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GFL transaction: The board unanimously recommends the proposed sale to GFL—which management says offers a meaningful premium (about 23% to the 60‑day VWAP) and lets shareholders retain upside via equity in the combined company—ahead of a May 27 shareholder vote, with a Competition Bureau review expected to take about 3–5 months and voting support agreements covering ~21% of shares.
Q1 financials: Secure reported Adjusted EBITDA of CAD 137 million on CAD 383 million revenue (36% margin) and CAD 101 million of funds flow from operations, and management now expects results toward the high end of 2026 EBITDA guidance while increasing growth capital to ~CAD 100 million from CAD 75 million.
Capital allocation and business momentum: SECURE raised its dividend 5% to CAD 0.105/share, repurchased nearly 1 million shares, and prioritized investment in higher‑margin waste streams and metals recycling (including additional rail cars), with an organic project pipeline of roughly CAD 300–400 million over the next two years.
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Secure Energy Services (TSE:SES) executives used the company’s first-quarter 2026 earnings call to highlight a “strong start” to the year, increased growth capital spending, and management’s rationale for a recently announced transaction with GFL Environmental ahead of a May 27 shareholder vote.
President and CEO Allen Gransch opened the call by focusing on the GFL transaction and the materials filed in connection with the upcoming shareholder meeting. Gransch said the deal “delivers immediate and certain value to shareholders at an attractive valuation,” including what he described as a “meaningful premium” to recent trading levels, while also allowing investors to “participate in future upside through equity ownership in the combined company.”
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Gransch said the board unanimously recommends shareholders vote in favor of the transaction after reviewing strategic alternatives. He said the board considered factors including “the opportunity to crystallize the value created,” participation in future value creation through GFL equity, and what he characterized as a limited number of alternative transactions compared with the “risk-adjusted value of continuing as a standalone business.”
Gransch also said the board believed GFL shares were trading below historical levels and “do not fully reflect the underlying value of the business,” creating potential for a future re-rating. In closing remarks, he said the transaction has the support of the board and a special committee of independent directors, and noted voting support agreements representing approximately 21% of outstanding shares from certain large shareholders, directors, and executive officers.
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During the Q&A, RBC Capital Markets analyst Arthur Nagorny asked why the company chose to pursue a sale now, given what he called a supportive oil price backdrop. Gransch said SECURE had executed a strategic repositioning within the waste sector and that the transaction “accelerates that recognition, capturing that intrinsic value today.” He pointed to what he described as a 23% premium to the 60-day volume-weighted average price and noted shareholders would retain “meaningful participation” through equity in the combined entity.
On regulatory review, Gransch said the company was preparing its submission to the Competition Bureau and that, at the time of the call, management was not expecting “any sort of material divestments,” while acknowledging the analysis was ongoing and the process could take “3-5 months.”
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CFO Chad Magus reported first-quarter Adjusted EBITDA of CAD 137 million on revenue of CAD 383 million, for an Adjusted EBITDA margin of 36%. Magus said revenue growth was modest, but EBITDA grew more strongly due to “a continued shift toward higher-margin waste streams, disciplined pricing, and cost control,” aligning with management’s focus on “quality of earnings over top-line growth.”
Magus said the company generated CAD 101 million of funds flow from operations in the quarter, which he said supported both the capital program and shareholder returns.
On balance sheet items, Magus pointed to restricted cash of CAD 31 million, which he said reflected margin posted on hedging positions due to “the sharp movement of oil prices during March.” He said the hedging-related margin requirements were “fully offset by physical positions” expected to be realized at a higher price. Magus also noted a higher-than-normal cash balance of CAD 59 million, attributing it to a large payment received on the last day of the quarter.
Magus said the revolver balance had been paid down by CAD 76 million since quarter-end to approximately CAD 350 million.
Magus said SECURE increased its dividend by 5% to CAD 0.105 per share paid quarterly. The company also repurchased nearly 1 million shares at a weighted average price “just over CAD 17.” In addition, Magus said SECURE spent CAD 22 million to advance previously announced plans, reiterating capital allocation priorities as: “Invest in the business, maintain a strong balance sheet, and return capital to shareholders.”
