Investor Presentation September 2013

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Investor Presentation September 2013


  • 1. Investor Presentation | September 2013

2. FORWARD LOOKING INFORMATION This presentation 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 presentation contains forward-looking statements relating to: future growth; results of operations; operational and financial performance; projected capital expenditures and commitments and the financing thereof; expansion; increases in revenue; equipment delivery and deployment dates; effect of rebranding; geographic allocation of equipment; customer commitments; ability to establish a working relationship with third party suppliers; expectations regarding the Corporation's ability to raise capital and to increase its equipment fleet; benefits associated with financial results; activity levels; business strategy; successful integration of structural changes; restructuring plans; organic growth potential; acquisitions and availability of insurance coverage. 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 presentation 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 Avedas businesses, including current business and economic trends; oil and natural gas commodity prices and production levels; 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. 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 Avedas 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 by Avedas annual information form and management discussion and analysis for the year ended December 31, 2012 (the "MD&A") and contained herein under the heading "Risk Factors". 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. 2 3. Oilfield Hauling Oilfield Rentals Matting Tanks Light towers Rig moving Heavy hauling Hot shot services Aveda Transportation and Energy Services (Aveda or the Company) is a growing provider of specialized oilfield hauling and rentals to the US and Western Canadian oil and gas industry Aveda was founded in 1994, went public in 2006 and was recapitalized in 2011 The Company is well positioned to take advantage of attractive organic and acquisition growth opportunities throughout North America Multiple cross-over business opportunities achieved through oilfield hauling and rental business units COMPANY OVERVIEW 3 4. Management David Werklund Executive Chairman Has been the Chairman of Aveda since 2006 and served as Interim President and CEO of Aveda from September 2011 to November 2012. Appointed as Executive Chairman in November 2012 Began career in 1965 at Shell Canada as a Production Operator Founder and Chairman of the Board of Directors of CCS Corporation (now Tervita Corporation) Co-Founder of Concord Well Servicing Founder & Executive Chairman of Werklund Capital Corporation The 2005 Ernst & Young's Canadian Entrepreneur of the Year Kevin Roycraft - President and CEO Joined Aveda in November 2012 More than 20 year of Transportation Industry Experience Former Vice-President of Operations for Liquid Transport Corp (one of North Americas largest bulk chemical and oil transportation company) Bharat Mahajan Vice-President, Finance & CFO Joined Aveda in October 2011 Held several positions with Magna International overseeing various international growth initiatives Former CFO of several oilfield service companies, including Wellpoint Systems Inc. and Norex Exploration Services Inc. Board Members Stefan Erasmus President of Werklund Capital Corporation Director of several private companies and charitable organizations Former Managing Director of Resources Global Professionals Doug McCartney Managing Partner of Burstall Winger LLP Practices in the areas of securities and corporate finance and corporate and commercial law Director or officer of several private companies Paul Shelley President of Convinco Financial Ltd. Former Senior Vice President, Corporate Development at Kos Corp. Investments Ltd. MANAGEMENT AND BOARD OF DIRECTORS 4 5. Historical Shareholder Returns CCS Selected Historical Acquisitions 5 David Werklund founded CCS Corporation (now Tervita Corporation) in 1984 and built it largely through the consolidation of several oilfield services companies and organic growth CCS privatized in 2007 for approximately C$3.5 billion (the largest Trust privatization in Canadian history) MANAGEMENT TRACK RECORD Source: FactSet CAGR Total Return CCS 24% 2490%CAGR Total Return CCS 24% 2490% 6. Capitalization Balance Sheet Summary(1) Share price (September 4, 2013) $2.70 Operating Line Available ($mm) $28.1 Shares Outstanding Basic (mm)(4) 10.0 Property and Equipment ($mm) $46.9 Shares Outstanding Fully Diluted (mm)(4) 12.8 Working Capital ($mm) $7.1 FD Market Capitalization ($mm) $34.6 Total Assets/Tangible Assets ($mm) $64.0/$61.0 Net Debt ($mm)(1) Tangible Book Value/Share $2.41 Loans and Borrowings $20.8 Convertible Debenture (face)(2) $4.7 Shareholder Summary(4) Cash(1)(3) ($3.7) Werklund Capital Corp 47.3% Total Net Debt ($mm) $21.8 Other Insiders 2.3% Enterprise Value ($mm)(5) $51.7 Total Insiders 49.6% CAPITALIZATION SNAPSHOT (1) At June 30, 2013 (2) Convertible into 1,850,980 common shares at $2.55 (3) Includes potential cash from exercise of all options and warrants of $2.9 million (4) At July 30, 2013 (5) Value of convertible debentures included in FD Market Capitalization removed face value from Net Debt to calculate Enterprise Value 6 7. 