ENTREC Announces 2013 Third Quarter Financial Results

ENTREC Corporation ("ENTREC" or the "Company") (TSX VENTURE:ENT), a leading
provider of heavy lift and heavy haul services, today announced financial
results for the three and nine months ended September 30, 2013. 




                                  Three Months Ended    Nine Months Ended   
$ thousands, except per share      Sept 30    Sept 30    Sept 30    Sept 30 
 amounts and margin percent           2013       2012       2013       2012 
                                                                            
Revenue                             59,080     36,298    160,090     88,465 
                                                                            
Gross profit                        20,948     12,222     56,445     30,936 
Gross margin                          35.5%      33.7%      35.3%      35.0%
                                                                            
Adjusted EBITDA(1)                  16,080      8,935     42,246     22,642 
  Margin(1)                           27.2%      24.6%      26.4%      25.6%
  Per share(1)                        0.14       0.11       0.40       0.36 
                                                                            
Adjusted net income(1)               6,220      3,541     16,166      9,459 
  Per share(1)                        0.05       0.05       0.15       0.15 
                                                                            
Net income                           5,644      3,143     15,471      8,684 
  Per share - basic                   0.05       0.04       0.14       0.14 
  Per share - diluted                 0.05       0.04       0.13       0.13 
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Note 1: See "Non-IFRS Financial Measures" section of the Company's Management
Discussion & Analysis for the three and nine months ended September 30, 2013.


"We continued to make great strides toward our long-term growth objectives in
the third quarter," said John M. Stevens, ENTREC's President and COO. "Effective
July 1st, we acquired GT's Crane and Transportation Services Inc. ("GT's"). This
acquisition made us the leading heavy lift and heavy haul company in northeast
B.C. and northwest Alberta and strongly positions us to benefit from future
investments in LNG-driven natural gas production and infrastructure in these
regions. In addition, through our growth and cost-saving initiatives, we are
continuing to increase EBITDA margins." 


"Our significantly expanded scale and operating capabilities are also enabling
us to pursue large crane and heavy haul contracts with customers in the Alberta
oil sands region and throughout northern B.C. We are currently working on a
number of customer opportunities that have the potential to bring our business
to the next level and drive higher levels of equipment utilization and
profitability in the future." 


Normal Course Issuer Bid ("NCIB") and Shareholder Rights Plan

With ENTREC's positive outlook for the future, the Company believes one of the
best investments it can make is in itself. Subject to the approval of the TSX
Venture Exchange, ENTREC plans to implement a NCIB program in the fourth quarter
of 2013, which will enable it to purchase issued and outstanding common shares
of the Company on the open market.


"Our business generates a significant amount of cash from operating activities,"
added Mr. Stevens. "In addition to completing another robust capital expenditure
program, we plan to utilize some of our projected free cash flow in 2013 and
2014 to execute an NCIB program. Our debt levels also remain conservative
(senior debt to EBITDA ratio at September 30, 2013 was 1.58) allowing for
additional flexibility in our capital allocation."


ENTREC is also in the process of implementing a shareholder rights plan in the
fourth quarter of 2013.


2013 Q3 Financial Results

For the three months ended September 30, 2013, revenue increased by 63% to $59.1
million from $36.3 million during the same period in 2012. This growth reflected
the positive impact of business acquisitions over the past year, partially
offset by lower rates of equipment utilization. As mentioned in previous
quarters, demand from the conventional oil and natural gas industry has been
weaker in 2013. The Company also experienced a temporary slowdown in demand from
the oil sands market during the third quarter. 


Adjusted EBITDA increased to $16.1 million during the three months ended
September 30, 2013 from $8.9 million in the comparative quarter in 2012. As a
percentage of revenue, third quarter adjusted EBITDA margin increased to 27.2%,
from 24.6% during the same period last year. The year-over-year improvement
reflects continued expansion into higher margin crane services. The increase
also reflects more cross-utilization of equipment resources across geographic
areas, which has enhanced margins by reducing ENTREC's reliance on third party
contractors. 


