Aveda Transportation and Energy Services Announces Record Revenue, EBITDA and Net Income for the Second Quarter of 2013 and the Opening of a New West Virginia Satellite Branch

CALGARY, ALBERTA--(Marketwired - Aug. 14, 2013) - Aveda Transportation and Energy Services Inc. (TSX VENTURE:AVE) ("Aveda" or the "Company"), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced record revenue, Adjusted EBITDA¹ and net income for the six and three months ended June 30, 2013.

2013 Second Quarter Business Highlights

• Revenue for the three months ended June 30, 2013 grew by $2.2 million to $20.0 million, compared with revenue of $17.8 million for the same period in 2012;
• Reported 13 consecutive quarters of record revenue growth as compared to the same period of the prior year;
• Generated net income for the three months ended June 30, 2013 of $0.4 million, an increase of $1.2 million compared to a $0.8 million loss for the same period in 2012. Net income per share increased to $0.04 compared to a loss per share of $0.10 in the comparative period;
• Increased Adjusted EBITDA¹ by 122.4% to $3.2 million in the second quarter of 2013 as compared to $1.4 million in the same period of 2012; and
• The Company's solid EBITDA results and positive cash flow generation reduced bank debt by $4.4 million in the three months ended June 30, 2013.

2013 First Half Business Highlights

• Revenue for the six months ended June 30, 2013 grew by $3.1 million to $43.5 million, compared with revenue of $40.4 million for the same period in 2012. Aveda achieved this revenue growth despite an average year-over-year rig count decline of approximately 10% in the areas the Company operates in;
• Generated net income for the six months ended June 30, 2013 of $2.1 million, an increase of $2.4 million compared to a $0.3 million loss for the same period in 2012. Net income per share increased to $0.21 compared to a loss per share of $0.04 in the comparative period;
• Generated Adjusted EBITDA¹ for the six months ended June 30, 2013 of $7.5 million, an increase of $3.1 million compared with Adjusted EBITDA¹ of $4.3 million for the same period in 2012, an increase of 72% year over year;
• Generated net cash provided by operating activities for the six months ended June 30, 2013 of $8.6 million, an increase of $3.4 million compared to $5.2 million for the same period in 2012;
• Repaid loans and borrowing of $7.8 million in the six months ended June 30, 2013; and
• Relocated the Company's Pennsylvania branch from New Columbia to Williamsport, Pennsylvania.

In addition, the Company is pleased to announce the opening of a satellite branch in Buckhannon, WV which will focus on rig moving in the Utica Shale play. There are currently 69 drilling rigs operating within a 100 mile radius of Aveda's new location. The Buckhannon branch will operate as an extension of Aveda's Williamsport, PA branch with minimal impact to overhead costs.

"I am very pleased with our ability to continue to deliver solid results," said Kevin Roycraft, President and Chief Executive Officer of Aveda. "I am also extremely excited about the opening of our new satellite branch in West Virginia. I am confident that this branch will contribute positive results in the fourth quarter of 2013."

The Company also announces that Martin Cheyne has for personal reasons tendered his resignation from Aveda's board of directors. The Company thanks Mr. Cheyne for his significant contributions to our successes over the years.

Aveda will host its second quarter fiscal 2013 results conference call on Thursday, August 15 at 9:00 a.m. Eastern Time (ET). Executive Chairman David Werklund, President and CEO Kevin Roycraft and Vice-President, Finance and CFO Bharat Mahajan will discuss Aveda's financial results for the quarter and then take questions from securities analysts.

To access the conference call by telephone, dial (647) 427-7450 or (888) 231-8191. A live audio webcast of the conference call will be available at http://www.newswire.ca/en/webcast/detail/1202119/1318239.

The conference call webcast will be archived and available at http://www.avedaenergy.com/investors/Conference-Calls/default.aspx until September 30, 2013.

The Company's consolidated financial statements and Management's Discussion and Analysis are available on the Company's website at www.avedaenergy.com or the SEDAR website at www.sedar.com.

