August 2016 Forward-looking Statements This presentation may - - PowerPoint PPT Presentation

August 2016

Forward-looking Statements

This presentation may contain forward-looking statements, including statements regarding the business and anticipated financial performance of ENTREC Corporation (“ENTREC” or the “Company”). These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward- looking statements. A number of factors could cause actual results to differ materially from those in the forward-looking statements, including, but not limited to, fluctuations in commodity prices, weather, access to capital markets, competition, changes in technology and government policies, decreases in capital spending by customers, decreases in exploration and development spending by customers, the ability or inability of the Company to increase profit margins or utilization, the ability or inability of the Company to expand to new markets, the ability or inability of the Company to successfully acquire and integrate

• ther businesses, the ability or inability of the Company to leverage its existing presence to expand its geographic footprint, the

ability or inability of the Company to improve operational efficiencies, and the degree to which committed and prospective bookings materialize. In light of the significant uncertainties inherent in the forward-looking statements included herein, the inclusion of such information should not be regarded as a representation by the Company or any other person that the objectives and plans of ENTREC will be achieved. The Company believes that the expectations reflected in these forward-looking statements are reasonable; however, no assurance can be given that these expectations will prove to be correct and such forward-looking statements included in this presentation should not be relied upon. In addition, these forward-looking statements relate to the date on which they are made. Unless otherwise required by applicable securities legislation, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events

• r otherwise.

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Investment Highlights

 Diversified industry exposure and client base

– Broad exposure to customers in the oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries

 Niche industry with high barriers to entry

– Actively increasing market share (completed 14 acquisitions since 2011)

 Strong recurring revenue base

– Multiple touch points with customers through construction and maintenance, repair and operation phases

 Historically strong track record of revenue and EBITDA growth

– 2015 revenue of $166 mm generating $23 mm of EBITDA

 Proven management team with extensive operating background  Significantly undervalued despite best-in-class long-lived assets

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Company Information

Toronto Stock Exchange ENT Basic Shares Outstanding (June 30, 2016) 109.4 million Share Price (August 1, 2016): $0.28 Market Capitalization: $31 million Working capital (June 30, 2016) $14 million Property, plant and equipment (June 30, 2016) $226 million Net Debt (June 30, 2016) $145 million Net tangible asset value (June 30, 2016) $113 million 52 Week Trading Range: $0.23/$0.46 Management and Board Holdings 50%

The Right Management Team

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Extensive Industry Experience Rod Marlin Executive Chairman

• Former President, CEO and Director of Eveready Inc., acquired by Clean Harbors Inc.

in July 2009

• Founder and former President of Marlin Travel Group, Canada’s largest travel company,

until 1993 sale John Stevens President, CEO + Director

• Former President and Director of NC Services Group, a private crane and hauling

company

• Former Senior Vice President of Eveready and its predecessor companies

Jason Vandenberg CFO

• Former CFO of Eveready and its predecessor companies
• Former accountant with Grant Thornton

Glen Fleming Executive VP, Operations

• Former Executive Vice President of Clean Harbors post acquisition of Eveready
• Prior thereto, was Vice President and COO of Eveready

Gavin Mcleod VP, Finance + Operations

• Former Director of Finance with Petrocom Construction
• Joined ENTREC in 2011

Whitney Irwin VP, HSE and Training

• Formerly with Flint Energy Services, a former parent company of ENTREC
• Re-joined ENTREC in 2011

Complementary Crane and Specialized Transportation Solutions

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Our Business

Specialized Cranes for Every Application

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Crawler Cranes: 23

FMV: $38 MM Used for: oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries 1

Rough Terrain Cranes: 51

FMV: $25 MM Used for: oil sands mining and in situ construction, LNG construction, other construction and LNG drilling 2

Hydraulic Truck Cranes: 11

FMV: $12 MM Used for: oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries 5

Boom/Picker Trucks: 84

FMV: $35 MM Used for: oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries 6

