2020 Annual Report
SUCCESS
THROUGH
SERVICE
PAN-CANADIAN INFRASTRUCTURE
SUPPORT SERVICES
Legend
Offices
Manufacturing Facilities
Yellowknife, NT
Baker Lake, NU
Kamloops, BC
Vancouver, BC
Grande Prairie, AB
Edmonton, AB
Calgary, AB
Winnipeg, MB
Amos, QC
Oromocto, NB
Halifax, NS
Thunder Bay, ON
Ottawa, ON
Montreal, QC
Mississauga, ON
Cambridge, ON
Grimsby, ON
2
TABLE OF CONTENTS
04 LETTER FROM THE BOARD CHAIR
05 LETTER FROM THE CEO
08 MANAGEMENT’S DISCUSSION
AND ANALYSIS
20 MANAGEMENT’S REPORT
TO SHAREHOLDERS
22 INDEPENDENT AUDITOR’S REPORT
TO SHAREHOLDERS
29
33
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO FINANCIAL STATEMENTS
IBC
CORPORATE INFORMATION
3
LETTER FROM THE
BOARD CHAIR
R. William McFarland
To all shareholders:
The year 2020 was quite a ride – COVID-19 closed
down the global and Canadian economies, we
completed the merger of Dexterra and Horizon
North and moved forward in charting a new path
and vision. It was a year to remember!
Thank you for the trust you have placed in the Board
of Directors and management team. I also want to
personally thank all of our 6,000-plus employees
across the country for responding with enthusiasm
to serve our customers, stay safe and give back to
our communities where we work and live. We not
only met the 2020 test but exceeded expectations.
We have dramatically transformed your company by
building a pan-Canadian support services company
to lead the way in the creation, management and
operation of vital infrastructure while delivering
value for shareholders.
Our emphasis on building shareholder value
and holding ourselves accountable is not a
passing fade but rather a way of doing business.
It was evidenced by the reinstatement of our
dividend, our commitment to reduce the debt
level, our focus on operational excellence and
cost containment and the reduction in our
capital spending. Solid operating results in a
COVID-19 environment, significant synergies
realized from the transaction and the successful
negotiation of a new credit facility present
great foundational pieces to build upon.
Looking forward, I and your management team led
by John Mac Cuish are committed to and excited
about building a Canadian services champion with
$1 billion in revenue and over $100 million in EBITDA.
A company that builds quality into everything we
do and also makes our communities and society
stronger.
We look forward to you joining us virtually for
our shareholders meeting and to answering
your questions. We are very fortunate to have
supportive and loyal shareholders and don’t take
that for granted. We will work hard in the coming
year to continue to build and earn your trust and
confidence.
R. William McFarland
Chairman
4
of why we are a partner of choice in our chosen
market segments. I strongly believe this client-
centric approach is fundamental to being a growth
organization and it is a critical part of our strategy
to become a pan-Canadian leader in infrastructure
support services. The value that we create for clients
is powered by the passionate people at Dexterra
Group who maintain and enhance the integrity
of their environments, optimize the utility of their
assets and deliver infrastructure and service to
support their organizational goals.
The quality of our employees, their engagement
and their focus are significant factors in our ability
to achieve our purpose of enabling the higher
performance and productivity of our clients
and playing a vital role in our communities and
economies. We create value for our team members
by promoting a healthy, safe, and inclusive work
culture, supporting their career objectives with
opportunities for growth and development, and
by inspiring them to embrace initiative and drive
innovation.
LETTER FROM THE CEO
Success Through Service
To our Dexterra Group stakeholders:
2020 was an unusual, yet exciting, year for our
company. Challenged by the COVID-19 pandemic
like many other Canadian businesses, we were
nevertheless able to complete a significant
transaction to lead our company into the future –
the combination of Horizon North and Dexterra that
created Dexterra Group.
The ambitious 90-day integration plan that followed
the transaction was extremely successful in building
teams and working together to achieve common
goals and delivering substantial cost synergies.
The annualized savings are $22 million and most of
the benefits were realized in 2020. It is important
to our success that we continue to deliver on the
cost savings over the long term and operate in an
efficient manner. To that effect, we have adopted a
decentralized model with nimble and accountable
business units and fewer layers of management
that push our decision making closer to our clients.
I want to thank the more than 6,000 Dexterra
Group employees across Canada who have done an
outstanding job supporting our customers over the
course of both the pandemic and our own business
merger. Our employees’ continued to focus on
delivering best-in-class quality service as we work
and adapt to an ever changing environment.
Striving for the safety of our clients and their
customers and working closely with them to
navigate economic uncertainty is a demonstration
5
We are also investing in the tools and resources to
create a high-performance culture that will allow us
to attract, retain and develop quality people across
our organization and create opportunities for top
talent while being leaders in cost competitiveness.
Our culture is one where employees are focused on
delivering on their goals, where they feel engaged,
empowered and are recognized for outstanding work
and where everyone is included and has a voice.
As part of our integration work and informed by a
multitude of touchpoints from our people across
Canada, we developed and are implementing a
new set of values that will create an environment for
delivering market leading performance in quality,
health and safety, operational delivery, financial
performance and client experience. The values are
discussed below.
Accountability - We don’t just walk by. We
own our successes and failures. If we see
something wrong, we act to resolve it. If we
see something right, we celebrate it.
Diversity - Everyone has a voice. Sharing is
how we learn. It’s how we make progress and
move forward as a team.
Partnership - Service is what we sell. By
asking for, listening to and acting on client
feedback, we create long-term, successful
partnerships that will help us grow our
business.
Trust - Our actions speak louder than our
words. Earned through clarity, compassion
and competence. It is our commitment to our
clients, our colleagues and our communities.
These values will guide us as we strive to deliver for
each of our key stakeholder groups – employees,
clients and shareholders. Our future is bright. We are
delivering on our promises to you our stakeholders:
profitable revenue growth, wise and strategic
spending, high-quality client-centric products and
services and a great place to work.
I want to thank again all those who have supported us
over the previous year as we have undertaken both an
exciting company transition and a health event of a
magnitude which most of us hopefully will never see
again. It has been my privilege as CEO to work directly
with many of our stakeholders and navigate through
these challenging times.
John Mac Cuish
Chief Executive Officer
6
MANAGEMENT’S DISCUSSION
AND ANALYSIS
December 31, 2020
This MD&A has been prepared as at March 10, 2021.
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
The following Management’s Discussion and Analysis (“MD&A”) prepared as at March 10, 2021 for Dexterra Group Inc.
(“Dexterra Group” or the “Corporation”), provides information concerning Dexterra Group’s financial condition and results of
operations. This MD&A should be read in conjunction with the Corporation's audited Consolidated Financial Statements ("2020
Financial Statements") for the year ended December 31, 2020 and 2019. Additional information about the Corporation,
including its Annual Information Form ("AIF") for the year ended December 31, 2020 can be found on SEDAR and sedar.com.
Some of the information contained in this MD&A contains forward-looking statements that involve risks and uncertainties. See
“Forward-Looking Information” for a discussion of the uncertainties, risks and assumptions associated with these statements.
Actual results may differ materially from those indicated or underlying forward-looking information as a result of various factors
including those described elsewhere in this MD&A and AIF.
On November 13, 2020, the shareholders of the Corporation approved a name change to Dexterra Group Inc. (previously
Horizon North Logistics Inc. ("Horizon North")). The common shares now trade on the Toronto Stock Exchange (“TSX”) under
the ticker symbol “DXT”. Adopting a new corporate name reflects the corporate transformation into a pan-Canadian, diversified
support services organization and marks a new phase in the Corporation's history as it focuses on delivering quality solutions for
the creation, management, and operation of infrastructure.
The accompanying 2020 Financial Statements of Dexterra Group as at and for the year ended December 31, 2020 and
December 31, 2019 are the responsibility of Dexterra Group’s management and have been prepared in accordance with
International Financial Reporting Standards (“IFRS”) and all amounts presented are in thousands of Canadian dollars unless
otherwise indicated.
Financial Summary
(000's except per share amounts)
Total Revenue(1)
EBITDA(2)(4)
Adjusted EBITDA(2)(4)(5)
Operating income(4)
Net earnings(3)(4)
Earnings per share
Basic(6)
Diluted(6)
Total assets
Total loans and borrowings
Net capital proceeds (spending)
Three months ended December 31,
Years ended December 31,
2020
2019
2020
2019
$
164,418
$
64,134
$
477,815
$
261,059
18,713
17,477
6,731
27
0.00
0.00
513,523
85,369
$
$
$
$
(1,242) $
3,240
3,315
2,031
1,455
0.04
0.04
174,830
5,453
(1,465)
$
$
$
$
$
77,190
71,087
50,752
64,479
1.25
1.24
513,523
85,369
1,430
$
$
$
$
$
16,465
16,540
12,826
9,304
0.28
0.28
174,830
5,453
(3,869)
$
$
$
$
$
(1)
(2)
(3)
(4)
(5)
(6)
Revenue for the year ended December 31, 2020 includes $6.6 million related to amounts awarded on two legal proceedings with former customers.
Please refer to "Non-GAAP measures" for the definition of EBITDA and Adjusted EBITDA.
Net earnings for the three months and year ended December 31, 2020 includes $(4.2) million and $29.9 million, respectively Bargain purchase (reduction)/gain resulting from the
Acquisition.
Includes $4.2 million and $32.9 million of pre-tax Canada Emergency Wage Subsidy for the three months and year ended December 31, 2020, respectively .
Non-recurring items excluded from Adjusted EBITDA for Q4 2020 relate to legal costs recovered through legal proceedings with a former customer and for the year ended December 31,
2020 incrementally adjusts for acquisition costs and the revenue in item (1) above.
All share and per share data presented has been retroactively adjusted to reflect the share Consolidation discussed in the "Outstanding Shares" section of the MD&A.
Non-GAAP measures
Certain measures in this MD&A do not have any standardized meaning as prescribed by generally accepted accounting
principles (“GAAP”) and, therefore, are considered non-GAAP measures. Non-GAAP measures include "EBITDA", calculated as
earnings before interest, taxes, depreciation, amortization, depreciation from equity investment, share based compensation,
bargain purchase gain (reduction) and gain/loss on disposal of property, plant and equipment, "Adjusted EBITDA", calculated as
EBITDA before acquisition costs, other revenue and non-recurring items, “EBITDA as a % of revenue”, calculated as EBITDA
divided by revenue, and "Free Cash Flow", calculated as net cash flows from (used in) operating activities, less maintenance
capital expenditures, payments for lease liabilities and finance costs, to provide investors with supplemental measures of
Dexterra Group's operating performance and thus highlight trends in its core businesses that may not otherwise be apparent
when relying solely on GAAP financial measures. Dexterra Group also believes that securities analysts, investors and other
interested parties frequently use non-GAAP measures in the evaluation of issuers. Dexterra Group’s management also uses
non-GAAP measures in order to facilitate operating performance comparisons from period to period, to prepare annual
operating budgets, and to determine components of management compensation.
These measures are regularly reviewed by the Chief Operating Decision Maker and provide investors with an alternative
method for assessing the Corporation’s operating results in a manner that is focused on the performance of the Corporation’s
ongoing operations and to provide a more consistent basis for comparison between periods. These measures should not be
construed as alternatives to net earnings and total comprehensive income determined in accordance with GAAP as an indicator
of the Corporation’s performance. The method of calculating these measures may differ from other entities and accordingly,
8
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
may not be comparable to measures used by other entities. For a reconciliation of these non-GAAP measures to their nearest
measure under GAAP please refer to "Reconciliation of non-GAAP measures".
Management's Discussion and Analysis
Core Business
Dexterra Group is a publicly listed corporation (TSX: DXT.TO) delivering quality solutions to create, manage and operate
infrastructure, offering both experience and regional expertise across Canada under its three operating business units: Facilities
Management, Workforce Accommodations, Forestry and Energy Services ("WAFES"), and Modular Solutions.
Our Facilities Management business delivers operations and maintenance solutions for built assets and infrastructure in the
public and private sectors, including aviation, defense, retail, healthcare, education and government. Our WAFES business
provides a full range of workforce accommodations solutions, forestry services and access solutions to clients in the mining,
forestry, construction and other natural resource sectors. Our Modular Solutions business integrates modern design concepts
with off-site manufacturing processes to produce high-quality building solutions for social and affordable housing, commercial,
residential and industrial clients. As a result of our diverse product and service offerings, Dexterra Group is uniquely positioned
to meet the needs of our customers in numerous sectors across Canada.
On May 29, 2020, Dexterra Group (previously Horizon North) entered into a transaction (the "Acquisition") with 10647802
Canada Limited, operating as Dexterra Integrated Facilities Management (“Dexterra”), a subsidiary of Fairfax Financial Holdings
Limited ("Fairfax Financial"). Pursuant to the Acquisition, the Corporation acquired all of the outstanding common shares of
Dexterra and in exchange issued 31,785,993 common shares of Dexterra Group to Dexterra’s sole shareholder, 9477179 Canada
Inc. (“Dexterra Parent”), a wholly-owned subsidiary of Fairfax Financial. Accordingly, Fairfax Financial indirectly owns a 49%
interest in the combined Corporation, while existing shareholders of the Corporation maintain a 51% interest. Prior to the
Acquisition, Fairfax Financial had no ownership interest in Dexterra Group.
For accounting purposes, the Acquisition constituted a reverse acquisition that involved a change of control of Dexterra Group
and a business combination of Horizon North and Dexterra, to form a new corporation that now carries on operations as
Dexterra Group Inc. Based on the guidance in IFRS 3, Business Combinations ("IFRS 3"), it was determined that Horizon North
was the accounting acquiree and Dexterra was the accounting acquirer, as Fairfax Financial, the sole shareholder of Dexterra,
now controls the Corporation. As a result, 2019 comparative information included herein is solely Dexterra. Horizon North
financial results are included subsequent to the Acquisition closing date. Refer to Note 4 of the 2020 Financial Statements for
further information.
Consolidated Results for 2020
Annual sales totaled $477.8 million compared to $261.1 million in the prior year, an increase of $216.7 million, primarily due to
the Acquisition and partially offset by the pandemic impact on the legacy Facilities Management results. The Corporation
reported consolidated net earnings of $64.5 million compared to consolidated net earnings of $9.3 million in the prior year. The
net earnings increase of $55.2 million includes a $29.9 million non-cash bargain purchase gain ("BPG") related to the
Acquisition. This BPG was based on the fair value of the consideration received by Fairfax Financial which was equal to the share
price at the close date in the amount of $100.9 million. The BPG equates to the difference between the estimated fair value of
the net assets acquired of Horizon North of $130.8 million and the consideration received by Fairfax Financial, as disclosed in
the 2020 Financial Statements.
Fourth Quarter Results and Overview
Highlights
•
•
•
•
•
Consolidated Q4 2020 revenue of $164.4 million and EBITDA of $18.7 million, an increase of $100.3 million and $15.5
million respectively, when compared to Q4 2019. The increase is mainly attributable to $97.3 million of revenue from the
Acquisition.
Net earnings increased by $2.8 million when compared with Q4 2019, excluding the non-cash bargain purchase reduction
of $4.2 million in Q4 2020 with the finalization of the purchase price equation related to the Acquisition;
Dexterra Group generated net cash flows from operating activities in Q4 2020 of $34.0 million, compared to the $2.5
million used in Q4 2019, an increase of $31.5 million, primarily reflecting improvements in EBITDA and in accounts
receivable collections;
Consolidated Adjusted EBITDA for Q4 2020 was $17.5 million compared to $3.3 million in 2019 and included $4.2 million
from the Canada Emergency Wage Subsidy ("CEWS") program;
The Facilities Management business had Q4 2020 revenue of $38.5 million, a decrease of $6.2 million or 14% from Q4
2019. EBITDA for the same period was $2.6 million, a decrease of $0.6 million when compared to Q4 2019;
9
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
•
•
•
•
The Modular Solutions business had Q4 2020 revenue of $48.2 million and EBITDA of $4.4 million. Revenue in Q4 2020
increased by $8.7 million when compared to Q3 2020. Backlog1 for social housing was $61.2 million at December 31, 2020,
excluding recurring modular business for school portables and specialty commercial structures worth approximately $40
million per annum. Continued growth in Modular solutions revenues in the back half of 2021 and beyond is expected;
The WAFES business had Q4 2020 revenue of $78.2 million, an increase of 302%, from Q4 2019. EBITDA for the same
period was $14.4 million, an increase of $12.6 million when compared to Q4 2019;
The Corporation has leased a facility in Cambridge, Ontario for NRB Modular Solutions. The capital cost of the plant is
estimated to be $7 million and it will provide incremental annual production capacity in excess of $100 million. The facility
will be operational by the end of the second quarter of 2021 and will ramp-up production through the remainder of 2021;
and
Dexterra Group paid a dividend of $0.075 per share on January 15, 2021 to shareholders of record on December 31, 2020,
and declared a dividend for the first quarter of 2021 of $0.075 per share. The dividend is payable to shareholders of record
at the close of business on March 31, 2021, to be paid on April 15, 2021.
Operational Analysis
(000's)
Revenue:
Facilities Management
WAFES
Modular Solutions
Inter-segment eliminations
Total Revenue
EBITDA:
Facilities Management
WAFES
Modular Solutions
Total EBITDA(1)
Other Revenue
Corporate and non-recurring items(2)
Total Adjusted EBITDA(1)
$
$
$
$
Three months ended December 31,
Years ended December 31,
2020
2019
2020
2019
38,522 $
78,225
48,212
(541)
164,418 $
44,698 $
19,436
—
—
64,134 $
147,229 $
234,681
98,767
(2,862)
477,815 $
2,609 $
3,195 $
21,345 $
14,391
4,360
21,360
—
(3,883)
17,477 $
1,744
—
4,939
—
(1,624)
3,315 $
57,245
10,636
89,226
(6,569)
(11,570)
71,087 $
166,761
94,298
—
—
261,059
9,778
11,403
—
21,181
—
(4,641)
16,540
(1)
(2)
Includes CEWS of $4.2 million and $32.9 million for Q4 2020 and the year ended December 31, 2020, respectively.