Financial Overview

(in thousands, except per share and ratio amounts)
	Six Months Ended June 30, 2013	Six Months Ended June 30, 2012	% Change 2012-2013	Three Months Ended June 30, 2013	Three Months Ended June 30, 2012	% Change 2012-2013
Revenue	43,495	40,380	7.7%	20,024	17,780	12.6%
Gross profit4	8,836	7,104	24.4%	3,977	2,815	41.3%
Gross margin	20.3%	17.6%	15.5%	19.9%	15.8%	N/A
Gross profit4 excluding depreciation and amortization	12,763	9,777	30.5%	5,922	4,223	40.2%
Gross margin excluding depreciation and amortization	29.3%	24.2%	N/A	29.6%	23.8%	N/A
Adjusted EBITDA1	7,467	4,345	71.9%	3,161	1,421	122.4%
Adjusted EBITDA1 as a percentage of revenue	17.2%	10.8%	59.5%	15.8%	8.0%	N/A
Net income (loss)	2,123	(330)	743.3%	400	(770)	151.9%
Net income (loss) as a percentage of revenue	4.9%	-0.8%	N/A	2.0%	-4.3%	N/A
Adjusted EBITDA1 per share	0.75	0.58	29.3%	0.32	0.19	68.8%
Earnings per share - basic	0.21	(0.04)	625.0%	0.04	(0.10)	140.0%
Earnings per share - diluted	0.20	(0.04)	600.0%	0.04	(0.10)	140.0%
Current ratio	2.01	2.10	-4.1%	2.01	2.10	-4.1%
Debt to equity ratio2	0.94	0.89	5.3%	0.94	0.89	5.3%
Debt to EBITDA ratio2, 3	1.98	2.24	-11.8%	1.98	2.24	-11.8%
Notes:
(1) This News Release contains the term Adjusted EBITDA. Adjusted EBITDA as presented does not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore it may not be comparable with the calculation of similar measures for other entities. Management uses Adjusted EBITDA to analyze the operating performance of the business. Adjusted EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS. It is defined as earnings before interest, taxes, depreciation and amortization excluding foreign exchange gains or losses which are primarily related to the US dollar activities of the Company and can vary significantly depending on exchange rate fluctuations, which are beyond the control of the Company, and write downs of intangible assets, goodwill impairment, financing costs, gains or losses on disposal of assets, stock based compensation, fees and expenses on settlement of debt and losses on extinguishment of debt.
(2) Debt includes, revolving credit facility, loans and borrowings, obligations under finance lease and convertible debenture as per their carrying amounts on the balance sheet.
(3) EBITDA used is Adjusted EBITDA for the trailing 12 months.
(4) Gross profit calculated as revenue less direct operating expense.

Outlook

The Company earns revenue primarily by providing specialized transportation services to companies engaged in exploration, development and production of petroleum resources. Demand for the Company's transportation services is therefore linked to the economic conditions of the energy industry and the general level of drilling activity in the exploration, development and production of petroleum resources in Western Canada and in the United States. Drilling activity in the WCSB and in the United States has in recent history been affected by amongst other things, low natural gas prices and higher than normal natural gas inventories in storage caused by many factors, including reduced demand for commodities as a consequence of a global recession and the temporary oversupply of natural gas due to the fast development of shale gas resources in the United States.

Countering these factors is a strong price for oil, which has allowed oil-focused regions such as areas surrounding the Company's Pleasanton and Midland, TX branches to experience robust rig counts. In the second quarter of 2013, oil prices showed a strong recovery compared to the first quarter, with WTI reaching $106/bbl¹, much better than the previously expected $90/bbl².

In Canada, the second quarter of 2013 showed rig counts akin to historical pattern up to the end of May³, while June showed a slower recovery than the previous years. With the end of the break-up season, early July rig counts have been strong and are above the same month in 2012, but below 2011. This is in line with the PSAC forecast of April 2013⁴. Unfavourable conditions caused by export capacity bottlenecks remain, with the province of Alberta appealing to rail transportation as an outlet for its crude oil while a decision on major pipeline projects is awaited⁵. Large capital expenditure projects continue to be challenged by the prevailing conditions, as exemplified by the late 2012 announcement of delays in large projects such as the Fort Hill and Joslyn oil sands mines⁶. Within WCSB gas plays, various companies have reduced capital expenditure investments due to the low returns experienced from the exploration and production of low-priced natural gas. Instead, these companies have shifted their focus towards cautious investments in liquids-rich plays, divesting from dry gas assets and reducing overall capital expenditure in expectation of market improvements⁷.

Canada in 2013 as a whole remains uncertain due to the market conditions described, including the risk of additional delays or cancellations in major upstream projects in Canada and continually depressed natural gas prices. However, a more optimistic outlook has been expressed by major players represented by the PSAC, supported by encouraging early rig counts coming out of the break-up season, but it remains to be seen whether such expectations will come to fruition.