Adjusted net income increased to $6.2 million in the third quarter, from $3.5
million last year, reflecting the higher revenue and improved adjusted EBITDA
margin. Third quarter adjusted net income included $0.3 million in non-recurring
acquisition and integration costs, primarily related to the acquisition of GT's,
compared to $0.4 million in the three months ended September 30, 2012. Adjusted
earnings per share were $0.05 per share, compared to $0.05 per share during the
same period last year. 


For the three months ended September 30, 2013, net income, reported in
accordance with IFRS, grew to $5.6 million or $0.05 per share from $3.1 million
or $0.04 per share in the third quarter last year. 


Outlook for 2014

"Our outlook for 2014 remains very positive," said Mr. Stevens. "Despite the
lower demand levels we have seen in some markets in recent months, quoting
activity in our key markets continues to be very strong for work commencing in
2014."


Oil sands demand is expected to ramp up beginning in the first quarter of 2014
and continue to gain momentum as the year progresses. Large heavy haul
transportation contracts awarded to ENTREC in the first half of 2013 will
commence in the first quarter of 2014 and continue through 2017. In addition,
ENTREC is working with oil sands customers on several large crane and heavy haul
transportation projects that will commence at different times throughout the
2014 year. Certain of these projects will extend through to 2017. 


Consistent with its strategy, ENTREC is also successfully expanding the amount
of long-term maintenance, repair and operation (MRO) contract work it performs
in the Alberta oil sands region. ENTREC was recently awarded a 5-year MRO
contract with an oil sands customer, which will commence shortly and generate up
to $15 million in incremental annual revenue. The Company is also making good
progress on cross-selling its crane and heavy haul transportation services to
existing and new oil sands customers. 


Northwest B.C. continues to be a busy area for ENTREC. The Company is currently
working on various mining, hydro-electric, pipeline, and oil and natural gas
projects in the region and is providing crane and transportation services to
support a multi-billion-dollar revitalization of an aluminum smelter in Kitimat,
B.C. ENTREC will continue to expand its service capabilities in this important
region throughout 2014 in preparation for the planned development of LNG
facilities. These projects, along with ancillary infrastructure developments,
are expected to require extensive crane and heavy haul transportation services.


With its recently completed acquisition of GT's, ENTREC now has a leading market
position in northeast B.C. and northwest Alberta. ENTREC believes this will be a
busy area for the Company in 2014 as it supports oil and natural gas projects in
the region. The Company is also in the process of expanding its operations into
Fort St. John, B.C. to better serve customers in this region.


Outlook for remainder of 2013

In the short-term, ENTREC expects activity levels in the fourth quarter will be
modest. Certain crane and heavy haul transportation projects will be ramping
down and the Company will also experience its typical Christmas season slow-down
in customer activity. Offsetting these reductions will be expected increased
revenue from ENTREC's operations in northeast B.C. and northwest Alberta during
the winter months. 


In light of the anticipated near-term, temporary reduction in utilization
levels, ENTREC is decreasing its revenue guidance for fiscal 2013. ENTREC
currently estimates revenue for the year ending December 31, 2013 could range
between $210 million and $220 million. This represents a reduction from its
previous revenue estimate of between $235 million and $245 million. 


2013 capital expenditure program

With ENTREC's strong outlook for demand for its services, the Company increased
its 2013 capital expenditure program to $57 million from a previously announced
program of $53 million. The additional $4 million of capital expenditures
primarily relates to the acquisition of equipment for a specific customer
project, the acquisition of employee-owned equipment previously utilized in the
GT's business, and specific equipment required to expand ENTREC's operations
into the Fort St. John, B.C. market this winter. 


ENTREC's revised 2013 capital expenditure program of $57 million now consists of
the following components:




Cranes (all-terrain, rough terrain, crawlers, truck cranes,                 
 picker trucks)                                                $  35 million
Heavy haul transportation equipment (including SPMTs)          $  16 million
Other                                                          $   6 million
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Total                                                                       
                                                               $  57 million



The revised program comprises $51 million of growth capital expenditures to grow
the equipment fleet, and particularly the crane fleet, together with $6 million
in maintenance capital expenditures. 


During the nine months ended September 30, 2013, ENTREC made capital
expenditures of $48.8 million, consisting of $44.8 million in growth capital
expenditures and $4.0 million in maintenance capital expenditures. Crane
equipment purchases accounted for approximately $31 million of the capital
expenditures, with the remainder directed to tractors and heavy haul trailers,
as well as to other support equipment. 


