DENVER, CO--(Marketwire - Nov 14, 2011) - ENSERVCO Corporation (
Selected Highlights:
- Third quarter revenue increases to $4.5 million from $3.4 million in Q3 last year
- Nine-month revenue improves to $18.3 million from $12.6 million in year-ago period
- Year-to-date adjusted EBITDA* up 164% to $2.7 million versus $1.0 million in same period last year
- Nine-month operating cash flow at $3.4 million versus cash used in operating activities of $391,000 at nine-month mark last year
- New operation centers open in Bakken and Niobrara regions
ENSERVCO Corporation (
"The third quarter was marked by strong revenue growth in all three of our service segments and in every geographic region we serve," said Rick Kasch, president and CFO. "In addition, we used what is traditionally a seasonally soft quarter to execute a major expansion of our service territory. Our new operation centers serving the Bakken and Niobrara shale formations opened late in the third quarter and have given us a solid foothold in two of the country's most active unconventional oil and gas fields.
"We are preparing to enter our peak season, which we expect will be in full swing during the coming weeks as cold weather sets in across the northern United States," Kasch added. "We are expanding the operations teams at our new facilities in Killdeer, North Dakota and Cheyenne, Wyoming, and are fabricating several new hot oiling and frac heating trucks, which we anticipate will enter our fleet during the fourth quarter. Our operations in the Marcellus Shale region have already experienced an uptick in seasonal demand, with several customers requesting heating services approximately 30 days earlier than last season."
Kasch said management continues to evaluate a range of new service offerings that could augment the Company's revenue stream and help smooth the current seasonal fluctuations in demand. "Exploration and production companies in many of the regions we serve are facing a significant shortage of various oilfield services. Our long-range objective is to play a larger role in addressing this unsatisfied demand."
Third quarter results
Third quarter revenue advanced 33% to $4.5 million from $3.4 million in the same quarter a year ago. At the service level, revenue from well enhancement operations, which includes frac heating, acidizing and hot oil services, increased 59% to $1.5 million versus $970,000 the same quarter last year. Increased demand for acidizing services and early-season hot oiling work in the Rocky Mountain region drove the improvement. Revenue from fluid management services, which consist of water hauling/disposal and frac tank rentals, increased 17% to $2.5 million versus $2.1 million in the third quarter of 2010. Well-site construction and roustabout revenue increased 60% to $512,000 from $321,000 in the same quarter a year ago.
Gross margin, which is generally lower during the third quarter than the Company's annualized rate, was flat at 13% versus last year's third quarter. The Company's operating loss was $1.7 million versus $1.6 million in the year-ago third quarter. The increase was attributable to higher labor costs associated with the expansion of the Company's corporate, administrative and operations staff; expenses incurred in opening the Company's new North Dakota and Wyoming facilities, and costs associated with the relocation of ENSERVCO's corporate headquarters to Denver. The Company also incurred additional non-cash expenses associated with stock option and warrant grants.
Third quarter net loss was $1.1 million, or $0.05 per diluted share, versus a net loss of $1.0 million, or $0.05 per diluted share, in the third quarter last year. Adjusted EBITDA* was a negative $134,000 versus a negative $212,000 in the same period a year ago.
Nine-month Results
Revenue through nine months increased 45% to $18.3 million from $12.6 million in the same period last year. Gross margin improved to 25% from 20% in last year's nine-month period. Operating loss declined to $1.2 million from an operating loss of $2.3 million at the nine-month mark last year. Net loss was $1.1 million, or $0.5 per diluted share, a $587,000 improvement when compared with a net loss of $1.7 million, or $0.10 per diluted share, in the same period last year.
Adjusted EBITDA* through nine months was $2.7 million, up 164% from adjusted EBITDA* of $1.0 million during the same period last year. Operating cash flow at the nine-month mark improved to $3.4 million versus cash used in operating activities of $391,000 during the same period last year.
About ENSERVCO
Through its various operating subsidiaries, ENSERVCO has rapidly emerged as one of the energy service industry's leading providers of hot oiling, acidizing, frac heating and fluid management services. The Company owns and operates a fleet of more than 225 specialized trucks, trailers, frac tanks and related well-site equipment. ENSERVCO operates in Colorado, Kansas, New Mexico, North Dakota, Oklahoma, Pennsylvania, Texas, Utah, Wyoming and West Virginia. ENSERVCO became a public company in July 2010 as a result of a merger transaction involving Aspen Exploration Corporation. Additional information about the Company is available at www.enservco.com.
