CES ENERGY SOLUTIONS CORP. ANNOUNCES RECORD FOURTH QUARTER AND FULL YEAR 2025 RESULTS WITH RECORD ADJUSTED EBITDAC AND AN INCREASE TO ITS QUARTERLY DIVIDEND

CALGARY, AB, March 10, 2026 /CNW/ – CES Energy Solutions Corp. (“CES” or the “Company”) (TSX:CEU) (OTC:CESDF) is pleased to announce record financial results for the three and twelve months ended December 31, 2025, along with a 29% increase to the quarterly dividend from $0.0425 to $0.055 per share, which will be paid on April 15, 2026, to the shareholders of record at the close of business on March 31, 2026.

• Record quarterly revenue of $664.5 million, increased 10% year over year
• Record quarterly Adjusted EBITDAC of $113.2 million at a 17.0% margin, increased 10% year over year
• Record annual revenue of $2.5 billion, increased 6% year over year
• Record annual Adjusted EBITDAC of $404.6 million at a 16.2% margin
• Annual Cash Flow from Operations of $285.4 million and Free Cash Flow of $166.5 million
• Conservative leverage of 1.23x Total Debt/Adjusted EBITDAC
• Returned $174.9 million to shareholders in the year through $34.8 million in dividends and $140.1 million for the repurchase of 16.8 million shares at an average price of $8.20 per share, and representing approximately 7.5% of common shares outstanding at January 1, 2025
• Announced a 29% increase to the quarterly dividend to $0.055 per share, representing an implied annual payout ratio of  19%

CES’ record fourth quarter results continue to demonstrate the significant merits of its unique business model. CES has continued to provide mission critical chemical solutions enabling our customers to succeed in an era of high service intensity levels, and increasingly complex drilling fluids and production chemical technology requirements.

These unique characteristics have produced strong financial results and notable customer recognition during the fourth quarter. Record quarterly revenue and Adjusted EBITDAC resulted primarily from a favorable product mix, contributions from recent acquisitions, new business wins, and growing demand for our products to support elevated service intensity levels.

CES remains confident in its ability to continue generating strong surplus free cash flow, supported by its unique business model, financial performance, outlook, and capital structure. On March 10, 2026, the Company’s Board of Directors approved an increase to the quarterly dividend from $0.0425 per share to $0.055 per share, which will be paid on April 15, 2026, to the shareholders of record at the close of business on March 31, 2026.

Fourth Quarter Results
Revenue in the fourth quarter set a new quarterly record at $664.5 million, representing a sequential increase of $41.3 million or 7% compared to $623.2 million in Q3 2025, and an increase of $59.1 million or 10% compared to $605.4 million in Q4 2024. For the twelve months ended December 31, 2025, CES generated record revenue of $2.5 billion, an increase of $140.5 million or 6% relative to the twelve months ended December 31, 2024. The increases over prior year comparative periods are driven by strong market share positions and continued strength in service intensity, resulting in an overall uptick in revenue despite softening industry rig counts in both the US and Canada.

Revenue generated in the US during Q4 2025 set a new quarterly record at $434.9 million, representing a sequential increase of $25.5 million or 6% compared to Q3 2025, and an increase of $44.7 million or 11% compared to Q4 2024. For the twelve months ended December 31, 2025, revenue generated in the US of $1.7 billion was up 5% relative to the twelve months ended December 31, 2024. US revenues for both the three and twelve month periods benefited from contributions from recent acquisitions, higher production levels, and strengthened market positioning, achieving US Drilling Fluids Market Share of 25% for both the three and twelve months ended December 31, 2025, respectively, compared to 21% and 22% for the three and twelve months ended December 31, 2024, respectively.  

Revenue generated in Canada during Q4 2025 was a fourth quarter record at $229.6 million, representing a sequential increase of $15.8 million or 7% compared to Q3 2025, and an increase of $14.4 million or 7% compared to Q4 2024. For the twelve months ended December 31, 2025, revenue generated in Canada of $841.9 million was up 8% relative to the twelve months ended December 31, 2024. Canadian revenues for both the three and twelve month periods benefited from strong market share and higher service intensity year over year. Canadian Drilling Fluids Market Share of 42% and 41% for the three and twelve months ended December 31, 2025, respectively, compared to 36% and 34% for the three and twelve months ended December 31, 2024, respectively.