2014 capital expenditure program

ENTREC is currently in the process of determining its 2014 capital expenditure
program in conjunction with its 2014 budgeting process. Although plans are not
yet finalized, the Company anticipates the program will initially range between
$35 million and $40 million and will consist of $10 million in maintenance
capital expenditures and $25 to $30 million in growth capital expenditures.
Growth capital expenditures will be focused on building the mobile crane fleet
as ENTREC works to expand its service capabilities in this market. 


ENTREC intends to fund its 2013 and 2014 capital expenditures programs from its
credit facilities, finance leases and cash from operating activities. The
Company also expects to have the flexibility to increase its capital expenditure
program throughout 2014 should customer demand warrant. The Company does not
believe it will need to raise any additional equity to fund its 2014 capital
expenditure program. 


A complete set of ENTREC's most recent financial statements and Management's
Discussion and Analysis will be filed on SEDAR (www.sedar.com) and posted on the
Company's website (www.entrec.com).


Third Quarter Conference Call

ENTREC will host a conference call and webcast to discuss its 2013 third quarter
financial results tomorrow, November 14, 2013 at 9:00 am (MST) (11:00 am
Eastern). The call can be accessed by dialing toll-free: 1-866-225-0198 or
416-340-2219 (GTA and International). 


A replay will be available approximately two hours after the completion of the
call until November 21, 2013 by dialing 905-694-9451 / 1-800-408-3053, passcode:
6985778.


The conference call will also be available via webcast within the Investors
section of ENTREC's website at: www.entrec.com.


About ENTREC

ENTREC is a leading provider of heavy lift and heavy haul services with
offerings encompassing crane services, heavy haul transportation, engineering,
logistics and support. ENTREC provides these services to the oil and natural
gas, construction, petrochemical, mining and power generation industries.
ENTREC's common shares trade on the TSX Venture Exchange under the trading
symbol "ENT". 




Consolidated Statements of Financial Position      September 30 December 31 
As at(thousands of Canadian dollars)                       2013        2012 
                                                              $           $ 
                                                                            
ASSETS                                                                      
Current assets                                                              
  Cash                                                      897       2,511 
  Trade and other receivables                            52,091      41,789 
  Inventory                                               2,307       1,968 
  Prepaid expenses and deposits                           3,327       1,936 
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                                                         58,622      48,204 
Non-current assets                                                          
  Long-term deposits and other assets                     2,411         523 
  Deposits on business acquisitions                           -       4,273 
  Property, plant and equipment                         203,233     134,761 
  Intangible assets                                      28,388      23,868 
  Goodwill                                               69,176      53,575 
  Deferred income taxes                                     220         165 
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Total assets                                            362,050     265,369 
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LIABILITIES AND SHAREHOLDERS' EQUITY                                        
Current liabilities                                                         
  Trade and other payables                               23,825      16,781 
  Income taxes payable                                    1,660       2,703 
  Acquisition consideration payable                       2,643       2,320 
  Current portion of long-term debt                      19,044      14,226 
  Current portion of obligations under finance                              
   lease                                                  1,642       1,298 
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                                                         48,814      37,328 
Non-current liabilities                                                     
  Long-term debt                                         75,121      64,281 
  Obligations under finance lease                         2,285       4,914 
  Notes payable                                           7,294           - 
  Convertible debentures                                 21,941      23,426 
  Deferred income taxes                                  27,717      19,428 
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Total liabilities                                       183,172     149,377 
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Shareholders' equity                                                        
  Share capital                                         141,684      94,880 
  Contributed surplus                                     8,851       8,429 
  Retained earnings                                      28,190      12,719 
  Accumulated other comprehensive income (loss)             153         (36)
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Total shareholders' equity                              178,878     115,992 
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Total liabilities and shareholders' equity              362,050     265,369 
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Consolidated Statements of Income    Three Months Ended  Nine Months Ended  
                                      Sept 30   Sept 30   Sept 30   Sept 30 
(thousands of Canadian dollars,          2013      2012      2013      2012 
 except per share amounts)                  $         $         $         $ 
                                                                            
