Cervus Equipment Corp. Announces 2015 Year End Results and Reduction of Quarterly Dividend

CALGARY, March 16, 2016 /CNW/ - Cervus Equipment Corp. ("Cervus" or the "Company") (TSX: CVL) today announced its financial results and operational highlights for the year ended December 31, 2015.

"2015 was a year of significant growth for Cervus.   We started the year with 19 more dealerships than at the beginning of 2014 which generated an additional $245 million in Revenue, and Cervus exceeded $1 billion of revenue for the first time. During 2015, we also focused on operational efficiencies, cost reduction initiatives, and maintenance of parts and service revenue which helped mitigate the impact of resource prices in our western Canadian transportation dealerships and our Commercial & Industrial ("C&I") segment," said Graham Drake, President and CEO of Cervus. "Looking ahead, Cervus will continue to manage costs while preserving our ability to meet increased customer demand when the industry cycle recovers.  Further, we are pleased with positive profitability trends in our Ontario transportation dealerships, and expect continued growth from these dealerships through 2016."


 Highlights for the Year:

  • The Company generated adjusted earnings1 of $13.3 million for the year ended December 31, 2015, and adjusted basic earnings per share2 of $0.86. For the comparable period in 2014, the Company generated adjusted earnings of $20.2 million and adjusted basic earnings per share of $1.33.
  • The Company generated a loss of $27.4 million in 2015, including the $36.9 million non-cash settlement with the Canada Revenue Agency, compared to net income of $18.5 million in 2014.
  • The Company generated $1.1 billion of revenue in 2015, exceeding the 2018 strategic revenue goal three years earlier than target. Total revenues increased $154.3 million and gross profit dollars increased $20.3 million compared to 2014.
  • Targeted cost reduction initiatives achieved a $12.6 million reduction in same store selling general and administrative ("SG&A") expenses, compared to 2014.
  • Acquisitions contributed $5.9 million of earnings before interest, taxes, depreciation, and amortization ("EBITDA"). Same store EBITDA was $40.4 million during the year compared to $50.8 million in 2014.
  • The Company extended and amended its revolving credit facility, extending maturity to December 2017. The $100 million syndicated credit facility provides stability for our existing operations and maintains capital flexibility for the future.
  • The Company reached an agreement with Canada Revenue Agency, confirming the eligibility of $44.3 million of tax savings claimed by the company through December 2014. The agreement resulted in a non-cash charge of $33.4 million related to the write-off of a portion of the Company's deferred tax asset.
  • The Company completed a review of branch capacity resulting in construction and relocation to a new Agriculture equipment facility in Ponoka, Alberta, as well as the relocation of our Cranbrook, BC dealership to Creston, BC. We closed our Grande Prairie C&I dealership, and relocated the Essex, Ontario Transportation dealership to a new location in Windsor, Ontario. We also opened a new dealership in Barrie, Ontario to better serve the Ontario market.
  • Dividends of $0.85 per share were declared to shareholders during 2015.
  • The Company climbed to #66 from #72 on the Alberta Venture's 2015 Venture 250 ranking.
  • The Saskatoon Peterbilt branch was awarded Peterbilt's Platinum Oval award for the third consecutive year, highlighting their outstanding performance as a dealership. Further, Cervus Equipment Peterbilt (Saskatchewan and Ontario) was one of ten North American dealer groups to earn Peterbilt's Best in Class award for 2015.

2015 Financial Highlights

Total 2015 EBITDA and income from operating activities decreased $4.5 million and $7.1 million, respectively, compared to 2014. Prolonged uncertainty in oil prices reduced demand for new equipment in the Commercial and Industrial (C&I) segment and the western Canadian locations of the Transportation segment. U.S. dollar appreciation and weather concerns early in the season reduced demand for new equipment sales in the Agriculture segment. The impact of lower new equipment demand was offset by relatively stable aftermarket activity and targeted expense control, which reduced 2015 same store SG&A expenses by $12.6 million compared to 2014.

In 2015, Agriculture segment EBITDA increased $2.4 million and income from operating activities was within 1% of what was achieved in 2014, as acquisition performance offset the decrease in same store results. Same store results were impacted by lower equipment demand due to weather concerns early in the season, followed by the appreciation of the US dollar later in the season. The impact of lower new equipment sales was offset by used equipment sales, parts and service activity, and targeted SG&A expense control.

