Sign Up for FREE Daily Energy News
  • Stay Connected
  • linkedin
  • twitter
  • facebook
  • instagram
  • youtube2
Copper Tip Energy Services
WEC - Western Engineered Containment
Hazloc Heaters
WEC - Western Engineered Containment
Copper Tip Energy
Hazloc Heaters

Enerflex Reports First Quarter 2017 Financial Results and Quarterly Dividend


Date issue: May 04, 2017
Time in: 5:17 PM e


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


(unaudited) ($ Canadian millions, except per share amounts, horsepower, and Three months ended percentages) March 31,
2017 2016 Change ---------------------------------------------------------------------------- Revenue $ 354.8 $ 271.7 $ 83.1 Gross margin 73.3 46.4 26.9 EBIT (loss) (1) 33.1 (91.1) 124.2 Adjusted EBIT (2) 30.2 7.2 23.0 EBITDA (1) 52.9 (68.5) 121.4 Adjusted EBITDA (2) 50.0 29.8 20.2 Net earnings (loss) - continuing operations $ 24.5 $ (93.5) $ 118.0 Earnings (loss) per share - continuing operations 0.28 (1.18) 1.46 Recurring revenue % (3) 38.2% 35.9% Bookings (4) $ 318.7 $ 65.0 $ 253.7 Backlog (4) 692.2 334.9 357.3 Rental horsepower 480,022 498,193 (18,171)

(1) Earnings before Interest (Finance Costs), Taxes, Depreciation and
Amortization ("EBITDA") and Earnings before Interest (Finance Costs) and
Taxes ("EBIT") are considered non-GAAP and additional GAAP measures, which
may not be comparable with similar non-GAAP or additional GAAP measures used
by other entities.
(2) Adjusted EBITDA and Adjusted EBIT are non-GAAP measures. These measures
provide a better representation of the Company's ongoing operations. Please
refer to the full reconciliation of these items in the Adjusted EBIT and
Adjusted EBITDA section.
(3) Determined by taking the trailing 12-month period.
(4) Bookings and backlog are considered non-GAAP measures that do not have
standardized meanings as prescribed by GAAP, and are therefore unlikely to
be comparable to similar measures used by other entities.


"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."

Quarterly Overview


-- Recorded bookings of $318.7 million, a significant increase of 390%

compared to the $65.0 million recorded in the first quarter of 2016. Bookings in the first quarter of 2017 marked the fourth consecutive quarter where the bookings increased over the same quarter from the comparative period. -- Engineered Systems backlog at March 31, 2017 was $692.2 million, an 11.4% increase compared to the December 31, 2016 backlog of $621.4 million. -- Reported an EBIT of $33.1 million for the three months ended March 31, 2017, compared to EBIT loss of $91.1 million in the first quarter of 2016. The EBIT loss for the three months ended March 31, 2016 includes goodwill impairment losses of $92.1 million. Adjusted EBIT was $30.2 million for the three months ended March 31, 2017, compared to $7.2 million for the same period in 2016, after excluding severance and restructuring costs in Canada, Asia and Australia; the impairment of assets and goodwill associated with Canada; and, the gain on the disposal of PP&E. -- The Company continues to see a strong bookings trend after the end of the quarter with approximately $250 million of bookings recorded already during the second quarter, including approximately $160 million of bookings in the Rest of World segment. -- Subsequent to quarter end, declared a quarterly dividend of $0.085 per share payable July 6, 2017 to shareholders on record on May 18, 2017.


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.


($ Canadian millions) Three months ended March 31, 2017 Total Canada USA ROW ---------------------------------------------------------------------------- Reported EBIT $ 33.1 $ 1.3 $ 22.6 $ 9.2 Restructuring costs in COGS and SG&A - - - - Write-down of equipment in COGS - - - - (Gain) loss on disposal of PP&E (2.9) (2.9) 0.0 (0.0) Goodwill impairment - - - - ---------------------------------------------------------------------------- Adjusted EBIT $ 30.2 $ (1.6) $ 22.6 $ 9.2 Depreciation and amortization 19.8 3.5 2.9 13.4 ---------------------------------------------------------------------------- Adjusted EBITDA $ 50.0 $ 1.9 $ 25.5 $ 22.6 -------------------------------------------- --------------------------------------------
($ Canadian millions) Three months ended March 31, 2016 Total Canada USA ROW ---------------------------------------------------------------------------- Reported EBIT (loss) $ (91.1) $ (101.2) $ 8.0 $ 2.1 Restructuring costs in COGS and SG&A 6.2 5.4 0.5 0.3 Write-down of equipment in COGS - - - - (Gain) loss on disposal of PP&E (0.0) (0.0) 0.0 0.0 Goodwill impairment 92.1 92.1 - - ---------------------------------------------------------------------------- Adjusted EBIT $ 7.2 $ (3.7) $ 8.5 $ 2.4 Depreciation and amortization 22.6 4.0 3.9 14.7 ---------------------------------------------------------------------------- Adjusted EBITDA $ 29.8 $ 0.3 $ 12.4 $ 17.1 -------------------------------------------- --------------------------------------------


Segmented Results

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 under the
Investors section and on SEDAR at

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 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.

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 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

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 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.

- END RELEASE - 04/05/2017

For further information:
For investor and media inquiries, please contact:
J. Blair Goertzen
President & Chief Executive Officer
D. James Harbilas
Executive Vice President & Chief Financial Officer


INDUSTRY: Energy and Utilities - Equipment, Energy and Utilities -
Oil and Gas
RELEASE ID: 20170504CC0118

Press Release from Marketwired 1-866-736-3779

All press releases are written by the client and have NO affiliation with the news copy written by The Canadian Press. Any questions that arise due to the content or information provided in the press release should be directed to the company/organization issuing the release, not to The Canadian Press.

Share This:

More News Articles

New SHOWCASE Directory Companies


Delta Remediation Inc.
The Coverall Shop
Muddy Boots
Axis Communciations
Vista Projects Limited
Payload Technologies Inc.
Smart-Project Management Inc. / Trusted Pipeline Advisor