Includes $1.3 million of legal cost recoveries in Q4 2020 which was applied against expenses and relates to the legal settlement award in Q3 2020 and for the year ended December 31,
2020 incrementally adjusts for transaction costs and $6.6 million awarded in two legal proceedings.
Facilities Management
For 2020, Facilities Management revenues were $147.2 million and decreased by $19.6 million or 12% from the $166.8 million
in 2019. Facilities Management revenue decreased primarily due to the temporary closure or reduction in operations at certain
facilities as a result of COVID-19. In particular, the aviation and retail sectors decreased by $32.1 million compared to 2019. This
was partially offset by new business.
EBITDA as a percentage of revenue increased to 14% in 2020 from 6% in 2019 due to the inclusion of $13.7 million CEWS in
2020. When adjusting for wage subsidies, EBITDA margin decreased to 5% for 2020 in comparison to 6% for the same period in
the prior year, mainly due to the increased costs in the healthcare and defense sector, and other costs associated with
operating in COVID-19 environment. See "Non-GAAP measures" above for the definition of "EBITDA as a percentage of
revenue".
Facilities Management revenues in Q4 2020 were $38.5 million, which represents a decrease of $6.2 million or 14% from the
$44.7 million in Q4 2019. Facilities Management revenue decreased primarily due to lower aviation and retail revenue, which
decreased by $8.4 million compared to Q4 2019. This was partially offset by new business.
EBITDA as a percentage of revenue was consistent at 7% in both Q4 2020 and Q4 2019 due to the inclusion of $1.0 million in
CEWS in Q4 2020 which offset the decrease in revenue from Q4 2019. When adjusting for wage subsidies, EBITDA margin was
1 Backlog is the total value of work that has not yet been completed that: (a) has a high certainty of being performed based on the existence of an executed contract or work order specifying
job scope, value and timing; or (b) has been awarded to Dexterra Group, as evidenced by an executed letter of award or agreement, describing the general job scope, value and timing of such
work, and where the finalization of a formal contract in respect of such work is reasonably assured and expects to be recognized in the next 12 months.
10
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
4% for Q4 2020 or 3% lower than Q4 2019, due to a restructuring and reorganization in Q4 2020, the increased costs in the
healthcare and defense sector, and other costs associated with operating in a COVID-19 environment.
Direct Costs
Direct Costs for the year ended December 31, 2020 were $121.8 million compared to $153.7 million in 2019, a decrease of
$31.9 million or 21% mainly due to the inclusion of $13.7 million CEWS in 2020 and decreased activity. When adjusting for wage
subsidies, direct costs as a percentage of revenue were at 92% in 2020 which is consistent with the prior year.
Direct Costs for Q4 2020 were $34.8 million compared to $40.7 million in Q4 2019, a decrease of $5.9 million or 14%, mainly
due to the inclusion of $1.0 million in CEWS in Q4 2020 and the decrease in costs associated with the lower revenue. When
adjusting for wage subsidies, direct costs as a percentage of revenue were at 93% in Q4 2020 compared to 91% in Q4 2019.
Workforce Accommodations, Forestry and Energy Services ("WAFES")
WAFES is comprised of two revenue streams: Workforce accommodations & Forestry and Energy Services.
WAFES revenue performance has been strong in a COVID-19 environment. Revenues from the WAFES segment for the year
ended December 31, 2020 were $234.7 million, an increase of $140.4 million compared to same period in 2019. The increase in
segment revenues was primarily driven by the Acquisition which added $132.5 million of revenue. Also, WAFES had other
revenue of $6.6 million related to amounts awarded for legal proceedings with two former customers.
For 2020, EBITDA as a percentage of revenue increased to 24% from 12% in the same period in 2019 mainly due to the inclusion
of $14.7 million CEWS and $6.6 million in legal settlements. When adjusting for wage subsidies and the legal settlements,
EBITDA as a percentage of revenue is at 15.3% which is an increase of 3% compared to 2019. This increase in margin is related
to stronger occupancy at higher margin camps.
Revenues from the WAFES segment for Q4 2020 were $78.2 million, an increase of $58.8 million compared to Q4 2019. The
increase in Q4 2020 segment revenues was primarily driven by the Acquisition which added $49.6 million of revenue growth in
catering and infrastructure install and rental activities.
EBITDA as a percentage of revenue increased to 18% in Q4 2020 from 9% in Q4 2019 mainly due to the inclusion of $2.8 million
CEWS and stronger occupancy at higher margin camps. When adjusting for wage subsidies, EBITDA as a percentage of revenue
is 15% which is an increase of 6% compared to Q4 2019. This increase in margin is related to stronger occupancy at higher
margin camps.
Workforce accommodations and forestry revenue
Revenues from workforce accommodations and forestry for 2020 were $216.3 million, an increase of $122.0 million when
compared to 2019. The increase in revenues was primarily driven by the Acquisition. When adjusting 2020 revenue to remove
acquisition related revenue of $114.1 million, revenue for the workforce accommodation and forestry increased by $7.9 million.
The increase in revenue was primarily due to increased activity under catering, infrastructure install and rental activities as a
result of new contracts that started in Q1 2020, which was partially offset by a decrease in seasonal work under forestry
services, mainly for fire camps and firefighting services and reductions in revenue associated with temporary closure and
reduction in operations at certain client facilities as a result of COVID-19.
Revenues from workforce accommodations and forestry for Q4 2020 were $71.8 million and increased by $52.3 million
compared to Q4 2019. The increase in Q4 2020 was mainly driven by the Acquisition. When adjusting Q4 2020 revenue to
remove Acquisition related revenue of $43.1 million, revenue for the workforce accommodation and forestry increased by $9.2
million to $28.6 million. This was due to increased activity in catering and infrastructure install and rental activities.
Energy Services
Revenues from energy services were $6.5 million and $18.4 million for the three months and year ended December 31, 2020,
respectively. The energy services business was part of the Acquisition. Revenue for energy services is primarily from mat and
relocatable structures rentals combined with equipment sales and installation. The Corporation has temporarily closed the mat
manufacturing plant due to lower business activity, however, the relocatables structures business experienced high utilization
throughout 2020.
Direct Costs
Direct costs in the WAFES business unit for the year ended December 31, 2020 were $175.1 million or 75% of revenue
compared to $81.3 million or 86% of revenue for 2019. Direct costs in 2020 includes $101.3 million of costs associated with the
acquired operations, partially offset by $14.7 million of CEWS. When adjusting for wage subsidies, direct costs were 81% of
11
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
revenue, which is a decrease of 6% compared to the prior year. This decrease as a percentage of revenue is the result of
increased revenue from higher margin services and Acquisition synergies achieved in by combining the WAFES operations.
Direct costs in the WAFES business unit for Q4 2020 were $63.0 million or 80% of revenue compared to $17.3 million or 89% of
revenue for Q4 2019. Direct costs in Q4 2020 includes $41.1 million of costs from the acquired operations, partially offset by
$2.8 million of CEWS. When adjusting for wage subsidies, direct costs were 84% of revenue, which is a decrease of 5%
compared to the prior period and reflects acquisition synergies, partially offset by the lower volumes in Q4 when compared to
the rest of 2020.
Modular Solutions
The Modular Solutions business was part of the Acquisition which closed on May 29, 2020. Modular Solutions segment
revenues for Q4 2020 and the year ended December 31, 2020 were $48.2 million and $98.8 million, respectively. These
revenues are primarily focused on social and affordable housing, industrial projects and portable classrooms.
EBITDA for Q4 2020 and for the 2020 post-Acquisition period, were $4.4 million and $10.6 million, respectively which included
$0.4 million and $3.3 million of CEWS impact. The results reflect the focus on social and affordable housing projects where
performance and execution have been strong as well as the positive impact of cost reductions and improved efficiencies in our
western Canada operations combined with continued strong performance from eastern Canada as we improved resource
utilization.
A key metric for the Modular Solutions segment is the backlog of projects and timing of backlog execution. The focus for this
business unit will be to secure and increase backlog, which was $61.2 million for social housing at the end of Q4 2020.
Additionally, Modular Solutions has recurring modular business beyond social housing worth approximately $40 million per
annum.
Direct Costs
Direct costs are comprised of labour, raw materials and transportation which vary directly with revenues, and a relatively fixed
component which includes rent, utilities and the design and technical services required in the bidding cycle and post award
manufacturing and installation of the product.
Direct costs were 89% and 86% of revenue for the three months and year ended December 31, 2020, respectively. Direct costs
are driven by labour and were positively impacted by $0.4 million and $3.3 million of CEWS for the three months and year
ended December 31, 2020, respectively.
Other Items
Selling, General & Administrative Expense
Selling, general & administrative expenses are comprised of corporate costs reflecting head and corporate office costs including
the executive officers and directors of the Corporation, and shared services including information technology, corporate
accounting staff and the associated costs of supporting a public company.
Selling, general & administrative expenses for the year ended December 31, 2020 were $22.1 million, an increase of $12.6
million compared to 2019, mainly due to the Acquisition, acquisition costs of $1.7 million incurred for the Acquisition and higher
business development costs to support future growth, which was partially offset by non-recurring recoveries of $1.2 million
recorded in Q4 2020 related to legal costs recovered through legal proceedings with a former customer and CEWS of $1.2
million. After adjusting for acquisition costs, non-recurring items and wage subsidies, selling and administrative expenses were
5% of total revenue in 2020, which is a 1% increase from 2019.
Selling, general & administrative expenses for Q4 2020 were $6.2 million, an increase of $3.4 million compared to Q4 2019,
mainly due to the Acquisition, which was partially offset by the impacts of the items described above. After adjusting for
transaction costs, non-recurring items and wage subsidies, selling and administrative expenses were 5% of total revenue in Q4
2020 and 4% in Q4 2019.
Depreciation and Amortization
Three months ended December 31,
Years ended December 31,
(000's)
Depreciation of property, plant and equipment
and right-of-use assets
Amortization of intangibles
Total depreciation and amortization
$
$
2020
10,232 $
905
11,137 $
2019
499 $
425
924 $
2020
22,139 $
2,925
25,064 $
2019
2,309
1,532
3,841
12
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
For 2020, depreciation and amortization was $25.1 million, an increase of $21.2 million compared to 2019, due to the increase
in Property, plant and equipment and lease liabilities from the Acquisition. For Q4 2020, depreciation and amortization was
$11.1 million, an increase of $10.2 million compared to Q4 2019, for the same reasons as the increase during the year. The
Corporation's plan for capital light operations will reduce depreciation expense in upcoming years.
Bargain Purchase Gain ("BPG")
A BPG of $29.9 million was recorded for the year ended December 31, 2020. The BPG equates to the difference between the
estimated fair value of the net assets acquired of Horizon North of $130.8 million and the consideration received by Fairfax
Financial, as disclosed in Note 4 "Business combination" of the 2020 Financial Statements. The BPG was reduced by $4.2 million
in Q4 2020 which was primarily due to a further writedown of the fair value of the inventory related to the Fairfield by Marriott
hotel project in Kitimat, British Columbia. The pandemic continues to have a significant impact on the hospitality industry
affecting the Corporation's ability to obtain a buyer for the hotel project. Manufacturing for the hotel project was stopped
earlier in the year and the Corporation is assessing amicable resolutions to obligations associated with the hotel project, which
have been impacted by the pandemic.
Finance costs
Finance costs include interest on loans and borrowings, interest on lease liabilities and accretion. For 2020, finance costs were
$4.6 million, an increase of $4.4 million compared to 2019. This related to the increase in loans and borrowings as well as the
lease liabilities from the Acquisition. For Q4 2020, finance costs were $1.5 million, an increase of $1.5 million compared to Q4
2019.
The effective interest rate on loans and borrowings for the year ended December 31, 2020 was 4.3%. The interest rate is
impacted by the debt level and tiered interest rate structure of the credit facility. The rate ranges from bank prime rate plus
1.00% to 3.25%.
Goodwill and intangible assets
Goodwill of $98.6 million is made up of $96.0 million recognized on the acquisition of certain assets and associated liabilities
comprising the services business carried on by Carillion Canada and certain of its affiliates (the “Carillion Services Assets”) in
2018 and $2.6 million recognized on the acquisition of the Powerful Group of Companies in 2019. Goodwill is not amortized.
The goodwill relating to the Carillion Services Assets is deductible for tax purposes via amortization. The Corporation concluded
there was no impairment of its goodwill or intangibles at December 31, 2020.
Gain/Loss on disposal
For 2020, the loss on disposal was $0.04 million compared to a gain on disposal of $0.2 million in 2019. For Q4 2020, the loss on
disposal was $0.2 million compared to a loss on disposal of $0.3 million in Q4 2019. The gains and losses on disposals are
typically generated from ongoing fleet management of operational assets and rationalization of idle assets.
Non-controlling interest
Dexterra Group owns 49% of Tangmaarvik Inland Camp Services Inc. ("Tangmaarvik") and controls its operations. As a result,
the results of Tangmaarvik are consolidated with the results of Dexterra Group and a non-controlling interest is recorded. For
the three months and year ended December 31, 2020 non-controlling interest of $0.1 million and $0.4 million was recorded,
respectively, compared to $0.1 million and $0.3 million in the same periods of the prior year.
Joint Venture
Dexterra Group owns 49% of Gitxaala Horizon North Services LP ("Gitxaala"). This equity investment is recorded at cost and
increases or decreases to recognize the Corporation's share of the profit or loss of the entity. Earnings for the year ended
December 31, 2020 were $0.7 million. The transactions with Gitxaala are described in Note 23 of the 2020 Financial Statements.
Income taxes
For the year ended December 31, 2020, the Corporation's effective income tax rate was 15.9% (2019 - 26.2%). The lower tax
rate for 2020 was primarily due to impact of the non-taxable BPG.
The Corporation has non-capital losses for Canadian tax purposes of $76.3 million available to reduce future taxable income in
Canada, and non-capital losses for United States tax purposes of $0.8 million available to reduce future taxable income in the
United States. The Corporation expects to fully utilize these losses before their expiry except as noted below.
Deferred tax assets of $2.0 million have not been recognized in respect of $7.2 million of tax losses because it is not probable
that future taxable profit will be generated against which the subsidiary of the Corporation can utilize the benefits.
The Corporation has completed the first phase of its restructuring plan to reduce cash taxes payable in 2021 and future years.
13
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
COVID-19 Pandemic
On March 11, 2020, the World Health Organization declared COVID-19 as a pandemic. Some of Dexterra Group’s businesses are
being classified as “essential services” in various cities and regions and are playing an important role in fighting the COVID-19
virus. Dexterra Group and its employees are playing a vital role in keeping client operations and infrastructure safe and virus
free. The safety of employees and customers continues to be a top priority.
Dexterra Group’s financial results continue to be impacted significantly as a result of the COVID-19 pandemic. The Facilities
Management segment continues to experience reductions in revenue as a result of reduced services, mainly in the Aviation and
Retail markets. The WAFES and Modular Solutions segments have seen less significant declines in revenue but have still been
impacted due to lower activity in camp/catering services, the British Columbia government shutdowns in early 2021 and the
delay of social and affordable housing projects and timing of portable classroom builds. New business opportunities in the
pipeline have also been affected and are expected to shift to future periods. It is impossible to forecast the duration and full
scope of the economic downturn caused by the COVID-19 pandemic and the related consequences it will have on the
Corporation and its business, including the potential impact on its services once these social distancing policies are lifted. At this
time, it is unknown to the Corporation how the COVID-19 pandemic will evolve and impact demand for the Corporation’s
services, which may lead to lower revenue, changes to the federal and provincial governments’ support programs for
businesses to help offset the impact of COVID-19, impact on the Corporation’s customers and their solvency and on the
Corporation's supply chain and safety of its workforce.
The Corporation is expecting to continue to experience lower revenue in 2021, due to the impacts of the pandemic and the
restrictions put in place by both the provincial and federal governments. The management team has implemented plans to
modify the cost structure to mitigate the impact of COVID-19, while continuing to provide essential services to its clients.
Additionally, the Corporation has applied for government support programs and qualified for $4.2 million and $32.9 million of
CEWS funding for the three months and year ended December 31, 2020, respectively. Based on the current changes to the
CEWS program, the benefit to the Corporation of any subsidies after December 31, 2020 is declining.
Outlook
Operations Outlook
The Corporation is focused on growth post pandemic, with both organic growth and growth through selective accretive
acquisitions. Timing of the acquisitions is unknown and will depend on opportunities.
The Corporation significantly improved its leverage and liquidity position subsequent to the Acquisition as well as increased its
available capital by negotiating the amended and extended credit facility with an increased limit to $175 million. Since the
Acquisition, approximately $53 million on its credit facility has been repaid. As at December 31, 2020, the Corporation had
$81.6 million of available liquidity which provides it with significant financial flexibility. Debt reduction will pause in the first
quarter of 2021 due to an increased COVID-19 impact on our WAFES business in British Columbia, and the NRB Modular
Solutions plant expansion discussed below.
With the recent announcement by Canada’s federal government and CMHC to provide $1 billion of funding to various cities
across the country for rapid housing, the Corporation is in a strong position to win a significant portion of that business. As such,
the Corporation has leased an NRB Modular Solutions plant in Cambridge, Ontario. The estimated capital cost to build the
factory is $7 million and estimated incremental annual production capacity exceeds $100 million annually, though the
investment plan assumes a graduated ramp up. Continued growth in Modular solutions revenues in the back half of 2021 and
beyond is expected.
