Cervus Equipment Corporation ("Cervus") Announces Annual Results for the Year Ended December 31, 201

Cervus Equipment Corporation ("Cervus") Announces Annual Results for the Year Ended December 31, 2010

Calgary, Alberta CANADA, March 09, 2011 /FSC/ - Cervus Equipment Corporation (CVL - TSX).

Overall Performance

During 2010 revenue grew by $91.7 million to $469.1 million compared to $377.5 million in 2009, an increase of 24%.  The primary reason for the increase in gross revenue was due to the January 2010 acquisition of A.R. Williams Materials Handling Ltd. ("ARW"), the September 2009 purchase of Ranchers Supply Inc. ("Ranchers") and the July 2010 purchase of our foreign subsidiary, Agriturf Limited ("Agriturf") and was offset by a decrease in gross revenue from the Company's contribution of two John Deere dealerships in Russell, Manitoba and Moosomin, Saskatchewan to acquire a 20% partnership interest in Maple Farm Equipment Partnership ("Maple") in January 2010.   Same store segment sales remained strong with the agricultural equipment segment contributing $33.4 million and the construction and industrial equipment segment contributing $9.3 million of the overall increase.  Total same store sales were $378.8 million for 2010 compared to $336.1 million for 2009.  

For the year ended December 31, 2010, gross margin decreased by 0.2% to 18.9% when compared to 19.1% for the same period of 2009.  The decrease in our overall gross margin was primarily a result of a decrease in our agricultural equipment segment which decreased to 16.1% for the year ended December 31, 2010 when compared to 18.5% for the same period of 2009, primarily from decreases experienced in our equipment margins.  This was offset by an increase in our gross margin for our construction and industrial equipment segment of 6.0% to 27.8% for the year ended December 31, 2010, compared to 21.8% for the same period of 2009.  The primary reason for the increase in the construction and industrial equipment segment's gross margin was due to a change in the sales mix as a result of the acquisition of ARW in January 2010.

Net earnings increased by $1.0 million in 2010 to $18.2 million or $1.29 per share compared to $17.2 million or $1.22 per share for 2009.  The agricultural equipment segment contributed $14.8 million (a decrease of $3.2 million from 2009 results) and the construction and industrial equipment segment contributed $3.6 million (an increase of $4.4 million from the loss of $831 thousand reported in 2009).  Revenues and earnings for the agricultural equipment segment have continued to outperform the construction and industrial equipment segment during 2010, which had been anticipated due to stronger global grain commodity prices and increased farm income in contrast to the decreased housing, construction and industrial sectors of the Alberta economy.  The construction and industrial equipment segment has begun to show signs of recovery from the lows experienced in 2009.

As a result of our increase in earnings, depreciation and amortization, and other non-cash working capital adjustments, cash flows from operating activities increased to $23.6 million ($1.67 per basic share) from $7.7 million ($0.55 per basic share) in 2009 and EBITDA increased to $28.4 million ($2.01 per basic share) in 2010 when compared to $24.4 million ($1.73 per basic share) for 2009.  

Commenting on Cervus' results, Peter Lacey, Chief Executive Officer said,
"We are very happy with the results of both our agricultural and construction and industrial segments.  It appears that we have begun to see a recovery in our construction and industrial equipment segment on a same store basis as well as seeing positive results from our acquisition of ARW in January 2010.  Although our agricultural equipment segment had its challenges with wet weather, especially in Saskatchewan, the segment continued to deliver strong year over year results."


