Wajax Corporation (TSX:WJX) today announced a significant increase in 2011
second quarter earnings and raised its monthly dividend to $0.20 per share.




                                 -------------------------------------------
(Dollars in millions, except per    Three Months Ended      Six Months Ended
 share data)                                   June 30               June 30
                                 -------------------------------------------
                                      2011       2010       2011       2010 
                                 -------------------------------------------
CONSOLIDATED RESULTS                                                        
Revenue                          $   334.1  $   272.0  $   638.0  $   500.2 
Earnings before tax              $    22.4  $    11.8  $    40.4  $    20.3 
Net earnings                     $    16.5  $    12.2  $    29.4  $    21.0 
Basic earnings per share         $    0.99  $    0.73  $    1.77  $    1.27 
                                                                            
SEGMENTS                                                                    
Revenue - Equipment              $   164.2  $   142.8  $   315.6  $   251.2 
  - Industrial Components        $    89.9  $    75.9  $   170.6  $   148.5 
  - Power Systems                $    81.0  $    55.1  $   154.0  $   102.6 
Earnings - Equipment             $    12.0  $    10.3  $    23.1  $    18.2 
    % margin                           7.3%       7.2%       7.3%       7.2%
  - Industrial Components        $     6.5  $     2.0  $    11.0  $     5.2 
    % margin                           7.3%       2.7%       6.4%       3.5%
  - Power Systems                $     8.3  $     3.7  $    15.3  $     4.6 
    % margin                          10.2%       6.6%       9.9%       4.5%
                                 -------------------------------------------



Second Quarter Highlights



--  Consolidated second quarter revenue of $334.1 million increased $62.1
    million, or 23%, compared to last year with gains in western Canada
    accounting for the majority of the increases in all three businesses.
    Power Systems revenue increased 47% on significantly higher equipment
    sales in western Canada and as a result of the May 2, 2011 acquisition
    of Ontario based Harper Power Products ("Harper"). Industrial Components
    revenue increased 18% on stronger demand for all major product
    categories and Equipment sales rose 15% on higher revenue from the
    construction, forestry and material handling sectors. 

--  Net earnings for the quarter were $16.5 million, or $0.99 per share,
    compared to $12.2 million, or $0.73 per share recorded in 2010. This
    represents an increase of 35% even though the Corporation is now subject
    to income tax since its conversion from an income fund as of January 1,
    2011. Earnings before tax of $22.4 million were almost double last
    year's level as a result of the higher volumes while maintaining
    disciplined control over selling, general and administrative costs in
    all three segments. 

--  Consolidated backlog of $281.7 million at June 30, 2011 increased $66.0
    million, or 31%, from $215.7 million at March 31, 2011 mainly as a
    result of higher mining and construction equipment orders in the
    Equipment segment. 



The Equipment segment recently closed an equipment supply agreement with Shell
Canada Energy for a total of seven Hitachi mining shovels and construction
excavators, adding to the already existing fleet of Hitachi equipment at Shell
Albian Sands, Shell's oil sands operation in the province of Alberta. In support
of Shell Albian Sands' fleet of Hitachi equipment, Wajax has also renewed and
extended the existing commercial arrangement with Shell Canada Energy for the
supply of parts, components and services until the end of April 2014. Both
companies enjoy an excellent business relationship and intend to further
strengthen their cooperation going forward.


Effective June 22, 2011, Rowan Companies, Inc. of Houston, Texas completed the
sale of its 100% ownership interest in LeTourneau Technologies, Inc.
("LeTourneau"), a mining wheel loader manufacturer to Milwaukee-based Joy Global
Inc. ("Joy"). Wajax is the exclusive distributor of LeTourneau products in
Canada. Joy has indicated that it intends to look for ways to integrate the
LeTourneau distribution activities with its P&H mining equipment operations
which will likely impact Wajax's current distribution arrangements with
LeTourneau. The sale and service of LeTourneau products in 2010 generated
approximately $40 million of revenue for Wajax and contributed approximately $10
million to earnings before interest and taxes. 


The Corporation announced a $0.02 per share increase in its monthly dividend.
Dividends of $0.20 per share ($2.40 annualized) were declared for the months of
August, September and October.


Commenting on the second quarter results and the outlook for the remainder of
2011, Neil Manning, President and CEO, stated:


"We continue to be very pleased with our 2011 results. The second quarter
improvement was driven by the robust energy, mining, forestry and construction
markets particularly in western Canada. However, we were also encouraged by
stronger results in the Equipment segment's Ontario operation and the eastern
Canada business of Industrial Components. Results from the Harper acquisition
for the two months since the transaction closed have met our expectations.


We have been able to minimize the effects of the supply disruption to our
Hitachi product line caused by the earthquake and resulting tsunami in Japan. As
we expected, the most significant issue relates to delays in obtaining mining
equipment, which will have some impact on our 2011 revenue. In addition, we
continue to experience some product shipment delays for a number of other
products from several suppliers, mainly as a result of increased global demand
and component shortages.


For the remainder of the year, we expect economic activity in the broader
Canadian economy will continue at a level similar to that experienced in the
first six months. Notwithstanding negative impacts from the Hitachi equipment
and other product supply disruptions, we also expect pre-tax earnings to
continue to be ahead of last year for the balance of 2011, but at a lower rate
of increase. Our decision to increase the monthly dividend takes into account
the strength of expected future earnings including the potential downside
effects on our LeTourneau products distribution arrangement."


Wajax Corporation is a leading Canadian distributor and service support provider
of equipment, industrial components and power systems. Reflecting a diversified
exposure to the Canadian economy, its three distinct core businesses operate
through a network of 118 branches across Canada. Its customer base spans natural
resources, construction, transportation, manufacturing, industrial processing
and utilities.


Wajax will Webcast its Second Quarter Financial Results Conference Call. You are
invited to listen to the live Webcast on Wednesday, August 3, 2011 at 2:30 p.m.
ET. To access the Webcast, enter www.wajax.com and click on the link for the
Webcast on the Investor Relations page. The archived Webcast will be available
at the above mentioned website within 24 hours after the conference call.


Forward-Looking Statements

This news release contains forward-looking statements. These statements relate
to future events or future performance and reflect management's current
expectations and assumptions.


Although we believe that the expectations represented in such forward-looking
statements are reasonable, there is no assurance that such expectations will
prove to be correct. Undue reliance should not be placed on forward-looking
statements, as a number of factors could cause the actual results to differ
materially from the expectations expressed in the forward-looking statements.
Information on risk factors is included in the Management's Discussion and
Analysis for the year ended December 31, 2010 under the heading "Risk and
Uncertainties", and in other reports filed by Wajax Income Fund and the
Corporation with Canadian securities regulators and available at www.sedar.com.


Management's Discussion and Analysis - Q2 2011

The following management's discussion and analysis ("MD&A") discusses the
consolidated financial condition and results of operations of Wajax Corporation
("Wajax" or "Corporation") for the quarter ended June 30, 2011. On January 1,
2011, Wajax adopted International Financial Reporting Standards ("IFRS"). The
term "Canadian GAAP" refers to Canadian GAAP before the adoption of IFRS. This
MD&A should be read in conjunction with the information contained in the
unaudited Condensed Consolidated Financial Statements and accompanying notes for
the quarter ended June 30, 2011, which have been prepared using IFRS, the annual
Audited Consolidated Financial Statements and accompanying notes of Wajax Income
Fund for the year ended December 31, 2010 which were prepared using Canadian
GAAP, and the associated MD&A. Information contained in this MD&A is based on
information available to management as of August 3, 2011.


Unless otherwise indicated, all financial information within this MD&A is in
millions of Canadian dollars, except share and per share data.


Additional information, including Wajax's Annual Report and Annual Information
Form, are available at www.sedar.com.


Responsibility of Management and the Board of Directors

Management is responsible for the information disclosed in this MD&A and the
unaudited Condensed Consolidated Financial Statements and accompanying notes,
and has in place appropriate information systems, procedures and controls to
ensure that information used internally by management and disclosed externally
is materially complete and reliable. Wajax's Board of Directors has approved
this MD&A and the unaudited Condensed Consolidated Financial Statements and
accompanying notes. In addition, Wajax's Audit Committee, on behalf of the Board
of Directors, provides an oversight role with respect to all public financial
disclosures made by Wajax, and has reviewed this MD&A and the unaudited
Condensed Consolidated Financial Statements and accompanying notes.


Disclosure Controls and Procedures and Internal Control over Financial Reporting 

Wajax has designed disclosure controls and procedures ("DC&P") to provide
reasonable assurance that material information relating to Wajax is made known
to the Chief Executive Officer and the Chief Financial Officer, particularly
during the period in which the interim filings are being prepared. Wajax has
designed internal controls over financial reporting ("ICFR") to provide
reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with
IFRS.


Wajax has not completed the design of DC&P and ICFR related to the May 2, 2011
acquisition of the assets of Harper Power Products ("Harper"). The Harper
operation had revenue of approximately $9.1 million since acquisition. Wajax
anticipates that the design of DC&P and ICFR related to Harper will be completed
prior to June of 2012 at which time it will be integrated with the existing
Power Systems control environment.


There were no changes in internal control over financial reporting that occurred
during Wajax's most recent interim period that have materially affected, or are
reasonably likely to materially affect, the Corporation's ICFR.


Wajax Corporation Overview

Effective January 1, 2011 Wajax Income Fund converted into a corporation,
pursuant to a plan of arrangement under the Canada Business Corporations Act
("CBCA") and the shares of Wajax Corporation began trading on the Toronto Stock
Exchange on January 4, 2011 under the symbol WJX.


Wajax's core distribution businesses are engaged in the sale and after-sale
parts and service support of equipment, industrial components and power systems,
through a network of 118 branches across Canada. Wajax is a multi-line
distributor and represents a number of leading worldwide manufacturers in its
core businesses. Its customer base is diversified, spanning natural resources,
construction, transportation, manufacturing, industrial processing and
utilities.


Wajax's strategy is to continue to grow earnings in all segments through
continuous improvement of operating margins and revenue growth while maintaining
a strong balance sheet. Revenue growth will be achieved through market share
gains, the addition of new or complementary product lines and expansion into new
geographic territories either organically or through acquisitions.


Forward-Looking Information

This MD&A contains forward-looking statements. These statements relate to future
events or future performance and reflect management's current expectations and
assumptions. The words "anticipate", "expect", "believe", "may", "should",
"estimate", "project", "outlook", "forecast" or similar words are used to
identify such forward-looking information. Such forward-looking statements
reflect management's current beliefs and are based on information currently
available to management of Wajax. Although we believe that the expectations
represented in such forward-looking statements are reasonable, there is no
assurance that such expectations will prove to be correct. By their very nature,
forward-looking statements involve inherent risks and uncertainties (both
general and specific) and the risk that the expectations represented in such
forward-looking statements will not be achieved. Undue reliance should not be
placed on forward-looking statements, as a number of important factors could
cause the actual events, performance or results to differ materially from the
events, performance and results discussed in the forward-looking statements.
These factors include, among other things: changes in laws and regulations
affecting Wajax and its business operations, changes in taxation of Wajax,
general business conditions and economic conditions in the markets in which
Wajax and its customers compete, fluctuations in commodity prices, Wajax's
relationship with its suppliers and manufacturers and its access to quality
products, the ability of Wajax to maintain and expand its customer base, actual
future market conditions being different than anticipated by management and the
Board of Directors of Wajax, and actual future operating and financial results
of Wajax being different than anticipated by management and the Board of
Directors of Wajax. You are cautioned that the foregoing list is not exhaustive.
You are further cautioned that the preparation of financial statements in
accordance with IFRS requires management to make certain judgments and estimates
that affect the reported amounts of assets, liabilities, revenues and expenses.
These estimates may change, having either a negative or positive effect on net
earnings as further information becomes available, and as the economic
environment changes. Additional information on these and other factors is
included in this MD&A under the heading "Risk and Uncertainties" and in other
reports filed by Wajax with Canadian securities regulators and available at
www.sedar.com. The forward-looking statements contained in this MD&A are
expressly qualified in their entirety by this cautionary statement. The
forward-looking statements contained herein are made as of the date of this MD&A
and Wajax does not undertake any obligation to publicly update such
forward-looking statements to reflect new information, subsequent events or
otherwise unless so required by applicable securities laws.


International Financial Reporting Standards

In February 2008, The Accounting Standards Board of the Canadian Institute of
Chartered Accountants confirmed that the use of IFRS is required in Canada for
publicly accountable profit oriented enterprises for fiscal years beginning on
or after January 1, 2011. The Corporation's first annual IFRS financial
statements will be for the year ending December 31, 2011 and will include the
comparative period of 2010. Accordingly, the Corporation has adopted IFRS
effective January 1, 2010 (the IFRS transition date) and has prepared its
unaudited Condensed Consolidated Financial Statements in accordance with
International Accounting Standard 34 Interim Financial Reporting. Prior to the
adoption of IFRS, the financial statements of the Corporation were prepared in
accordance with Canadian generally accepted accounting principles ("Canadian
GAAP").


