CALGARY, AB, May 8, 2026 /CNW/ - (TSX: ACX) ACT Energy Technologies Ltd (the "Company" or "ACT")'s 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 percentage, Adjusted EBITDAS, Adjusted EBITDAS margin percentage, Free cash flow, Net debt, Working capital 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.
2026 Q1 FINANCIAL RESULTS
-- Revenues of $144.5 million in 2026 Q1 increased 7% compared to $135.4
million one year ago. Strong growth in our Canadian segment plus the
acquisition of Texas-based Stryker Directional on January 5, 2026 were
the primary factors.
-- Adjusted EBITDAS(1) of $22.9 million grew 16% versus $19.7 million in the
first quarter of last year.
-- Adjusted EBITDAS margins(1) increased to 15.9% from 14.6% a year ago.
-- Canadian operating days(2) grew 5% despite the average Canadian rig count
falling by 4% year over year.
-- The Company closed the acquisition of Oklahoma-based SB Directional on
April 1, 2026 as part of a countercyclical effort to continue adding size,
scale and management depth in our U.S. business segment.
-- U.S. operating days(2) grew 64% sequentially versus the total achieved in
2025 Q4 due to increases in our pre-existing base business and
contributions from the recent Stryker acquisition.
-- On April 29, 2026, the Company also announced the early $USD 20.0 million
repayment of the exchangeable subordinated promissory note. ACT used its
available term facility to repay the note.
_________________________________
(1) Refer to the 'Non-GAAP measures' section in this News
Release.
(2) Per 'Supplementary financial measures and other definitions'
section in this News Release.
PRESIDENT'S MESSAGE
Comments from President & CEO Tom Connors:
"The first quarter represented an important inflection point for the Company. We delivered continued growth and expansion in our Canadian operations, while executing a transformational consolidation of our U.S. directional and rental businesses into a single, leaner and more focused operating platform. The integration of Stryker Energy Directional Services in January and SB Directional Services in April meaningfully strengthens our U.S. footprint, expands our customer base and adds scale as we position the business for an improving activity environment as we move through 2026 and into 2027.
"In Canada, our market presence, expanding technology offering and focus on high--performance service delivery once again positioned us among the most active directional drilling providers during the quarter. Operating days increased 5% year--over--year, despite a 4% decline in the Western Canadian rig count. While our foundation remains multilateral drilling, the continued adoption of rotary steerable and advanced technologies supported incremental activity and is expected to remain a key driver of utilization throughout the remainder of the year.
"In the United States, activity levels began to recover from the trough experienced in the fourth quarter of 2025, with operating days increasing sequentially by 13% in our pre-existing U.S. base business, and 64% overall when including the acquired Stryker business. The consolidation of management teams, optimization of the rental fleet and increased focus on higher--value rotary steerable work are improving the operating trajectory of the business. As industry consolidation has reduced competitive capacity, we believe our streamlined operating model and expanding direct--to--operator relationships position us to benefit from even modest improvements in overall activity levels.
"Challenging market conditions throughout 2025 and early 2026 have also created attractive counter--cyclical acquisition opportunities. The acquisitions of Stryker and SB added two experienced management teams, complementary customers and more than 30 incremental operating jobs per day. The integration of our proprietary motor and rotary steerable technology across the combined platform is expected to drive improved margins and returns over time.
"Our 2026 capital allocation strategy remains disciplined and balanced. We will continue to evaluate organic growth initiatives and accretive acquisitions while maintaining a conservative leverage profile. In parallel, we remain committed to returning capital to shareholders through optimal investments allowing for future debt reduction and investment into our Normal Course Issuer Bid and will continue to deploy capital in a measured and value--focused manner.
"Overall, we are executing on strategic initiatives that strengthen the business and enhance operating leverage. With recent additions, an expanded technology offering and a more efficient operating structure, we believe the Company is well positioned to capture improving market conditions as activity levels gradually recover," said Tom Connors, ACT President and Chief Executive Officer.
FINANCIAL HIGHLIGHTS
(stated in thousands of Canadian dollars, Three months ended March 31,
except net
income per common share amounts)
2026 2025
Revenues $ 144,463 $ 135,357
Gross margin percentage 21 % 22 %
Adjusted gross margin percentage(1) 27 % 28 %
Adjusted EBITDAS(1) $ 22,924 $ 19,699
Adjusted EBITDAS margin percentage(1) 16 % 15 %
Net income $ 4,845 $ 7,248
Per common share - basic $ 0.14 $ 0.21
Per common share - diluted $ 0.13 $ 0.19
Cash flow - operating activities $ (245) $ 18,685
Free cash flow(1) $ 9,058 $ 5,731
Weighted average common shares outstanding:
Basic (000s) 34,942 34,160
Diluted (000s) 38,568 37,867
(stated in thousands of Canadian dollars) March 31, December 31,
2026 2025
Working capital(1) $ 87,684 $ 84,092
Total assets $ 521,288 $ 462,382
Net debt(1) $ 91,279 $ 53,581
Exchangeable promissory notes ("EP notes") $ 27,429 $ 26,697
Shareholders' equity $ 264,913 $ 248,773
(1) Refer to the 'Non-GAAP measures' section in this News
Release.
OUTLOOK
Global energy markets entered 2026 with improving supply--demand fundamentals. Recent geopolitical instability has introduced additional uncertainty but has also reinforced the importance of secure North American supply, supporting a constructive medium--term commodity price environment. While public E&P capital programs are expected to remain disciplined in the near term, incremental activity from private operators is likely, providing modest upward pressure on drilling and completion activity.
