TerraVest Industries — Interim / Quarterly Report 2021

May 12, 2021

==> picture [196 x 52] intentionally omitted <==

INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS For the second quarter ended March 31, 2021

TERRAVEST INDUSTRIES INC.

Interim Condensed Consolidated Statements of Financial Position

(In thousands of Canadian dollars)

Note As at March 31, 2021 (Unaudited)	As at September 30, 2020 (Audited)
$ ASSETS Current Cash 21,315 Accounts receivable 45,261 Income taxes receivable 1,040 Inventories 83,588 Other current assets 6 7,375	$ 27,452 44,610 783 83,955 3,790
158,579 Non-Current Property, plant and equipment 75,980 Right-of-use assets 30,045 Intangible assets 18,718 Deferred income tax assets 7,563 Investments 7 3,513 Other non‐current assets 150 Goodwill 12,326	160,590 76,359 32,411 21,404 8,587 7,470 150 12,654
306,874	319,625
LIABILITIES Current Bank overdrafts 190 Revolving credit facility 599 Accounts payable and accrued liabilities 26,821 Deferred revenues 12,719 Dividends payable 9 1,845 Income taxes payable 925 Current portion of long‐term debt 4,932 Current portion of lease liabilities 4,491	735 864 24,536 15,888 1,868 2,833 5,251 4,374
52,522 Non-Current Long‐term debt 8 78,863 Lease liabilities 28,316 Deferred income tax liabilities 7,640	56,349 98,400 30,523 8,211
167,341	193,483
SHAREHOLDERS’ EQUITY Share capital 9 147,417 Share premium 33,487 Share‐based payments reserve 461 Accumulated other comprehensive income (loss) (1,671) Accumulated deficit (40,245)	149,284 35,191 417 393 (59,355)
139,449 Non‐controlling interest 84	125,930 212
139,533	126,142
306,874	319,625

See accompanying notes to the interim condensed consolidated financial statements

On behalf of the Board:

/s/ Charles Pellerin, Director /s/ Blair Cook, Director

1

TERRAVEST INDUSTRIES INC.

Interim Condensed Consolidated Statements of Income

(Unaudited – in thousands of Canadian dollars, except share and per share amount)

(Unaudited – in thousands of Canadian dollars, except share and per share amount)	(Unaudited – in thousands of Canadian dollars, except share and per share amount)
Second quarters ended Six months ended Note March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
$ $ $ SALES 14 Products 73,039 83,424 152,088 Services 3,438 3,327 6,729	$ 167,802 7,201
76,477 86,751 158,817 Cost of sales 55,644 69,451 115,892	175,003 137,221
Grossprofit 20,833 17,300 42,925	37,782
EXPENSES Administration 6,354 9,048 12,467 Selling 1,675 1,738 3,283 Financing costs 11 941 1,456 1,917 Other(gains)losses 12 (1,161) (712) (3,068)	17,359 3,442 3,027 (925)
7,809 11,530 14,599	22,903
EARNINGS BEFORE INCOME TAXES 13,024 5,770 28,326	14,879
INCOME TAX EXPENSE (RECOVERY) Current 1,964 1,303 5,202 Deferred 337 (805) 449	3,474 (287)
2,301 498 5,651	3,187
NET INCOME 10,723 5,272 22,675	11,692
Net income (loss) attributable to: Common shareholders 10,786 5,323 22,803 Non‐controllinginterest (63) (51) (128)	11,784 (92)
10,723 5,272 22,675	11,692
Weighted average number of common shares: Basic 10 18,473,942 18,712,670 18,483,713 Diluted 10 18,766,033 19,056,299 18,763,319	18,288,770 19,104,265
Net income per share: Basic 10 $0.58 $0.28 $1.23 Diluted 10 $0.57 $0.28 $1.22	$0.64 $0.63

See accompanying notes to the interim condensed consolidated financial statements

2

TERRAVEST INDUSTRIES INC.

