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CORPORATE PRESENTATION | MARCH 2015
The information contained in this corporate presentation (the "Presentation") is based on public information and Aveda Transportation and Energy Services Inc.'s ("Aveda" or the "Company")information. This Presentation does not constitute, or form a part of, and should not be construed as any offer or invitation to sell, allot or issue, or any solicitation of any offer to purchase orsubscribe for, any securities, nor shall it (or any part of it or anything contained or referred to in it) or the fact of its distribution form the basis of, or be relied upon in connection with, or act as anyinducement in relation to a decision to purchase or subscribe for or to enter into, any contract or commitment whatsoever for securities in any jurisdiction.
The securities of Aveda have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the "1933 Act"), or the securities laws of any state. Additionally, thisPresentation is not for release, publication or distribution in, into or from the United States of America.
This Presentation contains certain forward-looking statements and forward-looking information (collectively referred to herein as "forward-looking statements") within the meaning of applicableCanadian securities laws. All statements other than statements of historical fact are forward-looking statements. Forward-looking statements are often, but not always, identified by the use ofwords 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 andfinancial performance; projected capital expenditures and commitments and the financing thereof; benefits derived from capital expenditures; expansion opportunities; increases in revenue;equipment delivery and deployment dates; effect of and ability to complete rebranding; geographic allocation of equipment; customer commitments; ability to establish and maintain a workingrelationship with third party suppliers; expectations regarding the ability of Aveda 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; acquisition opportunities and benefits and availability of insurance coverage.
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 andassumptions are based on information currently available to Aveda, including information obtained from third party industry analysts and other third party sources. In some instances, materialassumptions 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 factorsand assumptions is not exhaustive. Specific material factors and assumptions 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 qualifiedpersonnel in Canada and the United States; the ability of Aveda to obtain parts, consumables, equipment, technology, and supplies in a timely manner to carry out its activities; the ability of Avedato 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 retain customers post-acquisitions; the ability of Aveda to obtain timely financing on acceptable terms; currency exchange and interest rates; risks associated with foreign operations; changes under governmentalregulatory 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 statementsnecessarily 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 offuture 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 Aveda’s annualinformation form and management discussion and analysis for the year ended December 31, 2014 (the "MD&A") and contained herein under the heading "Risk Factors". Any forward-lookingstatements 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 orotherwise.
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DISCLAIMER
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DISCLAIMER (CONT’D)DISCLAIMER (CONT’D)Future-Oriented Financial Information
This Presentation also contains future-oriented financial information and financial outlook information (collectively, "FOFI") about prospective results of operations, future net revenue, sharecapital, cash flows, and components thereof, all of which are subject to the same assumptions, risk factors, limitations, and qualifications as set forth in the above paragraphs including the risks setout in the Company's MD&A and annual information form for the year ended December 31, 2014. FOFI contained in this Presentation was made as of the date of this Presentation and was providedfor the purpose of providing information about management's current expectations and plans relating to the future. The Company disclaims any intention or obligation to update or revise anyforward looking statements or FOFI contained in this Presentation, whether as a result of new information, future events or otherwise, unless required pursuant to applicable securities law. Readersare cautioned that the forward looking statements and FOFI contained in this Presentation should not be used for purposes other than for which it is disclosed herein. The forward lookingstatements and FOFI contained in this Presentation are expressly qualified by this cautionary statement.
The forward-looking statements contained in this Presentation are made as of the date on the front page and the Company assumes no obligation to update publicly or to revise any of the includedforward-looking statements, whether as a result of new information, future events or otherwise, except as may be required by applicable securities laws. Certain information contained herein isbased on, or derived from, information provided by independent third-party sources. The Company believes that such information is accurate and that the sources from which it has been obtainedare reliable. The Company cannot guarantee the accuracy of such information, however, and has not independently verified the assumptions on which such information is based. The Company doesnot assume any responsibility for the accuracy or completeness of such information.