Revenue                                59,080    36,298   160,090    88,465 
Direct costs                           38,132    24,076   103,645    57,529 
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Gross profit                           20,948    12,222    56,445    30,936 
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Operating expenses                                                          
General and administrative expense      5,188     3,702    15,515     9,150 
Depreciation of property, plant and                                         
 equipment                              5,267     2,504    13,219     5,637 
Amortization of intangible assets         970       556     2,513     1,100 
Share-based compensation                  353       193     1,236       811 
(Gain) loss on disposal of property,                                        
 plant and equipment and other                                              
 assets                                  (198)       43       (48)      171 
Gain on change in fair value of                                             
 embedded derivative                     (448)        -    (2,316)        - 
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                                       11,132     6,998    30,119    16,869 
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Income before finance items and                                             
 income taxes                           9,816     5,224    26,326    14,067 
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Finance items                                                               
  Finance costs                         2,214       880     5,668     2,009 
  Finance income                            -        (2)        -       (19)
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                                        2,214       878     5,668     1,990 
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Income before income taxes              7,602     4,346    20,658    12,077 
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Income taxes                                                                
  Current                                  38       735     1,835     1,176 
  Deferred                              1,920       468     3,352     2,217 
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                                        1,958     1,203     5,187     3,393 
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Net income                              5,644     3,143    15,471     8,684 
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Earnings per share - basic               0.05      0.04      0.14      0.14 
Earnings per share - diluted             0.05      0.04      0.13      0.13 
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Non-IFRS Financial Measures

Adjusted EBITDA is defined as earnings before interest, income taxes,
depreciation, amortization, loss (gain) on disposal of property, plant and
equipment, change in fair value of embedded derivative, share-based
compensation, and non-recurring business acquisition and integration costs. In
addition to net income, Adjusted EBITDA is a useful measure as it provides an
indication of the financial results generated by ENTREC's principal business
activities prior to consideration of how these activities are financed or how
the results are taxed in various jurisdictions and before certain non-cash
expenses. Adjusted EBITDA also illustrates what ENTREC's EBITDA is, excluding
the effect of non-recurring business acquisition and integration costs. Adjusted
EBITDA margin is calculated as adjusted EBITDA divided by revenue. Per share
amounts are calculated as adjusted EBITDA divided by the basic weighted average
number of shares outstanding during the period.


Adjusted net income is calculated excluding the after-tax amortization of
acquisition-related intangible assets, notional interest accretion expense
arising from convertible debentures, and the gain (loss) on change in fair value
of the embedded derivative related to such convertible debentures. These
exclusions represent non-cash charges the Company does not consider indicative
of ongoing business performance. ENTREC also believes the elimination of
amortization of acquisition-related intangible assets provides management and
investors an improved view of its business results by providing a degree of
comparability to internally developed intangible assets for which the related
costs are expensed as incurred. Adjusted earnings per share is calculated as
adjusted net income divided by the basic weighted average number of shares
outstanding during the applicable period. 


Please see ENTREC's Management Discussion & Analysis for the three and nine
months ended September 30, 2013 for reconciliations of adjusted EBITDA and
adjusted net income to net income, the most directly comparable financial
measure calculated and presented in accordance with IFRS.


Forward-looking Statements

This press release contains forward-looking statements which reflect ENTREC's
current beliefs and are based on information currently available to ENTREC.
These statements require ENTREC to make assumptions it believes are reasonable
and are subject to inherent risks and uncertainties. Actual results and
developments may differ materially from the results and developments discussed
in the forward-looking statements as certain of these risks and uncertainties
are beyond ENTREC's control. 


