News Column

Badger Daylighting Ltd. Announces Results for the Six Months Ended June 30, 2014

August 13, 2014

Calgary, Alberta(FSCwire) -

Badger Daylighting Ltd. (the “Company” or “Badger”) is pleased to announce its results for the six months ended June 30, 2014. 

Highlights for the three months ended June 30, 2014:

•Revenues increased by approximately 37 percent to $100.7 million from $73.7 million for the comparable quarter of 2013 due to a 43 percent increase in Canadian revenues and a 30 percent increase in United States revenues. This is the second full quarter in which Fieldtek, acquired in November 2013, has been part of the financial results.  Without Fieldtek, Canadian revenues would have increased by 25 percent.  As a result of the increase in revenues, the Company’s quarterly Adjusted EBITDA increased by 13 percent to $25.1 million for the second quarter of 2014 from $22.3 million in the second quarter of 2013;•Adjusted EBITDA margins were 25 percent for the three months ended June 30, 2014 compared to 29 percent for the three months ended June 30, 2013;•Funds generated from operations increased by 15 percent period-over-period to $19.7 million from $17.1 million in the comparable quarter of 2013;•Adjusted EBITDA margins in Canada decreased to 23 percent from 29 percent for the comparable period of last year due to a combination of factors.   These factors include reduced margins in the western Canadian corporate operations due to slower activity in Northern Alberta and wet weather in Saskatchewan.  Adjusted EBITDA margins in the United States decreased to 27 percent from 31 percent for the comparable period of  last year due to increased costs and investment required for growth, mainly associated with recruiting and training additional people.•Badger had 908 daylighting units at the end of the second quarter of 2014, reflecting the addition of 120 daylighting units to the fleet to date in 2014 (57 units Q1; 63 units Q2) and the retirement of three units.  Of the total, 391 units were operating in Canada and 517 in the United States at quarter-end.  Badger had 330 units in Canada and 377 in the United States for a total of 707 units at June 30, 2013.  The new units were financed from cash generated from operations and existing credit facilities.

Management’s Discussion and Analysis

The following Management’s Discussion and Analysis (MD&A) should be read in conjunction with the attached unaudited interim consolidated financial statements of Badger Daylighting Ltd. (the “Company” or “Badger”).  The interim consolidated financial statements were prepared in accordance with International Financial Reporting Standards (IFRS).  Readers should also refer to the audited consolidated financial statements and MD&A for the year ended December 31, 2013, which along with all previous public filings, including the Company’s Annual Information Form for the year ended December 31, 2013, may be found on SEDAR at www.sedar.com.

All comparative share capital and profit per share amounts have been adjusted for the three for one share split that occurred on January 24, 2014.

This MD&A has been prepared taking into consideration information available to August 12, 2014.

CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING INFORMATION AND STATEMENTS

Certain statements and information contained in this MD&A and other continuous disclosure documents of the Company referenced herein, including statements related to the Company’s capital expenditures, projected growth, view and outlook toward margins, cash dividends, customer pricing, future market opportunities and statements, and information that contain words such as “could”, “should”, “can”, “anticipate”, “expect”, “believe”, “will”, “may” and similar expressions relating to matters that are not historical facts, constitute “forward-looking information” within the meaning of applicable Canadian securities legislation. These statements and information involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements and information. The Company believes the expectations reflected in such forward-looking statements and information are reasonable, but no assurance can be given that these expectations will prove to be correct. Such forward-looking statements and information included in this MD&A should not be unduly relied upon. These forward-looking statements and information speak only as of the date of this MD&A.

In particular, forward-looking information and statements include discussion reflecting the Company’s belief that:

•Internal preparations for anticipated growth in 2014 will be completed;•As long as overall activity in the economy and the oil and natural gas industry remains essentially constant, Badger will be able to continue to grow the business in 2014;•Badger in 2014 can further develop the organization to position itself to be able to handle the planned future growth;•The new locations opened in the United States will provide an increased contribution to cash flows from operations and net profit during 2014;•The current business development initiative will provide Badger with the additional new customers necessary to grow the business in 2014 and the future;•Eastern Canada will continue with steady growth in 2014, driven by activity in the utility and construction segments;•There will be an increase in Western Canada revenue during 2014 due to anticipated project volume and spending in the oil and natural gas sector;•The expectation that Western Canada EBITDA margins will improve during the remainder of 2014; and,•An increase in Company capital will be required to finance the anticipated capital expenditure program.

The forward-looking statements rely on certain expected economic conditions and overall demand for Badger’s services and are based on certain assumptions. The assumptions used to generate forward- looking statements are, among other things, that:

•Badger has the ability to achieve its revenue, net profit and cash flow forecasts for 2014;•There will be long-term demand for hydrovac services from oil refineries, petro-chemical plants, power plants and other large industrial facilities throughout North America;•Badger will maintain relationships with current customers and develop successful relationships with new customers;•The Company will collect customer payments in a timely manner; and•Badger will execute its growth strategy.

Risk factors and other uncertainties that could cause actual results to differ materially from those anticipated in such forward-looking statements include, but are not limited to: price fluctuations for oil and natural gas and related products and services; political and economic conditions; industry competition; Badger’s ability to attract and retain key personnel; the availability of future debt and equity financing; changes in laws or regulations, including taxation and environmental regulations; extreme or unsettled weather patterns; and fluctuations in foreign exchange or interest rates.

Readers are cautioned that the foregoing factors are not exhaustive. Additional information on these and other factors that could affect the Company’s operations and financial results is included in reports on file with securities regulatory authorities in Canada and may be accessed through the SEDAR website (www.sedar.com) or at the Company’s website. The forward-looking statements and information contained in this MD&A are expressly qualified by this cautionary statement. The Company does not undertake any obligation to publicly update or revise any forward-looking statements or information, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws.

NON-IFRS FINANCIAL MEASURES

This MD&A contains references to certain financial measures, including some that do not have any standardized meaning prescribed by IFRS and that may not be comparable to similar measures presented by other corporations or entities. These financial measures are identified and defined below:

“Cash available for growth and dividends” is used by management to supplement cash flow as a measure of operating performance and leverage. The objective of this measure is to calculate the amount available for growth and/or dividends to shareholders. It is defined as funds generated from operations less required debt repayments and maintenance capital expenditures, plus any proceeds received on the disposal of assets.

