Enerflex Ltd.

Good day, and thank you for standing by. Welcome to the Interflex fourth quarter 2023 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there'll be a question and answer session. To ask a question during the session, you'll need to press star 1-1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1-1 again. 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 Federley, Vice President of Corporate Development and Investor Relations. Please go ahead, sir.

Thank you, and good morning, everyone. Welcome to our fourth quarter and year-end 2023 earnings call. With me today are Mark Rossiter, President and CEO, Preet Ginza, 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 Mark, I'll remind everyone 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 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, Mark 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. Touching briefly on the quarter, Enerflex delivered adjusted EBITDA of $126 million and free cash flow of $185 million. demonstrating the strength and continued momentum from our occurring businesses, as well as the engineered systems product line. Energy infrastructure is generating stable results, and we continue to evaluate opportunities to maximize performance across our geographic platform. Our US contract compression asset is operating at high utilization rates, averaging 93% in the fourth quarter. The aftermarket services business is benefiting from increased activity levels price adjustments, and continued strong demand for spare parts and services. We recorded engineered systems bookings of $327 million in the quarter and $1.7 billion for the year, reflecting demand across three continents and solid client activity levels. However, bookings during the fourth quarter reflect a CCUS project that was canceled after our client was unable to secure required pipeline approvals. The project was originally booked in 2022. Despite the cancellation, Enerflex continues to see strong client activity across our regions, including the United States. We are especially pleased with the success of our cryogenic natural gas processing business line, with Enerflex receiving orders for five large-scale facilities during 2023 and an additional facility award in early 2024. This is a reflection of our expanded product offerings stemming from the Xterra transaction. As we enter 2024, visibility across our business is strong, supported by contract coverage across our energy infrastructure assets, the recurring nature of aftermarket service, and a $1.5 billion engineer systems backlog. Shifting to the integration of Xterrin, we are in the home stretch with efforts focused on final systems integration. We have updated our synergy guidance to reflect annual run rate synergies, having exceeded our previous target of $60 million U.S., Recent achievements include the streamlining of our global manufacturing footprint, exiting several non-core geographies, and monetization of non-core assets. We expect these actions, coupled with their focus on further enhancing the profitability of our core operations to enable continued debt reduction throughout 2024 and enhance Interflex's ability to deliver shareholder returns in the mid to long term. We remain committed to enhancing our financial position, repaying $167 million of long-term debt in the quarter, and reduced our leverage ratio to 2.3 at the end of December, consistent with our guidance. Our focus remains on strengthening the balance sheet and enhancing the company's financial flexibility. We were pleased to recently announce the appointment of Preet Dhinza as Senior Vice President and CFO effective March 1st. Preet has provided solid leadership and financial stewardship since joining Enerflex in October, and I'm excited to welcome him as our CFO at this important time for our company. We look forward to his continued leadership of Enerflex's strong global financial organization as we continue to unlock the benefits of the Xerion acquisition and position our company for long-term growth and value creation. Before I turn the call over to Preet, I want to emphasize that the underlying macro drivers for our business are strong. with the ongoing focus on global energy security and the growing need for low emissions natural gas, resulting in strong demand for Enerflex's energy infrastructure and energy transition solutions. With that, I'll turn it over to Preet to speak to the financial highlights of the quarter and provide an update on Enerflex's outlook for 2024.