Interim Condensed Consolidated Statements of Comprehensive Income

(Unaudited – in thousands of Canadian dollars)

(Unaudited – in thousands of Canadian dollars)	(Unaudited – in thousands of Canadian dollars)
Second quarters ended Six months ended March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
$ $ $ NET INCOME 10,723 5,272 22,675 Other comprehensive income (loss), net of income tax: Item that may be reclassified subsequently to profit or loss: Exchange difference on translating foreign operations (450) 3,135 (2,064)	$ 11,692 2,488
COMPREHENSIVE INCOME 10,273 8,407 20,611	14,180
Attributable to: Common shareholders 10,336 8,458 20,739 Non‐controllinginterest (63) (51) (128)	14,272 (92)
10,273 8,407 20,611	14,180

See accompanying notes to the interim condensed consolidated financial statements

3

TERRAVEST INDUSTRIES INC.

Interim Condensed Consolidated Statements of Changes in Shareholders’ Equity

(Unaudited – in thousands of Canadian dollars)

		Six months ended
	Note	March 31, 2021 March	31, 2020
		$	$
Share capital
Common shares:	9
Balance, beginning of year		149,284	139,290
Issued on conversion of convertible debentures		-	10,690
Repurchased and cancelled duringtheperiod		(1,867)	(247)
Balance,end ofperiod		147,417	149,733
Share premium
Balance, beginning of year		35,191	36,513
Carrying value of common shares and convertible debentures
repurchased lower than considerationpaid		(1,704)	(3)
Balance,end ofperiod		33,487	36,510
Share‐based payments reserve
Balance, beginning of year		417	432
Share‐basedpayments expense		44	43
Balance,end ofperiod		461	475
Accumulated other comprehensive income (loss)
Balance, beginning of year		393	163
Other comprehensive income(loss)		(2,064)	2,488
Balance,end ofperiod		(1,671)	2,651
Equity component of convertible debentures
Balance, beginning of year		-	1,451
Conversion of convertible debentures		-	(1,311)
Convertible debentures repurchased,net of income tax		-	(140)
Balance,end ofperiod		-	-
Accumulated deficit
Balance, beginning of year		(59,355)	(77,346)
Impact of change in accounting policy		-	(1,407)
Adjusted balance, beginning of year		(59,355)	(78,753)
Net income attributable to common shareholders		22,803	11,784
Dividends declared duringtheperiod		(3,693)	(3,705)
Balance,end ofperiod		(40,245)	(70,674)
Total shareholders’ equity attributable to common shareholders		139,449	118,695
Non‐controlling interest
Balance, beginning of year		212	423
Net loss attributable to non‐controllinginterest		(128)	(92)
Balance,end ofperiod		84	331
Total shareholders’ equity		139,533	119,026

See accompanying notes to the interim condensed consolidated financial statements

4

TERRAVEST INDUSTRIES INC.

Interim Condensed Consolidated Statements of Cash Flows

(Unaudited – in thousands of Canadian dollars)

