Velan Inc. Reports Second Quarter Results for Fiscal 2027

MONTREAL, Oct. 07, 2026 (GLOBE NEWSWIRE) -- Velan Inc. (TSX: VLN) (“Velan” or the “Company”), a leading global manufacturer of industrial valves, announced today financial results for its second quarter ended August 31, 2026. All amounts are expressed in U.S. dollars unless indicated otherwise.

SECOND-QUARTER HIGHLIGHTS FROM CONTINUING OPERATIONS

IFRS MEASURES

• Sales of $57.5 million, versus $67.6 million last year, as the timing and complexity of certain production orders shifted shipments into later periods. Uncertainty around changing tariff regulations and ongoing geopolitical tension also weighed on customer demand and order timing during the period.
• Gross profit of $12.6 million or 21.9%, of sales, compared to $15.7 million, or 23.2% of sales, last year.
• Net loss¹ of $15.1 million ($0.70 per share), versus a net loss of $1.7 million ($0.08 per share) last year, mainly reflecting $14.9 million of transaction-related costs (see “Significant Transactions”).
• Financial position: net cash (cash and cash equivalents less bank indebtedness) was negative $11.2 million as at August 31, 2026, compared to net cash of $41.5 million as at February 28, 2026, reflecting the transaction-related cash outflows.

NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES

• Backlog² of $262.5 million, down from $283.3 million at February 28, 2026, and down from $285.8 million a year earlier, reflecting shipments and softer bookings across several regions during the quarter.
• Bookings² of $47.9 million for the quarter, down from $65.2 million in the second quarter of fiscal 2026, reflecting weaker order intake in the nuclear, power and process end-markets in North America and continued soft bookings in China, partially offset by continued strength in maintenance, repair and overhaul (MRO) activity.
• Adjusted net loss² of $6.2 million ($0.29 per share), versus adjusted net loss of $1.2 million ($0.05 per share) last year.
• Adjusted EBITDA² of negative $0.7 million, compared to adjusted EBITDA of $3.4 million last year, reflecting the impact of lower sales and gross profit.

SIX MONTHS RESULTS FROM CONTINUING OPERATIONS

IFRS MEASURES

• Sales of $115.4 million, down $24.5 million or 17.5% compared to the same period last year.
• Gross profit of $24.0 million, or 20.8% of sales, versus $36.3 million, or 26.0% of sales, last year.
• Operating loss of $22.7 million, compared to an operating loss of $3.4 million a year ago.
• Net loss¹ of $24.5 million, or $1.14 per share, versus a net income of $16.2 million last year, or $0.75 per share last year.   

NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES

• Bookings² of $95.9 million, versus $143.4 million last year.
• Adjusted net loss² of $13.1 million, versus an adjusted net loss of $1.1 million last year.
• Adjusted EBITDA² of negative $2.8 million, compared to $7.1 million last year.

____________________

¹ Net income or loss refer to net income or loss attributable to subordinate and multiple voting shares
² Non-IFRS and supplementary financial measures – more information at the end of this report.

"Velan is entering a new phase focused on stronger execution, improved business performance and profitable growth," said Rishi Sharma, President and Chief Executive Officer of Velan. "Our second quarter results reflect challenges to the business we are actively working to meet. The demand environment in our core nuclear, defense and energy markets remains solid – the softness in results was driven by execution and delivery timing as well as volatility relating to tariffs, trade disputes and geopolitical uncertainty in the Middle East. We have moved quickly on matters within our control, with a focus around six transformation pillars— cost discipline, procurement and value engineering, talent and organizational improvements, manufacturing footprint, working capital and assets and growth acceleration. Together they are designed to build a leaner company and drive profitable growth.”

"Our second quarter results reflect significant one-time transaction costs rather than a change in the underlying business. We are focused on aligning our costs to current volumes and have taken meaningful actions, including the recent implementation of a workforce reduction. We also repaid our Canadian secured bank loan and, with a new $80 million credit facility in place, have the liquidity and flexibility to execute on the opportunities ahead," added Imran Gibbons, Chief Financial Officer of Velan.