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Selected Annual Information
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$ thousands,
except per       December    December    December    December    December
share amounts    31, 2010    31, 2009    31, 2008    31, 2007    31, 2006
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Revenues          469,130     377,475     348,675     304,984     269,134
Gross profit       88,729      71,955      67,412      53,984      44,104
Gross margin         18.9%       19.1%       19.3%       17.7%      16.3%
Net earnings       18,201      17,177      22,208      11,385      8,597
Net earnings per share
Basic                1.29        1.22        1.70        1.03        0.92
Diluted              1.25        1.19        1.68        1.00        0.86
Cash provided
by operating
activities         23,622       7,749      26,433      18,138       3,847
Per share - Basic    1.67        0.55        2.02        1.65        0.41
EBITDA1            28,431      24,386      27,881      17,106      13,771
EBITDA margin1        6.1%        6.5%        8.0%        5.6%       5.1%
Per share - basic    2.01        1.73        2.13        1.55        1.47
Dividends to
preferred shares      318           -           -         329         410
Dividends declared
to shareholders    10,203      10,152       9,491       8,004       6,607
Per share            0.72        0.72        0.72        0.72        0.72
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Weighted average shares outstanding
Basic              14,169      14,095      13,102      11,028       9,368
Diluted            14,593      14,400      13,248      11,352       9,992
Actual shares
outstanding        14,191      14,140      14,013      11,793      10,295
Closing market
price per share     15.10       12.60        5.93       10.87        5.77
Price earnings
ratio1 * basic       11.7        9.92        3.49       10.52        6.27
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Total assets      260,760     225,845     144,333     113,292     107,515
Long-term
liabilities        63,683      59,591       4,874       8,901       9,276
Total debt        145,062     126,751      54,314      64,891      71,355
Shareholders'
equity            115,698      99,094      90,019      48,401      36,160
Net book value
per share
- diluted            7.93        6.88        6.82        4.18        3.62
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Notes (1): The Non-GAAP measures indentified in this Press Release do not have any standardized meaning prescribed by Canadian generally accepted accounting principles ("GAAP") and are therefore unlikely to be comparable to similar measures presented by other issuers. These non-GAAP measures are more fully defined and discussed, together with reconciliation to the most directly related GAAP measure in the MD&A of Cervus on the results of operations for the year ended December 31, 2010.


Copies of the Cervus' annual audited financial reports are available on the internet at the Company's website at www.cervuscorp.com or on SEDAR at www.sedar.com.  


About Cervus

Cervus is a diversified corporation and has historically operated in two separate business segments, an agricultural equipment segment and a construction and industrial equipment segment.  These segments are managed separately and strategic decisions are made on the basis of their respective operating results.  The agricultural equipment segment consists primarily of 21 John Deere dealerships with 15 in Alberta, Saskatchewan and British Columbia and 6 in New Zealand.  The construction and industrial equipment segment consists primarily of 15 dealerships, 5 Bobcat and JCB dealerships operating in Alberta and 10 Clark, Sellick, Nissan and Doosan material handling equipment dealerships operating in Alberta, Saskatchewan and Manitoba. Cervus owns directly or indirectly, 100% of Cervus LP, Cervus AG Equipment LP and Cervus Contractors Equipment LP, together with 100% of the outstanding and issued shares of their respective general partners, Cervus GP Ltd., Cervus AG Equipment Ltd. and Cervus Contractors Equipment Ltd. and 60.3% of Agriturf Limited, a New Zealand company and its 100% interest in its subsidiary, Agriturf Rental and Leasing Limited.  The investment in Agriturf has been consolidated in the results of Cervus and a minority interest has been reported for the 39.7% ownership interest of unrelated parties.  In addition to the aforementioned subsidiaries, Cervus owns a 20% interest in Maple Farm Equipment Partnership in Saskatchewan and Manitoba that is comprised of 7 John Deere dealerships.  The cash flow of Cervus is primarily dependent on the results of the underlying limited partnerships and is derived from the flow-through of income of the LP's to Cervus by means of partnership allocations.


For further information, please contact:

Peter Lacey - President & CEO
Telephone: (403) 567-0339
Fax: (403) 567-0392
Email:  placey@cervuscorp.com

Randy Muth - Chief Financial Officer
Telephone: (403) 567-0339
Fax: (403) 567-0392
Email:  rmuth@cervuscorp.com



Source: Cervus LP (TSX: CVL) http://www.cervuscorp.com
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