliency of gross margins through replacement of third-party rental equipment with owned equipment, primarily focused on Rime MWD systems. Typically, decreased revenue of 15% and 17% in the three months ended December 31, 2025 and the year ended December 31, 2025, respectively, would result in the Company's fixed components of direct costs negatively impacting margin percentages. However, gross margins improved meaningfully over the prior year periods despite the decline in revenue. SEGMENTED INFORMATION United States Revenues U.S. revenues were $62.7 million in the three months ended December 31, 2025, a decrease of $16.6 million or 21%, compared to $79.3 million in for the same period in 2024. The Company experienced a 32% decrease in operating days(2) in the three months ended December 31, 2025 (2025 - 1,942 days; 2024 - 2,841 days). The Company's activity declines exceeded the 5% decrease in the average U.S. land rig count, magnified by certain of the Company's customers consolidating. In addition, the Company felt the impact of the increasingly competitive U.S. market given the general broad market uncertainties contributing to commodity price volatility. The average revenues per operating day(1) increased 16% in the three months ended December 31, 2025 (2025 - $32,303 per day; 2024 - $27,913 per day) due to higher portion of rental revenue and a favorable job mix requiring additional revenue generating technologies. U.S. revenues were $287.9 million in the year ended December 31, 2025, a decrease of $84.0 million or 23%, compared to $371.9 million for the same period in 2024. The Company experienced a 25% decrease in operating days(1) in the year ended December 31, 2025 (2025 - 9,972 days; 2024 - 13,337 days). The Company's activity declines exceeded the 6% decrease in the average U.S. land rig count mainly as a result of consolidation by some of the Company's customers. In addition, the Company felt the impact of the increasingly competitive U.S. market given the general market uncertainty contributing to commodity price volatility. The average revenues per operating day(1) increased 4% in the year ended December 31, 2025 (2025 - $28,873 per day; 2024 - $27,883 per day), with the same period in 2024. Direct costs U.S. direct costs included in cost of sales were $47.8 million in the three months ended December 31, 2025, a decrease of $14.3 million or 23%, compared to $62.1 million in for the same period in 2024. Direct costs as a percentage of revenues were 76% in the three months ended December 31, 2025, compared to 78% in for the same period in 2024. The decrease is mainly due to lower MWD third-party rental costs, resulting from the Rime MWD build-out and lower labour and repair costs related to cost reduction initiatives in the three months ended December 31, 2025. U.S. direct costs included in cost of sales were $211.5 million in the year ended December 31, 2025, a decrease of $70.1 million or 25%, compared to $281.6 million for the same period in 2024. The decrease is mainly due to lower MWD third-party rental costs, resulting from the Rime MWD build-out, and lower labour and repair costs related to lower activity and cost reduction initiatives in the year ended December 31, 2025. Direct costs as a percentage of revenues were 73% in the year ended December 31, 2025, compared to 76% for the same period in 2024, primarily as a result of lower MWD third-party rental costs resulting from the Rime MWD build-out.
Canadian Revenues Canadian revenues were $46.6 million in the three months ended December 31, 2025, a decrease of $2.2 million or 5%, compared to $48.8 million in for the same period in 2024, due to an 9% decrease in operating days(1) in the three months ended December 31, 2025 (2025 - 3,166 days; 2024 - 3,471 days) consistent with the Western Canada average land rig count decrease of 6%. The average revenues per operating day(1) increased 5% in the three months ended December 31, 2025 (2025 - $14,709 per day; 2024 - $14,054 per day). The increase in the average revenues per operating day(1) is mainly attributable to a favorable job mix requiring additional revenue generating technologies. Canadian revenues were $187.0 million in the year ended December 31, 2025, a decrease of $12.9 million or 6%, compared to $199.9 million for the same period in 2024, with the decline primarily attributable to a 6% decrease in operating days(1) in the year ended December 31, 2025 (2025 - 13,563 days; 2024 - 14,502 days). Consistent with a decline in the Western Canada average land rig count of 5%, ACT had a slight decline in activity during the year ended December 31, 2025, relative to the comparative period. The average revenues per operating day(1) were consistent in the year ended December 31, 2025 (2025 - $13,788 per day; 2024 - $13,785 per day), with the same period in 2024. Direct costs Canadian direct costs included in cost of sales were $32.7 million in the three months ended December 31, 2025, a decrease of $4.3 million or 12%, compared to $37.0 million in for the same period in 2024. The decrease is mainly due to lower repair, third-party rental and labour costs in the three months ended December 31, 2025, consistent with lower activity levels. As a percentage of revenues, direct costs were 70% in the three months ended December 31, 2025, compared to 76% in for the same period in 2024. A