Earnings release
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NEWS RELEASE Major Drilling Announces Record Quarterly Revenue for Its First Quarter 2027 MONCTON, New Brunswick (September 2, 2026) – Major Drilling Group International Inc. (“Major Drilling” or the “Company”) (TSX: MDI), the largest provider of drilling services to the mining sector, today reported results for the first quarter of Fiscal 2027, ended July 31, 2026. Quarterly Highlights: • Record quarterly revenue of $277.3 million, representing an 18.7% increase from the prior quarter and a 22.4% increase when compared to the same period last year. • Adjusted gross margin(1) of 24.0%, an increase from the 22.0% recorded in the prior quarter, though below the 25.2% recorded for the same period last year. • Generated EBITDA(1) of $37.2 million, a 15.9% increase when compared to the $32.1 million recorded for the same period last year. • Net earnings of $14.5 million (or $0.18 per share), a 43.6% increase when compared to net earnings of $10.1 million (or $0.12 per share) recorded for the same period last year. “The Company started the fiscal year on a strong note, with each region contributing double-digit revenue growth when compared to the prior year period. This was primarily driven by the deployment of additional rigs into the field throughout the quarter, combined with a gradually improving pricing environment. As a result, revenue increased by 22.4% year-over-year to $277.3 million, setting a new quarterly record in the Company’s 46-year history,” said Denis Larocque, President and CEO of Major Drilling. “Activity in Canada and the US continued to accelerate following prior exploration budget increases by senior mining customers. Growth was driven by both the award of new contracts and the addition of rigs to existing projects as customers expanded their drilling programs. Juniors are increasingly deploying capital following the significant increase in financing activity earlier in the calendar year. Activity levels in the South and Central American region continued to increase, driven primarily by incremental growth in Peru, while Mexico, Argentina, and Brazil also saw increases in activity levels. The Australasia and Africa segment also saw meaningful growth, driven primarily by Australia, where senior mining companies continued to increase their exploration efforts through expanded drill programs,” Mr. Larocque continued. “The adjusted gross margin of 24.0% in the quarter marked further improvement from the 22.0% realized in the prior quarter, reflecting ongoing pricing improvements, muted by ramp-up costs associated with new contracts, higher labour and consumable costs, and investments in workforce training and development. While these factors remain a near-term headwind, we expect margins to continue improving as ramp-up costs subside and pricing initiatives take hold,” noted Mr. Larocque. “Given strong revenue growth, the Company generated EBITDA of $37.2 million in the first quarter of Fiscal 2027, a 15.9% increase from the $32.1 million generated in the prior year period. Net cash (1) was $15.7 million, down from the end of the prior quarter as higher rig utilization resulted in a temporary increase in working capital requirements. Reflecting our ongoing commitment to maintaining a high-quality global fleet of rigs, we incurred $13.5 million in capital expenditures during the quarter, with the addition of 5 new drills and support equipment, while 10 older, less efficient drills were retired, bringing the total rig count to 683 at quarter-end,” said Ian Ross, CFO of Major Drilling.
