RE: RE: Earnings; who does this? ya better read th Rather than taking the malarky in their press release as 'good news', why not do yourself a favor and dig into their financial statements a bit?
Start with the last page of the Auditor's Report in front of the financial statements, and you will read (from the section entitled Emphasis of matter) that 'These conditions... indicate the existence of a material uncertainty that may cast significant doubt about the Company's ability to continue as a going concern.'
As another example, in the MD&A they state 'For the year ended December 31, 2011, the Company has repaid a total of $5.0 million of loans and borrowings, including $3.7 million to payout the high interest term debt facility'. What they conveniently neglect to mention is that total liabilities actually increased to $7.77 million from $6.97 million during the year.
If you are wondering why they released their news on the last day possible (a Friday afternoon), this may shed a bit of light on the subject. When you read the last paragraph of their press release, it discusses problems with internal financial control issues. '...during our yearend audit review, cut off issues were identified relating to a large project... costs and revenues were reallocated in order to more accurately reflect the economic activity in 2011.'
This company broke even in a year where every other service company knocked the ball out of the park - again. If you want to see how business in fact turned positive more than two years ago for Enterprise's competition, just take a look at how Cordy and Macro have done. Enterprise talks about how an economic resurgence 'just happened' in the sector in the last 6 months.
The only reason Enterprise barely broke even with a profit of $66,874 for 2011 was due to a $121,215 fair value adjustment relating to the refinancing of a loan. It was merely an accounting entry.
Don't forget that the outlook for their pipeline division is in fact bleak at best. Enterprise ties in natural gas wells. Ever wonder if the 10-year lows in natural gas prices have affected the drilling activity for new gas wells? They spend 11 paragraphs in the MD&A talking about high oil prices being a boon for Alberta. The reality is that these oil prices will only benefit Enterprise's utility installation division. We should be thankful that Enterprise purchased that division a few years ago... otherwise... you get my point.
So do you really think its time to take a position???