Wajax (WJX) Q4 2024 earnings summary

Executive summary

• Q4 2024 revenue rose 4.3% year-over-year to CAD 565.9 million, driven by strong mining equipment sales in Western Canada, including delivery of two large mining shovels, partially offset by lower ERS and industrial parts sales.

• Gross profit margin declined 420 basis points to 17.1% due to unfavorable sales mix, lower margins on equipment, ERS, and rental revenue, and increased market pressures.

• Adjusted EBITDA dropped 25.6% to CAD 35.1 million, and adjusted net earnings per share fell 58.2% year-over-year to $0.35, excluding $5.8 million in restructuring and related costs.

• Workforce reductions and a restructuring charge of CAD 5.8 million were recognized in response to market conditions.

• Thirty-two recordable incidents occurred in 2024, with a YTD TRIF of 0.94.

Financial highlights

• Full-year 2024 revenue was $2,097.6 million, down 2.6% from 2023; Q4 net earnings were $1.0 million, down 90.7% year-over-year.

• Q4 equipment sales surged 31.5% to CAD 208 million, led by mining and material handling, while industrial parts and ERS sales declined.

• Product support sales remained flat year-over-year, with minor regional fluctuations.

• Western Canada sales grew 16.7%, while Central and Eastern Canada sales declined 5.4% and 5.1%, respectively.

• Cash flow from operating activities increased to CAD 75.9 million in Q4, mainly due to inventory reduction.

Outlook and guidance

• Strong customer demand expected in mining and energy sectors for H1 2025, supported by a robust backlog, but overall market conditions remain soft with headwinds from potential tariffs and economic uncertainty.

• Management will focus on inventory reduction, margin improvement, cost control, and executing six refined strategic priorities for 2025.

• No expectation of near-term return to early 2024 margin levels, but improvement over Q4 is anticipated.