Welcome!

News Feed Item

ENTREC Provides Operational Update, Lowers 2014 Revenue Guidance

SPRUCE GROVE, ALBERTA -- (Marketwired) -- 04/11/14 -- ENTREC Corporation (TSX VENTURE:ENT) ("ENTREC" or the "Company"), a leading provider of heavy lift and heavy haul services, today provided an operational update and lowered its 2014 revenue guidance.

As was guided in ENTREC's Q4 and year-end financial results press release on March 10, 2014, the Company has been experiencing lower levels of equipment utilization to begin 2014. ENTREC expects these lower levels of business activity to continue into the second quarter. These reduced expectations primarily relate to the timing and delays in oil sands construction projects.

Based on current expectations for future business activity, and assuming no business acquisitions are completed, ENTREC estimates revenue for the year ending December 31, 2014 could range between $230 and $250 million. This range represents a decline from ENTREC's previous revenue estimate of between $250 million and $270 million and compares to pro forma revenue of $237 million that ENTREC and each of its acquired businesses achieved on a combined basis in the year ended December 31, 2013.

"Our competitive position in our industry and long term outlook remains positive," said John M. Stevens, ENTREC's President and CEO. "We believe this period of lower activity will be temporary. We are now geographically positioned where we want to be, with a growing equipment fleet offering the complete range of crane and heavy haul transportation services in markets that will drive significant growth in our business over the long-term. These markets include the Alberta oil sands region, the development of LNG supply and infrastructure in northern British Columbia and north-west Alberta, and the Bakken region of North Dakota."

Subject to finalization of ENTREC's first quarter financial results, the Company estimates its first quarter 2014 revenue will approximate $61 million. ENTREC's 2014 first quarter revenue remains subject to final quarter-end billing and accounting adjustments, and as a result, may be different from current expectations. The Company expects revenue to trend upward in the second half of 2014 as project work begins to ramp up and utilization levels increase. ENTREC expects higher utilization levels in later 2014 could also continue into 2015, 2016, and 2017 due to the long-term nature of many oil sands projects.

With ENTREC's lowered revenue outlook for 2014, the Company also expects its 2014 adjusted EBITDA margin will decline from 2013. Lower equipment utilization levels will result in lower absorption of the fixed components of the Company's operating costs. In addition, the Company has experienced pricing pressure related to its heavy haul transportation services due to the current lag in oil sands construction projects. The Company has experienced significant increases in fuel costs over the past several months, which have also reduced the Company's profitability.

ENTREC currently estimates its adjusted EBITDA margin for 2014 could range between 20% and 22%. Consistent with the anticipated trend in revenue, ENTREC believes its adjusted EBITDA margin will also begin 2014 lower and then increase as the year progresses and utilization improves. Subject to finalization of ENTREC's first quarter financial results, the Company expects its 2014 first quarter adjusted EBITDA margin could approximate 17%. ENTREC's 2014 first quarter adjusted EBITDA margin remains subject to final quarter-end accounting adjustments, and as a result, may be different from current expectations.

ENTREC continues to review its overall capital expenditures needs and reiterates its $46 million capital expenditure program for 2014, which will position ENTREC to continue to expand its crane fleet in anticipation of future demand. As part of this review, the Company has reallocated approximately $5 million of capital expenditures to equipment types currently experiencing higher levels of utilization.

Company Lowering its Cost Structure

ENTREC is working to diligently manage its cost structure to drive higher profitability in the future. These measures included a 15% reduction in ENTREC's salary workforce in late March 2014 and closure of two branches. ENTREC is also working with its customers to recover a portion of the higher fuel costs through rate increases and fuel surcharges.

Normal Course Issuer Bid (NCIB)

In November 2013 ENTREC implemented a NCIB to purchase for cancellation, from time to time, its issued and outstanding common shares. Pursuant to the NCIB, ENTREC may purchase for cancellation up to a maximum of 8,561,671 common shares, being approximately 10% of the public float, during the NCIB's term. The NCIB commenced November 20, 2013 and will terminate on November 19, 2014 or such earlier time as it is completed or otherwise terminated at ENTREC's option.

In March and April 2014, the Company acquired 1,474,800 common shares for cancellation (representing 1.3% of ENTREC's issued and outstanding common shares) pursuant to the NCIB at an average purchase price of $1.49 per share.

Despite ENTREC's reduced guidance for 2014, the Company does not believe it will need to raise any additional equity to fund its 2014 capital expenditure program or NCIB. The Company intends to fund its 2014 capital expenditure program and NCIB purchases from its new asset-based debt facility, finance leases and cash from operating activities.

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".

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.

Please see ENTREC's Management Discussion & Analysis for the year ended December 31, 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 MD&A include, but are not limited to: expectation that ENTREC's equipment utilization will remain lower throughout the first half of 2014; estimate that revenue for the year ending December 31, 2014 could range between $230 million and $250 million; estimate that revenue for the first quarter ended March 31, 2014 could approximate $61 million; expectation that demand for the Company's services in the Alberta oil sands region will gain momentum as the year progresses; estimate that overall adjusted EBITDA margin for fiscal 2014 will decline from 2013 and could range between 20% and 22% for the year ending December 31, 2014 and approximate 17% for the quarter ended March 31, 2014; plan to complete a 2014 capital expenditure program of $46 million; intention that the 2014 capital expenditure program and NCIB purchases will be funded from the Company's asset-based debt facility, finance leases and cash from operating activities; and that ENTREC will not need to raise additional equity to fund its 2014 capital expenditure program or NCIB.

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 2014 and beyond. 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 increase from current levels in the second half of 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 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 year ended December 31, 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 2014 and beyond are the volatility of the oil and gas industry, its exposure to the Alberta oil sands, workforce availability, competition, 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 intention to acquire shares pursuant to its NCIB is subject to 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.

