Major Drilling Group International Inc. press release

Major Drilling Announces Record Quarterly Revenue for Its First Quarter 2027

2026-09-02

TSX - Toronto Stock Exchange · Copper · Gold · Nickel · Zinc · Lithium · Silver · Uranium · Rare Earth Elements · Canada · Corporate Finance

MONCTON, New Brunswick, Sept. 02, 2026 (GLOBE NEWSWIRE) -- Major Drilling Group International Inc. (“Major Drilling” or the “Company”) (TSX: MDI), the largest provider of drilling services to the mining sector, today reported results for the first quarter of Fiscal 2027, ended July 31, 2026.

Quarterly Highlights:

Record quarterly revenue of $277.3 million, representing an 18.7% increase from the prior quarter and a 22.4% increase when compared to the same period last year. Adjusted gross margin(1)of 24.0%, an increase from the 22.0% recorded in the prior quarter, though below the 25.2% recorded for the same period last year. Generated EBITDA(1)of $37.2 million, a 15.9% increase when compared to the $32.1 million recorded for the same period last year. Net earnings of $14.5 million (or $0.18 per share), a 43.6% increase when compared to net earnings of $10.1 million (or $0.12 per share) recorded for the same period last year.

“The Company started the fiscal year on a strong note, with each region contributing double-digit revenue growth when compared to the prior year period. This was primarily driven by the deployment of additional rigs into the field throughout the quarter, combined with a gradually improving pricing environment. As a result, revenue increased by 22.4% year-over-year to $277.3 million, setting a new quarterly record in the Company’s 46-year history,” said Denis Larocque, President and CEO of Major Drilling.

“Activity in Canada and the US continued to accelerate following prior exploration budget increases by senior mining customers. Growth was driven by both the award of new contracts and the addition of rigs to existing projects as customers expanded their drilling programs. Juniors are increasingly deploying capital following the significant increase in financing activity earlier in the calendar year. Activity levels in the South and Central American region continued to increase, driven primarily by incremental growth in Peru, while Mexico, Argentina, and Brazil also saw increases in activity levels. The Australasia and Africa segment also saw meaningful growth, driven primarily by Australia, where senior mining companies continued to increase their exploration efforts through expanded drill programs,” Mr. Larocque continued.

“The adjusted gross margin of 24.0% in the quarter marked further improvement from the 22.0% realized in the prior quarter, reflecting ongoing pricing improvements, muted by ramp-up costs associated with new contracts, higher labour and consumable costs, and investments in workforce training and development. While these factors remain a near-term headwind, we expect margins to continue improving as ramp-up costs subside and pricing initiatives take hold,” noted Mr. Larocque.

“Given strong revenue growth, the Company generated EBITDA of $37.2 million in the first quarter of Fiscal 2027, a 15.9% increase from the $32.1 million generated in the prior year period. Net cash(1)was $15.7 million, down from the end of the prior quarter as higher rig utilization resulted in a temporary increase in working capital requirements. Reflecting our ongoing commitment to maintaining a high-quality global fleet of rigs, we incurred $13.5 million in capital expenditures during the quarter, with the addition of 5 new drills and support equipment, while 10 older, less efficient drills were retired, bringing the total rig count to 683 at quarter-end,” said Ian Ross, CFO of Major Drilling.

“Turning to the outlook, we expect rigs to continue to be gradually deployed into the field at incrementally higher prices as seniors continue to drive increasing activity levels as a result of larger exploration budgets, while juniors continue to move through more robust exploration programs following the substantial increase in financing activity earlier in the calendar year. While demand grows, the industry continues to navigate through a challenging labour market. We expect to improve pricing on new contracts and renewals to offset cost increases and improve margins as the fiscal year progresses,” continued Mr. Larocque.

“The Company continues to take proactive measures with respect to the hiring and retention of drill crews as labour remains our most significant challenge. As the availability of experienced drillers tightens, we have increased the number of trainee drillers, which has temporarily impacted productivity and is expected to continue doing so as they gain experience. In the key areas where the labour shortage is most problematic, particularly with respect to Canada and the U.S., we have scaled up our efforts at our training centers. The goals for these centers are to improve the retention rate of new hires, while also accelerating their learning curve and reducing overall training time without compromising safety,” concluded Mr. Larocque.

