Enservco(US:ENSV)2022-12-22 16:00Financial Performance - Revenues for the three months ended September 30, 2022 increased by approximately $82,000, or 3%, compared to the same period in 2021, while revenues for the nine months ended September 30, 2022 increased by approximately $3.9 million, or 35% [167]. - Segment profit for the nine months ended September 30, 2022 increased by approximately $1.7 million, or 136%, compared to the segment loss incurred for the same period in 2021 [168]. - Net loss for the three months ended September 30, 2022 was approximately $3.1 million, or a loss of $0.27 per basic and diluted share, compared to net income of approximately $369,000, or $0.03 per basic and diluted share, for the same period in 2021 [171]. - Net loss for the nine months ended September 30, 2022, was approximately $3.9 million, a decrease from a net loss of approximately $5.0 million for the same period in 2021, representing a 22% improvement [172]. - Adjusted EBITDA for the nine months ended September 30, 2022, was a loss of approximately $2.7 million, an improvement of approximately $1.4 million compared to a loss of approximately $4.1 million for the same period in 2021 [174]. - Adjusted EBITDA for the three months ended September 30, 2022, increased by approximately $222,000, or 14%, compared to the same period in 2021 [215]. Revenue Breakdown - Production Services revenues for the three months ended September 30, 2022, increased by approximately $305,000, or 12%, to $2.8 million compared to $2.5 million for the same period in 2021 [182]. - Completion and Other Services revenues for the nine months ended September 30, 2022, increased by approximately $1.8 million, or 38%, to $6.5 million compared to $4.7 million for the same period in 2021 [186]. - Hot oiling revenues for the nine months ended September 30, 2022, increased by approximately $1.8 million, or 29%, to approximately $8.0 million compared to approximately $6.2 million for the same period in 2021 [183]. - Production Services segment revenues in the Central USA Region for the nine months ended September 30, 2022, increased by approximately $2.3 million, or 53%, compared to the same period in 2021 [191]. - Completion and Other Services segment revenues in the Central USA Region increased by approximately $195,000, or 513%, for the three months ended September 30, 2022, compared to the same period in 2021 [194]. - Completion and Other Services segment revenues in the Eastern USA Region decreased by approximately $35,000, or 49%, for the three months ended September 30, 2022, compared to the same period in 2021 [195]. Expenses and Losses - Sales, general, and administrative expenses for the three months ended September 30, 2022 increased by approximately $187,000, or 21%, compared to the same period in 2021 [169]. - Other expense for the three months ended September 30, 2022 was approximately $438,000 compared to other income of approximately $2.7 million for the same period in 2021 [170]. - Segment loss for the three months ended September 30, 2022 decreased by approximately $271,000, or 42%, compared to the same period in 2021 [168]. - Direct operating expenses decreased by approximately $189,000, or 5%, for the three months ended September 30, 2022, compared to the same period in 2021 [199]. - Depreciation and amortization expense decreased by approximately $233,000, or 18%, to $1.1 million for the three months ended September 30, 2022, compared to the same period in 2021 [201]. - The Company recognized a loss from operations of $2.6 million for the three months ended September 30, 2022, compared to a loss of $2.9 million for the same period in 2021 [203]. Liquidity and Financing - The Company entered into a revolving credit facility with Cross River, issuing a $750,000 revolving promissory note, with $225,000 outstanding as of September 30, 2022 [155]. - As of September 30, 2022, the company's available liquidity was $736,000, consisting of $211,000 in cash and cash equivalents and $525,000 of unused availability through the Cross River Revolver Note [233]. - The company issued a $1.2 million convertible subordinated note in March 2022 and a $1.2 million convertible subordinated promissory note in July 2022, both with six-year terms [226][227]. - The company has capital obligations primarily related to its 2022 Financing Facilities, which mature through 2027, totaling $2.4 million in aggregate principal amount of convertible notes issued to Cross River [239]. - As of September 30, 2022, the Company had outstanding principal loan balances of approximately $9.3 million with a weighted average interest rate of 12.42% per year [217]. Market Conditions - WTI crude oil price averaged approximately $98 per barrel for the nine months ended September 30, 2022, compared to an average of approximately $60 per barrel in the comparable period last year [159]. - The price of crude oil increased from $55 per barrel in March 2021 to $98 per barrel as of September 30, 2022, positively impacting demand for the company's services [236]. - The number of domestic oil rigs in operation increased from 417 in March 2021 to 763 as of September 30, 2022, with a further rise to 780 rigs by the filing date of this report [236]. - The USA domestic rig count increased to 763 rigs in operation as of September 30, 2022, compared to 521 rigs at the same time a year ago, indicating increased activity levels [175]. - The company anticipates that fluctuations in demand for its services will continue to be cyclical, influenced by geopolitical factors and seasonal variations in the energy sector [235]. Working Capital and Cash Flow - As of September 30, 2022, the company had a working capital deficit of approximately $4.3 million, improved from a deficit of approximately $6.9 million as of December 31, 2021 [234]. - Cash provided by operating activities for the nine months ended September 30, 2022, was approximately $150,000, an increase of approximately $4.1 million compared to cash used in operating activities of approximately $3.9 million for the same period in 2021 [218]. - Cash provided by investing activities for the nine months ended September 30, 2022, was approximately $141,000, an increase of approximately $424,000 compared to cash used in investing activities of approximately $283,000 for the same period in 2021 [219]. - Cash used in financing activities for the nine months ended September 30, 2022, was approximately $229,000, a decrease of approximately $4.6 million compared to cash provided by financing activities of approximately $4.4 million for the same period in 2021 [220]. Accounting and Reporting - As of September 30, 2022, the company had no significant off-balance sheet arrangements that could materially affect its financial condition or results of operations [241]. - There have been no changes in the company's critical accounting policies since the filing of the Annual Report for the year ended December 31, 2021 [242]. - The company is classified as a smaller reporting company and is not required to provide additional market risk disclosures [243].