Click here to close now.


News Feed Item

CERF Incorporated Announces 2014 Second Quarter Results

CERF Reports Revenue of $10 million, Adjusted EBITDA(1) of $2.6 million and Net Income of $257 thousand for Q2 2014

CALGARY, ALBERTA -- (Marketwired) -- 08/18/14 -- 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 June 30, 2014.

"On the whole, CERF delivered a strong second quarter, increasing net income by more than $390 thousand, Adjusted EBITDA by 46%, and again reported revenues in excess of $10 million," stated Wayne Wadley, President and CEO. "Despite several construction related project delays that impacted our 4-Way business, we are very pleased to announce the eighth consecutive quarter in which CERF has delivered results exceeding those reported a year earlier."

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 June 30, 2014 and Management's Discussion and Analysis of the results are available on SEDAR at and on the Company's website at

Selected Q2 2014 Financial Highlights:

--  Net income increased to $257,000 or $0.02 per basic share in the quarter
    versus a net loss of $134,000 or ($0.01) per share during the prior
    year's quarter;
--  Adjusted EBITDA increased 46% to $2,602,000 for the quarter ended June
    30, 2014, compared to $1,784,000 for Q2 2013.
--  EBITDA per basic share, increased 7% to $0.16 in the second quarter
    versus $0.15 in 2013;
--  The Company paid dividends of $0.06 per share to shareholders in Q2 2014
    while maintaining the annualized payout ratio to 65% from an annualized
    payout ratio of 89% as at Q1 2013; and
--  During the second quarter, 252,900 warrants were executed resulting in
    proceeds of $796,000 and the exercise of 177,685 agent options resulted
    in proceeds of another $478,000.

Corporate Highlights:


--  As at August 13, 2014, 2,264,636 warrants have been exercised for total
    proceeds of $7.1 million and 245,006 agent options have been exercised
    for proceeds of $662,000.


--  On May 28, 2014, CERF enhanced its capability to provide equipment used
    in directional drilling applications with the acquisition of the
    business and assets of Empire Tool Inc. ("Empire"), a privately owned
    oilfield service and rental business for $9.2 million or approximately
    3.3 times Empire's 2013 adjusted and normalized EBITDA.
--  On June 26, 2014, CERF announced the proposed strategic business
    combination with Winalta Inc. ("Winalta")(TSXV: WTA), a publically traded
    oilfield accommodation rentals business. With an implied purchase price
    of approximately $65 million including net debt, CERF is acquiring
    Winalta at approximately 4.8 times EV / 2014E EBITDA creating some of
    the following benefits:
    --  increased EBITDA margins;
    --  reduced cash flow volatility due to the contract backed nature of
        Winalta's business;
    --  expanded geographic positioning;
    --  a more diverse suite of rental assets; and
    --  greater overall market penetration amongst E&P clients.

"The additions of Empire and Winalta greatly enhance our size and scope in the oilfield rental and services space," stated Mr. Wadley. "Both acquisitions complement and significantly grow our equipment fleet, enabling us to service a much broader customer base. Subject to shareholder approval on August 27, 2014, we look forward to welcoming the entire Winalta team to join us in continuing to expand our business and add value for our shareholders."


--  Margins for MCL were $1,208,000, an increase of 770% when compared those
    delivered in the prior year's quarter. Improvements are a result of
    increased impacted soil volumes, operational productivity and the
    positive result of initiatives to improve the quality of revenue and
    reduce expenses which were implemented in the previous quarter.

