ANNUAL REPORT
hospitality
Adjusted EBITDA in $ Millions(1)(2)(3)
Revenue in $ Millions(1)(3)
(1) Excludes results of the Modular business, which was sold in 2024.
(2) Adjusted EBITDA is a non-GAAP financial measure.
(3) 2023 results included unusually large wildfire support services.
Refer to Management Discussion & Analysis for reconciliation of non-GAAP Measures
NORTH AMERICAN
INFRASTRUCTURE
SUPPORT SERVICES
LEDGEND
$552
$67
$772
$73
$928
$107
$1003
$107
OFFICES
OPERATING
JURISDICTIONS
2021
2021
2022
2022
2023
2023
2024
2024
TABLE OF CONTENTS
04
LETTER FROM THE BOARD CHAIR
05
LETTER FROM THE CEO
07
MANAGEMENT’S DISCUSSION
AND ANALYSIS
18
MANAGEMENT’S REPORT
TO SHAREHOLDERS
20
INDEPENDENT AUDITOR’S REPORT
TO SHAREHOLDERS
27
32
58
CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO FINANCIAL
STATEMENTS
CORPORATE INFORMATION
LETTER FROM THE
CHAIR OF THE BOARD
To our shareholders:
In 2024, Dexterra Group made significant
progress towards achieving its vision of
becoming a leader in delivering quality
solutions to create, manage and operate
infrastructure across North America. The
company closed the sale of its Modular
business in Q3 for over $40 million,
purchased CMI Management LLC to
increase its U.S. footprint in capital-light
facilities management, and bought back
almost 1.2 million shares during the year.
All of these efforts, along with excellent
operating results and a strong balance
sheet, provide flexibility to continue to scale
the Support Services business in the future.
Our Board is excited about the prospects of
the business and along with management,
we are focused on delivering a return on
equity of 15% and maintaining the current
dividend level.
A big thank-you to Mark Becker, the
leadership team and all of our 9,000 strong
employee group for their contributions in
making 2024 a successful year.
We hope you will join us virtually for our
shareholders meeting on May 7, 2025, and
look forward to answering your questions.
Bill McFarland
Chair of the Board
Dexterra Group Annual Report 2024 | 4
Dexterra Group Annual Report 2024 | 5
2024 represents another significant step
forward in Dexterra’s journey of sustainable,
profitable growth. A central theme you will
find in this report and as we move through
2025 is how we are driving our business
forward by focusing on our core strengths
to bring greater value to all our stakeholders
- our clients, shareholders, employees,
business partners, and the communities in
which we operate.
We made meaningful progress in 2024
on delivering predictable results, growth,
and enhanced profitability with a focus
on our core capital-light services model,
including the successful divestment of
our Modular Solutions business. Following
this, we reorganized our business into two
business segments: Support Services and
Asset-based Services. This external and
internal operational alignment provides
better understanding of our business for
shareholders. A sincere thank-you to our
teams across the company, who worked
tirelessly to make this transition a success
while continuing to deliver exceptional
services to our clients, profitable results, and
business growth.
Additionally in 2024, we welcomed CMI
Management LLC (CMI) to Dexterra. CMI is
a U.S.-based provider of integrated facility
management (IFM) services primarily
to government clients. This strategic
investment expands our IFM footprint
in North America, as well as further
diversifying our end-markets. In 2025 and
beyond, we are focused on continuing
to build our IFM scale and capabilities
both organically and through accretive
acquisition opportunities in Canada and
the U.S.
Enhancing shareholder value remains an
overarching priority through delivery of
reliable, predictable, and profitable results
as well as a focus on capital allocation,
including maintaining our dividend,
supporting selective investments in the
existing business, remaining opportunistic
around share buybacks, and looking for
accretive acquisitions. We expect to deliver
a sustainable 15% return on equity over the
longer term.
LETTER FROM THE CEO
To our Dexterra Group stakeholders:
Dexterra Group Annual Report 2024 | 6
After laying the groundwork in 2024,
we are poised to leverage integrated
technological solutions and an innovative
approach to differentiate ourselves and
to create enhanced value for our clients
and customers. We have developed a
comprehensive technology roadmap that
spans improving internal systems and client-
facing solutions, and our Innovation Lab
(iLab) – a hub for client-focused technological
advancements. These initiatives reflect our
forward-looking approach to anticipate
client needs, while building a resilient and
competitive organization for the future.
Partnerships with Indigenous communities
and businesses also remain a vital element
to Dexterra’s success. Today, we are proud
to have over 80 Indigenous partnerships
that provide mutually beneficial support
to Indigenous communities. Our support
was recognized in 2024 with the Indigenous
Reconciliation Award, celebrating
our outreach, recruitment initiatives,
reconciliation-focused training programs,
and our partnerships with Indigenous
communities.
As wildfires continue to impact communities
in Canada, we are providing our expertise in
disaster response to benefit our clients and
their communities. In 2024, we provided
accommodations to support those impacted
by devastating wildfires in Jasper, Alberta, as
well as the rebuilding of the Little Red River
Cree Nation community in Northern Alberta.
We are proud to support the provincial
agencies and affected communities during
these times of crisis and natural disasters.
As a people-driven business, we put a lot of
emphasis on creating a workplace that is
safe, supportive, and inclusive. In recognition
of this work, Dexterra was recognized as
a Great Place to Work by the Excellence
Collection in 2024. As always, the health and
safety of our people remains a priority. In
2024 we achieved record safety performance
exemplifying our strong safety culture across
the company.
In summary, 2024 was a terrific year
for Dexterra. I am proud to lead our
organization into the future with great
things to come. Thank-you to all our
employees, clients, partners, and
shareholders for your ongoing support.
Mark Becker
Chief Executive Officer
MANAGEMENT’S DISCUSSION
AND ANALYSIS
December 31, 2024
This MD&A has been prepared as at March 6, 2025.
Dexterra Group Annual Report 2024 | 7
Dexterra Group Annual Report 2024 | 8
The following Management’s Discussion and Analysis (“MD&A”), prepared as at March 6, 2025 for Dexterra Group Inc.
(“Dexterra” or the “Corporation”), provides information concerning Dexterra’s financial condition and results of operations. This
MD&A should be read in conjunction with the Corporation’s audited Consolidated Financial Statements for the years ended
December 31, 2024 and 2023 (“Financial Statements”). For additional information, readers should also refer to Dexterra's
Annual Information Form (“AIF”) available on SEDAR at sedarplus.ca and Dexterra’s website at dexterra.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 the AIF.
Business Developments
Dexterra is a corporation registered and domiciled in Canada and its common shares are listed on the Toronto Stock Exchange
(“TSX”) under the symbol DXT. Dexterra is a diversified support services organization delivering quality solutions for the
management and operation of infrastructure across North America. Effective in the fourth quarter of 2024, Dexterra completed
the repositioning of its business from an operational and external reporting perspective. This repositioning combines our
businesses with similar characteristics and has realigned the segment reporting, taking into consideration how management
assesses performance of its business and makes decisions. The Corporation operates through two segments: Support Services
and Asset Based Services (“ABS”). Our Support Services business delivers a suite of operation, maintenance, and hospitality
solutions for a diverse range of public and private sector clients, including remote operations, governments, aviation, education,
industrial, transit, healthcare, and leisure. Our ABS business provides workforce accommodation structures, access solutions,
and space rentals to clients in the natural resources and infrastructure sectors among others. Further information concerning
these segments is included in our Financial Statements and this MD&A. Additional history of comparative information under our
new and legacy segmentation is also available on our website under Investors & Governance and is for informational purposes
only.
In early 2024, Dexterra decided to sell its Modular Solutions (“Modular”) business. On August 30, 2024, Dexterra closed the sale
of Modular to ATCO Structures & Logistics Ltd. The operating results and cash flows of Modular have been presented as
discontinued operations in the consolidated statements of comprehensive income and cash flows for the years ended
December 31, 2024 and 2023. The December 31, 2023 consolidated balance sheet was not restated.
The accompanying Financial Statements of Dexterra are the responsibility of Dexterra’s management and have been prepared
in accordance with International Financial Reporting Standards as issued by the International Accounting Standard Board (“IFRS
Accounting Standards”) and all amounts presented are in thousands of Canadian dollars unless otherwise indicated.
Financial Summary
Three months ended December 31,
Years ended December 31,
(000's except per share amounts)
2024
2023(1)
2024
2023(1)
Revenue
$
247,758
$
231,196
$
1,003,027
$
927,776
Adjusted EBITDA(2)
26,558
23,567
107,438
106,774
Adjusted EBITDA as a % of revenue(2)
10.7%
10.2%
10.7%
11.5%
Net earnings from continuing operations(1)(3)
7,584
8,291
37,540
35,810
Net loss from discontinued operations, net of income taxes(4)
(669)
(8,594)
(17,447)
(9,060)
Net earnings (loss)(3)
6,915
(303)
20,093
26,750
Earnings (loss) per share
Net earnings from continuing operations per share, basic and diluted
0.11
0.13
0.58
0.55
Total net earnings per share, basic and diluted
0.11
0.00
0.31
0.41
Total assets
524,890
607,088
524,890
607,088
Total loans and borrowings (“Net Debt”)
67,859
89,615
67,859
89,615
Free Cash Flow(2)
52,701
57,133
74,680
57,783
(1) The comparative numbers have been restated as the Modular business was classified to discontinued operations in Q1 2024.
(2) Please refer to the “Non-GAAP measures” section for the definition of Adjusted EBITDA, Adjusted EBITDA as a percentage of revenue, and Free Cash Flow and to the “Reconciliation of non-
GAAP measures” section for the related calculations.
(3) Acquisition costs in pre-tax earnings for the three months and year ended December 31, 2024, were $nil and $0.4 million. For the year ended December 31, 2023, charges included a $1.6
million contract loss provision (Q4 2023 - $0.7 million recovery), $2.7 million in restructuring and other costs (Q4 2023 - $nil), and a $2.2 million impairment charge (Q4 2023 - $nil). Please see
“Non-GAAP measures” section for additional details.
(4) Net loss from discontinued operations includes $1.8 million related to transaction and closing costs for the year ended December 31, 2024, and a $0.7 million and $2.0 million loss on sale for
the three months and year ended December 31, 2024, respectively (three months ended and year ended December 31, 2023 - $nil). The working capital adjustment was recorded in Q4 2024.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 9
Non-GAAP measures
Certain measures and ratios in this MD&A do not have any standardized meaning as prescribed by GAAP and, therefore, are
considered non-GAAP measures. Non-GAAP measures include “Adjusted EBITDA”, calculated as earnings from continuing
operations before interest, taxes, depreciation, amortization, equity investment depreciation, share based compensation, gain/
loss on disposal of property, plant and equipment, and non-recurring items; “Adjusted EBITDA as a % of revenue”, calculated as
Adjusted EBITDA divided by revenue; “Free Cash Flow”, calculated as net cash flows from (used in) operating activities from
continuing operations, less sustaining capital expenditures, lease payments and finance costs from continuing operations plus
proceeds on the sale of property, plant and equipment and intangible assets from continuing operations; and “Return on
Equity”, calculated as net earnings from continuing operations divided by average total shareholders’ equity. Sustaining capital
expenditures included in the definition of Free Cash Flow are replacement expenditures and/or leases necessary to maintain
the existing business from continuing operations.
These measures and ratios provide investors with supplemental measures of Dexterra's operating performance and highlight
trends in its core businesses that may not otherwise be apparent when relying solely on GAAP financial measures. Dexterra also
believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of
issuers. Dexterra’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 Makers 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 consistent basis for comparison between periods. These measures should not be
construed as alternatives to net earnings and total comprehensive income or operating cash flows as determined in accordance
with GAAP. The method of calculating these measures may differ from other entities and accordingly, 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 the “Reconciliation of non-GAAP measures”.
Management's Discussion and Analysis
Results for 2024
Highlights
•
The Corporation generated strong results from continuing operations for 2024 with consolidated revenue of $1.0 billion,
an increase of 8.1% compared to $927.8 million in the prior year. The increase in revenue was due to organic growth,
strong natural resource market activity levels and the contribution from the CMI Management LLC (“CMI”) acquisition.
•
Adjusted EBITDA from continuing operations for 2024 was $107.4 million (2023 - $106.8 million). Support Services EBITDA
rose significantly to a record $74.1 million, an increase of 36.8%. This was offset by lower 2024 EBITDA from ABS as
expected due to the abnormal level of wildfire activity in 2023. These 2024 developments were consistent with
management’s plans to increase the scale and profitability of the Support Services business.
•
Free Cash Flow (“FCF”) was $74.7 million for the year ended December 31, 2024, compared to $57.8 million in 2023. The
Adjusted EBITDA conversion to FCF was 69.5% as compared to 54.1% in the prior year and reflected strong operating
results and working capital management and nominal cash taxes payable as the company utilized tax loss carryforwards.
•
For the three months and year ended December 31, 2024, net earnings from continuing operations were $7.6 million and
$37.5 million, respectively, compared to $8.3 million and $35.8 million in 2023. Additionally, consolidated net earnings
were $20.1 million in 2024 compared to $26.8 million in 2023 and included non-recurring items of $0.4 million (2023 -
$6.5 million). 2024 consolidated net earnings were impacted by the loss from discontinued operations of $17.4 million
(2023 - $9.1 million). Our continuing operations delivered a return on equity of 13.3% in 2024 and 12.5% in 2023. Earnings
per share from continuing operations was $0.58 cents in 2024 compared to $0.55 cents in 2023.
