company overview. december 31, 2009 stock price outstanding units: 14,139,614 unit price: $12.81...
TRANSCRIPT
Company Overview
December 31, 2009Stock Price
•Outstanding Units: 14,139,614•Unit Price: $12.81•Market Cap: $181,128,455•Quarterly Distribution: $0.18
TSX Venture: CVL.UN
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Our Business Cervus Equipment
Corporation• Previously a publicly traded limited partnership and has recently converted to a corporation
• listed on the TSX Venture exchange
• Aggregator of equipment dealerships
• Two of the strongest brands in our market sectors – John Deere and Bobcat
• JCB – a strong brand in the UK, Europe, and Asia
• Sustainable performance
• Experienced management team
Company Background
& Achievemen
ts
1982 -2003 Founding shareholders involved with John Deere dealerships/ John Deere in Western Canada
2003 Cervus LP begins in March 2003 with 5 John Deere Agriculture Equipment stores in Alberta. Adds 2 more John Deere stores in Saskatchewan in November
2004 Acquires three additional John Deere stores, two in Saskatchewan and one in Manitoba
2005 Acquires 5 stores in Alberta selling Bobcat, JCB and JLG construction equipment and completes a $12 million private placement.
2006 Acquires a John Deere store in Watrous, Saskatchewan and closes a low performing store in south eastern Saskatchewan
2007 Acquires a John Deere dealership in Olds, Alberta 40 minutes north of Calgary
2008 Completes $25 million bought deal at $25 per unit.
2008 Acquires 2 John Deere stores in Melfort and Prince Albert Saskatchewan
2009 Acquires 2 John Deere stores in Pincher Creek and Claresholm Alberta and 1 store in Cranbrook British Columbia
2009 Converts to a corporation through transaction with Vasogen and now operates as Cervus Equipment Corporation
Our Locations
Cervus operates 22 John Deere, JCB, and Bobcat stores in Western Canada
Mapping our Success
Equipment
Percent of Revenue by Segment(for year ended December 31, 2008)
Agriculture Revenue by Segment(for year ended December 31, 2008)
Construction Revenue by Segment(for year ended December 31, 2008)
Financial Highlights
Revenue ($ millions)
Total Assets($ millions)
Net Earnings
($ millions)
Fiscal Overview
2008
Years ended December 31, 2008Annual
2008Annual 2007 % Change
Revenue ($ millions) 348.7 305.0 +14%
Net earnings available to partners ($millions) 22.2 11.4 +95%
Total partners equity ($ millions) 90.0 48.4 +86%
Quarterly Overview
$ thousands, except per unit amounts
Sept 30, 2009
June 30, 2009
March 31, 2009
Dec 31, 2008
Revenues 121,195 105,701 66,340 69,790
EBITDA 10,076 8,702 3,071 4,019
Funds from operations
Net earnings 8,744 7,330 1,675 2,635
Basic earnings per unit 0.62 0.52 0.12 0.19
Diluted earnings per unit 0.61 0.51 0.12 0.19
Weighted average units outstanding - basic
14,117 14,087 14,040 14,085
Fully diluted 14,361 14,258 14,190 14,147
Historical Agricultural Prices (Oats, Canola, Flaxseed)
Cervus & John Deere Stock Price Compared On A Percentage Basis
ARW Locations
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Our Mission
Cervus Equipment Corporation is in the business of acquiring
and operating authorized agricultural and industrial equipment
dealerships by facilitating dealer succession and providing
capital, resources, training and opportunity for the next
generation of dealers to effectively position them for
profitability and growth.
“Leading brands, a company-wide customer commitment, plus a skilled and dedicated team - this is why Cervus excels at what we do”
Corporate Conversion
StrategyCervus LP and Vasogen• Conversion is primarily motivated by
changes to Canadian federal income tax legislation
• Cervus provided $7.5 million to Vasogen
• Vasogen renamed Cervus Equipment Corporation
• A 3 for 2 stock split has been completed
• Quarterly dividend payments commenced in the fourth quarter 2009 of $0.18 per common share
• Will gain an estimated tax shield in excess of $225 million following the agreement
Growth Strategy
“We are a leadership company building
diverse and robust businesses that can perform through any cycle.”
Effective, Efficient Operations
We are migrating to a system of centralized processing and administration
in order to realize on the efficiencies now available through centralized
processing.
Trained, Experienced, Engaged Employees
A strong commitment to employee ownership ensures our employees have a
vested interest in the company’s performance and enjoy the fruits of their
labour while providing Cervus Equipment Corporation with a competitive
advantage.
Diversified, Well-Capitalized Dealership Networks
We need to grow in order to enhance the range and depth of services we
offer our customers and keep pace with consolidation. Significant growth
opportunities to take advantage of include consolidation of equipment
dealerships, plus geographical and market diversification.
Growth Strategy
Managing The Competitive Environment
We believe that in order for Cervus Equipment Corporation to have
sustainable earnings we must answer the competitive threat on three levels:
attention to our customers, partnering with our suppliers and strong market
presence.
Customer Focus
Customer satisfaction is a key performance criteria used in evaluating
dealership performance. Customer input is obtained formally and informally
and is used to modify dealership processes to improve our customer service.
Partnering With Suppliers
A strong relationship with our manufacturers is critical to ensuring product
delivery, price competition and quick response to competitive pressures.
Strong Market Presence
We believe that a strong market presence is a key factor in driving top and
bottom line results. We accomplish this by providing world-class products
and services to our customers at competitive prices.
Senior Managemen
tPeter Lacey, CEO, has been affiliated with the farm equipment industry for many years, having bought his first John Deere dealership in 1982 in Red Deer, AB. Mr. Lacey founded Cervus Corp. (the predecessor to Cervus Equipment Corporation, in 1999).
Randy Muth, CFO, holds the CA designation (Alberta) and the CPA designation (Illinois) and joined Cervus Equipment Corporation in the fall of 2005. Randy has worked for national and international companies in Canada and the US in finance and operational roles since the early 1980s.
Graham Drake, VP of Operations for the Agriculture Division, has been an owner/operator of a farm equipment dealership and has held various managerial and sales roles with John Deere Ltd. since 1982.
John Higgins, VP of Operations for the Construction Division, has held various managerial roles in the industrial equipment and transportation sector since the late 1970s
“These are positive times for Cervus Equipment Corporation. Strong
demand, especially in the agricultural sector, plus acquisition
opportunities at reasonable values, means we are in the forefront of a public market looking for growth stories like ours.”
Why Buy Cervus • Quarterly distributions of $0.18
• Experienced management team
• Young growth-orientated employees and
owners
• Opportunities for continued growth
• Agriculture is still strong despite recession
• Continued profitable dealerships
• Construction, although down, is still a good
long-term investment as infrastructure is still
needed in western Canada
Thank You