Non-International Financial Reporting Standards Measures
This Presentation may contain the terms EBITDA (earnings before interest, taxes, depreciation and amortization) and working capital which are defined in the MD&A. These measures are commonlyutilized in the oilfield services industry and are considered informative for management and stakeholders. Neither working capital nor EBITDA have a standardized meaning prescribed byinternational financial reporting standards ("IFRS") and therefore Aveda's calculations may not be comparable with the calculation of similar measures for other entities. Management uses EBITDAto analyze the operating performance of businesses. EBITDA as presented is not intended to represent cash provided by operating activities, net earnings or other measures of financial performancecalculated in accordance with IFRS.
This Presentation does not constitute a recommendation regarding the securities of Aveda. No reliance may be placed for any purpose whatsoever on the completeness, accuracy or fairness of theinformation or opinions contained in this Presentation nor is any responsibility or liability accepted for any errors or misstatements in, or omissions from, this Presentation or any direct orconsequential loss (howsoever arising) from any use of, or reliance on, this Presentation or otherwise in connection with it. No undertaking, representation, warranty or other assurance, express orimplied, is made or given by or on behalf of Aveda, or any of its respective directors, officers, partners, employees, agents, affiliates or advisers or any other person as to the accuracy, completenessor fairness of the information or opinions contained in this Presentation and no responsibility or liability is accepted by any of them for any such information or opinions.
Track Record for Growth Exposure to Resilient US Market/Strong Dollar
Broad and Diversified Footprint Multiple Revenue Streams
AT A GLANCE
Provinces/States Serviced 4
TRANSPORTATION
- Rig Moving- Hotshot
- Heavy Haul
~93.5%
OILFIELD RENTALS
~6.5%
Current terminal locations able to service 81% of total rigs in Canada and USA(see slide 7)
USA, 78%
Canada, 22%
2014 Average US to CND Exchange Rate ≈1.11
March 18, 2015 US to CND
Exchange Rate ≈ 1.26
2014
2010 2011 2012 2013 2014Revenue 39.8 72.2 83.3 88.7 155.9EBITDA 4.2 11.3 9.8 15 24.5
$0
$5
$10
$15
$20
$25
$30
$0
$20
$40
$60
$80
$100
$120
$140
$160
EBIT
DA ($
MM
)
Reve
nue
($M
M)
41% CAGR
55% CAGR
MANAGEMENT TEAM
5
David Werklund, Executive Chairman Strong history of founding and growing companies
both organically and through acquisitions‒ Founder and Chairman of Tervita Corporation
(previously named CCS Corporation); privatized in 2007 for C$3.5B (largest trust privatization in Canadian history)
‒ Founder and Executive Chairman of WerklundCapital Corp.
‒ Co-Founder of Concord Well Servicing
2013 Calgary Business Hall of Fame Laureate
2005 Ernst & Young’s Canadian Entrepreneur of the Year
Kevin Roycraft – President and CEO Over 20 years of Transportation Industry
Experience
Former Vice-President of Operations for Liquid Transport Corporation
Bharat Mahajan – VP, Finance and CFO Former CFO of several oilfield service companies,
including Wellpoint Systems Inc. and NorexExploration Services Inc.