Gransch said management now expects results to trend toward the high end of its 2026 Adjusted EBITDA guidance range and that the company is increasing growth capital to approximately CAD 100 million from CAD 75 million to accelerate “high-return infrastructure projects.” In discussion with analysts, COO Corey Higham said the incremental growth capital was directed to “the waste side,” including additional rail cars and “more water disposal assets in the Montney,” with those water assets expected to come online in the first quarter of 2027.
Higham emphasized the company’s view that its cash flow is “generally not tied to short-term commodity prices,” citing production, industrial demand, and “mandated environmental spending” as long-cycle drivers that support stable volumes. He said the company typically sees “limited near-term upside when prices rise and moderated downside when prices fall.”
Higham said the move toward the high end of guidance primarily reflected oil prices that were “approximately 20% stronger” than the company’s original assumption, while reiterating that SECURE’s direct commodity exposure is limited and the business impact is “modest.” He said year-over-year growth is being driven by base business strength, contributions from infrastructure projects and acquisitions commissioned through 2025 and early 2026, and improved performance in metals recycling.
In response to questions on volumes and disclosure changes, Higham said first-quarter liquids volumes were stable, driven by produced water volumes, while solids processing saw “outperformance in our metals group,” which offset softness in landfill volumes. Gransch added that at lower commodity prices the company tends to see recurring production volume through liquids processing facilities and landfills, and he pointed investors to an updated investor presentation posted on the company’s website to illustrate volume stability through cycles.
Gransch described landfill volumes as driven by three main streams:
Production waste generated daily, which he said is approximately a third of annual volumes;
Reclamation volumes, which he said account for “over a third” and are supported by regulations requiring spending on asset retirement obligations “approximately 5% per year” on a ratable basis;
Drilling-related volumes such as drill cuttings, which he said are influenced by activity levels but fluctuate less than in prior cycles.
On pricing, Gransch said SECURE has increased pricing “above inflation” in recent years and noted that at the end of the fourth quarter the company raised prices on average “in that 4%-5%” range. He said a portion of the business is supported by CPI-linked contracts, while other pricing opportunities reflect the difficulty of replicating infrastructure in core areas and customer demand to outsource increasingly complex produced water handling.
On metals recycling, Higham said first-quarter performance was “quite strong,” citing higher volumes, inventory reduction following a build in the second half of 2025, improved mill pricing, and logistics and integration improvements. Gransch said the company purchased another 50 rail cars and described a focus on reducing cycle time for shipments into the U.S. market. Later, Higham said the additional order would bring the fleet to about 300 cars, with approximately 250 owned and around 50 on short-term lease or approaching end-of-life. Management also said the newer cars have higher capacity, allowing about “30% more” material per car.
Asked about potential impacts from Section 232-related tariff changes, Higham said the company had not seen any impact and that about 95% of scrap shipments were going to the U.S., with a “low 5%” portion to the domestic market. Management said it was “too early to say” whether tariff changes could indirectly lift U.S. steel demand.
Higham said the company sees strong longer-term fundamentals, citing expectations for Western Canadian production to grow approximately 3% annually through 2030, supported by improved market access and LNG development. He also pointed to increasing reclamation and remediation requirements and rising produced water volumes associated with higher intensity development, which he said are contributing to a “structural shift towards outsourcing.”
Gransch told analysts the company sees a pipeline of organic projects of roughly CAD 300 million to CAD 400 million over the next two years, and suggested that pipeline could grow in a stronger activity environment. Higham added that the company is not constrained at a system level and is positioned to accept incremental volumes “without any outsized capital deployment,” with capital typically deployed where the system is constrained.
The call concluded with management reiterating support for the upcoming shareholder vote on the GFL transaction and recognition of employees’ focus on safety and execution.
SECURE is a leading waste management and energy infrastructure business headquartered in Calgary, Alberta. The Corporation's extensive infrastructure network located throughout western Canada and North Dakota includes waste processing and transfer facilities, industrial landfills, metal recycling facilities, crude oil and water gathering pipelines, crude oil terminals and storage facilities. Through this infrastructure network, the Corporation carries out its principal business operations, including the collection, processing, recovery, recycling and disposal of waste streams generated by our energy and industrial customers and gathering, optimization, terminalling and storage of crude oil and natural gas liquids.
The article "Secure Energy Services Q1 Earnings Call Highlights" was originally published by MarketBeat.