The most significant impacts on the Corporation's unaudited Condensed
Consolidated Financial Statements resulting from the adoption of IFRS are
discussed within the applicable sections of this MD&A and Note 13 of the
unaudited Condensed Consolidated Financial Statements.


All comparative figures have been restated in accordance with IFRS, unless
otherwise indicated.


Consolidated Results 



                                    Three months ended     Six months ended 
                                               June 30              June 30 
                                        2011      2010       2011      2010 
----------------------------------------------------------------------------
Revenue                            $   334.1 $   272.0  $   638.0 $   500.2 
----------------------------------------------------------------------------
Gross profit                       $    72.5 $    59.5  $   138.4 $   111.2 
Selling and administrative                                                  
 expenses                          $    49.0 $    46.6  $    95.9 $    88.7 
----------------------------------------------------------------------------
Earnings before finance costs and                                           
 income taxes                      $    23.5 $    12.9  $    42.5 $    22.5 
Finance costs                      $     1.1 $     1.1  $     2.1 $     2.1 
Income tax expense (recovery)      $     5.8 $    (0.3) $    11.1 $    (0.7)
----------------------------------------------------------------------------
Net earnings                       $    16.5 $    12.2  $    29.4 $    21.0 
----------------------------------------------------------------------------
                                                                            
Earnings per share                                                          
  - Basic                          $    0.99 $    0.73  $    1.77 $    1.27 
  - Diluted                        $    0.98 $    0.72  $    1.74 $    1.25 
----------------------------------------------------------------------------



Revenue

Revenue in the second quarter of 2011 increased 23% or $62.1 million to $334.1
million, from $272.0 million in 2010 and included $9.1 million of revenue from
the acquisition of the assets of Harper by the Power Systems segment effective
May 2, 2011 for consideration of $23.2 million. Segment revenue increased 15% in
Equipment (formerly Mobile Equipment), 18% in Industrial Components and 47% in
Power Systems compared to last year. For the six months ended June 30, 2011,
revenue increased 28% or $137.8 million.


Gross profit

Gross profit in the second quarter of 2011 increased $13.0 million due to higher
volumes compared to last year. The gross profit margin percentage for the
quarter of 21.7% decreased slightly from 21.9% in 2010 due primarily to a sales
mix variance resulting from a higher proportion of equipment sales in both the
Equipment and Power Systems segments compared to last year.


For the six months ended June 30, 2011, gross profit increased $27.2 million due
to higher volumes compared to last year. The gross profit margin percentage
decreased to 21.7% in 2011 from 22.2% in 2010 due primarily to a sales mix
variance resulting from a higher proportion of equipment sales in both the
Equipment and Power Systems segments compared to last year.


Selling and administrative expenses

Selling and administrative expenses increased $2.4 million in the quarter
compared to last year due mainly to the acquisition of Harper, higher sales
related personnel costs in the Equipment and Power Systems segments, additional
occupancy costs and other sales related expenses. The increase was offset
partially by lower bad debt expense in the Equipment segment compared to last
year. Selling and administrative expenses as a percentage of revenue decreased
to 14.7% in 2011 from 17.1% in 2010.


For the six months ended June 30, 2011, selling and administrative expenses
increased $7.2 million compared to last year due to higher sales related
personnel costs in the Equipment and Power Systems segments, a $2.0 million
increase in annual and mid-term incentive accruals, the acquisition of Harper,
additional occupancy costs and higher other sales related expenses. The increase
was offset partially by lower bad debt expense in the Equipment segment compared
to last year. Selling and administrative expenses as a percentage of revenue
decreased to 15.0% in 2011 from 17.7% in 2010.


Finance costs

Quarterly finance costs of $1.1 million remained the same compared to last year.
The impact of higher funded debt net of cash including obligations under finance
leases ("funded net debt") as a result of the acquisition of Harper on May 2,
2011, was offset by the positive impact of lower interest rates compared to last
year.


For the six months ended June 30, 2011, finance costs of $2.1 million remained
the same compared to 2010.


Income tax expense

Effective January 1, 2011, Wajax converted from an income fund to a corporation.
As a result, Wajax and its subsidiaries are subject to tax on all of their
taxable income from that date forward.


For the three months ended June 30, 2011, the effective income tax rate of 26.1%
was less than the Corporation's statutory income tax rate of 27.7% due mainly to
partnership income generated in 2011 which will be subject to tax in 2012 at a
lower rate.


For the six months ended June 30, 2011, the effective income tax rate of 27.4%
was less than the Corporation's statutory income tax rate of 27.7% due mainly to
partnership income generated in 2011 which will be subject to tax in 2012 at a
lower rate.


Net earnings

Quarterly net earnings of $16.5 million, or $0.99 per share, increased $4.3
million from $12.2 million, or $0.73 per share, in 2010. The positive impact of
higher volumes more than offset the negative impact of increased selling and
administrative and income tax expenses compared to last year.


For the six months ended June 30, 2011, net earnings increased $8.4 million to
$29.4 million, or $1.77 per share, from $21.0 million, or $1.27 per share, in
2010. The positive impact of higher volumes more than offset the negative impact
of increased selling and administrative and income tax expenses compared to last
year.


Comprehensive income

Comprehensive income for the quarter of $17.0 million increased $3.3 million
from $13.7 million the previous year due to the $4.3 million increase in net
earnings, offset by a $1.0 million decrease in other comprehensive income
compared to last year. The reduction in other comprehensive income resulted from
a decrease in gains on derivative instruments designated as cash flow hedges
outstanding at the end of the quarter, offset partially by an increase in losses
on derivative instruments designated as cash flow hedges in prior periods
reclassified to cost of inventory or finance costs in the current period.


For the six months ended June 30, 2011, comprehensive income of $30.1 million
increased $8.1 million from $22.0 million the previous year due to the $8.4
million increase in net earnings, offset by a $0.2 million decrease in other
comprehensive income compared to last year. The reduction in other comprehensive
income resulted from losses on derivative instruments designated as cash flow
hedges outstanding at the end of the period, offset mostly by an increase in
losses on derivative instruments designated as cash flow hedges in prior periods
reclassified to cost of inventory or finance costs in the current period.


Funded net debt

Funded net debt of $111.1 million as at June 30, 2011 increased $65.5 million
compared to December 31, 2010. The increase resulted mainly from cash used for
additional non-cash working capital of $48.0 million, dividends paid of $25.4
million, $21.6 million paid on closing for the acquisition of Harper, $13.9
million disbursed for rental fleet and other capital additions and interest
payments of $1.8 million. The increases were offset by year to date cash flows
from operating activities before changes in non-cash working capital of $47.4
million.


Wajax's $175 million bank credit facility expires December 31, 2011. Management
is currently in discussions with lenders regarding its refinancing and expects
to be able to enter into a new credit facility before the end of 2011.


Dividends

For the quarter ended June 30, 2011 monthly dividends declared totaled $0.51 per
share and included $0.15 per share for the month of April and $0.18 per share
for the months of May and June. For the quarter ended June 30, 2010 monthly cash
distributions declared were $0.45 per unit.


For the six months ended June 30, 2011 monthly dividends declared totaled $0.96
per share. For the six months ended June 30, 2010 monthly cash distributions
declared were $0.90 per unit.


On May 10, 2011 Wajax announced a monthly dividend of $0.18 per share ($2.16
annualized) for the month of July payable on August 22, 2011 to shareholders of
record on July 29, 2011. 


On August 3, 2011 Wajax announced monthly dividends of $0.20 per share ($2.40
annualized) for each of the months of August, September and October payable on
September 20, 2011, October 20, 2011 and November 21, 2011 to shareholders of
record on August 31, 2011, September 30, 2011 and October 31, 2011 respectively.



Tax information relating to 2011 dividends and prior year distributions is
available on Wajax's website at www.wajax.com.


Backlog

Consolidated backlog at June 30, 2011 of $281.7 million increased $66.0 million,
or 31%, from $215.7 million at March 31, 2011 due mainly to increases in order
intake in the Equipment segment and the acquisition of Harper. 


Quarterly Results of Operations

Equipment



                                   Three months ended      Six months ended 
                                              June 30               June 30 
                                      2011       2010       2011       2010 
----------------------------------------------------------------------------
Equipment(i)                     $    98.5  $    82.5  $   186.0  $   139.7 
Parts and service                $    65.7  $    60.3  $   129.6  $   111.5 
----------------------------------------------------------------------------
Segment revenue                  $   164.2  $   142.8  $   315.6  $   251.2 
----------------------------------------------------------------------------
Segment earnings                 $    12.0  $    10.3  $    23.1  $    18.2 
Segment earnings margin                7.3%       7.2%       7.3%       7.2%
----------------------------------------------------------------------------
(i) Includes rental revenue.                                                



Revenue in the second quarter of 2011 increased $21.4 million, or 15%, to $164.2
million from $142.8 million in the second quarter of 2010. Segment earnings for
the quarter increased $1.7 million to $12.0 million compared to the second
quarter of 2010. The following factors contributed to the Equipment segment's
second quarter results:




- Equipment revenue increased $16.0 million compared to last year. Specific 
  quarter-over-quarter variances included the following:                    
                                                                            
  - Construction equipment revenue increased $11.6 million due to increases 
    in new Hitachi excavator sales, primarily in western Canada, and JCB    
    equipment sales across Canada.                                          
  - Forestry equipment sales increased $8.7 million attributable to higher  
    market demand in all regions for Tigercat and forestry related Hitachi  
    products.                                                               
  - Material handling equipment revenue increased $3.3 million on higher    
    volumes in all regions.                                                 
  - Mining equipment sales decreased $5.8 million on fewer deliveries of    
    LeTourneau mining equipment in western Canada.                          
  - Crane and utility equipment revenue decreased $1.8 million due mainly to
    lower sales to utility customers in Ontario and eastern Canada.         
                                                                            
- Parts and service volumes increased $5.4 million compared to last year due
  principally to higher construction sector sales in western Canada and     
  mining sector sales in both eastern and western Canada.                   
                                                                            
- Segment earnings increased $1.7 million to $12.0 million compared to last 
  year as the positive impact of higher volumes outweighed the negative     
  impact of slightly lower parts and service margins and a $0.5 million     
  increase in selling and administrative expenses. Selling and              
  administrative expenses increased compared to last year due to higher     
  sales related expenses and offset partially by lower bad debt expense.    



Backlog of $151.0 million at June 30, 2011 increased $53.7 million compared to
March 31, 2011 due primarily to an increase in mining and construction equipment
orders in western Canada.


The Equipment segment recently closed an equipment supply agreement with Shell
Canada Energy for a total of seven Hitachi mining shovels and construction
excavators, adding to the already existing fleet of Hitachi equipment at Shell
Albian Sands, Shell's oil sands operation in the province of Alberta. In support
of Shell Albian Sands' fleet of Hitachi equipment, Wajax has also renewed and
extended the existing commercial arrangement with Shell Canada Energy for the
supply of parts, components and services until the end of April 2014.


Effective June 22, 2011 Rowan Companies, Inc. of Houston, Texas completed the
sale of its 100% ownership interest in LeTourneau Technologies, Inc.
("LeTourneau"), a mining wheel loader manufacturer, to Milwaukee-based Joy
Global Inc. ("Joy"). Wajax is the exclusive distributor of LeTourneau products
in Canada. Joy has indicated that it intends to look for ways to integrate the
LeTourneau distribution activities with its P&H mining equipment operations
which will likely impact Wajax's current distribution arrangement with
LeTourneau. The sale and service of LeTourneau products in 2010 generated
approximately $40 million of revenue for Wajax and contributed approximately $10
million to earnings before interest and taxes.


The segment continues to monitor developments in Japan related to the effects of
the March 11, 2011 earthquake and tsunami on the Hitachi Japan supply chain. The
Equipment segment is the distributor of Hitachi construction and forestry
excavators and mining equipment in Canada. Hitachi equipment and parts
distributed by Wajax are manufactured and sourced from various locations in
Japan and the United States. The expected impact on the Equipment segment in
2011 is as follows:




--  Supply disruptions related to parts sourced from Japan have not had, and
    are not anticipated to have, a significant effect on 2011 parts revenue.

--  With respect to mining equipment, the segment's continued working
    assumption is that there will be a delay in deliveries from Japan of up
    to six months. The effect on the segment's 2011 revenue is estimated to
    be a reduction of approximately $40 million. 



Industrial Components



                                 Three months ended        Six months ended 
                                            June 30                 June 30 
                                   2011        2010        2011        2010 
----------------------------------------------------------------------------
Segment revenue              $     89.9  $     75.9  $    170.6  $    148.5 
----------------------------------------------------------------------------
Segment earnings             $      6.5  $      2.0  $     11.0  $      5.2 
Segment earnings margin             7.3%        2.7%        6.4%        3.5%
----------------------------------------------------------------------------



Revenue of $89.9 million increased $14.0 million, or 18%, from $75.9 million in
the second quarter of 2010. Segment earnings increased $4.5 million to $6.5
million in the quarter compared to the previous year. The following factors
contributed to the segment's second quarter results:




--  Bearings and power transmission parts sales increased $4.9 million
    compared to last year due mainly to higher mining sector volumes across
    all regions and increased sales in the forestry, industrial and
    transportation sectors, primarily in eastern Canada and Ontario. 