Summary of Second Quarter Consolidated Financial Results:

                                          Three months ended June 30,
(in $,000s except percentages and
 per share data)                         2014      2013  $ Change         %
Revenue                                10,014    10,065       -51        -1%
Direct Expenses                         7,661     8,301      -640        -8%
Gross margin                            2,353     1,764       589        33%
Net income (loss)                         257      -134       391         -
Net income (loss) per basic share        0.02     -0.01      0.03         -
Adjusted EBITDA(1)                      2,602     1,784       818        46%
Adjusted Free Cash Flow                   667      -963     1,630         -
Annualized payout ratio                    65%       89%      -24%        -
Dividends per basic share               $0.06     $0.06         -         -

(1) See Financial Measures Reconciliations on page 4 of CERF's Second Quarter 2014 MD&A

Summarized financial results for the three months ended June 30, 2014 follow:



                                                               December 31,
                                               June 30, 2014           2013
Current assetsCash                                         -            557
  Accounts receivable                                  8,369          8,433
  Inventory                                            2,261          1,561
  Income taxes recoverable                                21              -
  Prepaid expenses and deposits                          519            397
                                                      11,170         10,948

Non-current assets
Long-term receivable                                     122            238
  Property and equipment                              44,434         36,890
  Intangibles and goodwill                            14,271         10,714
                                                      58,827         47,842
Total assets                                          69,997         58,790

Liabilities and Shareholders' Equity
Current liabilities:
  Bank indebtedness                                      957              -
  Accounts payable and accrued liabilities             4,837          5,339
  Dividends payable                                    1,055            963
  Income taxes payable                                     -            559
  Current portion of long-term debt                    2,700          1,502
  Current portion of finance leases                      282            314
                                                       9,831          8,677

Non-current liabilities:
  Long-term debt                                      20,475         14,801
  Obligation under finance leases                      3,980          4,106
  Deferred income taxes                                2,286          2,115
                                                      26,741         21,022

Total liabilities                                     36,572         29,699
Shareholders' equity
  Share capital                                       37,510         32,894
  Warrants                                               787            835
  Share purchase loans receivable                        (93)          (148)
  Contributed surplus                                    732            744
  Deficit                                             (5,511)        (5,234)
                                                      33,425         29,091
Total liabilities and shareholders' equity            69,997         58,790

See accompanying notes to the Condensed Consolidated Interim Financial Statements



                                   Three months ended      Six months ended
                                  June 30,   June 30,   June 30,   June 30,
                                      2014       2013       2014       2013
Revenues                            10,014     10,065     22,439     21,538
Direct expenses
  Direct operating costs             5,166      6,535     10,627     12,026
  Cost of sales of equipment,
   fuel and parts                      941        471      2,416      1,363
  Depreciation of equipment          1,554      1,295      2,945      2,705
                                     7,661      8,301     15,988     16,094
  Gross margin                       2,353      1,764      6,451      5,444
Other expenses
  General and administrative         1,324      1,218      2,808      2,592
  Depreciation of other property
   and equipment                        42         26         73         53
  Amortization of intangible
   assets                              235        251        485        502
  Business acquisition expenses         34          -         34         10
  Finance costs                        339        446        655        870
                                     1,974      1,941      4,055      4,027
Income (loss) before income
 taxes                                 379       (177)     2,396      1,417
Income taxes (recovery)
Current                               (179)       (37)       452        540
Deferred                               301         (6)       198        (99)
                                       122        (43)       650        441
Net income (loss) and
 comprehensive income
for the period                         257       (134)     1,746        976
Net income (loss) per share
  Basic                               0.02      (0.01)      0.11       0.08
  Diluted                             0.02      (0.01)      0.11       0.08

Weighted average number of
 shares outstanding
  Basic                         16,629,850 11,671,096 16,362,058 11,671,096
  Diluted                       16,721,603 11,671,096 16,399,818 11,671,096

See accompanying notes to the Condensed Consolidated Interim Financial Statements

