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Enerflex is an ethical and safety-oriented company guided by commitments to provide value to customers and shareholders, a safe and interesting work environment for its employees, and a positive impact on the communities in which it operates.
It has been well over three decades since our beginnings as a small shop supplying compression equipment in western Canada. But our customer focus and commitment to innovation, quality and safety has not changed.
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Enerflex’s people and projects are at work around the world, 24/7.
Extensive reciprocating and rotary screw experience. Wide horsepower range, with gas-fuelled and electric drives.
Thoroughly designed, well-built and efficiently delivered modules from our state-of-the-art facilities in Calgary, Alberta and Houston, Texas.
Enerflex offers complete global customer service. 24/7. Year-round.
Electric-drive generators up to 50 Mw, for independent and alternative power producers and anywhere stand-alone generation is needed.
Focus your capital outlays on drilling and completing wells by choosing from our broad lineup of rental packages.
We will help extend your equipment’s service life, upgrade system capacities or optimize the load on your compression horsepower.
We have the big-picture vision, talented people and industry-leading capabilities to fulfil requirements from design through long-term maintenance.
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Our extensive capabilities have been assembled and are being continually fine-tuned and strengthened specifically to meet our customer promise: being your single source supplier of innovative solutions.
Ongoing innovations serving the industry's focus on liquids extraction and LNG exports.
Enerflex's Houston manufacturing facility feeds global and domestic markets, with large-scale assembly capacity and comprehensive capabilities including high-capacity refrigeration, liquids fractionation and deep-cut processing.
Compression and processing rental equipment, after-market services, electric power opportunities and new equipment offerings serve a wide customer base.
Serving an array of customer requirements, from coal seam gas to LNG and high-pressure storage compression.
Our locally based design and engineering team serves this large region with specialized offshore and onshore compression, processing, refrigeration, rental equipment and FPSO topsides.
Integrated delivery of large turnkey facilities, including the 90 MMSCF per day processing facility with 6,000 barrels per day of condensate extraction for Oman Oil Company Exploration and Production.
Industry-leading capability and experience serving specialized needs across a culturally diverse and geographically broad region.
When you join Enerflex, you're on a team of exceptional people and you're in a place of opportunity to do exceptional things.
Enerflex people are problem-solvers, risk-takers and team players, passionate about translating skills into solutions that meet or exceed the needs and expectations of our customers.
Virtually everything we do involves collaboration. That is a key feature of our culture, and it strengthens the Company.
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August 14, 2013 05:21:05 pm
Enerflex Reports Second Quarter 2013 Financial Results and Announces Quarterly Dividend
CALGARY, ALBERTA--(Marketwired - Aug. 14, 2013) - Enerflex Ltd. (TSX:EFX) ("Enerflex" or "the Company"), a leading supplier of products and services to the global energy industry, today reported its financial and operating results for the three and six months ended June 30, 2013.
(1) Earnings before Interest (Finance Costs) and Taxes ("EBIT").
(2) Earnings before Interest (Finance Costs), Taxes, Depreciation and Amortization ("EBITDA") is a non-GAAP measure that does not have a standardized meaning and therefore may not be comparable to similar measures presented by other issuers.
Enerflex reported net earnings from continuing operations for the second quarter of 2013 of $18.4 million, $1.0 million lower than the same period of 2012. For the first six months of 2013, net earnings from continuing operations were $33.8 million, which was $0.5 million lower than the same period of 2012. Net earnings were negatively impacted by warranty expenses incurred primarily at the Casper, Wyoming manufacturing facility, and restructuring costs related to its closure, totalling $5.2 million for the second quarter and $8.7 million for the first six months of 2013.
Revenues for the second quarter and the first six months of 2013 were $311.0 million and $664.3 million, which were $43.6 million and $46.1 million lower, respectively, compared to the same periods in 2012. The decreases were due to lower revenue in the Canada and Northern U.S., and Southern U.S. and Latin America segments, while revenue for the International segment was lower for the second quarter but higher for the first six months of 2013, compared to the same periods of 2012.
During the second quarter of 2013, Enerflex closed its Casper, Wyoming compression and process manufacturing facility. Sales, Service, Rentals and Retrofit operations in the area will continue as before. The Casper new unit packaging facility opened in 2006 for the primary purpose of serving the Wyoming Powder River Basin. This region is no longer an active area for new compression. In addition, Enerflex has experienced manufacturing performance challenges at the facility, which have resulted in warranty expenses of $9.6 million over the last 24 months. Equipment scheduled to be packaged in Casper will now be completed at the Calgary facility or at the expanded Houston facility. Enerflex intends to sell or lease the Casper facility and has recorded $1.1 million in restructuring expenses related to the closure during the second quarter of 2013. Should the Powder River Basin again become active, it will be served through the Denver and Houston operations.
