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Cervus Announces Record Quarterly New Agriculture Equipment Sales for the Three Months Ended September 30, 2017

CALGARY, Nov. 8, 2017 (Canada NewsWire via COMTEX) --

Cervus Equipment Corporation ("Cervus" or the "Company") (TSX: CERV) today announced its financial results and operational highlights for the quarter ended September 30, 2017.

"Our Agriculture segment achieved record new equipment sales for the quarter, a result of focused sales efforts buoyed by an attractive Canadian dollar. I am also pleased to see the continued progress of our service optimization initiatives, where efficiencies are improving our customer experience and increasing service gross profit margins across all segments," said Graham Drake, President and CEO of Cervus. "For the remainder of 2017 and into 2018, our Agriculture sales team is focused on maintaining healthy inventory turns and servicing customer equipment. We continue to focus on systems and processes across our organization, centered on the efficiency and profitability of our divisions."

Highlights of the Quarter

    --  Revenue increased $32.9 million and 10% in the third quarter
        ended September 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(1) and adjusted basic income per share(1 )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(1)") was $18.7 million for the three months ended
        September 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 September 30, 2017 compared to the
        same period in 2016.

    --  The positive year to date equipment sales trend continued in
        our 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 September 30, 2017.

    --  Since commencement of the Company's Normal Course Issuer Bid
        ("NCIB"), Cervus has repurchased 240 thousand common shares
        under the NCIB as at September 30, 2017.


(___________________________________________1 )These financial measures are identified and defined within Cervus' third quarter Management's Discussion and Analysis under the section "Non-IFRS Financial Measures".

Financial Highlights

Income before tax for the three months ended September 30, 2017 decreased $0.7 million, comprised of a $0.9 million increase in our Agriculture segment, a $0.5 million increase in our C&I segment, offset by a $2.0 million decrease in our 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 September 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 September 30, 2016. In our 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 September 30, 2016, as our 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.

Selected Quarterly Information


                                                Three month                               Nine month
                                         periods ended September 30               periods ended September 30
                                        --------------------------                --------------------------

    ($ thousands, except per share                             2017  % Change       2016                        2017                       2016
    amounts)                                                        Compared                                          % Change
                                                                     to 2016                                          Compared
                                                                                                                       to 2016
    ---                                                                                                                -------

    Revenue                                                 367,630       10%    334,682                     956,101          14%       837,996

    Cost of sales                                         (309,078)      12%  (277,111)                  (800,403)         15%     (693,419)
    -------------                                          --------       ---    --------                    --------          ---       --------

    Gross profit                                             58,552        2%     57,571                     155,698           8%       144,577
    ------------                                             ------       ---      ------                     -------          ---        -------

    Other income                                                907       32%        689                       1,950        (25%)         2,605

    Unrealized foreign exchange gain                            255     (24%)        336                       1,078        (66%)         3,197
    --------------------------------                            ---      ----         ---                       -----         ----          -----

    Total other income                                        1,162       13%      1,025                       3,028        (48%)         5,802
    ------------------                                        -----       ---       -----                       -----         ----          -----

    Selling, general and administrative                    (45,072)       6%   (42,505)                  (131,105)          7%     (122,486)
    expense
    -------

    Income from operating activities                         14,642      (9%)     16,091                      27,621         (1%)        27,893

    Finance income                                              190      692%         24                         421         454%            76

    Finance costs                                           (1,464)    (45%)    (2,677)                    (4,793)       (42%)       (8,289)

    Share of loss of equity accounted                             -   (100%)        583                           -      (100%)            82
    investees, net of tax
    ---------------------

    Income before income tax                                 13,368      (5%)     14,021                      23,249          18%        19,762
    expense

    Income tax expense                                      (3,915)      13%    (3,477)                    (7,064)         41%       (5,000)
    ------------------                                       ------       ---      ------                      ------          ---         ------