Contacts:
ENTREC Corporation
John M. Stevens
President & CEO
(780) 960-5625

ENTREC Corporation
Jason Vandenberg
CFO
(780) 960-5630
www.entrec.com

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
The explosion of new web/cloud/IoT-based applications and the data they generate are transforming our world right before our eyes. In this rush to adopt these new technologies, organizations are often ignoring fundamental questions concerning who owns the data and failing to ask for permission to conduct invasive surveillance of their customers. Organizations that are not transparent about how their systems gather data telemetry without offering shared data ownership risk product rejection, regu...
More and more brands have jumped on the IoT bandwagon. We have an excess of wearables – activity trackers, smartwatches, smart glasses and sneakers, and more that track seemingly endless datapoints. However, most consumers have no idea what “IoT” means. Creating more wearables that track data shouldn't be the aim of brands; delivering meaningful, tangible relevance to their users should be. We're in a period in which the IoT pendulum is still swinging. Initially, it swung toward "smart for smart...
When you focus on a journey from up-close, you look at your own technical and cultural history and how you changed it for the benefit of the customer. This was our starting point: too many integration issues, 13 SWP days and very long cycles. It was evident that in this fast-paced industry we could no longer afford this reality. We needed something that would take us beyond reducing the development lifecycles, CI and Agile methodologies. We made a fundamental difference, even changed our culture...
The Internet of Things can drive efficiency for airlines and airports. In their session at @ThingsExpo, Shyam Varan Nath, Principal Architect with GE, and Sudip Majumder, senior director of development at Oracle, discussed the technical details of the connected airline baggage and related social media solutions. These IoT applications will enhance travelers' journey experience and drive efficiency for the airlines and the airports.
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
SYS-CON Events announced today that CA Technologies has been named “Platinum Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY, and the 21st International Cloud Expo®, which will take place October 31-November 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA. CA Technologies helps customers succeed in a future where every business – from apparel to energy – is being rewritten by software. From ...
In his keynote at 18th Cloud Expo, Andrew Keys, Co-Founder of ConsenSys Enterprise, provided an overview of the evolution of the Internet and the Database and the future of their combination – the Blockchain. Andrew Keys is Co-Founder of ConsenSys Enterprise. He comes to ConsenSys Enterprise with capital markets, technology and entrepreneurial experience. Previously, he worked for UBS investment bank in equities analysis. Later, he was responsible for the creation and distribution of life settle...
In his keynote at @ThingsExpo, Chris Matthieu, Director of IoT Engineering at Citrix and co-founder and CTO of Octoblu, focused on building an IoT platform and company. He provided a behind-the-scenes look at Octoblu’s platform, business, and pivots along the way (including the Citrix acquisition of Octoblu).
In his general session at 18th Cloud Expo, Lee Atchison, Principal Cloud Architect and Advocate at New Relic, discussed cloud as a ‘better data center’ and how it adds new capacity (faster) and improves application availability (redundancy). The cloud is a ‘Dynamic Tool for Dynamic Apps’ and resource allocation is an integral part of your application architecture, so use only the resources you need and allocate /de-allocate resources on the fly.
Containers have changed the mind of IT in DevOps. They enable developers to work with dev, test, stage and production environments identically. Containers provide the right abstraction for microservices and many cloud platforms have integrated them into deployment pipelines. DevOps and Containers together help companies to achieve their business goals faster and more effectively. In his session at DevOps Summit, Ruslan Synytsky, CEO and Co-founder of Jelastic, reviewed the current landscape of D...
The best way to leverage your Cloud Expo presence as a sponsor and exhibitor is to plan your news announcements around our events. The press covering Cloud Expo and @ThingsExpo will have access to these releases and will amplify your news announcements. More than two dozen Cloud companies either set deals at our shows or have announced their mergers and acquisitions at Cloud Expo. Product announcements during our show provide your company with the most reach through our targeted audiences.
Security, data privacy, reliability and regulatory compliance are critical factors when evaluating whether to move business applications from in-house client hosted environments to a cloud platform. In her session at 18th Cloud Expo, Vandana Viswanathan, Associate Director at Cognizant, In this session, will provide an orientation to the five stages required to implement a cloud hosted solution validation strategy.
SYS-CON Events announced today that Outlyer, a monitoring service for DevOps and operations teams, has been named “Bronze Sponsor” of SYS-CON's 20th International Cloud Expo®, which will take place on June 6-8, 2017, at the Javits Center in New York City, NY. Outlyer is a monitoring service for DevOps and Operations teams running Cloud, SaaS, Microservices and IoT deployments. Designed for today's dynamic environments that need beyond cloud-scale monitoring, we make monitoring effortless so you...
Cloud Expo, Inc. has announced today that Andi Mann and Aruna Ravichandran have been named Co-Chairs of @DevOpsSummit at Cloud Expo 2017. The @DevOpsSummit at Cloud Expo New York will take place on June 6-8, 2017, at the Javits Center in New York City, New York, and @DevOpsSummit at Cloud Expo Silicon Valley will take place Oct. 31-Nov. 2, 2017, at the Santa Clara Convention Center in Santa Clara, CA.
DevOps is being widely accepted (if not fully adopted) as essential in enterprise IT. But as Enterprise DevOps gains maturity, expands scope, and increases velocity, the need for data-driven decisions across teams becomes more acute. DevOps teams in any modern business must wrangle the ‘digital exhaust’ from the delivery toolchain, "pervasive" and "cognitive" computing, APIs and services, mobile devices and applications, the Internet of Things, and now even blockchain.