Entrec Corporation

Entrec Corporation

January 16, 2013 08:00 ET

ENTREC Approves 2013 Capital Expenditure Program and Increases Revenue Guidance

SPRUCE GROVE, ALBERTA--(Marketwire - Jan. 16, 2013) - ENTREC Corporation (TSX VENTURE:ENT) ("ENTREC" or the "Company"), a leading provider of cranes and heavy haul transportation services, today approved a $50 million capital expenditure program for 2013. The program consists of growth capital expenditures of $41 million and $9 million in maintenance capital expenditures.

"Moving into 2013, demand for our services remains very strong across the resource and industrial sectors we serve," said John M. Stevens, ENTREC's President and COO. "Our 2013 capital expenditure program will enable us to meet customer demand and continue to enhance our position as one of Western Canada's largest providers of both crane and heavy haul transportation services."

ENTREC believes oil sands infrastructure investment will continue to be a key driver of demand for its services throughout 2013 and 2014. In addition, ENTREC's recent acquisitions of Rain Coast Cranes & Equipment Inc. ("Rain Coast") and Tiggo Transport Ltd. ("Tiggo") position the Company to benefit from the burgeoning industrial development occurring in Northern BC and Northwest Alberta. This includes the development of LNG facilities planned for the Northwest, BC region, as well as ongoing mining, hydro-electric, pipelines, and oil and gas projects throughout these areas.

2013 Capital Expenditure Program

ENTREC's 2013 capital expenditure program will include:

Cranes (all-terrain, rough terrain, crawlers, truck cranes) $ 20 million
Picker trucks $ 4 million
Heavy haul transportation equipment $ 15 million
Fort McMurray land purchase $ 5 million
Other $ 6 million
Total $ 50 million

A large portion of the 2013 capital expenditure program will focus on the continued building of ENTREC's capability and market share in crane services. The Company anticipates that it may obtain additional crane units through rent-to-purchase options to further support expected demand.

Crane services are highly complementary to heavy haul transportation as they allow customers to obtain both their heavy haul and lifting needs from one vendor. Crane services also increase access to recurring onsite maintenance, repair and operation ("MRO") support work in the Alberta oil sands region, as well as to the significant industrial construction work occurring in both the oil sands and in Northwest BC. ENTREC has been building a strong presence in the crane market with its June 2012 acquisition of the Mains Group of Companies and October 2012 acquisition of Rain Coast. On December 31, 2012, ENTREC further expanded its crane capabilities with the acquisition of Taylor Crane Service, Inc. ("Taylor Crane"), which services customers in the Bakken oil formation region.

ENTREC's 2013 capital program includes $5 million in growth capital earmarked to complete the purchase of a new 10-acre property located in Fort McMurray, Alberta. The Company intends to build a shop and office on the property to support ENTREC's growth in the region.

2012 Capital Expenditure Program

For the year ended December 31, 2012, ENTREC expects to report capital expenditures of approximately $50 million, subject to final year-end adjustments. This is higher than the previously announced program of $39 million, with the increase primarily reflecting the impact of a $3.5 million initial deposit related to the acquisition of the Fort McMurray property and $9 million incurred in the fourth quarter of 2012 to buy out existing crane units previously rented under short-term operating leases. At December 31, 2012, ENTREC's net debt was approximately $107 million (subject to final year-end adjustments), including the value of the unsecured subordinated debentures financing for gross proceeds of $25 million completed in October 2012.

Revenue Guidance Increased

Based on current expectations for future business activity, ENTREC estimates revenue for the year ending December 31, 2013 could exceed $215 million. This represents an increase from previous revenue guidance of $200 million and includes anticipated incremental revenue of $4 million from the Taylor Crane acquisition.

For the year ended December 31, 2012, ENTREC estimates its revenue will slightly exceed the high end of its previous revenue guidance of between $125 million and $130 million. Final 2012 revenue results are subject to final year-end billing and accounting adjustments, and as a result, may be different from current expectations.


ENTREC specializes in the lifting, transportation (over the road and on-site), loading, off-loading and setting of overweight and oversized cargo for the oil and gas, construction, petrochemical, mining and power generation industries. The common shares of ENTREC trade on the TSX Venture Exchange under the trading symbol "ENT".

Forward-looking Statements

This press release contains forward-looking statements which reflect ENTREC's current beliefs and are based on information currently available to ENTREC. These statements require ENTREC to make assumptions it believes are reasonable and are subject to inherent risks and uncertainties. Actual results and developments may differ materially from the results and developments discussed in the forward-looking statements as certain of these risks and uncertainties are beyond ENTREC's control.

Examples of such forward-looking statements in this press release relate to, but are not limited to: ENTREC's projection that revenue for the year ending December 31, 2013 could exceed 215 million, ENTREC's expectation that revenue for the year ended December 31, 2012 will slightly exceed the high end of its previous guidance of between $125 and $130 million; expectation the recent acquisitions of Rain Coast, Tiggo and Taylor Crane will complement the Company's current crane and heavy haul transportation operations and position ENTREC to benefit from the burgeoning industrial development throughout Northern BC and Northwest Alberta; expectation the Company will execute its 2013 capital expenditure program of $50 million; and that ENTREC's 2012 capital expenditure program will approximate $50 million.

These forward-looking statements involve a number of significant assumptions. Key assumptions utilized in developing forward-looking statements related to ENTREC's future growth expectations include achieving its internal revenue, net income and cash flow forecasts for 2013 and 2014. Achieving these forecasts is largely dependent on a number of factors beyond ENTREC's control including all of the risks discussed further under the "Business Risks" section in ENTREC's Management Discussion and Analysis for the three months ended September 30, 2012. These risk factors are interdependent and the impact of any one risk or uncertainty on a particular forward-looking statement is not determinable.

ENTREC's ability to finance its capital expenditure programs is dependent on its ability to achieve debt financing terms acceptable to the lenders and ENTREC as well as meeting ENTREC's internal cash flow forecasts.

Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and other cautionary statements or factors contained herein, and there can be no assurance that the actual results or developments will be realized or, even if substantially realized, that they will have the expected consequences to, or effects on, ENTREC. These forward-looking statements are made as of the date of this press release. Except as required by applicable securities legislation, ENTREC assumes no obligation to update publicly or revise any forward-looking statements to reflect subsequent information, events, or circumstances.

Neither the 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.

Contact Information

  • ENTREC Corporation
    Rod Marlin
    Chairman & CEO
    (780) 960-5647

    ENTREC Corporation
    John M. Stevens
    President & COO
    (780) 960-5625

    ENTREC Corporation
    Jason Vandenberg
    (780) 960-5630