“EBITDA” is earnings before interest, taxes, depreciation and amortization and is a measure of the Company’s operating profitability and is therefore useful to management and investors. EBITDA provides an indication of the results generated by the Company’s principal business activities prior to how these activities are financed, assets are amortized or the results are taxed in various jurisdictions. EBITDA is calculated from the consolidated statement of comprehensive income as gross profit less selling, general and administrative costs, deferred unit plan costs and unrealized foreign exchange gain/loss. “Adjusted EBITDA” is EBITDA prior to recognizing deferred unit costs and unrealized foreign exchange gain (loss).  They are calculated as follows:

                                               



Three months ended March 31,



Six months ended June 30,  



$ thousands



2014



2013



2014     



2013



Gross profit



30,332



25,580



60,770



48,301



Selling, general and administrative costs



(5,239)



(3,292)



(11,310)



(6,312)



Deferred unit plan



2,522



(1,945)



(4,914)



(3,708)



Unrealized foreign exchange gain



2,407



-



2, 592



-



EBITDA



30,022



20,342



47,138



38,281



Deferred unit plan



(2,522)



1,945



4,914



3,708



Unrealized foreign exchange gain



(2,407)



-



(2,592)



-



Adjusted EBITDA



25,093



22,288



49,460



41,989



“Funded debt” is a measure of Badger’s long-term debt position. Funded debt is long-term debt.

“Funds generated from operations” is used to assist management and investors in analyzing operating performance and leverage. It is not intended to represent operating cash flow or operating profits for the period nor should it be viewed as an alternative to cash flow from operating activities, net profit or other measures of financial performance calculated in accordance with IFRS. Funds generated from operations are derived from the consolidated statement of cash flows and is calculated as follows:



Three months ended June 30,



Six months ended June 30,



$ thousands



2014



2013



2014       



2013



Cash provided by operating activities



27,869



23,025



38,140



27,574



Add (deduct):

Net change in non-cash working capital relating to operating activities



(8,220)



(5,906)



           (3,267)



3,641



Equity-settled share plan settled



in cash



    -



                               -  



Funds generated from operations



19,649



17,119



34,873



31,215



Growth capital expenditures” are capital expenditures that are intended to improve Badger’s efficiency, productivity or overall capacity and thereby allow Badger to expand overall activity and/or access new markets. They generally represent any net additions to the daylighting fleet. Growth capital expenditures exclude acquisitions.

“Maintenance capital expenditures” are any amounts incurred during a reporting period to keep the Company’s daylighting fleet at the same number of units (including costs incurred to extend the operational life of a daylighting unit), plus any other capital expenditures required to maintain the capacities of the existing business. The amount will fluctuate period-to-period depending on the number of units retired from the fleet.

“Net debt” is funded debt less cash and cash equivalents.

Cash available for growth and dividends, EBITDA, Adjusted EBITDA, funded debt, funds generated from operations, growth capital expenditures, maintenance capital expenditures and net debt throughout this document have the meanings set out above.

 

FINANCIAL HIGHLIGHTS



($ thousands, except per share and total shares outstanding information)

  

Three Months Ended June 30

 

Six Months Ended June 30

  

2014

 

2013

 

2014

 

2013



Revenue

 

         100,726

 

           73,658

 

         200,748

 

         142,812

         


EBITDA

 

           30,022

 

           20,343

 

           47,138

 

           38,281

         


Adjusted EBITDA

 

           25,093

 

           22,288

 

           49,460

 

           41,989

         


Profit Before Tax

 

           20,335

 

           14,207

 

           28,721

 

           26,543

         


Income Tax

        


     Expense

 

             5,562

 

             3,597

 

             7,869

 

             6,099



     Deferred

 

                 524

 

             1,238

 

                 873

 

             3,088

         


Net Profit

 

           14,249

 

             9,371

 

           19,979

 

           17,356



Profit per Share - Diluted ($)

 

                0.38

 

                0.25

 

                0.54

 

                0.47

         


Funds Generated from Operations

 

           19,649

 

           17,119

 

           34,873

 

           31,215



Funds from Operations per Share ($)

 

                0.53

 

                0.46

 

                0.94

 

                0.84

         


Maintenance Capital Expenditures

 

                 445

 

             2,505

 

             1,658

 

             3,178

         


Long-term Debt Repayments

 

                    -  

 

                    -  

 

                    -  

 

                    -  

         


Cash Available for Growth & Dividends

 

           19,464

 

           14,744

 

           33,556

 

           29,737

         


Dividends Declared

 

             3,333

 

             3,330

 

             6,666

 

             6,660

         


Growth Capital Expenditures

 

           26,665

 

           16,848

 

           51,510

 

           29,098

         


Total Shares Outstanding (end period)

 

   37,033,893

 

   36,997,893

 

   37,033,893

 

   36,997,893



OVERVIEW

Highlights for the three months ended June 30, 2014:

•Revenues increased by approximately 37 percent to $100.7 million from $73.7 million for the comparable quarter of 2013 due to a 43 percent increase in Canadian revenues and a 30 percent increase in United States revenues. This is the second full quarter in which Fieldtek, acquired in November 2013, has been part of the financial results.  Without Fieldtek, Canadian revenues would have increased by 25 percent.  As a result of the increase in revenues, the Company’s quarterly Adjusted EBITDA increased by 13 percent to $25.1 million for the second quarter of 2014 from $22.3 million in the second quarter of 2013;•Adjusted EBITDA margins were 25 percent for the six months ended June 30, 2014 compared to 29 percent for the six months ended June 30, 2013;•Funds generated from operations increased by 15 percent period-over-period to $19.7 million from $17.1 million in the comparable quarter of 2013;•Adjusted EBITDA margins in Canada decreased to 23 percent from 29 percent for the comparable period of last year due to a combination of factors.   These factors include reduced margins in the western Canadian corporate operations due to slower activity in Northern Alberta and wet weather in Saskatchewan.  Adjusted EBITDA margins in the United States decreased to 27 percent from 31 percent for the comparable period of  last year due to increased costs and investment required for growth, mainly associated with recruiting and training additional people.•Badger had 908 daylighting units at the end of the second quarter of 2014, reflecting the addition of 120 daylighting units to the fleet to date in 2014 and the retirement of three units.  Of the total, 391 units were operating in Canada and 517 in the United States at quarter-end.  Badger had 330 units in Canada and 377 in the United States for a total of 707 units at June 30, 2013.  The new units were financed from cash generated from operations and existing credit facilities.

OUTLOOK

Positives in the quarter;

 

•Growth continued with a 37 percent increase in revenue in the second quarter this year compared to the same quarter last year.  This required a large increase in recruiting and training expenses to secure the employees required to grow the Company.•The net addition of 117 units in the first six months of 2014 was a real achievement for both the Red Deer facility and the Company as a whole, who created the demand for these trucks.  Of interest, 82 of these units went to the US.•Better than expected results in Eastern Canada were due to past investments in the organization, business development efforts, restructuring of the Toronto operation and a good project.

