Enterprise Group Announces Results for First Quarter 2018
May 10 2018 - 7:30AM
Enterprise Group, Inc. (the “
Company” or
“
Enterprise”) (TSX:E), a consolidator of services
to the energy sector; focused primarily on specialized equipment
rental; today released its Q1 2018 results.
Consolidated: |
Three months ended March 31, 2018 |
|
Three months ended March 31, 2017 restated(2) |
|
Change |
|
Revenue |
$ |
6,810,906 |
|
$ |
7,015,278 |
|
($ |
204,372 |
) |
Gross margin |
$ |
2,126,160 |
|
$ |
2,695,739 |
|
($ |
569,579 |
) |
Gross margin % |
|
31 |
% |
|
38 |
% |
|
(7 |
%) |
EBITDA(1) |
$ |
1,487,253 |
|
$ |
1,835,990 |
|
($ |
348,737 |
) |
Income before tax |
$ |
290,616 |
|
$ |
210,495 |
|
$ |
80,121 |
|
Net income (loss) and comprehensive income (loss) |
$ |
3,190,242 |
|
($ |
50,627 |
) |
$ |
3,240,869 |
|
EPS |
$ |
0.06 |
|
$ |
0.00 |
|
$ |
0.06 |
|
(1) Identified and defined under “Non-IFRS
Measures”.(2) In March 2018, the Company closed a transaction to
divest substantially all the assets of CTHA. The net operations of
CTHA, including the prior period, are presented as a single amount
in the consolidated statements of income (loss) and comprehensive
income (loss).
- Revenue for the three months ended March 31, 2018 of $6,810,906
is relatively consistent with the prior period with a slight
decrease of $204,372 or 3%. The Company continues to see
increased activity. However, with no construction work completed in
the first quarter of 2018 on a major construction project in
Northeastern B.C., the increased activity experienced with other
customers did not fully offset the loss of revenue earned in the
first quarter of 2017 associated with that project. Although
this project has received government approval to continue, no
construction work was completed in the first quarter of 2018.
Enterprise recently responded to bids for the supply of specialized
equipment to support construction work that will take place in
2018.
- Gross margin for the three months ended March 31, 2018 of
$2,126,160 or 31%, decreased compared to the prior period and
EBITDA for the same period decreased by $348,737 to
$1,487,253. The decreases in gross margin and EBITDA are
consistent with decreased revenue associated with the major
construction project described above. Also, as explained
above, the revenue earned from increased customer activity that
partially offset the lost revenue from that project, was at lower
margins compared to the prior period.
- In March 2018, the Company closed a transaction to divest
substantially all the assets of Calgary Tunnelling & Horizontal
Augering Ltd. (“CTHA”). CTHA provided specialized trenchless
solutions for the energy, utility and infrastructure industries.
Gross cash proceeds from the transaction was $20,694,992.
Enterprise will utilize tax assets and tax losses to offset the
gain on this transaction to minimize cash tax payable. All
proceeds from the transaction were deployed towards reducing the
Company’s debt.
- During 2017, the Company integrated and upgraded its financial
and reporting systems along with its rental fleet tracking and
deployment system. Immediate efficiencies and cost savings
were experienced after implementing these systems. Further
enhancements to these systems continue and during the first quarter
of 2018 the Company deployed a proprietary asset tracking and
dispatch software called “Star”. The software is comprised of
multiple components that work together and exchange information
over a central data base. Star allows the fleet manager the
ability to ensure the highest level of service to the client, while
lowering costs and delivering maximum equipment performance.
- Over the last 2 years, the Company has made significant
improvements to its statement of financial position and overall
total debt. At March 31, 2018, after adjusting for goodwill
and deferred taxes, the Company has assets in excess of total debt
of approximately $54,000,000. Enterprise will continue to
look for opportunities to improve its financial position and
opportunities that will allow the Company to diversify and
expand.
StarChain Update
Development on the StarChain technology
continues. Enterprise’s technology development group is
currently performing infield testing with success. Management
expects to offer its customers specialized equipment capable of
several remote controllable features in H2 of 2018. The
Company’s equipment offerings will enable its customers to automate
and/or schedule the performance of the equipment which optimizes
usage, delivering several benefits such as; reduced fuel expenses,
lowering onsite maintenance costs, real-time reporting among many
others.
About Enterprise Group,
Inc.
Enterprise Group, Inc. is a consolidator of
services to the energy sector. The Company’s focus is
primarily on 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. More information is available at the Company’s
website www.enterprisegrp.ca. Corporate filings can be found
on www.sedar.com.
For questions or additional information, please
contact:Leonard Jaroszuk, President & CEO, or Desmond
O’Kell, Senior Vice-President 780-418-4400
contact@enterprisegrp.ca
Forward Looking InformationCertain 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.
Non-IFRS MeasuresThe Company uses International
Financial Reporting Standards (“IFRS”). EBITDA is not a
measure that has any standardized meaning prescribed by IFRS and is
therefore referred to as a non-IFRS measure. This news
release contains references to EBITDA. This non-IFRS measure
used by the Company may not be comparable to a similar measure used
by other companies. Management believes that in addition to
net income, EBITDA is a useful supplemental measure as it provides
an indication of the results generated by the Company’s principal
business activities prior to consideration of how those activities
are financed or how the results are taxed. EBITDA is
calculated as net income excluding depreciation, amortization,
interest, taxes and stock based compensation.
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