ANNUAL
REPORT
2023
Table of Contents
Versatile Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Farm King Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Message from the Chairman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Management Discussion & Financial Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Disclosure Controls & Internal Controls . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Management's Responsibility for the Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 18
Independent Auditor’s Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Consolidated Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Consolidated Statement of Income (Loss) and Comprehensive Income (Loss) . . . . 23
Consolidated Statement of Change in Shareholders’ Equity . . . . . . . . . . . . . . . . . . . . . . 23
Consolidated Statement of Cash Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Company Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Stock Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
10 Year Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
- 3 -
Versatile Introduction
In 2023, the Versatile division faced a landscape
pressure on our fill rates, impacting our ability to meet
filled with uncertainty, yet marked by resilience and
customer demands effectively. Nevertheless, proactive
adaptability. Despite persistent market challenges
measures have been taken to mitigate these factors,
and economic headwinds, we remained steadfast in
with a concerted effort to improve fill rates and optimize
our commitment to customer satisfaction, operational
supply chain efficiencies with the goals of ensuring
excellence, and strategic growth.
timely delivery and satisfying customer expectations.
Throughout the year, demand for our products
remained remarkably high, a testament to the quality
and reliability that customers expect from the Versatile
As we look towards the coming year, we anticipate a
return to normalcy due to these strategic initiatives and
a renewed focus on operational excellence.
brand. However, this surge in demand presented its
We finished 2023 by welcoming ASKO Holding as a
own set of challenges, with our factory struggling to
very strong strategic partner. ASKO and their group of
keep pace with the increased production requirements.
companies bring a deep understanding of agriculture
Despite our best efforts, supply chain disruptions
and construction equipment manufacturing, among
and logistical constraints compounded these issues,
other areas. Their strong financial backing and industry
requiring proactive measures to ensure timely delivery
expertise are set to bolster Versatile as we enter our
and to meet customer expectations.
next phase, enhancing our confidence as we move
Throughout these challenges, Versatile focused
into the future.
on dealer development and collaboration. Our
As we reflect on the trials and triumphs of 2023,
Dealer Meeting in Scottsdale, Arizona served as a
Versatile stands poised to embrace the challenges and
cornerstone event, providing a platform for professional
opportunities that lie ahead. With resilience as our
development and collaboration. Sessions focused
cornerstone, and the strength of both new and long-
on best practices for sales and marketing, employee
standing partnerships, we are committed to charting a
recruitment and retention, and equipment financing,
course of sustainable growth and success in the years
empowering our dealers with the tools and knowledge
to come.
needed to thrive in challenging times.
Versatile also established a permanent dealer technician
training facility at our parts warehouse in West
Memphis, Arkansas. This updated facility underscores
our dedication to providing comprehensive support
and training opportunities for our dealers, enhancing
service quality and customer satisfaction.
In 2023, we encountered barriers associated with parts
procurement, stemming from financial constraints and
supply chain disruptions. These constraints exerted
Adam Reid
Vice President, Sales & Marketing,
Versatile
- 4 -
Farm King Introduction
In 2023, Farm King encountered a mix of achievements
To assist in overcoming these challenges and achieve
and obstacles. Despite sustained consumer demand
maximum customer satisfaction, Farm King has the
attributed to high equipment demand and escalating
additional power of ASKO Holding, including their
commodity prices, the division grappled with notable
accumulated experience in the manufacturing industry
challenges, including disruptions in the supply chain
and an enthusiasm to grow in the North American
and a shortage of labor.
market.
To address these challenges, concerted efforts were
Our commitment to delivering superior products to
made to bolster our workforce through extensive
our customers remains unwavering. While we maintain
recruitment drives and enhanced training programs.
optimism for supply chain improvements, we continue
Looking ahead to the coming year, we recognize
the importance of strengthening our marketing
resources. Plans are underway to invest in expanding
our marketing team and enhancing our promotional
strategies. By leveraging innovative marketing
techniques and optimizing our online presence, we
to prioritize timely delivery and product quality, despite
the prevailing obstacles. We will actively pursue growth
opportunities with our existing dealers and will work to
expand our market presence through the establishment
of new dealers, reflecting our determination to navigate
the evolving landscape.
aim to amplify brand visibility and drive customer
As we move forward, Farm King remains steadfast in our
engagement. Additionally, we are excited to allocate
commitment to serving the needs of our customers and
additional engineering resources to enhance our
stakeholders. We are prepared to face challenges head-
current products and develop innovative solutions for
on with determination and perseverance, ensuring our
the future, reaffirming our dedication to excellence and
continued success and growth in the market.
customer satisfaction.
However, the path forward remains unpredictable,
particularly concerning the stability of the supply chain
and our capacity to meet escalating demand.
Grant Adolph P. Mgr.
Chairman of the Board &
Chief Operating Officer,
Buhler Industries Inc.
- 5 -
Message from the Chairman
I am pleased to announce significant changes that
manufacturing and the broader manufacturing
mark the beginning of an exciting new phase for the
sector. They demonstrate a profound understanding
company! After an extensive search, we are excited to
and appreciation for our brands, reinforcing their
welcome Basak Traktor, a division of ASKO Holding, as
commitment to our success.
our new majority shareholder. This transition signifies a
period of growth, innovation, and expanded horizons
for our organization.
Looking ahead, ASKO Holding is in growth mode, with
plans to expand their global presence. With six factories
specializing in agriculture and construction equipment,
ASKO Holding has accumulated experience of over 100
components, and complementary products, they bring
years; specifically running agricultural and construction
invaluable expertise and resources to our organization.
machinery factories more than a quarter century.
The brands in their portfolio, such as Basak Traktor
and MST have individual histories going back to early
1900s. ASKO's group of companies in the agricultural
and machinery sector have a sales network of over 40
countries mainly focusing on Europe, Middle East, Africa,
CIS and to some extent the far east. With the latest
acquisition of two North American companies, Custom
Equipment and Buhler Industries, ASKO’s operation and
sales network reaches world wide scale.
ASKO Holding brings a range of benefits to the table.
Primarily, they inject fresh financial resources into
our organization, providing stability and propelling
our growth ambitions forward. Additionally, their
integration with the global supply chain promises
In the coming months, we will be actively engaged in
market research, assessing the feasibility of introducing
select products from the ASKO Holding portfolio into
the North American market. This proactive strategy
underscores their dedication to identifying new
avenues for growth and broadening our market reach.
By exploring untapped territories, ASKO Holding aims to
expand our offerings, aligning them with the evolving
demands of our customers and solidifying our presence
in new markets.
While the past two years presented challenges, the
transition to our new majority shareholder signifies a
renewed sense of optimism and collaboration. We are
confident that together, we will overcome obstacles and
synergies and facilitates access to international markets
achieve greater heights.
Thank you for your ongoing
support and confidence in
our vision.
as production levels stabilize.
Aligned with our key priorities, ASKO Holding is
dedicated to resolving the challenges within our
supply chain. They recognize the importance of
adjusting production to match component availability
and prioritizing the reduction of aged component
inventory. For 2024, our focus is on implementing
strategies to optimize operations and transition to a
lean manufacturing model. Moreover, ASKO Holding
shares our enthusiasm for agriculture equipment
Grant Adolph P. Mgr.
Chairman of the Board &
Chief Operating Officer,
Buhler Industries Inc.
- 6 -
Management Discussion & Financial Analysis
Certain statements made in the following
Management’s Discussion and Analysis contain
forward-looking statements including, but not limited
to, statements concerning possible or assumed future
results of operations of Buhler Industries Inc. (the
Company). Forward-looking statements represent the
Company’s intentions, plans, expectations and beliefs,
and are not guarantees of future performance. Such
forward-looking statements represent the Company’s
current views based on information as at the date of this
report. They involve risks, uncertainties and assumptions
and the Company’s actual results could differ, which in
some cases may be material, from those anticipated in
these forward-looking statements. Unless otherwise
required by applicable securities law, the Company
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.
disclaims any intention or obligation to publicly update
Versatile has the claim of being the first North American
or revise this information, whether as a result of new
manufacturer to mass-produce and market articulated
information, future events or otherwise. The Company
four-wheel drive tractors. Since Versatile opened more
cautions investors not to place undue reliance upon
than 50 years ago, the Company has built over 100,000
forward-looking statements.
tractors at its plant in Winnipeg, Manitoba, Canada.
Currently, the plant builds articulating four-wheel drive
tractors from 405 to 620; tracked units from 530 to 620;
fixed-frame front-wheel assist tractor models from 175
to 365; as well as a complete line of tillage equipment.
Farm King products are manufactured in Morden,
Manitoba, Canada. The dealer network of over 1,200
North American locations provides first class service and
professional expertise to farmers and customers.
Buhler Industries remains committed to continuous
product improvement and incorporating new value-
added features. That tradition of excellence will
continue well into the future.
