Aveda Transportation and Energy Services Announces Record Revenue for the Fourth Quarter of 2012

CALGARY, ALBERTA--(Marketwired - April 8, 2013) - Aveda Transportation and Energy Services Inc. ("Aveda" or the "Company") (TSX VENTURE:AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced record revenue for the three and twelve months ended December 31, 2012.

2012 BUSINESS HIGHLIGHTS

• Revenue for the twelve months ended December 31, 2012 grew by $11.2 million to $83.3 million compared with revenue of $72.2 million for the same period in 2011, US revenue increased by 57% which offset a 14% decline in Canadian revenue;
  
  
• Generated net loss for the twelve months ended December 31, 2012 of $1.3 million, as compared to net income of $2.6 million for the same period in 2011;
  
  
• Generated Adjusted EBITDA(1) for the twelve months ended December 31, 2012 of $9.8 million, a decrease of $1.5 million compared with Adjusted EBITDA(1) of $11.3 million for the same period in 2011;
  
  
• Expanded equipment base by acquiring $23.6 million of net additional equipment and leaseholds in the year 2012;
  
  
• The Company rebranded itself as Aveda Transportation and Energy Services. Operating under a single brand will allow the Company to multiply individual successes across a strong and unified brand going forward;
  
  
• Commenced operations in new branches in Pleasanton, TX and Midland, TX. The Company signed a new lease on a new Pennsylvania facility and moved operations from New Columbia to Williamsport, PA in 2013;
  
  
• Raised $8.0 million ($7.2 million net of financing costs) in new equity financing, and increased its existing credit facility to $50 million from $35 million;
  
  
• Acquired selected assets of 1^st Rate Energy Services Inc. and a private company called Complete Energy Services Inc. together referred to as "Complete" for approximately $7.5 million. As a result of the acquisition the Company increased its rental fleet by 270 pieces of equipment and established operation in Sylvan Lake, AB;
  
  
• The Company elected to close its Crossfield, AB rental operation and combine it with the newly acquired Sylvan Lake, AB operation;
  
  
• Following consecutive periods of poor performance, the Company elected to close its Melita, MB and Grande Prairie, AB branches and allocated its fleet assets amongst other branches;
  
  
• Relocated Nisku, AB branch to Leduc, AB; and
  
  
• Hired Kevin Roycraft as the President and Chief Executive Officer in November 2012. Mr. Roycraft has more than 20 years of transportation industry experience. He was the former Vice-President of Operations for Liquid Transport Corp. (one of North America's largest bulk chemical and oil transportation company).
  
  

"Despite the challenging market conditions of the past year, Aveda's 2012 capital expenditure program and the Complete acquisition have positioned the Company for growth," said Kevin Roycraft, President and Chief Executive Officer of Aveda "I look forward to working with the Aveda team to capitalize on the great opportunities ahead."

Lucas Tomei has tendered his resignation as Corporate Secretary of the Company and is replaced by Kris Miks. The Company thanks Lucas for his services.

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)
	Twelve Months ended December 31, 2012		Twelve Months Ended December 31, 2011		% Change 2011 - 2012		Three Months Ended December 31, 2012		Three Months Ended December 31, 2011		% Change 2011 - 2012
Revenue	83,331		72,161		15.5	%	23,015		19,554		17.7	%
Gross profit(5)	13,745		17,118		-19.7	%	3,149		4,261		-26.1	%
Gross margin	16.5	%	23.7	%	-30.5	%	13.7	%	21.8	%	-37.2	%
Adjusted EBITDA(1)	9,761		11,332		-13.9	%	2,553		2,655		-3.8	%
Adjusted EBITDA(1) as a percentage of revenue	11.7	%	15.7	%	-25.4	%	11.1	%	13.6	%	-18.3	%
Net income (loss)	(1,278	)	2,599		-149.2	%	(517	)	336		-253.9	%
Net income (loss) as a percentage of revenue	-1.5	%	3.6	%	-142.6	%	-2.2	%	1.7	%	-230.7	%
Adjusted EBITDA per share(1,2)	1.11		1.96		-43.4	%	0.26		0.46		-44.2	%
Earnings per share - basic and diluted(2)	(0.15	)	0.45		-133.3	%	(0.05	)	0.06		-186.7	%
Current ratio	2.10		2.28		-7.8	%	2.10		2.28		-7.8	%
Debt to equity ratio(3)	1.36		1.34		1.8	%	1.36		1.34		1.8	%
Debt to EBITDA ratio (3,4)	3.38		2.10		60.6	%	3.38		2.10		60.6	%
Net capital assets addition	23,585		8,093		191.4	%	1,137		8,081		-85.9	%

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)	2011 Per share amounts calculated to take into consideration the Company's 30:1 share consolidation which took place on November 28, 2011 as if the share consolidation had been in effect throughout 2011.
(3)	Debt includes, revolving credit facility, loans and borrowings, obligations under finance lease and convertible debenture as per their carrying amounts on the balance sheet.
(4)	Twelve and three months ended December 31 debt to EBITDA ratio calculated using Adjusted EBITDA for the trailing 12 months.
(5)	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 caused by 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 to experience increasing rig counts. The Pleasanton and Midland branches are benefitting from such increases in Texas, while other US branches are making efforts to minimize revenue and margin reductions stemming from low activity levels in natural gas explorations.

