2021
ANNUAL REPORT
TABLE OF CONTENTS
Introduction Versatile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Introduction Farm King . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
President's Message . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Management Discussion & Financial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Management's Responsibility for the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 19
Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Consolidated Statement of Income (Loss) and Comprehensive Income (Loss) . . . . 24
Consolidated Statement of Change in Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . 24
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Company Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Stock Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10 Year Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
3
Introduction Versatile
Versatile celebrated numerous successes and faced
plant in Winnipeg, Manitoba, will begin manufacturing
many challenges in 2021. At the beginning of the year,
tillage equipment in 2022. This change will improve
farmers across North America were in a position to
logistics and bring the product closer to key markets
buy equipment due to the high commodity prices and
throughout Canada and the United States. More
increased international trade led by China's demand
parts became available through the U.S. distribution
for corn, soybeans and pork. Even with inconsistent
centers in Blair, Nebraska; Clarksville, Indiana; and West
weather patterns and droughts resulting in lower than
Memphis, Arkansas. The warehouse in West Memphis
expected crop yields in Western Canada and the United
became a primary distribution point for Versatile service
States, there was strong product demand throughout
parts as the central location and proximity to the FedEx
the year ensuring all available inventory sold to dealers.
World Hub allow this location to efficiently serve most
Versatile has continued to grow the dealer network and
of the United States.
focus on all areas of business that strengthen dealer
Further investment into product development and
relationships. Results of the 2021 Equipment Dealers
marketing continued. Last year saw the release of the
Association’s annual satisfaction survey substantiate
2022 4WD and DeltaTrack models, and the return of
the success of this approach. The dealer survey ranks
trade shows since the COVID-19 pandemic began.
manufacturers based on several factors including, parts
The new DeltaTrack was first introduced at the Farm
quality and availability, communication, warranty and
Progress Show in Decatur, Illinois, followed by the
marketing. Versatile has improved year-over-year and
Big Iron Farm Show in Fargo, North Dakota and the
in 2021 received the highest overall satisfaction rating
Agri-Trade Equipment Expo in Red Deer, Alberta.
since first participating in the survey.
Feedback on the 2022 models was overwhelming
The only notable area of decline was in product
availability. The manufacturing industry was affected
greatly by supply chain issues brought on by the
COVID-19 pandemic. Versatile was not exempt
positive. The favorable response was cemented as
the fall order writing program sold out all available
production slots. More than one-third of the tractors on
order have been pre-sold to end-users.
from these challenges and maintained regular
Versatile is in a strong position
communication with vendors, suppliers and internal
moving forward with our current
teams to reduce delays and maintain product quality.
product lineup, operational
Despite our best efforts, many suppliers experienced
improvements and strong
delays and material shortages, creating an inconsistent
dealer support. The supply chain
production schedule based on component availability.
issues will continue to be a
Steps were taken to reinforce product lines and
streamline North American operations. The facility in
Vegreville, Alberta, previously responsible for tillage
production, ceased operation in September 2021. The
4
challenge but we are optimistic
that production and demand
will thrive throughout 2022.
Adam Reid
Vice President of Sales & Marketing,
Versatile
Introduction Farm King
Farm King continued to navigate through supply
Farm King pursued capital and critical infrastructure
chain, logistical and manpower challenges in 2021
investments in the Morden facility. The conventional
due to COVID-19. Despite those challenges, product
auger consolidation project was initiated as a part of
lines formerly built in Fargo, North Dakota and
product development. The project’s aim is, to integrate
Willmar, Minnesota were successfully relocated to the
the best features of current and legacy conventional
Morden, Manitoba facility and streamlined. Capacity
auger models and to remove product duplication.
Farm King will continue to work towards product
quality, service and dealer relationship improvements.
consolidation enabled Farm King to substantially
increase manpower in Morden and reinstate a
second shift.
Strong commodity prices and some competitors’ in
season product shortages allowed Farm King to increase
market share in select product categories and grow
sales by 4%. 25 new dealers were added to Farm King’s
extensive dealer network in North America. 18 hub
locations across Canada and United States continued to
provide set up services to Farm King customers.
Maxim Loktionov
Vice President, Buhler Industries Inc.
5
President's Message
First, I would like to express words of support and
ag equipment. This growth was also largely due to
sympathy to all those people whose relatives or friends
the increased support and confidence of our dealers,
passed away because of the COVID-19 pandemic. Our
including multiple organizations which joined our
Company has done everything possible to minimize
dealer network in 2020-2021. As of February, a large
risks and the safety of the Company's employees and
portion of 2022 planned production is also booked and
visitors remains a priority. I also express my gratitude to
I have strong confidence there will be no impediments
all the employees who selflessly continued to do their
to finding homes for every tractor built this year. As one
work at the height of the pandemic.
of the consequences of limited and unstable flow of
The agenda of 2021 was mostly dictated by global
supply chain disruptions caused by the pandemic.
The Company was faced with ongoing delays in new
inventory shipments because of significant constrains
components, the decision was made to postpone our
export sales until the end of the third quarter in 2022
and to stay focused on catching up the backlog of North
American orders.
caused by capacity limitations experienced by some
I want to thank all our dealers for their cooperation and
of the key suppliers as well as innumerable delays of
also for their patience and willingness to support us
the components deliveries. To overcome the effect of
when we have had trouble getting tractors out on time.
these negative impacts the Buhler Industries team is
working closely with our supply chain on a daily basis
and has kept focus on specific issues to make sure that
production lines continue to operate. Looking into
2022, the supply chain issues will remain in place and
will continue to impact our operations.
The production of Versatile tillage products as well
as sales programs have been put on pause since last
September due to moving tillage production capacities
from our plant in Vegreville, Alberta to Winnipeg,
Manitoba. This transition was made with the goals of
improving efficiency and having better control over all
I express my appreciation and gratitude to all Buhler
business processes in the product life-cycle. The first
Industries’ suppliers for their efforts to support our
high-speed compact disc, the Fury, just recently left the
production schedule and overall business relationships
quality check area so the Company will be working on a
in these tough times.
relaunch and acceleration of tillage production over the
From sales prospective, 2021 was a very special year.
next few months.
With unprecedented support from Versatile dealers,
One of the noticeable highlights of the 2021 results is
the entire years volume of production had been
that increased level of Buhler Industries operational
fully booked by early March of 2021. This has never
profitability and positive net earnings which can be
been seen in the recent history of Versatile. The total
observed in the financial statement. The Company
volume of orders in 2021 went up by 441% compared
succeeded in absorbing significant losses of previous
to 2020, which was partly caused by the drastically
years, sustaining its capabilities of manufacturing,
increased demand in the North American market of
continuing new product development, and maintaining
6
an appropriate margin. I appreciate efforts and
equipment. We also understand that with pushing our
contribution of every Company stakeholder who made
sales higher we provide more opportunities to all our
this progress possible.
dealers, suppliers and other partners.
My vision of 2022 prospects is cautiously optimistic
In Q1-Q3 of 2022, our main focus in operations will
since the Company will still be affected by global supply
remain in North America. Our goals are to catchup the
chain challenges as well as by growing prices and
production backlog and eventually satisfy both, already
lead-time caused by limited manufacturing capacities
existing orders and expected ones. The Company will
observed in many businesses across the globe. At the
proceed with new development as scheduled so new
same time the Buhler Industries management team
generations of our product will come to fruition as
will continue to drive the Company in the direction of
we planned.
growth and efficiency driving our ultimate goal which
is making customers happy when owning brand-new
Yury Ryazanov
Chief Executive Officer and Director
Marat Nogerov
President
7
Management Discussion & Financial Analysis
Certain statements made in the following
Versatile has the claim of being the first North American
Management’s Discussion and Analysis contain
manufacturer to mass-produce and market articulated
forward-looking statements including, but not limited
four-wheel drive tractors. Since Versatile opened more
to, statements concerning possible or assumed future
than 50 years ago, the Company has built over 100,000
results of operations of Buhler Industries Inc. (the
tractors at its plant in Winnipeg, Manitoba, Canada.
Company). Forward-looking statements represent the
Currently, the plant builds fixed-frame front-wheel assist
Company’s intentions, plans, expectations and beliefs,
tractors from 175 to 365 horsepower and articulated
and are not guarantees of future performance. Such
four-wheel drives and DeltaTrack models from 405
forward-looking statements represent the Company’s
to 620, designed on the cornerstones of reliability,
current views based on information as at the date
durability, and ease of service and maintenance. Farm
of this report. They involve risks, uncertainties and
King products are manufactured in Morden, Manitoba,
assumptions and the Company’s actual results could
Canada. The dealer network of over 1,200 North
differ, which in some cases may be material, from
American locations provides first class service and
those anticipated in these forward-looking statements.
professional expertise to farmers and customers.
Unless otherwise required by applicable securities law,
the Company disclaims any intention or obligation to
publicly update or revise this information, whether as
a result of new information, future events or otherwise.
Buhler Industries remains committed to continuous
product improvement and incorporating new value-
added features. That tradition of excellence will
The Company cautions investors not to place undue
continue well into the future.
reliance upon forward-looking statements.
Company Overview
The Company is headquartered in Winnipeg, Manitoba,
Canada. Established in 1932 as an agricultural
equipment manufacturer, the original company was
purchased by John Buhler in 1969. Through expansion,
new products and acquisitions, the Company has
added many brands: Farm King, Ezee-On, Allied,
Inland and Versatile. Today the Company operates
several modern manufacturing plants and distribution
centers. Factories in Morden and Winnipeg (Manitoba)
build tractors, augers, snow blowers, mowers, tillage
equipment, compact implements and more. In addition,
the Company maintains Versatile and Farm King
warehouses in both Canada and the United States.
8
Management Discussion & Financial Analysis
TEN YEAR HIGHLIGHTS
In thousands of Canadian dollars (except per share amounts)
PERIOD END
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Revenue
Gross profit
GP%
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
357.749
340.349
325.521
245,676
274,067
311,974
287,984
229,119
249,550
317,178
54,858
57,318
47,730
22,266
21,226
36,153
3,474
10,343
11,685
33,079
15.3%
16.8%
14.7%
9.1%
7.7%
11.6%
1.2%
4.5%
5.7%
10.4%
Income from operations
31,750
34,789
22,491
(4,012)
(4,668)
9,387
(22,505)
(13,631)
(10,444)
6,305
As percentage of revenue
9%
10%
7%
(2%)
(2%)
Net earnings
16,363
19,891
12,458
(5,316)
(2,677)
3%
520
(8%)
(6%)
(4%)
2%
(49,532)
(29,489)
(25,809)
8,911
Earnings per share (EPS)
0.65
0.80
0.50
(0.21)
(0.11)
0.02
(1.98)
(1.18)
(1.03)
0.36
EBITDA
Total assets
27,247
34,927
24,081
(6,489)
561
7,249
(28,792)
2,075
(14,341)
19,177
250,569
283,403
362,844
339,029
278.415
319,739
290,378
262,604
227,759
224,949
Working capital
130,863
141,365
148,223
130,989
122,974
120,987
81,826
77,592
88,072
84,898
Shareholders’ equity
160,925
180,816
193,274
187,958
185,281
185,801
136,269
106,780
80,971
89,882
Book value per share
Return on average capital
Return on average equity
6.44
10%
11%
7.23
11%
12%
7.73
6%
7%
7.52
(3%)
(3%)
7.41
(1%)
(1%)
7.43
5.45
4.27
3.24
0%
0%
(16%)
(10%)
(27%)
(31%)
(24%)
(27%)
3.60
10%
10%
In this table, IFRS refers to the International Financial Reporting Standards. In 2021 the Company changed from it's year end to December 31
that included 15 months. All prior years ended September 30.
General Information
The following discussion and analysis dated March 31,
include the accounts of all subsidiaries. The Company
2022 was prepared by management and should be
read in conjunction with the consolidated financial
and all its Canadian subsidiaries operate with the
Canadian dollar as the functional currency. During the
statements prepared in accordance with International
year the Company changed the year end to December
Financial Reporting Standards (IFRS). The following
discussion and analysis is presented in millions of
31 and as a result comparisons will be December 31,
2021 (five quarters) versus September 30, 2020
Canadian dollars. The consolidated financial statements
(four quarters).
9
Management Discussion & Financial Analysis
Highlights
Revenue
Revenue for the fifteen month period was $317.2, up
$67.6 from sales of $249.6 in 2020. The Company’s
increased sales growth for the period primarily results
from the accounting change to a December year end in
2021. Included in 2021 are fifteen months of sales versus
twelve months of sales in 2020.
Gross Profit
Gross profit jumped to $33.1, an increase of $21.4
from the prior year’s $11.7. As a percentage of sales,
gross profits were 10.4%, an increase from the prior
year’s 4.7%. Strong demand for agricultural equipment
coupled with the Company’s continued focus on margin
improvements including the closure of manufacturing
facilities during the period have resulted in significant
margin improvements in the fifteen month period.
350
300
250
200
150
100
50
0
40
35
30
25
20
15
10
5
0
Sales (millions C$)
2017
2018
2019
2020
2021
Gross Profit (millions C$)
2017
2018
2019
2020
2021
Income from Operations
Income from Operations (millions C$)
Income from operations came in at $6.3 compared
with a loss of $10.5 in 2020. Selling and administration
expenses were $26.8, up from the prior year’s $22.1
primarily due to the change in accounting year end. As
a percentage of sales, selling and administration was
8.4%, down from the prior year percentage of 8.9%.
10
5
0
-5
-10
-15
-20
-25
10
2017
2018
2019
2020
2021
Management Discussion & Financial Analysis
Income and Comprehensive Income
Net Earnings (millions C$)
The net earnings for the fifteen month period was $8.9,
an improvement of $34.7 from the loss in the prior
year. Increased gross profit of $21.4 drove most of the
improvement over the prior year. In addition, the Company
recorded a gain on sale of intellectual property of $12.7 and
increased asset disposals of $0.8 when compared to the
prior year. Exchange rate gains contributed $3.1 compared
with the prior year. Finally, a gain on forgiveness of debt
of $1.5 and reduced taxes of $1.2 were offset by increased
spending on selling and administration costs of $4.6 and
R&D of $1.2 due mostly to having five quarters in 2021
instead of four quarters in 2020.