- 7 -
Management Discussion & Financial Analysis
TEN YEAR HIGHLIGHTS
In thousands of Canadian dollars (except per share amounts)
PERIOD END
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
Revenue
Gross profit
GP%
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
IFRS
325,521
245,676
274,067
311,974
287,984
229,119
249,550
317,178
239,869
238,526
47,730
22,266
21,226
36,153
3,474
10,343
11,685
33,079
34,009
27,655
14.7%
9.1%
7.7%
11.6%
1.2%
4.5%
4.7%
10.4%
14.2%
11.6%
Income from operations
22,491
(4,012)
(4,668)
9,387
(22,505)
(13,631)
(10,444)
6,305
11,440
(1,624)
As percentage of revenue
7%
(2%)
(2%)
Net earnings
12,458
(5,316)
(2,677)
3%
520
(8%)
(6%)
(4%)
2%
5%
(1%)
(49,532)
(29,489)
(25,809)
8,911
(1,031)
7,093
Earnings per share (EPS)
0.50
(0.21)
(0.11)
0.02
(1.98)
(1.18)
(1.03)
0.36
(0.04)
0.28
EBITDA
Total assets
24,081
(6,489)
561
7,249
(28,792)
2,075
(14,342)
19,177
7,247
15,871
362,844
339,029
278.415
319,739
290,378
262,604
227,759
224,949
231,611
232,850
Working capital
148,223
130,989
122,974
120,987
81,826
77,592
88,072
84,898
86,732
127,062
Shareholders’ equity
193,274
187,958
185,281
185,801
136,269
106,780
80,971
89,882
88,851
95,944
Book value per share
Return on average capital
Return on average equity
7.73
6%
7%
7.52
(3%)
(3%)
7.41
(1%)
(1%)
7.43
5.45
4.27
3.24
0%
0%
(31%)
(24%)
(27%)
(31%)
(24%)
(27%)
3.60
10%
10%
3.55
(1%)
(1%)
3.84
7%
8%
In this table, IFRS refers to the International Financial Reporting Standards. In 2021 the Company changed its year-end to December 31 and
reported results for 15 months. All prior years ended September 30.
GENERAL INFORMATION
The following discussion and analysis dated March 28,
include the accounts of all subsidiaries. The Company
2024 was prepared by management and should be
and all its Canadian subsidiaries operate with the
read in conjunction with the consolidated financial
Canadian dollar as the functional currency.
statements prepared in accordance with International
Financial Reporting Standards (IFRS). The following
discussion and analysis is presented in millions of
Canadian dollars. The consolidated financial statements
- 8 -
Management Discussion & Financial Analysis
HIGHLIGHTS
REVENUE
Revenue for the year was $238.5, down $1.4 from sales
of $239.9 in 2022. The Company’s sales were flat when
compared to 2022 and 2021 included a fifteen month
period due to the accounting change from September
30 to December 31.
GROSS PROFIT
Gross profit reached $27.7 in the year which is a
decrease of $6.3 from the prior year’s $34.0. As a
percentage of sales, gross profit was 11.6%, a decrease
from the prior year’s 14.2%. Gross profit was lower due
to locked in sales pricing and delays in manufacturing as
a result of supply chain challenges and inflationary cost
on materials.
SALES (MILLIONS C$)
2019
2020
2021
2022
2023
GROSS PROFIT (MILLIONS C$)
2019
2020
2021
2022
2023
350
300
250
200
150
100
50
0
35
30
25
20
15
10
5
0
INCOME/(LOSS) FROM OPERATIONS
INCOME FROM OPERATIONS (MILLIONS C$)
Loss from operations came in at $1.6 compared with
an income of $11.4 in the prior year. In 2023 income
from operations decreased from prior year by $13.0.
Selling and administration expenses were $29.3, up
from the prior year’s $22.6 primarily due to financial
advisor fees and legal fees incurred in the sale process
of Buhler Industries. As a percentage of sales, selling
and administration was 12.3%, up from the prior year
percentage of 9.4%.
12
9
6
3
0
-3
-6
-9
-12
-15
2019
2020
2021
2022
2023
- 9 -
Management Discussion & Financial Analysis
INCOME AND COMPREHENSIVE INCOME
NET PROFIT (MILLIONS C$)
The net profit for the year was $7.1, an increase of $8.1
from the $1.0 loss in the prior year. The significant items
that account for this increase is an increase in the gain
on disposal of assets of $20.6 due to a sale of land and
building, gain from interest income of $1.4 and gain from
foreign exchange of $3.5 compared to prior year. This is
offset by decreased income from operation of $13.0 and
increase in research and development of $4.0.
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 2023 was $15.9, an increase from
the prior year of $7.2.
10
5
0
-5
-10
-15
-20
-25
-30
20
15
10
5
0
-5
-10
-15
-20
2019
2020
2021
2022
2023
EBITDA (MILLIONS C$)
2019
2020
2021
2022
2023
WORKING CAPITAL
WORKING CAPITAL (MILLIONS C$)
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 year end was $127.1,
an increase from the prior year’s $86.7. Accounting
for much of the change were an increase accounts
receivable of $2.6, an increase inventory of $6.7 offset by
a decrease of accounts payable of $4.0 and a decrease in
current bank debt of $26.1.
150
120
90
60
30
0
2019
2020
2021
2022
2023
- 10 -
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 spent $11.4 in 2023 compared to $7.4 in 2022. Management believes this strategy will maintain the
Company’s competitive position in the marketplace.
(thousands C$)
(millions C$)
QUARTERLY NET EARNINGS RESULTS
NET QUARTERLY INCOME
2019
2020
2021
2022
2023
1st Quarter
(4,444)
(5,453)
(3,815)
394
4,121
2nd Quarter
7,041
(8,460)
436
1,054
16,059
3rd Quarter
(1,170)
462
3,759
(2,541)
(1,400)
4th Quarter
(30,916)
(12,358)
(743)
5th Quarter
-
-
9,274
(11,687)
62
-
Total
(29,489)
(25,809)
8,911
(1,031)
7,093
20
15
10
5
0
-5
-10
-15
-20
-25
-30
-35
1st Quarter
2nd Quarter
3rd Quarter 4th Quarter
5th Quarter
23222120192322212019232221201923222120192322212019
3
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
9
1
0
2
0
2
0
2
1
2
0
2
2
2
0
2
3
2
0
2
SUMMARY OF QUARTERLY RESULTS
Sales for the last quarter of 2023 was $54.8 which is a decrease of $6.8 compared to prior period of 2022. The
Company realized a lower income from operations of $10.8 due to lower gross profit of $7.0 and higher selling
and administrative expenses of $3.8 due to Buhler Industries sale. Net income in 2023 decreased by $11.7 to $11.6
primarily due to the $10.8 loss on income from operations.
During the quarter, Combined Factory Rostselmash Ltd., the majority shareholder of Buhler Industries, sold all of its
shares, which accounts for 96.7% of all of the outstanding shares of Buhler Industries, to Basak Tractor, a division of
ASKO Holding.
- 11 -
Management Discussion & Financial Analysis
CASH FLOW AND CAPITAL RESOURCES
OPERATING ACTIVITIES
NET CASH FLOW (MILLIONS C$)
Cash for the year was up $26.1 from 2022 coming in
at an indebtedness of $1.8 compared to the prior year
indebtedness of $27.9. Accounting for the increase in
cash was a net profit of $7.1, net proceeds from investing
activities of $23.4 and net proceeds from financing
activities of $23.6. This was offset by a reduction in
non-cash operating activities of $21.4 and a reduction in
non-cash working capital of $6.5.
INVENTORY TURNS
Management continues to work diligently to control
the investment in inventory in order to keep a
strong cash position. The Company’s inventory turns
was maintained at 1.2 in 2023 from 1.2 in 2022.
The Company dealt with significant supply-chain
disruptions in 2023 that continued from 2021 which
negatively impacted the manufacturing and shipment
of products.
35
30
25
20
15
10
5
0
-5
-10
-15
-20
-25
2.0
1.5
1.0
0.5
0.0
2019
2020
2021
2022
2023
INVENTORY TURNS
2019
2020
2021
2022
2023
INVESTING ACTIVITIES
ASSET PURCHASES (MILLIONS C$)
Cash received during the year for investing activities
was $23.3, compared to cash received of $4.2 in 2022.
Purchases of property, plant and equipment amounted to
$1.5, which were offset by the cash proceeds on the sale
of surplus assets of $24.8. In the prior year, purchases of
property, plant and equipment was $3.1, offset by the cash
proceeds on the sale of intellectual property of $3.2 and
surplus assets of $4.1.
5
4
3
2
1
0
2019
2020
2021
2022
2023
- 12 -
Management Discussion & Financial Analysis
FINANCING ACTIVITIES
The Company’s financing activities resulted in an inflow
of $23.6 for the year, compared to an outflow of $2.1
in the prior year. During the year the company made
mortgage payments of $2.3 and received related party
financing of $25.9. In the prior period the Company
made mortgage payments of $2.1.
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 a loan of $13.5 and
a mortgage of $8.9 in credit facilities. The Company is
currently in discussion to increase its credit facilities and
is also able to borrow money from its parent company,
Basak Tractor, a division of ASKO Holding.
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.
The Company currently has a variable interest bank
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
needs of the Company are being met by the bank credit
facility, which carries a low rate of variable interest.
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
RISKS AND FINANCIAL INSTRUMENTS
difference in this hedge is anticipated, forward foreign
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 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.
exchange contracts may be entered into to mitigate
the risk. Purchases of foreign exchange products for the
purpose of speculation are not permitted. Transactions
are only conducted with certain approved financial
institutions. Fluctuations in foreign exchange rates
represent a material exposure for the Company's
financial results. Hedging programs employed
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
The Company may enter into fixed-rate debt to
Canadian dollar relative to the U.S. dollar.
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
Credit risk arises from cash held with banks and credit
exposure to customers, including outstanding accounts
receivable. The Company assesses the credit quality of
customers, taking into account their financial position,
past experience and other factors. Management
- 13 -
Management Discussion & Financial Analysis
regularly monitors customer credit limits, performs
recognition. For loans classified under receivables, the
credit reviews and, in certain cases, insures accounts
Company measures credit risk based on the 12- month
receivable balances against credit losses. Nonetheless,
expected credit risk if there has not been a significant
unexpected deterioration in the financial condition of a
increase in credit risk since initial recognition.
customer can have a negative impact on net earnings in
the case of default.
LOOKING FORWARD
Increased sales are projected for 2024 as the Company
improves problems associated with supply chain issues.