In Canada, second--quarter activity is expected to be stronger than the prior year, supported by continued adoption of rotary steerable technology and the compelling economics of multi--lateral drilling. Seasonal spring breakup and weather--related disruptions may create short--term variability; however, underlying demand fundamentals remain supportive.
In the United States, the combined platform is currently operating at a high--water mark of more than 60 active jobs and is expected to steadily build activity as the year progresses. Industry consolidation, reduced service capacity and increased technology differentiation are expected to benefit well--capitalized, technically capable service providers.
From an oilfield services perspective, activity recovery is likely to be gradual rather than cyclical in nature, favoring companies with scale, strong balance sheets and differentiated technology. We believe our expanded footprint, integrated service model and focus on higher--margin, technology--enabled work position the Company to outperform as activity levels normalize.
(1) Per 'Supplementary financial measures and other definitions'
section in this news release.
(2) Per Baker Hughes and Rig Locator.
RESULTS OF OPERATIONS
Financial
Three months ended March 31,
(stated in thousands of Canadian dollars, 2026 2025
except percentages)
Revenues
United States $ 83,173 $ 81,616
Canada 61,290 53,741
Total revenues 144,463 135,357
Cost of sales
Direct costs (104,722) (97,873)
Depreciation and amortization (9,692) (7,348)
Share-based compensation (30) (131)
Total cost of sales (114,444) (105,352)
Gross margin $ 30,019 $ 30,005
Gross margin percentage 21 % 22 %
Adjusted gross margin percentage(1) 27 % 28 %
(1) Refer to the 'Non-GAAP measures' section in this News
Release.
Operational
(stated in Canadian dollars, except Three months ended March 31, %
operating days
and average industry land rig counts)
2026 2025 Change
Operating days(1)
United States 3,184 3,040 5 %
Canada 4,473 4,254 5 %
7,657 7,294 5 %
Average industry land rig count(2)
United States 516 538 (4 %)
Canada 191 199 (4 %)
Average revenues per operating day(1)
United States $ 26,122 $ 26,847 (3 %)
Canada $ 13,702 $ 12,633 8 %
$ 18,867 $ 18,557 2 %
Net lost-in-hole equipment
reimbursements(3) $ 4,892 $ 1,117 338 %
(1) Per 'Supplementary financial measures and other definitions'
section in this News Release.
(2) Per JWN RigLocator and Enverus.
(3) Refer to the 'Non-GAAP measures' section in this News
Release.
Summary
The Company delivered solid momentum in 2026 Q1, with higher operating days(1() across both Canada and the U.S. - driven in particular by the successful integration of the recent Stryker acquisition - serving as a catalyst for revenue growth over the prior period. Gross margin and Adjusted Gross Margin percentages(2() remained stable, reflecting disciplined operational execution.
Strengthened market position in Canada resulting from deployment of additional technologies, combined with the acquisition of Stryker in US, translated into increased activity levels and meaningful revenue gains compared to the same quarter last year. Adjusted gross margins(2) improved alongside higher revenues, while overall gross margin saw modest growth due to increased depreciation tied to the ongoing rollout of Rime MWD systems.
Overall, 2026 Q1 demonstrates a business that is scaling effectively, integrating acquisitions successfully, and building a stronger platform for sustained growth across both core markets.
_________________________________
1 Per 'Supplementary financial measures and other definitions'
section in this News Release.
2 Refer to the 'Non-GAAP measures' section in this News
Release.
SEGMENTED INFORMATION
United States
Revenues
U.S. revenues were $83.2 million in 2026 Q1, an increase of $1.6 million or 2%, compared to $81.6 million in 2025 Q1. The Company experienced a 5% increase in operating days(1) in 2026 Q1 (2026 Q1 - 3,184 days; 2025 Q1 - 3,040 days). The Company's activity increased despite a 4% decrease in the average U.S. land rig count, mainly due to recent Stryker acquisition. The average revenues per operating day(1() decreased 3% in 2026 Q1 (2026 Q1 - $26,122 per day; 2025 Q1 - $26,847 per day).The decline is primarily due to the 4% decrease in the average USD-CAD foreign exchange rate over the prior period.
Direct costs
U.S. direct costs included in cost of sales were $66.1 million in 2026 Q1, a increase of $4.0 million or 6%, compared to $62.1 million in 2025 Q1. Direct costs as a percentage of revenues were 80% in 2026 Q1, compared to 76% in 2025 Q1. The increase is mainly due to re-activation of certain equipment to offset rental costs, which resulted in higher maintenance expenses, the benefit is expected to be realized in future periods. Additionally, as the Company began to increase activity, certain of this work required new generation rental technologies, which the Company expects to displace in the upcoming months at minimal capital investment with quick paybacks.
Canadian
Revenues
Canadian revenues were $61.3 million in 2026 Q1, an increase of $7.6 million or 14%, compared to $53.7 million in 2025 Q1, due to a 5% increase in operating days(1) in 2026 Q1 (2026 - 4,473 days; 2025 - 4,254 days). Canadian operating days(1) increased 5% in Q1 2026, compared to Q1 2025, despite a 4% decrease in the Western Canadian rig count(1) . The main reasons are the use of ancillary technologies, new customers and delay in seasonal spring break in activities. The average revenues per operating day(1) increased by 8% in 2026 Q1 (2026 - $13,702 per day; 2025 - $12,633 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.