--  Fluid power and process equipment products and service revenue increased
    $9.1 million on improved oil and gas drilling activity in western Canada
    and increased sales to agriculture, metal processing and transportation
    customers.  

--  Segment earnings increased $4.5 million compared to last year due to the
    positive impact of higher volumes and a $0.4 million decrease in selling
    and administrative expenses. The decrease in selling and administrative
    expenses resulted mainly from lower personnel related costs. 



Backlog of $47.0 million as of June 30, 2011 increased $1.5 million compared to
March 31, 2011.


Power Systems



                                 Three months ended        Six months ended 
                                            June 30                 June 30 
                                   2011        2010        2011        2010 
----------------------------------------------------------------------------
Equipment                    $     36.1  $     18.4  $     71.6  $     32.0 
Parts and service            $     44.9  $     36.7  $     82.4  $     70.6 
----------------------------------------------------------------------------
Segment revenue              $     81.0  $     55.1  $    154.0  $    102.6 
----------------------------------------------------------------------------
Segment earnings             $      8.3  $      3.7  $     15.3  $      4.6 
Segment earnings margin            10.2%        6.6%        9.9%        4.5%
----------------------------------------------------------------------------



Revenue in the second quarter increased $25.9 million, or 47%, to $81.0 million
compared to $55.1 million in 2010 and included $9.1 million of revenue from the
Harper acquisition effective May 2, 2011. Segment earnings increased $4.6
million to $8.3 million in the quarter compared to the previous year. The
following factors impacted quarterly revenue and earnings:




--  Revenue in western Canada increased $18.2 million compared to last year.
    Equipment sales improved $15.1 million on higher sales to oil and gas
    customers and increased power generation equipment sales. Parts and
    service revenue increased $3.1 million mainly as a result of higher
    sales to off-highway customers, including those in the mining and oil
    and gas sectors. 

--  Revenue in central Canada of $9.1 million from the acquisition of Harper
    effective May 2, 2011 resulted primarily from sales to on-highway
    customers. 

--  Revenue in eastern Canada decreased by $1.4 million compared to 2010.
    Equipment sales increased $0.6 million while parts and service revenue
    decreased $2.0 million due to a decline in military and marine sector
    activity. 

--  Segment earnings increased $4.6 million compared to last year as the
    positive impact of higher volumes more than offset a $2.1 million
    increase in selling and administrative expenses. Selling and
    administrative expenses increased largely as a result of the Harper
    acquisition, higher annual and long term incentive accruals and
    commissions, offset partially by savings in other sales related
    expenses. 



Backlog of $83.7 million as of June 30, 2011 increased $10.8 million compared to
March 31, 2011 due mainly to the acquisition of Harper.


Effective May 2, 2011, Wajax purchased the assets of Harper the authorized
Ontario distributor for Detroit Diesel, Mercedes-Benz, MTU and Deutz engines,
MTU Onsite Energy generator sets and Allison transmissions with adjusted 2010
annual revenue of approximately $71 million. With the exception of Deutz
engines, Wajax Power Systems is presently the authorized distributor of these
lines in the rest of Canada except for portions of British Columbia. The
consideration for the assets was $23.2 million, subject to further post-closing
adjustments.


Wajax Power Systems has assumed the operation of Harper's 10 branches in Ontario
located in Toronto, Ottawa, Hamilton, London, Sudbury, Timmins, Kingston,
Cornwall, Niagara Falls and Pembroke. 


With Harper's business well established in the on-highway sector of the market,
Wajax intends to further expand its presence in the off-highway and power
generation sectors in Ontario. This acquisition also represents a major step
towards the strategic objective of becoming a national total power systems
solution provider.


Selected Quarterly Information



                 2011(1)                 2010(1)                 2009(2)    
                  Q2      Q1      Q4      Q3      Q2      Q1      Q4      Q3
----------------------------------------------------------------------------
Revenue      $ 334.1 $ 303.9 $ 317.1 $ 294.4 $ 272.0 $ 227.4 $ 259.1 $ 234.6
----------------------------------------------------------------------------
Net earnings $  16.5 $  12.8 $  15.0 $  19.6 $  12.2 $   8.9 $   8.3 $   6.8
                                                                            
Net earnings                                                                
 per share                                                                  
  - Basic    $  0.99 $  0.77 $  0.90 $  1.18 $  0.73 $  0.53 $  0.50 $  0.41
  - Diluted  $  0.98 $  0.76 $  0.89 $  1.16 $  0.72 $  0.53 $  0.50 $  0.40
----------------------------------------------------------------------------
(1) 2011 and 2010 financials are prepared in accordance with IFRS. In       
    addition, certain 2010 comparative amounts have been reclassified to    
    conform with the current period presentation. In particular, cash       
    discounts provided to customers have been reclassified out of selling   
    and administrative into revenue. In addition, cash discounts received   
    from vendors have been reclassified out of selling and administrative   
    expenses into cost of sales. The above reclassification do not affect   
    net earnings or cashflows.                                              
(2) 2009 financials are prepared in accordance with Canadian GAAP. In       
    addition, certain 2009 comparative amounts have been reclassified to    
    conform with the current period presentation. In particular, amounts    
    recovered from customers or manufacturers have been reclassified out of 
    selling and administrative expenses into revenue. In addition, service  
    department overhead amounts have been reclassified out of selling and   
    administrative expenses into cost of sales. The above reclassifications 
    do not affect net earnings or cashflows.                                



A discussion of Wajax's previous quarterly results can be found in Wajax's
quarterly MD&A reports available on SEDAR at www.sedar.com.


Cash Flow, Liquidity and Capital Resources

Net Cash Flows used in Operating Activities

While the IFRS adjustments do not impact the Corporation's total cash flows,
cash flows from operating activities and cash flows used in investing activities
have each been adjusted, by equal and offsetting amounts to reflect the
reclassification of rental equipment additions as operating activities.


For the six months ended June 30, 2011, net cash flows used in operating
activities amounted to $14.1 million, compared to $18.5 million generated from
operating activities the previous year. The $32.6 million decrease was due
primarily to a $40.2 million increased use of non-cash working capital and $9.8
million higher lift truck rental fleet additions in the Equipment segment,
offset by higher cash flows from operations before changes in non-cash working
capital of $17.2 million.


Changes in non-cash working capital for the first six months of 2011 compared to
2010 include the following components: 




                                                   Six months ended June 30 
Increase (decrease) in non-cash working                                     
 capital                                               2011            2010 
----------------------------------------------------------------------------
Trade and other receivables                   $        38.4   $        23.5 
Inventories                                   $        12.1   $         0.4 
Prepaid expenses                              $        (0.1)  $         4.7 
Trade and other payables                      $         0.6   $       (11.7)
Accrued Liabilities                           $        (2.6)  $        (9.7)
Provisions                                    $        (0.4)  $         0.6 
----------------------------------------------------------------------------
Total                                         $        48.0   $         7.8 
----------------------------------------------------------------------------



Significant components of the changes in non-cash working capital for the six
months ended June 30, 2011 are as follows:




--  Trade and other receivables increased $38.4 million due to the impact of
    higher sales activity in all segments and the recent postal strike. 

--  Inventories increased $12.1 million largely in the Power Systems and
    Industrial Components segments as a result of a continued growth in
    sales activity. 



At June 30, 2011 Wajax had employed $188.8 million in working capital, exclusive
of funded net debt, compared to $118.3 million at December 31, 2010. The $70.5
million increase was due primarily to the cash flow factors listed above, the
Harper acquisition and a $9.5 million decrease in dividends payable related to
the payment in January 2011 of distributions declared in December 2010 prior to
converting from an income fund to a corporation.


Investing Activities

For the six months ended June 30, 2011, Wajax paid $21.6 million of cash on
closing for the acquisition of Harper on May 2, 2011 and a net amount of $2.2
million on capital asset additions net of disposals compared to $1.3 million the
previous year.


Financing Activities

For the six months ended June 30, 2011, Wajax used $13.0 million of cash in
financing activities compared to $16.7 million in 2010. Distributions and
dividends paid to shareholders totaling $25.4 million, or $1.53 per share,
exceeded increases in long-term debt of $14.0 million in the period. 


Funded net debt of $111.1 million at June 30, 2011 increased $65.5 million
compared to December 31, 2010. The increase resulted mainly from cash used for
additional non-cash working capital of $48.0 million, distributions and
dividends paid of $25.4 million, $21.6 million paid on closing for the
acquisition of Harper, $13.9 million disbursed for rental fleet and other
capital additions and interest payments of $1.8 million. The increases were
offset by cash flows from operating activities before changes in non-cash
working capital of $47.4 million. Wajax's period-end funded net debt-to-equity
ratio of 0.52:1 at June 30, 2011 increased from the ratio of 0.23:1 at December
31, 2010.


Liquidity and Capital Resources

At June 30, 2011 Wajax had borrowed $94.0 million and issued $5.5 million of
letters of credit for a total utilization of $99.5 million of its $175 million
bank credit facility and had no utilization of its $15 million equipment
financing facility. Borrowing capacity under the bank credit facility is
dependent on the level of inventories on-hand and outstanding trade accounts
receivables. At June 30, 2011 borrowing capacity under the bank credit facility
was equal to $175 million.


Wajax's $175 million bank credit facility along with an additional $15 million
of capacity permitted under the credit facility, should be sufficient to meet
Wajax's short-term normal course working capital, maintenance capital and growth
capital requirements. In the long-term Wajax may be required to access the
equity or debt markets in order to fund significant acquisitions and growth
related working capital and capital expenditures.


The $175 million bank credit facility expires December 31, 2011. Management is
currently in discussions with lenders regarding its refinancing and expects to
be able to enter into a new credit facility before the end of 2011.


Financial Instruments

Wajax uses derivative financial instruments in the management of its foreign
currency and interest rate exposures. Wajax's policy is not to utilize
derivative financial instruments for trading or speculative purposes.
Significant derivative financial instrument transactions and those outstanding
at the end of the quarter were as follows:




--  Wajax has entered into the following interest rate swaps that have
    effectively fixed the interest rate on $80 million of Wajax's debt at
    the combined rate of 2.925%, plus applicable margins, until December 31,
    2011: 
    --  On June 7, 2008 the delayed interest rate swap Wajax entered into on
        May 9, 2007 with two of its lenders became effective. As a result,
        the interest rate on the $30 million non-revolving term portion of
        the bank credit facility was effectively fixed at 4.60% plus
        applicable margins until expiry of the facility on December 31,
        2011.  
    --  On January 23, 2009 a delayed interest rate swap Wajax entered into
        on December 18, 2008 with two of its lenders became effective. As a
        result, the interest rate on the $50 million revolving term portion
        of the bank credit facility was effectively fixed at 1.92% plus
        applicable margins until expiry of the facility on December 31,
        2011.  
    --  Margins on the debt associated with the interest rate swaps depend
        on Wajax's Leverage Ratio and range between 0.75% and 2.5%. 

--  Wajax enters into short-term currency forward contracts to fix the
    exchange rate on the cost of certain inbound inventory and to hedge
    certain foreign currency-denominated sales to (receivables from)
    customers as part of its normal course of business. As at June 30, 2011,
    Wajax had contracts outstanding to buy U.S.$29.3 million and to sell
    U.S.$4.4 million and EUR0.006 million (December 31, 2010 - to buy
    U.S.$34.1 million and to sell U.S.$0.3 million, June 30, 2010 - to buy
    U.S.$41.8 million and EUR0.2 million and to sell U.S.$0.03 million). The
    U.S. dollar contracts expire between July 2011 and December 2012, with a
    weighted average U.S./Canadian dollar rate of 0.9898 and weighted
    average Euro / Canadian dollar rate of 1.3964. 



Wajax measures financial instruments held for trading and not accounted for as
hedging items, at fair value with subsequent changes in fair value being charged
to earnings. Derivatives designated as effective hedges are measured at fair
value with subsequent changes in fair value being charged to other comprehensive
income. The fair value of derivative instruments is estimated based upon market
conditions using appropriate valuation models. The carrying values reported in
the balance sheet for financial instruments are not significantly different from
their fair values.


The transition to IFRS did not have a material effect on the Corporation's
accounting for financial instruments.


Currency Risk

There have been no material changes to currency risk since December 31, 2010.

Contractual Obligations

There have been no material changes to contractual obligations since December
31, 2010.


Off Balance Sheet Financing

The Equipment segment had $27.9 million (2010 - $22.6 million) of consigned
inventory on-hand from a major manufacturer as at June 30, 2011. In the normal
course of business, Wajax receives inventory on consignment from this
manufacturer which is generally sold to customers or purchased by Wajax. This
consigned inventory is not included in Wajax's inventory as the manufacturer
retains title to the goods.