			Six months ended
	Note	**March 31, **	2021 March	**31, **	2020
		$		$
OPERATING ACTIVITIES
Net income			22,675		11,692
Adjustments for:
Current income tax expense			5,202		3,474
Interest expense			1,783		2,782
Convertible debentures retirement costs			-		9
Items not affecting cash	13		3,445		8,441
Interest paid			(1,732)		(3,006)
Income taxes paid			(7,374)		(5,576)
Settlement of derivative financial instruments			19		(198)
Change in non‐cash operatingworkingcapital items	13		(1,718)		13,680
			22,300		31,298
INVESTING ACTIVITIES
Consideration paid on business combinations, net of
cash acquired			-		(10,978)
Payment of contingent consideration			-		(1,988)
Purchase of property, plant and equipment			(7,124)		(4,304)
Proceeds from disposal of property, plant and equipment			209		987
Proceeds from disposal of assets held for sale			-		3,065
Purchase of intangible assets			(226)		-
Investment in equity instruments			(309)		-
Proceeds from disposal of investment in equity instruments			10,034		-
Investment in associates			(1,616)		-
Investment injoint venture			(200)		-
			768		(13,218)
FINANCING ACTIVITIES
Net change in current revolving credit facility			(265)		(4,464)
Net change in long-term revolving operating loans, net of
transaction costs			(18,635)		(7,257)
Issuance of long-term debt			1,746		-
Repayment of long‐term debt			(1,629)		(965)
Repayment of lease liabilities			(2,149)		(1,631)
Common shares repurchased and cancelled	9		(3,571)		(375)
Convertible debentures repurchased			-		(1,093)
Dividendspaid			(3,716)		(3,595)
			(28,219)		(19,380)
Net outflows for the period			(5,151)		(1,300)
Cash and bank overdrafts, beginning of year			26,717		9,093
Impact of foreign exchange on cash and bank overdrafts			(441)		471
CASH AND BANK OVERDRAFTS, END OF PERIOD			21,125		8,264

See accompanying notes to the interim condensed consolidated financial statements

5

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021 (Unaudited – in thousands of Canadian dollars, except share and per share amount)

1. DESCRIPTION OF THE BUSINESS

TerraVest Industries Inc. (“TerraVest” or the “Company”) is incorporated under the laws of Alberta and is listed on the Toronto Stock Exchange (equity symbol: TVK). TerraVest’s head office is located at 4901 Bruce Road in Vegreville, Alberta, Canada.

TerraVest is a diversified industrial company that manufactures and sells goods and services to various end markets including: energy, agriculture, mining, and transportation, among others. TerraVest is focused on acquiring and operating market-leading businesses that will benefit from TerraVest’s financial and operational support. These opportunities generally center on manufactured steel products that complement TerraVest’s existing operations and provide integration benefits.

TerraVest is comprised of three operating segments: Fuel Containment, Processing Equipment and Service.

2. STATEMENT OF COMPLIANCE

These interim condensed consolidated financial statements have been prepared in accordance with IAS 34 Interim Financial Reporting (“IAS 34”) using the same accounting policies TerraVest disclosed in its audited consolidated financial statements for the year ended September 30, 2020.

These interim condensed consolidated financial statements do not include all the information required under International Financial Reporting Standards (“IFRS”) for complete set of financial statements. Therefore, these interim condensed consolidated financial statements should be read in conjunction with TerraVest’s audited consolidated financial statements for the year ended September 30, 2020.

These interim condensed consolidated financial statements were authorized for issue by the Board of Directors on May 11, 2021.

3. ESTIMATES

The preparation of financial statements requires management to make judgments, estimates and assumptions that may affect the application of policies and reported amounts of assets, liabilities, contingent assets and liabilities, income and expenses. Actual results could differ from these judgments, estimates and assumptions.

The judgments, estimates and assumptions applied in the interim condensed consolidated financial statements, including the key areas of estimation uncertainty, were the same as those applied in TerraVest’s audited consolidated financial statements for the year ended September 30, 2020, with the exception of:

• the estimate of income tax expense which is determined in the interim condensed consolidated financial statements using the estimated average annual effective income tax rate applied to the estimated taxable earnings of the interim period.

4. SEASONALITY

TerraVest’s operating segments are seasonal in nature. The strongest quarters for TerraVest are its first and last quarters. The Processing Equipment and Service segments generally experience higher sales in the first and second quarters as majority of the drilling in Western Canada occurs during this period. The Fuel Containment segment generally experiences higher revenues during the first and last quarters as demand for residential, commercial and industrial heating products increases heading into the winter months. The third quarter is typically the weakest across all segments. TerraVest takes advantage of this seasonality to build inventory levels during non-peak demand periods, thereby allowing TerraVest to more readily meet increased levels of demand during its regular peak demand periods.