| In millions of Canadian dollars (except earnings per share) | | Q1 2027 | | | Q1 2026 | | | | | Revenue | | $ | 277.3 | | | $ | 226.6 | | | Gross margin | | | 18.6 | % | | | 18.6 | % | | Adjusted gross margin | | | 24.0 | % | | | 25.2 | % | | EBITDA | | | 37.2 | | | | 32.1 | | | As percentage of revenue | | | 13.4 | % | | | 14.1 | % | | Net earnings | | | 14.5 | | | | 10.1 | | | Earnings per share | | | 0.18 | | | | 0.12 | |

(1)See “Non-IFRS Financial Measures”

First Quarter Ended July 31, 2026

Revenue for the first quarter of Fiscal 2027 reached $277.3 million, up 22.4% from revenue of $226.6 million recorded in the same quarter last year. The favourable foreign exchange translation impact on revenue, when compared to the effective rates for the same period last year, was approximately $8 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 increased by 31.6% to $110.7 million, compared to the same quarter last year. Growth was led by new contract starts and continued price increases, while labour availability remained a constraint across the region.

South and Central American revenue increased by 18.4% to $113.4 million for the quarter, compared to the same quarter last year. Peru continued to be the largest contributor to the region's growth, supported by new project activity, while Mexico and Brazil also grew with new project starts.

Australasian and African revenue increased by 13.7% to $53.2 million, compared to the same quarter last year. Growth in the region was driven by increased demand from seniors in Australia.

Gross margin percentage for the quarter as well as for the same quarter last year, was 18.6%. Depreciation expense totaling $15.2 million is included in direct costs for the current quarter, versus $14.9 million in the same quarter last year. Adjusted gross margin, which excludes depreciation expense, was 24.0% for the quarter, compared to 25.2% for the same quarter last year. The year-over-year decline in adjusted gross margin was primarily attributable to ongoing wage adjustments and training costs associated with the tight North American labour market, along with ramp-up costs across various operations and weather-related disruptions in Chile. These factors were partially offset by gradual pricing improvements, particularly within North America.

General and administrative costs were $23.8 million, an increase of $2.4 million compared to the same quarter last year, driven by annual inflationary wage adjustments and additional costs to address rapid growth in our busiest regions.

Other expenses were $6.0 million, up from $3.3 million in the same quarter last year, due primarily to increased incentive compensation costs resulting from improved profitability and higher stock-based compensation costs tied to the Company's share price performance.

Foreign exchange loss was $1.2 million, compared to a loss of $1.5 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 an expense of $4.6 million, compared to $3.9 million for the same quarter last year. The increase is a result of increased profitability, while the lower effective rate is due to utilization of previously unrecognized losses.

Net earnings were $14.5 million or $0.18 per share ($0.18 per share diluted) for the quarter, compared to net earnings of $10.1 million or $0.12 per share ($0.12 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:

| (in $000s CAD) | Q1 2027 | | | Q1 2026 | | | | | | | | | | | | | | Net earnings | $ | 14,483 | | | $ | 10,071 | | | Finance (revenues) costs | | 436 | | | | 632 | | | Income tax provision | | 4,649 | | | | 3,889 | | | Depreciation and amortization | | 17,595 | | | | 17,466 | | | EBITDA | $ | 37,163 | | | $ | 32,058 | |

Adjusted gross profit/margin - excludes depreciation expense:

| (in $000s CAD) | Q1 2027 | | | Q1 2026 | | | | | | | | | | | | | | Total revenue | $ | 277,346 | | | $ | 226,618 | | | Less: direct costs | | 225,897 | | | | 184,461 | | | Gross profit | | 51,449 | | | | 42,157 | | | Add: depreciation | | 15,238 | | | | 14,911 | | | Adjusted gross profit | | 66,687 | | | | 57,068 | | | Adjusted gross margin | | 24.0 | % | | | 25.2 | % |

Net cash (debt) – cash net of debt, excluding lease liabilities reported under IFRS 16 Leases:

| (in $000s CAD) | July 31, 2026 | | | April 30, 2026 | | | | | | | | | | | | | | Cash and cash equivalents | $ | 59,339 | | | $ | 62,631 | | | Contingent consideration | | (15,557 | ) | | | (14,695 | ) | | Long-term debt | | (28,036 | ) | | | (27,352 | ) | | Net cash (debt) | $ | 15,746 | | | $ | 20,584 | |

