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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.
Electric-drive generators up to 50 Mw, for independent and alternative power producers and anywhere stand-alone generation is needed.
Enerflex offers complete global customer service. 24/7. Year-round.
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.
Enerflex is an industry leader in technologies, solutions, and services for quickly and cost-efficiently treating produced water ranging in volumes from 1,000 to >1,000,000 + BWPD.
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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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May 04, 2017 03:17:49 pm
Enerflex Reports First Quarter 2017 Financial Results and Quarterly Dividend
CALGARY, ALBERTA--(Marketwired - May 4, 2017) - 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 months ended March 31, 2017.
Summary Table of First Quarter of 2017 Financial and Operating Results
"Enerflex's first quarter financial results continue to demonstrate the momentum that we experienced over the last half of 2016. Customers remain somewhat cautious with their capital expenditures; however, we are seeing evidence that capital budgets are improving in all of our operating regions," said J. Blair Goertzen, Enerflex's President and Chief Executive Officer. "With the relative stability in commodity prices, Enerflex experienced another quarter of strong customer enquiries and bookings in North America. On the strength of these bookings, Company backlog - a leading indicator of future revenue - was 11.4% higher than at the end of 2016. Enerflex remains committed to operating with caution and controlling costs, protecting the Company's balance sheet, and generating strong free cash flow."
First Quarter Results Summary
Net earnings for the first quarter of 2017 was higher compared to the same period of 2016 primarily as a result of higher revenues, improved gross margin, and lower SG&A expenses. The increase in revenues was primarily driven by improved Engineered Systems revenues in the Canada and USA segments. Service revenues decreased slightly over the same period last year, but the declines were partially offset by higher parts sales in Canada. Rental revenues also declined over the prior year due to lower utilization and rental rates, largely in the Rest of World segment. The consolidated gross margin percentage of 20.7% for the quarter, was higher than the 17.1% margin realized in the prior year. The margin increased due to improved project profitability, improved overhead absorption, lower inventory reserves, and lower asset impairments. SG&A expenses decreased $4.7 million during the three months ended March 31, 2017 primarily as a result of the effects of restructuring activities undertaken in prior periods, partially offset by higher stock-based compensation costs driven by higher share prices. The first quarter 2017 results also reflect an $2.9 million gain on the sale of fixed assets.
The Company's geographic and product line diversification contributed to keeping margins relatively stable in a continuingly competitive and constrained economic environment caused by low commodity prices.
Adjusted EBIT and Adjusted EBITDA
The Company recorded a number of items in its results that are not expected to recur in the normal course of business. The exclusion of these items presents a view of the results that should be more representative of the Company's normal operations. The presentation of adjusted EBIT and adjusted EBITDA should not be considered in isolation from EBIT or EBITDA as determined under IFRS. The adjusted EBIT and adjusted EBITDA may not be comparable to similar measures presented by other companies and should not be considered in isolation or as a replacement for measures prepared as determined under IFRS.
The items that have been adjusted for presentation purposes relate generally to two categories: 1) impairment or gains on assets; and, 2) restructuring activities. Exclusion of these items should allow for a better understanding of on-going, normal operations of the Company.
Canada segment revenue in the first quarter of 2017 was $76.3 million, an increase of $15.2 million or 24.8% from $61.2 million recorded in the same period of 2016. Engineered Systems revenue is reflective of the increased level of bookings from the back half of 2016. The Service product line revenue increased largely due to higher parts sales.
Operating loss for the first quarter of 2017 was $1.5 million compared to an operating loss of $11.4 million in the comparable quarter last year. This improvement resulted from higher revenues, improved gross margin and lower SG&A costs during the quarter. The increase in gross margin was the result of increased overhead absorption and lower inventory reserves. The reduction in SG&A expense was attributable to lower compensation expense on lower headcount. EBIT for the first quarter of 2017 was $1.3 million compared to an EBIT loss of $101.2 million in the first quarter of 2016. The first quarter of 2017 includes a $2.4 million gain on sale of a building. The 2016 results are unfavourably impacted by a $92.1 million goodwill impairment and $5.4 million of restructuring costs.