The Company has a large backlog of sales and continues
to have strong demand for its agricultural machinery
and equipment. The Company’s majority shares were
acquired by Basak Tractor a wholly-owned subsidiary of
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.
ASKO Holding on December 28, 2023. Subsequent to
year end, the Company received a loan of $14.4 million
IMPAIRMENT OF PROPERTY, PLANT
AND EQUIPMENT
from its Basak Tractor and has full support to grow its
An integral component of impairment testing is
sales from its majority owner.
The Company expects to see profitability improvement
as a result actions taken early in 2024. In addition,
margins are projected to improve in 2024 as a result
of operating efficiencies stemming from increased
shipments.
CRITICAL ACCOUNTING ESTIMATES
The Company believes the following accounting
estimates are critical to determining and understanding
the operating results and the financial position of the
Company.
EXPECTED CREDIT LOSSES
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
The Company recognizes expected credit losses on
cash flows and the appropriate discount rate. The
financial assets and changes in such losses, at each
recoverable amount is most sensitive to the discount
reporting date to reflect changes in credit risk since the
rate used for the discounted cash flow model as well as
initial recognition of the financial assets. For accounts
the expected future cash inflows and the growth rate
receivable, the Company applied the simplified
used for extrapolation purposes. A change in any of the
approach permitted by IFRS 9, under which the lifetime
significant assumptions or estimates could result in a
expected credit losses must be recognized upon initial
material change in the recoverable amount.
- 14 -
Management Discussion & Financial Analysis
CONTINGENCIES AND LITIGATION
credit risk on receivables. In general the Company has
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
matters could ultimately be resolved for amounts
materially different to provisions or disclosures
previously made by the Company.
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 year
ended December 31, 2023. The main estimates revised
not seen significant impacts from COVID-19 to date
other than supply chain challenges.
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 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 subject to taxation in multiple
jurisdictions. Significant judgment is required in
determining the worldwide provision for taxation.
to reflect the impact of COVID-19 pandemic on financial
There are many transactions and calculations for which
reporting were the determination of whether there was
the ultimate tax determination is uncertain during the
an indication that assets, CGU’s or groups of CGU’s may
ordinary course of business. The Company maintains
be impaired, the assumption used in the establishment
provisions for uncertain tax positions that it believes
of their recoverable amount when an impairment test
appropriately reflect its risk with respect to tax matters
was deemed necessary, and the assessment of the
under active discussion, audit, dispute or appeal with
- 15 -
Management Discussion & Financial Analysis
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
final tax outcome of these matters is different from the
amounts that were initially recorded, such differences
will affect the tax provisions in the period in which such
determination is made.
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.
- 16 -
Disclosure Controls & Internal Controls
DISCLOSURE CONTROLS
Management is responsible for establishing and
INTERNAL CONTROLS OVER FINANCIAL
REPORTING
maintaining disclosure controls and procedures in
Management is responsible for establishing and
order to provide reasonable assurance that material
maintaining adequate internal controls over financial
information relating to the Company is made known
reporting to provide reasonable assurance regarding
to them in a timely manner and that information
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
and therefore can only provide reasonable assurance as
possibility of human error and the circumvention or
to the effectiveness of internal controls over financial
overriding of the controls and procedures. Accordingly,
reporting, including the possibility of human error
even effective disclosure controls and procedures can
and the circumvention or overriding of the controls
only provide reasonable assurance of achieving their
and procedures. Based on management's design and
control objectives. Based on management's evaluation
testing of the effectiveness of the Company's internal
of the design and effectiveness of the Company's
controls over financial reporting, the Company's Chief
disclosure controls and procedures, the Company's
Executive Officer and Chief Financial Officer have
Chairman of the Board and Chief Financial Officer have
concluded that these controls and procedures are
concluded that these controls and procedures are
designed and operating effectively as of December
31, 2023 to provide reasonable assurance that the
designed and operating effectively as of December 31,
2023 to provide reasonable assurance that the financial
information being reported is materially accurate.
information being disclosed is recorded, summarized
During the period ended December 31, 2023, there
and reported as required.
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.
- 17 -
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,
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 Baker
Tilly HMA LLP, the external auditors, in accordance with
Canadian generally accepted auditing standards on
behalf of the shareholders.
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
includes an internal audit function and an established
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.
Grant Adoph P. Mgr.
Willy Janzen, CPA, CGA, B.Comm.
Chairman of the Board &
Chief Operating Officer
March 28, 2024
Chief Financial Officer
March 28, 2024
- 18 -
Management’s Responsibility for the
Financial Statements
Independent Auditor’s Report
To the Shareholders of Buhler Industries Inc.:
OPINION
We have audited the consolidated financial statements
of Buhler Industries Inc. and its subsidiaries (the
"Company"), which comprise the consolidated balance
sheet as at December 31, 2023, and the consolidated
statements of income (loss) and comprehensive income
loss, change in shareholders’ equity and cash flows for
the years then ended, and notes to the consolidated
financial statements, including a summary of material
accounting policy information.
the current period. These matters were addressed in
the context of our audit of the consolidated financial
statements as a whole, and in forming our opinion
thereon, and we do not provide a separate opinion on
these matters.
VALUATION OF INVENTORY
DESCRIPTION OF KEY AUDIT MATTER
The provision for obsolescence of inventory requires the
application of significant judgement by the Company,
particularly in the identification of slow moving and
In our opinion, the accompanying consolidated financial
obsolete inventory and the quantification of the
statements present fairly, in all material respects, the
provision to apply to the inventory identified. The
consolidated financial position of the Company as
discussion on the assessment of the estimate and the
at December 31, 2023, and its consolidated financial
underlying assumptions in included in Note 4(b) of the
performance and its consolidated cash flows for the
consolidated financial statements.
years then ended in accordance with International
Financial Reporting Standards.
BASIS FOR OPINION
We conducted our audits 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 Company in
accordance with the ethical requirements that are
relevant to our audits of the consolidated financial
statements in Canada, and we have fulfilled our other
ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we
have obtained is sufficient and appropriate to provide a
basis for our opinion.
KEY AUDIT MATTERS
Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the consolidated financial statements of
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:
•
The information, other than the consolidated
financial statements and our auditor’s report
thereon, included in the Annual Report, and
•
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.
- 19 -
Independent Auditor’s Report
In connection with our audits of the consolidated
Those charged with governance are responsible for
financial statements, our responsibility is to read the
overseeing the Company’s financial reporting process.
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 audits or otherwise
appears to be materially misstated.
We obtained the Annual Report and the Management’s
Discussion & Analysis prior to the date of this auditor’s
report. If, based on the work we have performed on this
other information, we conclude that there is a material
misstatement of this other information, we are required
to report that fact in this auditor’s report. We have
nothing to report in this regard.
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 International Financial Reporting
Standards, and for such internal control as management
determines is necessary to enable the preparation of
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
audit conducted in accordance with Canadian generally
accepted auditing standards will always detect a
material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of
users taken on the basis of these consolidated financial
statements.
As part of an audit in accordance with Canadian
generally accepted auditing standards, we exercise
professional judgment and maintain professional
skepticism throughout the audit. We also:
consolidated financial statements that are free from
•
Identify and assess the risks of material
material misstatement, whether due to fraud or error.
misstatement of the consolidated financial
In preparing the consolidated financial statements,
management is responsible for assessing the Company’s
ability to continue as a going concern, disclosing,
as applicable, matters related to going concern and
using the going concern basis of accounting unless
management either intends to liquidate the Company
or to cease operations, or has no realistic alternative but
to do so.
statements, whether due to fraud or error, design
and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion.
The risk of not detecting a material misstatement
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.
- 20 -
Independent Auditor’s Report
•
Obtain an understanding of internal control
supervision and performance of the group audit.
relevant to the audit in order to design
We remain solely responsible for our audit opinion.
audit procedures that are appropriate in the
circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the
Company’s internal control.
•
Evaluate the appropriateness of accounting
policies used and the reasonableness of accounting
We communicate with those charged with governance
regarding, among other matters, the planned scope
and timing of the audit and significant audit findings,
including any significant deficiencies in internal control
that we identify during our audit.
estimates and related disclosures made by
We also provide those charged with governance with
management.
•
Conclude on the appropriateness of management's
use of the going concern basis of accounting and,
based on the audit evidence obtained, whether
a material uncertainty exists related to events or
conditions that may cast significant doubt on the
Company’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 of our auditor's report. However, future events
or conditions may cause the Company to cease to
continue as a going concern.
•
Evaluate the overall presentation, structure and
a statement that we have complied with relevant
ethical requirements regarding independence, and to
communicate with them all relationships and other
matters that may reasonably be thought to bear on
our independence, and where applicable, related
safeguards.
From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the financial
statements of the current period and are therefore
the key audit matters. We describe these matters in
our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in
extremely rare circumstances, we determine that a
matter should not be communicated in our report
because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest
content of the consolidated financial statements,
benefits of such communication.
including the disclosures, and whether the
consolidated financial statements represent the
underlying transactions and events in a manner
that achieves fair presentation.
•
Obtain sufficient appropriate audit evidence
regarding the financial information of the entities
or business activities within the Company to
express an opinion on the consolidated financial
statements. We are responsible for the direction,
The engagement partner on the audit resulting in this
independent auditor's report is Michael Angers.
