Enerflex Reports First Quarter 2013 Financial Results and Announces Quarterly Dividend

Enerflex Reports First Quarter 2013 Financial Results and Announces Quarterly 
Dividend 
CALGARY, ALBERTA -- (Marketwired) -- 05/13/13 -- Enerflex Ltd.
(TSX:EFX) ("Enerflex" or "the Company"), a leading supplier of
products and services to the global energy industry, today reported
its financial and operating results for the three months ended March
31, 2013.  
Financial Highlights 


 
----------------------------------------------------------------------------
(unaudited)                                    Three months ended March 31, 
($ millions, except per share amounts and                                   
 percentages)                                    2013      2012   Change ($)
----------------------------------------------------------------------------
Revenue                                       $ 353.3   $ 355.7      $ (2.4)
Gross margin                                     61.0      62.3        (1.3)
Gross margin %                                   17.3%     17.5%            
EBIT (1)                                         22.8      21.6         1.2 
EBITDA (2)                                       32.6      31.4         1.2 
Net earnings (loss)                                                         
  Continuing                                     15.4      14.9         0.5 
  Discontinued                                   (0.5)     (0.8)        0.3 
Earnings (loss) per share                                                   
  Continuing                                     0.20      0.19        0.01 
  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 measure that does not have a      
    standardized meaning and therefore may not be comparable to similar     
    measures presented by other issuers                                     

 
Enerflex reported results for the first quarter of 2013 tha
t 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 $0.5 million
higher compared to 2012 as a result of lower selling and
administrative expenses, partially offset by lower gross margin and
higher income taxes.  
Effective January 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 to 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 liquids ("NGL") prices. The
International segment recorded bookings that were $7.6 million lower
in 2013 when compared to 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 were related to compression
and processing equipment that will be manufactured in these segments
but are destined for international markets, compared to $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 to $927.6 million
at the end of the same period last year, a decrease of $324.4 million
(35.0%). Sequentially, backlog decreased by $80.0 million from
December 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 stand point, 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 to $355.7 million in the
    first quarter of 2012, a decrease of $2.4 million or 0.7%; 
    
--  Achieved a gross margin of $61.0 million or 17.3% during the first
    quarter of 2013 compared to $62.3 million or 17.5% during the same
    period of 2012, a decrease of $1.3 million; 
    
--  Produced EBIT of $22.8 million or 6.4% of revenue for the first quarter
    compared to $21.6 million or 6.1% during the first quarter of 2012; EBIT
    as a percentage of revenue for the trailing 12 months ended March 31,
    2013 was 7.9%; 
    
--  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 ($0.20 cents per share), an increase of $0.5 million over
    the same period last year; 
    
--  Registered a return on capital employed from continuing operations,
    based on trailing 12-month EBIT, of 13.4% during the first quarter of
    2013 compared to 9.6% for the same period in 2012; 
    
--  Generated $189.3 million in bookings for the first three months of 2013
    compared to $222.7 million in the same period in 2012, a decrease of
    15.0%; 
    
--  Ended the quarter with a backlog of $603.2 million, a decrease of $80.0
    million or 11.7% from December 31, 2012; and 
    
--  Exited the quarter with $151.6 million in cash, 
resulting in a net cash
    to EBITDA ratio of 0.31:1 and a net cash to equity ratio of 0.05:1. 

 
Subsequent to the end of the first quarter of 2013: 


 
--  Enerflex declared the Company's quarterly dividend of $0.07 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; and 
    