EBITDA
EBITDA is the earnings before interest, income taxes,
depreciation and amortization, and is considered to be
a useful measure of the cash flow from operations of the
Company. EBITDA for 2021 was $19.2, an increase from
the prior year of $33.5. The improvement from the prior
year was due primarily to gains on gross margin, gain on
sale, exchange rate gains and forgiveness of debt.
Working Capital
Working capital is a measure of the Company's
ability to discharge its current obligations by using
its current assets. The Company continues to be in a
strong position as the working capital at period end
was $84.9, a decrease from the prior year’s $88.1.
Accounting for much of the change were decreases in
accounts receivable of $24.2 and an increase in bank
indebtedness of $15.3 and an increase in long-term
debt of $12.9 offset by increases in inventories of $19.5
and a reduction in accounts payable of $29.9.
10
0
-10
-20
-30
-40
-50
20
15
10
5
0
-5
-10
-15
-20
-25
-30
150
120
90
60
30
0
2017
2018
2019
2020
2021
EBITDA (millions C$)
2017
2018
2019
2020
2021
Working Capital (millions C$)
2017
2018
2019
2020
2021
11
Management Discussion & Financial Analysis
Research and Development
Consistent with the Company’s strategy over the past several years, the Company continues to invest in the
development of new products for the future so expenditures for research and development continued to be high.
The Company increased spending to $8.1, compared to $6.9 in 2020. The change in accounting year end accounts for
most of the increase in spending due to reporting five quarters in 2021 versus four quarters in 2020. Management
believes this strategy of continued investment in R&D will maintain the Company’s competitive position in the
marketplace.
(thousands C$)
(millions C$)
QUARTERLY NET EARNINGS RESULTS
5
NET QUARTERLY INCOME
2017
2018
2019
2020
2021
1st Quarter
(2,440)
(5,798)
(4,444)
(5,453)
(3,815)
2nd Quarter
(251)
(6,554)
7,041
(8,460)
436
3rd Quarter
2,581
(2,876)
(1,170)
462
3,759
4th Quarter
630
(34,304)
(30,916)
(12,358)
(743)
5th Quarter
-
-
-
-
9,274
Total
520
(49,532)
(29,489)
(25,809)
8,911
10
0
-5
-10
-15
-20
-25
-30
-35
1st Quarter
2nd Quarter
3rd Quarter 4th Quarter
5th Quarter
17
7
1
0
2
18
8
1
0
2
19
9
1
0
2
20
0
2
0
2
21
1
2
0
2
17
7
1
0
2
18
8
1
0
2
19
9
1
0
2
20
0
2
0
2
21
1
2
0
2
17
7
1
0
2
18
8
1
0
2
19
9
1
0
2
20
0
2
0
2
21
1
2
0
2
17
7
1
0
2
18
8
1
0
2
19
9
1
0
2
20
0
2
0
2
21
1
2
0
2
17
7
1
0
2
18
8
1
0
2
19
9
1
0
2
20
0
2
0
2
21
1
2
0
2
Summary of Quarterly Results
The change in accounting for the fiscal period resulted in five quarters during 2021 versus four quarters in 2020 and
the resulting quarterly discussion compares the October to December 2021 period versus the October to December
2020 prior period.
Sales for the quarter were $63.8 an increase of 12.5 from the prior period. Company sales has continued to grow, as
demand for agricultural equipment remains strong. Net income improved for the quarter to $13.1 an improvement
of 13.0 when compared to the prior period. Contributing to the increase in net income was improved margin of $1.8
over the prior period and a gain on sale of intellectual property of $12.1 for Tier III tractors that can no longer be sold
in North America due to emissions standards. This was offset by the gain on forgiveness of debt of $1.5 that was
recognized in the prior period and not repeated in the current period.
Changes in the balance sheet include, increases in inventory of $12.8 due to increased sales and supply chain
challenges and a reduction in accounts receivable of $14.3. Accounts payable dropped by $13.2 to $72.1 in the
current period and related party long term debt was reduced by $7.7.
12
Management Discussion & Financial Analysis
Cash Flow and Capital Resources
Operating Activities
Net Cash Flow (millions C$)
Cash for the period was down $15.3 from 2020, coming
in at an indebtedness of $22.1, compared to the prior
year indebtedness of $6.8. Accounting for the increase
in cash was net income of $8.9, net proceeds from
investing activities of $6.5 and net proceeds from
financing activities of $5.0. This was offset by a reduction
in non-cash working capital at $20.2 and a reduction in
non-cash operating activities of $15.4.
Management has diligently worked to control the
investment in inventory in order to keep a strong cash
position. The increase in sales has resulted in an increase
in the Company's inventory turns, improving to 1.8 in
2021 from 1.5 in 2020.
35
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
2.0
1.5
1.0
0.5
0.0
2017
2018
2019
2020
2021
Inventory Turns
2017
2018
2019
2020
2021
13
Management Discussion & Financial Analysis
Investing Activities
Asset Purchases (millions C$)
Cash received during the period for investing activities
was $6.5 compared to cash utilized of $0.3 in 2020.
Purchases of property, plant and equipment amounted
to $5.0, which were offset by the cash proceeds on the
sale of intellectual property of $11.2 and surplus assets
of $0.3. In the prior year, purchases of property, plant
and equipment was $1.1, offset by proceeds on sale of
surplus assets of $0.8.
5
4
3
2
1
0
2017
2018
2019
2020
2021
Financing Activities
The Company's financing activities resulted in an
inflow of $5.0 for the period, compared to $12.9 in the
prior year. The Company received $15.0 from proceeds
of long-term debt issuance and this was offset by
a repayment of debt of $10.0. In the prior year the
Company received tax credits of $0.6 and $12.3 in
advances from a related party.
Resources
In order for the Company to operate and grow,
continued funding resources are required. The Company
has several options for funding available to it such as
cash in the bank, cash provided by operations and
acquiring new debt. Under the current agreements in
place, the Company has access to $72.9 ($60.0 line of
credit, $12.9 mortgage facility) in credit facilities.
when appropriate. Despite the methods employed
to manage these risks, future fluctuations in interest
rates, exchange rates, raw material costs and customers
condition can be expected to impact net earnings.
The Company may enter into fixed-rate debt to
minimize the risk associated with interest rate
fluctuations. In addition, the Company may employ
hedging programs to minimize foreign exchange
risks associated with the changes in the value of
the Canadian dollar relative to the U.S. dollar. To the
extent possible, the Company maximizes natural
currency hedging by matching inflows from sales in
either currency with outflows of costs and expenses
denominated in the same currency. A portion of the
remaining exposure to fluctuations in exchange rates
may be mitigated with forward and option contracts.
Risks and Financial Instruments
The Company currently has a variable interest bank
The Company recognizes that net earnings are exposed
to changes in market interest rates, foreign exchange
rates, prices of raw materials and risks regarding
the financial condition of customers. These market
conditions are regularly monitored and actions are taken
credit facility. Should future cash requirements result
in additional debt be taken on, management would
evaluate the financing options available at that time and
take a course of action that is in the best interests of the
Company in the long-term. Currently, all of the financing
14
Management Discussion & Financial Analysis
needs of the Company are being met by the bank credit
of strong demand for agricultural machinery and
facility, which carries a low rate of variable interest.
equipment. Increased sales will require additional
With respect to foreign exchange, the Company
manages risk by use of the natural hedge that exists
between the U.S. dollar denominated accounts
receivables and accounts payable. Where a large
difference in this hedge is anticipated, forward foreign
exchange contracts may be entered into to mitigate
the risk. Purchases of foreign exchange products for the
purpose of speculation are not permitted. Transactions
inventories and receivables to support the sales growth.
The Company continues to experience supply chain
challenges faced by the agricultural manufacturers as
it works to improve shipments. The Company expects
to see margin improvement stemming from increased
customer demand and the reduction in manufacturing
costs that were implemented in the prior year.
Critical Accounting Estimates
are only conducted with certain approved financial
The Company believes the following accounting
institutions. Fluctuations in foreign exchange rates
estimates are critical to determining and understanding
represent a material exposure for the Company's
the operating results and the financial position of the
financial results. Hedging programs employed
Company.
may mitigate a portion of exposures to short-term
fluctuations in foreign currency exchange rates. The
Company's financial results over the long-term will
be affected by sizeable changes in the value of the
Canadian dollar relative to the U.S. dollar.
Expected Credit Losses
The Company recognizes expected credit losses on
financial assets and changes in such losses, at each
reporting date to reflect changes in credit risk since the
initial recognition of the financial assets. For accounts
Credit risk arises from cash held with banks and credit
receivable, the Company applied the simplified
exposure to customers, including outstanding accounts
approach permitted by IFRS 9, under which the lifetime
receivable. The Company assesses the credit quality of
expected credit losses must be recognized upon initial
customers, taking into account their financial position,
recognition. For loans classified under receivables, the
past experience and other factors. Management
Company measures credit risk based on the 12-month
regularly monitors customer credit limits, performs
expected credit risk if there has not been a significant
credit reviews and, in certain cases, insures accounts
increase in credit risk since initial recognition.
receivable balances against credit losses. Nonetheless,
unexpected deterioration in the financial condition of a
customer can have a negative impact on net earnings in
the case of default.
Looking Forward
Increased sales are projected for the year. The Company
has a large backlog that continues to grow as a result
Allowance for Inventory Obsolescence
and Net Realizable Value
The Company estimates allowances for potential
losses resulting from inventory becoming obsolete
or net realizable value declining below the carrying
values. Additional allowances may be required if the
physical condition of inventory deteriorates or customer
requirements change.
15
Management Discussion & Financial Analysis
lmpairment of Property, Plant and
Equipment
matters could ultimately be resolved for amounts
materially different to provisions or disclosures
An integral component of impairment testing is
previously made by the Company.
determining the asset's recoverable amount. The
determination of the recoverable amount involves
significant management judgment, including
projections of future cash flows and the appropriate
discount rates. The cash flows are derived from
financial forecasts and do not include restructuring
activities that the Company is not yet committed to
or significant future investments that will enhance
the asset's performance. Qualitative factors, including
market presence and trends, strength of customer
relationships, strength of local management, strength
of debt and capital markets, and degree of variability
in cash flows, as well as other factors, are considered
when making assumptions with regard to future
cash flows and the appropriate discount rate. The
recoverable amount is most sensitive to the discount
rate used for the discounted cash flow model as well as
the expected future cash inflows and the growth rate
used for extrapolation purposes. A change in any of the
significant assumptions or estimates could result in a
material change in the recoverable amount.
Contingencies and litigation
Should a lawsuit or claim be brought against the
Company, management assesses the potential financial
exposure of the Company. In assessing any probable
losses, the amount of possible insurance recoveries
will be projected. The Company accrues such liabilities
when a loss becomes probable and the net amount
of the loss can reasonably be estimated. Due to the
inherent uncertainties relating to the eventual outcome
of litigation and potential insurance recovery, certain
16
Warranty obligation
The Company offers warranties for its sale of equipment.
Management estimates the related provision for
future warranty claims based on historical warranty
claim information, as well as recent trends that might
suggest that past cost information may differ from
future claims. Factors that could impact the estimated
claim information include the success of the Company's
productivity and quality initiatives, as well as parts and
labor costs.
Economic Conditions
In the context of the COVID-19 pandemic and the
related climate of uncertainty, the Company revised
some of its most complex estimated and assumptions,
including significant judgement areas, used in preparing
the consolidated financial statements for the period
ended December 31, 2021. The main estimates revised
to reflect the impact of COVID-19 pandemic on financial
reporting were the determination of whether there was
an indication that assets, CGU's or groups of CGU's may
be impaired, the assumption used in the establishment
of their recoverable amount when an impairment test
was deemed necessary, and the assessment of the
credit risk on receivables. Additional revisions might be
required in the future depending on the development of
the pandemic and its impact on the final measurement
of the carrying amount of the Company's assets. In
general the Company has not seen significant impacts
from COVID-19 to date other than the supply chain
challenges.
Management Discussion & Financial Analysis
Income taxes
Estimation of income taxes includes evaluating the
recoverability of deferred tax assets based on an
assessment of the Company's ability to utilize the
underlying future tax deductions against future taxable
income before they expire. The Company's assessment
is based upon existing tax laws and estimates of future
taxable income. If the assessment of the Company's
ability to utilize the underlying future tax deductions
changes, the Company would be required to recognize
more or fewer of the tax deductions as assets, which
would decrease or increase the income tax expense in
the period in which this is determined.
the ultimate tax determination is uncertain during the
ordinary course of business. The Company maintains
provisions for uncertain tax positions that it believes
appropriately reflect its risk with respect to tax matters
under active discussion, audit, dispute or appeal with
tax authorities, or which are otherwise considered to
involve uncertainty. These provisions for uncertain
tax positions are made using management's best
estimate of the amount expected to be paid based
on a qualitative assessment of all relevant factors.
Management reviews the adequacy of these provisions
at each consolidated balance sheet date. However, it is
possible that at some future date an additional liability
could result from audits by taxing authorities. Where the
The Company makes claims for Scientific Research and
final tax outcome of these matters is different from the
Experimental Development (SRED) expenditures which
amounts that were initially recorded, such differences
are included in deferred taxes. The amounts recorded
will affect the tax provisions in the period in which such
are based on the Company's interpretation of the
determination is made.
Income Tax Act of Canada provisions which govern the
eligibility of SRED costs. The claims may be subject to
review by the Canada Revenue Agency (CRA) before
refunds are received. Actual collection may be materially
different than what is recorded in the financial
statements. The Company is currently challenging CRA
in court in regards to certain of its SRED credits and
believes that it will be successful in defending its SRED
claim. The Company's SRED credits are recorded on the
balance sheet after review of the relevant accounting
pronouncements and collectability or recovery is
reasonably assured.
