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TRANSCRIPT
March 2017
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
revenues 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
Proven management team with extensive operating background
Significantly undervalued despite best-in-class long-lived assets
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4
Company Information
Toronto Stock Exchange ENT
Basic Shares Outstanding (September 30, 2016) 109.5 million
Share Price (March 1, 2017): $0.25
Market Capitalization: $27 million
Working capital (December 31, 2016) $14 million
Property, plant and equipment FMV (December 31, 2016) $243 million
Net Debt (December 31, 2016) $150 million
Net tangible asset value (December 31, 2016) $89 million
52 Week Trading Range: $0.19/$0.35
Management and Board Holdings 49%
The Right Management Team
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Extensive Industry Experience
Rod Marlin Executive Chairman
Former President, CEO and Director of Eveready Inc., acquired by Clean Harbors Inc. in July 2009
Founder and former President of Marlin Travel Group, Canada’s largest travel company, until 1993 sale
John Stevens President, CEO + Director
Former President and Director of NC Services Group, a private crane and hauling company
Former Senior Vice President of Eveready and its predecessor companies
Jason Vandenberg
CFO
Former VP Finance and CFO of Eveready and its predecessor companies
Former Manager with Grant Thornton
Glen Fleming
Executive VP, Operations
Former Executive Vice President of Clean Harbors post acquisition of Eveready
Prior thereto, was Vice President and COO of Eveready
Gavin Mcleod
VP, Finance + Operations
Former Director of Finance with Petrocom Construction
Joined ENTREC in 2011
Whitney Irwin
VP, HSE and Training
Formerly with Flint Energy Services, a former parent company of ENTREC
Re-joined ENTREC in 2011
Complementary Crane and Specialized Transportation Solutions
6
Our Business
Specialized Cranes for Every Application
7
Crawler Cranes: 22 FMV: $35 MM
Used for: oil & gas, mining, petro chemical, power generation and infrastructure construction
1
Rough Terrain Cranes: 45 FMV: $22 MM
Used for: oil sands mining and in situ construction, LNG construction, other construction and oil & gas
2
Hydraulic Truck Cranes: 12 FMV: $8 MM
Used for: oil & gas, oil sands MRO, mining, petro chemical, power generation and infrastructure industries
5
Boom/Picker Trucks: 87 FMV: $34 MM
Used for: oil & gas, oil sands in situ MRO, mining, petro chemical, power generation and infrastructure industries
6
Carry Deck Cranes: 7 FMV: $1 MM
Used for: plant site maintenance and construction
3
All Terrain Cranes: 27 FMV: $40 MM
Used for: oil & gas, oil sands MRO, mining, petro chemical, power generation and infrastructure industries
4
Specialized Heavy Haul Fleet
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Conventional Multi-wheeled Trailers: 765
FMV: $34 MM
Multiple configurations (up to 96 wheels)
1 Hydraulic Platform Trailers: 375
FMV: $13 MM
Modular, highly customizable
2 Tractors: 190
FMV: $31 MM
Large diverse fleet of prime movers, winch tractors and highway tractors
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1 2 3
Asset Overview
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Equipment Units
Crane Fleet
Crawler Cranes 22
Rough Terrain Cranes 45
Carry Deck Cranes 7
All Terrain Cranes 27
Hydraulic Truck Cranes 12
Boom / Picker Trucks 87
Total 200
Specialized Transportation Fleet
Conventional Multi-Wheeled Trailers 765
Hydraulic Platform Trailer Lines 375
Tractors 190
ENTREC has an extensive fleet of cranes, trailers and tractors that serve all industries
– 200 cranes with multiple uses allow ENTREC to provide a crane for every application
– Large fleet of trailers reaching up to 96 wheels
December 31, 2016 net tangible asset value of $89.4 mm
Total Assets 242,664
Less: intangible assets (1,483)
Add: fair market value of PPE 242,885
Less: net book value of PPE (211,063)
Tangible Assets 273,003
Total Liabilities 183,561
Tangible Net Asset Value 89,442
Per Basic Share 0.82
Current Share Price (March 1, 2017) 0.25
Premium (Discount) to Net Tangible Asset Value -69.4%
Net Tangible Asset Value
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 3.0%
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 December 31, 2016:
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Borrowing base (% of equipment and accts receivable) $169.8 mm