Opportunities for improvement noted;

 

•Western Canada Corporate Operations continued to have reduced margins due to weaker than expected demand in Northern Alberta (mainly Oil Sands related) and wet spring weather in Saskatchewan.  The above factors cannot be controlled by Badger operating personnel.•United States margins and revenue per truck eroded in the second quarter as a result of the huge increase in the added number of trucks, number of new people and associated training costs.  The Company views these people costs as investments for future growth.

Regional Comments;

 

•The U.S. as a whole had a successful quarter in terms of bouncing back after the tough winter and early spring weather plus recruiting numerous staff required to staff and support the new units.  It is clear the organization is feeling some stress due to the rapid growth in the country. Organizational development in the U.S. remains a high priority for Badger.•The U.S. economy has improved which will create more work opportunities for Badger. However, this improvement has made it harder to recruit the required people to handle growth. •Eastern Canada has had a strong year in 2014 and this is forecast to continue for the rest of the year.  Although the economy is a bit slow there seems to be plenty of work for Badger to obtain and complete.  There is one project which has provided good revenue and margin for the Region. •Although Western Canada has been slower than anticipated, Badger believes work will pick up for the rest of the year with the exception of the Oil Sands area of Northern Alberta.  This area is expected to get busy later on in 2014.  Management is committed to improving margins during the rest of the year.•The plant in Red Deer continued to perform meeting all build expectations.  The plan going forward is to slightly reduce the build from 5 units a week to 4 units a week.  This reduction is deemed appropriate to allow the US to focus on improving revenue per truck and to continue to build the organization required to grow the business.

Overall the second quarter of 2014 was satisfactory for Badger given the additional growth achieved in both revenue and fleet size.  The Company's long term focus to continue profitable growth has not changed.  Badger intends to build the organization, grow the customer base, add more hydrovac units and improve business processes.  The outlook for the remainder of the year is positive for Badger given the good market for our services and better weather conditions.

Results of Operations



Revenues

Revenues of $100.7 million for the three months ended June 30, 2014 were 37 percent greater than the

$73.7 million generated during the comparable period in 2013. The increase is attributable to the following:

•Canadian revenues increased by 43 percent from $37.0 million in the second quarter of 2013 to $53.0 million in the second quarter of 2014. Western Canada revenue grew due to improved markets in certain areas and the addition of Fieldtek. Eastern Canada revenue increased due to business development successes and operational improvements; and•United States revenue went from $36.7 million for the three months ended June 30, 2013 to $47.6 million for the three months ended June 30, 2014. Revenues increased by 30 percent quarter-over-quarter. The increase is due to the addition of new areas last year and early this year, enhanced business development efforts that have succeeded in enlarging the customer base, and organizational improvements.

Badger’s average revenue per truck per month during the three months ended June 30, 2014 was $29,947 versus $31,800 for the three months ended June 30, 2013. Badger’s average revenue per truck per month during the six months ended June 30, 2014 was $31,983 versus $32,500 for the six months ended June 30, 2013.

Direct Costs



Direct costs for the quarter ended June 30, 2014 were $70.4 million compared to $48.1 million for the quarter ended June 30, 2013. The increase of 46 percent is less than the 37 percent increase in revenues and is due to increased investments for growth in the United States, discussed below.

Gross Profit



The gross profit percentage was 30 percent for the quarter ended June 30, 2014, down from the 35 percent for the quarter ended June 30, 2013. The Canadian gross profit percentage decreased from 36 percent for the second quarter of 2013 to 30 percent for the most recent quarter due to increased costs which have not yet turned into revenue. In addition, the Oil Sands have experienced lower activity than normal and Saskatchewan activity suffered from their wet weather. United States gross profit percentage decreased from 34 percent for the second quarter of 2013 to 30 percent for the most recent quarter due to increased costs recruiting and training additional personnel required to grow the business.

Depreciation of Property, Plant and Equipment



Depreciation of property, plant and equipment was $8.2 million for the three months ended June 30, 2014, $2.4 million higher than the $5.8 million incurred for the three months ended June 30, 2013, due to the increased number of hydrovac units in the fleet.

Finance Cost



Finance cost was $1.4 million for the quarter ended June 30, 2014 versus $0.4 million for the same quarter in 2013. The higher finance cost was due to having a higher average debt balance as well as moving most of the balance from short-term Bankers’ Acceptance rates to the longer-term Prudential facility with slightly higher interest rates.  Future borrowing will utilize the TD syndicated facility which will bear short-term, Banker Acceptance type rates.

Selling, General and Administrative Expenses



Selling, general and administrative expenses increased by 59 percent to $5.2 million for the quarter ended June 30, 2014 from $3.3 million for the quarter ended June 30, 2013. The main reason for the increase in expenditures was the increase in activity and investment in future growth in Badger’s business. As a percentage of revenues, selling, general and administrative expenses increased to 5.2 percent for the second quarter of 2014 from 4.5 percent for the second quarter of 2013.

Income Taxes



The effective tax rate for the six months ended June 30, 2014 was 30 percent versus 35 percent for the six months ended June 30, 2013. Profit before tax in Canada increased relative to United States  profit before tax, resulting in the decrease in the effective tax rate given that corporate income tax rates are higher in the United States.

Exchange Differences on Translation of Foreign Operations



The exchange differences result from converting the United States balance sheet and profit statement into Canadian currency, as the Canadian dollar strengthened relative to the prior period.

 

Liquidity and Dividends



Funds generated from operations increased to $19.7 million for the quarter ended June 30, 2014 from $17.1 million for the comparable period in 2013 due primarily to increased revenues and EBITDA. The Company uses its cash to pay dividends to shareholders, build additional hydrovac units, invest in maintenance capital expenditures and repay long-term debt.

The Company had working capital of $52.1 million at June 30, 2014 compared to $61.8 million at December 31, 2013 due to the increase in trade and other receivables.

The following table outlines the cash available to fund growth and pay dividends to shareholders for the three and six months ended June 30, 2014:

   

Three Months Ended

  

Six Months Ended



($)

  

June 30 2014

  

June 30 2014

         


Funds Generated from Operations

   

19,649

   

34,873



Add: proceeds from sale of PP&E

   

260

   

341



Deduct: Long-term Debt Repayment

        


Deduct: Maintenance Capital

   

(445)

   

(1,658)



Cash Available for Growth Capital

   

19,464

   

33,556



       and Dividends

        
         


Growth Capital Expenditures

   

26,665

   

51,510

         


Dividends Declared

   

3,333

   

6,666

         


In determining cash available for dividends, the Company excludes non-cash working capital changes for the period as well as growth capital expenditures. Changes in non-cash working capital items are excluded so as to remove the effects of timing differences in cash receipts and disbursements, which generally reverse themselves and can vary significantly between fiscal periods. Growth capital expenditures are excluded so as to include only the maintenance capital expenditures required to sustain the existing asset base.

