COLORADO SPRINGS, CO--(Marketwire - March 28, 2011) - ENSERVCO Corporation (
Fourth quarter revenue advanced 61% to $6.0 million from $3.7 million in the 2009 fourth quarter. Adjusted EBITDA* increased to $1.1 million versus negative $10,000 in the 2009 fourth quarter. Management said the growth in revenue and adjusted EBITDA was attributable to strong seasonal demand for ENSERVCO's fluid heating services, the positive impact of the Company's geographic expansion and a rebound in domestic onshore drilling activity.
ENSERVCO reduced its fourth quarter operating loss to $41,000 from $1.0 million in the 2009 fourth quarter. The Company achieved a positive bottom-line swing of $2.9 million, reducing its net loss to $163,000, or $0.01 per diluted share on 21,779,000 weighted average shares outstanding, versus a net loss of $3.0 million, or $0.21 per diluted share on 14,519,000 weighted average shares outstanding, in the fourth quarter of 2009.
Revenue for the full 2010 fiscal year increased 21% to $18.6 million from $15.4 million in 2009. Adjusted EBITDA* increased 388% to $2.0 million from $414,000 during the prior year. Loss from operations declined to $2.3 million from $4.0 million in 2009. Full-year net loss declined to $1.8 million, or $0.10 per diluted share on 17,642,000 weighted average shares outstanding, from $5.9 million, or $0.41 per diluted share on 14,519,000 weighted average shares outstanding, in 2009.
"The results of our 2010 expansion into the Northeast United States exceeded our expectations," said Mike Herman, chairman and chief executive officer. "We initiated operations in the Marcellus Shale region during the first quarter of 2010 to address the needs of a large existing customer. By the fourth quarter, we were serving 12 major exploration and production companies in the region. We now have a strong foothold in what has become one of North America's most active natural gas basins, and we are currently working to further expand our customer base and add services that will be counter seasonal to our heating operations."
"We also are encouraged by the progress we made in several of our core markets," Herman added. "In recent months, we have added several new customers in the Rocky Mountain region, where we anticipate we could see meaningful long-term growth. We believe our success at building market share in a competitive environment reflects the strength of our equipment portfolio and our reputation for outstanding customer service.
"Going forward, geographic expansion will remain one of our primary growth strategies. We are aggressively expanding our current operations in the Niobrara shale in eastern Wyoming, where state lease sales are commanding record valuations and there is intense competition among producers that are vying to drill in the formation. In addition, we continue to pursue opportunities in the active Bakken formation in North Dakota.
"Perhaps our most significant challenge in recent months is that customer demand has outstripped the availability of our well-site service equipment. Where possible, we have redeployed assets and personnel to more optimal locations, but we are also working to accelerate the construction of new trucks and equipment. Finally, we are actively evaluating opportunities to add new services that could augment our revenue stream and help mitigate the seasonality of our fluid heating business."
Rick Kasch, chief financial officer, said the Company is off to a strong start to fiscal 2011. "January represented a new monthly record for revenue, and given the favorable environment for the domestic oil and gas industry and our aggressive growth strategy, we are optimistic we will see continued improvements in our financial performance throughout 2011."
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 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.
*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 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.
| ENSERVCO CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||||||
| For the Three Months Ended | For the Year Ended | |||||||||||||||||||
| December 31, | December 31, | |||||||||||||||||||
| 2010 | 2009 | 2010 | 2009 | |||||||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||||||
| Revenues | $ | 6,014,786 | $ | 3,726,832 | $ | 18,641,286 | $ | 15,388,746 | ||||||||||||
| Cost of Revenue | 4,319,525 | 3,135,168 | 14,422,412 | 13,489,099 | ||||||||||||||||
| Gross Profit | 1,695,261 | 591,664 | 4,218,874 | 1,899,647 | ||||||||||||||||
| Operating Expenses | ||||||||||||||||||||
| General and administrative expenses | 662,848 | 601,645 | 2,540,859 | 1,486,124 | ||||||||||||||||
| Depreciation and amortization | 1,073,697 | 1,033,073 | 3,992,367 | 4,423,934 | ||||||||||||||||
| Total operating expenses | 1,736,545 | 1,634,718 | 6,533,226 | 5,910,058 | ||||||||||||||||
| Income (Loss) from Operations | (41,284 | ) | (1,043,054 | ) | (2,314,352 | ) | (4,010,411 | ) | ||||||||||||