6

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021 (Unaudited – in thousands of Canadian dollars, except share and per share amount)

5. FINANCIAL INSTRUMENTS

The fair value of the investment in equity instruments has been determined based on the quoted price in active markets and is classified in Level 1 of the fair value hierarchy. The fair values of revolving credit facilities and long-term debt have been determined based on discounted cash flows using interest rates for similar instruments. The fair values of the financial instruments measured at amortized cost are not significantly different to their carrying values. These items are classified in Level 2 of the fair value hierarchy.

TerraVest’s derivative financial instruments are forward exchange contracts and an interest rate swap agreement which are not traded in active markets. Forward exchange contracts have been fair valued using observable forward exchange rates and interest rates corresponding to the maturity of the contracts. The interest rate swap agreement has been fair valued using observable interest rates corresponding to the maturity of the agreement. The effects of non-observable inputs are not significant for forward exchange contracts and the interest rate swap agreement. These items are classified in Level 2 of the fair value hierarchy.

5.1 Forward exchange contracts

As at March 31, 2021, TerraVest had forward exchange contracts totaling $34,100 ($29,792 as at September 30, 2020) outstanding to sell, at various rates and expiring on various dates up to and including March 28, 2024. The fair value of forward exchange contracts was an asset of $927 as at March 31, 2021 included in other current assets (a liability of $391 as at September 30, 2020 was included in accounts payable and accrued liabilities).

5.2 Interest rate swap

As at March 31, 2021, TerraVest had an interest rate swap agreement expiring on June 9, 2025 for the notional amount of $25,000. Under the interest rate swap agreement, TerraVest receives interest on the notional amount at the 1-month CDOR rate in exchange for payments at a fixed rate of 0.87%, plus 140 to 265 basis points based on a prescribed ratio. The fair value of the interest rate swap agreement was an asset of $378 as at March 31, 2021 included in other current assets (a liability of $167 as at September 30, 2020 was included in accounts payable and accrued liabilities).

6. OTHER CURRENT ASSETS

	As at		As at
	March 31,	2021	September 30, 2020
	(Unaudited)		(Audited)
	$		$
Prepaid expenses		4,735	2,597
Derivative financial instruments		1,305	-
Other		1,335	1,193
		7,375	3,790

7. INVESTMENTS

	As at		As at
	March 31,	2021	September 30, 2020
	(Unaudited)		(Audited)
	$		$
Investment in equity instruments		500	6,273
Investment in associates		2,813	1,197
Investment injoint venturei)		200	-
		3,513	7,470

i) The investment in joint venture is accounted for using the equity method.

7

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021 (Unaudited – in thousands of Canadian dollars, except share and per share amount)

8. SHORT-TERM REVOLVING CREDIT FACILITY AND LONG-TERM DEBT

On March 17, 2021, certain subsidiaries of TerraVest operating in the Fuel Containment segment extended the term of their credit facility of $100,000 ($100,000 as at September 30, 2020) with a Canadian financial institution. The credit facility now expires on December 1, 2023.

On March 31, 2021, certain subsidiaries of TerraVest operating in the Processing Equipment and Service segments extended the term of their credit facilities totaling $50,000 ($50,000 as at September 30, 2020) with a Canadian financial institution. The credit facilities now expire on February 15, 2023.

8.1 Covenants

The quarterly financial covenants to comply with the revolving operating loan and long-term debt were as follows:

	Required	As at
Financial covenants	measurements	March 31, 2021
Total debt to equity ratio	≤ 2.50:1	1.79
Current ratio	≥ 1.15:1	1.42
Interest-bearing debt to EBITDA ratio	≤ 3.50:1	0.76
Interest coverage ratio	≥ 3.50:1	25.19
Funded debt to EBITDA ratio	≤ 3.00:1	2.57
Fixed charge coverage ratio	≥ 1.15:1	2.90

As at March 31, 2021, TerraVest was in compliance with all of its financial and non-financial covenants.

