EX-99.2 4 enservco8k42913exh992.htm PRESS RELEASE - MAY 2, 2013

 

Exhibit 99.2

 

 

  

ENSERVCO’s First Quarter Revenue Improves 95% to $18.6 Million

Fueling Tenfold Increase in Income from Continuing Operations;

Adjusted EBITDA* increases 251% to $7.3 Million

 

Selected Highlights:

·Gross margin improves to 44% from 31% in 2012 first quarter
·Operating income increases to $6.7 million, up from $721,000 in Q1 2012
·March 31, 2013 working capital of $7.4 million, up from $1.6 million at year-end 2012
·Management reports strong start to second fiscal quarter

 

DENVER, CO – May 2, 2013 – ENSERVCO Corporation (OTCQB: ENSV), a provider of well-site services to the domestic onshore conventional and unconventional oil and gas industries, today announced record revenue and earnings** for its first quarter ended March 31, 2013.

 

First quarter revenue increased 95% to a record $18.6 million from $9.5 million the first quarter last year, and a 65% increase over the previous quarterly revenue record of $11.3 million, which came in the fourth quarter of 2012. The increase was fueled by strong demand for ENSERVCO’s well enhancement services (frac heating, hot oiling, acidizing and pressure testing). Well enhancement revenue increased 125% to $16.5 million from $7.3 million in last year’s first quarter.  Revenue from fluid management services (water hauling/disposal and frac tank rentals) was $1.9 million, down from $2.1 million in the 2012 first quarter.

 

Gross margin improved to 44% from 31% in the prior year’s first quarter. Operating income was $6.7 million versus $721,000 in the first quarter a year ago, while income from continuing operations was $4.0 million, or $0.11 per diluted share, up from $379,000, or $0.01 per diluted share, in the first quarter of 2012. In addition to the strong revenue growth, the Company’s earnings reflected a $759,000 decrease in depreciation expense versus the first quarter last year, which was primarily due to a reassessment of the estimated useful lives of its trucks, equipment and disposal wells.

 

First quarter adjusted EBITDA* increased 251% to $7.3 million from $2.1 million in the 2012 first quarter.

 

“Our first quarter financial results reflect the rapid evolution of our business during recent quarters,” said Rick Kasch, president. “A strong increase in our frac heating and hot oiling capacity combined with normal weather across our expanded service territory led to the sharp increase in first quarter revenue, as well as a very strong improvement in earnings. Our first quarter adjusted EBITDA* nearly equaled our strongest full-year performance of $7.5 million in 2008.

 

“Cold temperatures have continued into the spring in many of our service regions, and this has led to a strong start to the second quarter. We expect demand for our frac heating, hot oiling and well maintenance services to show meaningful improvements during the second and third quarters versus the same periods in 2012. These expectations are based on our broader customer base and our move into regions where fluid heating work can last most of the year.”

 

 

 

 
 

 

 

One such region is North Dakota’s Williston Basin. Kasch said the Company last week entered into an agreement to provide well-enhancement equipment and services to Warrior LLC, a tribal-member-owned energy service company operating on the Fort Berthold Indian Reservation. The nearly million-acre reservation sits in the heart of a large and very active production region where operators are principally targeting the Bakken formation. As part of an effort to expand its service offering, Warrior has partnered with ENSERVCO.

 

“Our relationship with Warrior could represent a significant increase in activity out of our Killdeer, North Dakota facility,” Kasch added. “We look forward to working with the company to offer our well enhancement services to new customers.”

 

Kasch said management is taking additional steps to boost revenue during the summer season. “We are working aggressively to grow our core well maintenance services, such as acidizing and pressure testing, and continue to explore new offerings that could be added through acquisition. Given our strong start to the year and much improved working capital position, we are optimistic 2013 will be another year of record results for ENSERVCO.”

 

Conference Call Information

Management will hold a conference call to discuss these results. The call will begin at 1 p.m. Eastern (11 a.m. Mountain) and will be accessible by dialing 877-407-8033 (201-689-8033 for international callers). No passcode is necessary. A telephonic replay will be available through May 8, 2013, by calling 877-660-6853 (201-612-7415 for international callers) and entering the Conference ID #413079. To listen to the webcast, participants should access the ENSERVCO website, located at www.enservco.com, and link to the “Investors” page at least 15 minutes early to register and download any necessary audio software. A replay of the webcast will be available for 90 days.

 

About ENSERVCO

Through its various operating subsidiaries, 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 230 specialized trucks, trailers, frac tanks and related well-site equipment. ENSERVCO serves customers in six major domestic oil and gas fields, and operates in Colorado, Kansas, Montana, New Mexico, North Dakota, Oklahoma, Pennsylvania, Ohio, Texas, Wyoming and West Virginia. Additional information 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 Adjusted EBITDA to GAAP net income in the Consolidated Statements of Operations table at the end of this release. 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.

 

 

 

 
 

 

 

**All revenue and earnings results discussed herein exclude discontinued operations, which resulted in pretax losses of $119,000 and $165,000 for the first quarters of 2013 and 2012, respectively.

 

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, 2013. 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.