The Company is subject to taxation in multiple
jurisdictions. Significant judgment is required in
determining the worldwide provision for taxation.
There are many transactions and calculations for which
The operations and organizational structure of the
Company are complex, and related tax interpretations,
regulations and legislation are continually changing. As
a result, there are usually some tax matters in question
that result in uncertain tax positions. The Company
approaches uncertain tax positions from a liability or
exposure perspective. The Company provides for future
liabilities in respect of uncertain tax positions where
additional tax may become payable in future periods
and such provisions are based on management's
assessment of exposures.
17
Management Discussion & Financial Analysis
Disclosure Controls
Management is responsible for establishing and
maintaining disclosure controls and procedures in
order to provide reasonable assurance that material
information relating to the Company is made known
to them in a timely manner and that information
Internal Controls Over Financial
Reporting
Management is responsible for establishing and
maintaining adequate internal controls over financial
reporting to provide reasonable assurance regarding
the reliability of financial reporting and the preparation
required to be disclosed is reported within time periods
of financial statements for external purposes in
prescribed by applicable securities legislation. There are
accordance with IFRS. Internal control systems, no
inherent limitations to the effectiveness of any system
matter how well designed, have inherent limitations
of disclosure controls and procedures, including the
possibility of human error and the circumvention or
overriding of the controls and procedures. Accordingly,
even effective disclosure controls and procedures can
only provide reasonable assurance of achieving their
control objectives. Based on management's evaluation
of the design and effectiveness of the Company's
disclosure controls and procedures, the Company's
Chief Executive Officer and Chief Financial Officer have
concluded that these controls and procedures are
designed and operating effectively as of December
31, 2021 to provide reasonable assurance that the
information being disclosed is recorded, summarized
and reported as required.
and therefore can only provide reasonable assurance as
to the effectiveness of internal controls over financial
reporting, including the possibility of human error
and the circumvention or overriding of the controls
and procedures. Based on management's design and
testing of the effectiveness of the Company's internal
controls over financial reporting, the Company's Chief
Executive Officer and Chief Financial Officer have
concluded that these controls and procedures are
designed and operating effectively as of December 31,
2021 to provide reasonable assurance that the financial
information being reported is materially accurate.
During the period ended December 31, 2021, there
have been no changes in the design of the Company's
internal controls over financial reporting that have
materially affected, or are reasonably likely to materially
affect, its internal controls over financial reporting.
18
Management’s Responsibility for the
Financial Statements
The accompanying consolidated financial statements
The Board of Directors is responsible for ensuring
and all the information in this annual report are the
management fulfills its responsibilities for financial
responsibility of management and have been approved
reporting and is ultimately responsible for reviewing
by the Board of Directors. The financial statements
and approving the financial statements. The Board
have been prepared by management in accordance
carries out this responsibility through its Audit
with International Financial Reporting Standards. When
Committee. The Audit Committee is appointed
alternative accounting methods exist, management
by the Board and its directors are unrelated and
has chosen those it deems most appropriate in the
independent. The Committee meets periodically with
circumstances. Financial statements are not precise
management, as well as the external auditors, to discuss
since they include certain amounts based on estimates
internal controls over the financial reporting process,
and judgments. Management has determined such
auditing matters and financial reporting issues; to
amounts on a reasonable basis in order to ensure that
satisfy itself that each party is properly discharging
the financial statements are presented fairly, in all
its responsibilities; and, to review the annual report,
material respects.
Management has prepared the financial information
presented elsewhere in the annual report and
has ensured that it is consistent with the financial
statements.
Management has a system of internal controls
designed to provide reasonable assurance that the
financial statements are accurate and complete in
all material respects. The internal control system
the financial statements and the external auditors'
report. The Audit Committee reports its findings to the
Board for consideration when approving the financial
statements for issuance to the shareholders. The
Committee also considers, for review by the Board and
approval by the shareholders, the engagement or
re-appointment of the external auditors.
The financial statements have been audited by
BDO LLP, the external auditors, in accordance with
Canadian generally accepted auditing standards on
includes an internal audit function and an established
behalf of the shareholders.
business conduct policy that applies to all employees.
Management believes that the systems provide
reasonable assurance that transactions are properly
authorized and recorded, financial information is
relevant, reliable and accurate and that the Company's
assets are appropriately accounted for and adequately
safeguarded.
Yury Ryazanov
Willy Janzen, CPA, CGA, B.Comm.
Chief Executive Officer
March 31, 2021
Chief Financial Officer
March 31, 2021
19
Independent Auditor’s Report
To the Shareholders of Buhler Industries Inc.:
Opinion
We have audited the consolidated financial statements
The consolidated financial statements for the years
ended September 3, 2020 and 2019 (not presented
of Buhler Industries Inc. and its subsidiaries (the Group),
herein but from which the comparative information
which comprise the consolidated balance sheet as at
as at October 1, 2019 has been derived) excluding
December 31, 2021, and the consolidated statements
the adjustments that were applied to restate certain
of income (loss) and comprehensive income (loss) and
comparative information were audited by another
cash flows for the fifteen month period then ended,
and notes to the consolidated financial statements,
including a summary of significant accounting policies.
auditor who expressed an unmodified opinion on those
consolidated financial statements on December 24, 2020.
As part of our audit of the consolidated financial
In our opinion, the accompanying consolidated financial
statements for the year ended December 31, 2021,
statements present fairly, in all material respects, the
we also audited the adjustments that were applied to
consolidated financial position of the Group as at
restate certain comparative information for the year
December 31, 2021, and its consolidated financial
ended September 30, 2020.
performance and its consolidated cash flows for the
fifteen month period then ended in accordance with
International Financial Reporting Standards (IFRSs).
Basis for Opinion
We conducted our audit in accordance with
Canadian generally accepted auditing standards. Our
responsibilities under those standards are further
described in the Auditor’s Responsibilities for the Audit
of the Consolidated Financial Statements section of our
report. We are independent of the Group in accordance
In our opinion, such adjustments are appropriate and
have been properly applied.
Other than with respect to the adjustments that were
applied to restate certain comparative information,
we were not engaged to audit, review, or apply any
procedures to the consolidated financial statements for
the year ended September 30, 2020.
Key Audit Matters
Key audit matters are those matters that, in our
with the ethical requirements that are relevant to our
professional judgment, were of most significance in
audit of the consolidated financial statements in Canada,
our audit of the consolidated financial statements of
and we have fulfilled our other ethical responsibilities
the current period. These matters were addressed in
in accordance with these requirements. We believe that
the context of our audit of the consolidated financial
the audit evidence we have obtained is sufficient and
statements as a whole, and in forming our opinion
appropriate to provide a basis for our opinion.
thereon, and we do not provide a separate opinion on
Emphasis of Matter – Restated
Comparative Information
We draw attention to Note 24 to the consolidated
these matters.
Valuation of Inventory
Description of the key audit matter
financial statements, which explains that certain
The provision for obsolescence of inventory requires the
comparative information presented for the year
application of significant judgment by the Company,
September 30, 2020 has been restated. Our opinion is
particularly in the identification of slow moving and
not modified in respect of this matter.
obsolete inventory and the quantification of the
20
provision to apply to the inventory identified. The
discussion on the assessment of the estimate and the
underlying assumptions is included in Note 4c of the
consolidated financial statements.
How the key audit matter was addressed in the audit
We assessed the key assumptions applied by the
Company to calculate the provision. We tested the
calculation of the provision and we compared the
results of the analysis to comparable entities.
Other Information
Management is responsible for the other information.
The other information comprises:
Responsibilities of Management and
Those Charged with Governance for the
Consolidated Financial Statements
Management is responsible for the preparation and fair
presentation of the consolidated financial statements
in accordance with IFRSs, and for such internal control
as management determines is necessary to enable the
preparation of consolidated financial statements that
are free from material misstatement, whether due to
fraud or error.
In preparing the consolidated financial statements,
management is responsible for assessing the Group’s
ability to continue as a going concern, disclosing,
•
The information, other than the consolidated
as applicable, matters related to going concern and
financial statements and our auditor’s report
using the going concern basis of accounting unless
thereon, included in the Annual Report, and
management either intends to liquidate the Group or
•
The information included in the Management
Discussion & Financial Analysis.
Our opinion on the consolidated financial statements
does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated
financial statements, our responsibility is to read the
other information identified above and, in doing so,
consider whether the other information is materially
inconsistent with the consolidated financial statements
or our knowledge obtained in the audit, or otherwise
appears to be materially misstated.
to cease operations, or has no realistic alternative but to
do so.
Those charged with governance are responsible for
overseeing the Group’s financial reporting process.
Auditor’s Responsibilities for the
Audit of the Consolidated Financial
Statements
Our objectives are to obtain reasonable assurance
about whether the consolidated financial statements as
a whole are free from material misstatement, whether
due to fraud or error, and to issue an auditor’s report
that includes our opinion. Reasonable assurance is a
high level of assurance, but is not a guarantee that an
We obtained the Annual Report and the Management
audit conducted in accordance with Canadian generally
Discussion & Financial Analysis prior to the date of
accepted auditing standards will always detect a
this auditor’s report. If, based on the work we have
material misstatement when it exists. Misstatements can
performed on this other information, we conclude
arise from fraud or error and are considered material if,
that there is a material misstatement of this other
individually or in the aggregate, they could reasonably
information, we are required to report that fact in this
be expected to influence the economic decisions of
auditor’s report. We have nothing to report in this
users taken on the basis of these consolidated financial
regard.
statements.
As part of an audit in accordance with Canadian
generally accepted auditing standards, we exercise
21
Independent Auditor’s Report
professional judgment and maintain professional
of our auditor’s report. However, future events
skepticism throughout the audit. We also:
or conditions may cause the Group to cease to
•
Identify and assess the risks of material
continue as a going concern.
misstatement of the consolidated financial
•
Evaluate the overall presentation, structure and
statements, whether due to fraud or error, design
content of the consolidated financial statements,
and perform audit procedures responsive to those
including the disclosures, and whether the
risks, and obtain audit evidence that is sufficient
consolidated financial statements represent the
and appropriate to provide a basis for our opinion.
underlying transactions and events in a manner
The risk of not detecting a material misstatement
that achieves fair presentation.
resulting from fraud is higher than for one resulting
from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the
override of internal control.
•
Obtain sufficient appropriate audit evidence
regarding the financial information of the
entities or business activities within the Group to
express an opinion on the consolidated financial
•
Obtain an understanding of internal control
statements. We are responsible for the direction,
relevant to the audit in order to design
supervision and performance of the group audit.
audit procedures that are appropriate in the
We remain solely responsible for our audit opinion.
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
Group’s internal control.
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
•
Evaluate the appropriateness of accounting
including any significant deficiencies in internal control
policies used and the reasonableness of accounting
that we identify during our audit.
estimates and related disclosures made by
management.
We also provide those charged with governance with
a statement that we have complied with relevant
•
Conclude on the appropriateness of management’s
ethical requirements regarding independence, and to
use of the going concern basis of accounting and,
communicate with them all relationships and other
based on the audit evidence obtained, whether
matters that may reasonably be thought to bear on
a material uncertainty exists related to events or
our independence, and where applicable, related
conditions that may cast significant doubt on the
safeguards.
Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are
required to draw attention in our auditor’s report to
the related disclosures in the consolidated financial
statements or, if such disclosures are inadequate,
to modify our opinion. Our conclusions are based
on the audit evidence obtained up to the date
22
The engagement partner on the audit resulting in this
independent auditor’s report is Justin Friesen.
Winnipeg, Manitoba
March 31, 2022
Chartered
Professional Accountants
Consolidated Balance Sheet
(000's C$)
Assets
Current Assets
As at December 31,
As at September 30,
2021
2020
Restated - Note 24
Accounts receivable, net (note 9 and 22)
$
22,366
$
46,607
Income taxes receivable
Inventories, net (note 7)
Prepaid expenses
Total Current Assets
Property, plant and equipment (note 8)
Assets held for sale (note 8)
Deferred income tax assets (note 10)
Interests in joint ventures and other entities (note 11)
493
166,404
5,801
195,064
14,735
2,932
5,624
6,594
242
146,931
6,446
200,226
15,770
-
5,624
6,139
Total Assets
$
224,949
$
227,759
Liabilities and Shareholders’ Equity
Current Liabilities
Bank indebtedness (note 6)
Accounts payable and accrued liabilities (note 12)
Income taxes payable
Current portion of long-term debt (note 13)
Total Current Liabilities
Deferred income tax liabilities (note 10)
Long term debt (note 13)
Advance from related party (notes 9 and 24)
Total Liabilities
Shareholders’ Equity
Share capital (note 14)
Retained earnings
Total Shareholders' Equity
Total Liabilities and Equity
Subsequent events (note 23)
$
22,074
75,057
178
12,857
110,166
39
393
24,469
135,067
30,000
59,882
89,882
$
6,807
104,933
414
112,154
48
414
34,172
146,788
30,000
50,971
80,971
$
224,949
$
227,759
The accompanying notes are an integral part of the consolidated
financial statements.
Approved on behalf of the board:
Yury Ryazanov
Chief Executive Officer
March 31, 2022
Grant Adolph P. Mgr.
