CERF INCORPORATED Announces Record Results for the First Quarter of 2013

TSX Venture Symbol: CFL

CALGARY, May 28, 2013 /CNW/ - Mr. Wayne Wadley, President of CERF Incorporated (the "Company" or "CERF"), is pleased to announce the results for the first quarter of 2013.

Full details of the Company's results, in the form of the unaudited condensed consolidated financial statements and notes thereto for the three months ended March 31, 2013 and Management's Discussion and Analysis of the results dated May 27, 2013 are available on SEDAR at www.sedar.com and on the Company's website at www.cerfcorp.com.

Summary of fourth Quarter and Year to Date Consolidated Financial Results:

In C$,000's except
percentages and per
shares data



Revenue 11,444 7,210 4,234 59%
Direct Expenses 7,763 5,739 2,024 35%
Gross Margin % 32% 20% 12%  
Net Income 1,110 155 955 616%
4,003 1,624 2,379 146%
Dividend per share $0.06 $0.06    

Selected Highlights of the quarter:

  • Revenue increased 59% to $11,444,000 for Q1 2013 versus the corresponding period in 2012;
  • Equipment Rental Segment revenue increased 83% in Q1 2013, to $8,595,000, versus $4,698,000 in Q1 2012 being 75% of revenue for the first quarter of 2013 versus 65% in the first quarter of 2012. This was due in part to the acquisition of Trac Energy Services Ltd. ("TRAC") in October of 2012. TRAC provides rental equipment to the drilling and service sectors of the oil and natural gas industry and added $2,925,000 of revenue and $1,877,000 of EBITDA in the quarter;
  • Construction Equipment Rental revenue increased organically 38% by $1,215,000 to $4,392,000 in the first quarter of 2013 versus Q1 2012;
  • Waste Management Segment revenue increased 13% (by $337,000) for Q1 2013 to $2,849,000, versus the corresponding period in 2012;
  • Adjusted EBITDA increased 146% to $4,003,000 for the first quarter of 2013 versus $1,624,000 for the same period in 2012 reflecting the strong EBITDA impact of the TRAC acquisition had on the quarter as well as the strong organic growth in construction rentals.  Further, EBITDA per share in Q1 2013 was $0.34 versus $0.17 in Q1 2012, despite the fact that the Company issued an additional 2,027,729 common shares to acquire TRAC, being a 21% increase in shares outstanding;
  • Net income increased 616% to $1,110,000 for the three months ended March 31, 2013 or an earnings per share of $0.095 versus $155,000 for the same period in 2012 or an earnings per share of $0.01; and
  • The Company paid dividends of $0.06 per share to shareholders in the first quarter of 2012 for a total of $0.24 for the trailing twelve months.

Mr. Wadley, President  & CEO makes the following comments:

First Quarter Results

"Increased general economic activity in Alberta combined with strong demand for rental equipment drove all-time record quarterly revenue and EBITDA.  As we mentioned at the time of our 2012 Year End and Q4 results, the drivers that drove our business in Q4 2012 continued into Q1 and have continued into Q2 of 2013."

"In our rental segment, cold weather in the Edmonton operating area that drove the demand for our expanded rental heater fleet in Q4 continued throughout the entire first quarter and continued into the second quarter.  The transition into the summer construction season is off to a robust start as equipment specifically suited for summer is already in high demand.   This activity level is expected to continue throughout the summer."

"Our oilfield rental business operated by TRAC continued its strong activity in the first quarter with a large percentage of its rental fleet out in the field.  TRAC has been able to rent a good portion of its fleet throughout spring breakup which is a bonus to the overall results and we expect the increased demand to continue over the next several months.  When road bans are lifted after spring breakup and drilling rigs begin to move and go back to work TRAC equipment, which has been stored with the rigs, is expected to go back to work as well.  TRAC continues to be asked by key customers to supply more equipment in broader geographic regions, validating TRAC's commitment to high levels of service and the supply of quality rental equipment."

"While the waste management segment of our business is typically slower during the first quarter, we are gearing up for what appears to be a very busy summer.    In addition to the regular increase in summer waste material volumes moving through our six managed facilities, which drives incremental revenue, we have been contracted to complete several internally managed construction projects which are incremental to our management fee.  Our employees and equipment will complete a majority of that work in-house.  The waste removal business is running at its equipment capacity as spring cleaning projects and new jobsites are underway.  They expect to remain very busy until colder weather hits next winter."

