Enterprise Group, Inc.
TSX : E

Enterprise Group, Inc.

November 12, 2015 08:30 ET

Enterprise Group Announces Results for the Third Quarter of 2015

ST. ALBERT, ALBERTA--(Marketwired - Nov. 12, 2015) - Enterprise Group, Inc. ("Enterprise," or "the Company") (TSX:E) is pleased to announce its financial results for the three month period ended September 30, 2015 (the "third quarter").

Three months Three months Nine months Nine months
Consolidated: September 30, September 30, September 30, September 30,
2015 2014 2015 2014
Revenue $14,686,109 $18,785,208 $47,321,296 $53,962,130
Gross margin $3,396,779 $5,102,342 $10,987,560 $17,272,488
Gross margin % 23 % 27 % 23 % 32 %
EBITDA(1) $2,398,231 $4,230,133 $7,876,425 $13,989,542
Net (loss) income $(602,764 ) $1,538,087 $(1,898,860 ) $6,194,861
EPS $(0.01 ) $0.03 $(0.04 ) $0.14/0.13
Total assets $149,604,357 $135,512,831 $149,604,357 $135,512,831
(1) Identified and defined under "Non-IFRS Measures" within the Company's Management and Analysis for the period ended September 30, 2015.

Enterprise recorded revenue of $14.7 million and EBITDA of $2.4 million during the third quarter, decreases of $4.1 million and $1.8 million, respectively, when compared to the prior year. These declines, which the Company mitigated through proactive client engagement efforts, were primarily the result of a decline in oil and gas activity.

"Enterprise's results for the third quarter continue to demonstrate the impact of a weakened economy in Alberta," stated Leonard Jaroszuk, Enterprise's Chief Executive Officer. "The oil and gas industry has come under significant pressure as a result of the decline in energy prices, and this pressure has created challenges within Enterprise's operating environment. During the first half of 2015, these challenges were most evident within our Equipment Rental services division, while our Utilities/Infrastructure continued to experience relatively stable demand. However, as the economic slowdown has become more protracted, we are now witnessing similar headwinds across the full breadth of our business."

"In response to this changing operating environment, we have taken proactive steps to both streamline our cost structure and reinforce the strength of our client relationships. These efforts continued during the third quarter, and we believe once again mitigated a potentially far greater impact upon our results. Given limited visibility into future activity levels, we will remain devoted to these defensive strategies over the balance of the year. We will also continue to take a conservative approach towards our balance sheet."

Utilities/Infrastructure Division

The Utilities/Infrastructure Services division includes operations for T.C. Backhoe & Directional Drilling ("TCB") and Calgary Tunnelling & Horizontal Augering Ltd. ("CTHA").

Utilities/
Infrastructure
Three months Three months Nine months Nine months
Construction: September 30, September 30, September 30, September 30,
2015 2014 2015 2014
Revenue $8,059,910 $12,039,727 $23,888,989 $28,828,687
Decrease $(3,979,817 ) $(4,939,698 )
EBITDA(1) $1,337,191 $3,549,622 $3,957,181 $8,321,121
Decrease $(2,212,431 ) $(4,363,940 )
Total assets $51,984,226 $46,624,155 $51,984,226 $46,624,155
Increase $5,360,071 $5,360,071
(1) Identified and defined under "Non-IFRS Measures" within the Company's Management and Analysis for the period ended September 30, 2015.

Enterprise's Utilities/Infrastructure division generated revenue of $8.1 million during the third quarter, a decrease of $4.0 million when compared to the prior year. This decline was primarily the result of project delays at CTHA, as well as the challenges that have resulted from a weakened economy in Alberta.

The Utilities/Infrastructure division generated EBITDA of $1.3 million during the third quarter, a decrease of $2.2 million when compared to the prior year. This decline was primarily due to the project delays at CTHA, the overall revenue declines, as well as previously identified cost issues at TCB. The impact of these issues has been significant over the first nine months of 2015, and the Company continues to analyze and implement opportunities for improving this division's cost structure.

Equipment Rental Division

The Equipment Rental Services division includes operations for Artic Therm International Ltd., Hart Oilfield Rentals Ltd. ("Hart"), and Westar Oilfield Rentals Inc. ("Westar").

Three months Three months Nine months Nine months
Equipment Rental: September 30, September 30, September 30, September 30,
2015 2014 2015 2014
Revenue $6,626,199 $6,745,481 $23,432,307 $25,133,443
Increase $(119,282 ) $(1,701,136 )
EBITDA(1) $2,028,088 $1,935,600 $7,082,637 $9,160,269
Increase $92,488 $(2,077,632 )
Total assets $83,773,350 $56,540,496 $83,773,350 $56,540,496
Increase $27,232,854 $27,232,854
(1) Identified and defined under "Non-IFRS Measures" within the Company's Management and Analysis for the period ended September 30, 2015.

Enterprise's Equipment Rental division generated revenue of $6.6 million during the third quarter, a decrease of $0.1 million when compared to the prior year. This decline was primarily due to discounted rates for the Company's services, as well as by warmer than average weather, which had a pronounced impact on demand for flameless heaters. These factors were only partially offset by the additional revenue provided by the acquisition of Westar.

The Equipment Rental division generated EBITDA of $2.0 million during the third quarter, an increase of $0.1 million when compared to the prior year. This increase was primarily due to the addition of Westar, and was offset by the same factors that impacted revenue.

The Equipment Rental division's EBITDA margin improved to 30.2% year over year, primarily due to the benefit of various cost reduction efforts, particularly at Hart. These improvements were offset by the impact of the warmer weather on demand for flameless heaters.

Balance Sheet

Cash provided by operating activities in the third quarter was $1.1 million. This contributed to a quarter end balance of $5.6 million in cash and cash equivalents.

Total loans and borrowing at the end of the third quarter were $46.2 million, including finance lease liabilities, compared to $55.1 million at December 31, 2014. Of this total, the Company's current portion of loans and borrowings is $6.0 million, including $4.9 million in finance lease liabilities.

Conference Call Information

Enterprise will host a conference call for investors and analysts today, November 12, 2015, at 5:00 PM Eastern, in order to review the financial results for the period ended September 30, 2015. To participate in the conference call, please dial 416-340-2218 or toll free at 866-225-0198.

About Enterprise Group, Inc.

Enterprise Group, Inc. is a consolidator of construction services companies operating in the energy, utility and transportation infrastructure industries. The Company's focus is primarily construction services and specialized equipment rental. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management, and human resources to support continued growth. Enterprise acquired of Artic Therm International Ltd. in September 2012, Calgary Tunnelling & Horizontal Augering Ltd. in June 2013, Hart Oilfield Rentals in January 2014, and Westar Oilfield Rentals Inc. in October 2014. More information is available at the Company's website, www.enterprisegrp.ca.

Forward Looking Information

Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Company's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.

Contact Information

  • Enterprise Group, Inc.
    Candice Williams or Nathan Sellyn
    Investor Relations
    contact@enterprisegrp.ca
    780-328-3863

    Enterprise Group, Inc.
    Leonard Jaroszuk
    President & CEO
    780-418-4400

    Enterprise Group, Inc.
    Desmond O'Kell
    Senior Vice-President
    780-418-4400