•
The sale of the Modular business closed during 2024 with the closing working capital adjustment recorded in the Q4 2024
results. This divestiture has allowed Dexterra to simplify its business model to focus on the core capital-light Support
Services business and enhance the reliability and predictability of our business.
•
In connection with the ongoing Normal Course Issuer Bid (“NCIB”), Dexterra purchased and cancelled 1,177,100 common
shares in 2024 at a weighted average price of $6.72 per share for a total consideration of $7.9 million. Dexterra plans to
remain opportunistic with share buybacks in 2025 as we believe our shares are undervalued.
•
Dexterra paid dividends of $0.35 during the year and declared a dividend for Q1 2025 of $0.0875 per share for
shareholders of record at March 31, 2025, to be paid April 15, 2025.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 10
Fourth Quarter Results
Highlights
•
The Corporation generated consolidated revenue of $247.8 million for Q4 2024, an increase of 7.2%, compared to Q4
2023. The increase was primarily driven by organic growth, the acquisition of CMI, and robust natural resource market
activity in the Support Services business, partially offset by lower camp demobilization and installation project activity in
ABS compared to Q4 2023.
•
Adjusted EBITDA for Q4 2024 was $26.6 million compared to $23.6 million in Q4 2023. This increase is a result of stronger
revenues and margins in Support Services offset by lower volumes in ABS as several large projects were demobilized in Q4
2023.
•
Consolidated net earnings were $6.9 million for Q4 2024 compared to a net loss of $0.3 million in Q4 2023. The Q4 2023
loss included a net loss of $8.6 million from discontinued operations.
•
Q4 2024 experienced strong FCF of $52.7 million (2023 - $57.1 million) as accounts receivable were reduced significantly as
the business moved out of its normal seasonal peak activity period in Q3.
Operational Analysis
Three months ended December 31,
Years ended December 31,
(000's)
2024
2023
2024
2023
Revenue:
Support Services
$
206,472
$
174,659
$
811,180
$
734,340
Asset Based Services
41,286
56,537
191,847
192,936
Corporate, Other and Inter-segment eliminations
—
—
—
500
Total Revenue
$
247,758
$
231,196
$
1,003,027
$
927,776
Adjusted EBITDA:
Support Services
$
18,209
$
12,203
$
74,133
$
54,205
Asset Based Services
13,896
15,596
56,215
70,896
Corporate, Other and Inter-segment eliminations
(5,547)
(4,232)
(22,910)
(18,327)
Total Adjusted EBITDA
$
26,558
$
23,567
$
107,438
$
106,774
Adjusted EBITDA as a % of Revenue
Support Services
8.8 %
7.0 %
9.1 %
7.4 %
Asset Based Services
33.7 %
27.6 %
29.3 %
36.7 %
Support Services
Our Support Services business delivers a suite of operations, maintenance, and hospitality solutions for public and private
sector clients, including remote operations, governments, aviation, education, industrial, transit, healthcare, and leisure.
Revenue for the year ended December 31, 2024 was $811.2 million, an increase of 10.5% compared to 2023. The increase is
primarily driven by the acquisition of CMI which added $66.1 million in revenue and organic growth including several new larger
contracts that were mobilized in the second quarter of 2024.
Adjusted EBITDA for the year ended December 31, 2024 was $74.1 million, an increase of 36.8% compared to 2023. The main
factors for the overall increase in Adjusted EBITDA include the acquisition of CMI, improved Adjusted EBITDA margins in
Facilities Management which were 6.3% in Q4 2024 and strong occupancy at multiple large camps. In 2024, our Support
Services business was also successful in replacing the unprecedented wildfire hospitality activity in 2023 with new long-term
contracts. Collectively, these factors resulted in a significant net positive impact on Adjusted EBITDA and margins which are
expected to exceed 8% over the longer-term.
For Q4 2024, Support Services revenues were $206.5 million, an increase of 18.2% over Q4 2023. Adjusted EBITDA was $18.2
million in Q4 2024 compared to $12.2 million for Q4 2023 and Adjusted EBITDA as a percentage of revenue was 8.8% in Q4
2024 compared to 7.0% in Q4 2023. Drivers of the increases in revenue and Adjusted EBITDA are consistent with the factors
mentioned above.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 11
Direct Costs
Direct costs are comprised of labour, food costs, materials, supplies and transportation, which vary directly with revenues, and
have a relatively low fixed component that includes leases and utilities. Direct costs for the three months and year ended
December 31, 2024 were $181.5 million and $709.5 million compared to $158.3 million and $664.7 million, for the same
periods in the prior year, respectively. This increase in costs is primarily due to the increased volume of work from the
acquisition of CMI and the addition of new contracts. Direct costs as a percentage of revenue were 87.9% in Q4 2024 which is
improved compared to the 90.7% in Q4 2023 and reflects management’s focus on managing costs and higher occupancy and
activity levels at camps which improves margins as fixed costs are spread over higher volumes.
Asset Based Services
Our ABS business provides workforce accommodation structures, access solutions, and space solutions to clients in the natural
resources and infrastructure sectors among others. These businesses includes the supply and installation of workforce
accommodation facilities, access matting and soil stabilization that allow clients to access and move equipment in remote
locations, and includes the rental of modular space units. These assets are owned by the Company and rented or sold to clients.
Revenue for the year ended December 31, 2024 was $191.8 million a decrease of $1.1 million compared to $192.9 million in
2023. The decrease is due to a more normalized wildfire season in 2024 compared to 2023, which was mostly offset by the
strong utilization of assets including mobilization of new long-term contracts in 2024.
Adjusted EBITDA for the year ended December 31, 2024 was $56.2 million, a decrease of $14.7 million compared to $70.9
million in 2023. Adjusted EBITDA margin for the year ended December 31, 2024 was 29.3% compared to 36.7% in 2023. The
lower Adjusted EBITDA and Adjusted EBITDA margin in 2024 is due to the mix of business (i.e. unprecedented wildfire camp
construction activity occurred in 2023 versus new contract mobilization activity in 2024). Adjusted EBITDA margins in this
business in the future are expected to fluctuate between 30% to 40% depending on the mix of business.
For Q4 2024, ABS revenues were $41.3 million compared to $56.5 million in Q4 2023. The decrease was primarily due to the
demobilization activity of wildfire support camp equipment in Q4 2023. Adjusted EBITDA for the quarter was $13.9 million
compared to $15.6 million for Q4 2023 and Adjusted EBITDA as percentage of revenue was 33.7% in Q4 2024 compared in
27.6% in Q4 2023. The increase in Adjusted EBITDA margin in Q4 2024 is related to stronger camp equipment rentals in 2024
versus more demobilization activity in Q4 2023.
Direct Costs
Direct costs are comprised of labour, materials, supplies and transportation, which vary directly with revenues, and have a
relatively fixed component, which includes leases and utilities. Direct costs for the three months and year ended December 31,
2024 were $26.2 million and $131.4 million compared to $40.4 million and $120.4 million, for the same periods in the prior
year, respectively. The decrease in costs for the three months ended is primarily due to the lower activity levels during the
period as discussed above. The increase in costs for the year ended December 31, 2024 is driven by the nature of project work
in workforce accommodation structures resulting in change of product mix compared to the prior year. Direct costs as a
percentage of revenue were 63.5% in Q4 2024 which was lower compared to the 71.4% in Q4 2023 as a result of change in
product and service mix.
Corporate
Corporate costs for the year ended December 31, 2024 were $22.9 million and represented 2.3% of revenue compared to 2.0%
for the same period in 2023. The increase in costs in 2024 was primarily due to investments made to support organic growth
and the increasing scale of the business including the acquisition of CMI.
Other Items
Selling, general and administrative expense (“SG&A”)
SG&A expenses are comprised of 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.
SG&A expenses for the year ended December 31, 2024 were $53.5 million compared to $42.1 million for 2023. SG&A expenses
for Q4 2024 were $13.3 million compared to $10.6 million in Q4 2023. The increase for both the quarter and year was mainly
related to people investments to scale in the Support Services business including the addition of CMI operations.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 12
Depreciation and amortization
Years ended December 31,
(000’s)
2024
2023
Depreciation of property, plant and equipment and right-of-use assets
$
29,842 $
30,080
Amortization of intangible assets
5,363
4,895
Total depreciation and amortization
$
35,205 $
34,975
Depreciation and amortization for the year ended December 31, 2024 was $35.2 million which was consistent with 2023. The
Corporation plans to continue operating under a capital-light model going forward.
Share based compensation
Share based compensation for the year ended December 31, 2024 was $4.6 million, an increase of $2.9 million compared to the
prior year. This increase is driven by the long-term incentive plan, including performance share units issued to management
which are linked to shareholder returns. Compensation expense increased given the Corporation's stronger share price which
increased about 40% in 2024 and is aligned to the creation of shareholder value. Cash payments are only made if the share
price and shareholder returns on the vesting date meet the performance criteria. No cash payments were made under the PSUs
in 2024.
Finance costs
Finance costs include interest on loans and borrowings, interest on lease liabilities, and accretion of debt financing costs.
The effective interest rate on loans and borrowings for the year ended December 31, 2024 was 8.4% (December 31, 2023 -
8.8%), including amortization of financing costs. Costs are expected to decline in 2025 absent any acquisitions due a decreasing
debt level. Amounts drawn on the credit facility incur interest at bank prime rate plus 0.5% to 1.75% or the Canadian Overnight
Repo Rate Average (“CORRA”) rate plus 1.5% to 2.75%. The CORRA rate as at December 31, 2024 was 5.4% and our current
leverage ratio equates to an interest rate at the bottom of the range.
Goodwill
Goodwill as at December 31, 2024 was $146.8 million, an increase of $16.3 million compared to $130.4 million as at December
31, 2023. The increase includes $15.2 million of goodwill from the CMI acquisition and fluctuations in balances due to the
foreign currency translation of U.S. operations.
Intangible assets
Intangible assets as at December 31, 2024 were $37.6 million, an increase of $6.6 million compared to $31.0 million as at
December 31, 2023. The increase includes the acquisition of CMI, which contributed $12.7 million, partially offset by
amortization of $5.5 million during the year and the sale of Modular, which had intangible assets with a net carrying value of
$1.4 million. The remaining change in intangible assets is attributable to foreign currency translation, as CMI's intangible assets
have a U.S. functional currency.
Non-controlling interest
Dexterra 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 and a non-controlling interest is recognized. For the year
ended December 31, 2024, earnings of $0.2 million (2023 - $0.1 million) were attributed to the non-controlling interest.
Joint ventures
Dexterra holds a 49% ownership interest in Gitxaala Horizon North Services LP (“Gitxaala”) and Big Spring Lodging Limited
Partnership (“BSL LP”). These equity investments generate earnings from providing workforce accommodations, rentals, and
maintenance of relocatable structures. For the year ended December 31, 2024, loss from equity investments was $0.4 million
(2023 - net earnings of $2.0 million). During the year ended December 31, 2024, these joint ventures sold the majority of their
assets as part of the Corporation’s asset management strategy and the Corporation received cash distributions of $14.2 million
(2023 - $1.6 million).
Income taxes
For the year ended December 31, 2024, the effective income tax rate was 30%, compared to 25% in 2023. The effective tax rate
for the year ended December 31, 2024 was higher primarily due to the tax impact on the sale of assets and adjustments to prior
year returns. For December 31, 2023, the effective tax rate was generally consistent with the combined federal and provincial
income tax rates. The Corporation had nominal taxes payable of $1.1 million at year-end and utilized most of its tax loss
carryforwards in 2024 and expects to pay more significant cash taxes starting in 2026.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 13
Outlook
Strategic Outlook
Dexterra’s strategic focus is to deliver reliable and predictable results, strong profitability and growth, and a return on equity to
shareholders of 15%. This is expected to be achieved through a strategic focus on the Support Services business, specifically
growing integrated facilities management services (“IFM”) profitably by taking advantage of the large North American
outsourced services market. This is expected to be achieved through organic growth and accretive acquisitions that add critical
Integrated Facilities Management capability, technology, and scale. Our capital allocation priorities include: 1) maintaining the
dividend; 2) supporting selective high-return capital investments in our existing business; 3) remaining opportunistic on share
buybacks; and 4) accretive acquisitions while remaining focused on maintaining a strong balance sheet. Additionally, we expect
to make strategic technology investments to drive innovation, operational efficiency and support organic IFM growth.
Operations Outlook
Overall
Key components of our business plan include driving strong execution and operational excellence to deliver predictability in our
business results and win new sales opportunities that meet margin profitability targets.
Support Services
The focus of the Support Services business is growth through continued profitable organic growth and margin management.
Overall, we expect the margin for Support Services to exceed 8% in the longer-term.
Asset Based Services
All indications of key market activity suggest the strong utilization of our existing fleet of camp equipment and access matting to
continue in the near-term through 2025. We will continue to explore opportunities that offer high returns on capital in the
natural resource sector. Overall, margins are expected to range between 30% to 40%, depending on the mix of business
between rented assets and installation projects.
Economy
As a North American support services champion, a large majority of our costs are labour and materials that are sourced
domestically with some cross-border supply commodities which helps insulate us from the potential impacts of tariffs and
inflationary pressures. Dexterra is working proactively to manage the potential impacts of trade and inflationary pressures
through supply chain initiatives particularly with food, commodities, and supplies, by negotiating contract inflation terms and
pricing adjustments and by implementing cost management and other operational initiatives across the business.
