Aveda Transportation and Energy Services Announces Record Revenue for the Fourth Quarter of 2012

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, today announced record revenue for the three and
twelve months ended December 31, 2012. 


2012 BUSINESS HIGHLIGHTS



--  Revenue for the twelve months ended December 31, 2012 grew by $11.2
    million to $83.3 million compared with revenue of $72.2 million for the
    same period in 2011, US revenue increased by 57% which offset a 14%
    decline in Canadian revenue; 
    
--  Generated net loss for the twelve months ended December 31, 2012 of $1.3
    million, as compared to net income of $2.6 million for the same period
    in 2011; 
    
--  Generated Adjusted EBITDA(1) for the twelve months ended December 31,
    2012 of $9.8 million, a decrease of $1.5 million compared with Adjusted
    EBITDA(1) of $11.3 million for the same period in 2011; 
    
--  Expanded equipment base by acquiring $23.6 million of net additional
    equipment and leaseholds in the year 2012; 
    
--  The Company rebranded itself as Aveda Transportation and Energy
    Services. Operating under a single brand will allow the Company to
    multiply individual successes across a strong and unified brand going
    forward; 
    
--  Commenced operations in new branches in Pleasanton, TX and Midland, TX.
    The Company signed a new lease on a new Pennsylvania facility and moved
    operations from New Columbia to Williamsport, PA in 2013; 
    
--  Raised $8.0 million ($7.2 million net of financing costs) in new equity
    financing, and increased its existing credit facility to $50 million
    from $35 million; 
    
--  Acquired selected assets of 1st Rate Energy Services Inc. and a private
    company called Complete Energy Services Inc. together referred to as
    "Complete" for approximately $7.5 million. As a result of the
    acquisition the Company increased its rental fleet by 270 pieces of
    equipment and established operation in Sylvan Lake, AB; 
    
--  The Company elected to close its Crossfield, AB rental operation and
    combine it with the newly acquired Sylvan Lake, AB operation; 
    
--  Following consecutive periods of poor performance, the Company elected
    to close its Melita, MB and Grande Prairie, AB branches and allocated
    its fleet assets amongst other branches;  
    
--  Relocated Nisku, AB branch to Leduc, AB; and 
    
--  Hired Kevin Roycraft as the President and Chief Executive Officer in
    November 2012. Mr. Roycraft has more than 20 years of transportation
    industry experience. He was the former Vice-President of Operations for
    Liquid Transport Corp. (one of North America's largest bulk chemical and
    oil transportation company). 



"Despite the challenging market conditions of the past year, Aveda's 2012
capital expenditure program and the Complete acquisition have positioned the
Company for growth," said Kevin Roycraft, President and Chief Executive Officer
of Aveda "I look forward to working with the Aveda team to capitalize on the
great opportunities ahead."


Lucas Tomei has tendered his resignation as Corporate Secretary of the Company
and is replaced by Kris Miks. The Company thanks Lucas for his services. 


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


Financial Overview 



(in thousands, except per share and ratio amounts)                          
----------------------------------------------------------------------------
                                                                            
                   Twelve    Twelve               Three     Three           
                   Months    Months              Months    Months           
                    ended     Ended  % Change     Ended     Ended  % Change 
                 December  December    2011 -  December  December    2011 - 
                 31, 2012  31, 2011      2012  31, 2012  31, 2011      2012 
                ------------------------------------------------------------
Revenue            83,331    72,161      15.5%   23,015    19,554      17.7%
Gross profit(5)    13,745    17,118     -19.7%    3,149     4,261     -26.1%
Gross margin         16.5%     23.7%    -30.5%     13.7%     21.8%    -37.2%
                                                                            
Adjusted                                                                    
 EBITDA(1)          9,761    11,332     -13.9%    2,553     2,655      -3.8%
Adjusted                                                                    
 EBITDA(1) as a                                                             
 percentage of                                                              
 revenue             11.7%     15.7%    -25.4%     11.1%     13.6%    -18.3%
                                                                            
Net income                                                                  
 (loss)            (1,278)    2,599    -149.2%     (517)      336    -253.9%
Net income                                                                  
 (loss) as a                                                                
 percentage of                                                              
 revenue             -1.5%      3.6%   -142.6%     -2.2%      1.7%   -230.7%
                                                                            
Adjusted EBITDA                                                             
 per share(1,2)      1.11      1.96     -43.4%     0.26      0.46     -44.2%
                                                                            
Earnings per                                                                
 share - basic                                                              
 and diluted(2)     (0.15)     0.45    -133.3%    (0.05)     0.06    -186.7%
                                                                            
