Cervus Announces Second Quarter 2020 Results, $6 Million Increase in Adjusted Income Before Income Tax(1)

  • Total inventory decreased $96 million from June 30, 2019, including a $119 million decrease in Agriculture equipment inventory. This decrease in inventory, combined with strong used sales in the quarter, resulted in Agriculture used equipment turnover for the trailing twelve-month period ended June 30, 2020 improving to 2.31 times from 1.62 times at June 30, 2019. This was partly offset by a $21 million increase in Transportation new equipment inventory, as the impact of COVID-19 has softened demand for trucks and caused customers to defer taking delivery of their orders compared to 2019.

Select Financial Information

($ thousands, except per share amounts)

Three month periods
ended June 30

Six month periods
ended June 30

2020


% Change
Compared
to 2019

2019

2020


% Change
Compared
to 2019

2019

Equipment revenue

259,886

6%

244,464

442,383

9%

405,705

Product support revenue

81,083

(2%)

83,141

155,463

(1%)

156,698

Total revenue

340,969

4%

327,605

597,846

6%

562,403

Cost of sales before inventory
impairment

(288,514)

4%

(276,818)

(501,482)

7%

(468,619)

Inventory impairment

(1,328)

(66%)

(3,908)

(1,703)

(59%)

(4,181)

Gross profit

51,127

9%

46,879

94,661

6%

89,603

Total other income

3,710

167%

1,390

424

(83%)

2,495

Equipment commissions

(3,984)

18%

(3,376)

(6,677)

18%

(5,647)

G&A expenses

(36,820)

(6%)

(39,021)

(74,639)

(7%)

(79,871)

Income from operating activities

14,033

139%

5,872

13,769

109%

6,580

Net finance costs

(2,766)

(10%)

(3,061)

(6,057)

2%

(5,911)

Income before income tax expense

11,267


2,811

7,712


669

Income tax (expense) recovery

(1,991)


6

(1,139)


(564)

Income for the period

9,276


2,817

6,573


105

EBITDA(1)

19,903

66%

11,981

25,170

33%

18,876

 

Ratios







Gross profit margin as a % of revenue

15.0%


14.3%

15.8%


15.9%

Total SG&A as a % of gross profit

79.8%


90.4%

85.9%


95.4%

 

Income (loss) per share







Basic

0.59


0.18

0.42


0.01

Diluted

0.57


0.17

0.41


0.01

Basic – Adjusted(1)

0.44


0.15

0.47


(0.05)

Reconciliation of adjusted income
(loss) before income tax expense:







Income before income tax expense

11,267


2,811

7,712


669

Adjustments:







       Unrealized foreign exchange (gain)

       loss included in other income

(2,365)

278%

(625)

1,712

(240%)

(1,223)

       New Zealand wage subsidy

(818)

100%

(818)

100%

Adjusted income (loss) before
income tax expense(1)

8,084


2,186

8,606


(554)

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