Enservco Corporation (NYSE American: ENSV), a diversified national
provider of specialized well-site services to the domestic onshore
conventional and unconventional oil and gas industries, today
reported financial results for its fourth quarter and full year
ended December 31, 2022.
“Our seventh consecutive quarter of increased year-over-year
revenue culminated in 41% growth in full year revenue – to $21.6
million in 2022 from $15.3 million a year ago. Both our production
and completion operating segments produced double-digit growth for
the year as customer demand continued its steady rise following the
industry downturn and pandemic impact that began in early 2020,”
said Rich Murphy, Executive Chairman. “We also delivered solid
improvement in bottom line results for the full year, with net loss
reduced by 31% and adjusted EBITDA loss reduced by 56%.
Additionally, we are pleased to announce the February 2023
completion of a public offering that raised gross proceeds of
approximately $3.5 million that will be used to continue advancing
our growth and diversification initiatives.”
“More recently, we further strengthened our balance sheet when
Cross River Partners converted approximately $1.1 million in
convertible debt to equity. Cross River expects to convert its
remaining convertible notes in the amount of approximately $2.5
million pending approval by stockholders at the upcoming June 13,
2023, Annual Meeting. This expected conversion would mark the end
of our balance sheet restructuring effort that began in December
2019 when we had approximately $35 million in long-term debt, which
we expect to be reduced to less than $6.5 million in mid-2023. We
are now able to focus exclusively on increasing our revenue,
enhancing gross margins and pursuing accretive and diversifying
acquisitions or combinations within our more conservative financial
philosophy.”
2022 Fourth Quarter Results
Total revenue in the fourth quarter increased 59% to $6.5
million from $4.1 million in the same quarter last year. The
increase was attributable to stronger customer demand across both
operating segments.
Production services revenue, which includes hot
oiling and acidizing services, increased 4% to $2.6 million from
$2.5 million in the same quarter last year. Production services
generated a segment profit of $0.3 million compared to a segment
loss of $0.5 million in the same quarter last year. Completion
services revenue increased 142% in the fourth quarter to $3.9
million from $1.6 million in the same quarter last year. Completion
services generated a segment profit of $0.7 million compared to a
loss of $0.3 million in the same quarter last year.
Operating loss improved to $1.2 million from $3.2 million in the
same quarter last year. Total other expense was $0.5 million in
2022 compared to total other income $24,000 in the same quarter
last year.
The Company reported an improved net loss of $1.7 million
compared to a net loss of $3.1 million in the same quarter last
year.
Adjusted EBITDA was $17,000 compared to an adjusted EBITDA loss
of $2.0 million in the same quarter last year.
Full Year Results
Total revenue for the year ended December 31, 2022, was $21.6
million, up 41% from $15.3 million in the prior year.
This increase reflected higher customer demand across the
business. Specifically, production services revenue for the year
increased 24% to $11.2 million from $9.0 million a year ago and
generated a segment profit of $0.7 million versus a segment loss of
$0.7 million a year ago. Completion services revenue increased 65%
year over year to $10.4 million from $6.3 million a year ago and
generated a segment profit of $0.7 million versus a segment loss of
$1.3 million a year ago.
Operating loss improved by $3.0 million in 2022 – to $8.4
million from $11.4 million in the prior year. Total other income
was $2.8 million in 2022 compared to $3.6 million in the prior
year. Total other income in 2022 included a $4.3 million gain on
debt extinguishment, which was partially offset by $1.4 million in
current year interest expense. Total other income in the prior year
included $3.7 million in Employee Retention Credits and PPP loan
forgiveness and only nominal interest expense.
Net loss for the full year improved to $5.6 million from $8.1
million in the prior year.
Adjusted EBITDA loss in 2022 improved to $2.6 million from a
loss of $6.1 million in the prior year.
Enservco used $2.2 million in cash from operations in 2022, a
53% improvement over $4.8 million in the prior year.
To view financial statements on Form 10-K as filed with the SEC
today, click the following link:
https://www.sec.gov/ix?doc=/Archives/edgar/data/0000319458/000143774923008841/ensv20221231b_10k.htm
Conference Call InformationEnservco will not
conduct a conference call in conjunction with its Form 10-K filing
but plans to resume such calls beginning with first quarter results
expected to be released in mid-May.
About EnservcoThrough its various operating
subsidiaries, Enservco provides a range of oilfield services,
including hot oiling, acidizing, frac water heating, and related
services. The Company has a broad geographic footprint covering
seven major domestic oil and gas basins and serves customers in
Colorado, Montana, New Mexico, North Dakota, Oklahoma,
Pennsylvania, Ohio, Texas, Wyoming, West Virginia, Utah, Michigan,
Illinois, Florida, New Mexico and Louisiana. 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
(net income or loss) 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 loss
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.
Cautionary Note Regarding Forward-Looking
StatementsThis 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,"
“should,” 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 Enservco’s annual report on Form 10-K for the year ended
December 31, 2021, and subsequently filed documents with the SEC.
Forward looking statements in this news release that are subject to
risk include plans to release first quarter 2023 results and
conduct a conference call in mid-May, ability to continue
generating increased revenue and improved profitability, ability to
execute accretive M&A, continuation of customer demand, ability
to gain stockholder approval for debt conversion, potential to
continue converting convertible debt to equity and strengthen the
balance sheet, ability to reduce long-term debt to less than $6.5
million by mid-year 2023, and plans to convene an Annual Meeting in
June 2023. 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.
Contact:
Mark PattersonChief Financial OfficerEnservco
Corporationmpatterson@enservco.com
Jay PfeifferPfeiffer High Investor Relations,
Inc.Phone: 303-880-9000jay@pfeifferhigh.com
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