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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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February 22, 2018 04:14:05 pm
Enerflex Reports Fourth Quarter 2017 Financial Results and Quarterly Dividend
CALGARY, Alberta, Feb. 22, 2018 (GLOBE NEWSWIRE) -- 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 twelve months ended December 31, 2017.
Summary Table of Fourth Quarter and Twelve Months of 2017 Financial and Operating Results
“Enerflex’s strong fourth quarter results were driven by increasing levels of global activity and improved progress on major projects, with large contributions from projects where revenue recognition was shifted to the fourth quarter from the third quarter of this year. The fourth quarter continued the trend of strong bookings,” said J. Blair Goertzen, Enerflex’s President and Chief Executive Officer. “Enerflex remains optimistic regarding the demand for liquids-rich natural gas for 2018, specifically with respect to anticipated increases in activity levels in the USA and Rest of World segments, which will more than offset challenges in the Canadian market. Building off the success of adding assets which contributed to recurring revenue in 2017, the Company remains committed to this strategy in the USA and Rest of World segments in 2018.”
Fourth Quarter Results SummaryNet earnings of $27 million was higher than the net loss of $46 million from the fourth quarter of 2016. The 2016 results include some significant items that did not repeat in 2017, such as goodwill impairment.
Adjusted EBIT improved to $48 million in the fourth quarter of the year compared to $34 million in the same period of 2016, largely driven by increased revenues and some cost reductions. The revenue increased due to the increased activity in Engineered Systems, particularly in the United States and Canada with both regions benefiting from improved progress on projects that were delayed from the third quarter into the fourth quarter and the realization of strong previous bookings. Service and Rental revenues remain relatively consistent year-over-year. Contributions to Rental revenues by the assets acquired from Mesa Compression, LLC (“Mesa”) have offset weakness in Mexico. Gross margins have increased on the strength of improved revenues, however gross margin percentage is down slightly over the prior year, which is reflective of the higher proportion of revenues generated from the lower margin Engineered Systems compared to the higher margin Service and Rental. SG&A costs were lower compared to the same period for 2016, which includes the costs of restructuring activities. The 2017 results do not include similar costs and also reflect the reduction in costs created by those restructuring activities and the sale of idle facilities completed during late 2016 and 2017.
Fourth Quarter Segmented ResultsUSAUSA’s revenue was $205 million, an increase from $158 million a year earlier. This increase was the result of higher revenues across all product lines, particularly Engineered Systems, which increased by $27 million due to progression on projects where revenue recognition was delayed from the third quarter into the fourth quarter and the realization of the strong bookings that started in the back half of 2016 and continued through 2017. USA Rental revenue includes the contribution from the assets acquired from Mesa on July 31, 2017 and the subsequent build-out of the rental fleet.
Operating income increased by $2 million due to higher revenues, offset by increased SG&A costs driven by higher compensation costs and lower bad debt recovery.
Rest of WorldRest of World’s revenue was $86 million, a decrease of $46 million or 35% from 2016. Engineered Systems revenue was lower due to the completion of two projects within Argentina last year. Rental revenues declined due to lower utilization and rental rates in Mexico. Service revenues decreased as a result of lower service activity in Latin America, as well as reduced activity and parts sales in Australia and Asia.
Even though revenues decreased quarter-over-quarter, operating income increased by $2 million compared to the same period of 2016 as a result of decreased SG&A costs due to lower onerous lease provisions and higher foreign exchange gains.
CanadaCanada’s revenue was $160 million, an increase from $54 million recorded in the same period of 2016, primarily as a result of higher revenue from Engineered Systems, driven by progression on projects where revenue recognition was shifted from the third quarter into the fourth quarter and the realization of strong previous period bookings.
Operating income was $11 million compared to an operating loss of $11 million in the comparable quarter last year. This improvement resulted from higher revenues and lower SG&A costs, partially offset by project margin erosion. The reduction in SG&A expense was attributable to previously undertaken restructuring activities.
EBIT was $12 million compared to an EBIT loss of $68 million in the fourth quarter of 2016, which includes a goodwill impairment of $69 million.
OverallThe stabilization of commodity prices starting in the second half of 2016 led to increased enquiries and activity in 2017, particularly in Canada and the USA. Bookings in the USA continued to remain strong as customers have benefited from further prices increases over the last half of 2017. Prices in Canada have not experienced the same increases due to transportation issues and market conditions so customers in Canada remain hesitant about capital spending.
