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Aveda Transportation and Energy Services Reports Record First Quarter Revenue in 2017

Posted On May 16th
By : The Canadian Press
Comment: Off

FOR: AVEDA TRANSPORTATION AND ENERGY SERVICES
TSX VENTURE Symbol: AVE

Date issue: May 16, 2017
Time in: 4:15 PM e

Attention:

CALGARY, AB --(Marketwired - May 16, 2017) - 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, is pleased to announce its results for the three months ended March 31, 2017.

2017 First Quarter Business Highlights

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-- Revenue for the three months ended March 31, 2017 increased by $29.0

million or 241% to $41.0 million, compared with revenue of $12.0 million for the same period in 2016. Compared to the fourth quarter of 2016, revenue increased by $9.6 million from $31.4 million to $41.0 million due to improved rig counts, increased activity, and strong customer relationships developed by the management team put in place mid 2016; -- Gross profit excluding depreciation and amortization(1) in the first quarter of 2017 increased by $7.0 million to $6.8 million compared to a loss of $0.1 million in 2016. Comparing to the fourth quarter of 2016, gross profit excluding depreciation and amortization(1) increased by 45% from $4.7 million to $6.8 million; -- Adjusted EBITDA(1) in the first quarter of 2017 increased by $6.4 million to $2.6 million compared to a loss of $3.9 million in the first quarter of 2016; -- Net loss for the three months ended March 31, 2017 decreased by almost $7.0 million to $3.4 million, compared to a net loss of $10.3 million for the same period in 2016. Loss per share was $0.10 compared to $0.54 in the comparative period; -- Aveda expanded its operational footprint by opening a new terminal in Casper, WY; -- Aveda ended the quarter with a net asset value per share(6) of $0.70, $10.4 million in working capital with a working capital ratio of 1.45:1(2), and undrawn cash availability of $34.0 million on its senior debt facility; -- Aveda restructured its debt in the first quarter of 2017 as further outlined in the Company's news release dated January 13, 2017 and MD&A; -- The Company also raised gross proceeds of $22.8 million through an equity offering as outlined in the news released dated, February 22, 2017; and -- As a result of both successfully restructuring its debt and raising the equity outlined above, the Company now has a significantly stronger balance sheet.

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"The efforts of our team have resulted in Aveda posting record revenue of $41 million in the first quarter of 2017," said Ronnie Witherspoon, President and Chief Executive Officer of Aveda. "I am extremely excited by our results to date and look forward to continued success throughout 2017."

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

Investor Relations Update

The Company has posted an updated corporate presentation to its website. The
updated corporate presentation can be found at
http://www.avedaenergy.com/investor-hub/presentations/default.aspx.

Aveda's CEO and CFO also expect to be making presentations to retail and institutional investors in May and June 2017.

Conference Call

The Company will host its first quarter fiscal 2017 results conference call on Wednesday, May 17, 2017 at 10:30 a.m. Eastern Time (ET). President and CEO Ronnie Witherspoon 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 (416) 915-3239 or (403) 351-0324. A live audio webcast of the conference call will be available at: http://services.choruscall.ca/links/aveda20170517.html.

The conference call webcast will be archived and available until June 30, 2017 at:

http://www.avedaenergy.com/investor-hub/conference-calls/default.aspx.

Financial Overview

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(in thousands, except per share and
ratio amounts)
----------------------------------------

Three Three Months Months Ended Ended % Change March 31, March 31, 2016 - 2017 2016 2017 ---------- ---------- ---------- Revenue 40,962 12,011 241.0% Gross profit (loss)(1) 2,932 (4,787) 161.2% Gross margin(4) 7.2% -39.9% N/A Gross profit (loss)(1) excluding depreciation and amortization 6,798 (132) 5250.0% Gross margin excluding depreciation and amortization(5) 16.6% -1.1% N/A Adjusted EBITDA (loss)(1) 2,559 (3,865) 166.2% Adjusted EBITDA(1) as a percentage of revenue 6.2% -32.2% N/A Net income (loss) (3,412) (10,293) 66.9% Net loss as a percentage of revenue -8.3% -85.7% N/A Adjusted EBITDA (loss)(1) per share 0.07 (0.20) -135.0% Earnings per share - basic and diluted (0.10) (0.54) -81.5% Current ratio(2) 1.5 1.7 -12.7% Debt to equity ratio(3) 1.7 1.7 0.0%

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Outlook

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 is generally linked to the economic conditions of the energy industry and the level of drilling activity in the US and the WCSB.

