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

Marketwired

DENVER, CO--(Marketwired - May 2, 2013) - ENSERVCO Corporation (OTCQB: ENSV)

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

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.

             
             
             
    ENSERVCO Corporation
Condensed Consolidated Statements of Operations and Comprehensive Income
 
       
    For the Three 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 )
   
See notes to condensed consolidated financial statements.  
   
   
   
    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  
  Marketable securities     -       -  
  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  
  Subordinated debt - related party     -       -  
  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  
   
See notes to condensed consolidated financial statements.         
   
   
   
Contact:

Pfeiffer High Investor Relations, Inc.
Geoff High
Phone 303-393-7044
Email: Email Contact
Web: www.pfeifferhigh.com

MZ Group
Derek Gradwell
SVP
Natural Resources
Phone: 949-259-4995
Email: Email Contact
Web: www.mzgroup.com
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