ABL Facility utilized $126.2mm
Excess borrowing capacity $43.6mm
Minimum excess borrowing capacity required before senior debt to EBITDA financial covenant applies
$21.2mm
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
Over $32 Billion in Proposed Federal Infrastructure Spending Alone
Source: Government of Canada (Infrastructure Canada)
11
New Exposure to Power Transmission Spending
Recent Acquisition Provides Exposure to Several
Proposed Power Transmission Projects
ENTREC now has the ability to bid on diversified
power transmission projects throughout Canada
– Power projects include upgrades, extensions and/or
new: power plants, transmission lines and
substations, generating stations, power generating
dams, solar and other power infrastructure projects
Stable and consistent spending over near
to medium term through Canadian, US and
government owned entities with growing
capital power spending project budgets:
Opportunities with Basin
Electric’s $1 bn worth of projects in North Dakota
Valard transmission line
ATCO/Alberta Powerline: Fort McMurray west transmission line, ATCO: gas fired power plant and forest fire damage rehabilitation
SaskPower: Boundary Dam upgrades and
expansion, transmission lines and
substations
Manitoba Hydro: Keeyask
Generating Station, Bipole
III project, Conawapa generating
station
Nalcor Energy:
Labrador-Island Link
transmission system
Emera: Maritim
e Link
MAXIM: Deerland Peaking station
GTE Power: Brooks 1 Solar + TransAlta: Sundance gas fired
power plant
Ontario Hydro: Mattagami, New Post
Creek, Ranney Falls station,
Niagara Tunnel,
P.Sutherland Gen station
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Northeast Texas approved transmission line projects: Marshall-Hallsville improvements + Valliant-NW Texarkana
FGE Texas: Mitchell
County $1.2 bn natural gas power plant
Tenaska: Building of Brownsville electric
generating station in Cameron County, Texas
Positioned to Benefit from future Canadian LNG Projects
Well Count
$0
$5
$10
$15
0
500
1,000
1,500
Year 1 Year 3 Year 5 Year 7 Year 9
$B
illion
s
LNG Capital Expenditure Pattern
Source: Company Reports, ARC Financial Research
0
10
14
18
6
8
12
16
2
4
Year 1 Year 5 Year 10 Year 15
Pipeline Construction
LNG Export Terminal
Drilling
LNG Well Count Forecast
Dollars Spent
Based on the development of three LNG projects (LNG Canada, Pacific Northwest LNG and Kitimat LNG)
$B
illio
ns
ENTREC can Support Drilling, Pipelines and Terminal Construction
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Where We Operate
Industries Served: Conventional oil & gas
Mining
Petro chemical
Pulp & paper
Infrastructure
Refining
Power generation
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Oil Sands
LNG Industry
Bakken Oil Fields
Thompson and Winnipeg, Manitoba
Recent Expansion into Manitoba market through HighMark Crane acquisition
Western Canada & North Dakota
Exposure to natural resource, infrastructure and
transportation industries
Midland, Texas Recent greenfield expansion into the
Permian Basin
Bakken Oil Fields ENTREC Location
General Movement of Goods
Saskatchewan Recent greenfield
expansion to Estevan & Swift Current
Diverse Customer Base
15
Natural Resource Producers
EPCs / Manu. / Oilfield Service
High Barriers to Entry
High capital costs to build competitive fleet
Scale of fleet
Requires specialized knowledge and extensive experience
Critical importance of safety
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Competitive Position
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Conventional Platform Mobile, RTs &
Crawlers Pickers/
Boom Trucks
Heavy Haul Cranes
ENTREC
Mammoet
Sterling
Sarens
Myshak
Other
Premay
NC Services
~15%
~1%
N/A
N/A
N/A
~69%
~10%
~5%
~25%
~25%
N/A
~5%
N/A
~20%
~10%
~15%
~7.5%
~20%
~20%
~2.5%
~5%
~35%
N/A
~10%
~7.5%
~1%
~1%
N/A
~2.5%
~87%
N/A
~1%
Management estimates of % market share Western Canada
Conventional Heavy Haul & Crane Segments are Highly Fragmented
Annual Results
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Adjusted EBITDA & Margin Revenue
2013 2014 2015
Acquisitions $60 mm $9 mm $0 mm
Capex (net of disposals) $56 mm $56 mm $16 mm
Total Capital Spend $116 mm $65 mm $16 mm
2016
$5 mm
($15 mm)
$16 mm
2016
Quarterly Results
Adjusted EBITDA & Margin
Quarterly Revenue
2013 2014 2015
2013 2014 2015
2016
Strong Strategic Ownership Positions
20
40% Ownership
Between two strategic
investors in the industry
11% Ownership
