Canadian Equipment Rental Fund Limited Partnership Announces 2010 Results

TSX Venture Symbol: CFL.UN

CALGARY, April 21 /CNW/ - Mr. Wayne Wadley, president of CERF GP Corp., the general partner of Canadian Equipment Rental Fund Limited Partnership ("CERF" or the "Partnership"), is pleased to announce the results for the year ended December 31, 2010.

Full details of the Partnership's results, in the form of the audited financial statements and notes thereto for the year ended December 31, 2010 and Management's Discussion and Analysis of the results dated April 19, 2011 are available on SEDAR at www.sedar.com and on the Partnership's website www.cerflp.com .

Highlights of the year ended December 31, 2010 were:

  • On December 21, 2010 the Partnership closed its public offering of 2,500,000 limited partnership units at a price of $2.50 per unit with gross proceeds of $6,250,000. After issue costs, net proceeds were $5,633,188.

  • Revenue for 2010 increased 13.5% when compared to 2009 revenue.

  • Net income per limited partnership unit was $0.11, in comparison to the 2009 net income per unit of $0.07, thereby showing a substantial increase of 57%.

Forward-Looking Statements

Certain statements contained in this press release constitute "forward-looking statements" under applicable securities laws.  These statements relate to future events or future performance and are based on the Partnership's current expectations, estimates, projections, assumptions and beliefs.  Although the Partnership believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.  Accordingly, undue reliance should not be placed on these forward-looking statements.  The use of any of the words "expect", "anticipate", "continue", "estimate", "objective", "ongoing", "may", "will", "project", "should", "believe", "plans", "intends" and similar expressions are intended to identify forward-looking statements.  In particular, but without limiting the foregoing, this press release contains forward-looking information pertaining to the anticipated completion of the Reorganization.  All such forward-looking statements involve known and unknown risks and uncertainties, certain of which are beyond the control of the Partnership.  The forward-looking statements contained in this press release are made as of the date hereof and the Partnership does not intend, and does not assume any obligation, to update or revise any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable securities laws.

Mr. Wadley makes the following statements:

"We started to see an increase in activity levels by the third quarter of 2010.  Since then, the demand for our services has rapidly increased. Major construction projects, previously put on hold, have begun to unfold. These projects, coupled with heavy snowfall and cold weather increased the need for a large cross section of our equipment fleet. This stimulus has increased our fourth quarter revenues and we have achieved a strong financial position for the year-end.

In 2009, as the recession unfolded, we faced several challenges. We decided that regardless of these challenges, we would ensure our business continued to reflect our corporate values: provide excellent value for our products and services and invest in our staff who provide that service every day. We value our customers highly and we want to remain their first choice service provider.

Our strategy of staff retention and minimal fleet reduction safeguarded those values. Early in 2010, we sensed that the Edmonton and northern Alberta rental market would be amongst the first markets in North America to see a rebound. The increase in oil prices has driven the economic recovery facilitating a surge in construction activity. In the third quarter of 2010, our efforts paid off and the demand for our services rebounded. We were able to meet our customer's needs, with the quality service level they have come to expect. Our competitors struggled to attract and acquire skilled labor and rebuild their rental fleets.  The outcome was that we were in a very strong position by the end of 2010.

We continued to perfect our systems and refocus our people by creating in house customer service programs aimed at refining our customer service and fleet utilization.  Our aggressive expansion of our rental equipment inventories over the past 5 years has enabled us to reduce our capital spending during the recession while continuing to offer quality equipment that met the demands of our diverse customer base. The majority of our capital spending focused on meeting the ever-growing demand for waste management solutions. We provided those solutions with our waste disposal division; Smart-Way Disposal and Recycling Company Ltd.

Our prudent cash management succeeded and we were able to maintain a distribution of $0.24 annually to our unitholders.

CERF LP has come through the recession in good shape.

The fourth quarter of 2010 shows a substantial recovery over 2009.  We believe that this trend will continue through 2011 and 2012. Alberta's colder than average weather conditions and heavy snowfall have increased demand for our heaters and related equipment. Changes in waste management have meant that waste management solutions are shifting to reclaim and reduce.  We have designed and introduced several new products for prudent management of waste materials that provide excellent cost effective solutions for our customers.