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; global and local political and economic environments and conditions; competitive pressures; exposure to currency movements (which can affect the Company's revenue in Canadian dollars); currency restrictions; 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; skilled labour availability/retention for drill crews; the level of funding for the Company's clients (particularly for junior mining companies); the integration of business acquisitions and the realization of the intended benefits of such acquisitions; changes in jurisdictions in which the Company operates (including changes in regulation); efficient management of the Company's growth; the Company's dependence on key customers; the impact of operational changes; safety of the Company's workforce; risks and uncertainties relating to climate change and natural disasters; the geographic distribution of the Company's operations; 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, 2026, 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 largest provider of drilling services in the metals and mining industry. The diverse needs of the Company’s global clientele are met through field operations and registered offices that span across North America, South America, Australia, Asia, Africa, and Europe. Established in 1980, the Company has grown to become a global brand in the mining space, known for tackling many of the world’s most challenging drilling projects. Supported by a highly skilled workforce, Major Drilling is led by an experienced senior management team that has steered it through various economic and mining cycles, supported by regional managers known for delivering decades of superior project management.

Major Drilling is regarded as an industry expert at delivering a wide range of drilling services, including reverse circulation, surface and underground coring, directional, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive/longhole, and surface drill and blast, along with the ongoing development and evolution of its suite of data and technology-driven innovation services.

Webcast/Conference Call/Annual General Meeting Information

Major Drilling Group International Inc. will provide a simultaneous webcast and conference call to discuss its quarterly results on Thursday, September 3, 2026 at 8:00 am (ET).

To access the live webcast, which includes a slide presentation, please visit the Investors/Webcasts & Presentations section of the Major Drilling website and click on the link or click here: Webcast Link. Please note that this is listen-only mode.

To participate in the conference call, please pre-register using this Link. Registrants will receive an email confirmation with dial-in details.

For those unable to participate, a replay of the webcast will be archived for one year and can be accessed on the Major Drilling website at www.majordrilling.com/investors/webcasts/.

Major Drilling Group International Inc.’s Annual General Meeting will be held on Thursday, September 3, 2026 at 3:30pm EDT in person at McCarthy Tétrault, 66 Wellington St. West, 53rd Floor, Clarkson Room, Toronto ON M5K 1E6, and virtually at www.virtualshareholdermeeting.com/MDI2026.

For further information:

Ryan Hanley Director of Capital Markets Tel: (506) 227-2426 ir@majordrilling.com

| Major Drilling Group International Inc. | | | | | | | | | Interim Condensed Consolidated Statements of Operations | | | | | | | | | (in thousands of Canadian dollars, except per share information) | | | | | | | | | (unaudited) | | | | | | | | | | | | | | | | | | | Three months ended | | | | | | | | | July 31 | | | | | | | | | | | | | | | | | | 2026 | | | 2025 | | | | | | | | | | | | | | TOTAL REVENUE | $ | 277,346 | | | $ | 226,618 | | | | | | | | | | | | DIRECT COSTS (note 7) | | 225,897 | | | | 184,461 | | | | | | | | | | | | GROSS PROFIT | | 51,449 | | | | 42,157 | | | | | | | | | | | | | | | | | | | | | OPERATING EXPENSES | | | | | | | | | General and administrative (note 7) | | 23,794 | | | | 21,368 | | | Amortization of intangible assets | | 1,400 | | | | 1,530 | | | Other expenses (revenues) | | 6,020 | | | | 3,291 | | | (Gain) loss on disposal of property, plant and equipment | | (573 | ) | | | (120 | ) | | Foreign exchange (gain) loss | | 1,240 | | | | 1,496 | | | Finance (revenues) costs | | 436 | | | | 632 | | | | | 32,317 | | | | 28,197 | | | | | | | | | | | | EARNINGS BEFORE INCOME TAX | | 19,132 | | | | 13,960 | | | | | | | | | | | | INCOME TAX EXPENSE (RECOVERY) (note 8) | | | | | | | | | Current | | 6,438 | | | | 6,597 | | | Deferred | | (1,789 | ) | | | (2,708 | ) | | | | 4,649 | | | | 3,889 | | | | | | | | | | | | NET EARNINGS | $ | 14,483 | | | $ | 10,071 | | | | | | | | | | | | | | | | | | | | | EARNINGS PER SHARE (note 9) | | | | | | | | | Basic | $ | 0.18 | | | $ | 0.12 | | | Diluted | $ | 0.18 | | | $ | 0.12 | | | | | | | | | | |

