COLORADO SPRINGS, CO--(Marketwire - November 15, 2010) - ENSERVCO Corporation (
OTCBB:
ASPN), a
provider of well-site services to the domestic onshore oil and gas
industry, today announced financial results for its third quarter and
nine-month period ended Sept. 30, 2010.
For the third quarter, which is generally the Company's slowest fiscal
period, revenue increased 14% to $3.4 million from $3.0 million in the same
period a year ago. The increase was largely due to increased water hauling
revenue, particularly within the Marcellus Shale region where the Company
commenced operations in June. Concurrent with the year-over-year revenue
growth was a reduction in the cost of revenue, which resulted from a series
of cost-control measures instituted in 2009 in response to the industry
downturn. The lower cost of revenue led to a $494,000 positive swing in
gross profit and a 16% improvement in gross margin, which increased to 14%
from a negative 2% in the same quarter last year.
Total operating expenses were $2.0 million versus $1.4 million in the third
quarter last year. The increase was primarily due to higher general and
administrative expenses associated with the Company's July 27, 2010 merger
with Aspen Exploration Corporation, as well as new costs associated with
operating as a publicly traded company.
Third quarter loss from operations was $1.6 million versus an operating
loss of $1.4 million in the third quarter last year. Net loss was $1.0
million, or $0.05 per diluted share on 19.6 million weighted average shares
outstanding, versus a net loss of $1.4 million, or $0.10 per diluted share
on 14.5 million weighted average shares outstanding in the year-ago third
quarter.
For the nine-month period, revenue increased 8% to $12.6 million from $11.7
million at the nine-month mark last year. Gross margin increased to 20%
from 11% during the same period in 2009. Operating loss declined to $2.3
million from $3.0 million in the comparable year-ago period, while net loss
declined to $1.7 million, or $0.10 per diluted share on 16.2 million
weighted average shares outstanding, from $2.9 million, or $0.20 per
diluted share on 14.5 million weighted average shares outstanding.
Mike Herman, chairman and CEO, said, "Our commencement of operations in the
Marcellus Shale and our merger with Aspen both represent recent strategic
accomplishments that we believe have enhanced our prospects for long-term
growth and increased shareholder value.
"We have just entered our first full cold-weather season in the Marcellus,
and as expected, we are experiencing a sharp increase in demand for our
frac heating and hot oiling services. We have added several heating units
to our Marcellus-based fleet and are working aggressively to capture market
share in the region. Our efforts to date have helped us establish customer
relationships with some of the largest exploration and production companies
operating in the Appalachian Basin."
Herman added, "In the coming months, we intend to further expand our
equipment fleet to address growing demand, and will continue to explore
expansion opportunities within other regions that are benefitting from the
increase in domestic drilling activity. One of our long-term objectives is
to further diversify the services we offer and the territories where we
provide them, which should enhance our financial performance and help
mitigate the seasonal fluctuations we currently experience."
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 and frac heating
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, West Virginia and Wyoming. ENSERVCO became a public company
in July 2010 when it merged with Aspen Exploration Corporation, which is
now doing business under the trade name ENSERVCO Corporation. Additional
information about the Company is available at
www.enservco.com.
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 September 29, 2010. 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.