The Company recorded bookings of $317.5 million during the second quarter, which was $50.7 million higher than the comparable period last year. This increase was primarily due to increased booking activity in the Canada and Northern U.S., and International segments, partially offset by lower activity in the Southern U.S. and Latin America segment. Although natural gas prices weakened during the second quarter, the Canada and Northern U.S. segment recorded bookings that were $53.8 million higher in 2013 compared to 2012, primarily driven by customer orders destined for international markets. Bookings in the Southern U.S. and Latin America segment remained steady over the first six months of the year as a result of strong activity levels in liquids-rich resource basins despite a recent weakening in natural gas liquids ("NGL") prices. The International segment recorded bookings of $75.7 million in the second quarter of 2013 compared to $72.8 million recorded in the same period of 2012. These projects have long lead times associated with tendering, bid evaluation and contract award as they tend to be larger in scale and scope. It is important to highlight that $82.2 million and $119.8 million in bookings recorded in the second quarter and first six months of 2013 in the Canada and Northern U.S., and Southern U.S. and Latin America segments were related to compression and processing equipment that will be manufactured in these segments but are destined for international markets, compared to $36.2 million and $86.9 million, respectively, in the same periods of 2012.
Enerflex had a backlog of $697.8 million at the end of the second quarter of 2013, compared to $921.2 million at the end of the same period last year, a decrease of $223.4 million or 24.2%. Sequentially, backlog has increased by $94.6 million or 15.6% from March 31, 2013.
"Despite lower revenue levels, gross margin and net earnings from continuing operations were comparable to the prior year. Although the Canada and Northern U.S. market continues to struggle with weak natural gas prices, bookings destined for both domestic and international markets increased over 2012 levels. Bookings were stable for the Southern U.S. and Latin America region, and we remain cautiously optimistic for the remainder of 2013 in this region. Finally, the International segment continued to demonstrate long-term opportunities through strong bookings for the quarter and the award of a significant long-term maintenance agreement in the AustralAsia region. In aggregate, strong bookings for the quarter, and an improved backlog, position us well for the remainder of 2013," said J. Blair Goertzen, Enerflex's President and Chief Executive Officer. Mr. Goertzen added that "during the quarter, we have exited the European business, which has been reported as a discontinued operation since the third quarter of 2011. Overall, management remains cautiously optimistic at the end of the second quarter given the improvement shown in backlog levels, and the opportunities currently being pursued. Our healthy balance sheet leaves the Company right-sized for challenges over the remainder of 2013, and well positioned to capitalize on opportunities that may arise."
Second Quarter Highlights
In the three and six months ended June 30, 2013, Enerflex:
Subsequent to the end of the second quarter of 2013:
The financial results by segment, for the three and six months ended June 30, 2013 compared to the same period in 2012:
Gross margin for the quarter ended June 30, 2013 was $64.4 million or 20.7% of revenue compared to $66.0 million or 18.6% of revenue for the same period of 2012. Gross margin for the first six months of 2013 was $125.4 million or 18.9% of revenue as compared to $128.3 million or 18.1% of revenue for the same period of 2012. The decrease in gross margin was primarily due to lower gross margin in the Canada and Northern U.S. segment, and for the second quarter of 2013, lower gross margin in the Southern U.S. and Latin America segment, due to lower Engineered Systems revenue. This was partially offset by strong gross margin performance by the International segment both for the quarter and first six months. Gross margin for the three and six months ended June 30, 2013, was negatively impacted by warranty expenses and the margin impact of the closure of the Casper, Wyoming facility, in the amount of $4.3 million and $7.8 million, respectively. Approved variation claims of $5.4 million in the second quarter and first six months of 2013 positively impacted gross margin.
Bookings in the second quarter of 2013 increased by $50.7 million over the same period of the prior year, and were $17.2 million higher for the first six months of 2013. In Canada and the Northern U.S., despite continued weak natural gas prices, bookings for the quarter and the first six months of 2013 were $53.8 million and $24.8 million higher, respectively, coming primarily from increases in bookings destined for international destinations, but also for domestic locations, particularly during the second quarter. In the Southern U.S. and Latin America segment, bookings for the quarter were $6.1 million lower than 2012, but remained comparable with 2012 for the first six months of 2013, despite weakening NGL prices as decreases in domestic bookings were replaced by bookings destined for international markets. Bookings for the International segment were $3.0 million higher in the second quarter of 2013, but lower by $4.7 million for the first six months of 2013 when compared to the same periods in 2012.
As a result of these higher bookings levels, the backlog has increased to $697.8 million as at June 30, 2013, which represents a $14.6 million or 2.1% increase from December 31, 2012, and a $94.6 million or 15.6% increase from March 31, 2013.
Update on Discontinued Operations
The European Service and CHP business, within the International segment, has been reported as a discontinued operation since the third quarter of 2011. In June 2013, Enerflex completed the disposal of the European business to a company specializing in CHP fabrication and service. As part of the arrangement, Enerflex transferred certain maintenance contracts and employees to the purchasing company, as well as all obligations associated with these contracts and employees. The disposal was conducted in accordance with Dutch information and consultation rules.
Quarterly Results Material
Enerflex's interim condensed financial statements for the three and six months ended June 30, 2013, and the accompanying Management's Discussion and Analysis, will be available on the Enerflex website at www.enerflex.com* under the Investors section and on SEDAR at www.sedar.com.
