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Press release from Marketwire

Enseco Energy Services Corp. Announces Record Results For the Quarter and Year Ended March 31, 2012

Wednesday, July 04, 2012

Enseco Energy Services Corp. Announces Record Results For the Quarter and Year Ended March 31, 201208:46 EDT Wednesday, July 04, 2012CALGARY, ALBERTA--(Marketwire - July 4, 2012) - Enseco ENERGY SERVICES CORP ("Enseco" or the "Company") (TSX VENTURE:ENS) announces its financial results for the quarter and year ended March 31, 2012.HIGHLIGHTS FOR THE PERIOD ENDED MARCH 31, 2012Enseco has achieved record results and has shown continual quarter over quarter improvement in all of its business while substantially reducing it overall debt in the March 31, 2012 fiscal year.Revenue increased 19% to $79 million for the year; Adjusted gross margins increased by 5% to 37% for the year; EBITDAS increased by 81% to $13.7 million year over year; Net income increased by $6.9 million from ($2.8) million to $4.1 million in the current year; The Company reduced its debt by $10.5 million for the year ending March 31, 2012 and continues to reduce its debt on a quarterly basis; Enseco has diversified its customer and operating base by increasing its US revenues to be 1/3 of total revenue; RESULTS FROM OPERATIONSThree months endedTwelve months endedMarch 31,March 31,In thousands of dollars2012201120122011Revenue from continuing operations 1$24,500$21,707$78,927$66,199Adjusted gross margin from continuing operations 1$9,039$6,084$28,993$21,645EBITDAS from continuing operations 1$4,538$1,950$13,683$7,564Net income (loss) from continuing operations before tax$2,373$(1,535)$4,104$(2,772)Per common share - basic$0.12$(0.08)$0.20$(0.16)Per common share - diluted$0.11$(0.08)$0.19$(0.16)Net income (loss) from discontinued operations$-$-$-$(388)Per common share - basic and diluted$-$-$-$(0.02)Total net income (loss) before tax$2,373$(1,535)$4,104$(3,160)Per common share - basic$0.12$(0.08)$0.20$(0.18)Per common share - diluted$0.11$(0.08)$0.19$(0.18)Cash flow from continuing operations, before changes in non-cash working capital items 1$4,445$5,173$13,542$7,564Cash flow from/(used in) operating activities$3,220$1,692$10,992$6,6351 See definition within the Non-IFRS Measures section of the Company's MD&A dated June 28, 2012OUTLOOKEnseco's record performance is a direct result of its successful expansion into both the Canadian and United States resource plays. In 2013 Enseco will focus on a strategy for continued growth in these geographical areas by expanding its US production testing fleet and targeting US directional drilling opportunities.Enseco is well positioned in the current commodity price environment with the majority of its income related to horizontal oil and liquids drilling activity. Enseco has focused its operating areas in some of the most economic resource plays in the US and Canada, such as the Bakken in both Canada and the United States in which the underlying fundamentals should remain strong. The Company will continue to work with its customers to refine existing technology and processes to allow the Company to have continued success during times when commodity pricing is turbulent.The Company has developed a capital program that allows it to be flexible to market changes and industry demand. This flexibility will allow the Company to deploy new equipment only in areas where it can be fully utilized.In fiscal 2012 the Company embarked on developing an in house motor repair facility. In June 2012 this facility become operational providing the Company with the ability to repair a significant portion of its motor fleet. Management expects to achieve a major reduction in repair and rental costs as well as improved efficiency and decreased downtime.The Company will experience the benefits from the new motor shop facility in Leduc, Alberta in the coming year. The major benefits from repairing motors in house will ultimately be to provide better service quality to our customers.Directional and horizontal drilling continues to increase as a percentage of total wells drilled and now comprises over 80% of total wells drilled. Demand for the Company's directional drilling services and production testing frac flowback services are expected to continue to remain strong. Longer, more complex, flow back operations are expected to continue to increase the requirements for production testing services in both Canada and the US.The Company continues to successfully leverage the service quality of all its divisions resulting in overall improved margins companywide. The improved service quality has well positioned the Company for future growth in all divisions.With continued and increasing positive cash flow, Enseco is focused on accelerating its expansion into the US and reducing overall debt levels while opportunistically increasing its capital expenditures to take advantage of the growth in our core operating areas. Enseco is also able to redeploy equipment between Canada and the US as demand changes between these two operating basins.It is expected that the pursuit of these growth opportunities, accompanied by initiatives to improve margin efficiency, and reduced debt levels, will continue to improve the Company's financial performance in the future.PROPERTYOn March 8, 2012 the Company completed the previously announced sale of a first secured mortgage (the "Mortgage") held by the Company over certain real property located in British Columbia to a company controlled by the former President and Chief Executive Officer of Enseco, for gross proceeds of $750,000. The proceeds from the sale of the Mortgage were used to fund the Company's capital program.FILINGSEnseco will be filing later today with Canadian securities regulatory authorities its audited consolidated financial statements for the year ended March 31, 2012 and the accompanying management's discussion and analysis ("MD&A"). These filings will be available under Enseco's SEDAR profile at www.sedar.comABOUT ENSECO ENERGY SERVICES CORP.Enseco is a premier supplier of directional drilling, production testing and frac flowback services operating throughout the Western Canadian Sedimentary Basin and select markets in the United States, Our corporate office is located in Calgary and sales offices are located in both Calgary and Denver. Enseco is led by an experienced management team with a focus on continued value creation through accretive acquisitions and organic growth.FORWARD LOOKING DISCLAIMERCertain information and statements contained in this news release constitute forward-looking information or forward-looking statements (collectively "Forward-looking statements"), under applicable securities legislation, including, but not limited to: statements concerning Enseco's future business strategy, marketing and expansion plans for Canada and the United States; the anticipated capital program and the benefits and results thereof; anticipated declines in repair and rental costs; plans to refine