Enterprise Group Announces Results for First Quarter 2025
- Strategic $20M acquisition of FlexEnergy Canada grants exclusive rights for FlexEnergy turbines in Canada
- New lending facility with Bank of Montreal secured with better terms and $1.5M settlement discount
- Strong margins maintained at 50% gross margin and 43% EBITDA
- $5.9M investment in capital assets for fleet expansion and modernization
- Positive cash flow from operations of $5.0M
- Revenue decreased 16% year-over-year to $10.3M
- Gross margin declined 25% to $5.2M compared to prior year
- Adjusted EBITDA fell 30% to $4.4M year-over-year
- Earnings per share dropped to $0.04 from $0.07-0.08 in prior year
- New deferred tax expense of $743,773 compared to nil in prior period
St. Albert, Alberta--(Newsfile Corp. - May 8, 2025) - Enterprise Group, Inc. (TSX: E) (OTCQB: ETOLF) (the "Company" or "Enterprise"), a consolidator of energy services (including specialized equipment and services to the energy/resource sector), emphasizes technologies that mitigate, reduce, or eliminate CO2 and Green House Gas (GHG) and other harmful emissions for small local and Tier One resource clients, is pleased to announce its Q1 2025 results.
OVERALL PERFORMANCE AND RESULTS OF OPERATIONS
| Three months March 31, 2025 | Three months March 31, 2024 | |||
| Revenue | ||||
| Gross margin | ||||
| Adjusted EBITDA(1) | ||||
| Net income and comprehensive income | ||||
| Income per share - Basic | ||||
| Income per share - Diluted |
(1) Identified and defined under "Non-IFRS Measures".
- Activity levels increased for the first quarter of 2025 compared to the fourth quarter of 2024, returning to levels consistent with the first quarter of 2024 with gross margin and EBITDA returning to near historic levels at
50% and43% respectively. Revenue for the three months ended March 31, 2025, was$10,328,085 compared to$12,326,288 in the prior period, a decrease of$1,998,203 or16% . Gross margin for the three months ended March 31, 2025, was$5,175,343 compared to$6,896,344 in the prior period, a decrease of$1,721,001 of25% . Adjusted EBITDA for the three months ended March 31, 2025, was$4,415,855 compared to$6,337,853 in the prior period, a decrease of$1,921,998 or30% . These lower amounts are largely due to a natural gas infrastructure project which ended in Q1 2024.
- For the three months ended March 31, 2025, the Company generated cash flow from operations of
$5,032,037 compared to$5,659,665 in the prior period. This change is consistent with revenue levels during the period. The Company continues to utilize a combination of cash flow, debt and equity to right-size and modernize its equipment fleet to meet customer demands. During the three months March 31, 2025, the Company acquired$5,855,510 of capital assets, primarily for growth in natural gas power systems and diversifying the Company's infrastructure rental fleet to support customer demand.
- On May 7, 2025, Enterprise closed the previously announced transaction to acquire
100% of the shares of Flex Leasing Power and Service ULC ("FlexEnergy Canada") from Flex Leasing Power and Service LLC ("FlexEnergy Solutions") for a purchase price of$20 million . With this strategic transaction, Enterprise becomes the exclusive supplier for FlexEnergy turbines in Canada, further solidifying its market leadership and positioning Enterprise at the forefront of addressing the growing demand for reliable and efficient natural gas to electric power solutions across Canada and various industries. The acquisition includes 17 turbines with a 333 kW capacity, allows the Company access to add 2.0 MW units for future growth, and makes Enterprise the exclusive provider to rent, lease, sell and service FlexEnergy turbines in Canada. Long-term leasing contracts, along with long-term maintenance contracts, create a recurring revenue stream for Enterprise.