Adjusted EBITDAC set a quarterly record at $113.2 million, representing an increase of 10% compared to both Q3 2025 and Q4 2024. Q4 2025 Adjusted EBITDAC as a percentage of revenue of 17.0% improved from 16.6% in Q3 2025 and came in line with Q4 2024. The improvement to Adjusted EBITDAC for the three months ended December 31, 2025, was driven by record quarter revenue levels combined with strong margins, an attractive product mix, and continued increased service intensity. For the twelve months ended December 31, 2025, Adjusted EBITDAC set a record at $404.6 million, up from $403.2 million for the twelve months ended December 31, 2024, and Adjusted EBITDAC as a percentage of revenue decreased to 16.2% from 17.1% a year ago. Adjusted EBITDAC benefitted from record quarter revenue levels, an attractive product mix, and continued increased service intensity, partially offset by personnel investments to support new business initiatives in the previous quarters.

Net income for the three and twelve months ended December 31, 2025, increased 63% to $68.3 million and 7% to $204.7 million, respectively, relative to the comparable periods of 2024. The increases in both the three and twelve month periods were driven by record revenue, a foreign exchange gain associated with the depreciation of the US dollar, and strong margins. The twelve month period further benefited from lower stock-based compensation expense, driven by more modest share price appreciation compared to the prior year combined with a lower number of cash-settled awards outstanding.

During the quarter, CES returned $60.6 million to shareholders (Q4 2024 – $45.1 million), through $51.4 million in shares repurchased under its NCIB and its quarterly dividend of $9.2 million (Q4 2024 – $38.2 million and $6.9 million, respectively). For the twelve months ended December 31, 2025, CES returned $174.9 million to shareholders (2024 – $129.9 million), through $140.1 million in shares repurchased under its NCIB and its quarterly dividends of $34.8 million (2024 – $103.1 million and $26.9 million, respectively).

CES generated $84.2 million in Funds Flow from Operations in Q4 2025, compared to $85.8 million generated in Q3 2025 and $68.8 million generated in Q4 2024. For the twelve months ended December 31, 2025, CES generated $324.4 million of Funds Flow from Operations compared to $293.0 million in 2024. Funds Flow from Operations excludes the impact of working capital, and is reflective of the continued strong surplus free cash flow generated in 2025.

For Q4 2025, net cash provided by operating activities totaled $107.6 million compared to $51.6 million in Q3 2025, and $62.2 million in Q4 2024. The improvement to Cash Flow From Operations for the three months ended December 31, 2025, was driven by strong financial performance combined with a working capital harvest in the current period. For the twelve months ended December 31, 2025, net cash provided by operating activities of $285.4 million compared to $304.7 million for the twelve months ended December 31, 2024. The decrease in net cash provided by operating activities was driven by an increase to working capital requirements to support record revenue levels when compared to the prior year. 

CES generated $78.4 million in Free Cash Flow in Q4 2025, compared to $27.2 million generated in Q3 2025, and $34.6 million generated in Q4 2024. The improvement to Free Cash Flow for the three months ended December 31, 2025, was driven by strong financial performance combined with a working capital harvest in the current period. For the twelve months ended December 31, 2025, CES generated $166.5 million of Free Cash Flow compared to $186.9 million in 2024. The year over year decrease was driven by elevated working capital requirements to support record revenue levels and increased lease repayments. Free Cash Flow includes the impact of quarterly working capital variations, net of capital expenditures, and lease repayments.

As at December 31, 2025, CES had a Working Capital Surplus of $693.4 million, which decreased from $713.9 million at September 30, 2025, and compared to $681.1 million at December 31, 2024. The movement during the quarter was driven by increases to accounts payable and accrued liabilities, and a decrease in inventory on favorable timing of the procurement cycle, countering the increase to record quarterly revenue levels. The increase in Working Capital Surplus year over year was driven by record revenue levels resulting in an increase in accounts receivable, partly offset by a decrease in inventory and higher accounts payable and accrued liabilities. The Company continues to focus on working capital optimization benefiting from the high quality of its customers, diligent internal credit monitoring processes, and strategic procurement initiatives.  

As at December 31, 2025, CES had Total Debt of $496.6 million compared to $510.3 million at September 30, 2025, and $452.6 million at December 31, 2024. Included in Total Debt at December 31, 2025, is the Senior Facility of $109.3 million (December 31, 2024 – $148.8 million), $275.0 million of Senior Notes (December 31, 2024 – $200.0 million), and lease obligations of $99.2 million (December 31, 2024 – $91.9 million). The decrease in Total Debt during the three month period was driven by strong financial performance in the period combined with a working capital harvest, partially offset by elevated shareholder returns. The increase in Total Debt compared to December 31, 2024, was driven by increased investments in working capital combined with elevated shareholder returns, partially offset by strong financial performance achieved throughout the year. 

