Major Drilling Announces Third Quarter 2025 Results

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MONCTON, New Brunswick, March 06, 2025 (GLOBE NEWSWIRE) -- Major Drilling Group International Inc. ("Major Drilling” or the "Company”) (TSX: MDI), a leading provider of specialized drilling services to the mining sector, today reported results for the third quarter of fiscal 2025, ended January 31, 2025. 

Quarterly Highlights:

• Revenue of $160.7 million, up 21.0% from the $132.8 million recorded in the same quarter last year.
• Adjusted gross margin⁽¹⁾ of 19.5% as the Company completed maintenance & repair programs, as is typical during the seasonally weaker quarter, in preparation for increased activity levels through calendar 2025.
• Completed the acquisition of Explomin, increasing the Company's exposure to a top-tier copper jurisdiction and further expanding its list of senior customers. 
• Ended the quarter with $11.4 million in net cash⁽¹⁾ despite closing the largest acquisition in Company history.
• Achieved the best quarterly safety record in Company history with a TRIFR of 0.38. 

"Through the third quarter, which is traditionally the weakest of our fiscal year as customers pause operations for the holiday season, the Company successfully completed the acquisition of Explomin Perforaciones and subsidiaries ("Explomin") while maintaining relatively stable revenue from existing operations. As we move through the budgeting season, there have been several positive indications with respect to exploration spending, most notably from the larger exploration budgets outlined by several of our senior customers in conjunction with their year-end results. This is further supported by an increase in the number of junior financings completed over the first two months of the year,” said Denis Larocque, President and CEO of Major Drilling.

"The completion of the Explomin acquisition marks another transformational event in the Company's history, expanding our senior customer base in a region that has been on our radar for a number of years. Explomin's long-term contracts with both surface and underground operations, provide diversity and stability to our revenue mix, while at slightly lower margins. Its strong brand and reputation throughout the countries in which it operates matches many of the qualities and attributes that Major Drilling has become known for,” Mr. Larocque continued.

"While we prepare for what is expected to be a busier calendar year, we also remain proud of our industry-leading safety record, as we achieved the lowest quarterly TRIFR ("Total Recordable Injury Frequency Rate") in Company history, coming in at 0.38 at the end of the quarter. This continued focus on safety was further demonstrated by our recent receipt of the 'Safe Day Everyday Gold Award' from the AME-BC, together with the PDAC and the CDDA in January,” continued Mr. Larocque. 

"The Company generated $160.7 million in revenue in the quarter, a 21.0% increase when compared to the same period in the prior year. Excluding the acquisition of Explomin, which was completed at the beginning of the quarter, revenue totaled $127.9 million, representing a decrease of 3.7% when compared to the same period last year. The Company's balance sheet remains extremely strong with net cash of $11.4 million, despite the $84 million cash outlay, and $21 million contingent consideration recognized on closing the largest acquisition in the Company's history during the quarter. We continue to invest in our industry-leading fleet and support gear, spending $12.6 million on capital expenditures during the quarter, including 4 new drills, while disposing of 1 older, less efficient drill, bringing the total fleet size to 705 rigs after including 92 rigs acquired through the Explomin transaction,” said Ian Ross, CFO of Major Drilling.

"While the positive indicators related to global exploration spending point to a more optimistic outlook for calendar 2025, the year started off at a slower pace relative to the prior year's ramp-up as a result of mobilization delays due to a variety of reasons, including permitting delays, inclement weather, and slower start-ups at various projects. While these delays are expected to impact activity levels at the start of fiscal Q4, we expect the ramp-up to continue, matching last year's activity levels in the latter part of March and into April. In preparation for this anticipated ramp-up, the retention of experienced crews remains a key strategic focus, which is expected to have an impact on margins early in the quarter,” concluded Mr. Larocque.

⁽¹⁾    See "Non-IFRS Financial Measures”

Third Quarter Ended January 31, 2025

Total revenue for the quarter was $160.7 million, up 21.0% from revenue of $132.8 million recorded in the same quarter last year. Excluding Explomin, revenue for the quarter would have been $127.9 million, down 3.7% from the same quarter last year. The favourable foreign exchange translation impact on revenue, when compared to the effective rates for the previous year, was approximately $3 million, while the impact on net earnings was minimal as expenditures in foreign jurisdictions tend to be in the same currency as revenue.

Revenue for the quarter from Canada - U.S. drilling operations decreased by 31.0% to $43.0 million, compared to the same period last year. The decrease was mainly due to a seasonal shutdown of certain drill programs earlier than in previous years, with fewer program extensions, along with a more competitive environment due to a lack of junior financings.

South and Central American revenue increased by 121.5% to $75.3 million for the quarter, compared to the same quarter last year, driven by the addition of Explomin operations. Excluding Explomin, revenue increased by 25%, compared to the same period last year, driven by elevated levels of activity in Chile, which were partially offset by slowdowns in Argentina due to decreased activity levels.

Australasian and African revenue increased by 15.8% to $42.4 million, compared to the same period last year. Growth in the region was driven by continued strength in Australia where increased activity levels led to shorter holiday shutdowns at some projects when compared to last year, while activity levels in Mongolia also remain robust. 