About CERF Incorporated

CERF is engaged in the equipment rental business (the "Equipment Rental Segment") and the waste management business (the "Waste Management Segment") in Alberta.  The Equipment Rental Segment includes the rental of residential, commercial and industrial construction related equipment including sales and service of equipment.  It also includes the rental and sale of equipment to the drilling and service sectors of the oil and natural gas industry.  The Waste Management Segment consists of complete waste facility management (currently we manage 6 landfill sites in central Alberta) with all that entails including waste facility design and construction services, recycling management, and collection services, and consulting services.  The Waste Management Segment also consists of waste removal and disposal from commercial, industrial and residential customers.

CERF Incorporated trades on the TSX Venture Exchange under the symbol "CFL" and currently has 11,671,096 shares issued and outstanding.

Forward-Looking Statements

Certain statements included or incorporated by reference in this press release constitute forward-looking statements or forward-looking information, including management's assessment of expected activity levels throughout the summer of 2013, expected increase in demand for TRAC rental equipment over the next several months, expected demand for TRAC rental equipment after spring breakup, and expected activity levels until next winter in the waste management segment. Forward-looking statements or information may contain statements with the words "anticipate", "believe", "expect", "plan", "intend", "estimate", "propose", "budget", "project", "would have realized', "may have been" or similar words suggesting future outcomes or expectations. Although the Company believes that the expectations implied in such forward-looking statements or information are reasonable, undue reliance should not be placed on these forward-looking statements because the Company can give no assurance that such statements will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of assumptions about the future and uncertainties. Although management believes these assumptions are reasonable, there can be no assurance that they will be proved to be correct, and actual results could differ materially from those anticipated.  For this purpose, any statements herein that are not statements of historical fact may be deemed to be forward-looking statements.  Such risks and uncertainties include, but are not limited to:  general economic conditions, industry conditions, weather conditions, commodity prices, currency fluctuations and competition from other equipment rental companies. The forward-looking statements or information contained in this press release are made as of date hereof and the Company assumes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new contrary information, future events or any other reason, unless it is required by any applicable securities laws. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.

Summarized financial results for the three months ended March 31, 2013 follow:


    March 31, 2013 December 31,
Current assets    
  Accounts receivable 9,717 7,765
  Inventory 1,307 1,369
  Income taxes recoverable 590
  Prepaid expenses and deposits 280 297
    11,304 10,021
Non-current assets    
  Loan receivable 402 456
  Property and equipment 35,566 35,041
  Intangibles and goodwill 11,468 11,719
    47,436 47,216
Total assets 58,740 57,237
Liabilities and Shareholders' Equity    
Current liabilities:    
  Bank indebtedness 4,565 1,569
  Accounts payable and accrued liabilities 4,010 5,771
  Dividends payable 700 700
  Income taxes payable 2       —
  Current portion of long-term debt 4,372 4,430
  Current portion of finance leases 386 451
    14,035 12,921
Non-current liabilities:    
  Long-term debt 19,537 19,662
  Obligation under finance leases 4,331 4,420
  Deferred income taxes 2,097 2,190
    25,965 26,272
Total liabilities 40,000 39,193
Shareholders' equity    
  Share capital 22,897 22,897
  Share purchase loans receivable (203) (203)
  Contributed surplus 673 387
  Deficit (4,627) (5,037)
    18,740 18,044
Total liabilities and shareholders' equity 58,740 57,237


    Three months ended March 31
  2013 2012
Revenues 11,444 7,210
Direct expenses    
  Direct operating costs 5,491 3,883
  Cost of sales of equipment, fuel and parts 862 925
  Depreciation of equipment 1,410 931
    7,763 5,739
  Gross margin 3,681 1,471
Operating expenses    
  General and administrative 1,374 779
  Depreciation of other property and  equipment 28 91
  Amortization of intangible assets 251 111
  Business acquisition expenses 10 7
    1,663 988
Other expenses    
  Finance costs 424 251
Income before income taxes 1,594 232
Income taxes 484 77
Net income and comprehensive income for the period 1,110 155
Net income per share    
  Basic $ 0.095 $ 0.01
  Diluted $ 0.095 $ 0.01

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. 




For further information:

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

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