On October 23, 2025, the Company completed the private placement of $75.0 million of 6.875% senior unsecured notes (the “Additional Senior Notes”) due May 24, 2029, at a premium price of $1,031.25 per $1,000 principal amount of Senior Notes. The Additional Senior Notes were issued under the indenture governing the Company’s $200.0 million of Senior Notes and accordingly will form a single series with such previously issued Senior Notes. This financing further improves CES’ capital structure and provides ample liquidity to support identified growth opportunities.

Working Capital Surplus exceeded Total Debt at December 31, 2025, by $196.8 million (December 31, 2024 – $228.5 million). As of the date of this press release, the Company had total long-term debt of approximately $398.0 million, comprised of a net draw on its Senior Facility of approximately $123.0 million and its outstanding $275.0 million Senior Notes due May 24, 2029.

Strategic Acquisition: On June 1, 2025, CES closed the acquisition of substantially all of the business assets of Fossil Fluids LLC. (“Fossil Fluids”). Fossil Fluids provides independent drilling fluids solutions for the upstream oil and gas industry, with a focus on servicing the Mid-Continent region. Operating under AES Drilling Fluids, the acquisition augments the Company’s regional operations and will be enhanced by CES’ advanced technology and supply chain capabilities, extensive customer reach in its North American platform, and vertically integrated business model. The aggregate purchase price was $14.2 million consisting of $7.0 million in up front cash consideration and $7.2 million in deferred consideration, which is payable in cash as an earn-out upon achieving certain EBITDA thresholds over a three-year period post close.

Outlook

The resilient demand drivers from developing countries, growing LNG and AI related power requirements, and global support of energy transition initiatives, combined with depletion of existing resources, reduced investment in the upstream oil and gas sector over recent years, and diminished available inventory quality, has necessitated increased service intensity and advanced chemical treatment for available resources. The result is a continuation of constructive end markets for CES’ products and services which enhance drilling and production performance.

In light of economic uncertainty, OPEC+ cadence of production cut reversals, and ongoing global conflicts, energy supply-demand dynamics have remained resilient. Industry fundamentals continue to support critical drilling and production activity for oil and natural gas as depressed global exploration activity and diminishing high-quality drilling locations provide cautious optimism for suitable pricing over the mid to longer term. In the shorter term the situation is more fluid as customers are closely monitoring fluctuating oil and gas pricing in the context of their inherent production economics which may impact activity levels, spending plans, and, by extension, product pricing. While the current political landscape and impact of recently imposed tariffs in both the US and Canada continue to generate potential  near term uncertainty, including within the energy sector, CES’ business model provides relative insulation due to its significant proportion of revenue derived in the US versus Canada, its vertically integrated business models in both countries, and flexible supply chain capabilities.

CES expects to benefit from secular trends in upstream activity, increased service intensity levels, and adoption of advanced critical chemical solutions by capitalizing on its established infrastructure, industry leading positioning, vertically integrated business model, and strategic procurement practices.

Commensurate with current record revenue levels, CES expects 2026 capital expenditures, net of proceeds on disposals of assets, to be approximately $90.0 million, weighted equally between maintenance and expansion capital to support sustained activity levels and business development opportunities. CES plans to continue its disciplined and prudent approach to capital expenditures and will adjust its plans as required to support prudent growth initiatives throughout divisions.

CES has proactively managed both the duration and the flexibility of its debt. In April 2025, CES amended, extended, and upsized its Senior Facility, with improved terms and a maturity extension until November 2028, and in October 2025, CES successfully issued an additional $75.0 million of Senior Notes due May 24, 2029, on favourable terms. The combination of the Senior Notes and the Senior Facility further strengthens the Company’s capital structure, reduces the cost of capital, and effectively addresses CES’ near-term and foreseeable longer-term requirements. CES routinely considers its capital structure, including increasing or decreasing the capacity of its Senior Facility, issuance or redemption of Senior Notes, and other potential financing options. 

CES’ underlying business model is capex light and asset light, enabling the generation of significant surplus free cash flow. As our customers endeavor to maintain or grow production in the current environment, CES will leverage its established infrastructure, business model, and nimble customer-oriented culture to deliver superior products and services to the industry. CES sees the consumable chemical market increasing its share of the oilfield spend as operators continue to: drill longer reach laterals and drill them faster; expand and optimize the utilization of pad drilling; increase the intensity and size of their fracs; and require increasingly technical and specialized chemical treatments to effectively maintain existing cash flow generating wells and treat growing production volumes and water cuts from new wells.

Conference Call Details

With respect to the fourth quarter results, CES will host a conference call / webcast at 9:00 am MT (11:00 am ET) on Wednesday, March 11, 2026. The link to webcast and dial-in information can be found at www.cesenergysolutions.com. A recording of the live audio webcast of the conference call will also be available on our website at www.cesenergysolutions.com. The webcast will be archived for approximately 90 days.

Financial Highlights

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