CALGARY, ALBERTA — (Marketwired) — 11/28/13 — Mr. Wayne Wadley, President of CERF Incorporated (TSX VENTURE: CFL) (the “Company” or “CERF”), is pleased to announce the results for the third quarter of 2013.
Full details of the Company–s results, in the form of the unaudited condensed consolidated financial statements and notes thereto for the three and nine months ended September 30, 2013 and Management–s Discussion and Analysis of the results dated November 27, 2013 are available on SEDAR at and on the Company–s website at .
Selected Highlights:
Mr. Wadley, President & CEO makes the following comments:
“The business environment in Alberta and Western Canada remains brisk. The unemployment rate in Alberta is still only 4.3% so there remains a lot of activity in most industrial sectors. Albertans worked an average 5.9% longer in July than the Canadian average of 30.3 hours per week as employers may be requesting overtime to avoid hiring more workers who are in scarce supply.
Alberta remains one of the strongest construction markets in North America. The province is expected to see average growth in real GDP of about 3.7% in 2013 and 2014 compared to the national forecast of 2.3% according to the recent forecasts by the Bank of Canada.
In our local market, Edmonton housing starts are expected to be up 8% in 2013 to 13,900 from 2012. 2014 starts are expected to moderate slightly to about 12,200 which is still a strong growth rate.
Regional non-residential construction activity increased by 5.7% in Alberta for the third quarter of 2013 compared to 2012 according to CMHC–s third quarter 2013 Housing Outlook, which also projects that Alberta new home construction will increase 1.8% in 2014 over 2013. This bodes well for continued strong demand for the remainder of 2013 and into 2014 for construction equipment rentals and waste collection services.
Our businesses remained busy throughout the quarter and into the fourth quarter. With cold weather arriving on schedule, our construction and industrial rentals business experienced very strong demand for heating and other winter specific equipment. Utilization of our heater fleet is near 90%. Customers continue to be bullish on their projected workloads and this translates into strong current and future demand for our equipment and services going into the winter months. A good percentage of our heater fleet has been contracted for the entire season easing the daily logistics required to maintain that portion of the fleet. To meet the demand for construction rental equipment we have invested $8.1mm in new equipment in the last 21 months. We believe that this investment will return increased revenues throughout the remainder of 2013 and throughout 2014.
Our oil and gas rentals business had a strong summer and fall as a high percentage of equipment was dedicated to active drilling rigs and long term horizontal drilling and SAGD drilling projects. Sproule – Worldwide Petroleum Consultants is forecasting prices for light Edmonton Par Crude to remain above $89 per barrel through 2018 (Sproule Forecasts, September 30, 2013). In response to the demand for oilfield rentals we have invested $2.7mm in well site rental equipment. The oil and gas rentals business has diversified its customer base through this fleet expansion over the past year and has increased its sales force by 25%.
In our waste facility management business, we commenced shipments to a third party organics facility. Cell construction was completed giving our operated Leduc facility expanded air space for non-hazardous industrial and special waste. Delays in this construction due to abnormally wet weather in the summer caused placement challenges for our special waste and resulted in lower than historical average volumes of material being disposed. Our waste collection business continues to grow revenues and control costs. Their increased volumes lead to better utilization of assets thereby improving margins.
The closing of our recent equity offerings, which resulted in the Company raising approximately $11.85 million, has allowed us to pay down bank loans which were incurred when we acquired TRAC, and will free up cash flow and credit capacity that will allow us to make internal investments in equipment and seek accretive acquisitions for future growth.
Management believes that the Company is in a very strong position and poised for continued growth.”
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” and currently has 16,059,356 common shares issued and outstanding.
Forward-Looking Statements
Certain statements included or incorporated by reference in this press release constitute forward-looking statements or forward-looking information, including management–s assessment of expected activity levels throughout 2013 and continuing through 2014, and expected increase in demand for rental equipment over the next year as well as forecasted economic measures for the Province of Alberta and oil prices for light Edmonton Par Crude. Forward-looking statements or information may contain statements with the words “anticipate”, “believe”, “expect”, “plan”, “intend”, “estimate”, “propose”, “budget”, “project”, “would have realized–, “may have been” or similar words suggesting future outcomes or expectations. Although the Company believes that the expectations implied in such forward-looking statements or information are reasonable, undue reliance should not be placed on these forward-looking statements because the Company can give no assurance that such statements will prove to be correct. Forward-looking statements or information are based on current expectations, estimates and projections that involve a number of assumptions about the future and uncertainties. These assumptions include that demand for rental equipment will continue to increase and that revenues and earnings will continue to grow, and that the Company will be able to invest in new equipment and/or acquire accretive assets that will add to the Company–s future growth and profitability. Although management believes these assumptions are reasonable, there can be no assurance that they will be proved to be correct, and actual results will differ materially from those anticipated. For this purpose, any statements herein that are not statements of historical fact may be deemed to be forward-looking statements. Such risks and uncertainties include, but are not limited to: general economic conditions, industry conditions, weather conditions, commodity prices, currency fluctuations and competition from other companies. The forward-looking statements or information contained in the MD&A are made as of the date hereof and the Company assumes no obligation to update publicly or revise any forward-looking statements or information, whether as a result of new contrary information, future events or any other reason, unless it is required by any applicable securities laws. The forward-looking statements or information contained in this press release are expressly qualified by this cautionary statement.
Summarized financial results for the three and nine months ended September 30, 2013 follow:
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.
Contacts:
CERF Inc.
Wayne Wadley
President and CEO
(403) 850-4095
CERF Inc.
Ken Stephens
CFO
(780) 410-2998 ext 5
(403) 238-2720 (FAX)