In the Facilities Management business, the growth prospects are significant and based on compound annual growth rates for
the market which are estimated to be double digit over the next several years. The pandemic has delayed this growth
opportunity. There will be no significant rebound in the aviation sector until the population receives vaccinations and has
confidence to travel. The Facilities Management business has line of sight to over $300 million of annual revenue being
competitively bid in the next three years.
The Crossroads Lodge in Kitimat, British Columbia and Coastal GasLink pipeline camps have been temporarily closed during the
first quarter of 2021 given the provincial governments restrictions and impact on the construction of the LNG Canada facility.
This short-term decline in revenue and EBITDA is expected to be offset by wins in our Eastern Canadian business and CEWS
funding. The management team has implemented plans to modify the cost structure to mitigate the impact of COVID-19, while
continuing to provide essential services to its clients.
Seasonality
Dexterra Group’s earnings are affected by seasonality in certain operating segments. Historically, earnings in the second and
third quarters are positively impacted by the seasonal Forestry operations, which is part of the WAFES segment. For the
Workforce Accommodations portion of the WAFES segment, camp occupancy is historically at its lowest level during the holiday
season. This, in conjunction with the Forestry Services low revenue winter season, causes revenues to be at their lowest levels
14
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
in the first and fourth quarters. The Modular Solutions and Facilities Management segments include project work that may also
not be evenly distributed throughout the fiscal year.
Liquidity and Capital Resources
For the year ended December 31, 2020, cash generated by operating activities was $72.8 million, compared to $1.6 million in
the same period of 2019. The variance was driven primarily by the $55.2 million increase in net earnings for the period and was
used to repay debt post-Acquisition.
The significant improvement in cash flow from investing activities for the year ended December 31, 2020, compared to the
same period in 2019, is mainly related to 2019 payments of $17.6 million to former shareholders of Carillion Canada in
connection with the acquisition of the Carillion Services assets and $12.5 million for the acquisition of the PGC and the Carillion
Canada purchase price finalization, as well as 2020 asset sales as a result of the capital light operating model and low capital
expenditures.
Cash flows from financing activities decreased due to the significant repayments on the credit facility of $57.9 million and
increased lease payments and finance costs related to the Acquisition, compared to the $17.6 million in proceeds received in
exchange for common shares in 2019. Finance activities include payments on loans and borrowings, finance costs paid and the
cash impact of finance leases.
Working capital at December 31, 2020 was $67.7 million, compared to $19.6 million at December 31, 2019, an increase of $48.1
million. This was mainly due to working capital related to the Acquisition. Working capital investment in the business is also
higher in the first and third quarters.
Borrowing capacity (000's)
Bank borrowing:
Available credit facility
Drawings on credit facility
Letters of credit
Borrowing capacity(1)
December 31, 2020 December 31, 2019
$
$
175,000 $
86,411
6,963
81,626 $
32,000
5,453
2,915
23,632
(1)
Calculated as available bank lines less drawings on credit facility and letters of credit.
On June 30, 2020, Dexterra Group reached an agreement with its lenders to amend its credit facility and extend the maturity
date to December 30, 2022. The credit facility has an available limit of $175.0 million and is secured by a $400.0 million first
fixed and floating charge debenture over all assets of the Corporation and its wholly-owned subsidiaries. The interest rate for
the credit facility is calculated on a grid pricing structure based on the Corporation’s debt to EBITDA ratio. The Corporation is
required to maintain a Debt to EBITDA ratio of less than 3.50:1:00 and an interest coverage ratio greater than 2:50:1:00 as at
December 31, 2020. Amounts drawn on the credit facility incur interest at bank prime rate plus 1.00% to 2.25% or the Bankers’
Acceptance rate plus 2.00% to 3.25%. The credit facility has a standby fee ranging from 0.50% to 0.81%. The operating facility in
place at December 31, 2019 was Dexterra’s stand-alone facility prior to the Acquisition. The facility was repaid on May 29, 2020
upon closing the Acquisition.
The Corporation's financial position and liquidity are strong. The Corporation generated Free Cash Flow of $64.0 million in 2020.
In future quarters, principal sources of liquidity include generated Free Cash Flow and proceeds from the disposal of idle or
underutilized assets across its operating segments. As at December 31, 2020, the Corporation was in compliance with all
financial and non-financial covenants related to the credit facility.
Capital Spending
For the year ended December 31, 2020, gross capital spending was $3.5 million compared to $4.4 million in the same period of
2019. Capital spending in Q4 2020 was mainly focused on small equipment and is in line with the Corporation's capital light
strategy.
Management evaluates and manages its capital spending plans taking into account proceeds from the sale of property, plant
and equipment, resulting in net capital proceeds of $1.4 million for the year ended December 31, 2020 compared to net capital
spending of $3.9 million in the same period of 2019. Capital spending was offset by the proceeds received on selling
underutilized energy services assets.
As noted in the Outlook section, the Corporation leased a NRB Modular Solutions plant in Cambridge, Ontario, with an
estimated capital cost of $7 million and annual production capacity exceeding $100 million in annual sales revenue. This plant
will be used to meet the recent surge in social affordable housing demand and will open for production in Q2 2021.
Management expects normalized recurring capital spending to approximate $5 million per annum, excluding the new NRB
plant.
15
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
Quarterly Summary of Results
(000's except per share amounts)
Revenue(1)
EBITDA(2)
Net earnings (loss) attributable to shareholders
Net earnings per share, basic
Net earnings per share, diluted
(000's except per share amounts)
Revenue
EBITDA
Net earnings attributable to shareholders
Net earnings per share, basic and diluted
Three months ended
2020
December
2020
September
2020
June
$
164,418 $
176,918 $
76,106 $
18,713
(103)
0.00
0.00
33,444
16,131
0.25
0.24
22,885
47,139
1.08
1.08
Three months ended
2019
December
2019
September
2019
June
$
64,134 $
76,151 $
66,493 $
3,240
1,370
0.04
5,185
3,330
0.10
6,164
3,566
0.11
2020
March
60,373
2,147
864
0.03
0.03
2019
March
54,281
1,876
752
0.02
(1)
(2)
Revenue for the third quarter of 2020 includes $6.6 million related to amounts awarded on two legal proceedings with former customers.
EBITDA for the fourth quarter of 2020 includes 1.2 million in non-recurring items. EBITDA for the third quarter of 2020 includes the $6.6 million impact of other revenue.
Revenue increased in the fourth quarter of 2020 compared to the same period in 2019 primarily due to the revenue from the
Acquisition of $97.3 million, partially offset by the impacts of COVID-19 on operations. EBITDA increased significantly in the
fourth quarter of 2020 when compared to the same period in 2019 due primarily to the Acquisition, combined with the $4.2
million in wage subsidies and was partially offset by the impacts of COVID-19 on operations. Net earnings in Q4 2020 were
impacted by the $4.2 million non-cash reduction in the bargain purchase gain.
When compared to Q3 2020, revenue has decreased by $25.0 million for the WAFES segment, due to the inclusion of $6.6
million of revenue in Q3 2020 related to amounts awarded on two legal proceedings; low levels of camp occupancy during the
Q4 holiday season; and the impact of Forestry's low revenue winter season. This decrease was partially offset by revenue
increases from Q3 2020 to Q4 2020 for Facilities Management and Modular Solutions as these operations are not impacted by
seasonality to the same extent as WAFES. EBITDA was negatively impacted by CEWS decreasing by $5.1 million from Q3 2020 to
Q4 2020.
Reconciliation of non-GAAP measures
The following provides a reconciliation of non-GAAP measures to the nearest measure under GAAP for items presented
throughout the MD&A.
(000's)
Net earnings
Add:
Share based compensation
Depreciation & amortization
Equity investment depreciation
Finance costs
Bargain purchase gain
Loss (Gain) on disposal of property, plant and equipment
Income tax expense
EBITDA
Acquisition costs
Other revenue(1)
Non-recurring items(2)
Adjusted EBITDA(3)
Three months ended December 31,
Years ended December 31,
2020
2019
2020
$
27 $
1,455 $
64,479 $
148
11,137
141
1,538
4,247
156
1,319
—
924
—
59
—
285
517
354
25,064
296
4,632
(29,881)
36
12,210
$
18,713 $
3,240 $
77,190 $
—
—
(1,236)
17,477 $
$
75
—
—
1,702
(6,569)
(1,236)
2019
9,304
—
3,841
—
222
—
(202)
3,300
16,465
75
—
—
(1) Other revenue includes amounts awarded to the Corporation through legal proceedings with two former customers.
(2) Non-recurring items relate to legal costs recovered through legal proceedings with a former customer.
(3) Includes $4.2 million and $32.9 million of pre-tax CEWS for the three months and year ended December 31, 2020, respectively .
3,315 $
71,087 $
16,540
16
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
(000's)
Net cash flows from operating activities
Net capital proceeds (spending)
Finance costs paid
Lease payments
Free Cash Flow
Changes in Accounting Policies
Three months ended December 31,
Years ended December 31,
2020
$
34,018 $
(1,242)
(1,379)
(2,328)
$
29,069 $
2019
2,544 $
(1,465)
(59)
(189)
831 $
2020
72,806 $
1,430
(4,989)
(5,231)
64,016 $
2019
1,561
(3,869)
(222)
(605)
(3,135)
Dexterra Group’s IFRS accounting policies are provided in Note 3 to the 2020 Financial Statements for the years ended
December 31, 2020 and 2019.
Outstanding Shares
On July 16, 2020, the Corporation completed a five-for-one share consolidation of all of its issued and outstanding common
shares (“the Consolidation”). Prior to the Consolidation, a total of 324,346,871 common shares were issued and outstanding
and after the Consolidation the Corporation has 64,869,417 issued and outstanding common shares. All share and per share
data presented in the 2020 Financial Statements and MD&A has been retroactively adjusted to reflect the Share Consolidation.
The post-Consolidation Common Shares continue to be listed on the Toronto Stock Exchange (TSX) under the trading symbol
“DXT”. Dexterra Group had 64,869,417 voting common shares issued and outstanding as at March 10, 2021, of which 49% or
31,785,993 are owned by subsidiaries of Fairfax Financial Holdings Limited.
Off-Balance Sheet Financing
Dexterra Group has no off-balance sheet financing.
Management’s Report on Disclosure Controls and Procedures and Internal Controls over
Financial Reporting
Disclosure Controls and Procedures
The Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) have designed, or caused to be designed under their
supervision, disclosure controls and procedures (“DC&P”) as defined in National Instrument 52-109 - Certification of Disclosure
in Issuers' Annual and Interim Filings ("NI 52-109") of the Canadian Securities Administrators, to provide reasonable assurance
that: (i) material information relating to the Corporation is made known to the CEO and the CFO by others, particularly during
the period in which the interim filings are being prepared; and (ii) information required to be disclosed by the Corporation in its
annual filings, interim filings or other reports filed or submitted by it under securities legislation is recorded, processed,
summarized and reported within the time periods specified in securities legislation.
Throughout 2021, Dexterra Group will continue to evaluate its DC&P, making modifications from time-to-time as deemed
necessary. There were no changes in Dexterra Group’s DC&P that occurred during the period ended December 31, 2020 that
have materially affected, or are reasonably likely to materially affect, Dexterra Group’s DC&P.
Internal Controls over Financial Reporting
The CEO and the CFO have designed, or caused to be designed under their supervision, internal controls over financial reporting
(“ICFR”) as defined in NI 52-109 of the Canadian Securities Administrators, in order to provide reasonable assurance regarding
the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS.
There were no changes to the Corporation’s ICFR during the period ended December 31, 2020 that have materially affected, or
are reasonably likely to materially affect, the Corporation’s ICFR.
In accordance with the requirements of NI 52-109, an evaluation of the effectiveness of DC&P and ICFR was carried out under
the supervision of the CEO and CFO at December 31, 2020. Based on this evaluation, the CEO and CFO have concluded that the
Corporation’s DC&P and ICFR were effective as at December 31, 2020.
Limitations on the Effectiveness of Disclosure Controls and Procedures and Internal Control over Financial
Reporting
Because of their inherent limitations, DC&P and ICFR may not prevent or detect misstatements, errors or fraud. Control
systems, no matter how well conceived or implemented, can provide only reasonable, not absolute, assurance that the
objectives of the control systems are met.
17
Management’s Discussion and Analysis
Three months and years ended December 31, 2020 and 2019
Risks and Uncertainties
The financial risks, critical accounting estimates and judgements, and risk factors related to Dexterra Group and its business,
which should be carefully considered, are disclosed in the Annual Information Form under "Risk Factors" and in the 2020
Financial Statements under Note 22, both dated March 10, 2021, and this MD&A should be read in conjunction with them. Such
risks may not be the only risks facing Dexterra Group. Additional risks not currently known may also impair Dexterra Group’s
business operations and results of operation.
Critical Accounting Estimates and Judgements
This MD&A of Dexterra Group’s financial condition and results of operations is based on its consolidated financial statements,
which are prepared in accordance with IFRS. The preparation of the consolidated financial statements requires management to
make estimates and judgements about the future. Estimates and judgements are continually evaluated and are based on
historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. The resulting accounting estimates will, by definition, seldom equal the related actual results. The MD&A should
be read in conjunction with the 2020 Financial Statements and the changes to the areas of estimation and judgement are
disclosed in Note 3 "Significant accounting policies and determination of fair values".
Financial Instruments and Risk Management
In the normal course of business, the Corporation is exposed to a number of financial risks that can affect its operating
performance. These risks are: credit risk, liquidity risk and interest rate risk. The Corporation’s overall risk management
program and prudent business practices seek to minimize any potential adverse effects on the Corporation’s financial
performance. The MD&A should be read in conjunction with the 2020 Financial Statements and the changes in the risk
management or in any risk management policies as disclosed in Note 22 "Financial risk management".
Forward-Looking Information
Certain statements contained in this MD&A may constitute forward-looking information under applicable securities law.
Forward-looking information may relate to Dexterra Group’s future outlook and anticipated events, business, operations,
financial performance, financial condition or results and, in some cases, can be identified by terminology such as “continue”;
“forecast”; “may”; “will”; “project”; “could”; “should”; “expect”; “plan”; “anticipate”; “believe”; “outlook”; “target”; “intend”;
“estimate”; “predict”; “might”; “potential”; “continue”; “foresee”; “ensure” or other similar expressions concerning matters
that are not historical facts. In particular, statements regarding Dexterra Group’s future operating results and economic
performance, its leverage, the NRB Modular Solutions plant in Cambridge, and its objectives and strategies are forward-looking
statements. These statements are based on certain factors and assumptions, including expected growth, results of operations,
performance and business prospects and opportunities regarding Dexterra Group, which Dexterra Group believes are
reasonable as of the current date. While management considers these assumptions to be reasonable based on information
currently available to Dexterra Group, they may prove to be incorrect. Forward-looking information is also subject to certain
known and unknown risks, uncertainties and other factors that could cause Dexterra Group’s actual results, performance or
achievements to be materially different from any future results, performance or achievements expressed or implied by such
forward- looking information, including, but not limited to: the ability to retain clients, renew existing contracts and obtain new
business; an outbreak of contagious disease that could disrupt its business; the highly competitive nature of the industries in
which Dexterra Group operates; reliance on suppliers and subcontractors could have a material adverse effect on its business;
profitability could be adversely affected by cost inflation; volatility of industry conditions could impact demand for its services; a
reduction in the availability of credit could reduce demand for Dexterra Group’s products and services; Dexterra Group’s
significant shareholder may substantially influence its direction and operations and its interests may not align with other
shareholders; its significant shareholder’s 49% ownership interest may impact the liquidity of the common shares; cash flow
may not be sufficient to fund its ongoing activities at all times; loss of key personnel; the failure to receive or renew permits or
security clearances; risks related to significant legal proceedings or regulatory proceedings/changes; environmental damage and
liability is an operating risk in the industries in which Dexterra Group operates; climate changes could increase Dexterra Group’s
operating costs and reduce demand for its services; liabilities for failure to comply with public procurement laws and
regulations; any deterioration in safety performance could result in a decline in the demand for its products and services; failure
to realize anticipated benefits of acquisitions and dispositions; inability to develop and maintain relationships with Indigenous
communities; the seasonality of Dexterra Group’s business; inability to restore or replace critical capacity in a timely manner;
reputational, competitive and financial risk related to cyber-attacks and breaches; failure to effectively identify and manage
disruptive technology; economic downturns can reduce demand for Dexterra Group’s services; its insurance program may not
fully cover losses. Additional risks and uncertainties are described in Note 22 of the Corporation's Consolidated Financial
Statements for the years ended December 31, 2020 and 2019 contained in our most recent Annual Report filed with securities
regulatory authorities in Canada and available on SEDAR at sedar.com. The reader should not place undue importance on
forward-looking information and should not rely upon this information as of any other date. Dexterra Group is under no
obligation and does not undertake to update or alter this information at any time, except as may be required by applicable
securities law.
18
MANAGEMENT’S REPORT
TO SHAREHOLDERS
MANAGEMENT’S REPORT TO SHAREHOLDERS
The accompanying consolidated financial statements of Dexterra Group Inc. (“Dexterra Group” or
the “Corporation”) have been approved by the Board of Directors (the “Board”) of Dexterra Group and
have been prepared by management in accordance with International Financial Reporting Standards.
Financial statements will, by necessity, include certain amounts based on estimates and judgments. The
financial information contained throughout this report has been reviewed to ensure consistency with
these consolidated financial statements.
Management has overall responsibility for internal controls and maintains accounting systems designed
to provide reasonable assurance that transactions are properly authorized, assets safeguarded and that
the financial records form a reliable base for the preparation of accurate and timely financial information.
The Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of disclosure
controls and procedures and internal controls over financial reporting and have concluded that they are
effective.
The Board oversees the management of the business and affairs of Dexterra Group; including ensuring
management fulfills its responsibilities for financial reporting and is ultimately responsible for reviewing
and approving the financial statements. The Board carries out this responsibility principally through
its Audit Committee, which consists of four independent directors. An independent firm of chartered
accountants, appointed as external auditor by the shareholders, has audited the consolidated financial
statements and its report is included herein. The Audit Committee has reviewed the consolidated
financial statements with management and the external auditor.
John Mac Cuish
President and Chief Executive Officer
Drew Knight
Chief Financial Officer
20
INDEPENDENT AUDITOR’S REPORT
TO SHAREHOLDERS
Independent auditor’s report
To the Shareholders of Dexterra Group Inc.
Our opinion
In our opinion, the accompanying consolidated financial statements present fairly, in all material respects,
the financial position of Dexterra Group Inc. and its subsidiaries (together, the Corporation) as at
December 31, 2020 and 2019, and its financial performance and its cash flows for the years then ended in
accordance with International Financial Reporting Standards as issued by the International Accounting
Standards Board (IFRS).
What we have audited
The Corporation’s consolidated financial statements comprise:
the consolidated statements of financial position as at December 31, 2020 and 2019;
the consolidated statements of comprehensive income for the years then ended;
the consolidated statements of changes in equity for the years then ended;
the consolidated statements of cash flows for the years then ended; and
the notes to the consolidated financial statements, which include significant accounting policies and
other explanatory information.
Basis for opinion
We conducted our audit in accordance with Canadian generally accepted auditing standards. Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the consolidated financial statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.
Independence
We are independent of the Corporation in accordance with the ethical requirements that are relevant to
our audit of the consolidated financial statements in Canada. We have fulfilled our other ethical
responsibilities in accordance with these requirements.
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2
T: +1 416 863 1133, F: +1 416 365 8215
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
22
Key audit matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated financial statements for the year ended December 31, 2020. 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.
Key audit matter
How our audit addressed the key audit matter
Valuation of a significant portion of the
property, plant and equipment acquired in a
business combination
Refer to note 1 – Reporting entity, note 2 –
Statement of compliance and note 4 – Business
combination to the consolidated financial
statements.
Our approach to addressing the matter involved the
following procedures, among others:
Tested how management estimated the fair
values of a significant portion of the property,
plant and equipment, which included the
following:
On May 29, 2020, Dexterra Group Inc. (previously
Horizon North) acquired 100% of the issued and
outstanding shares of Dexterra Integrated Facilities
Management (Dexterra). The business combination
between Horizon North and Dexterra is being
accounted for as a reverse acquisition, whereby the
assets and liabilities of Horizon North are recorded
at their fair values on the date of the transaction.
The fair value of the assets acquired included
$191.5 million in property, plant and equipment.
Management applied significant judgment in
estimating the fair value of property, plant and
equipment. For a significant portion of property,
plant and equipment, management used a cost
approach adjusted for economic obsolescence
(valuation method) to value these assets.
Management developed significant assumptions
with respect to the cost approach, which included
the replacement costs, inflation indices, physical
depreciation and obsolescence considerations in
the valuation of a significant portion of property,
plant and equipment. Adjustments for economic
obsolescence were based on discounted cash flow
models, which included the following assumptions:
forecasted cash flows, growth rates and discount
rates.
- Read the purchase agreement.
- Tested the mathematical accuracy of
management’s discounted cash flow
models to determine the economic
obsolescence.
- Evaluated the reasonableness of the
significant assumptions used by
management to determine the economic
obsolescence adjustments related to
forecasted cash flows and growth rates by
considering management’s budget,
strategy and business plan approved by the
Board of Directors and the current and past
performance of Horizon North.
- Professionals with specialized skill and
knowledge in the field of valuation assisted
in evaluating the appropriateness of
management’s valuation method, as well
as the reasonableness of significant
assumptions, which included replacement
costs, inflation indices, physical
depreciation and obsolescence
considerations and the discount rates
applied.
23
Key audit matter
How our audit addressed the key audit matter
We considered this a key audit matter due to the
significant judgment applied by management in
estimating the fair values of a significant portion of
property, plant and equipment, including the
development of significant assumptions. This, in
turn, led to a high degree of auditor judgment,
subjectivity and effort in performing procedures and
evaluating audit evidence relating to the significant
assumptions used by management. The audit effort
involved the use of professionals with specialized
skill and knowledge in the field of valuation.
Impairment assessment of goodwill
Refer to note 2 – Statement of compliance,
note 3 – Significant accounting policies and
determination of fair values and note 9 – Intangible
assets and goodwill to the consolidated financial
statements.
The Corporation had goodwill of $98.6 million as at
December 31, 2020 and is allocated to cash
generating units (CGUs). Goodwill is subject to
impairment testing on an annual basis and at the
end of each reporting period during the year if an
indicator of impairment exists. Impairment exists
when the carrying value of a CGU exceeds its
recoverable amount.
Management applied significant judgment in
determining the recoverable amounts. The
recoverable amounts of the CGUs were based on a
value-in-use method using discounted cash flow
models. Significant assumptions used in the
discounted cash flow models included forecasted
cash flows, growth rates and discount rates.
Management concluded that there was no
impairment of goodwill as at December 31, 2020.
- Tested the underlying data used in the
discounted cash flow models.
Our approach to addressing the matter involved the
following procedures, amongst others:
Evaluated how management determined the
recoverable amounts of the CGUs, which
included the following:
- Assessed the appropriateness of the
method used and tested the mathematical
accuracy of the discounted cash flow
models.
- Evaluated the reasonableness of significant
assumptions such as forecasted cash flows
and growth rates applied by management
in the discounted cash flow models by
considering management’s budget,
strategy and business plan approved by the
Board of Directors, current and past
performance of the CGUs and industry data
published by third parties.
- Professionals with specialized skill and
knowledge in the field of valuation assisted
in evaluating the appropriateness of
management’s value-in-use method and
testing the reasonableness of the discount
rates.
- Tested the underlying data used in the
discounted cash flow models.
24
Key audit matter
How our audit addressed the key audit matter
Tested the disclosures made in the
consolidated financial statements, particularly
on the sensitivity of the significant assumptions
used.
We considered this a key audit matter due to the
significant judgment applied by management in
determining the recoverable amounts of the CGUs,
including the development of significant
assumptions. This, in turn, led to a high degree of
auditor judgment, subjectivity and effort in
performing procedures and evaluating audit
evidence relating to the significant assumptions
used by management. The audit effort involved the
use of professionals with specialized skill and
knowledge in the field of valuation.
Other information
Management is responsible for the other information. The other information comprises the Management’s
Discussion and Analysis.
Our opinion on the consolidated financial statements does not cover the other information and we do not
express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other
information identified above and, in doing so, consider whether the other information is materially
inconsistent with the consolidated financial statements or our knowledge obtained in the audit, or
otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other
information, we are required to report that fact. 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 IFRS, and for such internal control as management determines is
necessary to enable the preparation of consolidated financial statements that are free from material
misstatement, whether due to fraud or error.
25
In preparing the consolidated financial statements, management is responsible for assessing the
Corporation’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 Corporation or to cease operations, or has no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the Corporation’s financial reporting
process.
Auditor’s responsibilities for the audit of the consolidated financial statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as
a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s
report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a
guarantee that an 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:
Identify and assess the risks of material misstatement of the consolidated financial 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.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Corporation’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by 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 Corporation’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 Corporation to
cease to continue as a going concern.
Evaluate the overall presentation, structure and content of the consolidated financial statements,
including the disclosures, and whether the consolidated financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
26
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Corporation to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group audit. We
remain solely responsible for our audit opinion.
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.
We also provide those charged with governance with 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 consolidated 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 benefits of such communication.
The engagement partner on the audit resulting in this independent auditor’s report is Michael Hawtin.
/s/PricewaterhouseCoopers LLP
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
March 10, 2021
27
CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2020 and December 31, 2019
Consolidated statement of financial position
(000’s)
Assets
Current assets
Cash
Trade and other receivables
Inventories
Prepaid expenses and other
Income tax receivable
Total current assets
Non-current assets
Property, plant and equipment
Right-of-use assets
Intangible assets
Goodwill
Deferred income taxes
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities
Loans and borrowings
Trade and other payables
Deferred revenue
Income taxes payable
Asset retirement obligations
Lease liabilities
Contingent consideration
Total current liabilities
Non-current liabilities
Lease liabilities
Contingent consideration
Asset retirement obligations
Loans and borrowings
Deferred income taxes
Non-current liabilities
Total liabilities
Shareholders’ Equity
Share capital
Contributed surplus
Retained earnings
Non-controlling interest
Total shareholders’ equity
Note
December 31,
2020
December 31,
2019
$
—
$
5,14
6
7
8
9
9
17
10
149,532
12,445
5,981
—
167,958
184,047
22,052
23,457
98,640
2,587
14,782
345,565
$
513,523
$
—
81,815
3,310
2,895
5,102
7,160
—
100,282
18,921
1,448
6,527
85,369
—
112,265
11
$
14
12
8
8
12
11
17
13
$
212,547
$
232,348
354
66,451
1,823
300,976
2,577
35,432
4,451
1,781
965
45,206
8,254
1,672
21,058
98,640
—
—
129,624
174,830
5,453
16,229
2,867
—
—
614
400
25,563
1,061
1,439
—
—
1,644
4,144
29,707
131,543
—
12,150
1,430
145,123
174,830
29
Total liabilities and shareholders’ equity
$
513,523
$
The accompanying notes are an integral part of the consolidated financial statements.
Mary Garden
Director, Audit Committee Chair
John MacCuish
Director, Chief Executive Officer
Consolidated statement of comprehensive income
(000's except per share amounts)
Revenue
Revenue from operations
Other revenue
Total revenue
Operating expenses
Direct costs
Selling, general and administrative expenses
Depreciation
Amortization of intangible assets
Share based compensation
Loss (gain) on disposal of property, plant and equipment
Operating income
Finance costs
Earnings from equity investment
Bargain purchase gain
Earnings before income taxes
Income tax
Income tax expense
Net earnings
Net Earnings Attributable to:
Non-controlling interest
Shareholders
Earnings per common share:
Net earnings per share, basic
Net earnings per share, diluted
Years ended December 31,
Note
2020
2019
14 $
14
471,246
$
261,059
6,569
477,815
—
261,059
379,502
235,072
15
16
7,8
9
13
4
17
22,107
22,139
2,925
354
36
50,752
4,632
(688)
(29,881)
76,689
12,210
64,479
448
64,031
19
19
$
$
1.25
1.24
$
$
9,522
2,309
1,532
—
(202)
12,826
222
—
—
12,604
3,300
9,304
286
9,018
0.28
0.28
Weighted average common shares outstanding:
Basic
Diluted
19
19
51,311
51,447
31,755
31,755
The accompanying notes are an integral part of the consolidated financial statements.
30
Consolidated statement of changes in equity
(000’s)
Balance as at December 31, 2018
Issuance of common shares
Dividends
Net income
Share Capital -
Number of
Note
Shares Share Capital
Contributed
Surplus
Retained
Earnings
Non-
Controlling
Interest
Total
27,525 $
113,908 $
— $
6,132 $
1,258 $
121,298
4,261
17,635
—
—
—
—
—
—
—
—
(3,000)
9,018
—
(114)
286
17,635
(3,114)
9,304
Balance as at Balance as at December 31, 2019
31,786 $
131,543 $
— $
12,150 $
1,430 $
145,123
Acquisition
Dividends
Share issue costs
Share based compensation
Net income
4
20
4
13
33,083
100,904
—
—
—
—
—
(99)
—
—
—
—
—
354
—
—
(9,730)
—
—
64,031
—
(55)
—
—
448
100,904
(9,785)
(99)
354
64,479
Balance as at December 31, 2020
64,869 $
232,348 $
354 $
66,451 $
1,823 $
300,976
The accompanying notes are an integral part of the consolidated financial statements.
31
Consolidated statement of cash flows
(000’s)
Cash provided by (used in):
Operating activities:
Net earnings
Adjustments for:
Depreciation
Amortization of intangible assets
Share based compensation
Loss (gain) on disposal of property, plant and equipment
Bargain purchase gain
Book value of used fleet sales transferred to inventory
Purchase of rental fleet
Earnings on equity investments
Asset retirement obligation settled
Finance costs
Income tax expense
Changes in non-cash working capital
Income taxes paid
Net cash flows from operating activities
Investing activities:
Acquisition of Powerful Group of Companies and Carillion Canada
Purchase of property, plant and equipment
Purchase of intangible assets
Equity investment
Proceeds on sale of property, plant and equipment
Deferred payment to former shareholder
Net cash flows used in investing activities
Financing activities:
Issuance of common shares
Payments for lease liabilities
Proceeds from (payments on) loans and borrowings
Finance costs paid
Dividends paid
Net cash flows from (used in) financing activities
Change in cash position
Cash, beginning of year
Cash, end of year
The accompanying notes are an integral part of the consolidated financial statements.
Years ended December 31,
Note
2020
2019
$
64,479
$
9,304
7,8
9
13
4
12
17
18
4
22,139
2,925
354
36
(29,881)
2,067
(2,283)
(688)
(1,360)
4,632
12,210
1,467
(3,291)
72,806
—
(3,462)
(1,524)
(2,264)
4,892
—
(2,358)
2,309
1,532
—
(202)
—
—
—
—
—
222
3,300
(9,769)
(5,135)
1,561
(12,513)
(4,382)
(374)
—
513
(17,635)
(34,391)
—
17,635
(5,231)
(57,885)
(4,989)
(4,920)
(73,025)
(2,577)
2,577
$
—
$
(605)
5,453
(222)
(3,114)
19,147
(13,683)
16,260
2,577
32
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
1. Reporting entity
Dexterra Group Inc. ("Dexterra Group" or the "Corporation") is a corporation registered and domiciled in Canada and its
common shares are listed on the Toronto Stock Exchange ("TSX") under the symbol DXT. The Corporation's head office is at
5915 Airport Road, Suite 425, Mississauga, ON L4V 1T1. The consolidated financial statements of the Corporation as at and for
the year ended December 31, 2020 are comprised of the Corporation and its subsidiaries and the Corporation's interest in
jointly controlled entities. Dexterra Group is a pan-Canadian support services platform which operates across eleven provinces
and territories and diversified end markets. Our Facilities Management business delivers operation and maintenance solutions
for built assets and infrastructure in the public and private sectors, including aviation, defence and security, retail, healthcare,
education and government. Our Workforce Accommodations, Forestry and Energy Services ("WAFES") business provides a full
range of workforce accommodations solutions, forestry services and access solutions to clients in the energy, mining, forestry
and construction sectors among others. Our Modular Solutions business integrates modern design concepts with off-site
manufacturing processes to produce high-quality building solutions for social and affordable housing, commercial, residential
and industrial clients.
On May 29, 2020, Dexterra Group (previously Horizon North Logistics Inc. ("Horizon North")) entered into a transaction (the
"Acquisition") with 10647802 Canada Limited, operating as Dexterra Integrated Facilities Management (“Dexterra”), a
subsidiary of Fairfax Financial Holdings Limited (TSX: FFH and FFH.U) (“Fairfax Financial”). Pursuant to the Acquisition, the
Corporation acquired all of the outstanding common shares of Dexterra and in exchange issued 31,785,993 common shares of
Dexterra Group to Dexterra’s sole shareholder, 9477179 Canada Inc. (“Dexterra Parent”), a wholly-owned subsidiary of Fairfax
Financial. Accordingly, Fairfax Financial indirectly owns a 49% interest in the combined Corporation, while existing shareholders
of the Corporation maintain a 51% interest. Prior to the Acquisition, Fairfax Financial had no ownership interest in Dexterra
Group.
For accounting purposes, the Acquisition constituted a reverse acquisition that involved a change of control of Dexterra Group
and a business combination of Horizon North and Dexterra, to form a new corporation that now carries on operations as
Dexterra Group Inc.. Based on the guidance in IFRS 3, Business Combinations ("IFRS 3"), it was determined that Horizon North
was the accounting acquiree and Dexterra was the accounting acquirer, as Fairfax Financial, the sole shareholder of Dexterra,
now controls the Corporation. As a result, 2019 comparative information included herein is solely Dexterra. Horizon North
financial results are included subsequent to the Acquisition closing date. Refer to Note 4 for further information.
On July 16, 2020, the Corporation completed a five-for-one share consolidation of all of its issued and outstanding common
shares (“the Consolidation”). Prior to the Consolidation, a total of 324,346,871 common shares were issued and outstanding,
and after the Consolidation the Corporation has 64,869,417 issued and outstanding common shares. All share and per share
data presented in the Corporation’s consolidated financial statements, including share options outstanding, has been
retroactively adjusted to reflect the Consolidation, unless otherwise noted.
On November 13, 2020, the shareholders of the Corporation approved the name change to Dexterra Group Inc. The common
shares now trade on the TSX under the ticker symbol “DXT”. Adopting a new corporate name reflects the transformation into a
pan-Canadian, diversified support services organization and marks a new phase in the Corporation's history as it focuses on
delivering quality solutions for the creation, management, and operation of infrastructure.
2. Statement of compliance
Basis of Preparation
a.
Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
(“IFRS”).
The consolidated financial statements were authorized for issue by the Board of Directors on March 10, 2021.
b. Basis of measurement
The consolidated financial statements have been prepared using the historical cost basis.
c. Change in Accounting Policy
Effective January 1, 2020, the Corporation changed its accounting policy of presenting expenses recognized in the
consolidated statement of comprehensive income from nature to function in accordance with IAS 1 - Presentation of
financial statements. There are also presentation changes to the segment information disclosure. The Corporation believes
presenting an analysis of expenses recognized by function and presentation amendments provide more reliable and
relevant financial information to users of its financial statements.
