St. Albert, Alberta--(Newsfile Corp. - May 13, 2021) - Enterprise Group, Inc. (TSX: E) (the "Company" or "Enterprise"), a consolidator of services to the energy sector; focused primarily on specialized equipment rental; today released its Q1 2021 results.
| | Three months March 31, 2021 | | Three months March 31, 2020 | | ||
| Revenue | $ | 5,859,287 | $ | 6,986,550 | ||
| Gross margin | $ | 2,726,358 | $ | 2,849,296 | ||
| Gross margin % | 47% | 41% | ||||
| EBITDA(1) | $ | 2,392,768 | $ | 2,306,444 | ||
| Net income and comprehensive income | $ | 93,639 | $ | 504,695 | ||
| Income per share | $ | 0.00 | $ | 0.01 | |
(1) Identified and defined under "Non-IFRS Measures".
- The downturn in the energy industry, compounded by COVID-19, has significantly reduced activity throughout Enterprise's business sector. Reduced activity from COVID-19 began at the end of the first quarter of 2020, continued throughout 2020 and into 2021. Although COVID-19 protocols have allowed Enterprise's customers to return to work, activity levels have not yet returned to pre COVID-19 levels. Enterprise's customers have also modified their behaviours and requirements due to COVID-19. Over the past few years, Enterprise has been updating and modernizing its systems and processes to be effectively used in a cloud computing environment. The Company's fleet tracking, business intelligence and finance systems have all been modernized and, as a result, Enterprise was able to work effectively and adapt to COVID-19 protocols with respect to the workplace, social distancing and working remotely. Revenue for the three months ended March 31, 2021, was $5,859,287 compared to $6,986,550 in the prior period, a decrease of $1,127,263.
- Gross margin for the three months ended March 31, 2021, was $2,726,358 compared to the prior period of $2,849,296, a decrease of $122,938. However, on a percentage basis, gross margin for the three months increased 6 percent over the prior period to 47%. EBITDA was $2,392,768 for the three months ended March 31, 2021, compared to $2,306,444 in the prior period, an increase of $86,324.
- The Company is utilizing the Canadian Emergency Wage Subsidy Program as in tended, keeping employees working and on payroll during the COVID -19 pandemic. The Company continues to monitor changes to all government programs and will alter its cost structure accordingly if required. Utilizing the CEWS and CERS programs, the Company recorded $300,656 ($126,370 - March 2020) against direct costs for the three months ended March 31, 2021. Utilizing the CEWS and CERS programs, the Company recorded $346,614 ($140,570 - March 2020) against EBITDA for the three months ended March 31, 2021.
- The Company generated cash flow from operations for the three months ended March 31, 2021, of $1,389,470 compared to $646,229 in the prior year. During the three months ended March 31, 2021, the Company purchased and cancelled 468,000 shares at a cost of $94,289, reducing the share capital account by $672,160.
- Since the initiation of the share buyback program, the Company has purchased and cancelled 6,527,500 shares at a cost of $1,221,134 and as a result, the Company's share capital account has been reduced by $9,418,141 over the entire share buyback program. Enterprise believes its stock remains undervalued and will continue to re-invest positive cash flow to buy-back shares to enhance shareholder value.
- The Company continues to utilize a combination of cash flow and debt to right-size and modernize its equipment fleet to meet customer demands. During the three months ended March 31, 2021, the Company purchased $1,446,751 of capital assets, primarily for natural gas power generation equipment and upgrading the energy efficiency of existing equipment. The Company also sold equipment during the quarter and received $663,912 of proceeds from those sales which were re-invested in new equipment.
- In addition to the use of government programs, Enterprise is actively controlling and reducing costs through layoffs, compensation adjustments, premises consolidation, limiting business expenses and travel, contract re-negotiations and postponement of bonuses. It is uncertain if existing government programs will continue or if new programs will be put in place. The Company continues to monitor changes to all government programs and will alter its cost structure accordingly if required.
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 . Corporate filings can be found on .
For questions or additional information, please contact:
Leonard Jaroszuk, President & CEO, or
Desmond O'Kell, Senior Vice-President
780-418-4400
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 ) 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, taxes and stock based compensation.
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