Enservco Corp (ENSV)·Q2 2024 Earnings Summary

Executive Summary

• Q2 revenue was $3.8M (+1% y/y) with net loss of $2.3M (-$0.08/share), improving y/y but down sharply q/q as seasonality normalized after a strong Q1; Adjusted EBITDA loss narrowed to $(0.67)M from $(1.10)M y/y .
• Portfolio transformation advanced: exited Colorado frac water heating, closed Buckshot Trucking (immediately accretive year-round logistics), and executed a share exchange/financing with Star Equity to bolster equity and liquidity; management said recent transactions mean 3Q/4Q results should be “materially improved” with Buckshot contributing from mid-August .
• No quantitative guidance provided; management emphasized integration of Buckshot and debt restructuring (Utica facility) as near-term priorities and reiterated intent to regain NYSE American compliance after equity enhancements and debt conversions .
• Catalysts/risk: execution on Buckshot scaling (including brokerage launch), Utica restructuring, NYSE appeal outcome; macro/seasonality risks persist for legacy operations and financing risk highlighted by receivables funding agreement -.

What Went Well and What Went Wrong

• What Went Well

  • Adj. EBITDA loss narrowed y/y to $(0.67)M (vs. $(1.10)M) on flat revenue and improved operations; YTD Adj. EBITDA turned positive at $1.57M .
  • Strategic actions closed: sold Colorado frac water heating assets to reduce seasonality and pay down Utica; closed Buckshot (TTM ~$9.5M revenue, >$2M EBITDA per call) to add year-round logistics; Star Equity deal added equity and short-term financing -.
  • Management tone confident on integration and outlook: “materially improve… beginning in the second half of 2024,” with 5 months of Buckshot operations reflected in 2H24; focus on regaining NYSE compliance (equity raised/converted) -.

• What Went Wrong

  • Seasonality and mix: revenue fell q/q from $9.8M in Q1 to $3.8M in Q2; Production Services revenue declined y/y (acidizing weaker), driving operating loss of $(1.10)M .
  • Bottom-line still negative: Q2 net loss $(2.33)M; other expense swung to $(0.81)M, increasing total other expense and pressuring net results .
  • Listing risk persists pending NYSE appeal despite equity actions; company also entered a sale of future receivables agreement for working capital, underscoring tight liquidity -.

Financial Results

Segment revenue mix

Selected KPIs and balance sheet items

Notes: Q2 revenue +1% y/y; Q2 operating loss $(1.10)M; Q2 “Other (expense) income” $(0.81)M .

Guidance Changes

No explicit numeric guidance was issued.

Earnings Call Themes & Trends

Management Commentary

• “Our second quarter results marked an overall improvement on both a quarterly and year-to-date basis…which places us in a good position for the second half of 2024 as we begin to benefit from the positive financial performance and substantial opportunities provided by our recent transactions.” — CEO Rich Murphy .
• “We recently divested certain non-core assets and invested in opportunities such as logistics that generate solid cash flow…exit of our seasonal-focused Colorado frac water heating business and the closing of the immediately accretive Buckshot acquisition…” — CEO Rich Murphy .
• “Our second quarter…benefiting from improved pricing, longer winter and increased activity…financial performance…not indicative of future results, which we believe will be materially improved beginning in the…second half of 2024.” — CFO Mark Patterson .
• “In short, we believe the repositions, Enservco 2.0 will prove to be the true value creator for stockholders…confident we will be in a strong position as we enter 2025.” — CEO Rich Murphy .

Q&A Highlights

• Buckshot performance and plan: TTM revenue “a little over $9.5M” and EBITDA “over $2M”; asset-light ~28–29 trucks; brokerage overlay expected to enhance revenue/EBITDA and expand into wind/solar/Enservco customers -.
• Brokerage timing: “at hand” with authority, bond, insurance in place within “1 or 2 weeks,” aiming for rapid ramp via co-brokerage/partnerships and cross-selling to Enservco customers .
• Hot oiling market: steady run-rate, no pricing concessions seen; pushing price increases; strategic to maintain year-round cash generation .

Estimates Context

• Wall Street consensus for Q2 2024 revenue and EPS via S&P Global was unavailable at time of analysis (microcap coverage limited), so beats/misses vs consensus cannot be determined [GetEstimates error noted; no figures shown].

Key Takeaways for Investors

• The story shifts from seasonal heating to year-round energy logistics: Buckshot adds non-seasonal revenue/EBITDA and a brokerage growth lever; expect visible 2H24 uplift as integration progresses - -.
• Q2 financials show y/y operational improvement (narrower Adj. EBITDA loss) but underscore seasonality; watch mix as Production Services pricing remains firm and Completion exposure shrinks post-Colorado exit .
• Liquidity and balance sheet actions (equity line, conversions, Star exchange) aim to cure NYSE equity deficiency; Utica paydown/restructure next—execution on debt steps is a near-term stock catalyst/risk - .
• Integration milestones to monitor: Buckshot brokerage launch, cross-selling into Enservco basins/customers, and incremental capacity to Rockies/Texas/Marcellus footprints -.
• Expect 3Q to reflect ~2 months of Buckshot and 4Q a full quarter; management signals “material improvement” starting in 2H24—model trajectory rather than Q2 standalone .
• Risk balance: small-cap financing (use of receivables sale), listing appeal outcome, and macro/commodity swings that could affect legacy services demand - .

Appendix: Additional Context from Q1 and Q4

• Q1 2024: Revenue $9.8M (+10% y/y); net income $0.7M ($0.03); Adj. EBITDA $2.22M (+125% y/y) on colder weather and pricing; G&A down 18% - .
• Q4 2023: Revenue $6.5M; net loss $(1.9)M ($(0.07)); positive Adj. EBITDA ($0.062M); pricing/margin momentum and debt reduction progress - -.