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“Turning to the outlook, we expect rigs to continue to be gradually deployed into the field at incrementally higher prices as seniors continue to drive increasing activity levels as a result of larger exploration budgets, while juniors continue to move through more robust exploration programs following the substantial increase in financing activity earlier in the calendar year. While demand grows, the industry continues to navigate through a challenging labour market. We expect to improve pricing on new contracts and renewals to offset cost increases and improve margins as the fiscal year progresses,” continued Mr. Larocque. “The Company continues to take proactive measures with respect to the hiring and retention of drill crews as labour remains our most significant challenge. As the availability of experienced drillers tightens, we have increased the number of trainee drillers, which has temporarily impacted productivity and is expected to continue doing so as they gain experience. In the key areas where the labour shortage is most problematic, particularly with respect to Canada and the U.S., we have scaled up our efforts at our training centers. The goals for these centers are to improve the retention rate of new hires, while also accelerating their learning curve and reducing overall training time without compromising safety,” concluded Mr. Larocque. In millions of Canadian dollars (except earnings per share) Q1 2027 Q1 2026 Revenue $ 277.3 $ 226.6 Gross margin 18.6% 18.6% Adjusted gross margin 24.0% 25.2% EBITDA 37.2 32.1 As percentage of revenue 13.4% 14.1% Net earnings 14.5 10.1 Earnings per share 0.18 0.12 (1) See “Non-IFRS Financial Measures” First Quarter Ended July 31, 2026 Revenue for the first quarter of Fiscal 2027 reached $277.3 million, up 22.4% from revenue of $226.6 million recorded in the same quarter last year. The favourable foreign exchange translation impact on revenue, when compared to the effective rates for the same period last year, was approximately $8 million, while the impact on net earnings was minimal as expenditures in foreign jurisdictions tend to be in the same currency as revenue. Revenue for the quarter from Canada - U.S. drilling operations increased by 31.6% to $110.7 million, compared to the same quarter last year. Growth was led by new contract starts and continued price increases, while labour availability remained a constraint across the region. South and Central American revenue increased by 18.4% to $113.4 million for the quarter, compared to the same quarter last year. Peru continued to be the largest contributor to the region's growth, supported by new project activity, while Mexico and Brazil also grew with new project starts. Australasian and African revenue increased by 13.7% to $53.2 million, compared to the same quarter last year. Growth in the region was driven by increased demand from seniors in Australia. Gross margin percentage for the quarter as well as for the same quarter last year, was 18.6%. Depreciation expense totaling $15.2 million is included in direct costs for the current quarter, versus $14.9 million in the same quarter last year. Adjusted gross margin, which excludes depreciation expense, was 24.0% for the quarter, compared to 25.2% for the same quarter last year. The year-over-year decline in adjusted gross margin was primarily attributable to ongoing wage adjustments and training costs associated with the tight North American labour market, along with ramp-up costs across various operations and weather-related disruptions in Chile. These factors were partially offset by gradual pricing improvements, particularly within North America. General and administrative costs were $23.8 million, an increase of $2.4 million compared to the same quarter last year, driven by annual inflationary wage adjustments and additional costs to address rapid growth in our busiest regions. Other expenses were $6.0 million, up from $3.3 million in the same quarter last year, due primarily to increased incentive compensation costs resulting from improved profitability and higher stock-based compensation costs tied to the Company's share price performance.
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Foreign exchange loss was $1.2 million, compared to a loss of $1.5 million for the same quarter last year. While the Company's reporting currency is the Canadian dollar, various jurisdictions have net monetary assets or liabilities exposed to various other currencies. The income tax provision for the quarter was an expense of $4.6 million, compared to $3.9 million for the same quarter last year. The increase is a result of increased profitability, while the lower effective rate is due to utilization of previously unrecognized losses. Net earnings were $14.5 million or $0.18 per share ($0.18 per share diluted) for the quarter, compared to net earnings of $10.1 million or $0.12 per share ($0.12 per share diluted) for the prior year quarter. Non-IFRS Financial Measures The Company’s financial data has been prepared in accordance with IFRS ®, with the exception of certain financial measures detailed below. The measures below have been used consistently by the Company’s management team in assessing operational performance on both segmented and consolidated levels, and in assessing the Company’sfinancial strength. The Company believes these non-IFRS financial measures are key, for both management and investors, in evaluating performance at a consolidated level and are commonly reported and widely used by investors and lending institutions as indicators of a company’soperating performance and ability to incur and service debt, and as a valuation metric. These measures do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similarly titled measures presented by other publicly traded companies and should