Chairman of the Board
March 31, 2022
23
Consolidated Statement of Income (Loss) and
Comprehensive Income (Loss)
For the fifteen month period ended December 31, 2021 and the year ended September 30, 2020 (000's C$ except per share amounts)
Revenue net (note 9)
Cost of goods sold (note 9)
Gross Profit
Selling & administration expenses
Income/(Loss) from Operations
Gain on disposal of assets (notes 8 and 9)
Gain on forgiveness of debt (note 6)
Interest income
Interest expense (notes 15)
(Gain)/Loss on foreign exchange
Share of income from interests in joint ventures and other entities (note 11)
Research and development costs
Net Income/(Loss) Before Taxes
Current income taxes (note 10)
Deferred income taxes (note 10)
Total income taxes
$
2021
317,178
284,099
$
2020
249,550
237,865
33,079 10.4%
26,774 8.4%
11,685 4.7%
22,129 8.9%
6,305 2.0%
(10,466)
(4.2%)
(14,068)
(1,525)
(20)
7,429
(2,097)
(508)
8,106
(526)
-
(309)
7,074
1,022
(94)
6,909
8,988 2.8%
(24,542)
(9.8%)
77
-
77
1,384
(117)
1,267
Net Income/(Loss) and Comprehensive Income/(Loss)
$
8,911 2.8%
$
(25,809)
(10.3%)
Consolidated Statement of Change in
Shareholders’ Equity
For the fifteen month period ended December 31, 2021 and the year ended September 30, 2020 (000's C$ except per share amounts)
Capital Stock, beginning and end of period
Retained Earnings, beginning of period
Net income/(loss) and comprehensive income/(loss) for the period
Retained Earnings, end of period
Shareholders’ Equity, end of period
Loss per share
Basic and fully diluted
2021
30,000
50,971
8,911
59,882
80,882
0.36
$
$
$
2020
30,000
76,780
(25,809)
50,971
80,971
(1.03)
$
$
$
The accompanying notes are an integral part of the consolidated financial statements.
24
Consolidated Statement of Change in
Shareholders’ Equity
Consolidated Statement of Cash Flows
For the fifteen month period ended December 31, 2021 and the year ended September 30, 2020 (000's C$)
Cash provided by (used in) operating activities
Net income/(loss) and comprehensive income/(loss)
$
8,911
$
(25,809)
2021
2020
Add (deduct) non-cash items
Depreciation of property, plant and equipment
Gain on disposal of assets
Gain on forgiveness of debt
(Gain)/Loss on foreign exchange
Deferred income taxes
Share of income from interests in joint ventures and other entities
Net change in non-cash working capital balances (note 18)
Investing activities
Purchase of property, plant and equipment
Proceeds on sale of assets
Proceeds on sale of property
Financing activities (note 19)
Recovery of tax credits
Repayment of long-term debt
Proceeds on long-term debt issuance
Advances/(repayment) from related party
Foreign exchange (loss) gain on bank indebtedness
Net cash in the period
Bank indebtedness, beginning of period
2,760
(14,068)
(1,525)
(2,097)
-
(508)
(6,527)
(20,242)
(26,769)
(4,961)
252
11,184
6,475
-
(2,143)
15,000
(7,833)
5,024
3
(15,267)
(6,807)
3,127
(526)
-
1,011
(117)
(94)
(22,408)
41,475
19,067
(1,096)
765
-
(331)
566
-
-
12,314
12,880
(701)
30,915
(37,722)
Bank indebtedness, end of period
$
(22,074)
$
(6,807)
25
Notes to Consolidated Financial Statements
1. Basis of Operations
as at December 31, 2021 incorporating financial results for the
Buhler Industries Inc. (the Company) was incorporated under the laws
fifteen-month transition period from October 1, 2020 to December
of Canada on February 1, 1994. On March 24, 1994 the Company was
31, 2021 (with a comparative of the year ended September 30, 2020).
listed and posted for trading on the TSX under the stock exchange
As a result, the amounts presented in these consolidated financial
symbol “BUI”. The address of the registered office is 1260 Clarence
statements are not entirely comparable. The Company will revert to
Avenue, Winnipeg, Manitoba. The majority shareholder is Combine
a customary reporting calendar on a December 31 year end, with
Factory Rostselmash Ltd. and as of December 31, 2021 owns 96.7%
fiscal quarters ending on the last day of March, June, September and
of all outstanding shares of the Company.
December each year.
The Company, through its subsidiaries and a joint venture, has
The consolidated financial statements have been prepared under the
manufacturing and warehousing facilities in Canada and the United
historical-cost convention, except that certain financial instruments
States of America (U.S.). The Company produces farm equipment for
are stated at their fair value.
sale in Canada, U.S. and overseas.
The consolidated financial statements were approved by the Board of
The geopolitical situation in Eastern Europe intensified on February
Directors on March 31, 2022.
24, 2022, with Russia’s invasion of Ukraine. The situation continues
to evolve as military activity proceeds and additional sanctions are
imposed. The war is increasingly affecting economic and global
financial markets and exacerbating ongoing economic challenges,
including issues such as rising inflation and global supply-chain
disruption.
The Company’s majority owner is Combine Factory Rostselmash
Ltd. ("Rostselmash"), a privately held Russian-based manufacturer
of agricultural equipment. No sanctions have been imposed on
the Company's majority shareholder, the owners of the majority
shareholder or any officers or directors of the Company. The Company
has not paid dividends to the majority owner since it was purchased
by Rostselmash. The Company has had limited sales and purchases in
the region and is not materially impacted by the conflict. In addition,
the Company does not store inventories or other assets in the region
and as a result the Company has no exposure to its assets.
Political events and sanctions are continually changing and differ
across the globe. As a result, volatility in commodity prices and
currencies may impact the supply chain, demand for equipment and
profit margins. The Company continues to monitor the situation.
2. Basis of Presentation
The Company prepares its consolidated financial statements in
accordance with International Financial Reporting Standards (IFRS).
The Company’s functional currency is the Canadian dollar. The
Canadian dollar is the reporting currency as much of the Company’s
business, as well as the majority of the Company’s financing, is
conducted in Canadian dollars.
3. Significant Accounting Policies
(a) Basis of consolidation
The consolidated financial statements include the accounts of the
Company and its active wholly-owned subsidiaries, Buhler Versatile
Inc., Buhler Trading Inc., B.I.I. Fargo, Inc., Buhler Versatile USA Inc.,
Implement Sales Co. Inc., Haskett Properties Inc., ISCO Inc., Progressive
Manufacturing Ltd., John Buhler Inc., and Amarillo Service and
Supply Inc. Control exists when the Company has the power to
govern the financial and operating policies so as to obtain benefits
from its activities. The Company holds 100% of the voting rights of
the subsidiaries, and therefore controls these entities. The financial
statements of all subsidiaries are prepared as of the same reporting
date using consistent accounting policies. All inter-company balances
and transactions, including any unrealized profits arising from inter-
company transactions have been eliminated.
(b) Business combinations
Business combinations are accounted for using the acquisition
method of accounting. The consideration transferred for the
acquisition of a subsidiary is the fair values of the assets transferred,
the liabilities incurred by the former owners of the acquiree and the
equity interests issued by the Company. The consideration transferred
includes the fair value of any asset or liability resulting from a
contingent consideration arrangement. Acquisition costs incurred
are expensed and included in general and administrative expenses.
Any contingent consideration to be transferred by the acquirer
will be recognized at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration which is
deemed to be an asset or liability will be recognized in accordance
On March 25, 2021, the Company voted on changing its financial year
with IAS 39 either in the statement of income or as a change to other
end to December 31 from its previous year end of September 30. As a
comprehensive income. Contingent consideration that is classified as
result, the Company has prepared consolidated financial statements
equity is not re-measured, and its subsequent settlement is accounted
26
Notes to Consolidated Financial Statements
for within equity.
(e) Revenue recognition
Identifiable assets acquired and liabilities and contingent liabilities
assumed in a business combination are measured initially at their fair
values at the acquisition date, irrespective of the extent of any non-
controlling interest. Goodwill is initially measured as the excess of the
aggregate of the consideration transferred over the net identifiable
Revenue is recognized when control of the equipment or parts has
been transferred and the Company’s performance obligations to the
customers have been satisfied. Revenue is measured as the amount
of consideration the Company expects to receive in exchange for
transferring the goods.
assets acquired and liabilities assumed. If this consideration is less
The timing of when the Company transfers the goods to the customer
than the fair value of the net assets of the subsidiary acquired, the
may differ from the timing of the customer’s payment.
difference is recognized directly in the statement of income.
(c) Foreign currency translation
The functional currency for each of the Company’s subsidiaries is
the currency of the primary economic environment in which the
entity operates. For all subsidiaries the functional currency has
Revenues are stated net of discounts, allowances, settlement
discounts and rebates, as well as costs for sales incentive programs,
which are determined on the basis of historical costs and charged
against profit for the period in which the corresponding sales are
recognized.
been determined to be the Canadian dollar. Transactions in foreign
The Company has determined that the customers from the sale of
currencies are translated to the respective functional currencies of
equipment and parts are generally dealers. Transfer of control, and
each entity within the consolidated group using the exchange rates
thus related revenue recognition, generally corresponds to when the
in effect at the date of the transactions. Monetary assets and liabilities
equipment and parts are made available to the customer, based on
denominated in foreign currencies at the reporting date are translated
the shipping terms negotiated with customers. Most product is sold
to the functional currency at the exchange rates prevailing at the end
FOB Origin, while sales to related parties are shipped FOB Destination.
of the reporting period. Non-monetary items measured at historical
Therefore, the Company recognizes revenue at a point in time, when
cost in a foreign currency are translated to the functional currency
control is transferred to the customer at a sale price that the Company
using the exchange rate prevalent at the date of acquisition. Non-
expects to receive.
monetary items denominated in foreign currencies that are measured
at fair value are translated to the functional currency at the exchange
rate prevalent at the date that the fair value was determined. Foreign
currency differences arising from translation are recognized in net
income, except for exchange differences arising on the translation
of financial instruments qualifying as a cash flow hedge, which are
recognized directly in other comprehensive income (“OCI”).
(d) Inventories
Inventories are stated at the lower of cost and net realizable value.
The cost of inventories is based on the first-in first-out principle and
includes expenditures incurred in acquiring the inventories and
bringing them to their existing location and condition. In the case
of manufactured inventories, cost includes an appropriate share of
variable and fixed overheads based on normal operating capacity. Any
excess, unallocated, fixed overhead costs are expensed as incurred.
Net realizable value is the estimated selling price in the ordinary
course of business, less the estimated costs of completion and selling
expenses. Inventories are written down to net realizable value if net
realizable value declines below carrying amount. When circumstances
that previously caused inventories to be written down below cost no
longer exist or when there is clear evidence of an increase in selling
For all sales, no significant uncertainty exists surrounding the
purchaser’s obligation to pay for equipment and parts. The Company
records appropriate allowance for credit losses.
The cost of incentives, if any, are estimated at the inception of a
contract at the amount that is expected to be paid and is recognized
as a reduction to revenue at the time of the sale. If the estimate
of the incentive changes following the sale to the customer, the
change in estimate is recognized as an adjustment to revenue in the
period of the change. The Company grants certain sales incentives
to support sales of its products to retail customers. At the later of
the time of sale or the time an incentive is announced to dealers, the
Company records the estimated impact of sales allowances in the
form of dealer and customer incentives as a reduction of revenue.
Subsequent adjustments to sales incentive programs related to
products previously sold are recognized as an adjustment to revenues
in the period the adjustment is determinable. The determination of
sales allowances requires management to make estimates based upon
historical data, estimated future market demand for products, field
inventory levels, announced incentive programs, competitive pricing
and interest rates, among other things.
price, the amount of the write-down previously recorded is reversed.
(f) Sales allowances
The Company grants certain sales incentives to support sales of its
27
Notes to Consolidated Financial Statements
products to retail customers. At the later of the time of sale or the
(j) Cash/bank indebtedness
time an incentive is announced to dealers, the Company records
Cash/bank indebtedness includes cash on hand, bank overdrafts
the estimated impact of sales allowances in the form of dealer and
and bankers acceptances. Bank overdrafts are repayable on demand.
customer incentives as a reduction of revenue. The expense for new
Bank overdrafts and bankers acceptances form an integral part of the
programs is accrued at the inception of the program. The amounts
Company’s cash management and are included as a component of
of incentives to be paid are estimated. The determination of sales
cash/bank indebtedness for the purpose of the statement of
allowances requires management to make estimates based upon
cash flows.
historical data, estimated future market demand for products, field
inventory levels, announced incentive programs, competitive pricing
and interest rates, among other things.
(g) Property, plant and equipment
(k) Income taxes
Income tax expense comprises current and deferred tax. Income tax
expense is recognized in the statement of comprehensive income
except to the extent that it relates to items recorded directly to equity,
Property, plant and equipment are stated at cost less accumulated
in which case it is recognized directly in equity.
depreciation and any impairment losses. Cost includes any directly
attributable costs, borrowing costs on qualifying construction
projects, and the costs of dismantling and removing the items and
restoring the site on which they are located. When major components
of an item of property and equipment have different useful lives, they
are accounted for as separate items. Depreciation is calculated using
the following methods to allocate the cost of assets less their residual
values over their estimated useful lives as follows:
Buildings
Equipment
Computer equipment
4 - 5%
20 - 100%
30 - 100%
Straight line
Declining balance
Declining balance
Depreciation methods, useful lives and residual values are reviewed
at each reporting date. Assets under construction and land are not
depreciated.
Current income tax expense is the expected income tax payable on
the taxable income for the period, using income tax rates enacted or
substantively enacted in the jurisdictions the Company is required to
pay income tax at the reporting date, and any income adjustments to
income taxes payable in respect of previous periods. Current income
tax expense is adjusted by changes in deferred tax assets and liabilities
attributable to temporary differences between the tax bases of assets
and liabilities and their carrying amounts in the financial statements,
and by the availability of unused income tax losses.
Deferred tax expense is recognized using the balance sheet method
in which temporary differences are calculated based on the carrying
amounts of assets and liabilities for financial reporting purposes and
the tax bases of assets and liabilities for income taxation purposes.
Deferred tax is not recognized for the following temporary timing
differences: the initial recognition for both goodwill and assets and
Leases of property, plant and equipment on terms that provide a
liabilities in a transaction that is not a business combination and
contractual right of use are measured at cost, comprised of the initial
that affects neither accounting nor taxable income; and differences
measurement of the corresponding finance lease payable, lease
relating to investments in subsidiaries to the extent that it is probable
payments made at or before the commencement date and any initial
that they will not reverse in the foreseeable future. Deferred tax is
direct costs. They are subsequently depreciated on a straight-line basis
measured at the income tax rates that are expected to be applied
and reduced by impairment losses. At period end, the Company had
when the temporary difference reverses, that is, when the asset is
no right of use assets.
