Adjusted EBITDA1 of $132 million ($0.47/basic share) Discretionary Free Cash Flow1 of $93 million ($0.33/basic share) Strengthened our capital structure with debt repayment and refinancing. At March 31, 2024, the Corporation had $264 million of cash and $751 million in available borrowing capacity, subject to covenant restrictions, providing ample liquidity for shareholder returns and funding of growth initiatives 2024 planned growth expenditures increased to approximately $75 million (from $50 million previously announced) with customer support for infrastructure expansion projects Intention to launch a Substantial Issuer Bid next week as part of our capital allocation strategy CALGARY, AB, April 25, 2024 /CNW/ - SECURE Energy Services Inc. ("SECURE" or the "Corporation") (TSX:SES), a leading waste management and energy infrastructure company, reported today its operational and financial results for the three months ended March 31, 2024. "We're pleased to report a solid start to 2024, with first-quarter results meeting our expectations, allowing us to narrow our Adjusted EBITDA guidance to $450-$465 million for the year," said Allen Gransch, President and incoming CEO. "Strong execution across all business units continues to underscore the stability of our cash flow generation capabilities. In addition, we've optimized our capital structure through debt repayment and refinancing, positioning us with substantial liquidity for strategic initiatives. Our critical infrastructure network, expertise, and financial position set us up to drive operational excellence, growth, and long-term sustainability as a leading waste management and energy infrastructure company. "Over the last quarter, the Corporation successfully refinanced its long-term debt and continued to deliver shareholder returns through dividends and share buybacks, while maintaining significant financial flexibility. Given our positive operational results in the first quarter, the Board of Directors and management continue to believe that a significant gap exists between SECURE's current market valuation and that of peers in the waste management and energy infrastructure sector. In light of these factors, alongside ongoing initiatives, we intend to initiate a Substantial Issuer Bid next week as a key element of SECURE's capital allocation strategy." FIRST QUARTER HIGHLIGHTS Closed the sale of 29 facilities to Waste Connections, Inc. (through its wholly owned subsidiary) for $1.15 billion on February 1, 2024 (the "Sale Transaction"). The 29 facilities were formerly owned by Tervita Corporation and were ordered to be divested by the Competition Tribunal. Repaid the entire amount drawn on the $800 million senior secured revolving credit facility, excluding letters of credit. Redeemed the outstanding US$153 million aggregate principal amount of 11% senior secured notes due 2025. Closed the offering of $300 million aggregate principal amount of 6.75% senior unsecured notes due 2029. Net proceeds from the offering, along with cash on hand, were used to redeem the outstanding $340 million aggregate principal amount of 7.25% senior unsecured notes due 2026. Repurchased and cancelled 12,055,510 shares under the normal course issuer bid at a weighted average price per share of $10.47 for a total of $126 million, reducing our shares outstanding by 4% in the first quarter. The Corporation repurchased an additional 2,812,700 share subsequent to quarter end. Paid a quarterly dividend of $0.10 per common share, which currently represents an attractive yield of 3.5% on our common shares compared to peers. Generated revenue (excluding oil purchase and resale) of $360 million, a decrease of 13% from the first quarter of 2023, primarily related to the impact of the Sale Transaction, and the divestiture of two non-core oilfield service business units in 2023, partially offset by higher volumes and improved margins across the Corporation's remaining infrastructure network. Recorded net income of $422 million or $1.50 per basic share, an increase of $367 million or $1.32 per basic share compared to the first quarter of 2023. The increase was primarily driven by the gain of $520 million recognized on the Sale Transaction, net of the current and deferred tax expenses resulting from the gain. Achieved Adjusted EBITDA of $132 million ($0.47 per basic share), a decrease of 13% to the first quarter of 2023 (4% on a per basic share basis) due to the same factors impacting revenue. However, the decrease in Adjusted EBITDA per basic share was partially offset by a reduction in the number of common shares outstanding resulting from ongoing share repurchases over the past year, which resulted in a decrease of 8% to the weighted average basic shares outstanding in the first quarter of 2024 from the 2023 comparative period. Generated funds flow from operations of $108 million ($0.38 per basic share), a decrease of 21% to the first quarter of 2023 (14% on a per basic share basis) as a result of lower operating profit resulting from the Sale Transaction. Generated Discretionary Free Cash Flow of $93 million ($0.33 per basic share), a decrease of 24% to the first quarter of 2023 (18% on a per basic share basis) as lower Adjusted EBITDA was partially offset by reduced spending on sustaining capital due to reduced facility count following the Sale Transaction. The Corporation's operating and financial highlights for the three months ended March 31, 2024 and 2023 can be summarized as follows: Three months ended March 31, ($ millions except share and per share data) 2024 2023 % change Revenue (excludes oil purchase and resale) 360 416 (13) Oil purchase and resale 2,489 1,491 67 Total revenue 2,849 1,907 49 Adjusted EBITDA (1) 132 151 (13) Per share ($), basic (1) 0.47 0.49 (4) Per share ($), diluted (1) 0.46 0.49 (6) Net income 422 55 667 Per share ($), basic 1.50 0.18 733 Per share ($), diluted 1.47 0.18 717 Funds flow from operations 108 136 (21) Per share ($), basic and diluted (1) 0.38 0.44 (14) Discretionary free cash flow (1) 93 122 (24) Per share ($), basic (1) 0.33 0.40 (18) Per share ($), diluted (1) 0.32 0.39 (18) Capital expenditures (2) 19 46 (59) Dividends declared per common share 0.1000 0.1000 — Total assets 2,645 2,830 (7) Long-term liabilities 543 1,184 (54) Common shares - end of period 279,071,264 300,818,846 (7) Weighted average common shares: Basic 281,557,907 306,517,269 (8) Diluted 286,486,941 310,026,987 (8) 1 Non-GAAP financial measure/ratio. Refer to the "Non-GAAP and other specified financial measures" section herein. 2 The Corporation classifies capital expenditures as either growth, acquisition or sustaining capital. Refer to "Operational Definitions" in the MD&A for further information. OUTLOOK SECURE is extremely well positioned for success with a strong industry backdrop, growth opportunities, and the financial capacity to execute on our strategic initiatives and deliver enhanced shareholder returns. With the Trans Mountain pipeline expansion scheduled to begin operations in the second quarter, our customers can gain take away capacity and stronger pricing with access to global markets paving the way for sustained and expanded activity levels in the years ahead. We expect industry fundamentals will drive increased volumes and overall demand for SECURE's infrastructure. With our waste processing facilities currently operating at approximately 60 percent utilization, we have ample capacity to accommodate growing customer needs for processing, disposal, recycling, recovery, and terminalling, all with minimal incremental fixed costs or additional capital investment. Proceeds from the Sale Transaction, as well as continued ...