2. 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 or
subscribe 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 any
inducement 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, this
Presentation 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 applicable
Canadian 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 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; 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 working
relationship 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 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 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 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 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 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 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 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 by Aveda’s annual
information form and management discussion and analysis for the year ended December 31, 2013 (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
DISCLAIMER
3. 3
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, share
capital, 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 set
out in the Company's MD&A and annual information form for the year ended December 31, 2013. FOFI contained in this Presentation was made as of the date of this Presentation and was provided
for 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 any
forward 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. Readers
are 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 looking
statements 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 included
forward-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 is
based 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 obtained
are 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 does
not 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 commonly
utilized in the oilfield services industry and are considered informative for management and stakeholders. Neither working capital nor EBITDA have a standardized meaning prescribed by
international financial reporting standards ("IFRS") and therefore Aveda's calculations may not be comparable with the calculation of similar measures for other entities. Management uses EBITDA
to 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 performance
calculated 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 the
information 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 or
consequential 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 or
implied, 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, completeness
or 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.
4. COMPANY OVERVIEW
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
4
Oilfield Hauling Oilfield Rentals
– Rig moving
– Heavy hauling
– Hot shot services
– Matting
– Tanks
– Light towers
– Shacks
5. MANAGEMENT AND BOARD MEMBERS
5
Management Board Members
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 and Executive Chairman of Werklund Capital Corporation
– The 2005 Ernst & Young's Canadian Entrepreneur of the Year
– The 2013 Calgary Business Hall of Fame Laureate
David Werklund – Executive Chairman
Stefan Erasmus
– President of Werklund Capital Corporation
– Director of several private companies and charitable
organizations
– Former Managing Director of Resources Global Professionals
Doug McCartney
– Partner of Burstall Winger Zammit LLP
– Practices in the areas of securities and corporate finance
and corporate and commercial law
– Director or officer of several private companies
Kevin Roycraft - President and CEO
– Joined Aveda in November 2012
– More than 20 years of Transportation Industry Experience
– Former Vice-President of Operations for Liquid Transport Corp
Paul Shelley
– Independent Businessman
– Former Senior Vice President, Corporate Development at
Kos Corp. Investments Ltd.
Bharat Mahajan – Vice-President, Finance and 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.
6. Historical Shareholder Returns CCS Select Historical Acquisitions
MANAGEMENT TRACK RECORD
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)
6
Source: FactSet
CAGR Total Return
CCS 24% 2490%
7. Capitalization(1) Balance Sheet Summary(1)
Share price (July 4, 2014) $5.60 Operating Line Available ($MM)(4) $69.0
Shares Outstanding Basic (MM) 19.9 Property and Equipment ($MM)(5) $101.9
Outstanding Stock Options (MM) 1.1 Working Capital ($MM) $16.5
Shares Outstanding Fully Diluted (MM) 21.0 Total Assets/Tangible Assets ($MM)(6) $167.9/$139.7
FD Market Capitalization ($MM) $117.6
Net Debt ($MM)
Loans and Borrowings(2) $56.0 Shareholder Summary(1)
Cash(3) ($4.3) Werklund Capital Corp 33.3%
Total Net Debt ($MM) $51.7 Other Insiders 1.2%
Enterprise Value ($MM) $169.3 Total Insiders 34.5%
(1) At March 31, 2014. All values are expressed in Canadian dollars
(2) Actual loans and borrowings as at March 31, 2014 was $38.1 MM. Value has been increased by $17.9 MM to reflect the borrowing of $25.61 MM to
acquire Precision Drilling’s U.S. rig moving assets on July 1, 2014 and other on-going operational adjustments. The borrowing of $25.61 MM related to the
acquisition of Precision Drilling’s U.S. rig moving assets is based on a purchase price of $24 MM US and the June 2014 closing exchange rate of 1.067
(Source: Bank of Canada)
(3) Includes potential cash from exercise of all options of $3.4 million
(4) Actual operating line available as at March 31, 2014 was $36.7MM. Value has been adjusted to reflect the increase in Aveda’s senior lending facility from
$75 MM to $125 MM on June 25, 2014. Value is equal to the difference between $125 MM and the loans and borrowing amount of $56 MM.
