Good morning, welcome to Cervus Equipment's Q2 2021 results conference call. For the duration of the call, all participants are in listen-only mode. This call is being webcast and a replay will be available on Cervus' website. You may access the accompanying presentation now by going to the investor page of Cervus' website at cervusequipment.com. Please note that today's call will address Cervus' Q2 performance and industry outlook and will not include a question-and-answer session. If you're having any difficulties hearing the call, please press star zero for operator assistance. I would now like to turn the call over to Cervus' President and Chief Executive Officer, Ms. Angela Lekatsas. Please go ahead, Ms. Lekatsas. Thank you, operator. Good morning, everyone. Thank you for joining us today to discuss the results of Cervus Equipment for the second quarter of 2021. On the call with me is Catie Busch, our Chief Financial Officer. Before we get into our prepared remarks regarding our second quarter performance, I want to take a moment to advise listeners of an exciting announcement issued this morning regarding the proposed acquisition of Cervus by Brandt Tractor for CAD 19.50 per share in cash. This transaction delivers tremendous value for our shareholders and clearly demonstrates the successful execution of our strategy. The Board of Directors and a special committee of independent directors are unanimously recommending that Cervus shareholders vote in favor of the proposal. This transaction results in positioning Cervus for the next stage of evolutionary growth for our dealerships. The size and scale of the entity created by the combination of our two companies will allow for increased investment into Cervus Equipment for the benefit of our employees and our customers. As a result of this announcement, we will not be taking questions on the call today, but we invite you to refer to our public news release issued this morning. Our remarks today will be focused on a different good news story, that of our record second quarter results. With that, I'll turn the call over to Catie Busch to discuss our financial performance. After Catie's comments, I will provide an update on our progress against our strategic objectives and some commentary on our industry outlook. Catie? Thank you, Angela, and welcome everyone. Before we continue, I would like to advise listeners that this presentation may contain forward-looking statements and information that is subject to certain risks, uncertainties, and assumptions. For a complete discussion of the factors, risks, and uncertainties that may lead to actual results or events differing materially from those expected, please refer to Cervus' most recent quarterly MD&A, which is available on our website. Please note that during today's call, we will discuss non-GAAP financial measures, including results on an adjusted basis and key performance indicators. We have included reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures in our MD&A. Turning to slide three, I will walk through the components of the quarter-over-quarter change in adjusted income before tax. Adjusted income before tax amounted to CAD 15 million, representing a record second quarter for the company. An increase of CAD 7 million, or 84%, over the Q2 2020, which is seen in comparing the two gray bars on the far left and right margins of the chart. This unprecedented Q2 profitability reflects continued strength in our Agriculture segment in all geographies and the convergence of recovering activity levels in our end markets in our T ransportation and Industrial segments. Our focused execution on enhanced sales practices and growing product support revenues produced a 25% increase in gross profit. Despite extended lead times for equipment and parts industry-wide, all segments contributed to this growth and profitability quarter-over-quarter. Moving left to right, the primary factor in our quarter-over-quarter growth was a CAD 9.7 million increase in equipment gross profit, driven by a combination of elevated sales and expanded margins. Also contributing to the growth in the quarter was a CAD 2.9 million increase in product support gross profit as parts, as well as service and other revenues, were up 7% and 10% respectively. General and administrative, or G&A expense, increased CAD 6 million or 15% relative to the second quarter of 2020, reflecting cost containment measures that were enacted a year ago in response to the emerging pandemic, as well as the continued investment in strategic parts initiatives and new locations in our Agriculture segment. The combination of these factors resulted in a record second quarter for Cervus with a CAD 7 million increase in adjusted income before tax quarter-over-quarter. Turning to slide four and the balance sheet, total inventory increased CAD 8 million compared to the second quarter of 2020. The majority of this variance arose within our Agriculture segment, which experienced a CAD 38 million increase in new equipment and parts inventories, partly offset by a CAD 32 million reduction in used equipment inventory. Within the Transportation segment, new equipment inventory increased CAD 2.4 million quarter-over-quarter to CAD 72 million, with substantially all of these units committed to customers. By contrast, approximately half of the CAD 69 million of new equipment inventory on hand at June 30th, 2020 was committed to customers. Our financial position remains strong, and a quarterly dividend of CAD 0.11 per share was declared to shareholders of record as of June 30th, 2021. I will now turn the call back over to Angela for a discussion of our strategy advancements and our outlook. Angela? Thank you, Catie. Over the next few slides, I will be highlighting significant aspects of our second quarter performance relative to our strategic objectives and our outlook. Beginning with slide