more favorable revenue mix in the three months ended December 31, 2025, relative to for the same period in 2024, is the primary factor in direct costs being lower as a percentage of revenues in the three months ended December 31, 2025. Canadian direct costs included in cost of sales were $125.2 million in the year ended December 31, 2025, a decrease of $9.2 million or 7%, compared to $134.4 million for the same period in 2024. The decrease is mainly due to lower repair, third-party rental and labour costs in the year ended December 31, 2025, consistent with lower activity levels. As a percentage of revenues, direct costs were 67% in the year ended December 31, 2025, compared to 67% for the same period in 2024. CONSOLIDATED Revenues The Company's revenues were $109.3 million in the three months ended December 31, 2025, a decrease of $18.8 million or 15%, compared to $128.1 million in for the same period in 2024. The decrease is driven by a 19% decrease in operating days(1) (2025 - 5,108 days; 2024 - 6,312 days) offset by a 5% increase in the average revenues per operating day(1) (2025 - $21,398; 2024 - $20,292). The Company recognized $474.9 million of revenues in the year ended December 31, 2025, a decrease of $96.9 million or 17%, compared to $571.8 million for the same period in 2024. The decrease is driven by a 15% decrease in operating days(1) (2025 - 23,535 days; 2024 - 27,839 days), and a 2% decrease in the average revenues per operating day(1) (2025 - $20,180; 2024 - $20,539). The decline in the consolidated average revenues per operating day(1) was primarily due to a higher weighting of Canadian operating days(1), which has lower average equipment intensity per job, and therefore lower average revenues per operating day(1) compared to U.S. jobs. Direct Costs The Company recognized $80.5 million of direct costs in the three months ended December 31, 2025, a decrease of $18.6 million or 19%, compared to $99.1 million in for the same period in 2024. The decrease is mainly due to lower labour and repair costs resulting from the decrease in operating days(1) and cost reduction initiatives, and lower third-party MWD rental costs mainly related to the Rime MWD build-out. The Company recognized $336.7 million of direct costs in the year ended December 31, 2025, a decrease of $79.3 million or 19%, compared to $416.0 million for the same period in 2024. The decrease is mainly due to lower labour and repair costs resulting from the decrease in operating days(1), and lower third-party MWD rental costs mainly related to the Rime MWD build-out. Direct costs as a percentage of revenues decreased to 74% in the three months ended December 31, 2025, compared to 77% in for the same period in 2024. Lower third-party MWD rental costs mainly related to the Rime MWD build-out contributed to this reduction. Also contributing to the reduction was higher Lost-in-hole revenues(1) in the three months ended December 31, 2025, relative to the comparative period, since lost-in-hole activity typically has lower associated costs then other forms of revenue. Direct costs as a percentage of revenues were 71% for the year ended December 31, 2025, compared to 73% for the same period in 2024.
Gross margin and Adjusted gross margin(2) The Gross margin and Adjusted gross margin percentages(2) improved in for the fourth quarter and year ended December 31, 2025 compared to the same periods in 2024 despite a 15% and 17% decrease in revenues in the three months ended December 31, 2025 and the year ended December 31, 2025, respectively. This improvement is primarily due to the ongoing deployment of its newly built MWD fleet, reducing third-party rental costs. Depreciation and amortization expense Depreciation and amortization expense included in cost of sales increased to $8.2 million in the three months ended December 31, 2025, compared to $6.7 million in for the same period in 2024, mainly due to a higher portion of the MWD build-out being depreciated. Depreciation and amortization expense included in cost of sales remained consistent for the years ended December 31, 2025 and 2024 at $30.9 million. Selling, general and administrative ("SG&A") expenses
The Company recognized direct costs included in SG&A expenses of $11.6 million and $56.3 million in the three months ended December 31, 2025 and the year ended December 31, 2025, which were slightly higher than $10.6 million and $54.5 million for the same periods in 2024, respectively. As a result of SG&A being more fixed cost in nature, against lower revenues, direct costs included in SG&A expenses as a percentage of revenues were 11% and 12% in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to 8% and 10% for the same periods in 2024, respectively. Depreciation and amortization included in SG&A expenses were $2.8 million and $11.0 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $2.7 million and $10.1 million for the same periods in 2024, respectively. The slight increases are mainly due to amortization expense associated with RSS licenses acquired in the latter part of 2024. Stock-based compensation included in SG&A expenses were $0.5 million and $3.0 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $0.6 million and $2.6 million for the same periods in 2024, respectively. The increase for the year ended December 31, 2025 is mainly due to restricted shares granted in 2025.
