CERF INCORPORATED Announces Results for the Second Quarter of 2012

TSX Venture Symbol: CFL

CALGARY, Aug. 27, 2012 /CNW/ - Mr. Wayne Wadley, President of CERF Incorporated (the "Company" or "CERF Inc."), is pleased to announce the results for the three and six months ended June 30, 2012.

Full details of the Company's results, in the form of the unaudited condensed consolidated interim financial statements and notes thereto for the three and six months ended June 30, 2012 and Management's Discussion and Analysis of the results dated August 23, 2012 are available on SEDAR at www.sedar.com and on the Company's website at www.cerfcorp.com.

Q2 2012 financial highlights and recent events:

• Q2 revenues exceeded Q2 2011 revenues by over 34%. Revenues for the six months exceed the same period in 2011 by 38%.
  
  
• Waste management revenue for the second quarter increased 73% over Q2 2011.
  
  
• Rental revenues for the quarter increased 8% over Q2 of 2011.
  
  
• Cash flow from operations continues to be strong, generating $3,176,636 for the first six months of the year.
  
  
• CERF continues to build an infrastructure of quality people and systems to support organic growth and pursue outside expansionary activities.
  
  
• The Company paid dividends of $0.06 per share to the shareholders in the second quarter of 2012 for total of $0.12 per share for the six months ended June 30, 2012.
  
  
• On April 20, 2012, CERF's wholly owned subsidiary The Smart-Way Disposal & Recycling Company Ltd. completed the acquisition of all, or substantially all, of the assets used in the business of The Bin Company Inc. ("Bin Company").  Bin Company's business involves waste collection, reduction and disposal in and around the Edmonton, Alberta area market.
  
  Management believes that the operations of Bin Company will integrate nicely with Smart-Way's existing operations in the Edmonton area.  Smart-Way's strategy to increase its presence in the homeowner and retail markets with products like EZ-Bag® will now be accelerated with the addition of Bin Company's BinBag™.  Bin Company's fleet of trucks and disposal bins and diverse customer base will also complement Smart-Way's fleet of similar assets.

Mr. Wadley makes the following statements:

"With the housing and commercial sectors continually expanding to meet the ongoing demand of Alberta's economy the future is looking very bright for both the rental and waste management industries.  As we move into Q3, 4-Way revenue is expected to continue on the upslope toward the busy winter season.   MCL's special projects, which were delayed by the wet weather in Q1 and Q2, should bring increased revenue in Q3 as clients rush to complete the projects before the onset of winter. Demand for the Smart-Way's EZ-Bag® system continues to grow in both the Calgary and Edmonton marketplaces, and the addition of the Bin Company assets and customers are expected to provide additional revenues during the summer renovation season."

CERF Inc. is engaged in the rental, sale and service of industrial and construction equipment and provides waste management and environmental services. CERF Inc. which trades on the TSX Venture Exchange under the symbol "CFL" and currently has 9,643,367 shares issued and outstanding.

Forward-Looking Statements

Certain information contained herein relating to, but not limited to, CERF Inc. and its predecessor CERF LP and its businesses, and the statements of Mr. Wadley, constitutes forward-looking information under applicable securities laws. All statements, other than statements of historical fact, which address activities, events or developments that CERF Inc. expects or anticipates may or will occur in the future, are forward-looking information. Forward-looking information typically contains statements with words such as "may", "estimate", "anticipate", "believe", "expect", 'plan", "intend", "target", "project", 'forecast" or similar words suggesting future outcomes or outlook. Forward-looking statements in this news release include, but are not limited to, statements with respect to the future economic wellbeing of Western Canada and by implication of CERF Inc.