Winnipeg, Manitoba
March 28, 2024
Chartered
Professional Accountants
- 21 -
Consolidated Balance Sheet
(000's C$)
Assets
Current Assets
As at December 31,
As at December 31,
2023
2022
Accounts receivable, net (note 9 and 22)
$
26,009
$
23,366
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)
82
181,996
4,291
212,378
13,085
-
6
7,381
96
175,312
4,014
202,788
14,416
1,765
5,773
6,869
Total Assets
$
232,850
$
231,611
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)
Advances from related parties (note 9)
Total Current Liabilities
Deferred income tax liabilities (note 10)
Long-term debt (note 13)
Advances from related parties (notes 9)
Total Liabilities
Shareholders’ Equity
Share capital (note 14)
Retained earnings
Total Shareholders' Equity
Total Liabilities and Equity
Subsequent events (note 23)
$
1,807
71,851
143
8,929
2,586
85,316
22
–
51,568
136,906
30,000
65,944
95,944
$
27,943
75,854
250
11,244
765
116,056
22
–
26,682
142,760
30,000
58,851
88,851
$
232,850
$
231,611
The accompanying notes are an integral part of the consolidated
financial statements.
Approved on behalf of the board:
Allan Stewart
Director
March 28, 2024
Grant Adolph P. Mgr.
Chairman of the Board and
Chief Operating Officer
March 28, 2024
- 22 -
Consolidated Statement of Income (Loss) and
Comprehensive Income (Loss)
For the year ended December 31 (000’s C$)
Revenue, net (note 9 and 17)
$
Cost of goods sold (note 9 and 16)
Gross Profit
Selling & administration expenses
Income/(Loss) from Operations
(Gain) on disposal of assets
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
2023
238,526
210,871
$
2022
239,869
205,860
27,655 11.6%
34,009 14.2%
29,279 12.3%
(1,624)
-0.7%
22,569 9.4%
11,440 4.8%
(23,616)
(1,490)
6,178
(811)
(512)
11,433
(3,035)
(74)
5,946
2,653
(337)
7,406
7,194 3.0%
(1,119)
-0.5%
(973)
1,074
101
78
(166)
(88)
Net Income/(Loss) and Comprehensive Income/(Loss)
$
7,093 3.0%
$
(1,031)
-0.4%
Consolidated Statement of Change in
Shareholders’ Equity
For the year ended December 31 (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
Income (Loss) per share
Basic and fully diluted
2023
30,000
58,851
7,093
65,944
95,944
0.28
$
$
$
2022
30,000
59,882
(1,031)
58,851
88,851
(0.04)
$
$
$
The accompanying notes are an integral part of the consolidated financial statements.
- 23 -
Consolidated Statement of Cash Flows
For the year ended December 31 (000’s C$)
Cash provided by (used in) operating activities
Net income/(loss) and comprehensive income/(loss)
$
7,093
$
(1,031)
2023
2022
Add (deduct) non-cash items
Depreciation of property, plant and equipment
(Gain) on disposal of assets
(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 intellectual property
Financing activities (note 19)
Repayment of long-term debt
Advances from related party
Foreign exchange (loss) gain on bank indebtedness
Net cash in the period
2,499
(23,616)
(811)
1,074
(512)
(14,273)
(6,466)
(20,739)
(1,479)
24,833
-
23,354
(2,315)
25,908
23,593
(72)
26,136
2,420
(3,035)
2,653
(166)
(337)
504
(7,712)
(7,208)
(3,131)
4,141
3,169
4,179
(2,143)
–
(2,143)
(697)
(5,869)
Bank indebtedness, beginning of period
(27,943)
(22,074)
Bank indebtedness, end of period
$
(1,807)
$
(27,943)
The accompanying notes are an integral part of the consolidated financial statements.
- 24 -
Notes to Consolidated Financial Statements
1. Basis of Operations
(b) Business combinations
Buhler Industries Inc. (the Company) was incorporated under the laws
Business combinations are accounted for using the acquisition
of Canada on February 1, 1994. On March 24, 1994 the Company was
method of accounting. The consideration transferred for the
listed and posted for trading on the TSX under the stock exchange
acquisition of a subsidiary is the fair values of the assets transferred,
symbol “BUI”. The address of the registered office is 1260 Clarence
the liabilities incurred by the former owners of the acquiree and the
Avenue, Winnipeg, Manitoba. The majority shareholder is Başak
equity interests issued by the Company. The consideration transferred
Traktör Tarim Ziraat Ve Iş Makinalari Sanayi Ticaret A.Ş. (Basak Tractor)
includes the fair value of any asset or liability resulting from a
and as of year end December 31, 2023 owns 96.7% of all outstanding
contingent consideration arrangement. Acquisition costs incurred
shares of the Company. Basak Tractor is a wholly-owned subsidiary of
are expensed and included in general and administrative expenses.
ASKO Holding.
The Company, through its subsidiaries and a joint venture, has
manufacturing and warehousing facilities in Canada and the United
States of America (U.S.). The Company produces farm equipment for
sale in Canada, U.S. and overseas.
2. Basis of Presentation
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
with IAS 39 either in the statement of income or as a change to other
comprehensive income. Contingent consideration that is classified as
equity is not re-measured, and its subsequent settlement is accounted
The Company prepares its consolidated financial statements in
for within equity.
accordance with International Financial Reporting Standards (IFRS).
Identifiable assets acquired and liabilities and contingent liabilities
The Company’s functional currency is the Canadian dollar. The
assumed in a business combination are measured initially at their fair
Canadian dollar is the reporting currency of most the Company’s
values at the acquisition date, irrespective of the extent of any non-
business, as well as the majority of the Company’s financing is
controlling interest. Goodwill is initially measured as the excess of the
conducted in Canadian dollars.
The consolidated financial statements have been prepared under the
historical-cost convention, except that certain financial instruments
are stated at their fair value.
aggregate of the consideration transferred over the net identifiable
assets acquired and liabilities assumed. If this consideration is less
than the fair value of the net assets of the subsidiary acquired, the
difference is recognized directly in the statement of income.
The consolidated financial statements were approved by the Board of
(c) Foreign currency translation
Directors on March 28, 2024.
Functional and presentation currency
3. Material Accounting Policy Information
(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., 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.
The Company’s consolidated financial statements are presented in
Canadian dollars, which is also the Company’s functional currency.
The functional currency for each of the Company’s subsidiaries is the
currency of the primary economic environment in which the entity
operates.
Transaction and balances
Transactions in foreign currencies are translated to the respective
functional currency of each entity within the consolidated group
using the exchange rates in effect at the date of the transactions.
Monetary assets and liabilities denominated in foreign currencies
at the reporting date are translated to the functional currency at
the exchange rates prevailing at the end of the reporting period.
Nonmonetary items measured at historical cost in a foreign currency
are translated to the functional currency using the exchange
rate prevalent at the date of acquisition. Non-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
- 25 -
Notes to Consolidated Financial Statements
differences arising from translation are recognized in net income,
The cost of incentives, if any, are estimated at the inception of a
except for exchange differences arising on the translation of financial
contract at the amount that is expected to be paid and is recognized
instruments qualifying as a cash flow hedge, which are recognized
as a reduction to revenue at the time of the sale. If the estimate
directly in other comprehensive income (“OCI”).
of the incentive changes following the sale to the customer, the
(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
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.
longer exist or when there is clear evidence of an increase in selling
(f) Sales allowances
price, the amount of the write-down previously recorded is reversed.
The Company grants certain sales incentives to support sales of its
(e) Revenue recognition
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.
The timing of when the Company transfers the goods to the customer
may differ from the timing of the customer’s payment.
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. The expense for new
programs is accrued at the inception of the program. The amounts
of incentives to be paid are estimated. 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
Revenues are stated net of discounts, allowances, settlement
and interest rates, among other things.
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.
(g) Property, plant and equipment
Property, plant and equipment are stated at cost less accumulated
depreciation and any impairment losses. Cost includes any directly
attributable costs, borrowing costs on qualifying construction
The Company has determined that the customers from the sale of
projects, and the costs of dismantling and removing the items and
equipment and parts are generally dealers. Transfer of control, and
restoring the site on which they are located. When major components
thus related revenue recognition, generally corresponds to when the
of an item of property and equipment have different useful lives, they
equipment and parts are made available to the customer, based on
are accounted for as separate items. Depreciation is calculated using
the shipping terms negotiated with customers. Most product is sold
the following methods to allocate the cost of assets less their residual
FOB Origin, while sales to related parties are shipped FOB Destination.
values over their estimated useful lives as follows:
Therefore, the Company recognizes revenue at a point in time when
control is transferred to the customer at a sale price that the Company
expects to receive.
For all sales, no significant uncertainty exists surrounding the
Buildings
Equipment
Computer equipment
4 - 5%
20 - 100%
30 - 100%
Straight line
Declining balance
Declining balance
purchaser’s obligation to pay for equipment and parts. The Company
Depreciation methods, useful lives and residual values are reviewed
records appropriate allowance for credit losses.
at each reporting date. Assets under construction, assets held for sale
and land are not depreciated.
- 26 -
Notes to Consolidated Financial Statements
Leases of property, plant and equipment on terms that provide a
that affects neither accounting nor taxable income; and differences
contractual right of use are measured at cost, comprised of the initial
relating to investments in subsidiaries to the extent that it is probable
measurement of the corresponding finance lease payable, lease
that they will not reverse in the foreseeable future. Deferred tax is
payments made at or before the commencement date and any initial
measured at the income tax rates that are expected to be applied
direct costs. They are subsequently depreciated on a straight-line basis
when the temporary difference reverses, that is, when the asset is
and reduced by impairment losses. At year end, the Company had no
realized or the liability is settled, based on the income tax laws that
right of use assets.
have been enacted or substantively enacted at the reporting date.
(h) Research and development expenses
Deferred tax assets are recognized only to the extent that it is
The Company expenses all research and development costs as they
probable that future taxable income will be available against which
are incurred unless they meet the criteria for deferral in accordance
the assets can be utilized. Deferred tax assets are reviewed at each
with IAS 38 Intangible Assets. No such development costs have been
reporting date and are reduced to the extent that it is no longer
deferred to date.
