Transcript
Page 1: Investor Presentation September 2013

Investor Presentation | September 2013

Page 2: Investor Presentation September 2013

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 futureoutcomes. In particular, this presentation contains forward-looking statements relating to: future growth; results of operations; operational and financialperformance; projected capital expenditures and commitments and the financing thereof; expansion; increases in revenue; equipment delivery and deploymentdates; 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; businessstrategy; successful integration of structural changes; restructuring plans; organic growth potential; acquisitions and availability of insurance coverage. Avedabelieves the expectations reflected in such forward-looking statements are reasonable as of the date hereof but no assurance can be given that these expectationswill 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 andother third party sources. In some instances, material assumptions and material factors are presented elsewhere in this presentation in connection with theforward-looking statements. Readers are cautioned that the following list of material factors and assumptions is not exhaustive. Specific material factors andassumptions 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;• 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. Suchforward-looking statements necessarily involve known and unknown risks and uncertainties, which may cause Aveda’s actual performance and financial results infuture periods to differ materially from any projections of future performance or results expressed or implied by such forward-looking statements. These risks anduncertainties include, but are not limited to, the risks identified by Aveda’s annual information form and management discussion and analysis for the year endedDecember 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

Page 3: Investor Presentation September 2013

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 oilfieldhauling 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 opportunitiesthroughout North America

Multiple cross-over business opportunities achieved through oilfield hauling and rental business units

COMPANY OVERVIEW

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Page 4: Investor Presentation September 2013

ManagementDavid Werklund – Executive Chairman Has been the Chairman of Aveda since 2006 and served as Interim

President and CEO of Aveda from September 2011 to November2012. 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 America’s largest bulk chemical and oiltransportation 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 MembersStefan 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

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Page 5: Investor Presentation September 2013

Historical Shareholder Returns CCS Selected Historical Acquisitions

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David Werklund founded CCS Corporation (now Tervita Corporation) in 1984 and built it largely through theconsolidation 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%

Page 6: Investor Presentation September 2013

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

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Page 7: Investor Presentation September 2013

352

182

Permian

456

231

32Barnett

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 / RegionRecently Opened OfficeExpansion Opportunity

Oil Focused

NGL Focused

Aveda has a targeted growth plan thatis focused on targeting oil/liquid richweighted basins across North America

Based on a recent market analysis,Aveda estimates each rig movesapproximately 1.4 times per month or17 times per year (approx. 35,450moves per year based on the Sep. 62013 rig count)

Aveda’s reputation, customerrelationships and quality service resultsin high utilization of its transportationequipment

Currently More Than 2,000 Active Rigs in North America(1)

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OILFIELD HAULING MARKET

Eagle Ford

North American ActiveLand Rig Count(1)

2013 2,086

2012 2,157

2011 2,439

2010 2,014

Utica 35Northern Texas/Oklahoma

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Page 8: Investor Presentation September 2013

NORTH AMERICAN OPERATIONS

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New satellite branch inBuckhannon, WV

Ten offices located in the heartof the key North Americanresource plays

Significant expansion opportunitiesespecially in U.S. markets

Flexible workforce can betransferred cross border to highactivity areas

Experienced team of more than260 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

Page 9: Investor Presentation September 2013

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

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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

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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

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OILFIELD RENTALS OVERVIEW

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Modern, well maintained equipment with 703 piecesin the rental fleet

Contributed approximately 6% of revenue in 2012 Plan to build critical mass through the acquisition of

competitors with similar or complementaryequipment

Typical acquisition multiples identified at 2.5x to 3.5xEBITDA

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

Page 12: Investor Presentation September 2013

GROWTH STRATEGY

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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

Page 13: Investor Presentation September 2013

FINANCIAL PERFORMANCE: REVENUE

Year-Over-Year Revenue ($mm) Revenue by Geography

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Reported 13 consecutive quarters of record revenue growth as compared to the same period ofthe 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

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FINANCIAL PERFORMANCE: EBITDA

Year-Over-Year EBITDA ($mm)

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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)

0.01.02.03.04.05.06.07.08.0

First Six Months 2012 First Six Months 2013

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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

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Page 16: Investor Presentation September 2013

CONTACT

Bharat MahajanChief Financial Officer

Aveda Transportation and Energy ServicesSuite 300, 435 – 4th Avenue SW

Calgary, ABT2P 3A8

(403) [email protected]

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