Cervus Equipment Corp. Announces 2014 Year End Results

CALGARY, March 11, 2015 /CNW/ - Cervus Equipment Corp. ("Cervus") (TSX: CVL) today announced its financial results and operational highlights for the year ended 2014.

"Cervus made several strategic acquisitions in 2014, adding 13 Peterbilt dealerships in Ontario and six John Deere dealerships in Alberta, which contributed a total of $125.5 million of incremental revenue for the year. We believe that our geographic, industry and product diversification strategy puts the Company in a strong position for 2015." said Graham Drake, President and CEO of Cervus. "Looking forward, accelerated manufacturing activity and cross border trade provide tailwinds for our Ontario Transportation operations, while Agriculture is operating from a position of strength following a second consecutive year of record Canadian farm income in 2014."

Due to the 2014 expansion of Peterbilt operations, the Company has realigned its operations into Agricultural, Transportation, and Commercial and Industrial ("C&I") segments. All prior period disclosure has been updated to reflect changes in operating segments, and certain amounts have been reclassified to conform to the current year presentation.

Highlights for the Year:

  • Revenues increased $118.5 million and gross profit dollars increased $23.4 million compared to 2013.
  • Income from operating activities on a same store basis increased $0.3 million to $34.7 million.
  • The Company incurred $1.6 million in acquisition and integration costs.
  • Earnings before interest, taxes, depreciation, and amortization ("EBITDA") increased $0.5 million to $52.4 million, excluding acquisition costs.
  • Profit attributable to shareholders decreased $4.7 million.
  • Cervus was awarded Peterbilt's 2014 North American Dealer of the Year award, for the performance of our Peterbilt operations.
  • Cervus completed the acquisition of the assets of Peterbilt of Ontario Inc., adding 13 Peterbilt truck dealerships.
  • Cervus acquired four John Deere full service dealerships adjacent to the Company's existing Alberta locations, through the acquisition of the shares of Evergreen Equipment Ltd.
  • Cervus acquired two John Deere full service dealerships adjacent to the Company's existing Alberta locations, through the acquisition of the assets of Deer Country Equipment (1996) Ltd.
  • Cervus acquired the remaining 46.7% of Windmill AG Pty Ltd., bringing the Company's ownership to 100% in Australia.
  • The Company entered into a committed, two year, $100 million syndicated credit facility ensuring continued strategic flexibility.
  • The Company was ranked #20 on Alberta Venture's 2014 Fast Growth 50 List.

Financial Highlights For the Year Ended December 31, 2014:

Revenue increased by $118.5 million or by 13.8% ($43.2 million from the Agricultural equipment segment and $80.4 from the Transportation segment, offset by a $5.1 million decrease from the C&I equipment segment). Same store 2014 revenue of $854.2 million was consistent with 2013 revenue of $861.1 million.

Gross profit margin was 19.1%, similar to 2013.  The increase in sales resulted in an increase in gross profit dollars of $23.4 million for the year ended 2014 when compared to 2013.

Selling, general and administrative expenditures increased to 16.1% of total revenue in 2014 compared to 15.4% in 2013.

Profit attributable to shareholders in the year decreased by $4.7 million compared to 2013, primarily due to $1.6 million of non-recurring acquisition costs during the year and a $2.8 million reduction on earnings from equity investments.

EBITDA decreased by $1.1 million to $50.8 million in 2014 compared with $51.9 in 2013. Excluding the $1.6 million of acquisition costs, EBITDA increased $0.5 million in 2014.

As at December 31, 2014, Cervus had working capital of $119.4 million, including $18.8 million in cash and cash equivalents, up $6.1 million compared to $113.2 million at December 31, 2013.

Selected Annual Information






Total 2014

2014 Same Store


(in $ thousands, except per share amounts)

2014


%
Change
Compared
to 2013

2014
Same
Store


%
Change
Compared
to 2013

2013

Revenue

979,609

14%

854,157

(1%)

861,138

Cost of sales

(792,936)

14%

(687,075)

(2%)

(697,829)

Gross profit

186,673

14%

167,082

2%

163,309

Other income

3,715

(4%)

4,223

9%

3,885

Selling, general and administrative expense

(157,678)

19%

(136,633)

3%

(132,796)

Income from operating activities

32,710

(5%)

34,672

1%

34,398

Finance income

384

(28%)

221

(58%)

532

Finance costs

(7,656)

14%

(6,828)

1%

(6,735)

Share of profit of equity accounted investees, net of income tax

712

(80%)

712

(80%)

3,527

Profit before income tax expense

26,150

(18%)

28,777

(9%)

31,722

Income tax expense

(7,654)

(9%)

(8,387)

(0)%

(8,396)

Profit for the year

18,496

(21%)

20,390

(13%)

23,326

Profit attributable to shareholders

18,362

(20%)

20,256

(12%)

23,090

EBITDA1

50,811

(2%)

50,322

(3%)

51,883

EBITDA margin1

5.2%


5.9%


6.0%

Ratios as a percentage of revenue:







Gross profit margin

19.1%


19.6%


19.0%


Selling, general and administrative

16.1%


16.0%


15.4%

Earnings per share







Basic

1.21

(21%)

1.34

(13%)

1.54


Diluted

1.15

(22%)

1.27

(14%)

1.48








Notes: [1] These financial measures are identified and defined under the section "Non-IFRS Financial Measures".

 

Conference Call Information

Cervus will host its 2014 year end results conference call on March 12, 2015 at 11:00 a.m. Eastern Time. Interested parties may access the conference call by dialling (647) 427-7450 or 1-888-231-8191. Please connect approximately 10 minutes prior to the beginning of the call. The conference call will be archived for replay until Thursday, March 19, 2015 at midnight. To access the archived conference call, dial (416) 849-0833 or 1-855-859-2056 and enter the reservation number 91229019 followed by the number sign. A live audio webcast of the conference call will be available at: http://www.newswire.ca/en/webcast/detail/1489431/1658433. 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 operates authorized agricultural, construction, materials handling and transportation equipment dealerships.  The Company has interests in 75 dealerships in Canada, New Zealand, and Australia, employing more than 1,700 people. 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".

Forward Looking Information

This press release contains certain forwardlooking information ("forwardlooking information") within the meaning of applicable Canadian securities laws. Forwardlooking information is often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes.  Forwardlooking information is not a guarantee of future performance and involves a number of assumptions and a number of risks and uncertainties some of which are described herein. These risks and uncertainties include the risks identified under the heading "Risk Factors – Risks Related to the Business" in the 2014 Annual Information Form of Cervus Equipment Corporation dated March 10, 2015 available electronically at www.sedar.com under Cervus' profile including but not limited to Cervus' reliance on key manufacturers for the delivery of products, their respective dependence on the strength of sales to the agricultural sector, the seasonal and cyclical nature of the business, workforce availability and acquisition related risks such as effective and timely integration into Cervus' business operations. Cervus believes the expectations reflected in such forwardlooking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forwardlooking information should not be unduly relied upon. You are cautioned that the preceding list of assumptions and risks is not exhaustive. Any forwardlooking information is made as of the date hereof and, except as required by law, Cervus assumes no obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Cervus Equipment Corporation

For further information: Investor Inquiries: Graham Drake - President & CEO, (403) 567-2095, gdrake@cervusequipment.com; Randy Muth - Chief Financial Officer, (403) 567-2097, rmuth@cervusequipment.com


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890