(5) Actual property and equipment as at March 31, 2014 was $76.3 MM. Value has been increased to reflect the equipment added as a result of the
acquisition of Precision Drilling’s U.S. rig moving assets on July 1, 2014. The increase is equal to $25.61 MM based on the acquisition price of $24 MM US
and the June 2014 closing exchange rate of 1.067 (Source: Bank of Canada)
(6) Includes value of equipment added as a result of the acquisition of Precision Drilling’s U.S. rig moving assets on July 1, 2014 (see footnote 5) 7
CAPITALIZATION SNAPSHOT
8. Map Legend
Terminal Location Prior to 2012
Recent Organic Expansion (2012 or 2013)
Planned 2014 Organic Expansion
Recent Acquisition (2013 or 2014)
Oil Focused
NGL Focused
Permian
(560 Rigs)
Barnett (26 Rigs)
Williston/
Bakken (178 Rigs)
WCSB (301 Rigs)
(1) Active rigs on or about July 3rd 2014; as per Baker Hughes
(2) Three offices in Calgary area – Heavy Haul, Service and Corporate Office
(3) See Aveda’s press release dated June 25, 2014; expected to begin operations in the third quarter
(4) US Corporate Office
Marcellus
(79 Rigs)
NORTH AMERICAN OPERATIONS
Aveda estimates each rig
moves approximately 17 times
per year (approx. 35,700
potential moves per year based
on July 2014 rig count)
Aveda’s reputation, customer
relationships and quality
service results in high
utilization of its transportation
equipment
Experienced team of
approximately 550 employees
Approximately 2,100 Active Rigs in North America(1)
8
Eagle Ford (213 Rigs)
Northern Texas/Oklahoma (260 Rigs)
Utica
(43 Rigs)
Colorado (68 Rigs)
Expansion Opportunity
Houston, TX (4)
Midland, TX
Pleasanton, TX
Mineral Wells, TX
Oklahoma(3)
Williamsport, PA
Buckhannon, WV
Calgary, AB (2)
Sylvan Lake, AB
Slave Lake, ABEdson, AB
Leduc, AB
Williston, ND
9. Modern, well maintained current fleet of 1,040
pieces of equipment (341 power units) after M&K
(Williston, ND) and Precision Acquisitions
Current employees of approximately 550 (292
operators)
Fragmented industry makes for attractive
consolidation opportunities
Primary competitors include Mullen, Monster Heavy
Haulers, Flint and regional specialty haulers
Hauling Fleet Blue Chip Customer Base
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OILFIELD HAULING OVERVIEW
0 100 200 300 400 500 600
Cranes
Bed Trucks
Pickers/Loaders
Miscellaneous
Tractors
Trailers
Aveda Pre-Acquisitions M&K Acquisition Precision Acquisition
10. 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
The Result:
– 11% price premium for Aveda
– 64% reduction in rig downtime for customer
10
OILFIELD HAULING CASE STUDY
40 Mile Rig Move – Marcellus Shale(1)
Competitor Aveda
11 Days 4 Days
(1) 1,250 hp, jackknife triple rig, ~ 70 loads
11. Modern, well maintained equipment with over 1,450
pieces in the rental fleet after the Belair (Edson, AB)
and M&K (Williston, ND) Acquisitions
Plan to build critical mass through the acquisition of
competitors with similar or complementary
equipment
Typical acquisition multiples identified at 3.0x to 3.5x
EBITDA
Equipment Composition in Rental Fleet Blue Chip Customer Base
11
OILFIELD RENTALS OVERVIEW
0 100 200 300 400 500
Well-site Shacks
Shale Bins
Light Towers
Rig Mats
Tanks
Aveda Pre-Acquisitions Belair Acquisition M&K Acquisition
12. Capital Expenditure Program
Approximately $3.5 million spent year to date; balance of 2014 currently under review
Organic Growth Initiatives
Opening new branch in Oklahoma during the third quarter of 2014; minimum threshold of monthly
rig moves agreed to with major operator in the region
1 new branch in 2013 (Buckhannon, WV); 2 new branches in 2012 (Midland and Pleasanton, TX)
Growth Through Acquisitions
Acquire complementary fleets in both new and existing geographies
Typical acquisition multiples of 3.0x to 3.5x EBITDA
Evaluating potential acquisitions of various sizes in high activity regions
12
GROWTH STRATEGY
Execute on opportunities in oil/liquid weighted basins across North America
13. 42%
58%
Q1 2013
29%
71%
Q1 2014
Canada United States
Annual Growth (2010 – 2013) Geographical Mix
Annual Growth (2009 – 2013) Quarter over Quarter Growth
REVENUE PERFORMANCE ($MM)
Growing exposure to the resilient U.S.
market
Consistent revenue growth
– 51% revenue growth in the first
quarter of 2014 vs. 2013
– Compounded annual growth rate
(CAGR) of 27.2% between 2009 and
2013
13
23.5
35.4
0
5
10
15
20
25
30
35
40
Q1 2013 Q1 2014
33.9
39.8
72.2
83.3
88.7
0
20
40
60
80
100
2009 2010 2011 2012 2013
14. EBITDA PERFORMANCE ($MM)
53% increase in EBITDA year over year
(2012 – 2013), and quarter over quarter
(Q1 2013 – Q1 2014), reflecting:
– Higher utilization across North America
– Premium pricing in key resource plays
– Operational efficiencies
Compound annual growth rate of 63.6%
between 2009 and 2013
14
Annual Growth (2012 – 2013)
Quarter over Quarter Growth
9.8
15.0
8
9
10
11
12
13
14
15
16
2012 2013
4.3
6.6
0
1
2
3
4
5
6
7
Q1 2013 Q1 2014
15. Announced planned organic expansion into Oklahoma (Q3 2014) driven by a “minimum
rig moves” agreement with a major operator in the region
Closed acquisition of Precision Drilling’s U.S. rig moving assets (July 1, 2014)
Increased senior lending facility from $75 million to $125 million (June 25, 2014)
Completed company-wide implementation of TMW (transportation management
software)
Closed Belair (November 8, 2013) and M&K acquisitions (January 31, 2014)
Completed $23.0 million Common Shares bought deal private placement financing
Converted $4.7 million convertible debenture into equity
Moved US Corporate Office from Mineral Wells, TX to Houston, TX
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RECENT ACHIEVEMENTS
16. Proven management team with a history of value creation
Solid industry fundamentals supported by continued strong commodity prices
Strong balance sheet and cash flow generation
Significant growth opportunities across emerging oil/liquid weighted resource plays
- Organic growth
- Acquisitions
16
INVESTMENT HIGHLIGHTS
17. CONTACT
Bharat Mahajan, CA
VP Finance & Chief Financial Officer
Aveda Transportation and Energy Services
Suite 300, 435 – 4th Avenue SW
Calgary, AB T2P 3A8
(403) 264-5769
bharat.mahajan@avedaenergy.com
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