Provision
The Company is subject to a historical U.S. sales and use tax audit (the "Audit") period that originated prior to the Company's acquisition of Altitude Energy Partners ("AEP Acquisition") on July 14, 2022, with certain errors determined to extend into the period after the AEP Acquisition (the "Post-Closing Audit Period"). In 2025 the Company received additional information relating to this Audit impacting the Post-Closing Audit Period and recorded an incremental provision of $4.8 million. No revisions to this estimate were made in the three months ended December 31, 2025. In the fourth quarter of 2025, the Company paid $4.1 million to the tax authorities in partial settlement of the Audit. As at December 31, 2025, the Company's Post-Closing Audit Period provision accrued is $8.0 million. Also in relation to the Audit, certain liabilities originated prior to the AEP Acquisition (the "Pre-Closing Audit Period"). The Company has recognized a provision of $14.8 million in Trade and other payables related to the Pre-Closing Audit Period. Pursuant to the Equity Purchase Agreement related to the AEP Acquisition, the sellers provided the Company with an indemnity related to pre-closing tax issues, specifically identifying the risk around the Audit. Accordingly, the Company has recognized an offsetting indemnity receivable of $14.8 million in Other receivable. This assessment relies on estimates and assumptions and may involve a series of judgments about future events. All figures in this section are presented in Canadian dollars; however, the underlying figures are denominated in U.S. dollars and are therefore subject to fluctuations in foreign currency exchange rates. New information may become available that prompts the Company to adjust its judgment regarding the adequacy of this provision. Research and development ("R&D") costs
The Company recognized R&D costs of $1.3 million and $5.0 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $1.0 million and $5.2 million for the same periods in 2024, respectively. R&D costs include salaries, benefits, purchased materials and shop supply costs related to new product development and technology and engineering. Write-off of property, plant and equipment
The Company recognized a write-off of property, plant and equipment of $1.0 million and $3.7 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $0.6 million and $3.5 million for the same periods in 2024, respectively. The write-offs related to equipment lost-in-hole and damaged beyond repair. Lost-in-hole equipment and damaged beyond repair reimbursements from customers are based on service agreements held with clients and are recognized as revenue. Finance costs
Finance costs - loans and borrowings and EP notes were $1.9 million, a decrease of $0.1 million, compared to $2.0 million in for the same period in 2024. Finance costs - loans and borrowings and EP notes were $7.1 million in the year ended December 31, 2025, a decrease of $1.7 million, compared to $8.8 million for the same period in 2024. The decrease is mainly due to a lower outstanding balance of loans and borrowings in the three months ended December 31, 2025 compared to for the same period in 2024, and a lower interest rate as a result of the Company's refinancing completed in 2025 Q1. In addition, the Company had finance costs - lease liabilities of $0.3 million and $1.2 million in the three months ended December 31, 2025 and the year ended December 31, 2025, related to lease liabilities, compared to $0.3 million and $0.9 million for the same periods in 2024, respectively. Foreign exchange
The Company recognized a foreign exchange loss of $2.1 million and a foreign exchange loss of $6.3 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to a foreign exchange gain of $6.9 million and a foreign exchange gain of $8.6 million for the same periods in 2024, respectively. During the three months ended December 31, 2025 the Canadian dollar exchange rate decreased by 1% from $1.39 at September 30, 2025 to $1.37 at December 31, 2025. Therefore the Company recognized foreign exchange gain of $0.3 million on revaluation of the Company's USD denominated balances and foreign exchange loss of $2.3 million on revaluation of the intercompany loans issued by the parent company to its self-sustaining foreign subsidiaries. The offsetting foreign exchange gain on intercompany loans held by the subsidiaries is recognized as part of the translation of foreign operations within other comprehensive income, as described below. The Company's foreign operations are denominated in USD and differences due to fluctuations in the foreign currency exchange rates are recorded in other comprehensive income. The Company recognized a foreign currency translation loss on foreign operations of $1.0 million in the three months ended December 31, 2025, compared to a gain of $4.8 million in for the same period in 2024. The Company recognized a foreign currency translation loss of $3.7 million in the year ended December 31, 2025, compared to a gain of $6.1 million for the same period in 2024. Income tax (recovery) expense
