Enservco Corporation Reports 2021 Fourth Quarter and Full Year Financial Results

Q4 revenue up 71% YOY as Company posts gains across all service offerings based on increased customer activity driven by higher commodity prices Third consecutive quarter of double-digit YOY revenue growth following pandemic and drilling downturn that began in second quarter of 2020 Balance sheet recently strengthened through refinancing of bank debt Growth momentum carries into 2022 with first quarter revenue expected to increase between 58% and 64% YOY Company working to complete 2022 first and second quarter Form 10-Qs and will conduct earnings conference call at that time to address all recent results LONGMONT, Colo., July 07, 2022 (GLOBE NEWSWIRE) -- Enservco Corporation (NYSE: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 2021 fourth quarter and full year ended December 31, 2021. "We are encouraged by our sustained growth momentum that saw us close the year with our third consecutive quarter of year-over-year revenue increases and significant growth in all of our service areas, particularly in the more predictable hot oiling business," said Rich Murphy, Executive Chairman. "We are benefitting from increased customer demand driven by higher commodity prices and the addition of new customers. We also have redeployed equipment to more active areas and are expanding our geographic footprint while executing at a high level for legacy and new customers. While activity levels have improved and pricing pressures have alleviated, the drilling and pandemic downturn of 2020 continued to adversely affect our bottom line through 2021. "We believe the oil and gas industry outlook is very favorable and are focused on extending our growth momentum, which should result in an improved bottom line in 2022. For the first quarter of 2022, we expect to report that revenue will increase in the range of 58% to 64% over the prior year first quarter. "We recently strengthened our balance sheet by significantly reducing our total debt, which has been largely reclassified as long-term liabilities with four to six-year terms. We also strengthened our finance team with the appointment of Mark Patterson to the role of Chief Financial Officer. Mark is a highly accomplished finance and operations executive with an extensive track record of helping companies accelerate growth. We look forward to benefitting from his skill set and leadership as we continue to execute our growth strategy." Patterson is a former Board Member and CFO of Express-1 Expedited Solutions, which later changed its name to XPO Logistics – a $12 billion NYSE-listed freight transportation company. Previous assignments include Executive Vice President, CFO and COO of All-State Express, where he led operations, sales, safety, accounting and strategic planning; CFO and acting CEO of Transcard LLC, a financial technology company where he was responsible for operations, finance and accounting; and Executive Vice President and CFO of Appalachian Underwriters, an international insurance group where he led financial and operational matters. He is the founder and an owner of BetterWay Logistics, a fast-growing private freight brokerage agency. 2021 Fourth Quarter Results Total revenue in the 2021 fourth quarter increased 71% to $4.1 million from $2.4 million in the same quarter last year. The increase was attributable to higher commodity prices and increased customer demand across all the Company's service offerings. Production services revenue, which includes hot oiling and acidizing services, increased 39% to $2.5 million from $1.8 million in the same quarter last year. Production services generated a segment loss of $476,000 compared to a segment profit of $11,000 in the same quarter last year. The increased loss was primarily attributable to higher labor costs due to a tight labor market and wage increases, higher fleet repair and maintenance costs due to increased utilization, and higher heating and diesel fuel costs. Completion services revenue, which includes frac water heating and other services, increased 159% in the fourth quarter to $1.6 million from $0.6 million in the same quarter last year. The segment loss improved to $301,000 from $562,000 year over year. Sales, general and administrative expense increased 36% year over year to $1.3 million from $0.9 million due to an increase in bad debt expense related to timing of receivables aging on certain frac water heating projects, partially offset by lower franchise tax expenses. Depreciation and amortization expense was slightly lower at $1.2 million versus $1.3 million in the same quarter last year. Total operating expenses in the fourth quarter increased 24% to $7.3 million from $5.9 million due to higher costs of delivering services coupled with increased SG&A expense. The Company reported