Enterprise Group, Inc. Announces Second Quarter Results
August 14 2013 - 7:06PM
Marketwired
Enterprise Group, Inc. ("Enterprise", or "Company") (TSX:E) is
pleased to announce the Company's results for the period ended June
30, 2013.
QUARTERLY HIGHLIGHTS
-- Enterprise's operations are seasonal and the second quarter continues to
be the slowest quarter of the year. It has been well publicized that the
weather in western Canada during the second quarter has had a
significant impact on both utilities and infrastructure construction
projects, which has also affected Enterprise's rental equipment
division. This in turn has created a backlog of work which will have a
positive impact on revenue in the last half of the year. During this
slower operational period, Enterprise focused on its strategy by
solidifying financing, assessing future acquisitions and completing the
previously announced acquisition.
-- Enterprise completed the acquisition of a specialized underground
infrastructure construction company, Calgary Tunnelling & Horizontal
Augering Ltd., for a purchase price of $12,000,000 plus working capital.
The acquisition was funded through a combination of cash, the issuance
of 727,908 common shares at a deemed price of $0.69 per share and vendor
take-back financing in the amount of $1,000,000 to be paid over two
years. This acquisition is aligned with the Company's strategy to focus
on infrastructure and specialty rental operations and will assist to
mitigate the seasonality of existing operations and provide significant
future growth opportunities. The effective date of the acquisition was
June 14, 2013 and combined with the wet conditions and flooding in
Alberta, the impact of this acquisition on the second quarter operating
results is minimal. The Company estimates that if this acquisition had
occurred January 1, 2013, the Company's consolidated revenues and net
income for the six months ended June 30, 2013 would have been
approximately $19,000,000 and $5,100,000 respectively.
-- In the second quarter, the Company increased its senior secured finance
facility to a maximum of $20,000,000 from $12,500,000. The increase
provides an additional financing source for future acquisitions, capital
expenditures and working capital.
-- In June 2013, the Company purchased land for $2,050,000 to support the
new multi-million dollar service contract awarded in the first quarter
to the utilities/infrastructure construction division. The land will
have multiple purposes providing operational efficiencies and cost
effectiveness while servicing the new contract.
-- Artic Therm International Ltd. has completed the construction of 3
project units which are in the final commission stage. The remaining 3
units are on schedule for completion in the fall to take advantage of
the busy winter heating season.
-- Earnings per share for the six months ended June 30, 2013 was $0.03
compared to $0.01 in the same period last year. Earnings per share for
the quarter was ($0.02) compared to $0.01 in the same period last year.
-- For the six months ended June 30, 2013 net income was $1,624,000
compared to $585,000 in the same period last year, an increase of
$1,039,000. Net loss for the quarter was ($1,523,000), compared to net
income of $417,000 in the same period last year. Results include a non-
cash charge of $625,000 for the fair value of stock options issued and
also includes an additional $500,000 of fees associated with raising
capital and the acquisition.
-- Revenue for the six months ended June 30, 2013 was $13,730,000 compared
to $7,523,000 in the same period last year, an increase of $6,207,000.
Revenue for the quarter increased by $934,000 to $4,826,000 compared to
the same period last year.
-- EBITDAS(1) for the six months ended June 30, 2013 increased by
$2,501,000 to $3,906,000 compared to the same period last year. EBITDAS
for the quarter decreased by $805,000 to $5,000 compared to the same
period last year.
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SUMMARY FINANCIAL OVERVIEW
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For the three months For the six months
ended ended
June 30 June 30
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2013 2012 % chg % of Revenue 2013 2012 % chg % of Revenue
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Revenue $ 4.8 $ 3.9 23% $13.7 $ 7.5 83%
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EBITDAS 0.0 0.8 (99%) 0% 3.9 1.4 179% 28%
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Net
Income
(loss) (1.5) 0.4 (475%) - 1.6 0.6 63% 12%
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EPS (0.02) 0.01 0.03 0.01
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% change are representative of whole un-rounded numbers
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(1) EBITDAS = Earnings Before Interest, Tax, Depreciation, Amortization and
Stock Based Compensation
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 utility & infrastructure construction 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 became a Western Canadian leader in flameless
heat technology in September 2012 with its acquisition of Artic
Therm International Ltd. and is poised to become a technological
leader in underground infrastructure construction upon closing of
its pending infrastructure construction acquisition.
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.
Non-IFRS Measures
The 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 and taxes.
Contacts: First Canadian Capital Corp. Daniel Boase
416-742-5600DBoase@firstcanadiancapital.com Enterprise Group, Inc.
Leonard D. Jaroszuk President & CEO
780-418-4400contact@EnterpriseGRP.ca Enterprise Group, Inc. Desmond
O'Kell Vice President 780-418-4400contact@EnterpriseGRP.ca
www.EnterpriseGRP.ca
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