Wajax's off balance sheet financing arrangements, with non-bank lenders, include
operating lease contracts in relation to Wajax's long-term lift truck rental
fleet in the Equipment segment. At June 30, 2011, the non-discounted operating
lease commitment for the rental fleet was $5.0 million (December 31, 2010 - $6.0
million).


In the event the inventory consignment program was terminated, Wajax would
utilize interest free financing, if any, made available by the manufacturer
and/or utilize capacity under its bank credit facility. Although management
currently believes Wajax has adequate debt capacity, Wajax would have to access
the equity or debt markets, or temporarily reduce dividends to accommodate any
shortfalls in Wajax's credit facility. See the Liquidity and Capital Resources
section.


Under IFRS, vehicle leases that were previously classified as operating leases
under Canadian GAAP are assessed as financing leases. Assets under finance lease
are capitalized at the commencement of the lease at the fair value of the leased
asset or, if lower, at the present value of the minimum lease payments. The
liability is recorded in the statement of financial position and classified
between current and non-current amounts. Lease payments are apportioned between
finance charges and a reduction of the lease liability so as to achieve a
constant rate of return of interest on the remaining balance of the liability.


Dividends

Dividends to shareholders were declared as follows:



Record Date                             Payment Date   Per Share      Amount
----------------------------------------------------------------------------
April 29, 2011                          May 20, 2011   $    0.15   $     2.5
May 31, 2011                           June 20, 2011        0.18         3.0
June 30, 2011                          July 20, 2011        0.18         3.0
----------------------------------------------------------------------------
Three months ended June 30, 2011                       $    0.51   $     8.5
----------------------------------------------------------------------------



On May 10, 2011 Wajax announced a monthly dividend of $0.18 per share ($2.16
annualized) for the month of July payable on August 22, 2011 to shareholders of
record on July 29, 2011. 


On August 3, 2011 Wajax announced monthly dividends of $0.20 per share ($2.40
annualized) for each of the months of August, September and October payable on
September 20, 2011, October 20, 2011 and November 21, 2011 to shareholders of
record on August 31, 2011, September 30, 2011 and October 31, 2011 respectively.



Tax information relating to 2011 dividends and prior year distributions is
available on Wajax's website at www.wajax.com.


Productive Capacity and Productive Capacity Management

During the quarter, Wajax increased its productive capacity through the
acquisition of Harper which increased the Power Systems' Ontario infrastructure
by an additional ten branches. There have been no other material changes to the
Corporation's productive capacity and productive capacity management since
December 31, 2010.


Financing Strategies

Wajax's $175 million bank credit facility along with the $15 million demand
inventory equipment financing facility should be sufficient to meet Wajax's
short-term normal course working capital, maintenance capital and growth capital
requirements. The $175 million bank credit facility expires December 31, 2011.
Management is currently in discussions with lenders regarding its refinancing
and expects to be able to enter into a new credit facility before the end of
2011.


Wajax's short-term normal course working capital requirements can swing widely
quarter-to-quarter due to the timing of large inventory purchases and/or sales
and changes in market activity. In general, as Wajax experiences growth, there
is a need for additional working capital as was the case in 2006 and 2008.
Conversely, as Wajax experiences economic slowdowns working capital reduces
reflecting the lower activity levels as was the case in 2009. Fluctuations in
working capital are generally funded by, or used to repay, the bank credit
facilities. 


In the long-term Wajax may also be required to access the equity or debt markets
or reduce dividends in order to fund significant acquisitions and growth related
working capital and capital expenditures.


Borrowing capacity under the bank credit facility is dependent on the level of
Wajax's inventories on-hand and outstanding trade accounts receivables. At June
30, 2011 borrowing capacity under the bank credit facility was equal to $175
million.


The bank credit facility contains covenants that could restrict the ability of
Wajax to make dividend payments, if (i) an event of default exists or would
exist as a result of a dividend payment, and (ii) the leverage ratio (Debt to
EBITDA) is greater than 3.0. If the leverage ratio is less than or equal to 3.0,
then the aggregate dividend payments by the borrowers in each fiscal quarter may
not exceed 115% of distributable cash for the trailing four fiscal quarters.
Borrowing capacity under the bank credit facility is dependent on the level of
inventories on-hand and outstanding trade accounts receivables. For further
detail, the bank credit facility is available on SEDAR at www.sedar.com.


Share Capital

The shares of Wajax issued are included in shareholders' equity on the balance
sheet as follows:




Issued and fully paid shares as at June 30, 2011            Number    Amount
----------------------------------------------------------------------------
Balance at the beginning of the year                    16,629,444    $105.9
Rights exercised                                                 -         -
----------------------------------------------------------------------------
Balance at end of quarter                               16,629,444    $105.9
----------------------------------------------------------------------------



Wajax has five share-based compensation plans; the Wajax Share Ownership Plan
("SOP"), the Deferred Share Program ("DSP"), the Directors' Deferred Share Unit
Plan ("DDSUP"), the Mid-Term Incentive Plan for Senior Executives ("MTIP") and
the Deferred Share Unit Plan ("DSUP"). SOP, DSP and DDSUP rights are issued to
the participants and are settled by issuing Wajax Corporation shares. The
cash-settled MTIP and DSUP consist of annual grants that vest over three years
and are subject to time and performance vesting criteria. A portion of the MTIP
and the full amount of the DSUP grants are determined by the price of the
Corporation's shares. Compensation expense for the SOP, DSP and DDSUP is
determined based upon the fair value of the rights at the date of grant and
charged to earnings on a straight line basis over the vesting period, with an
offsetting adjustment to contributed surplus. Compensation expense for the DSUP
and the share-based portion of the MTIP varies with the price of the
Corporation's shares and is recognized over the vesting period. Wajax recorded
compensation cost of $1.1 million for the quarter (2010 - $1.2 million) and $2.5
million for the six months ended (2010 - $1.9 million) in respect of these
plans.


Effective January 1, 2011 the SOP, DSP, DDSUP and MTIP plans have been amended
to reflect the conversion to a corporation. 


Critical Accounting Estimates

The preparation of financial statements requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenue and expenses during the reporting
period. Significant accounting estimates include the provision for inventory
obsolescence, provision for doubtful accounts and any impairment of goodwill and
other assets, classification of leases, warranty reserve and measurement of
employee benefit obligations. Wajax makes a provision for doubtful accounts when
there is evidence that a specific account may become uncollectible. Wajax does
not provide a general reserve for bad debts. As conditions change, actual
results could differ from those estimates. Critical accounting estimates used by
Wajax's management are discussed in detail in the MD&A for the year ended
December 31, 2010 which can be found on SEDAR at www.sedar.com.


Accounting Changes

Transition to International Financial Reporting Standards 

The Corporation has adopted IFRS on January 1, 2011 as required by the
Accounting Standards Board of the Canadian Institute of Chartered Accountants.
The Corporation provided information on its transition to IFRS in its MD&A for
the quarter ended March 31, 2011. This information has not changed materially
from what was provided.


Note 13 of the condensed consolidated financial statements provides an
explanation of the transition to IFRS. In addition, Note 13 provides detailed
reconciliations between Canadian GAAP and IFRS of the consolidated income
statement and consolidated statement of comprehensive income for the three
months and six months ended June 30, 2010 and of the consolidated statement of
financial position as at June 30, 2010. These reconciliations provide
explanations of each major difference.


New standards and interpretations not yet adopted

As of January 1, 2013, the Corporation will be required to adopt IFRS 9
Financial Instruments, which is the result of the first phase of the IASB's
project to replace IAS 39 Financial Instruments: Recognition and Measurement.
The new standard replaces the current multiple classification and measurement
models for financial assets and liabilities with a single model that has only
two classification categories: amortized cost and fair value. The Corporation is
currently assessing the impact of this standard on its consolidated financial
statements.


As of January 1, 2013, the Corporation will be required to adopt IFRS 10
Consolidated Financial Statements, which establishes principles for the
preparation and presentation of consolidated financial statements when an entity
controls one or more other entities. The Corporation does not expect IFRS 10 to
have a material impact on its consolidated financial statements.


As of January 1, 2013, the Corporation will be required to adopt IFRS 13 Fair
Value Measurement, which defines fair value and sets out a framework for
measuring fair value when fair value measurements are required or permitted by
other IFRSs. The Corporation is currently assessing the impact of this standard
on its consolidated financial statements.


As of January 1, 2013, the Corporation will be required to adopt amendments to
IAS 1 Presentation of Financial Statements, which require that an entity present
separately the items of OCI that may be reclassified to profit or loss in the
future from those that would never be reclassified to profit or loss. The
Corporation intends to adopt the amendments in its financial statements for the
annual period beginning on January 1, 2013. As the amendments only require
changes in the presentation of items in other comprehensive income, the
Corporation does not expect the amendments to IAS 1 to have a material impact on
the financial statements.


As of January 1, 2013, the Corporation will be required to adopt amendments to
IAS 19 Employee Benefits, which requires recognition of actuarial gains and
losses immediately in other comprehensive income, the full recognition of past
service costs immediately in profit or loss, recognition of the expected return
on plan assets in profit or loss to be calculated based on the rate used to
discount the defined benefit obligation, and certain additional disclosures. The
Corporation is currently assessing the impact of this standard on its
consolidated financial statements.


Risks and Uncertainties

As with most businesses, Wajax is subject to a number of marketplace and
industry related risks and uncertainties which could have a material impact on
operating results. Wajax attempts to minimize many of these risks through
diversification of core businesses and through the geographic diversity of its
operations. There are however, a number of risks that deserve particular comment
which are discussed in detail in the MD&A for the year ended December 31, 2010
which can be found on SEDAR at www.sedar.com. For the period July 1, 2011 to
August 3, 2011 there have been no material changes to the business of Wajax that
require an update to the discussion of the applicable risks discussed in the
MD&A for the year ended December 31, 2010. 


Outlook 

Improvements in the second quarter were driven by the robust energy, mining,
forestry and construction markets particularly in western Canada. However,
management was also encouraged by stronger results in the Equipment segment's
Ontario operation and the eastern Canada business of Industrial Components.
Results from the Harper acquisition for the two months since the transaction
closed have met our expectations.


The Equipment segment has been able to minimize the effects of the supply
disruption to its Hitachi product line caused by the earthquake and resulting
tsunami in Japan. As expected, the most significant issue relates to delays in
obtaining mining equipment, which will have some impact on 2011 revenue. In
addition, the segment continues to experience some product shipment delays for a
number of other products from several suppliers, mainly as a result of increased
global demand and component shortages.


For the remainder of the year, management expects economic activity in the
broader Canadian economy will continue at a level similar to that experienced in
the first six months. Notwithstanding negative impacts from the Hitachi
equipment and other product supply disruptions, management also expects pre-tax
earnings to continue to be ahead of last year for the balance of 2011, but at a
lower rate of increase. Wajax's decision to increase the monthly dividend takes
into account the strength of expected future earnings including the potential
downside effects on its LeTourneau products distribution arrangement.


Additional information, including Wajax's Annual Report and Annual Information
Form, are available on SEDAR at www.sedar.com.


WAJAX CORPORATION

Unaudited Condensed Consolidated Financial Statements

For the three and six months ended June 30, 2011

Notice required under National Instrument 51-102, "Continuous Disclosure
Obligations" Part 4.3(3) (a):


The attached condensed consolidated financial statements have been prepared by
Management of Wajax Corporation and have not been reviewed by the Corporation's
auditors.




