Covalon Technologies Ltd. posted a fourth-quarter net profit of CAD 2.8 million in its fiscal third quarter of 2026, a 42-fold increase from CAD 65,000 in the same period a year earlier, as revenue rose 20% to CAD 10.0 million.
Gross profit surged 73% to CAD 6.7 million, lifting gross margin to 67.2% from 46.5% a year ago. Adjusted EBITDA more than tripled to CAD 3.0 million, while operating expenses edged up 1% to CAD 4.0 million. Earnings per share reached CAD 0.10, compared with breakeven in the prior-year quarter. The company maintained a current ratio of 3.8 and reported no bank debt.
For the nine months ended June 30, revenue increased 6% to CAD 25.9 million, with gross profit up 23% to CAD 16.1 million. Gross margin expanded to 62.8% from 54.0%, while adjusted EBITDA rose more than 50% to CAD 4.7 million. Operating cash flow jumped 147% to CAD 7.4 million, and cash and equivalents totaled CAD 19.4 million at quarter-end.
U.S. sales of vascular access and surgical consumables grew 51% in the quarter, outpacing the broader market by roughly tenfold. Contamination protection products VALGuard and CovaClear saw U.S. revenue rise 68% year-over-year and 34% sequentially. The company serves about 200 to 300 U.S. hospitals, representing roughly 3% to 5% of the market, and retained all top 50 hospital system customers from the prior year. Named accounts included Mayo Clinic, Nationwide Children’s Hospital and Stanford Health Care.
Covalon declared a CAD 4.1 million dividend earlier in the fiscal year, its first in company history, and invested more than CAD 1 million in property, plant and equipment at its Mississauga facility. Shares slipped 0.87% to CAD 2.29, within a 52-week range of CAD 1.55 to CAD 2.41.
Management attributed the performance to sustained operational improvements. Chief Executive Officer Brent Ashton said the results reflect compounding benefits from years of strategic work, highlighting efficient scaling with revenue up 20%, gross profit up 73% and operating expenses rising just 1%. He added that clinical adoption is translating into commercial gains and shareholder value, with international markets still early in the growth cycle.