| Other (Expense) Income | ||||||||||||||||||||
| Interest expense | (176,447 | ) | (208,368 | ) | (728,241 | ) | (699,125 | ) | ||||||||||||
| Gain (loss) on disposals of equipment | (58,928 | ) | (92,387 | ) | (71,003 | ) | (79,785 | ) | ||||||||||||
| Unrealized Derivative Loss | - | (140,733 | ) | (140,733 | ) | |||||||||||||||
| Gain on sale of investments | 188,186 | - | 188,186 | |||||||||||||||||
| Interest and other income | (38,803 | ) | 1,981 | 153,557 | 7,472 | |||||||||||||||
| Total other (expense) | (85,992 | ) | (439,507 | ) | (457,501 | ) | (912,171 | ) | ||||||||||||
| Income (Loss) Before Income Tax (Expense) Benefit | (127,276 | ) | (1,482,561 | ) | (2,771,853 | ) | (4,922,582 | ) | ||||||||||||
| Income Tax (Expense) Benefit | (36,186 | ) | (1,545,843 | ) | 926,188 | (972,882 | ) | |||||||||||||
| Net Income (Loss) | $ | (163,462 | ) | $ | (3,028,404 | ) | $ | (1,845,665 | ) | $ | (5,895,464 | ) | ||||||||
| Other Comprehensive Income (Loss) | ||||||||||||||||||||
| Unrealized gains (losses) on investment securities, net of tax | 119,570 | - | 156,738 | - | ||||||||||||||||
| Comprehensive Income (Loss) | $ | (43,892 | ) | $ | (3,028,404 | ) | $ | (1,688,927 | ) | $ | (5,895,464 | ) | ||||||||
| Earnings per Common Share – Basic and Diluted | ||||||||||||||||||||
| Income (Loss) Per Common Share | $ | (0.01 | ) | $ | (0.21 | ) | $ | (0.10 | ) | $ | (0.41 | ) | ||||||||
| Weighted average number of common shares outstanding (presented on an equivalent basis) | 21,778,866 | 14,519,244 | 17,641,876 | 14,519,244 | ||||||||||||||||
| ADJUSTED EBITDA | ||||||||||||||||||||
| Net Income (Loss) | $ | (163,462 | ) | $ | (3,028,404 | ) | $ | (1,845,665 | ) | $ | (5,895,464 | ) | ||||||||
| Add Back: | ||||||||||||||||||||
| Interest Expense | 176,447 | 208,368 | 728,241 | 699,125 | ||||||||||||||||
| Provision for income taxes | 36,186 | 1,545,843 | (926,188 | ) | 972,882 | |||||||||||||||
| Depreciation and amortization | 1,073,697 | 1,033,073 | 3,992,367 | 4,423,934 | ||||||||||||||||
| EBITDA | $ | 1,122,868 | $ | (241,120 | ) | $ | 1,948,755 | $ | 200,477 | |||||||||||
| Add Back: | ||||||||||||||||||||
| Stock-based compensation | 49,681 | - | 342,277 | - | ||||||||||||||||
| Loss on disposals of equipment | 58,928 | 92,387 | 71,003 | 79,785 | ||||||||||||||||
| Unrealized Derivative Loss | - | 140,733 | - | 140,733 | ||||||||||||||||
| Gain on sale of investments | (188,186 | ) | - | (188,186 | ) | - | ||||||||||||||
| Interest and other income | 38,803 | (1,981 | ) | (153,557 | ) | (7,472 | ) | |||||||||||||
| ADJUSTED EBITDA | $ | 1,082,094 | $ | (9,981 | ) | $ | 2,020,292 | $ | 413,523 | |||||||||||
| ENSERVCO CORPORATION CONSOLIDATED BALANCE SHEET | |||||||||
| December 31, | December 31, | ||||||||
| 2010 | 2009 | ||||||||
| ASSETS | |||||||||
| Current Assets | |||||||||
| Cash and cash equivalents | $ | 1,637,807 | $ | 148,486 | |||||
| Accounts receivable, net | 4,101,331 | 2,131,592 | |||||||
| Prepaid expenses and other current assets | 681,307 | 359,110 | |||||||
| Inventories | 300,527 | 309,927 | |||||||
| Income taxes receivable | 634,941 | 385,192 | |||||||
| Deferred tax asset | 20,041 | 82,435 | |||||||
| Total current assets | 7,375,954 | 3,416,742 | |||||||
| Property and Equipment, net | 14,452,298 | 16,452,812 | |||||||
| Non-Competition Agreements, net | 420,000 | 660,000 | |||||||
| Goodwill | 301,087 | 301,087 | |||||||
| Other Assets | 71,537 | 0 | |||||||
| TOTAL ASSETS | $ | 22,620,876 | $ | 20,830,641 | |||||
| LIABILITIES AND MEMBERS' EQUITY | |||||||||
| Current Liabilities | |||||||||
| Accounts payable and accrued liabilities | $ | 2,066,353 | $ | 1,276,071 | |||||
| Line of credit borrowings | 1,050,000 | 1,339,507 | |||||||
| Current portion of long-term debt | 3,107,122 | 1,132,412 | |||||||
| Total current liabilities | 6,223,475 | 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 | 8,657,675 | 10,692,516 | |||||||
| Interest rate swaps | - | 140,733 | |||||||
| Deferred income taxes, net | 1,434,282 | 2,468,984 | |||||||
| Total long-term liabilities | 11,791,957 | 14,002,228 | |||||||
| Total liabilities | 18,015,432 | 17,750,218 | |||||||
| Commitments and Contingencies (Note 11) | |||||||||
| Equity | |||||||||
| Common stock. $.005 par value | |||||||||
| Authorized: 50,000,000 shares | |||||||||
| Issued: 21,882,466 shares | |||||||||
| Treasury Stock: 103,600 shares | |||||||||
| Issued and outstanding: 21,778,866 at December 31, 2010 and -0- at December 31, 2009 | 108,894 | - | |||||||
| Additional paid-in-capital | 5,489,823 | - | |||||||
| Retained earnings | (1,150,011 | ) | - | ||||||
| Accumulated other comprehensive loss – investment securities | 156,738 | - | |||||||
| Members' equity | 3,080,423 | ||||||||
| Total equity | 4,605,444 | 3,080,423 | |||||||
| TOTAL LIABILITIES AND EQUITY | $ | 22,620,876 | $ | 20,830,641 | |||||
Contact Information:
CONTACT:
Geoff High
Pfeiffer High Investor Relations, Inc.
303-393-7044