9. SHARE CAPITAL AND SHARE-BASED PAYMENTS

9.1 Common shares

Changes in the common shares issued and outstanding were as follows:

	As at March	31, 2021
	Number	Amount
		$
Balance, beginning of year	18,681,250	149,284
Repurchased and cancelled	(233,635)	(1,867)
Balance,end ofperiod	18,447,615	147,417

During the six months ended March 31, 2021, TerraVest repurchased 233,635 common shares (31,000 during the six months ended March 31, 2020) under its common shares normal course issuer bid (“NCIB”) for total consideration of $3,571 ($375 during the six months ended March 31, 2020). The difference between the amount paid for the common shares and their carrying value was recorded in share premium.

On March 17, 2021, TerraVest renewed its common shares NCIB under which it may repurchase 1,028,726 common shares. The common shares NCIB expires on March 16, 2022. The remaining number of common shares available for repurchase under the current common shares NCIB was 1,000,191 as at March 31, 2021.

8

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021 (Unaudited – in thousands of Canadian dollars, except share and per share amount)

9.2 Share-based payments arrangement

The stock options outstanding and the weighted average exercise prices as at March 31, 2021 were as follows:

Grant Date Expiry Date Exercise price Opening balance Settled or exercised Closing balance Vested and exercisable	Unvested
Feb. 9, 2017 Feb. 9, 2022 $9.10 333,000 - 333,000 333,000 Mar. 9, 2017 Mar. 9, 2024 $9.10 267,500 ‐ 267,500 267,500 Jan. 20,2020 Jan. 20,2027 $13.12 100,000 ‐ 100,000 33,333	- - 66,667
700,500 ‐ 700,500 633,833	66,667
Weighted average exerciseprice $9.67 ‐ $9.67 $9.31

During the six months ended March 31, 2021, no stock options were granted or forfeited.

9.3 Dividends

During the six months ended March 31, 2021, TerraVest has declared dividends totaling $0.20 per common share ($0.20 per common share during the six months ended March 31, 2020). As at March 31, 2021, $1,845 was included in dividends payable.

Subsequent to the end of the quarter, TerraVest declared a cash dividend of $0.10 per common share payable on July 12, 2021 to shareholders of record on June 30, 2021.

10. EARNINGS PER SHARE

The following table provides a breakdown of the numerator and denominator used in the calculation of earnings per share and diluted earnings per share:

Numerator Net income attributed to common shareholders $10,786 $5,323 $22,803 Financing costs on convertible debentures, net of income tax - 9 -	$11,784 203
Diluted net income attributed to common shareholders $10,786 $5,332 $22,803	$11,987
Denominator Common shares, beginning of period 18,477,850 18,305,841 18,681,250 Weighted average shares issued - 407,909 - Weighted average shares repurchased (3,908) (1,080) (197,537)	17,642,489 658,866 (12,585)
Weighted average shares, end of period ‐ basic 18,473,942 18,712,670 18,483,713 Dilutive effect of convertible debentures - 51,498 - Dilutive effect of stock options 292,091 292,131 279,606	18,288,770 543,085 272,410
Weighted average shares, end of period ‐ diluted 18,766,033 19,056,299 18,763,319	19,104,265
Net income per share ‐ basic $0.58 $0.28 $1.23 Net incomeper share ‐ diluted $0.57 $0.28 $1.22	$0.64 $0.63

9

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021

(Unaudited – in thousands of Canadian dollars, except share and per share amount)

11. FINANCING COSTS

	Second quarters ended	Second quarters ended	Second quarters ended	Six months ended	Six months ended
	March 31,	2021 March 31, 2020 March 31, 2021 March 31, 2020
	$		$	$	$
Interest on revolving credit facilities and
long-term debt		519	993	1,061	1,929
Interest on lease liabilities		355	374	722	699
Interest on convertible debentures		-	7	-	154
Accretion of convertible debentures		-	5	-	122
Amortization of financing costs		67	68	134	114
Convertible debentures retirement costs		-	9	-	9
		941	1,456	1,917	3,027