Held several positions with Magna International overseeing various international growth initiatives
-500%
0%
500%
1000%
1500%
2000%
2500%
3000%
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15
Year
CCS (Tervita) Historical Shareholder Returns
CAGR = 24%Total Return = 2,490%
Capitalization Balance Sheet SummaryShare price (March 16, 2015) $2.09 Operating Line Available ($MM)(7) $56.6
Shares Outstanding Basic (MM)(1) 19.1 Property and Equipment ($MM)(2) $97.8
Outstanding Stock Options (MM)(2) 1.4 Working Capital ($MM)(2) $16.8
Shares Outstanding Fully Diluted (MM)(3) 20.5 Total Assets/Tangible Assets ($MM)(2) $147.6/$132.7
FD Market Capitalization ($MM) $42.8 Tangible Assets/Share(8) $4.88
Net Debt ($MM)
Loans and Borrowings(2) $50.1 Shareholder Summary(9)
Cash(4) ($6.0) Werklund Capital Corp 34.7%
Net Debt ($MM) $44.1 IA Michael Investment Counsel Ltd. 16.8%
Enterprise Value ($MM) $86.9 Invesco Ltd. 13.3%
Net Debt/EBITDA(5) 1.8x Senior Management and Directors(10) 1.85%
Net Debt/Total Capitalization(6) 38%
(1) Shares outstanding as of December 31, 2014 were approximately 19.9MM. As a result of the Normal Course Issuer Bid (“NCIB”) announced December 23, 2014, Aveda has acquired approximately 800K shares as of March 26, 2015 decreasing the total shares outstanding to approximately 19.1MM
(2) As at December 31, 2014(3) Fully diluted shares outstanding as of December 31, 2014 were approximately 21.3MM. As a result of the NCIB (see footnote 1), the fully diluted shares outstanding as at March 26, 2015 is approximately
20.5MM(4) Calculation: cash balance as at December 31, 2014 ($0.9M) + potential cash from exercise of all options ($5.1MM)(5) 2014 EBITDA approximately $24.5MM(6) As at December 31, 2014; calculation: Net debt ($44.1M) ÷ (Net Debt ($44.1M) + Shareholder’s Equity ($71.9M))(7) As at March 26, 2015(8) Calculation: December 31, 2014 Working Capital ($16.8MM) + FMV of Fleet Equipment ($121.4MM, see page Section 10 in MD&A) + NBV of non-appraised assets ($4.7MM, see Section 10 in MD&A) – Loans
and Borrowings ($50.1MM) ÷Shares Outstanding as at March 26, 2015 (19.1MM, see footnote 1)(9) Share balances as at December 31, 2014 (source: Bloomberg); total shares outstanding as at March 26, 2015 (approximately 19.1MM as a result of NCIB – see footnote 1)(10) Does not include David Werklund, Executive Chairman, who owns Aveda shares through Werklund Capital Corp. 6
CAPITALIZATION SNAPSHOT
Map Legend
Terminal Location Prior to 2012
2012/2013 Organic Expansion
2014 Organic Expansion
2013/2014 Acquisition
Oil Focused
NGL Focused
(1) Active rigs on or about March 20, 2015 (source: Baker Hughes)
(2) Aveda’s research suggests that each rig moves an average of 17 times per year at an average cost of $75K. Based on the North American rig count of 1,170, the estimated value of the market is $1.5B
(3) Two branches in Calgary area –Heavy Haul/Service and Corporate Office
(4) US Corporate Office
NORTH AMERICAN OPERATIONS
Permian(292 Rigs)
Barnett (6 Rigs)
Williston/Bakken (99 Rigs)
WCSB (144 Rigs)
Marcellus (69 Rigs)
Eagle Ford (138 Rigs)
Northern Texas/Oklahoma (164 Rigs)
Utica (30 Rigs)
Colorado (39 Rigs)Expansion Opportunity
Houston, TX (4)
Midland, TX
Pleasanton, TX
Mineral Wells, TX
Oklahoma
Williamsport, PA
Buckhannon, WV
Calgary, AB (3)
Sylvan Lake, AB
Slave Lake, ABEdson, AB
Leduc, AB
Williston, ND
There are 1,170 Active Rigs in North America(1) representing an estimated market size of $1.5B(2). Aveda’s current terminal locations cover approximately 81% of the potential North American market
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Blue Chip Customer Base
8
OILFIELD HAULING OVERVIEW
18
51
57
192
215
507
0 100 200 300 400 500 600
Cranes
Bed Trucks
Pickers/Loaders
Miscellaneous
Tractors
Trailers
Hauling Fleet
One of the largest and youngest fleets in the industry:
1,040 pieces of equipment
6 years - the average age of key power units (tractors/bed trucks/cranes)
(1) Includes pickups, crew vans, forklifts, as well as other equipment
(1)
A company-wide philosophy based on over 20 years of rig moving experience (the best people, working safely, using the best equipment = industry leading results)
9
THE “AVEDA WAY”
An Industry Leader
SAFETY‒ Zero incident rate mentality
‒ Among the most advanced/developed safety programs in the industry
PEOPLE‒ One of the lowest turn-over rates in the industry
‒ Competitive wages, on-going development opportunities and room for advancement attract top talent
EQUIPMENT‒ Among the most modern fleets in the industry
‒ Strict maintenance policy
Blue Chip Customer Base
10
OILFIELD RENTALS OVERVIEW
25
47
96
353
393
0 75 150 225 300 375 450
Well-site Shacks
Shale Bins
Light Towers
Rig Mats
Tanks
Rentals Fleet (Select Categories)
Over 1,450 Pieces of modern, well-maintained equipment
Growth Capital 2015/2016 annual estimated capex of $3MM to $5MM Approximately $107MM spent on equipment and acquisitions over previous 3 years (2012 – 2014)
Organic Growth Initiatives Opened new branch in Oklahoma during the third quarter of 2014 1 new branch in 2013 (Buckhannon, WV); 2 new branches in 2012 (Midland and Pleasanton, TX)
Growth Through Acquisitions Acquire complementary fleets in both new and existing geographies Completed two accretive acquisitions in 2014 Typical acquisition multiples of 3.0x to 3.5x EBITDA
11
GROWTH STRATEGYExecute on opportunities in oil/liquid weighted basins that drive shareholder value
Geographical Mix
Annual Growth (2010 – 2014) Quarter over Quarter Growth
43%
57%2012
63%
37%
2010
22%
78%
2014
REVENUE PERFORMANCE ($MM)
12
Growing Exposure to Resilient US Market
21.8 45.90
5
10
15
20
25
30
35
40
45
50
Q4 2013 Q4 2014
39.8 72.2 83.3 88.7 155.90
20
40
60
80
100
120
140
160
2010 2011 2012 2013 2014
Annual Growth (2012 – 2014)
EBITDA PERFORMANCE ($MM)
13
Quarter over Quarter Growth
Annual EBITDA Margin (2012 – 2014)
9.8 15.0 24.58
10
12
14
16
18
20
22
24
26
2012 2013 2014
3.1 8.3 0
1
2
3
4
5
6
7
8
9
Q4 2013 Q4 2014
11.7% 17.0% 15.7%0%
3%
5%
8%
10%
13%
15%
18%
20%
2012 2013 2014
Target = 20%
Proven management team with history of value creation Executive chairman founded CCS Corporations (now called Tervita Corporations) with $50K; company was
privatized in 2007 for C$3.5B
CEO and CFO with proven track record for expanding businesses
Growing exposure to resilient US market and strong dollar
Strong balance sheet and cash flow generation - 2014 net debt/EBITDA of 1.8x and tangible assets per share of $4.88
Fragmented industry making for attractive acquisition opportunities Successful track record for expanding organically and acquisitively
Successfully integrated 3 acquisitions during 2013/2014
Opened 4 new terminals between 2012 and 2014; 2 of which are among Aveda’s strongest and most consistent performers (Midland, TX and Pleasanton, TX)
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KEY TAKEAWAYS
USA, 78%
USA, 37%
Can, 22%
Can, 63%
0% 20% 40% 60% 80% 100%
2014
2010
Revenue Mix By Country (2010 to 2014)
2014 Average US to CND Exchange Rate ≈1.11
March 18, 2015 US to CND
Exchange Rate ≈ 1.26
Bharat Mahajan, CAVP Finance & Chief Financial Officer
Aveda Transportation and Energy ServicesSuite 300, 435 – 4th Avenue SW
Calgary, AB T2P 3A8(403) 264-5769
Kevin RoycraftPresident & Chief Executive Officer
Aveda Transportation and Energy ServicesSuite 1200, 333 N. Sam Houston Parkway E.
Houston, TX 77060(832) 917-4950
CONTACT
15
Aveda Board Members:
David WerklundExecutive Chairman of Werklund
Capital Corporation
Stefan ErasmusPresident, Werklund Capital
Corporation
Doug McCartneyPartner, Burstall Winger Zammit LLP
Paul ShelleyIndependent Businessman
