|By Marketwired .||
|April 11, 2014 07:00 AM EDT||
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.
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.
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.
John M. Stevens
President & CEO
SYS-CON Events announced today that ReadyTalk, a leading provider of online conferencing and webinar services, has been named Vendor Presentation Sponsor at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. ReadyTalk delivers audio and web conferencing services that inspire collaboration and enable the Future of Work for today’s increasingly digital and mobile workforce. By combining intuitive, innovative tec...
Sep. 26, 2016 08:00 PM EDT Reads: 2,848
Major trends and emerging technologies – from virtual reality and IoT, to Big Data and algorithms – are helping organizations innovate in the digital era. However, to create real business value, IT must think beyond the ‘what’ of digital transformation to the ‘how’ to harness emerging trends, innovation and disruption. Architecture is the key that underpins and ties all these efforts together. In the digital age, it’s important to invest in architecture, extend the enterprise footprint to the cl...
Sep. 26, 2016 07:30 PM EDT Reads: 285
Fifty billion connected devices and still no winning protocols standards. HTTP, WebSockets, MQTT, and CoAP seem to be leading in the IoT protocol race at the moment but many more protocols are getting introduced on a regular basis. Each protocol has its pros and cons depending on the nature of the communications. Does there really need to be only one protocol to rule them all? Of course not. In his session at @ThingsExpo, Chris Matthieu, co-founder and CTO of Octoblu, walk you through how Oct...
Sep. 26, 2016 06:30 PM EDT Reads: 2,133
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
Sep. 26, 2016 05:15 PM EDT Reads: 1,586
Vidyo, Inc., has joined the Alliance for Open Media. The Alliance for Open Media is a non-profit organization working to define and develop media technologies that address the need for an open standard for video compression and delivery over the web. As a member of the Alliance, Vidyo will collaborate with industry leaders in pursuit of an open and royalty-free AOMedia Video codec, AV1. Vidyo’s contributions to the organization will bring to bear its long history of expertise in codec technolo...
Sep. 26, 2016 05:15 PM EDT Reads: 2,591
SYS-CON Events announced today that Bsquare has been named “Silver Sponsor” of SYS-CON's @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. For more than two decades, Bsquare has helped its customers extract business value from a broad array of physical assets by making them intelligent, connecting them, and using the data they generate to optimize business processes.
Sep. 26, 2016 05:00 PM EDT Reads: 2,717
Traditional on-premises data centers have long been the domain of modern data platforms like Apache Hadoop, meaning companies who build their business on public cloud were challenged to run Big Data processing and analytics at scale. But recent advancements in Hadoop performance, security, and most importantly cloud-native integrations, are giving organizations the ability to truly gain value from all their data. In his session at 19th Cloud Expo, David Tishgart, Director of Product Marketing ...
Sep. 26, 2016 05:00 PM EDT Reads: 1,831
Digitization is driving a fundamental change in society that is transforming the way businesses work with their customers, their supply chains and their people. Digital transformation leverages DevOps best practices, such as Agile Parallel Development, Continuous Delivery and Agile Operations to capitalize on opportunities and create competitive differentiation in the application economy. However, information security has been notably absent from the DevOps movement. Speed doesn’t have to negat...
Sep. 26, 2016 04:30 PM EDT Reads: 2,111
If you’re responsible for an application that depends on the data or functionality of various IoT endpoints – either sensors or devices – your brand reputation depends on the security, reliability, and compliance of its many integrated parts. If your application fails to deliver the expected business results, your customers and partners won't care if that failure stems from the code you developed or from a component that you integrated. What can you do to ensure that the endpoints work as expect...
Sep. 26, 2016 04:30 PM EDT Reads: 1,619
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 sett...
Sep. 26, 2016 04:30 PM EDT Reads: 3,361
The Transparent Cloud-computing Consortium (abbreviation: T-Cloud Consortium) will conduct research activities into changes in the computing model as a result of collaboration between "device" and "cloud" and the creation of new value and markets through organic data processing High speed and high quality networks, and dramatic improvements in computer processing capabilities, have greatly changed the nature of applications and made the storing and processing of data on the network commonplace.
Sep. 26, 2016 04:15 PM EDT Reads: 1,029
Your business relies on your applications and your employees to stay in business. Whether you develop apps or manage business critical apps that help fuel your business, what happens when users experience sluggish performance? You and all technical teams across the organization – application, network, operations, among others, as well as, those outside the organization, like ISPs and third-party providers – are called in to solve the problem.
Sep. 26, 2016 04:00 PM EDT Reads: 2,529
Cognitive Computing is becoming the foundation for a new generation of solutions that have the potential to transform business. Unlike traditional approaches to building solutions, a cognitive computing approach allows the data to help determine the way applications are designed. This contrasts with conventional software development that begins with defining logic based on the current way a business operates. In her session at 18th Cloud Expo, Judith S. Hurwitz, President and CEO of Hurwitz & ...
Sep. 26, 2016 03:45 PM EDT Reads: 2,919
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...
Sep. 26, 2016 03:30 PM EDT Reads: 1,559
Enterprise IT has been in the era of Hybrid Cloud for some time now. But it seems most conversations about Hybrid are focused on integrating AWS, Microsoft Azure, or Google ECM into existing on-premises systems. Where is all the Private Cloud? What do technology providers need to do to make their offerings more compelling? How should enterprise IT executives and buyers define their focus, needs, and roadmap, and communicate that clearly to the providers?
Sep. 26, 2016 03:00 PM EDT Reads: 1,557