Cervus Equipment Corp. Announces 2013 Year End Results

Symbol: CVL (TSX)

CALGARY, March 12, 2014 /CNW/ - Cervus Equipment Corp. ("Cervus" or the "Company") (TSX: CVL) today announced its financial results and operational highlights for the year ended 2013.

"In 2013, Cervus experienced a 23 per cent increase in revenue compared to 2012, driven by strong demand for agricultural equipment combined with increased new equipment sales and parts revenue in our commercial and industrial segment," said Graham Drake, President and CEO of Cervus. "We are very pleased with a third consecutive year of record revenues in our agricultural segment.  Our 2013 construction and material handling results continue to show strong growth, with 2013 revenue comparable to 2008 levels. Further, our Peterbilt locations have exceeded expectations in their first full year of inclusion, substantiating a productive partnership with PACCAR."

Highlights for the Year:

  • On May 28, 2013, the Company purchased an additional 18.6% interest in Windmill AG Pty Ltd. ("Windmill") for $1.8 million in cash, bringing the Company`s ownership interest to 53.3%.
  • The Company substantially completed its branding initiative in 2013 and is currently operating as Cervus Equipment across all divisions.
  • Gross revenue increased by $168.2 million or by 23.0% to $899.8 million for the year when compared to 2012. Same store sales increased 14.1% or $103.0 million.
  • Gross margin dollars for the year increased by $24.5 million or 17.6% to $163.3 million from $138.8 million in 2012.
  • Basic earnings per share for the year was $1.54, down $0.04 from $1.58 in 2012, while EBITDA per fully diluted share increased 8.9% to $3.31 from $3.04 in 2012.

Financial Highlights:

For the year ended December 31, 2013, revenue increased by $168.2 million or 23.0% ($134.8 million from the agricultural equipment segment and $33.4 million from the commercial and industrial equipment segment). Same store revenue increased $103.0 million or 14.1% ($89.3 million or 18.7% from the agricultural equipment segment and $13.7 million or 5.5% from the commercial and industrial equipment segment).

For the year ended December 31, 2013, overall gross margin decreased to 18.1% from 19.0% in 2012.  The decrease was primarily a result of margin pressure in the agricultural segment. The increase in sales, partially offset by a decrease in gross margin percentage, resulted in an increase in gross margin dollars of $24.5 million for the year ended 2013 when compared to 2012.

Selling, general and administrative ("SG&A") expenditures decreased to 14.8% of total revenue in 2013 compared to 14.9% in 2012.

Profit for the year decreased by $0.3 million compared to 2012, primarily due to decreases in gross margin percentage combined with increases in Windmill's SG&A costs and same store personnel expenses; as well as amortization of intangible assets, convertible debenture interest and branding expenses.

EBITDA increased by $5.0 million to $51.9 million, or $3.31 per fully diluted share in 2013 compared with $3.04 per fully diluted share for the same period in 2012. The most significant factor contributing to the increase in EBITDA for the year was the increase in gross margin dollars during 2013, partially offset by increased expenditures before interest, taxes, depreciation and amortization.

As at December 31, 2013, Cervus had working capital of $113.2 million, including $14.7 million in cash and cash equivalents, up $26.1 million compared to $87.1 million at December 31, 2012.

Selected Annual Information
(in $ thousands, except per share amounts) 2013 2012 %
change
Revenues 899,806 731,586 23.0%
Gross profit 163,309 138,810 17.6%
Gross margin 18.1% 19.0% -4.8%
Net profit 23,326 23,625 -1.3%
Net profit attributable to shareholders 23,090 23,437 -1.5%
  Per share  - Basic        1.54         1.58 -2.5%
  Per share - Diluted         1.48         1.52 -3.0%
Cash provided by operating activities 28,293 18,951 49.3%
  Per share - Basic 1.89 1.28 47.7%
EBITDA[1] 51,883 46,856 10.7%
EBITDA margin [1] 5.8% 6.4% -9.4%
  Per share - diluted         3.31         3.04 8.9%
Dividends declared to shareholders 11,759 11,031 6.6%
  Per share        0.79         0.75 5.3%
Weighted average shares outstanding      
  Basic 14,968 14,791 1.2%
  Diluted        15,653 15,406 1.6%
Actual shares outstanding 15,012 14,900 0.8%
  Closing market price per share       23.91       18.74      28.0%
Total assets 426,230 399,816 6.6%
Long-term liabilities 78,540 69,562 12.9%
Total liabilities 207,810 199,172 4.3%
Shareholders' equity 218,420 200,644 8.9%
Net book value per share - diluted 13.95 13.02 7.1%
Notes:  [1] These financial measures are identified and defined under the section "Non-IFRS Financial Measures".

Conference Call Information

Cervus will host its 2013 year end results conference call on March 13, 2014 at 11:00 a.m. Eastern Time. Interested parties may access the conference call by dialling (888) 231-8191 (domestic) or (647) 427-7450 (international). The conference call will be archived for replay until Thursday, March 20, 2014 at midnight. To access the archived conference call, dial (416) 849-0833 or 1-855-859-2056 and enter the reservation number 2361707 followed by the number sign. A live audio webcast of the conference call will be available at: http://www.newswire.ca/en/webcast/detail/1307923/1443793. Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above website for 90 days.

About Cervus Equipment Corporation

Cervus acquires and manages authorized agricultural, commercial, industrial and transportation equipment dealerships with interests in 55 dealership locations in Western Canada, New Zealand, and Australia. The primary equipment brands represented by Cervus include John Deere agricultural equipment; Bobcat and JCB construction equipment; Clark, Sellick and Doosan material handling equipment; and Peterbilt transportation equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CVL".

 

SOURCE Cervus Equipment Corporation

For further information:

Graham Drake - President & CEO
Telephone: (403) 567-2095
Fax: (403) 567-0392
Email: gdrake@cervusequipment.com

Randy Muth - Chief Financial Officer
Telephone: (403) 567-2097
Fax: (403) 567-0392
Email: rmuth@cervusequipment.com