The recent transition in the U.S. government and the possibility of increased protectionist trade and other policies pose risks to
the Canadian and U.S. economies which could impact the Corporation as these uncertainties could have economic implications,
disrupt supply chains, or cause inflationary pressures. We are closely monitoring these developments and will adapt our
strategies to mitigate any adverse effects on our business.
Liquidity and Capital Resources
The Corporation has a very strong balance sheet and a credit facility with an available limit of up to $260 million plus an
uncommitted accordion of $150 million. The facility matures on September 7, 2026. See Note 12 of the Financial Statements for
more details.
Net Debt was $67.9 million at December 31, 2024, compared to $102.2 million at Q3 2024. The decrease in debt from Q3 2024
was expected as our accounts receivable from the strong summer activity levels were converted into cash as the business
moved out of its normal seasonal peak activity period in Q3 2024. Adjusted EBITDA conversion to FCF was 69.5% for the 2024
year as compared to 54.1% in 2023. Adjusted EBITDA conversion to FCF is expected to continue to be above 50% over the
medium-term, with Q3 and Q4 experiencing the highest conversions to FCF as a result of the seasonality of the Support Services
business. We will continue to have the benefit of paying nominal income taxes in 2025 as the Corporation’s 2025 tax
installments will not be payable until early 2026.
For a summary of contractual obligations including payments due for each of the next five years see the Liquidity Risk section of
Note 23 of the Financial Statements.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 14
Capital Spending
For the year ended December 31, 2024, gross capital spending for property, plant and equipment was $26.4 million compared
to $20.4 million for the same period of 2023. This included a $5.5 million investment in sustaining capital primarily related to
replenishing older furniture and equipment for the Support Services segment, partially offset by proceeds from the sale of
property, plant and equipment of $2.7 million. Sustaining capital expenditures are replacement expenditures and/or leases
necessary to maintain the existing business and are expected to continue to be approximately 1% to 1.5% of revenue on an
annualized basis. Actual amounts may vary depending on the timing of expenditures.
During the 2024 year, capital expenditures included a $20.5 million investment in growth capital associated with high return
opportunities in workforce accommodation structures and access matting. Growth capital expenditures are incurred when
accretive and advantageous opportunities are identified.
Quarterly Summary of Results
Three months ended
(000's except per share amounts)
2024
December
2024
September
2024
June
2024
March
Revenue(1)
$
247,758
$
269,749
$
253,624
$
231,896
Adjusted EBITDA(1)
26,558
32,024
29,277
19,579
Adjusted EBITDA as a % of revenue(1)
10.7 %
11.9 %
11.5 %
8.4 %
Net earnings from continuing operations
7,584
13,359
12,162
4,435
Net loss from discontinued operations, net of income taxes
(669)
(5,693)
(3,082)
(8,003)
Net earnings (loss)
6,915
7,666
9,080
(3,568)
Net earnings from continuing operations per share, basic and diluted
0.11
0.21
0.19
0.07
Total net earnings (loss) per share, basic and diluted
0.11
0.12
0.14
(0.06)
Three months ended
(000's except per share amounts)
2023
December
2023
September
2023
June
2023
March
Revenue(1)
$
231,196
$
265,842
$
214,709
$
216,029
Adjusted EBITDA(1)
23,567
38,204
25,239
19,764
Adjusted EBITDA as a % of revenue(1)
10.2 %
14.4 %
11.8 %
9.1 %
Net earnings from continuing operations
8,291
13,900
8,935
4,684
Net loss from discontinued operations, net of income taxes
(8,594)
(25)
(441)
—
Net earnings (loss)
(303)
13,875
8,494
4,684
Net earnings from continuing operations per share, basic and diluted
0.13
0.21
0.14
0.07
Total net earnings per share, basic and diluted
0.00
0.21
0.13
0.07
(1) Revenue and Adjusted EBITDA for the periods ended as presented above have been restated to exclude discontinued operations.
Selected Annual Information
Years ended December 31,
(000's except per share amounts)(1)
2024
2023
2022
Revenue(1)
$
1,003,027
$
927,776
$
771,906
Adjusted EBITDA(1)
107,438
106,774
73,056
Adjusted EBITDA as a % of revenue(1)
10.7 %
11.5 %
9.5 %
Net earnings from continuing operations
37,540
35,810
12,166
Net loss from discontinued operations, net of income tax
(17,447)
(9,060)
(8,451)
Net earnings
20,093
26,750
3,715
Net earnings from continuing operations per share, basic and diluted
0.58
0.55
0.19
Total net earnings per share, basic and diluted
0.31
0.41
0.05
Total assets
524,890
607,088
611,401
Net Debt
67,859
89,615
94,045
Dividends declared per share
0.350
0.350
0.350
(1) Revenue and Adjusted EBITDA for the years ended December 31, 2024, 2023, and 2022 have been restated to exclude discontinued operations.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 15
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:
Adjusted EBITDA
Three months ended December 31,
Years ended December 31,
(000's)
2024
2023
2024
2023
Net earnings from continuing operations
$
7,584
$
8,291
$
37,540
$
35,810
Add:
Share based compensation (recovery)
1,200
(236)
4,557
1,778
Depreciation & amortization
9,612
8,661
35,205
34,975
Equity investment depreciation
87
439
974
1,613
Finance costs
2,364
3,242
13,058
13,438
Loss (gain) on disposal of property, plant and equipment
15
1,042
(354)
935
Asset impairment(1)
—
—
—
2,210
Income tax expense
5,696
2,788
16,097
11,694
Contract loss provision (recovery)(2)
—
(660)
—
1,596
Restructuring and other costs(3)
—
—
361
2,727
Adjusted EBITDA
$
26,558
$
23,567
$
107,438
$
106,774
(1) For the year ended December 31, 2023, the Corporation recognized an asset impairment of $2.2 million on excess camp assets which it was selling.
(2) Contract loss provision (recovery) for the three months and year ended December 31, 2023 of $0.7 million and $1.6 million was driven by the settlement of an onerous Support Services
contract with a customer and provision for an onerous Support Services contract related to the right-sizing of the Support Services portfolio, respectively.
(3) Restructuring and other costs for the year ended December 31, 2024 of $0.4 million include expenses related to the acquisition of CMI during the year. Restructuring and other costs for the
three months and year ended December 31, 2023 of $nil and $2.7 million, respectively include costs related to the CEO and CFO transitions of $1.9 million and demobilization and
restructuring costs of $0.8 million.
Free Cash Flow
Three months ended December 31,
Years ended December 31,
(000's)
2024
2023
2024
2023
Net cash flows from continuing operating activities
$
58,150
$
62,779
$
96,481
$
81,728
Sustaining capital expenditures, net of proceeds from the sale of property,
plant and equipment and intangible assets
(1,424)
(600)
(2,754)
(2,625)
Finance costs paid
(1,986)
(2,799)
(12,165)
(13,013)
Lease payments
(2,039)
(2,247)
(6,882)
(8,307)
Free Cash Flow
$
52,701
$
57,133
$
74,680
$
57,783
Return on Equity
Years ended December 31,
(000's)
2024
2023
Net earnings from continuing operations
$
37,540
$
35,810
Average total shareholders’ equity(1)
282,984
286,999
Return on Equity (%)
13.3 %
12.5 %
(1) Average total shareholders’ equity is calculated as the average of beginning total shareholders’ equity and ending total shareholders’ equity for the year.
Accounting Policies
Dexterra’s IFRS Accounting Standards policies are provided in Note 3 to the Financial Statements.
Outstanding Shares
Dexterra had 62,795,463 voting common shares issued and outstanding as at February 28, 2025, of which 50.9% or 31,957,781
are owned by subsidiaries of Fairfax Financial Holdings Limited.
See Note 14 of the Financial Statements for details on the NCIB.
Off-Balance Sheet Financing
Dexterra has no off-balance sheet financing.
Management’s Discussion and Analysis
Three months and years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 16
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.
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
Accounting Standards.
Based on the evaluation of the design and operating effectiveness of the Corporation's DC&P and ICFR, the CEO and the CFO
concluded that the Corporation's DC&P and ICFR were effective as at December 31, 2024. There have been no changes in
Dexterra’s DC&P or ICFR that occurred during the year ended December 31, 2024 that have materially affected, or are
reasonably likely to materially affect, Dexterra’s DC&P or ICFR.
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.
Risks and Uncertainties
The financial risks, critical accounting estimates and judgements, and risk factors related to Dexterra and its business, which
should be carefully considered, are disclosed in the AIF dated March 6, 2025 under “Risk Factors”, and this MD&A should be
read in conjunction with them. Such risks may not be the only risks facing Dexterra. Additional risks not currently known may
also impair Dexterra’s business operations and results of operations.
Critical Accounting Estimates and Judgements
This MD&A of Dexterra’s financial condition and results of operations is based on its Financial Statements, which are prepared
in accordance with IFRS Accounting Standards. The preparation of the 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 Financial Statements.
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: geopolitical risk, 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 Financial Statements.
Management’s Discussion and Analysis
Three months and years ended December 31, 2023 and 2022
Dexterra Group Annual Report 2024 | 17
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’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’s future operating results and economic performance, including
return on equity and Adjusted EBITDA margins; capital allocation priorities, acquisition strategy; its capital light model, market
and inflationary environment expectations, asset utilization, camp occupancy levels, its leverage, discontinued operations, FCF,
wildfire activity expectations, U.S. tariff impacts, and its objectives and strategies are forward-looking statements. These
statements are based on certain factors and assumptions, including expected growth, market recovery, results of operations,
performance and business prospects and opportunities regarding Dexterra. While management considers these assumptions to
be reasonable based on information currently available to Dexterra, 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’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 operates; outsourcing of services trends; reliance on suppliers and
subcontractors; cost inflation; U.S. tariff impacts; volatility of industry conditions could impact demand for its services; a
reduction in the availability of credit could reduce demand for Dexterra’s products and services; Dexterra’s significant
shareholder may substantially influence its direction and operations and its interests may not align with other shareholders; its
significant shareholder’s 51% 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; significant legal proceedings or regulatory proceedings/changes; environmental damage and liability is an operating
risk in the industries in which Dexterra operates; climate changes could increase Dexterra’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’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’s services; its insurance program may not fully cover losses. Additional risks and
uncertainties are described in Note 23 to the Financial Statements contained in its most recent Annual Report filed with
securities regulatory authorities in Canada and available on SEDAR at sedarplus.ca. The reader should not place undue
importance on forward-looking information and should not rely upon this information as of any other date. Dexterra 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.
Management’s Discussion and Analysis
Three months and years ended December 31, 2023 and 2022
MANAGEMENT’S REPORT
TO SHAREHOLDERS
Dexterra Group Annual Report 2024 | 18
Dexterra Group Annual Report 2024 | 19
Mark Becker
President and Chief Executive Officer
Denise Achonu
Chief Financial Officer
March 6, 2025
The accompanying consolidated financial statements and Management’s Discussion
and Analysis of Dexterra Group Inc. (“Dexterra Group” or the “Corporation”) have been
approved by the Board of Directors (“Board”) of Dexterra Group. The consolidated financial
statements 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
five 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 considers the report of the external
auditor, assesses the adequacy of internal controls of the company, examines the fees
and expenses of the auditor and reviews the consolidated financial statements with
management and the external auditor and reports its findings to the Board.
MANAGEMENT’S REPORT TO SHAREHOLDERS
INDEPENDENT AUDITOR’S REPORT
TO SHAREHOLDERS
Dexterra Group Annual Report 2024 | 20
Dexterra Group Annual Report 2024 | 21
PricewaterhouseCoopers LLP
PwC Tower, 18 York Street, Suite 2500, Toronto, Ontario, Canada M5J 0B2
T.: +1 416 863 1133, F.: +1 416 365 8215, Fax to mail: ca_toronto_18_york_fax@pwc.com
“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.
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, 2024 and 2023, 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 Accounting Standards).
What we have audited
The Corporation’s consolidated financial statements comprise:
the consolidated statements of financial position as at December 31, 2024 and 2023;
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, comprising material accounting policy information
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.
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, 2024. These matters were
Dexterra Group Annual Report 2024 | 22
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
Impairment assessment of goodwill
Refer to note 2 − Basis of preparation, note 3 −
Material accounting policies and determination
of fair values and note 10 − Intangible assets
and goodwill to the consolidated financial
statements.
The Corporation had goodwill of $146.7 million
as at December 31, 2024 which 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 fair value less costs of disposal method
using discounted cash flow models. Significant
assumptions used in the discounted cash flow
models included revenue growth rates, earnings
before interest, taxes, depreciation, amortization,
depreciation from equity investment, share
based compensation, and gain/loss on disposal
of property, plant and equipment (EBITDA) and
discount rates. Management concluded that
there was no impairment of goodwill as at July 1,
2024, the date of the annual assessment.
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
Our approach to addressing the matter included the
following procedures, among others:
Evaluated how management determined the
recoverable amounts of the CGUs, which
included the following:
–
Tested the mathematical accuracy of the
discounted cash flow models.
–
Evaluated the reasonableness of significant
assumptions such as revenue growth rates
and EBITDA 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.
–
Evaluated the appropriateness of
management’s fair value less costs of
disposal method and assessed the
reasonableness of the discount rates with
the assistance of professionals with
specialized skill and knowledge in the field of
valuation.
–
Tested the underlying data used in the
discounted cash flow models.
Tested the disclosures made in the consolidated
financial statements, particularly on the
sensitivity of the significant assumptions used.
Dexterra Group Annual Report 2024 | 23
Key audit matter
How our audit addressed the key audit matter
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 and the information, other than the consolidated financial statements and our
auditor’s report thereon, included in the annual report.