33
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
d. Functional and presentation currency
These consolidated financial statements are presented in Canadian dollars ("CAD"), which is the Corporation and
subsidiaries’ functional currency with the exception of a United States (“US”) operational entity which has a US dollar
("USD") functional currency.
e. Use of estimates and judgments
The preparation of financial statements in conformity with IFRS requires management to make judgments, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. The judgments, estimates and associated assumptions are based on historical experience and other factors that
are considered to be relevant. Actual outcomes may differ from these estimates. The judgments, estimates and underlying
assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the
estimate is revised if the revision affects only that period or in the period of the revision and future periods if the revision
affects both current and future periods. The judgments, estimates and assumptions that have the most significant risk of
causing a material adjustment to the carrying amounts of assets and liabilities recognized in the consolidated financial
statements are as follows:
Estimates & Judgements
•
•
•
•
•
•
Purchase price equations - The acquired assets and assumed liabilities are generally recognized at fair value on the date
the Corporation obtains control of a business. The measurement of each business combination is based on the information
available on the acquisition date. Management applied significant judgment in estimating the fair value of property, plant
and equipment. For a significant portion of the property, plant and equipment, management used a cost approach
adjusted for economic obsolescence to value these assets. Significant assumptions were developed with respect to the
cost approach including the replacement costs, inflation indices, physical depreciation and obsolescence considerations in
the valuation of property, plant and equipment. Adjustments for economic obsolescence were based on discounted cash
flow models which included the following assumptions: forecasted cash flows, growth rates and discount rates attributable
to these assets. The estimate of fair value of the acquired intangible assets and other assets and the liabilities are largely
based on projected cash flows, discount rates, and market conditions at the date of acquisition.
Impairment - Impairment exists when the carrying value of an asset or cash generating unit (“CGU”) exceeds its
recoverable amount, which is the higher of its fair value less costs of disposal (“FVLCOD”) and its value in use (“VIU”). The
FVLCOD calculation is based on available data from binding sales transactions, conducted at arm’s length, for similar assets
or observable market prices less incremental costs for disposing of the asset. If no such transactions can be identified, an
appropriate valuation model is used. The Corporation uses the VIU method, which is based on a discounted cash flow
models. Management applied significant judgment in determining the recoverable amounts. The most significant
assumptions in estimating the recoverable amount of each CGU include forecasted cash flows, growth rates and discount
rates. Forecasted cash flows include assumptions around EBITDA (Earnings before interest, taxes, depreciation,
amortization, depreciation from equity investment, share based compensation, bargain purchase gain and gain/loss on
disposal of property, plant and equipment).
Revenue Recognition Estimate - The Corporation recognized revenue at a point in time or upon transfer of control for its
construction contracts and estimates progress of these contracts by comparing costs incurred to the total expected costs
of the project.
Construction Receivable Estimate - The Corporation recognizes that the price of many construction contracts may change
over the duration of the construction period. Change orders may be issued by customers to modify the original contract
scope of work or conditions resulting in possible disputes or claims regarding additional amounts owing may arise.
Construction work related to a change order or claim may proceed, and costs may be incurred, in advance of final
determination of the value of the change order. As many change orders and claims may not be settled until the end of the
construction project, management estimates what changes orders to include in the determination of revenue recognized
and changes in these estimates could result in significant increases or decreases in revenue and income during any
particular accounting period.
Collectability of receivables - The Corporation estimates the collectability of accounts receivable, including unbilled
accounts receivable related to current period service revenue. An analysis of historical bad debts, client creditworthiness,
the age of accounts receivable and current economic trends and conditions are used to evaluate the adequacy of the
provision for expected credit losses and the collectability of receivables. Significant estimates must be made and used in
connection with establishing the provision in any accounting period. Material differences may result if management made
different judgments or utilized different estimates.
Asset Retirement Obligation (“ARO”) - The Corporation recognizes an asset retirement obligation to account for future
demobilisation and reclamation of specific camps. Use of an ARO requires estimates of the asset retirement costs, timing
of payments, present value discount rate and inflation rate to determine the amount recognized in accordance with the
accounting policy set out in Note 3(i).
34
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
•
Share-based compensation transactions - The fair value of the employee share options is measured using the Black-Scholes
option pricing model. Measurement inputs include the share price on measurement date, the exercise price of the
instrument, the expected volatility (based on weighted average historic volatility adjusted for changes expected due to
publicly available information), the weighted average expected life of the instruments (based on historical experience and
general option holder behavior), the forfeiture rate, the expected dividends, and the risk-free interest rate (based on
government bonds). Service and non-market performance conditions are not taken into account in determining fair value.
3. Significant accounting policies and determination of fair values
(a) Basis of consolidation
i.
Subsidiaries
Subsidiaries are entities controlled by the Corporation. The financial statements of subsidiaries are included in the
consolidated financial statements from the date that control commences until the date that control ceases. The
accounting policies of subsidiaries are aligned with the policies adopted by the Corporation.
ii.
Joint ventures
The Corporation’s joint ventures are those entities over whose activities the Corporation has joint control, established
by contractual agreement. Joint ventures are accounted for using the equity method (equity accounted investees) and
are initially recognized at cost.
iii. Special purpose entities
The Corporation has established a number of special purpose entities (“SPE”) for operating purposes. An SPE is
consolidated when, based on an evaluation of the substance of its relationship with the Corporation and the SPE's
risks and rewards, the Corporation concludes that it controls the SPE. Control exists when the Corporation is exposed
to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns
through its power over the entity.
iv.
Transactions eliminated on consolidation
Intra-group balances and transactions, and any unrealized income and expenses arising from intra-group transactions,
are eliminated in preparing the consolidated financial statements. Unrealized gains arising from transactions with
equity accounted investees are eliminated against the investment to the extent of the Corporation’s interest in the
investee.
v.
Non-controlling interest
The Corporation owns 49% of Tangmaarvik Inland Camp Services Inc. and control exists. As a result, the results of
Tangmaarvik Inland Camp Services Inc. are consolidated with the results of the Corporation and a non-controlling
interest is recorded.
(b) Business combinations
Business combinations are accounted for using the acquisition method. Determining whether an acquisition meets the
definition of a business combination or represents an asset purchase requires judgment on a case by case basis. If the
acquisition meets the definition of a business combination, the assets acquired and assumed liabilities are classified or
designated based on the contractual terms, economic conditions, the Corporation’s operating and accounting policies, and
other factors that exist on the acquisition date. The acquired identifiable net assets are measured at their fair value at the
date of acquisition. Any excess of the purchase price over the fair value of the net assets acquired is recognized as
goodwill. Furthermore, any excess of the fair value of the net assets acquired over the purchase price is recognized as a
bargain purchase gain.
Acquisition costs, other than those associated with the issue of debt or equity securities, that the Corporation incurs in
connection with a business combination are expensed as incurred.
35
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
(c) Financial instruments
IFRS 9 contains three principal classification categories for financial assets: measured at amortized cost, fair value through
other comprehensive income (“FVOCI”) and fair value through the consolidated statement of comprehensive income
(“FVTPL”). The classification of financial assets under IFRS 9 is generally based on the business model in which a financial
asset is managed and its contractual cash flow characteristics. Derivatives embedded in contracts where the host is a
financial asset in the scope of the standard are never separated. Instead, the hybrid financial instrument as a whole is
assessed for classification.
The “expected credit loss” model applies to financial assets measured at amortized cost, and contract assets and debt
instruments at FVOCI.
i.
Non-derivative financial assets
The initial classification of a financial asset depends upon the Corporation’s business model for managing its financial
assets and the contractual terms of the cash flows. There are three measurement categories into which the
Corporation classified its financial assets:
Amortized Cost: Includes assets that are held within a business model whose objective is to hold assets to collect
contractual cash flows and its contractual terms give rise on specified dates to cash flows that represent solely
payments of principal and interest;
FVOCI: Includes assets that are held within a business model whose objective is achieved by both collecting
contractual cash flows and selling the financial assets, where its contractual terms give rise on specified dates to
cash flows that represent solely payments of principal and interest; or
FVTPL: Includes assets that do not meet the criteria for amortized cost or FVOCI and are measured at fair value
through the consolidated statement of comprehensive income. This includes all derivative financial assets.
The Corporation initially recognizes trade and other receivables on the date that they originate. All other financial
assets are recognized initially on the trade date at which the Corporation becomes a party to the contractual
provisions of the instrument.
The Corporation’s financial assets, trade and other receivables, are initially recognized at fair value plus any directly
attributable transaction costs. Subsequently, they are measured at amortized cost using the effective interest
method, less any impairment losses.
The Corporation derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or
it transfers the rights to receive the contractual cash flows on the financial asset in a transaction in which substantially
all the risks and rewards of ownership of the financial asset are transferred. Any interest in transferred financial assets
that is created or retained is recognized as a separate asset or liability.
Financial assets and liabilities are offset and the net amount presented in the consolidated statement of financial
position when, and only when, there is a legal right to offset the amounts and the Corporation intends either to settle
on a net basis or to realize the asset and settle the liability simultaneously.
ii. Non-derivative financial liabilities
The Corporation’s financial liabilities are categorized as measured at amortized cost. The Corporation initially
recognizes debt securities issued and subordinated liabilities on the date that they are originated. All other financial
liabilities are recognized initially on the trade date at which it becomes a party to the contractual provisions of the
instrument.
The Corporation derecognizes a financial liability when its contractual obligations are discharged, cancelled or expire.
Bank overdrafts and swinglines that are repayable on demand and form an integral part of the Corporation’s cash
management are included as a component of loans and borrowings for the purpose of the statement of cash flows.
Liabilities are recognized initially at fair value plus any directly attributable transaction costs. Subsequent to initial
recognition these financial liabilities are measured at amortized cost using the effective interest method.
iii.
Share capital
Common shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and
share options are recognized as a deduction from equity, net of any tax effects.
(d) Property, plant and equipment
i.
Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated
impairment losses.
36
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
Cost includes expenditures that are directly attributable to the acquisition of the asset, including non-recoverable
indirect taxes, acquisition costs including the cost of materials and direct labour, any other costs directly attributable
to bringing the assets to a working condition for their intended use, the costs of dismantling and removing the items
and restoring the site on which they are located, and borrowing costs on qualifying assets.
Costs related to assets under construction are capitalized when incurred. Assets under construction are not
depreciated until they are completed and available for use in the manner intended by management. When this
occurs, the asset is transferred to property, plant and equipment.
When parts of an item of property, plant and equipment have different useful lives, they are accounted for as
separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property, plant and equipment, and are recognized net within operating
expenses in the consolidated statement of comprehensive income.
Proceeds from the sale of rental equipment that is routinely sold before the end of its useful life are included in
revenue and net cash flows from operating activities. The investments in the acquisition or manufacturing of rental
equipment is also included in net cash flows from operating activities if the assets are expected to be predominantly
sold before the end of their useful life, otherwise the investments are included in net cash flows from investing
activities.
ii.
Subsequent costs
The cost of replacing a major component of an item of property, plant and equipment is recognized in the carrying
amount of the item if it is probable that the future economic benefits embodied within the part will flow to the
Corporation, and its cost can be measured reliably. The carrying amount of the replaced major component is
derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognized in the
consolidated statement of comprehensive income as incurred.
iii. Depreciation
Depreciation is calculated using the depreciable amount, which is the cost of an asset, less its residual value.
Depreciation is recognized in the consolidated statement of comprehensive income on a straight-line basis over the
estimated useful lives of each part of an item of property, plant and equipment, since this most closely reflects the
expected pattern of consumption of the future economic benefits embodied in the asset. Leased assets are
depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the
Corporation will obtain ownership by the end of the lease term.
The estimated useful lives for the current and comparative periods are as follows:
Assets
Buildings
Furniture & fixtures
Leasehold improvements
Computer hardware & software
Automotive
Mats
Camp facilities (residual value of 20%)
Camp & catering supplies
Equipment
Method
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line
Straight-line pool
Straight-line
Straight-line pool
Useful life
25 years
5 years
Term of lease
5 years
4-8 years
6 years
15 years
3 years
Straight-line
5-10 years
Depreciation methods, useful lives, and residual values are reviewed at each financial year end and adjusted if
appropriate. Land and assets under construction are not depreciated.
(e) Intangible assets
i.
Goodwill
Goodwill arises on the acquisition of subsidiaries, associates and joint ventures. Goodwill is measured at cost less
accumulated impairment losses. In respect of equity accounted investees, the carrying amount of goodwill is included
in the carrying amount of the investment. Goodwill is not amortized but is tested at least annually for impairment and
at the end of each reporting period during the year if an indicator of impairment exists.
37
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
ii.
Assets acquired
Intangible assets are acquired as a result of a business combination or the purchase of other contractual or legal rights
which are transferable or separable. Intangibles acquired as part of a business combinations are measured at fair
value on initial recognition. Intangible assets purchased are measured at cost. Amortization is charged on a straight
line basis to the consolidated statement of comprehensive income over their expected useful lives, as follows:
Assets
Customer relationships
Trade Names
Software and other
Method
Straight-line
Straight-line
Straight-line
Useful life
10 - 25 years
7 years
3 years
Amortization methods, useful lives, and residual values are reviewed at each financial year-end and adjusted if
appropriate.
(f) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on a weighted
average or standard cost principle and includes expenditures incurred in acquiring the inventories, production or conversion
costs, and other costs in bringing them to their existing location and condition. In the case of manufactured inventories and
work-in-progress, cost includes an appropriate share of production overheads based on normal operating capacity.
Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion
and selling expenses.
(g) Impairment
i.
Financial assets
An impairment loss in respect of a financial asset measured at amortized cost is calculated using the “expected credit
loss” model and recognizes expected credit losses as a loss allowance. The Corporation recognizes an amount equal to
the lifetime expected credit losses based on the Corporation’s historical experience and including forward-looking
information. The carrying amount of these assets in the consolidated statement of financial position is net of any loss
allowance. When a subsequent event causes the amount of impairment loss to decrease, the decrease in impairment
loss is reversed through net earnings.
ii. Non-financial assets
The carrying amounts of the Corporation’s non-financial assets, other than inventories and deferred tax assets are
reviewed at each reporting date to determine whether there is any indication of impairment. If any such indication
exists, then the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indefinite useful
lives or assets that are not yet available for use, the recoverable amount is estimated each year at the same time.
The recoverable amount of an asset is the greater of its value in use and its fair value less costs of disposal. In
assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount
rate that reflects current market assessments of the time value of money and the risks specific to the asset. For the
purpose of impairment testing, assets that cannot be tested individually are grouped together into 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 (the "CGU"). The Corporation has identified four CGUs: Workforce Accommodations and
Forestry, Energy Services, Facilities Management, and Modular Solutions. For the purposes of goodwill impairment
testing, goodwill acquired in a business combination is allocated to the CGU or group of CGUs that are expected to
benefit from the synergies of the business combination. This allocation is subject to an operating segment ceiling test
and reflects the lowest level at which that goodwill is monitored for internal reporting purposes.
The Corporation’s corporate assets do not generate separate cash inflows. If there is an indication that a corporate
asset may be impaired, then the recoverable amount is determined for the group of CGUs to which the corporate
asset belongs.
An impairment loss is recognized if the carrying amount of an asset or its CGU exceeds its estimated recoverable
amount. Impairment losses are recognized in the consolidated statement of comprehensive income. Impairment
losses recognized in respect of CGUs are allocated first to reduce the carrying amount of any goodwill allocated to the
units and then to reduce the carrying amounts of the other assets in the unit (group of units), on a pro rata basis. An
impairment loss in respect of goodwill is not reversed.
38
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
(h) Employee benefits
i.
Defined contribution plan
The Corporation’s defined contribution plan is a post-employment benefit plan under which the Corporation pays
fixed contributions into a separate entity and will have no legal or constructive obligation to pay further amounts.
Obligations for contributions to defined contribution plans are recognized as an employee benefit expense in the
statement of comprehensive income when they are due.
ii.
Short-term benefits
Short-term employee benefit obligations are measured on an undiscounted basis and are expensed as the related
service is provided. A liability is recognized for the amount expected to be paid under the short-term cash bonus plans
if the Corporation has a present legal or constructive obligation to pay this amount as a result of past service provided
by the employee and the obligation can be estimated reliably.
iii.
Share based compensation transactions
Equity-settled transactions
The grant date fair value of share-based compensation awards granted to officers and employees is recognized as an
expense, with a corresponding increase in equity, over the period that the employees unconditionally become
entitled to the awards (vesting period). The amount recognized as an expense is adjusted to reflect the number of
awards for which the related service and non-market vesting conditions are expected to be met, such that the
amount ultimately recognized as an expense is based on the number of awards that do meet the related service and
non-market performance conditions at the vesting date.
Cash-settled transactions
The Corporation has a Restricted Share Unit (“RSU”) and Performance Share Unit (“PSU”) plan for its eligible officers
and employees. The fair value of the amount payable to officers and employees in respect of the RSUs and PSUs, for
which the participants are eligible to receive an equivalent cash value of the common shares at a future date,
adjusted by the performance criteria for the PSUs, is recognized as an expense with a corresponding increase in
liabilities over the period that the employees and officers provide the related service and become entitled to
payment. The liability is re-measured at each reporting date and at the settlement date. Any changes in the fair value
of the liability are recognized as share based compensation expense in the consolidated statement of comprehensive
income.
(i) Provisions
A provision is recognized if, as a result of a past event, the Corporation has a present legal or constructive obligation that
can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation.
