Mr. Leonard Jaroszuk reports
ENTERPRISE GROUP ANNOUNCES RESULTS FOR FOURTH QUARTER AND FULL YEAR 2022
Enterprise Group Inc. has released its Q4 2022 and FY 2022 results.
Overall performance and results of operations:
- The 2022 year has been one of the strongest in recent history. Higher capital spending in the energy industry combined with increased customer activity levels has resulted in improved results. During the year, Enterprise secured additional supply and services agreements with three of its Tier 1 clients, which contributed to the improved operating results. Revenue for the year ended Dec. 31, 2022, was $26,892,249 compared with $18,732,335 in the prior period, an increase of $8,159,914 or 44 per cent. Adjusted gross margin for the year ended Dec. 31, 2022, was $10,879,928 compared with $4,982,731 in the prior period, an increase of $5,897,197 or 118 per cent. Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) for the year ended Dec. 31, 2022, was $8,147,223 compared with $2,959,020 in the prior period, an increase of $5,188,203 or 175 per cent. Revenue for the three months ended Dec. 31, 2022, was $8,734,471 compared with $5,730,978 in the prior period, an increase of $3,003,493 or 52 per cent. Adjusted gross margin for the three months ended Dec. 31, 2022, was $4,157,875 compared with $2,091,874 in the prior period, an increase of $2,066,001 or 99 per cent. Adjusted EBITDA for the three months ended Dec. 31, 2022, was $3,283,612 compared with adjusted EBITDA of $1,547,549 in the prior period, an increase of $1,736,063 or 112 per cent. Increases in gross margin and EBITDA for the year and the quarter are reflective of increased customer activity in 2022 while maintaining the overall cost structure of the company.
- For the year ended Dec. 31, 2022, the company generated cash flow from operations of $5,910,830 compared with $3,500,869 in the prior year. This change is consistent with the higher activity during the year. 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 Dec. 31, 2022, the company purchased $5,569,011 of capital assets, primarily for natural gas power generation, upgrading the energy efficiency of existing equipment and meeting specific requests from customers. During this same period, the company also sold property, plant and equipment and received proceeds, $1,216,724 of which were reinvested in new equipment.
- During year ended Dec. 31, 2022, the company purchased and cancelled 1,799,000 shares at a cost of $714,614, or 40 cents per share. These shares had a carrying value of $1.36 per share for a total of $2,445,077, which has been removed from the share capital account. Since the initiation of the share buyback program, the company has purchased and cancelled 10,057,500 shares at a cost of $2,391,560, or 24 cents per share. These shares have a carrying value of $1.42 per share for a total of $14,289,151, which has been removed from the share capital account over the entire share buyback program. In addition to the share buyback program, during year ended Dec. 31, 2022, management exercised 4,881,000 options resulting in net proceeds of $901,070 being reinvested into the company, creating a management ownership position of 40 per cent. Enterprise has renewed its normal course issuer bid through to Aug. 29, 2023. The company believes its stock remains undervalued, as the company's book value is 68 cents per share. In addition, the company has available tax losses of 17 cents per share and is in the process of developing a consolidated tax plan to utilize those losses. Management will continue to be aggressive in acquiring its shares.
- In April of this year, Enterprise Group officially launched a new wholly owned subsidiary, Evolution Power Projects Inc. (EPP). EPP is the leading provider of low-emission mobile power systems and associated surface infrastructure to the energy, resource and industrial sectors. The company's innovative methods are delivering to its clients low-emission natural gas-powered systems and micro-grid technology, allowing clients to eliminate diesel entirely. A significant portion of Enterprise's capital expenditures for 2022 was for additional natural gas-powered systems, including turbine generators. EPP can now provide mobile microgrid technology in the one-megawatt range, which has allowed EPP to expand its services into water pumping and drilling support, further eliminating the use of diesel power. Also, EPP's systems are equipped to deliver real-time emission metrics, providing its clients the assurances necessary for them to accomplish their ESG (environmental, social and governance) reporting and objectives.
- In the prior year, the company 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 nil for the three months ended Dec. 31, 2022 (2021 -- $28,586), against direct costs and nil (2021 -- $31,624) against EBITDA. Utilizing the CEWS and CERS programs, the company recorded nil for the year ended Dec. 31, 2022 (2021 -- $1,649,087), against direct costs and nil (2021 -- $1,908,866) against EBITDA.
- After year-end on Jan. 23, 2023, the company's common shares began trading on the OTCQB Venture Market under the ticker symbol ETOLF. In addition to the listing, Enterprise's shares are now eligible for electronic clearing and settlement with the Depository Trust Company for trading in the United States. This listing will help to increase Enterprise's visibility and accessibility to a growing audience of U.S. investors.
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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