Mr. J. Blair Goertzen reports

ENERFLEX REPORTS FIRST QUARTER 2013 FINANCIAL RESULTS AND ANNOUNCES QUARTERLY DIVIDEND

Enerflex Ltd. has released its financial and operating results for the three months ended March 31, 2013.

                       FINANCIAL HIGHLIGHTS
  (in millions of dollars, except per-share amounts and percentages)

                                                           Three months
                                                         ended March 31,
                                                         2013      2012

Revenue                                               $ 353.3   $ 355.7
Gross margin                                             61.0      62.3
Gross margin %                                           17.3%     17.5%
EBIT(1)                                                  22.8      21.6
EBITDA(2)                                                32.6      31.4
Net earnings (loss)
Continuing                                               15.4      14.9
Discontinued                                             (0.5)     (0.8)
Earnings (loss) per share
Continuing                                               0.20      0.19
Discontinued                                            (0.01)    (0.01)
                                                                            
(1) Earnings before interest (finance costs) and taxes (EBIT).             
(2) Earnings before interest (finance costs), taxes, depreciation and       
    amortization (EBITDA) is a non-GAAP (generally accepted accounting
    principles) measure that does not have a standardized meaning and 
    therefore may not be comparable with similar measures presented by 
    other issuers.                                     

Enerflex reported results for the first quarter of 2013 that were in line with the same period of 2012. The $2.4-million decrease in revenue was due to lower revenue in the Canada and northern U.S. segment, which was largely offset by increases in the southern U.S. and Latin America and international segments. Net earnings from continuing operations for the first quarter of 2013 were $500,000 higher compared with 2012, as a result of lower selling and administrative expenses, partially offset by lower gross margin and higher income taxes.

Effective Jan. 1, 2013, the reporting for the production and processing division was changed from the international business segment to the Canada and northern U.S. segment. The change in reporting was to focus the division on expansion into Alberta's oil sands, and to better align Enerflex's North American manufacturing facilities. Comparative amounts for 2012 have been reclassified to reflect this change for both the Canada and northern U.S. and international business segments.

The company recorded bookings of $189.3-million during the first quarter, which was $33.4-million lower than the comparable period last year. This decrease was primarily due to decreased booking activity in the Canada and northern U.S. and international segments. The decrease in bookings compared with the first quarter of 2012 of $42.9-million in the Canada and northern U.S. segment was a result of continued weak natural gas prices, which have caused lower activity levels in the Western Canadian sedimentary resource basins. Bookings in the southern U.S. and Latin America segment increased over the first quarter of the prior year, as a result of strong activity levels consistent with stable natural gas liquid (NGL) prices. The international segment recorded bookings that were $7.6-million lower in 2013 when compared with the same period in 2012; however, these projects have long lead times associated with tendering, bid evaluation and contract award, as they tend to be larger in scale and scope. It is important to highlight that $37.6-million of first quarter 2013 bookings recorded in the Canada and northern U.S. and southern U.S. and Latin America segments was related to compression and processing equipment that will be manufactured in these segments but are destined for international markets, compared with $50.6-million in the same period of 2012. Enerflex had a backlog of $603.2-million at the end of the first quarter of 2013, compared with $927.6-million at the end of the same period last year, a decrease of $324.4-million (35 per cent). Sequentially, backlog decreased by $80-million from Dec. 31, 2012.

"The Enerflex management team is pleased with our first quarter financial results," said J. Blair Goertzen, Enerflex's president and chief executive officer. "As a result of steady revenue levels from our geographical diversification, we have recorded strong first quarter results. The Canada and northern U.S. market continues to struggle with weak natural gas prices, and this trend is expected to continue through the first half of 2013. The southern U.S. and Latin America region has been stable from a bookings standpoint, and we remain cautiously optimistic for the remainder of 2013 in this region. Finally, there continue to be opportunities in our international segment; however, we expect that these potential project awards will have long lead times, as evidenced by $55.5-million in bookings in this segment subsequent to the end of the first quarter of 2013. With a strong balance sheet, a continued focus on expanding our capabilities and a focus on controlling our costs, we are currently right sized for the challenges of 2013, and well positioned to capitalize on the opportunities that will arise."