12. OTHER (GAINS) LOSSES

	Second quarters ended	Second quarters ended	Six months ended	Six months ended
	March 31, 2021 March 31, 2020 March 31, 2021 March 31, 2020
	$	$	$	$
(Gain) loss on foreign exchange	681	(2,551)	2,813	(2,023)
Change in fair value of derivative
financial instruments	(624)	2,886	(1,704)	2,365
Change in fair value of investment in
equity instruments	(1,116)	-	(3,973)	-
(Gain) loss on disposal of property, plant
and equipment	(102)	(55)	(204)	(275)
(Gain) loss on disposal of assets held for sale	-	(931)	-	(931)
(Gain)loss on contingent considerations	-	(61)	-	(61)
	(1,161)	(712)	(3,068)	(925)

10

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021 (Unaudited – in thousands of Canadian dollars, except share and per share amount)

13. SUPPLEMENTAL CASH FLOW INFORMATION

	Six months ended
	March 31, 2021 March	31, 2020
	$	$
Adjustments for items not affecting cash
Depreciation of property, plant and equipment	4,547	4,320
Depreciation of right-of-use assets	2,429	1,893
Amortization of intangible assets	2,472	2,000
Amortization of deferred development costs	-	65
Amortization of financing costs	134	114
Share‐based compensation expense	44	43
Net change of inventory valuation allowance	(26)	101
Change in fair value of derivative financial instruments	(1,704)	2,365
Change in fair value of investment in equity instruments	(3,973)	-
(Gain) loss on disposal of property, plant and equipment	(204)	(275)
(Gain) loss on disposal of assets held for sale	-	(931)
(Gain) loss on contingent considerations	-	(61)
Deferred income tax expense (recovery)	449	(287)
Accretion of convertible debentures	-	122
Cancellation of long-term debt	(1,274)	-
Other	551	(1,028)
	3,445	8,441
Change in non‐cash operating working capital items
Accounts receivable	(90)	16,072
Inventories	(732)	(1,651)
Other current assets	(965)	409
Accounts payable and accrued liabilities	2,974	(744)
Deferred revenues	(2,905)	(406)
	(1,718)	13,680

13.1 Additional cash flow information

Deposits on purchase of PP&E of $1,400 were recorded in other current assets as at March 31, 2021 ($nil as at March 31, 2020).

Purchase of PP&E of $465 was unpaid and recorded as accounts payable and accrued liabilities as at March 31, 2021 ($nil as at March 31, 2020).

Leases, for which an amount of $201 was recognized in right-of-use assets and lease liabilities during the six months ended March 31, 2021 ($6,510 during the six months ended March 31, 2020), had no cash impact on investing and financing activities.

11

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021 (Unaudited – in thousands of Canadian dollars, except share and per share amount)

14. SEGMENTED INFORMATION

14.1 Reportable segments

TerraVest determines its reportable segments based on the structure of its operations, which as at March 31, 2021 is divided into three operating business units: Fuel Containment, Processing Equipment and Service. Corporate is not a segment and is disclosed for reconciliation purposes.

The following tables also provide information on disaggregated revenue as part of its segmented information disclosure.

