Enterprise Group Announces Results for Fourth Quarter and Full Year 2023

Rhea-AI Summary

Enterprise Group, Inc. (ETOLF) reports strong financial performance in Q4 2023 and FY2023 with record net income and adjusted EBITDA. The company focuses on energy services and technologies to reduce CO2 emissions, benefiting from industry trends and increased capital spending in the energy sector.

Positive

• Record net income of $6,169,904 and highest Adjusted EBITDA of $13,285,880 in FY2023.
• Revenue increased by 25% to $33,500,501 in FY2023 compared to the previous year.
• Gross margin improved by 42% to $15,501,969 in FY2023.
• Adjusted EBITDA increased by 63% to $13,285,880 in FY2023.
• Cash flow from operations surged to $13,530,272 in FY2023 from $5,910,830 in the prior year.
• Company acquired $15,110,693 of capital assets in FY2023 primarily for natural gas power generation equipment.
• Share buyback program resulted in the repurchase and cancellation of 1,278,500 shares at a cost of $512,085 in FY2023.
• Renewed bank loan facility with extended term and reduced interest rate for increased financing flexibility.
• Common shares of the Company started trading on the OTCQB Venture Market under the ticker symbol ETOLF.
• Increased visibility and accessibility to U.S. investors through electronic clearing and settlement with the Depository Trust Company.

Negative

• None.

St. Albert, Alberta--(Newsfile Corp. - March 7, 2024) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"). Enterprise, a consolidator of energy services (including specialized equipment rental to the energy/resource sector), emphasizing technologies that mitigate, reduce, or eliminate CO2 and Greenhouse Gas emissions for small to Tier One resource clients, is pleased to announce its Q4 2023 and FY2023 results.

Enterprise Group - President and CEO, Leonard Jaroszuk comments: "In the past fiscal year, Enterprise has seen notable achievements, including a record net income of $6,169,904 and the highest Adjusted EBITDA of $13,285,880 since our transition to specialized equipment rental. Our success is underpinned by several key industry trends." Jaroszuk further adds: "Our customers are increasingly adopting technological advancements to drive efficiency, reduce emissions, and cut costs. This shift has opened opportunities for Enterprise in providing natural gas power solutions, aligning with the growing demand for cleaner energy alternatives."

Jaroszuk continues: "Furthermore, the energy sector is witnessing a steady increase in capital spending, particularly in infrastructure investments aimed at improving market access and efficiency. This, coupled with heightened drilling and completion activity and favorable commodity prices, bodes well for Enterprise's continued growth and market presence. While these developments are encouraging, we remain focused on prudent and strategic decision-making to navigate the evolving landscape of the energy industry. Our commitment to delivering value to our shareholders and customers remains unwavering as we strive for sustained growth and profitability."

OVERALL PERFORMANCE AND RESULTS OF OPERATIONS

	Three months December 31, 2023		Three months December 31, 2022		Year months December 31, 2023		Year ended December 31, 2022
Revenue	$9,598,945		$8,743,471		$33,500,501		$26,892,249
Gross margin	$4,844,194	50%	$4,157,875	48%	$15,501,969	45%	$10,879,928	40%
Adjusted EBITDA(1)	$4,374,735	46%	$3,238,612	37%	$13,285,880	40%	$8,149,223	30%
Net income and comprehensive income	$2,255,159		$1,788,426		$6,169,904		$2,275,495
Income per share — Basic and Diluted	$0.05		$0.04		$0.12		$0.05

 

(1) Identified and defined under "Non-IFRS Measures".

• The 2023 year is one of the strongest in recent history and activity in the first part of 2024 continues to be strong. Drilling and completion activity was higher throughout 2023 and the Company saw many of its customers using more natural gas powered equipment to support site infrastructure and as a result, there was more demand for the Company's products and services. The 2023 year did have some challenges in the second and fourth quarters, mainly from forest fires in Northern Alberta and British Columbia and project delays due to warm weather in the fourth quarter. Revenue for the three months ended December 31, 2023, was $9,598,945 compared to $8,743,471 in the prior period, an increase of $864,474 or 10%. Gross margin for the three months ended December 31, 2023, was $4,844,194 compared to $4,157,875 in the prior period, an increase of $686,321 or 17%. Adjusted EBITDA for the three months ended December 31, 2023, was $4,374,735 compared to $3,238,612 in the prior period, an increase of $1,136,123 or 35%. Revenue for the year ended December 31, 2023, was $33,500,501 compared to $26,892,249 in the prior year, an increase of $6,608,252 or 25%. Gross margin for the year ended December 31, 2023, was $15,501,969 compared to $10,879,928 in the prior year, an increase of $4,622,041 or 42%. Adjusted EBITDA for the year ended December 31, 2023, was $13,285,880 compared to $8,149,223 in the prior year, an increase of $5,138,657 or 63%. Increases in revenue, gross margin and EBITDA for the year, are reflective of increased customer activity in 2023 while maintaining the operating efficiencies of the Company.