 

 

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   ENSERVCO Corporation
   Condensed Consolidated Statements of Operations and Comprehensive Income
   For theThree Months Ended
   March 31,
   2013  2012
   (Unaudited)  (Unaudited)
       
Revenues  $18,567,166   $9,527,955 
           
Cost of Revenue   10,401,143    6,579,429 
           
Gross Profit   8,166,023    2,948,526 
           
Operating Expenses          
General and administrative expenses   907,073    903,360 
Depreciation and amortization   563,836    1,323,797 
Total operating expenses   1,470,909    2,227,157 
           
Income from Operations   6,695,114    721,369 
           
Other Income (Expense)          
Interest expense   (314,052)   (208,991)
Gain on disposals of equipment   306,457    —   
Gain on sale of investments   —      11,762 
Other   14,113    58,464 
Total other income (expense)   6,518    (138,765)
           
Income From Continuing Operations Before Tax Expense   6,701,632    582,604 
Income Tax Expense   (2,695,061)   (203,847)
Income From Continuing Operations   4,006,571    378,757 
           
Discontinued Operations          
Loss from discontinued operations   (118,918)   (165,361)
Income tax benefit   46,378    64,491 
Loss on discontinued operations, net of tax   (72,540)   (100,870)
           
Net Income  $3,934,031   $277,887 
           
Other Comprehensive Gain (Loss)          
Unrealized loss on available-for-sale securities, net of tax   —      (21,215)
Unrealized gain on interest rate swap, net of tax   10,232    —   
Reclassification into earnings, net of tax   338    —   
Total other comprehensive gain (loss)   10,570    (21,215)
           
Comprehensive Income  $3,944,601   $256,672 
           
           
           
Earnings per Common Share – Basic          
Income from continuing operations  $0.12   $0.01 
Discontinued operations   —      —   
Net Income  $0.12   $0.01 
           
Earnings per Common Share – Diluted          
Income from continuing operations  $0.11   $0.01 
Discontinued operations   —      —   
Net Income  $0.11   $0.01 
           
           
Basic weighted average number of common shares outstanding   31,825,294    21,778,866 
Add: Dilutive shares assuming exercise of options and warrants   3,172,940    1,240,747 
Diluted weighted average number of common shares outstanding   34,998,234    23,019,613 
           
           
           
EBITDA From Continuing Operations:          
Income From Continuing Operations  $4,006,571   $378,757 
Add (Deduct):          
Interest expense   314,052    208,991 
Income tax expense   2,695,061    203,847 
Depreciation and amortization   563,836    1,323,797 
EBITDA From Continuing Operations   7,579,520    2,115,392 
Add (Deduct):          
Stock-based compensation   38,696    44,636 
Warrants issued   30,023    —   
Gain on disposal of equipment   (306,457)   —   
Gain on sale of investments   —      (11,762)
Other income   (14,113)   (58,464)
Adjusted EBITDA From Continuing Operations  $7,327,669   $2,089,802 
           
           
EBITDA* From Discontinued Operations:          
Loss From Discontinued Operations  $(72,540)  $(100,870)
Add (Deduct):          
Interest expense   963    750 
Income tax benefit   (46,378)   (64,491)
Depreciation and amortization   —      77,395 
EBITDA* From Discontinued Operations   (117,955)   (87,216)
Add (Deduct):          
Stock-based compensation   —      —   
Warrants issued   —      —   
Loss on disposal of equipment   —      —   
Gain on sale of investments   —      —   
Other (income) expense   —      —   
Adjusted EBITDA* From Discontinued Operations  $(117,955)  $(87,216)

 

 

 

 

 

 

 

 
 

 

   ENSERVCO Corporation
    Condensed Consolidated Balance Sheets 
    March 31,    December 31, 
    2013    2012 
    (Unaudited)      
ASSETS          
Current Assets          
Cash and cash equivalents  $803,271   $533,627 
Accounts receivable, net   13,420,456    7,791,342 
Prepaid expenses and other current assets   1,288,099    802,020 
Inventories   264,884    273,103 
Deferred tax asset   142,745    153,466 
Total current assets   15,919,455    9,553,558 
           
Property and Equipment, net   13,801,019    15,020,890 
Fixed Assets Held for Sale, net   71,342    304,429 
Non-Competition Agreements, net   15,000    30,000 
Goodwill   301,087    301,087 
Long-term portion of interest rate swap   22,374    16,171 
Other Assets   723,068    630,891 
           
TOTAL ASSETS  $30,853,345   $25,857,026 
           
LIABILITIES AND STOCKHOLDERS’ EQUITY          
Current Liabilities          
Accounts payable and accrued liabilities  $3,520,176   $3,585,785 
Fed/State income tax payable   1,509,297    —   
Line of credit borrowings   1,234,447    2,151,052 
Current portion of long-term debt   2,229,883    2,236,343 
Current portion of interest rate swap   13,476    24,048 
Total current liabilities   8,507,279    7,997,228 
           
Long-Term Liabilities          
Deferred rent payable   20,127    20,860 
Long-term debt, less current portion   9,909,737    10,570,928 
Deferred income taxes, net   1,586,869    451,662 
Total long-term liabilities   11,516,733    11,043,450 
Total liabilities   20,024,012    19,040,678 
           
Commitments and Contingencies          
           
Stockholders' Equity          
Common and preferred stock. $.005 par value          

       Authorized: 100,000,000 common shares and 10,000,000

preferred shares

          
       Issued: 31,928,894 common shares and -0- preferred shares          
       Treasury Stock: 103,600 common shares         

       Issued and outstanding: 31,825,294 common shares, and -0-

        
preferred shares, at March 31, 2013 and December 31, 2012,          
respectively   159,127    159,127 
Additional paid-in-capital   9,933,085    9,864,363 
Accumulated earnings (deficit)   731,694    (3,202,337)
Accumulated other comprehensive income   5,427    (4,805)
Total stockholders' equity   10,829,333    6,816,348 
           
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY  $30,853,345   $25,857,026 

 

 

 

Contacts:

Pfeiffer High Investor Relations, Inc.

Geoff High

Phone 303-393-7044

Email: geoff@pfeifferhigh.com

Web: www.pfeifferhigh.com

 

MZ Group

Derek Gradwell

SVP, Natural Resources

Phone: 949-259-4995

Email: dgradwell@mzgroup.us

Web: www.mzgroup.com