Enerflex Ltd. (NYSE:EFXT) Q4 2023 Earnings Conference Call February 29, 2024 10:00 AM ET

Company Participants

Jeffrey Fetterly - VP, Corporate Development & IR

Marc Rossiter - President, CEO & Director

Preet Dhindsa - Interim CFO

Conference Call Participants

Aaron MacNeil - TD Cowen

Cole Pereira - Stifel

Tim Monachello - ATB Capital Markets

John Gibson - BMO Capital Markets

Keith MacKey - RBC Capital Markets

Operator

Good day, and thank you for standing by. Welcome to the Enerflex Fourth Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your first speaker today, Jeff Fetterly, Vice President of Corporate Development and Investor Relations. Please go ahead, sir.

Jeffrey Fetterly

Thank you, and good morning, everyone. Welcome to our fourth quarter and year end 2023 earnings call. With me today are Marc Rossiter, President and CEO; Preet Dhindsa, Interim CFO; and Ben Park, Vice President, Corporate Controller. During today's call, we'll speak to our fourth quarter and year end results, outlook for 2024, and provide an update on how we are progressing on our near and long-term strategic priorities.

Before I turn it over to Marc, I'll remind everyone that today's discussion will include non-IFRS and other financial measures as well as 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, refer to the advisory statements within our news release, MD&A and other regulatory filings, all available on our website and under our SEDAR Plus and EDGAR profiles. All dollar amounts discussed today are in Canadian dollars unless otherwise stated.

I'll now turn it over to our President and CEO, Marc Rossiter.

Marc Rossiter

Thanks, Jeff, and thank you all for joining us in this morning's call. Yesterday, Enerflex reported its fourth quarter and year end 2023 results, which reflect a strong finish to the year and solid operating results across our geographies. Our energy infrastructure and aftermarket services business lines demonstrated steady performance in 2023 and are positioned to continue driving stable, sustainable returns, thanks to Enerflex's diversified global footprint.

Approximately two-thirds of Enerflex's gross margin before depreciation and amortization, both for Q4 and full year 2023 was generated from recurring sources. And markets outside North America contributed approximately 50% of our total gross margin during this period. Our Engineered Systems product line achieved record annual revenue during 2023 and successfully navigated a volatile supply chain environment to deliver solid margins.