                              WAJAX CORPORATION                             
                    CONDENSED CONSOLIDATED STATEMENTS OF                    
                             FINANCIAL POSITION                             
                                                                            
                                                                            
As at                                                                       
(unaudited, in thousands of Canadian                June 30,   December 31, 
 dollars)                                               2011           2010 
----------------------------------------------------------------------------
ASSETS                                                                      
CURRENT                                                                     
Cash                                             $         -  $      42,954 
Trade and other receivables                          184,447        135,517 
Inventories                                          218,910        196,460 
Prepaid expenses                                       7,421          7,244 
----------------------------------------------------------------------------
                                                     410,778        382,175 
----------------------------------------------------------------------------
                                                                            
NON-CURRENT                                                                 
Rental equipment                          Note 4      23,371         15,794 
Property, plant and equipment             Note 5      48,350         46,090 
Intangible assets                         Note 6      81,929         72,972 
Deferred tax assets                       Note 9           -          5,277 
Pension asset                                            395            240 
----------------------------------------------------------------------------
                                                     154,045        140,373 
----------------------------------------------------------------------------
                                                 $   564,823  $     522,548 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND SHAREHOLDERS' EQUITY                                        
CURRENT                                                                     
Bank indebtedness                                $     7,970  $           - 
Trade and other payables                             141,258        134,832 
Accrued liabilities                                   68,510         64,229 
Provisions                                             5,286          4,892 
Dividends payable                                      2,993         12,472 
Income taxes payable                                   2,540          2,072 
Obligations under finance leases                       3,689          3,677 
Derivative instrument liability                        1,356          2,452 
Bank debt                                             93,839         79,680 
----------------------------------------------------------------------------
                                                     327,441        304,306 
----------------------------------------------------------------------------
                                                                            
NON-CURRENT                                                                 
Provisions                                             4,375          4,338 
Deferred tax liabilities                  Note 9       5,590              - 
Employee benefits                                      4,033          4,132 
Other liabilities                                      3,372          5,221 
Obligations under finance leases                       5,595          5,227 
----------------------------------------------------------------------------
                                                      22,965         18,918 
----------------------------------------------------------------------------
                                                                            
SHAREHOLDERS' EQUITY                                                        
Share capital                                        105,892              - 
----------------------------------------------------------------------------
Trust units                                                -        105,892 
----------------------------------------------------------------------------
Contributed surplus                       Note 8       7,338          6,426 
----------------------------------------------------------------------------
Retained earnings                                    102,801         89,411 
Accumulated other comprehensive loss                  (1,614)        (2,405)
----------------------------------------------------------------------------
                                                     101,187         87,006 
----------------------------------------------------------------------------
Total shareholders' equity                           214,417        199,324 
----------------------------------------------------------------------------
                                                 $   564,823  $     522,548 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



These condensed consolidated financial statements were approved by the Board of
Directors on August 3, 2011.




                              WAJAX CORPORATION                             
                  CONDENSED CONSOLIDATED INCOME STATEMENTS                  
                                                                            
(unaudited, in thousands of               Three months                      
 Canadian dollars, except per share              ended     Six months ended 
 data)                                         June 30              June 30 
                                                                            
                                         2011     2010        2011     2010 
----------------------------------------------------------------------------
                                                                            
Revenue                             $ 334,069 $272,042   $ 637,998 $500,163 
Cost of sales                         261,539  212,575     499,605  388,995 
----------------------------------------------------------------------------
Gross profit                           72,530   59,467     138,393  111,168 
----------------------------------------------------------------------------
Selling and administrative                                                  
 expenses                              49,044   46,558      95,887   88,685 
----------------------------------------------------------------------------
Earnings before finance                                                     
 costs and income taxes                23,486   12,909      42,506   22,483 
Finance costs                           1,109    1,082       2,085    2,149 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes                                 22,377   11,827      40,421   20,334 
Income tax expense                                                          
 (recovery)                  Note 9     5,839     (337)     11,067     (707)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings                        $  16,538 $ 12,164   $  29,354 $ 21,041 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Basic earnings per share    Note 10 $    0.99 $   0.73   $    1.77 $   1.27 
Diluted earnings per share  Note 10 $    0.98 $   0.72   $    1.74 $   1.25 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                              WAJAX CORPORATION                             
                    CONDENSED CONSOLIDATED STATEMENTS OF                    
                            COMPREHENSIVE INCOME                            
                                                                            
(unaudited, in thousands of          Three months ended     Six months ended
Canadian dollars)                               June 30              June 30
                                                                            
                                         2011      2010      2011       2010
----------------------------------------------------------------------------
                                                                            
Net earnings                        $  16,538 $  12,164 $  29,354  $  21,041
----------------------------------------------------------------------------
                                                                            
Losses on derivative instruments                                            
 designated as cash flow hedges in                                          
 prior periods reclassified to cost                                         
 of inventory or finance costs                                              
 during the period, net of tax of                                           
 $160 (2010 - $34) and year to date,                                        
 net of tax of $390 (2010 - $49)          422       320     1,029        459
                                                                            
Gains (losses) on derivative                                                
 instruments designated as cash flow                                        
 hedges during the period, net of                                           
 tax of $16 (2010 - $108) and year                                          
 to date, net of tax of $87 (2010 -                                         
 $115)                                     34     1,215      (238)       509
                                                                            
----------------------------------------------------------------------------
Other comprehensive income, net of                                          
 tax                                      456     1,535       791        968
----------------------------------------------------------------------------
                                                                            
Total comprehensive income          $  16,994 $  13,699 $  30,145  $  22,009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                              WAJAX CORPORATION                             
                    CONDENSED CONSOLIDATED STATEMENTS OF                    
                       CHANGES IN SHAREHOLDERS' EQUITY                      





                                                                            
                                                                            
For the six months ended                                                    
 June 30, 2011                                        Contributed           
(unaudited, in thousands of            Share    Trust     surplus  Retained 
 Canadian dollars)                   capital    units    (Note 8)  earnings 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2011                    $       -  105,892       6,426    89,411 
                                                                            
Conversion to corporation            105,892 (105,892)          -         - 
                                                                            
Net earnings                               -        -           -    29,354 
                                                                            
Other comprehensive income                                                  
Losses on derivative                                                        
 instruments designated as                                                  
 cash flow hedges in prior                                                  
 periods reclassified to                                                    
 cost of inventory or                                                       
 finance costs during the                                                   
 period, net of tax                        -        -           -         - 
                                                                            
Losses on derivative                                                        
 instruments designated as                                                  
 cash flow hedges during                                                    
 the period, net of tax                    -        -           -         - 
                                                                            
----------------------------------------------------------------------------
Total other comprehensive                                                   
 income                                    -        -           -         - 
----------------------------------------------------------------------------
Total comprehensive income                                                  
 for the period                            -        -           -    29,354 
----------------------------------------------------------------------------
Dividends                    Note 7        -        -           -   (15,964)
----------------------------------------------------------------------------
Share-based compensation                                                    
 expense                     Note 8        -        -         912         - 
----------------------------------------------------------------------------
June 30, 2011                      $ 105,892        -       7,338   102,801 
----------------------------------------------------------------------------
                                                                            

                           Accumulated other comprehensive                  
                                income (loss) ("AOCL")                      
                           -------------------------------                  
For the six months ended                         Gains and                  
 June 30, 2011                   Actuarial       Losses on                  
(unaudited, in thousands of      Gains and       Cash Flow                  
 Canadian dollars)                  Losses          Hedges            Total 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2011                       (628)         (1,777) $       199,324 
                                                                            
Conversion to corporation                -               -                - 
                                                                            
Net earnings                             -               -           29,354 
                                                                            
Other comprehensive income                                                  
Losses on derivative                                                        
 instruments designated as                                                  
 cash flow hedges in prior                                                  
 periods reclassified to                                                    
 cost of inventory or                                                       
 finance costs during the                                                   
 period, net of tax                      -           1,029            1,029 
                                                                            
Losses on derivative                                                        
 instruments designated as                                                  
 cash flow hedges during                                                    
 the period, net of tax                  -            (238)            (238)
                                                                            
----------------------------------------------------------------------------
Total other comprehensive                                                   
 income                                  -             791              791 
----------------------------------------------------------------------------
Total comprehensive income                                                  
 for the period                          -             791           30,145 
----------------------------------------------------------------------------
Dividends                                -               -          (15,964)
----------------------------------------------------------------------------
Share-based compensation                                                    
 expense                                 -               -              912 
----------------------------------------------------------------------------
June 30, 2011                         (628)           (986) $       214,417 
----------------------------------------------------------------------------
                                                                            
                              WAJAX CORPORATION                             
                    CONDENSED CONSOLIDATED STATEMENTS OF                    
                       CHANGES IN SHAREHOLDERS' EQUITY                      
                                                                            
                                                                            
                                                                            
For the six months ended June                                               
 30, 2010                                                        Contributed
(unaudited, in thousands of                     Share     Trust      surplus
 Canadian dollars)                            capital     units     (Note 8)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2010                           $         -   105,307        5,645
                                                                            
Net earnings                                        -         -            -
                                                                            
Other comprehensive loss                                                    
Losses on derivative instruments                                            
 designated as cash flow hedges                                             
 in prior periods reclassified                                              
 to cost of inventory or finance                                            
 costs during the period, net of                                            
 tax                                                -         -            -
                                                                            
Gains on derivative instruments                                             
 designated as cash flow hedges                                             
 during the period, net of tax                      -         -            -
                                                                            
----------------------------------------------------------------------------
Total other comprehensive loss                      -         -            -
----------------------------------------------------------------------------
Total comprehensive income for                                              
 the period                                         -         -            -
----------------------------------------------------------------------------
Dividends                          Note 7           -         -            -
----------------------------------------------------------------------------
Share-based compensation expense   Note 8           -         -          592
----------------------------------------------------------------------------
June 30, 2010                             $         -   105,307        6,237
----------------------------------------------------------------------------

                                                         AOCL               
                                            -----------------               
For the six months ended June                                               
 30, 2010                                           Gains and               
(unaudited, in thousands of       Retained          Losses on               
 Canadian dollars)                earnings   Cash Flow Hedges         Total 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2010                     90,258             (2,233)  $   198,977 
                                                                            
Net earnings                        21,041                  -        21,041 
                                                                            
Other comprehensive loss                                                    
Losses on derivative instruments                                            
 designated as cash flow hedges                                             
 in prior periods reclassified                                              
 to cost of inventory or finance                                            
 costs during the period, net of                                            
 tax                                     -                459           459 
                                                                            
Gains on derivative instruments                                             
 designated as cash flow hedges                                             
 during the period, net of tax           -                509           509 
                                                                            
----------------------------------------------------------------------------
Total other comprehensive loss                            968           968 
----------------------------------------------------------------------------
Total comprehensive income for                                              
 the period                         21,041                968        22,009 
----------------------------------------------------------------------------
Dividends                          (14,944)                 -       (14,944)
----------------------------------------------------------------------------
Share-based compensation expense         -                  -           592 
----------------------------------------------------------------------------
June 30, 2010                       96,355             (1,265)  $   206,634 
----------------------------------------------------------------------------
                                                                            
                             WAJAX CORPORATION                              
                    CONDENSED CONSOLIDATED STATEMENTS OF                    
                                 CASH FLOWS                                 
                                                                            
                                                   Six months ended June 30 
(unaudited, in thousands of Canadian                                        
 dollars)                                               2011           2010 
----------------------------------------------------------------------------
OPERATING ACTIVITIES                                                        
  Net earnings                                  $     29,354   $     21,041 
  Items not affecting cash flow:                                            
    Depreciation and amortization                                           
      Rental equipment                                 2,066          1,736 
      Property, plant and equipment                    2,364          2,160 
      Assets under finance lease                       1,446          1,249 
      Intangible assets                                  252            295 
    Share-based compensation expense      Note 8         912            592 
    Other liabilities                                 (1,849)         1,268 
    Non-cash rental expense                              (49)           (27)
    Pension expense, net of payments                    (254)           123 
    Finance costs                                      2,085          2,149 
    Income tax expense (recovery)                     11,067           (707)
----------------------------------------------------------------------------
Cash flows from operating activities                                        
 before changes in non-cash working                                         
 capital                                              47,394         29,633 
----------------------------------------------------------------------------
Changes in non-cash working capital:                                        
  Trade and other receivables                        (38,376)       (23,502)
  Inventories                                        (12,107)          (410)
  Prepaid expenses                                       101         (4,659)
  Trade and other payables                              (601)        12,664 
  Accrued liabilities                                  2,611          9,319 
  Provisions                                             394           (648)
----------------------------------------------------------------------------
                                                     (47,978)        (7,236)
----------------------------------------------------------------------------
Cash flows (used in) generated from                                         
 operating activities                                   (584)        22,397 
----------------------------------------------------------------------------
  Rental equipment additions                         (11,709)        (1,861)
  Provisions                                              37            (19)
  Interest paid                                       (1,826)        (2,083)
  Income taxes received (paid)                           (37)            61 
----------------------------------------------------------------------------
Net cash flows (used in) generated from                                     
 operating activities                                (14,119)        18,495 
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
INVESTING ACTIVITIES                                                        
  Property, plant and equipment additions             (2,207)        (1,367)
  Proceeds on disposal of property, plant                                   
   and equipment                                          41             93 
  Acquisition of business                 Note                              
                                           11        (21,603)             - 
----------------------------------------------------------------------------
Net cash flows used in investing                                            
 activities                                          (23,769)        (1,274)
----------------------------------------------------------------------------
                                                     (37,888)        17,221 
----------------------------------------------------------------------------
FINANCING ACTIVITIES                                                        
  Increase in bank debt                               14,000              - 
  Increase in transaction costs                            -            (92)
  Payments under finance leases                       (1,593)        (1,677)
  Dividends paid                          Note 7     (25,443)       (14,944)
----------------------------------------------------------------------------
Net cash flows used in financing                                            
 activities                                          (13,036)       (16,713)
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net change in cash and cash equivalents              (50,924)           508 
----------------------------------------------------------------------------
Cash - beginning of period                            42,954          9,207 
----------------------------------------------------------------------------
(Bank indebtedness) cash - end of period        $     (7,970)  $      9,715 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



WAJAX CORPORATION 

NOTES TO CONDENSED CONSOLIDATED

FINANCIAL STATEMENTS 

JUNE 30, 2011

(unaudited, amounts in thousands of Canadian dollars, except share and per share
data)


1. COMPANY PROFILE

Wajax Corporation ("the Corporation") is incorporated in Canada. The address of
the Corporation's registered office is 3280 Wharton Way, Mississauga, Ontario,
Canada. The Corporation's core distribution businesses are engaged in the sale
and after-sale parts and service support of equipment, industrial components and
power systems, through a network of 118 branches across Canada. The Corporation
is a multi-line distributor and represents a number of leading worldwide
manufacturers across its core businesses. Its customer base is diversified,
spanning natural resources, construction, transportation, manufacturing,
industrial processing and utilities.