not be construed as an alternative to other financial measures determined in accordance with IFRS. EBITDA - earnings before interest, taxes, depreciation, and amortization: (in $000s CAD) Q1 2027 Q1 2026 Net earnings $ 14,483 $ 10,071 Finance (revenues) costs 436 632 Income tax provision 4,649 3,889 Depreciation and amortization 17,595 17,466 EBITDA $ 37,163 $ 32,058 Adjusted gross profit/margin - excludes depreciation expense: (in $000s CAD) Q1 2027 Q1 2026 Total revenue $ 277,346 $ 226,618 Less: direct costs 225,897 184,461 Gross profit 51,449 42,157 Add: depreciation 15,238 14,911 Adjusted gross profit 66,687 57,068 Adjusted gross margin 24.0% 25.2% Net cash (debt) – cash net of debt, excluding lease liabilities reported under IFRS 16 Leases: (in $000s CAD) July 31, 2026 April 30, 2026 Cash and cash equivalents $ 59,339 $ 62,631 Contingent consideration (15,557) (14,695) Long-term debt (28,036) (27,352) Net cash (debt) $ 15,746 $ 20,584
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Forward-Looking Statements This news release includes certain information that may constitute “forward-looking information” under applicable Canadian securities legislation. All statements, other than statements of historical facts, included in this news release that address future events, developments, or performance that the Company expects to occur (including management’s expectations regarding the Company’s objectives, strategies, financial condition, results of operations, cash flows and businesses) are forward-looking statements. Forward-looking statements are typically identified by future or conditional verbs such as “outlook”, “believe”, “anticipate”, “estimate”, “project”, “expect”, “intend”, “plan”, and terms and expressions of similar import. All forward-looking information in this news release is qualified by this cautionary note. Forward-looking information is necessarily based upon various estimates and assumptions including, without limitation, the expectations and beliefs of management related to the factors set forth below. While these factors and assumptions are considered reasonable by the Company as at the date of this document in light of management’s experience and perception of current conditions and expected developments, these statements are inherently subject to significant business, economic and competitive uncertainties and contingencies. Known and unknown factors could cause actual results to differ materially from those projected in the forward-looking statements and undue reliance should not be placed on such statements and information. Such forward-looking statements are subject to a number of risks and uncertainties that include, but are not limited to: the level of activity in the mining industry and the demand for the Company's services; global and local political and economic environments and conditions; competitive pressures; exposure to currency movements (which can affect the Company's revenue in Canadian dollars); currency restrictions; measures affecting trade relations between countries, including the imposition of tariffs and countermeasures, as well as the possible impacts on the Company's clients, operations and, more generally, the economy; skilled labour availability/retention for drill crews; the level of funding for the Company's clients (particularly for junior mining companies); the integration of business acquisitions and the realization of the intended benefits of such acquisitions; changes in jurisdictions in which the Company operates (including changes in regulation); efficient management of the Company's growth; the Company's dependence on key customers; the impact of operational changes; safety of the Company's workforce; risks and uncertainties relating to climate change and natural disasters; the geographic distribution of the Company's operations; failure by counterparties to fulfill contractual obligations; disease outbreak; as well as other risk factors described under “General Risks and Uncertainties” in the Company’s MD&A for the year ended April 30, 2026, available on the SEDAR+ website at www.sedarplus.ca. Should one or more risk, uncertainty, contingency, or other factor materialize or should any factor or assumption prove incorrect, actual results could vary materially from those expressed or implied in the forward-looking information. Forward-looking statements made in this document are made as of the date of this document and the Company disclaims any intention and assumes no obligation to update any forward-looking statement, even if new information becomes available, as a result of future events, or for any other reasons, except as required by applicable securities laws. About Major Drilling Major Drilling Group International Inc. is the world’s largest provider of drilling services in the metals and mining industry. The diverse needs of the Company’sglobal clientele are met through field operations and registered offices that span across North America, South America, Australia, Asia, Africa, and Europe. Established in 1980, the Company has grown to become a global brand in the mining space, known for tackling many of the world’smost challenging drilling projects. Supported by a highly skilled workforce, Major Drilling is led by an experienced senior management team that has steered it through various economic and mining cycles, supported by regional managers known for delivering decades of superior project management. Major Drilling is regarded as an industry expert at delivering a wide range of drilling services, including reverse circulation, surface and underground coring, directional, sonic, geotechnical, environmental, water-well, coal-bed methane, shallow gas, underground percussive/longhole, and surface drill and blast, along with the ongoing development and evolution of its suite of data and technology-driven innovation services.
