Total revenue declined to $9.4 million from $24.8 millionProduction services revenue of $3.2 million vs. $4.1 millionCompletion services revenue of $6.2 million vs. $20.7 millionNet loss of $2.8 million vs. net income of $4.3 millionAdjusted EBITDA loss of $0.5 million vs. positive $7.9 millionDENVER, May 15, 2020 (GLOBE NEWSWIRE) — 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 first quarter ended March 31, 2020.“The sharp reduction in customer drilling and completion and activity in the fourth quarter carried into the first quarter and was exacerbated by the Saudi-Russia price war and the worldwide economic slowdown due to the Covid-19 pandemic,” said Ian Dickinson, President and CEO. “We continue to take steps to right size our cost structure. Since the first of the year we have taken approximately $2.0 million in annualized costs out of the business. This includes a significant headcount reduction, compensation cuts across the organization, closure of our Oklahoma facility and a temporary scaling back of operations at two other facilities. In addition, we have reduced our 2020 maintenance Capex budget by approximately $600,000 due to lower expected activity levels. These moves were difficult but necessary as we manage through the immediate challenges facing our industry.“On a brighter note, we continue to build on the market share gains we achieved in 2019. We have won and are pursuing additional incremental business with new customers across our footprint, with a particular focus in Texas, Colorado, Pennsylvania and North Dakota,” Dickinson added. “We also continue to focus on strengthening our balance sheet and are in ongoing discussions with our lender and advisors regarding debt restructuring options.”First Quarter Results
Total revenue in the first quarter ended March 31, 2020, declined 62% to $9.4 million from $24.8 million in the same quarter last year.Production services revenue was down 22% year over year to $3.2 million from $4.1 million. Production services included hot oiling, which declined to $2.9 million from $3.6 million, and acidizing, which declined to $270,000 from $469,000.Production services generated a segment loss of $292,000 in the first quarter as compared to a segment profit of $770,000 in the same quarter last year.Completion services revenue was down 70% in the first quarter to $6.2 million from $20.7 million.Completion services generated a segment profit of $1.2 million, down from a segment profit of $8.7 million in the same quarter last year.Total operating expenses in the first quarter declined 37% year over year to $11.6 million from $18.5 million due primarily to lower costs of providing completion services. Sales, general and administrative expense increased 10% in the first quarter to $1.8 million from $1.6 million. The increase was attributable to higher costs associated with bad debt reserve as well as professional fees related to the Company’s efforts to restructure its debt. Those increases were partially offset by elimination of redundant costs related to the acquisition of Adler Hot Oil Service.The Company reported an operating loss of $2.3 million in the first quarter compared to operating income of $6.3 million in the same quarter last year. Net loss in the first quarter was $2.8 million, or $0.05 per diluted share, versus net income of $4.3 million, or $0.08 per diluted share, in the same quarter last year.
Adjusted EBITDA in the first quarter was a negative $503,000, down from a positive $7.9 million in the same quarter last year.Enservco used $1.0 million in cash from operations in the first quarter, down from $2.6 million in cash used in operations in the same quarter last year.Conference Call Information
Management will hold a conference call today to discuss these results. The call will begin at 2:30 p.m. Mountain Time (4:30 p.m. Eastern) and will be accessible by dialing 844-369-8770 (862-298-0840 for international callers). No passcode is necessary. A telephonic replay will be available through May 29, 2020, by calling 877-481-4010 (919-882-2331 for international callers) and entering the Conference ID #34739. To listen to the webcast, participants should go to the ENSERVCO website 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 until June 15, 2020. The webcast also is available at the following link: https://www.webcaster4.com/Webcast/Page/2228/34739.About Enservco
Through its various operating subsidiaries, Enservco provides a wide 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 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 (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 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.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 Enservco’s annual report on Form 10-K for the year ended December 31, 2019, and subsequently filed documents with the SEC. Forward looking statements in this news release that are subject to risk include the ability to continue growing market share and taking costs out of the business and the ability to restructure debt. 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:Jay Pfeiffer
Pfeiffer High Investor Relations, Inc.
Phone: 303-880-9000
Email: [email protected]
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