TOROMONT ANNOUNCES RESULTS FOR THE SECOND QUARTER OF 2025 AND QUARTERLY DIVIDEND
TORONTO, July 29, 2025 /CNW/ - Toromont Industries Ltd. (TSX:TIH) today reported its financial results for the second quarter ended June 30, 2025.
Three months ended June 30
Six months ended June 30
($ millions, except per share amounts)
2025
2024
% change
2025
2024
% change
Revenue
$ 1,376.5
$ 1,359.9
1 %
$ 2,466.1
$ 2,376.2
4 %
Operating income
$ 170.7
$ 177.5
(4) %
$ 269.2
$ 284.1
(5) %
Net earnings
$ 124.3
$ 135.4
(8) %
$ 198.8
$ 219.3
(9) %
Basic earnings per share ("EPS")
$ 1.53
$ 1.65
(7) %
$ 2.45
$ 2.67
(8) %
"Our team delivered resilient results in the second quarter while continuing to navigate macroeconomic and international trade uncertainties. Our disciplined approach remains unchanged and we continue to invest in our people and capabilities to support our customers today and into the future. Revenue increased overall, while net income was slightly lower, reflecting reduced interest income and short term non-cash costs related to the AVL acquisition," stated Michael S. McMillan, President and Chief Executive Officer of Toromont Industries Ltd. "The Equipment Group performed well with improving growth in rental and product support activity and new equipment deliveries in the construction and power segments. These were offset by lower equipment deliveries in the mining segment as expected, which tends to be more variable due to the nature of this segment. CIMCO posted higher revenue and earnings, reflecting healthy market demand and effective execution in both Canada and the US."
HIGHLIGHTS:
Consolidated Results
Revenue increased $16.6 million or 1% in the second quarter compared to the similar period last year, with higher revenue at CIMCO up 13% and relatively unchanged revenue in the Equipment Group. CIMCO's growth reflects good package revenue and higher product support revenue in Canada and the US. The Equipment Group continued to deliver against the healthy order backlog, in addition to revenues from the acquired business. Improved rental revenue and strong product support were offset by slightly lower total equipment sales.
Revenue increased $89.9 million (up 4%) to $2.5 billion for the year‑to‑date period. Revenue increased in both groups, with the Equipment Group up 3% and CIMCO up 11% compared to 2024. Growth reflects higher new equipment sales and solid execution against order backlog, along with the acquired business. Rental revenue improved on higher utilization in a slower market. Product support revenue increased 1% year‑to‑date compared to last year on growth in both Groups. We continue to recruit for our technician workforce to support our long‑term strategic objectives.
Operating income(1) decreased 4% in the quarter, as the higher revenue was more than offset by higher expenses. Operating income as a percentage of sales decreased to 12.4% from 13.1% in the prior year.
Operating income decreased 5% in the year‑to‑date period, and was 10.9% of revenue compared to 12.0% in the similar period last year, reflecting lower gross margins and slightly higher expenses in the current period.
Net interest expense increased by $8.7 million in the quarter and $13.7 million in the first half reflecting interest expense on the March 2025 debenture issue as well as lower interest income earned on cash on hand due to lower interest rates.
Net earnings decreased $11.0 million or 8% in the quarter versus a year ago to $124.3 million. EPS was $1.53 (basic) and $1.52 (fully diluted), 7% lower compared to the same period last year.
For the year‑to‑date period, net earnings decreased $20.5 million or 9% to $198.8 million compared to the similar period last year. EPS was $2.45 (basic) and $2.43 (fully diluted), 8% lower compared to last year.
Bookings(1) for the second quarter increased 14% compared to last year with higher bookings at both CIMCO and the Equipment Group. On a year-to-date basis, bookings increased 1% with both groups reporting higher bookings: Equipment Group up 1% and CIMCO up 4%.
Backlog(1) of $1.4 billion as at June 30, 2025, was up slightly from $1.3 billion as at June 30, 2024. Backlog remains healthy, reflecting deliveries and progress on construction schedules, good new booking activity and backlog related to the acquired business.
Equipment Group
Production at AVL Manufacturing Inc. ("AVL") has been expanding since the date of acquisition supporting the healthy order backlog and building demand. Hiring and development of production capacity continues at an accelerated pace. Revenues for the three and six month periods ended June 30, 2025 were $57.0 million and $79.0 million respectively. As part of the accounting for the acquisition, the company recognized intangible assets related to order backlog and customer relationships, both of which are amortized over time. Certain other non-cash expenses are also charged as a result of the acquisition accounting related to the commitment for purchase of the remaining shares of AVL. Non-cash expenses recognized for these items amounted to $21.5 and $30.0 million respectively (pre-tax basis), for the three and six months ended June 30, 2025. Net loss for AVL after consideration of amortization of intangibles recognized at acquisition was approximately $0.03 and $0.04 per share respectively. During the quarter the Company acquired a facility in Charlotte, North Carolina for approximately $60.0 million to expand production capacity and serve the eastern US market. We expect the facility to begin production in Q4.