Direct costs
Canadian direct costs included in cost of sales were $38.6 million in 2026 Q1, an increase of $2.8 million or 8%, compared to $35.7 million in 2025 Q1. The increase is mainly due to higher repair, third-party rental and labour costs in 2026 Q1, consistent with higher activity levels. As a percentage of revenues, direct costs were 63% in 2026 Q1, compared to 66% in 2025 Q1.
CONSOLIDATED
Revenues
The Company's revenues were $144.5 million in 2026 Q1, an increase of $9.1 million or 7%, compared to $135.4 million in 2025 Q1. The increase is driven by a 5% increase in operating days(1) (2026 Q1 - 7,657 days; 2025 Q1 - 7,294 days) and by a 2% increase in the average revenues per operating day(1) (2026 Q1 - $18,867; 2025 Q1 - $18,557).
Direct Costs
The Company recognized $104.7 million of direct costs in 2026 Q1, an increase of $6.8 million or 7%, compared to $97.9 million in 2025 Q1. The increase is mainly due to higher labour and repair costs resulting from the increase in operating days(1) .
Direct costs as a percentage of revenues remained stable at 72% in 2026 Q1 and 2025 Q1.
Gross margin and Adjusted gross margin(2)
The Gross margin and Adjusted gross margin percentages(2() remained relatively consistent in 2026 Q1 compared to 2025 Q1.
Depreciation and amortization expense
Depreciation and amortization expense included in cost of sales increased to $9.7 million in 2026 Q1, compared to $7.3 million in 2025 Q1, mainly due to addition of Stryker assets and a higher portion of the MWD build-out being depreciated.
Selling, general and administrative ("SG&A") expenses
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Selling, general and administrative expenses:
Direct costs $ 16,906 $ 16,433
Depreciation and amortization 3,157 2,826
Share-based compensation 497 541
Selling, general and administrative expenses $ 20,560 $ 19,800
__________________________________
1 Per 'Supplementary financial measures and other definitions'
section in this News Release.
2 Refer to the 'Non-GAAP measures' section in this News
Release.
The Company recognized direct costs included in SG&A expenses of $16.9 million in 2026 Q1, which were slightly higher than $16.4 million in 2025 Q1. As a result of SG&A being more fixed cost in nature, against higher revenues, direct costs included in SG&A expenses as a percentage of revenues were the same 12% in 2026 Q1, compared to 12% in 2025 Q1.
Depreciation and amortization included in SG&A expenses was $3.2 million in 2026 Q1, compared to $2.8 million in 2025 Q1. The slight increases are mainly due to amortization expense coming from recent Stryker acquisition.
Stock-based compensation included in SG&A expenses were $0.5 million in 2026 Q1, compared to $0.5 million in 2025 Q1.
Research and development ("R&D") costs
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Research and development costs $ 1,410 $ 1,364
The Company recognized R&D costs of $1.4 million in 2026 Q1, compared to $1.4 million in 2025 Q1. 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
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Write-off of property, plant and equipment $ 982 $ 179
The Company recognized a write-off of property, plant and equipment of $1.0 million in 2026 Q1, compared to $0.2 million in 2025 Q1. 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
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Finance costs - loans and borrowings and
promissory
notes $ 2,309 $ 2,235
Finance costs - lease liabilities $ 353 $ 281
Finance costs - loans and borrowings and promissory notes were $2.3 million, an increase of $0.1 million, compared to $2.2 million in 2025 Q1. The increase is mainly due to a higher outstanding balance of loans and borrowings in 2026 Q1 compared to 2025 Q1 and issuance of promissory notes related to Stryker acquisition (refer to Transactions section of this News Release), offset by lower average borrowing costs.
In addition, the Company had finance costs of $0.4 million in 2026 Q1, related to lease liabilities, compared to $0.3 million in 2025 Q1.
Foreign exchange
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Foreign exchange gain (loss) $ 2,302 $ (250)
Foreign currency translation gain (loss) on
foreign
operations $ 1,041 $ (79)
The Company recognized a foreign exchange gain of $2.3 million in 2026 Q1 , compared to a foreign exchange loss of $0.3 million in 2025 Q1. During 2026 Q1 the Canadian dollar exchange rate increased by 1% from $1.37 at December 31, 2025 to $1.39 at March 31, 2026. Therefore the Company recognized foreign exchange loss of $0.6 million on revaluation of the Company's USD denominated balances and foreign exchange gain of $2.9 million on revaluation of the intercompany loans issued by the parent company to its self-sustaining foreign subsidiaries. The offsetting foreign exchange loss 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 gain on foreign operations of $1.0 million in 2026 Q1, compared to a loss of $0.1 million in 2025 Q1.
Income tax expense (recovery)
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Current tax expense $ 110 $ 74
Deferred tax expense (recovery) 1,634 (1,269)
Income tax expense (recovery) $ 1,744 $ (1,195)
The Company recognized an income tax expense of $1.7 million in 2026 Q1, compared to an income tax recovery of $1.2 million in 2025 Q1. 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. The Company remains focused on sustaining reasonable levels of Net debt(1() , deploying excess Free cash flow(1) and utilizing excess available capital resources for high return investment opportunities, including the NCIB and strategic and accretive acquisitions.