(h) Research and development expenses
realized or the liability is settled, based on the income tax laws that
have been enacted or substantively enacted at the reporting date.
The Company expenses all research and development costs as they
Deferred tax assets are recognized only to the extent that it is
are incurred unless they meet the criteria for deferral in accordance
probable that future taxable income will be available against which
with IAS 38 Intangible Assets. No such development costs have been
the assets can be utilized. Deferred tax assets are reviewed at each
deferred to date.
reporting date and are reduced to the extent that it is no longer
probable that the related income tax benefit will be realized.
(i) Interest in joint ventures and other entities
Current tax assets and liabilities are offset when the Company and
The Company accounts for its interest in joint ventures using the
its subsidiaries have a legally enforceable right to offset the amounts
equity method. Interests in other entities where there is no significant
and intend to either settle on a net basis, or to realize the asset and
influence are recorded at fair value.
settle the liability simultaneously. Deferred tax assets and liabilities are
28
Notes to Consolidated Financial Statements
offset when there is a legally enforceable right to offset and when the
position. Changes in fair value are recognized in the consolidated
deferred tax balances relate to the same income tax authority.
statement of comprehensive income through gains/losses on foreign
(l) Financial instruments
exchange.
In accordance with IFRS 9 - Financial Instruments, financial assets are
(n) Comprehensive income
classified as measured at either amortized cost, fair value through
Comprehensive income includes all changes in equity of the Company,
other comprehensive income or fair value through profit or loss,
except those resulting from investments by shareholders and
depending on the business model for managing such financial assets
dividends paid. Comprehensive income is the total of net income and
and the asset’s contractual cash flow characteristics. Financial liabilities
other comprehensive income. Other comprehensive income comprises
are classified as measured at amortized cost using the effective
revenues, expenses, gains and losses that require recognition, but
interest method.
The Company’s financial instruments are classified as follows: a)
cash and cash equivalents (bank indebtedness) - fair value through
profit and loss, b) accounts receivable - amortized cost, c) advances
to related parties - amortized cost, d) accounts payable and accrued
are excluded from net income. The Company does not have any
items giving rise to other comprehensive income, nor is there any
accumulated balance of other comprehensive income. All gains and
losses, including those arising from measurement of all financial
instruments have been recognized in net income for the period.
liabilities - amortized cost, d) interests in other entities - fair value
(o) Product warranties
through profit and loss, e) advances from related parties - amortized
The Company makes provisions for estimated expenses related
cost and f ) long-term debt - amortized cost. All financial instruments
to product warranties at the time products are sold. Management
are included in the consolidated balance sheet and are measured at
establishes these estimates based on historical information on the
fair value except loans and receivables and other financial liabilities,
nature, frequency and average cost of warranty claims. The Company
which are measured at amortized cost.
All changes in fair value are recorded to the statement of
comprehensive income unless cash flow hedge accounting is used, in
seeks to improve product quality and minimize warranty expenses
arising from claims. Warranty costs may differ from those estimated if
actual claim rates are higher or lower than historical rates.
which case changes in fair value are recorded in other comprehensive
(p) Impairment
income.
Impairment of non-financial assets
The Company’s policy is not to utilize derivative financial instruments
Tangible assets and definite life intangible assets are reviewed at
for trading or speculative purposes. The Company may utilize
each balance sheet date to determine whether events or conditions
derivative instruments in the management of its foreign currency and
indicate that their carrying amount may not be recoverable. If any
interest rate exposures.
FVTPL financial instruments are subsequently measured at fair value
and all gains and losses are included in net income in the period
in which they arise. Available-for-sale financial instruments are
subsequently measured at fair value with revaluation gains and losses
included in other comprehensive income until the instrument is
derecognized or impaired.
(m) Derivative financial instruments
The Company operates principally in Canada and the United States,
which gives rise to risks that its income and cash flows may be
adversely impacted by fluctuations in foreign exchange rates. The
such indication exists, the recoverable amount of the asset, which
is the higher of its fair value less costs to sell and its value in use, is
estimated in order to determine the extent of the impairment loss.
Where the asset does not generate cash flows that are independent
from other assets, the Company estimates the recoverable amount
of the cash-generating unit (CGU) to which the asset belongs. For
tangible and intangible assets excluding goodwill, the CGU is the
smallest group of assets that generates cash inflows from continuing
use that are largely independent of the cash inflows of other assets or
groups of assets.
Impairment of financial assets
Company may enter into foreign currency forward contracts to
Financial assets are assessed at each reporting date to determine
manage foreign exchange exposures on accounts receivable expected
whether there is any objective evidence that they are impaired. A
to be recovered in U.S. dollars.
The fair value of each contract is included on the consolidated balance
sheet within derivative financial instrument assets or liabilities,
depending on whether the fair value was in an asset or liability
financial asset is considered to be impaired if objective evidence
indicates that one or more events have had a negative effect on
the estimated future cash flows of that asset. An impairment loss is
calculated as the difference between its carrying amount, and the
29
Notes to Consolidated Financial Statements
present value of the estimated future cash flows discounted at their
attributes. The Company’s assessment is based upon existing tax
original effective interest rate. All impairment losses are recognized in
laws and estimates of future taxable income. If the assessment of
the consolidated statement of comprehensive income. An impairment
the Company’s ability to utilize the underlying future tax deductions
loss is reversed if the reversal can be related objectively to an event
changes, the Company would be required to recognize more or fewer
occurring after the impairment loss was recognized.
of the tax deductions as assets, which would decrease or increase the
4. Critical Accounting Estimates and Judgments
The Company makes estimates and assumptions concerning the
future. The resulting accounting estimates may, by definition, not
equal the actual results. The estimates and assumptions that are
critical to the determination of carrying value of assets and liabilities
are addressed below.
(a) Sales incentives
The Company provides certain sales incentives on some sales that
may be settled after period end. An estimate of these amounts that
may be payable is accrued, but may vary based on the programs
in place at the time of settlement. These have been accrued for in
accounts payable and accrued liabilities.
(b) Allowance for inventory obsolescence and net realizable value
The Company estimates allowances for potential losses resulting from
inventory becoming obsolete and that cannot be processed and/
or sold to customers. Additional allowances may be required if the
physical condition of inventory deteriorates or customer requirements
change and cost exceeds net realizable value. The Company has
high estimation uncertainty regarding its inventory provision. The
Company provision ranges from 20% to 30% on selected items. If this
assumption changed by 10% the provision would increase or decrease
by $4.5 million.
(c) Provision for warranty costs
income tax expense in the period in which this is determined.
The Company makes claims for Scientific Research and Experimental
Development (SRED) expenditures which are included in deferred
taxes. The amounts recorded are based on the Company's
interpretation of the Income Tax Act of Canada provisions which
govern the eligibility of SRED costs. The claims may be subject to
review by the Canada Revenue Agency (CRA) before refunds are
received. Actual collection may be materially different than what
is recorded in the financial statements. The Company is currently
challenging CRA in court in regards to certain of its SRED credits
and believes that it will be successful in defending its SRED claim.
The Company's SRED credits are recorded on the balance sheet after
review of the relevant accounting pronouncements (note 10).
The Company is subject to taxation in multiple jurisdictions. Significant
judgment is required in determining the worldwide provision for
taxation. There are many transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course
of business. The Company maintains provisions for uncertain tax
positions that it believes appropriately reflect its risk with respect
to tax matters under active discussion, audit, dispute or appeal
with tax authorities, or which are otherwise considered to involve
uncertainty. These provisions for uncertain tax positions are made
using management’s best estimate of the amount expected to be paid
based on a qualitative assessment of all relevant factors. Management
The Company offers warranties for its sale of equipment. Management
reviews the adequacy of these provisions at each consolidated
estimates the related provision for future warranty claims based on
balance sheet date. However, it is possible that at some future date
historical warranty claim information, as well as recent trends that
an additional liability could result from audits by taxing authorities.
might suggest that past cost information may differ from future
Where the final tax outcome of these matters is different from the
claims.
Factors that could impact the estimated claim information include the
amounts that were initially recorded, such differences will affect the tax
provisions in the period in which such determination is made.
success of the Company’s productivity and quality initiatives, as well
The operations and organizational structure of the Company are
as parts and labor costs.
(d) Income taxes
Estimation of income taxes includes evaluating the recoverability of
deferred tax assets based on an assessment of the Company’s ability
to utilize the underlying future tax deductions against future taxable
income before they expire. Management plans to take all necessary
steps to utilize deferred tax attributes before they expire and believe
they have a plan that ensures they will ultimately fully utilize these
complex, and related tax interpretations, regulations and legislation
are continually changing. As a result, there are usually some tax
matters in question that result in uncertain tax positions. The
Company approaches uncertain tax positions from a liability or
exposure perspective. The Company provides for future liabilities
in respect of uncertain tax positions where additional tax may
become payable in future periods and such provisions are based on
management’s assessment of exposures.
30
Notes to Consolidated Financial Statements
(e) Economic conditions
Russian ownership (Note 1), management is monitoring ongoing
In the context of the Covid-19 pandemic and the related climate of
compliance.
uncertainty, the Company revised some of its most complex estimated
and assumptions , including significant judgement areas, used in
preparing the consolidated financial statements for the period ended
December 31, 2021. The main estimates revised to reflect the impact
of Covid-19 pandemic on financial reporting were the determination
of whether there was an indication that assets, CGU’s or groups of
CGU’s may be impaired, the assumption used in the establishment
of their recoverable amount when an impairment test was deemed
necessary, and the assessment of the credit risk on receivables.
In the prior period, the Company also accessed loans in the amount
of $1,534 ($1,146 USD) with Alerus Financial. These loans bore interest
at 1% per annum. These loans were scheduled to have repayments
commence on December 15, 2020, however prior to scheduled
repayments commencing, but subsequent to period end, the loans
were repaid in full through receipt of government grants from the
United States Small Business Administration’s Paycheck Protection
Program.
Additional revisions might be required in the future depending
7. Inventories (000's C$)
on the development of the pandemic and its impact on the final
measurement of the carrying amount of the Company’s assets.
The Covid-19 pandemic continues to disrupt supply chains and the
Companies ability to produce all parts on a timely basis.
(f) Government grants
Government assistance that requires payment and that is non-interest
bearing is accounted for at its fair value, based on management’s
best estimates. The difference between the assistance amount and its
fair value is accounted for as a government grant and recognized in
income over the period in which the related cost they are intended to
compensate for are recognized.
Raw materials
Work in process
Finished goods
December 31,
2021
September 30,
2020
$ 83,048
4,284
79,072
$ 50,786
5,896
90,249
$ 166,404
$ 146,931
During the period, inventories in the amount of $206,678 (2020
- $170,674) were expensed to cost of goods sold, which included
net inventory reversals of write-downs of $4,212 (2020 - recoveries
$1,556).
The carrying value of inventories is pledged as security against the
5. Accounting Standards Implemented in 2021
No new accounting standards came into effect in 2021 fiscal year.
Company’s credit facilities.
Included in inventories are units sold on consignment being held at
dealers locations in the amount of $782 (2020 - $3,861).
6. Credit Facilities (000’s C$)
The Company has available a financing facility in the amount
of $60,000 (2020 - $60,000). This facility is an asset-based credit
agreement with the Canadian Imperial Bank of Commerce (CIBC).
The credit facility is secured by a general security agreement and
assignment of specific receivables and inventory in Canada and the
U.S. In addition, certain Canadian properties are also secured by CIBC.
The Company convenants that the value of its accounts receivable and
inventories are less than or equal to 85% of it's calculated borrowing
base or it is subjected to a Fixed Charge Coverage Ratio of not less
than 1.05:1.00. The financing facility is at Bankers Acceptance and/or
LIBOR rates plus stamping fees. At December 31, 2021, the amount
drawn on this facility is $27,299 (2020 - $6,673). Cash balances of
$5,224 (2020 - $1,400) have been netted with the above facilities.
The financing agreement incorporates an Anti-Corruption Laws and
Sanctions covenants requiring the Company and its officers, directors,
employees and agents to not be a sanctioned person. The agreement
also contains and a Material Adverse Effect covenant. Due to its
31
Notes to Consolidated Financial Statements
8. Property, Plant and Equipment (000’s C$
9. Related Party Transactions (000's C$)
Land
Buildings
Equipment
Computer
Equipment
Total
3,557
9,096
-
-
-
-
(110)
(908)
4,645
1,064
(127)
742
32
(2)
18,040
1,096
(239)
(1,988)
(231)
(3,127)
3,557
8,078
-
-
1,708
-
3,594
2,772
(274)
(1,275)
(1,657)
-
541
481
(30)
-
15,770
4,961
(304)
(2,932)
Sept. 30,
2019 net
book value
Additions
Disposals
Depreciation
Sept. 30,
2020 net
book value
Additions
Disposals
Transfer to
held for sale
Accounts receivable from controlling
shareholder
2021
2020
$4,229
$3,076
Accounts payable to controlling shareholder
83
2,086
Advances from controlling shareholder
24,469
34,172
Net sales to controlling shareholder
including intellectual property sales
recorded as gains on disposal of assets
$19,572
$6,052
Net purchases from controlling shareholder
143
378
All transactions with related parties are recorded at fair value agreed
to by the related parties. In the current period, the Company sold
certain intellectual properties to the controlling shareholder. These
relate to Tier III tractor models that no longer have a market in North
Depreciation
-
(1,054)
(1,509)
(197)
(2,760)
America for $14,400. There was no cost basis for these intellectual
Dec. 31,
2021 net
book value
$2,282
$7,075
$4,583
$795
$14,735
agreed upon are based on external valuations.
properties, which resulted in a gain on sale of $14,400. The amounts
Land
Buildings
Equipment
Computer
Equipment
Total
Cost
$3,557
$28,361
$58,412
$6,847
$97,177
Accumulated
depreciation
2020 net
book value
-
(20,283)
(54,818)
(6,306)
(81,407)
$3,557
$8,078
$3,594
$541
$15,770
Cost
$ 3,557
$30,015
$54,278
$5,026
$90,705
(1,275)
(1,657)
-
-
(2,932)
-
(21,283)
(49,695)
(4,231)
(75,970)
Transfer to
held for sale
Accumulated
depreciation
2021 net
book value
The advances from the controlling shareholder of $19,300 USD (2020
- $25,618 USD) bears interest at 5.0%. Amounts are repayable in USD
as follows:
Due Date
November 2023
January 2024
January 2024
Accrued interest
Total
2021
2020
Restated
(note 24)
$8,000
$8,000
3,020
8,280
-
9,020
8,280
318
$19,300
$25,618
$2,282
$7,075
$4,583
$795
$14,735
Compensation of Key Management
The Company reviewed its property, plant and equipment for
indicators of impairment. No assets were identified as impaired.