About CERF Incorporated

CERF Incorporated is a Canadian public corporation engaged in the rental, sale and service of industrial and construction equipment and waste management and environmental services. 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 TSXV 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.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
I recently attended and was a speaker at the 4th International Internet of @ThingsExpo at the Santa Clara Convention Center. I also had the opportunity to attend this event last year and I wrote a blog from that show talking about how the “Enterprise Impact of IoT” was a key theme of last year’s show. I was curious to see if the same theme would still resonate 365 days later and what, if any, changes I would see in the content presented.
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
The Internet of Things (IoT) is growing rapidly by extending current technologies, products and networks. By 2020, Cisco estimates there will be 50 billion connected devices. Gartner has forecast revenues of over $300 billion, just to IoT suppliers. Now is the time to figure out how you’ll make money – not just create innovative products. With hundreds of new products and companies jumping into the IoT fray every month, there’s no shortage of innovation. Despite this, McKinsey/VisionMobile data...
Just over a week ago I received a long and loud sustained applause for a presentation I delivered at this year’s Cloud Expo in Santa Clara. I was extremely pleased with the turnout and had some very good conversations with many of the attendees. Over the next few days I had many more meaningful conversations and was not only happy with the results but also learned a few new things. Here is everything I learned in those three days distilled into three short points.
With major technology companies and startups seriously embracing IoT strategies, now is the perfect time to attend @ThingsExpo 2016 in New York and Silicon Valley. Learn what is going on, contribute to the discussions, and ensure that your enterprise is as "IoT-Ready" as it can be! Internet of @ThingsExpo, taking place Nov 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 17th Cloud Expo and will feature technical sessions from a rock star conference faculty ...
In his General Session at DevOps Summit, Asaf Yigal, Co-Founder & VP of Product at, explored the value of Kibana 4 for log analysis and provided a hands-on tutorial on how to set up Kibana 4 and get the most out of Apache log files. He examined three use cases: IT operations, business intelligence, and security and compliance. Asaf Yigal is co-founder and VP of Product at log analytics software company In the past, he was co-founder of social-trading platform Currensee, which...
DevOps is about increasing efficiency, but nothing is more inefficient than building the same application twice. However, this is a routine occurrence with enterprise applications that need both a rich desktop web interface and strong mobile support. With recent technological advances from Isomorphic Software and others, rich desktop and tuned mobile experiences can now be created with a single codebase – without compromising functionality, performance or usability. In his session at DevOps Su...
As organizations realize the scope of the Internet of Things, gaining key insights from Big Data, through the use of advanced analytics, becomes crucial. However, IoT also creates the need for petabyte scale storage of data from millions of devices. A new type of Storage is required which seamlessly integrates robust data analytics with massive scale. These storage systems will act as “smart systems” provide in-place analytics that speed discovery and enable businesses to quickly derive meaningf...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his General Session at 17th Cloud Expo, Bruce Swann, Senior Product Marketing Manager for Adobe Campaign, explored the key ingredients of cross-channel marketing in a digital world. Learn how the Adobe Marketing Cloud can help marketers embrace opportunities for personalized, relevant and real-time customer engagement across offline (direct mail, point of sale, call center) and digital (email, website, SMS, mobile apps, social networks, connected objects).
The buzz continues for cloud, data analytics and the Internet of Things (IoT) and their collective impact across all industries. But a new conversation is emerging - how do companies use industry disruption and technology enablers to lead in markets undergoing change, uncertainty and ambiguity? Organizations of all sizes need to evolve and transform, often under massive pressure, as industry lines blur and merge and traditional business models are assaulted and turned upside down. In this new da...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
We all know that data growth is exploding and storage budgets are shrinking. Instead of showing you charts on about how much data there is, in his General Session at 17th Cloud Expo, Scott Cleland, Senior Director of Product Marketing at HGST, showed how to capture all of your data in one place. After you have your data under control, you can then analyze it in one place, saving time and resources.
In recent years, at least 40% of companies using cloud applications have experienced data loss. One of the best prevention against cloud data loss is backing up your cloud data. In his General Session at 17th Cloud Expo, Sam McIntyre, Partner Enablement Specialist at eFolder, presented how organizations can use eFolder Cloudfinder to automate backups of cloud application data. He also demonstrated how easy it is to search and restore cloud application data using Cloudfinder.
The Internet of Everything is re-shaping technology trends–moving away from “request/response” architecture to an “always-on” Streaming Web where data is in constant motion and secure, reliable communication is an absolute necessity. As more and more THINGS go online, the challenges that developers will need to address will only increase exponentially. In his session at @ThingsExpo, Todd Greene, Founder & CEO of PubNub, exploreed the current state of IoT connectivity and review key trends and t...