Enerflex (EFXT) Issues FY23 Outlook, Prelim 2024 Guidance

Enerflex Ltd. (NYSE: EFXT) today is providing a full-year 2023 update and its preliminary financial and operational outlook for 2024.

FULL-YEAR 2023 UPDATE

Based on our preliminary review of unaudited results, Enerflex estimates 2023 capital expenditures of approximately US$110 million, below our guidance range of US$120 million to US$140 million, as we prioritized debt reduction to lower net financing costs. As at December 31, 2023, Enerflex’s net debt1 balance was less than US$900 million, which reflects gross debt repayments of approximately US$120 million during the fourth quarter.

OUTLOOK

Enerflex’s preliminary outlook for 2024 reflects strong demand across our business units and geographic regions. The company is focused on generating free cash flow and further improving our financial flexibility.

Operating results in 2024 will be underpinned by the highly contracted Energy Infrastructure product line and the recurring nature of After-market Services, which together are expected to account for 55% to 65% of our gross margin before depreciation and amortization2. Complementing Enerflex's recurring revenue businesses is the Engineered Systems product line, which carried a backlog of approximately CAD$1.5 billion (US$1.1 billion) as at December 31, 2023 and is expected to benefit from increasing natural gas production in our core regions. The Company expects the majority of its backlog to convert into revenue over the next 12 months.

Enerflex is targeting a disciplined capital program in 2024, with total capital expenditures of US$90 million to US$110 million. This includes a total of approximately US$70 million for maintenance and PP&E capital expenditures. Investing to expand our Energy Infrastructure business in 2024 is discretionary and will be allocated to customer supported opportunities that are expected to generate attractive returns and deliver value to Enerflex shareholders.

Providing meaningful shareholder returns, including a sustainable dividend, continues to be a priority for Enerflex. We recognize this has been impacted in the near-term by increased leverage and interest expense. Enerflex will continue to focus on debt reduction and lowering net finance costs in 2024, which will improve our ability to provide shareholder returns over the medium and long-term. We continue to evaluate our target long-term capital structure and capital allocation parameters and expect to provide more clarity in the coming months.

Long-term fundamentals for natural gas are robust, given its critical role in supporting global decarbonization efforts and future economic growth. Enerflex is poised for long-term growth as it continues to capitalize on the growing demand for low-carbon solutions through its vertically integrated natural gas, produced water and energy transition offerings.

FOURTH QUARTER AND YEAR-END 2023 RESULTS

Enerflex plans to release its financial results and operating highlights for the three months and year ended December 31, 2023 after markets close on Wednesday, February 28, 2024. Results will be communicated by news release and will be available on the Company's website at www.enerflex.com and under the Company's SEDAR+ and EDGAR profiles at www.sedarplus.ca and www.sec.gov/edgar, respectively.

Investors, analysts, members of the media, and other interested parties, are invited to participate in a conference call and audio webcast on Thursday, February 29, 2024 at 8:00 a.m. (MST), where members of senior management will discuss the Company's results. A question-and-answer period will follow.

To participate, register at https://register.vevent.com/register/BI222e9b07c1cd49bf83196efe5ae1976c. Once registered, participants will receive the dial-in numbers and a unique PIN to enter the call. The audio webcast of the conference call will be available on the Enerflex website at www.enerflex.com under the Investors section or can be accessed directly at https://edge.media-server.com/mmc/p/c68of9ho.

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