CERF Incorporated
TSX VENTURE : CFL

May 15, 2014 06:30 ET

CERF Incorporated Announces Solid 2014 First Quarter Results

CERF Reports Revenue of $12 million, Adjusted EBITDA of $4 million and Net Income of $1.5 million for Q1 2014

CALGARY, ALBERTA--(Marketwired - May 15, 2014) - Mr. Wayne Wadley, President of CERF Incorporated (the "Company" or "CERF") (TSX VENTURE:CFL) is pleased to announce financial and operating results for the Company for the three months ended March 31, 2014.

"CERF had a successful start to 2014, and we are very pleased to announce the seventh consecutive quarter in which CERF has delivered results that exceeded those reported a year earlier," stated Mr. Wadley. " In the first quarter we recorded meaningful increases in our net income, and adjusted free cash flow coupled with a significant decrease in our payout ratio were driven by higher demand for service in our rental equipment division."

Full details of the Company's financial results, in the form of the unaudited, condensed, consolidated interim financial statements and notes for the three months ended March 31, 2014 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 Financial Highlights for Q1 2014 Include:

  • Revenue increased 9% to $12,424,000 for the quarter versus 11,444,000 in the quarter ended March 31, 2013;
  • Net income increased 34% to $1,488,000 share in Q1 2014 versus $1,110,000 in Q1 2013;
  • Net Income per share decreased 3% to $0.092 per share in Q1 2014 from $0.095 per share in Q1 2013 despite a 38% increase in the number of shares outstanding.
  • Adjusted EBITDA increased 1% to $4,026,000 for the first quarter of 2014 versus $4,001,000 for 2013;
  • The Company paid dividends of $0.06 per share to shareholders in 2014 while reducing the annualized payout ratio to 44% from an annualized payout ratio of 89% as at Q1 2013; and
  • Adjusted free cash flow generated during 2014 was $724,000 compared to adjusted free cash flow of $(963,000) in Q1 2013;

Summary of the First Quarter 2014 Consolidated Financial Results:

In C$,000's except percentages and per share data Three months ended March 31, 2014 Three months ended March 31, 2013 $
change
%
Revenue 12,424 11,444 980 9%

Direct Expenses
8,326 7,763 563 7%

Gross Margin %
33% 32% 1%

Net Income
1,488 1,110 378 34%

Net income per share, basic
0.092 0.095 (0.003) (3)%

Adjusted EBITDA
4,026 4,001 25 1%

Adjusted Free Cash Flow
724 (963) 1,687 175%

Trailing 12 Month payout ratio
44% 89% (45)%

Dividend per share
0.06 0.06 - 0%

Summarized financial results for the three months ended March 31, 2014 follow:

CERF INCORPORATED

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

IN THOUSANDS OF CANADIAN DOLLARS

Unaudited March 31, 2014 December 31, 2013
Assets
Current assets:
Cash 176 557
Accounts receivable 9,182 8,433
Inventory 1,574 1,561
Income taxes recoverable - -
Prepaid expenses and deposits 364 397
11,296 10,948
Non-current assets:
Long term receivable 177 238
Property and equipment 38,010 36,890
Intangibles and goodwill 10,463 10,714
48,650 47,842
Total assets 59,946 58,790
Liabilities and Shareholders' Equity
Current liabilities:
Bank indebtedness - -
Accounts payable and accrued liabilities 5,159 5,339
Dividends payable 968 963
Income taxes payable 260 559
Current portion of long-term debt 1,502 1,502
Current portion of finance leases 290 314
8,179 8,677
Non-current liabilities:
Long-term debt 15,871 14,801
Obligation under finance leases 4,042 4,106
Deferred income taxes 2,011 2,115
21,924 21,022
Total liabilities 30,102 29,699


Shareholders' equity
Share capital 33,106 32,894
Warrants 835 835
Share purchase loans receivable (148) (148)
Contributed surplus 765 744
Deficit (4,714) (5,234)
29,844 29,091
Total liabilities and shareholders' equity 59,946 58,790

CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME AND COMPREHENSIVE INCOME

IN THOUSANDS OF CANADIAN DOLLARS

(unaudited) Three months ended March 31, 2014 Three months ended March 31,
2013
Revenues 12,424 11,444
Direct expenses
Direct operating costs 5,460 5,491
Cost of sales of equipment, fuel and parts 1,475 862
Depreciation of equipment 1,391 1,410
8,326 7,763
Gross margin 4,098 3,681
Operating expenses
General and administrative 1,484 1,374
Depreciation of other property and equipment 31 28
Amortization of intangible assets 251 251
Business acquisition expenses - 10
1,766 1,663
Other expenses
Finance costs 316 424
Income before income taxes 2,016 1,594

Income taxes
Current 631 577
Deferred (103) (93)
528 484
Net income and comprehensive income for the period 1,488 1,110
Net income per share
Basic $0.092 $ 0.095
Diluted $0.092 $ 0.095

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".

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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