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 $(0.2) million in 2026 Q1, compared to $18.7 million in 2025 Q1. The Company's first quarter usually results in an investment in working capital as it is a period of high activity in Canada. Canadian activity in 2026 Q1 was higher than prior years, resulting in a higher investment in working capital during 2026 Q1 than the prior year. Additionally, increased activity in the U.S. relative to 2025 Q4 contributed to additional investment into working capital.
Free cash flow(1) of $9.1 million in 2026 Q1, compared to Free cash flow(1) of $5.7 million in 2025 Q1. The increase is attributable to higher revenues and Adjusted EBITDA(1) levels combined with lower capital expenditures.
At March 31, 2026, the Company had working capital(1) , excluding current portion of debt (loans and borrowings and promissory notes) of $87.7 million (December 31, 2025 - $84.1 million).
Normal course issuer bid
During the three months ended March 31, 2026, 279,072 (2025 - 742,699) common shares were purchased under the NCIB for a total purchase amount of $1.6 million (2024 - $4.5 million) at an average price of $5.78 (2025 - $6.09) per common share. A portion of the purchase amount reduced share capital by $1.5 million (2025 - $4.2 million) and the residual purchase amount of $0.1 million (2025 - $0.3 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 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 March 31, 2026, the Company did not recognize accrued liability for the common shares to be purchased under the Plan. As at December 31, 2025, the accrued liability related to the reduction of share capital was $1.4 million. During the three months ended March 31, 2026, the Company reversed the previously recognized accrual, resulting in a net decrease to share capital of $1.4 million.
Subsequent to December 31, 2026, the Company purchased 6,000 common shares for a total purchase amount of $0.04 million, at an average purchase price of $6.50 per common share.
Syndicated and revolving credit facilities
On March 24, 2026, the Company entered into a Sixth 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 took effect as at April 1, 2026 in connection with the closing of the SB Directional Services acquisition on April 1, 2026 (see Transactions section in this News Release). The Amended Credit Agreement provided for the following:
i. A Revolving Facility with an approximate principal
amount of $186.8 million comprised of: i) $130.0 million
Syndicated Revolving Facility ("CAD Syndicated Revolving
Facility") and ii) $15.0 million revolving facility
provided by ATB Financial ("ATB Revolving Facility"),
iii) USD $10.0 million revolving facility provided
by HSBC Bank USA, N.A. ("HSBC Revolving Facility")
and iv) a new USD $20.0 million 3 year Term Facility
available to repay the Exchangeable Promissory Notes;
ii. Interest rate remained unchanged as the financial
institution's prime rate plus 1.0% to 1.75% or Canadian
Overnight Repo Rate Average rate / Secured Overnight
Financing Rate plus 2.0% to 2.75%;
iii. The maturity date remained as March 21, 2028;
iv. Increased the financial covenant of Consolidated Funded
Debt to Consolidated Credit Agreement EBITDA ratio
to 3.0:1 (previously required to be no less than 2.5:1).
The Consolidated Interest Coverage ratio remained
unchanged and shall not be less than 3.0:1. The Consolidated
Fixed Charge Coverage Ratio shall not be less than
1.25:1; and
v. The syndicate of lenders remained unchanged.
As at March 31, 2026, $53.6 million of the $124.0 million Revolving Facility remained undrawn. No repayments were made on the Revolving Facility subsequent to quarter-end.
_______________________________
1 Refer to the 'Non-GAAP measures' section in this News
Release.
At March 31, 2026, the Company was in compliance with all covenants, including its financial covenants, which were as follows:
-- Consolidated Funded Debt to Consolidated Credit Agreement EBITDA ratio
shall not exceed 2.5 : 1.0 (calculated - 1.2);and
-- Consolidated Interest Coverage ratio shall not be less than 3.0 :1.0
(calculated - 12.4).
Contractual obligations and contingencies
As at March 31, 2026, the Company's commitment to capital is approximately $7.2 million (December 31, 2025 - $3.7 million), which is expected to be incurred over the next six months.
The Company holds six letters of credit totaling $1.8 million (December 31, 2025 - $1.7 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 March 31, 2026:
(stated in thousands Carrying One year 2 years 3-5 years Thereafter
of Canadian dollars) amount
Loans and borrowings
andpromissory notes -
principal $ 80,618 $ 4,059 $ 74,190 $ 2,369 $ --
Exchangeable
promissory
("EP")notes -
principal 27,878 27,878 -- -- --
Interest payments on
loans andborrowings
and promissory notes 10,595 5,743 4,681 171 --
Lease liabilities -
undiscounted 21,351 5,251 5,057 7,259 3,784
Trade and other
payables 118,096 118,096 -- -- --
Total $ 258,858 $ 161,347 $ 83,928 $ 9,799 $ 3,784
Capital structure
As at May 7, 2026, the Company has 38,547,049 common share and 2,006,742 stock options.
NET CAPITAL EXPENDITURES
The following table details the Company's Net capital expenditures (1) :
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
MWD and related equipment $ 494 $ 14,855
Motors and related equipment 10,495 7,985
Shop and automotive equipment 132 56
Other 259 653
Gross capital expenditures 11,380 23,549
Less: net lost-in-hole equipment
reimbursements(1) (4,892) (1,117)
Net capital expenditures(1) $ 6,488 $ 22,432
(1) Refer to the 'Non-GAAP measures' section in this News
Release.
Equipment additions totaling $11.4 million included $0.8 million of items previously purchased and held in inventory for the Rime MWD system build-out in 2026 Q1.
As at March 31, 2026, property, plant and equipment included $3.3 million (December 31, 2025 - $1.8 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.