The Company recognized an income tax recovery of $4.9 million and $7.6 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to an income tax recovery of $3.5 million and $10.1 million for the same periods in 2024, respectively. In year ended December 31, 2025, the Company re-recognized $3.1 million of its Canadian tax pools (2024 - $15.3 million) due to management's assessment and estimates that they would likely be utilized in the near future. Income tax expense (recovery) is recognized based upon expected annualized rates using the statutory rates of 23% for both Canada and the U.S. adjusted for key items that will affect the Company's actual tax for the period. LIQUIDITY AND CAPITAL RESOURCES Annually, the Company's principal source of liquidity is cash generated from its operations. In addition, the Company has the ability to fund liquidity requirements through its credit facility and the issuance of additional debt and/or equity, if available. In order to facilitate the management of its liquidity, the Company prepares an annual budget, which is updated, as necessary, depending on varying factors, including changes in capital structure, execution of the Company's business plan and general industry conditions. The annual budget is approved by the Board of Directors and updated forecasts are prepared as the fiscal year progresses with changes reviewed by the Board of Directors. Cash flow - operating activities was $40.5 million and $91.7 million in the three months ended December 31, 2025 and the year ended December 31, 2025, compared to $20.9 million and $90.2 million for the same periods in 2024, respectively. ACT remains focused on reducing its Net debt(1) and generating Free cash flow(1), as defined in the 'Non-GAAP measures' section of this news release. In addition, the Company will remain opportunistic in executing its NCIB and making strategic and accretive acquisitions. At December 31, 2025, the Company had working capital(1), excluding current portion of debt (loans and borrowings and EP notes) of $84.1 million (December 31, 2024 - $84.4 million).
Common share consolidation On May 9, 2024, the shareholders of the Company approved the consolidation of the issued and outstanding common shares of the Company, on the basis of one post-consolidation common share for a range of five to ten pre-consolidation common shares. On June 10, 2024, the Board of Directors approved a consolidation ratio of one post-consolidation share for seven pre-consolidation common shares (the "Consolidation"). As a result, on July 3, 2024, 243,383,392 common shares issued and outstanding prior to the Consolidation were reduced to 34,769,056 common shares. No fractional common shares were issued in connection with the Consolidation, and all fractional common shares that otherwise would have been issued was rounded to the nearest whole common share. The number of common shares and per common share amounts in this news release, as they relate to the pre-Consolidation period, were restated to reflect the Consolidation. Normal course issuer bid During the year ended December 31, 2025, 1,907,386 (2024 - 1,144,250) common shares were purchased under the NCIB for a total purchase amount of $10.2 million (2024 - $7.0 million) at an average price of $5.32 (2024 - $6.08) per common share. A portion of the purchase amount reduced share capital by $10.1 million (2024 - $6.5 million) and the residual purchase amount of $0.1 million (2024 - $0.4 million) was recorded to the surplus. In connection with the NCIB, the Company established an automatic securities purchase plan ("the Plan"). Accordingly, the Company may repurchase its common shares under the Plan on any given trading day during the NCIB, including during regulatory restrictions or self-imposed trading blackout periods. The Plan commenced on August 11, 2025, and will terminate on August 10, 2026. As at December 31, 2025, the Company recognized $1.4 million as an accrued liability (with a corresponding reduction to share capital) for the maximum number of common shares to be purchased under the Plan. As at December 31, 2024, the accrued liability related to the reduction of share capital was $1.9 million. During the year ended December 31, 2025, the Company reversed the previously recognized accrual and recorded the new liability, resulting in a net decrease to share capital of $0.5 million. Subsequent to December 31, 2025, the Company purchased 280,072 common shares for a total purchase amount of $1.6 million, at an average purchase price of $5.76 per common share. Syndicated and revolving credit facilities On March 21, 2025, the Company entered into a Fifth Amended and Restated Credit Agreement with its existing syndicate of lenders co-lead by ATB Financial and Royal Bank of Canada ("Amended Credit Agreement"). The Amended Credit Agreement provided for the following:
As at December 31, 2025, $62.8 million of the $123.7 million Revolving Facility remained undrawn. No repayments were made on the CAD Syndicated Revolving Facility subsequent to quarter-end. As at December 31, 2025, the Company was in compliance with all covenants. Financial covenants are as follows:
Contractual obligations and contingencies As at December 31, 2025, the Company's commitment to capital is approximately $3.7 million (December 31, 2024 - $11.9 million), which is expected to be incurred over the next six months. The Company holds six letters of credit totaling $1.7 million (December 31, 2024 - $1.8 million) related to rent payments, corporate credit cards and a utilities deposit. The Company is involved in various other legal claims and tax audits associated with the normal course of operations. The Company believes that any liabilities that may arise pertaining to such matters would not have a material impact on its financial position. Refer to the 'Provision' section in this news release for more details. The following table outlines the anticipated payments related to contractual commitments subsequent to December 31, 2025:
