Bourgault Industries Ltd. Issues Layoff Notices

Bourgault Industries Ltd. has issued layoff notices to approximately 7% of its workforce. The company is experiencing reduced demand for its products due to a number of negative events that have occurred in the markets that it services. These notices will take effect in approximately 8 weeks unless market conditions improve substantially in the interim. The factors that are impacting demand for farm equipment include:

• Drought in Western Canada, the Northern US Plains, Australia and parts of Eastern Europe has reduced crop yields in the affected areas;
• Massive steel price increases due to tariffs and duties have made farm equipment more expensive;
• Because of tariffs, lentil prices are approximately 50% lower than they were one year ago;
• Durum prices are more than $2.00 per bushel lower than a year ago;
• Canola prices are lower than one year ago;
• An abnormally wet fall has reduced crop quality for cereal grains and some of the pulse crops on the Western Prairies and Northern U.S. Plains;
• Drying costs will significantly reduce profit margins for farmers in the wet areas;
• The frost in September on the Northern Prairies has reduced crop quality and yields of later seeded crops; and
• Soil moisture in the southwestern Prairies and the upper Northern US Plains has improved but large areas are still experiencing low soil moisture reserves.

Upon the return of more normal market conditions, Bourgault Industries Ltd. would expect to return to higher production levels shortly after normalization occurs.