Cervus Equipment Corporation has announced its financial results for the three months ended June 30, 2021.
Cervus delivered $15 million in adjusted income before tax, a record for the second quarter and a significant increase of $7 million or 84%, compared to $8 million generated in the same period last year.1 The company said its accelerated performance reflects the convergence of recovering activity levels in our end markets and enhanced sales practices, with Cervus’ strategic focus on growing product support revenues and gross margins.
“Our record second quarter results reflect increased demand across all segments, particularly in Transportation as economies reopened and activity rebounded from subdued pandemic levels,” said Angela Lekatsas, President and Chief Executive Officer of Cervus. “Cervus navigated the logistical challenges of extended manufacturer lead times and delayed deliveries resulting from increased demand and supply shortages exceptionally well, allowing us to establish a new high-water mark for second quarter profitability. I want to take this opportunity to thank and congratulate our 1,588 valuable employees for this remarkable achievement.
The company also announced it has entered into an arrangement agreement providing for a plan of arrangement pursuant to which all the issued and outstanding shares of the Company would be acquired by Brandt Tractor Ltd. for cash consideration of $19.50 per share.
Second Quarter 2021 Highlights
The Company reported income of $13 million compared to a $9 million in the second quarter of 2020.
Total revenue increased 18% in the quarter, with growth in both equipment and product support sales reported by all segments. This revenue growth, in concert with a 0.8% expansion in overall gross profit margin, drove a 25% increase in gross profit.
A reduction in interest-bearing debt resulted in a 29% decrease in net finance costs compared to the second quarter of 2020.
Agriculture used equipment inventory turnover for the trailing twelve-month period ended June 30, 2021, accelerated to 3.44 times, compared to 2.31 times at June 30, 2020.1
- Agriculture equipment revenue increased 10% in the quarter and 4% year to date, primarily driven by increased customer demand for new equipment, supported by strong market fundamentals in all our geographies. Product support revenue increased 1% in the quarter and 6% year to date, as our execution on strategic parts initiatives, including online and on the road parts sales, and the addition of two new locations after the first quarter of 2020, was partly offset by the impact of parts supply shortages and a relatively easy seeding season in the second quarter of 2021.