Enservco(US:ENSV)2022-11-13 16:00Revenue Growth - Revenues for the three months ended June 30, 2022 increased by approximately $363,000, or 12%, compared to the same period in 2021, driven by a recovery in USA domestic rig counts and expansion into East Texas [162]. - Revenues for the six months ended June 30, 2022 increased by approximately $3.8 million, or 46%, compared to the same period in 2021, with an average USA domestic rig count increase of 60% from 423 to 675 rigs [163]. - For the six months ended June 30, 2022, total revenues increased by approximately $3.8 million, or 46%, to $12.0 million compared to $8.2 million for the same period in 2021 [176]. - Production Services revenues increased approximately $1.8 million, or 44%, to $5.9 million for the six months ended June 30, 2022, driven by increased hot oiling activity [178]. - Hot oiling revenues for the six months ended June 30, 2022 increased approximately $1.6 million, or 39%, to approximately $5.5 million compared to $3.9 million for the same period in 2021 [179]. - Acidizing revenues for the six months ended June 30, 2022 increased by approximately $264,000, or 194%, to approximately $400,000 from approximately $136,000 [180]. - Completion and Other Services revenues for the six months ended June 30, 2022 increased approximately $2.0 million, or 49%, to $6.2 million compared to $4.2 million for the same period in 2021 [182]. - Production Services segment revenues in the Central USA Region for the six months ended June 30, 2022 increased approximately $1.7 million, or 63%, compared to the same period in 2021 [187]. - Completion and Other Services segment revenues in the Rocky Mountain Region for the six months ended June 30, 2022 increased approximately $2.2 million, or 80%, compared to the same period in 2021 [189]. Profit and Loss - Segment profit for the six months ended June 30, 2022 increased by approximately $1.4 million, or 243%, compared to the segment loss incurred for the same period in 2021 [164]. - Net loss for the three months ended June 30, 2022 was approximately $3.9 million, or a loss of $0.34 per share, compared to a net loss of approximately $1.4 million, or a loss of $0.13 per share, for the same period in 2021 [167]. - Net loss for the six months ended June 30, 2022 was approximately $795,000, or a loss of $0.07 per share, compared to a net loss of approximately $5.3 million, or a loss of $0.52 per share, for the same period in 2021 [168]. - Adjusted EBITDA for the three months ended June 30, 2022 was a loss of approximately $1.6 million, consistent with the loss in the same period in 2021 [169]. - The Company recognized a loss from operations of $3.6 million for the three months ended June 30, 2022, compared to a loss of $3.0 million for the same period in 2021, while the loss for the six months ended June 30, 2022 was $4.6 million, an improvement from a loss of $5.3 million in 2021 [200]. - Adjusted EBITDA for the six months ended June 30, 2022 increased by approximately $1.2 million, or 46%, compared to the same period in 2021, primarily due to improvement in segment profit [212]. Expenses - Sales, general, and administrative expenses for the three months ended June 30, 2022 increased by approximately $566,000, or 57%, primarily due to professional fees related to the restatement of Form 10-Qs [165]. - Direct operating expenses increased by approximately $222,000, or 6%, for the three months ended June 30, 2022, compared to the same period in 2021, and increased by approximately $2.4 million, or 27%, for the six months ended June 30, 2022 [196]. - Sales, general, and administrative expenses for the six months ended June 30, 2022 increased approximately $679,000, or 34%, to $2.7 million [197]. - Interest expense for the three months ended June 30, 2022 increased approximately $422,000, and for the six months ended June 30, 2022 increased approximately $561,000 compared to the same periods in 2021 [201]. - Other income for the three months ended June 30, 2022 was approximately $57,000, down from approximately $1.1 million for the same period in 2021, and for the six months ended June 30, 2022 was approximately $92,000 compared to approximately $1.0 million in 2021 [202]. Cash Flow and Financing - Cash provided by operating activities for the six months ended June 30, 2022 was approximately $1.3 million, compared to cash used of approximately $2.1 million for the same period in 2021, reflecting a $3.4 million improvement [215]. - Cash provided by investing activities for the six months ended June 30, 2022 was approximately $203,000, compared to cash used of approximately $130,000 in 2021, an increase of approximately $333,000 [216]. - Cash used in financing activities for the six months ended June 30, 2022 was approximately $1.3 million, a decrease of approximately $5.9 million compared to cash provided of approximately $4.6 million in 2021 [217]. - As of June 30, 2022, the Company had outstanding principal loan balances of approximately $8.1 million with a weighted average interest rate of 11.50% per year [214]. - The Company completed a refinancing transaction, paying $8.4 million in cash to East West Bank and agreeing to pay 5.00% of net proceeds from Receivables Financing, capped at $1.0 million [220]. - Heat Waves entered into a Master Lease Agreement with Utica Leaseco for a $6.225 million equipment-collateralized loan, requiring 51 monthly payments starting at $168,075 [221]. - Under the Receivables Financing with LSQ Funding Group, the Company can factor accounts receivable up to 85%, with a maximum of $10.0 million [222]. - The Company issued a $1.2 million convertible subordinated note to Cross River Partners, accruing interest at 7% per annum, with quarterly interest payments for the first year [223]. - As of June 30, 2022, the Company had available liquidity of $320,000, consisting of $308,000 in cash and $12,000 under the LSQ Facility [229]. - The working capital deficit improved to approximately $3.9 million as of June 30, 2022, from $6.9 million as of December 31, 2021, primarily due to the refinancing [230]. Market Conditions - The average WTI crude oil price for the six months ended June 30, 2022 was approximately $100 per barrel, compared to approximately $57 per barrel in the same period last year [154]. - The price of crude oil increased from $55 per barrel in March 2021 to $108 per barrel as of June 30, 2022, impacting demand for the Company's services [232]. - The domestic rig count rose from 417 in March 2021 to 770 as of the filing date, indicating a correlation between rig count and demand for services [232]. - The Company experienced increased demand for its services due to improved micro and macro-economic conditions, despite ongoing impacts from the pandemic and geopolitical tensions [154]. - The Company anticipates capital requirements for operating expenses, debt servicing, and capital expenditures for the remainder of 2022 [228]. - The Company believes it is positioned for improved operational results barring a decline in crude oil prices or a reduction in domestic rig counts [234].