Adjusted EBIT and Adjusted EBITDAThe 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 three categories: 1) impairment or gains on assets; 2) restructuring activities; and 3) acquisition costs. Exclusion of these items should allow for a better understanding of ongoing, normal operations of the Company. Enerflex has also presented the impact of share-based compensation as it is an item that can fluctuate significantly with share price changes that are not directly linked to the performance of the Company.
The Company has also incurred SG&A costs in the fourth quarter and twelve months of 2017 of $1.1 million and $8.7 million, respectively, related to ongoing arbitration proceedings with Oman Oil Exploration and Production LLC (“OOCEP”). These amounts are not adjusted for in the calculation of Adjusted EBIT and Adjusted EBITDA.
Private PlacementOn December 15, 2017, the Company closed a private placement offering of senior unsecured notes. Pursuant to the private placement, the Company issued $105 million U.S. dollar and $15 million Canadian dollar 7-year notes maturing December 15, 2024 bearing an interest rate of 4.67 percent and 4.50 percent respectively, and $70 million U.S. dollar and $30 million Canadian dollar 10-year notes maturing December 15, 2027 bearing an interest rate of 4.87 percent and 4.79 percent respectively.
US Tax ReformThe Company has also assessed the U.S. tax reform in the Tax Cuts and Jobs Act (“the Act”) on USA operations. The Act has an immaterial impact on the calculation of the 2017 tax expense and deferred tax liability calculations because of the relatively small balance of accumulated timing differences between the accounting and tax income as at December 31, 2017. Prospectively, the Act will impact the Company through the reduction of the federal corporate income tax rate to 21 percent and the ability to immediately expense certain qualified property for tax purposes.
DividendSubsequent to the end of the fourth quarter of 2017, Enerflex declared a quarterly dividend of $0.095 per share, payable on April 5, 2018, to shareholders of record on March 8, 2018.
Quarterly Results MaterialThis press release should be read in conjunction with Enerflex’s audited consolidated financial statements as at and for the years ended December 31, 2017 and 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 DetailsEnerflex will host a conference call for analysts, investors, members of the media, and other interested parties on Friday, February 23, 2018 at 7:30 a.m. MST (9:30 a.m. EST) to discuss the fourth 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 February 23, 2018 at 7:30 a.m. MST (9:30 a.m. EST). A replay of the teleconference will be available on February 23, 2018 at 12:30 p.m. MST until March 2, 2018 at 12:30 p.m. MST. Please call 1.855.859.2056 or 1.404.537.3406 and enter conference ID 6488265.
About Enerflex 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 2,100 employees worldwide. Enerflex, its subsidiaries, interests in associates and joint-ventures operate in Canada, the United States, Argentina, Bolivia, Brazil, Colombia, Mexico, Australia, the United Kingdom, the United Arab Emirates, Oman, Bahrain, Kuwait, 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 InformationThis press release contains forward-looking information within the meaning of applicable Canadian securities laws. These statements relate to management’s expectations about future events, results of operations and the Company’s future performance (both operational and financial) and business prospects. All statements other than statements of historical fact are forward-looking statements. The use of any of the words “anticipate”, “plan”, “contemplate”, “continue”, “estimate”, “expect”, “intend”, “propose”, “might”, “may”, “will”, “shall”, “project”, “should”, “could”, “would”, “believe”, “predict”, “forecast”, “pursue”, “potential”, “objective” and “capable” and similar expressions are intended to identify forward-looking information. In particular, this press release includes (without limitation) forward-looking information pertaining to: the anticipated duration of weak natural gas prices and the effect thereof in Canada and USA markets; expected bookings; and 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. Forward-looking information involves known and unknown risks and uncertainties and other factors, which are difficult to predict and may affect the Company’s operations, including, 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. As a result of such known and unknown risks, uncertainties and other factors, actual results, performance, or achievements could differ materially from those expressed in, or implied by, these statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking information will transpire or occur. The forward-looking information included in this press release should not be unduly relied upon. The forward-looking information contained herein is expressly qualified in its entirety by the above cautionary statement. The forward-looking information included in this press release is made as of the date hereof and, other than as required by law, the Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.
For investor and media inquiries, please contact:
Oil and Gas Solutions
Suite 904, 1331 Macleod Trail SE
Calgary, AB, T2G 0K3, Canada
Main Phone: +1.403.387.6377