*Note on non-GAAP Financial Measures
This press release and the accompanying tables include a discussion of EBITDA and Adjusted EBITDA, which are non-GAAP financial measures provided as a complement to the results provided in accordance with generally accepted accounting principles ("GAAP"). The term "EBITDA" refers to a financial measure that we define as earnings plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes from EBITDA stock-based compensation and, when appropriate, other items that management does not utilize in assessing ENSERVCO's operating performance (as further described in the attached financial schedules). None of these non-GAAP financial measures are recognized terms under GAAP and do not purport to be an alternative to net income as an indicator of operating performance or any other GAAP measure. We have reconciled EBITDA to GAAP net income in the following table.
We intend to continue to provide these non-GAAP financial measures as part of our future earnings discussions and, therefore, the inclusion of these non-GAAP financial measures will provide consistency in our financial reporting.
Cautionary Note Regarding Forward-Looking Statements
This news release contains information that is "forward-looking" in that it describes events and conditions ENSERVCO reasonably expects to occur in the future. Expectations for the future performance of ENSERVCO are dependent upon a number of factors, and there can be no assurance that ENSERVCO will achieve the results as contemplated herein. Certain statements contained in this release using the terms "may," "expects to," and other terms denoting future possibilities, are forward-looking statements. The accuracy of these statements cannot be guaranteed as they are subject to a variety of risks, which are beyond ENSERVCO's ability to predict, or control and which may cause actual results to differ materially from the projections or estimates contained herein. Among these risks are those set forth in a Form 10-K filed on March 28, 2011. It is important that each person reviewing this release understand the significant risks attendant to the operations of ENSERVCO. ENSERVCO disclaims any obligation to update any forward-looking statement made herein.
| ENSERVCO Consolidated Statements of Operations | |||||||||||||||||||
| For the Three Months Ended | For the Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2011 | 2010 | 2011 | 2010 | ||||||||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||||||||||||
| Revenues | $ | 4,532,274 | $ | 3,406,290 | $ | 18,265,614 | $ | 12,626,500 | |||||||||||
| Cost of Revenue | 3,952,923 | 2,960,385 | 13,619,711 | 10,102,887 | |||||||||||||||
| Gross Profit | 579,351 | 445,905 | 4,645,903 | 2,523,613 | |||||||||||||||
| Operating Expenses | |||||||||||||||||||
| General and administrative expenses | 1,058,602 | 1,031,883 | 2,450,153 | 1,878,011 | |||||||||||||||
| Depreciation and amortization | 1,215,524 | 993,977 | 3,410,063 | 2,918,670 | |||||||||||||||
| Total operating expenses | 2,274,126 | 2,025,860 | 5,860,216 | 4,796,681 | |||||||||||||||
| Income from Operations | (1,694,775 | ) | (1,579,955 | ) | (1,214,313 | ) | (2,273,068 | ) | |||||||||||
| Other (Expense) Income | |||||||||||||||||||
| Interest expense | (161,642 | ) | (177,553 | ) | (513,918 | ) | (551,794 | ) | |||||||||||
| Gain (loss) on disposals of equipment | - | (19,200 | ) | (44,286 | ) | (12,075 | ) | ||||||||||||
| Interest and other income | (726 | ) | 108,996 | (38,436 | ) | 192,360 | |||||||||||||
| Total other (expense) income | (162,368 | ) | (87,757 | ) | (596,640 | ) | (371,509 | ) | |||||||||||
| Income Before Income Tax Expense | (1,857,143 | ) | (1,667,712 | ) | (1,810,953 | ) | (2,644,577 | ) | |||||||||||
| Income Tax (Expense) Benefit | 726,719 | 661,913 | 715,313 | 962,374 | |||||||||||||||
| Net Income (Loss) | $ | (1,130,424 | ) | $ | (1,005,799 | ) | $ | (1,095,640 | ) | $ | (1,682,203 | ) | |||||||
| Other Comprehensive Income | |||||||||||||||||||
| Unrealized losses on investment securities, net of tax | (46,451 | ) | 37,168 | (130,300 | ) | (484,296 | ) | ||||||||||||
| Comprehensive Income | $ | (1,176,875 | ) | $ | (968,631 | ) | $ | (1,225,940 | ) | $ | (2,166,499 | ) | |||||||
| Earnings per Common Share | |||||||||||||||||||