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 Accounting Standards, and for such internal control as management
determines is necessary to enable the preparation of consolidated financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, management is responsible for assessing the
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.
Dexterra Group Annual Report 2024 | 24
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.
Plan and perform the group audit to obtain sufficient appropriate audit evidence regarding the financial
information of the entities or business units within the Corporation as a basis for forming an opinion on
the consolidated financial statements. We are responsible for the direction, supervision and review of
the audit work performed for purposes of the group audit. We remain solely responsible for our audit
opinion.
Dexterra Group Annual Report 2024 | 25
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 Alodie Cuvelier-
Brew.
Chartered Professional Accountants, Licensed Public Accountants
Toronto, Ontario
March 6, 2025
/s/PricewaterhouseCoopers LLP
CONSOLIDATED FINANCIAL STATEMENTS
Years ended December 31, 2024 and December 31, 2023
Dexterra Group Annual Report 2024 | 26
Dexterra Group Annual Report 2024 | 27
Consolidated Financial Statements of
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 28
Consolidated statement of financial position
(000’s)
Note
December 31,
2024
December 31,
2023
Assets
Current assets
Trade and other receivables
6
$
153,574
$
212,572
Inventories
7
18,129
28,690
Prepaid expenses and other
7,444
6,482
Total current assets
179,147
247,744
Non-current assets
Property, plant and equipment
8
144,177
145,550
Right-of-use assets
9
16,379
23,370
Intangible assets
10
37,581
30,988
Goodwill
10
146,757
130,436
Deferred income tax assets
18
—
12,532
Other assets
11
849
16,468
Total non-current assets
345,743
359,344
Total assets
$
524,890
$
607,088
Liabilities
Current liabilities
Trade and other payables
$
124,786
$
163,158
Deferred revenue
15
7,884
10,618
Income tax payable
1,078
430
Asset retirement obligations
13
4,831
3,768
Lease liabilities
9
6,365
7,988
Total current liabilities
144,944
185,962
Non-current liabilities
Lease liabilities
9
10,901
19,700
Contingent consideration
755
704
Asset retirement obligations
13
586
2,586
Loans and borrowings
12
67,859
89,615
Other long term liabilities
14
3,683
939
Deferred income tax liabilities
18
17,209
20,567
Non-current liabilities
100,993
134,111
Total liabilities
245,937
320,073
Shareholders’ Equity
Share capital
14
226,610
231,071
Contributed surplus
4,316
3,268
Accumulated other comprehensive income
1,161
174
Retained earnings
46,463
52,322
Non-controlling interest
403
180
Total shareholders’ equity
278,953
287,015
Total liabilities and shareholders’ equity
$
524,890
$
607,088
The accompanying notes are an integral part of the consolidated financial statements.
Mary Garden
Mark Becker
Director, Audit Committee Chair
Director, Chief Executive Officer
Dexterra Group Annual Report 2024 | 29
Consolidated statement of comprehensive income
Years ended December 31,
(000's except for earnings per share amounts)
Note
2024
2023
Revenue
Revenue from operations
$
1,003,027
$
927,776
Operating expenses
Direct costs
16
843,001
786,752
Selling, general and administrative expenses
17
53,519
42,141
Depreciation
8,9
29,842
30,080
Amortization of intangible assets
10
5,363
4,895
Share based compensation
14
4,557
1,778
Loss (gain) on disposal of property, plant and equipment
(354)
935
Asset impairment
8
—
2,210
Operating income
67,099
58,985
Finance costs
9,12,13
13,058
13,438
Loss (earnings) from equity investments
11
404
(1,957)
Earnings before income taxes
53,637
47,504
Income tax
Income tax expense
18
16,097
11,694
Net earnings from continuing operations
37,540
35,810
Net loss from discontinued operations, net of income taxes
5
(17,447)
(9,060)
Net earnings for the period
20,093
26,750
Other comprehensive income
Translation gain (loss) on foreign operations
987
(167)
Total comprehensive income for the year
$
21,080
$
26,583
Net earnings attributable to:
Net earnings from continuing operations
$
37,317
$
35,678
Net loss from discontinued operations, net of income taxes
(17,447)
(9,060)
Net earnings attributed to shareholders
19,870
26,618
Net earnings attributed to non-controlling interest
223
132
Earnings per common share:
Net earnings from continuing operations per share, basic and diluted
20
$
0.58
$
0.55
Net loss from discontinued operations per share, basic and diluted
20
(0.27)
(0.14)
Total net earnings per share, basic and diluted
$
0.31
$
0.41
Weighted average common shares outstanding:
Basic
20
64,017
64,993
Diluted
20
64,297
65,221
The accompanying notes are an integral part of the consolidated financial statements.
Dexterra Group Annual Report 2024 | 30
Consolidated statement of changes in equity
(000’s)
Note
Share capital
- Number of
Shares
Share capital
Contributed
surplus
Accumulated
other
comprehensive
income
Retained
earnings
Non-
controlling
interest
Total
Balance as at December 31, 2022
65,242 $
233,968 $
2,236 $
341 $
50,245 $
193 $
286,983
Dividends
21
—
—
—
—
(22,708)
(145)
(22,853)
Exercise of stock options
14
40
173
(51)
—
—
—
122
Share based compensation
14
—
—
1,083
—
—
—
1,083
Shares purchased and cancelled
14
(855)
(3,070)
—
—
(1,833)
—
(4,903)
Total comprehensive income
—
—
—
(167)
26,618
132
26,583
Balance as at December 31, 2023
64,427
231,071
3,268
174
52,322
180
287,015
Dividends
21
—
—
—
—
(22,348)
—
(22,348)
Exercise of stock options
14
15
64
(18)
—
—
—
46
Share based compensation
14
—
—
1,066
—
—
—
1,066
Shares purchased and cancelled
14
(1,177)
(4,525)
—
—
(3,381)
—
(7,906)
Total comprehensive income
—
—
—
987
19,870
223
21,080
Balance as at December 31, 2024
63,264 $
226,610 $
4,316 $
1,161 $
46,463 $
403 $
278,953
The accompanying notes are an integral part of the consolidated financial statements.
Dexterra Group Annual Report 2024 | 31
Years ended December 31,
(000’s)
Note
2024
2023
Cash provided by (used in):
Operating activities:
Net earnings from continuing operations
$
37,540
$
35,810
Adjustments for:
Depreciation
8,9
29,842
30,080
Amortization of intangible assets
10
5,363
4,895
Share based compensation
14
4,557
1,778
Loss (gain) on disposal of property, plant and equipment
(354)
935
Asset impairment
8
—
2,210
Net transfers between inventory and rental fleet
8
(6,736)
3,383
Loss (earnings) on equity investments
11
404
(1,957)
Non-cash revaluation of contingent consideration
—
7
Asset retirement obligation settled
13
(1,078)
(6,299)
Finance costs
13,058
13,438
Income tax expense
18
16,097
11,694
Changes in non-cash working capital
19
(1,175)
(14,198)
Income taxes paid
(1,037)
(48)
Net cash flows from operating activities
96,481
81,728
Net cash flows used in discontinued operating activities
(29,561)
(1,182)
Investing activities:
Purchase of property, plant and equipment
8
(26,393)
(20,378)
Purchase of intangible assets
10
(40)
(96)
Proceeds on sale of property, plant and equipment
2,667
947
Acquisition of VCI
4
(380)
(3,704)
Acquisition of CMI
4
(24,863)
—
Holdback payment for prior acquisitions
—
(2,220)
Proceeds from divestiture of Modular
5
41,796
—
Cash distributions received from equity investments
11
14,178
1,572
Net cash flows from (used in) investing activities
6,965
(23,879)
Net cash flows used in discontinued investing activities
(148)
(167)
Financing activities:
Issuance of common shares
14
46
92
Shares purchased and cancelled
14
(7,906)
(4,903)
Payments for lease liabilities
(6,882)
(8,307)
Repayments on loans and borrowings
12
(22,181)
(3,918)
Finance costs paid
(12,165)
(13,013)
Dividends paid to non-controlling interest
—
(331)
Dividends paid to shareholders
21
(22,450)
(22,779)
Net cash flows used in continuing financing activities
(71,538)
(53,159)
Net cash flows used in discontinued financing activities
(2,199)
(3,341)
Changes in continuing operations cash position
31,908
4,690
Changes in discontinued operations cash position
(31,908)
(4,690)
Change in cash position
—
—
Cash, beginning of year
—
—
Cash, end of year
$
—
$
—
Consolidated statement of cash flows
The accompanying notes are an integral part of the consolidated financial statements.
Dexterra Group Annual Report 2024 | 32
1. Reporting entity
Dexterra Group Inc. (“Dexterra” 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 with 49% of the voting common shares at
December 31, 2024 owned by subsidiaries of Fairfax Financial Holdings Limited resulting in de facto control over the
Corporation as its largest equity and voting shareholder. Dexterra is a diversified support services organization delivering quality
solutions for the management and operation of infrastructure across North America.
Effective in the fourth quarter of 2024, Dexterra completed the repositioning of its business from an operational and external
reporting perspective. This repositioning aligns our businesses with similar characteristics and has realigned the segment
reporting, taking into consideration how management assesses performance of its business and makes decisions. The
Corporation operates through two segments: Support Services and Asset Based Services. The Support Services business delivers
a suite of operation, maintenance, and hospitality solutions for a diverse range of public and private sector clients, including
remote operations, governments, aviation, education, industrial, transit, healthcare, and leisure. The Asset Based Services
business provides workforce accommodation structures, access solutions, and space rentals to clients in the natural resources
and infrastructure sectors among others. The 2023 comparatives have been restated to reflect the change in reportable
segments. The change in segment reporting change does not have an impact on our consolidated results.
On August 30, 2024, the Corporation closed the sale of the Modular Solutions (“Modular”) business for a price of $43.3 million.
The operating results for 2024 have been presented as discontinued operations in the consolidated statement of
comprehensive income and cash flows. Comparatives in the consolidated statement of comprehensive income and cash flows
have been reclassified to conform with current year presentation for discontinued operations. Refer to Note 5 of these financial
statements for further details.
2. Basis of preparation
a. Statement of compliance
The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards
as issued by the International Accounting Standard Board (“IFRS Accounting Standards”). The consolidated financial
statements were authorized for issue by the Board of Directors on March 6, 2025.
b. 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.
c. Use of estimates and judgement
The preparation of financial statements in conformity with IFRS requires management to make judgements, estimates and
assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and
expenses. The judgements, 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 judgements, 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.
Critical accounting estimates and judgements
•
Purchase price equations (see Note 4) - The acquired assets and assumed liabilities are 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 applies significant judgement in estimating the fair value
of the customer relationships. Management used the multi-period excess earnings method to fair value customer
relationships using a discounted cash flow model. The significant assumptions used in the discounted cash flow
models are revenue growth rates, the earnings before interest, taxes, depreciation, amortization, equity investment
depreciation, share based compensation, and gain/loss on disposal of property, plant and equipment (“EBITDA”) and
discount rates.
•
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. Management applied significant judgement in determining the
recoverable amounts. The recoverable amounts of the CGUs were based on the FVLCOD method using discounted
cash flow models. Significant assumptions used in the discounted cash flow models included revenue growth rates,
EBITDA and discount rates.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 33
3. Material 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
through ownership, voting rights, or 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. A 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. See Note 25 for details.
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 is exposed to variable returns from its
involvement with the entity such that 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. As at December 31,
2024 and 2023, none of the SPEs held any net assets and therefore there was no related non-controlling interest.
(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 judgement 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. 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.
Any contingent consideration is measured at fair value at the date of acquisition and is remeasured at each reporting date
with subsequent changes in the fair value of the contingent consideration being recognized in profit or loss.
(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 net earnings (“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 not
separated. Instead, the hybrid financial instrument as a whole is assessed for classification.
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 classifies 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;
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 34
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 net earnings. 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 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. No gain or loss is recognized in the
consolidated statement of comprehensive income for shares repurchased and cancelled.
(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.
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 the appropriate class of 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 within operating
expenses in the consolidated statement of comprehensive income.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 35
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 net
earnings.
iii.
Depreciation
Depreciation is calculated using the depreciable amount, which is the cost of an asset, less its residual value.
Depreciation is recognized in net earnings 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
Category
Method
Useful life
Camp & catering smallwares
Camp equipment & mats
Straight-line
1.5 years
Camp facilities (residual value of 20%)
Camp equipment & mats
Straight-line
15 years
Mats
Camp equipment & mats
Straight-line
3-6 years
Buildings
Land & buildings
Straight-line
25 years
Leasehold improvements
Land & buildings
Straight-line
Term of lease
Automotive
Automotive & trucking equipment
Straight-line
4-8 years
Computer hardware
Manufacturing & other equipment
Straight-line
5 years
Equipment
Manufacturing & other equipment
Straight-line
5-10 years
Furniture & fixtures
Manufacturing & other equipment
Straight-line
5 years
Depreciation methods, useful lives, and residual values are reviewed at each financial year end and adjusted if
required. Land and assets under construction are not depreciated.
(e) Intangible assets and goodwill
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.
ii.
Assets acquired
Intangible assets are acquired as a result of a business combination or through the purchase of other contractual or
legal rights which are transferable or separable. Intangibles acquired as part of a business combination are measured
at fair value on initial recognition. Intangible assets purchased are measured at cost. Amortization is charged on a
straight line basis to net earnings over their expected useful lives, as follows:
Assets
Method
Useful life
Customer relationships
Straight-line
Up to 10 years
Trade names and franchise fee agreements
Straight-line
7 years
Software and other
Straight-line
3 years
Amortization methods, useful lives, and residual values are reviewed at each financial year-end and adjusted if
required.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 36
(f) Inventories
Inventories are measured at the lower of cost and net realizable value. The cost of inventories is based on a weighted
average 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.
