St. Albert, Alberta--(Newsfile Corp. - November 8, 2018) - 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 Q3 2018 results.
| Consolidated: | Three months ended September 30, 2018 | Three months ended September 30, 2017 restated(2) | Nine months ended September 30, 2018 | Nine months ended September 30, 2017 restated(2) |
| Revenue | $4,846,989 | $5,706,413 | $14,897,845 | $16,954,144 |
| Gross margin | $593,073 | $1,272,241 | $1,406,447 | $4,444,766 |
| Gross margin % | 12% | 22% | 9% | 26% |
| EBITDA(1) | $33,164 | $859,338 | $(660,993) | $2,425,178 |
| Loss before tax | $(1,521,703) | $(1,070,240) | $(5,151,460) | $(3,207,509) |
| Net (loss) income | $(1,100,220) | $328,933 | $(1,244,714) | $(1,308,998) |
| EPS | $(0.02) | $0.01 | $(0.02) | $(0.02) |
(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).
- The Company's operations are subject to seasonality and historically experiences lower activity in spring, however lower activity continued into the first part of the third quarter. Many customers chose to delay the re-start of operations after spring thaw and gradually began re-starting operations throughout the quarter.
- Despite the reduced activity during the third quarter, for the nine months ended September 30, 2018, the Company generated positive cash flow from operations of $2,524,377 and over the same period the Company purchased and cancelled 370,500 shares valued at $170,901. Enterprise believes its stock remains undervalued and will continue to re-invest positive cash flow to buy-back shares to enhance shareholder value. Enterprise has obtained approval for a normal course issuer bid to purchase up to 10% of its outstanding stock.
- Over the last two years, the Company has made significant improvements to its statement of financial position and overall total debt and continues to make regular debt repayments. At September 30, 2018, after adjusting for goodwill and deferred taxes, the Company has assets more than total debt of approximately $48,000,000. Enterprise will continue to look for opportunities to improve its financial position and opportunities that will allow the Company to diversify and expand.
- For the nine months ended September 30, 2018, Enterprise added $4,212,722 of capital assets to complement its rental fleet. Most of the equipment added, was at the request of, or in consultation with Enterprise's customers, and as a result, these additions were generating revenue shortly after acquired. Also, in June 2018, Enterprise acquired property that it was previously renting in Pouce Coupe, British Columbia. Ownership of the Pouce Coupe property will allow for diversification and expansion in that region to better service customers.
- Revenue for the three months ended September 30, 2018, of $4,846,989 decreased by $859,424 or 15% when compared with the prior period. Revenue for the nine months ended September 30, 2018, of $14,897,845 decreased by $2,056,299 compared to the prior period from the gradual or delayed re-starting of operations as explained above.
- Gross margin for the three months ended September 30, 2018, of $593,073 or 12%, decreased compared to the prior period and EBITDA for the same period decreased to $33,164. The decrease in gross margin and EBITDA are consistent with decreased revenue as explained above. During the third quarter, Enterprise continues to maintain a solid customer base, however customer demand was for lower margin services compared to the mix of services provided in the prior period. Management is committed to maintaining a high quality of service provided to its customers to position the Company to benefit from future increases in activity levels and additional work from large project approvals. Gross margin for the nine months ended September 30, 2018, was $1,406,447, a decrease of $3,038,319 from the prior period. The decrease is due to slower activity as explained above.
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.