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
(j) Cash/bank indebtedness
Cash/bank indebtedness includes cash on hand, bank overdrafts
offset when there is a legally enforceable right to offset and when the
deferred tax balances relate to the same income tax authority.
and bankers acceptances. Bank overdrafts are repayable on demand.
(l) Financial instruments
Bank overdrafts and bankers acceptances form an integral part of
In accordance with IFRS 9 - Financial Instruments, financial assets are
the Company’s cash management and are included as a component
classified as measured at either amortized cost, fair value through
of cash/bank indebtedness for the purpose of the statement of cash
other comprehensive income or fair value through profit or loss,
flows.
(k) Income taxes
Income tax expense comprises current and deferred tax. Income tax
expense is recognized in the statement of comprehensive income
depending on the business model for managing such financial
assets and the asset’s contractual cash flow characteristics. Financial
liabilities are classified as measured at amortized cost using the
effective interest method.
except to the extent that it relates to items recorded directly to equity,
The Company’s financial instruments are classified as follows: a)
in which case it is recognized directly in equity.
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,
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
liabilities - amortized cost, d) interests in other entities - fair value
through profit and loss, e) advances from related parties - amortized
cost and f ) long term debt - amortized cost. All financial instruments
are included in the consolidated balance sheet and are measured at
fair value except loans and receivables and other financial liabilities,
which are measured at amortized cost.
and by the availability of unused income tax losses.
All changes in fair value are recorded to the statement of
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
comprehensive income unless cash flow hedge accounting is used, in
which case changes in fair value are recorded in other comprehensive
income.
the tax bases of assets and liabilities for income taxation purposes.
The Company’s policy is not to utilize derivative financial instruments
Deferred tax is not recognized for the following temporary timing
for trading or speculative purposes. The Company may utilize
differences: the initial recognition for both goodwill and assets and
derivative instruments in the management of its foreign currency and
liabilities in a transaction that is not a business combination and
interest rate exposures.
- 27 -
Notes to Consolidated Financial Statements
FVTPL financial instruments are subsequently measured at fair value
is the higher of its fair value less costs to sell and its value in use, is
and all gains and losses are included in net income in the period
estimated in order to determine the extent of the impairment loss.
in which they arise. Available-for-sale financial instruments are
Where the asset does not generate cash flows that are independent
subsequently measured at fair value with revaluation gains and losses
from other assets, the Company estimates the recoverable amount
included in other comprehensive income until the instrument is
of the cash-generating unit (CGU) to which the asset belongs. For
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
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.
adversely impacted by fluctuations in foreign exchange rates. The
Impairment of financial assets
Company may enter into foreign currency forward contracts to
manage foreign exchange exposures on accounts receivable expected
to be recovered in US dollars.
Financial assets are assessed at each reporting date to determine
whether there is any objective evidence that they are impaired. A
financial asset is considered to be impaired if objective evidence
The fair value of each contract is included on the consolidated balance
indicates that one or more events have had a negative effect on
sheet within derivative financial instrument assets or liabilities,
the estimated future cash flows of that asset. An impairment loss is
depending on whether the fair value was in an asset or liability
calculated as the difference between its carrying amount, and the
position. Changes in fair value are recognized in the consolidated
present value of the estimated future cash flows discounted at their
statement of comprehensive income through gains/losses on foreign
original effective interest rate. All impairment losses are recognized in
exchange.
(n) Comprehensive income
the consolidated statement of comprehensive income. An impairment
loss is reversed if the reversal can be related objectively to an event
occurring after the impairment loss was recognized.
Comprehensive income includes all changes in equity of the
Company, except those resulting from investments by shareholders
4. Critical Accounting Estimates and Judgments
and dividends paid. Comprehensive income is the total of net
The Company makes estimates and assumptions concerning the
income and other comprehensive income. Other comprehensive
future. The resulting accounting estimates may, by definition, not
income comprises revenues, expenses, gains and losses that require
equal the actual results. The estimates and assumptions that are
recognition, but are excluded from net income. The Company does
critical to the determination of carrying value of assets and liabilities
not have any items giving rise to other comprehensive income, nor
are addressed below.
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 year.
(o) Product warranties
(a) Sales incentives
The Company provides certain sales incentives on some sales that
may be settled after year end. An estimate of these amounts that may
be payable is accrued, but may vary based on the programs in place
The Company makes provisions for estimated expenses related
at the time of settlement. These have been accrued for in accounts
to product warranties at the time products are sold. Management
payable and accrued liabilities.
establishes these estimates based on historical information on the
nature, frequency and average cost of warranty claims. The Company
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.
(p) Impairment
Impairment of non-financial assets
(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
Tangible assets and definite life intangible assets are reviewed at
Company provision ranges from 20% to 30% on selected items. If
each balance sheet date to determine whether events or conditions
this assumption changed by 10%, the provision would increase or
indicate that their carrying amount may not be recoverable. If any
decrease by $6.2 million (December 31, 2022 - $5.4 million).
such indication exists, the recoverable amount of the asset, which
- 28 -
Notes to Consolidated Financial Statements
(c) Provision for warranty costs
consolidated balance sheet date. However, it is possible that at some
The Company offers warranties for its sale of equipment. Management
future date an additional liability could result from audits by taxing
estimates the related provision for future warranty claims based on
authorities. Where the final tax outcome of these matters is different
historical warranty claim information, as well as recent trends that
affect the tax provisions in the period in which such determination is
might suggest that past cost information may differ from future claims.
made.
from the amounts that were initially recorded, such differences will
Factors that could impact the estimated claim information include the
The operations and organizational structure of the Company are
success of the Company’s productivity and quality initiatives, as well as
complex, and related tax interpretations, regulations and legislation
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
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.
they have a plan that ensures they will ultimately fully utilize these
(e) Economic conditions
attributes. The Company’s assessment is based upon existing tax
In the context of the COVID-19 pandemic and the related climate of
laws and estimates of future taxable income. If the assessment of
uncertainty, the Company revised some of its most complex estimated
the Company’s ability to utilize the underlying future tax deductions
and assumptions , including significant judgement areas, used in
changes, the Company would be required to recognize more or fewer
preparing the consolidated financial statements for the year ended
of the tax deductions as assets, which would decrease or increase the
December 31, 2023. The main estimates revised to reflect the impact
income tax expense in the period in which this is determined.
of COVID-19 pandemic on financial reporting were the determination
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
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.
recorded in the financial statements. The Company's SRED credits are
The Covid-19 pandemic continues to disrupt supply chains and the
recorded on the balance sheet after review of the relevant accounting
Company’s ability to produce all parts on a timely basis.
pronouncements (note 10).
(f) Government grants
The Company is subject to taxation in multiple jurisdictions.
Government assistance that requires payment and that is non-interest
Significant judgment is required in determining the worldwide
bearing is accounted for at its fair value, based on management’s
provision for taxation. There are many transactions and calculations
best estimates. The difference between the assistance amount and its
for which the ultimate tax determination is uncertain during the
fair value is accounted for as a government grant and recognized in
ordinary course of business. The Company maintains provisions for
income over the period in which the related cost they are intended to
uncertain tax positions that it believes appropriately reflect its risk
compensate for are recognized.
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
5. Recently Adopted and Future Accounting Pronouncements
(a) Recently Adopted Accounting Pronouncements
The Company has adopted the following new amendments that
could have an impact on the consolidated financial statements. Other
than the adoption of these items, the accounting policies applied
- 29 -
Notes to Consolidated Financial Statements
are consistent with those applied in the previous year. Definition of
current and the entity’s right to defer settlement is contingent
Accounting Estimates - Amendments to IAS 8 - In February 2021,
on compliance with future covenants within twelve months. The
the IASB issued amendments to, Accounting Policies, Changes in
amendments are effective for annual reporting periods beginning
Accounting Estimates and Errors (“IAS 8”) in which it introduces a
on or after January 1, 2024, and must be applied retrospectively. The
definition of ‘accounting estimates’. The amendments clarify the
Company is currently assessing the impact of the amendments.
6. Credit Facilities (000’s C$)
The Company has a financing facility in the amount of $13,484
(2022 - $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 US. In addition,
certain Canadian properties are also secured by CIBC. The Company
covenants that the value of its accounts receivable and inventories
are not 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 SOFR
rates plus stamping fees. At December 31, 2023, the amount drawn on
this facility is $13,484, (December 31, 2022 - $41,053). Cash balances
of $11,676 have been netted with the facility (December 31, 2022 -
$13,110). As of December 31, 2023, the credit agreement has been
frozen and is currently under negotiation.
7. Inventories (000's C$)
Raw materials
Work in process
Finished goods
2023
$ 98,525
5,390
78,081
2022
$ 93,270
4,443
77,599
$ 181,996
$ 175,312
During the year, inventories in the amount of $149,955 (2022 -
$149,575) were expensed to cost of goods sold, which included net
inventory write-downs of $2,143 (2022 - write downs of $1,526).
