Cervus Temporarily Reallocates Shareholder Distributions

CALGARY, AB, June 10, 2020 /CNW/ - Cervus Equipment Corporation ("Cervus" or the "Company") (TSX: CERV) today announced that the Cervus Board of Directors have approved renewed activity under the Company's existing Normal Course Issuer Bid ("NCIB"). This activity will be funded by a temporary reduction in the quarterly dividend to $0.015 per share, from $0.11 per share.

"Cervus has a long history of distributing a portion of free cash flow to investors and since 2017 we have considered both dividends and share buybacks to be a return of capital to shareholders," said Peter Lacey, Founder and Chairman of the Board. "In our view it would be a significant oversight not to capture the opportunity to buy Cervus shares at a substantial discount to tangible book value, especially in light of future growth aspirations communicated in our five-year strategic plan. For this reason, the Board has approved a reallocation in our distribution to shareholders, temporarily reducing the dividend and increasing the NCIB, beginning in July 2020. The Board will continue to assess shareholder distributions on a quarterly basis."

A dividend of $0.015 will be paid on or about July 15, 2020, to Cervus shareholders of record as at June 30, 2020. This is a reduction from the dividend of $0.11 per share paid in the first quarter of 2020. Commensurate with the temporary dividend reduction, Cervus anticipates allocating the difference between $0.11 and $0.015 per share towards quarterly purchases under the NCIB.  

Angela Lekatsas, President and CEO stated, "In these extraordinary times, we see no better investment for Cervus than in our own stock. Our stable balance sheet has maintained both covenants and cash flow, enabling continued shareholder distributions. Structuring these distributions through the NCIB in the short term is closely aligned with our strategic objective to effectively allocate capital."

Since 2017, under various NCIB facilities, Cervus has repurchased 748,150 shares at a total cost of $9.8 million and an average cost of $13.08 per share. The current NCIB, the details of which were previously released September 10, 2019, expires on September 15, 2020. 

About Cervus Equipment
Cervus provides equipment solutions to customers in agriculture, transportation, and industrial markets across Canada, Australia, and New Zealand. Throughout its territories and across its diverse markets, Cervus dealerships are united in delivering sales and support of the market-leading equipment our customers depend on to earn a living. The Company operates 63 Cervus dealerships and is the authorized representative of leading equipment brands including: John Deere agricultural equipment; Peterbilt transportation equipment; and Clark, Sellick, Doosan, JLG and Baumann material handling equipment. Its common shares are listed on the Toronto Stock Exchange and trade under the symbol "CERV".

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SOURCE Cervus Equipment Corporation