CALGARY, Alta. — Cervus Equipment Corp. today announced its financial results and operational highlights for the quarter ended Sept. 30, 2017.
Highlights of the Quarter
- Revenue increased $32.9 million and 10% in the third quarter ended Sept. 30, 2017, compared to the same period of 2016.
- Income for the quarter decreased $1.1 million to $9.5 million, compared to $10.5 million of income for the comparable period in 2016.
- Adjusted income and adjusted basic income per share was $9.2 million and $0.58 per share respectively, compared to adjusted income of $10.5 million and adjusted income per share of $0.66 in the third quarter of 2016.
- Earnings before interest, taxes, depreciation and amortization (“EBITDA”) was $18.7 million for the three months ended Sept. 30, 2017, compared to $22.0 million in 2016, a decrease of 15% quarter over quarter.
- Service department process improvement initiatives contributed to an increase in overall service gross profit margin of 4.2% quarter over quarter.
- All divisions generated increased parts and service revenue in the three month period ended Sept. 30, 2017 compared to the same period in 2016.
- The positive year to date equipment sales trend continued in the agriculture segment, achieving record third quarter equipment sales of $224 million.
- Dividends of $0.07 per share were declared to shareholders of record as at Sept. 30, 2017.
- Since commencement of the Company’s Normal Course Issuer Bid (“NCIB”), Cervus has repurchased 240,000 common shares under the NCIB as of Sept. 30, 2017.
Income before tax for the three months ended Sept. 30, 2017 decreased $0.7 million, comprised of a $0.9 million increase in the agriculture segment, a $0.5 million increase in the C&I segment, offset by a $2.0 million decrease in the transportation segment. EBITDA decreased $3.3 million compared to the third quarter of 2016.
Agriculture income before tax increased $0.9 million for the three-month period ended Sept. 30, 2017, while EBITDA decreased $1.1 million compared to the third quarter of 2016. Focused sales efforts combined with significant harvest activity in the quarter drove increased equipment, parts, and service sales. Gross profit increased $1.5 million, while overall gross profit margin decreased 1.2%, due to the sales mix impact of a 34% increase in new equipment sales in the quarter.
Transportation loss before tax increased by $2.0 million in the third quarter, while EBITDA decreased by $2.5 million compared to the three-month period ended Sept. 30, 2016. In Cervus’ Saskatchewan dealerships, revenue increased by 2.8% while overall gross profit percentage remained consistent with 2016, resulting in income from operating activities of $0.5 million. In Ontario, overall revenue decreased 2.5%, while gross profit margin percentage decreased 1.4%, resulting in a loss from operating activities of $1.0 million.
Income before tax in our C&I segment improved by $0.5 million compared to the three-month period ended Sept. 30, 2016, as the parts and service departments have accelerated significantly, along with a 5% increase in equipment sales. The additional sales generated were achieved on a flat expense base, reducing SG&A to 24.1% as a percent of revenue, while EBITDA increased by $0.3 million quarter over quarter.