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Webcast/Conference Call/Annual General Meeting Information Major Drilling Group International Inc. will provide a simultaneous webcast and conference call to discuss its quarterly results on Thursday, September 3, 2026 at 8:00 am (ET). To access the live webcast, which includes a slide presentation, please visit the Investors/Webcasts & Presentations section of the Major Drilling website and click on the link or click here: Webcast Link. Please note that this is listen-only mode. To participate in the conference call, please pre-register using this Link. Registrants will receive an email confirmation with dial-in details. For those unable to participate, a replay of the webcast will be archived for one year and can be accessed on the Major Drilling website at www.majordrilling.com/investors/webcasts/. Major Drilling Group International Inc.’sAnnual General Meeting will be held on Thursday, September 3, 2026 at 3:30pm EDT in person at McCarthy Tétrault, 66 Wellington St. West, 53rd Floor, Clarkson Room, Toronto ON M5K 1E6, and virtually at www.virtualshareholdermeeting.com/MDI2026. For further information: Ryan Hanley Director of Capital Markets Tel: (506) 227-2426 ir@majordrilling.com
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Major Drilling Group International Inc. Interim Condensed Consolidated Statements of Operations (in thousands of Canadian dollars, except per share information) (unaudited) Three months ended July 31 2026 2025 TOTAL REVENUE $ 277,346 $ 226,618 DIRECT COSTS (note 7) 225,897 184,461 GROSS PROFIT 51,449 42,157 OPERATING EXPENSES General and administrative (note 7) 23,794 21,368 Amortization of intangible assets 1,400 1,530 Other expenses (revenues) 6,020 3,291 (Gain) loss on disposal of property, plant and equipment (573) (120) Foreign exchange (gain) loss 1,240 1,496 Finance (revenues) costs 436 632 32,317 28,197 EARNINGS BEFORE INCOME TAX 19,132 13,960 INCOME TAX EXPENSE (RECOVERY) (note 8) Current 6,438 6,597 Deferred (1,789) (2,708) 4,649 3,889 NET EARNINGS $ 14,483 $ 10,071 EARNINGS PER SHARE (note 9) Basic $ 0.18 $ 0.12 Diluted $ 0.18 $ 0.12
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Major Drilling Group International Inc. Interim Condensed Consolidated Statements of Comprehensive Earnings (in thousands of Canadian dollars) (unaudited) Three months ended July 31 2026 2025 NET EARNINGS $ 14,483 $ 10,071 OTHER COMPREHENSIVE EARNINGS Items that may be reclassified subsequently to profit or loss Unrealized gain (loss) on foreign currency translations 11,669 (537) Unrealized gain (loss) on derivatives (net of tax) (934) 106 COMPREHENSIVE EARNINGS $ 25,218 $ 9,640
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Major Drilling Group International Inc. Interim Condensed Consolidated Statements of Changes in Equity For the three months ended July 31, 2026 and 2025 (in thousands of Canadian dollars) (unaudited) Retained Other Share-based Foreign currency Share capital earnings reserves payments reserve translation reserve Total BALANCE AS AT MAY 1, 2025 $ 263,108 $ 177,695 $ (293) $ 3,615 $ 77,973 $ 522,098 Exercise of stock options 345 - - (96) - 249 Share-based compensation - - - 11 - 11 Stock options expired/forfeited - 22 - (22) - - 263,453 177,717 (293) 3,508 77,973 522,358 Comprehensive earnings: Net earnings - 10,071 - - - 10,071 Unrealized gain (loss) on foreign currency translations - - - - (537) (537) Unrealized gain (loss) on derivatives - - 106 - - 106 Total comprehensive earnings - 10,071 106 - (537) 9,640 BALANCE AS AT JULY 31, 2025 $ 263,453 $ 187,788 $ (187) $ 3,508 $ 77,436 $ 531,998 BALANCE AS AT MAY 1, 2026 $ 266,789 $ 199,217 $ 2,071 $ 1,839 $ 86,098 $ 556,014 Exercise of stock options - - - - - - Share-based compensation - - - - - - Stock options expired/forfeited - - - - - - 266,789 199,217 2,071 1,839 86,098 556,014 Comprehensive earnings: Net earnings - 14,483 - - - 14,483 Unrealized gain (loss) on foreign currency translations - - - - 11,669 11,669 Unrealized gain (loss) on derivatives - - (934) - - (934) Total comprehensive earnings - 14,483 (934) - 11,669 25,218 BALANCE AS AT JULY 31, 2026 $ 266,789 $ 213,700 $ 1,137 $ 1,839 $ 97,767 $ 581,232