First quarter highlights

In the three months ended March 31, 2013, Enerflex:

• Generated revenue of $353.3-million, compared with $355.7-million in the first quarter of 2012, a decrease of $2.4-million or 0.7 per cent;
• Achieved a gross margin of $61-million or 17.3 per cent during the first quarter of 2013, compared with $62.3-million or 17.5 per cent during the same period of 2012, a decrease of $1.3-million;
• Produced EBIT of $22.8-million or 6.4 per cent of revenue for the first quarter, compared with $21.6-million or 6.1 per cent during the first quarter of 2012; EBIT as a percentage of revenue for the trailing 12 months ended March 31, 2013, was 7.9 per cent;
• Generated first quarter EBITDA of $32.6-million, an increase of $1.2-million over the first quarter of 2012;
• Recorded net earnings from continuing operations in the first quarter of $15.4-million (20 cents per share), an increase of $500,000 over the same period last year;
• Registered a return on capital employed from continuing operations, based on trailing 12-month EBIT, of 13.4 per cent during the first quarter of 2013, compared with 9.6 per cent for the same period in 2012;
• Generated $189.3-million in bookings for the first three months of 2013, compared with $222.7-million in the same period in 2012, a decrease of 15 per cent;
• Ended the quarter with a backlog of $603.2-million, a decrease of $80-million or 11.7 per cent from Dec. 31, 2012;
• Exited the quarter with $151.6-million in cash, resulting in a net-cash-to-EBITDA ratio of 0.31 to 1 and a net-cash-to-equity-ratio of 0.05 to 1.

Subsequent to the end of the first quarter of 2013:

• Enerflex declared the company's quarterly dividend of seven cents per share, payable on July 5, 2013, to shareholders of record on May 27, 2013;
• Bookings in the international segment totalled $55.5-million, which included a large order for the installation and construction of a compressor station in South Australia;
• The company and its lenders finalized an amendment to its existing bank facilities to extend the term of the facilities by one year.

Financial results

The company generated $353.3-million in revenue in the first quarter of 2013, compared with $355.7-million in 2012. The decrease in revenue of $63.7-million in the Canada and northern U.S. segment was largely offset by revenue increases of $2.5-million and $58.7-million in the southern U.S. and Latin America and international segments, respectively. Lower opening backlog resulted in decreased engineered systems revenue, partially offset by stronger service revenue in all regions, and an increase in rental revenue in the Canada and northern U.S. segment.

Gross margin for the quarter ended March 31, 2013, was $61-million or 17.3 per cent of revenue, compared with $62.3-million or 17.5 per cent of revenue for the same period of 2012. The decrease in gross margin of $1.3-million (2.1 per cent) was primarily due to lower gross margin in the Canada and northern U.S. segment, which was partially offset by stronger gross margins in the southern U.S. and Latin America and international segments. Gross margin was lower as a result of weaker plant utilization, warranty costs incurred that were higher than historical averages on three projects in the Canada and northern U.S. segment, and cost escalations on international projects.

Backlog at March 31, 2013, was $603.2-million, compared with $927.6-million at March 31, 2012, a 35-per-cent decrease over the comparable period. As compared with Dec. 31, 2012, backlog at March 31, 2013, decreased by $80-million or 11.7 per cent. In the Canada and the northern U.S. segment, the decrease was a result of continued weak natural gas prices and a corresponding drop in customers' capital spending levels. In the southern U.S. and Latin America segment, bookings relating to the liquids-rich shale resource basins temporarily slowed in the third quarter of 2012, before recovering in the fourth quarter of 2012 and into the first quarter of 2013. The decrease in international backlog was primarily attributable to the company's partial fulfilment of the equipment orders destined for Australia and the Sultanate of Oman, compounded by lower bookings in the first quarter of 2013.

Update on discontinued operations

As noted in previous public disclosures, Enerflex would consider a sale, partial sale, exit or combination thereof of the European service and combined heat and power (CHP) business. Enerflex is now pursuing alternatives involving a partial sale and wind-up of the service and CHP business. The partial sale and wind-up process is continuing and is subject to, and shall be conducted in accordance with, Dutch information and consultation rules.

Quarterly results material

Enerflex's interim condensed financial statements for the three months ended March 31, 2013, and the accompanying management's discussion and analysis, will be available on the Enerflex website under the investors section and on SEDAR.

Conference call and webcast details

Enerflex will host a conference call for analysts, investors, members of the media and other interested parties on Tuesday, May 14, 2013, at 9 a.m. MT (11 a.m. ET) to discuss the first quarter 2013 financial results and operating highlights. The call will be hosted by J. Blair Goertzen, president and CEO, and D. James Harbilas, vice-president and chief financial officer.

If you wish to participate in this conference call, please call 1-800-406-9725. Please dial in 10 minutes prior to the start of the call. No passcode is required. The live audio webcast of the conference call will be available on the Enerflex website under the investors section on May 14, 2013, at 9 a.m. MT (11 a.m. ET). Approximately one hour after the call, a recording of the event will be available on the company's website.

A replay of the teleconference will be available one hour after the conclusion of the call until midnight on May 21, 2013. Please call 1-800-558-5253 and enter passcode 21655065.

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