    Income for the period                                     9,453     (10%)     10,544                      16,185          10%        14,762
    ---------------------                                     -----      ----      ------                      ------          ---         ------

    Income attributable to                                    9,453     (12%)     10,741                      16,190           8%        14,959
    shareholders
    ============

    EBITDA(1)                                                18,688     (15%)     21,981                      40,218         (7%)        43,017

    EBITDA margin(1)                                           5.1%                6.6%                       4.2%                      5.1%

    Ratios as a percentage of
    revenue:

    Gross profit margin                                       15.9%               17.2%                      16.3%                     17.3%


    Selling, general and administrative                       12.3%               12.7%                      13.7%                     14.6%


    Income per share

    Adjusted - Basic1                                          0.58                 0.66                        0.93                       0.66

    Basic                                                      0.60                 0.67                        1.03                       0.96

    Diluted                                                    0.57                 0.64                        0.98                       0.91
    -------                                                    ----                 ----                        ----                       ----

    Notes:

    [1] These financial measures are
     identified and defined within
     Cervus' second quarter
     Management's Discussion and
     Analysis under the section "Non-
     IFRS Financial Measures".

Conference Call Information

Cervus will host its third quarter 2017 results conference call on November 9, 2017 at 11:00 a.m. Eastern Time. Interested parties may access the conference call by dialling (647) 427-7450 or 1-888-231-8191. Please connect approximately 10 minutes prior to the beginning of the call. The conference call will be archived for replay until Thursday, November 16, 2017 at midnight. To access the archived conference call, dial (416) 849-0833 or 1-855-859-2056 and enter the reservation number 3279348 followed by the number sign.

A live audio webcast of the conference call will be available at: http://event.on24.com/r.htm?e=1533799&s=1&k=A46785CF515F05713F1F2F7E7BB6DC4F

Please connect at least 15 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast. The webcast will be archived at the above website for 90 days.

About Cervus Equipment Corporation

Cervus acquires and operates authorized agricultural, construction, materials handling and transportation equipment dealerships. The company has interests in 63 dealerships in Canada, New Zealand and Australia, employing more than 1,500 people. The primary equipment brands represented by Cervus include John Deere agricultural equipment; Peterbilt transportation equipment; Bobcat, CMI and JCB construction equipment; and Clark, Sellick and Doosan material handling equipment. The common shares of Cervus are listed on the Toronto Stock Exchange and trade under the symbol "CERV".

Forward Looking Information

This press release contains certain forward?looking information ("forward?looking information") within the meaning of applicable Canadian securities laws. Forward?looking information is often, but not always, identified by the use of words such as "anticipate", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "expect", "may", "will", "project", "should" or similar words suggesting future outcomes. Forward?looking information is not a guarantee of future performance and involves a number of assumptions and a number of risks and uncertainties some of which are described herein. These risks and uncertainties include the risks identified under the heading "Risk Factors - Risks Related to the Business" in the 2016 Annual Information Form of Cervus Equipment Corporation dated March 15, 2017, available electronically at www.sedar.com under Cervus' profile. Cervus believes the expectations reflected in such forward?looking information are reasonable but no assurance can be given that these expectations will prove to be correct and such forward?looking information should not be unduly relied upon. You are cautioned that the preceding list of assumptions and risks is not exhaustive. Any forward?looking information is made as of the date hereof and, except as required by law, Cervus assumes no obligation to publicly update or revise such information to reflect new information, subsequent or otherwise.

The Toronto Stock Exchange does not accept responsibility for the adequacy or accuracy of this release.

SOURCE Cervus Equipment Corporation

View original content: http://www.newswire.ca/en/releases/archive/November2017/08/c8708.html

SOURCE: Cervus Equipment Corporation

Investor inquiries: Graham Drake - President & CEO, (403) 567-2095,
gdrake@cervusequipment.com; Randy Muth - Chief Financial Officer, (403) 567-2097,
rmuth@cervusequipment.com

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