Carry Deck Cranes: 7

FMV: $1 MM Used for: plant site maintenance and construction 3

All Terrain Cranes: 29

FMV: $45 MM Used for: oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries 4

Specialized Heavy Haul Fleet

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Conventional Multi- wheeled Trailers: 770 FMV: $36 MM Multiple configurations (up to 96 wheels)

1

Hydraulic Platform Trailers: 400 FMV: $14 MM Modular, highly customizable

2

Tractors: 215 FMV: $32 MM Large diverse fleet of prime movers, winch tractors and highway tractors

3 1 2 3

Asset Overview

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Equipment Units Crane Fleet Crawler Cranes 23 Rough Terrain Cranes 51 Carry Deck Cranes 7 All Terrain Cranes 29 Hydraulic Truck Cranes 11 Boom / Picker Trucks 84 Total 205 Specialized Transportation Fleet Conventional Multi-Wheeled Trailers 750 Hydraulic Platform Trailer Lines 375 Tractors 195

• ENTREC has an extensive fleet of cranes, trailers and tractors that serve all industries

– 205 cranes with multiple uses allow ENTREC to provide a crane for every application – Large fleet of trailers reaching up to 96 wheels

• June 30, 2016 book value of $74.5 mm; net tangible asset value of $112.7 mm

Total Assets 257,897 Less: intangible assets (1,900) Add: fair market value of PPE 266,000 Less: net book value of PPE (225,979) Tangible Assets 296,018 Total Liabilities 183,363 Tangible Net Asset Value 112,655 Per Basic Share 1.03 Current Share Price (August 1, 2016) 0.28 Premium (Discount) to Net Tangible Asset Value

• 72.8%

Net Tangible Asset Value

ABL Senior Debt Facility

• $240 mm ABL Facility led by Wells Fargo
• No Principal repayments until maturity in March 2019
• Effective interest rate (including transaction costs) of 2.7% on USD debt and

3.2% of CAD debt

• Borrowing base calculated on net orderly liquidation value of fleet plus

accounts receivable

• No cash flow financial covenants as long as excess borrowing capacity

exceeds 12.5% of borrowing base

• Key Metrics at June 30, 2016:

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Borrowing base (% of equipment and accts receivable) $168.8 mm ABL Facility utilized $122.4mm Excess borrowing capacity $46.4 mm Minimum excess borrowing capacity required before senior debt to EBITDA financial covenant applies $21.1mm

Positioned to Benefit from Increased Infrastructure Spending

Federal Infrastructure Spend is Growing

• Federal government has proposed $32 billion in

infrastructure spending over the next 10 years – British Columbia - $5.2 billion – Alberta - $3.9 billion

• Alberta’s provincial government has budgeted an

additional $9 billion committed to transportation initiatives and over $8 billion for municipal infrastructure support from now until year end 2020

– Saskatchewan - $1.3 billion

Why we will win Contracts?

 Coordinated heavy haul and heavy lift services  Large, highly specialized equipment fleet  Extensive engineering and logistics support  Highly skilled employees  Excellent safety track record

Over $32 Billion in Proposed Federal Infrastructure Spending Alone

Source: Government of Canada (Infrastructure Canada)

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New Exposure to Power Transmission Spending

Recent Acquisition Provides Exposure to Several Proposed Power Transmission Projects

• ENTREC now has the ability to bid on diversified

power transmission projects throughout Canada

– Power projects include upgrades, extensions and/or new: power plants, transmission lines and substations, generating stations, power generating dams, solar and other power infrastructure projects

• Stable and consistent spending over near

to medium term through Canadian, US and government owned entities with growing capital power spending project budgets:

Opportunities with Basin Electric’s $1 bn worth of projects in North Dakota Valard transmission line ATCO/Alberta Powerline: Fort McMurray west transmission line, ATCO: gas fired power plant and forest fire damage rehabilitation SaskPower: Boundary Dam upgrades and expansion, transmission lines and substations Manitoba Hydro: Keeyask Generating Station, Bipole III project, Conawapa generating station Nalcor Energy: Labrador- Island Link transmission system Emera: Maritim e Link MAXIM: Deerland Peaking station GTE Power: Brooks 1 Solar + TransAlta: Sundance gas fired power plant Ontario Hydro: Mattagami, New Post Creek, Ranney Falls station, Niagara Tunnel, P.Sutherland Gen station

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Northeast Texas approved transmission line projects: Marshall- Hallsville improvements + Valliant-NW Texarkana FGE Texas: Mitchell County $1.2 bn natural gas power plant Tenaska: Building of Brownsville electric generating station in Cameron County, Texas

Positioned to Benefit from future Canadian LNG Projects

Well Count $0 $5 $10 $15 500 1,000 1,500 Year 1 Year 3 Year 5 Year 7 Year 9 $Billions

LNG Capital Expenditure Pattern

Source: Company Reports, ARC Financial Research

10 14 18 6 8 12 16 2 4 Year 1 Year 5 Year 10 Year 15 Pipeline Construction LNG Export Terminal Drilling

LNG Well Count Forecast

Dollars Spent

Based on the development of three LNG projects

(LNG Canada, Pacific Northwest LNG and Kitimat LNG) $Billions

ENTREC can Support Drilling, Pipelines and Terminal Construction

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Where We Operate

Industries Served:

• Conventional oil & gas
• Mining
• Petro chemical
• Pulp & paper
• Infrastructure
• Refining
• Power generation

14 Oil Sands LNG Industry Bakken Oil Fields Thompson, Manitoba Recent Expansion into Manitoba market through HighMark Crane acquisition Western Canada & North Dakota Exposure to natural resource, infrastructure and transportation industries Midland, Texas Recent greenfield expansion into the Permian Basin Bakken Oil Fields ENTREC Location General Movement

• f Goods

Diverse Customer Base

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Natural Resource Producers EPCs /

• Manu. /

Oilfield Service

High Barriers to Entry

• High capital costs to build competitive fleet
• Scale of fleet
• Requires specialized knowledge and extensive experience
• Critical importance of safety

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Competitive Position

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Conventional Platform Mobile, RTs & Crawlers Pickers/ Boom Trucks Heavy Haul Cranes ENTREC Mammoet Sterling Sarens Myshak Other Premay NC Services ~15% ~1% N/A N/A N/A ~69% ~10% ~5% ~25% ~25% N/A ~5% N/A ~20% ~10% ~15% ~7.5% ~20% ~20% ~2.5% ~5% ~35% N/A ~10% ~7.5% ~1% ~1% N/A ~2.5% ~87% N/A ~1%

Management estimates of % market share Western Canada

Conventional Heavy Haul & Crane Segments are Highly Fragmented

Annual Results

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Adjusted EBITDA & Margin Revenue

2012 2013 2014

Acquisitions $114 mm $60 mm $9 mm Capex (net of disposals) $41 mm $56 mm $56 mm Total Capital Spend $155 mm $116 mm $65 mm

2015

$0 mm $16 mm $16 mm

2016 2016

Quarterly Results

Adjusted EBITDA & Margin Quarterly Revenue

2013 2014 2015 2013 2014 2015

Strong Strategic Ownership Positions

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40% Ownership Between two strategic investors in the industry 13% Ownership Employee Ownership Majority of Company Ownership between Two Industry Members and ENTREC Employees

Top Institutional Shareholders Shares (000s) Interest JV Driver Corporation 22,422 20.5% Manitoulin Transport 21,246 19.4% Foyston Gordon & Payne 11,027 10.1% Top Institutional Shareholders 54,695 50.0% Top Insider Shareholders Shares (000s) Interest Glen Fleming - Executive VP, Operations 3,766 3.4% Rod Marlin - Executive Chairman 3,556 3.2% Peter Lacey - Director 1,372 1.3% John M. Stevens - President, CEO & Director 800 0.7% Jason Vandenberg - CFO 250 0.2% Other Directors and Officers 173 0.2% Top Insider Shareholders 9,917 9.1% Employee Ownership Plans (excluding RSUs) 4,661 4.3% Implied Retail and Unidentified Institutional 40,197 36.7% Basic Shares Outstanding 109,470 100.0%