Provisions are determined by discounting the expected future cash flows at a pre-tax risk-free rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is
recognized as finance cost. As at December 31, 2020 the Corporation has recognized a provision for Asset Retirement
Obligations and a contingent consideration related to the Powerful Group of Companies 2019 acquisition.
(j) Revenue
The Corporation uses IFRS 15, Revenue from Contracts with Customers ("IFRS 15"). IFRS 15 provides a model for the
recognition and measurement of all revenue flowing from contracts with customers. The core principle is that revenue
recognition should align with the transfer of promised goods or services to customers in an amount that reflects the
consideration the entity expects to be entitled to in exchange for those goods or services.
The Corporation recognizes revenues over time as it fulfills its performance obligations to clients in line with contracted
terms. A performance obligation is a promise in a contract to transfer a distinct good or service to a client. A contract's
transaction price is allocated to each distinct performance obligation and recognized as revenues when, or as, the
performance obligation is satisfied. If a client contract has multiple performance obligations, the consideration in the
contract is allocated to the separate performance obligations based on stand-alone selling prices. Any modifications or
variations to contracts-in-progress are assessed to determine if they fall under the scope of the existing contract
performance obligation(s) or form part of a new performance obligation.
Revenues are derived mainly from the following types of client contracts and major products and services:
i.
Facilities Management
Facilities management provides solutions for ongoing maintenance and operations of high-quality infrastructure.
Ongoing facility management services are generally similar each month and are provided to customers at a contracted
price based on the amount of hours of service by the Corporation's employees and the amount of supplies required.
Revenue is recognized over time as the services are provided to the customer. If a contract has distinct performance
39
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
obligations, the transaction price is allocated to each performance obligation and recognized as revenue as the
performance obligation is satisfied.
ii.
Construction Contract Revenue
Construction contract revenue includes the initial amount agreed to in the contract plus any variations in contract
work, claims, and incentive payments, to the extent that it is highly probable that a significant revenue reversal will
not occur. The Corporation recognizes revenue over time for its construction contracts, and estimates progress of
these contracts by comparing costs incurred to the total expected costs of the project. Contract expenses are
recognized as incurred unless they create an asset related to future contract activity. An expected loss on a contract is
recognized immediately in the consolidated statement of comprehensive income.
iii. Workforce Accommodation
Workforce accommodation includes the management, supply and installation of modular and exploration facilities
and catering. In the workforce accommodation business, distinct performance obligations include the supply and
installation of the facilities, catering and maintenance of the facilities. Revenue is recognized when the supply and
installation of the facilities is complete and when catering services are provided to the customer. Catering services are
provided to customers at a contract price per unit served. If a contract has distinct performance obligations, the
transaction price is allocated to each performance obligation and recognized as revenue as the performance
obligation is satisfied.
iv.
Forestry Services
Forestry services includes reforestation solutions, forest thinning and firefighting services. Revenue is recognized over
time as the services are provided to the customer. Reforestation, forest thinning solutions and firefighting services are
provided to customers at a contracted price per unit. If a contract has distinct performance obligations, the
transaction price is allocated to each performance obligation and recognized as revenue as the performance
obligation is satisfied.
v.
Energy Services
The Corporation provides access mat rental, relocatable structure rental, and transportation services to customers.
Revenue from rendering of these services are recognized over time. Rental days are used to measure the rental fleet
revenue. Revenue is recognized at the applicable day rate for each asset rented, based on rates specified in each
contract, and as the services are performed.
vi.
Sale of used fleet
The Corporation routinely sells items of property, plant and equipment that it has held for rental and such assets are
transferred to inventories at their carrying amount when they cease to be held for rent. The proceeds from the sale of
such assets are recognized as revenue at a point in time when control of the assets transfers.
vii. Sale of other goods
Revenue from the sale of other goods is measured at the fair value of the consideration received or receivable. The
Corporation recognizes revenue when it transfers control of the product or service to a customer, which is generally
when title passes from the Corporation to its customer, collectability is reasonably assured, the associated costs can
be estimated reliably, and there is no continuing management involvement with the goods. The Corporation
recognizes revenue from the sale of other goods at a point in time.
(k) Leases
A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of
time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset,
the Corporation assesses whether:
•
•
•
The contract involves the use of an identified asset - this may be specified explicitly or implicitly, and should
be physically distinct or represent substantially all of the capacity of a physically distinct asset.
The Corporation has the right to obtain substantially all of the economic benefits from use of the asset
throughout the period of use; and
The Corporation has the right to direct the use of the asset. The Corporation has this right when it has the
decision-making rights that are most relevant to changing how and for what purpose the asset is used.
The Corporation recognizes a right-of-use asset and a lease liability at the lease commencement date. A right-of-use asset is
initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at
or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove
the underlying asset or to restore the underlying assets or the site on which it is located, less any lease incentives received.
40
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the
earlier of the end of the useful life or the end of the lease term. The estimated useful lives of right-of-use assets are
determined on the same basis as those of property, plant and equipment.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement
date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Corporation’s
incremental borrowing rate. Generally, the Corporation uses its incremental borrowing rate as the discount rate.
The lease liability is measured at amortized cost using the effective interest method. It is remeasured when there is a
change in future lease payments arising from a change in a rate, if there is a change in the Corporation’s estimate or the
amount expected to be payable under the residual value guarantee, or if the Corporation changes its assessment of
whether it will exercise a purchase, extension or termination period.
The Corporation presents right-of-use assets and finance lease liabilities in the consolidated statement of financial position.
The Corporation has elected not to recognize right-of-use assets and lease liabilities for short-term leases that have an
expected lease term of 12 months or less and leases of low-value assets. The Corporation recognizes the lease payments
associated with these leases as an expense on a straight-line basis over the lease term.
As a lessor
When the Corporation acts as a lessor, it determines at inception whether each lease is a finance lease or an operating
lease.
The Corporation makes an overall assessment of whether the lease transfers substantially all of the risks and rewards
incremental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an
operating lease. As part of this assessment, the Corporation considers certain indicators such as whether the lease is for the
major part of the economic life of the asset.
If the contract contains lease and non-lease components, the Corporation applies IFRS 15 to allocate the consideration in
the contract.
(l) Finance income and costs
Finance income comprises interest income on funds invested. Interest income is recognized as it accrues in the consolidated
statement of comprehensive income, using the effective interest method.
Finance costs comprise of interest expense on loans and borrowings, unwinding of the discount on ARO provisions, and
changes in the fair value of financial assets at fair value through the consolidated statement of comprehensive income.
Borrowing costs that are not directly attributable to the acquisition, construction, or production of a qualifying asset are
recognized in the consolidated statement of comprehensive income using the effective interest method.
Foreign currency gains and losses are reported on a net basis.
(m) Income tax
Income tax expense comprises current and deferred tax. Current tax and deferred tax are recognized in the consolidated
statement of comprehensive income except to the extent that it relates to a business combination or items recognized
directly in equity or other comprehensive income.
Current tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or
substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognized for the following
temporary differences: the initial recognition of assets or liabilities in a transaction that is not a business combination and
that affects neither accounting nor taxable earnings, and differences relating to investments in subsidiaries and jointly
controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred
tax is not recognized for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is
measured at the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws
that have been enacted or substantively enacted by the reporting date. Deferred tax assets and liabilities are offset if there
is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same
tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and
assets on a net basis or their tax assets and liabilities will be realized simultaneously.
A deferred tax asset is recognized for unused tax losses, tax credits, and deductible temporary differences to the extent that
it is probable that future taxable profits will be available against which they can be utilized. Deferred tax assets are reviewed
at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be
realized.
41
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
(n) Earnings per share
The Corporation presents basic and diluted earnings per share (“EPS”) data for its common shares. Basic EPS is calculated by
dividing the net earnings attributable to common shareholders of the Corporation by the weighted average number of
common shares outstanding during the period. Diluted EPS is calculated by the weighted average number of common
shares outstanding for the effects of all dilutive potential common shares, which is comprised of share options granted to
employees.
(o) Segment reporting
A segment is a distinguishable component of the Corporation that is engaged either in providing related products or services
(business segment) which is subject to risks and returns that are different from those of other segments. The business
segments are determined based on the Corporation’s management and internal reporting structure.
Segment results, assets and liabilities include items directly attributable to a segment, as well as those that can be allocated
on a reasonable basis. Unallocated items comprise mainly investments and related revenue, loans and borrowings and
related expenses, corporate assets and head office expenses, and income tax assets and liabilities.
Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and
intangible assets other than goodwill.
(p) Foreign currency translation
The consolidated financial statements are presented in CAD.
Foreign currency transactions entered into are translated into the functional currency of the operations at the exchange
rate on the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are re-translated
into the functional currency using the exchange rate on the period end date. Foreign currency translation gains and losses
resulting from the settlement of transactions and the re-translation at period end are recognized in the consolidated
statement of comprehensive income within total profit. Non-monetary items that originated in a foreign currency are
translated at the exchange rate from the original transaction date.
The US entity has a USD functional currency therefore translated to be included in the consolidated financial statements in
CAD as follows: income and expenses are translated into CAD using the exchange rates on the dates of the transactions and
the assets and liabilities on the consolidated statement of financial position are translated into CAD at the period end
exchange rate. The effect of translation is recognized in other comprehensive income and included as translation of foreign
operations in accumulated other comprehensive income within equity.
Foreign currency gains and losses arising from monetary items receivable from or payable to a foreign operation, for which
settlement is neither planned nor likely to occur, form a part of the exchange differences in the net investment in the
foreign operations and are recognized initially in other comprehensive income. Upon disposal or partial disposal of an entity
with a functional currency other than CAD, any accumulated exchange differences will be reclassified to the consolidated
statement of comprehensive income within total profit.
(q) Government Assistance
IAS 20 "Accounting for government grants and disclosure of government assistance" ("IAS 20") sets out the standard for
accounting of government grants and other forms of government assistance. Government assistance is not recognized until
there is reasonable assurance that the Corporation will comply with the associated conditions, and that the grant will be
received. Government grants shall be recognized in the consolidated statement of comprehensive income on a systematic
basis over the periods in which the entity recognizes the expenses for the related costs for which the assistance is intended
to compensate. For government assistance that becomes receivable as compensation for expenses or losses already
incurred, or for the purpose of giving immediate financial support to the Corporation with no future related costs, are
recognized in the consolidated statement of comprehensive income for the period in which it becomes receivable. The
Corporation recognized government assistance as a reduction in the related expense, through the consolidated statement
of comprehensive income.
(r) Adoption of new IFRS standards
Definition of a Business
In October 2018, the International Accounting Standards Board ("IASB") issued 'Definition of a Business (Amendments to
IFRS 3)' which is intended to clarify the definition of a business. The amendment includes an election to use a concentration
test. This simplified assessment results in the treatment of an acquisition as an asset acquisition if substantially all of the fair
value of the gross assets is concentrated in a single identifiable asset or group of similar assets. If the election to use the
concentration test is not made or the test fails, then the assessment focuses on the existence of a substantive process.
Goodwill may only be recognized as a result of acquiring a business, not as a result of an asset acquisition. The Corporation
adopted the amendment as at the effective date of January 1, 2020, with no impact to the consolidated financial statements
as a result of initial application.
42
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
Definition of Material
In October 2018, the IASB issued 'Definition of Material (amendments to IAS 1 and IAS 8)' which clarified and aligned the
definition of material in order to improve consistency in the application of that concept. The Corporation adopted the
amendment as at the effective date of January 1, 2020, with no impact to the consolidated financial statements as a result
of initial application.
(s) New standards and interpretations not yet adopted
The new standards, amendments to standards and interpretations not yet effective for the year ended December 31, 2020,
and not applied in preparing these consolidated financial statements are disclosed below. The Corporation intends to adopt
these standards, if applicable, when they become effective on January 1, 2022.
In May 2020, the IAS issued 'Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)' which amends the
standard regarding costs a company should include as the cost of fulfilling a contract when assessing whether a contract is
onerous. Costs of fulfilling a contract can either be incremental costs of fulfilling that contract or an allocation of other costs
that relate directly to fulfilling contracts. The Corporation is still assessing the impact this amendment will have on its
consolidated financial statements, if any.
4. Business combination
On May 29, 2020, Dexterra Group Inc. (previously Horizon North), acquired 100% of the issued and outstanding shares of
Dexterra through issuing 31,785,993 shares of the Corporation to Dexterra Parent, as described in Note 1. Management
performed an analysis under IFRS 3 and determined that Dexterra is the accounting acquirer of Horizon North. As such, the
Acquisition constitutes a Reverse Take Over for accounting purposes. Therefore, Dexterra is deemed to be the continuing
enterprise for accounting purposes and accordingly its assets and liabilities are included in these consolidated financial
statements at historical cost. Horizon North, being the acquired enterprise for accounting purposes, has its assets and liabilities
included in these financial statements at their fair value on the date of the acquisition in accordance with IFRS 3.
The acquisition is being accounted for using the acquisition method whereby the assets and liabilities of the acquiree are
recorded at their fair values, with the deficit of the aggregate consideration relative to the fair value of the identifiable net
assets recorded as a bargain purchase gain. The Corporation assessed the fair values of the net assets acquired based on
management’s best estimate of the fair value, which takes into consideration the condition of the assets acquired, current
industry conditions and the discounted future cash flows expected to be received from the assets as well as the amount it is
expected to cost to settle the outstanding liabilities. The purchase equation is final as at December 31, 2020.
Consideration:
Share consideration
Recognized fair value amounts of assets acquired and liabilities assumed:
Trade & other receivables (net)(1)
Inventories
Prepaid expenses and other
Property, plant and equipment
Right-of-use assets
Intangible assets - trade names
Deferred income tax asset
Income taxes receivable
Other assets(2)
Trade and other payables
Deferred revenue
Asset retirement obligations
Lease liabilities
Loans and borrowings
Total identifiable net assets
Bargain purchase gain on acquisition
$
$
$
$
(000's)
100,904
(000's)
110,843
12,668
7,897
191,462
21,878
3,800
8,250
357
10,479
(60,200)
(2,079)
(11,100)
(25,285)
(138,185)
130,785
(29,881)
(1) Trade and other receivables included a provision for expected credit losses of $3.9 million.
(2) Other assets at May 29, 2020 included an equity accounted investment in Gitxaala Horizon North Services Limited Partnership ($8.8 million), a joint venture that is
49% owned by the Corporation, and the long term portion of finance lease receivable.
43
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
The share consideration was determined based on the number of Dexterra Group common shares not acquired by Dexterra as
part of the Acquisition, which amounted to 33,083,424 common shares at $3.05 per common share. The amount per share was
based on Dexterra Group's closing price on the TSX on May 29, 2020, the date of the closing of the Acquisition, retroactively
adjusted for the Consolidation. A bargain purchase gain was recorded with this business combination as the share consideration
is based upon a share price at closing which was lower than the fair value of the identifiable net assets.
From the date of acquisition to December 31, 2020, the former Horizon North operations contributed $228.4 million of revenue
and $17.4 million of income before tax to the Corporation. If the business combination had been completed on January 1, 2020,
the revenue and income before income tax for the year ending December 31, 2020 for the combined entity, adjusting for the
former Horizon North's Q1 2020 impairment loss and the lower depreciation expense from the assets being recorded at fair
value, would have been $640.7 million and $67.1 million, respectively, which includes the $29.9 million bargain purchase gain
and $4.9 million in transaction costs.
Dexterra incurred costs related to the acquisition of Dexterra Group of $1.8 million relating to share issuance, legal, due
diligence and external advisory fees. The cost related to the share issuance totaling $0.1 million were included in share capital
on the consolidated statement of financial position. The costs related to the due diligence and external advisory fees totaling
$1.7 million were included in selling, general & administrative expenses on the consolidated statement of comprehensive
income.
2019 Business Combination
On November 1, 2019, Dexterra acquired 100% of the voting shares of the Powerful Group of Companies Inc. ("PGC") and
certain affiliates, which provides HVAC, electrical, plumbing, interior renovation, carpentry, communications, fire safety and
energy management services. The acquisition of PGC expanded the Corporation's capabilities and services it can offer to its
facility management clients. Total consideration was $6.5 million, with $3.9 million in total identifiable net assets, resulting in
Goodwill of $2.57 million. Contingent consideration of $1.8 million was recorded, of which $1.4 million remains as at December
31, 2020.
Revenue and net earnings for the year ended December 31, 2019, would have been $7.3 million and $0.9 million higher,
respectively, if the acquisition had occurred on January 1, 2019. Subsequent to the acquisition date of November 1, 2019, PGC
contributed revenue and net earnings of $1.3 million and $0.01 million, respectively, to the Facilities Management segment for
the year ended December 31, 2019.
5. Trade and other receivables
(000’s)
Trade receivables
Accrued receivables
Construction receivables
Other receivables
Provision for expected credit losses
Trade and Other receivables
Holdbacks
Trade and Other receivables excluding holdbacks
December 31, 2020
December 31, 2019
$
64,954 $
68,922
11,867
5,513
151,256 $
(1,724)
149,532 $
(11,185)
138,347 $
$
$
$
26,573
8,877
—
134
35,584
(152)
35,432
(811)
34,621
Construction receivables represent progress billings to customers under open construction contracts, holdback amounts billed
on construction contracts which are not due until the contract work is substantially completed and amounts recognized as
revenue under open construction contracts not billed to customers. The Corporation estimates that the carrying value of
financial assets within trade and other receivables approximate their fair value.