			Second	quarter ended	March 31, 2021
	Fuel	Processing
	Containment	Equipment	Service	Corporate	Total
	$	$	$	$	$
Sales	40,709	32,322	3,438	8	76,477
Depreciation and amortization	1,910	2,422	399	-	4,731
Financing costs (income)	450	440	54	(3)	941
Income tax expense (recovery)	2,222	92	(49)	36	2,301
Net income	7,456	2,860	141	266	10,723
Purchase of property, plant and
equipment,net ofproceeds	2,402	1,499	118	-	4,019
			Six	months ended	March 31, 2021
	Fuel	Processing
	Containment	Equipment	Service	Corporate	Total
	$	$	$	$	$
Sales	92,828	59,244	6,729	16	158,817
Depreciation and amortization	3,825	4,845	778	-	9,448
Financing costs (income)	939	872	111	(5)	1,917
Income tax expense (recovery)	5,362	225	(28)	92	5,651
Net income	16,776	3,630	441	1,828	22,675
Goodwill and intangible assets	16,365	14,679	-	-	31,044
Segment assets	142,867	131,311	19,185	13,511	306,874
Segment liabilities	77,676	73,247	14,788	1,630	167,341
Purchase of property, plant and
equipment,net ofproceeds	3,758	2,878	279	-	6,915

12

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements

For the second quarter ended March 31, 2021

(Unaudited – in thousands of Canadian dollars, except share and per share amount)

			Second	quarter ended	March 31, 2020
	Fuel	Processing
	Containment	Equipment	Service	Corporate	Total
	$	$	$	$	$
Sales	34,515	48,909	3,327	-	86,751
Depreciation and amortization	1,973	1,914	419	-	4,306
Financing costs	698	643	99	16	1,456
Income tax expense (recovery)	557	239	(39)	(259)	498
Net income (loss)	1,887	2,162	(304)	1,527	5,272
Purchase of property, plant and
equipment,net ofproceeds	776	774	98	-	1,648
			Six	months ended	March 31, 2020
	Fuel	Processing
	Containment	Equipment	Service	Corporate	Total
	$	$	$	$	$
Sales	84,723	83,079	7,201	-	175,003
Depreciation and amortization	3,970	3,443	865	-	8,278
Financing costs	1,403	1,145	202	277	3,027
Income tax expense (recovery)	2,945	729	(59)	(428)	3,187
Net income (loss)	8,453	3,260	(477)	456	11,692
Goodwill and intangible assets	20,087	18,711	-	-	38,798
Segment assets	147,734	148,624	19,079	3,747	319,184
Segment liabilities	91,488	91,030	15,417	2,223	200,158
Purchase of property, plant and
equipment,net ofproceeds	2,710	450	157	-	3,317

14.2 Geographical information

TerraVest generates revenue from two segmental regions. The concentration of TerraVest’s revenue is derived from Canadian and U.S. sales.

March 31, 2021 March 31, 2020 March 31, 2021	March 31, 2020
$ $ $ SALES Canada 45,329 57,072 87,480 United States 31,148 29,679 71,337	$ 107,499 67,504
76,477 86,751 158,817	175,003

13

TERRAVEST INDUSTRIES INC. Notes to the Interim Condensed Consolidated Financial Statements For the second quarter ended March 31, 2021

(Unaudited – in thousands of Canadian dollars, except share and per share amount)

Certain non-current assets and goodwill by geographic segment:

		As at March 31, 2021 – Unaudited	As at March 31, 2021 – Unaudited
	Canada	United States	Total
	$	$	$
Property, plant and equipment	62,599	13,381	75,980
Right-of-use assets	28,226	1,819	30,045
Intangible assets	12,319	6,399	18,718
Goodwill	6,915	5,411	12,326
	110,059	27,010	137,069
		As at September 30, 2020 – Audited
	Canada	United States	Total
	$	$	$
Property, plant and equipment	62,672	13,687	76,359
Right-of-use assets	30,363	2,048	32,411
Intangible assets	13,948	7,456	21,404
Goodwill	6,915	5,739	12,654
	113,898	28,930	142,828

15. IMPACT OF COVID-19

Management continues to monitor and assess the ongoing development of the COVID-19 and respond accordingly. The impacts, if any, will be accounted for when they are known and may be assessed. During the six months ended March 31, 2021, certain subsidiaries of TerraVest’s recognized government subsidies totaling $7,992 in net income. Government subsidies helped maintain employment during a period where revenues have been temporarily reduced.

14