In 2010 the Corporation was structured as an unincorporated, open-ended, limited
purpose investment trust called Wajax Income Fund ("the Fund"). On January 1,
2011, the Fund converted into a corporation pursuant to a Plan of Arrangement
under the Canada Business Corporations Act. Unitholders of the Fund
automatically received one common share of the Corporation in exchange for each
unit of the Fund. The conversion was accounted for as a continuity of interests.
The business continues to be carried on by the same management team that was in
place prior to the completion of the conversion.


2. BASIS OF PREPARATION

Statement of compliance

These condensed consolidated financial statements have been prepared in
accordance with International Accounting Standard 34 Interim Financial
Reporting. These are the Corporation's interim International Financial Reporting
Standards ("IFRS") condensed consolidated financial statements for part of the
period covered by the first IFRS annual financial statements, and IFRS 1
First-time Adoption of International Financial Reporting Standards has been
applied. The condensed consolidated financial statements do not include all of
the disclosures required for full annual consolidated financial statements.
Accordingly, these condensed consolidated financial statements should be read in
conjunction with the annual consolidated financial statements of Wajax Income
Fund for the year ended December 31, 2010 reported under previous Canadian
generally accepted accounting principles ("Canadian GAAP") and the condensed
consolidated financial statements of the Corporation for the three months ended
March 31, 2011, which were the first financial statements presented under IFRS.


An explanation of how the transition to IFRS has affected the reported financial
position, financial performance and cash flows of the Corporation is provided in
Note 13. This note includes reconciliations of equity and total comprehensive
income for comparative periods and of equity at the date of transition reported
under previous Canadian GAAP to those reported for those periods and at the date
of transition under IFRS. The Corporation's date of transition to IFRS was
January 1, 2010. 


Basis of measurement

The condensed consolidated financial statements have been prepared under the
historical cost basis, except for derivative financial instruments and held for
trading financial instruments that have been measured at fair value.


Functional and presentation currency

These condensed consolidated financial statements are presented in Canadian
dollars, which is the Corporation's functional currency. All financial
information presented in Canadian dollars has been rounded to the nearest
thousand, unless otherwise stated and except share and per share data.


Judgements and estimation uncertainty

The preparation of the condensed consolidated financial statements in conformity
with IFRS requires management to make judgements, estimates and assumptions that
affect the application of accounting policies and the reported amounts of
assets, liabilities and revenues and expenses. Actual results could differ from
those estimates. The Corporation bases its estimates on historical experience
and various other assumptions that are believed to be reasonable in the
circumstances. 


In preparing these condensed consolidated financial statements, the significant
judgments made by management in applying the Corporation's accounting policies
and the key sources of estimation uncertainty are expected to be the same as
those to be applied in the first annual IFRS financial statements. The more
significant judgements and assumptions that have an effect on the amounts
recognized in the condensed consolidated financial statements are provision for
doubtful accounts, inventory obsolescence, asset impairment, classification of
leases, impairment of intangible assets, warranty reserve and measurement of
employee benefit obligations.


3. NEW STANDARDS AND INTERPRETATIONS NOT YET ADOPTED 

These condensed consolidated financial statements have been prepared using IFRS
currently issued and expected to be effective at the end of the Corporation's
first annual IFRS reporting period, December 31, 2011. Accounting policies
currently adopted under IFRS are subject to change as a result of either a new
standard being issued or as a result of a voluntary change in accounting policy
made by the Corporation during 2011. A change in an accounting policy used may
result in material changes to the Corporation's reported financial position,
results of operations and cash flows.


As of January 1, 2013, the Corporation will be required to adopt IFRS 9
Financial Instruments, which is the result of the first phase of the IASB's
project to replace IAS 39 Financial Instruments: Recognition and Measurement.
The new standard replaces the current multiple classification and measurement
models for financial assets and liabilities with a single model that has only
two classification categories: amortized cost and fair value. The Corporation is
currently assessing the impact of this standard on its consolidated financial
statements.


As of January 1, 2013, the Corporation will be required to adopt IFRS 10
Consolidated Financial Statements, which establishes principles for the
preparation and presentation of consolidated financial statements when an entity
controls one or more other entities. The Corporation does not expect IFRS 10 to
have a material impact on its consolidated financial statements.


As of January 1, 2013, the Corporation will be required to adopt IFRS 13 Fair
Value Measurement, which defines fair value and sets out a framework for
measuring fair value when fair value measurements are required or permitted by
other standards. The Corporation is currently assessing the impact of this
standard on its consolidated financial statements.


As of January 1, 2013, the Corporation will be required to adopt amendments to
IAS 1 Presentation of Financial Statements, which require that an entity present
separately the items of OCI that may be reclassified to profit or loss in the
future from those that would never be reclassified to profit or loss. The
Corporation intends to adopt the amendments in its financial statements for the
annual period beginning on January 1, 2013. As the amendments only require
changes in the presentation of items in other comprehensive income, the
Corporation does not expect the amendments to IAS 1 to have a material impact on
the financial statements.


As of January 1, 2013, the Corporation will be required to adopt IAS 19 Employee
Benefits, which requires recognition of actuarial gains and losses immediately
in other comprehensive income, the full recognition of past service costs
immediately in profit or loss, recognition of the expected return on plan assets
in profit or loss to be calculated based on the rate used to discount the
defined benefit obligation, and certain additional disclosures. The Corporation
is currently assessing the impact of this standard on its consolidated financial
statements.


4. RENTAL EQUIPMENT

The Corporation acquired rental equipment with a cost of $6,027 during the
quarter (2010 - $582) and $11,709 year to date (2010 - $1,861). Rental equipment
with a carrying amount of $922 during the quarter (2010 - $579) and $2,066 year
to date (2010 - $1,293) ceased to be rented and was classified as held for sale
in the normal course of business and transferred to inventory.


5. PROPERTY, PLANT AND EQUIPMENT

The Corporation acquired property, plant and equipment with a cost of $2,531
during the quarter (2010 - $861) and $4,182 year to date (2010 - $1,962). Assets
with a carrying amount of $310 during the quarter (2010 - $6) and $368 year to
date (2010 - $93) were disposed of, resulting in gains on disposal of nil during
the quarter (2010 - $18) and $16 year to date (2010 - $191).


Included in the above are vehicles held under finance leases:



                                            June 30, 2011  December 31, 2010
----------------------------------------------------------------------------
Cost                                     $         22,129   $         22,006
Accumulated depreciation                           12,279             12,542
----------------------------------------------------------------------------
Carrying amount                          $          9,850   $          9,464
----------------------------------------------------------------------------



All property, plant and equipment except vehicles held under finance leases have
been pledged as security for bank debt.


6. INTANGIBLE ASSETS



                                Goodwill      Product     Customer     Total
                                         distribution   lists/Non-          
                                               rights  competition          
                                                        agreements          
----------------------------------------------------------------------------
Cost                                                                        
----------------------------------------------------------------------------
January 1, 2010               $   66,335        4,900        4,302 $  75,537
----------------------------------------------------------------------------
June 30, 2010                     66,335        4,900        4,302    75,537
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2011               $   66,335        4,900        4,302 $  75,537
Acquisition of business            4,309        3,900        1,000     9,209
----------------------------------------------------------------------------
June 30, 2011                     70,644        8,800        5,302    84,746
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Accumulated amortization                                                    
----------------------------------------------------------------------------
January 1, 2010               $        -            -        2,032 $   2,032
Amortization for the period            -            -          295       295
----------------------------------------------------------------------------
June 30, 2010                          -            -        2,327     2,327
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2011               $        -            -        2,565 $   2,565
Amortization for the period            -            -          252       252
----------------------------------------------------------------------------
June 30, 2011                          -            -        2,817     2,817
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
Net book value                                                              
----------------------------------------------------------------------------
January 1, 2010               $   66,335        4,900        2,270 $  73,505
----------------------------------------------------------------------------
June 30, 2010                 $   66,335        4,900        1,975 $  73,210
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
January 1, 2011               $   66,335        4,900        1,737 $  72,972
----------------------------------------------------------------------------
June 30, 2011                 $   70,644        8,800        2,485 $  81,929
----------------------------------------------------------------------------



7. DIVIDENDS DECLARED

During the three months ended June 30, 2011 the Corporation declared cash
dividends of $0.51 per share, or $8,481 (June 30, 2010, distributions of $0.45
per unit or $7,472).


Year to date, the Corporation declared cash dividends of $0.96 per share, or
$15,964 (June 30, 2010, distributions of $0.90 per unit or $14,944).


8. SHARE-BASED COMPENSATION PLANS

The Corporation has five share-based compensation plans: the Wajax Share
Ownership Plan ("SOP"), the Deferred Share Program ("DSP"), the Directors'
Deferred Share Unit Plan ("DDSUP"), the Mid-Term Incentive Plan for Senior
Executives ("MTIP") and the Deferred Share Unit Plan ("DSUP").


a) Share Rights Plans

Under the SOP, DSP and the DDSUP, rights are issued to the participants which,
upon satisfaction of certain time and performance vesting conditions, are
settled by issuing Wajax Corporation shares for no cash consideration. The
rights are settled when the participant is no longer employed by the Corporation
or one of its subsidiary entities or no longer sits on its board. The aggregate
number of shares issuable to satisfy entitlements under these plans may not
exceed 1,050,000 shares. Compensation expense is based upon the fair value of
the rights at the date of grant and is charged to earnings on a straight-line
basis over the vesting period, with an offsetting adjustment to contributed
surplus. Forfeitures are recognized as they occur. The Corporation recorded
compensation cost of $367 for the quarter (2010 - $300) and $912 for the year to
date (2010 - $592) in respect of these plans. 




Share Ownership Plan            June 30, 2011            June 30, 2010      
----------------------------------------------------------------------------
                            Number of Fair value at  Number of Fair value at
                               Rights time of grant     Rights time of grant
----------------------------------------------------------------------------
Outstanding at beginning                                                    
 of year                      101,999  $      2,326    126,125  $      2,764
Granted in the period           4,285           158      4,740           115
----------------------------------------------------------------------------
Outstanding at end of                                                       
 period                       106,284  $      2,484    130,865  $      2,879
----------------------------------------------------------------------------
                                                                            
                                                                            
At June 30, 2011 97,524 SOP rights were vested.                             
                                                                            
Deferred Share Program          June 30, 2011            June 30, 2010      
----------------------------------------------------------------------------
                            Number of Fair value at  Number of Fair value at
                               Rights time of grant     Rights time of grant
----------------------------------------------------------------------------
Outstanding at beginning                                                    
 of year                       24,164  $        738     21,944  $        673
Granted in the period           5,087           191        826            20
----------------------------------------------------------------------------
Outstanding at end of                                                       
 period                        29,251  $        929     22,770  $        693
----------------------------------------------------------------------------
                                                                            
No DSP rights have vested at June 30, 2011.                                 
                                                                            
 Directors' Deferred Share                                                  
 Unit Plan                       June 30, 2011           June 30, 2010      
----------------------------------------------------------------------------
                            Number of Fair value at  Number of Fair value at
                               Rights time of grant     Rights time of grant
----------------------------------------------------------------------------
Outstanding at beginning                                                    
 of year                      147,797  $      3,641    117,518  $      2,768
Granted in the period          13,269           495     13,936           348
----------------------------------------------------------------------------
Outstanding at end of                                                       
 period                       161,066  $      4,136    131,454  $      3,116
----------------------------------------------------------------------------



DDSUP rights vest immediately upon grant.

b) Mid-Term Incentive Plan for Senior Executives ("MTIP")

The MTIP, which is settled in cash, consists of an annual grant that vests over
three years and is based upon time and performance vesting criteria, a portion
of which is determined by the price of the Corporation's shares. Compensation
expense varies with the price of the Corporation's shares and is recognized over
the 3 year vesting period. The Corporation recorded compensation cost of $771
for the quarter (2010 - $869) and $1,559 for the year to date (2010 - $1,336) in
respect of the share-based portion of the MTIP. At June 30, 2011 the carrying
amount of the share-based portion of the MTIP liability was $5,411 (2010 -
$2,144).


c) Deferred Share Unit Plan ("DSUP")

The DSUP, which is settled in cash, consists of an annual grant that vests over
three years and is based upon time and performance vesting criteria.
Compensation expense for DSUP rights varies with the price of the Corporation's
shares and is recognized immediately in earnings. The rights are settled when
the participant is no longer employed by the Corporation or one if its
subsidiary entities. The Corporation has not yet recorded any compensation cost
in respect of the share-based portion of the DSUP.