Conference Call and Webcast Details
Enerflex will host a conference call for analysts, investors, members of the media and other interested parties on Thursday, August 15, 2013 at 9:00 a.m. MDT (11:00 a.m. EDT) to discuss the second quarter 2013 financial results and operating highlights. The call will be hosted by Mr. J. Blair Goertzen, President and Chief Executive Officer and Mr. D. James Harbilas, Vice President and Chief Financial Officer of Enerflex Ltd.
If you wish to participate in this conference call, please call 1.800.734.8507. Please dial in 10 minutes prior to the start of the call. No passcode is required. The live audio webcast of the conference call will be available on the Enerflex website at www.enerflex.com* under the Investors section on August 15, 2013 at 9:00 a.m. MDT (11:00 a.m. EDT). Approximately one hour after the call, a recording of the event will be available on the Company's website.
A replay of the teleconference will be available one hour after the conclusion of the call until midnight, August 22, 2013. Please call 1.800.558.5253 or 1.416.626.4100 and enter passcode 21668532.
Enerflex Ltd. is a single source supplier for natural gas compression, oil and gas processing, refrigeration systems and power generation equipment - plus in-house engineering and mechanical service expertise. The Company's broad in-house resources provide the capability to engineer, design, manufacture, construct, commission and service hydrocarbon handling systems. Enerflex's expertise encompasses field production facilities, compression and natural gas processing plants, CO2 processing plants, refrigeration systems and power generators servicing the natural gas production industry.
Headquartered in Calgary, Canada, Enerflex has approximately 3,000 employees worldwide. Enerflex, its subsidiaries, interests in associates and joint-ventures operate in Canada, the United States, Argentina, Colombia, Australia, the United Kingdom, Russia, the United Arab Emirates, Oman, Egypt, Bahrain, Indonesia and Singapore. Enerflex's shares trade on the Toronto Stock Exchange under the symbol "EFX". For more information about Enerflex, go to www.enerflex.com*.
Advisory Regarding Forward-Looking Statements
To provide Enerflex shareholders and potential investors with information regarding Enerflex, including management's assessment of future plans, Enerflex has included in this news release certain statements and information that are forward-looking statements or information within the meaning of applicable securities legislation, and which are collectively referred to in this advisory as "forward-looking statements". Information included in this news release that is not a statement of historical fact may be forward-looking information. When used in this document, words such as "plans", "expects", "will", "may" and similar expressions are intended to identify statements containing forward-looking information. Forward-looking statements and information contained in this news release include, but are not limited to: (i) the anticipated duration of weak natural gas prices and the effect thereof in Canada and Northern U.S. markets; (ii) expected bookings in Southern U.S. and Latin America; and (iii) the nature and scope of opportunities in the International segment. In developing the forward-looking information in this news release, the Company has made certain assumptions with respect to general economic and industry growth rates, commodity prices, currency exchange and interest rates, competitive intensity and shareholder and regulatory approvals. Readers are cautioned not to place undue reliance on forward-looking statements, as there can be no assurance that the future circumstances, outcomes or results anticipated in, or implied by, such forward-looking statements will occur or that plans, intentions or expectations upon which the forward-looking statements are based will occur.
Forward-looking information involves known and unknown risks and uncertainties and other factors, which may cause or contribute to Enerflex achieving actual results that are materially different from any future results, performance or achievements expressed or implied by such forward-looking information. Such risks and uncertainties include, among other things, the impact of general economic conditions; industry conditions, including the adoption of new environmental, taxation and other laws and regulations and changes in how they are interpreted and enforced; volatility of oil and gas prices; oil and gas product supply and demand; risks inherent in the ability to generate sufficient cash flow from operations to meet current and future obligations, including future dividends to shareholders of the Company; increased competition; the lack of availability of qualified personnel or management; labour unrest; political unrest; fluctuations in foreign exchange or interest rates; stock market volatility; opportunities available to or pursued by the Company; obtaining financing; and other factors, many of which are beyond its control.
The foregoing list of factors and risks is not exhaustive. For an augmented discussion of the risk factors and uncertainties that affect or may affect Enerflex, the reader is directed to the section entitled "Risk Factors" in Enerflex's most recently filed Annual Information Form, as well as Enerflex's other publicly filed disclosure documents, available on www.sedar.com. The reader is cautioned that these factors and risks are difficult to predict and that the assumptions used in the preparation of such information, although considered reasonably accurate at the time of preparation, may prove to be incorrect. Readers are cautioned that the actual results achieved will vary from the information provided in this press release and that such variation may be material. Consequently, Enerflex does not represent that actual results achieved will be the same in whole, or in part, as those set out in the forward-looking information. Furthermore, the statements containing forward-looking information that are included in this news release are made as of the date of this news release, and Enerflex does not undertake any obligation, except as required by applicable securities legislation, to update publicly or to revise any of the included forward-looking information, whether as a result of new information, future events or otherwise. The forward-looking information contained in this news release is expressly qualified by this cautionary statement.
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