The following table outlines the excess of cash provided by operating activities and net profit for the period over dividends declared during the six months ended June 30, 2014 and 2013 and the year ended December 31, 2013:

The following table outlines the excess of cash provided by operating activities and net profit for the period over dividends declared during the six months ended June 30, 2014 and 2013 and the year ended December 31, 2013:



Six months ended June



Six months ended June



Year ended December



($)



30, 2014



30, 2013



31, 2013



Cash provided by operating activities



38,140



27,574



58,403



Net profit



19,979



17,356



40,363



Dividends declared

 

Excess of cash provided by operating activities over

dividends declared



6,666

31,474



6,666

20,915



13,323

45,080



Excess of net profit over dividends declared



13,313



10,696



27,040



The Company pays cash dividends monthly to its shareholders. They may be reduced, increased or suspended by the Board of Directors depending on the operations of Badger and the performance of its assets. The actual cash flow available for dividends to shareholders of Badger is a function of numerous factors, including: the Company’s financial performance; debt covenants and obligations; working capital requirements; maintenance and growth capital expenditure requirements for the purchase of property, plant and equipment; and the number of shares outstanding.

The Company maintains a strong balance sheet. Its debt management strategy includes retaining sufficient funds from available distributable cash to finance maintenance capital expenditures as well as working capital needs. Growth capital expenditures will generally be financed through existing debt facilities, proceeds received from equity financings or cash retained from operating activities. The majority of the cash provided by operating activities in the six months ended June 30, 2014 was used to finance growth capital expenditures and to pay dividends to shareholders.

If maintenance capital expenditures increase in future periods, the Company’s cash available for growth capital expenditures and dividends will be negatively affected. Due to Badger’s growth rate in recent years, the majority of the hydrovac units are relatively new, with an average age of approximately four years. As a result, Badger is incurring relatively low maintenance capital expenditures. Over time, Badger would expect to incur annual maintenance capital expenditures approximately equaling the year’s depreciation expense. Badger estimates it will remove approximately 10 to 15 hydrovac units from the fleet in 2014. Badger expects that cash provided by operations and cash available for growth capital expenditures and dividends will be sufficient to fund its future maintenance capital expenditures.

Badger is restricted from declaring dividends if it is in breach of the covenants under its credit facilities. As at the date of this MD&A the Company is in compliance with all debt covenants and is able to fully utilize its credit facilities as well as declare dividends. Badger does not have a credit rating.

Capital Resources

Investing

The Company spent $27.1 million on property, plant and equipment for the three months ended June 30, 2014 compared to $19.4 million for the three months ended June 30, 2013. The costs to build a hydrovac unit remained consistent with the average for 2013.

Maintenance capital expenditures are incurred during a period to keep the hydrovac fleet at the same number of units plus any other capital expenditures required to maintain the business. This amount will fluctuate period-to-period depending on the number of units retired from the fleet. During the first six months of 2014 only three hydrovac units were removed from the fleet.

Financing

Extendable revolving credit facility

The Corporation has established a $75.0 million extendable revolving credit facility.  The purpose of the credit facility is to finance the Corporation's capital expenditure program and for general corporate purposes. The credit facility bears interest, at the Corporation's option, at either the bank's prime rate (June 30, 2014 – 3.250%) or bankers' acceptance rate plus 1.25% (June 30, 2014 – 2.748%). An additional stand-by fee calculated at an annual rate of 0.25% per annum is also required on the unused portion of the credit facility. This fee is expensed as incurred.

The credit facility has no required principal repayment. The credit facility expires on June 21, 2015 and is renewable by mutual agreement of the Corporation and the lender for an additional 364 day period, after which the entire amount must be repaid. If not renewed, interest is payable monthly on the facility for 364 days after which the entire amount is to be repaid.

The extendable revolving credit facility is collateralized by a general security interest over the Corporation’s assets, property and undertaking, present and future.

Under the terms of the credit facilities, the Corporation must comply with certain financial and non-financial covenants, as defined by the bank. Throughout 2014, and as at June 30, 2014, the Corporation was in compliance with all of these covenants.

As at June 30, 2014, the Corporation has issued letters of credit in the amount of approximately $2.0 million The outstanding letters of credit support the U.S. insurance program and reduce the amount available under the extendable revolving credit facility.

At June 30, 2014, the Corporation had available $59.2 million (December 31, 2013 - $16.3 million) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

After the quarter-closed the Corporation increased and extended this facility through a syndication effort led by TD Bank. Two additional institutions joined the facility, which was increased to $125.0 million with an optional $50.0 million accordion feature. The maturity date was extended to July 22, 2018.

Senior secured notes

On January 24, 2014 Badger closed a private placement of senior secured notes.  The notes, which rank pari passu with the extendable revolving credit facility, have a principal amount of US $75.0 million, and an interest rate of 4.83% per annum and mature on January 24, 2022. The Canadian dollar equivalent on January 24, 2014 was $82.9 million. Amortizing principal repayments of US $25.0 million are due under the notes on January 24, 2020, January 24, 2021 and January 24, 2022.  Interest is paid semi-annually in arrears.

For the six months ended June 30, 2014, Badger recorded an unrealized foreign exchange gain of $2.6 million. This was due to the impact of the change over the period in the value of the Canadian dollar relative to the US dollar on the Corporation’s $75.0 million of US dollar denominated debt

As of June 30, 2013 and the date of this MD&A Badger is in compliance with all financial covenants under both credit facility agreements.

SHARE CAPITAL

Shareholders’ capital increased from $80.6 million at December 31, 2012 to $80.8 million at June 30, 2013 due to certain employees exercising their options. Shares outstanding at June 30, 2013 were 12,332,631. There was no change to the balance as of August 12, 2013.

