Cervus Equipment Corp. Announces First Quarter 2015 Results

CALGARY, May 13, 2015 /CNW/ - Cervus Equipment Corp. ("Cervus") (TSX: CVL) today announced its financial results and operational highlights for the quarter ended March 31, 2015.

"We are very pleased with the results from our Agriculture segment in the first quarter, which were up over last year," said Graham Drake, President and CEO of Cervus. "The adjustment to lower oil prices has negatively impacted Construction and Saskatchewan Transportation operations. Our Ontario Transportation group continues through its integration and streamlining objectives, and we are very optimistic about the potential for this group, given the strengthening Ontario market and the sales momentum the team has generated."     

Highlights for the Quarter:

• Revenues increased $71.5 million and gross profit dollars increased $11.2 million compared to the three months ended March 31, 2014. Same store revenues decreased $11.0 million.
• SG&A as a percentage of revenue decreased to 18.6% in the first quarter of 2015 compared to 19.8% in the three months ended March 31, 2014.
• Income from operating activities increased $0.5 million in the Agriculture segment. Overall income from operating activities for the three months ended March 31, 2015 decreased $2.5 million resulting in a loss of $1.1 million, which included a $1.3 million loss on unrealized foreign exchange.
• Profit available to shareholders decreased $0.7 million when excluding $1.3 million of unrealized loss on foreign exchange.
• Earnings before interest, taxes, depreciation, and amortization ("EBITDA") increased 2% to $4.1 million.

Financial Highlights For the Quarter Ended March 31, 2015:

Revenue increased by $71.5 million or by 42.9%, $36.9 million from the Agricultural equipment segment and $39.4 from the Transportation segment, offset by a $4.7 million decrease from the Construction and Industrial ("C&I") equipment segment.  

Gross profit margin increased $11.2 million, although decreasing to 18.6% from 19.8% in the comparative period, due to the inclusion of equipment sales in the Ontario fleet market.  Acquisitions contributed $12.0 million of incremental gross profit dollars. Selling, general and administrative expenditures decreased to 18.6% of total revenue in the first quarter of 2015 compared to 19.8% in 2014.

Profit attributable to shareholders decreased by $2.1 million compared to the first quarter of 2014 due to $1.3 million of unrealized foreign currency losses, combined with resource prices impacting C&I and Saskatchewan Transportation operations.  Higher interest on acquisition related financing also contributed to the overall decrease in profit attributable to shareholders partly offset by increased earnings from equity investments.

EBITDA of $4.1 million during the first quarter of 2015 was consistent with the same period in 2014.

As at March 31, 2015, Cervus had working capital of $130.0 million, including $11.8 million in cash and cash equivalents, compared to $119.4 million at December 31, 2014.

Selected Quarterly Information

	Three months period ended March 31
	Total 2015		2015 Same Store
($ thousands, except per share amounts)	2015	% Change Compared to 2014	2015 Same Store^1	% Change Compared to 2014	2014
Revenue	238,422	43%	155,903	(7%)	166,889
Cost of sales	(194,110)	(45%)	(123,612)	8%	(133,768)
Gross profit	44,312	34%	32,291	(3%)	33,121
Other income	153	(88%)	445	(65%)	1,281
Unrealized foreign exchange gain (loss)	(1,326)		(604)		11
Total other income	(1,173)	(191%)	(159)	(112%)	1,292
Selling, general and administrative expense	(44,271)	(34%)	(32,411)	2%	(33,088)
(Loss) income from operating activities	(1,132)	(185%)	(279)	(121%)	1,325
Finance income	57	6%	56	4%	54
Finance costs	(2,643)	(60%)	(1,804)	(9%)	(1,652)
Share of profit of equity accounted investees,     net of income tax	321	145%	321	145%	(714)
Loss before income tax expense	(3,397)	(244%)	(1,706)	(73%)	(987)
Income tax recovery	422	83%	212	(8%)	230
Loss for the period	(2,975)	(293%)	(1,494)	(97%)	(757)
Loss attributable to shareholders	(2,896)	(248%)	(1,415)	(70%)	(833)
EBITDA^1	4,128	2%	3,465	(15%)	4,053
EBITDA margin^1	1.7%		2.2%		2.4%
Ratios as a percentage of revenue:
Gross profit margin	18.6%		20.7%		19.8%
Selling, general and administrative	18.6%		20.8%		19.8%
Earnings per share
Basic	(0.19)	(217%)	(0.09)	(50%)	(0.06)
Diluted	(0.18)	(260%)	(0.09)	(80%)	(0.05)

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

Conference Call Information

Cervus will host its first quarter 2015 results conference call on May 14, 2015 at 11:00 a.m. Eastern Time. Interested parties may access the conference call by dialling [phone] 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, May 21, 2015 at midnight. To access the archived conference call, dial [phone] or 1-855-859-2056 and enter the reservation number 33452703 followed by the number sign.

A live audio webcast of the conference call will be available at: http://event.on24.com/r.htm?e=986134&s=1&k=0A746F67914B43BBB05574D67C41B7DD. 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

Investor Inquiries: Graham Drake - President & CEO, [phone], [email protected]; Randy Muth - Chief Financial Officer, [phone], [email protected]