44
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
6. Inventories
(000’s)
Raw materials
Work-in-progress
Finished goods and supplies
Inventories
7. Property, plant and equipment
Carrying Amounts
(000’s)
Cost
December 31, 2018
Acquisition
Additions
Disposals
December 31, 2019
Acquisition
Acquisition - Assets under construction
Additions
Assets under construction
Asset Retirement Obligation
Disposals
December 31, 2020
Accumulated Depreciation
December 31, 2018
Depreciation
Disposals
December 31, 2019
Depreciation
Disposals
December 31, 2020
Net book value
December 31, 2020
December 31, 2019
December 31, 2020
December 31, 2019
$
$
4,082 $
1,114
7,249
12,445 $
—
—
4,451
4,451
Camp
equipment
& mats
Land & buildings
Automotive &
trucking
equipment
Furniture,
fixtures & other
equipment
$
3,283 $
1,062 $
336 $
2,813 $
—
2,228
(414)
5,097
142,688
19
3,757
12
1,865
—
476
(12)
1,526
26,405
—
(217)
—
—
—
228
(42)
522
18,838
—
695
—
—
382
1,528
(355)
4,368
2,962
550
223
102
—
Total
7,494
382
4,460
(823)
11,513
190,893
569
4,458
114
1,865
(4,989)
(30)
(2,597)
(38)
(7,654)
148,449 $
27,684 $
17,458 $
8,167 $
201,758
899 $
838
(210)
1,527
9,823
(1,799)
9,551 $
264 $
38
(12)
290
922
(7)
56 $
56
(14)
98
3,866
(54)
769 $
772
(197)
1,344
1,716
(15)
1,205 $
3,910 $
3,045 $
1,988
1,704
(433)
3,259
16,327
(1,875)
17,711
138,898 $
26,479 $
13,548 $
3,570 $
1,236 $
424 $
5,122 $
3,024 $
184,047
8,254
$
$
$
$
$
45
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
8. Leases
(i)
Right-of-use assets
(000’s)
Cost
January 1, 2019
Adoption of IFRS 16
Additions
December 31, 2019
Acquisition
Additions
Disposals
December 31, 2020
Accumulated Depreciation
January 1, 2019
Depreciation
December 31, 2019
Depreciation
Disposals
December 31, 2020
Net book value
December 31, 2020
December 31, 2019
Camp
equipment
& mats
Land &
buildings
Automotive &
trucking
equipment
Furniture,
fixtures & other
equipment
$
— $
— $
— $
— $
—
—
—
2,445
3,524
(376)
886
33
919
19,316
788
(638)
476
698
1,174
75
391
—
—
184
184
42
219
—
Total
—
1,362
915
2,277
21,878
4,922
(1,014)
$
$
$
$
$
5,593 $
20,385 $
1,640 $
445 $
28,063
— $
— $
— $
— $
—
—
2,510
(377)
316
316
2,806
(29)
243
243
378
—
46
46
118
—
—
605
605
5,812
(406)
2,133 $
3,093 $
621 $
164 $
6,011
3,460 $
17,292 $
1,019 $
281 $
22,052
— $
603 $
931 $
138 $
1,672
(ii)
Lease liabilities
Maturity Analysis – contractual undiscounted cash flows
Year 1
Year 2
Year 3
Year 4
Year 5 and beyond
Total undiscounted lease payable as at December 31, 2020
Lease liabilities included in the statement of financial position at December 31, 2020
Current
Non-current
$
$
$
(000's)
8,394
5,474
3,888
2,600
10,041
30,397
26,081
7,160
18,921
At December 31, 2020, the Corporation has not sub-leased any right-of-use assets, there were no restrictions or covenants
imposed by leases that would create a material impact on the financial statements and there were no sale and leaseback
transactions.
The amount of lease interest expense recognized during the year ended December 31, 2020 is $0.8 million (2019 - $0.1 million).
46
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
9. Intangible assets and Goodwill
Intangible assets at the consolidated statement of financial position date are as follows:
(000’s)
Cost
Trade Names
Customer
Relationships
Computer software
and other
As at December 31, 2018
$
— $
20,000 $
751 $
Acquisition
Additions
As at December 31, 2019
Acquisition
Additions
December 31, 2020
Accumulated Amortization
As at December 31, 2018
Amortization
As at December 31, 2019
Amortization
December 31, 2020
Net book value
December 31, 2020
December 31, 2019
—
—
—
3,800
—
2,483
—
22,483
—
—
—
374
1,125
—
1,524
3,800 $
22,483 $
2,649 $
— $
973 $
45 $
—
—
380
1,190
2,163
1,854
342
387
691
380 $
4,017 $
1,078 $
3,420 $
— $
18,466 $
20,320 $
1,571 $
738 $
$
$
$
$
$
Total
20,751
2,483
374
23,608
3,800
1,524
28,932
1,018
1,532
2,550
2,925
5,475
23,457
21,058
Goodwill at the consolidated statement of financial position date is as follows:
(000’s)
Balance, beginning of year
Acquisitions (Note 4)
Balance, end of year
Impairment of Goodwill
December 31, 2020
December 31, 2019
$
$
98,640
$
—
98,640
$
96,070
2,570
98,640
The Corporation assesses indicators of impairment at the end of each reporting period and performs a detailed impairment test
at least annually. At December 31, 2020, an impairment test was performed for all CGUs with allocated goodwill, which
comprise Facilities Management and Workforce Accommodations and Forestry. No impairment was identified.
The recoverable amount of the CGUs was calculated based on the VIU method, which is based on discounted cash flow models.
The cash flows are derived from the Corporation’s board approved budget and do not include restructuring activities that the
Corporation is not yet committed to or significant future investments that will enhance the asset’s performance of the CGUs
being tested. The calculation of the value in use was based on the following key assumptions:
•
•
The discount rate was estimated based on the Corporation's weighted average cost of capital, taking into account the
nature of the assets being valued and their specific risk profile. The after-tax discount rates used in determining the
recoverable amount for both CGUs was 12.7% (2019 - 12.9%).
The revenue growth rates for the first five years are based on management's internal budgets and projections. The
projections for Facilities Management take into account the impacts of the pandemic on the aviation and retail
sectors, which are forecasted to have an impact on the 2021 and 2022 forecasted cash flows. Annual revenue growth
rates between 15% to 23% and 0% to 4% were used for the Facilities Management and Workforce Accommodation
and Forestry CGUs, respectively. The long-term growth rate for both CGUs used in determining the recoverable
amount is 2.5% (2019 - 2.5%).
Sensitivities
The most sensitive inputs to the VIU model are the discount rate and the revenue growth rate. All else being equal, a 5%
decrease in the revenue growth rates would cause an impairment of $5.3 million for Facilities Management and no impairment
for Workforce Accommodations & Forestry. All else being equal, a 1% increase in the discount rate would cause an $5.0 million
impairment for Facilities Management and no impairment for Workforce Accommodations & Forestry. The impairment analysis
is impacted due to the pandemic's effect on the Facilities Management results and forecasts in the near term, even though the
Corporation expects there would be significant improvement in a post-pandemic environment.
47
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
10. Other assets
Other assets at December 31, 2020 include an equity accounted investment in Gitxaala Horizon North Services Limited
Partnership, a joint venture that is 49% owned by the Corporation ($11.7 million) and long-term lease receivables ($3.1 million),
all of which were acquired as part of the Acquisition.
11. Loans and borrowings
(000’s)
Committed credit facility
Unamortized financing costs
Total borrowings
December 31, 2020
December 31, 2019
$
$
86,411
$
(1,042)
85,369
$
5,453
—
5,453
The carrying value of Dexterra Group’s debt approximates its fair value, as debt bears interest at variable rates which
approximate market rates.
On June 30, 2020, Dexterra Group reached an agreement with its lenders to amend its credit facility and extend the maturity
date to December 30, 2022. The credit facility has an available limit of $175.0 million and is secured by a $400.0 million first
fixed and floating charge debenture over all assets of the Corporation and its wholly-owned subsidiaries. The interest rate for
the credit facility is calculated on a grid pricing structure based on the Corporation’s debt to EBITDA ratio. The Corporation is
required to maintain a Debt to EBITDA ratio of less than 3.50:1:00 and an interest coverage ratio greater than 2:50:1:00 as at
December 31, 2020. Amounts drawn on the credit facility incur interest at bank prime rate plus 1.00% to 2.25% or the Bankers’
Acceptance rate plus 2.00% to 3.25%. The credit facility has a standby fee ranging from 0.50% to 0.81%.
As at December 31, 2020, the Corporation was in compliance with all financial and non-financial covenants related to the credit
facility and available borrowing capacity was $81.6 million, which includes $7.0 million in letters of credit.
The operating facility in place at December 31, 2019 was Dexterra’s stand-alone facility prior to the Acquisition. The facility was
repaid and cancelled upon closing the Acquisition.
12. Asset retirement obligations
Provisions include constructive site restoration obligations for camp projects to restore lands to previous condition when camp
facilities are dismantled and removed.
(000’s)
Balance, beginning of year
Acquisition
Additions
Asset retirement obligations settled
Change in estimate
Accretion of provisions
Balance, end of year
December 31, 2020
December 31, 2019
$
— $
11,100
1,419
(1,360)
448
22
$
11,629 $
—
—
—
—
—
—
—
The estimated present value of rehabilitating the sites at the end of their useful lives has been estimated using existing
technology, adjusted for inflation and discounted using a risk-free rate. The future value amount of $11.8 million at
December 31, 2020 (December 31, 2019 - nil) was determined using a risk free interest rate of 0.53% and an inflation rate of
0.30%. The timing of these payments is dependent on various factors, such as the estimated lives of the equipment and
industry activity in the region but is anticipated to occur between 2021 and 2028.
(000’s)
Current
Non-current
Balance, end of year
December 31, 2020
December 31, 2019
$
$
5,102 $
6,527
11,629 $
—
—
—
48
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
13. Share capital
As described under Note 1, on July 16, 2020, the Corporation completed a five-for-one share consolidation of all of its issued
and outstanding common shares. All current and prior period share and per share data presented below, including share
options outstanding, has been retroactively adjusted to reflect the Consolidation unless otherwise noted.
(a) Authorized and issued
The Corporation is authorized to issue an unlimited number of voting common shares without nominal or par value and an
unlimited number of preferred shares issuable in series. The number of common shares and share capital are presented in the
table below:
(In 000's other than number of shares)
Balance, December 31, 2018
Issuance of common shares
Balance, December 31, 2019
Acquisition
Share issue costs
Balance, December 31, 2020
Total number of
shares
Total share capital
27,524,764 $
4,261,229
31,785,993 $
33,083,424
—
113,908
17,635
131,543
100,904
(99)
64,869,417 $
232,348
On May 29, 2020, Dexterra Group acquired 100% of the issued and outstanding shares of Dexterra through issuing 31,785,993
shares of Dexterra Group to Dexterra Parent, as described in Note 1 and Note 4. As Dexterra was determined to be the
accounting acquirer, the number of common shares outstanding as at December 31, 2019 has been adjusted retrospectively to
reflect the capital of Dexterra using the exchange ratio established in the acquisition agreement.
(b) Long-term incentive plans
Share option plan
The Corporation adopted a plan in 2020 for its directors, officers, and key employees whereby options may be granted, to a
maximum of 10% of the issued and outstanding common shares, or 6,486,942 options, subject to certain terms and conditions.
Share option vesting privileges are at the discretion of the Board of Directors and current options issued vest over three years in
three equal portions on the first, second and third anniversary from the grant date, except for 200,000 options which vest and
expire on March 12, 2021. All share options are equity settled with a weighted average remaining contractual life of 4.4 years as
at December 31, 2020 and the current options granted have a maximum term of 5 years.
Balance, beginning of period
Granted
Forfeited
Balance, end of period
Year ended
December 31, 2020
Outstanding options
Weighted average
exercise price
— $
1,055,000
(65,000)
990,000 $
—
3.21
3.05
3.22
The exercise prices for options outstanding and exercisable at December 31, 2020 are as follows:
Exercise price per share
$3.05
$6.21 to $6.53
Total options outstanding
Exercisable options
Weighted average
exercise price per
share
Weighted average
remaining
contractual life in
years
3.05
6.37
4.4
5.0
Number
940,000 $
50,000 $
Weighted average
exercise price per
share
Number
— $
— $
—
—
49
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
The Corporation calculated the fair value of the share options granted using the Black-Scholes pricing model to estimate the fair
value of the share options issued at the date of grant. The weighted average fair value of all options granted during the period
and the assumptions used in their determination are as follows:
Fair value per option
Forfeiture rate
Grant price
Expected life
Risk free interest rate
Dividend yield rate
Volatility
$
$
December 31, 2020
1.25
9.96 %
3.21
3.0 years
0.30 %
0.23 %
62.74 %
Expected volatility is estimated by considering historic average share price volatility. For the year ended December 31, 2020,
share based compensation for share options included in net earnings amounted to $0.4 million (2019 - nil).
Subsequent to year-end, the Corporation issued 527,272 share options under the plan.
Restricted Share Units ("RSU") and Performance Share Units ("PSU") incentive award plan
The Corporation has a RSU Plan and a PSU Plan whereby RSUs and PSUs may be granted, subject to certain terms and
conditions.
Under the terms of the RSU plan, the awarded units vest in three equal portions on the first, second and third anniversary from
the grant date, and will be settled in cash in the amount equal to the fair market value of the Corporation's share price on that
date. There are no RSUs outstanding as at December 31, 2020. Subsequent to year-end, the Corporation issued 28,970 RSUs to
directors which will be settled in cash upon vesting.
Under the terms of the PSU plan, the awarded units vest on the third anniversary of the grant date according to the vesting
criteria, and the vested units will be settled in cash in the amount equal to the fair market value of the Corporation's share price
on that date. The vesting criteria is fixed by the Board of Directors. Performance Criteria set by the Board at the time of the
grant of PSUs, may include i) total shareholder return, including dividends; ii) the participant’s satisfactory individual
performance; and (iii) any other terms and conditions the Board may in its discretion determine with respect to vesting. There
are no PSUs outstanding as at December 31, 2020. Subsequent to year-end, the Corporation issued 301,454 PSUs to its officers
and key employees which will be settled in cash upon vesting, if the performance criteria are met.
14. Revenue & other revenue
Contract balances
The following table provides information about receivables, contract assets and contract liabilities from contracts with
customers.
(000's)
Contract assets, which are included in trade and other accounts receivables
Contract liabilities, which are included in deferred revenue
December 31, 2020
December 31, 2019
$
$
35,241 $
3,310 $
1,355
2,867
The contract assets relate to the Corporation's rights for work completed but not billed at the reporting date, mainly related to
the modular business, and are included in trade and other receivables. The contract assets are transferred to receivables when
the rights become unconditional. This usually occurs when the Corporation completes a construction milestone under the
agreed upon contract. The balance is made up of $24.0 million in accrued construction receivables, net of holdbacks of $5.1
million, and $11.2 million in holdbacks receivable from customers, which are generally due within three to six months of
services being completed. The contract liabilities relate to payments received from customers for which revenue is recognized
over time.
The amount of $2.9 million recognized in contract liabilities at the beginning of the year has been recognized as revenue for the
year ended December 31, 2020, with the exception of $0.5 million included in deferred revenue as at December 31, 2019,
which is being amortized over 1.5 years.
As all contracts have an expected duration of one year or less, the Corporation has taken the practical expedient and not
disclosed the remaining performance obligations as at December 31, 2020.
Other revenue
Other revenue of $6.6 million comprises amounts awarded to the Corporation through legal proceedings with two former
customers. The recovery of expenses of $1.3 million was recorded against legal costs in selling, general and administrative
expenses.
50
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
15. Direct costs
(000's)
Wages and benefits
Subcontracting
Product cost
Equipment and repairs
Vehicles
Cost of goods manufactured - materials
Cost of goods manufactured - labour
Partnership profit sharing
Workforce accommodations operating costs
Other operating expense
Years ended December 31,
2020
2019
$
161,771 $
153,926
69,503
48,683
7,943
8,621
32,167
16,007
4,924
9,718
20,165
$
379,502 $
28,730
29,048
5,102
3,754
—
—
—
708
13,804
235,072
The amount of inventories recognized as an expense during the year ended December 31, 2020 is $48.2 million (2019 - nil).
Included in wages and benefits is the impact of the Canada Emergency Wage Subsidy, which reduced wages and benefits by
$31.7 million for the year ended December 31, 2020.
16. Selling, general and administrative expenses
(000's)
Wages and benefits
Other selling and administrative expenses
Years ended December 31,
2020
17,395 $
4,712
22,107 $
$
$
2019
3,560
5,962
9,522
Included in wages and benefits is the impact of the Canada Emergency Wage Subsidy, which reduced wages and benefits by
$1.2 million for the year ended December 31, 2020.
17. Income taxes
For the year ended December 31, 2020, the Corporation's effective income tax rate was 16%. The lower tax rate for the year
was primarily due to the Acquisition and related non-taxable bargain purchase gain.
For the year ended December 31, 2019, the Corporation's effective income tax rate of 26% was relatively consistent with the
statutory rate.
The Corporation has non-capital losses for Canadian tax purposes of $76.3 million available to reduce future taxable income in
Canada, and non-capital losses for United States tax purposes of $0.8 million available to reduce future taxable income in the
United States. The Corporation expects to fully utilize these losses before their expiry except as noted below.
Deferred tax assets of $2.0 million have not been recognized in respect of $7.2 million of tax losses because it is not probable
that future taxable profit will be generated against which the subsidiary of the Corporation can utilize the benefits.