Key management personnel are those persons having authority and
responsibility for planning, directing and controlling the activities
of the Company. The Board of Directors and Executive Committee
Included in property, plant and equipment is $709 of equipment not
are key management personnel. The following table details the
being depreciated as the assets are not yet in use (2020 - $19).
During the previous year, and into the current period the Company
transitioned operations from its Fargo, ND and Willmar, MN to it’s
Morden, MB facility. As a result the facilities and related land in these
two locations is now considered redundant to the needs of the
Company and are actively listed for sale. It is anticipated both facilities
will be sold in the coming year.
compensation paid to these key management personnel (note - no
amounts were paid for post-retirement benefits nor were there any
share based payments):
Salaries, fees and short term employee
benefits
2021
2020
$2,781
$2,460
32
Notes to Consolidated Financial Statements
10. Income Taxes (000's C$)
Current period
Adjustment for prior years
Current income tax expense (recovery)
Origination and reversal of timing
differences
Derecognition of tax credits
SR&ED credits earned
Deferred taxes (recovery) expense
2021
$107
(30)
$77
-
-
-
-
2020
$602
782
$1,384
$(117)
-
-
$(117)
taxable profits is probable. The ability to realize the tax benefits of
these losses is dependent upon a number of factors, including the
future profitability of operations in the jurisdictions in which the tax
losses arose.
The Company has a deferred tax asset of $35,308 in Canada
(2020 - $34,058). In the current period, only $5,624 (2020 - $5,624) has
been recorded. The remaining $29,684 will be recognized in future
periods when profitability returns in Canada. These losses begin to
expire in 2037.
Deferred tax assets of $18,211 in the U.S. (2020 - $19,296) in excess
of the deferred tax losses are available to be carried forward to
Combined Canadian federal and
provincial income tax rate
Foreign tax rate differences applied to
profits (losses)
27.0%
27.0%
future periods. Management believes that these assets will be
realized in future periods. As a result of losses over the past few
-
-
years, management has decided to not recognize these assets as at
Derecognition of tax credits
(4.6%)
(27.2%)
Losses carried back at a higher tax rate
Adjustments for prior years
SR&ED credits earned
Non-taxable portion of capital gains
Permanent differences and other
Effective income tax rate
-
3.6%
(4.0%)
(24.4%)
3.3%
0.9%
-
(3.2%)
-
-
(1.8%)
(5.2%)
Income taxes paid during the period were $468 (2020 - $317).
December 31, 2021. These assets will be recognized in future periods
when profitability returns in the U.S.. These losses begin to expire
in 2034.
The current value of all SRED claims net of estimated taxes and
allowances is $4,693 (September 30, 2020 - $4,693). The Company's
claims for SRED credits for the tax years 2005 - 2011 ($5,506) are
currently being challenged by Canada Revenue Agency (CRA). The
claim for 2005 will be reviewed by tax court, while claims for 2006 and
2007 are being held in abeyance by CRA pending the outcome of the
2005 claim. Tax years 2008 through to 2011 have received refunds
Deferred income taxes are recorded to reflect the timing differences
in the amount of $813 during the prior year and the assessments for
arising from deduction of warranty costs for income tax purposes,
these years will
the amounts of depreciation and amortization provided in the period
be appealed. Final settlement for these claims may take several years
compared to the allowances deducted for income tax purposes,
to resolve.
taxable losses carried forward to future periods, expected Scientific
Research and Experimental Development (SRED) tax credit claims and
other temporary timing differences.
The 2012, 2013 and 2014 claims ($2,206) have been approved and
were paid out by CRA in prior years. The 2015, 2016 and 2017 claims
have been approved and partially paid out by CRA ($1,633), with
The following are the components of the deferred tax assets and
the remaining payment expected in a future period when there is
liabilities recognized by the Company:
taxable income. The 2018 claim for $482 is currently under review. The
2020 and 2021 SRED claims will be filed with CRA prior to any filing
deadlines.
Deferred income tax assets
Property, plant and equipment
SRED credits
Total
2021
$931
4,693
2020
$931
4,693
$5,624
$5,624
Deferred income tax liabilities
Property, plant and equipment
2021
$39
2020
$48
Deferred tax assets are recognized for tax loss carry-forwards to the
extent that the realization of the related tax benefit through future
33
Notes to Consolidated Financial Statements
11. Interests in Joint Ventures and Other Entities (000’s C$)
13. Short and Long-Term Debt (000’S C$)
The Company has a joint venture operating as Bradley Steel Processors
The Company’s long-term debt consists of a $15,000 facility with
Inc. and minority interests in other various entities.
Canadian Imperial Bank of Commerce, secured by a mortgage on
The summarized financial information of the Company’s share of the
investments in joint ventures and other entities is as follows:
Balance sheet information
2021
2020
Assets
Current
Non-current
Total Assets
Liabilities
Current
Non-current
Total Liabilities
Equity
Total Liabilities and Equity
Income statement
information
Revenues
Profit from continuing
operations
Net income and
comprehensive income
Other information
Dividends received from joint
ventures and other entities
Depreciation
Income tax expense
$6,942
174
$7,116
$520
2
522
6,594
$7,116
$6,123
249
$6,372
$231
2
233
6,139
$6,372
$7,239
$4,140
$697
$508
$10
$38
$189
$131
$94
$26
$18
$36
12. Warranty Provision (000’S C$)
The Company generally provides its customers with a warranty on the
goods sold. The movement in the provision for warrant costs during
the Company’s Winnipeg properties and a guarantee from Export
Development Canada. The loan matures on October 8, 2022 and is
amortized over 84 months with principal repayments commencing
February 2021 in the amount of $179 per month. It is anticipated that
this will be renewed in October 2022.
The long-term debt facility incorporates the same Anti-Corruption
Laws and Sanctions and Material Adverse Effect covenants as the
credit facility discussed in Note 6.
The Company has long-term debt of $393, 2020 - $414 ($310 USD,
2020 - $310 USD) due to The City of Willmar. This amount bears
interest at the annual rate of the implicit price deflator for Minnesota
and is due June 2025.
14. Capital Stock and Options (000’s C$)
Authorized, an unlimited number of Class A & B common shares.
2021
2020
Shares
Shares
Issued Class A
common
25,000 $30,000
25,000
$30,000
There are no options outstanding as of December 31, 2021 nor
September 30, 2020.
15. Interest Paid (000’s C$)
Bank indebtedness
Wholesale financing
Long-term debt
2021
$691
4,161
2,577
$7,429
2020
$1,602
4,117
1,355
$7,074
the period is as follows:
Opening balance
Warranty accrual (recovery) (net)
Effect of exchange rate
Closing balance
Interest expense includes interest on long-term, bank indebtedness
and wholesale financing. Through an agreement with DLL, the initial
wholesale financing interest expense for the dealer is paid by Buhler
Industries Inc. to DLL to support a segment of Buhler’s North American
dealer network. Under the agreement, dealers have dedicated credit
2020
$5,810
3,490
15
lines with DLL, customized service, and competitive terms that allow
2021
$9,315
2,045
(48)
$11,312
$9,315
them to manage and grow their businesses effectively. The floorplan
The Company’s warranty costs for the period, net of recoveries from
suppliers, was $15,179 (2020 - $11,671).
financing terms and interest costs are variable and may change
from time to time. As part of the agreement with DLL, the Company
guarantees the repurchase of equipment in certain instances such as
dealer bankruptcy.
34
Notes to Consolidated Financial Statements
16. Expenses by Nature (000’s C$)
Raw materials and
consumables used
Depreciation and amortization
Personnel expenses
Freight
2021
2020
$240,921
$197,952
2,760
64,095
8,443
1,937
61,918
5,118
$316,219
$266,925
17. Segmented Information (000’s C$)
2021
Canada
U.S.
CIS
Other
Revenue
$122,170 $154,847
$7,381 $32,780
Property, plant,
and equipment
10,460
5,143
167
-
19. Cash Flow Changes from Financing Activities (000’s C$)
Details of changes in financing activities for the period ended
December 31, 2021 and September 30, 2020 are as follows:
Short-term
debt
Long-term
debt
Advances
from
related
party
Total
Sept 30, 2019
Cash flows
Foreign exchange
Sept 30, 2020
Cash flows
-
-
-
-
-
Foreign exchange
12,857
$(411)
$(21,858)
$(22,269)
-
(3)
(12,314)
(12,314)
-
(3)
(411)
(34,172)
(34,586)
-
21
7,833
1,870
7,833
1,891
Dec 31, 2021
$12,857
$ (393)
$(24,469)
$(24,862)
2020
20. Capital Management
The Company’s fundamental objectives in managing capital are to
Canada
U.S.
CIS
Other
maintain financial flexibility in order to preserve its ability to meet
Revenue
$102,192
$120,840
$8,887
$28,850
Property, plant,
and equipment
10,460
5,143
167
-
CIS is the Commonwealth of Independent States, including Russia,
Kazakhstan and Ukraine.
18. Changes in non-cash working capital (000’s C$)
Details of changes in financing activities for the period ended
December 31, 2021 and September 30, 2020 are as follows:
Accounts receivable
Inventories
Prepaid expenses
Accounts payable and accrued
liabilities
Income taxes receivable/
payable
Foreign exchange loss on the
above items
2021
$24,240
(19,473)
644
(29,875)
(487)
4,709
2020
$12,766
18,700
(2,902)
9,511
4,218
(815)
financial obligations, ensure adequate liquidity and financial flexibility
at all times, and deploy capital to provide an appropriate investment
return to its shareholders while maintaining prudent levels of financial
risk. The Company believes that the aforementioned objectives are
appropriate in the context of the Company’s business.
The Company defines its capital as cash, bank indebtedness,
shareholders’ equity, long-term debt, advances from related party, net
of any cash and cash equivalents. The Company’s financial strategy
is designed to maintain a flexible capital structure consistent with
the objectives stated above and to respond to changes in economic
conditions and the risk characteristics of underlying assets. In order
to maintain or adjust its capital structure, the Company may purchase
shares for cancellation pursuant to normal course issuer bids, issue new
shares, raise debt (secured, unsecured, convertible and/or other types
of available debt instruments), enter into hedging arrangements and
refinance existing debt with different characteristics, amongst others.
The Company constantly monitors and assesses its financial
performance and economic conditions in order to ensure that its net
$(20,242)
$41,478
debt levels are prudent.
The Company’s financial objectives and strategy are reviewed on
an annual basis. The Company believes that its ratios are within
reasonable limits, in light of the relative size of the Company and its
capital management objectives.
There are no externally imposed capital restrictions on the Company.
There were no changes in the Company’s approach to capital
management during the period.
35
Notes to Consolidated Financial Statements
21. Financial Instruments (000’s C$)
values of these financial instruments approximate fair value due to the
The following presents the carrying value and fair value of the
short term nature of the financial instruments or they are carried at
Company’s financial instruments:
fair value.
Bank
indebtedness
Accounts
receivable
2021
Financial Asset/
Liability
Classification
Carried
at cost/
Amortized
cost
Fair
value
Amortized cost
$(22,074)
The Company has classified its interest in other entities as FVTPL.
These shares are not actively traded in a quoted market and
accordingly fair value has been estimated to be cost.
The Company categorizes its fair value measurements of financial
instruments according to a three-level hierarchy. The hierarchy
prioritizes the inputs used by the Company’s valuation techniques. A
Amortized cost
19,197
level is assigned to each fair value measurement based on the lowest
Interest in other
entities
FVTPL
Accounts payable
and accured
liabilities
Current portion of
long-term debt
Amortized cost
(71,888)
Amortized cost
(12,875)
Long term debt
Amortized cost
(393)
level input significant to the fair value measurement in its entirety. The
103
three levels of the fair value hierarchy are defined as follows:
Level 1 – fair value measurements that reflect unadjusted, quoted
prices in active markets for identical assets and liabilities that the
Company has the ability to access at the measurement date.
Level 2 – fair value measurements using inputs other than quoted
prices included within Level 1 that are observable for the asset or
liability, either directly or indirectly. These include quoted prices
Advances from
related parties
Amortized cost
(24,469)
for similar assets and liabilities in active markets, quoted prices for
2020
Financial asset/
Liability
Classification
Carried
at cost/
Amortized
cost
Fair value
Bank
indebtedness
Accounts
receivable
Amortized cost
$(6,807)
Amortized cost
46,607
Interest in other
entities
FVTPL
Amortized cost
(104,933)
Accounts payable
and accrued
liabilities
Current portion of
long-term debt
Amortized cost
Long term debt
Amortized cost
-
(414)
Advances from
related parties
Amortized cost
(34,172)
identical or similar assets and liabilities in inactive markets, inputs that
are observable that are not prices (such as interest rates and credit
risks) and inputs that are derived from or corroborated by observable
market data. The fair values of interest in other entities are disclosed at
fair value based on a level 2 classification.
Level 3 – fair value measurements using significant non-market
observable inputs. These include valuations for assets and liabilities
that are derived using data, some or all of which is not market
observable data, including assumptions about risk. The Company
157
does not have any financial instruments measured at fair values based
on level 3 inputs.