____________________________________
1 Refer to the 'Non-GAAP measures' section in this News
Release.
TRANSACTIONS
On January 5, 2026 the Company acquired all the assets of Stryker Energy Directional Services, LLC for total purchase consideration of $32.8 million. Stryker was founded in 2010 and based in Conroe, Texas, it is a well-established directional drilling services provider with a highly experienced management team and a strong operating history across the Southern United States. In 2025, Stryker averaged approximately 17 active jobs per operating day, including work utilizing RSS technology. See the notes to the financial statements for further details on the purchase price allocation.
On April 1, 2026, the Company acquired the directional drilling services business of SB Directional Services. The total consideration is estimated around $66.1 million. The consideration is comprised of US$30 million in cash and US$17.6 million, or 3,624,232 in ACT common shares. The acquisition of SB Directional adds to ACT's position as one of the leading independent directional drilling companies in the US, increasing exposure in the Anadarko and Permian basins.
In connection with the SB Acquisition, the Company entered into a Sixth Amended and Restated Credit Agreement with its existing syndicate of lenders co-lead by ATB Financial and Royal Bank of Canada (refer to Liquidity and Capital Resources section of this News Release).
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, Net debt, 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:
i) "Adjusted gross margin" is a non-GAAP financial measure
and has been reconciled to gross margin, being the
most directly comparable measure calculated in accordance
with IFRS. Adjusted gross margin is a non-GAAP measure
of changes in financial performance that are closely
related to the Company's core operating activities,
by excluding items that management evaluates separately
when assessing underlying margin trends, including
inventory valuation adjustments, depreciation and
amortization and equity dilution costs reflected as
share based compensation, all included in cost of
sales (see tabular calculation);
ii) "Adjusted gross margin percentage" - calculated as
Adjusted gross margin divided by revenues; is considered
a primary indicator of operating performance (see
tabular calculation);
iii) "Adjusted EBITDAS" is a non-GAAP financial measure
and has been reconciled to net income / (loss) for
the applicable financial periods, being the most directly
comparable measure calculated in accordance with IFRS.
Management utilizes Adjusted EBITDAS to translate
historical variability in the Company's principal
business activities into future financial expectations.
By isolating incremental items from net income, including
income / expense items related to how the Company
chooses to manage financing elements of the business
(including elements affecting shareholder dilution),
taxation, and non-cash charges, management can better
predict future financial results from our principal
business activities (see tabular calculation). The
items included in this calculation are as follows:
1. Non-cash expenditures, including depreciation,
amortization and impairment of non-financial assets;
2. Consideration as to how the Company chose to finance
its business, generate financial income and incur
financial expenses, including foreign exchange income
/ ( expenses), share based compensation (reflected in
common share dilution calculations) and finance
costs;
3. Other specified items are items impacting current
period operating performance not reflect underlying
operating performance for the period, including costs
incurred for business acquisitions, severance charges
and inventory valuation adjustments; and
4. Taxation in various jurisdictions.
Prior period Adjusted EBITDA figures were updated
to ensure consistency with year--end News Release,
reflecting changes in the treatment of share-based
retention awards.
iv) "Adjusted EBITDAS margin percentage" - calculated
as Adjusted EBITDAS divided by revenues; provides
supplemental information to net income that is useful
in evaluating the results and financing of the Company's
business activities before considering certain charges
as a percentage of revenues (see tabular calculation);
v) "Free cash flow" - calculated as cash flow - operating
activities prior to changes in non-cash working capital
and non-recurring expenses, less: i) cash flow - investing
activities excluding cash paid on acquisitions (updated
from property, plant and equipment ("PP&E") and intangible
asset additions, excluding assets acquired in business
combinations), ii) cash interest paid and iii) repayments
of lease liabilities, net of finance costs, offset
by proceeds on disposal of PP&E. This is a useful
supplemental measure of the Company's ability to generate
funds from operations available for future capital
expenditures, debt repayments, or other strategic
initiatives (see tabular calculation).
Free cash flow was updated from prior periods to no
longer add back cash taxes paid and to deduct cash
interest expense instead of required debt repayments.
This change was made in order to more accurately portray
the ongoing operating cash flows of the business and
align with disclosures from other oilfield services
peers, in order to provide a more accurate depiction
of ACT's cash generation and improve comparability
for financial statement users.
vi) "Net capital expenditures" - calculated as the gross
capital expenditures less Net lost-in-hole equipment
reimbursements, as defined below - refer to the "Net
capital expenditures" section of this News Release
for tabular calculation. The timing and amount of
equipment lost-in-hole can very from period to period.
Therefore, Net capital expenditures is a useful supplemental
financial measure as it provides insight on the amount
of investing capital requirements attributable to
lost-in-hole equipment. Components impacting Net capital
expenditures are as follows:
1. "Lost-in-hole revenues" - represent reimbursements
received from customers and insurance proceeds
related to directional drilling equipment that is
lost in-hole or damaged beyond repair. Management
considers lost-in-hole revenue to be supplemental
information that assists in understanding
fluctuations in the Company's reported revenues under
IFRS Accounting Standards. Although lost-in-hole
revenues tend to remain relatively consistent over
longer periods, they can vary significantly from
period to period, causing fluctuations in the
Company's financial results;
2. "Net lost-in-hole equipment reimbursements" -
represent lost-in-hole revenues, as defined above,
less outflows associated with vendor payments for
insurance coverage and third-party rental equipment
replacement related to equipment lost-in-hole or
damaged beyond repair.
vii "Working capital" - calculated as current assets less
current liabilities, excluding the current portion
of loans and borrowings and promissory notes. Management
uses this measure as an indication of the Company's
financial and cash liquidity position.
viii) "Net debt" - calculated as the sum of current and
long-term loans and borrowings and promissory notes,
less cash. This is a useful supplemental measure of
the company's total debt levels, adjusted for its
cash position (see tabular calculation), as the Company's
credit agreements provide for a reduction of total
debt by certain of its cash position in calculating
covenants.
