Enservco(US:ENSV) ZACKS·2025-01-06 17:21Stock Performance - Shares of Enservco Corporation (ENSV) lost 16.6% since the company reported its Q3 2024 earnings, compared to the S&P 500's 0.7% decline over the same period [1] - Over the past month, the stock fell 18.1% versus the S&P 500's 3.1% decline [1] Financial Performance - Q3 2024 loss per share improved to 5 cents from 12 cents in the year-ago quarter [2] - Total revenues increased 51.7% to $3.98 million from $2.62 million in Q3 2023, driven by the new logistics services segment [2] - Gross margin improved to 39% from 33.2% in Q3 2023, reflecting higher contributions from the cost-efficient logistics segment [5] - Adjusted EBITDA loss narrowed 31% to $0.96 million from $1.39 million in the prior-year period [5] Segmental Performance - Production Services revenues fell 11.4% year-over-year to $2.33 million from $2.62 million, reflecting lower customer demand in certain regions [3] - Operating expenses for Production Services declined to $2.43 million from $3.15 million a year ago [3] - Logistics Services generated $1.66 million in revenues in Q3 2024, with operating expenses of $0.87 million [4] Expenses - SG&A expenses rose 80.2% to $1.76 million from $0.98 million in Q3 2023, primarily due to higher stock-based compensation and expanded operational needs [6] - Depreciation and amortization expenses dropped nearly 48% to $0.44 million from $0.85 million in Q3 2023, reflecting recent asset divestitures [6] - Total operating expenses increased to $5.5 million from $5 million in the prior-year quarter [7] Cash & Debt Position - Cash position stood at $0.17 million as of Sept 30, 2024, down from $0.2 million at the end of 2023 [8] - Current liabilities rose to $13.48 million from $10.03 million at the end of 2023 [8] - Long-term debt, net of current maturities, decreased to $3.26 million from $4.88 million at the end of 2023 [8] Management Commentary - Logistics services segment, supported by the Buckshot Trucking acquisition, contributed to revenue growth [10] - Declining revenues from production services reflected subdued market demand in certain regions [10] - Management expressed concerns about cash flow constraints and the need for additional financing [11] - Challenges in integrating the Buckshot Trucking acquisition, including unforeseen costs and operational inefficiencies, were acknowledged [11] Other Developments - Enservco sold its frac water heating assets in Colorado for $1.70 million, resulting in a $0.70-million gain [12] - The company's stock was delisted from the NYSE American exchange in November 2024 and transitioned to the OTCQB market [13] Conclusion - Enservco demonstrated robust top-line growth driven by its new logistics segment, but faced challenges such as declining production services revenues, elevated SG&A expenses, and liquidity issues [14] - The company's strategic shift, including asset divestitures and focus on logistics, underscores its efforts to stabilize operations [14]