9. INCOME TAXES 

On January 1, 2011, a plan of arrangement was completed and Wajax Income Fund
was converted to Wajax Corporation. The arrangement resulted in the
reorganization of the Fund into a corporate structure which is subject to income
tax on all of its taxable income at combined federal and provincial rates. 


Prior to conversion, the Fund was a "mutual fund trust" as defined under the
Income Tax Act (Canada) and was not taxable on its income to the extent that it
was distributed to its unitholders. Pursuant to the terms of the Declaration of
Trust, all taxable income earned by the Fund was distributed to its unitholders.
Accordingly, no provision for income taxes was required on taxable income earned
by the Fund that was distributed to its unitholders. For 2010, only the Fund's
corporate subsidiaries were subject to tax on their taxable income.


Income tax expense comprises current and deferred tax as follows:



For the six months ended June 30                          2011         2010 
----------------------------------------------------------------------------
Current                                             $      506   $       53 
Deferred                                                                    
  - Origination and reversal of temporary                                   
   difference                                           11,057          132 
  - Change in tax law and rate                            (496)        (892)
Income tax expense (recovery)                       $   11,067   $     (707)
----------------------------------------------------------------------------



The calculation of current tax is based on a combined federal and provincial
statutory income tax rate of 27.7% (2010 - 29.4%). The tax rate for the current
year is 1.7% lower than 2010 due to the effect of the reduced statutory tax
rates. Deferred tax assets and liabilities are measured at tax rates that are
expected to apply to the period when the asset is realized or the liability is
settled. Deferred tax assets and liabilities have been measured using an
expected average combined statutory income tax rate of 25.9% based on the tax
rates in years when the temporary differences are expected to reverse.


The reconciliation of effective income tax is as follows:



 For the six months ended June 30                           2011       2010 
----------------------------------------------------------------------------
 Combined statutory income tax rate                         27.7%      29.4%
 Expected income tax expense at statutory rates        $  11,196  $   5,976 
 Income of the Fund taxed directly to unitholders              -     (6,500)
 Non-deductible expenses                                     418        257 
 Deferred tax related to changes in tax law and rates       (496)      (892)
 Other                                                       (51)       452 
----------------------------------------------------------------------------
 Income tax expense (recovery)                         $  11,067  $    (707)
----------------------------------------------------------------------------



Deferred income tax relates to book and tax basis differences for assets and
liabilities and is attributable to the following:   




                                                June 30,     December 31, 
                                                    2011             2010 
--------------------------------------------------------------------------
 Accrued liabilities and provisions not                                   
  currently deductible                       $     8,608   $        8,258 
 Partnership income not currently taxable        (10,720)               - 
 Property, plant and equipment                    (1,649)          (1,418)
 Vehicles under finance lease                       (177)            (146)
 Deductible goodwill and other assets             (2,168)          (2,052)
 Deductible future financing costs                   (16)             (38)
 Derivative instrument liability not                                      
  currently deductible                               370              673 
 Income tax losses available for carry                                    
  forward                                            162                - 
--------------------------------------------------------------------------
 Net deferred income tax (liabilities)                                    
  assets                                     $    (5,590)  $        5,277 
--------------------------------------------------------------------------



10. EARNINGS PER SHARE 

The following table sets forth the computation of basic and diluted earnings per
share:




                                Three months ended          Six months ended
                                           June 30                   June 30
                                 2011         2010         2011         2010
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Numerator for basic and                                                     
 diluted earnings per                                                       
 unit:                                                                      
- net earnings            $    16,538 $     12,164 $     29,354 $     21,041
----------------------------------------------------------------------------
                                                                            
Denominator for basic                                                       
 earnings per unit:                                                         
- weighted average units   16,629,444   16,603,423   16,629,444   16,603,423
----------------------------------------------------------------------------
                                                                            
Denominator for diluted                                                     
 earnings per unit:                                                         
- weighted average units   16,629,444   16,603,423   16,629,444   16,603,423
                                                                            
- effect of dilutive unit                                                   
 rights                       284,656      261,201      280,641      256,465
----------------------------------------------------------------------------
                                                                            
Denominator for diluted                                                     
 earnings per unit         16,914,100   16,864,624   16,910,085   16,859,888
----------------------------------------------------------------------------
                                                                            
Basic earnings per unit   $      0.99 $       0.73 $       1.77 $       1.27
----------------------------------------------------------------------------
                                                                            
Diluted earnings per unit $      0.98 $       0.72 $       1.74 $       1.25
----------------------------------------------------------------------------
----------------------------------------------------------------------------



No share rights were excluded from the above calculations as none were
anti-dilutive.


11. ACQUISITION OF BUSINESS

On May 2, 2011, the Corporation's Power Systems segment acquired certain assets
of Harper Power Products Inc. ("Harper") for consideration of $23,172, subject
to post-closing adjustments. The acquisition price was funded through the
Corporation's existing bank credit facility. The acquisition secures the Ontario
distribution rights for certain product lines and complements the segment's
existing product distribution rights in the rest of Canada, except for portions
of British Columbia.


For the two months since the acquisition, Harper contributed revenue of $9,147
and net earnings of $456 to the quarter's results. Had the acquisition occurred
on January 1, 2011 the Corporation estimates that it would have reported revenue
of $656,290 and net earnings of $30,396 on its condensed consolidated income
statement for the six months ended June 30, 2011. In determining these amounts,
management has assumed that the level of business activity experienced by Harper
after May 2, 2011 is representative of the level of business activity that it
would have experienced prior to the acquisition.


Recognized amounts of identifiable assets acquired and liabilities assumed are
as follows:




                                                                            
Trade and other receivables                                      $   10,554 
Inventories                                                           8,277 
Prepaid expenses                                                        281 
Property, plant and equipment                                         1,930 
Trade and other payables                                             (7,079)
----------------------------------------------------------------------------
Tangible net assets acquired                                         13,963 
Goodwill and other intangible assets (note 6)                         9,209 
----------------------------------------------------------------------------
                                                                 $   23,172 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



An amount of $21,603 was paid on closing based upon a preliminary estimate of
tangible net assets acquired. The final values of tangible net assets acquired
are still being determined. The total purchase price will be adjusted for any
change in the value of tangible net assets acquired once finally determined. An
estimate of the purchase price adjustment has been accrued in trade and other
payables. The amount of any trade and other receivables which prove to be
uncollectable will be deducted from the purchase price.


The goodwill is mainly attributable to the skills and technical talent of
Harper's workforce and its existing branch network, synergies expected to be
achieved from integrating the business into the existing Power Systems segment
and the value expected to be generated from its operation over time, for
example, through growing the power generation business in Ontario. It is
anticipated that amounts attributed to goodwill and other intangible assets will
be 75% deductible for income tax purposes.


The Corporation incurred acquisition-related costs of $385 relating to external
legal fees and due diligence costs. These costs have been included in selling
and administrative expenses on the condensed consolidated income statement.


12. SEGMENTED INFORMATION

The Corporation operates through a network of 118 branches in Canada in three
core businesses which reflect the internal organization and management structure
according to the nature of the products and services provided. The Corporation's
three core businesses are: i) the distribution, modification and servicing of
equipment; ii) the distribution, servicing and assembly of industrial
components; and iii) the distribution and servicing of power systems. 




----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the three                                            Segment            
 months ended                                       Eliminations            
 June 30, 2011                                               and            
                              Industrial     Power   Unallocated            
                   Equipment  Components   Systems       Amounts      Total 
----------------------------------------------------------------------------
Equipment         $   91,086 $           $  36,104 $              $ 127,190 
Parts                 43,954      89,895    29,368                  163,217 
Service               21,730                15,560                   37,290 
Rental and other       7,411                              (1,039)     6,372 
----------------------------------------------------------------------------
Revenue           $  164,181 $    89,895 $  81,032 $      (1,039) $ 334,069 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Segment earnings                                                            
 before finance                                                             
 costs and income                                                           
 taxes            $   11,951 $     6,544 $   8,271 $              $  26,766 
Corporate costs                                                             
 and eliminations                                         (3,280)    (3,280)
----------------------------------------------------------------------------
Earnings before                                                             
 finance costs                                                              
 and income taxes                                                           
                      11,951       6,544     8,271        (3,280)    23,486 
Finance costs                                              1,109      1,109 
Income tax                                                                  
 expense                                                   5,839      5,839 
----------------------------------------------------------------------------
Net earnings      $   11,951 $     6,544 $   8,271 $     (10,228) $  16,538 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
For the six                                              Segment            
 months ended                                       Eliminations            
 June 30, 2011                                               and            
                              Industrial     Power   Unallocated            
                   Equipment  Components   Systems       Amounts      Total 
----------------------------------------------------------------------------
Equipment         $  171,586 $           $  71,551 $              $ 243,137 
Parts                 88,777     170,619    53,449                  312,845 
Service               40,816                28,963                   69,779 
Rental and other      14,445                              (2,208)    12,237 
----------------------------------------------------------------------------
Revenue           $  315,624 $   170,619 $ 153,963 $      (2,208) $ 637,998 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Segment earnings                                                            
 before finance                                                             
 costs and income                                                           
 taxes            $   23,142 $    10,989 $  15,285 $              $  49,416 
Corporate costs                                                             
 and eliminations                                         (6,910)    (6,910)
----------------------------------------------------------------------------
Earnings before                                                             
 finance costs                                                              
 and income taxes                                                           
                      23,142      10,989    15,285        (6,910)    42,506 
Finance costs                                              2,085      2,085 
Income tax                                                                  
 expense                                                  11,067     11,067 
----------------------------------------------------------------------------
Net earnings      $   23,142 $    10,989 $  15,285 $     (20,062) $  29,354 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Segment assets                                                              
 excluding                                                                  
 intangible                                                                 
 assets           $  239,096 $   120,019 $ 123,405 $              $ 482,520 
Intangible assets     21,541      45,768    14,620                   81,929 
Corporate and                                                               
 other assets                                                374        374 
----------------------------------------------------------------------------
Total assets      $  260,637 $   165,787 $ 138,025 $         374  $ 564,823 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                         Segment            
For the three                                       Eliminations            
 months ended                                                and            
 June 30, 2010                Industrial     Power   Unallocated            
                   Equipment  Components   Systems       Amounts      Total 
----------------------------------------------------------------------------
Equipment         $   74,471 $           $  18,404 $              $  92,875 
Parts                 42,334      75,944    23,458                  141,736 
Service               18,057                13,250                   31,307 
Rental and other       7,982                              (1,858)     6,124 
----------------------------------------------------------------------------
Revenue           $  142,844 $    75,944 $  55,112 $      (1,858) $ 272,042 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Segment earnings                                                            
 before finance                                                             
 costs and income                                                           
 taxes            $   10,251       2,049     3,656 $              $  15,956 
Corporate costs                                                             
 and eliminations                                         (3,047)    (3,047)
----------------------------------------------------------------------------
Earnings before                                                             
 finance costs                                                              
 and income taxes                                                           
                      10,251       2,049     3,656        (3,047)    12,909 
Finance costs                                              1,082      1,082 
Income tax                                                                  
 recovery                                                   (337)      (337)
----------------------------------------------------------------------------
Net earnings      $   10,251 $     2,049 $   3,656 $      (3,792) $  12,164 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                          Segment           
For the six months                                   Eliminations           
 ended                                                        and           
June 30, 2010                  Industrial     Power   Unallocated           
                    Equipment  Components   Systems       Amounts     Total 
----------------------------------------------------------------------------
Equipment          $  124,216 $           $  32,013 $              $156,229 
Parts                  78,207     148,528    44,721                 271,456 
Service                33,285                25,819                  59,104 
Rental and other       15,521                              (2,147)   13,374 
----------------------------------------------------------------------------
Revenue            $  251,229 $   148,528 $ 102,553 $      (2,147) $500,163 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Segment earnings                                                            
 before finance                                                             
 costs and income                                                           
 taxes             $   18,170 $     5,196 $   4,600 $              $ 27,966 
Corporate costs                                                             
 and eliminations                                          (5,483)   (5,483)
----------------------------------------------------------------------------
Earnings before                                                             
 finance costs and                                                          
 income taxes          18,170       5,196     4,600        (5,483)   22,483 
Finance costs                                               2,149     2,149 
Income tax                                                                  
 recovery                                                    (707)     (707)
----------------------------------------------------------------------------
Net earnings       $   18,170 $     5,196 $   4,600 $      (6,925) $ 21,041 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
                                                                            
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Segment assets                                                              
 excluding                                                                  
 intangible assets $  198,958 $   100,719 $  98,806 $              $398,483 
Intangible assets      21,541      46,225     5,444                  73,210 
Cash                                                        9,715     9,715 
Corporate and                                                               
 other assets                                               3,246     3,246 
----------------------------------------------------------------------------
Total assets       $  220,499 $   146,944 $ 104,250 $      12,961  $484,654 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Segment assets do not include assets associated with the corporate office,
financing or income taxes. Additions to corporate assets, and depreciation of
these assets, are included in segment eliminations and unallocated amounts.