The following tables provide reconciliations from the IFRS Accounting Standards to non-GAAP measures included in this News Release.
Adjusted gross margin
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Gross margin $ 30,019 $ 30,005
Add non-cash items included in cost of sales:
Write-down of inventory included in cost of (37) --
sales
Depreciation and amortization 9,692 7,348
Share-based compensation 30 131
Adjusted gross margin $ 39,704 $ 37,484
Adjusted gross margin percentage 27 % 28 %
Adjusted EBITDAS
Three months ended March 31,
(stated in thousands of Canadian dollars, 2026 2025
except percentages)
Net income $ 4,845 $ 7,248
Add (deduct):
Income tax recovery 1,744 (1,195)
Non-cash expenditures, including depreciation,
amortization
and impairment 12,849 10,174
Share-based compensation 527 672
Finance costs - loans and borrowings and
promissory
notes 2,309 2,235
Finance costs - lease liabilities 353 281
Unrealized foreign exchange (gain) loss (2,333) 284
Acquisition and restructuring costs 2,667 --
Other items, including inventory write off (37) --
Adjusted EBITDAS $ 22,924 $ 19,699
Adjusted EBITDAS margin percentage 16 % 15 %
Free cash flow
Three months ended March 31,
(stated in thousands of Canadian dollars) 2026 2025
Cash flow - operating activities $ (245) $ 18,685
Add (deduct):
Changes in non-cash operating working capital 21,409 1,091
Non-recurring expenses -- --
Less:
Cash flow - investing activities excluding
cash paid
on acquisitions (8,473) (10,809)
Interest paid (2,130) (2,199)
Repayments of lease liabilities (1,503) (1,037)
Free cash flow $ 9,058 $ 5,731
Net debt
(stated in thousands of Canadian dollars) March 31, December 31,
2026 2025
Loans and borrowings and promissory notes, current $ 4,059 $ 602
Loans and borrowings and promissory notes, long term 76,244 60,932
Exchangeable promissory notes, current 27,429 26,697
Less:
Cash (16,453) (34,650)
Net debt $ 91,279 $ 53,581
SUPPLEMENTARY FINANCIAL MEASURES AND OTHER DEFINITIONS
i) "Operating days" - are defined as the total number
of calendar days during which directional drilling
services were actively provided to a customer at a
rig site, excluding any days where personnel or equipment
were on location but not engaged in active drilling
operations (such as standby, rig move days, or other
non-operational periods, regardless of whether partial
revenues were recognized);
ii) "Average revenues per operating day" - is a supplemental
operational metric calculated by dividing revenues,
either for a specific geographic segment or on a consolidated
basis as reported under IFRS Accounting Standards,
by the corresponding number of operating days for
that segment or on a consolidated basis. Management
uses revenues per operating day to assess pricing
strength, service intensity, and comparative financial
performance against different periods and across different
geographic markets; and
iii) "Job count" - sometimes referred to as daily jobs,
refers to the number of drilling rigs on which our
directional equipment is used for operation.
COMMON INDUSTRY TERMS
i) "LNG" - natural gas that typically is transported
via pipeline with customer demand limited to regions
with access to these pipelines. Through liquefaction,
larger volumes of natural gas can be economically
exported by sea to new markets;
ii) "LNG Train" or "Train" - refers to a complete processing
unit within an LNG facility that converts natural
gas into liquefied natural gas (LNG). Each train includes
all the required equipment -- such as compressors,
heat exchangers, and refrigeration systems -- to carry
out the liquefaction process independently;
iii) "Lost-in-hole" or "lost-in-hole equipment" - refers
to directional drilling tools or equipment (such as
MWD or RSS systems) that become significantly damaged
or unrecoverable downhole during drilling operations.
This situation typically results in the customer being
charged for the replacement cost of the lost equipment;
iv) "MWD" - Measurement-while-drilling is a down-hole
tool used in oil, natural gas and geothermal wells
that provides real-time drilling data to the directional
driller enabling more precise placement and optimized
drilling operations;
v) "OPEC+" - is a group of oil-producing countries that
work together to control the supply of oil in the
global market to help keep prices stable;
vi) "Rig count" - is the estimated number of active rigs
drilling directionally as tracked by JWN RigLocator
for Canada and Enverus for the U.S. industry rig count
levels. This industry data can help provide an indication
of potential activity for the Company. Rig count levels
include only those estimated to be drilling directionally
in both Canada and the U.S., excluding rigs drilling
vertically; and
vii) "RSS" - Rotary steerable system which is a high-technological
drilling tool that simultaneously steers and rotates
the drill bit without manual intervention enabling
for more accurate drilling, especially in curved or
horizontal wells.
