Enerflex Ltd. press release

Enerflex Ltd. Announces Second Quarter 2026 Financial and Operational Results

2026-08-06

TSX - Toronto Stock Exchange · Natural Gas · Ethane · Natural Gas Liquids · Oil · Hydrogen · Canada · Corporate Finance

ADJUSTED EBITDA OF $128 MILLION, FREE CASH FLOW OF $32 MILLION AND RETURN ON CAPITAL EMPLOYED OF 15.4%

STRONG OPERATIONAL VISIBILITY WITH ES BACKLOG INCREASING TO $1.5 BILLION AT THE END OF Q2/26

ORGANIC GROWTH CAPEX FORECASTED AT TOP END OF GUIDANCE RANGE FOR 2026; ON TRACK TO EXPAND U.S. CONTRACT COMPRESSION FLEET BY 10-15% YEAR-OVER-YEAR

CALGARY, Alberta, Aug. 06, 2026 (GLOBE NEWSWIRE) -- Enerflex Ltd. (TSX: EFX) (NYSE: EFXT) (“Enerflex” or the “Company”) today reported its financial and operational results for the three months ended June 30, 2026.

All amounts presented are in U.S. Dollars unless otherwise stated.

MANAGEMENT COMMENTARY

Paul Mahoney, Enerflex's President and Chief Executive Officer stated: "Enerflex delivered another quarter of solid operational performance, reflecting disciplined execution and our focus on operational excellence. Results continue to be underpinned by our Energy Infrastructure and After-Market Services business lines, and the Engineered Systems business maintained strong commercial momentum. Strong bookings has translated into increasing visibility for our ES business, with a book to bill ratio of 1.5 times during the first half of 2026 and our forward visibility for ES revenue increasing to $1.5 billion, the highest level in Enerflex’s history.

As highlighted during our May 27thinvestor update, Enerflex’s focus is on competing intentionally in the markets where we can win, improving relentlessly through operational excellence, and delivering disciplined value adding growth for our shareholders. This is reflected in our value creation objectives, which include improving the underlying profitability and returns of our business, and growing revenue ahead of our underlying markets. We are moving with urgency to execute on these priorities, including initiatives to enhance collaboration, leverage scale, improve operational efficiency and solidify our capabilities. I would like to thank our global team for embracing the challenge and look forward to updating our stakeholders as we progress."

Preet Dhindsa, Enerflex’s Senior Vice President and Chief Financial Officer, added: “Enerflex delivered another quarter of strong financial performance, supported by disciplined execution and strong cash generation. During the quarter, we extended the maturity of our revolving credit facility to 2029 while increasing the accordion feature to $200 million, solidifying the Company’s financial flexibility as we execute our strategy. With a strong balance sheet and ample available liquidity, we remain focused on disciplined capital allocation, investing in profitable growth opportunities, and long-term value creation for shareholders.”

