Enservco Corporation Reports 2022 Fourth Quarter and Full Year Financial Results

Source: www.gulfoilandgas.com 3/31/2023, Location: North America

Q4 revenue up 59% YOY to $6.5 million from $4.1 million
Seventh consecutive quarter of YOY revenue growth following drilling downturn and pandemic impact that began in 2020
Q4 net loss improves to $1.7 million from $3.1 million
Q4 adjusted EBITDA turns positive at $17,000 vs. loss of $2.0 million
Full year revenue up 41% YOY to $21.6 million from $15.3 million due to revenue gains in both production and completion segments
Full year net loss improves to $5.6 million from $8.1 million
Full year adjusted EBITDA improves to loss of $2.6 million from loss of $6.1 million
February 2023 public offering raised approximately $3.5 million in gross proceeds

Executive Chairman’s investment firm converted $1.1 million of convertible debt to common stock with plans for future fixed price conversions pending stockholder approval at upcoming Annual Meeting scheduled for June 13, 2023

Enservco Corporation, a diversified national provider of specialized well-site services to the domestic onshore conventional and unconventional oil and gas industries, 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.


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