CERF Incorporated
TSX VENTURE : CFL

April 28, 2014 06:30 ET

CERF Incorporated Announces Audited Financial Results for the Year Ended December 31, 2013

CALGARY, ALBERTA--(Marketwired - April 28, 2014) - Mr. Wayne Wadley, President of CERF Incorporated (the "Company" or "CERF")(TSX VENTURE:CFL), is pleased to announce audited financial and operating results for the Company for the year ended December 31, 2013.

Full details of the Company's financial results, in the form of the audited consolidated financial statements and notes thereto for the year ended December 31, 2013 and Management's Discussion and Analysis of the results are available on SEDAR at www.sedar.com and on the Company's website at www.cerfcorp.com.

Selected Highlights of the year ended 2013 include:

  • Revenue increased 38% to $46,757,000 for the year ended December 31, 2013 versus the year ended December 31, 2012;
  • Net income increased 1,094% to $3,129,000 or $0.23 per basic share in 2013 versus $262,000 or $0.02 per share in 2012;
  • Adjusted EBITDA increased 64% to $13,027,000 for the year ended December 31, 2013 versus $7,960,000 for 2012. Further, EBITDA per share, basic in 2013 was $0.96 versus $0.76 in 2012;
  • The Company paid dividends of $0.24 per share to shareholders in 2013 while reducing the annualized payout ratio to 52% from an annualized payout ratio of 76% in 2012;
  • Adjusted free cash flow generated during 2013 was $6,521,000 compared to adjusted free cash flow of $3,214,000 in 2012;
  • Long term debt was reduced by $7,789,000; and
  • Debt to equity was improved to a ratio of 0.95 to 1.00 from a 2012 debt to equity ratio of 2.05 to 1.00.

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

In C$,000's except percentages and per share data Q42013 Q42012 $change % YTD 2013 YTD2012 $change %
Revenue 12,522 11,252 1,270 11 % 46,757 33,770 12,987 38 %
Direct Expenses 9,260 8,346 914 11 % 34,687 27,159 7,528 28 %
Gross Margin % 26 % 26 % 0 % 26 % 20 % 6 %
Net Income 1,005 669 336 50 % 3,129 262 2,867 1,094 %
Net income per share, basic 0.06 0.06 - 0 % 0.23 0.02 0.21 1050 %
Adjusted EBITDA 3,629 3,372 257 8 % 13,027 7,960 5,067 64 %
Adjusted Free Cash Flow 2,006 1,937 69 4 % 6,521 3,214 3,307 103 %
Trailing 12 Month payout ratio 52 % 76 % (24 )%
Dividend per share 0.06 0.06 - 0 % 0.24 0.24 - 0 %

Summarized financial results for the year ended December 31, 2013 follow:

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

IN THOUSANDS OF CANADIAN DOLLARS

December 31, 2013 December 31, 2012
Assets
Current assets:
Cash 557 -
Accounts receivable 8,433 7,765
Inventory 1,561 1,369
Income taxes recoverable - 590
Prepaid expenses and deposits 397 297
10,948 10,021
Non-current assets:
Long term receivable 238 456
Property and equipment 36,890 35,041
Intangibles and goodwill 10,714 11,719
47,842 47,216
Total assets 58,790 57,237
Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness - 1,569
Accounts payable and accrued liabilities 5,339 5,771
Dividends payable 963 700
Income taxes payable 559 -
Current portion of long-term debt 1,502 4,430
Current portion of finance leases 314 451
8,677 12,921
Non-current liabilities:
Long-term debt 14,801 19,662
Obligation under finance leases 4,106 4,420
Deferred income taxes 2,115 2,190
21,022 26,272
Total liabilities 29,699 39,193
Shareholders' equity
Share capital 32,894 22,897
Warrants 835 -
Share purchase loans receivable (148 ) (203 )
Contributed surplus 744 387
Deficit (5,234 ) (5,037 )
29,091 18,044
Total liabilities and shareholders' equity 58,790 57,237

CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME

IN THOUSANDS OF CANADIAN DOLLARS

Year ended December 31
2013 2012
Revenues 46,757 33,770
Direct expenses
Direct operating costs 25,284 18,786
Cost of sales of equipment, fuel and parts 3,716 3,391
Depreciation of equipment 5,687 4,982
34,687 27,159
Gross margin 12,070 6,611
Operating expenses
General and administrative 4,999 3,638
Depreciation of other property and equipment 108 98
Amortization of intangible assets 1,005 678
Impairment of goodwill - 203
Business acquisition expenses 15 241
6,127 4,858
Other expenses
Finance costs 1,590 1,352
Income before income taxes 4,353 401
Income taxes
Current 989 276
Deferred 235 (137 )
1,224 139
Net income and comprehensive income for the year 3,129 262
Net income per share
Basic $ 0.23 $ 0.02
Diluted $ 0.23 $ 0.02

The Company is also announcing it has retained 5 Quarters Investor Relations, Inc. ("5QIR") to provide strategic investor relations (IR) services on behalf of the Company. 5QIR is a Calgary-based capital markets communications firm providing strategic counsel on financial communications, continuous disclosure compliance and proactive corporate outreach programs.

Under the terms of the agreement, 5QIR will provide investor relations services to the Company for two six month terms, subject to termination upon 30 days' written notice by either party. As consideration for the services, 5QIR will be paid a retainer fee of $7,000 per month. 5QIR acts at arm's length to CERF and does not have any interest, directly or indirectly, in CERF or its securities, or any right or intent to acquire such an interest. 5QIR has many years of experience managing in-house IR programs for numerous issuers.

The appointment of 5QIR remains subject to approval by the TSX Venture Exchange.

About CERF Incorporated

CERF is 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 (six landfill sites in central Alberta) 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".

About 5QIR

Based on the belief that effective Investor Relations goes beyond four quarters, 5 Quarters Investor Relations, Inc. was established to support public companies with financial communications, continuous disclosure compliance and proactive investor outreach programs. The firm is based in Calgary, Alberta, and is owned and operated by Cindy Gray, a seasoned IR professional with over 16 years of experience working in IR as well as leading the oil & gas business development practice for TSX and TSX Venture Exchange from Calgary. For further information, please visit www.5qir.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.

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