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:
2026 2025 2025 2025 2025 2024 2024 Q3 2024 Q2
Q1 Q4 Q3 Q2 Q1 Q4
Average
exchange
rate
($CAD/$US) 0.729 0.717 0.726 0.723 0.697 0.714 0.733 0.731
WTI
($US/bbl) 71.98 59.64 65.74 64.63 71.84 70.69 76.24 81.71
US NYMEX
natural gas
($US/Mmbtu) 4.79 3.75 3.03 3.19 4.15 2.44 2.11 2.09
i) "WTI" - West Taxes Intermediate is a widely used benchmark
price for light, sweet crude oil in North America
and is a key reference point for crude oil pricing
and industry activity levels;
ii) "bbl" - is the standard unit of measurement for crude
oil and stands for one barrel, equivalent to 42 U.S.
gallon;
iii) "US NYMEX" - refers to the benchmark price for natural
gas traded on the New York Mercantile Exchange ("NYMEX")
and is widely used as the reference pricing indicator
for North American natural gas markets; and
iv) "Mmbtu" - stands for one million British thermal units
and is a standard unit of measurement used to quantify
the energy content of natural gas.
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 2026 Net capital expenditure budget and financing thereof;
-- Given the current market uncertainty, partly as a result of the enacted
and proposed U.S. tariffs, the Company's 2026 Net capital expenditure
budget will be dynamic and adjusted to reflect management's expectation
of future activity levels;
-- The first quarter represented an important inflection point for the
Company.
-- The integration of Stryker Energy Directional Services in January and SB
Directional Services in April meaningfully strengthens the U.S. footprint,
expands the Company's customer base and adds scale as the Company
positions the business for an improving activity environment as it moves
through 2026 and into 2027.
-- In Canada, the Company's market presence, expanding technology offering
and focus on high--performance service delivery once again positioned it
among the most active directional drilling providers during the quarter.
-- While the Company's foundation remains multilateral drilling, the
continued adoption of rotary steerable and advanced technologies
supported incremental activity and is expected to remain a key driver of
utilization throughout the remainder of the year.
-- As industry consolidation has reduced competitive capacity, the Company
believes its streamlined operating model and expanding
direct--to--operator relationships position it to benefit from even
modest improvements in overall activity levels.
-- The acquisitions of Stryker and SB added two experienced management teams,
complementary customers and more than 30 incremental operating jobs per
day.
-- The integration of our proprietary motor and rotary steerable technology
across the combined platform is expected to drive improved margins and
returns over time.
-- The Company's 2026 capital allocation strategy remains disciplined and
balanced.
-- The Company will continue to evaluate organic growth initiatives and
accretive acquisitions while maintaining a conservative leverage profile.
-- In parallel, the Company remains committed to returning capital to
shareholders through optimal investments allowing for future debt
reduction and investment into our Normal Course Issuer Bid and will
continue to deploy capital in a measured and value--focused manner.
-- The benefit of re-activation of certain equipment is expected to be
realized in future periods.
-- As the Company began to increase activity, certain of this work required
new generation rental technologies, which the Company expects to displace
in the upcoming months at minimal capital investment with quick paybacks.
-- Overall, we are executing on strategic initiatives that strengthen the
business and enhance operating leverage.
-- With recent additions, an expanded technology offering and a more
efficient operating structure, we believe the Company is well positioned
to capture improving market conditions as activity levels gradually
recover.
-- Global energy markets entered 2026 with improving supply--demand
fundamentals.
-- Recent geopolitical instability has introduced additional uncertainty but
has also reinforced the importance of secure North American supply,
supporting a constructive medium--term commodity price environment.
-- While public E&P capital programs are expected to remain disciplined in
the near term, incremental activity from private operators is likely,
providing modest upward pressure on drilling and completion activity.
-- In Canada, second--quarter activity is expected to be stronger than the
prior year, supported by continued adoption of rotary steerable
technology and the compelling economics of multi--lateral drilling.
-- Seasonal spring breakup and weather--related disruptions may create
short--term variability; however, underlying demand fundamentals remain
supportive.
-- In the United States, the combined platform is currently operating at a
high--water mark of more than 60 active jobs and is expected to steadily
build activity as the year progresses.
-- Industry consolidation, reduced service capacity and increased technology
differentiation are expected to benefit well--capitalized, technically
capable service providers.
-- From an oilfield services perspective, activity recovery is likely to be
gradual rather than cyclical in nature, favoring companies with scale,
strong balance sheets and differentiated technology.
-- The Company believes its expanded footprint, integrated service model and
focus on higher--margin, technology--enabled work position the Company to
outperform as activity levels normalize.
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:
-- the performance of ACT's business;
-- impact of economic and social trends;
-- oil and natural gas commodity prices and production levels;
-- capital expenditure programs and other expenditures by ACT and its
customers;
-- the ability of ACT to attract and retain key management personnel;
-- the ability of ACT to retain and hire qualified personnel;
-- the ability of ACT to obtain parts, consumables, equipment, technology,
and supplies in a timely manner to carry out its activities;
-- the ability of ACT to maintain good working relationships with key
suppliers;
-- the ability of ACT to retain customers, market its services successfully
to existing and new customers and reliance on major customers;
-- risks associated with technology development and intellectual property
rights;
-- obsolescence of ACT's equipment and/or technology;
-- the ability of ACT to maintain safety performance;
-- the ability of ACT to obtain adequate and timely financing on acceptable
terms;
-- the ability of ACT to comply with the terms and conditions of its credit
facility;
-- the ability to obtain sufficient insurance coverage to mitigate
operational risks;
-- currency exchange and interest rates;
-- risks associated with future foreign operations;
-- the ability of ACT to integrate its transactions and the benefits of any
acquisitions, dispositions and business development efforts;
-- environmental risks;
-- business risks resulting from weather, disasters and related to
information technology;
-- changes under governmental regulatory regimes including tariffs and tax,
environmental, climate and other laws in Canada and the U.S.; and
-- competitive risks.