22. Financial Risk Management (000’s C$)
The Company’s risk management program focuses on the
unpredictability of financial markets and seeks to minimize potential
adverse effects on the Company’s financial performance. The Company
manages its risks and risk exposures through a combination of
insurance, a system of internal and disclosure controls and sound
business practices.
Financial instruments includes bank indebtedness, accounts
Risk management is primarily the responsibility of the Company’s
receivable, advances to related parties, financial instruments, long-
corporate finance function. Significant risks are regularly monitored
term receivables, interests in other entities not subject to significant
and actions are taken, when appropriate, according to the Company’s
influence, accounts payable and accrued liabilities, advances
approved policies, established for that purpose. In addition, as
from related parties and long-term debt. Except for the long-term
required, these risks are reviewed with the Company’s Board of
receivables, interests in other entities and long-term debt, the carrying
Directors.
36
Notes to Consolidated Financial Statements
Interest Rate Risk
In addition, translation differences arise when foreign currency
The Company’s interest rate risk arises from its variable rate bank
monetary assets and liabilities are translated at foreign exchange
indebtedness, wholesale financing and long-term debt. The long-
rates that change over time. These foreign exchange gains and losses
term debt at a very low rate, and therefore carries minimal interest
are recorded in revenues. As a result of the Company’s U.S. dollar net
rate risk. As the bank indebtedness is all variable rate, the Company is
monetary position within the Canadian dollar reporting currency
exposed to a certain level of interest rate risk. Management feels that
operations through to December 31, 2021 a one-cent strengthening/
these risks are manageable as the interest rate on this debt is less than
weakening in the period-end foreign exchange rate from Canadian
prime and therefore has not entered into any instruments to mitigate
dollars to U.S. dollars would have decreased/increased net earnings by
this risk. Based on the level of bank indebtedness outstanding at
$90 (2020 - $81).
December 31, 2021, a 1% increase/decrease in the rate being charged
to the Company would result in a $273 (2020 - $67) decrease/increase
in net earnings.
As the mortgage financing is all variable rate, the Company is exposed
to certain level of interest rate risk. Based on the level of mortgage
22. Financial Risk Management (000’s C$) - continued
The Company’s exposure to foreign currency risk reported in U.S.
dollars was as follows:
2021
2020
$5,949
$18,849
(4,821)
(11,157)
financing at December 31, 2021, a 1% increase/decrease to the
Accounts receivable
Company would result in a $129 (2020 - $nil) decrease/increase in net
earnings.
Accounts payable and other accrued
liabilities
As the wholesale financing is all variable rate, the Company is exposed
to certain level of interest rate risk. Based on the level of mortgage
financing at December 31, 2021, a 1% increase/decrease to the
Advances from related party
(19,300)
(25,618)
Long term debt
(310)
(310)
$(18,482)
$(18,236)
Company would result in a $555 (2020 - $1,139) decrease/increase in
The Company is partially insulated from large foreign exchange gains
net earnings.
Commodity Price Risk
The Company’s manufacturing costs are affected by the price
of raw materials, namely steel. In order to manage its risk, the
Company applies a steel surcharge to its product when the cost of
steel increases significantly. The Company’s preferred practice is to
match raw materials cost changes with selling price adjustments,
although there is a time lag. This matching is not always possible, as
customers react to selling price pressures related to raw material price
fluctuations according to conditions pertaining to their markets.
Foreign Exchange Risk
and losses by virtue of its mix of cash inflows and outflows in U.S.
dollars. Gains and losses generated by fluctuations in the exchange
rates used to translate U.S. dollar assets are offset by similar gains
and losses on U.S. dollar liabilities. The Company also uses forward
contracts to further mitigate these fluctuations when the natural
hedges are forecasted to be insufficient.
As at December 31, 2021 the Company had US to CAD foreign currency
contracts with a notional value of $nil in place (2020 - $2,500) Fair
value adjustments are recognized with (gain) loss on foreign exchange
in the consolidated statement of comprehensive income. A one-cent
strengthening/weakening in the period end foreign exchange rate
from CAD to USD would have increased/decreased the value of these
The Canadian dollar is the Company’s functional currency. The
contracts by $nil (2020 - $25) before taxes.
Company operates primarily in Canada and the United States. The
reporting currency of the Company is Canadian dollars, whereas the
Liquidity Risk
functional currency for operations in the United States and sales to
the CIS region are the U.S. dollar. Fluctuations in the exchange rate
between the U.S. dollar and Canadian dollar will affect the Company’s
reported results. However, the impact of changes in foreign exchange
rates on the Company’s reported results differs over time depending
on whether the Company is generating a net cash inflow or outflow of
Canadian dollars. This is largely dependent on the Company’s revenue
mix by currency as operating costs denominated in Canadian dollars
have been relatively stable.
Investments to drive growth can require significant financial resources.
A range of funding alternatives is available to the Company including
cash on hand, cash flow provided by operations, additional debt,
the issuance of equity or a combination thereof. The Company has
current credit facilities of $60,000 in place. Actual bank funding may
differ as the result of margin availability subject to meeting certain
accounts receivable and inventory covenants. As at December 31,
2021 the Company had access to $42,970 (2020 - $38,700), subject to
compliance to covenants in the credit facility (Note 6). The Company
37
Notes to Consolidated Financial Statements
manages its liquidity risk by forecasting cash flows and determining
accounts receivable balances outstanding based on the status of the
if the credit facilities in place are adequate or if additional financing
receivable in relation to when the receivable was due and payable and
would be required.
related allowance for doubtful accounts:
The 2021 requirements for capital expenditures, working capital
and debt repayments can be financed from cash resources, cash
flow provided by operating activities and unused credit facilities.
The following table outlines the maturity analysis of the Company’s
financial liabilities:
2021
2022
2023
2024
2025
Post
2026
Total
$22,074
$ -
$ -
$ -
$ -
$ -
$22,074
Bank indebtedness
71,888
-
-
-
Accounts payable and accrued liabilities
-
-
Due to related party
10,143
14,326
Short-term debt
-
-
-
-
2,143
2,143
2,143
2,143
2,143
2,143
12,858
-
-
-
Long-term debt
-
Total
393
-
393
$ 96,105
$ 2,143
$12,286
$16,469
$2,536
$2,143
$131,682
Current - neither impaired nor past due
$17,007
$34,234
2021
2020
Not impaired but past the due date; Within
30 days
31-60 days
Over 60 days
623
47
1,657
828
2,455
11,028
20,132
47,747
Less: Allowance for doubtful accounts
(935)
(1,140)
Total receivables, net
$19,197
$46,607
71,888
The following table details the continuity of the allowance for
doubtful accounts:
24,469
2021
2020
Balance, beginning of period
$(1,140)
$(1,271)
Provisions for the period, net of recoveries
Uncollectible amounts written off
Foreign exchange impact
Balance, end of period
23. Subsequent Events
(617)
763
59
(161)
289
3
$(935)
$(1,140)
Credit Risk
Financial instruments which potentially subject the Company to credit
risk and concentrations of credit risk consist principally of accounts
receivable. Management has assessed that the credit risk associated
with accounts receivable is mitigated by the credit agreements
During the year the Company announced the closure of the Vegreville,
Alberta facility. At year end the Company was in the process of
transferring production lines and inventory out of the facility. The
production line at Vegreville is expected to be transferred to Winnipeg,
MB following the 2021 fiscal year.
the Company has in place including personal guarantees from the
24. Comparative Period Balances
counterparties.
The maximum exposure to the risk of credit for accounts receivable
corresponds to their book value. Historically, the Company has
Certain prior period amounts have been reclassified for consistency
with the current year presentation. These reclassifications had no
effect on the reported results of operations.
experienced nominal bad debts as a result of the security agreements
In the prior period, advance from related party was shown as short-
in place that allow the Company to recovery goods from dealers that
term debt and has been re-classed to long-term debt based on
has not been paid for as well as personal guarantees. During 2021, the
the contractual terms to properly reflect the agreed upon terms of
Company recorded a bad debt expense of $617 (2020 - $161).
repayment of the obligation.
The carrying amount of accounts receivable is reduced through the
use of an allowance account and the amount of the loss is recognized
in the consolidated statements of net loss and loss within selling and
administration expenses. When a receivable balance is considered
uncollectible, it is written off against the allowance for doubtful
accounts. Subsequent recoveries of amounts previously written off are
credited against selling and administration expenses.
The following table sets out the aging details of the Company’s
38
Company Information
Audit Committee
Ossama AbouZeid - Audit Chairman
Allan L .V . Stewart
Oleg Gorbunov
Legal Counsel
Thompson Dorfman Sweatman LLP
Winnipeg, Manitoba
Exchange Listing
The shares of Buhler Industries Inc . are
listed on the Toronto Stock Exchange
and trading under the symbol “BUI” .
Corporate Banker
Canadian Imperial Bank of Commerce
Winnipeg, Manitoba
Cusip Number
119 918 100
Transfer Agent
Computershare Trust Company of Canada
Calgary, Alberta
Corporate Office
1260 Clarence Avenue
Winnipeg, Manitoba, R3T 1T2
Ph: (204) 661-8711
Fax: (204) 654-2503
Web site: www .buhlerindustries .com
Auditors
BDO LLP
Winnipeg, Manitoba
Annual Meeting
The annual meeting of shareholders will be
held on June 22, 2022, 11:00 AM at
1260 Clarence Avenue, Winnipeg, Manitoba
Directors
NAME
Grant Adolph P .Mgr
Yury Ryazanov
OFFICE
Director/Chairman
Director/CEO
PRINCIPAL OCCUPATION
Chief Operating Officer, Buhler lndustries lnc .
Vice President and Co-owner of Novoe Sodrugestvo Ltd .
Ossama AbouZeid PhD, MBA
Director/Audit Chairman
Partner/Consultant of NXT partners
Adam Reid
Allan Stewart В .А ., LL .B .
Dmitry Udras
Oleg Gorbunov
Director
Director
Director
Director
Vice President of Sales & Marketing, Versatile
Lawyer, Thompson Dorfman Sweatman LLP
Member and Co-owner of Novoe Sodrugestvo Ltd .
Adviser to the СЕО of Novoe Sodrugestvo Ltd .
Officers and Senior Management
Marat Nogerov
Maxim Loktionov
Grant Adolph P .Mgr
Willy Janzen СРА, CGA ., B .Comm .
Officer
Officer
Officer
Officer
President, Buhler lndustries lnc .
Vice President, Buhler lndustries lnc .
Chief Operating Officer, Buhler lndustries lnc .
Chief Financial Officer, Buhler lndustries lnc .
Adam Reid
Management
Vice President of Sales & Marketing, Versatile
Todd Trueman С .1 .М ., P .Mgr ., C .Mgr . Management
Director of Human Resources, Buhler lndustries lnc .
Neil Frechette
Louis Lepine
Doug White
Olga Shopp
Natalia Nikushkina
Management
Management
Management
Management
Management
Director of Information Technology, Buhler Industries Inc .
Director of Corporate Quality, Buhler lndustries lnc .
