CERF, 4-Way Post Double-Digit 2012 Revenue Hikes

April 26, 2013
Canadian Equipment Rental Fund Inc. posted a 26-percent fourth quarter revenue increase and a 27-percent full year 2012 jump, with revenue leaping from CDN $26.6 million to $33.8 million. Its equipment rental segment, which does business as 4-Way Equipment Rental, based in Edmonton, Alberta, Canada, boosted its revenue 38 percent in the fourth quarter to $7.1 million, compared with $5.1 million for the fourth quarter of 2011. Its full-year total jumped 14 percent to $19.3 million, compared with $17 million for 2011, and increased 5 percent organically.

Canadian Equipment Rental Fund Inc. posted a 26-percent fourth-quarter revenue increase and a 27-percent full year 2012 jump, with revenue leaping from CDN $26.6 million to $33.8 million. Its equipment rental segment, which does business as 4-Way Equipment Rental, based in Edmonton, Alberta, Canada, boosted its revenue 38 percent in the fourth quarter to $7.1 million, compared with $5.1 million for the fourth quarter of 2011. Its full-year total jumped 14 percent to $19.3 million, compared with $17 million for 2011, and increased 5 percent organically.

On Oct. 3, 2012, CERF acquired TRAC Energy Services Ltd. in its equipment rental segment. TRAC provides rental equipment to the drilling and services sectors in the oil and gas industry and allows 4-Way to participate more directly in Alberta’s strong oil and gas industry. TRAC added $1.48 million of revenue in the fourth quarter, along with $747,000 of EBITDA.

CERF’s waste management segment revenue jumped 9 percent for the fourth quarter to $4.15 million and increased 50 percent for the year to $14.45 million, in part because of the acquisition of MCL in the second quarter of 2011. The waste management segment provided for 43 percent of the company’s 2012 revenues.

“Both businesses segments performed well and are poised for further growth,” said Wayne Wadley, president and CEO. “In 2011/2012, we made significant investments in new rental equipment and corporate infrastructure such as IT, salespeople and other human resources preparing for a recovery in the equipment rental segment. We expected this recovery to take hold in early 2012, but it ended up being delayed until Q4 2012. As a result, financial results for the first nine months of the year did not meet our expectations as increased expenses were not rewarded with higher expected revenue and margins. In addition, poor weather conditions (early spring and a wet summer) in the first three quarters of 2012 negatively affected results in both segments. However, we have started to hit our stride in Q4.”

Wadley added that the recovery of the company’s equipment rental segment that began in the fourth quarter has continued into the first quarter of 2013.

“The strong Alberta economy is the wind at our sails helping to drive our growth,” Wadley said. “Our growth is also driven by our business strategy, acquisition program and solid execution. In terms of the Alberta economy, the Alberta Government Department of Finance and Enterprise estimates 3.8-percent GDP growth for 2013 and a further 3 percent for 2014. Growth drivers such as the $29 billion of current oil sands construction projects underway and nearly $86 billion of new projects proposed, substantial government spending and infrastructure projects and strong immigration are propelling our growth directly and indirectly in CERF’s two business segments — equipment rentals and waste management.

“Our equipment rental segment, which includes the recent acquisition of TRAC in October 2012, has a young and in-demand fleet of equipment that will serve us well for the next several years. This is due to the fact we made significant fleet investments to take advantage of growth opportunities. In our construction rental business (4-Way), we invested nearly $9 million (net of disposals) in the last two years in new construction equipment in response to the growing need for our equipment and services in the industrial, commercial, residential and infrastructure construction markets. The recovery we have been planning for in construction rentals finally hit its stride in Q4 and is continuing into Q1 2013. Similarly, in our oilfield rental equipment business, which began with the TRAC acquisition in October 2012, we have added approximately $1.4 million in new equipment to their $10 million of oil field rental equipment to meet increased demand for their oilfield related products and services the benefits of which will be seen in 2013."

4-Way Equipment Rental is No. 94 on the RER 100.