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).
CONDENSED CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
As at March 31, 2026 and December 31, 2025
Canadian dollars in '000s
March 31, December 31,
2026 2025
Assets
Current assets:
Cash $ 16,453 $ 34,650
Trade receivables 119,777 78,408
Other receivable 15,041 14,789
Current taxes receivable 3,043 3,066
Prepaid expenses 7,207 6,320
Inventories 49,830 47,017
Total current assets 211,351 184,250
Property, plant and equipment 166,687 141,897
Intangible assets 68,055 62,793
Right-of-use assets 18,037 16,266
Goodwill 43,986 41,382
Deferred tax asset 13,172 15,794
Total non-current assets 309,937 278,132
Total assets $ 521,288 $ 462,382
Liabilities and Shareholders' Equity
Current liabilities:
Trade and other payables $ 118,096 $ 95,711
Current taxes payable 320 --
Loans and borrowings, current 574 602
Exchangeable promissory notes 27,429 26,697
Promissory notes, current 3,485 --
Lease liabilities, current 5,251 4,447
Total current liabilities 155,155 127,457
Loans and borrowings, long-term 70,390 60,932
Promissory notes, long-term 5,854 --
Lease liabilities, long-term 16,100 15,502
Deferred tax liability 8,876 9,718
Total non-current liabilities 101,220 86,152
Total liabilities 256,375 213,609
Shareholders' equity:
Share capital 200,475 190,255
Treasury shares (229) (229)
Exchangeable promissory notes 1,242 1,242
Contributed surplus 17,908 17,811
Accumulated other comprehensive income 16,513 15,472
Retained earnings 29,004 24,222
Total shareholders' equity 264,913 248,773
Total liabilities and shareholders' equity $ 521,288 $ 462,382
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Three months ended March 31, 2026 and 2025
Canadian dollars in '000s except per share amounts
Three months ended March 31,
2026 2025
Revenues $ 144,463 $ 135,357
Cost of sales:
Direct costs (104,722) (97,873)
Depreciation and amortization (9,692) (7,348)
Share-based compensation (30) (131)
Total cost of sales (114,444) (105,352)
Gross margin 30,019 30,005
Selling, general and administrative expenses:
Direct costs (16,906) (16,433)
Depreciation and amortization (3,157) (2,826)
Share-based compensation (497) (541)
Total selling, general and administrative
expenses (20,560) (19,800)
Research and development costs (1,410) (1,364)
Write-off of equipment (982) (179)
Gain on disposal of equipment 763 157
Income from operating activities 7,830 8,819
Finance costs - loans and borrowings and
promissory
notes (2,309) (2,235)
Finance costs - lease liabilities (353) (281)
Foreign exchange gain (loss) 2,302 (250)
Acquisition and restructuring costs (881) --
Income before income taxes 6,589 6,053
Income tax (expense) recovery:
Current (110) (74)
Deferred (1,634) 1,269
Income tax (expense) recovery (1,744) 1,195
Net income 4,845 7,248
Other comprehensive income (loss)
Foreign currency translation differences on
foreign
operations 1,041 (79)
Total comprehensive income $ 5,886 $ 7,169
Net income per share - basic $ 0.14 $ 0.21
Net income per share - diluted $ 0.13 $ 0.19
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
Three months ended March 31, 2026 and 2025
Canadian dollars in '000s
Share TreasuryShares Exchangeable Contributedsurplus Accumulatedothercomprehensiveincome Retained Totalshareholders'equity
capital promissory earnings
("EP") Notes
Balance,
December 31,
2024 $ 195,516 $ (469) $ 1,242 $ 17,408 $ 19,151 $ 8,732 $ 241,580
Comprehensive
income (loss) -- -- -- -- (79) 7,248 7,169
Repurchased
pursuant to
normalcourse
issuer bid (4,219) -- -- -- -- (303) (4,522)
Accrued
purchases under
thenormal
course issuer
bid (2,030) -- -- -- -- 214 (1,816)
Issued pursuant
to stock
optionexercises 331 -- -- (130) -- -- 201
Share-based
compensation -- -- -- 672 -- -- 672
Balance, March
31, 2025 $ 189,598 $ (469) $ 1,242 $ 17,950 $ 19,072 $ 15,891 $ 243,284
Share Treasuryshares EP Contributedsurplus Accumulatedothercomprehensiveincome Retained Totalshareholders'equity
capital Notes (loss)
earnings
Balance, December 31,
2025 $ 190,255 $ (229) $ 1,242 $ 17,811 $ 15,472 $ 24,222 $ 248,773
Comprehensive income -- -- -- -- 1,041 4,845 5,886
Consideration for
businesscombination,
net of share
issuecosts 6,354 -- -- -- -- -- 6,354
Issued pursuant to
privateplacements,
net of share
issuecosts 3,849 -- -- -- -- -- 3,849
Repurchased pursuant
tonormal course
issuer bid (1,549) -- -- -- -- (63) (1,612)
Accrued purchases
under thenormal
course issuer bid 1,387 -- -- -- -- -- 1,387
Issued pursuant to
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