SELECTED QUARTERLY FINANCIAL INFORMATION



All amounts are  $000's except



2014



2013



2012



Per Share amounts are $'s



Q2



Q1



Q4



Q3



Q2



Q1



Q4



Q3



Revenue



100,726



100,022



92,240



87,542



73,658



69,154



62,249



61,961



Net Profit



14,249



5,730



11,233



11,774



9,371



7,985



7,888



7,902



Net Profit per share - Basic



0.38



0.15



0.30



0.32



0.25



0.22



0.21



0.21



Net Profit per shaare - Diluted



0.38



0.15



0.30



0.32



0.25



0.22



0.21



0.21



CHANGES IN ACCOUNTING POLICIES

The Corporation adopted amendments to IFRS 7, IAS 32, IAS 36, and IFRIC 21 on January 1, 2014. There was no material impact to the Corporation’s interim condensed consolidated financial statements as a result of the adoption of those standards.

ACCOUNTING STANDARDS PENDING ADOPTION



The following are the IFRS pronouncements which have been issued but are not yet effective as at June 30, 2013. The pronouncements may, however, have a future impact on the measurement and/or presentation of the Company’s consolidated financial statements. The pronouncements are as follows:

    •IFRS 9, ‘Financial Instruments’ was issued in November 2009 as the first step in its project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. IFRS 9 introduces new requirements for classifying and measuring financial assets that must be applied starting January 1, 2015, with early adoption permitted. The IASB intends to expand IFRS 9 during the intervening period to add new requirements for classifying and measuring financial liabilities, de-recognition of financial instruments, impairment and hedge accounting. The Company is assessing the impact of this standard on the consolidated financial statements.


CRITICAL ACCOUNTING ESTIMATES

There have been no material changes to critical accounting estimates since December 31, 2012.

 

DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING

 



Disclosure Controls and Procedures

Badger’s President and CEO and its VP Finance and CFO have designed, or caused to be designed under their direct supervision, Badger’s disclosure controls and procedures (as defined by National Instrument 52-109 – Certification of Disclosure in Issuers’ Annual and Interim Filings, adopted by the Canadian Securities Administrators) to provide reasonable assurance that (i) material information relating to Badger, including its consolidated subsidiaries, is made known to them by others within those entities, particularly during the period in which the annual filings are being prepared; and (ii) material information required to be disclosed in the annual filings is recorded, processed, summarized and reported on a timely basis.  Further,  they  have  evaluated,  or  caused  to  be  evaluated  under  their  direct  supervision,  the effectiveness of Badger’s disclosure controls and procedures at June 30, 2014 and have concluded the disclosure controls and procedures are effective.

Internal Control over Financial Reporting



Badger’s President and CEO and its VP Finance and CFO have also designed, or caused to be designed under their direct supervision, Badger’s internal control over financial reporting to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS. Further, using the criteria established in Internal Control Integrated Framework published by the Committee of Sponsoring Organizations of the Treadway Commission, they have evaluated, or caused to be evaluated under their direct supervision, the effectiveness of Badger’s internal control over financial reporting at June 30, 2014 and have concluded the internal controls over financial reporting are effective.

Changes in Internal Control over Financial Reporting



In the second quarter of 2014 Management changed its internal control over financial reporting by adding a second review of the tax provision calculation. Previously the CFO calculated the tax provision, but no review was performed. Currently the CFO calculates the tax provision and the result is reviewed by a separate accounting and tax firm. Based on this additional review, the Company has eliminated the previously reported material weakness over internal control.

Inherent Limitations



Notwithstanding the foregoing, because of its inherent limitations a control system can provide only reasonable assurance that the objectives of the control system are met and may not prevent or detect misstatements. Management’s estimates may be incorrect, or assumptions about future events may be incorrect, resulting in varying results. In addition, management has attempted to minimize the likelihood of  fraud.  However,  any  control  system  can  be  circumvented  through  collusion  and  illegal  acts.

BUSINESS RISKS



The MD&A for the year ended December 31, 2013, which was filed on SEDAR, includes an overview of business risks associated with the Company. Those business risks remain. The reader is also referred to Badger’s 2013 Annual Information Form.

Badger is North America’s largest provider of non-destructive excavating services. Badger traditionally works for contractors and facility owners in the utility and petroleum industries. The Company’s key technology is the Badger Hydrovac, which is used primarily for safe digging in congested grounds and challenging conditions. The Badger Hydrovac uses a pressurized water stream to liquefy the soil cover, which is then removed with a powerful vacuum system and deposited into a storage tank. Badger manufactures its truck-mounted hydrovac units.

The Toronto Stock Exchange has neither approved nor disapproved the information contained herein.

For more information regarding this press release, please contact:



Tor Wilson                                                       Gerald Schiefelbein

President and CEO                                           Vice President Finance and CFO

1000, 635 – 8th Avenue SW Calgary,

Alberta T2P 3M3 Telephone 403-264-8500

Fax 403-228-9773

Badger Daylighting Ltd.

Interim Condensed Consolidated Financial Statements (unaudited)

For the period ended June 30, 2014

REVIEW OF INTERIM FINANCIAL STATEMENTS

Under National Instrument 51-102, Part 4, subsection 4.3(3)(a), if an auditor has not performed a review of the interim condensed consolidated financial statements, the statements must be accompanied by a notice indicating that the financial statements have not been reviewed by an auditor.

The accompanying unaudited interim condensed consolidated financial statements of the Corporation have been prepared by Badger Daylighting Ltd. management.

The Corporation’s independent auditor has not performed a review of the accompanying unaudited interim condensed consolidated financial statements in accordance with standards established by the CICA for a review of interim financial statements by an entity’s auditor.

BADGER DAYLIGHTING LTD.

Unaudited Interim Consolidated Statement of Financial Position

(Expressed in thousands of Canadian Dollars)



As at



Notes



June 30, 2014

$



December 31, 2013

$



ASSETS



Current Assets



Cash and cash equivalents



3,347



8,623



Trade and other receivables



89,001



92,115



Prepaid expenses



1,383



1,459



Income taxes receivable



-



-



Inventories



4,461



3,300



98,192



105,497



Non-current Assets



Property, plant and equipment



249,945



211,614



Goodwill and intangible assets



16,149



16,787



266,094



228,401



Total Assets



364,286



333,898



LIABILITIES AND SHAREHOLDERS’ EQUITY



Current Liabilities



Trade and other payables



27,128



23,657



Deferred unit plan liability



6



15,735



13,933



Income taxes payable



2,087



4,952



Dividends payable



1,111



1,111



46,061



43,653



Non-current Liabilities



Long-term debt



4



95,804



82,319



Deferred income tax



38,245



36,857



134,049



119,176



Shareholders’ Equity



Shareholders’ capital



5



80,944



80,944



Contributed surplus



5



548



548



Accumulated other comprehensive income (loss)



5



3,085



3,291



Retained earnings



99,599



86,286



184,176



171,069



Total Liabilities and Shareholders’ Equity



364,286



333,898



The accompanying notes are an integral part of these interim condensed consolidated financial statements.