2016 was a challenging year, yet the Company steadily improved its performance in the last two quarters of 2016 and the trend continues into 2017 with the Company generating positive Adjusted EBITDA in the third and fourth quarters of 2016 and the first quarter of 2017. Relative to the first half of 2016, both oil and natural gas prices have rebounded and rig counts in both Canada and the United States have substantially risen in the first quarter of 2017. Activity levels, particularly in the United States are continuing to increase.

In the third quarter of 2016, the Company opened a second location in the Permian Basin in Pecos, TX. In the fourth quarter of 2016, the Company recommenced operations in the Marcellus Shale in Williamsport, PA. In the first quarter of 2017, the Company expanded its operations by opening a satellite facility in Casper, WY to service the Uinta, Wamsutter, Pinedale and DJ Basins. In the second quarter of 2017, the Company has expanded its operations by opening a new satellite yard in Midland, TX in the Permian Basin. The Company also expects to expand its operations in the second quarter of 2017 by relocating its existing operations in Marshall, TX to a larger facility and expanding its operations at that location. The Company is also evaluating opening a second location in the Northeastern United States.

The Company restructured its senior leadership team in the first half of 2016 with individuals that have extensive relationships in the oil and gas sector. Through these relationships, the Company is being invited to participate in an increased amount of bid activity. The Company's revenue results since the new management team took over are as follows:

http://www.marketwire.com/library/MwGo/2017/5/16/11G139041/Images/image-29f99 2f1922286d291fa5a93fe4c8e56.jpg

Based on the information above, Aveda expects to see continued improvements in Adjusted EBITDA and net income results in 2017.

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, 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, Edson, AB, Pleasanton, TX, Midland, TX, Pecos, TX, Marshall, TX, Williston, ND, Casper, WY, Williamsport, PA and Oklahoma City, OK. 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, Adjusted 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:

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-- 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 customers: -- 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 suppliers; -- 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.

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The forward-looking statements regarding Aveda's potential revenue, EBITDA and Adjusted 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, 2016 (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", "Adjusted EBITDA", "gross profit" "gross profit margin", "gross profit excluding depreciation and amortization" and "gross margin excluding depreciation and amortization" which are defined in the MD&A. The above terms 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 EBITDA, Adjusted EBITDA, gross profit, gross profit margin, gross profit excluding depreciation and amortization, and gross margin excluding depreciation and amortization to analyze the operating performance of the business. These non-IFRS measures presented are 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.

Notes:

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1. See March 31, 2017 MD&A Section 6.
2. Current ratio calculated as current assets divided by current

liabilities. 3. Debt includes loans and borrowings and note payable as per their carrying amounts on the balance sheet. 4. Gross margin is calculated as gross profit divided by revenue. 5. Gross margin excluding depreciation and amortization is calculated by dividing gross profit excluding depreciation and amortization by revenue. 6. Net asset value per share calculated by dividing total equity ($40.2 million) by common shares outstanding (57.2 million).

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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.

Image Available: http://www.marketwire.com/library/MwGo/2017/5/16/11G139041/Images/image-29f992f1922286d291fa5a93fe4c8e56.jpg

- END RELEASE - 16/05/2017

For further information:

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

COMPANY:
FOR: AVEDA TRANSPORTATION AND ENERGY SERVICES
TSX VENTURE Symbol: AVE

INDUSTRY: Transportation and Logistics - Trucking, Energy and Utilities - Oil and Gas

RELEASE ID: 20170516CC017

Press Release from Marketwired 1-866-736-3779

All press releases are written by the client and have NO affiliation with the news copy written by The Canadian Press. Any questions that arise due to the content or information provided in the press release should be directed to the company/organization issuing the release, not to The Canadian Press.

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