Although CERF Inc. believes that the expectations conveyed by the forward-looking information are reasonable based on information available on the date of preparation, no assurances can be given as to future results, levels of activity and achievements. Undue reliance should not be placed on the information contained herein, as actual results achieved will vary from the information provided herein and the variations may be material.  CERF Inc. makes no representation that actual results achieved will be the same in whole or in part as those set out in the forward-looking information. Furthermore, the forward-looking statements contained herein are made as of the date hereof and CERF Inc. does not undertake any obligation to update publicly or to revise any forward-looking information, whether as a result of new information, future events or otherwise. Any forward-looking information contained herein is expressly qualified by this cautionary statement.

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Summarized financial results for the three and six months ended June 30, 2012 follow:

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CERF INCORPORATED

		June 30, 2012	December 31, 2011
Assets
Current assets
	Cash	881,543	4,370,989
	Accounts receivable	5,205,136	5,900,994
	Inventory	1,171,415	848,403
	Income taxes recoverable	170,314	—
	Prepaid expenses and deposits	308,332	216,326
		7,736,740	11,336,712
Non-current assets
Loan receivable		562,503	665,674
	Property and equipment	23,430,408	22,269,785
	Intangibles and goodwill	3,654,528	3,599,104
		27,647,439	26,534,563
Total assets		35,384,179	37,871,275
Liabilities and Shareholders' Equity
Current liabilities:
	Bank indebtedness	1,227,786	1,164,707
	Accounts payable and accrued liabilities	2,587,155	3,755,003
	Dividends payable	579,915	579,915
	Income taxes payable	—	65,463
	Current portion of long-term debt	7,151,113	4,151,093
	Current portion of finance leases	557,150	593,750
		12,103,119	10,309,931
Non-current liabilities:
	Long-term debt	4,217,530	7,151,519
	Obligation under finance leases	4,614,876	4,874,181
	Deferred income taxes	420,316	623,822
		9,252,722	12,649,522
Shareholders' equity
	Share capital	17,701,144	17,701,144
	Share purchase loans receivable	(254,932)	(309,532)
	Contributed surplus	385,463	382,615
	Deficit	(3,803,337)	(2,862,405)
		14,028,338	14,911,822
Total liabilities and shareholders' equity		35,384,179	37,871,275

 

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CERF INCORPORATED

		Three months ended June 30		Six months ended June 30
		2012	2011	2012	2011
Revenues
	Equipment rental	2,607,226	2,407,469	5,784,265	5,496,034
	Waste management	3,915,691	2,258,910	6,427,407	2,505,188
	Sales of equipment, fuel and parts	730,409	678,264	1,969,151	2,112,939
	Service and other	295,519	262,111	577,648	563,752
		7,548,845	5,606,754	14,758,471	10,677,913
Direct expenses
	Cost of sales of equipment, fuel and parts	605,134	539,669	1,530,033	1,675,416
	Depreciation of equipment	1,010,870	855,863	1,941,844	1,520,853
	Direct operating costs	4,829,921	3,051,816	8,832,664	4,875,058
		6,445,925	4,447,348	12,304,541	8,071,327
	Gross margin	1,102,920	1,159,406	2,453,930	2,606,586
Operating expenses
	General and administrative	545,336	411,760	1,204,023	792,100
	Depreciation of other property and equipment	88,074	76,301	179,529	166,797
	Amortization of intangible assets	160,351	68,333	271,576	68,333
	Business acquisition expenses	10,947	38,312	17,963	127,382
		804,708	594,706	1,673,091	1,154,612
Other expenses
	Finance costs	288,169	237,214	539,116	435,993
Income before income taxes		10,043	327,486	241,723	1,015,981
Income taxes (recovery)
	Current	90,889	55,777	227,190	506,936
	Deferred	(143,950)	(7,453)	(203,506)	(261,233)
		(53,061)	48,324	23,684	245,703
Net income and comprehensive income for the period		63,104	279,162	218,039	770,278
Net income per share
	Basic	0.01	0.03	0.02	0.09
	Diluted	0.01	0.03	0.02	0.09

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: CERF Inc.

Wayne Wadley, President and CEO at [phone] or by email at [email protected] or Ken Stephens CFO at [phone], by fax at [phone] or by email at [email protected].