Examples of such forward-looking statements in this press release relate to, but
are not limited to: expectation of increased revenue from ENTREC's operations in
northeast B.C. and northwest Alberta this winter; estimate revenue could range
between $210 million and $220 million for the year ending December 31, 2013;
belief oil sands demand will begin ramping up in the first quarter of 2014 and
continue to gain momentum as the year progresses; estimate a recently awarded
MRO contract will commence shortly and generate up to $15 million in incremental
annual revenue; belief ENTREC will continue to expand its service capabilities
in northwest B.C. in 2014 as it anticipates the planned development of LNG
facilities; expectation northwest Alberta and northeast B.C. will be a busy area
for ENTREC in 2014 as it supports oil and natural gas projects in the region;
belief that with ENTREC's significantly expanded scale and operating
capabilities, it is working on several more customer opportunities that will
bring its business to the next level and drive higher levels of equipment
utilization and profitability in the future; plan to implement a normal course
issuer bid in the fourth quarter of 2013; plan to implement a shareholder rights
plan in the fourth quarter of 2013, plan to complete a revised 2013 capital
expenditure program of $57 million; estimate ENTREC's 2014 capital expenditure
program could initially range between $35 and $40 million; belief ENTREC's 2013
and 2014 capital expenditure programs will help support the growing demand for
its services and will be funded from its credit facilities, finance leases and
cash from operating activities and that it will have the flexibility to increase
its 2014 capital expenditure program throughout 2014 should customer demand
warrant; and expectation the Company will not need to raise any additional
equity to fund its 2014 capital expenditure program;


ENTREC's forward-looking statements involve a number of significant assumptions.
Key assumptions utilized in developing forward-looking statements related to
ENTREC's growth and revenue expectations include achieving its internal revenue,
net income and cash flow forecasts for 2013 and 2014. Key assumptions involved
in preparing ENTREC's internal forecasts include, but are not limited to, its
expectations and estimates that: demand for crane and heavy haul transportation
services in western Canada continues as expected through the remainder of 2013
and increases from current levels in 2014; ENTREC will be able to retain key
personnel and attract additional high-quality personnel to support its planned
revenue growth; construction projects and production activity in the Alberta oil
sands region and in northern British Columbia continue at or above current
levels; ENTREC is able to achieve anticipated revenues on current and future MRO
contracts; the planned development of LNG facilities proceeds and certain
customers choose to utilize ENTREC's services; there are no significant
unplanned increases in ENTREC's cost structure, including those costs related to
fuel and wages; market interest rates remain similar to current rates and that
additional debt financing remains available to ENTREC on similar terms to its
existing debt financing; there is no prolonged period of inclement weather that
impedes or delays the need for crane and heavy haul transportation services; the
competitive landscape in western Canada for crane and heavy haul transportation
services does not materially change during the remainder of 2013 and in 2014;
and there is no material adverse change in overall economic conditions.


Achieving these forecasts largely depends on a number of factors beyond ENTREC's
control including several of the risks discussed further under "Business Risks"
in ENTREC Management's Discussion & Analysis for the three and none months ended
September 30, 2013. The business risks that are most likely to affect ENTREC's
ability to achieve its internal revenue, net income and cash flow forecasts for
2013 and 2014 are the volatility of the oil and gas industry, its exposure to
the Alberta oil sands, workforce availability, weather and seasonality,
availability of debt and equity financing, competition, and business integration
risks. These risk factors are interdependent and the impact of any one risk or
uncertainty on a particular forward-looking statement is not determinable. 


ENTREC's ability to implement a normal course issuer bid in the fourth quarter
of 2013 is subject to receipt of regulatory approval, potential fluctuations in
the market price of its shares and the potential management may find another,
more desirable use for its available funds.


ENTREC's ability to finance its capital expenditure program through its debt
facilities depends on its ability to achieve debt financing terms acceptable to
the lenders and ENTREC as well as meeting its internal cash flow forecasts. 


Consequently, all of the forward-looking statements made in this press release
are qualified by these cautionary statements and other cautionary statements or
factors contained herein, and there can be no assurance that the actual results
or developments will be realized or, even if substantially realized, that they
will have the expected consequences to, or effects on, ENTREC. These
forward-looking statements are made as of the date of this press release. Except
as required by applicable securities legislation, ENTREC assumes no obligation
to update publicly or revise any forward-looking statements to reflect
subsequent information, events, or circumstances.


Neither the TSX Venture Exchange nor its regulation services provider (as that
term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.


FOR FURTHER INFORMATION PLEASE CONTACT: 
ENTREC Corporation
Rod Marlin
Chairman & CEO
[phone]


ENTREC Corporation
John M. Stevens
President & COO
[phone]


ENTREC Corporation
Jason Vandenberg
CFO
[phone]
www.entrec.com