Enterprise Group, Inc. Announces First Quarter Results

ST. ALBERT, ALBERTA--(Marketwired - May 9, 2013) - Enterprise Group, Inc. ("Enterprise", or "Company") (TSX:E) is pleased to announce the Company's first quarter results for the period ended March 31, 2013, and its seventh consecutive quarter of profitability.

QUARTERLY HIGHLIGHTS

  • Net profit for the quarter surpassed not only any historical quarter but also exceeded any full fiscal year's profitability in the history of the Company.
  • Net income for the quarter was $3,167,000, or 34% of revenue, compared to $169,000 in the same quarter last year, an increase of $2,998,000.
  • Earnings per share for the quarter was $0.05 per share compared to $nil in the same quarter last year.
  • Revenue for the quarter increased by $5,273,000 to $8,904,000 compared to the same period last year.
  • EBITDAS(1) for the quarter increased by $3,306,000 to $3,901,000 or 44% of revenue,compared to the same period last year.
  • Gross profit for the quarter was $5,202,000 or 58.4% compared to $1,226,000 or 33.8% for the same period last year.
  • The Company's utilities/infrastructure construction division renewed a three year, multi-million dollar service contract with one of Canada's premier power suppliers and due to the high level of service and quality of work, this division was awarded a second contract from the same customer that is similar in size and scope. These contracts were signed in February of 2013.
  • The Company added depth to its management team hiring Warren Cabral, CA as Chief Financial Officer to assist with the future growth of the Company.
  • To assist in executing the Company's strategy, in February $1,050,000 was raised in a non brokered private placement of 4,200,000 units at $0.25 per unit. Each unit is comprised of one common share and one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share at an exercise price of $0.35 for a period of six months from the closing of the offering, subject to accelerated expiry in certain circumstances.
  • Also in February, the Company signed a letter of intent to acquire a specialized underground infrastructure construction company for $12,000,000. This acquisition is aligned with the Company's strategy to focus on infrastructure and specialty rental operations and will assist to mitigate the seasonality of the Company's existing operations. The purchase price of the acquisition is just over two times EBITDA of the target company.
  • To finance this acquisition, in March the Company entered into an arrangement to raise $6,000,000 of unsecured convertible debentures. The debentures have a two year term at 6% interest and will be convertible into common shares at a price of $.50 per share.
  • Additionally, subsequent to the quarter end, on May 2, 2013, the Company accepted a term sheet presented by PNC Bank Canada Branch (PNC) to increase its current senior secured finance facility from $12,500,000 to a maximum of $20,000,000.
SUMMARY FINANCIAL OVERVIEW
For the three months ended
March 31
2013 2012 % chg % of Revenue
Revenue $ 8.9 $ 5.3 145 %
Gross Profit 5.2 1.2 324 % 58 %
EBITDAS 3.9 .6 556 % 44 %
Net Income 3.2 0.2 1,777 % 34 %
EPS 0.05 -
% change are representative of whole un-rounded numbers

(1) EBITDAS = Earnings Before Interest, Tax, Depreciation, Amortization and Stock Based Compensation

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 utility & infrastructure construction 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. Enterprise became a Western Canadian leader in flameless heat technology in September 2012 with its acquisition of Artic Therm International Ltd. and is poised to become a technological leader in underground infrastructure construction upon closing of its pending infrastructure construction acquisition.

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. In particular, statements with respect to the completion of the proposed acquisition, the terms and conditions of the transaction, the completion of an asset-based debt financing and financial information relating to the private company include forward-looking information. The proposed acquisition may not be completed on the terms and conditions contemplated herein or at all. 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-IFRSmeasure 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 and taxes.