| Major Drilling Group International Inc. | | | | | | | | | Interim Condensed Consolidated Statements of Comprehensive Earnings | | | | | | | | | (in thousands of Canadian dollars) | | | | | | | | | (unaudited) | | | | | | | | | | | | | | | | | | | Three months ended | | | | | | | | | July 31 | | | | | | | | | | | | | | | | | | | | | | | | | | | 2026 | | | 2025 | | | | | | | | | | | | | | NET EARNINGS | $ | 14,483 | | | $ | 10,071 | | | | | | | | | | | | OTHER COMPREHENSIVE EARNINGS | | | | | | | | | | | | | | | | | | Items that may be reclassified subsequently to profit or loss | | | | | | | | | Unrealized gain (loss) on foreign currency translations | | 11,669 | | | | (537 | ) | | Unrealized gain (loss) on derivatives (net of tax) | | (934 | ) | | | 106 | | | | | | | | | | | | COMPREHENSIVE EARNINGS | $ | 25,218 | | | $ | 9,640 | |

| Major Drilling Group International Inc. | | | | | | | | | | | | | | | | | | | | | | | | | Interim Condensed Consolidated Statements of Changes in Equity | | | | | | | | | | | | | | | | | | | | | | | | | For the three months ended July 31, 2026 and 2025 | | | | | | | | | | | | | | | | | | | | | | | | | (in thousands of Canadian dollars) | | | | | | | | | | | | | | | | | | | | | | | | | (unaudited) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Retained | | | Other | | | Share-based | | | Foreign currency | | | | | | | | | | | | | Share capital | | | earnings | | | reserves | | | payments reserve | | | translation reserve | | | Total | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | BALANCE AS AT MAY 1, 2025 | $ | 263,108 | | | $ | 177,695 | | | $ | (293 | ) | | $ | 3,615 | | | $ | 77,973 | | | $ | 522,098 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Exercise of stock options | | 345 | | | | - | | | | - | | | | (96 | ) | | | - | | | | 249 | | | Share-based compensation | | - | | | | - | | | | - | | | | 11 | | | | - | | | | 11 | | | Stock options expired/forfeited | | - | | | | 22 | | | | - | | | | (22 | ) | | | - | | | | - | | | | | 263,453 | | | | 177,717 | | | | (293 | ) | | | 3,508 | | | | 77,973 | | | | 522,358 | | | Comprehensive earnings: | | | | | | | | | | | | | | | | | | | | | | | | | Net earnings | | - | | | | 10,071 | | | | - | | | | - | | | | - | | | | 10,071 | | | Unrealized gain (loss) on foreign | | | | | | | | | | | | | | | | | | | | | | | | | currency translations | | - | | | | - | | | | - | | | | - | | | | (537 | ) | | | (537 | ) | | Unrealized gain (loss) on derivatives | | - | | | | - | | | | 106 | | | | - | | | | - | | | | 106 | | | Total comprehensive earnings | | - | | | | 10,071 | | | | 106 | | | | - | | | | (537 | ) | | | 9,640 | | | | | | | | | | | | | | | | | | | | | | | | | | | | BALANCE AS AT JULY 31, 2025 | $ | 263,453 | | | $ | 187,788 | | | $ | (187 | ) | | $ | 3,508 | | | $ | 77,436 | | | $ | 531,998 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | BALANCE AS AT MAY 1, 2026 | $ | 266,789 | | | $ | 199,217 | | | $ | 2,071 | | | $ | 1,839 | | | $ | 86,098 | | | $ | 556,014 | | | | | | | | | | | | | | | | | | | | | | | | | | | | Exercise of stock options | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | Share-based compensation | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | Stock options expired/forfeited | | - | | | | - | | | | - | | | | - | | | | - | | | | - | | | | | 266,789 | | | | 199,217 | | | | 2,071 | | | | 1,839 | | | | 86,098 | | | | 556,014 | | | Comprehensive earnings: | | | | | | | | | | | | | | | | | | | | | | | | | Net earnings | | - | | | | 14,483 | | | | - | | | | - | | | | - | | | | 14,483 | | | Unrealized gain (loss) on foreign | | | | | | | | | | | | | | | | | | | | | | | | | currency translations | | - | | | | - | | | | - | | | | - | | | | 11,669 | | | | 11,669 | | | Unrealized gain (loss) on derivatives | | - | | | | - | | | | (934 | ) | | | - | | | | - | | | | (934 | ) | | Total comprehensive earnings | | - | | | | 14,483 | | | | (934 | ) | | | - | | | | 11,669 | | | | 25,218 | | | | | | | | | | | | | | | | | | | | | | | | | | | | BALANCE AS AT JULY 31, 2026 | $ | 266,789 | | | $ | 213,700 | | | $ | 1,137 | | | $ | 1,839 | | | $ | 97,767 | | | $ | 581,232 | |