TSX:AVE $ 1.95 -0.10 -4.88% Volume: 1,500 shares September 2, 2021
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Aveda Transportation and Energy Services Announces Solid Results for the First Quarter of 2015 Despite Challenging Industry Conditions

CALGARY, AB --(Marketwired - May 29, 2022) -  Aveda Transportation and Energy Services Inc. ("Aveda" or the "Company") (TSX VENTURE: AVE), a leading provider of oilfield hauling services and equipment rentals to the energy industry, today announced solid results for the three months ended March 31, 2022.
--  Despite the significant slow-down experienced in the oil and gas sector
    due to the drastic decline in the price of oil and natural gas, revenue
    for the three months ended March 31, 2022 grew by $1.2 million to $36.6
    million, compared with revenue of $35.5 million for the same period in
    2014. US revenue increased by 27.9% while Canadian revenue decreased by
    55.6% which resulted in an overall revenue increase of 3%;
--  Generated Adjusted EBITDA1 for the quarter ended March 31, 2022 of $4.4
    million, a decrease of $2.2 million compared with Adjusted EBITDA1 of
    $6.6 million for the same period in 2014;
--  Generated net loss for the quarter ended March 31, 2022 of $1.1 million,
    compared to $2.5 million of net income for the same period in 2014. Loss
    per share was $0.06 compared to basic earnings per share of $0.15 in the
    comparative period;
--  Completed the repurchase of 844,462 shares via the Company's normal
    course issuer bid ("NCIB") for total net cash outlay of $1.8 million;
--  After making an earn-out payment of $1.5 million, tax payment in the US
    of $0.6 million and purchasing shares of $1.8 million under the NCIB,
    the Company repaid loans and borrowings of $10.3 million in the quarter
    from internally generated cash flow. The resulting debt to EBITDA1ratio
    at the end the quarter was 1.92, the best ratio in over a year;
--  The Company ended the quarter with $9.9 million in working capital with
    a working capital ratio of 1.7:1;
--  Completed the restructuring of the North Dakota rig moving operations
    commenced in 2014 with the recruitment of a new Regional Manager and a
    new Rig Moving Manager. The restructuring has returned the North Dakota
    operation to profitability;
--  The Company has implemented wage roll backs across the organization to
    reduce costs; and
--  The Company has consolidated its Alice, TX yard with its Pleasanton, TX
    branch due to the proximity of its geographic location in order to
    reduce travel time needed to reach job sites.

"During the first quarter, our customers continue to seek ways to reduce spending and capital budgets in this low commodities environment," said Kevin Roycraft, President and Chief Executive Officer of Aveda. "We have delivered these results despite fierce competition and downward pricing pressure. We have been able to mitigate the full impact of the industry slowdown by increasing market share in certain regions and diligently managed our costs. At the same time, we have strengthened our balance sheet and repurchased our undervalued shares in the open market. We are positioning the Company to be even stronger and more profitable when the industry environment improves."

The Company also announces that Jason McCormick has resigned as the Company's Corporate Secretary. The Company thanks Mr. Jason McCormick for this contributions, and Mr. Douglas McCartney will take over the role of the Company's Corporate Secretary.

The Company will host its first quarter fiscal 2015 results conference call on Monday, June 1, 2022 at 9:00 a.m. Eastern Time (ET). Executive Chairman David Werklund, President and CEO Kevin Roycraft and Vice-President, Finance and CFO Bharat Mahajan will discuss Aveda's financial results for the quarter and then take questions from securities analysts.

To access the conference call by telephone, dial (647) 427-7450 or 1-888-231-8191. A live audio webcast of the conference call will be available at: http://event.on24.com/r.htm?e=1000563&s=1&k=4719451FA5F12C6BD33F8DBEB2E893BB.

The conference call webcast will be archived and available at: http://www.avedaenergy.com/investors/Conference-Calls/default.aspx until June 30, 2021.

The Company's consolidated financial statements and Management's Discussion and Analysis are available on the Company's website at www.avedaenergy.com or the SEDAR website at www.sedar.com.