In the WCSB, rig counts in the fourth quarter 2012 failed to ramp up(1) to levels normally expected for that time of the year. This deviation from the typical industry cycle is reported to stem from export capacity bottlenecks coupled with delays in the approval of the Keystone XL and Northern Gateway pipelines. Similarly, while first quarter 2013 showed rig counts akin to first quarter 2011 up to the end of February(2), early March statistics indicate an earlier and steeper decline in rig counts even before the usual start of the "spring break-up" season. This is in line with expectations that 2013 might face limited growth in exploration and production projects reflecting the cited market conditions, as exemplified by the late 2012 announcement of delays in large projects such as the Fort Hill and Joslyn oil sands mines(3). 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 improvements(4).

(1)	June Warren Nickels Rig Locator, accessed on March 7, 2013, at http://www.riglocator.ca/
(2)	CAODC Statistics, accessed on March 7, 2013 at http://www.caodc.ca/
(3)	http://www.theglobeandmail.com/globe-investor/suncor-joins-spending-retreat/article4813907/
(4)	http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/encana-puts-brakes-on-liquids-plays/article8656404/

Despite Aveda's rental asset additions in 2012, revenues have not picked up as aggressively as expected in the rentals division. This indicates a need for further analysis and efforts geared specifically at increasing utilization of current excess capacity, including evaluating customer opportunities outside of the immediate geographical range of our Sylvan Lake location.

In the first quarter of 2013, Aveda anticipates a decrease in revenue in Canada between 25% and 35% compared to the same period in 2012. In Canada, 2013 as whole remains highly 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.

Opportunities for expansion and growth continue to appear strongest in the US. According to the Baker Hughes Rig Count(5), drilling activity in the Eagle Ford and Permian basins remains close to the highest levels experienced in the last 10 years, although in both basins, rig counts have stabilized roughly at the same levels as the previous year as of the first week of March 2012. The high activity levels have allowed Aveda to grow significantly in these areas, with the opening of two new branches (Pleasanton and Midland) in 2012. In contrast, the Mineral Wells branch has faced a significant decline in rig counts in the Dallas/Ft. Worth Basin (Barnett Shale play), and the Company is working to minimize revenue and EBITDA declines by focusing efforts at acquiring new customers in higher activity areas. However, the terminal still faces significant decreases in revenue compared to 2012, and no major recovery is expected due to the significant reductions in rig counts in the region (40% to 50% decline in rig counts) and a portion of the revenue from this branch shifted to the Midland branch. Pennsylvania's early results, on the other hand, show a strong recovery both in revenue and EBITDA compared to the same period in 2012 - this despite the 30% decline in active rigs. These results, however, are subject to strong downward price pressures stemming from a fierce competitive environment and a shrinking market size. The Company continues to make efforts to obtain the best possible results under these circumstances. It is expected that rig counts will continue the downward trend in Pennsylvania gas plays, however management believes the decline may be partially offset by the relocation of rigs to oil plays further west in the state.

(5)	Baker Hughes Rig Count, accessed on March 7, 2013, at http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm

The Midland branch, Aveda's newest, continues to increase its activities as it is established within the Permian Basin client base. The terminal is expected to realize its full potential in mid-2013.

As discussed earlier, when utilizing third party equipment the Company charges its customers a minimal markup. A significant portion of the Company's third party revenue is derived from the US. By utilizing more Company owned equipment instead of hiring third party contractors, the Company anticipates being able to enjoy better gross margin contribution going forward in 2013.

In contrast with Canada, in the US, Aveda expects an increase in revenue between 40% and 50% in the first quarter of 2013, compared to the same period in 2012. The anticipated revenue increase should result in higher EBITDA both on an absolute basis and as a percentage of revenue as compared to the first quarter of 2012. The year as whole, however, remains uncertain due to the market conditions of natural gas focused plays such as the ones serviced by the Mineral Wells and Pennsylvania branches.

The North American economy faces several macro-economic uncertainties, such as the anemic gross domestic product growth rate, and political uncertainties that relates to the oil and gas industries. It is not clear at this time what impact, if any, these uncertainties will have on the North American oil and gas industry and conversely on the operations of the Company. The Company is monitoring these macro-economic issues through feedback from its customers and will adjust its operations as necessary.

Due to the uncertainties discussed above, the Company does not expect considerable capital expenditures in 2013. Excluding acquisitions the Company anticipates investing $2.0-$5.0 million on its 2013 capital expenditure program.

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 and Williamsport, PA. 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.