Toromont Industries Ltd.

Consolidated revenue increased 16% in Q2 and 15% in the first half of 2026. Operating income increased 41% in the quarter and 42% year-to-date, while basic EPS was $1.53 in Q2 and $2.66 year-to-date. Net earnings were largely unchanged versus last year in Q2 and increased 9% or $18.4 million in the first six months. Gross profit margins improved across the company; on the Equipment Group, gross profit margins rose 270 basis points in Q2 and 330 basis points year-to-date, while CIMCO margins fell 90 basis points in Q2 and 120 basis points year-to-date. For guidance, management did not give formal quarterly or annual numerical guidance, but said backlog continues to grow nicely at $2.9 billion, roughly 60% of Equipment Group backlog is expected to deliver over the next 12 months, and roughly 75% of CIMCO backlog is expected to be realized over the next 12 months. Management also said AVL orders continue to be taken for delivery in 2027, Charlotte is expected to be at full capacity coming out of Q3, and the new Hamilton-area facility is expected to begin production sometime mid-2027.

Mike McMillan said the quarter reflected solid execution across the business, with revenue and earnings growth driven by the Equipment Group, continued AVL expansion, and disciplined operations. He emphasized long-term priorities: safe and reliable operations, customer service, technician hiring, digital capability, and disciplined investment. His tone was constructive but cautious, noting trade uncertainty, FX volatility, and macro headwinds while highlighting strong liquidity and growing backlog.

John Doolittle highlighted the hard numbers: revenue up 16% in Q2, operating income up 41%, EPS at $1.53, and net earnings up 9% in the first half. He called out AVL revenue of $171 million in Q2 and purchase commitment expenses of $54.3 million in the quarter, versus $1.7 million a year ago, explaining that these expenses weigh on reported results but not the underlying base business trend. He also said the company ended the first half with $1.2 billion in cash, $449 million of credit capacity, and a negative 13% net debt-to-total capitalization ratio, and noted the regular quarterly dividend of $0.56 per share.

Analysts focused heavily on AVL: management said the $1 billion order is made up of multiple purchase orders, largely for the U.S. East Coast, and is mostly to be delivered in 2027. They said the new Hamilton-area land purchase was about $20 million, total build-out is roughly $75 million all-in, and the new site should add roughly 40% to 50% capacity to the overall business when fully ramped. Questions also centered on margins, with management saying AVL margins are still solid and not expected to see a major directional move, though the new facility will bring some cost ahead of revenue; on the broader equipment market, management said activity is improving modestly but supply remains well-balanced rather than tight.