Dividend and Growth TSX-V: CFL CFL 1 TSX-V Forward Looking - - PowerPoint PPT Presentation

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Dividend and Growth TSX-V: CFL CFL 1 TSX-V Forward Looking - - PowerPoint PPT Presentation

Corporate Presentation December 2015 Dividend and Growth TSX-V: CFL CFL 1 TSX-V Forward Looking Statements or expectations upon which they are based will Certain information with respect to CERF The Company cannot can guarantee future


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SLIDE 1

CFL

TSX-V

1

Corporate Presentation

December 2015

Dividend and Growth

TSX-V: CFL

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SLIDE 2

CFL

TSX-V

2

P.O Box 1326 Vernon, BC, V1T 6N6

  • r expectations upon which they are based will
  • ccur.

By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the predictions, forecasts, projections and

  • ther

forward looking statements will not

  • ccur.

Forward-looking statements and information in this presentation herein include, but are not limited to, statements with respect to:

  • results of various projects of the Company;
  • growth expectations within the Company;
  • the performance and characteristics of the

Company’s rental fleet;

  • capital expenditure programs;
  • realization of the anticipated benefits of

acquisitions and dispositions; and

  • pro forma estimates for 2015 based on

analyst consensus. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, there can be no assurance that such expectations will prove to be correct.

Forward Looking Statements

Certain information with respect to CERF Incorporated (the “Company”) in this presentation herein contain certain forward- looking statements and forward looking information which are based upon the Company’s current internal expectations, estimates, projections, assumptions and

  • beliefs. In some cases, words such as “plan”,

“expect”, “project”, “intend”, “believe”, “anticipate”, “estimate”, “may”, “will”, “potential”, “proposed” and other similar words,

  • r statements that certain events or conditions

“may” or “will” occur, are intended to identify forward-looking statements and forward- looking information. These statements are not guarantees of future performance and involve known and unknown risks, uncertainties and

  • ther factors that may cause actual results or

events to differ materially from those anticipated in the forward-looking statements

  • r information. In addition, this presentation

may contain forward-looking statements and information attributed to third party industry

  • sources. Undue reliance should not be placed
  • n these forward-looking statements, as there

can be no assurance that the plans, intentions The Company cannot can guarantee future results, levels of activity, performance or achievements. Consequently, there is no representation by the Company that actual results achieved will be the same in whole or in part as those set out in the forward-looking statements and information. Some

  • f the risks and other factors, some of which are

beyond the Company’s control, which could cause results to differ materially from those expressed in the forward-looking statements and information contained in this presentation herein include, but are not limited to:

  • general economic conditions in Canada, the

United States and globally;

  • failure

to realize anticipated benefits

  • f

acquisitions;

  • stock market volatility and market valuations;
  • competition for, among other things, capital and

skilled personnel;

  • the availability of capital on acceptable terms;

and

  • the need to obtain required approvals from

regulatory authorities; Readers are cautioned that the foregoing list of factors is not exhaustive.

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CFL

TSX-V

3

Financial Snapshot

Leveraged to Northern Alberta’s Industrial and Commercial Construction and Oil and Gas Sectors

As at December 1, 2015

Trading Symbol TSX-V

CFL

Shares outstanding (Basic)

36.4 mm

Share price

$0.72

52 week high / low

$2.96 / $0.70

Volume (30 day avg.)

43,916

Yield

11%

Market Capitalization

$26 mm

Net Debt (Q3)(1)

$30.6 mm

Enterprise value (EV)

$57.0 mm

(1) Net debt is calculated as bank debt + interest bearing obligations – unrestricted cash

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CFL

TSX-V

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Diverse Revenue Streams

OILFIELD RENTALS SEGMENT

  • Surface Rentals
  • Down Hole Equipment
  • Accommodations

2014

(2) (1)(2)

Energy Services Division

(1) Adjusted EBITDA shown here does not include $2.4 mm in unallocated corporate fees (2) Includes Winalta for 4 months of 2014 and Empire for 7 months of 2014

Industrials Division

INDUSTRIAL RENTALS SEGMENT WASTE MANAGEMENT SEGMENT

2014

(1)

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SLIDE 5

CFL

TSX-V

5

Track Record

Total Distributions / Share

$3.54

Earnings Per Share (TTM)

$0.09

Current Annualized Dividend

41

As at December 1, 2015

Current Price

$0.70

$0.08

Consecutive Quarterly Dividends

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CFL

TSX-V

6

Our Strategy

Organic Growth

Strategic opportunities within the business segments Target top-line growth rate of 10%

Complementary Acquisitions

Six accretive acquisitions to date 3 energy services / 3 industrials Balanced cash and share Target - high margin / low head count

Dividend

Diversified model provides dividend stability More than $26 mm paid in dividends to date 41 consecutive quarterly dividends

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CFL

TSX-V

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Industrials Division

Heaters Generators Compaction Other Equipment Industrial Rentals Segment Waste Management Segment Manage 5 Government Landfills Manage 2 Government Transfer Stations Contracted Transfer Services Commercial Waste Collection

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CFL

TSX-V

8 35K sq. ft. facility on 6 Acres

CFL

TSX-V

Construction Rentals

Equipment to Facilitate Commercial Construction Projects

* Alberta Finance and Enterprise

Compressors 9% Generators 16% Compaction 10% Heaters 20% Other 45%

400 plus active customers

Major construction contractors Home builders Government and infrastructure

85% repeat customers

Top 10 customers 1/3 revenue Average relationship 14 yrs.

