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1ST QUARTER: CERVUS EQUIPMENT SALES DOWN 1%, RETURNS TO PROFITABILITY
Cervus Equipment Corp reports:

To view the complete report, click here.

Calgary, Alberta - Cervus Equipment Corporation ("Cervus" or the "Company") (TSX: CERV) today announced its financial results for the three months ended March 31, 2021.

Cervus generated $3.2 million in adjusted income before tax, a significant increase of $2.7 million compared to the $0.5 million generated in the first quarter of 2020.1 This improved performance reflects the Company's strategic focus on growing product support revenue, as well as lower finance costs associated with decreased inventory levels.

"In what is typically our slowest quarter, I am proud of our team's successful execution on initiatives to grow parts sales, which increased 11% in the quarter, driving a 7% increase in overall product support revenue," said Angela Lekatsas, President and Chief Executive Officer of Cervus. "Despite a decrease in equipment and service revenues from continued impacts of the global pandemic, we achieved a 5% increase in gross profit quarter over quarter, from this change in the proportion of revenue from product support.

"Strong industry demand, compounded by supply chain constraints related to the pandemic and severe weather events, impacted the availability and timing of equipment from our manufacturers in the quarter. We expect manufacturer supply chain issues, including semiconductor shortages, may continue into the second and third quarters of the year, and are working in partnership with our manufacturers to minimize the impact to our customers and our business."

First Quarter 2021 Highlights
The Company reported income of $3.0 million or $0.19 per basic share in the first quarter of 2021, compared to a loss of $2.7 million or ($0.17) per basic share in the first quarter of 2020.

Adjusted income per basic share was $0.15, compared to $0.02 in the first quarter of 2020, which excludes the impact of government subsidies and unrealized foreign exchange losses.1

Total revenue decreased 1% in the quarter, comprised of a 4% decrease in equipment revenue, partly offset by a 7% increase in product support revenue. This change in sales mix resulted in a 5% increase in gross profit.

A $70 million reduction in total inventory, combined with the repayment of amounts owing under our syndicate and capital facilities in the third quarter of 2020, resulted in a 41% decrease in net finance costs compared to the first quarter of 2020.

Agriculture used equipment inventory turnover for the trailing twelve-month period ended March 31, 2021, improved to 3.28 times, compared to 1.89 times at March 31, 2020.1

Adjusted free cash flow from operations was $7 million for the three month period ended March 31, 2021 compared to $4.1 million in 2020, an increase of $3.2 million.1

A quarterly dividend of $0.11 per share was declared to shareholders of record at March 31, 2021.


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