World News: 21:01 GMT Wednesday 15th May 2019. [ENSERVCO via Globe Newswire via SPi World News]
DENVER, May 15, 2019 (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, 2019.
“Enservco delivered solid results in virtually all key financial metrics in the first quarter. Revenue grew by 29% to $26.2 million, inclusive of the Adler acquisition,” said Ian Dickinson, President and CEO. “Net income increased 111% to $4.3 million, with adjusted EBITDA up 49% to $7.2 million. Adjusted EBITDA margins were 27.3%, up 360 basis points year over year. Our revenue growth was particularly impressive since the first half of January was slower than normal because customers were re-ramping frac activity as crude oil prices recovered. Net income was lower than expected due to approximately $1.0 million in cost overruns in our water transfer segment due to frozen water lines that required us to use third-party labor and equipment. From an overall financial performance perspective, we are clearly on a positive trajectory. Eight of our last nine quarters have shown year-over-year increases in revenue and our annual profit metrics have trended higher over the past two years. Assuming stable commodity prices, we are optimistic about continuing our positive momentum.
“Our strong first quarter performance was due to a number of factors. Steady demand from our E&P customers played a key role. We have a loyal customer base that includes hundreds of E&Ps, ranging from small operators to the largest major oil and gas producers in the U.S. We have also executed on a number of process improvement initiatives and are generating results. In 2019, consistent with our culture of continuous improvement, we are focused on further streamlining field operations with real-time, data driven systems and processes. We are implementing a digital fleet management system that integrates dispatching and geo-location, maintenance and inventory, truck data and safety, reporting and compliance, electronic invoicing, and finance and accounting. We expect these initiatives to result in additional operating efficiencies and advance our ultimate objectives of de-levering our balance sheet and better positioning the Company for organic growth and accretive M&A.”
Well enhancement services revenue increased 29% year over year to $24.8 million from $19.3 million. The well enhancement segment included frac water heating, up 42% to $20.7 million from $14.6 million; hot oiling, essentially flat at $3.6 million; and acidizing, down 54% to $0.5 million from $1.0 million. The well enhancement segment generated income of $9.6 million in the first quarter, a 55% increase over $6.2 million in segment income in the prior year. Lower acidizing revenue in the first quarter was due to a decline in services performed for two customers in Texas and Wyoming that were more active in the same quarter last year. In addition, the acidizing fleet had more downtime than usual due to redeployment activities following the closure of the Company’s underperforming Kansas location. Management’s goal is to drive profitable growth in its acidizing business as the year progresses.
Water transfer segment revenue increased 44% in the first quarter to $1.4 million from $1.0 million in the same quarter last year. The segment generated a loss of $757,000 in the first quarter compared to income of $38,000 in the same quarter last year due to the aforementioned cost overruns related to two line-freeze incidents. The Company has taken corrective measures to reduce the potential for future such incidents.
Total operating expenses in the first quarter increased 23% year over year to $21.0 million from $17.1 million due primarily to higher direct variable costs associated with increased activity across the Company’s service lines and locations, the additional water transfer costs, and an increase in overhead – primarily depreciation expense – associated with the acquisition of Adler Hot Oil Service. In addition, sales, general and administrative expense increased 20% year over year to $1.6 million from $1.4 million due to higher administrative costs required to support the growth of the business.
Despite higher costs in the first quarter, the Company achieved a 65% increase in income from operations – to $5.3 million from $3.2 million year over year. Net income in the first quarter grew 111% to $4.3 million, or $0.08 per diluted share, from $2.0 million, or $0.04 per diluted share, in the same quarter last year.
Adjusted EBITDA increased 49% in the first quarter to $7.2 million from $4.8 million in the same quarter last year. Adjusted EBITDA margins (adjusted EBITDA as a percentage of revenue) improved by 360 basis points in the first quarter to 27.3% from 23.7% in the same quarter last year due to improved operating efficiencies.
Jay PfeifferPfeiffer High Investor Relations, Inc.Phone: 303-880-9000Email:
Globe Newswire: 21:01 GMT Wednesday 15th May 2019
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