FINANCIAL RESULTS in ‘000s of U.S. dollars, excluding per share amounts)	Three-month periods ended				Six-month periods ended
	August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025
From continuing operations
Sales	$57,537		$67,611		$115,367		$139,840
Gross profit	$12,605		$15,675		$23,961		$36,301
Gross margin	21.9	%	23.2	%	20.8	%	26.0	%
Administration costs	$16,902		$15,377		$32,621		$33,690
Transaction based expenses	$14,936		$690		$15,449		$6,064
Other expenses (income)	($4,266	)	($777	)	($1,411	)	($45	)
Operating income (loss)	($14,967	)	$385		($22,698	)	($3,408	)
Net income (loss)	($15,052	)	($1,660	)	($24,488	)	$16,166
Net income from discontinued operations	$ -		($780	)	$ -		$58,599
Net income (loss)	($15,052	)	($2,440	)	($24,488	)	$74,765
(in dollars per share – basic and diluted)
Net income (loss) from continuing operations	($0.70	)	($0.08	)	($1.14	)	$0.75
Net income (loss) from discontinued operations	$ -		($0.03	)	$ -		$2.71
Net income (loss)	($0.70	)	($0.11	)	($1.14	)	$3.46

NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES (From continuing operations, in ‘000s of U.S. dollars, excluding per share amounts)	Three-month periods ended				Six-month periods ended
	August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025
Adjusted EBITDA	($713	)	$3,358		($2,811	)	$7,138
Adjusted net income (loss)	($6,206	)	($1,153	)	($13,133	)	($1,063	)
per share - basic and diluted	($0.29	)	($0.05	)	($0.61	)	($0.05	)

BACKLOG AND BOOKINGS

BACKLOG (‘000s of U.S. dollars)	As at
	August 31, 2026			February 28, 2026			August 31, 2025
Backlog	$262,471			$283,290			$285,800
for delivery within the next 12 months	$200,062			$216,706			$252,355

BOOKINGS (‘000s of U.S. dollars, excluding ratios)

Three-month periods ended

Six-month periods ended

August 31, 2026

August 31, 2025

August 31, 2026

August 31, 2025

Bookings

$47,947

$65,165

$95,936

$143,399

As at August 31, 2026, the backlog from continuing operations stood at $262.5 million, down from $283.3 million as at February 28, 2026, and down from $285.8 million a year earlier. The decline was broad-based, with the largest reductions at the Company’s Korean, German and ABV (Italy-based) operations, reflecting shipments and softer bookings across several end-markets during the period, partially offset by growth at the Company’s North American and Indian operations. As at August 31, 2026, approximately 76% of the backlog, representing $200.1 million of orders, is expected to be delivered within the next 12 months, a significant proportion, reflecting the shorter-duration mix of remaining orders. Currency movements had a $0.3 million positive effect on the value of the backlog during the first six months of fiscal 2027 mainly due to the strengthening of the euro versus the U.S. dollar.

Bookings from continuing operations totaled $47.9 million in the second quarter of fiscal 2027, down from $65.2 million in the second quarter of fiscal 2026. The decrease reflects weaker order intake in the nuclear, power and process end-markets in North America and continued soft bookings at the Company’s China operations, partially offset by continued strength in MRO activity, which represented a significant share of total bookings in the quarter.

In the first half of fiscal 2027, bookings from continuing operations totaled $95.9 million, compared to $143.4 million in the first half of fiscal 2026. The decrease is mainly attributable to the factors mentioned above. Currency movements had a $0.1 million positive effect on the value of bookings for the period.

SECOND QUARTER RESULTS

Sales from continuing operations totaled $57.5 million, a decrease of $10.1 million, or 15.0%, compared to $67.6 million for the same period last year. The decrease primarily reflects lower shipment volumes at the Company's North American and China operations, resulting from softer bookings in recent periods, delays in certain large-project deliveries, and continued production and logistics challenges, including delays linked to ongoing conflict in the Middle East. These decreases were partially offset by higher shipments of large offshore and floating production project orders, mainly serving customers in the Middle East and Asia. Currency movements had a $1.0 million negative effect on sales for the period.

Gross profit from continuing operations was $12.6 million, compared to $15.7 million last year. The decline primarily reflects the impact of lower sales volumes on the absorption of fixed production overhead costs at several of the Company's manufacturing operations, together with the net impact of tariffs on cross-border shipments and a less favorable project mix at certain operations, partially offset by a favorable reversal of aged inventory provisions at the Company's Asian operations. As a percentage of sales, gross profit was 21.9%, compared to 23.2% last year.

