Enerflex Ltd (ENRFF) Q1 2022 Earnings Conference Call May 5, 2022 10:00 AM ET

Company Participants

Stefan Ali - Director of Strategy, Risk & IR

Marc Rossiter - President and CEO

Sanjay Bishnoi - Senior VP & CFO

Conference Call Participants

Michael Robertson - National Bank Financial

Aaron MacNeil - TD Securities

Cole Pereira - Stifel

Tim Monachello - ATB Capital Markets

Operator

Good morning, ladies and gentlemen, and welcome to the Enerflex First Quarter 2022 Results Conference Call. [Operator Instructions] As a reminder, this conference call is being recorded.

I would now like to turn the conference over to your host, Stefan Ali, Vice President, Strategy and Investor Relations. Please go ahead.

Stefan Ali

Thank you, operator, and good morning, everyone. Here with me are Marc Rossiter, Enerflex' President and Chief Executive Officer; Sanjay Bishnoi, Enerflex' Senior Vice President and Chief Financial Officer; and Ben Park, Enerflex' Vice President, Corporate Controller.

During this call, we'll be providing our financial results for the 3 months ended March 31, 2022, a brief commentary on the performance of our 3 business segments and a summary of our financial position. Today's discussion will include forward-looking statements regarding Enerflex' expectations for future performance and business prospects.

Forward-looking information involves risks and uncertainties, and the stated expectations could differ materially from actual results or performance. For more information, please see the advisory comments within our news release, MD&A and other regulatory filings.

Approximately 1 hour following the completion of this call, a recording will be available on our website under the Investors section. During this call, unless otherwise stated, we'll be referring to the 3 months ended March 31, 2022, compared to the same period of 2021. We'll proceed on the basis that you've all taken the opportunity to read yesterday's press release.

I'll now turn the call over to Marc.

Marc Rossiter

Thanks, Stefan, and good morning, everyone. We are pleased to report a successful first quarter and continued positive momentum across our business. Our ability to secure higher volumes of work in recent months is a function of robust supply and demand fundamentals in the oil and gas industry where ongoing strength in commodity prices, improved balance sheets of our customers and a renewed focus on energy security, led to quarterly Engineered Systems bookings of over $230 million and grew our backlog for a fifth consecutive quarter.

Increased industry activity is the first step towards normalizing Engineered Systems gross margins and as a result of recent bookings activity, we've generated a quarter-over-quarter gross margin improvement of 200 basis points in our manufacturing business, despite increased supply chain pressures. While we're cautiously optimistic about the trajectory of the recovery, we continue seeing many of our customers maintain their commitment to our capital discipline and there remains some uncertainty in predicting the impact of geopolitical events on the global energy landscape and pace of energy development across our regions.