SUMMARY RESULTS

| | | Three months ended June 30, | | | Six months ended June 30, | | | | | | | | | | | | | ($ millions, except per share amounts, percentages and ratios) | | 2026 | | | 2025 | | | 2026 | | | 2025 | | | | | | | Revenue | | $ | 582 | | | $ | 615 | | | $ | 1,166 | | | $ | 1,167 | | | Gross margin ("GM") | | | 139 | | | | 139 | | | | 284 | | | | 267 | | | GM as a percentage of revenue ("GM %") | | | 23.9 | % | | | 22.6 | % | | | 24.4 | % | | | 22.9 | % | | Selling, general and administrative expenses (“SG&A”) | | | 81 | | | | 61 | | | | 160 | | | | 118 | | | Operating income | | | 58 | | | | 76 | | | | 126 | | | | 147 | | | EBITDA1 | | | 94 | | | | 134 | | | | 204 | | | | 239 | | | EBIT1 | | | 57 | | | | 92 | | | | 130 | | | | 158 | | | Net earnings | | | 30 | | | | 60 | | | | 73 | | | | 84 | | | Earnings per share - basic | | | 0.25 | | | | 0.49 | | | | 0.60 | | | | 0.68 | | | Long-term debt | | | 529 | | | | 679 | | | | 529 | | | | 679 | | | Net debt2 | | | 455 | | | | 608 | | | | 455 | | | | 608 | | | Cash provided by (used in) operating activities | | | 89 | | | | (4 | ) | | | 121 | | | | 92 | | | | | | | | | | | | | | | | | | | | | Key Financial Performance Indicators (“KPIs”) | | | | | | | | | | | | | | | | | | ES backlog3 | | $ | 1,453 | | | $ | 1,227 | | | $ | 1,453 | | | $ | 1,227 | | | ES bookings3 | | | 488 | | | | 365 | | | | 971 | | | | 570 | | | EI contract backlog4 | | | 1,193 | | | | 1,462 | | | | 1,193 | | | | 1,462 | | | GM before depreciation and amortization (“GM before D&A”)5 | | | 173 | | | | 175 | | | | 352 | | | | 336 | | | GM before D&A as a percentage of revenue ("GM before D&A %")5 | | | 29.7 | % | | | 28.5 | % | | | 30.2 | % | | | 28.8 | % | | Adjusted EBITDA6 | | | 128 | | | | 130 | | | | 265 | | | | 243 | | | Free cash flow7 | | | 32 | | | | (39 | ) | | | 47 | | | | 46 | | | Bank-adjusted net debt to EBITDA ratio7 | | | 0.8 | x | | 1.3x | | | | 0.8 | x | | 1.3x | | | | | Return on capital employed (“ROCE”)7,8 | | | 15.4 | % | | | 16.4 | % | | | 15.4 | % | | | 16.4 | % |

_ 1EBITDA is defined as earnings before net finance costs, income taxes, depreciation and amortization. EBIT is defined as earnings before net finance costs and income taxes._ 2Net debt is defined as total long-term debt less cash and cash equivalents, as presented in the Financial Statements. 3Refer to the “ES Backlog and Bookings” section of the MD&A for further details. 4Refer to the “EI Contract Backlog” section of the MD&A for further details. 5Refer to the “Gross Margin before D&A by Product Line and Recurring Gross Margin before D&A” section of the MD&A for further details. 6Refer to the “Adjusted EBITDA” section of the MD&A for further details. 7Refer to the “Non-IFRS Measures” section of the MD&A for further details. 8Determined by using the trailing 12-month period.

Enerflex’s consolidated financial statements and notes (the “Financial Statements”) and Management’s Discussion and Analysis (“MD&A”) as at June 30, 2026, can be accessed on the Company’s website at www.enerflex.comand under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.caand www.sec.gov/edgar, respectively.

Q2/26 FINANCIAL OVERVIEW

Generated revenue of $582 million compared to $615 million in Q2/25 and $584 million in Q1/26 Lower revenue compared with prior year was primarily driven by project sequencing and resource allocation for expansion of Enerflex’s U.S. contract compression fleet within the Engineered Systems (“ES”) product line ES book-to-bill ratio (calculated as bookings divided by revenue), was 1.6x during Q2/26 and 1.1x on a trailing eight quarter average, highlighting the Company is consistently replenishing its backlog in line with project execution

Recorded gross margin before depreciation and amortization of $173 million, or 30% of revenue, compared to $175 million, or 29% of revenue in Q2/25 and $179 million, or 31% of revenue during Q1/26 Energy Infrastructure (“EI”) and After Market Services (“AMS”) product lines generated 69% of consolidated gross margin before depreciation and amortization during Q2/26 ES gross margin before depreciation and amortization of 18% in Q2/26 compared to 18% in Q2/25, and 19% in Q1/26, with the sequential decrease related primarily to mix and project sequencing