five and the product support chart on the left, revenue grew 8% quarter-over-quarter to CAD 87.5 million in Q2 2021. As Catie mentioned, this was attributable to growth in parts as well as service and other revenues. If we dive in a little deeper into the segment improvements, we delivered parts revenue growth in all three segments with 2% in Agriculture, 15% in Transportation and 4% in Industrial. This revenue growth reflects our continued execution on initiatives such as expanded product offerings, increased capabilities for online and on-the-road parts sales, expansion of on-site inventory at our Agriculture customer sites, and our new locations in Nipawin, Saskatchewan and Colac, Australia. This growth in parts was supplemented by increases in service revenues in our Transportation and Industrial segments, which benefited from higher customer activity levels as COVID-19 related restrictions eased. Meanwhile, an improved economic outlook supported strong demand for our Industrial segment's training programs. Our Agriculture segment reported a minimal decline in service, reflecting the contrast between what was an easy seeding season in 2021 relative to 2020, which in addition to usual seeding activity, saw the spring harvest of overwintered crops in many regions. Moving to the chart on the right, year-to-date absorption improved across all segments. While absorption growth is not linear, we are trending upward and closer to our long-term targets. Turning to our third strategic objective, which is driving return on invested capital, we achieved a trailing 12-month return on invested capital of 23.8% for Q2 2021. This was largely driven by improvement in profitability and the effective management of our largest asset, which is inventory. We continue to deliver on our initiative to increase velocity of used equipment turns through the trade washout cycle that you saw last year. By Q4 2020, we had surpassed our long-term overall goal of 2.5 turns. In Q2 2021, we delivered 3.44 turns in Agriculture, 3.42 turns in Transportation and 3.73 turns in Industrial. Moving to our Agriculture outlook. Following an early and relatively easy spring seeding season, this year's growing season in Western Canada has been defined by regional extreme heat and dry weather conditions, which has adversely impacted the crop grade and expected yield across much of the prairie provinces. This deterioration in quality and yield could have a detrimental impact on income prospects for farmers and their propensity for large capital equipment expenditures. Solid demand and price fundamentals for principal field crops, as well as government assistance in the form of enhanced insurance programs, should help offset some of this impact to farm income. Increased demand in the U.S. and Canada for new equipment, combined with supply chain disruptions, continue to affect equipment availability and lead times for product in our Canadian geography as demand outpaces supply. Deere has some exciting new product hitting the market, most notably their flagship X9 combine, where machine availability is not a concern. Turning to Australia, global demand for Agriculture commodities remains strong, with weather through the winter months providing favorable conditions for the next growing season. Our New Zealand operations also continue to benefit from strong industry fundamentals, with prices and production holding up well for most Agriculture commodities. Equipment availability has been able to keep pace with customer demand in both regions, but impending constraints still linger through the supply chain. Moving to slide eight. Demand for new trucks is anticipated to remain strong through the balance of 2021, linked to renewed customer and industry confidence, as well as the summer reopening of provincial economies. This increase in customer demand is evidenced in our order backlog. As Catie mentioned earlier, substantially all of our CAD 72 million in new equipment inventory on hand at quarter end is committed to customers, compared to approximately half of the CAD 69 million in new inventory committed to customers last year at this time. PACCAR, the owner of Peterbilt, affirmed that customer demand for new trucks remains strong with Class 8 truck sales in North America estimated to be in the range of 260,000 units-280,000 units in 2021. While customer demand for trucks is anticipated to hold through 2021, truck deliveries are delayed by industry-wide semiconductor and other component shortages, resulting in order boards for new trucks being pushed out to mid-2022. These delays notwithstanding, our customers have responded positively to both newly launched models and upgraded features of the Peterbilt trucks. Turning to our Industrial segment, improvements in the resource sectors in Alberta and Saskatchewan, in combination with summer economic reopening, have had a positive impact on customer sentiment and demand. Training revenues, which are a leading indicator for economic growth, more than doubled in the second quarter of 2021 when compared to the same quarter of 2020. However, like our other segments, pandemic related disruptions are still reverberating through the supply chain, making it challenging to source product in a timely manner. I am extremely proud of Cervus and its employees, not only for setting this new high watermark for performance, but also for their commitment to and successful execution of our strategic initiatives. The offer we announced today is an affirmation of the value that this hard work and dedication has created, and I want to take this opportunity to thank and congratulate each and every one of our 1,588 valuable employees for these remarkable results. On that closing note, I would like to thank you for joining us this morning. Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
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