TSX Venture Symbol: CFL.UN
CALGARY, April 15 /CNW/ - Mr. Wayne Wadley, President of CERF GP Corp., the general partner of Canadian Equipment Rental Fund Limited Partnership (the "Partnership") announces financial and operating results for the year ended December 31, 2007.
Canadian Equipment Rental Fund Limited Partnership delivered significant growth with record revenues, net income and equity in 2007. Highlights from the past year include:
- Increased revenues by 54% from $10,169,191 to $15,687,978.
- Increased Partnership income before income tax by 62% from $2,291,121
to $3,710,160.
- Partners' equity, after distributions to partners of $3,482,059,
increased by 17% from $7,803,302 at the end of 2006 to $9,143,410 in
2007. The number of partnership units outstanding at December 31
increased by 12% from 5,114,119 in 2006 to 5,740,107 in 2007.
- To bring the growth into perspective, the Partnership has almost
quadrupled revenue from $4.6 million in 2005 when it first became a
publicly traded organization to $15.6 million. Earnings before
depreciation, interest, taxes, amortization and stock based
compensation ("EDITAC") have gone from $1.3 million in 2005 to
$6.9 million in just two short years. EBITAC per unit on a weighed
average basis has improved from $0.46 per unit in 2005 to $1.34 per
unit in 2007.
Mr. Wadley comments, "Equipment rentals experienced the most growth of the business lines with an impressive increase of 50% compared to 2006. We focused on a planned expansion of our fleet in our core equipment lines of heaters, air compressors, and generators as well as expanding our specialty equipment primarily in material handling line which resulted in higher revenues. The first quarter was very strong, setting records as contractors were still going full out in housing and commercial construction. In 2007 we introduced fuel cells as a new product to the marketplace which increased our fuel re-sales substantially. Labor shortages have led to high demand for specialized equipment that reduces labor such as hydronic heaters which require very little supervision once set up. Demand for our setup and teardown services remained high keeping our crews busy to the end of the winter season. In the second quarter, compaction and air equipment rentals took up the slack created by the end of heater season. Third quarter followed with traditional slower demand for our fleet as customers took off some well deserved time to enjoy the summer months. In the 4th quarter, the extra demand for lighting equipment and heaters combined with the rush to complete as much work as possible before freeze up saw us post another record setting quarter. Overall, 2007 saw a high demand for all sectors of equipment that grew from $9,054,413 in 2006 to $13,524,176 in rental revenue for 2007.
New equipment sales grew by 360% over last year. The demand for equipment increased due to a number of factors. One of the most significant factors has been the decrease in the US dollar which drove down the cost of most equipment in Canada making it more affordable to buy. This has contributed significantly to our buying power for rental equipment as well. Another factor is the remoteness and long term nature of some projects. Customers in the construction, oilfield and transportation industries prefer to own equipment for long term projects located in northern Alberta and NWT.
Demand for certain product lines increased twofold over last year. In particular, heating equipment more than doubled over last year as customers extended their projects into the winter operating season. Sales of Ground Heater equipment saw the largest increase as customers responded to the 'multi-use' capabilities of these machines.
Due to our success with many of our more than 50 product lines, we continue to be sought after as a dealer for various lines of equipment. We are constantly researching these lines and will be expanding our product offerings based on the needs and feedback of our customer base.
We also saw an increasing demand from customers needing our specialized skills and knowledge to repair their equipment. Our well trained service technicians helped us broaden our customer base in equipment rentals. Part of this increased demand comes from rental competitors who have chosen to stop servicing customer owned equipment. The shortage of skilled equipment technicians forced many companies to outsource their equipment repair and service.
The 2007 year saw slower activity in individual housing starts as the market goes through an inventory downsizing. However multi-housing projects and a very active commercial market have more than made up for any lost revenues in the housing sector. We are expecting the commercial construction market to actually accelerate in 2008 to keep up with the demand for office and warehouse space in the Edmonton region. CERF LP is particularly well placed to take advantage of this demand as this is our primary customer base at this time.
With many of our customers gearing up for long term projects from tank farm construction to power plant expansions, new equipment sales will form a growing part of our revenues. Even with this increase in sales, we see continued growth in rental revenues both in value and proportion of overall sales indicates there is a great deal of demand for equipment on all fronts. The main shift to date from our customers has been a preference for new over used equipment purchases. With these sales, we expect to be asked to provide ongoing service and repairs of their equipment as we are a recognized factory representative for warranty work on many lines of equipment that we sell. Demand for on site service continues to rise as well. We are addressing this by adding to our existing fleet of service units."
CERFLP is a Canadian limited partnership engaged in the rental, sale and service of industrial and construction equipment. CERFLP trades on the TSX Venture Exchange under the symbol "CFL.UN" and currently has 5,759,777 units issued and outstanding.
FORWARD-LOOKING STATEMENTS
This press release contains forward looking statements subject to various risk factors and uncertainties, which may cause the actual results, performances, cash flows or the ability to pay distributions to be materially different from the results, performances, cash flow or the ability to pay distributions expressed or implied by such forward looking statements.
The TSX Venture Exchange does not accept responsibility for the adequacy
or accuracy of this release.
CANADIAN EQUIPMENT RENTAL FUND LIMITED PARTNERSHIP
Balance Sheets
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December 31, December 31,
2007 2006
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Assets
Current assets:
Cash $ 254,833 $ -
Accounts receivable 4,874,826 3,581,326
Inventory and other 462,781 452,601
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5,592,440 4,033,927
Property and equipment 13,297,555 9,054,413
Prepaid rent 88,200 88,200
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$18,978,195 $13,176,540
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Liabilities and Partners' Equity
Current liabilities:
Bank indebtedness $ - $ 150,059
Accounts payable and accrued liabilities 2,160,026 1,629,045
Distributions payable 861,016 562,553
Note payable 300,000 -
Current portion of long-term debt 1,627,525 763,584
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4,948,567 3,105,241
Long-term debt 4,420,689 1,967,997
Note payable - 300,000
Future income tax 572,515 -
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9,941,771 5,373,238
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Partners' equity:
Limited Partnership units 8,125,047 6,199,626
Unit purchase loans receivable (530,740) -
Contributed surplus 398,724 215,869
Retained earnings 1,043,393 1,387,807
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9,036,424 7,803,302
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$18,978,195 $13,176,540
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Statements of Operations
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Year ended Year ended
December 31, December 31,
2007 2006
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Revenues $15,687,978 $10,169,191
Expenses:
General and administrative 875,216 580,710
Interest on long term debt 334,877 237,428
Operating 7,847,973 5,543,313
Unit based compensation 267,244 244,774
Amortization of property and equipment 2,652,508 1,271,845
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11,977,818 7,878,070
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Income before income taxes 3,710,160 2,291,121
Future income taxes 572,515 -
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Net income for the year 3,137,645 2,291,121
Other comprehensive income - -
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Comprehensive net income for the year 3,137,645 2,291,121
Retained earnings, beginning of year 1,387,807 346,180
Partner distributions declared (3,482,059) (1,249,494)
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Retained earnings, end of year $ 1,043,393 $ 1,387,807
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Net income per unit
Basic $ 0.60 $ 0.63
Diluted $ 0.57 $ 0.61
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