SG&A was $81 million for the three months ended June 30, 2026, up $20 million from the prior year period, due to higher stock-based compensation and investments to support growth and operational improvements. Core SG&A1was $58 million for the three months ended June 30, 2026 compared to $52 million in Q2/25 and $55 million during the first quarter of 2026 Adjusted earnings before finance costs, income taxes, depreciation, and amortization (“adjusted EBITDA”) of $128 million compared to $130 million in Q2/25 and $137 million in Q1/26 Cash provided by operating activities before changes in working capital (“FFO”) of $87 million in Q2/26 compared to $89 million in Q2/25 and $95 million in Q1/26, a function of lower adjusted EBITDA. Cash provided by operating activities (“CFO”) was $89 million, which included net working capital recovery of $2 million. This compares to cash used in operating activities of $4 million in Q2/25 and cash provided by operating activities of $32 million in Q1/26 Free cash flow increased to $32 million in Q2/26 compared to the use of cash of $39 million during Q2/25 and source of cash of $15 million during Q1/26. The increase in FCF compared to prior year and prior period reflected higher CFO, being partially offset by higher capital spending Return on capital employed (“ROCE”)2was 15.4% in Q2/26, compared to 16.4% in Q2/25 and 17.3% during Q1/26. Lower ROCE primarily reflects the decrease in trailing 12-month EBIT, which was impacted by unrealized gains on redemption options related to the senior secured notes recognized in prior periods, partially offset by lower average capital employed, predominantly due to a decline in net debt Net earnings of $30 million or $0.25 per share in Q2/26 compared to $60 million or $0.49 per share in Q2/25 and $43 million or $0.35 per share in Q1/26. Compared to Q2/25, profitability benefited from lower net finance costs, however was offset by higher share-based compensation expense and an unrealized gain of $15 million related to the redemption options of its senior secured notes recognized in the prior year Invested $53 million in the business, comprised of $35 million for growth, primarily allocated to expand the Company’s contract compression fleet in the U.S., and $18 million for maintenance and PP&E

STRATEGIC AND OPERATIONAL HIGHLIGHTS

ES backlog as at June 30, 2026 of $1.5 billion provides strong visibility into future revenue generation and business activity levels. Bookings of $488 million during Q2/26 compared to $365 million in Q2/25, $483 million in Q1/26 and a trailing eight quarter average of $363 million. ES bookings included a broad mix of end markets, including cryogenic gas processing, refrigeration for LNG export, large compression stations and power generation. ES book-to-bill ratio (calculated as bookings divided by revenue), was 1.6x during Q2/26 and 1.1x on a trailing eight quarter average, highlighting the Company is consistently replenishing its backlog in line with project execution Enerflex’s U.S. contract compression business continues to perform well, led by increasing natural gas production in the Permian. Utilization remained relatively consistent at 93% across a fleet size of 496,000 horsepower. Enerflex continues to target customer supported contract compression fleet growth of 10-15% during 2026, with the majority of additions expected to be deployed during the second half of the year. Enerflex is also securing long-lead time components to support further growth in 2027, 2028 and 2029 Enerflex is closely monitoring the conflict in the Middle East, and to-date, the Company’s operations in the region have operated uninterrupted. Local teams have established response processes and contingency planning, ensuring continued safety of our people and reliability of the Company’s operations. Enerflex’s operations in the Middle East, which are principally in Bahrain and Oman comprise 17 distinct natural gas and produced water projects, and an installed compression and power generation fleet of approximately 350,000 horsepower Aligned the Company's Canadian and U.S. operations under a unified North American framework to enhance collaboration, leverage scale, improve operational efficiency, and strengthen customer service across the region On February 25, 2026, Enerflex announced a definitive agreement to divest the majority of its operations in the Asia Pacific (“APAC”) region to INNIO Group. Completion of the transaction is subject to standard closing conditions and regulatory approvals and remains on track to close during the second half of 2026 Enerflex has secured a commitment for gas compression stations in the Vaca Muerta unconventional play in Argentina. The equipment is supported by a long-term EI and AMS contract with a strategic client partner Enerflex reached several important ReliaCore™ milestones, advancing the Company's digitally connected service ecosystem. We launched our Houston-based Remote Operations Center, are leveraging SMART dispatch technology to connect customer assets with technical expertise and intelligent workflows and deployed Enerflex’s first ReliaCore EDGE devices. Together, these capabilities extend service coverage, accelerate issue resolution, and build a foundation for advanced analytics and predictive maintenance capabilities that are expected to improve asset performance, reduce downtime, and create long-term economic value for both Enerflex and our client partners

