Canadian Equipment Rental Fund Limited Partnership Announces 2009 Results
TSX Venture Symbol: CFL.UN
CALGARY, April 23 /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, 2009.
Full details of the Partnership's results, in the form of the audited financial statements for the year ended December 31, 2009 and Management's Discussion and Analysis of the results dated April 22, 2010 are available on SEDAR at www.sedar.com and on the Partnership's website www.cerflp.com.
Highlights of the year ended December 31, 2009 were:
- Revenue for the year was $13,135,355.
- Net income per unit of $0.07 basic.
- Distributions of $0.42 per unit were declared for the year.
FORWARD LOOKING STATEMENTS
This press release contains forward looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances, cash flows or the ability to pay distributions to be materially different from the results, performances, cash flow or the ability to pay distributions expressed or implied by such forward looking statements.
Mr. Wadley makes the following statements:
"The economic downturn that started in late 2008 continued through most of 2009 and impacted virtually all sectors and countries. Even amid these tough market conditions, Canadian Equipment Rental Fund LP was affected but survived, thanks in large part to our product and customer diversity, our conservative fiscal policies and the growth we have delivered over the past four years.
We were faced with many difficult decisions this past year as a result of the recession. Our board and management team relied on our past experience to guide the partnership through a complex year. Early in the recession we decided not to make deep staff and equipment reductions as some of our competitors. Our experience has taught us that all recessions end and while the strategy not to make deep cuts would cause us some short term pain in 2009, when the recession finally ended we would be in good position to benefit from the recovery. Skilled labor is essential to our services and investing in people has always been a key to our success. Our staff consists of highly trained technical service personnel who require specialized equipment training to ensure that we meet our customer service levels of quality assurance. We believe that the decision to keep these trained staff was the right one and will prove to be a good decision. In the future, other rental companies will struggle to attract key personnel and rebuild their rental fleets to meet the renewed customer demand. Because of our longer term strategies, we feel we will be ahead of these competitors and better positioned to continue to exceed the needs of our diverse customer base.
We did, however, implement prudent cost cutting measures such as reducing overtime hours, implementing wage freezes for the majority of staff and empowering staff to reduce expenditures in various departments. Another decision we made was to reduce capital expenditures for rental equipment. With the growth of our equipment base in recent years, we still maintain one of the newest fleets in the industry. Our spending focused only on partial fleet renewal and meeting customer demand for equipment. The only significant assets added were the ones acquired from an Edmonton based waste removal company that we placed into our newly created subsidiary, The Smart-Way Disposal and Recycling Company Ltd. Finally we found it necessary to temporarily reduce the size of our quarterly distributions. We review our distribution policy quarterly and as the economy and our financial position improves, we expect to adjust the distributions to our partners accordingly.
We are proud to say that our top 25 customers remained loyal despite the cost cutting and discount pricing strategies being offered by our competition. These valued customers did more business with us in 2009 than in the year previous. We believe this is in a large part due to our accomplished staff, the diverse and balanced product line and the complete service solutions we offer. The rental industry continues to be a very relationship oriented business. By keeping our knowledgeable staff in place, it keeps these important relationships intact and is crucial especially in more difficult times. Studies have shown that companies that have gone through significant attrition during leaner periods are less likely to succeed when activity returns to more normal levels. From our experience, service, not price remains the number one priority to the customer even in the tougher times.
From early indications in the first quarter, we believe that 2010 will be a better year for the partnership. According to the Edmonton Construction Association, there were 33% more posted projects between January to March 2010 as compared to the same period last year. Contractors remain cautiously optimistic about the year ahead with further recovery expected towards last quarter of 2010 and continuing into 2011. We are starting to see more activity in housing construction as the builders have sold most of their inventory and the threat of rising interest rates are motivating first time buyers to enter the market. Indications from most of our commercial contractors are that bidding has increased and the projects to bid on are more substantial than in 2009. Federal Government infrastructure spending is starting to take hold as the lag time for permitting and approvals have now passed and projects can move into the building phase. Finally the waste disposal and recycling business we acquired during the year is showing great promise. At present we are experiencing high demand for our recycling and disposal services."
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 6,096,450 units issued and outstanding.
CANADIAN EQUIPMENT RENTAL FUND LIMITED PARTNERSHIP
Consolidated Balance Sheets
December 31, December 31,
2009 2008
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Assets
Current assets:
Cash $ 42,502 $ 227,425
Accounts receivable 2,370,047 3,870,472
Inventory 764,249 796,329
Prepaid expenses 215,506 206,442
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3,392,304 5,100,668
Property and equipment 17,995,205 14,449,882
Goodwill 203,477 -
Financial derivatives 19,697 -
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$21,610,683 $19,550,550
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Liabilities and Partners' Equity
Current liabilities:
Bank indebtedness $ 317,193 $ -
Accounts payable and accrued liabilities 1,053,376 1,669,591
Distributions payable 365,334 929,476
Note payable 300,000 300,000
Current portion of long-term debt 1,776,959 1,461,502
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3,812,862 4,360,569
Long-term debt 5,296,964 5,640,673
Obligation under capital lease 4,430,759 -
Future income tax 301,340 594,740
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13,841,925 10,595,982
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Partners' equity:
Limited Partnership units 9,068,408 8,272,782
Unit purchase loans receivable (438,659) (487,877)
Contributed surplus 470,613 469,197
(Deficit) retained earnings (1,331,604) 700,466
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7,768,758 8,954,568
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$21,610,683 $19,550,550
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CANADIAN EQUIPMENT RENTAL FUND LIMITED PARTNERSHIP
Consolidated Statements of Operations
Year ended Year ended
December 31, December 31,
2009 2008
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Revenues $13,135,355 $17,066,828
Expenses:
General and administrative 1,224,560 1,167,537
Interest on long term debt 473,848 407,197
Operating 7,551,171 8,700,876
Amortization of property and equipment 3,777,921 3,430,185
Loss (gain) on financial derivatives (19,697) -
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13,007,803 13,705,795
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Income before income taxes 127,552 3,361,033
Future income taxes (recovery) (293,400) 22,225
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Net and comprehensive income for the year 420,952 3,338,808
Retained earnings, beginning of year 700,466 1,043,393
Partner distributions declared (2,453,022) (3,681,735)
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(Deficit) retained earnings, end of year $(1,331,604) $ 700,466
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Net income per unit
Basic $0.07 $0.60
Diluted $0.07 $0.56
Full financial statements and notes thereto as well as management discussion and analysis are available on the SEDAR website at www.sedar.com.
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.
%SEDAR: 00022335E
For further information: Wayne Wadley, President & CEO at (403) 850-4095 or by email at [email protected] or Ken Stephens CFO at (403) 298-8695 or by email at [email protected]
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