Mr. Leonard Jaroszuk reports

ENTERPRISE GROUP ANNOUNCES RESULTS FOR FIRST QUARTER 2022

Enterprise Group Inc. has released its Q1 2022 results.

• The first quarter has been one of the strongest quarters in recent years. Higher capital spending in the energy industry combined with colder weather have increased activity levels and improved results. Revenue for the three months ended March 31, 2022, was $7,629,418 compared with $5,859,287 in the prior period, an increase of $1,770,131, or 30 per cent. Adjusted gross margin for the three months ended March 31, 2022, was $3,521,822 compared with $1,925,873 in the prior period, an increase of $1,595,949, or 83 per cent. Adjusted EBITDA for the three months ended March 31, 2022, was $3,029,861, compared with $1,465,383 in the prior period, an increase of $1,564,478, or 107 per cent.
• During the three months ended March 31, 2022, the company purchased and cancelled 487,500 shares at a cost of $157,484, or 32 cents per share. These shares had a carrying value of $1.42 per share for a total of $694,053, which has been removed from the share capital account. Since the initiation of the share buyback program; the company has purchased and cancelled 8,746,000 shares at a cost of $1,676,946, or 21 cents per share. These shares have a carrying value of $1.43 per share for a total of $12,537,128, 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 reinvest positive cash flow to buy back shares to enhance shareholder value.
• For the three months ended March 31, 2022, the company generated cash flow from operations of $2,679,056 compared with $1,389,501 in the three months ended March 31, 2021. This change is consistent with the higher activity at the end of the year and continuing into the first quarter of 2022. 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 three months ended March 31, 2022, the company purchased $1,783,794 of capital assets, primarily for natural gas power generation equipment, upgrading the energy efficiency of existing equipment and meeting specific requests from customers. During this same period, the company also sold equipment and received $410,304 of proceeds from those sales, which were reinvested in new equipment.
• In the prior year, 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 (earnings before interest, taxes, depreciation and amortization) to reflect the results without any subsidy programs. Utilizing the CEWS and CERS programs, the company recorded nil for the three months ended March 31, 2022 (March, 2021 -- $800,516), against direct costs and nil (March, 2021 -- $927,416) against adjusted EBITDA for the three months ended March 31, 2021.

Outlook

Capital spending in the energy industry has been steadily improving. Commodity prices have risen on strengthening fundamentals and oil and gas demand has been recovering, despite some continued effects of the COVID-19 pandemic and evolving regulatory risks. Industry data on drilling and completion activity, high crude oil prices and significant increases to budgeted capital programs, all support improved activity.

Enterprise's outlook for the remainder of 2022 is positive. The company anticipates its customers will continue to increase their drilling and completion activity as industry fundamentals continue to improve. The company also sees new opportunities for its natural gas power solutions as the energy industry continues its search for lower carbon emission alternatives. Enterprise will continue to work with all its stakeholders, including customers, suppliers and indigenous partners to provide effective solutions to help reduce carbon emissions.

About Enterprise Group Inc.

Enterprise Group 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 (carbon dioxide) and greenhouse gas emissions for itself and its clients. The company is well known to local Tier 1 and international resource companies with operations in Western Canada.

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