| Income Per Common Share - Basic | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.10 | ) | |||||||
| Income Per Common Share - Fully Diluted | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.05 | ) | $ | (0.10 | ) | |||||||
| Basic weighted average number of common shares outstanding | 21,778,866 | 19,648,325 | 21,778,866 | 16,247,725 | |||||||||||||||
| Add: Dilutive shares assuming exercise of options and warrants | 0 | 0 | 0 | 0 | |||||||||||||||
| Diluted weighted average number of common shares outstanding | 21,778,866 | 19,648,325 | 21,778,866 | 16,247,725 | |||||||||||||||
| ADJUSTED EBITDA | |||||||||||||||||||
| Net Income | $ | (1,130,424 | ) | $ | (1,005,799 | ) | $ | (1,095,640 | ) | $ | (1,682,203 | ) | |||||||
| Add Back: | |||||||||||||||||||
| Interest Expense | 161,642 | 177,553 | 513,918 | 551,794 | |||||||||||||||
| Provision for income taxes | (726,719 | ) | (661,913 | ) | (715,313 | ) | (962,374 | ) | |||||||||||
| Depreciation and amortization | 1,215,524 | 993,977 | 3,410,063 | 2,918,670 | |||||||||||||||
| EBITDA | $ | (479,977 | ) | $ | (496,182 | ) | $ | 2,113,028 | $ | 825,887 | |||||||||
| Add Back (Deduct): | |||||||||||||||||||
| Stock-based compensation | 345,219 | 292,596 | 454,084 | 292,596 | |||||||||||||||
| Warrants issued | - | 81,771 | 46,353 | 81,771 | |||||||||||||||
| Loss (gain) on disposals of equipment | - | 19,200 | 44,286 | 12,075 | |||||||||||||||
| Interest and other income | 726 | (108,996 | ) | 38,436 | (192,360 | ) | |||||||||||||
| ADJUSTED EBITDA | $ | (134,032 | ) | $ | (211,611 | ) | $ | 2,696,187 | $ | 1,019,969 | |||||||||
| ENSERVCO Consolidated Balance Sheets | |||||||||||
| September 30, | December 31, | ||||||||||
| 2011 | 2010 | ||||||||||
| (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current Assets | |||||||||||
| Cash and cash equivalents | $ | 525,801 | $ | 1,637,807 | |||||||
| Accounts receivable, net | 3,249,885 | 4,101,331 | |||||||||
| Marketable securities | 154,212 | 365,786 | |||||||||
| Prepaid expenses and other current assets | 651,593 | 315,521 | |||||||||
| Inventories | 344,537 | 300,527 | |||||||||
| Income taxes receivable | 0 | 634,941 | |||||||||
| Deferred tax asset | 109,233 | 20,041 | |||||||||
| Total current assets | 5,035,261 | 7,375,954 | |||||||||
| Property and Equipment, net | 15,477,129 | 14,452,298 | |||||||||
| Non-Competition Agreements, net | 240,000 | 420,000 | |||||||||
| Goodwill | 301,087 | 301,087 | |||||||||
| Other Assets | 58,503 | 71,537 | |||||||||
| TOTAL ASSETS | $ | 21,111,980 | $ | 22,620,876 | |||||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||||||
| Current Liabilities | |||||||||||
| Accounts payable and accrued liabilities | $ | 2,195,287 | $ | 2,066,353 | |||||||
| Line of credit borrowings | 1,314,358 | 1,050,000 | |||||||||
| Current portion of long-term debt | 3,771,842 | 3,107,122 | |||||||||
| Total current liabilities | 7,281,487 | 6,223,475 | |||||||||
| Long-Term Liabilities | |||||||||||
| Deferred rent payable | 5,511 | - | |||||||||
| Subordinated debt – related party | 1,477,760 | 1,700,000 | |||||||||
| Long-term debt, less current portion | 7,735,372 | 8,657,675 | |||||||||
| Deferred income taxes, net | 731,908 | 1,434,282 | |||||||||
| Total long-term liabilities | 9,950,551 | 11,791,957 | |||||||||
| Total liabilities | 17,232,038 | 18,015,432 | |||||||||
| Stockholders' Equity | |||||||||||
| Common and preferred stock. $.005 par value | |||||||||||
| Authorized: 100,000,000 common shares and 10,000,000 preferred shares Issued: 21,882,466 common shares and -0- preferred shares Treasury Stock: 103,600 common shares Issued and outstanding: 21,778,866 common shares and -0- preferred shares at September 30, 2011 and December 31, 2010 |
108,894 |
108,894 |
|||||||||
| Additional paid-in-capital | 5,990,260 | 5,489,823 | |||||||||
| Retained deficit | (2,245,651 | ) | (1,150,011 | ) | |||||||
| Accumulated other comprehensive income – investment securities | 26,439 | 156,738 | |||||||||
| Total stockholders' equity | 3,879,942 | 4,605,444 | |||||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 21,111,980 | $ | 22,620,876 | |||||||
Contact Information:
CONTACT:
Geoff High
Pfeiffer High Investor Relations, Inc.
303-393-7044