August 11, 2020
Horizon North Logistics Inc. Announces Results for the Second Quarter Ended June 30, 2020

TORONTO, ONTARIO, August 11, 2020 – TSX Symbol: HNL

Horizon North Logistics Inc. (“Horizon North” or the “Corporation”) reported its financial and operating results for the three and six months ended June 30, 2020 and 2019. In addition, Horizon North announced a quarterly dividend of $0.075 per common share which will be paid on October 15, 2020 to shareholders of record on September 30, 2020. The dividend is an “eligible dividend” in accordance with the income tax act of Canada.


  • Merger with Dexterra (the “Acquisition”) closed May 29, 2020 and treated as a Reverse Take Over;
  • Revenue of $76.1 million and EBITDA of $22.9 million, including transaction costs of $0.4 million;
  • Net earnings of $47.4 million including a Bargain purchase gain of $34.1 million and Adjusted EPS of $0.06;
  • EBITDA was positively impacted by $18.4 million of Canada Emergency Wage Subsidies;
  • Achieved cost synergies that will save $18.0 million annualized and $14.0 million in 2020;
  • New committed credit facility of $175 million closed June 30, 2020;
  • Net debt reduced from $138 million to $124 million since the merger, targeting under $100 million at year end;
  • Reinstatement of the quarterly Dividend at $0.075 per share;
  • Share consolidation occurred on a 5 for 1 basis to start trading on July 16, 2020;


The merger of Dexterra and Horizon North, which was completed on May 29, 2020, has created a leading support services company in Canada that offers a range of services in light asset facilities management, workforce accommodations, industrial services and modular construction solutions to a broader base of combined customers across a more diversified industry and geographic platform throughout Canada. The company has significant cross-selling revenue opportunities internally and externally by utilizing Fairfax Financial partner company relationships.

Horizon North had Q2 2020 revenue of $76.1 million and EBITDA of $22.9 million, an increase of $9.6 million and $16.7 million respectively, when compared to Q2 2019. Net earnings increased by $43.6 million when compared with Q2 2019, including a Bargain purchase gain of $34.1 million.

The Corporation significantly improved its leverage and liquidity position through the Acquisition as well as the amended and extended credit facility with increased limit to $175 million. At June 30, 2020 the Corporation had $46.1 million of available liquidity which provides it with improved financial flexibility to enable growth organically and future merger and acquisitions activities. Additionally, the Corporation applied for government support programs for $18.4 million of Canada Emergency Wage Subsidy (“CEWS”) funding in the second quarter of 2020 which helped offset the negative earnings impact of COVID-19. The wage subsidy helped to maintain staffing levels and enhance customer service.


Revenue for Q2 2020 was $76.1 million which was $9.6 million or 14% higher when compared to Q2 2019. The increase is attributable to $26.3 million of revenue from the acquisition of Horizon North, partially offset by the COVID-19 related revenue loss impacts of $16.7 million. The revenue loss has been substantial in Facilities Management, however, Modular Solutions and WAFES revenues remain strong relative to the pandemic impact.


Facilities Management revenues in Q2 2020 were $29.6 million and decreased by $9.2 million or 24% from the $38.8 million in Q2 2019. Facilities Management revenue decreased primarily due to the temporary closure or reduction in operations at certain facilities as a result of COVID-19, mainly in the aviation and retail sectors. This was partially offset by revenue of $2.0 million from the Powerful Group of Companies (“PGC”) which was acquired in November 2019, and realization of new sales secured of $1.9 million.

EBITDA as a percentage of revenue increased to 35% in Q2 2020 from 5% in Q2 2019 due to the inclusion of $9.3 million CEWS in Q2 2020. When adjusting for CEWS, EBITDA margin decreased to 4.0% for Q2 2020 which was mainly associated with increased costs in the healthcare sector and additional costs associated with operating in a COVID-19 environment.

As businesses are expected to reopen in the third quarter of the year, the Corporation expects that its clients will have heightened requirements for cleaning, disinfecting and building maintenance services and Horizon North should be well positioned to support these expanded requirements. While the Corporation reduced its variable cost structure to align with the expected lower revenue, the Corporation cannot accurately predict the extent to which COVID-19 will impact its operations.


The Modular Solutions business was part of the Acquisition of Horizon North which closed on May 29, 2020. Modular Solutions segment revenues for Q2 2020 and the first six months of 2020 were $11.0 million, reflecting revenues generated since the Acquisition primarily focused on social and affordable housing, industrial projects and portable classrooms.