We are strategically located in the center of the resurging Alberta economy.  Alberta is considered one of the few safe oil sources in the world.  The recent Libyan civil crisis and other instability in Northern Africa and the Middle East are reminders of the instability of oil resources these areas. Prior to the current instabilities, oil prices were expected to average US$81.45 per barrel in 2010-11, rising to US$95.75 by 2013-14. Although most of Libya's oil goes to Europe analysts agree the activity there impacts the global price of oil. Libya is one of the world's primary sources light sweet crude preferred by refineries. Oil and gasoline prices could reach as high as $120/bbl and $1.50/L respectively if the crisis continues. Strong oil prices positively impact the economics of investment. This is evident in Alberta as the prices rise for both the oil sands and conventional oil rise.  Robust investment and increasing oil exports are expected to drive Alberta's economic growth through much of 2011 - 2015.

We want to take advantage of the growth in Alberta. Our key strategy to take advantage of this growth is to focus on the diversification of our business in the industrial, construction and waste management sectors. We will continue to provide exceptional value in specialty markets, and broaden our product offerings. Our presence in Alberta and Western Canada will grow as we expand our products and services to key markets."

CERF is an Alberta limited partnership engaged in the rental, sale and service of industrial and construction equipment.  CERF trades on the TSX Venture Exchange under the symbol "CFL.UN" and currently has 8,640,906 units issued and outstanding.

   

CANADIAN EQUIPMENT RENTAL FUND LIMITED PARTNERSHIP

Consolidated Balance Sheets

  December 31,  December 31,
  2010  2009
     
Assets    
Current assets:    
  Cash  $ 5,011,552 $ 42,502
  Accounts receivable     3,972,819 2,370,047
  Inventory   713,026 764,249
  Prepaid expenses and deposits   222,111 215,506
  9,919,508 3,392,304
     
Property and equipment   15,802,840  17,995,205
Goodwill   203,477  203,477
Future income tax   155,394 
Financial derivatives   2,240  19,697 
  $ 26,083,459  $ 21,610,683
     
Liabilities and Partners' Equity    
Current liabilities:     
  Bank indebtedness  $ —  $ 317,193
  Accounts payable and accrued liabilities     2,297,724   1,053,376
  Distributions payable   366,987  365,334
  Note payable   300,000  300,000
  Current portion of long-term debt   1,714,645  1,681,313
  Current portion of obligation under capital lease   106,685  95,646
  4,786,041  3,812,862
     
Long-term debt   4,154,666  5,296,964
Obligation under capital lease   4,324,074  4,430,759
Future income tax   —  301,340 
  13,264,781  13,841,925
     
Partners' equity:    
  Limited Partnership units  14,765,518  9,068,408
  Unit purchase loans receivable  (374,535)  (438,659)
  Contributed surplus  548,802  470,613
  Deficit  (2,121,107)  (1,331,604)
  12,818,678  7,768,758
  $ 26,083,459  $ 21,610,683

 

 

CANADIAN EQUIPMENT RENTAL FUND LIMITED PARTNERSHIP

Consolidated Statements of Operations and Deficit

  Year ended  Year ended
  December 31,  December 31,
  2010  2009
     
Revenues  $ 14,908,523  $ 13,135,355
       
Expenses:    
  General and administrative    1,404,298  1,224,560
  Interest on long term debt    295,097  307,618
  Interest on obligation under capital lease  491,934  166,230
  Operating     8,905,321  7,551,171
  Amortization of property and equipment  2,999,509  3,343,758
  Loss on disposal of property and equipment  419,245  434,163
  Loss (gain) on financial derivatives  17,457  (19,697)
  14,532,861  13,007,803
     
Income before income taxes    375,662  127,552
       
Future income taxes (recovery)    (295,422)  (293,400)
       
Net income and comprehensive income for the year    671,084   420,952
     
(Deficit) retained earnings, beginning of year  (1,331,604)  700,466
     
Partner distributions declared  (1,460,587)  (2,453,022)
       
Deficit, end of year  $ (2,121,107)  $ (1,331,604)
       
Net income per unit    
  Basic  $0.11  $0.07
  Diluted   $0.11  $0.07

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

 

SOURCE Canadian Equipment Rental Fund Limited Partnership

For further information:

Wayne Wadley, President & CEO at (403) 850-4095 or by email at wwadley@cerflp.com or Ken Stephens CFO at (403) 281-1042, by fax at (403) 238-2720 or by email at kstephens@cerflp.com.

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Canadian Equipment Rental Fund Limited Partnership

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