BADGER DAYLIGHTING LTD.

Unaudited Interim Consolidated Statement of Comprehensive Income

(Expressed in thousands of Canadian Dollars)



For the six months ended



For the three months ended



June 30,



June 30,



June 30,



June 30,



Notes



2014

$



2013

$



2014

$



2013

$



Revenues



7



200,748



142,812



100,726



73,658



Direct costs



139,978



94,511



70,394



48,078



Gross profit



60,770



48,301



30,332



25,580



Depreciation of property, plant and equipment



15,676



11,102



8,108



5,769



Amortization of intangible assets



638



-



319



-



Selling, general and administrative



11,310



6,312



5,239



3,292



Deferred unit plan



4,914



3,708



(2,522)



1,945



Operating profit



28,232



27,179



19,188



14,574



Gain on sale of property, plant and equipment



(216)



(52)



(159)



(23)



Finance cost



2,319



688



1,419



390



Unrealized foreign exchange (gain) loss



(2,592)



-



(2,407)



-



Profit before tax



28,721



26,543



20,335



14,207



Income tax expense



8,742



9,187



6,086



4,836



Net profit for the period



19,979



17,356



14,249



9,371



Other comprehensive income (loss):



Items that may be reclassified subsequently to profit or loss



Exchange differences on translation of foreign operations



(206)



4,146



(4,214)



2,642



Total comprehensive income for the period attributable to shareholders of the Corporation



19,773



21,502



10,035



12,013



Earnings per share



Basic



8



0.54



0.47



0.38



0.25



Diluted



8



0.54



0.47



0.38



0.25

          


The accompanying notes are an integral part of these interim condensed consolidated financial statements.

BADGER DAYLIGHTING LTD.

Unaudited Interim Consolidated Statement of Changes in Equity

(Expressed in thousands of Canadian Dollars)



Shareholders’ capital



Contributed surplus



Accumulated other comprehensive income (loss)



Retained earnings



Total equity



Notes



$



$



$



$



$



As at January 1, 2013



80,640



2,061



(2,239)



59,246



139,708



Net profit for the period



-



-



-



17,356



17,356



Other comprehensive income for the period



-



-



4,146



-



4,146



Share options exercised



5



135



-



-



-



135



Options surrendered for cash



5



-



(1,513)



-



-



(1,513)



Dividends



-



-



-



(6,660)



(6,660)



As at June 30, 2013



80,775



548



1,907



69,942



153,172



As at January 1, 2014



80,944



548



3,291



86,286



171,069



Net profit for the period



-



-



19,979



19,979



Other comprehensive income for the period



-



-



(206)



-



(206)



Dividends



-



-



-



(6,666)



(6,666)



As at June 30, 2014



80,944



548



3,085



99,599



184,176



The accompanying notes are an integral part of these interim condensed consolidated financial statements.

BADGER DAYLIGHTING LTD.

Unaudited Interim Consolidated Statement of Cash Flows

(Expressed in thousands of Canadian Dollars)



For the six months ended



For the three months ended



June 30,



June 30,



June 30,



June 30,



Notes



2014

$



2013

$



2014

$



2013

$



Operating activities



Net profit for the period



19,979



17,356



14,249



9,371



Non-cash adjustments to reconcile profit from operations to net cash flows:



Depreciation of property, plant and equipment



15,676



11,102



8,108



5,769



Amortization of intangible assets



638



-



319



-



Deferred income tax



873



3,088



524



1,239



Equity-settled share plan settled in cash



5



-



(1,513)



-



-



Gain on sale of property plant and equipment



(216)



(52)



(159)



(23)



Unrealized foreign exchange (gain) loss



(2,592)



-



(2,407)



-



Unrealized foreign exchange (gain) loss on deferred tax



515



1,234



(985)



763



34,873



31,215



19,649



17,119



Net change in non-cash working capital relating to operating activities



3,267



(3,641)



8,220



5,906



Net cash flows from operating activities



38,140



27,574



27,869



23,025



Investing activities



Purchase of property, plant and equipment



(53,168)



(32,276)



(27,110)



(19,353)



Purchase of intangible assets



-



(2,555)



-



(2,555)



Proceeds from sale of property, plant and equipment



341



187



260



130



Net cash flows used in investing activities



(52,827)



(34,644)



(27,438)



(21,778)



Financing activities



Proceeds received on the exercise of share options



135



-



Proceeds from long-term debt



98,989



14,258



3,289



3,575



Repayment of long-term debt



(82,912)



-



-



-



Dividends paid to owners



(6,666)



(6,659)



(3,333)



(3,330)



Net cash flows from financing activities



9,411



7,734



(44)



245



Net (decrease) increase in cash and cash equivalents



(5,276)



664



975



1,492



Cash and cash equivalents, beginning of period



8,623



2,460



2,372



1,632



Cash and cash equivalents, end of period



3,347



3,124



3,347



3,124



Supplemental cash flow information:



Interest paid



2,319



688



1,419



390



Income tax paid



10,513



7,443



2,055



2,657



The accompanying notes are an integral part of these interim condensed consolidated financial statements.

BADGER DAYLIGHTING LTD.

Notes to the Interim Condensed Consolidated Financial Statements

Six months ended June 30, 2014

(Unaudited – Expressed in thousands of Canadian Dollars unless stated otherwise)

1    Incorporation and Operations



Badger Daylighting Ltd. and its subsidiaries (together “Badger” or the “Corporation”) provide non-destructive excavating services to the utility, transportation, industrial, engineering, construction and petroleum industries in Canada and the United States. Badger is a publicly traded corporation. The address of the registered office is 1000, 635 – 8th Avenue SW, Calgary, Alberta T2P 3M3.

The interim condensed consolidated financial statements of the Corporation for the period ended June 30, 2014 were authorised for issue in accordance with a resolution of the directors on August 12, 2014.

All current and comparative share capital and profit per share amounts have been adjusted to reflect the three-for-one share split that was completed in January 2014.



2    Basis of Preparation



Statement of compliance

These interim consolidated financial statements have been prepared in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34") as issued by the International Accounting Standards Board ("IASB").

The interim condensed consolidated financial statements should be read in conjunction with the Corporation’s annual consolidated financial statements for the year ended December 31, 2013, as well as the Corporation’s interim consolidated financial statements for the period ended March 31, 2014.

Basis of measurement

These consolidated financial statements have been prepared under the historical cost convention.

Functional and presentation currency

These consolidated financial statements are presented in Canadian dollars, which is the Corporation’s functional currency.