EBITDA for Q2 2020 and the first six months of 2020 was $2.3 million, which included $1.2 million of CEWS impact. Strong EBITDA reflects the focus on social and affordable housing projects where performance and execution have been strong as well as the positive impact of cost reductions and improved efficiencies in western Canada operations combined with continued strong performance from eastern Canada which has optimized utilization of plant capacity.

The Modular Solutions division is well positioned to benefit from the increased Federal and Provincial support for affordable and social housing through the demonstrated success of the affordable and social housing strategy and execution in Western Canada in combination with the addition of southern Ontario manufacturing capacity. Horizon North will continue to explore opportunities across the pan-Canadian geography to grow the affordable and social housing backlog of projects and has signed a contract with the City of Toronto to design, deliver and install 100 modular units of permanent supportive housing in the first phase of the City of Toronto’s modular pilot initiative. Upon completion, this initiative would see up to 250 modular supportive homes constructed in Toronto and revenue from the first phase of this project is expected to be between $17.0 and $20.0 million.

The Modular Solutions division will focus on affordable and social housing projects and does not expect to build hotels in the foreseeable future. A number of corrective actions including closure of the Aldergrove, British Columbia facility, temporary shutdown of the Calgary facility and significant reductions in overhead costs have been executed. Management expects these changes to improve efficiency and profitability for the Modular Solutions division overall.


WAFES has been deemed an essential service and its revenue performance has been strong in a COVID-19 environment. Revenues from the WAFES segment for Q2 2020 were $36.3 million, an increase of $8.6 million or 31% compared to Q2 2019. The increase in Q2 2020 segment revenues was driven by the Acquisition of Horizon North which added $16.1 million of revenue. When adjusting Q2 2020 revenue to remove the Acquisition related revenue, revenue for WAFES decreased by $7.5 million to $20.2 million. This was primarily due to decreased Workforce accommodations and forestry revenue.

EBITDA as a percentage of revenue increased to 34% in Q2 2020 from 21% in Q2 2019 mainly due to the inclusion of $7.1 million CEWS and Acquisition related EBITDA of $3.5 million. When adjusting for CEWS and the Acquisition, EBITDA as a percentage of revenue is 8% which is a decrease of 13% compared to Q2 2019. This decrease of margin is related to reduced revenues from higher margin firefighting and forestry related services and revenue mix of infrastructure install and catering activities.

Horizon North has a long history and expertise in providing workforce accommodations, hospitality and other services across Canada’s Northern regions. Opportunities within the Northwest Ontario mining and power infrastructure sectors have been captured and we continue to pursue growth opportunities with key clients in terms of their arctic development plans. Horizon North will continue to focus on developing and expanding its capabilities and footprint across Canada’s highly variable and remote Northern regions. A key strength of Horizon North is a national footprint active in the major resource development regions: Alberta, British Columbia, Manitoba, Ontario, Quebec and Nunavut. Horizon North has a long history of operating in this region and strong network of relationships with indigenous communities.

WAFES revenue decline is nominal and is an exceptional performance with the pandemic impact on industrial customers and the complete elimination of wildfire revenues which may be pandemic related. Workforce accommodations new sales have been behind plan primarily due to COVID-19 and market conditions but are expected to pick up Q3 and Q4 of 2020 especially around the mining industry and powerline projects in Central Canada. The Outland Youth Employment program, Horizon North’s community driven initiative that works towards equity and opportunity for Indigenous youth, remains a central component of the Horizon North northern business plan as it allows Horizon North to expand relationships with Indigenous stakeholders which are critical to its collective success.


Operating cash flow before net change in non-cash working capital was $22.8 million in the second quarter of 2020 while working capital used $15.0 million of cash. Consequently, net cash provided by operations was $7.8 million in the quarter. This cash flow was more than sufficient to fund $1.4 million of finance costs and $0.6 million of capital expenditures.

The Corporation’s financial position and liquidity remain strong. The Corporation has generated Free Cash Flow of $17.7 million in the first half of 2020. In future quarters, principal sources of liquidity include generated Free Cash Flow plus non-recurring cash receipts received in Q3 2020 from litigation proceeds of $7.6 million and the June CEWS claim received in July of $10.5 million. Additionally the Corporation deferred any further spending on the Fairfield by Marriott hotel in Kitimat, British Columbia while actively searching for a buyer, consistent with the capital light strategy of the new combined entity, and are actively looking to dispose of idle or under utilized assets across its operating segments. As at June 30, 2020, the Corporation was in compliance with all financial and non-financial covenants related to the credit facility.


