Results don't look good Enterprise Group Announces Record Third Quarter 2014 Revenues
19:12 EST Wednesday, November 12, 2014
ST. ALBERT, ALBERTA--(Marketwired - Nov. 12, 2014) - Enterprise Group, Inc. ("Enterprise," or "the Company") (TSX:E) is pleased to announce its financial results for the three month period ended September 30, 2014 ("the third quarter").
THIRD QUARTER HIGHLIGHTS AND SIGNIFICANT EVENTS
- Quarterly revenue of $18.8 million, an increase of $8.8 million when compared to the prior year.
- Quarterly EBITDAS of $4.5 million, an increase of $0.7 million when compared to the prior year.
- On October 15, 2014, the Company completed its acquisition of Westar Oilfield Rentals Inc. ("Westar"), a privately held oilfield site service company, for a purchase price of approximately $13.5 million.
- On October 2, 2014, the Company announced that Calgary Tunnelling & Horizontal Augering Ltd. ("CTHA") had taken delivery of the Direct Pipe® System ("Direct Pipe"), one of the most advanced tunnelling systems in the world.
| | Three months | | Three months | | Nine months | | Nine months | |
| Consolidated: | September 30, | | September 30, | | September 30, | | September 30, | |
| | 2014 | | 2013 | | 2014 | | 2013 | |
| Revenue | $ | 18,785,208 | | $ | 10,002,040 | | $ | 53,962,130 | | $ | 23,737,273 | |
| Gross margin | $ | 6,934,298 | | $ | 4,322,424 | | $ | 22,989,799 | | $ | 11,196,344 | |
| Gross margin % | | 37 | % | | 43 | % | | 43 | % | | 47 | % |
| EBITDAS | $ | 4,547,281 | | $ | 3,886,648 | | $ | 14,250,986 | | $ | 7,792,812 | |
| Net Income | $ | 1,538,087 | | $ | 3,948,137 | | $ | 6,194,861 | | $ | 5,572,096 | |
| EPS | $ | 0.01 | | $ | 0.05 | | $ | 0.05 | | $ | 0.08 | |
| Total Assets | $ | 135,512,831 | | $ | 58,907,687 | | $ | 135,512,831 | | $ | 58,907,687 | |
Enterprise's third quarter results reflect both the continued positive impact of the Company's acquisitions and increasing demand for the Company's services. The benefit of these factors is highlighted by the Company's quarterly revenue of $18.8 million, which represents an 88% improvement when compared to prior year, and the Company's quarterly EBITDAS of $4.6 million, which represents a 17% improvement when compared to the prior year.
Enterprise recorded an EBITDAS margin of 24.2% during the third quarter, a decline of 14.7 percentage points when compared to the prior year. This decline can be primarily distributed to the high-level of demand for the Company's services, which was necessitated extensive use of third-party equipment during the third quarter. This metric is expected to improve moving forward, as subcontracted equipment will be partially replaced by the capital assets the Company purchased over the course of 2014.
On September 30, 2014, Enterprise announced that it had completed its $20.0 million of planned capital expenditures for 2014, and that all equipment purchased under the program had been both received and deployed. These capital expenditures are expected to create improvements in both the Company's revenue and operating margins.
"We are satisfied by Enterprise's results for the third quarter, which represent record quarterly revenues for our business," stated Leonard Jaroszuk, the Company's Chief Executive Officer. "These record revenues are testament to both the contributions of our acquisitions and the continued strong demand for our services.
"The acquisitions made since the beginning of 2013 have generated top line synergies, reflecting our continued integration efforts. We fully expect that Westar, our most recent addition, will continue this trend. Westar will be immediately accretive to Enterprise's business, facilitate several major new client relationships, and - perhaps most importantly - further establish our position as a key player within Western Canada's oilfield service industry.
"During the third quarter, demand continued to exceed our operating capacity. While we are obviously pleased by how this reflects upon the quality of our service, it has forced us to rely heavily upon third-party equipment, resulting in considerable pressure upon our operating margins. Fortunately, we expect that this pressure will be partially alleviated by the equipment purchased through our recently completed $20 million capital program.