Gross margin percentage for the quarter was 10.3%, compared to 14.2% for the same period last year. Depreciation expense totaling $14.8 million is included in direct costs for the current quarter, versus $12.3 million in the same quarter last year. Adjusted gross margin, which excludes depreciation expense, was 19.5% for the quarter, compared to 23.4% for the same period last year. The decrease in margins from the prior year was mainly attributable to reduced activity levels in certain regions, increased mobilization costs, retention of experienced crews, and annual preventative maintenance programs, which are completed during the seasonal slowdown while the drills are idle for the holiday season.

General and administrative costs were $22.8 million, an increase of $5.7 million compared to the same quarter last year. The increase from the prior year was driven by the addition of Explomin, annual inflationary wage adjustments and amortization of the intangible asset recognized as part of the Explomin acquisition.

Foreign exchange loss was $1.6 million, compared to a loss of $2.3 million for the same quarter last year. While the Company's reporting currency is the Canadian dollar, various jurisdictions have net monetary assets or liabilities exposed to various other currencies.

The income tax provision for the quarter was a recovery of $0.8 million, compared to an expense of $0.9 million for the prior year period. The income tax provision was impacted by non-tax affected losses in certain regions.

Net loss was $9.1 million or $0.11 per share ($0.11 per share diluted) for the quarter, compared to net loss of $2.3 million or $0.03 per share ($0.03 per share diluted) for the prior year quarter. 

Non-IFRS Financial Measures

The Company's financial data has been prepared in accordance with IFRS, with the exception of certain financial measures detailed below. The measures below have been used consistently by the Company's management team in assessing operational performance on both segmented and consolidated levels, and in assessing the Company's financial strength. The Company believes these non-IFRS financial measures are key, for both management and investors, in evaluating performance at a consolidated level and are commonly reported and widely used by investors and lending institutions as indicators of a company's operating performance and ability to incur and service debt, and as a valuation metric. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS.

EBITDA - earnings before interest, taxes, depreciation, and amortization:

Adjusted gross profit/margin - excludes depreciation expense:

Net cash - cash net of debt, excluding lease liabilities reported under IFRS 16 Leases:

Forward-Looking Statements

This news release includes certain information that may constitute "forward-looking information” under applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this news release that address future events, developments, or performance that the Company expects to occur (including management's expectations regarding the Company's objectives, strategies, financial condition, results of operations, cash flows and businesses) are forward-looking statements. Forward-looking statements are typically identified by future or conditional verbs such as "outlook”, "believe”, "anticipate”, "estimate”, "project”, "expect”, "intend”, "plan”, and terms and expressions of similar import. All forward-looking information in this news release is qualified by this cautionary note.

Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management related to the factors set forth below. While these factors and assumptions are considered reasonable by the Company as at the date of this document in light of management's experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information.

Such forward-looking statements are subject to a number of risks and uncertainties that include, but are not limited to: the level of activity in the mining industry and the demand for the Company's services; competitive pressures; global and local political and economic environments and conditions; measures affecting trade relations between countries, including the imposition of tariffs and countermeasures, as well as the possible impacts on the Company's clients, operations and, more generally, the economy; the integration of business acquisitions and the realization of the intended benefits of such acquisitions; the level of funding for the Company's clients (particularly for junior mining companies); exposure to currency movements (which can affect the Company's revenue in Canadian dollars); currency restrictions; the Company's dependence on key customers; efficient management of the Company's growth; safety of the Company's workforce; risks and uncertainties relating to climate change and natural disaster; the geographic distribution of the Company's operations; the impact of operational changes; changes in jurisdictions in which the Company operates (including changes in regulation); failure by counterparties to fulfill contractual obligations; disease outbreak; as well as other risk factors described under "General Risks and Uncertainties” in the Company's MD&A for the year ended April 30, 2024, available on the SEDAR+ website at www.sedarplus.ca. Should one or more risk, uncertainty, contingency, or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information.

Forward-looking statements made in this document are made as of the date of this document and the Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events, or for any other reasons, except as required by applicable securities laws.

About Major Drilling

Major Drilling Group International Inc. is the world's leading provider of specialized drilling services primarily serving the mining industry. Established in 1980, Major Drilling has over 1,000 years of combined experience and expertise within its management team. The Company maintains field operations and offices in North America, South America, Australia, Asia and Africa. Major Drilling provides a complete suite of drilling services including surface and underground coring, directional, reverse circulation, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive/longhole drilling, surface drill and blast, a variety of mine services, and ongoing development of data-driven, high-tech drillside solutions.

Webcast/Conference Call

Major Drilling Group International Inc. will provide a simultaneous webcast and conference call to discuss its quarterly results on Friday, March 7, 2025 at 8:00 AM (EST). To access the webcast, which includes a slide presentation, please go to the investors/webcasts section of Major Drilling's website at www.majordrilling.com and click on the link. Please note that this is listen-only mode.

To participate in the conference call, please dial 416-340-2217, participant passcode 3731712# and ask for Major Drilling's Third Quarter Results Conference Call. To ensure your participation, please call in approximately five minutes prior to the scheduled start of the call.

For those unable to participate, a taped rebroadcast will be available approximately one hour after the completion of the call until Monday, March 31, 2025. To access the rebroadcast, dial 905-694-9451 and enter the passcode 2116538#. The webcast will also be archived for one year and can be accessed on the Major Drilling website at www.majordrilling.com.

For further information:

Ryan Hanley

Director, Corporate Development & Investor Relations

Tel: (506) 857-8636

Fax: (506) 857-9211

[email protected]