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Major Drilling Group International Inc. Interim Condensed Consolidated Statements of Cash Flows (in thousands of Canadian dollars) (unaudited) Three months ended July 31 2026 2025 OPERATING ACTIVITIES Earnings before income tax $ 19,132 $ 13,960 Operating items not involving cash Depreciation (note 7) 16,195 15,936 Amortization of intangible assets 1,400 1,530 (Gain) loss on disposal of property, plant and equipment (573) (120) Share-based compensation - 11 Finance (revenues) costs recognized in earnings before income tax 436 632 36,590 31,949 Changes in non-cash operating working capital items (20,436) (13,118) Finance revenues received (costs paid) (436) (632) Income taxes paid (3,965) (3,266) Cash flow from (used in) operating activities 11,753 14,933 FINANCING ACTIVITIES Repayment of lease liabilities (413) (384) Issuance of common shares due to exercise of stock options - 249 Change in long-term debt 684 (24) Cash flow from (used in) financing activities 271 (159) INVESTING ACTIVITIES Change in investments (3,500) - Acquisition of property, plant and equipment (note 6) (13,462) (14,380) Proceeds from disposal of property, plant and equipment 1,127 193 Cash flow from (used in) investing activities (15,835) (14,187) Effect of exchange rate changes 519 504 INCREASE (DECREASE) IN CASH (3,292) 1,091 CASH, BEGINNING OF THE PERIOD 62,631 45,987 CASH, END OF THE PERIOD $ 59,339 $ 47,078
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Major Drilling Group International Inc. Interim Condensed Consolidated Balance Sheets As at July 31, 2026 and April 30, 2026 (in thousands of Canadian dollars) (unaudited) July 31, 2026 April 30, 2026 ASSETS CURRENT ASSETS Cash and cash equivalents $ 59,339 $ 62,631 Trade and other receivables (note 11) 207,121 179,484 Income tax receivable 7,982 9,016 Inventories 117,132 111,239 Prepaid expenses 15,676 9,982 407,250 372,352 PROPERTY, PLANT AND EQUIPMENT (note 6) 283,305 281,467 RIGHT-OF-USE ASSETS 10,950 7,491 INVESTMENTS 17,255 14,105 DEFERRED INCOME TAX ASSETS 5,696 4,540 GOODWILL 70,507 67,979 INTANGIBLE ASSETS 17,336 18,062 $ 812,299 $ 765,996 LIABILITIES CURRENT LIABILITIES Trade and other payables $ 156,971 $ 142,131 Income tax payable 4,485 3,115 Current portion of lease liabilities 2,278 1,616 Current portion of contingent consideration 6,425 6,561 170,159 153,423 LEASE LIABILITIES 9,214 6,177 CONTINGENT CONSIDERATION 9,132 8,134 LONG-TERM DEBT 28,036 27,352 DEFERRED INCOME TAX LIABILITIES 14,526 14,896 231,067 209,982 SHAREHOLDERS' EQUITY Share capital 266,789 266,789 Retained earnings 213,700 199,217 Other reserves 1,137 2,071 Share-based payments reserve 1,839 1,839 Foreign currency translation reserve 97,767 86,098 581,232 556,014 $ 812,299 $ 765,996
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MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JULY 31, 2026 AND 2025 (UNAUDITED) (in thousands of Canadian dollars, except per share information) 1. NATURE OF ACTIVITIES Major Drilling Group International Inc. (the “Company”) is incorporated under the Canada Business Corporations Act and has its head office at 111 St. George Street, Moncton, NB, Canada. The Company’scommon shares are listed on the Toronto Stock Exchange (“TSX”). The principal source of revenue consists of contract drilling for companies primarily involved in mining and mineral exploration. The Company has operations in North America, South America, Australia, Asia, and Africa. 2. BASIS OF PRESENTATION Statement of compliance These Interim Condensed Consolidated Financial Statements have been prepared in accordance with IAS 34 Interim Financial Reporting (“IAS 34”) as issued by the International Accounting Standards Board (“IASB”) and using the accounting policies as outlined in the Company’sannual Consolidated Financial Statements for the year ended April 30, 2026. On September 2, 2026, the Board of Directors authorized the financial statements for issue. Basis of consolidation These Interim Condensed Consolidated Financial Statements incorporate the financial statements of the Company and entities controlled by the Company. Control is achieved when the Company is exposed or has rights to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. The results of subsidiaries acquired or disposed of during the period are included in the Consolidated Statements of Operations from the effective date of acquisition or up to the effective date of disposal, as appropriate. Intercompany transactions, balances, income and expenses are eliminated on consolidation, where appropriate. Basis of preparation These Interim Condensed Consolidated Financial Statements have been prepared based on the historical cost basis, except for certain financial instruments that are measured at fair value, using the same accounting policies and methods of computation, as presented in the Company’sannual Consolidated Financial Statements for the year ended April 30, 2026. 