Opportunities for expansion and growth continue to appear strongest in the US. According to the Baker Hughes Rig Count⁸, drilling activity in the Eagleford and Permian basins remains close to the highest levels experienced in the last 10 years, although in both basins, rig counts in July 2013 appear to have stabilized 8% lower than the same period in 2012. Rig counts remain, however, at very high levels compared to previous years, and the slight decline shown is not expected to represent any significant reduction in Aveda's activity levels in these regions due to increase in rig efficiency resulting in more frequent rig moves. The high activity levels experienced have allowed Aveda to grow significantly in these areas, with the opening of two new branches (Pleasanton and Midland) in 2012. The Midland branch continues to increase its activities as it is established within the Permian Basin client base. The terminal is showing strong month over month growth in 2013. In contrast, the Mineral Wells branch has faced a significant decline in rig counts in the Dallas/Ft. Worth Basin (Barnett Shale play), and is working to maximize revenue and EBITDA by focusing efforts at acquiring new customers in higher activity, liquids-rich areas to the north.

¹ Bloomberg Energy and Oil Prices, found at http://www.bloomberg.com/energy/ and accessed on July 10, 2013
² Petroleum Services Association of Canada, Drilling Activity Forecast Update, April 25 2013
³ CAODC Statistics, accessed on July 10, 2013 at www.caodc.ca
⁴ Petroleum Services Association of Canada, Drilling Activity Forecast Update, April 25 2013
⁵ According to the Canadian Association of Oil Producers, cited at Profiler Magazine, June 2013 edition, page 11. ISSN 1204-4741
⁶ http://www.theglobeandmail.com/globe-investor/suncor-joins-spending-retreat/article4813907/
⁷ http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/encana-puts-brakes-on-liquids-plays/article8656404/
⁸ Baker Hughes Rig Count, accessed on July 10, 2013, at http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

Pennsylvania is also facing significant declines in rig counts in the surrounding area. The declining rig counts have created significant downward price pressure due to fierce competitive environment and a shrinking market size. It is expected that rig counts will continue a slow downward trend in Pennsylvania gas plays. However, the Company has continued to maintain solid revenues out of its Pennsylvania branch as this branch has been servicing customers in the Utica Shale play in addition to its traditional customer base in the Marcellus. The solid demand in the Utica Shale play has led the Company to expand its operations by opening a satellite branch in Buckhannon, WV. This branch is being run and managed by Aveda's Pennsylvania team, as such, the expansion is being undertaken with minimal impact to overhead costs.

Aveda has recently experienced increases in quoting activity levels across its rig moving branches and is also seeing a greater willingness by customers to enter into master service agreements. With the expansion of the Company's operations into Buckhannon, and generally higher customer quoting activity levels, Aveda is increasing its planned capital expenditure to $4.0 - $5.0 million in 2013.

About Aveda Transportation and Energy Services

Aveda provides specialized transportation of products, materials, supplies and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas and Pennsylvania. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Slave Lake, AB, Leduc, AB, Sylvan Lake, AB Mineral Wells, TX, Pleasanton, TX, Midland, TX, Williamsport, PA and Buckhannon, WV. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.

This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: demand for the Company's services and general industry activity level; the Company's growth opportunities; and expectation to maintain revenue and equipment utilization. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:

• the performance of Aveda's businesses, including current business and economic trends;
• oil and natural gas commodity prices and production levels;
• the effect of the rebranding on Aveda's businesses;
• capital expenditure programs and other expenditures by Aveda and its customers:
• the ability of Aveda to retain and hire qualified personnel;
• the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities;
• the ability of Aveda to maintain good working relationships with key suppliers;
• the ability of Aveda to market its services successfully to existing and new customers;
• the ability of Aveda to obtain timely financing on acceptable terms;
• currency exchange and interest rates;
• risks associated with foreign operations;
• changes under governmental regulatory regimes and tax, environmental and other laws in Canada and the United States; and
• a stable competitive environment.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2012 (the "MD&A"). Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

This News Release contains the terms EBITDA and Adjusted EBITDA which are defined in the MD&A. EBITDA and Adjusted EBITDA as presented do not have any standardized meaning prescribed by international financial reporting standards (IFRS) and therefore may not be comparable with the calculation of similar measures for other entities. Management uses Adjusted EBITDA to analyze the operating performance of the business. Adjusted EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.