Bri-Chem Announces 2025 Third Quarter Financial Results

Core Viewpoint - Bri-Chem Corp. reported a decrease in sales for Q3 2025 compared to the same period in 2024, primarily due to lower fluid distribution sales and a decline in active land rigs in North America. However, the company showed significant improvements in adjusted EBITDA and operating earnings, indicating better operational efficiency and cost management [1][4][8]. Financial Performance - Consolidated sales for Q3 2025 were $18.2 million, down from $22 million in Q3 2024, reflecting a decrease of $3.8 million or 17% [2][4]. - Adjusted EBITDA increased to $836 thousand in Q3 2025, up 42% from $588 thousand in Q3 2024, with adjusted EBITDA as a percentage of revenue rising from 3% to 5% [2][8]. - Operating earnings rose to $576 thousand in Q3 2025, a 146% increase from $234 thousand in the same period last year [2][8]. - Net earnings for Q3 2025 were $160 thousand, compared to a net loss of $269 thousand in Q3 2024, marking a significant turnaround [2][8]. Sales Breakdown - Canadian drilling fluids distribution sales were $2.3 million, a 41% decrease from the prior year, attributed to a reduction in active land rigs [5]. - U.S. drilling fluids distribution sales were $9.5 million, down 19% from $11.7 million in Q3 2024, with an average of 525 active land rigs in Q3 2025, a decrease of approximately 7% from the previous year [6]. - Canadian blending and packaging sales decreased to $3.7 million, down 19% from $4.6 million in Q3 2024, while U.S. blending and packaging sales increased by 49% to $2.7 million due to higher cementing activities [7]. Financial Position - Total assets decreased by 14% to $48.9 million compared to $57.1 million in the previous year [2]. - Working capital fell by 21% to $10.8 million, primarily due to a significant decrease in accounts receivables and inventory [2][4]. - Long-term debt slightly decreased by 4% to $6.3 million, while shareholders' equity was down 8% to $19.5 million [2]. Market Outlook - The North American energy sector is expected to stabilize, with modest growth anticipated in early 2026 as drilling and completion programs increase in response to improved price stability [9][10]. - In Canada, drilling activity is projected to follow seasonal trends, with winter drilling expected to provide a moderate uplift in demand [10]. - In the U.S., rig counts are expected to stabilize and gradually strengthen, particularly in the Permian Basin, supporting steady demand for Bri-Chem's products [11]. Strategic Initiatives - Following the recent Annual General Meeting, Bri-Chem appointed a new Board of Directors to enhance operational performance and long-term shareholder value [13]. - The company will conduct a comprehensive strategic review of all business units to evaluate performance and profitability, aiming to improve capital allocation and operational focus [14]. - Management emphasizes liquidity preservation and cost efficiency to sustain margin performance amid competitive pricing [12][15].