Administration costs from continuing operations amounted to $16.9 million, or 29.4% of sales, compared to $15.4 million, or 22.7% of sales, last year mainly attributed to increase in engineering and R&D costs. The increase as a percentage of sales mainly reflects the lower sales base described above.

The Company incurred transaction based expenses of $14.9 million, consisting entirely of transaction-related costs associated with the change of control transaction (see 'Significant Transactions'), compared to $0.7 million in transaction-related costs in the second quarter of fiscal 2026.

Adjusted EBITDA from continuing operations, excluding transaction-related costs, was negative $0.7 million, versus $3.4 million a year ago. The decrease is primarily attributable to lower gross profit and higher administration costs as a percentage of sales.

For the second quarter of fiscal 2027, the net loss from continuing operations was $15.1 million ($0.70 per share), compared to a net loss of $1.7 million ($0.08 per share) in the second quarter of fiscal 2026.

Excluding transaction-related costs, the adjusted net loss from continuing operations was $6.2 million ($0.29 per share) in the second quarter of fiscal 2027, compared to an adjusted net loss of $1.2 million ($0.05 per share) in the second quarter of fiscal 2026.

SIX-MONTH RESULTS

Sales from continuing operations amounted to $115.4 million, a decrease of $24.5 million, or 17.5%, compared to $139.8 million a year ago. The decrease primarily reflects lower shipment volumes at the Company's North American and China operations, resulting from softer bookings in recent periods, delays in certain large-project deliveries, and continued production and logistics challenges, partially offset by higher shipments of large offshore and floating production project orders. Currency movements had a $0.7 million negative effect on sales for the period.

Gross profit from continuing operations was $24.0 million, compared to $36.3 million last year. As a percentage of sales, gross profit was 20.8%, compared to 26.0% last year.

Administration costs from continuing operations were $32.6 million, or 28.3% of sales, compared to $33.7 million, or 24.1% of sales, last year. The increase as a percentage of sales mainly reflects the lower sales base described above; in dollar terms, cost reduction initiatives at certain operations — including headcount actions and the deferral of information-technology projects — contributed to a year-over-year decrease in administration costs, partially offset by higher costs at other operations.

The Company incurred transaction based  expenses of $15.4 million, compared to $6.1 million last year, consisting entirely of transaction-related costs associated with the closing of the change of control transaction.

Adjusted EBITDA from continuing operations, excluding transaction-related costs, was negative $2.8 million, versus $7.1 million last year. The decrease is primarily attributable to lower gross profit and higher administration costs as a percentage of sales.

Net loss from continuing operations was $24.5 million, or $1.14 per share, compared to net income of $16.2 million, or $0.75 per share, in the prior year. There were no results from discontinued operations in the six-month period of fiscal 2027, compared to net income from discontinued operations of $58.6 million, or $2.71 per share, last year, which included the gain on disposal of the French assets. As a result, net loss was $24.5 million, or $1.14 per share, compared with net income of $74.7 million, or $3.46 per share, a year ago.

Adjusted net loss from continuing operations, excluding transaction-related costs, was $13.1 million, or $0.61 per
share, versus an adjusted net loss of $1.1 million, or $0.05 per share, a year ago.

FINANCIAL POSITION

As at August 31, 2026, net cash (cash and cash equivalents less bank indebtedness) was negative $11.2 million, compared to net cash of $41.5 million as at February 28, 2026, primarily reflecting transaction-related cash outflows in connection with the change of control transaction. As at August 31, 2026, the Company had drawn $39.9 million on its new $80 million revolving credit facility secured in connection with the closing of the transaction, and remains in compliance with all covenants related to its debt and credit facilities. Based on the borrowing base calculation and applicable covenant limitations, available borrowing capacity under global revolving credit facilities amounted to $66.2 million as at August 31, 2026. Combined with cash and cash equivalent of $28.2 million and short-term investments of $1.4 million, the Company had total available liquidity of $95.8 million as at August 31, 2026. Total assets stood at $320.1 million, versus $346.6 million as at February 28, 2026, total liabilities amounted to $166.8 million, up from $164.5 million as at February 28, 2026, and total equity was $153.3 million, versus $182.1 million as at February 28, 2026, reflecting the Company's net loss for the six-month period.