The Company expects to meet its obligations through normal operating cash flows. If additional liquidity is required to fund near- term obligations, including those related to the EP notes maturity, the Company has access to its Revolving Credit Facility and subsequent to year end, the Company has entered into an arrangement with ATB Financial ("ATB"), as administrative agent, and ATB and Royal Bank of Canada, as co-lead arrangers, to increase the size of the Company's existing syndicated credit facility which further supports the ability to refinance the EP notes, subject to bank agreement compliance (see the "Transactions" section of the news release for further details). Capital structure As at March 24, 2026, the Company has 34,916,431 common shares, 1,882,764 stock options, and EP Notes, that are exchangeable into a maximum of 3,510,000 common shares outstanding. NET CAPITAL EXPENDITURES The following table details the Company's Net capital expenditures (1):
Equipment additions totaling $49.4 million included $8 million of items previously purchased and held in inventory for the Rime MWD system build-out in 2025 Q1. As at December 31, 2025, property, plant and equipment included $1.8 million (2024 - $12.3 million) of MWD equipment not yet being depreciated as they are currently being manufactured and tested. Depreciation of the assets will commence upon the assets being fully operational. Given the current market uncertainty, the Company's 2026 gross and Net capital expenditures(1) budget will be dynamic and adjusted to reflect management's expectation of future activity levels. Currently, the Company's target Net capital expenditures(1) budget is anticipated to relate to sustaining and growth capital expenditures that will enhance realized gross margin percentage levels, including optimizing ACT's high-performance mud motors, MWD in both Canada and the U.S., and selective RSS deployments. ACT intends to fund its 2026 capital plan from cash flow - operating activities.
OUTLOOK Although we remain encouraged by the long-term fundamentals supporting energy demand, near-term conditions carry a higher degree of uncertainty and potential volatility as a result of geopolitical developments and trade-related uncertainty. Over the coming months, we expect to gain greater clarity on whether recent changes in commodity prices are temporary or more structural; however, based on current customer discussions we do not expect a meaningful impact on drilling activity or capital spending in the short term. In Canada, overall industry activity was 8–10% lower than the same quarter last year; however, we saw a modest increase in our activity levels and captured a higher share of industry job counts year over year. This improvement was primarily driven by increased RSS demand and the continued adoption of multi-lateral drilling techniques - areas where our deep experience and technology are ideally suited. Given the compelling economics for customers on these well types, we believe the environment for drilling activity in Western Canada will remain constructive. We anticipate second-quarter activity will continue to improve on a year-over-year basis as operators adopt more of our technology and further expand pad-style drilling. In the U.S., job counts in our existing business remained relatively flat, while our overall job count increased following the Stryker Acquisition early in the quarter. The growing use of RSS technology by our clients continues to translate into stronger aggregate revenue per day and operating margins, consistent with the trend we saw in the latter parts of 2025. Looking ahead to the second quarter, we expect job counts to remain steady at recent levels, with the potential for additional activity once the SB Directional Services acquisition is finalized early in the quarter. TRANSACTIONS On January 5, 2026 the Company acquired all the assets of Stryker Energy Directions Services, LLC for total purchase consideration of $32.9 million, consisting of $17.2 million cash, 1,299,394 of the Company's common share and $9.2 million in promissory notes. The preliminary purchase price allocation is based on Management's best estimate of fair value and consist of $1.8 million of inventory, $22.2 million of PP&E and $8.9 million of intangible assets. Upon finalizing the fair value of net assets acquired, adjustment to initial estimates, including goodwill, may be required. On March 9, 2026, the Company announced entering into an agreement to acquire the directional drilling services business of SB Directional Services. The total consideration is estimated around $64.3 million. The consideration is comprised of US$30 million in cash and US$17 million, or 3,624,232 in ACT common shares. The transaction is expected to close in early April 2026. Upon completion of the SB Acquisition, the Company will have expanded its U.S. operating footprint and customer network. The