St. Albert, Alberta--(Newsfile Corp. - August 14, 2020) - 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 Q2 2020 results.
| Three months June 30, 2020 | Three months June 30, 2019 | Six months June 30, 2020 | Six months June 30, 2019 | |||||||||
| Revenue | $ | 2,144,570 | $ | 3,192,272 | $ | 9,131,120 | $ | 10,341,694 | ||||
| Gross margin | $ | 206,054 | $ | 64,794 | $ | 3,055,353 | $ | 3,136,273 | ||||
| Gross margin % | 10% | 2% | 33% | 30% | ||||||||
| EBITDA(1) | $ | (16,154 | ) | $ | (531,379 | ) | $ | 2,290,293 | $ | 2,030,425 | ||
| Net loss and comprehensive loss | $ | (1,844,963 | ) | $ | (2,234,060 | ) | $ | (1,340,265 | ) | $ | (1,541,075 | ) |
| Loss per share | $ | (0.04 | ) | $ | (0.04 | ) | $ | (0.03 | ) | $ | (0.03 | ) |
(1) Identified and defined under "Non-IFRS Measures".
The Company has been able to maintain its customer base and as a result, the activity experienced up to mid-March 2020 was consistent with the prior year. However, as a result of COVID-19 guidelines and restrictions, customers did reduce activity negatively impacting revenue in Q2. Revenue for the three months ended June 30, 2020, was $2,144,570 compared to $3,192,272 a decrease of $1,047,702. Revenue for the six months ended June 30, 2020, was $9,131,120 compared to $10,341,694 a decrease of $1,210,574.
The Company generated positive cash flow from operations for the three months ended June 30, 2020 of $2,689,488 and $3,335,717 for the six months ended June 30, 2020, which was consistent to the prior periods of $2,550,506 and $3,174,494 for the three and six months respectively. During the six months ended June 30, 2020, the Company purchased and cancelled 884,000 shares at a cost of $125,744. As result, the Company's share capital account was reduced by $1,269,636 representing the average share value of outstanding shares cancelled. Enterprise believes its stock remains undervalued and will continue to re-invest positive cash flow to buy-back shares to enhance shareholder value.
Gross margin for the three months ended June 30, 2020, was $206,054 or 10%, an increase of $141,260 compared to the prior period of $64,794 or 2%. Utilizing the Canada Emergency Wage Subsidy program, the Company recorded $593,486 of the wage subsidy against direct costs for the three months ended June 30, 2020. Gross margin for the six months ended June 30, 2020, was $3,055,353 or 33%, a decrease of $80,920 compared to the prior period of $3,136,273 or 30%. On a percentage basis however, gross margin for the six months increased by 3% over the prior period. EBITDA was $(16,154) for the three months ended June 30, 2020, an increase of $515,225 compared to the prior period. Utilizing the Canada Emergency Wage Subsidy program, the Company recorded $661,981 of the wage subsidy against direct costs the for the six months ended June 30, 2020. EBITDA was $2,290,293 for the six months ended June 30, 2020, an increase of $259,868 compared to the prior period.
For the six month period ended June 20, 2020, the Company increased cashflow from operations to $3,335,717 million compared to the prior year period and reduced long term debt by $1,901,761 compared to the year ended December 31, 2019. Through the reduction of debt, and increases in EBITDA, the Company improved its financial covenants for the period ended June 30, 2020.
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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