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
For the purpose of assessing impairment of non-financial assets, the Corporation determines its CGUs. Assets and
liabilities are grouped into CGUs at the lowest level of separately identified cash inflows. Determination of what
constitutes a CGU is subject to management judgment. The asset composition of a CGU can directly impact the
recoverability of assets included within the CGU.
The carrying amounts of the Corporation’s non-financial 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, the recoverable amount is estimated at
least once a year. The annual impairment test for the year ended December 31, 2024 was completed on July 1, 2024
and no impairment existed.
The recoverable amount of an asset is the greater of its FVLCOD and VIU. In assessing the recoverable amount, 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. 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. Goodwill
allocation must reflect the lowest level at which that goodwill is monitored for internal reporting purposes and cannot
be larger than the operating segment before aggregation.
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 net earnings. 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.
(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 Direct
costs and Selling, general and administrative expenses in the consolidated 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.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 37
iii.
Share based compensation transactions
Equity-settled transactions
The grant date fair value of share-based compensation awards granted to directors, 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).
Cash-settled transactions
The Corporation has a Restricted Share Unit (“RSU”) and Performance Share Unit (“PSU”) plan for its eligible directors,
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. For PSUs, 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 adjusted based on the number of awards that do meet the related service and non-
market performance conditions at the vesting date. 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 in Share based compensation expense in
net earnings.
(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 a finance cost.
(j) Revenue
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.
The transaction price of customer contracts may change over the duration of the contract period. Change orders may be
issued to modify the original contract scope of work or conditions resulting in possible disputes or claims regarding
additional amounts owing may arise. Service delivery 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 change orders and claims may not be settled
until the end of the project, management estimates what change orders to include in the determination of revenue
recognized.
Deferred revenue relates to payments received in advance of performance under the customer contract. Deferred revenue
is recognized as revenue as the Corporation fulfills its performance obligations under the contract. In normal course,
deferred revenue is recognized within a year as Corporation contracts are expected to have a duration of one year or less.
Revenues are derived mainly from the following types of client contracts and major products and services:
i.
Remote & Hospitality Services
Remote & Hospitality Services provide solutions for ongoing operations of infrastructure such as catering and
housekeeping. Revenue is recognized over time as the services are provided to the customer. Catering and other
hospitality services are generally 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.
ii.
Facilities Management
Facilities Management provides solutions for ongoing maintenance and operations of 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 obligations,
the transaction price is allocated to each performance obligation and recognized as revenue as the performance
obligation is satisfied.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 38
iii.
Asset Based Services
Asset Based Services includes the supply and installation of workforce structures and access solutions. Distinct
performance obligations include the supply, installation, and rental of the relocatable structures, access mat rental
and other ancillary services. Revenue is recognized over time as the supply and installation of the facilities is
completed over a period of time as work is completed for its construction contracts and estimates progress of these
contracts by comparing costs incurred to the total expected costs of the project. To determine the estimated costs to
complete construction contracts, assumptions and estimates are required to evaluate matters related to schedule,
material and labour costs, labour productivity, changes in scope, or terms of the contract, inflationary pressures and
availability and terms for subcontractors. Due to the nature of construction activities, estimates can change over the
life of the contracts which may significantly impact profitability. Rental days are used to measure rental fleet revenue.
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 include 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 generally 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.
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. Proceeds from the sale
of rental fleet that is routinely sold before the end of its useful life are included in net cash flows from operating
activities. The investments in the acquisition or manufacturing of rental fleet are 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.
vi.
Sale of food and other goods
Revenue from the sale of food and other goods is measured at 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.
(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 when it meets the
above criteria. 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.
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.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 39
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 net earnings,
using the effective interest method.
Finance costs comprise of interest expense on loans and borrowings, interest on lease liabilities, unwinding of the discount
on provisions, and foreign currency exchange gains/losses. Borrowing costs that are not directly attributable to the
acquisition, construction, or production of a qualifying asset are recognized in net earnings 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 income tax expense
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.
(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 year. 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 and directors.
(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.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 40
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 year 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 year end are recognized in the consolidated
statement of comprehensive income within net earnings. Non-monetary items that originated in a foreign currency are
translated at the exchange rate from the original transaction date.
The US entities have a USD functional currency and are therefore translated 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 year 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.
(q) Adoption of new standards and interpretations
The new standards, amendments to standards and interpretations effective for the year ended December 31, 2024, and
applied in preparing these consolidated financial statements are disclosed below.
i.
Classification of liabilities with covenants as current or non-current (Amendments to IAS 1)
With the introduction of the two amendments to IAS 1 in 2024, for a liability to be classified as non-current, a
company must have the right to defer settlement of the liability for at least twelve months after the reporting
period. The right must also have substance and exist at the end of the reporting period and the classification of
the liability must be unaffected by the likelihood that the company will exercise that right. If a company is
required to comply with covenants on or before the end of the reporting period, these covenants will affect
whether such a right exists at the end of the reporting period. The amendments are effective for annual periods
beginning on or after January 1, 2024 and have no impact on the Corporation’s consolidated financial statements.
(r) New standards and interpretations not yet adopted
The new standards, amendments to standards and interpretations not yet effective for the year ended December 31, 2024,
and not applied in preparing these consolidated financial statements are disclosed below. The Corporation intends to adopt
these standards when they become effective.
i.
Amendments to the Classification and Measurement of Financial Instruments (Amendments to IFRS 9 and IFRS 7)
On May 30, 2024, the IASB issued amendments to IFRS 9 Financial Instruments and IFRS 7 Financial Instruments:
Disclosures which included clarification on the date of recognition and derecognition of certain financial assets
and liabilities, and additional required disclosures for financial assets and liabilities with contractual terms that
reference a contingent event. An entity is not required to restate comparative information when it first applies
these amendments, however, it is permitted to do so only if possible without the use of hindsight. If an entity
does not restate prior periods, the cumulative effect of initially applying the amendments is recognized as an
adjustment to opening equity. The Corporation is currently evaluating the impact of the standard on its
consolidated financial statements.
ii.
Presentation and Disclosure in Financial Statements (IFRS 18)
On April 9, 2024, the IASB issued IFRS 18 which replaces IAS 1 Presentation of Financial Statements while carrying
forward many of the requirements in IAS 1. IFRS 18 introduces new requirements to present specified categories
and defined subtotals in the statement of earnings and to provide disclosures on management-defined
performance measures in the notes to the financial statements, and also makes certain amendments to IAS 7
Statement of Cash Flows and IAS 33 Earnings per Share. The standard is to be applied retrospectively, with specific
transition provisions, for annual reporting periods beginning on or after January 1, 2027 with earlier application
permitted. The Corporation is currently evaluating the impact of the standard on its consolidated financial
statements.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 41
4. Business combinations
(a) CMI
On February 29, 2024, Dexterra acquired 100% of the issued and outstanding shares of CMI Management LLC (“CMI”) for $28.0
million (consideration of $31.5 million less $3.5 million cash acquired). CMI is based in Alexandria, Virginia and provides facilities
management services to a number of federal government agencies and commercial clients across the United States. The
purchase price includes a holdback that will be released to the previous owners 18 months after the closing date of the
transaction on the assumption that certain standard warranties expire with no payments required. As at December 31, 2024,
the holdback amount of $3.1 million has been included in trade and other payables on the consolidated statement of financial
position. The acquisition is reported as part of the Support Services segment.
Acquisitions are accounted for using the acquisition method whereby the assets acquired and the liabilities assumed are
recorded at their fair values with the surplus of the aggregate consideration relative to the fair value of the identifiable net
assets recorded as goodwill. The results of operations are included in the Corporation’s consolidated financial statements from
the respective date of acquisition.
The primary factors that resulted in the recognition of intangible assets and goodwill are: contracts with existing customers and
the strategic value to the Corporation’s platform, people and growth plan. The goodwill recognized is deductible for income tax
purposes.
The Corporation incurred certain legal and advisory fees of $0.4 million related to the acquisition which were included in selling,
general and administrative expenses in the consolidated statement of comprehensive income for the year ended December 31,
2024. The purchase price equation has been finalized.
From the date of acquisition to December 31, 2024, the Corporation recognized $66.1 million in revenue and $4.3 million in
earnings before income taxes attributable to the acquired operations. If CMI was acquired January 1, 2024, the acquisition
would have added revenue of $77.8 million and earnings before income taxes of $4.9 million.
The following summarizes the assets acquired and liabilities assumed related to the CMI acquisition:
Consideration:
(000's)
Cash consideration
$
28,354
Holdback payable
3,126
Total consideration
$
31,480
Fair value of assets acquired and liabilities assumed:
Cash
$
3,491
Trade and other receivables
6,733
Prepaid expenses and other
370
Property, plant and equipment
620
Right-of-use assets
38
Trade and other payables
(7,638)
Lease liabilities
(39)
Tangible net assets
3,575
Customer relationships
12,735
Goodwill
15,170
Total identifiable net assets
$
31,480
(b) VCI
On January 31, 2023, Dexterra acquired 100% of the issued and outstanding shares of VCI Controls Inc. (“VCI”) for net
consideration of $4.2 million, after cash acquired and the holdback net of working capital adjustments. This acquisition
provided the Corporation with access to growth opportunities with new customers and increased additive service offerings to
existing customers. The VCI financial results are reported as part of the Support Services segment.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 42
The following summarizes the assets acquired and liabilities assumed on VCI acquisition:
Consideration:
(000's)
Cash consideration
$
3,793
Holdback, net of working capital adjustments
980
Total consideration
$
4,773
Fair value of assets acquired and liabilities assumed:
Cash
$
589
Trade and other receivables
1,891
Prepaid expenses and other
171
Inventories
84
Property, plant and equipment
44
Right-of-use assets
211
Trade and other payables
(979)
Deferred income tax liabilities
(16)
Lease liabilities
(211)
Tangible net assets
1,784
Customer relationships
1,088
Goodwill
1,901
Total identifiable net assets
$
4,773
The primary factors that contributed to the residual purchase price allocation and resulted in the recognition of goodwill are:
the assembled workforce of VCI, access to growth opportunities with new customers, and the increased additive service
offerings to existing customers. The goodwill recognized is not deductible for income tax purposes.
5. Discontinued operations
As disclosed in Note 1, the Corporation closed the sale of Modular on August 30, 2024. The operating results of Modular are
presented as discontinued operations in the consolidated statement of comprehensive income and cash flows for the year
ended December 31, 2024 and 2023 and the related prior year amounts have been restated.
Net Assets Divested
The following table summarizes the balance sheet impact of the sale of Modular for total consideration of $43.3 million. A loss
on sale of $3.8 million was recorded in the year ended December 31, 2024 and included certain legal and advisory fees and
other closing costs of $1.8 million related to the divestiture. As at December 31, 2024, the working capital receivable of $1.5
million is included in trade and other receivables in the statement of financial position.
Consideration:
Note
(000’s)
Cash consideration received on closing
$
41,796
Working capital adjustment
1,478
Total consideration
$
43,274
Carrying value of assets and liabilities sold:
Working capital
$
34,351
Property, plant and equipment
8
9,270
Right-of-use assets
9
12,031
Intangible assets
10
1,367
Deferred tax liabilities
(1,049)
Lease liabilities - long-term
(10,705)
Total net assets sold
$
45,265
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 43
Loss from Discontinued Operations
The following table summarizes the operating results of Modular which have been aggregated and presented as discontinued
operations for the years ended December 31, 2024 and 2023.
(000's)
Note
December 31, 2024
December 31, 2023
Revenue
$
75,606 $
189,422
Operating expenses:
Direct costs
16
85,179
190,276
Selling, general and administrative expenses
17
6,975
5,292
Depreciation and amortization
8,9,10
875
5,269
Share based compensation (recovery)
(55)
35
Other
(3)
(16)
Operating loss
(17,365)
(11,434)
Finance costs
450
832
Loss from discontinued operations before loss on sale
(17,815)
(12,266)
Loss on sale including transaction and other costs
(3,838)
—
Income tax recovery
4,205
3,206
Net loss from discontinued operations, net of income taxes
$
(17,447) $
(9,060)
6. Trade and other receivables
(000’s)
December 31, 2024
December 31, 2023
Trade receivables
$
118,157 $
133,897
Deferred trade receivables and holdbacks
6,208
28,961
Total trade receivables
124,365
162,858
Accrued trade receivables
22,775
42,406
Other receivables including receivable from sale of Modular of $1.5 million
9,974
8,837
Allowance for expected credit losses
(3,540)
(1,529)
Total
$
153,574 $
212,572
Deferred trade receivables and holdbacks of $6.2 million (December 31, 2023 - $29.0 million) represent amounts billed on
contracts which are not due until the contract work is substantially complete and any lien period has expired. All deferred trade
receivables and holdbacks are expected to be collected within 12 months. Credit risks are further described in Note 23.
7. Inventories
(000’s)
December 31, 2024
December 31, 2023
Raw materials
$
1,782 $
9,419
Food inventory
7,853
9,477
Work-in-progress
936
1,150
Finished goods and supplies
7,557
8,644
Inventories(1)
$
18,129 $
28,690
(1) Total inventory for the year ended December 31, 2024 includes $nil related to Modular (December 31, 2023 - $8.4 million).