BALANCE SHEET AND LIQUIDITY

Enerflex exited Q2/26 with net debt of $455 million, which included $74 million of cash and cash equivalents, a reduction of $153 million compared to Q2/25. Enerflex’s bank-adjusted net debt-to-EBITDA ratio was approximately 0.8x at the end of Q2/26, down from 1.3x at the end of Q2/25 and 0.9x at the end of Q1/26 On June 24, 2026, Enerflex entered into an amended and restated credit agreement with respect to its syndicated secured revolving credit facility (the “RCF”). The maturity date of the RCF has been extended by three years to June 30, 2029, and availability is unchanged at $800 million. The Company’s limit under the RCF may be increased by up to $200 million at the request of the Company, subject to lenders’ consent, compared to $50 million previously. The Company also continues to maintain a $70 million unsecured credit facility (the “LC Facility”) with one of the lenders in its RCF syndicate

OUTLOOK

We continue to see favorable multi-year fundamentals across our core markets, driven by increasing natural gas and liquids production. Operating results are expected to be underpinned by the highly contracted EI product line and the recurring nature of AMS. The EI product line is supported by customer contracts expected to generate approximately $1.2 billion of revenue over their remaining terms.

Performance for Enerflex's ES product line is expected to benefit from healthy demand for compression and processing equipment across our key markets and a backlog of approximately $1.5 billion as at June 30, 2026, the majority of which is expected to convert into revenue over the next 12 months. Interest in distributed power solutions also continues to build, with our pipeline of opportunities now exceeding seven gigawatts across data center and other power generation applications.

Enerflex's strategic priorities include:

| | (1) | driving productivity improvements across the Company’s global operations through operational excellence; | | | (2) | focusing on the highest-value growth opportunities and markets where the Company can win, including advancing opportunities in distributed power generation alongside its core natural gas infrastructure markets; and | | | (3) | allocating capital to drive long-term value creation through disciplined growth, maximizing free cash flow, and providing direct shareholder returns. |

Capital Allocation

Enerflex is refining its capital expenditure guidance for 2026, with the Company now targeting organic capital expenditures of $185 million to $195 million (prior guidance of $175 million to $195 million). This includes: (1) organic growth capital expenditures of approximately $100 million (prior guidance of $90 million to $100 million); (2) maintenance capital expenditures of $70 million to $80 million; and (3) PP&E and infrastructure investments of approximately $15 million to support the Company’s ES business and activity in adjacent markets, including electric power generation.

Organic growth capital spending will continue to focus on customer supported opportunities and primarily allocated to expand the Company’s contract compression fleet in the U.S. Notably, the fundamentals for contract compression in the U.S. remain strong, led by expected increases in natural gas production and capital spending discipline from market participants.

Enerflex continues to evaluate selective, disciplined bolt-on acquisition opportunities. Inorganic growth will be focused on enhancing capabilities and accelerating scale in the Company’s core North American markets. All opportunities will be balanced with Enerflex’s focus on maintaining a strong financial position and opportunities to provide direct shareholder returns.

DIVIDEND DECLARATION

Enerflex is committed to paying a sustainable quarterly cash dividend to shareholders. The Board of Directors has declared a quarterly dividend of CAD $0.0425 per share, payable on September 2, 2026 to shareholders of record on August 19, 2026.

CONFERENCE CALL AND WEBCAST DETAILS

Investors, analysts, members of the media, and other interested parties, are invited to participate in a conference call and audio webcast on Thursday, August 6, 2026 at 8:00 a.m. (MDT), where members of senior management will discuss the Company’s results. A question-and-answer period will follow.

