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Cervus Equipment
Announces Second Quarter Results

Highlights of the Quarter

  • Gross revenue increased by $49.6 million or by 34% to $196.7 million for the second quarter of 2012 over $147.1 million reported in the second quarter of 2011. Same store sales accounted for $18.6 million or 13% of the increase.
  • Net profit for the period increased by $1.7 million or 30% to $7.4 million for the second quarter of 2012 from $5.7 million reported in the second quarter of 2011.
  • EBITDA (“see Non-IFRS Financial Measures”) increased by $3.4 million or 32% to $14.1 million in the second quarter of 2012 from $10.7 million reported in the same period of 2011.

Overall Performance

During the three month period ended June 30, 2012, revenue increased by $49.6 million ($12.8 million for our agricultural equipment segment and $36.7 million for our commercial and industrial equipment segment) to $196.7 million from $147.1 million, an increase of 34%. Same store revenue
increased $18.6 million or 13% ($12.8 million or 12% for our agricultural equipment segment and $5.8 million or 15.8% for our commercial and industrial equipment segment). Same store sales exclude the results of Cervus’ purchase of the business operations of Frontier Peterbilt Sales Ltd. (“Frontier”) in March 2012.

For the three month period ended June 30, 2012, overall gross margin was 19.1%, an increase of 0.2% from a gross margin of 18.9% 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 has increased by $1.7 million or 30% for the three month period ended June 30, 2012.

Agricultural Equipment

Revenue for our agricultural equipment segment increased by $12.8 million or 11.6% for the three month period ended June 30, 2012 when compared to the same period of 2011 and $29.2 million or 17.6% year to date.

New equipment sales increased by $8.4 million or 14.2% during the three month period ended June 30, 2012 when compared to the same period of 2011 and $15.4 million or 18.1% year to date. Used equipment sales increased by $3.0 million or 9.2% for the three month period ended June 30, 2012 when compared to the same period of 2011 and increased $9.8 million or 20.6% year to date. The most significant area of sales improvements has been in our sprayer, windrower, and implement product lines.

Our parts revenue has increased by $851 thousand or 7.3% during the three month period ended June 30, 2012 when compared to the same period of 2011 and increased $2.3 million or 11.8% year to date. Service revenue increased by $1.1 million or 15.8% for the three month period ended June 30,
2012 when compared to the same period of 2011 and $1.8 million or 14.5% year to date. The overall increase in parts and service sales is primarily related to parts and service required as a result of our increase in new and used equipment sales.

Rental revenue decreased by $469 thousand during the three month period ended June 30, 2012 and $122 thousand for the six month period ended June 30, 2012 when compared to the same periods of 2011. This decrease in rental income is primarily related to fair weather conditions for seeding season and no additional equipment was required.

Commercial and Industrial Equipment

Revenue from our Commercial and industrial segment increased by $36.7 million or 100.7% (same store increased $5.8 million or 15.8%) for the three month period ended June 30, 2012 when compared to the same period of 2011 and $45.9 million or 69.9% (same store increased $11.5 million
or 17.5%) year to date. Same store amounts exclude the results of Frontier.

New equipment sales increased by $22.6 million or 109.8% (same store increased $5.1 million or 25.0%) during the three month period ended June 30, 2012 when compared to the same period of 2011 and $29.7 million or 86.7% (same store increased $11.0 million or 32.2%) year to date. Used equipment sales increased by $2.7 million or 102.7% (same store decreased $150 thousand or 5.8%) for the three month period ended June 30, 2012 when compared to the same period of 2011 and increased $2.7 million or 54.3% (same store decreased $468 thousand or 9.3%) year to date. The increase in our same store new and used equipment sales is primarily due to the increased activity being experienced in the oil and gas sector of Alberta seen in early 2012 which has carried through the 2nd quarter of 2012.

Parts revenues have increased $7.5 million or 114.4% (same store increased $168 thousand or 2.6%) and service revenue has increased by $3.6 million or 76.1% (same store increased $248 thousand or 5.2%) during the three months ended June 30, 2012 when compared to the same period of 2011 and
parts revenue has increased $8.7 million or 66.2% (same store increased $214 thousand or 1.6%) and service revenue has increased $4.4 million or 46.5% (same store increased $334 thousand or 3.6%) year to date. The overall increase in same store parts and service revenues is consistent with
overall increase in whole goods sales.

Rental income has not changed significantly over the three and six month periods ended June 30, 2012 when compared to the same period of 2011.

For full financials and analysis, see the complete report here.

Posted August 8, 2012
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