Revenue was relatively unchanged at $1.2 billion for the quarter. New equipment sales decreased 5%, mainly due to lower mining deliveries (against a strong comparable), partially offset by increases in construction and power systems markets, which includes the acquired business. Rental revenue increased 15%, with improved utilization and a higher RPO (rental with a purchase option) fleet. Product support revenue was also up 4% in Q2 on higher parts and service revenue.
Revenue was up $66.0 million or 3% to $2.2 billion for the year‑to‑date period. New equipment sales increased 6% on good deliveries in the construction and power systems markets, including the acquired business, offsetting lower mining revenues which are coming off a relatively heavy investment cycle. Rental revenue increased 13%, with similar trends as noted for the quarter above. Product support was marginally up 1%.
Operating income decreased $11.1 million or 7% to $154.1 million in the second quarter, as higher expenses more than offset the higher revenue and improved gross margins.
Operating income decreased $21.0 million or 8% to $243.0 million in the year‑to‑date period. Higher revenue was more than offset by lower gross margins and higher expenses. Operating income margin was 10.9% versus 12.2% in the comparable period last year, primarily reflecting lower gross margins and higher relative expense levels, including acquisition-related items.
Bookings in the second quarter were $637.8 million, an increase of 5% from the comparable period last year, as improved bookings in construction, power systems and material handling were partially offset by lower mining orders. Year-to-date bookings were $1.1 billion, an increase of 1% from the similar period last year. Bookings increased in construction (+9%), material handling (+45%) and in power systems (+94%), reflecting strong execution and the acquired business. Mining orders were lower against a strong comparable last year (lower by 47%).
Backlog of $1.0 billion at the end of June 2025 was lower by $42.4 million or 4% from the end of June 2024. Backlog includes $246.4 million order backlog at the recently acquired company AVL. Excluding this, backlog was 28% lower compared to the same time last year, reflecting good deliveries against customer orders over the last twelve months.
CIMCO
Revenue increased $15.7 million or 13% compared to the second quarter last year. Package revenue was higher, up 22%, with good execution on package project construction and improvements in equipment delivery schedules. Product support revenue was up 1%, reflecting good market activity in Canada supported by the increased technician workforce, offset by slightly lower US activity.
Revenue increased $23.8 million or 11% to $236.2 million for the year‑to‑date period. Package revenue was up 20% on good execution on projects in both Canada (+10%) and the US (+48%). Product support activity increased 3%, with higher activity in both Canada and in the US reflecting good execution.
Operating income increased $4.4 million or 36% for the quarter, as the higher revenue and improved gross margins were partially offset by unfavourable sales mix (lower product support to total revenue) and higher expenses.
Operating income was up $6.1 million or 30% to $26.2 million for the year‑to‑date period, reflecting similar trends as noted for the quarter. Operating income margin increased to 11.1% (2024, 9.5%) reflecting higher gross margins again on good execution.
Bookings increased 185% in the second quarter to $93.0 million, and increased 4% for the year‑to‑date period to $140.7 million. For the year, higher bookings in Canada, up 28%, were partially offset by lower bookings in the US, down 38%. Industrial bookings were 18% higher while recreational bookings were 10% lower. Booking activity can be variable over time based on customer decision making and construction schedules.
Backlog of $351.0 million as at June 30, 2025 was up $61.3 million or 21% from June 2024. Backlog in the US was strong, up 46% from this time last year, while backlog in Canada was also up 10%.
Financial Position
Toromont's share price of $122.39 at the end of June 2025, translated to a market capitalization(1) and a total enterprise value(1) of $9.9 billion.
The Company maintained a strong financial position. Leverage as represented by the net debt to total capitalization(1) ratio was -3% at the end of June 2025, compared to -9% at the end of December 2024 and ‑6% at the end of June 2024. The change in ratio from this time last year reflects continuing cash inflow from operations, more than offset by investment in working capital, capital expenditures and two business acquisitions.
The Company purchased and cancelled 337,500 common shares for $40.3 million under the Normal Course Issuer Bid program in the six-month ended June 30, 2025 (608,000 common shares for $75.0 million in 2024).
The Board of Directors approved the regular quarterly dividend of $0.52 cents per share, payable on October 3, 2025 to shareholders on record on September 5, 2025.
The Company's return on equity(1) was 17.6% at the end of June 2025, on a trailing twelve‑month basis, compared to 19.2% at the end of December 2024 and 21.0% at the end of June 2024. Trailing twelve‑month pre‑tax return on capital employed(1) was 23.1% at the end of June 2025, compared to 25.7% at the end of December 2024 and 27.9% at the end of June 2024.
Subsequent to the end of the quarter, on July 11, 2025, the Company completed the early redemption of its 10‑year, 3.71% senior debentures, which were due on September 30, ...