The carrying value of inventories is pledged as security against the
Company’s credit facilities. Included in inventories are units sold on
consignment being held at dealers locations in the amount of $305
(2022 - $592).
distinction between changes in accounting estimates and changes
in accounting policies and the correction of errors. Also, they clarify
how entities use measurement techniques and inputs to develop
accounting estimates. The amendments are effective for annual
reporting periods beginning on or after January 1, 2023, and apply to
changes in accounting policies and changes in accounting estimates
that occur on or after the start of that period. Earlier application is
permitted as long as this fact is disclosed. The application of such
amendment had no impact on the Company or the consolidated
financial statements. Disclosure of Accounting Policies - Amendments
to IAS 1 and IFRS Practice Statement 2 - In February 2021, the IASB
issued amendments to Presentation of Financial Statements
(“IAS 1”), and Making Materiality Judgements (“IFRS Practice
Statement 2”), in which it provides guidance and examples to
help entities apply materiality judgements to accounting policy
disclosures. The amendments aim to help entities provide accounting
policy disclosures that are more useful by replacing the requirement
for entities to disclose their ‘significant’ accounting policies with a
requirement to disclose their ‘material’ accounting policies and adding
guidance on how entities apply the concept of materiality in making
decisions about accounting policy disclosures. The amendments to
IAS 1 are applicable for annual periods beginning on or after January
1, 2023, with earlier application permitted. Since the amendments
to the IFRS Practice Statement 2 provide non-mandatory guidance
on the application of the definition of material to accounting policy
information, an effective date for these amendments is not necessary.
The application of such amendment had no impact on the Company
or the consolidated financial statement.
(b) Future Accounting Pronouncements
Amendments to standards that have been issued but are not yet
effective up to the date of issuance of these consolidated financial
statements, which are likely to have an impact on the Company,
are listed below. The Company intends to adopt these amended
standards and interpretations, if applicable, when they become
effective. IFRS 1, Presentation of Financial Statements – Non-current
Liabilities with Covenants – In January 2020 and October 2022, the
IASB issued amendments to paragraphs 69 to 76 of IAS 1 to specify
the requirements for classifying liabilities as current or non-current.
Additional requirement has been introduced to require disclosure
when a liability arising from a loan agreement is classified as non-
- 30 -
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
Dec. 31, 2021
net book
value
Additions
Disposals
Transfer to
held for sale
Held for sale
assets sold
2,282
7,075
-
1,119
(763)
(1,304)
(130)
(543)
596
1,244
4,583
1,950
(116)
-
-
795
62
(14)
-
-
14,735
3,131
(2,197)
(673)
1,840
Depreciation
-
(682)
(1,490)
(248)
(2,420)
Dec. 31, 2022
net book
value
Additions
Disposals
Held for sale
assets sold
1,985
6,909
-
312
(849)
(1,093)
4,927
1,165
(133)
809
956
-
595
14,416
1
-
-
1,478
(2,075)
-
Depreciation
-
(605)
(1,698)
(196)
(2,499)
Dec. 31, 2023
net book
value
Recorded as:
$1,945
$6,479
$4,261
$400
$13,085
Land
Buildings
Equipment
Computer
Equipment
Total
Accounts receivable from controlling
shareholder
Accounts payable to controlling shareholder
2023
2022
$ -
-
$1,097
32
Advances from controlling shareholder
54,154
27,447
Net sales to controlling shareholder
Net purchases from controlling shareholder
-
-
$935
2
All transactions with related parties are recorded at the fair value
agreed to by the related parties.
The advances from the controlling shareholder of $40,945 USD
(2022 - $20,265 USD) bears interest at 8.0% (2022 - 5.0%). Amounts are
repayable in USD as follows:
Due Date
January 2024
December 2024 (revised from November 2023)
June 2025
June 2028
Accrued interest
Total
Compensation of Key Management
2023
2022
-
-
11,300
8,000
26,000
12,990
1,955
965
$40,945
$20,265
Cost
$2,794
$28,975
$53,833
$4,419
$90,021
Key management personnel are those persons having authority and
Transfer to
held for sale
Accumulated
depreciation
2022 net
book value
(809)
(956)
-
-
(1,765)
responsibility for planning, directing and controlling the activities
-
(21,110)
(48,906)
(3,824)
(73,840)
$1,985
$6,909
$4,927
$595
$14,416
of the Company. The Board of Directors and Executive Committee
are key management personnel. The following table details the
compensation paid to these key management personnel (note - no
amounts were paid for post-retirement benefits nor were there any
Cost
$ 1,945
$26,722
$49,105
$4,419
$82,101
share based payments):
Accumulated
depreciation
2023 net
book value
-
(20,243)
(44,754)
(4,019)
(69,016)
$1,945
$6,479
$4,261
$400
$13,085
Salaries, fees and short term employee
benefits
2023
2022
$5,213
$2,591
The Company reviewed its property, plant and equipment for
indicators of impairment. No assets were identified as impaired.
Included in property, plant and equipment is $322 of equipment not
being depreciated as the assets are not yet in use (2022 - $626).
- 31 -
Notes to Consolidated Financial Statements
10. Income Taxes (000's C$)
Current year
Adjustment for prior years
Current income tax expense (recovery)
Origination and reversal of timing
differences
Derecognition of deferred tax asset
Deferred taxes (recovery) expense
Combined Canadian federal and
provincial income tax rate
Foreign tax rate differences applied to
profits (losses)
Derecognition of tax credits
Adjustments for prior years
SR&ED credits earned
Non-taxable portion of capital gains
Derecognition of deferred tax asset
Permanent differences and other
Effective income tax rate
2023
$ -
(973)
$(973)
1,074
1,074
2022
$300
(222)
$78
(166)
(166)
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 $32,133 in Canada (2022
- $35,285). In the current year, only $6 (2022 - $5,773) has been
recorded. The remaining $32,127 will be recognized in future periods
when profitability returns in Canada. These losses begin to expire in
2037.
Deferred tax assets of $10,120 USD in the US (2022 - $12,529 USD) in
27.0%
27.0%
excess of the deferred tax losses are available to be carried forward
-
-
to future periods. Management believes that these assets will be
realized in future periods. As a result of losses over the past few
(17.0%)
(0.2%)
(5.6%)
(10.9%)
5.7%
2.4%
1.4%
(68.2%)
(10.0%)
29.8%
10.9%
0%
19.0%
8.5%
years, management has decided not to recognize these assets as at
December 31, 2023. These assets will be recognized in future periods
when profitability returns in the US. These losses begin to expire in
2034.
The current value of all SRED claims net of estimated taxes and
allowances is $0 (December 31, 2022 - $4,693). The Company's claims
for SRED credits for the tax years 2005 - 2011 ($5,506) were challenged
and successfully concluded with Canada Revenue Agency (CRA) in
Net income taxes paid (recovered) during the year were ($5,559) (2022
2023.
– paid $457).
The claim for 2005 was reviewed by tax court and won by the
Deferred income taxes are recorded to reflect the timing differences
Company in 2023. As a result, the Company was able to negotiate
arising from deduction of warranty costs for income tax purposes,
a settlement for the years 2006 - 2011. The total amount of cash
the amounts of depreciation and amortization provided in the year
received in 2023 for the years 2005 - 2011 including interest was
compared to the allowances deducted for income tax purposes,
$7,099.
taxable losses carried forward to future periods, expected Scientific
The 2023 SRED claim will be filed with CRA prior to any filing
Research and Experimental Development (SRED) tax credit claims and
deadlines.
other temporary timing differences.
The following are the components of the deferred tax assets and
liabilities recognized by the Company:
Deferred income tax assets
Property, plant and equipment
SRED credits
Total
Deferred income tax liabilities
Property, plant and equipment
2023
$6
-
$6
2023
$22
2022
$1,080
4,693
$5,773
2022
$22
Deferred tax assets are recognized for tax loss carry-forwards to the
extent that the realization of the related tax benefit through future
taxable profits is probable. The ability to realize the tax benefits of
- 32 -
Notes to Consolidated Financial Statements
11. Interests in Joint Ventures and Other Entities (000’s C$)
12. Warranty Provision (000’S C$)
The Company has a joint venture operating as Bradley Steel Processors
The Company generally provides its customers with a warranty on the
Inc. and minority interests in other various entities.
goods sold. The movement in the provision for warrant costs during
The summarized financial information of the Company’s share of the
investments in joint ventures and other entities is as follows:
the year is as follows:
Balance sheet information
2023
2022
Opening balance
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
$7,896
134
$8,030
$648
1
649
7,381
$8,030
$7,113
135
$7,248
$378
1
379
6,869
$7,248
$7,922
$7,519
$675
$512
$17
$32
$170
$462
$337
$12
$34
$127
Warranty accrual (recovery) (net)
Effect of exchange rate
Closing balance
2023
2022
$10,298
(820)
1
$11,312
(1,018)
4
$9,477
$10,298
The Company’s warranty costs for the year, net of recoveries from
suppliers, was $8,010 (2022 - $6,938).
13. Short and Long-Term Debt (000’S C$)
The Company’s long-term debt consists of a $15,000 facility with
Canadian Imperial Bank of Commerce, secured by a mortgage on
the Company’s Winnipeg properties and a guarantee from Export
Development Canada. The loan matures on October 31, 2023 and
is amortized over 84 months with principal repayments that began
February 2021 in the amount of $179 per month. The Company is
currently in discussion to renew its long term debt and line of credit.
The December 2023 balance is $8,929 (December 2022— $10,715).
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 nil, 2022 - $529 (nil, 2022 - $391
USD) due to The City of Willmar. This amount bears interest at the
annual rate of the implicit price deflator
14. Capital Stock and Options (000’s C$)
Authorized, an unlimited number of Common Shares.
2023
2022
Shares
Shares
Issued Class A
common
25,000 $30,000
25,000
$30,000
There are no options outstanding as of December 31, 2023 nor
December 31, 2022.