In 2015, Transportation segment EBITDA increased $2.3 million and income from operating activities decreased $0.3 million compared to 2014, excluding the impact of unrealized foreign exchange. Same store operating income from Ontario operations increased $2.4 million in 2015 due to higher revenues and integration-related process improvements. Low oil prices significantly impacted equipment demand in Saskatchewan, resulting in a $4.8 million decrease in 2015 operating income compared to 2014. Maintenance of customer relationships and a focus on internal efficiencies enabled the retention of parts and service revenues in Saskatchewan, which supported gross margin dollars.

C&I segment EBITDA and income from operating activities decreased $7.3 million and $4.6 million in 2015, respectively.  Low oil prices have had a significant impact on Alberta's light construction industry, with demand for new construction equipment decreasing 32% year over year.   

Selected Annual Information

Total 2015

2015 Same Store2

($ thousands, except per share amounts)


% Change
to 2014


% Change
to 2014








Cost of sales






Gross profit






Other income






Unrealized foreign exchange (loss)






Total other (loss) income






Selling, general and administrative expense






Income from operating activities






Finance income






Finance costs






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






Income before income tax expense






Income tax expense1




Income (loss) for the period




Income (loss) attributable to shareholders










EBITDA margin2




Ratios as a percentage of revenue:

Gross profit margin




Selling, general and administrative




Earnings per share

Basic - Adjusted2













[1] Includes impact of $36.9 million non-cash settlement with the CRA.

[2] These non-IFRS financial measures do not have any standardized meaning under IFRS, may not be comparable to similar measures presented by other issuers and are defined and reconciled to their most directly comparable IFRS measure within our Management's Discussion and Analysis for the year ended December 31, 2015 under the section "Non-IFRS Financial Measures", which document is available electronically at www.sedar.com under Cervus' profile. 


Cervus' Board of Directors have approved a cash dividend to Cervus shareholders of $0.07 per share for the first quarter of 2016.  Payment will be made on or about April 15, 2016 to shareholders of record as of the close of business on March 31, 2016.

This is a reduction from the previous quarterly dividend of $0.2125 per share. Cervus continues to believe payment of a dividend reinforces financial discipline by returning a portion of annual profits to shareholders in cash.  Cervus also believes in maintaining a strong balance sheet and financial flexibility. Accordingly, the Board of Directors have reduced Cervus' dividend.   Investors are cautioned that quarterly dividends remain subject to approval from the Board of Directors of Cervus, and may be increased, decreased or suspended by the board at any time.

Conference Call Information

Cervus will host its 2015 year end results conference call on March 17, 2016 at 11:00 a.m. 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 24, 2016 at midnight. To access the archived conference call, dial (416) 849-0833 or 1-855-859-2056 and enter the reservation number 59918127 followed by the number sign.

A live audio webcast of the conference call will be available at:

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 72 dealerships in 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".

Forward Looking Information

This press release contains certain forward‐looking information ("forward-looking information") within the meaning of applicable Canadian securities laws. Forward-looking 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.  Forward-looking information included within this press release includes Cervus' intention to continue to pay a quarterly dividend and Cervus' expectation of continued growth from its Ontario transportation dealerships through 2016.  However, forward-looking 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. As such, actual results may vary from the forward-looking information provided. 

With respect to the future payment of quarterly dividends, investors are cautioned that the declaration and payment of such dividends remain subject to approval from the Board of Directors of Cervus, and may be increased, decreased or suspended by the Board at any time.  Further, both the payment of any dividends and the expected continued growth from Cervus' Ontario transportation dealerships through 2016 are subject to various risks including, but not limited to those risks identified under the heading "Risk Factors – Risks Related to the Business" in the Annual Information Form of Cervus Equipment Corporation for the year ended December 31, 2015 dated March 15, 2016 available electronically at www.sedar.com under Cervus' profile. Cervus believes the expectations reflected in such forward-looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward-looking information should not be unduly relied upon. You are cautioned that the preceding list of assumptions and risks is not exhaustive. Any forward-looking 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.


1 The Company calculates adjusted earnings as income attributed to shareholders adjusted to exclude the impact of:  settlements with the Canada Revenue Agency, unrealized foreign currency gains and losses, acquisition and integration costs, and gains and losses on the sale of real estate.  For reconciliation to income (loss) attributed to shareholders for the period, refer to Cervus' Management's Discussion and Analysis for the year ended December 31, 2015, available at www.sedar.com.

2 Adjusted basic earnings per share is calculated as adjusted earnings divided by the weighted average shares outstanding during the period.


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) 567-0392, rmuth@cervusequipment.com

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