Mr. Marc Rossiter reports
ENERFLEX LTD. ANNOUNCES EXTENSION AND CONSOLIDATION OF CREDIT FACILITIES, NEW TARGET LEVERAGE FRAMEWORK AND TIMING OF SECOND QUARTER RESULTS
Enerflex Ltd. has extended and consolidated its credit facilities and outlined a new target leverage framework.
All amounts presented in this release are in U.S. Dollar ("USD") unless otherwise stated.
Extension and Consolidation of Credit Facilities
Enerflex has entered into an agreement to extend the maturity date of its secured revolving credit facility (the "RCF") by one year to October 13, 2026. Availability under the RCF has been increased to $800 million from $700 million. Enerflex has received renewed lending commitments from all current syndicate members and has also introduced HSBC Bank USA, N.A. as a lender.
In conjunction with the extension, Enerflex will be repaying all outstanding amounts under its secured term loan (the "TLA") using cash on hand and availability under the expanded RCF. As at March 31, 2024, the TLA had drawings of $120 million.
The Company also continues to maintain a $70 million unsecured credit facility (the "LC Facility") with one of the lenders in its RCF syndicate. The LC Facility is supported by performance security guarantees provided by Export Development Canada. As at March 31, 2024, the Company had utilized $36 million of the $70 million LC Facility limit.
Target Leverage Framework and Capital Allocation
Enerflex is introducing a new leverage framework, targeting a bank-adjusted net debt-to-EBITDA ratio of 1.5x to 2.0x. The new leverage framework is underpinned by the highly utilized U.S. contract compression fleet, contracted international Energy Infrastructure product line and the recurring nature of our After-market Services business. Enerflex's Energy Infrastructure product line is supported by customer contracts, which are expected to generate approximately $1.6 billion of revenue during their current remaining terms.
Providing meaningful returns to shareholders is a priority for Enerflex. Once the Company is operating within its target leverage range, Enerflex expects to re-evaluate capital allocation priorities, which could include increased dividends, share repurchases, additional growth capital spending, and/or further repayment of debt. Allocation decisions will be based on providing the most attractive shareholder returns and measured against Enerflex's ability to maintain balance sheet strength.
Management Commentary
Preet Dhindsa, Enerflex's Senior Vice President and Chief Financial Officer, stated, "We are pleased with the extension and expansion of our RCF, appreciate the support of our syndicate members, and welcome HSBC Bank USA, N.A. as a new member. Repayment of the TLA reduces Enerflex's finance costs and reflects on-going efforts to optimize our debt stack."
Mr. Dhindsa continued, "From a financial flexibility perspective, we remain well positioned, with our bank-adjusted net debt-to-EBITDA leverage ratio exiting Q1/24 at 2.2x and the extension and expansion of the RCF providing ample liquidity to support our global business. We are pleased to introduce a new target leverage framework and believe it provides a visible path for the Company to increase shareholder returns over time. In 2024, Enerflex will continue to focus on generating free cash flow, repaying debt, and lowering finance costs."
Second Quarter Results
Enerflex plans to release its financial results and operating highlights for the three and six months ended June 30, 2024, after markets close on Wednesday, August 7, 2024. Results will be communicated by news release and will be available on the Company's website at www.enerflex.com and under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.ca and www.sec.gov/edgar, respectively.
Investors, analysts, members of the media, and other interested parties, are invited to participate in a conference call and audio webcast on Thursday, August 8, 2024 at 8:00 a.m. (MDT), where members of senior management will discuss the Company's results. A question-and-answer period will follow.
To participate, register at https://register.vevent.com/register/BIf11ae800bdbc49e3ae8271e165e1e310. Once registered, participants will receive the dial-in numbers and a unique PIN to enter the call. The audio webcast of the conference call will be available on the Enerflex website at www.enerflex.com under the Investors section or can be accessed directly at https://edge.media-server.com/mmc/p/j3n23f36.
ABOUT ENERFLEX
Enerflex is a premier integrated global provider of energy infrastructure and energy transition solutions, deploying natural gas, low-carbon, and treated water solutions - from individual, modularized products and services to integrated custom solutions. With over 4,500 engineers, manufacturers, technicians, and innovators, Enerflex is bound together by a shared vision:
Transforming Energy for a Sustainable Future.
The Company remains committed to the future of natural gas and the critical role it plays, while focused on sustainability offerings to support the energy transition and growing decarbonization efforts.
Enerflex's common shares trade on the Toronto Stock Exchange under the symbol "EFX" and on the New York Stock Exchange under the symbol "EFXT". For more information about Enerflex, visit www.enerflex.com.
We seek Safe Harbor.
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