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Share Name | Share Symbol | Market | Type |
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Entrec Corporation | TSXV:ENT | TSX Venture | Common Stock |
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-- Revenue up 59% over same period in prior year from legacy companies -- Adjusted EBITDA $5.6 million and net income of $0.06 per share -- Revenue outlook increased for fiscal 2012 Entrec Transportation Services Ltd. ("ENTREC" or the "Company") (TSX VENTURE:ENT) is pleased to announce its financial results for the quarter ended March 31, 2012. Revenue was $23.4 million, representing a 59% increase from the combined pro forma revenue of $14.7 million generated from each of ENTREC's business acquisitions, on a combined basis, in the three month period ended March 31, 2011. "Not only are we obtaining growth from business acquisitions, we are also achieving substantial organic revenue growth from integrating these acquisitions, achieving higher rates of equipment utilization, growing our fleet of equipment, and benefiting from the cross-utilization of our people and equipment resources among our geographic areas," comments Rod Marlin, ENTREC's chairman and CEO. The Company's strong revenue resulted in Adjusted EBITDA of $5.6 million and net income of $2.5 million or $0.06 per share during the three months ended March 31, 2012. Increased Revenue Guidance for Fiscal 2012 "Our outlook for the remainder of 2012 and 2013 is very positive," added Mr. Marlin. "Capital spending on projects within the Alberta oil sands region and across western Canada has grown significantly commencing in the second half of 2011 resulting in increased demand for heavy haul transportation services. Complimenting this increase is also higher demand for on-site services to support existing facilities in the Alberta oil sands region." Based on ENTREC's current expectations for future business activity and assuming no further business acquisitions are completed, the Company currently estimates revenue for the year ending December 31, 2012 could be between $85 million and $95 million. This represents an increase from its previous revenue guidance of between $70 million and $75 million and results from adding the revenue contribution related to the acquisition of the Singer Specialized Group of Companies ("Singer") in April 2012 and from further increases in ENTREC's business outlook for the remainder the year. We believe further increases in our revenue guidance for 2012 may be possible should fundamentals within the heavy haul transportation industry continue to improve and we realize synergies associated with our acquisition of Singer. ENTREC will also continue to aggressively pursue its growth strategies in 2012. Future business acquisitions completed in fiscal 2012 may further increase its revenue estimates. The Company estimates its acquisition of the Mains Group, if completed, could initially contribute an additional $30 million to $35 million of revenue to operations on an annual basis. "Since completing our Qualifying Transaction in May 2011, we have been impressed with our progress in executing our growth strategies," said Mr. Marlin. "This execution, combined with the improvement of overall fundamentals within our industry, are placing us into what we believe is an enviable position as the right company at the right place at the right time." Executing ENTREC's Growth Strategies During the first quarter of 2012, ENTREC continued to execute on its growth strategies. The Company commenced its $22.3 million 2012 capital expenditure program, adding $7.2 million in property, plant and equipment in the quarter, consisting of $0.7 million in maintenance capital expenditures and $6.5 million in growth capital expenditures to expand its truck and heavy haul trailer fleet. In April 2012, ENTREC completed the acquisition of Singer for aggregate consideration of $10.0 million in cash and the issuance of 3,900,000 common shares. The acquisition of Singer allowed ENTREC to consolidate a significant competitor in the Calgary market and represented an important milestone in the Company's strategy of becoming the premier provider of heavy haul transportation services in its markets. In March 2012, ENTREC into a letter of intent, subject to certain conditions, to acquire the Mains Group of Companies ("Mains Group") for an aggregate purchase price of $56.3 million, subject to certain adjustments. Based in Nisku, Alberta, the Mains Group has been providing crane and heavy haul transportation services to all major industry sectors throughout western Canada for 18 years. "Crane services are very complimentary to heavy haul transportation and allow our customers to obtain both their heavy haul and lifting needs from one vendor," comments Mr. Marlin. "This acquisition, if completed, will represent a significant step forward for us in becoming a leading provider of integrated crane and heavy haul solutions to our customers throughout North America." 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). About ENTREC ENTREC specializes in the lifting, transportation (over the road and on-site), loading, off-loading and setting of overweight and oversized cargo for the oil and gas, construction, petrochemical, mining and power generation industries. The common shares of ENTREC trade on the TSX Venture Exchange under the trading symbol "ENT". Non-IFRS Financial Measures Adjusted EBITDA is defined as earnings before interest, taxes, depreciation, amortization, loss (gain) on disposal of property, plant and equipment, and share-based compensation. 