technology and service offerings and the development of proprietary technology; plans to reduce debt; anticipated growth in the Company's directional drilling and production testing businesses; plans to increase staffing levels, expectations regarding future revenues, cash flow, gross margins, EBITDAS, improved efficiencies, cost reductions, rental reductions, profit margins and other financial results; expectations regarding resource play drilling activity levels and drilling programs; general industry and operating conditions; expectations regarding future higher utilization rates and demand for the Company's services (including the nature of services expected to be required by customers in the future); future geographical and service focus; the development of a motor repair facility and the benefits to be obtained therefrom; expectations regarding Enseco's ability to finance its current operations, capital expenditures, acquisitions, and future growth and to manage its current debt levels; expectations regarding the Company's ability to obtain the continued co-operation of the Company's lender; the Company's ability to raise additional debt or equity; expectations respecting the competitive position of Enseco's business divisions; expectations concerning the financing of future business activities; access to capital and capital expenditures, and expectations regarding future accounting standards and elections. Although management of the Company believes that the expectations reflected in such forward looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. Accordingly, readers should not place undue reliance upon any of the forward-looking information set out in this press release. Readers should review the cautionary statement respecting forward-looking information that appears below. All of the forward looking statements of the Company contained in this news release are expressly qualified, in their entirety, by this cautionary statement.The information and statements contained in this news release that are not historical facts are forward-looking statements. Forward-looking statements (often, but not always, identified by the use of words such as "seek", "plan", "continue", "estimate", "project", "predict", "potential", "targeting", "intend", "could", "might", "should", "believe", "expect", "may", "anticipate" or "will" and similar expressions) may include plans, expectations, opinions, or guidance that are not statements of fact. Forward -looking statements are based upon the opinions, expectations and estimates of management as at the date the statements are made and are subject to a variety of risks and uncertainties and other factors that could cause actual events or outcomes to differ materially from those anticipated or implied by such forward -looking statements. These factors include, but are not limited to, such things as: changes in industry conditions (including the levels of capital expenditures made by oil and gas producers and explorers); the credit risk to which the Company is exposed in the conduct of its business; general economic conditions in North America and globally; fluctuations in prevailing commodity prices or currency and interest rates; the competitive environment to which the various business divisions are, or may be, exposed in all aspects of their business; the ability of the Company's various business divisions to access equipment (including parts) and new technologies and to maintain relationships with key suppliers; the ability of the Company's various business divisions to attract and maintain key personnel and other qualified employees; various environmental risks to which the Company's business divisions are exposed in the conduct of their operations, inherent risks associated with the conduct of the businesses in which the Company's business divisions operate ; timing and costs associated with the acquisition of capital equipment; the impact of weather and other seasonal factors that affect business operations; availability of financial resources or third -party financing and the impact of new laws or changes in administrative practices on the part of regulatory authorities.Forward-looking information concerning the nature and timing of growth within the various business divisions is based on the current budget of the Company (which is subject to change), factors that affected the historical growth of such business divisions, sources of historic growth opportunities, anticipated capital expenditures, and expectations relating to future economic and operating conditions. Forward -looking information concerning the future competitive position of the Company's business divisions is based upon the current competitive Services environment in which those business divisions operate, expectations relating to future economic and operating conditions, current and announced build programs and other expansion plans of other organizations that operate in the energy service business. Forward-looking information concerning the financing of future business activities is based upon the financing sources on which the Company has historically relied and expectations relating to future economic and operating conditions. Forward -looking information concerning future economic and operating conditions is based upon historical economic and operating conditions, opinions of third -party analysts respecting anticipated economic and operating conditions.With respect to forward-looking statements contained in this news release, Enseco has made assumptions regarding commodity prices and royalty regimes; availability of skilled labour; timing and amount of capital expenditures; future foreign exchange rates; interest rates; the impact of increasing competition; conditions in general economic and financial markets; effects of regulation by governmental agencies; and future operating costs.Management has included the above summary of assumptions and risks related to forward-looking information provided in this news release order to provide a more complete perspective on Enseco's future operations and such information may not be appropriate for other purposes. Enseco's actual results, performance or achievement could differ materially from those expressed in, or implied by, these forward-looking statements and, accordingly, no assurance can be given that any of the events anticipated by the forward-looking statements will transpire or occur, or if any of them do so, what benefits that the Enseco will derive there from. Readers are cautioned that the foregoing lists of factors are not exhaustive. These forward-looking statements are made as of the date of in this news release and Enseco disclaims any obligation to update publicly any forward-looking statements, whether as a result of new information, future events or results or otherwise, other than as required by applicable securities laws.FOR FURTHER INFORMATION PLEASE CONTACT: Blair LaytonEnseco Energy Services Corp.CFO403-806-0088Info@enseco.comwww.enseco.com