Enterprise Group Announces Results for the Fourth Quarter and Full Year 2015
ST. ALBERT, ALBERTA--(Marketwired - Mar 28, 2016) - Enterprise Group, Inc. ("Enterprise," or "the Company") (TSX:E) is pleased to announce its financial results for the three and twelve month periods ended December 31, 2015 (the "fourth quarter" and "full year 2015," respectively).
HIGHLIGHTS
Three months | Three months | Year ended | Year ended | ||||||||
Revenue | $ | 13,301,900 | $ | 25,667,320 | $ | 60,623,196 | $ | 79,629,450 | |||
EBITDA | $ | 30,424 | $ | 6,339,693 | $ | 7,906,849 | $ | 20,245,679 | |||
(Loss) income before income tax (1) | $ | (21,231,451 | ) | $ | 2,475,747 | $ | (23,789,003 | ) | $ | 9,064,446 | |
Net (loss) income (1) | $ | (18,408,291 | ) | $ | (463,462 | ) | $ | (20,307,151 | ) | $ | 5,731,399 |
Basic and diluted earnings per share | $ | (0.36 | ) | $ | 0.04 | $ | (0.40 | ) | $ | 0.12 | |
Total assets | $ | 119,217,868 | $ | 165,101,322 | $ | 119,217,868 | $ | 165,101,322 | |||
(1) | Includes a non-recurring and non-cash impairment charge of $17,032,509 relating to property, plant and equipment, intangible assets and goodwill. |
Enterprise's revenue declined 24% to $60,623,196 for the year ended December 31, 2015 and declined 48% to $13,301,900 for the fourth quarter due to:
Severe decline in activity of the energy industry, triggered by the reduction in oil prices over the last 18 months;
Pricing reductions; and
Numerous project delays due to economic uncertainty.
EBITDA declined to $7,906,849 for the year ended December 31, 2015 and $30,424 for the fourth quarter as a result of the same factors that drove revenue decreases. While Enterprise has taken numerous measures to reduce the Company's cost structure, it remains committed to the highest service levels.
Enterprise has modified the financial covenants tied to the bank loan facility from PNC Bank Canada Branch. At December 31, 2015, the senior leverage ratio and fixed charge coverage ratio have been waived. New covenant levels have been set for 2016 and 2017 that recognize the Company's challenging operating environment.
In December 2015, the Company recognized an impairment charge of $17,032,509 relating to property, plant and equipment, intangible assets and goodwill. This impairment charge was non-cash and will have no impact on future operations and cash flows.
Utilities/Infrastructure Services Division
Three months | Three months | Year ended | Year ended | |||||||||
Revenue | $ | 6,959,098 | $ | 11,025,991 | $ | 30,848,087 | $ | 39,854,678 | ||||
Decrease | $ | (4,066,893 | ) | $ | (9,006,591 | ) | ||||||
EBITDA | $ | 153,162 | $ | 1,700,434 | $ | 4,110,343 | $ | 10,021,555 | ||||
Decrease | $ | (1,547,272 | ) | $ | (5,911,212 | ) | ||||||
Total Assets | $ | 39,834,642 | $ | 55,624,058 | ||||||||
Decrease | $ | (15,789,416 | ) | |||||||||
The utilities/infrastructure services division includes operations for T.C. Backhoe & Directional Drilling Ltd. ("TCB") and Calgary Tunnelling & Horizontal Augering Ltd. Revenue for the three months and year ended December 31, 2015 was lower compared to 2014, declining by $4,066,893 and $9,006,591 respectively. These declines were primarily the result of previously disclosed delays at CTHA, as well as the challenges that resulted from a weakened economy in Alberta.
The Utilities/Infrastructure Division generated EBITDA of $153,162 during the fourth quarter, a decrease of $1,547,272 when compared to the prior year. EBITDA for the full year was $4,110,343, a decrease of $5,911,212 when compared to the prior year. These declines were primarily due to various project delays at CTHA, as well as previously identified cost issues at TCB. The impact of these issues were significant over the first three quarters of 2015. The Company continues to analyze and implement opportunities for streamlining this division's cost structure.
Equipment Rental Services Division
Three months | Three months | Year ended | Year ended | |||||||||
Revenue | $ | 6,342,802 | $ | 14,641,329 | $ | 29,775,109 | $ | 39,774,772 | ||||
Decrease | $ | (8,298,527 | ) | $ | (9,999,663 | ) | ||||||
EBITDA | $ | 862,147 | $ | 5,894,144 | $ | 7,944,784 | $ | 15,054,413 | ||||
Decrease | $ | (5,031,997 | ) | $ | (7,109,629 | ) | ||||||
Total Assets | $ | 74,362,564 | $ | 93,053,266 | ||||||||
Decrease | $ | (18,690,702 | ) | |||||||||
The Equipment Rental Services Division includes operations for Artic Therm International Ltd., Hart Oilfield Rentals Ltd. and Westar Oilfield Rentals Ltd. Revenue for the three months and year ended December 31, 2015 was lower compared to 2014, declining by $8,298,527 and $9,999,663 respectively. These declines were primarily due to lower activity and discounted rates for the Company's services. Additionally, warmer weather has had a pronounced impact on the demand for flameless heaters. Results for the year ended December 31, 2015 were also impacted by the warmer than average weather and associated early arrival of spring break-up and road bans. These factors were only partially offset by the additional revenue provided by the acquisition of Westar.
The Equipment Rental Services division generated EBITDA of $862,147 during the fourth quarter, a decrease of $5,031,997 when compared to the prior year. EBITDA for the year ended December 31, 2015 was $7,944,784, a decrease of $7,109,629 when compared to the prior year. This decline was primarily due to the same factors that impacted revenue.
Pricing pressure and workflow reductions continued in the fourth quarter of 2015. Visibility remains limited for this division's services for 2016, and its customers remain cautious. To address these challenges, the Company has reduced the head count of this division by approximately 43% since the beginning of 2015. Additionally, reduced work weeks have been put in place and a number of senior management personnel at this division have accepted salary reductions. Even though the Company is streamlining costs where appropriate, the Company is committed to certain service standards for its existing clients, which management believes to be critical for fostering the Company's longer-term growth. As the Company better understands the economic outlook for 2016 and the likely level of demand for its services, it will adjust its internal infrastructure accordingly.
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 construction services 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. More information is available at the Company's website, www.enterprisegrp.ca - also, today's filings can be found on www.sedar.com.
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"). EBITDAS 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 EBITDAS. 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, EBITDAS 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. EBITDAS is calculated as net income excluding depreciation, amortization, interest, taxes and stock based compensation.