The current and deferred tax expense breakdown is as follows:
Income tax expense (000's):
Current
Deferred
Years ended December 31,
2020
8,258 $
3,952
12,210 $
$
$
2019
2,100
1,200
3,300
51
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
The provision for income taxes differs from that which would be expected by applying statutory rates. A reconciliation of the
differences is as follows:
(000's)
Earnings before income tax
Combined federal and provincial income tax rate
Expected income tax expense
Non-deductible share based compensation
Changes in tax rates
Non-taxable portion of capital gain
Non-deductible bargain purchase gain
Non-deductible and other
18. Cash flow information
The details of the changes in non-cash working capital are as follows:
(000's)
Trade and other receivables
Inventories
Prepaid expenses and other
Trade and other payables
Deferred revenue
19. Net earnings per share
A summary of the common shares used in calculating earnings per share is as follows:
Number of common shares, beginning of period
Common shares issued
Acquisition
Weighted average common shares outstanding - basic
Effect of share purchase options(1)
Weighted average common shares outstanding - diluted
Years ended December 31,
2020
2019
76,689
$
12,604
26 %
26 %
19,939
$
3,277
$
$
89
(31)
282
(7,919)
(150)
—
—
—
—
23
$
12,210
$
3,300
Years ended December 31,
2020
(2,181) $
4,674
2,346
(659)
(2,713)
1,467 $
2019
2,117
(839)
493
(11,540)
—
(9,769)
$
$
Years ended December 31,
2020
31,785,993
—
19,524,619
51,310,612
135,972
2019
27,524,764
4,230,012
—
31,754,776
—
51,446,584
31,754,776
(1)
Corporation’s common stock during the period exceeds the exercise price of the option.
The Corporation utilizes the treasury stock method for calculating the dilutive effect of share purchase options when the average market price of the
52
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
20. Dividends
A dividend of $0.075 per share was declared for the quarter ended December 31, 2020 and has been accrued in trade and other
payables as at December 31, 2020. The dividend is payable to shareholders of record at the close of business on December 31,
2020 to be paid on January 15, 2021.
(ooo's except per share amounts)
2020
2019
March 31
June 30
September 30
December 31
Total dividend
Amount per share Total dividend amount
Amount per share Total dividend amount
$
$
— $
—
0.075
0.075
— $
—
4,865
4,865
0.15 $
9,730 $
— $
—
—
0.094
0.094 $
—
—
—
3,000
3,000
21. Reportable segment information
The Corporation operates through three operating segments: Facilities Management, WAFES and Modular Solutions.
The Facilities Management business delivers operation and maintenance solutions for built assets and infrastructure in the
public and private sectors, including aviation, defence and security, retail, healthcare, education and government. The WAFES
segment combines the workforce accommodations operations, forestry and associated services as well as energy services such
as access matting and relocatable rentals. The Modular Solutions segment comprises all modular manufacturing and installation
operations for social and affordable housing, commercial and residential end markets. Corporate includes the costs of head
office administration, interest costs, taxes, other corporate costs and residual assets and liabilities.
Information regarding the results of all segments is included below. Inter-segment pricing is determined on an arm’s length
basis.
Year ended December 31, 2020 (000's)
Revenue
Other revenue
Total revenue
Operating expenses
Direct costs
Selling, general and administrative expenses
Depreciation and amortization
Share based compensation
(Gain) loss on disposal of property, plant and equipment
Operating income (loss)
Earnings on equity investment
Bargain purchase gain
Finance costs
Earnings (loss) before income taxes
Total assets
Facilities
Management
WAFES
Modular
Solutions
Corporate
Inter-segment
Eliminations
Total
$
147,229 $
228,112 $
98,767 $
— $
(2,862) $
471,246
—
6,569
—
147,229
234,681
98,767
—
—
—
6,569
(2,862)
477,815
121,791
175,085
4,093
3,343
—
(4)
3,335
18,129
—
(20)
85,285
2,847
2,485
—
60
—
11,832
1,107
354
—
(2,659)
379,502
—
—
—
—
22,107
25,064
354
36
18,006
38,152
8,090
(13,293)
(203)
50,752
—
—
—
(688)
—
253
—
—
663
—
(29,881)
3,716
—
—
—
(688)
(29,881)
4,632
$
$
18,006 $
38,587 $
7,427 $
12,872 $
(203) $
76,689
183,221 $
246,465 $
74,008 $
11,041 $
(1,212) $
513,523
Year ended December 31, 2019 (000's)(1)
Facilities
Management
WAFES
Modular
Solutions
Corporate
Inter-segment
Eliminations
Total
Revenue
$
166,761 $
94,298 $
— $
— $
— $
261,059
Operating expenses
Direct costs
Selling, general and administrative expenses
Depreciation and amortization
(Gain) loss on disposal of property, plant and equipment
Operating income (loss)
Finance costs
Earnings (loss) before income taxes
Total assets
153,746
3,237
2,261
50
7,517
—
81,326
1,570
1,210
(233)
10,425
—
—
—
—
—
—
—
$
$
7,517 $
10,425 $
111,587 $
61,277 $
— $
— $
—
4,715
370
(19)
(5,066)
222
(5,288) $
1,966 $
—
—
—
—
—
—
— $
— $
235,072
9,522
3,841
(202)
12,826
222
12,604
174,830
(1)
Certain prior year amounts have been reclassified to conform to the current year's presentation.
53
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
22. Financial risk management
Overview
The Corporation is exposed to a number of different financial risks arising from the normal course of business operations as well
as through the Corporation’s financial instruments comprised of cash and cash equivalents, trade and other receivables, trade
and other payables, and loans and borrowings. These risk factors include credit risk, liquidity risk, and market risk, including
currency exchange risk and interest rate risk.
The Corporation’s risk management practices include identifying, analyzing and monitoring the risks faced by the Corporation.
The following presents information about the Corporation’s exposure to each of the risks and the Corporation’s objectives,
policies and processes for measuring and managing risk. For additional risks and uncertainties regarding the Corporation, please
refer to Risk Factors in Appendix A of the Annual Information Form.
COVID-19 Pandemic
The rapid spread of the COVID-19 virus, which was declared by the World Health Organization to be a pandemic on March 11,
2020, and actions taken globally in response to COVID-19, have significantly disrupted business activities throughout the world.
The Corporation's business relies, to a certain extent, on free movement of goods, services, and capital within Canada, which
has been significantly restricted as a result of the COVID-19 pandemic. Given the ongoing and dynamic nature of the
circumstances surrounding COVID-19, it is difficult to predict how significant the impact of COVID-19, including any responses to
it, will be on the economy and the Corporation’s business in particular, or for how long any disruptions are likely to continue.
The extent of such impact will depend on future developments, which are highly uncertain, rapidly evolving and difficult to
predict, including additional actions which may be taken to contain COVID-19, as well as the timing of the re-opening of the
economy in Canada. Such further developments could have a material adverse effect on the Corporation's business, financial
condition, results of operations and cash flows.
The management team has implemented plans to modify the cost structure to mitigate the impact of COVID-19, while
continuing to provide essential services to its clients. Additionally, the Corporation has applied for government support
programs and qualified for $32.9 million of Canada Emergency Wage Subsidy ("CEWS") funding for the year ended December
31, 2020, which has helped to offset the negative earnings impact of COVID-19.
The Corporation continues to monitor the recoverability of trade receivables and the impact of current and expected future
credit losses are reflected in the expected credit loss provisions. There was no significant impact to expected future credit losses
due to COVID-19 at December 31, 2020. Further developments related to the economy in Canada, which were unforeseen as at
December 31, 2020, could have an adverse effect on the recoverability of trade receivables and the expected credit loss
provision. The ultimate impact of COVID-19 on the Corporation's liquidity and future cash flows may not be fully known for an
extended period of time.
54
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
Credit risk
The following shows the aged balances of trade and other receivables:
(000's)
Trade receivables
Neither impaired nor past due
Outstanding 31-60 days
Outstanding 61-90 days
Outstanding more than 90 days
Total trade receivables
Construction receivables
Neither impaired nor past due
Outstanding 31-60 days
Outstanding 61-90 days
Outstanding more than 90 days
Total construction receivables
Accrued receivables
Accrued construction receivables
Other receivables
Provision for expected credit losses
Total trade and other receivables
December 31, 2020
December 31, 2019
$
52,860 $
14,099
7,798
1,152
3,144
64,954
6,325
3,527
1,309
706
11,867
39,796
29,126
5,513
(1,724)
8,649
2,214
1,611
26,573
—
—
—
—
—
8,877
—
134
(152)
$
149,532 $
35,432
As at December 31, 2020, the Corporation provided for expected credit losses in the amount of $1.7 million. Due to the
COVID-19 pandemic and the resulting material disruption to businesses globally, combined with the significant decline in
commodity prices, the provision includes $0.7 million recorded for the year ended December 31, 2020 that specifically relates
to higher risk receivables from customers operating in the oil & gas and mining industries.
The Corporation had no major customers who generated greater than 10% of revenue in 2020, compared to one major
customer who generated 12% of total revenues in 2019.
Liquidity risk
The following shows the timing of cash outflows relating to trade and other payables, lease liabilities and loans and borrowings:
(000's)
Year 1
Year 2
Year 3
Year 4
Year 5 and beyond
December 31, 2020
December 31, 2019
Trade and
other payables(1)
Lease liabilities(2)
Loans and
borrowings(3)
Trade and
other payables(1)
Lease liabilities(2)
Loans and
borrowings(3)
$
81,815 $
8,394 $
— $
16,629 $
692 $
5,453
767
—
—
681
$
83,263 $
5,474
3,888
2,600
10,041
30,397 $
86,411
—
—
—
383
375
—
681
972
208
—
—
—
—
—
—
86,411 $
18,068 $
1,872 $
5,453
(1)
(2)
(3)
Trade and other payables include trade and other payables and contingent consideration.
Lease liabilities include total undiscounted lease payments.
Loans and borrowings include Dexterra Group's senior secured revolving term credit facility. The timing and amount of interest payments will fluctuate depending on balances
outstanding and applicable interest rates.
(b) Market risk
Market risk is the risk or uncertainty arising from possible market price movements and their impact on future performance of
the Corporation. The market price movements that could adversely affect the value of the Corporation’s financial assets,
liabilities and expected future cash flows include foreign currency exchange risk and interest rate risk. As the Corporation’s
exposure to foreign currency exchange risk and interest rate risk is limited, the Corporation does not currently hedge its
55
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
financial instruments.
i.
Foreign currency exchange risk
The Corporation has limited exposure to foreign currency exchange risk as sales and purchases are typically
denominated in CAD. The Corporation’s exposure to foreign currency exchange risk arises from the purchase of some
raw materials, which are denominated in USD, and foreign operations with USD functional currency.
As the foreign currency exchange risks are primarily based on the realized foreign exchange, the following sensitivity
analysis is to determine the impact on cash used in operating activities. The effect of a $0.01 increase in the USD/CAD
exchange rate would decrease cash used in operating activities for the year ended 2020 by approximately $0.02
million (December 31, 2019 - $0.06 million). This assumes that the quantity of USD raw material purchases and the
foreign operations in the year remain unchanged and that the change in the USD/CAD exchange rate is effective from
the beginning of the year.
ii.
Interest rate risk
The Corporation is exposed to interest rate risk as changes in interest rates may affect interest expense and future
cash flows. The primary exposure is related to the Corporation’s revolving credit facility which bears interest at a rate
of prime plus 1.00% to 2.25% or the Bankers’ Acceptance rate plus 2.00% to 3.25%. If prime were to have increased
by 1.00%, it is estimated that the Corporation’s net earnings would have decreased by approximately $0.7 million for
the year ended December 31, 2020. This assumes that the amount and mix of fixed and floating rate debt in the
period remains unchanged and that the change in interest rates is effective from the beginning of the period.
23. Related parties
(000's)
Joint Venture
Revenue
Recovery of administrative overhead
Included in accounts receivable
December 31, 2020
December 31, 2019
$
2,931 $
285
9,335
—
—
—
The Corporation earned revenue of $2.9 million for the year ended December 31, 2020 for the manufacturing, installation and
transportation of relocatable units provided to Gitxaala Horizon North Services LP, a joint venture that is 49% owned by the
Corporation. There was also $0.3 million in management fees and cost recoveries for administrative overhead related to
accounting and management services. $9.3 million is owed to Dexterra Group from Gitxaala Horizon North Services LP. Of this
amount, $6.9 million is amounts due from third parties and the remaining $2.4 million is receivable from Gitxaala First Nation,
the entity that owns 51% of the joint venture.
As at December 31, 2020, Dexterra Group has performance and labour bonds outstanding with Northbridge General Insurance
Corporation, a company with the same controlling shareholder as Dexterra Group, totaling $56.7 million. $0.4 million in fees for
these bonds were paid through an intermediary broker, including broker commission, for the year ended December 31, 2020
(2019 - $0.9 million).
All outstanding balances are to be settled with cash, and none of the balances are secured.
Key management personnel are those persons that have the authority and responsibility for planning, directing and controlling
the activities of the Corporation, directly or indirectly. Key management personnel of the Corporation include its named
executive officers and the board of directors.
Key management personnel compensation for the year ended December 31, 2020 and 2019 is comprised as follows:
(000's)
Short-term employee benefits
Post-employment benefits
Share based compensation
(1)
Certain prior year amounts have been amended to conform to the current year's presentation.
Years ended December 31,
2020
3,086 $
82
274
3,442 $
2019(1)
1,778
120
—
1,898
$
$
56
Notes to the consolidated financial statements
Years ended December 31, 2020 and 2019
24. Significant subsidiaries
The consolidated financial statements of the Corporation include the accounts of its one wholly-owned partnership, as well as
twelve special purpose entities:
Horizon North Camp & Catering Partnership
Kitikmeot Camp Solutions Limited (“Kitikmeot”)
Subsidiary Name
Acho Horizon North Camp Services Limited Partnership (“Acho”)
Secwepemc Camp & Catering Limited Partnership (“Secwepemc”)
Halfway River Horizon North Camp Services Limited Partnership (“HRHN”)
Two Lakes Horizon North Camp Services Limited Partnership (“TLHN”)
Tahltan Horizon North Services Inc. ("Tahltan")
Acden Horizon North Limited Partnership ("Acden")
Sekui Limited Partnership ("Sekui")
Eclipse Camp Solutions Incorporated ("Eclipse")
Deninu Kue Horizon North Camp & Catering Limited Partnership ("DKHN")
Skin Tyee Horizon North Camp Services Limited Partnership ("STHN")
Tangmaarvik Inland Camp Services Inc. ("Tangmaarvik")
The Partnership is the primary operating entity of the Corporation.
(a) Special purpose entities
Ownership Interest (%)
Country of
Incorporation
December 31, 2020 December 31, 2019
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
Canada
100
49
49
49
49
49
49
49
49
49
49
49
49
—
—
—
—
—
—
—
—
—
—
—
—
49
The Corporation has a 49% interest in the ownership and voting rights of Kitikmeot, Acho, Secwepemc, HRHN, TLHN, Tahltan,
Acden, Sekui, Eclipse, DKHN, STHN and Tangmaarvik and maintains two out of four board of director seats in these special
purpose entities (“SPE”). These SPE’s are consolidated when, based on an evaluation of the substance of its relationship with
the Corporation and the SPE’s risks and rewards, the Corporation concludes that it controls the SPE. The SPE’s, other than
Tangmaarvik, do not have net earnings but rather have limited assets and the only non-flow through expenses are management
fees paid to the partners. An aboriginal billing vehicle or partnership is required to achieve aboriginal participation and secure
projects in specific regions of Canada. The Corporation’s control is established under terms that impose strict limitations on the
decision-making powers of the SPE’s management. The control results in the Corporation receiving the majority of the benefits
related to the SPE’s operations and net assets, being exposed to the majority of risks incident to the SPE’s activities and
retaining the majority of the residual or ownership risks related to the SPE’s or their assets. The SPE's, other than Tangmaarvik,
were acquired as part of the Acquisition.
57
CORPORATE
INFORMATION
Board of Directors
Senior Leadership Team
R. William McFarland
Chair of the Board
Toronto, Ontario
(1)(2)
Mary Garden
Victoria, British Columbia
(1)(2)
Rod Graham
Calgary, Alberta
David Johnston
Ottawa, Ontario
(2)(3)
Simon Landy
Toronto, Ontario
(1)(3)
John MacCuish
Burlington, Ontario
Kevin Nabholz
Calgary, Alberta
(2)(3)
Russell Newmark
Inuvik, Northwest Territories
(1)(3)
(1) Audit Committee Member
(2) Corporate Governance and Compensation Committee Member
(3) Enterprise Risk Management Committee Member
Auditor
PricewaterhouseCoopers LLP
Toronto, Ontario
Transfer Agent
AST Trust Company (Canada)
1 Toronto Street, Suite 1200
Toronto, Ontario M5C 2V6
Annual Meeting of Shareholders
Wednesday, May 19, 2021 at 10:00 a.m. Eastern Time
Virtual Meeting: Live Webcast :
https://web.lumiagm.com/170453125
John MacCuish
Chief Executive Officer &
President Facilities Management
R. Drew Knight
Chief Financial Officer
Cindy G. McArthur
Chief Human Resources Officer
Mark Becker
Chief Operating Officer & President Workforce
Accommodations, Forestry and Energy Services
Dawn Nigro
President, NRB Modular Solutions
Christos Gazeas
Executive Vice President,
Legal and General Counsel
Lee-Anne Lyon-Bartley
Executive Vice President,
Health, Safety, Environment and Quality
JD MacCuish
Executive Vice President,
Strategy & Corporate Planning
Head Office
5915 Airport Road, Suite 425
Mississauga, Ontario L4V 1T1
Stock Exchange Listing
Toronto Stock Exchange
Symbol: DXT
Website
dexterra.com
58
SUCCESS THROUGH SERVICE
We’ve been serving Canadian clients for over 75 years.
The companies that began independently and now
form Dexterra Group have an outstanding record of
supporting the infrastructure and built assets that play
a vital role in our society. We bring the right teams with
the right skills together – offering both experience and
regional expertise so companies can operate their day
to day, confidently and successfully.
1-866-305-6565 | dexterra.com | TSX: DXT
59