Source: Bloomberg, Public Disclosure, SEDI

Strategic Ownership in ENTREC

• Alberta based company established in 1989
• Provider of contractor and fabrication

services for the industrial, commercial / multi-unit residential and industrial buildings, marine, environmental and public infrastructure industries

• Clients include CNRL, Imperial Oil, Shell,

Devon

• Currently hold 20.5% of ENTREC’s basic

shares outstanding

• Manitoulin has one of the most extensive

transportation networks in Canada

– 50 years of operating experience

• Provides truckload, less than truckload,

trans-border, rail intermodal and specialized transportation services from

• ver 100 locations across Canada
• Recently acquired Hi-Way 13’s less-than-

truckload division (built out Alberta coverage)

– $136 mm transaction value (including debt)

• On October 29, 2015, Manitoulin Transport

announced a strategic investment into ENTREC, acquiring ownership of 15.4%

– Since then, they have acquired more stock to take ownership up to 19.4%

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Strategy

• Short-term strategy

– Focus on MRO business – Infrastructure projects – Power transmission – Cross sell crane and heavy haul services – Cost reduction initiatives – Reduction of long-term debt

• Long-term strategy

– Continued geographic expansion and industry diversification

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Investment Highlights

 Diversified industry exposure and client base

– Broad exposure to customers in the oil & gas, mining, petro chemical, pulp & paper, power generation and infrastructure industries

 Niche industry with high barriers to entry

– Actively increasing market share (completed 14 acquisitions since 1995)

 Strong recurring revenue base

– Multiple touch points with customers through construction and maintenance, repair and operation phases

 Historically strong track record of revenue and EBITDA growth

– 2015 revenue of $166 mm generating $23 mm of EBITDA

 Proven management team with extensive operating background  Significantly undervalued despite best-in-class long-lived assets

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Appendix

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Board of Directors

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Experienced Board of Directors

Board of Directors

Rod Marlin Executive Chairman

• Former President, CEO and Director of Eveready Inc., acquired by Clean Harbors Inc in July 2009
• Founder and former President of Marlin Travel Group, Canada’s largest travel company, until sale in 1993

Peter Lacey Director

• President, CEO and Director of Cervus Equipment Corporation and its predecessor companies since 1998
• Former Director and Chairman of Eveready and its predecessor companies until sale in 2009

Dwayne Hunka Director

• President of DHI Group and Hunka Capital
• Prior thereto, was VP, Business Development for JV Driver Projects, a provider of construction services

Mark Maybank Director

• Active private investor, director, advisor and entrepreneur associated with a variety of private companies
• Former President and COO of Canaccord Genuity until 2011

Charles Sanders Director

• CFO with JV Driver since 2008, formerly held the position of corporate accountant with the organization
• Former accountant with Hill and Partners

Don Goodwill Director

• President of Manitoulin Transport, a Canadian transportation company with 74 Canadian terminal locations
• Became a Director of ENTREC on November 23, 2015 following a significant investment into the company

Brian Tod Director

• Business lawyer acting as counsel to the Edmonton office of Miller Thomson, a national law firm
• Has been with Miller Thomson since 1971

John Stevens President, CEO and Director

• Former President and Director of NC Services Group, a private crane and hauling company
• Former Senior Vice President of Eveready and its predecessor companies

Contact Information

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Corporate Office

ENTREC Corporation

26420 Township Road 531A Acheson, AB T7X 5A3

Company Contacts

Rod Marlin

Executive Chairman 780.962.1600 rmarlin@entrec.com

John Stevens

President and Chief Executive Officer 780.960.5625 jstevens@entrec.com

Jason Vandenberg

Chief Financial Officer 780.960.5630 jvandenberg@entrec.com