Enservco reports revenue growth
Enservco Corp. (NYSE American: ENSV), which provides specialized wellsite services to the domestic oil and gas industries, has recorded its eighth consecutive quarter of higher yearover-year revenue.
In an earnings report issued Tuesday for the first quarter of 2023, which ended March 31, the Weld County-based company said revenue gained 4% year over year, to $8.9 million from $8.6 million, fueled by increased customer demand coupled with continued growth in Enservco’s East Texas hot oiling operations and price increases in certain markets.
In addition, said executive chairman Rich Murphy in a prepared statement, “our gross profit improved by 56% year over year and adjusted EBITDA more than tripled. We anticipate improved profit metrics based on expected nonrecurrence of certain legal and stock-based compensation expenses combined with company-wide cost reductions.”
“EBITDA” refers to earnings (net income or loss) plus or minus net interest plus taxes, depreciation and amortization. Adjusted EBITDA excludes stock-based compensation and, when appropriate, other items that management does not utilize in assessing Enservco’s operating performance.
“We are focused on three primary initiatives: improving cost efficiencies, further de-levering our balance sheet and continuing to grow and diversify our revenue,” Murphy said. “We are implementing expense reductions across our business, with an emphasis on lowering corporate overhead, including headcount and public company costs. Having already reduced our peak long-term debt of $36 million to $7.2 million, we anticipate further debt reduction in 2023 and are working on a refinancing plan designed to lower debt service and enhance cash flows.”
Gross profit increased to $2 million from $1.3 million in the same quarter last year. Net loss in the first quarter was $1 million, or 7 cents per basic and diluted share, versus net income of $3.1 million, or 27 cents per basic and diluted share in the same quarter last year. That loss included approximately $300,000 in legal costs, a large portion of which are expected to be non-recurring, as well as $100,000 for a one-time restricted stock issuance.
The year-ago first quarter included a $4.3 million gain on extinguishment of debt related to the company’s first quarter 2022 debt refinancing.
Enservco said in the report that it had continued to reduce long-term debt in the first quarter, which declined to $7.2 million from $8.4 million at the end of 2022 and from a high of $36 million in 2019 when the company began its debtreduction program.