Enservco(US:ENSV)2024-08-14 20:20Oil Prices and Market Conditions - For the six months ended June 30, 2024, WTI crude oil prices averaged $80 per barrel, compared to $75 per barrel for the same period in 2023, indicating a 6.67% increase[112]. - The price of crude oil was $83 per barrel as of June 30, 2024, compared to $52 per barrel in December 2019[155]. - The number of domestic rigs in operation increased to 581 as of June 30, 2024, from a low of 417 in March 2021[155]. - The total number of domestic rigs in operation decreased to 581 as of June 30, 2024, down from 674 rigs as of June 30, 2023, reflecting a decline of approximately 13.8%[112]. - The company anticipates ongoing demand for its services despite a long-term trend away from fossil fuels due to supply chain shortages and infrastructure development[156]. Financial Performance - Revenues for the three months ended June 30, 2024 increased marginally to $3.764 million, compared to $3.729 million for the same period in 2023, while revenues for the six months increased by $915,000, or 7%[116]. - Segment profit for the three months ended June 30, 2024 was $349,000, an increase of $536,000, or 287%, compared to a segment loss of $187,000 for the same period in 2023[117]. - Net loss for the three months ended June 30, 2024 was $2.3 million, or a loss of $0.08 per share, an improvement from a net loss of $2.6 million, or a loss of $0.12 per share, for the same period in 2023[119]. - Adjusted EBITDA for the three months ended June 30, 2024 was a loss of $667,000, compared to a loss of $1.1 million for the same period in 2023[120]. - Net loss for Q2 2024 was $1.59 million, an improvement from a net loss of $3.56 million in Q2 2023[138]. - Adjusted EBITDA for Q2 2024 improved by $434,000, or 39%, compared to Q2 2023, totaling $1.57 million[144]. Expenses and Cost Management - Direct operating expenses for the three months ended June 30, 2024 decreased by $501,000, or 13%, compared to the same period in 2023[132]. - Sales, general, and administrative expenses for the three months ended June 30, 2024 increased by $306,000, or 35%, primarily due to the acquisition of Buckshot Trucking LLC[133]. - Depreciation and amortization expense for the three months ended June 30, 2024 decreased by $657,000, or 70%, compared to the same period in 2023[134]. - Interest expense for the three months ended June 30, 2024 decreased by $103,000, or 20%, compared to the same period in 2023[136]. - The Company incurred $908,000 in expenses related to note conversions during the three and six months ended June 30, 2024[102]. Acquisitions and Financing - The Company acquired Buckshot Trucking LLC for a total of $5 million, consisting of $3.75 million in cash and $1.25 million in common stock, with an additional contingent payment of up to $500,000[106]. - The Company issued 6,459,938 shares of common stock as part of the Buckshot Acquisition, with promissory notes totaling $2.7 million issued to the sellers[108]. - The Company has a note purchase agreement with Star Equity for $1 million, secured by shares of preferred stock, to finance the Buckshot Acquisition[111]. - The Company entered into a common stock purchase agreement allowing the sale of up to $10 million of newly issued shares, with stockholder approval obtained for issuance beyond the Exchange Cap[104]. - The company has entered into a $10 million equity line of credit to assist with equity raises[152]. Liquidity and Working Capital - Cash provided by operating activities for the six months ended June 30, 2024, was $3.18 million, up from $386,000 in the same period in 2023, an increase of $2.8 million[145]. - Current assets increased to $8.14 million as of June 30, 2024, from $5.72 million as of December 31, 2023[147]. - Working capital deficit improved to $105,000 as of June 30, 2024, from a deficit of $4.3 million at the end of 2023[154]. - Available liquidity as of June 30, 2024, was $357,000, consisting of $332,000 in cash and cash equivalents and $25,000 under the LSQ Facility[152]. Risks and Regulatory Environment - The Company faces risks including competition, inflation, and regulatory changes that could impact its operations and financial performance[99]. - No significant off-balance sheet arrangements were reported that could materially affect the financial condition or results of operations as of June 30, 2024[158]. - There have been no changes in critical accounting policies since the Annual Report on Form 10-K for the year ended December 31, 2023[159].