Cervus Equipment Corp. Announces Second Quarter 2012 Results

Symbol: CVL (TSX)

CALGARY, Aug. 8, 2012 /CNW/ - Cervus Equipment Corp. ("Cervus" or the "Company") (TSX: CVL) today announced its financial results and operational highlights for the quarter ended June 30, 2012.

"In addition to the increased revenue realized from the Frontier acquisition, Cervus' same store sales experienced healthy growth this quarter," said Graham Drake, President and CEO of Cervus, "Subsequent to end of the quarter, Cervus entered into agreements that marked our entry into Australia and increased our stake in agricultural dealerships in New Zealand, both of which demonstrate the execution of our overall growth strategy."

Highlights since April 1, 2012:

• Acquired 30% of the shares in Windmill AG Pty Ltd, an Australian John Deere agriculture dealer, and 45% interest in PPJ Investment Ltd., a real estate holding company.
• Closed a $34.5 million public offering of convertible debentures.
• Acquired the remaining 39.7% interest in Agriturf Limited that Cervus did not already own; and entered into agreements to purchase five John Deere dealership branches in New Zealand.
• Appointed Peter Lacey as Executive Chairman of the Board of Directors, with Graham Drake assuming the role of CEO.
• Increased gross revenue by $49.6 million (same store $18.6 million) to $196.7 million from $147.1 million in the second quarter of 2011.
• Increased net profit for the period by $1.7 million to $7.4 million, from the second quarter 2011 profit of $5.7 million.
• Increased EBITDA by $3.4 million or 31.9% to $14.1 million in the second quarter of 2012 from $10.7 million reported in the same period of 2011.

Financial Highlights:

During the second quarter of 2012, revenue grew by $49.6 million or 33.7% to $196.7 million when compared to the same quarter of 2011.  Same store sales increased by $18.6 million or 13%.  Both operating segments reported increases in revenues with the agricultural equipment segment increasing by 11.6% and the commercial and industrial equipment segment increasing by 100.7% (same store 15.8%).

For the quarter ended June 30, 2012, overall gross margin increased slightly to 19.1% from 18.9% reported in the same period of 2011.

As a result of our increase in same store sales and the purchase of the operations of Frontier, net profit for the period increased by $1.7 million to $7.4 million from $5.7 million in 2011.  Selling, general and administrative expenditures increased to 14.6% of total revenue for the three month period ended June 30, 2012 compared to 13.7% for the same period in 2011.

EBITDA increased by $3.4 million to $14.1 million, or $0.92 per fully diluted share, in the second quarter of 2012 compared with $0.71 per fully diluted share for the same period in 2011. The most significant factor contributing to the increase in EBITDA during the three and six month periods ended June 30, 2012 when compared to the same periods of 2011 was the addition of Frontier and increased earnings.

As at June 30, 2012, Cervus had working capital of $56.7 million, down $22.4 million compared to $79.1 million at December 31, 2011.

Selected Quarterly Information

$ thousands, except per share amounts			Three Months Ended June 30, 2012	Three Months Ended June 30, 2011	% change	Six Months Ended June 30, 2012	Six Months Ended June 30, 2011	% change
Revenues			196,654	147,091	33.7	306,436	231,364	32.4
Gross profit			37,610	27,808	35.2	60,666	45,903	32.2
Gross margin			19.1%	18.9%	1.1	19.8%	19.8%	-
Net profit			7,438	5,730	29.8	8,834	5,576	58.4
Net profit attributable to shareholders			7,428	5,912	25.6	8,646	5,855	47.7
	Per share - Basic		0.50	0.40	25.0	0.59	0.40	47.5
	Per share - Diluted		0.49	0.39	25.6	0.57	0.39	46.2
Cash provided by operating activities			1,714	7,275	(76.4)	17,532	7,952	120.5
	Per share-Basic		0.12	0.50	(76.0)	1.19	0.55	116.4
EBITDA^1			14,094	10,687	31.9	19,385	12,824	51.2
EBITDA margin^1			7.3%	7.3%	-	6.3%	5.5%	14.5
	Per share-basic		0.96	0.89	7.9	1.32	0.74	78.4
Dividends declared to shareholders			2,725	2,637	3.3	5,411	5,194	4.2
		Per share	0.19	0.18	5.6	0.37	0.36	2.8
Weighted average shares outstanding
	Basic		14,719	14,618	0.7	14,721	14,410	2.2
	Diluted		15,278	15,074	1.4	15,278	14,865	2.8
Actual shares outstanding						14,729	14,649	0.6
Closing market price per share						17.99	17.00	5.8
Total assets						387,789	278,407	39.3
Long-term liabilities						47,414	7,767	510.5
Total liabilities						199,558	103,899	92.1
Shareholders' equity						188,231	174,933	7.6
Net book value per share - diluted						12.32	11.76	4.8

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

Conference Call Information

Cervus will host its second quarter 2012 results conference call on August 9, 2012 at 10:00 a.m. Eastern Time. Interested parties may access the conference call by dialling [phone] (domestic) or [phone] (international). The conference call will be archived for replay until Thursday, August 16, 2012 at midnight. To access the archived conference call, dial [phone] or 1-855-859-2056 and enter the reservation number 14591736 followed by the number sign.

About Cervus Equipment Corporation

Cervus acquires and manages authorized agricultural, commercial, industrial and transportation equipment dealerships with interests in 51 dealerships located in Western Canada, New Zealand and Australia.   The primary equipment brands represented by Cervus include John Deere agricultural equipment; Bobcat and JCB construction equipment; Clark, Sellick, Nissan 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".

SOURCE: Cervus Equipment Corporation

Graham Drake - President & CEO
Telephone: [phone]
Fax: [phone]
Email: [email protected]  

Randy Muth - Chief Financial Officer
Telephone: [phone]
Fax: [phone]
Email: [email protected]