USA segment revenue in the first quarter of 2017 was $193.2 million, an increase of $83.4 million or 75.9% from $109.8 million a year earlier. The increase is due to higher Engineered Systems revenue, partially offset by lower Service and Rental revenue. Engineered Systems revenue increased due to the realization of the increased bookings in the back half of 2016 as compared to the back half of 2015. Service revenue was lower as a result of deferred maintenance, while Rental revenue was lower due to weaker utilization and rental rates.
Operating income increased by $14.6 million during the first quarter of 2017 due to higher revenue, higher gross margins, and decreased SG&A expenses. Gross margin increases were driven by project margin improvements and improved overhead absorption. SG&A expenses decreased primarily due to lower compensation expense on lower headcount.
Rest of World
Rest of World segment revenue in the first quarter of 2017 was $85.3 million, which decreased by $15.5 million or 15.3% from 2016 due to decreases in Engineered Systems, Service and Rental revenue. Engineered Systems revenue declined due to the completion of some larger projects in 2016, largely in the Middle East and Argentina. Service revenue remained under pressure with lower service activity in Latin America and Australia, and reduced parts sales in Australia and Asia, partially offset by higher activity in the Middle East / Africa ("MEA") region. Rental revenues have also decreased due to lower utilization and rental rates in Mexico, and slower economic conditions in some of the markets this segment services.
Stabilization of commodity prices in the second half of 2016 and first quarter of 2017 led to increased enquiries and continued strength in bookings in the first quarter, particularly in the Canada and USA segments. The Company is cautiously optimistic that further stability or improvement in commodity prices may cause customers to further increase investment, which should translate to further demand for the Company's products and services. The start of 2017 has been positive with bookings of $318.7 million, predominantly in North America. The Rest of World segment continues to experience strong enquiry levels and after the quarter, the Company recorded approximately $160 million of new customer bookings in the Middle East and Colombia. Enerflex also signed a rental contract renewal that runs for five years for 14,000 horsepower, consistent with our strategy of increasing our recurring revenue stream.
Subsequent to the end of the first quarter of 2017, Enerflex declared a quarterly dividend of $0.085 per share, payable on July 6, 2017, to shareholders of record on May 18, 2017.
Enerflex's Board of Directors
As previously outlined in Enerflex's 2017 Information Circular, Wayne S. Hill has decided not to stand for re-election to Enerflex's Board of Directors. Over the past six years, Wayne has been a vital part of Enerflex's Board, including serving as Chair of the Audit Committee and as a member of the Nominating and Corporate Governance Committee. "On behalf of the Board of Directors, Management, and Enerflex Shareholders, we would like to thank Wayne for his tremendous work and contributions and wish him well in his future endeavors," said Stephen J. Savidant, Enerflex's Chairman of the Board. The Director search has been ongoing since March 2017 and Enerflex anticipates making an announcement regarding the results of the interview process and director search in the coming weeks.
Quarterly Results Material
This press release should be read in conjunction with Enerflex's Interim Condensed Financial Statements as at and for the three months ended March 31, 2017, 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 Friday, May 5, 2017 at 8:00 a.m. MST (10:00 a.m. EST) to discuss the first quarter 2017 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 1.844.231.9067 or 1.703.639.1277. 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 May 5, 2017 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 11:00 p.m. MST on May 12, 2017. Please call 1.855.859.2056 or 1.404.537.3406 and enter conference ID 8198110.
Enerflex Ltd. is a single source supplier of natural gas compression, oil and gas processing, refrigeration systems, and electric power generation equipment - plus related 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 1,800 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, the United Arab Emirates, Oman, Bahrain, Indonesia, Malaysia, 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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