- 33 -
Notes to Consolidated Financial Statements
15. Interest Paid (000’s C$)
Bank indebtedness
Wholesale financing
Long-term debt
2023
$2,473
1,604
2,101
$6,178
2022
$1,807
2,110
2,029
$5,946
Interest expense includes interest on long term, bank indebtedness
and wholesale financing. Through an agreement with DLL, the initial
wholesale financing interest expense for the dealer is paid by Buhler
Industries Inc. to DLL to support a segment of Buhler’s North American
dealer network. Under the agreement, dealers have dedicated credit
lines with DLL, customized service, and competitive terms that allow
them to manage and grow their businesses effectively. The floorplan
financing terms and interest costs are variable and may change
from time to time. As part of the agreement with DLL, the Company
guarantees the repurchase of equipment in certain instances such as
18. Changes in non-cash working capital (000’s C$)
Details of changes in financing activities for the year ended
December 31, 2023 and December 31, 2022 are as follows:
Accounts receivable
Inventories
Prepaid expenses
Accounts payable and accrued
liabilities
Income taxes receivable/
payable
Deferred tax recovery
Foreign exchange loss on the
above items
2023
$(2,643)
(6,685)
(277)
(2,666)
(93)
4,694
1,204
2022
$(4,169)
(8,908)
1,788
2,159
469
-
949
$(6,466)
$(7,712)
19. Cash Flow Changes from Financing Activities (000’s C$)
Details of changes in financing activities for the year ended
December 31, 2023 and December 31, 2022 are as follows:
dealer bankruptcy.
16. Expenses by Nature (000’s C$)
Raw materials and
consumables used
Depreciation and amortization
Personnel expenses
Freight
17. Segmented Information (000’s C$)
2023
2022
$179,513
$171,803
2,499
63,468
6,103
2,420
53,824
7,788
$251,583
$235,835
Short-term
debt
Long-term
debt
Advances
from related
parties
Total
Dec 31, 2021
(12,857)
(393)
(24,469)
(37,719)
Cash flows
Foreign exchange
Non-cash interest
Reclassification
of debt
2,143
(1)
-
(529)
-
(26)
(110)
529
-
(1,726)
(1,252)
2,143
(1,753)
(1,362)
-
-
2023
Dec 31, 2022
$(11,244)
$ -
$(27,447) $(38,691)
Canada
U.S.
Other
Cash flows
2,315
Revenue
$100,985 $126.245
$11,296
Foreign exchange
Property, plant, and equipment
11,261
1,824
-
Non-cash interest
2022
Related Party
-
-
-
-
-
-
-
-
539
2,315
539
(1,338)
(1,338)
(25,908)
(25,908)
Canada
U.S.
Other
Dec 31, 2023
$(8,929)
$ - $(54,154) $(63,083)
Revenue
$90,576
$139,010
$8,331
Property, plant, and equipment
Assets Held for Sale
12,057
1,096
2,359
669
-
-
20. Capital Management
The Company’s fundamental objectives in managing capital are to
maintain financial flexibility in order to preserve its ability to meet
CIS is the Commonwealth of Independent States, including Russia and
financial obligations, ensure adequate liquidity and financial flexibility
Kazakhstan.
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.
- 34 -
Notes to Consolidated Financial Statements
The Company defines its capital as cash, bank indebtedness,
shareholders’ equity, longterm debt, advances from related parties,
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
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.
2022
Financial Asset/
Liability
Classification
Carried
at cost/
Amortized
cost
Fair
value
Bank indebtedness
Amortized cost
$(27,943)
Accounts receivable Amortized cost
23,366
Interest in other
entities
FVTPL
41
Accounts payable
and accured
liabilities
Current portion of
long-term debt
Amortized cost
(75,854)
Amortized cost
(11,244)
Long term debt
Amortized cost
-
Advances from
related parties
Amortized cost
(27,447)
Financial instruments includes bank indebtedness, accounts
receivable, advances to related parties, financial instruments, long
There are no externally imposed capital restrictions on the Company.
term receivables, interests in other entities not subject to significant
There were no changes in the Company’s approach to capital
management during the year.
21. Financial Instruments (000’s C$)
influence, accounts payable and accrued liabilities, advances
from related parties and long term debt. Except for the long term
receivables, interests in other entities and long term debt, the carrying
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.
2023
Financial Asset/
Liability
Classification
Carried
at cost/
Amortized
cost
Fair
value
Bank indebtedness
Amortized cost
$(1,807)
Accounts receivable Amortized cost
26,009
Interest in other
entities
FVTPL
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
level is assigned to each fair value measurement based on the lowest
level input significant to the fair value measurement in its entirety. The
three levels of the fair value hierarchy are defined as follows:
41
Accounts payable
and accured
liabilities
Current portion of
long-term debt
Amortized cost
(71,851)
Level 1 – fair value measurements that reflect unadjusted, quoted
prices in active markets for identical assets and liabilities that the
Amortized cost
(8,929)
Company has the ability to access at the measurement date.
Long term debt
Amortized cost
-
Level 2 – fair value measurements using inputs other than quoted
prices included within Level 1 that are observable for the asset or
Advances from
related parties
Amortized cost
(54,154)
liability, either directly or indirectly. These include quoted prices
for similar assets and liabilities in active markets, quoted prices for
identical or similar assets and liabilities in inactive markets, inputs that
- 35 -
Notes to Consolidated Financial Statements
are observable that are not prices (such as interest rates and credit
to the Company would result in a $169 (December 31, 2022 - $172)
risks) and inputs that are derived from or corroborated by observable
decrease/increase in net earnings.
market data. The fair values of interest in other entities are disclosed at
fair value based on a level 2 classification.
Commodity Price Risk
Level 3 – fair value measurements using significant non-market
observable inputs. These include valuations for assets and liabilities
that are derived using data, some or all of which is not market
observable data, including assumptions about risk. The Company
does not have any financial instruments measured at fair values based
on level 3 inputs.
22. Financial Risk Management (000’s C$)
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.
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
The Canadian dollar is the Company’s functional currency. The
Company operates primarily in Canada and the United States. The
reporting currency of the Company is Canadian dollars, whereas the
functional currency for operations in the United States and sales to
the CIS region are the U.S. dollar. Fluctuations in the exchange rate
Risk management is primarily the responsibility of the Company’s
between the U.S. dollar and Canadian dollar will affect the Company’s
corporate finance function. Significant risks are regularly monitored
reported results. However, the impact of changes in foreign exchange
and actions are taken, when appropriate, according to the Company’s
rates on the Company’s reported results differ over time depending
approved policies, established for that purpose. In addition, as
on whether the Company is generating a net cash inflow or outflow of
required, these risks are reviewed with the Company’s Board of
Canadian dollars. This is largely dependent on the Company’s revenue
Directors.
Interest Rate Risk
The Company’s interest rate risk arises from its variable rate bank
indebtedness, wholesale financing and long term debt. The long-term
debt is at a very low rate, and therefore carries minimal interest rate
risk. As the bank indebtedness is all variable rate, the Company is
exposed to a certain level of interest rate risk. Management feels that
these risks are manageable as the interest rate on this debt is near the
prime interest rate and therefore has not entered into any instruments
to mitigate this risk. Based on the level of bank indebtedness
outstanding at December 31, 2023, a 1% increase/decrease in the rate
mix by currency as operating costs denominated in Canadian dollars
have been relatively stable.
In addition, translation differences arise when foreign currency
monetary assets and liabilities are translated at foreign exchange
rates that change over time. These foreign exchange gains and losses
are recorded in revenues. As a result of the Company’s U.S. dollar net
monetary position within the Canadian dollar reporting currency
operations through to December 31, 2023, a one-cent strengthening/
weakening in the year-end foreign exchange rate from Canadian
dollars to U.S. dollars would have decreased/ increased net earnings
by $315 (2022 - $213).
being charged to the Company would result in a $18 (December 31,
The Company’s exposure to foreign currency risk reported in U.S.
2022 - $279) decrease/increase.
dollars was as follows:
As the mortgage financing is all variable rate, the Company is exposed
to a certain level of interest rate risk. Based on the level of mortgage
Accounts receivable
financing outstanding at December 31, 2023, a 1% increase/decrease
to the Company would result in a $89 (December 31, 2022 - $107)
Accounts payable and other accrued
liabilities
2023
2022
$9,256
$9,219
(17,989)
(16,916)
decrease/increase in net earnings.
Advances from related party
(40,945)
(20,265)
As the wholesale financing is all variable rate, the Company is exposed
to a certain level of interest rate risk. Based on the level of wholesale
financing outstanding at December 31, 2023, a 1% increase/decrease
Long term debt
-
(391)
$(49,678)
$(28,353)
- 36 -
Notes to Consolidated Financial Statements
The Company is partially insulated from large foreign exchange gains
Credit Risk
and losses by virtue of its mix of cash inflows and outflows in U.S.
Financial instruments which potentially subject the Company to credit
dollars. Gains and losses generated by fluctuations in the exchange
risk and concentrations of credit risk consist principally of accounts
rates used to translate U.S. dollar assets are offset by similar gains
receivable. Management has assessed that the credit risk associated
and losses on U.S. dollar liabilities. The Company also uses forward
with accounts receivable is mitigated by the credit agreements
contracts to further mitigate these fluctuations when the natural
the Company has in place including personal guarantees from the
hedges are forecasted to be insufficient.
counterparties.
As at December 31, 2023, the Company had no U.S. to Canadian
dollar foreign currency forward contracts (December 31, 2022 - $nil).
Fair value adjustments are recognized within (gain) loss on foreign
exchange in the consolidated statement of comprehensive income.
Liquidity Risk
The maximum exposure to the risk of credit for accounts receivable
corresponds to their book value. Historically, the Company has
experienced nominal bad debts as a result of the security agreements
in place that allow the Company to recover goods from dealers that
has not been paid for as well as personal guarantees. For the year
to date, the Company recorded a bad debt recovery of $24 (2022 -
Investments to drive growth can require significant financial resources.
expense of $261).