Financial Overview
(in thousands, except per share and ratio
                                                 Three      Three
                                                Months     Months
                                                 Ended      Ended   % Change
                                             March 31,  March 31,     2022 -
                                                  2015       2014       2015
Revenue                                         36,636     35,455       3.3%
Gross profit(5)                                  4,088      7,541     -45.8%
Gross margin                                     11.2%      21.3%        N/A
Gross profit(5) excluding depreciation and
 amortization                                    8,560     10,289     -16.8%
Gross margin excluding depreciation and
 amortization                                    23.4%      29.0%        N/A
Adjusted EBITDA(1)                               4,386      6,572     -33.3%
Adjusted EBITDA(1) as a percentage of
 revenue                                         12.0%      18.5%        N/A
Net income                                     (1,139)      2,544    -144.8%
Net income as a percentage of revenue            -3.1%       7.2%        N/A
Adjusted EBITDA(1) per share                      0.22       0.38     -42.1%
Earnings per share - basic                      (0.06)       0.15    -140.0%
Earnings per share - diluted                    (0.06)       0.15    -140.0%
Current ratio(2)                                  1.66       1.77      -6.4%
Debt to equity ratio(3)                           0.57       0.56       2.5%
Debt to EBITDA ratio(3, 4)                        1.92       2.20     -12.7%

Aveda earns revenue primarily by providing specialized transportation services to companies engaged in the exploration, development and production of petroleum resources. As a result, demand for Aveda's transportation services are generally linked to the economic conditions of the energy industry and the level of drilling activity in the WCSB and US.

In recent history, total drilling activity in the WCSB and US has been negatively impacted due to lower average oil and natural gas prices. This has largely been the result of increased supply in both the US and other oil producing countries with a reduction in usage as large economies such as China start to slow and traditional economies such as Europe are still in difficulty, this led to oil stockpiles at their highest level in over 50 years.

Although the oil price remains depressed compared to the high levels it experienced in mid-2014, the last few weeks have seen a firming of the price of West Texas Intermediate ("WTI") hovering around $60.0 per barrel in the early part of May as stockpiles of oil in storage being drawn down. Significant uncertainty still remains as to the magnitude and timing of any future recovery in oil and natural gas prices and the potential impact to the oil and gas service industry. If prices do stabilize many commentators believe that investment could start again in third or fourth quarter of 2015 at which point service companies will need to be able to react quickly to the increase in work.

The current climate presents both challenges and opportunities for Aveda; the outstanding results from 2014 allowed the Company to strengthen its balance sheet and, despite the drop in revenues in the early part of 2015, Aveda has still managed to pay down debt to reduce leverage. Whilst workload has reduced and price pressures are impacting revenues, the Company has implemented cost controls including wage rollbacks and requesting price reductions from key suppliers that will reduce the cost base of the organization. The Company still managed to generate positive Adjusted EBITDA1 in the first quarter whilst many of its competitors were generating a loss.

Opportunities are available for the Company to continue to increase its market share as competitors exit the industry and, because of the strength of its balance sheet, Aveda is in a prime position to be able to make targeted, strategic acquisitions and will continue to evaluate these opportunities as they arise.

Aveda will continue to review its operations in both Canada and the US, the restructure of the North Dakota operations has resulted in a return to profitability for this operation despite the reduction in rig counts in the Williston area. The merging of the Alice, TX and Pleasanton, TX branches is expected to result in cost savings both in overhead and operational costs. Additionally, the closure of the Slave Lake, AB branch in April will reduce costs whilst the ongoing work can be handled by other Alberta branches and the merger of the Heavy Haul and Hotshot branches will result in economies of scale and a more coherent service offering to our customers.

Both Pennsylvania and West Virginia branches have experienced lower pricing pressures than other US branches as the rig counts have not reduced as dramatically, key competitors have left the region reducing over capacity in the market and allowing Aveda to increase market share.

Overall, the Company expects the next two quarters to be especially challenging. The Company expects additional competitors to gradually exit the market. As the competitors leave the market, the pricing pressure may ease as the Company gains additional market share. Over the long term, the Company is well positioned to thrive, with a strong balance sheet and a dedicated work force, Aveda is well positioned to maximize on opportunities that may be presented to it and emerge from the current downturn stronger and more profitable.

About Aveda Transportation and Energy Services

Aveda provides specialized transportation services and equipment required for the exploration, development and production of petroleum resources in the Western Canadian Sedimentary Basin and in the United States of America principally in and around the states of Texas, Pennsylvania, Oklahoma and North Dakota. Transportation services include both the equipment necessary to move the load as well as a trained, professional driver capable of securing, moving and manipulating the load at its origin and destination. Aveda's rental operations include the rental of well-sites, tanks, mats, pickers, light towers and other equipment necessary for oilfield operations.

Aveda was incorporated in 1994 as a private company to serve the oil and gas industry. In the spring of 2006 the Company went public on the TSX Venture Exchange. Aveda has major operations in Calgary, AB, Leduc, AB, Sylvan Lake, AB, Edson, AB, Mineral Wells, TX, Pleasanton, TX, Midland, TX, Williamsport, PA, Buckhannon, WV, Williston, ND, and Cherokee, Oklahoma. Aveda is publicly traded on the TSX Venture Exchange under the symbol AVE. For more information on Aveda please visit www.avedaenergy.com.