OUTLOOK

Bookings were softer in the second quarter, particularly in the nuclear, power and process end-markets in North America and at the Company's China operations, while MRO activity remained comparatively resilient. Demand in core nuclear, defense and energy markets remains solid while management believes that momentum is continuing to build in nuclear and naval modernization spending is also rising – in power, there is steady aftermarket demand despite the current geopolitical uncertainty, while MRO continues to be resilient. Management believes near-term order activity will continue to be mixed across regions, with a number of larger opportunities in the Company's core end-markets currently in the pipeline at varying stages of qualification, and a portion expected to convert in the near term.  

The Company continues to focus on cost discipline, including the workforce reduction implemented subsequent to quarter-end (see “Significant Transactions”), which management expects will improve the Company's cost structure over the coming fiscal quarters.

DIVIDEND

The Board of Directors of Velan, after considering the Company's current priorities, including the implementation of its restructuring plan and the preservation of liquidity, has determined that the Company would not pay a dividend for the remainder of fiscal 2027. The Board of Directors will re-evaluate the Company’s dividend policy on an annual basis.

SIGNIFICANT TRANSACTIONS

On June 15, 2026, the Company announced the closing of the sale by its controlling shareholder, Velan Holding Co. Ltd., of its controlling interest in the Company. The closing created an obligation for the Company to pay conditional fees related to the transaction, resulting in $14.9 million of transaction-related costs recorded in the second quarter of fiscal 2027.

In connection with the closing, the Company secured a new $80 million revolving credit facility with a major chartered bank, maturing in June 2031. Proceeds were used to repay existing North American debt, including the Company's Canadian secured bank loan, which was fully repaid during the second quarter of fiscal 2027, and to fund general corporate purposes, including the transaction-related costs described above.

Subsequent to August 31, 2026, the Company implemented a restructuring plan affecting its corporate activities, including workforce reductions. As the restructuring was implemented after the reporting date, no provision has been recorded in the Company's financial statements for the quarter. Management currently estimates associated restructuring costs of approximately $2 million to $3 million, which will be recognized in the subsequent reporting period.

CONFERENCE CALL NOTICE

Financial analysts, shareholders, and other interested individuals are invited to attend the second quarter conference call to be held on Thursday, October 8, 2026, at 8:00 a.m. (EDT). The toll-free call-in number is 1-800-990-4777 or by RapidConnect URL: https://emportal.ink/3SCcDG3. The material that will be referenced during the conference call will be made available shortly before the event on the company’s website under the Investor Relations section (https://velan.com/investor-relations). A replay of the call will be available within 2 hours of the end of the call until October 15th, 2026, by calling 1-289-819-1450 or 1-888-660-6345 and entering the replay code 20020.

ABOUT VELAN

Founded in Montreal in 1950, Velan Inc. (www.velan.com) is a leading global manufacturer of a broad range of industrial valves for use in critical applications. Velan pioneers advanced valve technologies that power the world’s most critical applications including power generation, nuclear, oil and gas, chemicals, LNG and cryogenics, pulp and paper, geothermal processes, shipbuilding, defense, and carbon-neutral technologies. The Company employs approximately 1,300 people with its global manufacturing base spanning three continents. Velan Inc. is a public company with its shares listed on the Toronto Stock Exchange under the symbol VLN.

SAFE HARBOUR STATEMENT

This news release may include forward-looking statements, which generally contain words like “should”, “believe”, “anticipate”, “plan”, “may”, “will”, “expect”, “intend”, “continue” or “estimate” or the negatives of these terms or variations of them or similar expressions, all of which are subject to risks and uncertainties, which are disclosed in the Company’s filings with the appropriate securities commissions. While these statements are based on management’s assumptions regarding historical trends, current conditions and expected future developments, as well as other factors that it believes are reasonable and appropriate in the circumstances, no forward-looking statement can be guaranteed and actual future results may differ materially from those expressed herein. The Company disclaims any intention or obligation to update or revise any forward-looking statements contained herein whether as a result of new information, future events or otherwise, except as required by the applicable securities laws. The forward-looking statements contained in this news release are expressly qualified by this cautionary statement.

NON-IFRS AND SUPPLEMENTARY FINANCIAL MEASURES

In this press release, the Company has presented measures of performance or financial condition which are not defined under IFRS (“non-IFRS measures”) and are, therefore, unlikely to be comparable to similar measures presented by other companies. These measures are used by management in assessing the operating results and financial condition of the Company and are reconciled with the performance measures defined under IFRS. The Company has also presented supplementary financial measures which are defined at the end of this report. Reconciliation and definition can be found below.