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 44
8. Property, plant and equipment
(000’s)
Camp equipment
& mats
Land & buildings
Automotive &
trucking
equipment
Manufacturing &
other equipment
Total
Cost
Balance as at December 31, 2022
$
153,189 $
33,564 $
17,879 $
11,864 $
216,496
Additions
14,920
3,599
375
1,666
20,560
Acquisition of VCI (Note 4 (b))
—
—
—
44
44
Asset retirement obligations (Note 13)
642
—
—
—
642
Net transfers from (to) inventory
(4,439)
—
—
—
(4,439)
Disposals
(1,179)
(1,348)
(378)
(464)
(3,369)
Asset impairment(1)
(2,210)
—
—
—
(2,210)
Balance as at December 31, 2023
160,923
35,815
17,876
13,110
227,724
Additions
23,426
1,451
323
1,341
26,541
Acquisition of CMI (Note 4 (a))
—
—
620
—
620
Change in asset retirement obligations (Note 13)
(43)
—
—
—
(43)
Net transfers from (to) inventory
6,345
—
—
—
6,345
Disposals(3)
(4,387)
(11,674)
(3,426)
(3,834)
(23,321)
Foreign currency translation(2)
—
—
35
9
44
Balance as at December 31, 2024
$
186,264 $
25,592 $
15,428 $
10,626 $
237,910
Accumulated depreciation
Balance as at December 31, 2022
$
34,717 $
5,210 $
13,315 $
6,646 $
59,888
Depreciation
18,301
2,231
2,361
1,935
24,828
Net transfers from (to) inventory
(1,057)
—
—
—
(1,057)
Disposals
(893)
(116)
(357)
(119)
(1,485)
Balance as at December 31, 2023
51,068
7,325
15,319
8,462
82,174
Depreciation
19,077
1,658
1,281
1,636
23,652
Net transfers from (to) inventory
(391)
—
—
—
(391)
Disposals(3)
(2,125)
(3,751)
(2,915)
(2,981)
(11,772)
Foreign currency translation(2)
—
—
69
1
70
Balance as at December 31, 2024
$
67,629 $
5,232 $
13,754 $
7,118 $
93,733
Net book value
Balance as at December 31, 2023
$
109,855 $
28,490 $
2,557 $
4,648 $
145,550
Balance as at December 31, 2024
$
118,635 $
20,360 $
1,674 $
3,508 $
144,177
(1) For the year ended December 31, 2023, the Corporation recognized an impairment of $2.2 million on camp assets which were held for sale. The loss was included
in the consolidated statement of comprehensive income.
(2) Foreign currency translation relates to the assets held in Dexterra Services LLC and CMI which have a functional currency of USD.
(3) Total disposals include derecognition of assets with a carrying value of $9.3 million as a result of the divestiture of Modular (see Note 5).
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 45
9. Leases
(i)
Right-of-use assets
(000’s)
Camp
equipment
& mats Land & buildings
Automotive &
trucking
equipment
Manufacturing &
other equipment
Total
Cost
Balance as at December 31, 2022
$
7,796 $
29,271 $
5,121 $
319 $
42,507
Acquisition of VCI (Note 4 (b))
—
49
162
—
211
Additions
1,463
4,536
3,530
162
9,691
Disposals
(4,809)
(6,198)
(178)
(290)
(11,475)
Balance as at December 31, 2023
4,450
27,658
8,635
191
40,934
Acquisition of CMI (Note 4 (a))
—
—
—
38
38
Additions
1,440
5,639
4,779
115
11,973
Disposals(2)
(1,805)
(21,837)
(464)
(141)
(24,247)
Foreign currency translation(1)
—
5
20
—
25
Balance as at December 31, 2024
$
4,085 $
11,465 $
12,970 $
203 $
28,723
Accumulated depreciation
Balance as at December 31, 2022
$
4,256 $
12,646 $
1,999 $
243 $
19,144
Depreciation
3,350
4,832
1,610
75
9,867
Disposals
(4,809)
(6,198)
(150)
(290)
(11,447)
Balance as at December 31, 2023
2,797
11,280
3,459
28
17,564
Depreciation
1,673
2,713
2,478
92
6,956
Disposals(2)
(1,805)
(10,111)
(210)
(55)
(12,181)
Foreign currency translation(1)
—
—
—
5
5
Balance as at December 31, 2024
$
2,665 $
3,882 $
5,727 $
70 $
12,344
Net book value
Balance as at December 31, 2023
$
1,653 $
16,378 $
5,176 $
163 $
23,370
Balance as at December 31, 2024
$
1,420 $
7,583 $
7,243 $
133 $
16,379
(1) Foreign currency translation relates to the assets held in Dexterra Services LLC and CMI which have a functional currency of USD.
(2) Total disposals include derecognition of assets with a carrying value of $12.0 million as a result of the divestiture of Modular (see Note 5).
(ii)
Lease liabilities
Maturity Analysis – contractual undiscounted cash flows
(000's)
Year 1
$
7,407
Year 2
4,973
Year 3
3,189
Year 4
1,419
Year 5 and beyond
2,818
Total undiscounted lease payable as at December 31, 2024
$
19,806
Lease liabilities included in the statement of financial position at December 31, 2024
$
17,266
Current
6,365
Non-current
10,901
For the year ended December 31, 2024, the Corporation had a $0.1 million lease receivable related to sublet leased equipment
(2023 - $1.1 million). The lease and sub-lease expire in 2025. There were no restrictions or covenants imposed by leases of a
material nature and there were no sale and leaseback transactions.
The lease interest expense recognized for the year ended December 31, 2024 was $1.5 million (2023 - $1.6 million). Of these
amounts, $0.5 million in lease interest expense pertain to discontinued operations for the corresponding periods.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 46
10. Intangible assets and goodwill
Intangible assets at the consolidated statement of financial position date are as follows:
(000’s)
Trade names and
franchise fee
agreements
Customer
Relationships
Computer software
and other
Total
Cost
Balance as at December 31, 2022
$
4,550 $
40,657 $
4,767 $
49,974
Acquisition of VCI (Note 4 (b))
—
1,088
—
1,088
Additions
91
—
5
96
Foreign currency translation(1)
—
(22)
—
(22)
Balance as at December 31, 2023
4,641
41,723
4,772
51,136
Acquisition of CMI (Note 4 (a))
—
12,735
—
12,735
Additions
40
—
—
40
Disposals(2)
(3,801)
(2)
(65)
(3,868)
Foreign currency translation(1)
—
852
—
852
Balance as at December 31, 2024
$
880 $
55,308 $
4,707 $
60,895
Accumulated amortization
Balance as at December 31, 2022
$
1,932 $
9,232 $
3,435 $
14,599
Amortization
902
3,691
956
5,549
Balance as at December 31, 2023
2,834
12,923
4,391
20,148
Amortization
379
4,827
266
5,472
Disposals(2)
(2,443)
(2)
(56)
(2,501)
Foreign currency translation(1)
—
195
—
195
Balance as at December 31, 2024
$
770 $
17,943 $
4,601 $
23,314
Net book value
Balance as at December 31, 2023
$
1,807 $
28,800 $
381 $
30,988
Balance as at December 31, 2024
$
110 $
37,365 $
106 $
37,581
(1) Foreign currency translation relates to the assets held in Dexterra Services LLC and CMI which have a functional currency of USD.
(2) Total disposals include derecognition of assets with a carrying value of $1.4 million as a result of the divestiture of Modular (see Note 5).
Goodwill re-allocation
Subsequent to the annual impairment test, the Corporation realigned its reporting structure to better reflect its continuing
businesses from an operational and external reporting perspective. As a result of the realignment of its segments, the
Corporation has amended its CGUs as follows: Remote & Hospitality Services, Facilities Management, and Asset Based Services.
Goodwill under the Corporation’s new operating segments at the consolidated statement of financial position date is as follows:
(000’s)
December 31, 2024
Goodwill allocated to:
Support Services
Remote & Hospitality Services
$
58,541
Facilities Management
20,565
Asset Based Services
67,651
Balance, end of year
$
146,757
(1) For the year ended December 31, 2023, Goodwill of $95.8 million and $34.6 million was allocated to the Integrated Facilities Management (“IFM”) and Workforce
Accommodations and Forestry (“WAF”) CGUs, respectively.
Goodwill impairment assessment
The Corporation assesses indicators of impairment at the end of each reporting period and performs a detailed impairment test
at least annually. An impairment test was performed as at July 1, 2024 for all CGUs with allocated goodwill, which at that time
comprised of IFM and WAF. No impairment was identified.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 47
The recoverable amount of the CGUs was calculated based on FVLCOD discounted cash flow models. The cash flows are derived
from the Corporation’s forecast, budget, strategy and business plan approved by the Board of Directors. The approved forecast,
budget, strategy and business plan use current and anticipated contracts and market conditions to project revenue. EBITDA is
calculated using historical margins and additional operational factors. The calculation of the FVLCOD discounted cash flow
model 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 12.5% (July 1, 2023 - 14.0%).
•
The revenue growth rates are based on management's internal forecast and projections. Average annual revenue
growth rates for 2025 - 2029 were estimated to be up to 5.0% for WAF and 11.0% for IFM.
•
The long-term growth rate after 5 years used in determining the recoverable amount is 2.5% (July 1, 2023 - 2.5%).
•
EBITDA for the period to 2029 is based on management's internal forecast and projections. EBITDA margins were
projected to exceed 6% for IFM and approximate 12% for WAF.
Sensitivities
The most sensitive inputs to the discounted cash flow model are in the IFM segment and relate to the discount rate, the
revenue growth rate, and EBITDA margins. All else being equal, a 300 basis points decrease in the revenue growth rates (8%), a
100 basis points decrease in EBITDA margin (6.0%), or a 75 basis points increase in the discount rate (13.25%) would, on an
individual basis, result in an immaterial impairment in the IFM CGU.
11. Other assets
Other assets at December 31, 2024 include equity accounted investments in Gitxaala Horizon North Services Limited
Partnership (“Gitxaala”) and Big Spring Lodging Limited Partnership (“BSL LP”). These joint ventures are 49% owned by the
Corporation with a carrying value of $nil (December 31, 2023 - $13.1 million) and $0.8 million (December 31, 2023 - $2.2
million), respectively. During the year ended December 31, 2024, Gitxaala and BSL LP paid cash distributions of $13.1 million
and $1.1 million, respectively (December 31, 2023 - $1.4 million and $0.2 million, respectively) to the Corporation for its share
of cumulative profit. These equity investments represent operations which generate earnings from providing workforce
accommodations, rentals, and maintenance of relocatable structures. In addition to the equity investments, the other assets
include long-term lease receivables of $nil (December 31, 2023 - $1.1 million).
On November 28, 2024, the Corporation signed a new limited partnership agreement with an existing Indigenous partner to
form Cree Horizon Limited Partnership (“Cree Horizon LP”). The Corporation owns 49% of the newly formed partnership. The
Partnership had no activities during the year ended December 31, 2024. Subsequent to year-end, the Corporation contributed
assets to Cree Horizon LP with a carrying value of $1.1 million. The Partnership is accounted for as a joint venture using the
equity method.
12. Loans and borrowings
(000’s)
December 31, 2024
December 31, 2023
Committed credit facility
$
68,723
$
90,904
Unamortized financing costs
(864)
(1,289)
Total borrowings
$
67,859
$
89,615
The credit facility matures on September 7, 2026, has an available limit of $260 million plus an uncommitted accordion of $150
million, and is secured by a $400 million first fixed and floating charge debenture over all assets of the Corporation and its
wholly-owned subsidiaries. The interest rate is calculated on a grid pricing structure based on the Corporation’s debt to EBITDA
ratio. Amounts drawn on the credit facility incur interest at bank prime rate plus 0.50% to 1.75% or the Canadian Overnight
Repo Rate Average (“CORRA”) plus 1.50% to 2.75%. The credit facility has a standby fee on the committed available limit
ranging from 0.30% to 0.55% per annum.
As at December 31, 2024, the Corporation was in compliance with all financial and non-financial covenants related to the credit
facility and had letters of credit outstanding in the amount of $13.0 million (2023 - $16.7 million). For the year ended December
31, 2024, the Corporation incurred finance costs relating to the loans and borrowings of $11.2 million (2023 - $12.2 million).
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 48
13. Asset retirement obligations
Provisions include constructive site restoration obligations for corporation owned camp projects to restore lands to previous
condition when camp facilities are dismantled and removed.
(000’s)
December 31, 2024
December 31, 2023
Balance, beginning of year
$
6,354 $
11,642
Asset retirement obligations settled
(1,078)
(6,299)
Change in estimate
(43)
642
Accretion of provisions
184
369
Balance, end of year
$
5,417 $
6,354
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 Corporation has estimated the net present value of
its asset retirement obligation at December 31, 2024 to be $5.4 million (December 31, 2023 - $6.4 million). The Corporation
used an average risk free interest rate of 3.01% and an inflation rate of 1.47% (December 31, 2023 - 3.88% and 1.72%,
respectively) to calculate the net present value of its asset retirement obligations as at December 31, 2024. 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 up to 2028.
