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Enterprise Group Announces Results for Second Quarter 2019

Newsfile Corp.

St. Albert, Alberta--(Newsfile Corp. - August 8, 2019) - 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 Q2 2019 results.


Three months
June 30, 2019
Three months
June 30, 2018(2)
Six months
June 30, 2019
Six months
June 30, 2018(2)
Revenue $3,192,272 $3,240,620 $10,341,694 $10,050,856
Gross margin $64,794 $(1,309,763) $3,136,273 $815,639
Gross margin % 2% (40)% 30% 8%
EBITDA(1) $(531,379) $(2,181,411) $2,030,425 $(694,156)
Net loss and comprehensive loss $(2,234,060) $(3,334,737) $(1,541,075) $(144,494)
EPS $(0.04) $(0.06) $(0.03) $0.00

 

(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 loss and comprehensive loss.

  • The increased activity experienced in Q4 2018 continued into 2019, however an unseasonably wet spring and summer continued into July and has delayed the start of several projects. Industry wide price reductions and competition continues to impact margins, however through the Company's continued efforts to operate more efficiently and effectively manage its resources and costs, Enterprise improved its margins over the prior period. The Company's high level of service combined with its expertise and specialized equipment has allowed the Enterprise to retain long-term customers while expanding its customer base.

  • Despite the wet weather during the second quarter, for the six months ended June 30, 2019, the Company generated positive cash flow from operations of $3,174,494 compared to $1,857,387 in the prior period. Over the same period the Company purchased and cancelled 126,000 shares at a cost of $25,781. As result, the Company's share capital account was reduced by $180,966, representing the average share value of outstanding shares. Enterprise believes its stock remains undervalued and will continue to re-invest positive cash flow to buy-back shares to enhance shareholder value.

  • Revenue for the three months ended June 30, 2019, was $3,192,272 which was relatively unchanged compared to the prior period. Revenue for the six months ended June 30, 2019, of $10,341,694 increased by $290,838 compared to the prior period.

  • Gross margin for the three months ended June 30, 2019, was $64,794 or 2%, an increase of $1,374,557 compared to the prior period of negative $(1,309,763) or (40%). EBITDA was $(531,379) for the three months ended June 30, 2019, an increase of $1,650,032 compared to the prior period. For the six months ended June 30, 2019, gross margin was $3,136,273 or 30%, an increase of $2,320,634 compared to the prior period of $815,639 or 8%. EBITDA was $2,030,425 for the six months ended June 30, 2019, an increase of $2,724,581 compared to the prior period. Enterprise is realizing the benefits of its efforts to improve gross margin and EBITDA, which includes reducing third party rentals, reducing the use of external contactors and effectively managing resources and staffing levels.

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

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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