CERF Incorporated Announces Solid 2014 First Quarter Results

CALGARY, ALBERTA--(Marketwired - May 15, 2014) - Mr. Wayne Wadley, President of CERF Incorporated (the "Company" or "CERF") (TSX VENTURE:CFL) is pleased to announce financial and operating results for the Company for the three months ended March 31, 2014.

"CERF had a successful start to 2014, and we are very pleased to announce the seventh consecutive quarter in which CERF has delivered results that exceeded those reported a year earlier," stated Mr. Wadley. " In the first quarter we recorded meaningful increases in our net income, and adjusted free cash flow coupled with a significant decrease in our payout ratio were driven by higher demand for service in our rental equipment division."

Full details of the Company's financial results, in the form of the unaudited, condensed, consolidated interim financial statements and notes for the three months ended March 31, 2014 and Management's Discussion and Analysis of the results are available on SEDAR at www.sedar.com and on the Company's website at www.cerfcorp.com.

Selected Financial Highlights for Q1 2014 Include:

• Revenue increased 9% to $12,424,000 for the quarter versus 11,444,000 in the quarter ended March 31, 2013;
• Net income increased 34% to $1,488,000 share in Q1 2014 versus $1,110,000 in Q1 2013;
• Net Income per share decreased 3% to $0.092 per share in Q1 2014 from $0.095 per share in Q1 2013 despite a 38% increase in the number of shares outstanding.
• Adjusted EBITDA increased 1% to $4,026,000 for the first quarter of 2014 versus $4,001,000 for 2013;
• The Company paid dividends of $0.06 per share to shareholders in 2014 while reducing the annualized payout ratio to 44% from an annualized payout ratio of 89% as at Q1 2013; and
• Adjusted free cash flow generated during 2014 was $724,000 compared to adjusted free cash flow of $(963,000) in Q1 2013;

Summary of the First Quarter 2014 Consolidated Financial Results:

In C$,000's except percentages and per share data	Three months ended March 31, 2014	Three months ended March 31, 2013	$ change	%
Revenue	12,424	11,444	980	9%
Direct Expenses	8,326	7,763	563	7%
Gross Margin %	33%	32%		1%
Net Income	1,488	1,110	378	34%
Net income per share, basic	0.092	0.095	(0.003)	(3)%
Adjusted EBITDA	4,026	4,001	25	1%
Adjusted Free Cash Flow	724	(963)	1,687	175%
Trailing 12 Month payout ratio	44%	89%		(45)%
Dividend per share	0.06	0.06	-	0%

Summarized financial results for the three months ended March 31, 2014 follow:

CERF INCORPORATED

CONDENSED CONSOLIDATED INTERIM STATEMENTS OF FINANCIAL POSITION

IN THOUSANDS OF CANADIAN DOLLARS

Unaudited		March 31, 2014	December 31, 2013
Assets
Current assets:
	Cash	176	557
	Accounts receivable	9,182	8,433
	Inventory	1,574	1,561
	Income taxes recoverable	-	-
	Prepaid expenses and deposits	364	397
		11,296	10,948
Non-current assets:
	Long term receivable	177	238
	Property and equipment	38,010	36,890
	Intangibles and goodwill	10,463	10,714
		48,650	47,842
Total assets		59,946	58,790
Liabilities and Shareholders' Equity
Current liabilities:
	Bank indebtedness	-	-
	Accounts payable and accrued liabilities	5,159	5,339
	Dividends payable	968	963
	Income taxes payable	260	559
	Current portion of long-term debt	1,502	1,502
	Current portion of finance leases	290	314
		8,179	8,677
Non-current liabilities:
	Long-term debt	15,871	14,801
	Obligation under finance leases	4,042	4,106
	Deferred income taxes	2,011	2,115
		21,924	21,022
Total liabilities		30,102	29,699
Shareholders' equity
	Share capital	33,106	32,894
	Warrants	835	835
	Share purchase loans receivable	(148)	(148)
	Contributed surplus	765	744
	Deficit	(4,714)	(5,234)
		29,844	29,091
Total liabilities and shareholders' equity		59,946	58,790

CONDENSED CONSOLIDATED INTERIM STATEMENT OF INCOME AND COMPREHENSIVE INCOME

IN THOUSANDS OF CANADIAN DOLLARS

(unaudited)		Three months ended March 31, 2014	Three months ended March 31, 2013
Revenues		12,424	11,444
Direct expenses
	Direct operating costs	5,460	5,491
	Cost of sales of equipment, fuel and parts	1,475	862
	Depreciation of equipment	1,391	1,410
		8,326	7,763
Gross margin		4,098	3,681
Operating expenses
	General and administrative	1,484	1,374
	Depreciation of other property and equipment	31	28
	Amortization of intangible assets	251	251
	Business acquisition expenses	-	10
		1,766	1,663
Other expenses
	Finance costs	316	424
Income before income taxes		2,016	1,594
Income taxes
	Current	631	577
	Deferred	(103)	(93)
		528	484
Net income and comprehensive income for the period		1,488	1,110
Net income per share
	Basic	$0.092	$ 0.095
	Diluted	$0.092	$ 0.095

About CERF Incorporated

CERF is in the equipment rental business (the "Equipment Rental Segment") and the waste management business (the "Waste Management Segment") in Alberta. The Equipment Rental Segment includes the rental of residential, commercial and industrial construction-related equipment, including sales and service of equipment. It also includes the rental and sale of equipment to the drilling and service sectors of the oil and natural gas industry. The Waste Management Segment consists of complete waste facility management (six landfill sites in central Alberta) including waste facility design and construction services, recycling management and collection services, and consulting services. The Waste Management Segment also consists of waste removal and disposal from commercial, industrial and residential customers. CERF Incorporated trades on the TSX Venture Exchange under the symbol "CFL".

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.