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. Please see ENTREC's Management Discussion & Analysis for the three months ended March 31, 2012 for a reconciliation of Adjusted EBITDA 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: ENTREC's projection that revenue for the year ending December 31, 2012 will be between $85 million and $95 million before considering the impact of future business acquisitions; that further increases in our revenue guidance for 2012 may be possible should fundamentals within the heavy haul transportation industry continue to improve and we realize synergies associated with our acquisition of Singer; that the acquisition of the Mains Group could contribute initially an additional $30 million to $35 million of revenue to operations on an annual basis; expectation the Company will execute its 2012 capital expenditure program of $22.3 million; and belief that the acquisitions of Singer and the Mains Group, if completed, will contribute to the achievement of ENTREC's overall growth strategies. These forward-looking statements involve a number of significant assumptions. Key assumptions utilized in developing forward-looking statements related to ENTREC's future growth expectations include achieving its internal revenue, net income and cash flow forecasts for 2012 and 2013. Achieving these forecasts is largely dependent on a number of factors beyond ENTREC's control including all of the risks discussed further under the "Business Risks" section in ENTREC's Management Discussion and Analysis for the three months ended March 31, 2012. 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 finance its capital expenditure program through credit facilities and finance leases is dependent on its ability to achieve debt financing terms acceptable to the lenders and ENTREC as well as meeting ENTREC's internal cash flow forecasts. Forward-looking statements associated with ENTREC's potential acquisition of the Mains Group rely on certain expectations and assumptions, including, among others, (i) the results of ENTREC's due diligence review of the businesses proposed to be acquired being satisfactory, (ii) the ability of the parties to agree to the terms of definitive agreements, (iii) ENTREC's ability to receive the various approvals required, (iv) ENTREC's ability to obtain sufficient financing to complete the transactions; and (v) the Mains Group meeting or exceeding ENTREC's internal revenue, net income, and cash flow forecasts for that business in the future. 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. ---------------------------------------------------------------------------- Entrec Transportation Services Ltd. Interim Statements of Financial Position Unaudited As at March 31 December 31 November 1 2012 2011 2010 (thousands of Canadian dollars) $ $ $ ASSETS Current assets Cash 17,203 115 1,876 Trade and other receivables 21,207 13,679 1 Inventory 770 576 - Prepaid expenses and deposits 356 406 - ---------------------------------------------------------------------------- 39,536 14,776 1,877 Non-current assets Long-term deposits 400 400 - Property, plant and equipment 51,570 45,680 - Intangible assets 6,281 6,440 - Goodwill 10,356 10,356 - ---------------------------------------------------------------------------- Total assets 108,143 77,652 1,877 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Bank indebtedness - 267 - Trade and other payables 7,572 5,949 9 Acquisition consideration payable 4,000 4,125 - Current portion of credit facilities 5,267 5,251 - Current portion of obligations under finance lease 618 313 - Credit facilities 20,938 22,238 - ---------------------------------------------------------------------------- 38,395 38,143 9 Non-current liabilities Obligations under finance lease 2,519 1,141 - Deferred income taxes 2,321 1,877 - ---------------------------------------------------------------------------- Total liabilities 43,235 41,161 9 ---------------------------------------------------------------------------- Shareholders' equity Share capital 60,475 34,759 1,833 Contributed surplus 1,296 1,125 189 Retained earnings (deficit) 3,137 607 (154) ---------------------------------------------------------------------------- Total shareholders' equity 64,908 36,491 1,868 ---------------------------------------------------------------------------- Total liabilities and shareholders' equity 108,143 77,652 1,877 ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Entrec Transportation Services Ltd. Interim Statements of Income (Loss) and Comprehensive Income (Loss) Unaudited For the three months ended March 31 April 30 (thousands of Canadian dollars, except per 2012 2011 share amounts) $ $ Revenue 23,437 - Direct costs 15,332 - ---------------------------------------------------------------------------- Gross profit 8,105 - ---------------------------------------------------------------------------- Operating expenses General and administrative expenses 2,531 190 Depreciation of property, plant and equipment 1,268 - Amortization of intangible assets 206 - Share-based compensation 171 - Loss on disposal of property, plant and equipment 9 - ---------------------------------------------------------------------------- 4,185 190 ---------------------------------------------------------------------------- Income (loss) before finance items and income taxes 3,920 (190) ---------------------------------------------------------------------------- Finance items Finance costs 474 - Finance income (10) (4) ---------------------------------------------------------------------------- 464 (4) ---------------------------------------------------------------------------- Income (loss) before income taxes 3,456 (186) ---------------------------------------------------------------------------- Income taxes Current - - Deferred 926 - ---------------------------------------------------------------------------- 926 - ---------------------------------------------------------------------------- Net income (loss) and comprehensive income (loss) 2,530 (186) ---------------------------------------------------------------------------- ---------------------------------------------------------------------------- Earnings (loss) per share - basic and diluted 0.06 (0.07) ---------------------------------------------------------------------------- ----------------------------------------------------------------------------
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