13. EXPLANATION OF TRANSITION TO IFRS 

This is the first year that the Corporation has presented its condensed
consolidated financial statements in accordance with IFRS. In the year ended
December 31, 2010, the Corporation reported under previous Canadian GAAP. 


The accounting policies set out in Note 3 of the condensed consolidated
financial statements of the Corporation for the three months ended March 31,
2011 have been applied in preparing the condensed consolidated financial
statements for the three and six months ended June 30, 2011.


In preparing its opening IFRS statement of financial position, the Corporation
has adjusted amounts reported previously in financial statements prepared in
accordance with previous Canadian GAAP. An explanation of how the transition
from previous Canadian GAAP to IFRS has affected the Corporation's reported
financial position, financial performance and cash flows is set out in the
tables below and the notes that accompany the tables.


IFRS 1 First-time Adoption of International Financial Reporting Standards sets
forth guidance for the initial adoption of IFRS. Under IFRS 1, the standards are
applied retrospectively at the transitional statement of financial position date
and, in general, all adjustments to assets and liabilities are taken to retained
earnings, unless certain exemptions are elected and certain mandatory exceptions
are applied. In preparing its opening IFRS statement of financial position, the
Corporation has elected the following exemptions:


Business combinations before January 1, 2010 (IFRS 3 "Business Combinations")

The Corporation has elected not to apply IFRS 3 retrospectively to business
combinations that took place before January 1, 2010. In addition, and as a
condition under IFRS 1 for applying this exemption, goodwill relating to
business combinations that occurred prior to January 1, 2010 was tested for
impairment even though no impairment indicators were identified. No impairment
existed at the date of transition. 


Employee Benefits - actuarial gains and losses (IAS 19 "Employee Benefits")

Under IFRS, the Corporation's accounting policy is to recognize all actuarial
gains and losses immediately in other comprehensive income. At the date of
transition, the Corporation has elected to recognize all cumulative actuarial
gains and losses in retained earnings. 


Employee Benefits - pension costs (IAS 19 "Employee Benefits")

The Corporation has elected to disclose the present value of the defined benefit
obligation, fair value of the plan assets, surplus or deficit in the plan, and
the experience adjustments arising on the plan assets or liabilities, for each
accounting period prospectively from the date of transition to IFRS.




Reconciliation of Consolidated Income Statement                             
                                                                            
For the three months ended  Canadian  Employee  Leases Inventory       IFRS 
 June 30, 2010                  GAAP  Benefits  IAS 17     IAS 2            
                                        IAS 19                              
----------------------------------------------------------------------------
(In thousands of Canadian                                                   
 dollars)                                                                   
----------------------------------------------------------------------------
                                                                            
Revenue                    $ 272,042                              $ 272,042 
Cost of sales                212,296                         279    212,575 
----------------------------------------------------------------------------
Gross profit                  59,746                        (279)    59,467 
----------------------------------------------------------------------------
Selling and administrative                                                  
 expenses                     46,812       (35)   (219)              46,558 
----------------------------------------------------------------------------
Earnings before finance                                                     
 costs and income taxes       12,934        35     219      (279)    12,909 
Finance costs                  1,045                37                1,082 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes                        11,889        35     182      (279)    11,827 
Income tax expense                                                          
 (recovery)                     (317)        9      49       (78)      (337)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings               $  12,206        26     133      (201) $  12,164 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Reconciliation of Consolidated Statement of Comprehensive Income            
                                                                            
For the three months ended    Canadian  Employee  Leases Inventory      IFRS
 June 30, 2010                    GAAP  Benefits  IAS 17     IAS 2          
                                          IAS 19                            
----------------------------------------------------------------------------
(In thousands of Canadian                                                   
 dollars)                                                                   
----------------------------------------------------------------------------
                                                                            
Net earnings                 $  12,206        26     133      (201) $ 12,164
----------------------------------------------------------------------------
                                                                            
Losses on derivative                                                        
 instruments designated as                                                  
 cash flow hedges in prior                                                  
 periods reclassified to                                                    
 cost of inventory or                                                       
 finance costs during the                                                   
 period, net of tax                320                                   320
                                                                            
Gains on derivative                                                         
 instruments designated as                                                  
 cash flow hedges during the                                                
 period, net of tax              1,215                                 1,215
                                                                            
----------------------------------------------------------------------------
Other comprehensive income,                                                 
 net of tax                      1,535                                 1,535
----------------------------------------------------------------------------
                                                                            
Total comprehensive income   $  13,741        26     133      (201) $ 13,699
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Reconciliation of Consolidated Income Statement                             
                                                                            
For the six months ended   Canadian  Employee  Leases  Inventory       IFRS 
 June 30, 2010                 GAAP  Benefits  IAS 17      IAS 2            
                                       IAS 19                               
----------------------------------------------------------------------------
(In thousands of Canadian                                                   
 dollars)                                                                   
----------------------------------------------------------------------------
                                                                            
Revenue                   $ 500,163                               $ 500,163 
Cost of sales               389,148                         (153)   388,995 
----------------------------------------------------------------------------
Gross profit                111,015                          153    111,168 
----------------------------------------------------------------------------
Selling and administrative                                                  
 expenses                    89,253       (70)   (498)               88,685 
----------------------------------------------------------------------------
Earnings before finance                                                     
 costs and income taxes      21,762        70     498        153     22,483 
Finance costs                 2,076                73                 2,149 
----------------------------------------------------------------------------
Earnings before income                                                      
 taxes                       19,686        70     425        153     20,334 
Income tax expense                                                          
 (recovery)                    (882)       18     114         43       (707)
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net earnings              $  20,568        52     311        110  $  21,041 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
                                                                            
Reconciliation of Consolidated Statement of Comprehensive Income            
                                                                            
For the six months ended June   Canadian Employee Leases Inventory      IFRS
 30, 2010                           GAAP Benefits IAS 17     IAS 2          
                                           IAS 19                           
----------------------------------------------------------------------------
(In thousands of Canadian                                                   
 dollars)                                                                   
----------------------------------------------------------------------------
                                                                            
Net earnings                   $  20,568       52    311       110 $  21,041
----------------------------------------------------------------------------
                                                                            
Losses on derivative                                                        
 instruments designated as                                                  
 cash flow hedges in prior                                                  
 periods reclassified to cost                                               
 of inventory or finance costs                                              
 during the period, net of tax       459                                 459
                                                                            
Gains on derivative                                                         
 instruments designated as                                                  
 cash flow hedges during the                                                
 period, net of tax                  509                                 509
                                                                            
----------------------------------------------------------------------------
Other comprehensive income,                                                 
 net of tax                          968                                 968
----------------------------------------------------------------------------
                                                                            
Total comprehensive income     $  21,536       52    311       110 $  22,009
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
Reconciliation of Consolidated Statement of Financial Position              
                                                                            
As at June 30,     Canadian  Employee  Leases Inventory   Income       IFRS 
 2010                  GAAP  Benefits  IAS 17     IAS 2  Tax IAS            
                               IAS 19                         12            
----------------------------------------------------------------------------
(In thousands of                                                            
 Canadian                                                                   
 dollars)                                                                   
----------------------------------------------------------------------------
ASSETS                                                                      
CURRENT                                                                     
Cash              $   9,715                                       $   9,715 
Trade and other                                                             
 receivables        147,039                                         147,039 
Inventories         177,780                       1,832             179,612 
Prepaid expenses     12,459                                          12,459 
Income taxes                                                                
 receivable             204                                 (204)         - 
Deferred tax                                                                
 assets               4,053                               (4,053)         - 
----------------------------------------------------------------------------
                    351,250                       1,832   (4,257)   348,825 
----------------------------------------------------------------------------
                                                                            
NON-CURRENT                                                                 
Rental equipment     15,202                                          15,202 
Property, plant                                                             
 and equipment       35,279             9,187                        44,466 
Intangible assets    73,210                                          73,210 
Deferred tax                                                                
 assets                   -       865     (76)             2,042      2,831 
Pension asset         2,459    (2,339)                                  120 
----------------------------------------------------------------------------
                    126,150    (1,474)  9,111              2,042    135,829 
----------------------------------------------------------------------------
                  $ 477,400    (1,474)  9,111     1,832   (2,215) $ 484,654 
----------------------------------------------------------------------------
----------------------------------------------------------------------------
                                                                            
LIABILITIES AND                                                             
 SHAREHOLDERS'                                                              
 EQUITY                                                                     
CURRENT                                                                     
Trade and other                                                             
 payables         $  96,161        (5)                            $  96,156 
Accrued                                                                     
 liabilities         75,381                                          75,381 
Provisions            4,211                                           4,211 
Distributions                                                               
 payable              2,491                                           2,491 
Income taxes                                                                
 payable                  -                         507     (204)       303 
Obligations under                                                           
 finance leases           -             3,684                         3,684 
----------------------------------------------------------------------------
                    178,244        (5)  3,684       507     (204)   182,226 
----------------------------------------------------------------------------
                                                                            
NON-CURRENT                                                                 
Provisions            3,499                                           3,499 
Deferred income                                                             
 taxes                2,011                               (2,011)         - 
Employee benefits     2,956       970                                 3,926 
Derivative                                                                  
 instrument                                                                 
 liability            1,518                                           1,518 
Bank debt            79,519                                          79,519 
Other liabilities     2,108                                           2,108 
Obligations under                                                           
 finance leases           -             5,224                         5,224 
----------------------------------------------------------------------------
                     91,611       970   5,224             (2,011)    95,794 
----------------------------------------------------------------------------
                                                                            
SHAREHOLDERS'                                                               
 EQUITY                                                                     
Trust units         105,307                                         105,307 
----------------------------------------------------------------------------
Contributed                                                                 
 surplus              6,237                                           6,237 
----------------------------------------------------------------------------
Retained earnings    97,266    (2,439)    203     1,325              96,355 
Accumulated other                                                           
 comprehensive                                                              
 loss                (1,265)                                         (1,265)
----------------------------------------------------------------------------
                     96,001    (2,439)    203     1,325              95,090 
----------------------------------------------------------------------------
Total                                                                       
 shareholders'                                                              
 equity             207,545    (2,439)    203     1,325             206,634 
----------------------------------------------------------------------------
                  $ 477,400    (1,474)  9,111     1,832   (2,215) $ 484,654 
----------------------------------------------------------------------------
----------------------------------------------------------------------------



Material adjustments to the statement of cash flows for 2010

Consistent with the Corporation's accounting policy choice under IAS 7 Statement
of Cash Flows, interest paid and income taxes paid have moved into the body of
the Statement of Cash Flows, whereas they were previously disclosed as
supplementary information. There are no other material differences between the
statement of cash flows presented under IFRS and the statement of cash flows
presented under previous Canadian GAAP.


Notes to the reconciliations

(a) Employee Benefits (IAS 19) 

Under Canadian GAAP, the Corporation accounted for post-employment benefits
under CICA Handbook Section 3461, Employee Future Benefits, whereby defined
benefit pension plan net actuarial gains or losses over 10% of the greater of
the benefit obligation and the fair value of the plan assets were amortized to
income over the average remaining service life of active employees. Under IAS
19, Employee Benefits, the Corporation has adopted the policy of recognizing
actuarial gains and losses in full in other comprehensive income in the period
in which they occur.


(b) Leases (IAS 17) 

Under Canadian GAAP, the Corporation assessed vehicle leases under CICA Handbook
Section 3065, Leases, as operating leases. Under IAS 17, Leases, the Corporation
has assessed the vehicle leases as financing leases. Under finance leases the
asset is recorded at the lower of its fair value and the present value of the
minimum lease payments at the inception of the lease. The liability is included
in the statement of financial position and classified between current and
non-current amounts. The interest component of the lease payments is charged to
earnings over the period of the lease so as to achieve a constant rate of
interest on the remaining balance of the liability. 


(c) Inventory (IAS 2) 

Under Canadian GAAP, the Corporation did not allocate overhead to work in
process inventory relating to customer repair orders. Under IFRS the Corporation
allocates overhead to work in process inventory relating to customer repair
orders resulting in an adjustment to inventory and opening retained earnings.


(d) Income Taxes (IAS 12) 

The effect of applying IAS 12, Income Taxes, is that all deferred tax balances
are now classified as non-current. No other changes arise from this section.
Applicable income tax rates have been applied to all IFRS adjustments.


(e) Comparative Information 

Certain comparative amounts have been reclassified to conform with the current
period presentation.


In particular, cash discounts provided to customers in an amount of $256 for the
quarter and $493 year to date have been reclassified out of selling and
administrative expenses into revenue.


In addition, cash discounts received from vendors in an amount of $294 for the
quarter and $571 year to date have been reclassified out of selling and
administrative expenses into cost of sales.


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