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 is currently
in discussion to secure a new credit facility and long term debt. Actual
bank funding may differ as the result of margin availability subject to
meeting certain accounts receivable and inventory covenants. As at
December 31, 2023 the Company had access to $23,230 (December
31, 2022 - $49,952), subject to compliance to covenants in the credit
facility (Note 6). The Company manages its liquidity risk by forecasting
cash flows and determining if the credit facilities in place are adequate
or if additional financing would be required.
The 2023 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:
2024
2025
2026
2027
2028
Post
2028
Total
Bank indebtedness
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 income and loss within selling
& 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 & administration expenses.
The following table sets out the aging details of the Company’s
accounts receivable balances outstanding based on the status of the
receivable in relation to when the receivable was due and payable and
related allowance for doubtful accounts:
2023
2022
Current - neither impaired nor past due
$25,285
$22,146
Not impaired but past the due date;
Within 30 days
31-60 days
Over 60 days
288
350
86
604
71
1,827
26,009
24,648
$1,807
$ -
$ -
$ -
$ -
$ -
$1,807
Accounts payable and accrued liabilities
Less: Allowance for doubtful accounts
-
(1,282)
Total receivables, net
$26,009
$23,366
71,851
-
2,586
34,388
-
-
-
-
Due to related parties
2,143
2,143
2,143
-
17,180
Long-term debt
357
2,143
Total
$78,387
$36,531
$2,143
$2,143
$17,537
-
-
-
-
71,851
54,154
8,929
The following table details the continuity of the allowance for
doubtful accounts:
2023
2022
Balance, beginning of period
$(1,282)
$(935)
Provisions for the period, net of recoveries
24
(261)
$136,741
Uncollectible amounts written off
(recovered)
Foreign exchange impact
Balance, end of period
1,268
(10)
(89)
3
$-
$(1,282)
- 37 -
Notes to Consolidated Financial Statements
23. Subsequent Events
a) The Company appointed Zafer Ozbalaban as President of Buhler
Industries Inc. in January 2024.
(b) The Company received additional advances from its majority
owner, Basak Tractor, a wholly owned subsidiary of ASKO Holding.
The Company received $7.7 million USD in January 2024 and $3.0
million USD in February 2024.
- 38 -
Company Information
Audit Committee
Ossama AbouZeid - Audit Chairman
Allan L .V . Stewart
Arda Akarsu
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
Baker Tilly HMA LLP
Winnipeg, Manitoba
Annual Meeting
The annual meeting of shareholders will be
held on June 19, 2024, 11:00 AM at
1260 Clarence Avenue, Winnipeg, Manitoba
Directors
NAME
Grant Adolph P .Mgr
Zafer Ozbalaban
Levent Kiroglu
Ossama AbouZeid
Allan Stewart B .A, LL . B .
Ismail Konukoglu
Arda Akarsu
OFFICE
Director/Chairman of the Board
PRINCIPAL OCCUPATION
Chief Operating Officer, Buhler lndustries lnc .
Director
Director
President - Buhler Industries Inc .
Senior Executive Board Member - ASKO Holding
Director/Audit Chairman
NXT Partners – Partner/Consultant
Director
Director
Director
Lawer, Thompson Dorfman Sweatman LLP
Strategic Business Development - ASKO Holding
Executive Committee Member - ASKO Holding
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 - Farm King
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
Mike Silva
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
As at December 31, 2023
- 39 -
Stock Data
Buhler (excl. dividends) compared with TSX Index
1994 to December 31, 2023
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
2
2
0
2
3
2
0
2
Daily Closing Price
Opened March 25, 1994 at $1.05
Closed December 31, 2023 at $2.44
4
9
-
r
a
M
5
9
-
n
a
J
5
9
-
t
c
O
6
9
-
g
u
A
7
9
-
y
a
M
8
9
-
r
a
M
9
9
-
n
a
J
9
9
-
t
c
O
0
0
-
g
u
A
1
0
-
y
a
M
2
0
-
r
a
M
2
0
-
c
e
D
3
0
-
t
c
O
4
0
-
l
u
J
5
0
-
y
a
M
6
0
-
b
e
F
6
0
-
c
e
D
7
0
-
p
e
S
8
0
-
l
u
J
9
0
-
y
a
M
0
1
-
b
e
F
0
1
-
c
e
D
1
1
-
p
e
S
2
1
-
l
u
J
3
1
-
r
p
A
4
1
-
b
e
F
4
1
-
v
o
N
5
1
-
p
e
S
6
1
-
l
u
J
7
1
-
r
p
A
8
1
-
b
e
F
8
1
-
v
o
N
9
1
-
p
e
S
0
2
-
n
u
J
1
2
-
r
p
A
2
2
-
b
e
F
2
2
-
v
o
N
3
2
-
p
e
S
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
Yearend
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
High
Low
Close
Trading Vol.
(000’ s)
2.10 1.60 1.98 2.54
4.25
3.25
3.74
3.75
5.50
5.92
7.30
7.63
7.60
7.25
6.90
6.34
6.00
6.50
5.69
7.25
7.30
6.50
6.00
5.00
4.89
3.98
3.89
3.89
3.29
2.79
1.05 1.10 1.37 1.70
2.45
2.35
2.70
3.00
3.48
5.20
5.48
7.00
4.35
5.30
5.00
4.75
5.15
5.20
5.04
5.20
5.51
4.40
4.40
4.14
3.53
2.6
2.25
2.20
1.51
1.88
1.40 1.45 1.66 2.39
3.05
3.06
3.57
3.60
5.25
5.57
7.20
7.35
5.60
6.90
5.40
5.25
5.81
5.60
5.35
6.40
5.51
5.70
4.40
4.45
3.60
3.73
2.50
2.96
1.93
2.44
1,311 867 1,927 3,015 4,134 2,274 1,092 2,800 1,836 1,321 5,024 1,703 3,010 5,637 2,138
745
1,996
684
1,245
897
1,037
603
344
116
123
141
115
199
98
273
- 40 -
10 Year Summary
SUMMARY OF OPERATIONS
Reported standards utilized
2014
IFRS
2015
IFRS
2016
IFRS
2017
IFRS
2018
IFRS
2019
IFRS
2020
IFRS
2021
IFRS
2022
IFRS
2023
IFRS
In thousands of Canadian dollars (except per share amounts)
325,501
245,676
274,067
311,974
287,984
229,119
277,791
223,410
252,841
275,821
284,510
218,776
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
47,730
25,239
22,491
(401)
(314)
3,741
(3,497)
(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)
(24,542)
9,539
19,057
1,267
520
(49,532)
(29,489)
(25,809)
4,799
385
-
-
-
-
-
943
1,096
-
-
-
-
-
-
(26,032)
(37,722)
(22,682)
(6,807)
4,639
3,216
2,785
2,963
-
-
-
Reduction of long-term debt
3,191
4,968
2,642
Dividends paid
Net cash flow
-
-
-
17,871
(633)
1,230
4,219
(46,225)
Net cash (bank indebtedness)
(51,715)
(52,830)
(20,452)
(12,553)
(37,254)
BALANCE SHEET SUMMARY
Cash, receivables and prepaid expenses
102,473
80,555
73,680
73,983
63,884
67,331
Inventory
Total current assets
Total assets
213,089
201,463
142,372
180,911
171,612
165,631
315,562
282,018
216,052
254,894
235,496
232,962
362,844
339,029
278,415
319,739
290,378
262,604
227,759
53,295
146,931
200,226
Total current liabilities
167,339
151,029
93,078
133,907
153,670
155,370
112,154
Total short and long-term debt
6,857
2,669
-
-
401
411
414
Total liabilities
169,570
151,071
93,134
133,938
154,109
155,824
146,788
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
Gross margin (% of revenue)
Selling & Admin. (% of revenue)
EBITDA (% of revenue)
Net earnings (% of revenue)
Return on average capital
Return on average equity
193,274
187,958
185,281
185,801
136,269
106,780
25.0
25.0
25.0
25.0
25.0
25.0
148,223
130,989
122,974
120,987
81,826
77,592
13.02
0.96
5.7
0.73
0.50
11.06
0.71
-
5.51
7.73
1.9
0.3
1.5
14.7%
8%
7%
4%
6%
7%
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
0.29
15.3
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%
- 41 -
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%)
(31%)
(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%)
(24%)
(24%)
80,971
25.0
88,072
9.98
(0.57)
(3.9)
(0.71)
(1.03)
(2.19)
(0.91)
-
2.26
3.24
1.8
0.1
1.5
4.7%
9%
(5.7%)
(10%)
(27%)
(27%)
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)
-
(11,671)
(22,074)
28,660
166,404
195,064
224,949
110,166
13,250
135,067
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%
239,869
205,860
34,009
22,569
11,440
(3,035)
(74)
5,946
2,653
(337)
7,406
(1,119)
(88)
(1,031)
238,526
210,871
27,655
29,279
(1,624)
(23,616)
(1,490)
6,178
(811)
(512)
11,433
7,194
101
7,093
(3,131)
(1,479)
-
-
2,143
(2,315)
-
1,389
(27,943)
27,476
175,312
202,788
-
9,592
(1,807)
30,382
181,996
212,378
231,611
232,850
116,056
11,244
85,316
8,929
142,760
136,906
88,851
25.0
95,944
25.0
86,732
127,062
9.59
0.29
6.7
0.19
(0.04)
(48.25)
0.06
-
1.93
3.55
1.8
0.4
1.2
14.2%
9.4%
3%
0%
(1%)
(1%)
9.54
0.63
3.9
0.48
0.28
8.71
0.38
-
2.44
3.84
2.5
0.1
1.2
11.6%
12.3%
6.7%
3%
7%
8%
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