(000’s)
December 31, 2024
December 31, 2023
Current
$
4,831 $
3,768
Non-current
586
2,586
Balance, end of year
$
5,417 $
6,354
14. Share capital
(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, of which no preferred shares are outstanding. The number of common
shares and share capital are presented in the table below:
(In 000's, other than number of shares)
Total number of
shares
Total share capital
Balance, December 31, 2022
65,241,628 $
233,968
Shares purchased and cancelled
(855,100)
(3,070)
Options exercised
40,001
173
Balance, December 31, 2023
64,426,529
231,071
Shares purchased and cancelled
(1,177,100)
(4,525)
Options exercised
15,000
64
Balance, December 31, 2024
63,264,429 $
226,610
On May 15, 2023, Dexterra commenced a Normal Course Issuer Bid (“NCIB”) under which the Corporation can purchase up to a
maximum of 1,300,000 shares over the period to May 14, 2024, subject to certain restrictions under the securities laws. The
Corporation had purchased and cancelled 1,134,400 common shares under this NCIB. On May 23, 2024, the Corporation
renewed the NCIB program permitting the purchase of the remaining 165,600 common shares not purchased under the
previous NCIB. The Corporation subsequently amended the NCIB program, increasing the maximum number of common shares
that the Corporation can repurchase to 3,207,361 of Dexterra’s issued and outstanding common shares up to May 22, 2025.
For the year ended December 31, 2024, the Corporation purchased and cancelled 1,177,100 common shares (December 31,
2023 - 855,100 common shares) at a weighted average price of $6.72 per share (December 31, 2023 - $5.73 per share) for a
total consideration of $7.9 million (December 31, 2023 - $4.9 million). As at December 31, 2024, the Corporation had
cumulatively purchased and cancelled 2,032,200 common shares under the NCIB program at a weighted average share price of
$6.30 and total consideration of $12.8 million.
The shares purchased and cancelled are accounted for as a reduction in the Corporation’s equity. No gain or loss is recognized
in the consolidated statement of comprehensive income on the purchase and cancellation of treasury shares under the terms of
the NCIB. The total consideration paid includes any commissions or fees which are recognized directly in equity.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 49
(b) Long-term incentive plans
(i) Share option plan
Outstanding options
Weighted average
exercise price
Balance, December 31, 2022
1,632,000 $
5.90
Granted
841,615
5.35
Exercised
(40,001)
3.05
Forfeited
(246,956)
6.52
Balance, December 31, 2023
2,186,658
5.67
Granted
1,122,127
5.84
Exercised
(15,000)
3.05
Forfeited
(126,113)
6.02
Balance, December 31, 2024
3,167,672 $
5.73
The exercise prices for options outstanding and exercisable at December 31, 2024 were as follows:
Total options outstanding
Exercisable options
Exercise price per share
Number
Weighted average
exercise price per
share
Weighted average
remaining
contractual life in
years
Number
Weighted average
exercise price per
share
$3.05 to $5.95
2,362,673 $
5.14
3.0
760,770 $
3.98
$5.96 to $6.53
417,751
6.49
1.0
417,751
6.49
$6.54 to $8.50
387,248
8.48
2.0
258,158
8.48
3,167,672 $
5.73
2.6
1,436,679 $
5.52
The exercise prices for options outstanding and exercisable at December 31, 2023 were as follows:
Total options outstanding
Exercisable options
Exercise price per share
Number
Weighted average
exercise price per
share
Weighted average
remaining
contractual life in
years
Number
Weighted average
exercise price per
share
$3.05 to $5.95
1,315,776 $
4.52
3.0
525,075 $
3.21
$5.96 to $6.53
456,843
6.48
2.1
312,585
6.48
$6.54 to $8.50
414,039
8.45
3.0
138,003
8.45
2,186,658 $
5.67
2.8
975,663 $
5.00
The Corporation calculated the fair value of the share options granted using the Black-Scholes pricing model at the date of
grant. The weighted average fair value of all options granted during the year and the assumptions used in their determination
are as follows:
December 31, 2024
December 31, 2023
Fair value per option
$1.07
$1.46
Forfeiture rate
9.58 %
9.15 %
Grant price
$5.84
$5.35
Expected life
3.0 years
3.0 years
Risk free interest rate
3.78 %
3.74 %
Dividend yield rate
6.03 %
6.65 %
Volatility
35.85 %
54.94 %
For the year ended December 31, 2024, share based compensation for share options included in net earnings amounted to $1.1
million (2023 - $1.1 million). Subsequent to year-end, the Corporation issued 1,043,702 share options under the plan with an
exercise price of $7.71 per share, and participants of the plan exercised 33,334 share options at a weighted average exercise
price of $3.05 per share.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 50
(ii) RSU and PSU incentive award plan (“RSU Plan” and “PSU Plan”, respectively)
(a) RSUs
The Corporation has a RSU Plan whereby RSUs 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. RSUs were granted to members of the Board of Directors, as well as officers and key employees.
The following table summarizes the RSU’s outstanding:
December 31, 2024
December 31, 2023
Units outstanding, beginning of year
134,491
40,621
Granted
230,312
117,473
Vested and exercised
(51,285)
(16,759)
Forfeited
(4,466)
(6,844)
Units outstanding, end of year
309,052
134,491
As at December 31, 2024, trade and other payables and other long term liabilities included $0.9 million and $0.7 million,
respectively, for outstanding RSUs (2023 - $0.5 million and $nil, respectively). For the year ended December 31, 2024, share
based compensation for RSUs included in net earnings amounted to $1.4 million (2023 - $0.4 million).
(b) PSUs
The Corporation has a PSU Plan whereby PSUs may be granted, subject to certain terms and conditions.
Under the terms of the PSU Plan, the awarded units vest no later than 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. 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. The PSUs have been
issued to the Corporation’s officers and key employees and will be settled in cash upon vesting, if the performance criteria are
met.
The following table summarizes the PSU’s outstanding:
December 31, 2024
December 31, 2023
Units outstanding, beginning of year
867,524
519,129
Granted
406,843
492,013
Forfeited and expired
(251,698)
(143,618)
Units outstanding, end of year
1,022,669
867,524
As at December 31, 2024, other long term liabilities included $3.0 million for outstanding PSUs (December 31, 2023 - $0.9
million). For the year ended December 31, 2024, share based compensation for PSUs included in net earnings amounted to $2.1
million (2023 - $0.3 million).
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 51
15. Revenue
Contract balances
The following table provides information about contract assets and contract liabilities from contracts with customers:
(000's)
December 31, 2024
December 31, 2023
Contract assets, which are included in total trade and accrued trade receivables
$
6,208 $
45,548
Contract liabilities, which are included in deferred revenue
7,884
10,618
The contract assets relate to the Corporation's rights for work completed but not billed at the reporting date, and are included
in total trade and accrued trade receivables. The contract assets are transferred to trade receivables when the rights become
unconditional. This usually occurs when the Corporation completes a construction milestone under the agreed upon contract.
Accrued trade receivables and deferred trade receivables as at December 31, 2023 include Modular balances of $16.6 million
and $13.7 million, respectively. Contract assets are generally due within three to six months of services being completed. The
deferred revenue is comprised of contract liabilities which mainly relate to payments received from customers, and for which
revenue is recognized over time and is excluded from revenue from operations.
The amount of $10.6 million recognized in contract liabilities at the beginning of the year has been recognized as revenue for
the year ended December 31, 2024 (2023 - $10.7 million).
As the Corporation’s 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, 2024.
16. Direct costs
Years ended December 31,
(000's)
2024
2023
Wages and benefits
$
405,321 $
378,026
Subcontracting
134,059
85,419
Product cost
189,578
198,386
Equipment and repairs
11,998
11,058
Transportation and travel
21,606
20,177
Partnership profit sharing
14,108
18,313
Utilities and occupancy costs
33,405
40,115
Other operating expenses
32,927
35,258
Direct costs related to continuing operations
843,001
786,752
Direct costs related to discontinued operations (Note 5)
85,179
190,276
Total direct costs
$
928,180 $
977,028
17. Selling, general and administrative expenses
Years ended December 31,
(000's)
2024
2023
Wages and benefits(1)
$
34,679 $
27,347
Other selling and administrative expenses
18,840
14,794
Selling, general and administrative expenses related to continuing operations
53,519
42,141
Selling, general and administrative expenses related to discontinued operations (Note 5)
6,975
5,292
Total selling, general and administrative expenses
$
60,494 $
47,433
(1) Wages and benefits for the year ended December 31, 2024 include CEO & CFO transition costs of $nil (2023 - $1.9 million).
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 52
18. Income taxes
For the year ended December 31, 2024, the Corporation's effective income tax rate was 30%, compared to 25% in 2023. The
provision for income taxes differs from that which would be expected by applying statutory rates as follows:
Years ended December 31,
(000's)
2024
2023
Earnings before income tax
$
53,637
$
47,504
Combined federal and provincial income tax rate
25 %
25 %
Expected income tax expense
13,409
11,876
Non-deductible items
238
298
Changes in tax rates
(609)
(150)
Tax rate differential on certain transactions
874
192
Adjustments related to prior periods
765
(522)
Tax impact of disposition of capital assets
1,239
—
Other items
181
—
Income tax expense
$
16,097
$
11,694
The Corporation has non-capital losses for Canadian tax purposes of $6.9 million at December 31, 2024, (December 31, 2023 -
$54.2 million) available to reduce future taxable income. The Corporation believes that it is probable that the results of future
operations will generate sufficient taxable income to fully utilize these losses before their expiry.
The current and deferred tax expense breakdown is as follows:
Years ended December 31,
Income tax expense (000's):
2024
2023
Current
$
1,671 $
34
Deferred
14,426
11,660
$
16,097 $
11,694
On June 20, 2024, Bill C-69, Budget Implementation Act, 2024, No. 1, became enacted into law. Among other measures, Bill
C-69 included a revised version of Canada's Global Minimum Tax Act, which implements into Canadian domestic law the global
minimum tax under Pillar Two as developed by the Organisation for Economic Co-operation and Development. In general terms,
the global minimum tax is intended to ensure that large multinational enterprises are subject to an effective tax rate of at least
15% on their profits in each jurisdiction in which they operate. In jurisdictions where the effective tax rate is less than 15%, a
top-up tax may be levied. The Corporation has determined it is not subject to the top up tax as a result of this legislation.
19. Cash flow information
The details of the changes in non-cash working capital are as follows, and excludes the opening balance sheet impacts related
to the acquisitions and discontinued operations:
Years ended December 31,
(000's)
2024
2023
Trade and other receivables
$
3,086 $
(2,308)
Inventories
2,170
(3,582)
Prepaid expenses and other
58
(3,119)
Trade and other payables
(12,866)
(3,509)
Deferred revenue
6,377
(1,680)
Change in non-cash working capital, continuing operations
$
(1,175) $
(14,198)
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 53
20. Net earnings per share
A summary of the common shares used in calculating earnings per share is as follows:
Years ended December 31,
2024
2023
Number of common shares, beginning of year
64,426,529
65,241,628
Common shares issued, weighted average
8,770
19,479
Shares cancelled under NCIB, weighted average
(417,960)
(268,496)
Weighted average common shares outstanding - basic
64,017,339
64,992,611
Effect of share purchase options(1)
279,320
228,796
Weighted average common shares outstanding - diluted
64,296,659
65,221,407
(1) The Corporation utilizes the treasury stock method for calculating the dilutive effect of share purchase options when the average market price of the Corporation’s
common stock during the year exceeds the exercise price of the option.
21. Dividends
A dividend of $0.0875 per share ($0.35 annually) was declared for the quarter ended December 31, 2024 and has been accrued
in trade and other payables as at December 31, 2024. The dividend is payable to shareholders of record at the close of business
on December 31, 2024 and was paid on January 15, 2025. Subsequent to December 31, 2024, Dexterra declared a dividend of
$0.0875 per share for shareholders of record at March 31, 2025, to be paid April 15, 2025.
(000's except per share amounts)
2024
2023
Amount per share
Dividend declared
Amount per share
Dividend declared
March 31
$
0.0875 $
5,612 $
0.0875 $
5,708
June 30
0.0875
5,600
0.0875
5,695
September 30
0.0875
5,600
0.0875
5,667
December 31
0.0875
5,536
0.0875
5,638
Total dividends declared
$
0.3500 $
22,348 $
0.3500 $
22,708
22. Reportable segment information
The Corporation’s new operating segments, as described in Note 1, are as follows:
•
Support Services: Comprised of Remote & Hospitality Services and Facilities Management. Remote & Hospitality
Services includes amounts relating to support services previously under WAF, as well as food services previously
under IFM.
•
Asset Based Services: Comprised of Access Solutions & Relocatable Structures (formerly Energy Services) and
workforce structures revenue previously grouped to WAF.
Segmented revenue, operating income (loss), earnings (loss) before income taxes, and total assets for years ended December
31, 2024 and 2023 are as follows:
Year ended December 31, 2024 (000's)
Support Services
Asset Based
Services
Corporate, Other,
and Inter-segment
Eliminations
Total
Revenue(1)
$
811,180 $
191,847 $
— $
1,003,027
Operating expenses:
Direct costs
709,505
131,357
2,139
843,001
Selling, general and administrative expenses
27,739
4,648
21,132
53,519
Depreciation and amortization
11,025
23,414
766
35,205
Share based compensation
466
184
3,907
4,557
Loss (gain) on disposal of property, plant and equipment
18
(372)
—
(354)
Operating income (loss)
62,427
32,616
(27,944)
67,099
Finance costs
(1,014)
(397)
(11,647)
(13,058)
Earnings (loss) from equity investments(2)
193
(597)
—
(404)
Earnings (loss) before income taxes
$
61,606 $
31,622 $
(39,591) $
53,637
Total assets
$
275,876 $
236,500 $
12,514 $
524,890
(1) For the year ended December 31, 2024, revenue from Canadian and U.S. operations were $922.5 million and $80.5 million, respectively. All U.S. revenue was
generated in the Support Services segment.