3. APPLICATION OF NEW AND REVISED IFRS® ACCOUNTING STANDARDS The Company has not applied the following IASB standard that has been issued, but is not yet effective: • IFRS 18 (as issued in 2024) - Presentation and Disclosure of Financial Statements - effective for periods beginning on or after January 1, 2027, with earlier application permitted. The standard replaces IAS 1, Presentation of Financial Statements, and includes requirements for the presentation and disclosure of information in financial statements, such as the presentation of subtotals within the statement of operations and the disclosure of management-defined performance measures within the financial statements. The Company has performed a detailed preliminary assessment of the application of IFRS 18 to its financial statements, including a preliminary classification of each statement of operations line item. IFRS 18 will not affect the recognition and measurement of items in the financial statements. The assessment remains in progress and continues to be reviewed with the Company's external auditor. The Company has implemented changes to its processes during the current period to capture information at the level of detail required under IFRS 18 for retrospective application. The Company will provide updated disclosure in subsequent periods as the assessment is finalized.
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MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JULY 31, 2026 AND 2025 (UNAUDITED) (in thousands of Canadian dollars, except per share information) 4. KEY SOURCES OF ESTIMATION UNCERTAINTY AND CRITICAL ACCOUNTING JUDGMENTS The preparation of financial statements, in conformity with IFRS Accounting Standards, requires management to make judgments, estimates and assumptions that are not readily apparent from other sources, which affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate is revised, if the revision affects only that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Significant areas requiring the use of management estimates relate to the useful lives of property, plant and equipment and intangible assets for depreciation and amortization purposes, inventory valuation, determination of income and other taxes, recoverability of deferred income tax assets, assumptions used in compilation of share-based payments, provisions, contingent considerations, impairment testing of goodwill, and impairment testing of intangible and long-lived assets. The Company applied judgment in determining the functional currency of the Company and its subsidiaries, the determination of cash-generating units (“CGUs”), the degree of componentization of property, plant and equipment, the recognition of provisions, and the determination of the probability that deferred income tax assets will be realized from future taxable earnings. 5. SEASONALITY OF OPERATIONS The third quarter (November to January) is normally the Company’sweakest quarter due to the slowdown of mining and exploration activities, often for extended periods over the holiday season. 6. PROPERTY, PLANT AND EQUIPMENT Capital expenditures for the three months ended July 31, 2026 were $13,462 (2025 - $14,380). The Company did not obtain direct financing for the three months ended July 31, 2026 or 2025. 7. EXPENSES BY NATURE Direct costs by nature were as follows: Q1 2027 Q1 2026 Depreciation $ 15,238 $ 14,911 Employee salaries and benefit expenses 98,202 82,881 Repairs and maintenance, materials, and consumables 109,063 85,275 Other 3,394 1,394 $ 225,897 $ 184,461 General and administrative expenses by nature were as follows: Q1 2027 Q1 2026 Depreciation $ 957 $ 1,025 Employee salaries and benefit expenses 13,030 11,577 Other general and administrative expenses 9,807 8,766 $ 23,794 $ 21,368