Acquisition In connection with the SB Acquisition, and partially to fund the SB Acquisition, ACT has entered into an arrangement with ATB, as administrative agent, and ATB and Royal Bank of Canada, as co-lead arrangers, to increase the size of the Company's existing syndicated credit facility from approximately CAD$125 million to CAD$145 million, and increase the U.S. dollar credit availability from USD $10 million to USD$30 million ("Amended Credit Facilities"). The USD committed credit facilities are comprised of (i) a US$10 million revolving facility, and (ii) a new US$20 million delayed draw term facility, having a term of 3 years with equal quarterly repayments of USD$1.67 million, available for purposes of refinancing the US$20 million EP notes issued in connection with a prior acquisition which matures in July 2026. The funded debt to EBITDA covenant has increased to 3.00:1.00 from 2.50:1.00 as part of the Amended Credit Facilities. NON-GAAP MEASURES ACT uses certain performance measures throughout this news release that are not defined under IFRS Accounting Standards or Generally Accepted Accounting Principles ("GAAP"). These non-GAAP measures do not have a standardized meaning and may differ from that of other organizations, and accordingly, may not be comparable. Investors should be cautioned that these measures should not be construed as alternatives to IFRS Accounting Standards measures as an indicator of ACT's performance. These measures include the Adjusted gross margin, Adjusted gross margin percentage, Adjusted EBITDAS, Adjusted EBITDAS margin percentage, Free cash flow, Working capital and Net capital expenditures. Management believes these measures provide supplemental financial information that is useful in the evaluation of ACT's operations. These non-GAAP measures are defined as follows:
The following tables provide reconciliations from the IFRS Accounting Standards to non-GAAP measures included in this news release. Adjusted gross margin
Adjusted EBITDAS
Free cash flow
Changes in Free cash flow methodology The Company has modified its definition of Free cash flow to better align its internal reporting, how other similar entities report and how the Company evaluates using and making investments.
Net debt
SUPPLEMENTARY FINANCIAL MEASURES AND OTHER DEFINITIONS
COMMON INDUSTRY TERMS
INDUSTRY PRICING METRICS Common industry pricing metrics that affect our business directly, such as $CAD/$US foreign exchange, and indirectly through our customer's cash flows, such as WTI and and US NYMEX natural gas, are as follows:
FORWARD LOOKING STATEMENTS This news release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. In particular, this news release contains forward-looking statements relating to, among other things:
The Company believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon. Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to the Company, including information obtained from third-party industry analysts and other third-party sources. In some instances, material assumptions and material factors are presented elsewhere in this news release in connection with the forward-looking statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:
Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause the Company's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in this news release and in the Company's Annual Information Form under the heading "Risk Factors". Any forward-looking statements are made as of the date hereof and, except as required by law, the Company assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise. All forward-looking statements contained in this news release are expressly qualified by this cautionary statement. Further information about the factors affecting forward-looking statements is available in the Company's current Annual Information Form that has been filed with Canadian provincial securities commissions and is available on www.sedarplus.ca and the Company's website (www.actenergy.com). CONSOLIDATED STATEMENT OF FINANCIAL POSITION As at December 31, 2025 and December 31, 2024
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Year ended December 31, 2025 and 2024
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY Year ended December 31, 2025 and 2024
CONSOLIDATED STATEMENT OF CASH FLOWS Year ended December 31, 2025 and 2024
ACT Energy Technologies Ltd., based in Calgary, Alberta, Canada, is incorporated under the Business Corporations Act (Alberta) and operates in the U.S. and Canada under Altitude Energy Partners, Discovery Downhole Services in the U.S., and Rime Downhole Technologies, LLC in the U.S.. ACT's common shares are publicly-traded on the Toronto Stock Exchange under the symbol "ACX". ACT is a trusted partner to North American energy companies requiring high performance directional drilling services and related downhole technologies. We work in partnership with our customers to tailor our equipment and expertise to meet their specific geographical and technical needs. Our experience, technologies and responsive personnel enable our customers to achieve higher efficiencies and lower project costs. For more information, visit www.actenergy.com. SOURCE ACT Energy Technologies LTD. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Company Codes: Toronto:ACX | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