an improved net loss of $3.1 million, or $0.27 per share, in the fourth quarter, compared to a net loss of $3.7 million, or $0.69 per share, in the same quarter last year. Adjusted EBITDA in the fourth quarter was a negative $2.0 million compared to a negative $1.5 million in the year-ago fourth quarter. Full Year Results Total revenue for the year ended December 31, 2021, was $15.3 million, down 2% from $15.7 million in the prior year. The decline reflected the challenging first quarter of 2021 when commodity prices and rig counts still fully reflected the pandemic and drilling downturn that began in 2020 compared to the more historically typical first quarter of 2020 prior to onset of the pandemic. Production services revenue for the year increased 17% to $9.0 million from $7.7 million a year ago. The increase reflected the Company's growth momentum in the second, third and fourth quarters of 2021, which more than offset lower activity in the first quarter. The segment loss was essentially flat year over year at $722,000 versus $696,000. Completion services revenue declined 21% year over year to $6.3 million from $8.0 million due to reduced activity in the first quarter of 2021. The segment loss increased 54% to $1.3 million from $0.8 million. Total operating expenses in 2021 were 6% lower at $26.8 million versus $28.4 million in the prior year due to lower costs of providing completion services combined with significant cost reductions at the corporate level. Sales, general and administrative expense in 2021 was reduced by 16% year over year to $4.2 million from $5.0 million, reflecting successful cost reduction efforts. Depreciation and amortization expense was nearly flat at $5.2 million. Net loss for the full year was $8.1 million, or $0.74 per share, compared to a net loss of $2.5 million, or $0.60 per share, in the same period last year. The 2021 net loss included nearly $3.6 million in other income resulting primarily from PPP loan forgiveness and employee retention tax credits while the 2020 net loss included an $11.9 million gain on restructuring of the Company's credit facility. Adjusted EBITDA loss in 2021 increased 6% to a negative $6.1 million from a negative $5.7 million in the prior year. Enservco used $4.8 million in cash from operations in 2021 compared to $4.4 million in 2020. Conference Call Information Enservco is working to complete its 2022 first and second quarter Form 10-Qs. Once they are completed and filed, the Company intends to conduct a conference call to discuss all recent results. About Enservco Through 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 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," "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 ability to increase year-over-year first quarter 2022 revenue by 58% to 64%; ability to sustain a strong balance sheet, growth momentum, increased customer activity, higher commodity prices, reduced pricing pressure, and geographic footprint, and to execute at a high level; and expectations of a favorable macro outlook. 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 Patterson SVP Enservco Corporation mpatterson@enservco.com Jay Pfeiffer Pfeiffer High Investor Relations, Inc. Phone: 303-880-9000 jay@pfeifferhigh.com ENSERVCO CORPORATION AND SUBSIDIARIES Condensed Consolidated Statements of Operations (In thousands except per share amounts) For the Three Months Ended December 31, For the Year Ended December 31, 2021 2020 2021 2020 Revenues: Production services $ 2,456 $ 1,766 $ 9,012 $ 7,714 Completion and other services 1,624 626 6,325 7,969 Total revenues 4,080 2,392 15,337 15,683 Expenses: Production services 2,932 1,755 9,734 8,410 Completion and other services 1,925 1,188 7,605 8,801 Sales, general and administrative expenses 1,281 944 4,185 5,002 Severance and transition costs 7 6 7 145 (Gain) loss on disposal of equipment (194 ) (12 ) (124 ) 47 Impairment loss 128 733 128 733 Depreciation and amortization 1,240 1,305 5,215 5,282 Total operating expenses 7,319 5,919 26,750 28,420 Loss from operations (3,239 ) (3,527 ) (11,413 ) (12,737 ) Other income (expense): Interest expense (7 ) (30 ) (57 ) (1,695 ) Gain on restructuring of senior revolving credit facility - - - 11,916 Other income 31 1 3,699 126 Total other income (expense) 24 (29 ) 3,642 10,347 Loss from continuing operations before taxes (3,215 ) (3,556 ) (7,771 ) (2,390 ) Income tax benefit (expense) 129 3 (273 ) (12 ) Loss from continuing operations (3,086 ) (3,553 ) (8,044 ) (2,402 ) Loss from discontinued operations - (167 ) (8 ) (107 ) Net loss $ (3,086 ) $ (3,720 ) $ (8,052 ) $ (2,509 ) Loss from continuing operations per common share - basic and diluted $ (0.27 ) $ (0.66 ) $ (0.74 ) $ (0.57 ) Loss from discontinued operations per common share - basic and diluted - (0.03 ) Full story available on Benzinga.com