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ENTERPRISE GROUP ANNOUNCES RESULTS FOR THIRD QUARTER 2021

ST. ALBERT, Alberta, November 12, 2021 (NEWSFILE CORP) -- 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 Q3 2021 results.

 

 

 

Three months Sept 30, 2021

 

Three months Sept 30, 2020

 

Nine months

Sept 30, 2021

 

Nine months  Sept 30, 2020

Revenue

$3,916,528

$2,505,840

$13,001,357

$11,636,960

Gross margin

$1,196,418

$352,221

$4,466,484

$3,407,573

Gross margin %

31%

14%

35%

29%

EBITDA(1)

$725,496

$11,425

$3,243,839

$2,301,716

EBITDA %(1)

19%

0%

25%

20%

Net loss and comprehensive loss

$(969,492)

$(1,555,677)

$(2,502,402)

$(2,895,946)

Loss per share

$(0.02)

$(0.03)

$(0.05)

$(0.06)

(1)           Identified and defined under “Non-IFRS Measures”.

 

·       Revenue for the three months ended September 30, 2021, was $3,916,528 compared to $2,505,840 an increase of $1,410,688.  Revenue for the nine months ended September 30, 2021, was $13,001,357 compared to $11,636,960.

·       Gross margin for the three months ended September 30, 2021, was $1,196,418 compared to the prior period of $352,221, an increase of $844,197.  On a percentage basis, gross margin for the three months increased by 17% over the prior period to 31%. EBITDA was $725,496 for the three months ended September 30, 2021, compared to EBITDA of $11,425 in the prior period, an increase of $714,071.  Gross margin for the nine months ended September 30, 2021, was $4,466,484 compared to the prior period of $3,407,573, an increase of $1,058,911.  On a percentage basis, gross margin for the nine months increased by 6% over the prior period to 35%. EBITDA was $3,243,839 for the nine months ended September 30, 2021, compared to of $2,301,716 in the prior period, an increase of $942,123.

·       Effective September 7, 2021, the Company changed lenders and replaced its bank loan facility with a $30,000,000 revolving line of credit.  There are no required principal repayments until the due date, September 7, 2024. The facility is subject to certain borrowing restrictions and bears interest at the 10.00%.  The facility is secured by a first charge on all the Company's assets except those secured with other lenders.  The facility has an option to extend for an additional twelve months if both parties mutually agree on the terms.  The flexibility of the new facility, gives the Company the ability to meet the needs of our customers more quickly through increased capital asset spending and organic growth, and to pursue acquisition targets more aggressively.

·       For the nine months ended September 30, 2021, the company generated cash flow from operations of $3,467,365 which is consistent with the prior period of $3,558,993.  Also, for the nine months ended September 30, 2021, the Company purchased and cancelled 1,407,000 shares at a cost of $316,239, reducing the share capital account by $2,010,702. 

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·     Since the initiation of the share buyback program, the Company has purchased and cancelled 7,466,500 shares at a cost of $2,196,942 and as a result, the Company’s share capital account has been reduced by $10,570,683 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 nine months ended September 30, 2021, the Company purchased $3,190,054 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 nine months ended September 30, 2021 and received $1,098,551 of proceeds from those sales which were re-invested in new equipment.

·     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. 

·       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 $360,624 ($333,798 – September 2020) against direct costs for the three months ended September 30, 2021, and $417,890 ($700,080 – September 2020) against EBITDA for the three months ended September 30, 2021.  Utilizing the CEWS and CERS programs, the Company recorded $1,620,502 ($1,082,880 – September 2020) against direct costs for the nine months ended September 30, 2021, and $1,877,242 ($1,226,917 – September 2020) against EBITDA for the nine months ended September 30, 2021. 

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

 

 

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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, taxes and stock based compensation.

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