Employee Ownership
Majority of Company Ownership between Two Industry Members and ENTREC Employees
Top Institutional Shareholders Shares (000s) Interest
JV Driver Corporation 22,422 20.5%
Manitoulin Transport 21,431 19.6%
Foyston Gordon & Payne 11,027 10.1%
Top Institutional Shareholders 54,880 50.1%
Top Insider Shareholders Shares (000s) Interest
Glen Fleming - Executive VP, Operations 3,767 3.4%
Rod Marlin - Executive Chairman 3,556 3.2%
Peter Lacey - Director 1,372 1.3%
John M. Stevens - President, CEO & Director 800 0.7%
Jason Vandenberg - CFO 250 0.2%
Other Directors and Officers 190 0.2%
Top Insider Shareholders 9,935 9.1%
Employee Ownership Plans (excluding RSUs) 2,296 2.1%
Implied Retail and Unidentified Institutional 42,391 38.7%
Basic Shares Outstanding 109,502 100.0%
Source: Bloomberg, Public Disclosure, SEDI
Strategic Ownership in ENTREC
Alberta based company established in 1989
Provider of contractor and fabrication
services for the industrial, commercial /
multi-unit residential and industrial buildings,
marine, environmental and public
infrastructure industries
Clients include CNRL, Imperial Oil, Shell,
Devon
Currently hold 20.5% of ENTREC’s basic
shares outstanding
Manitoulin has one of the most extensive
transportation networks in Canada
– 50 years of operating experience
Provides truckload, less than truckload,
trans-border, rail intermodal and
specialized transportation services from
over 100 locations across Canada
Recently acquired Hi-Way 13’s less-than-
truckload division (built out Alberta
coverage)
– $136 mm transaction value (including debt)
On October 29, 2015, Manitoulin Transport
announced a strategic investment into
ENTREC, acquiring ownership of 15.4%
– Since then, they have acquired more stock to
take ownership up to 19.6%
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Strategy
Short-term strategy
– Focus on MRO business
– Permian Basis expansion
– Infrastructure projects
– Power transmission
– Cross sell crane and heavy haul services
– Cost reduction initiatives
– Reduction of long-term debt
Long-term strategy
– Continued geographic expansion and industry diversification
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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 1995)
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
Proven management team with extensive operating background
Significantly undervalued despite best-in-class long-lived assets
23
Appendix
24
Board of Directors
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Experienced Board of Directors
Board of Directors
Rod Marlin Executive Chairman
Former President, CEO and Director of Eveready Inc., acquired by Clean Harbors Inc in July 2009
Founder and former President of Marlin Travel Group, Canada’s largest travel company, until sale in 1993
Peter Lacey
Director
President, CEO and Director of Cervus Equipment Corporation and its predecessor companies since 1998
Former Director and Chairman of Eveready and its predecessor companies until sale in 2009
Dwayne Hunka
Director
President of DHI Group and Hunka Capital
Prior thereto, was VP, Business Development for JV Driver Projects, a provider of construction services
Mark Maybank
Director
Active private investor, director, advisor and entrepreneur associated with a variety of private companies
Former President and COO of Canaccord Genuity until 2011
Charles Sanders
Director
CFO with JV Driver since 2008, formerly held the position of corporate accountant with the organization
Former accountant with Hill and Partners
Don Goodwill
Director
President of Manitoulin Transport, a Canadian transportation company with 74 Canadian terminal locations
Became a Director of ENTREC on November 23, 2015 following a significant investment into the company
Brian Tod
Director
Business lawyer acting as counsel to the Edmonton office of Miller Thomson, a national law firm
Has been with Miller Thomson since 1971
John Stevens
President, CEO and Director
Former President and Director of NC Services Group, a private crane and hauling company
Former Senior Vice President of Eveready and its predecessor companies
Contact Information
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Corporate Office
ENTREC Corporation 26420 Township Road 531A Acheson, AB T7X 5A3
Company Contacts
Rod Marlin Executive Chairman
780.962.1600
John Stevens President and Chief Executive Officer
780.960.5625
Jason Vandenberg Chief Financial Officer
780.960.5630