Forward-Looking Statements
This MD&A contains forward-looking information and statements within the meaning of applicable Canadian securities laws and
within the meaning of the safe harbor provisions of the US Private Securities Litigation Reform Act of 1995. These statements relate to Management’s expectations about future events, results of operations, and the future performance (both
financial and operational) and business prospects of Enerflex. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “future”, “plan”,
“contemplate”, “continue”, “estimate”, “expect”, “intend”, “propose”, “might”, “may”, “will”, “shall”, “project”, “should”,
“could”, “would”, “believe”, “predict”, “forecast”, “pursue”, “potential”, “objective”, “capable”, and similar expressions, are intended to identify
forward-looking information and statements. In particular, this MD&A includes (without limitation) forward-looking information and statements pertaining to: the timing pursuant to which the recent Labor Board order will be reviewed and the
Company’s continuing expectation that the ultimate decision from the Labor Board will be immaterial to the financial results of Enerflex; the Company’s ability to successfully dispute the purported termination of the EH Cryo project
contract as wrongful and to protect its position in respect of the EH Cryo project; disclosures under the heading “Outlook” including: (i) expectations that customer contracts which support the EI product line will generate
$1.6 billion of revenue during their current terms; (ii) expectations that a majority of the $1.3 billion backlog will convert to revenue over the next 12 months; (iii) in response to weakness in near-term natural gas prices
combined with the anticipated overall mix of projects in Enerflex’s ES backlog, expectations that the ES gross margin before depreciation and amortization will be more consistent with the historical long-term average for this business line with
near-term revenue expected to remain steady; (iv) expectations for capital spending in full-year 2024 to be $80 million to $90 million, which includes approximately $60 million for maintenance and PP&E capital expenditures;
(v) expectations that growth capital in 2025 will remain below the Company’s long-term average; and (vi) capital allocation priorities going forward could include increases to the Company’s dividend, share repurchases, additional
growth spending, and/or further repayment of debt, if any, and the timing associated therewith, if at all; expectations that the Company’s cash flows from operations in 2024, together with cash and cash equivalents on hand and currently
available credit facilities, will be more than sufficient to fund investments for working capital and capital assets; expectations that Management will complete a full scope evaluation to support the Company’s 2024 year-end representations when required; the Company’s continued belief that sufficient resources have been committed to the remediation plan for 2024; and the continuation by the Company of paying a sustainable
quarterly cash dividend with such dividend being based on the availability of cash flows, anticipated market conditions, and the general needs of the business.
All forward-looking information and statements in this MD&A are subject to important risks, uncertainties, and assumptions,
which may affect Enerflex’s operations, including, without limitation: the impact of economic conditions; the markets in which Enerflex’s products and services are used; general industry conditions; changes to, and introduction of new,
governmental regulations, laws, and income taxes; increased competition; insufficient funds to support capital investments; availability of qualified personnel or management; political unrest and geopolitical conditions; and other factors, many of
which are beyond the control of Enerflex. As a result of the foregoing, actual results, performance, or achievements of Enerflex could differ and such differences could be material from those expressed in, or implied by, these statements, including
but not limited to: the ability of Enerflex to realize the anticipated benefits of, and synergies from, the acquisition of Exterran and the timing and quantum thereof; the interpretation and treatment of the transaction to acquire Exterran by
applicable tax authorities; the ability to maintain desirable financial ratios; the ability to access various sources of debt and equity capital, generally, and on acceptable terms, if at all; the ability to utilize tax losses in the future; the
ability to maintain relationships with partners and to successfully manage and operate the business; risks associated with technology and equipment, including potential cyberattacks; the occurrence and continuation of unexpected events such as
pandemics, severe weather events, war, terrorist threats, and the instability resulting therefrom; risks associated with existing and potential future lawsuits, shareholder proposals, and regulatory actions; and those factors referred to under the
heading “Risk Factors” in: (i) Enerflex’s Annual Information Form for the year ended December 31, 2023, (ii) Enerflex’s management’s discussion and analysis for the year ended December 31, 2023, and
(iii) Enerflex’s Management Information Circular dated March 15, 2024, each of the foregoing documents being accessible under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and
www.sec.gov/edgar, respectively.
Readers are cautioned that the foregoing list of assumptions and risk factors
should not be construed as exhaustive. The forward-looking information and statements included in this MD&A are made as of the date of this MD&A and
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M-26 Q3 2024 Report |
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