EDMONTON, Nov. 25 /CNW/ - Mr. Wayne Wadley, president of CERF GP Corp.,
the general partner of Canadian Equipment Rental Fund Limited Partnership (the
"Partnership"), is pleased to report the results for the second quarter ended
September 30, 2005.
Quarter Highlights Include:
- First quarter of operations for the Partnership
- Increase in revenue of 181% over the same period last year
- Earnings of $153, 266 representing basic earnings of $0.049 per
unit
- Net additions of $463,613 of equipment to the fleet
Mr. Wadley comments, "Our success this quarter has been accomplished
through our focus on improved utilization and expanding our rental fleet. The
fact that sales for the quarter ended September 30, 2005 exceeded sales for
the quarter ended October 31, 2004 and that net income for the current quarter
were almost equal to those of the 2004 quarter is a great achievement and
represents a significant increase in sales volume while controlling costs.
Historically, October is the strongest sales month of the year which is not
included in this quarter's numbers. We were able to meet some of the demand
for equipment, but still remain challenged to meet the needs of our customer
in the winter months especially in the areas of material handling, power
generation, and heating equipment".
The three months ended September 30, 2005 represent the first quarter of
operations as a limited partnership since 4-Way Equipment Rentals Ltd. 0
("4-Way") reorganized to become Canadian Equipment Rental Fund a public
limited partnership. To reflect this continuity the comparative periods
presented prior to June 23, 2005 are those of 4-Way. 4-Way had a 2004 year end
of April 30, therefore the comparative quarters are the three months ended
July 31, 2004, October 31, 2004 and January 31, 2005. Net income for the
quarter was $153,266 and $254,355 for the six months that ended. This
represents basic earnings per unit of $0.049 for the three months and $0.096
for the six month period.
Rentals
Demand for rental equipment in the construction and industrial sectors
continues to be strong heading into the winter season. Equipment shortages in
key areas remain prevalent as renovation and new construction contractors in
the residential, commercial, and light industrial sectors attempt to complete
projects before the colder weather arrives. The industrial maintenance sector
was busy this quarter as maintenance contractors struggled to meet tight plant
maintenance schedules. Many of the plants that had put their maintenance
projects on hold in latter 2003 and 2004 have begun to execute their
maintenance schedules putting a strain on refractory companies. The seasonally
warm weather helped many of our customers complete projects ahead of schedule
and rent equipment longer than anticipated.
Equipment Sales
Equipment sales, both new and used continue to be strong as demand for
equipment continues with contractors stocking up for the many projects they
have lined up over the next 2 to 5 years. Winter season brings a demand for
heaters, light towers and generators in particular as transport, construction
and oil/gas service companies increase their operations.
Recent economic forecasts for our trading area indicate the demand will
continue to grow with new projects coming online in the Fort McMurray region
and throughout northern Alberta. Edmonton continues to be the hub of
manufacturing and service sectors that support both conventional oil and gas
drilling and the development of the oil sands.
Service and Repair
The service area remained very busy with fleet maintenance and customer
repairs. Marketing efforts in creating awareness of our service areas have
seen strong results with referral business from our existing customer base.
Customer equipment repaired included small tools to large air compressors,
skid steers, and forklifts. Warranty service claims also rose as we added to
the growing number of manufacturers that use the Partnership as a warranty
service center. The Partnership is a warranty center for more than seven major
manufacturers including Ingersoll-Rand, Mr. Heater/Enerco, Ground Heaters,
Sullair, Wacker, and Frostfighters. We are currently in negotiation to become
a major parts and distribution warehouse for Western Canada.
<<
Selected Financial Information
Balance Sheet
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September March 31,
30, 2005 2005
(unaudited)
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Assets
Current assets:
Accounts receivable $1,394,151 $1,481,767
Inventory 395,435 -
Prepaid expenses and other 39,685 75,616
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1,829,271 1,557,383
Property and equipment 4,104,982 3,415,199
Prepaid rent 88,200 88,200
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$6,022,453 $5,060,782
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-------------------------------------------------------------------------
Liabilities and Partners' Equity
Current liabilities:
Bank indebtedness $ 360,537 $ 459,021
Accounts payable and accrued liabilities 1,076,299 809,681
Income taxes payable - 38,733
Callable bank debt - 1,912,310
Current portion of long-term debt 434,244 51,416
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1,871,080 3,271,161
Long-term debt 1,398,902 50,575
Notes payable 800,000 -
Future income taxes - 347,092
-------------------------------------------------------------------------
4,069,982 3,668,828
Partners' equity
Partners' capital 1,752,176 120
Contributed surplus 47,029 248,790
Accumulated earnings 153,266 1,143,044
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$6,022,453 $5,060,782
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Statements of Operations
(unaudited)
-------------------------------------------------------------------------
Three Three
months months Six months Six months
ended ended ended ended
September October September October
30, 2005 31, 2004 30, 2005 31, 2004
-------------------------------------------------------------------------
Revenue: $1,586,550 $1,510,126 $2,862,598 $2,366,408
-------------------------------------------------------------------------
Expenses:
Cost of sales 551,259 508,066 869,844 724,327
General and
administrative 168,958 172,121 340,502 327,906
Interest 56,481 25,707 99,108 45,711
Operating 467,006 425,194 957,167 834,652
Amortization of
property and equipment 203,501 159,647 390,836 301,409
Gain on disposal of
property and equipment (13,921) (718) (58,314) (72,288)
-------------------------------------------------------------------------
1,433,284 1,290,017 2,599,143 2,161,717
-------------------------------------------------------------------------
Income before income
taxes 153,266 220,109 263,455 204,691
-------------------------------------------------------------------------
Income taxes:
Current - 20,361 9,100 20,361
Future - 40,758 - 28,723
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- 61,119 9,100 49,084
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Net income for the
period $ 153,266 $ 158,990 $ 254,355 $ 155,607
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Net income per unit
Basic $ 0.049 $ 0.075 $ 0.096 $ 0.074
Diluted $ 0.049 $ 0.075 $ 0.095 $ 0.074
-------------------------------------------------------------------------
-------------------------------------------------------------------------
Statement of Partners' Equity
(unaudited)
-------------------------------------------------------------------------
September 30, 2005
-----------------------------------------------
Class "A" shares Partnership Units
-------------------------------------------------------------------------
Partners' capital
Balance, March 31, 2005 12,000 $ 120 - $ -
Issued to general
partner for cash 1 10
Issued on conversion
of shares to
partnership units (12,000) (120) 2,100,000 933,342
Issued to Affirm
Capital Inc. for cash 1,036,300 1,036,300
Unit issue costs (217,476)
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Balance, end of period - $ - 3,136,301 $1,752,176
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September
Accumulated earnings 30, 2005
-------------------------------------------------------------------------
Retained earnings, as at March 31, 2005 $1,143,044
Reversal of future tax liability on conversion to partnership 347,092
Conversion of capital stock 120
Conversion of contributed surplus 248,790
Notes given on conversion to partnership (859,764)
Affirm options continued on conversion to partnership (47,029)
Allocated to partners' capital on conversion to partnership (933,342)
Net income for the period 254,355
-------------------------------------------------------------------------
Accumulated earnings, end of period $ 153,266
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Additional information and full financial statements for current and past
periods may be found on the SEDAR web site at www.sedar.com.
CERF LP is a Canadian limited partnership engaged in the rental, sale and
service of industrial and construction equipment. CERF LP trades on the TSX
Venture Exchange under the symbol "CFL.UN" and currently has 3,136,301 units
issued and outstanding.
>>
%SEDAR: 00022335E
