2021 Financials..strong Q4 , Improving Outlook
ORIGINAL: Enterprise Group Announces Results for Fourth Quarter and Full Year 2021
2022-03-15 08:31 ET - News Release
St. Albert, Alberta--(Newsfile Corp. - March 15, 2022) - Enterprise Group, Inc. (TSX: E) (the "Company" or "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 2021 and FY2021 results.
OVERALL PERFORMANCE AND RESULTS OF OPERATIONS
| | Three months December 31,
2021 | | Three months December 31,
2020 | | Year ended December 31,
2021 | | Year ended December 31,
2020 | |
| Revenue | $5,730,978 | | $3,883,145 | | $18,732,335 | | $15,520,105 | |
| Gross margin | $2,120,460 | 37% | $1,787,065 | 46% | $6,631,818 | 35% | $5,194,826 | 33% |
| Adjusted Gross margin(1)(2) | $2,091,874 | 37% | $1,453,065 | 37% | $4,982,731 | 27% | $3,778,147 | 24% |
| Adjusted EBITDA(1)(2) | $1,547,549 | 27% | $1,010,161 | 26% | $2,962,020 | 16% | $2,085,177 | 13% |
| Net income (loss) and comprehensive income (loss) | $126,582 | | $(2,137,763) | | $(2,375,818) | | $(5,033,709) | |
| Income (loss) per share | $0.00 | | $(0.04) | | $(0.05) | | $(0.10) | |
(1) Identified and defined under "Non-IFRS Measures".
(2) The Canadian Emergency Wage Subsidy and Rent Subsidy Programs ended in October 2021. Starting in Q4 2021 to provide further comparability to pre-COVID operations, the Company has presented an Adjusted Gross Margin and Adjusted EBITDA to reflect the results of operations without any subsidy programs.
- The downturn in the energy industry, compounded by COVID-19, significantly reduced activity throughout Enterprise's business sector for the majority of 2021. Reduced activity from COVID-19 began at the end of the first quarter of 2020 and into the fourth quarter of 2021. Although COVID-19 protocols have allowed Enterprise's customers to return to work, activity levels have not yet returned to pre COVID-19 levels. Increased capital spending in the energy industry combined with colder weather have increased activity levels and improved results.
- Revenue for the three months ended December 31, 2021, was $5,730,978 compared to $3,883,145 in the prior period, an increase of $1,847,833 or 48%. Adjusted gross margin for the three months ended December 31, 2021, was $2,091,874 compared to $1,453,065 in the prior period, an increase of $638,809 or 44%. Adjusted EBITDA for the three months ended December 31, 2021, was $1,547,549 compared to $1,010,161 in the prior period, an increase of $537,388 or 53%.
- Revenue for the year ended December 31, 2021, was $18,732,335 compared to $15,520,105 in the prior year, an increase of $3,212,230 or 21%. Adjusted gross margin for the year ended December 31, 2021, was $4,982,731 compared to $3,778,147 in the prior year, an increase of $1,204,584 or 32%. Adjusted EBITDA for the year ended December 31, 2021, was $2,9262,020 compared to $2,085,177 in the prior year, an increase of $876,843 or 42%.
- During the three months ended December 31, 2021, the Company purchased and cancelled 627,500 shares at a cost of $191,313, or $0.30 per share. These shares had a carrying value of $1.43 per share for a total of $893,218 which has been removed from the share capital account. For the year ended December 31, 2021, the Company purchased and cancelled 2,034,500 shares at a cost of $507,552, or $0.25 per share. These shares had a carrying value of $1.43 per share for a total of $2,903,920 which has been removed from the share capital account. Since the initiation of the share buyback program, the Company has purchased and cancelled 8,258,500 shares at a cost of $1,676,946 or $0.20 per share. These shares have a carrying value of $1.43 per share for a total of $11,843,075 which has been removed from the share capital account over the entire share buyback program. Enterprise believes its stock remains undervalued and will continue to re-invest positive cash flow to buy-back shares to enhance shareholder value.
- The Company has benefited from the Canadian Emergency Wage Subsidy and Rent Subsidy Programs ("CEWS" and "CERS") which ended in October 2021. To provide further comparability to pre-Covid operations, the Company has presented Adjusted Gross Margin and Adjusted EBITDA to reflect the results without any subsidy programs. Utilizing the CEWS and CERS programs, the Company recorded $28,586 ($333,798 - December 2020) against direct costs for the three months ended December 31, 2021, and $31,624 ($391,932 - December 2020) against Adjusted EBITDA for the three months ended December 31, 2021. Utilizing the CEWS and CERS programs, the Company recorded $1,649,087 ($1,416,679 - December 2020) against direct costs for the year ended December 31, 2021, and $1,908,866 ($1,618,866 - December 2020) against Adjusted EBITDA for the year ended December 31, 2021.
- Effective September 7, 2021, the Company changed lenders and replaced its bank loan facility with a $30,000,000 revolving line of credit. The flexibility of the new facility gives the Company the ability to meet the needs of our customers more quickly through increased capital asset spending and organic growth, and to aggressively pursue acquisition targets. Also, a fixed interest rate provides cost stability as interest rates continue to rise and even with a fixed interest rate, the all in yearly maintenance and compliance costs of the new facility are comparable to the prior bank loan. There are no required principal repayments until the due date, September 7, 2024. The facility is subject to certain borrowing restrictions and bears interest at the 10.00%. The facility is secured by a first charge on all the Company's assets except those secured with other lenders. The facility has an option to extend for an additional twelve months if both parties mutually agree on the terms.
- For the year ended December 31, 2021, the company generated cash flow from operations of $3,500,869 compared to $3,983,730 in the prior period. This change is consistent with increased cash demands to support higher activity at the end of the year combined with the time it takes to monetize accounts receivable. 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, 2021, the Company purchased $3,845,497 of capital assets, primarily for natural gas power generation equipment, upgrading the energy efficiency of existing equipment and meeting specific requests from customers. The Company also sold equipment during the year ended December 31, 2021, and received $1,374,962 of proceeds from those sales which were re-invested in new equipment.
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 an