352 182 Permian 456 231 32 Barnett 86 Williston/ Bakken WCSB (1) Active rigs as of or close to September 6th of relevant year (source: Baker Hughes & CAODC) Marcellus Active in Play / Region Recently Opened Office Expansion Opportunity Oil Focused NGL Focused Aveda has a targeted growth plan that is focused on targeting oil/liquid rich weighted basins across North America Based on a recent market analysis, Aveda estimates each rig moves approximately 1.4 times per month or 17 times per year (approx. 35,450 moves per year based on the Sep. 6 2013 rig count) Avedas reputation, customer relationships and quality service results in high utilization of its transportation equipment Currently More Than 2,000 Active Rigs in North America(1) 7 OILFIELD HAULING MARKET Eagle Ford North American Active Land Rig Count(1) 2013 2,086 2012 2,157 2011 2,439 2010 2,014 Utica 35Northern Texas/ Oklahoma 184 8. NORTH AMERICAN OPERATIONS 8 New satellite branch in Buckhannon, WV Ten offices located in the heart of the key North American resource plays Significant expansion opportunities especially in U.S. markets Flexible workforce can be transferred cross border to high activity areas Experienced team of more than 260 employees LEDUC CALGARY MIDLAND PLEASANTON SLAVE LAKE MINERAL WELLS WILLIAMSPORT Geographic Locations Fixed Asset Allocation(1) (1) Based on total equipment Net Book Value at June 30, 2013 SYLVAN LAKE 47%53% US Canada BUCKHANNON 9. OILFIELD HAULING OVERVIEW Modern, well maintained fleet 556 pieces of equipment (164 power units) 268 employees (158 operators) Fragmented industry makes for attractive consolidation opportunities Primary competitors include TransForce, Mullen, Flint and regional specialty haulers 9 556 Pieces of Equipment in Hauling Fleet Blue Chip Customer Base 0 50 100 150 200 250 300 350 Picker Bed Truck Miscellaneous Winch Tractor Trailer 10. 10 Competitor Aveda 40 mile rig move Marcellus Shale (1) The Result: 11% price premium for Aveda 64% reduction in rig downtime for customer (1) 1,250 hp, jackknife triple rig, ~ 70 loads 4 days Aveda has outperformed its competitors as a result of: Newer, more specialized equipment Experienced personnel Planning and communications Ability to meet industry demands for heavier equipment and larger loads 11 days OILFIELD HAULING CASE STUDY 11. OILFIELD RENTALS OVERVIEW 11 Modern, well maintained equipment with 703 pieces in the rental fleet Contributed approximately 6% of revenue in 2012 Plan to build critical mass through the acquisition of competitors with similar or complementary equipment Typical acquisition multiples identified at 2.5x to 3.5x EBITDA 703 Pieces of Equipment in Rental Fleet Blue Chip Customer Base 0 50 100 150 200 250 300 Generators Miscellaneous Light Towers Tanks Rig Mats 12. GROWTH STRATEGY 12 Capital Expenditure Program Completed capital expenditure of $25 million in 2012 $4 - $5 million capital expenditure planned for 2013 $4 - $4.5 million of oilfield hauling and rental fleet maintenance $0.5 million in transportation management systems planned for 2013 Organic Growth Initiatives Existing Customers Rig moving and ancillary equipment (e.g. tanks, trailers, etc.) Implement transportation management systems (e.g. GPS, satellite communications) Expansion into New Areas new satellite branch in Buckhannon, WV Target high activity resource plays focused on oil and NGL exploration Growth Through Acquisitions Acquire complementary fleets in both new and existing geographies Typical acquisition multiples of 2.5x to 3.5x EBITDA Evaluating potential acquisitions ranging in value from $6 to $20 million 13. FINANCIAL PERFORMANCE: REVENUE Year-Over-Year Revenue ($mm) Revenue by Geography 13 Reported 13 consecutive quarters of record revenue growth as compared to the same period of the prior year Expansion into U.S. resource plays and increasing utilization 8% revenue growth in the first six months of 2013 vs. first six months of 2012 despite year-over- year average rig count decline of approximately 10% in the areas the Company operates 0.0 20.0 40.0 60.0 80.0 100.0 2009 2010 2011 2012 First Six Months Revenue ($mm) 35% 65% Canada United States 2013 35.0 40.0 45.0 First Six Months 2012 First Six Months 2013 50% 50% 2012 14. FINANCIAL PERFORMANCE: EBITDA Year-Over-Year EBITDA ($mm) 14 First six months EBITDA increased by $3.1 million compared to 2012 Higher utilization across North America Premium pricing in key resource plays Operational efficiencies resulting in increased margins (1) Removes one-time items associated with winter retention bonus, and EBITDA from opened/restructured branches (2) Includes pro-forma EBITDA for 2012 Oilfield Rentals acquisition 0.0 2.0 4.0 6.0 8.0 10.0 12.0 14.0 2009 2010 2011 2012 2012 Pro- forma(1)(2) First Six Months EBITDA ($mm) 0.0 1.0 2.0 3.0 4.0 5.0 6.0 7.0 8.0 First Six Months 2012 First Six Months 2013 15. INVESTMENT HIGHLIGHTS Proven management team with a history of value creation Solid industry fundamentals supported by continued strong oil prices Significant growth opportunities across emerging oil-weighted resource plays Organic growth Acquisitions 15 16. CONTACT Bharat Mahajan Chief Financial Officer Aveda Transportation and Energy Services Suite 300, 435 4th Avenue SW Calgary, AB T2P 3A8 (403) 264-5769 16


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