To participate, register at https://register-conf.media-server.com/register/BIebea8b6833b642bbbff6b1c892d4954a. 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 atwww.enerflex.comunder the Investors section or can be accessed directly at https://edge.media-server.com/mmc/p/jgxueet4/.

NON-IFRS MEASURES

Throughout this news release and other materials disclosed by the Company, Enerflex employs certain measures to analyze its financial performance, financial position, and cash flows, including net debt-to-EBITDA ratio, ES backlog and bookings, EI contract backlog, free cash flow, GM before depreciation and amortization, and bank-adjusted net debt-to-EBITDA ratio. These non-IFRS measures are not standardized financial measures under IFRS and may not be comparable to similar financial measures disclosed by other issuers. Non-IFRS measures should not be considered more meaningful than generally accepted accounting principles measures as indicators of Enerflex’s performance. For information which is incorporated by reference into this news release, refer to “Non-IFRS Measures” in Enerflex’s MD&A for the three months ended June 30, 2026, which can be accessed on Enerflex’s website at www.enerflex.com and under the electronic profile of the Company on SEDAR+ and EDGAR at www.sedarplus.caand www.sec.gov/edgar, respectively.

Adjusted EBITDA

| | Three months ended June 30, 2026 | | | | | | | | | | | | | | | | | ($ millions) | | NAM | | | LATAM | | | EH | | | Total | | | | | | | Net earnings1 | | | | | | | | | | | $ | 30 | | | | | | Income taxes1 | | | | | | | | | | | | 15 | | | | | | Net finance costs1,2 | | | | | | | | | | | | 12 | | | | | | EBIT3 | | $ | 33 | | | $ | 13 | | | $ | 10 | | | $ | 57 | | | Depreciation and amortization | | | 16 | | | | 9 | | | | 12 | | | | 37 | | | EBITDA | | $ | 49 | | | $ | 22 | | | $ | 22 | | | $ | 94 | | | Restructuring and transaction costs | | | 3 | | | | - | | | | 2 | | | | 5 | | | Share-based compensation | | | 13 | | | | 3 | | | | 3 | | | | 19 | | | Impact of finance leases | | | | | | | | | | | | | | | | | | Principal payments received | | | - | | | | - | | | | 11 | | | | 11 | | | Unrealized gain on redemption options3 | | | | | | | | | | | | (1 | ) | | | | | Adjusted EBITDA | | $ | 65 | | | $ | 25 | | | $ | 38 | | | $ | 128 | |

_ 1The Company included net earnings, income taxes, and net finance costs on a consolidated basis to reconcile to EBIT._ 2Net finance costs are considered corporate expenditure and have therefore not been allocated to reporting segments. 3EBIT includes $1 million unrealized gain on redemption options associated with the USD denominated senior unsecured notes (the "2031 Notes"). Debt is managed within Corporate and is not allocated to reporting segments.

| | Three months ended June 30, 2025 | | | | | | | | | | | | | | | | | ($ millions) | | NAM | | | LATAM | | | EH | | | Total | | | | | | | Net earnings1 | | | | | | | | | | | $ | 60 | | | | | | Income taxes1 | | | | | | | | | | | | 14 | | | | | | Net finance costs1,2 | | | | | | | | | | | | 18 | | | | | | EBIT3 | | $ | 51 | | | $ | 20 | | | $ | 6 | | | $ | 92 | | | Depreciation and amortization | | | 15 | | | | 10 | | | | 17 | | | | 42 | | | EBITDA | | $ | 66 | | | $ | 30 | | | $ | 23 | | | $ | 134 | | | Share-based compensation | | | 2 | | | | 1 | | | | - | | | | 3 | | | Impact of finance leases | | | | | | | | | | | | | | | | | | Principal payments received | | | - | | | | - | | | | 8 | | | | 8 | | | Unrealized gain on redemption options3 | | | | | | | | | | | | (15 | ) | | | | | Adjusted EBITDA | | $ | 68 | | | $ | 31 | | | $ | 31 | | | $ | 130 | |