--  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 to $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 Canada and Northern
U.S.  
Gross margin for the quarter ended March 31, 2013 was $61.0 million
or 17.3% of revenue compared to $62.3 million or 17.5% of revenue for
the same period of 2012. The decrease in gross margin of $1.3 million
(2.1%) 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 to $927.6
million at March 31, 2012, a 35.0% decrease over the comparable
period. As compared to December 31, 2012, backlog at March 31, 2013
decreased by $80.0 million or 11.7%. In Canada and the Northern U.S.,
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, bookings relating to the
liquids-rich shale resources 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 fulfillment 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
ongoing 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 at
www.enerflex.com under the Investors section and on SEDAR at
www.sedar.com.  
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
9:00 a.m. MDT (11:00 a.m. EDT) to discuss the first quarter 2013
financial results and operating highlights. The call will be hosted
by Mr. J. Blair Goertzen, President and Chief Executive Officer and
Mr. D. James Harbilas, Vice President and Chief Financial Officer of
Enerflex Ltd. 
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 at
www.enerflex.com under the Investors section on May 14, 2013 at 9:00
a.m. MDT (11:00 a.m. EDT). 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, May 21, 2013. Please call
1.800.558.5253 and enter passcode 21655065.  
About Enerflex  
Enerflex Ltd. is a single source supplier for natural gas
compression, oil and gas processing, refrigeration systems and power
generation equipment - plus in-house engineering and mechanical
service expertise. The Company's broad in-house resources provide the
capability to engineer, design, manufacture, construct, commission
and service hydrocarbon handling systems. Enerflex's expertise
encompasses field production facilities, compression and natural gas
processing plants, CO2 processing plants, refrigeration systems and
power generators service the natural gas production industry.  
Headquartered in Calgary, Canada, Enerflex has approximately 3,000
employees worldwide. Enerflex, its subsidiaries, interests in
associates and joint-ventures operate in Canada, the United States,
Argentina, Colombia, Australia, the United Kingdom, Russia, the
United Arab Emirates, Oman, Egypt, Bahrain, Indonesia and Singapore.
Enerflex's shares trade on the Toronto Stock Exchange under the
symbol "EFX". For more information about Enerflex, go to
www.enerflex.com.  
Advisory Regarding Forward-Looking Statements 
To provide Enerflex shareholders and potential investors with
information regarding Enerflex, including management's assessment of
future plans, Enerflex has included in this news release certain
statements and information that are forward-looking statements or
information within the meaning of applicable securities legislation,
and which are collectively referred to in this advisory as
"forward-looking statements". Information included in this news
release that is not a statement of historical fact may be
forward-looking information. When used in this document, words such
as "plans", "expects", "will", "may" and similar expressions are
intended to identify statements containing forward-looking
information. Forward-looking statements and information contained in
this news release include, but are not limited to: (i) the
anticipated duration of weak natural gas prices and the effect
thereof in Canada and Northern U.S. markets; (ii) expected bookings
in Southern U.S. and Latin America; (iii) the nature and scope of
opportunities in the International segment; and (iv) alternatives
being pursued relating to the European Service and CHP business. In
developing the forward-looking information in this news release, the
Company has made certain assumptions with respect to general economic
and industry growth rates, commodity prices, currency exchange and
interest rates, competitive intensity and shareholder and regulatory
approvals. Readers are cautioned not to place undue reliance on
forward-looking statements, as there can be no assurance that the
future circumstances, outcomes or results anticipated i
n or implied
by such forward-looking statements will occur or that plans,
intentions or expectations upon which the forward-looking statements
are based will occur.  
Forward-looking information involves known and unknown risks and
uncertainties and other factors, which may cause or contribute to
Enerflex achieving actual results that are materially different from
any future results, performance or achievements expressed or implied
by such forward-looking information. Such risks and uncertainties
include, among other things, the impact of general economic
conditions; industry conditions, including the adoption of new
environmental, taxation and other laws and regulations and changes in
how they are interpreted and enforced; volatility of oil and gas
prices; oil and gas product supply and demand; risks inherent in the
ability to generate sufficient cash flow from operations to meet
current and future obligations, including future dividends to
shareholders of the Company; increased competition; the lack of
availability of qualified personnel or management; labour unrest;
political unrest; fluctuations in foreign exchange or interest rates;
stock market volatility; opportunities available to or pursued by the
Company; obtaining financing; and other factors, many of which are
beyond its control. 
The foregoing list of factors and risks is not exhaustive. For an
augmented discussion of the risk factors and uncertainties that
affect or may affect Enerflex, the reader is directed to the section
entitled "Risk Factors" in Enerflex's most recently filed Annual
Information Form, as well as Enerflex's other publicly filed
disclosure documents, available on www.sedar.com. The reader is
cautioned that these factors and risks are difficult to predict and
that the assumptions used in the preparation of such information,
although considered reasonably accurate at the time of preparation,
may prove to be incorrect. Readers are cautioned that the actual
results achieved will vary from the information provided in this
press release and that such variation may be material. Consequently,
Enerflex does not represent that actual results achieved will be the
same in whole, or in part, as those set out in the forward-looking
information.  
Furthermore, the statements containing forward-looking information
that are included in this news release are made as of the date of
this news release, and Enerflex does not undertake any obligation,
except as required by applicable securities legislation, to update
publicly or to revise any of the included forward-looking
information, whether as a result of new information, future events or
otherwise. The forward-looking information contained in this news
release is expressly qualified by this cautionary statement.
Contacts:
Enerflex Ltd.
J. Blair Goertzen
President & Chief Executive Officer
403.236.6852 
Enerflex Ltd.
D. James Harbilas
Vice President & Chief Financial Officer
403.236.6857
www.enerflex.com
 
 
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