(2) Earnings (loss) from equity investments for the year ended December 31, 2024 includes equity investment depreciation of $1.0 million in Asset Based Services.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 54
Year ended December 31, 2023 (000's)
Support Services
Asset Based
Services
Discontinued
Operations
Corporate, Other,
and Inter-segment
Eliminations
Total
Revenue(1)(2)
$
734,340 $
192,936 $
— $
500 $
927,776
Operating expenses
Direct costs
664,663
120,367
—
1,722
786,752
Selling, general and administrative expenses(3)
16,782
3,933
—
21,426
42,141
Depreciation and amortization
8,856
24,898
—
1,221
34,975
Share based compensation
213
55
—
1,510
1,778
Loss (gain) on disposal of property, plant and equipment
(171)
(9)
—
1,115
935
Asset impairment(4)
—
2,210
—
—
2,210
Operating income (loss)
43,997
41,482
—
(26,494)
58,985
Finance costs
(870)
(309)
—
(12,259)
(13,438)
Earnings from equity investments(5)
1,310
647
—
—
1,957
Earnings (loss) before income taxes
$
44,437 $
41,820 $
— $
(38,753) $
47,504
Total assets excluding goodwill
$
169,237 $
189,738 $
95,624 $
22,053 $
476,652
Goodwill(6)
—
—
—
—
130,436
Total assets
$
169,237 $
189,738 $
95,624 $
22,053 $
607,088
(1) Corporate results for the year ended December 31, 2023 included revenue in the amount of $0.5 million related to contract restructuring.
(2) For the year ended December 31, 2023, revenue from Canadian and U.S. operations were $914.8 million and $13.0 million, respectively. All U.S. revenue was
generated in the Support Services segment.
(3) Selling, general and administrative expenses for the year ended December 31, 2023 included CEO and CFO transition costs of $1.9 million.
(4) For the year ended December 31, 2023, the Corporation recognized an asset impairment of $2.2 million on excess camp assets which were held for sale.
(5) Earnings from equity investments for the year ended December 31, 2023 includes equity investment depreciation of $1.6 million in Asset Based Services.
(6) Goodwill was allocated to the Corporation’s new CGUs at December 31, 2024. There was no such allocation for the comparative period.
23. 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, trade and other receivables, trade and other payables,
and loans and borrowings. These risk factors include geopolitical risk, credit risk, liquidity risk, and market risk, including interest
rate. The Corporation’s risk management practices include identifying, analyzing and monitoring the risks faced by the
Corporation.
Geopolitical risk
The current transition in the U.S. government and the possibility of protectionist trade and other policies pose risks to the
Canadian economy including the energy and mining sectors. The threat of tariffs and trade restrictions may disrupt supply
chains and reduce market access, while a potential economic downturn could decrease demand for our products and services.
The Corporation is closely monitoring these developments and are prepared to adapt our strategies to mitigate any adverse
effects on our business.
Credit risk
The following shows the aged balances of trade and other receivables:
(000's)
December 31, 2024
December 31, 2023
Trade receivables
Neither impaired nor past due
102,020
132,761
Outstanding 31-60 days
8,267
15,623
Outstanding 61-90 days
8,363
2,885
Outstanding more than 90 days
5,715
11,589
Total trade receivables
124,365
162,858
Accrued trade receivables
22,775
42,406
Other receivables
9,974
8,837
Allowance for expected credit losses
(3,540)
(1,529)
Total trade and other receivables
$
153,574 $
212,572
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 55
As at December 31, 2024, the Corporation provided for expected credit losses in the amount of $3.5 million (2023 - $1.5
million). The provision for expected credit losses is based on an expected credit losses matrix and fluctuates based on the aging
of balances in receivables. The Corporation continues to monitor the recoverability of trade receivables and the impact of
current and expected future credit losses.
The Corporation had no major customer from which it generated greater than 10% of total revenue in 2024 (2023 - none).
Liquidity risk
Liquidity risk is the risk that the Corporation will not be able to meet its financial obligations as they fall due. The Corporation’s
approach to managing liquidity risk is to ensure that it always has sufficient cash and borrowing capacity on its credit facility to
meet its obligations when they become due. Management typically forecasts cash flows for each quarter to identify financing
requirements. These requirements are then addressed through a combination of demand credit facilities and access to capital
markets while maintaining optimal capital structure. The Corporation believes that future cash flows generated by the
operations and access to additional liquidity through capital and banking markets will be adequate to meet its financial
obligations.
The following shows the timing of cash outflows relating to trade and other payables, lease liabilities and loans and borrowings:
December 31, 2024
December 31, 2023
(000's)
Trade and
other payables(1)
Lease liabilities(2)
Loans and
borrowings(3)
Trade and
other payables(1)
Lease liabilities(2)
Loans and
borrowings(3)
Year 1
$
125,864 $
7,407 $
— $
163,588 $
9,337 $
—
Year 2
2,597
4,973
68,723
—
7,520
—
Year 3
1,842
3,189
—
1,643
5,891
90,904
Year 4
—
1,419
—
—
4,970
—
Year 5 and beyond
—
2,818
—
—
3,418
—
$
130,303 $
19,806 $
68,723 $
165,231 $
31,136 $
90,904
(1) Trade and other payables include trade and other payables, other long-term liabilities, contingent consideration and income tax payable.
(2) Lease liabilities include total undiscounted lease payments.
(3) Loans and borrowings include Dexterra’s senior secured revolving term credit facility. The timing and amount of interest payments will fluctuate depending on
balances outstanding and applicable interest rates.
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
financial instruments.
i.
Foreign currency exchange risk
The Corporation’s exposure to foreign currency exchange risk arises from its foreign operations in Dexterra Services
LLC and CMI which have a US functional currency. If the USD exchange rate were to decrease by 1.00%, the impact on
the Corporation’s net earnings and shareholder’s equity would be immaterial. For the remainder of the Corporation’s
operations, there is limited exposure to foreign currency exchange risk as sales and purchases are typically
denominated in CAD.
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 bank
prime rate plus 0.50% to 1.75% or the Canadian Overnight Repo Rate Average (“CORRA”) plus 1.50% to 2.75%. If rates
were to have increased by 1.00%, it is estimated that the Corporation’s net earnings and shareholder’s equity would
have decreased by approximately $1.3 million for the year ended December 31, 2024 (2023 - $1.4 million). This
assumes that the amount and mix of fixed and floating rate debt in the year remains unchanged and that the change
in interest rates is effective from the beginning of the year.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 56
24. Related parties
(000's)
December 31, 2024
December 31, 2023
Joint ventures
Revenue
$
1,080 $
1,399
Management fee
520
625
Included in accounts receivable
1,584
2,421
Joint ventures and affiliates
The Corporation charged $0.5 million (2023 - $0.6 million) in management fees for administrative overhead related to
accounting and management services. As at December 31, 2024, Gitxaala owed $1.0 million (2023 - $2.0 million) in payables to
the Corporation which comprised of flow-through revenue generated from providing catering and workforce accommodation
services to third parties through Gitxaala. The amount is paid to the Corporation as Gitxaala billings to customers are collected.
The Corporation earned revenue of $1.1 million (2023 - $1.4 million) for the year ended December 31, 2024 for catering
services and equipment rentals provided to BSL LP. As at December 31, 2024, BSL LP owed $0.6 million (2023 - $0.4 million) in
payables to the Corporation which are considered to be part of normal course of operations.
Insurance
Dexterra Group has certain property insurance policies with Northbridge. The premiums paid in both years are approximately
$0.3 million annually at normal commercial rates.
Key management personnel
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.
The Corporation has entered into executive employment agreements with certain executive officers that provide for
termination payments. These agreements continue indefinitely until terminated in accordance with the terms thereof and the
base salary payable under the agreements is subject to annual review.
Key management personnel compensation for the year ended December 31, 2024 and 2023 is comprised as follows:
Years ended December 31,
(000's)
2024
2023
Short-term employee benefits
$
5,405 $
4,171
Post-employment benefits
314
203
Termination benefits(1)
390
1,854
Share-based compensation
2,736
1,230
$
8,845 $
7,458
(1) The termination benefits for the year ended December 31, 2023 include CEO & CFO transition costs of $1.9 million (2024 - $nil).
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 57
25. Subsidiaries
Ownership Interest (%)
Subsidiary Name
Country of
Incorporation
December 31, 2024
December 31, 2023
Acden Horizon North Limited Partnership ("Acden")
Canada
49
49
Acho Horizon North Camp Services Limited Partnership (“Acho”)
Canada
49
49
CMI Management LLC (“CMI”)
USA
100
—
Dana Hospitality Limited Partnership (“Dana”)
Canada
100
100
Deninu Kue Horizon North Camp & Catering Limited Partnership ("DKHN")
Canada
49
49
Dexterra Community Initiatives (“DCI”)
Canada
100
100
Dexterra Group USA Inc.
USA
100
100
Dexterra on Demand Inc.(1)
Canada
100
—
Dexterra Services LLC
USA
100
100
Eclipse Camp Solutions Incorporated ("Eclipse")
Canada
40
40
FCPI Dana Investments Inc.(2)
Canada
—
100
Halfway River Horizon North Camp Services Limited Partnership (“HRHN”)
Canada
49
49
HN Pituvvik Camp Services Ltd. (“Pituvvik”)
Canada
49
49
Horizon North Camp & Catering Partnership (“HNCCP”)
Canada
100
100
Horizon North Kapewin Inc. (“Kapewin”)
Canada
49.5
49.5
Kitikmeot Camp Solutions Limited (“Kitikmeot”)
Canada
49
49
Marek Hospitality Inc. (“Marek”)
Canada
100
100
NRB Inc.(3)
Canada
—
100
Pioneer Site Service Ltd. (“Pioneer”)
Canada
100
100
Powerful Group of Companies (“PGC”)(1)
Canada
—
100
Secwepemc Camp & Catering Limited Partnership (“Secwepemc”)
Canada
49
49
Sekui Limited Partnership ("Sekui")
Canada
49
49
Skin Tyee Horizon North Camp Services Limited Partnership ("STHN")
Canada
49
49
Tahltan Horizon North Services Inc. ("Tahltan")
Canada
49
49
Tangmaarvik Inland Camp Services Inc. ("Tangmaarvik")
Canada
49
49
Two Lakes Horizon North Camp Services Limited Partnership (“TLHN”)
Canada
49
49
VCI Controls Inc. (“VCI”)(1)
Canada
—
100
(1) On January 1, 2024, PGC and VCI were amalgamated into one combined entity named Dexterra On Demand Inc.
(2) On January 2, 2024, FCPI Dana Investment Inc. was dissolved.
(3) On December 13, 2024, NRB Inc. was amalgamated with its parent, Dexterra Group Inc..
Special purpose entities
The Corporation has an equity interest in Kitikmeot, Acho, Secwepemc, HRHN, TLHN, Tahltan, Acden, Sekui, Eclipse, DKHN,
STHN, Pituvvik, Kapewin and Tangmaarvik and maintains two out of four or five board of director seats in these SPE with the
remaining voting rights and board of director seats being held by Indigenous partners. Based on an evaluation of the substance
of its relationship with the Corporation and the SPE’s risks and rewards, the Corporation controls these entities. 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 or their assets. The SPE, other than Tangmaarvik, do not have net earnings and have limited assets with the non-flow
through expenses being management fees paid to the partners. Indigenous participation in the governance of these SPE is
required to secure projects in specific regions of Canada.
Notes to the consolidated financial statements
Years ended December 31, 2024 and 2023
Dexterra Group Annual Report 2024 | 58
Sanjay Gomes
President, Facilities Management
Jeff Litchfield
President, Remote & Hospitality
Services
Denise Achonu
Chief Financial Officer
Christos Gazeas
Executive Vice President,
Legal and General Counsel
Cindy G. McArthur
Chief Human Resources Officer
CORPORATE
INFORMATION
Mark Becker
Toronto, Ontario
Mary Garden
Victoria, British Columbia
(1)(2)
David Johnston
Ottawa, Ontario
(2)(3)
Kevin Nabholz
Calgary, Alberta
(2)(3)
Russell Newmark
Inuvik, Northwest Territories
(1)(3)
Tabatha Bull
Toronto, Ontario
Toni Rossi
Toronto, Ontario
Simon Landy
Toronto, Ontario
(1)(3)
R. William McFarland
Chair of the Board
Toronto, Ontario
(1)(2)
Board of Directors
(1) Audit Committee Member
(2) Corporate Governance and Compensation Committee Member
(3) Enterprise Risk Management Committee Member
Mark Becker
Chief Executive Officer
Executive Leadership Team
JD MacCuish
Executive Vice President,
Strategy & Corporate Planning
(1)
Dexterra Group Annual Report 2024 | 59
Auditor
PricewaterhouseCoopers LLP
Toronto, Ontario
Transfer Agent
TSX Trust Company (Canada)
1 Toronto Street, Suite 1200
Toronto, Ontario M5C 2V6
Annual Meeting of Shareholders
Wednesday, May 7, 2025 at 10:00 a.m. EST
Live Webcast: https://web.lumiconnect.com/223882189
Head Office
5925 Airport Road, Suite 1000
Mississauga, Ontario L4V 1W1
Stock Exchange Listing
Toronto Stock Exchange
Symbol: DXT
Website
dexterra.com
1-866-305-6565 | dexterra.com | TSX: DXT
We’ve been serving North American 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.