Enservco reports Q3 EPS (13c) vs. (27c) last year

Reports Q3 revenue $2.9M vs. $3.1M last year. “We are pleased to report an increase in revenue for the nine-month period despite our earlier exit from North Dakota, which negatively impacted third quarter and year-to-date revenue comparisons. As a result, our year-to-date adjusted EBITDA improved by 42% to a negative $1.5 million from a negative $2.6 million. Of particular note, we are seeing substantially improved pricing and longer-term customer commitments for the 2023-24 heating season in all of our active basins,” said Rich Murphy, Executive Chairman. “The strategic decision to exit North Dakota will allow us to reallocate resources to operating areas that offer more potential for improved profitability and growth over the long term,” Murphy added. “We are in advanced discussions to sell real estate and excess equipment related to the North Dakota operations, which will strengthen our cash position as we move into our heating season. We also have made significant progress de-levering our business in 2023, closing the third quarter with just $4.2 million in term debt associated with our equipment financing, down from $5.3 million at 2022 year-end and from a high of approximately $36 million in 2019 when we commenced our debt reduction program. We intend to continue paying down debt as we increase revenue and operations become more profitable. Near the end of the third quarter we acquired for stock substantially all of the assets of Rapid Hot, a major provider of frac water heating services in Ohio, Pennsylvania and West Virginia. In addition to strengthening our position in the Marcellus shale, this transaction adds incremental revenue as well as management depth, with Rapid Hot’s president and CFO Mike Lade joining Enservco as Chief of Staff. We also added Rapid Hot managing member Steve Weyel to our Board and look forward to benefitting from his many years of experience in the energy space and particularly from his ability to identify and close M&A opportunities. In conjunction with this acquisition, we completed a $1.6 million convertible debt financing that included participation from lead investors of Rapid Hot, an Enservco board member and Cross River Partners. We are steadily building momentum across our business and are now entering our fourth and first quarter heating season when we generate the majority of our revenue and profitability. Moving forward, we are focused on growing revenue both organically and through M&A, controlling costs to improve profitability and reducing long-term debt. We are encouraged by improving margins and continued drilling activity in our markets and based on customer feedback, expect further demand growth for our services,” Murphy concluded.