Adjusted net income (loss), Adjusted net income (loss) per share, Earnings before interest, taxes, depreciation and amortization ("EBITDA") and Adjusted EBITDA

	Three-month periods ended				Six-month periods ended
(in thousands, except per share amounts; certain totals may not add up due to rounding)	August 31, 2026		August 31, 2025		August 31, 2026		August 31, 2025
	$		$		$		$
Reconciliation of net income (loss) from continuing operations to adjusted net income (loss) from continuing operations and adjusted net income (loss) from continuing operations per share
Net income (loss) from continuing operations	(15,052	)	(1,660	)	(24,488	)	16,166
Adjustments for:
Asbestos-related costs	-		-		-		(754	)
Transaction-related costs	10,978		507		11,355		6,635
Non-recurring provision adjustments	(2,132	)	-		-		-
Non-recurring tax recovery on France transaction	-		-		-		(23,110	)
Adjusted net income (loss) from continuing operations	(6,206	)	(1,153	)	(13,133	)	(1,063	)
per share – basic and diluted	(0.29	)	(0.05	)	(0.61	)	(0.05	)
Reconciliation of net income (loss) from continuing operations to Adjusted EBITDA from continuing operations
Net income (loss) from continuing operations	(15,052	)	(1,660	)	(24,488	)	16,166
Adjustments for:
Depreciation of property, plant and equipment	1,684		1,723		3,382		3,352
Amortization of intangible assets and financing costs	543		541		999		1,060
Finance costs – net	342		244		426		634
Income tax expense (recovery)	(266	)	1,820		1,421		(20,138	)
EBITDA	(12,749	)	2,668		(18,260	)	1,074
Adjustments for:
Asbestos-related costs	-		-		-		(754	)
Transaction-related costs	14,936		690		15,449		6,818
Non-recurring provision adjustments	(2,900	)	-		-		-
Adjusted EBITDA	(713	)	3,358		(2,811	)	7,138

The term “Adjusted net income (loss)” is defined as net income or loss attributable to Subordinate and multiple voting shares plus adjustment, net of income taxes, for costs related to the change of control transaction, restructuring and asbestos provision The terms “Adjusted net income (loss) per share” is obtained by dividing Adjusted net income (loss) by the total amount of subordinate and multiple voting shares. The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

The term “EBITDA” is defined as adjusted net income plus depreciation of property, plant & equipment, plus amortization of intangible assets, plus net finance costs, plus income tax provision. The term “Adjusted EBITDA” is defined as EBITDA plus adjustment for costs related to the change of control transaction, restructuring and asbestos provision The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Definitions of supplementary financial measures

The term “Net new orders” or “bookings” is defined as firm orders, net of cancellations, recorded by the Company during a period.  Bookings are impacted by the fluctuation of foreign exchange rates for a given period. The measure provides an indication of the Company’s sales operation performance for a given period as well as an expectation of future sales and cash flows to be achieved on these orders.

The term “backlog” is defined as the buildup of all outstanding bookings to be delivered by the Company. The Company’s backlog is impacted by the fluctuation of foreign exchange rates for a given period. The measure provides an indication of the future operational challenges of the Company as well as an expectation of future sales and cash flows to be achieved on these orders.

The forward-looking statements contained in this press release are expressly qualified by this cautionary statement.

Contact:
Imran Gibbons, Chief Financial Officer
Velan Inc.
Tel: (438) 817-4430

Consolidated Statements of Financial Position
(in thousands of U.S. dollars)
				As at
		August 31,		February 28,
		2026		2026
		$		$
Assets
Current assets
Cash and cash equivalents		28,205		53,354
Short-term investments		1,379		371
Accounts receivable		68,070		75,369
Income taxes recoverable		9,156		5,511
Inventories		145,287		147,140
Deposits and prepaid expenses		8,385		3,337
Derivative assets		7		59
Assets held for sale		780		-
		261,269		285,141
Non-current assets
Property, plant and equipment		48,806		50,935
Intangible assets and goodwill		4,140		4,477
Deferred income taxes		4,914		5,283
Other assets		977		771
		58,837		61,466
Total assets		320,106		346,607
Liabilities
Current liabilities
Bank indebtedness		39,372		10,663
Short-term bank loans		-		1,199
Accounts payable and accrued liabilities		68,518		85,094
Income taxes payable		1,906		1,330
Customer deposits		13,911		20,211
Provisions		7,597		10,227
Derivative liabilities		292		130
Current portion of long-term lease liabilities		1,546		1,592
Current portion of long-term debt		3,194		3,737
		136,336		134,183
Non-current liabilities
Long-term lease liabilities		3,598		3,968
Long-term debt		2,309		14,488
Income taxes payable		467		-
Deferred income taxes		1,790		1,346
Customer deposits		17,733		5,584
Other liabilities		4,590		4,935
		30,487		30,321
Total liabilities		166,823		164,504
Total equity		153,283		182,103
Total liabilities and equity		320,106		346,607

