COLORADO SPRINGS, CO--(Marketwire - May 10, 2011) - ENSERVCO Corporation (OTCBB: ENSV)
Highlights:
-- Revenue increases 58% to $9.3 million from $5.9 million in Q1 last year -- Adjusted EBITDA up 131% to $2.8 million from $1.2 million -- Net Income up 713% to $885,000 from $109,000 -- EPS reported at $0.04 vs. $0.01 -- Operating cash flow reaches $2.3 million at March 31, 2011 -- Working capital improves 71% to $1.97 million from $1.15 million
ENSERVCO Corporation (OTCBB: ENSV), a provider of well-site services to the domestic onshore oil and gas industry, today reported strong growth in revenue and profitability for its first fiscal quarter ended March 31, 2011.
First quarter revenue was $9.3 million, a 58% increase over $5.9 million in the first quarter last year. The increase is largely attributable to ENSERVCO's expanding operations in the Marcellus Shale formation in the Northeast United States, where the Company experienced strong seasonal demand for fluid heating services during the recent winter season. The Company also reported strong first quarter revenue growth throughout its Central U.S. and Rocky Mountain operating regions.
From a service offering perspective, first quarter revenue from well enhancement operations, which includes frac heating, acidizing and hot oil services, increased 58% to $6.7 million versus last year's first quarter, while revenue from fluid management services, which consists of water hauling/disposal, and frac tank rentals, increased to $2.4 million, up 70% from the first quarter of 2010.
First quarter gross margin improved to 37% from 29% in last year's first quarter. Operating income increased to $1.6 million from $247,000 in the comparable year-ago quarter, while net income improved to $885,000, or $0.04 per share, from $109,000, or $0.01 per share, in the first quarter last year.
First quarter adjusted EBITDA* increased 131% to $2.8 million versus $1.2 million in the 2010 first quarter. ENSERVCO also reported a sharp improvement in operating cash flow, which was $2.3 million, compared with cash used for operations of $26,000 at the three-month mark last year.
"Our first quarter results reflect the progress made during the past year to expand our domestic footprint and broaden our customer base," said Mike Herman, chairman and CEO. "Since opening our facility in southeast Pennsylvania during last year's first quarter, we have captured significant market share throughout the Marcellus Shale region. Now, many of those same customers are requesting our services in other active exploration and production regions such as the Niobrara Shale in the Central U.S. and the Bakken in the north.
"We recently announced plans to open a sizeable new facility in Cheyenne, Wyoming, which represents our second operations center in the Niobrara, and will help us better serve our customers moving into the northern portions of the formation," Herman added. "Expanding our presence in the Niobrara and establishing a facility the Bakken are key near-term objectives, as both regions have heating seasons that last up to 10 months of the year.
"The expanding use of horizontal drilling techniques, as well as the continued growth of the domestic rig count are very positive leading indicators for our business," Herman said. "We are very encouraged by our strong start to fiscal 2011, and will maintain a sharp focus on additional growth opportunities going forward."
About ENSERVCO
Through its two operating subsidiaries, Heat Waves Hot Oil Service and Dillco Fluid Service, ENSERVCO has 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 200 specialized trucks, trailers, frac tanks and related well-site equipment. ENSERVCO operates in Colorado, Kansas, New Mexico, 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 CORPORATION
CONSOLIDATED STATEMENT OF OPERATIONS
For the Three Months Ended
March 31,
--------------------------
2011 2010
----------- -----------
(Unaudited) (Unaudited)
Revenues $ 9,261,521 $ 5,874,570
Cost of Revenue 5,797,434 4,195,013
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Gross Profit 3,464,087 1,679,557
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Operating Expenses
General and administrative expenses 748,904 485,205
Depreciation and amortization 1,080,607 947,781
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Total operating expenses 1,829,511 1,432,986
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Income from Operations 1,634,576 246,571
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Other (Expense) Income
Interest expense (180,311) (190,181)
Gain (loss) on disposals of equipment (44,286) 7,125
Unrealized Derivative Loss - 13,078
Interest and other income 4,744 235,421
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Total other (expense) income (219,853) 65,443
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Income Before Income Tax Expense 1,414,723 312,014
Income Tax Expense 529,635 203,120
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Net Income $ 885,088 $ 108,894
=========== ===========
Other Comprehensive Income
Unrealized losses on investment securities,
net of tax (81,344) -
----------- -----------
Comprehensive Income $ 803,744 $ 108,894
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Earnings per Common Share
Income Per Common Share - Basic $ 0.04 $ 0.01
Income Per Common Share - Fully Diluted $ 0.04 $ 0.01
Basic weighted average number of common shares
outstanding 21,778,866 14,519,244
Add: Dilutive shares assuming exercise of
options and warrants 618,940 0
----------- -----------
Diluted weighted average number of common
shares outstanding 22,397,806 14,519,244
ADJUSTED EBITDA
Net Income $ 885,088 $ 108,894
Add Back:
Interest Expense 180,311 190,181
Provision for income taxes 529,635 203,120
Depreciation and amortization 1,080,607 947,781
----------- -----------
EBITDA $ 2,675,641 $ 1,449,976
Add Back (Deduct):
Stock-based compensation 49,681 -
Loss (gain) on disposals of equipment 44,286 (7,125)
Unrealized derivative gain - (13,078)
Interest and other income (4,744) (235,421)
----------- -----------
ADJUSTED EBITDA $ 2,764,864 $ 1,194,352
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ENSERVCO CORPORATION
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
------------ ------------
2011 2010
------------ ------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 1,956,497 $ 1,637,807
Accounts receivable, net 4,714,697 4,101,331
Prepaid expenses and other current assets 808,405 681,307
Inventories 240,418 300,527
Income taxes receivable - 634,941
Deferred tax asset 84,707 20,041
------------ ------------
Total current assets 7,804,724 7,375,954
Property and Equipment, net 14,151,745 14,452,298
Non-Competition Agreements, net 360,000 420,000
Goodwill 301,087 301,087
Other Assets 56,604 71,537
------------ ------------
TOTAL ASSETS $ 22,674,160 $ 22,620,876
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 1,876,393 $ 2,066,353
Income taxes payable 401,393 -
Line of credit borrowings - 1,050,000
Current portion of long-term debt 3,560,768 3,107,122
------------ ------------
Total current liabilities 5,838,554 6,223,475
------------ ------------
Long-Term Liabilities
Subordinated debt - related party 1,700,000 1,700,000
Long-term debt, less current portion 8,077,560 8,657,675
Deferred income taxes, net 1,599,179 1,434,282
------------ ------------
Total long-term liabilities 11,376,739 11,791,957
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Total liabilities 17,215,293 18,015,432
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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 March 31, 2011 and December 31, 2010 108,894 108,894
Additional paid-in-capital 5,539,505 5,489,823
Retained deficit (264,926) (1,150,011)
Accumulated other comprehensive income -
investment securities 75,394 156,738
------------ ------------
Total stockholders' equity 5,458,867 4,605,444
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 22,674,160 $ 22,620,876
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Contact Information: CONTACT: Geoff High Pfeiffer High Investor Relations, Inc. 303-393-7044