A copy of the Corporation’s condensed consolidated interim financial statements for the three and six months ended June 30, 2020 and 2019 and related Management’s Discussion and Analysis (“MD&A”) have been filed with the Canadian securities regulatory authorities and are available on SEDAR at and The condensed consolidated interim financial statements have been prepared in accordance with International Financial Reporting Standards and the reporting currency is in Canadian dollars.


In this press release Horizon North uses non-GAAP measures including “EBITDA”, calculated as earnings before interest, taxes, depreciation, amortization, share based compensation, bargain purchase gain and gain/loss on disposal of property, plant and equipment, “Adjusted EBITDA”, calculated as EBITDA before transaction costs, “EBITDA as a % of revenue”, calculated as EBITDA divided by revenue, “Adjusted Earnings Per Share”, calculated as net earnings less the bargain purchase gain divided by the weighted average number of shares outstanding, and “Free Cash Flow”, calculated as net cash flows from (used in) operating activities, less changes in non-cash working capital for investing activities, capital expenditures, payments for lease liabilities and finance costs, to provide investors with supplemental measures of Horizon North’s operating performance and thus highlight trends in its core businesses that may not otherwise be apparent when relying solely on GAAP financial measures. Horizon North also believes that securities analysts, investors and other interested parties frequently use non-GAAP measures in the evaluation of issuers. Horizon North’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.

Certain measures in this press release do not have any standardized meaning as prescribed by generally accepted accounting principles (“GAAP”) and, therefore, are considered non-GAAP measures. These measures are regularly reviewed by the Chief Operating Decision Maker and provide investors with an alternative method for assessing the Corporation’s operating results in a manner that is focused on the performance of the Corporation’s ongoing operations and to provide a more consistent basis for comparison between periods. These measures should not be construed as alternatives to net earnings and total comprehensive income determined in accordance with GAAP as an indicator of the Corporation’s performance. The method of calculating these measures may differ from other entities and accordingly, may not be comparable to measures used by other entities. For a reconciliation of these non-GAAP measures to their nearest measure under GAAP please refer to “Reconciliation of non-GAAP measures” in the MD&A.


Certain statements contained in this press release may constitute forward-looking information within the meaning of securities laws. Forward-looking information may relate to Horizon North’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 Horizon North’s future operating results and economic performance and its objectives and strategies are forward-looking statements. These statements are based on certain factors and assumptions, including expected growth, results of operations, performance and business prospects and opportunities regarding Horizon North, which Horizon North believes are reasonable as of the current date. While management considers these assumptions to be reasonable based on information currently available to Horizon North, they may prove to be incorrect. Forward-looking information is also subject to certain factors that could cause actual results to differ materially from what Horizon North currently expects.

The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. While management may elect to, Horizon North is under no obligation and does not undertake to update or alter this information at any time, except as may be required by law.


Horizon North will host a conference call and webcast to begin promptly at 10:00 Eastern time on August 12, 2020 to discuss Horizon North’s second quarter results.

To access the conference call by telephone the conference call dial in number is 1-888-231-8191

A live webcast of the conference call will be accessible on Horizon’s website at by selecting the webcast link on the home page. A PowerPoint presentation will be posted on Horizon’s website at on August 11, 2020 to be reviewed on the conference call.

An archived recording of the conference call will be available approximately one hour after the completion of the call until August 26, 2020 by dialing 1-855-859-2056 or 416-849-0833, passcode 8497374.


Horizon North is a publicly listed corporation (TSX: HNL) operating a pan-Canadian support services platform across eleven provinces and territories and diversified end markets.

Our Modular Solutions business integrates modern design concepts with off-site manufacturing processes to produce highquality building solutions for commercial, residential and industrial clients. Our Facilities Management business delivers operation and maintenance solutions for built assets and infrastructure in the public and private sectors, including aviation, defence and security, retail, healthcare, education and government. Our Workforce Accommodations, Forestry and Energy Services business provides a full range of workforce accommodations solutions, forestry services and access solutions to clients in the energy, mining, forestry and construction sectors among others.

Horizon North has an outstanding record of creating and managing places that play a vital role in the national economy and our local communities. What sets us apart is our expertise in bringing together the right people with the right skills to transform service delivery and improve customers’ experiences.


Additional information related to Horizon North, including the Corporation’s annual information form, press releases, financial statements and management’s discussion and analysis are available on SEDAR at

Drew Knight, CFO
Toronto head office: 5915 Airport Rd., Suite 425 Mississauga, Ontario L4V 1T1
Telephone: (416) 767-1148

You can also visit our website at

Let’s make your place better, together.

Our experts are ready to work with you to discover the best solution for your people and organization.