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MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JULY 31, 2026 AND 2025 (UNAUDITED) (in thousands of Canadian dollars, except per share information) 8. INCOME TAXES The income tax provision for the periods can be reconciled to accounting earnings before income tax as follows: Q1 2027 Q1 2026 Earnings before income tax $ 19,132 $ 13,960 Statutory Canadian corporate income tax rate 27% 27% Expected income tax provision based on statutory rate 5,166 3,769 Non-recognition of tax benefits related to losses 168 705 Utilization of previously unrecognized losses (2,051) (42) Other foreign taxes paid 378 467 Rate variances in foreign jurisdictions 405 (81) Permanent differences and other 583 (929) Income tax provision recognized in net earnings $ 4,649 $ 3,889 The Company periodically assesses its liabilities and contingencies for all tax years open to audit based upon the latest information available. For those matters where it is probable that an adjustment will be made, the Company records its best estimate of these tax liabilities, including related interest charges. Inherent uncertainties exist in estimates of tax contingencies due to changes in tax laws. While management believes they have adequately provided for the probable outcome of these matters, future results may include favourable or unfavourable adjustments to these estimated tax liabilities in the period the assessments are made, or resolved, or when the statutes of limitations lapse. 9. EARNINGS PER SHARE All of the Company’s earnings are attributable to common shares, therefore, net earnings are used in determining earnings per share. Q1 2027 Q1 2026 Net earnings $ 14,483 $ 10,071 Weighted average number of shares: Basic (000s) 82,236 81,865 Diluted (000s) 82,284 82,018 Earnings per share Basic $ 0.18 $ 0.12 Diluted $ 0.18 $ 0.12 As at July 31, 2026, all stock options were in-the-money. The calculation of diluted earnings per share for the period ended July 31, 2025 excludes the effect of 200,000 options as they were not in-the-money. The total number of shares outstanding on July 31, 2026 was 82,236,286 (2025 - 81,887,836).
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MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JULY 31, 2026 AND 2025 (UNAUDITED) (in thousands of Canadian dollars, except per share information) 10. SEGMENTED INFORMATION The Company’soperations are divided into the following three geographic segments, corresponding to its management structure: Canada - U.S.; South and Central America; and Australasia and Africa. The services provided in each of the reportable segments are essentially the same. The accounting policies of the segments are the same as those described in the Company’s annual Consolidated Financial Statements for the year ended April 30, 2026. Management evaluates performance based on earnings from operations in these three geographic segments before finance costs, general corporate expenses and income taxes. Data relating to each of the Company’sreportable segments is presented as follows: Q1 2027 Q1 2026 Revenue Canada - U.S.* $ 110,716 $ 84,070 South and Central America 113,434 95,763 Australasia and Africa 53,196 46,785 $ 277,346 $ 226,618 *Canada - U.S. includes revenue of $52,511 (2025 - $39,169) for Canadian operations. Q1 2027 Q1 2026 Earnings (loss) from operations Canada - U.S. $ 12,400 $ 6,160 South and Central America 6,836 6,241 Australasia and Africa 9,508 9,995 28,744 22,396 Finance (revenues) costs 436 632 General and corporate expenses** 9,176 7,804 Income tax 4,649 3,889 14,261 12,325 Net earnings $ 14,483 $ 10,071 **General and corporate expenses include expenses for corporate offices and stock-based compensation. Amounts presented in comparative periods for certain items have been allocated consistent with current year presentation. This allocation had no impact on consolidated net earnings. Q1 2027 Q1 2026 Capital expenditures Canada - U.S. $ 5,297 $ 1,285 South and Central America 4,865 10,674 Australasia and Africa 2,874 2,332 Unallocated and corporate assets 426 89 Total capital expenditures $ 13,462 $ 14,380