Economic growth in Alberta

Alberta TTM building permits up 18%*

  • Est. 2% population growth in 2015

8

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CFL

TSX-V

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Waste Management

7 Regional Facilities

5 Government 2 Government transfer stations Long term contracts

Commercial waste collection

Roll-off bin and collections services

EBITDA margins of approximately 20% Opposite seasonality to Equipment Rental Business

Landfills Cities

Drayton Valley

AB

Calgary Edmonton Camrose Leduc Rose Ridge

MCL provides heavy equipment and personnel

Aspen Hinton

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CFL

TSX-V

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Growth Opportunities

Industrial Rentals Segment

Organically grown since 1998 Large and growing market in Canada

Waste Management Segment

Provide additional services for existing facilities Add new contracts Acquisitions

  • Vertically integrate waste management services

CFL

TSX-V

Acquisition Strategy

Geographic expansion Undercapitalized targets

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CFL

TSX-V

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Energy Services

Modern, diverse rental fleet High-quality modular accommodations

Wellsite accommodations Integrated Wellsite System (IWS) Drill Camps Dedicated Geo labs (DGL)

Specialty pipe

$81mm

Replacement Value

Surface Rentals $19 mm / 23% Accommodations $54 mm / 67% Downhole Equipment $8 mm / 10%

Downhole Equipment Surface Rentals Accommodations

Heavy weight drill pipe Drill pipe Drill collars Related handling equipment 400 bbl. Tanks Floc Tanks Generators Full complement of equipment

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CFL

TSX-V

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Putting it Together

Drill Pipe Wellsite Accommodation Shale Tanks Light Towers 400 bbl Tanks Floc Tanks Generators Specialty Drill Pipe

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CFL

TSX-V

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Growth Opportunities

Leveraging existing client relationships and expanding product

  • ffering

CAPEX allocation to assets required for customers operating longer-term, less seasonal Operational efficiencies through better utility of services technicians Acquisitions that expand operational footprint

CFL

TSX-V

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SLIDE 14

CFL

TSX-V

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$15 $27 $34 $47 $58 $5 $8 $8 $13 $19

$0 $10 $20 $30 $40 $50 $60 $70 2010 2011 2012 2013 2014 Revenue EBITDA

($MM)

Financial Performance

Note: 2015 CERF consensus includes estimates by Global Securities and Alta Corp, Industrial Alliance and Mackie Research

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CFL

TSX-V

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Balance Sheet

$11 $17 $29 $20 $33

0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 $0 $5 $10 $15 $20 $25 $30 $35 2010 2011 2012 2013 2014

Net Debt (1)

Assets

$144 mm

Liabilities

$48 mm

Net Debt(1) / EBITDA(2) Dec 31, 2014 Dec 31, 2013

Cash and equivalents

$1,603 $557

Working capital

$10,060 $2,271

Long-term debt

$33,351 $18,907

(1) all interest bearing debt ( bank debt + financial leases) (2) CERF Adjusted EBITDA plus stock based comp, acquisition expenses + non recurring expenses

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CFL

TSX-V

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Management and Board of Directors

Insiders Own ~ 17%

Management

Joined

Austin Fraser

President 2014 Former President of Winalta Inc.

Derrek Wong, MBA,CFA,FCMA

CFO 2014 Over 25 years financial management and capital markets experience

Skip Kerr

COO 2013 30 years of waste industry and management experience Independent Directors

Joined

Artie T. Kos

Executive Chairman 2015 Chairman and Chief Executive Officer of ATK Oilfield Transportation Inc.

  • J. Blair Goertzen

Director 2014 President and CEO of Enerflex Ltd.

Bill Guinan

Director 2005 Partner of BLG LLP

David Maplethorpe

Director 2011 Former CEO of MCL

Brad R. Munro

Director 2014 President and CEO of Bittercreek Capital Corp.

Wayne Wadley

Director 2014 Founder and former President and CEO of CERF Incorporated.

Ken Stephens

Director 2005 Former CFO of CERF Incorporated (Retired)

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CFL

TSX-V

17

Why CERF

Compelling organic growth opportunity in Northern Alberta’s diversified energy services and industrial sectors Disciplined acquisition strategy

  • Robust pipeline of complementary business targets

Diversified cash flow supports dividend

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CFL

TSX-V

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Contact Us

TSX-V: CFL

Industrials & Energy Services

Derrek Wong MBA,CFA,FCMA VP Finance and CFO (780) 410-2998 drwong@cerfcorp.com Austin Fraser, EVP Corporate Development (780) 410-2998 afraser@cerfcorp.com