August 2016
Forward-looking Statements This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of ENTREC Corporation (“ENTREC” or the “Company”) . These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, fluctuations in commodity prices, weather, access to capital markets, competition, changes in technology and government policies, decreases in capital spending by customers, decreases in exploration and development spending by customers, the ability or inability of the Company to increase profit margins or utilization, the ability or inability of the Company to expand to new markets, the ability or inability of the Company to successfully acquire and integrate other businesses, the ability or inability of the Company to leverage its existing presence to expand its geographic footprint, the ability or inability of the Company to improve operational efficiencies, and the degree to which committed and prospective bookings materialize. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of ENTREC will be achieved. The Company believes that the expectations reflected in these forward-looking statements are reasonable; however, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this presentation should not be relied upon. In addition, these forward-looking statements relate to the date on which they are made. Unless otherwise required by applicable securities legislation, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. 2
Investment Highlights Diversified industry exposure and client base – Broad exposure to customers in the oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries Niche industry with high barriers to entry – Actively increasing market share (completed 14 acquisitions since 2011) Strong recurring revenue base – Multiple touch points with customers through construction and maintenance, repair and operation phases Historically strong track record of revenue and EBITDA growth – 2015 revenue of $166 mm generating $23 mm of EBITDA Proven management team with extensive operating background Significantly undervalued despite best-in-class long-lived assets 3
Company Information Toronto Stock Exchange ENT Basic Shares Outstanding (June 30, 2016) 109.4 million Share Price (August 1, 2016): $0.28 Market Capitalization: $31 million Working capital (June 30, 2016) $14 million Property, plant and equipment (June 30, 2016) $226 million Net Debt (June 30, 2016) $145 million Net tangible asset value (June 30, 2016) $113 million 52 Week Trading Range: $0.23/$0.46 Management and Board Holdings 50% 4
The Right Management Team Extensive Industry Experience Rod Marlin Former President, CEO and Director of Eveready Inc., acquired by Clean Harbors Inc. Executive Chairman in July 2009 Founder and former President of Marlin Travel Group, Canada’s largest travel company, until 1993 sale John Stevens Former President and Director of NC Services Group, a private crane and hauling President, CEO + company Director Former Senior Vice President of Eveready and its predecessor companies Jason Vandenberg Former CFO of Eveready and its predecessor companies CFO Former accountant with Grant Thornton Glen Fleming Former Executive Vice President of Clean Harbors post acquisition of Eveready Executive VP, Prior thereto, was Vice President and COO of Eveready Operations Gavin Mcleod Former Director of Finance with Petrocom Construction VP, Finance + Joined ENTREC in 2011 Operations Whitney Irwin Formerly with Flint Energy Services, a former parent company of ENTREC VP, HSE and Training Re-joined ENTREC in 2011 5
Our Business Complementary Crane and Specialized Transportation Solutions 6
Specialized Cranes for Every Application Crawler Cranes: 23 1 FMV: $38 MM Used for : oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries Rough Terrain Cranes: 51 2 FMV: $25 MM Used for : oil sands mining and in situ construction, LNG construction, other construction and LNG drilling All Terrain Cranes: 29 4 FMV: $45 MM Carry Deck Cranes: 7 3 Used for : oil & gas, mining, petro FMV: $1 MM chemical, pulp & paper, power Used for : plant site maintenance generation and infrastructure industries and construction Hydraulic Truck Cranes: 11 5 FMV: $12 MM Used for : oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries Boom/Picker Trucks: 84 6 FMV: $35 MM Used for : oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries 7
Specialized Heavy Haul Fleet 1 2 3 1 Conventional Multi- 2 Hydraulic Platform 3 Tractors: 215 wheeled Trailers: 770 Trailers: 400 FMV: $32 MM FMV: $36 MM FMV: $14 MM Large diverse fleet of prime Multiple configurations (up to Modular, highly movers, winch tractors and 96 wheels) customizable highway tractors 8
Asset Overview ENTREC has an extensive fleet of cranes, trailers and tractors that serve all industries – 205 cranes with multiple uses allow ENTREC to provide a crane for every application – Large fleet of trailers reaching up to 96 wheels June 30, 2016 book value of $74.5 mm; net tangible asset value of $112.7 mm Equipment Units Net Tangible Asset Value Total Assets 257,897 Crane Fleet (1,900) Less: intangible assets Crawler Cranes 23 266,000 Add: fair market value of PPE Rough Terrain Cranes 51 (225,979) Less: net book value of PPE Tangible Assets 296,018 Carry Deck Cranes 7 All Terrain Cranes 29 Total Liabilities 183,363 Hydraulic Truck Cranes 11 Tangible Net Asset Value 112,655 Boom / Picker Trucks 84 Per Basic Share 1.03 Total 205 Current Share Price (August 1, 2016) 0.28 Premium (Discount) to Net Tangible Asset Value -72.8% Specialized Transportation Fleet Conventional Multi-Wheeled Trailers 750 Hydraulic Platform Trailer Lines 375 Tractors 195 9
ABL Senior Debt Facility $240 mm ABL Facility led by Wells Fargo No Principal repayments until maturity in March 2019 Effective interest rate (including transaction costs) of 2.7% on USD debt and 3.2% of CAD debt Borrowing base calculated on net orderly liquidation value of fleet plus accounts receivable No cash flow financial covenants as long as excess borrowing capacity exceeds 12.5% of borrowing base Key Metrics at June 30, 2016: Borrowing base (% of equipment and accts receivable) $168.8 mm ABL Facility utilized $122.4mm Excess borrowing capacity $46.4 mm Minimum excess borrowing capacity required before senior debt to EBITDA financial covenant applies $21.1mm 10
Positioned to Benefit from Increased Infrastructure Spending Federal Infrastructure Spend is Growing Federal government has proposed $32 billion in infrastructure spending over the next 10 years – British Columbia - $5.2 billion – Alberta - $3.9 billion Alberta’s provincial government has budgeted an additional $9 billion committed to transportation initiatives and over $8 billion for municipal infrastructure support from now until year end 2020 – Saskatchewan - $1.3 billion Why we will win Contracts? Coordinated heavy haul and heavy lift services Large, highly specialized equipment fleet Extensive engineering and logistics support Highly skilled employees Excellent safety track record Source: Government of Canada (Infrastructure Canada) Over $32 Billion in Proposed Federal Infrastructure Spending Alone 11
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