Enerflex Ltd.

Good morning, ladies and gentlemen, and welcome to the Interflex first quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. Following Interflex's prepared remarks, we will conduct a question and answer session. Instructions will follow at that time. As a reminder, this conference call is being recorded. I would now like to turn the conference over to your host, Stephan Alley, Vice President, Strategy and Investor Relations. Please go ahead.

Thank you, Operator. Good morning, everyone, and thank you for joining us on our first quarter 2023 earnings call. With me today are Mark Rossiter, President and CEO, Matt Lemieux, Interim CFO, and Ben Park, Vice President, Corporate Controller. During today's call, we'll touch on highlights from our first quarter results and provide an update on how we're progressing our near-term strategic priorities. Before I turn it over to Mark, I'll remind everybody that today's discussion will include non-IFRS and other financial measures as well as forward-looking statements regarding Enerflex's 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 CDAR 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, Mark Roster.

Thanks, Stephan, and thanks to all our listeners for joining today's call. Last night, Enerflex reported results that signal a strong start to 2023 as we continue to de-risk our near-term strategic priorities and realize the benefits of the Xterra acquisition. Headline results included a record quarterly revenue of $825 million, net earnings of $14 million, and adjusted EBITDA of $123 million. a reflection of the momentum we established in our business in 2022. Not only did our large platform of energy infrastructure assets generate significant cash flows, but elevated activity levels within our North American business supported strong financial performance. Our engineered systems bookings reached $517 million in the first quarter, as we maintained our backlog balance of $1.5 billion. Our backlog is an important indicator of future cash flow generation from our engineered systems business, and gives us additional confidence that we are on track to meet our debt reduction target. In addition, engineered systems gross margins continue to expand towards historical averages, including for new bookings in the quarter. We reduced our first quarter SG&A significantly from the fourth quarter of 2022, as we remain keenly focused on improving our cost structure and realizing the overhead synergies from the external acquisition. Operationally, the business is performing quite well across all regions and product lines. As I mentioned in our update at year end, we brought two major infrastructure projects to commercial operation in the Middle East this quarter, growing our current cash flows from the region. We also continue to advance work on the cryogenic facility in Kurdistan, which is expected to be completed in 2024. Today, our infrastructure first business model is rooted in our international operations in Latin America and the Eastern Hemisphere, where the market outlook remains very strong. Key drivers and customer demand, namely energy security and long cycle development, are expected to support healthy activity levels for the foreseeable future. Complementing our international operations is our U.S. contract compression fleet, which benefits from consistently high demand. Average utilization rates reached 96% in the first quarter of 2023, a record for Enerflex. While we continue to observe near-term weakness in North American natural gas pricing, I will remind our listeners that the vast majority of our activity within the region Both our engineered systems and our contract compression continues to be predominantly focused in oil-producing and liquid-rich plays. On the energy transition front, we continue to see strong demand for our product offerings. We secured $95 million of energy transition-related bookings in the first quarter. We also electrified about 7,000 horsepower of compression within our U.S. contract compression fleet. These electric assets provide clear pathways to reduce our customer Scope 1 greenhouse gas emissions. We anticipate continued success in this area. Growing our global energy transition business is a key long-term strategic priority for Enerflex. Looking now at our strategic priorities for 2023, first and foremost this year is about deleveraging and delivering on the cost savings and synergies from the Xterran acquisition. We continue to be laser focused on deleveraging through the course of this year. With construction and commissioning of these large infrastructure projects behind us and the ongoing execution of our sizable $1.5 billion engineer assistance backlog, we are now in a position to harvest free cash flow to strengthen the balance sheet. We expect that strong business performance through the course of 2023 will enable us to meet our debt target of below 2.5 times bank adjusted net debt to EBITDA by the end of the year. giving us additional flexibility to deliver increased returns to shareholders thereafter. Next, regarding the progress we're making in our integration efforts, we've now captured about $50 million worth of the expected $60 million of annual run rate synergies. Most of these synergies relate to headcount rationalization. To further increase operational efficiencies within the business, we will optimize our global manufacturing footprint by closing our facilities in the Middle East and Singapore later this year. Moving forward, we will focus our strong manufacturing capabilities solely in North America to serve the energy needs of our customers around the globe in the most competitive manner possible. Synergies associated with these closures, if any, will be incremental to the synergy figures I've spoken to. I'll now turn it over to Matt Lemieux to speak to the financial highlights from last night's release. Thanks, Mark, and good morning, everyone.