 

3    Recent accounting pronouncements



The Corporation adopted amendments to IFRS 7, IAS 32, IAS 36, and IFRIC 21 on January 1, 2014. There was no material impact to the Corporation's interim condensed consolidated financial statements as a result of the adoption of those standards.

The Corporation has reviewed new and revised accounting pronouncements that have been issued but are not yet effective and determined that the following may have an impact on the Corporation:

    •IFRS 9, ‘Financial Instruments’ was issued in November 2009 as the first step in its project to replace IAS 39 ‘Financial Instruments: Recognition and Measurement’. IFRS 9 introduces new requirements for classifying and measuring financial instruments that must be applied starting January 1, 2018, with early adoption permitted. The IASB intends to expand IFRS 9 during the intervening period to add new requirements for classifying and measuring financial liabilities, de-recognition of financial instruments, impairment and hedge accounting. The Corporation will assess the impact of this standard in conjunction with the other phases, when the final standard including all phases is issued.

4    Long-term debt



June 30,

 2014

$



December 31, 2013

$



Extendable revolving credit facility



15,764



82,319



Senior secured notes



80,040



-



95,804



82,319

Extendable revolving credit facility



The Corporation has established a $75,000 extendable revolving credit facility.  The purpose of the credit facility is to finance the Corporation's capital expenditure program and for general corporate purposes. The credit facility bears interest, at the Corporation's option, at either the bank's prime rate (June 30, 2014 – 3.25%) or bankers' acceptance rate plus 1.25% (June 30, 2014 – 2.748%). An additional stand-by fee calculated at an annual rate of 0.25% per annum is also required on the unused portion of the credit facility. This fee is expensed as incurred.

The credit facility has no required principal repayment. The credit facility expires on June 21, 2015 and is renewable by mutual agreement of the Corporation and the lender for an additional 364 day period, after which the entire amount must be repaid. If not renewed, interest is payable monthly on the facility for 364 days after which the entire amount is to be repaid.

The extendable revolving credit facility is collateralized by a general security interest over the Corporation’s assets, property and undertaking, present and future.

Under the terms of the credit facilities, the Corporation must comply with certain financial and non-financial covenants, as defined by the bank. Throughout 2014, and as at June 30, 2014, the Corporation was in compliance with all of these covenants.

As at June 30, 2014, the Corporation has issued letters of credit in the amount of approximately $1,180. The outstanding letters of credit reduce the amount available under the extendable revolving credit facility.

At June 30, 2014, the Corporation had available $63,000 (December 31, 2013 - $16,321) of undrawn committed borrowing facilities in respect of which all conditions precedent had been met.

Senior secured notes



On January 24, 2014 Badger closed a private placement of senior secured notes.  The notes, which rank pari passu with the extendable revolving credit facility, have a principal amount of US $75,000, and an interest rate of 4.83% per annum and mature on January 24, 2022. The Canadian dollar equivalent on January 24, 2014 was $82,912. Amortizing principal repayments of US $25,000 are due under the notes on January 24, 2020, January 24, 2021 and January 24, 2022.  Interest is paid semi-annually in arrears.

For the six months ended June 30, 2014, Badger recorded an unrealized foreign exchange gain of $2,592. This was due to the impact of the change over the period in the value of the Canadian dollar relative to the US dollar on the Corporation’s $75,000 of US dollar denominated debt.

5    Shareholders’ capital and reserves

A)Authorized shares



An unlimited number of voting common shares are authorized without nominal or par value.

B)Issued and outstanding



Number of Shares



Amount

$



At December 31, 2012



36,979,893



80,640



Shares issued pursuant to the share option plan



54,000



304



At December 31, 2013 and June 30, 2014



37,033,893



80,944



Share amounts have been restated to reflect the impact of the three-for-one common share split completed in January 2014.

C)Accumulated other comprehensive income (loss)



The accumulated other comprehensive income (loss) is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries.

D)Contributed surplus



The contributed surplus reserve is used to recognise the fair value of share options granted to employees, including key management personnel, as part of their remuneration.



For the six months ended



For the three months ended



June 30,

 2014

$



June 30,

 2013

$



June 30,

 2014

$



June 30,

 2013

$



Opening balance



548



2,061



548



548



Equity-settled share plan settled in cash



-



(1,513)



-



-



Closing balance



548



548



548



548

6    Deferred Unit Plan



The Deferred Unit Plan (“DUP”) was established to reward officers and employees. Directors may also participate in the plan whereby they will be paid 60% to 100% of the annual retainer in the form of deferred units. Pursuant to the terms of the DUP, participants are granted deferred units with a value equivalent to the value of a Badger share. Subsequent to the January 2014 three-for-one common share split, each unit under the plan was amended to provide three units, each with a value of one post-split Badger share. The deferred units granted earn additional deferred units for the dividends that would otherwise have been paid on the deferred units as if they instead had been issued as Badger shares on the date of the grant. The deferred units granted other than to the directors, which vest immediately, vest equally over a period of three years from the date of the grant. Upon vesting, the participant may elect to redeem the deferred units for an equal number of Badger shares or the cash equivalent.

The DUP has been accounted for as a cash-settled plan. The compensation expense is based on the estimated fair value of the deferred units outstanding at the end of each quarter (share price $  June 30, 2014; share price $28.42 December 31, 2013) and recognized using graded vesting throughout the term of the vesting period, with a corresponding credit to liabilities.

The liability of deferred units outstanding as at June 30, 2014 is $15,735 (December 31, 2013 - $13,933). The fair value of deferred units exercisable as at June 30, 2014 is $14,201 (December 31, 2013 - $10,799). Changes in the number of deferred units under the Badger DUP were as follows:



Units



At December 31, 2012



498,375



Granted



101,550



Dividends earned



14,418



Redeemed



(34,002)



Forfeited



(13,323)



At December 31, 2013



567,018



Granted



40,415



Dividends earned



2,532



Redeemed



(90,178)



Forfeited



(4,451)



At June 30, 2014



515,426



Exercisable at June 30, 2014



 403,323

 

7    Revenues



For the six months ended



For the three months ended



June 30, 2014 $



June 30, 2013

$



June 30, 2014

$



June 30, 2013

$



Rendering of services



199,522



141,868



100,234



73,156



Truck placement fees



1,226



944



492



502



200,748



142,812



100,726



73,658

8    Earnings per share



Basic earnings per share (“EPS”)

Basic EPS is calculated by dividing profit or loss attributable to ordinary equity holders (the numerator) by the weighted average number of ordinary shares outstanding (the denominator) during the period. The denominator is calculated by adjusting the shares in issue at the beginning of the period by the number of shares bought back or issued during the period, multiplied by a time-weighting factor. Earnings per share and share amounts have been retroactively restated to reflect the three-for-one share split completed in January 2014.