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MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JULY 31, 2026 AND 2025 (UNAUDITED) (in thousands of Canadian dollars, except per share information) 10. SEGMENTED INFORMATION (Continued) Q1 2027 Q1 2026 Depreciation and amortization Canada - U.S. $ 6,148 $ 6,554 South and Central America 7,084 6,225 Australasia and Africa 4,219 4,455 Unallocated and corporate assets 144 232 Total depreciation and amortization $ 17,595 $ 17,466 July 31, 2026 April 30, 2026 Identifiable assets Canada - U.S.* $ 251,249 $ 244,736 South and Central America 374,878 349,319 Australasia and Africa 250,823 233,442 Unallocated and corporate liabilities (64,651) (61,501) Total identifiable assets $ 812,299 $ 765,996 *Canada - U.S. includes property, plant and equipment as at July 31, 2026 of $53,300 (April 30, 2026 - $54,278) for Canadian operations. 11. FINANCIAL INSTRUMENTS Fair value The carrying values of cash, trade and other receivables, demand credit facilities and trade and other payables approximate their fair value due to the relatively short period to maturity of the instruments. The carrying value of contingent consideration and long-term debt approximates their fair value as the interest applicable is reflective of fair market rates. Financial assets and liabilities measured at fair value are classified and disclosed in one of the following categories: • Level 1 - quoted prices (unadjusted) in active markets for identical assets or liabilities; • Level 2 - inputs other than quoted prices included in level 1 that are observable for the assets or liabilities, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and • Level 3 - inputs for the assets or liabilities that are not based on observable market data (unobservable inputs). The Company enters into certain derivative financial instruments to manage its exposure to market risks, comprised of share-price forward contracts with a combined notional amount of $7,563, maturing at varying dates through June 2028. The fair value hierarchy requires the use of observable market inputs whenever such inputs exist. A financial instrument is classified to the lowest level of the hierarchy for which a significant input has been considered in measuring fair value. The Company’sderivatives, with fair values as follows, are classified as level 2 financial instruments and recorded in trade and other receivables (payables) in the Interim Condensed Consolidated Balance Sheets. There were no transfers of amounts between level 1, level 2 and level 3 financial instruments for the three months ended July 31, 2026. July 31, 2026 April 30, 2026 Share-price forward contracts $ 2,257 $ 4,930 Credit risk As at July 31, 2026, 95.2% (April 30, 2026 - 96.6%) of the Company’strade receivables were aged as current and 0.6% (April 30, 2026 - 0.7%) of the trade receivables were impaired.
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MAJOR DRILLING GROUP INTERNATIONAL INC. NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED JULY 31, 2026 AND 2025 (UNAUDITED) (in thousands of Canadian dollars, except per share information) 11. FINANCIAL INSTRUMENTS (Continued) The movements in the allowance for impairment of trade receivables during the periods were as follows: July 31, 2026 April 30, 2026 Opening balance $ 1,211 $ 2,179 Increase in impairment allowance 59 342 Recovery of amounts previously impaired - (893) Write-off charged against allowance - (431) Foreign exchange translation differences 7 14 Ending balance $ 1,277 $ 1,211 Foreign currency risk As at July 31, 2026, the most significant carrying amounts of net monetary assets and/or liabilities (which may include intercompany balances with other subsidiaries) that: (i) are denominated in currencies other than the functional currency of the respective Company subsidiary; and (ii) cause foreign exchange rate exposure, including the impact on earnings before income taxes (“EBIT”),if the corresponding rate changes by 10%, are as follows (in $000s CAD): Rate variance IDR/USD MNT/USD USD/AUD USD/ZAR PEN/USD USD/CLP USD/CAD Other Net exposure on monetary assets (liabilities) 10,053 7,540 6,030 (6,152) (6,975) (8,982) (17,030) (3,228) EBIT impact +/-10% 1,117 838 670 684 775 998 1,892 359 Liquidity risk The following table details contractual maturities for the Company’sfinancial liabilities: 1 year 2-3 years 4-5 years Thereafter Total Trade and other payables $ 156,971 $ - $ - $ - $ 156,971 Lease liabilities (interest included) 2,900 5,318 3,009 2,103 13,330 Contingent consideration (undiscounted) 7,008 11,563 - - 18,571 Long-term debt (interest included) 1,604 28,437 - - 30,041 $ 168,483 $ 45,318 $ 3,009 $ 2,103 $ 218,913