- On April 30, 2025, the Company finalized a new lending facility with The Bank of Montreal. The new Facility is to be used for acquisitions, capital expenditures, and working capital. It replaces the company's previous lending facility and consolidates Enterprise's debt resulting in a lower overall interest rate and lower borrowing costs. The Company's previous facility was paid out on February 28, 2025, which included a negotiated settlement discount of
$1,500,000 , resulting in a reduction to interest expense of more than$127,000 for the first quarter of 2025. The new facility bears interest at a rate of up to prime +2% , is secured by a first charge on all company assets and is subject to certain financial covenants.
- For the three months ended March 31, 2025, the Company recorded a deferred tax expense of
$743,773 compared to $nil in the prior period. This non-cash charge results from different accounting and tax treatment of newly acquired equipment, creating a deferred tax liability and deferred tax expense on the Company's financial statements. In prior years the Company's deferred tax liability was offset by a deferred tax asset. In 2024, the deferred tax liability surpassed the deferred tax asset, and as a result the Company will continue to record a deferred tax expense going forward.
- The Company continues to monitor the evolving landscape of international trade policies, including the impact of tariffs on the Canadian energy sector. While the Government of Canada has implemented retaliatory tariffs in response to U.S. trade actions, as outlined by the Department of Finance Canada, the Company has assessed that these measures have not materially affected its operations. Importantly, Canadian energy exports remain included under the United States-Mexico-Canada Agreement (USMCA) and are not subject to additional tariffs, which reinforces the stability of cross-border energy trade. Furthermore, tariffs on U.S.-manufactured equipment have not disrupted procurement or project timelines, and the Company continues to source critical equipment from the United States without significant cost or supply challenges. As such, current trade developments are not expected to impact the Company's operational performance or strategic capital expenditures in the near term.
About Enterprise Group, Inc.
Enterprise Group, Inc. 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 and Greenhouse Gas emissions for itself and its clients. The Company is well known to local Tier One and international resource companies with operations in Western Canada. More information is available at the Company's website www.enterprisegrp.ca. Corporate filings can be found on www.sedarplus.ca.
For questions or additional information, please contact:
Leonard Jaroszuk: Chairman & CEO, or
Desmond O'Kell: President
contact@enterprisegrp.ca
780-418-4400
Forward-Looking Information
Certain statements contained in this news release constitute forward-looking information. These statements relate to future events or the Company's future performance. The use of any of the words "could", "expect", "believe", "will", "projected", "estimated" and similar expressions and statements relating to matters that are not historical facts are intended to identify forward-looking information and are based on the Company's current belief or assumptions as to the outcome and timing of such future events. Actual future results may differ materially. The Company's Annual Information Form and other documents filed with securities regulatory authorities (accessible through the SEDAR+ website www.sedarplus.ca) describe the risks, material assumptions and other factors that could influence actual results and which are incorporated herein by reference. The Company disclaims any intention or obligation to publicly update or revise any forward-looking information, whether as a result of new information, future events or otherwise, except as may be expressly required by applicable securities laws.
Non-IFRS Measures
The Company uses International Financial Reporting Standards ("IFRS"). Adjusted EBITDA is not a measure that has any standardized meaning prescribed by IFRS and is therefore referred to as a non-IFRS measure. This news release contains references to adjusted EBITDA. This non-IFRS measure used by the Company may not be comparable to a similar measure used by other companies. Management believes that in addition to net income, adjusted EBITDA is a useful supplemental measure as it provides an indication of the results generated by the Company's principal business activities prior to consideration of how those activities are financed or how the results are taxed. Adjusted EBITDA is calculated as net income excluding depreciation, amortization, interest, taxes and stock based compensation.
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/251236
FAQ
What caused ETOLF's revenue decline in Q1 2025?
What is the significance of Enterprise Group's FlexEnergy Canada acquisition?
How did ETOLF's new lending facility impact its financials?
What were Enterprise Group's (ETOLF) key financial metrics for Q1 2025?
How much did Enterprise Group invest in capital assets during Q1 2025?