• For the year ended December 31, 2023, the company generated cash flow from operations of $13,530,272 compared to $5,910,830 in the prior year. This change is consistent with the higher activity levels during the year and the growth in the natural gas power generation business. The Company continues to utilize a combination of cash flow and debt to right-size and modernize its equipment fleet to meet customer demands. During the year ended December 31, 2023, the Company acquired $15,110,693 of capital assets, primarily for natural gas power generation equipment and facilities, upgrading existing equipment, and meeting specific requests from customers. Also, the Company purchased land to expand operations and is in the process of constructing a new facility. The Company continues to see its customers switching to natural gas as a cleaner and more efficient alternative to diesel, increasing the demand for natural gas generators and micro-grid packages.

• During the year ended December 31, 2023, the Company repurchased and cancelled 1,278,500 shares at a cost of $512,085, or $0.40 per share. These shares had a carrying value of $1.32 per share for a total of $1,681,478 which has been removed from the share capital account. Since the initiation of the share buyback program, the Company has purchased and cancelled 11,336,000 shares at a cost of $2,903,646 or $0.26 per share. These shares have a carrying value of $1.41 per share for a total of $15,970,630 which has been removed from the share capital account over the entire share buyback program. The Company renewed its bid on August 24, 2023, with a termination date of August 29, 2024, or such earlier time as the bid is completed or terminated at the option of the Company. Management will continue to acquire its shares as they believe its stock remains undervalued as the Company's book value is $0.82 per share. Additionally, the Company has available tax losses of $0.14 per share and is in the process of developing a consolidated tax plan to utilize those losses.

• On September 29, 2023, the Company made changes to its bank loan facility. The term has been extended for one additional year, now expiring on September 29, 2025. The interest rate changed to 10.5% and prepayment penalties have been removed. These changes give the Company greater flexibility on financing choices to meet increased activity and the demands of its customers.

• On January 23, 2023, the Company's common shares began trading on the OTCQB Venture Market under the ticker symbol ETOLF. In addition to the listing, Enterprise's shares are now eligible for electronic clearing and settlement with the Depository Trust Company for trading in the United States. This listing will help to increase Enterprise's visibility and accessibility to a growing audience of U.S. investors.

About Enterprise Group, Inc.
Enterprise Group, Inc is a consolidator of services-including specialized equipment rental to the energy/resource sector. The Company works with particular emphasis on systems and technologies that mitigate, reduce, or eliminate CO2 and Greenhouse Gas emissions for itself and its clients. The Company is well known to local Tier One and international resource companies with operations in Western Canada. More information is available at the Company's website www.enterprisegrp.ca. Corporate filings can be found on www. sedarplus.com. For questions or additional information, please contact:

For questions or additional information, please contact:
Leonard Jaroszuk: President & CEO, or
Desmond O'Kell: Senior Vice-President
contact@enterprisegrp.ca
780-418-4400

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.

Non-IFRS Measures
The Company uses International Financial Reporting Standards ("IFRS"). EBITDAS 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 EBITDAS. 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, EBITDAS 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. EBITDAS is calculated as net income excluding depreciation, amortization, interest, taxes and stock based compensation.

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/200774

FAQ

What was the record net income for Enterprise Group, Inc. in FY2023?

The record net income for Enterprise Group, Inc. in FY2023 was $6,169,904.

What was the highest Adjusted EBITDA reported by Enterprise Group, Inc. in FY2023?

The highest Adjusted EBITDA reported by Enterprise Group, Inc. in FY2023 was $13,285,880.

What was the percentage increase in revenue for Enterprise Group, Inc. in FY2023 compared to the previous year?

The revenue for Enterprise Group, Inc. increased by 25% to $33,500,501 in FY2023 compared to the previous year.

What was the percentage increase in gross margin for Enterprise Group, Inc. in FY2023 compared to the previous year?

The gross margin for Enterprise Group, Inc. improved by 42% to $15,501,969 in FY2023 compared to the previous year.

What was the percentage increase in Adjusted EBITDA for Enterprise Group, Inc. in FY2023 compared to the previous year?

The Adjusted EBITDA for Enterprise Group, Inc. increased by 63% to $13,285,880 in FY2023 compared to the previous year.

What was the cash flow from operations for Enterprise Group, Inc. in FY2023?

The company generated cash flow from operations of $13,530,272 in FY2023.

What was the total cost of repurchasing and cancelling shares by Enterprise Group, Inc. in FY2023?

The company repurchased and cancelled 1,278,500 shares at a cost of $512,085 in FY2023.

What changes were made to Enterprise Group, Inc.'s bank loan facility in FY2023?

The term of the bank loan facility was extended for one additional year, expiring on September 29, 2025, with a reduced interest rate of 10.5%.

When did Enterprise Group, Inc.'s common shares start trading on the OTCQB Venture Market and under what ticker symbol?

The common shares of Enterprise Group, Inc. started trading on the OTCQB Venture Market on January 23, 2023, under the ticker symbol ETOLF.