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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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November 09, 2016 03:44:10 pm
Enerflex Reports Third Quarter 2016 Financial Results and Quarterly Dividend
CALGARY, ALBERTA--(Marketwired - Nov. 9, 2016) - Enerflex Ltd. (TSX:EFX) ("Enerflex" or "the Company" or "we" or "our"), a leading supplier of products and services to the global energy industry, today reported its financial and operating results for the three and nine months ended September 30, 2016.
Summary Table of Third Quarter and First Nine Months of 2016 Financial and Operating Results
"Enerflex's third quarter financial results reflect the challenging business environment we currently operate in. Customers are being cautious with their capital expenditures due to low commodity prices, and we expect this environment will continue to weigh on the sector, particularly in Canada," said J. Blair Goertzen, Enerflex's President and Chief Executive Officer. "Enerflex will continue to remain focused on controlling costs, protecting its balance sheet, and generating strong free cash flow during this prolonged downturn. Having said that, the recent increase in commodity prices led to an increased level of enquiries and a rebound in bookings in the quarter. Enerflex is cautiously optimistic that further stability in commodity prices will allow oil and gas producers to increase investment in their businesses, which will ultimately drive demand for Enerflex's products and services."
Third Quarter Results Summary
Net earnings for the third quarter of 2016 were lower compared to the same periods of 2015 as a result of reduced gross margin, partially offset by lower SG&A expenses and lower income tax expense. Gross margin in the Canada and USA segments for the quarter decreased by $22.5 million on lower revenues. For the Rest of World segment gross margin increased during the third quarter. The consolidated gross margin percentage increased for the quarter on project margin improvements and an increased proportion of higher margin Rental revenue, which more than offset costs related to on-going warranty disputes, severance costs, and higher inventory allowances. SG&A expenses decreased during the three months ended September 30, 2016 by $7.8 million on lower compensation expense due primarily to headcount reductions, partially offset by bad debt expenses. Compensation expense decreased due to lower headcount and reduced incentive accruals, partially offset by larger mark-to-market share based compensation, unfavorable foreign exchange movements and restructuring costs during the third quarter of 2016.
Canada segment revenue in the third quarter of 2016 was $60.3 million, down $59.8 million or 49.8% from $120.1 million recorded in the same period of 2015. The segment has been negatively affected by the significant decline in activity levels due to low commodity prices. Engineered Systems revenue was down on lower 2016 opening backlog of $150.9 million compared to $332.0 million at the start of 2015. Lower Service revenue reflects lower parts sales, while lower Rental revenue was due to a decrease in rental unit sales and lower utilization of the Canadian rental fleet.
Operating loss for the third quarter of 2016 of $0.5 million decreased by $10.5 million from the same period in 2015 on lower gross margin partially offset by lower SG&A expenses. The decrease in gross margin resulted primarily from lower revenues, lower project margins, and severance costs of $0.1 million, partially offset by improved warranty experience. The reduction in SG&A expense was attributable to lower compensation expense on lower headcount, and lower office and occupancy costs due to facility closures, partially offset by higher bad debt expenses, compared to the third quarter of 2015.
USA segment revenue in the third quarter of 2016 was $103.9 million, down $76.1 million or 42.3% from $180.0 million a year earlier. The reduction in revenue resulted from a decrease in Engineered Systems revenue on lower opening backlog and reduced Service revenue on lower parts sales, partially offset by higher Rental revenue.
Operating income decreased by $6.0 million during the third quarter of 2016 due to lower gross margin, partially offset by reduced SG&A expenses. Gross margin decreased primarily as a result of lower revenues, partially offset by project margin improvements. The decreases in SG&A expenses were primarily a result of lower compensation expense on reduced headcount.
Rest of World
Rest of World segment revenue in the third quarter of 2016 was $98.3 million, down $26.9 million or 21.5% from 2015. The decrease in revenue was the result of a reduction in Engineered Systems revenue on lower opening backlog and a decrease in Service revenue, partially offset by an increase in Rental revenue with new rental projects in the Middle East and Latin America coming online. Service revenue decreased on lower service activity in Latin America and Australia, and reduced parts sales in Australia and Asia, partially offset by higher activity in the MEA region.
Operating income of $18.0 million increased by $1.7 million or 10.6% in the third quarter as a result of improved gross margin and lower SG&A expenses. The increase in gross margin was a result of project margin improvements, and an increased proportion of higher margin Rental revenue, partially offset by the impact of lower revenues. SG&A expenses decreased due to lower compensation expense on reduced headcount.
Subsequent to the end of the third quarter of 2016, Enerflex declared a quarterly dividend of $0.085 per share, payable on January 12, 2017, to shareholders of record on November 21, 2016.
Quarterly Results Material
This press release should be read in conjunction with Enerflex's Interim Condensed Financial Statements as at and for the three and nine months ended September 30, 2016, and the accompanying Management's Discussion and Analysis, both of which 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, November 10, 2016 at 8:00 a.m. MST (10:00 a.m. EST) to discuss the third quarter 2016 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, Executive Vice President and Chief Financial Officer of Enerflex.
If you wish to participate in this conference call, please call 1.888.222.3067. 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 November 10, 2016 at 8:00 a.m. MST (10:00 a.m. EST). 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, November 17, 2016. Please call 1.800.558.5253 or 1.416.626.4100 and enter passcode 21820666.
Enerflex Ltd. is a single source supplier of natural gas compression, oil and gas processing, refrigeration systems, and electric power 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, refrigeration systems, and electric power equipment servicing the natural gas production industry.
Headquartered in Calgary, Canada, Enerflex has approximately 1,900 employees worldwide. Enerflex, its subsidiaries, interests in associates and joint-ventures operate in Canada, the United States, Argentina, Bolivia, Brazil, Colombia, Mexico, Peru, Australia, the United Kingdom, Russia, the United Arab Emirates, Oman, Bahrain, Indonesia, Malaysia, Singapore, and Thailand. 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 press release include, but are not limited to: (i) the anticipated duration of weak natural gas prices and the effect thereof in Canada and USA markets; (ii) expected bookings; and (iii) the nature and scope of challenges and opportunities in the Rest of World 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 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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