Enterprise Group, Inc. Announces Second Quarter Results

Marketwired

ST. ALBERT, ALBERTA--(Marketwired - Aug 14, 2013) - Enterprise Group, Inc. ("Enterprise", or "Company") (TSX:E) is pleased to announce the Company's results for the period ended June 30, 2013.

QUARTERLY HIGHLIGHTS

  • Enterprise's operations are seasonal and the second quarter continues to be the slowest quarter of the year. It has been well publicized that the weather in western Canada during the second quarter has had a significant impact on both utilities and infrastructure construction projects, which has also affected Enterprise's rental equipment division. This in turn has created a backlog of work which will have a positive impact on revenue in the last half of the year. During this slower operational period, Enterprise focused on its strategy by solidifying financing, assessing future acquisitions and completing the previously announced acquisition.
  • Enterprise completed the acquisition of a specialized underground infrastructure construction company, Calgary Tunnelling & Horizontal Augering Ltd., for a purchase price of $12,000,000 plus working capital. The acquisition was funded through a combination of cash, the issuance of 727,908 common shares at a deemed price of $0.69 per share and vendor take-back financing in the amount of $1,000,000 to be paid over two years. 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 existing operations and provide significant future growth opportunities. The effective date of the acquisition was June 14, 2013 and combined with the wet conditions and flooding in Alberta, the impact of this acquisition on the second quarter operating results is minimal. The Company estimates that if this acquisition had occurred January 1, 2013, the Company's consolidated revenues and net income for the six months ended June 30, 2013 would have been approximately $19,000,000 and $5,100,000 respectively.
  • In the second quarter, the Company increased its senior secured finance facility to a maximum of $20,000,000 from $12,500,000. The increase provides an additional financing source for future acquisitions, capital expenditures and working capital.
  • In June 2013, the Company purchased land for $2,050,000 to support the new multi-million dollar service contract awarded in the first quarter to the utilities/infrastructure construction division. The land will have multiple purposes providing operational efficiencies and cost effectiveness while servicing the new contract.
  • Artic Therm International Ltd. has completed the construction of 3 project units which are in the final commission stage. The remaining 3 units are on schedule for completion in the fall to take advantage of the busy winter heating season.
  • Earnings per share for the six months ended June 30, 2013 was $0.03 compared to $0.01 in the same period last year. Earnings per share for the quarter was ($0.02) compared to $0.01 in the same period last year.
  • For the six months ended June 30, 2013 net income was $1,624,000 compared to $585,000 in the same period last year, an increase of $1,039,000. Net loss for the quarter was ($1,523,000), compared to net income of $417,000 in the same period last year. Results include a non-cash charge of $625,000 for the fair value of stock options issued and also includes an additional $500,000 of fees associated with raising capital and the acquisition.
  • Revenue for the six months ended June 30, 2013 was $13,730,000 compared to $7,523,000 in the same period last year, an increase of $6,207,000. Revenue for the quarter increased by $934,000 to $4,826,000 compared to the same period last year.
  • EBITDAS(1) for the six months ended June 30, 2013 increased by $2,501,000 to $3,906,000 compared to the same period last year. EBITDAS for the quarter decreased by $805,000 to $5,000 compared to the same period last year.
SUMMARY FINANCIAL OVERVIEW
For the three months ended
June 30
For the six months ended
June 30
2013 2012 % chg % of Revenue 2013 2012 % chg % of Revenue
Revenue $ 4.8 $ 3.9 23 % $ 13.7 $ 7.5 83 %
EBITDAS 0.0 0.8 (99 %) 0 % 3.9 1.4 179 % 28 %
Net Income (loss) (1.5 ) 0.4 (475 %) - 1.6 0.6 63 % 12 %
EPS (0.02 ) 0.01 0.03 0.01
% 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. 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 and taxes.

Contact:
First Canadian Capital Corp.
Daniel Boase
416-742-5600
DBoase@firstcanadiancapital.com
Enterprise Group, Inc.
Leonard D. Jaroszuk
President & CEO
780-418-4400
contact@EnterpriseGRP.ca
Enterprise Group, Inc.
Desmond O'Kell
Vice President
780-418-4400
contact@EnterpriseGRP.ca
www.EnterpriseGRP.ca

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