This News Release contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicable Canadian securities laws. All statements other than statements of present or historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "anticipate", "achieve", "could", "believe", "plan", "intend", "objective", "continuous", "ongoing", "estimate", "outlook", "expect", "may", "will", "project", "should" or similar words, including negatives thereof, suggesting future outcomes. In particular, this News Release contains forward-looking statements relating to: demand for the Company's services and general industry activity level; the Company's growth opportunities; and expectations regarding the Company's revenue, EBITDA and equipment utilization. Aveda believes the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectations will prove to be correct and such forward-looking statements should not be unduly relied upon.

Various material factors and assumptions are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking statements. Those material factors and assumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, material assumptions and material factors are presented elsewhere in this News Release in connection with the forward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors and assumptions include, but are not limited to:

--  the performance of Aveda's businesses, including current business and
    economic trends;
--  oil and natural gas commodity prices and production levels;
--  the effect of the rebranding on Aveda's businesses;
--  capital expenditure programs and other expenditures by Aveda and its
--  the ability of Aveda to retain and hire qualified personnel;
--  the ability of Aveda to obtain parts, consumables, equipment,
    technology, and supplies in a timely manner to carry out its activities;
--  the ability of Aveda to maintain good working relationships with key
--  the ability of Aveda to market its services successfully to existing and
    new customers;
--  the ability of Aveda to obtain timely financing on acceptable terms;
--  currency exchange and interest rates;
--  risks associated with foreign operations;
--  changes under governmental regulatory regimes and tax, environmental and
    other laws in Canada and the United States; and
--  a stable competitive environment.

The forward-looking statements regarding Aveda's potential revenue and EBITDA are included herein to provide readers with an understanding of Aveda's anticipated cash flow and Aveda's ability to fund its expenditures based on the assumptions described herein. Readers are cautioned that this information may not be appropriate for other purposes.

Forward-looking statements are not a guarantee of future performance and involve a number of risks and uncertainties, some of which are described herein. Such forward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda's actual performance and financial results in future periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks and uncertainties include, but are not limited to, the risks identified in Aveda's annual information form and management discussion and analysis for the year ended December 31, 2021 (the "MD&A"), which are available for viewing on SEDAR at www.sedar.com. Any forward-looking statements are made as of the date hereof and, except as required by law, Aveda assumes no obligation to publicly update or revise such statements to reflect new information, subsequent or otherwise.

This News Release contains the terms "EBITDA" and "Adjusted EBITDA" which are defined in the MD&A. EBITDA and Adjusted EBITDA as presented do not have any standardized meanings prescribed by international financial reporting standards ("IFRS") and therefore may not be comparable with the calculation of similar measures for other entities. Management uses Adjusted EBITDA to analyze the operating performance of the business. Adjusted EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performance calculated in accordance with IFRS.

This News Release contains the terms "cash flow", "working capital" and "working capital ratio", which do not have any standardized meanings prescribed by IFRS and therefore may not be comparable with the calculation of similar measures for other entities. As an indicator of the Company's performance, cash flow should not be considered as an alternative to, or more meaningful than, net cash from operating activities as determined in accordance with IFRS. The Company considers cash flow to be a key measure as it demonstrates the Company's underlying ability to generate the cash necessary to fund operations and support activities related to its major assets. Cash flow is determined by adding back changes in non-cash operating working capital to cash from operating activities. Management calculates working capital as current assets less current liabilities and uses this measure to analyze operating performance and leverage.


1.  This News Release contains the term Adjusted EBITDA. Adjusted EBITDA as
    presented does not have any standardized meaning prescribed by
    international financial reporting standards (IFRS) and therefore it may
    not be comparable with the calculation of similar measures for other
    entities. Management uses Adjusted EBITDA to analyze the operating
    performance of the business. Adjusted EBITDA as presented is not
    intended to represent cash provided by operating activities, net
    earnings or other measures of financial performance calculated in
    accordance with IFRS. It is defined as earnings before interest, taxes,
    depreciation and amortization excluding foreign exchange gains or losses
    which are primarily related to the US dollar activities of the Company
    and can vary significantly depending on exchange rate fluctuations,
    which are beyond the control of the Company, and write downs of
    intangible assets, goodwill impairment, financing costs, gains or losses
    on disposal of assets, stock based compensation, fees and expenses on
    settlement of debt and losses on extinguishment of debt.
2.  Current ratio calculated as current assets divided by current
3.  Debt includes loans and borrowings as per their carrying amounts on the
    balance sheet.
4.  EBITDA used is Adjusted EBITDA for the trailing twelve months.
5.  Gross profit calculated as revenue less direct operating expense.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.


For more information, please contact:
Bharat Mahajan, CA
Vice President, Finance and Chief Financial Officer
(403) 264-5769
[email protected]
Source: Aveda Transportation and Energy Services

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