The calculation of basic earnings per share for the six months ended June 30, 2014, was based on the net profit available to common shareholders of $19,979 (2013 - $17,356), and a weighted average number of common shares outstanding of 37,033,893 (2013 – 36,996,402).

The calculation of basic earnings per share for the three months ended June 30, 2014, was based on the net profit available to common shareholders of $14,249 (2013 - $9,371), and a weighted average number of common shares outstanding of 37,033,893 (2013 – 36,997,893).

The weighted average number of common shares is calculated as follows:

  

For the six months ended



For the three months ended



30-Jun-14



30-Jun-13



30-Jun-14



30-Jun-13



Issued common shares outstanding, beginning of period

 

37,033,893



36,979,893



37,033,893



37,033,893



Effect of share options exercised

 

-



16,509



-



-



Weighted average number of common shares, end of period

 

37,033,893



36,996,402



37,033,893



37,033,893



Diluted EPS

Diluted EPS is calculated by adjusting the earnings and number of shares for the effects of dilutive options and other dilutive potential shares. The effects of anti-dilutive potential shares are ignored in calculating diluted EPS. All options are considered anti-dilutive when the Corporation is in a loss position. Diluted earnings per share and share amounts have been retroactively restated to reflect the three-for-one share split completed in January 2014.

The calculation of diluted earnings per share for the six months ended June 30, 2014, was based on a weighted average number of common shares outstanding after adjustment for the effects of all dilutive potential common shares of 37,033,893 (2013 – 37,020,291).

The calculation of diluted earnings per share for the three months ended June 30, 2014, was based on a weighted average number of common shares outstanding after adjustment for the effects of all dilutive potential common shares of 37,033,893 (2013 – 37,022,760).

The weighted average number of dilutive potential common shares is calculated as follows:

  

For the six months ended



For the three months ended



30-Jun-14



30-Jun-13



30-Jun-14



30-Jun-13



Weighted average number of common shares (basic)

 

37,033,893



36,996,402



37,033,893



36,997,893



Effect of share options

 

-



23,899



-



24,867



Weighted average number of common shares (diluted)

 

37,033,893



37,020,291



37,033,893



37,022,760

9    Segment reporting



The Corporation operates in two geographic/reportable segments providing non-destructive excavating services to each of these segments. The following is selected information for the periods ended June 30, 2014 and 2013 based on these geographic segments.



For six months ended:



June 30, 2014



June 30, 2013



Canada ($)



U.S. ($)



Total ($)



Canada ($)



U.S. ($)



Total ($)



Revenues



109,092



91,656



200,748



76,363



66,449



142,812



Direct costs



74,758



65,220



139,978



48,968



45,543



94,511



Depreciation of property, plant and equipment



7,068



8,608



15,676



5,338



5,764



11,102



Amortization of intangible assets



638



-



638



-



-



-



Selling, general and administrative



8,626



2,684



11,310



4,796



1,516



6,312



Deferred unit plan



4,914



-



4,914



3,708



-



3,708



Profit before tax



13,620



15,101



28,721



12,971



13,572



26,543



For three months ended:



June 30, 2014



June 30, 2013



Canada ($)



U.S. ($)



Total ($)



Canada ($)



U.S. ($)



Total ($)



Revenues



53,050



47,676



100,726



36,965



36,693



73,658



Direct costs



36,963



33,431



70,394



23,705



24,373



48,078



Depreciation of property, plant and equipment



3,633



4,475



8,108



2,725



3,044



5,769



Amortization of intangible assets



319



-



319



-



-



-



Selling, general and administrative



3,918



1,321



5,239



2,440



852



3,292



Deferred unit plan



(2,522)



(2,522)



1,945



-



1,945



Profit before tax



11,891



8,444



20,335



5,808



8,399



14,207



Selected Consolidated Statement of Financial Position Information



Canada ($)



U.S. ($)



Total ($)



As at June 30, 2014



Property, plant and equipment



122,104



127,841



249,945



Intangible assets



16,149



-



16,149



Total assets



193,255



171,031



364,286



As at December 31, 2013



Property, plant and equipment



103,740



107,874



211,614



Intangible assets



16,787



-



16,787



Total assets



178,703



155,195



333,898



Selected Consolidated Statement of Cash Flows Information



For six months ended:



June 30, 2014



June 30, 2013



Canada ($)



U.S. ($)



Total ($)



Canada ($)



U.S. ($)



Total ($)



Additions to non-current assets:



Property, plant and equipment



25,465



27,703



53,168



11,536



20,740



32,276



Intangible assets



-



-



-



2,555



-



2,555



For three months ended:



June 30, 2014



June 30, 2013



Canada ($)



U.S. ($)



Total ($)



Canada ($)



U.S. ($)



Total ($)



Additions to non-current assets:



Property, plant and equipment



13,287



13,823



27,110



7,519



11,834



19,353



Intangible assets



-



-



-



2,555



-



2,555

         

10 Subsidiaries



The consolidated financial statements include the financial statements of Badger Daylighting Ltd. and the subsidiaries listed in the following table:



% equity interest



Name



Country of Incorporation



June 30,

2014




December 31,

2013




Badger Daylighting (Fort McMurray) Inc.



Canada



100%



100%



Badger Edmonton Ltd.



Canada



100%



100%



Fieldtek Ltd.



Canada



100%



100%



Badger ULC



Canada



100%



100%



Badger Daylighting USA, Inc.



United States of America



100%



100%



Badger Daylighting Corp.



United States of America



100%



100%



Badger, LLC



United States of America



100%



100%



Balances and transactions between Badger Daylighting Ltd. and its subsidiaries have been eliminated on consolidation and are not disclosed in this Note. There are no significant restrictions on the Corporation’s or its subsidiaries ability to access or use the assets, and settle the liabilities, of the Corporation.

11 Subsequent events



a)     In connection with the extendable revolving credit facility, subsequent to June 30, 2014 the Corporation increased and extended this facility through a syndication effort led by TD Bank. Two additional institutions joined the facility, which was increased to $125,000 with an optional $50,000 accordion feature. The maturity date was extended to July 22, 2018.





To view this press release as a PDF file, click onto the following link:

public://news_release_pdf/badger08132014final.pdf



Source: Badger Daylighting Ltd. (TSX:BAD) http://www.badgerinc.com/










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Source: Filing Services Canada


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