Consolidated Statements of Income (loss)
(in thousands of U.S. dollars, excluding number of shares and per share amounts)
	Three-month periods ended					Six-month periods ended
	August 31,		August 31,			August 31,		August 31,
	2026		2025			2026		2025
	$		$			$		$
Sales	57,537		67,611			115,367		139,840
Cost of sales	44,932		51,936			91,406		103,539
Gross profit	12,605		15,675			23,961		36,301
Administration costs	16,902		15,377			32,621		33,690
Transaction based expenses	14,936		690			15,449		6,064
Other expense (income)	(4,266	)	(777	)		(1,411	)	(45	)
Operating income (loss)	(14,967	)	385			(22,698	)	(3,408	)
Financing expenses	(342	)	(244	)		(426	)	(634	)
Income (loss) before income taxes	(15,309	)	141			(23,124	)	(4,042	)
Income tax expense (recovery)	(266	)	1,820			1,421		(20,138	)
Net income (loss) for the period from continuing operations	(15,043	)	(1,679	)		(24,545	)	16,096
Results from discontinued operations	-		(780	)		-		58,599
	(15,043	)	(2,459	)		(24,545	)	74,695
Net income (loss) attributable to:
Subordinate Voting Shares and Multiple Voting Shares	(15,052	)	(2,440	)		(24,488	)	74,765
Non-controlling interest	9		(19	)		(57	)	(70	)
Net income (loss) for the period	(15,043	)	(2,459	)		(24,545	)	74,695
Net income (loss) per Subordinate and Multiple Voting Share
Basic and diluted from continuing operations	(0.70	)	(0.08	)		(1.14	)	0.75
Basic and diluted from discontinued operations	-		(0.03	)		-		2.71
Basic and diluted from all operations	(0.70	)	(0.11	)		(1.14	)	3.46
Dividends declared per Subordinate and Multiple	-		0.07			-		0.31
Voting Share	(CA$ - )		(CA$ 0.10)			(CA$ - )		(CA$ 0.43 )
Total weighted average number of Subordinate and
Multiple Voting Shares
Basic and diluted	21,585,635		21,585,635			21,585,635		21,585,635

Consolidated Statements of Comprehensive Income (loss)
(in thousands of U.S. dollars)
	Three-month periods ended					Six-month periods ended
	August 31,		August 31,			August 31,		August 31,
	2026		2025			2026		2025
	$		$			$		$
Comprehensive Income (loss)
Net income (loss) for the period	(15,043	)	(2,459	)		(24,545	)	74,695
Other comprehensive income (loss)
Foreign currency translation of foreign subsidiaries	1,282		(2,319	)		(4,279	)	(5,191	)
Reclassification of foreign currency translation from discontinued operations	-		-			-		12,456
Comprehensive Income (loss)	(13,761	)	(4,778	)		(28,824	)	81,960
Comprehensive income (loss) attributable to:
Subordinate Voting Shares and Multiple Voting Shares	(13,770	)	(4,759	)		(28,767	)	82,030
Non-controlling interest	9		(19	)		(57	)	(70	)
Comprehensive Income (loss)	(13,761	)	(4,778	)		(28,824	)	81,960
Other comprehensive Income (loss) is composed solely of items that may be reclassified subsequently to the consolidated statement of Income (loss).