Operations Manager, Versatile
Director of Engineering, Versatile
Director of Purchasing, Versatile
39
Stock Data
Buhler (excl. dividends) compared with TSX Index
1994 to December 31, 2021
Buhler
TSX
n
e
p
O
4
9
9
1
5
9
9
1
6
9
9
1
7
9
9
1
8
9
9
1
9
9
9
1
0
0
0
2
1
0
0
2
2
0
0
2
3
0
0
2
4
0
0
2
5
0
0
2
6
0
0
2
7
0
0
2
8
0
0
2
9
0
0
2
0
1
0
2
1
1
0
2
2
1
0
2
3
1
0
2
4
1
0
2
5
1
0
2
6
1
0
2
7
1
0
2
8
1
0
2
9
1
0
2
0
2
0
2
1
2
0
2
Daily Closing Price
Opened March 25, 1994 at $1.05
Closed December 31, 2021 at $2.96
4
9
-
r
a
M
5
9
-
t
c
O
7
9
-
y
a
M
9
9
-
n
a
J
0
0
-
g
u
A
2
0
-
r
a
M
3
0
-
t
c
O
5
0
-
y
a
M
6
0
-
c
e
D
8
0
-
l
u
J
0
1
-
b
e
F
1
1
-
p
e
S
3
1
-
r
p
A
4
1
-
v
o
N
6
1
-
l
u
J
8
1
-
b
e
F
9
1
-
p
e
S
1
2
-
r
p
A
750
675
600
525
450
375
300
225
150
75
$8.00
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
(cid:31)(cid:30)(cid:29)(cid:28)(cid:27)(cid:26)(cid:25)(cid:24)(cid:31)
(cid:23)(cid:22)(cid:22)(cid:21) (cid:27)(cid:23)(cid:22)(cid:22)(cid:20) (cid:27)(cid:23)(cid:22)(cid:22)(cid:19) (cid:27)(cid:23)(cid:22)(cid:22)(cid:18) (cid:27) (cid:23)(cid:22)(cid:22)(cid:17) (cid:27) (cid:23)(cid:22)(cid:22)(cid:22) (cid:27) (cid:16)(cid:15)(cid:15)(cid:15) (cid:27) (cid:16)(cid:15)(cid:15)(cid:23) (cid:27) (cid:16)(cid:15)(cid:15)(cid:16) (cid:27) (cid:16)(cid:15)(cid:15)(cid:14) (cid:27) (cid:16)(cid:15)(cid:15)(cid:21) (cid:27) (cid:16)(cid:15)(cid:15)(cid:20) (cid:27) (cid:16)(cid:15)(cid:15)(cid:19) (cid:27) (cid:16)(cid:15)(cid:15)(cid:18) (cid:27) (cid:16)(cid:15)(cid:15)(cid:17) (cid:27)
(cid:16)(cid:15)(cid:15)(cid:22) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:15) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:23) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:16) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:14) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:21) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:20) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:19) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:18) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:17) (cid:27)
(cid:16)(cid:15)(cid:23)(cid:22) (cid:27)
(cid:16)(cid:15)(cid:16)(cid:15) (cid:27)
(cid:16)(cid:15)(cid:16)(cid:23) (cid:27)
(cid:30)(cid:29)(cid:28)(cid:27)(cid:31)
(cid:15)(cid:14)(cid:13)(cid:31)
(cid:26)(cid:25)(cid:24)(cid:23)(cid:31) (cid:24)(cid:25)(cid:22)(cid:23)(cid:31) (cid:24)(cid:25)(cid:21)(cid:20)(cid:31) (cid:26)(cid:25)(cid:19)(cid:18)(cid:31)
(cid:18)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:17)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:17)(cid:25)(cid:16)(cid:18)(cid:31)
(cid:17)(cid:25)(cid:16)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:19)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:21)(cid:26)(cid:31)
(cid:16)(cid:25)(cid:17)(cid:23)(cid:31)
(cid:16)(cid:25)(cid:22)(cid:17)(cid:31)
(cid:16)(cid:25)(cid:22)(cid:23)(cid:31)
(cid:16)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:22)(cid:25)(cid:21)(cid:23)(cid:31)
(cid:22)(cid:25)(cid:17)(cid:18)(cid:31)
(cid:22)(cid:25)(cid:23)(cid:23)(cid:31)
(cid:22)(cid:25)(cid:19)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:22)(cid:21)(cid:31)
(cid:16)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:16)(cid:25)(cid:17)(cid:23)(cid:31)
(cid:22)(cid:25)(cid:19)(cid:23)(cid:31)
(cid:22)(cid:25)(cid:23)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:23)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:20)(cid:21)(cid:31)
(cid:17)(cid:25)(cid:21)(cid:20)(cid:31)
(cid:17)(cid:25)(cid:20)(cid:21)(cid:31)
(cid:17)(cid:25)(cid:20)(cid:21)(cid:31)
(cid:24)(cid:25)(cid:23)(cid:19)(cid:31) (cid:24)(cid:25)(cid:24)(cid:23)(cid:31) (cid:24)(cid:25)(cid:17)(cid:16)(cid:31) (cid:24)(cid:25)(cid:16)(cid:23)(cid:31)
(cid:26)(cid:25)(cid:18)(cid:19)(cid:31)
(cid:26)(cid:25)(cid:17)(cid:19)(cid:31)
(cid:26)(cid:25)(cid:16)(cid:23)(cid:31)
(cid:17)(cid:25)(cid:23)(cid:23)(cid:31)
(cid:17)(cid:25)(cid:18)(cid:20)(cid:31)
(cid:19)(cid:25)(cid:26)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:18)(cid:20)(cid:31)
(cid:16)(cid:25)(cid:23)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:17)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:17)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:23)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:16)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:24)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:26)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:23)(cid:18)(cid:31)
(cid:19)(cid:25)(cid:26)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:19)(cid:24)(cid:31)
(cid:18)(cid:25)(cid:18)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:18)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:24)(cid:18)(cid:31)
(cid:17)(cid:25)(cid:19)(cid:17)(cid:31)
(cid:26)(cid:25)(cid:22)(cid:31)
(cid:26)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:26)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:12)(cid:11)(cid:14)(cid:10)(cid:9)(cid:31)
(cid:24)(cid:25)(cid:18)(cid:23)(cid:31) (cid:24)(cid:25)(cid:18)(cid:19)(cid:31) (cid:24)(cid:25)(cid:22)(cid:22)(cid:31) (cid:26)(cid:25)(cid:17)(cid:21)(cid:31)
(cid:17)(cid:25)(cid:23)(cid:19)(cid:31)
(cid:17)(cid:25)(cid:23)(cid:22)(cid:31)
(cid:17)(cid:25)(cid:19)(cid:16)(cid:31)
(cid:17)(cid:25)(cid:22)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:19)(cid:16)(cid:31)
(cid:16)(cid:25)(cid:26)(cid:23)(cid:31)
(cid:16)(cid:25)(cid:17)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:22)(cid:23)(cid:31)
(cid:22)(cid:25)(cid:21)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:18)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:26)(cid:19)(cid:31)
(cid:19)(cid:25)(cid:20)(cid:24)(cid:31)
(cid:19)(cid:25)(cid:22)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:17)(cid:19)(cid:31)
(cid:22)(cid:25)(cid:18)(cid:23)(cid:31)
(cid:19)(cid:25)(cid:19)(cid:24)(cid:31)
(cid:19)(cid:25)(cid:16)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:18)(cid:23)(cid:31)
(cid:18)(cid:25)(cid:18)(cid:19)(cid:31)
(cid:17)(cid:25)(cid:22)(cid:23)(cid:31)
(cid:17)(cid:25)(cid:16)(cid:17)(cid:31)
(cid:26)(cid:25)(cid:19)(cid:23)(cid:31)
(cid:26)(cid:25)(cid:21)(cid:22)(cid:31)
(cid:24)(cid:129)(cid:17)(cid:24)(cid:24)(cid:31) (cid:20)(cid:22)(cid:16)(cid:31)(cid:24)(cid:129)(cid:21)(cid:26)(cid:16)(cid:31)(cid:17)(cid:129)(cid:23)(cid:24)(cid:19)(cid:31) (cid:18)(cid:129)(cid:24)(cid:17)(cid:18)(cid:31) (cid:26)(cid:129)(cid:26)(cid:16)(cid:18)(cid:31) (cid:24)(cid:129)(cid:23)(cid:21)(cid:26)(cid:31) (cid:26)(cid:129)(cid:20)(cid:23)(cid:23)(cid:31) (cid:24)(cid:129)(cid:20)(cid:17)(cid:22)(cid:31) (cid:24)(cid:129)(cid:17)(cid:26)(cid:24)(cid:31) (cid:19)(cid:129)(cid:23)(cid:26)(cid:18)(cid:31) (cid:24)(cid:129)(cid:16)(cid:23)(cid:17)(cid:31) (cid:17)(cid:129)(cid:23)(cid:24)(cid:23)(cid:31) (cid:19)(cid:129)(cid:22)(cid:17)(cid:16)(cid:31) (cid:26)(cid:129)(cid:24)(cid:17)(cid:20)(cid:31)
(cid:16)(cid:18)(cid:19)(cid:31)
(cid:24)(cid:129)(cid:21)(cid:21)(cid:22)(cid:31)
(cid:22)(cid:20)(cid:18)(cid:31)
(cid:24)(cid:129)(cid:26)(cid:18)(cid:19)(cid:31)
(cid:20)(cid:21)(cid:16)(cid:31)
(cid:24)(cid:129)(cid:23)(cid:17)(cid:16)(cid:31)
(cid:22)(cid:23)(cid:17)(cid:31)
(cid:17)(cid:18)(cid:18)(cid:31)
(cid:24)(cid:24)(cid:22)(cid:31)
(cid:24)(cid:26)(cid:17)(cid:31)
(cid:24)(cid:18)(cid:24)(cid:31)
(cid:24)(cid:24)(cid:19)(cid:31)
(cid:24)(cid:21)(cid:21)(cid:31)
(cid:8)(cid:7)(cid:6)(cid:5)(cid:29)(cid:4)(cid:28)(cid:31) (cid:3)(cid:14)(cid:11)(cid:25)(cid:31)
(cid:2)(cid:23)(cid:23)(cid:23)(cid:1) (cid:10)(cid:127)(cid:31)
(cid:31)
40
10 Year Summary
SUMMARY OF OPERATIONS
Reported standards utilized
2012
IFRS
2013
IFRS
2014
IFRS
2015
IFRS
2016
IFRS
2017
IFRS
2018
IFRS
2019
IFRS
2020
IFRS
2021
IFRS
In thousands of Canadian dollars (except per share amounts)
361,234
340,349
325,501
245,676
274,067
311,974
287,984
229,119
305,480
283,031
277,791
223,410
252,841
275,821
254,510
218,776
55,754
23,292
32,462
(1,213)
(553)
3,507
2,705
-
8,375
19,641
(3,278)
16,363
57,318
22,529
34,789
(74)
(300)
4,459
47,730
25,239
22,491
(401)
(314)
3,741
(3,586)
(3,497)
(605)
8,533
26,362
(6,471)
19,891
(628)
8,663
14,927
(2,469)
12,458
22,266
26,278
(4,012)
(114)
(376)
3,345
(200)
(473)
8,323
(14,517)
(9,201)
(5,316)
21,226
25,894
(4,668)
(8,160)
(332)
4,315
(789)
(780)
8,739
(7,661)
(4,984)
(2,677)
249,550
237,865
11,685
22,129
(10,466)
(526)
(309)
7,074
1,022
(94)
6,909
36,153
26,766
3,474
25,979
9,387
(22,505)
(4,066)
(2,381)
(511)
7,894
622
(481)
12,345
(332)
5,926
1,152
(521)
9,604
(2,376)
(2,896)
10,343
23,974
(13,631)
(19,437)
(568)
9,050
494
(540)
7,802
(39,993)
(10,432)
(24,505)
9,539
19,057
1,267
520
(49,532)
(29,489)
(25,809)
4,799
385
-
-
943
1,096
-
-
-
-
-
-
-
-
-
317,178
284,099
33,079
26,774
6,305
(15,593)
(20)
7,429
(2,097)
(508)
8,106
8,988
77
8,911
(4,961)
15,000
(2,143)
-
2,444
5,857
4,639
3,216
2,785
2,963
-
-
-
-
-
Reduction of long-term debt
5,949
2,139
3,191
4,968
2,642
Dividends paid
Net cash flow
Net cash (bank indebtedness)
BALANCE SHEET SUMMARY
-
21,203
19,293
-
24,336
24,160
-
-
-
17,871
(633)
1,230
4,219
(46,225)
(468)
(22,682)
(11,671)
(51,715)
(52,830)
(20,452)
(12,553)
(37,254)
(37,722)
(6,807)
(22,074)
Cash, receivables and prepaid expenses
79,849
85,491
102,473
80,555
73,680
73,983
63,884
67,331
131,703
153,325
213,089
201,463
142,372
180,911
171,612
165,631
211,552
238,816
315,562
282,018
216,052
254,894
235,496
232,962
250,755
283,403
362,844
339,029
278,415
319,739
290,378
262,604
227,759
224,949
78,624
11,746
89,830
97,451
167,339
151,029
93,078
133,907
153,670
155,370
146,326
110,166
9,607
6,857
2,669
-
-
401
411
414
13,250
102,587
169,570
151,071
93,134
133,938
154,109
155,824
146,788
135,067
53,295
146,931
200,226
28,661
166,404
195,064
160,925
180,816
193,274
187,958
185,281
185,801
136,269
106,780
25.0
25.0
25.0
25.0
25.0
25.0
25.0
25.0
132,928
141,365
148,223
130,989
122,974
120,987
81,826
77,592
14.45
13.61
13.02
1.10
4.9
0.90
0.65
8.17
0.85
-
5.35
6.44
2.7
0.1
2.4
1.41
4.5
1.23
0.80
8.04
0.97
-
6.40
7.23
2.5
0.1
2.0
0.96
5.7
0.73
0.50
11.06
0.71
-
5.51
7.73
1.9
0.3
1.5
9.83
(0.26)
(22.0)
(0.46)
(0.21)
(24.81)
(0.03)
-
5.70
7.52
1.9
0.3
1.1
9.1%
11%
(3%)
(2%)
(3%)
(3%)
10.96
0.02
196.1
(0.15)
(0.11)
12.48
0.27
16.6
0.13
0.02
(41.09)
213.94
0.05
-
4.40
7.41
2.3
0.1
1.5
7.7%
9%
0%
(1%)
(1%)
(1%)
0.17
-
4.45
7.43
1.9
0.1
1.7
11.6%
9%
2%
0%
0%
0%
11.52
(1.15)
(3.1)
(1.30)
(1.98)
(1.82)
(1.85)
-
3.60
5.45
1.5
0.3
1.6
1.2%
9%
(10.0%)
(17%)
(16%)
(31%)
9.16
0.08
44.9
(0.08)
(1.18)
(3.16)
(1.04)
-
3.73
4.27
1.5
0.4
1.3
4.5%
10%
1%
(13%)
(10%)
(24%)
Gross margin (% of revenue)
15.4%
16.9%
14.7%
Selling & Admin. (% of revenue)
EBITDA (% of revenue)
Net earnings (% of revenue)
Return on average capital
Return on average equity
6%
8%
5%
10%
11%
7%
10%
6%
11%
12%
8%
7%
4%
6%
13%
80,971
25.0
88,072
9.98
(0.57)
(4.4)
(0.69)
(1.03)
(2.42)
1.23
-
2.51
3.24
1.8
0.4
1.5
4.7%
9%
(6)%
(10%)
(27%)
(27%)
89,882
25.0
84,898
12.69
0.77
3.9
0.66
0.36
8.30
0.47
-
2.96
3.60
1.8
0.4
1.8
10.4%
8%
6%
3%
10%
10%
Revenue
Cost of goods sold
Gross profit
Selling & admin. expense
(Loss) Income from operations
Gain on sale of capital assets
Interest income
Interest expense
Foreign exchange (gain) loss
Share of income of joint venture
Research & development exp.
Net earnings before taxes
Income tax expense (recovery)
Net earnings
CASH FLOW SUMMARY
Capital asset purchases
Long term debt incurred
Inventory
Total current assets
Total assets
Total current liabilities
Total short and long-term debt
Total liabilities
Total shareholders equity
Shares o/s (avg. in millions)
Working capital
DATA PER COMMON SHARE
Revenue
EBITDA
Price to EBITDA
EBIT
Net earnings
Price to earnings
Cash flow
Dividends paid
Closing share price
Shareholders’ equity
STATISTICAL DATA
Current ratio
Interest bearing debt/ equity ratio
Inventory turnover
Notes
42
Notes
43
Buhler Industries Inc.
1260 Clarence Avenue
Winnipeg
Manitoba
Canada
R3T 1T2
Ph: 204.661.8711
Fax: 204.654.2503
buhlerindustries.com
info@buhler.com