Enterprise Group Announces Results for First Quarter 2019
St. Albert, Alberta--(Newsfile Corp. - May 10, 2019) - Enterprise Group, Inc. (TSX: E) (the "Company" or "Enterprise"), a consolidator of services to the energy sector; focused primarily on specialized equipment rental; today released its Q1 2019 results.
| ||Three months |
March 31, 2019
|Three months |
March 31, 2018(2)
|Gross margin %||43%||31%||12%|
|Net (loss) income and comprehensive (loss) income||$692,986||$3,190,242||($2,497,256)|
(1) Identified and defined under "Non-IFRS Measures".
(2) In March 2018, the Company closed a transaction to divest substantially all the assets of CTHA. The net operations of CTHA, including the prior period, are presented as a single amount in the consolidated statements of income (loss) and comprehensive income (loss).
The increased activity experienced in Q4 2018 continued into Q1 2019. Industry wide price reductions and competition continues to impact margins, however through the Company's continued its efforts to operate more efficiently and effectively manage its resources and costs, Enterprise improved its margins over the prior period. The Company's high level of service combined with its expertise and specialized equipment has allowed the Enterprise to retain long-term customers while expanding its customer base.
Revenue for the three months ended March 31, 2019, was $7,149,422, an increase of $339,186 compared to the prior period. Having a broader customer base has amplified the nominal increase in activity experienced in Q1 2019 compared to Q1 2018 and resulted in higher revenue.
Gross margin for the three months ended March 31, 2019, was $3,071,478 or 43%, an increase from $2,125,399 or 31% compared to the prior period. EBITDA was $2,561,805 for the three months ended March 31, 2019, an increase of $1,074,553 compared to the prior period. Enterprise continues its efforts to improve gross margin and EBITDA, which includes reducing third party rentals, reducing the use of external contactors and effectively managing resources and staffing levels.
In March 2018, the Company closed a transaction to divest substantially all the assets of Calgary Tunnelling & Horizontal Augering Ltd. ("CTHA"). CTHA provided specialized trenchless solutions for the energy, utility and infrastructure industries. Gross cash proceeds, including working capital from the transaction was $20,194,992. All proceeds from the transaction were deployed towards reducing the Company's debt.
About Enterprise Group, Inc.
Enterprise Group, Inc. is a consolidator of services to the energy sector. The Company's focus is primarily on specialized equipment rental. The Company's strategy is to acquire complementary service companies in Western Canada, consolidating capital, management, and human resources to support continued growth. More information is available at the Company's website www.enterprisegrp.ca. Corporate filings can be found on www.sedar.com.
For questions or additional information, please contact:
Leonard Jaroszuk, President & CEO, or
Desmond O'Kell, Senior Vice-President
Forward Looking Information
Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Company's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR website www.sedar.com) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
The Company uses International Financial Reporting Standards ("IFRS"). EBITDA is not a measure that has any standardized meaning prescribed by IFRS and is therefore referred to as a non-IFRS measure. This news release contains references to EBITDA. This non-IFRS measure used by the Company may not be comparable to a similar measure used by other companies. Management believes that in addition to net income, EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. EBITDA is calculated as net income excluding depreciation, amortization, interest, taxes and stock based compensation.
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