Condensed Consolidated Statements of Operations
For the Three Months For the Nine Months
Ended Ended
September 30, September 30,
------------------------ ------------------------
2010 2009 2010 2009
----------- ----------- ----------- -----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
Revenues $ 3,406,290 $ 2,981,924 $12,626,500 $11,661,914
Cost of Revenue 2,960,385 3,030,517 10,102,887 10,353,931
----------- ----------- ----------- -----------
Gross Profit 445,905 (48,593) 2,523,613 1,307,983
----------- ----------- ----------- -----------
Operating Expenses
General and
administrative
expenses 1,031,883 457,237 1,878,011 884,479
Depreciation and
amortization 993,977 907,694 2,918,670 3,390,861
----------- ----------- ----------- -----------
Total operating
expenses 2,025,860 1,364,931 4,796,681 4,275,340
----------- ----------- ----------- -----------
Income (Loss) from
Operations (1,579,955) (1,413,524) (2,273,068) (2,967,357)
----------- ----------- ----------- -----------
Other (Expense) Income
Interest expense (177,553) (150,675) (551,794) (490,757)
Gain (loss) on
disposals of
equipment (19,200) 3,906 (12,075) 12,602
Interest and other
income 108,996 337 192,360 5,491
----------- ----------- ----------- -----------
Total other (expense) (87,757) (146,432) (371,509) (472,664)
----------- ----------- ----------- -----------
Income (Loss) Before
Income Tax (Expense)
Benefit (1,667,712) (1,559,956) (2,644,577) (3,440,021)
Income Tax (Expense)
Benefit 661,913 116,887 962,374 572,961
----------- ----------- ----------- -----------
Net Income (Loss) $(1,005,799) $(1,443,069) $(1,682,203) $(2,867,060)
=========== =========== =========== ===========
Other Comprehensive
Income (Loss)
Unrealized gains
(losses) on investment
securities, net of tax 37,168 - (484,296) -
----------- ----------- ----------- -----------
Comprehensive Income
(Loss) $ (968,631) $(1,443,069) $(2,166,499) $(2,867,060)
=========== =========== =========== ===========
Earnings per Common
Share - Basic and
Diluted Income (Loss)
Per Common Share $ (0.05) $ (0.10) $ (0.10) $ (0.20)
Weighted average
number of common
shares outstanding
(presented on an
equivalent
basis) 19,648,325 14,519,244 16,247,725 14,519,244
Proforma Information
(presented for the
nine months ended
September 30, 2010
and 2009)
Proforma Revenues $12,626,500 $11,661,914
Proforma Net Income
(Loss) $(2,085,040) $(3,901,231)
Income (Loss) Per
Common Share - Basic
and Diluted $ (0.13) $ (0.18)
Weighted average number
of common shares
outstanding 16,247,725 21,778,866
Condensed Consolidated Balance Sheets
September 30, December 31,
------------ -------------
2010 2009
------------ -------------
(Unaudited)
ASSETS
Current Assets
Cash and cash equivalents $ 905,858 $ 148,486
Accounts receivable, net 1,970,299 2,131,592
Prepaid expenses and other current assets 882,551 262,076
Inventories 328,698 309,927
Income taxes receivable 351,348 385,192
Deferred tax asset 62,715 82,435
------------ -------------
Total current assets 4,501,469 3,319,708
Property and Equipment, net 14,414,949 16,452,812
Non-Competition Agreements, net 480,000 660,000
Goodwill 301,087 301,087
Other Assets 152,347 97,034
------------ -------------
TOTAL ASSETS $ 19,849,852 $ 20,830,641
============ =============
LIABILITIES AND MEMBERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $ 1,487,378 $ 1,276,071
Line of credit borrowings 370,000 1,339,507
Current portion of long-term debt 2,397,077 1,132,412
------------ -------------
Total current liabilities 4,254,455 3,747,990
------------ -------------
Long-Term Liabilities
Related party payables - 199,995
Subordinated debt - related party 1,700,000 500,000
Long-term debt, less current portion 8,215,642 10,692,516
Interest rate swaps - 140,733
Deferred income taxes, net 1,099,349 2,468,984
------------ -------------
Total long-term liabilities 11,014,991 14,002,228
------------ -------------
Total liabilities 15,269,446 17,750,218
------------ -------------
Commitments and Contingencies
Equity
Common stock. $.005 par value
Authorized: 50,000,000 shares
Issued and outstanding: 21,778,866 at
September 30, 2010 and -0- at
December 31, 2009 108,894 -
Additional paid-in-capital 5,440,142 -
Retained earnings (1,005,798) -
Accumulated other comprehensive loss -
investment securities 37,168 -
Members' equity 3,080,423
------------ -------------
Total equity 4,580,406 3,080,423
------------ -------------
TOTAL LIABILITIES AND EQUITY $ 19,849,852 $ 20,830,641
============ =============
Contact Information: CONTACT:
Geoff High
Pfeiffer High Investor Relations, Inc.
303-393-7044