Consolidated Statements of Changes in Equity
(in thousands of U.S. dollars, excluding number of shares)
	Equity attributable to the Subordinate and Multiple Voting shareholders
	Share capital		Contributed surplus		Accumulated other comprehensive loss		Retained earnings		Total		Non controlling interest		Total equity
Balance - February 28, 2025	72,695		6,355		(47,141	)	65,952		97,861		877		98,738
Net Income (loss) for the period	-		-		-		74,765		74,765		(70	)	74,695
Other comprehensive loss	-		-		(5,191	)	-		(5,191	)	-		(5,191	)
Comprehensive Income (loss)	-		-		(5,191	)	74,765		69,574		(70	)	69,504
Reclassification of foreign currency translation to discontinued operations	-		-		12,456		-		12,456		-		12,456
Dividends
Multiple Voting Shares	-		-		-		(4,869	)	(4,869	)	-		(4,869	)
Subordinate Voting Shares	-		-		-		(1,886	)	(1,886	)	-		(1,886	)
Balance - August 31, 2025	72,695		6,355		(39,876	)	133,962		173,136		807		173,943
Balance - February 28, 2026	72,695		6,355		(27,526	)	129,957		181,481		626		182,107
Net Loss for the period	-		-		-		(24,488	)	(24,488	)	(57	)	(24,545	)
Other comprehensive loss	-		-		(4,279	)	-		(4,279	)	-		(4,279	)
Comprehensive loss	-		-		(4,279	)	(24,488	)	(28,767	)	(57	)	(28,824	)
Balance - August 31, 2026	72,695		6,355		(31,805	)	105,469		152,714		569		153,283

Consolidated Statements of Cash Flow
(in thousands of U.S. dollars)
	Three-month periods ended					Six-month periods ended
	August 31,		August 31,			August 31,		August 31,
	2026		2025			2026		2025
	$		$			$		$
Cash flows from
Operating activities
Net income (loss) for the period	(15,043	)	(2,459	)		(24,545	)	74,695
Less: results from discontinued operations	-		(780	)		-		58,599
Net income (loss) for the period from continuing operations	(15,043	)	(1,679	)		(24,545	)	16,096
Adjustments to reconcile net loss to cash used by operating activities	5,671		2,389			15,792		(14,726	)
Changes in non-cash working capital items	(5,482	)	(17,808	)		(24,506	)	(34,875	)
Cash provided (used) by operating activities from continuing operations (excluding Asbestos settlement)	(14,854	)	(17,098	)		(33,259	)	(33,505	)
Asbestos Settlement transaction	-		-			-		(143,553	)
Cash provided (used) by operating activities from continuing operations	(14,854	)	(17,098	)		(33,259	)	(177,058	)
Investing activities
Short-term investments	(8	)	-			(1,020	)	(33	)
Additions to property, plant and equipment	(1,840	)	(979	)		(2,632	)	(2,932	)
Additions to intangible assets	(669	)	-			(669	)	-
Proceeds on disposal of property, plant and equipment	134		180			159		1,133
Net change in other assets	(203	)	(49	)		(200	)	(14	)
Cash provided (used) by investing activities from continuing operations (excluding proceeds on disposal of France assets)	(2,586	)	(848	)		(4,362	)	(1,846	)
Proceeds on disposal of France assets	-		(780	)		-		182,363
Cash provided (used) by investing activities from continuing operations	(2,586	)	(1,628	)		(4,362	)	180,517
Financing activities
Dividends paid to Subordinate and Multiple Voting shareholders	-		(6,755	)		-		(6,755	)
Short-term bank loans	-		-			(1,199	)	-
Increase in long-term debt	2,315		80			2,315		1,143
Repayment of long-term debt	(12,403	)	(642	)		(14,699	)	(1,512	)
Repayment of long-term lease liabilities	(498	)	(413	)		(918	)	(812	)
Cash provided (used) by financing activities from continuing operations	(10,586	)	(7,730	)		(14,501	)	(7,936	)
Effect of exchange rate differences on cash	(119	)	149			(537	)	1,590
Net change in cash during the period from continuing operations	(28,145	)	(26,307	)		(52,659	)	(2,887	)
Net change in cash during the period from discontinued operations	-		(780	)		-		8,745
Net change in cash during the period	(28,145	)	(27,087	)		(52,659	)	5,858
Net cash – Beginning of the period	16,978		55,784			41,492		32,364
Net cash – End of the period	(11,167	)	29,477			(11,167	)	29,477
Net cash is composed of:
Cash and cash equivalents	28,205		36,093			28,205		36,093
Bank indebtedness	(39,372	)	(6,616	)		(39,372	)	(6,616	)
Net cash – End of the period	(11,167	)	29,477			(11,167	)	29,477
Supplementary information
Interest received (paid)	(430	)	(39	)		(809	)	(278	)
Income taxes paid	(630	)	(1,437	)		(1,829	)	(2,864	)