Current ratio        2.10      2.28      -7.8%     2.10      2.28      -7.8%
                                                                            
Debt to equity                                                              
 ratio(3)            1.36      1.34       1.8%     1.36      1.34       1.8%
                                                                            
Debt to EBITDA                                                              
 ratio (3,4)         3.38      2.10      60.6%     3.38      2.10      60.6%
                                                                            
Net capital                                                                 
 assets addition   23,585     8,093     191.4%    1,137     8,081     -85.9%
                                                                            
Notes:                                                                      
(1)   This News Release contains the term Adjusted EBITDA. Adjusted EBITDA  
      as presented does not have any standardized meaning prescribed by     
      international financial reporting standards (IFRS) and therefore it   
      may not be comparable with the calculation of similar measures for    
      other entities. Management uses Adjusted EBITDA to analyze the        
      operating performance of the business. Adjusted 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. It is defined as earnings before interest,      
      taxes, depreciation and amortization excluding foreign exchange gains 
      or losses which are primarily related to the US dollar activities of  
      the Company and can vary significantly depending on exchange rate     
      fluctuations, which are beyond the control of the Company, and write  
      downs of intangible assets, goodwill impairment, financing costs,     
      gains or losses on disposal of assets, stock based compensation, fees 
      and expenses on settlement of debt and losses on extinguishment of    
      debt.                                                                 
(2)   2011 Per share amounts calculated to take into consideration the      
      Company's 30:1 share consolidation which took place on November 28,   
      2011 as if the share consolidation had been in effect throughout 2011.
(3)   Debt includes, revolving credit facility, loans and borrowings,       
      obligations under finance lease and convertible debenture as per their
      carrying amounts on the balance sheet.                                
(4)   Twelve and three months ended December 31 debt to EBITDA ratio        
      calculated using Adjusted EBITDA for the trailing 12 months.          
(5)   Gross profit calculated as revenue less direct operating expense.     



Outlook

The Company earns revenue primarily by providing specialized transportation
services to companies engaged in exploration, development and production of
petroleum resources. Demand for the Company's transportation services is
therefore linked to the economic conditions of the energy industry and the
general level of drilling activity in the exploration, development and
production of petroleum resources in Western Canada and in the United States.
Drilling activity in the WCSB and in the United States has in recent history
been affected by amongst other things, low natural gas prices and higher than
normal natural gas inventories in storage caused by many factors including
reduced demand for commodities as a consequence of a global recession and the
temporary oversupply of natural gas caused by the fast development of shale gas
resources in the United States.


Countering these factors is a strong price for oil, which has allowed
oil-focused regions to experience increasing rig counts. The Pleasanton and
Midland branches are benefitting from such increases in Texas, while other US
branches are making efforts to minimize revenue and margin reductions stemming
from low activity levels in natural gas explorations. 


In the WCSB, rig counts in the fourth quarter 2012 failed to ramp up(1) to
levels normally expected for that time of the year. This deviation from the
typical industry cycle is reported to stem from export capacity bottlenecks
coupled with delays in the approval of the Keystone XL and Northern Gateway
pipelines. Similarly, while first quarter 2013 showed rig counts akin to first
quarter 2011 up to the end of February(2), early March statistics indicate an
earlier and steeper decline in rig counts even before the usual start of the
"spring break-up" season. This is in line with expectations that 2013 might face
limited growth in exploration and production projects reflecting the cited
market conditions, as exemplified by the late 2012 announcement of delays in
large projects such as the Fort Hill and Joslyn oil sands mines(3). Within WCSB
gas plays, various companies have reduced capital expenditure investments due to
the low returns experienced from the exploration and production of low-priced
natural gas. Instead, these companies have shifted their focus towards cautious
investments in liquids-rich plays, divesting from dry gas assets and reducing
overall capital expenditure in expectation of market improvements(4).




(1) June Warren Nickels Rig Locator, accessed on March 7, 2013, at          
    http://www.riglocator.ca/                                               
(2) CAODC Statistics, accessed on March 7, 2013 at http://www.caodc.ca/     
(3) http://www.theglobeandmail.com/globe-investor/suncor-joins-spending-    
    retreat/article4813907/                                                 
(4) http://www.theglobeandmail.com/report-on-business/industry-news/energy- 
    and-resources/encana-puts-brakes-on-liquids-plays/article8656404/       



Despite Aveda's rental asset additions in 2012, revenues have not picked up as
aggressively as expected in the rentals division. This indicates a need for
further analysis and efforts geared specifically at increasing utilization of
current excess capacity, including evaluating customer opportunities outside of
the immediate geographical range of our Sylvan Lake location.


In the first quarter of 2013, Aveda anticipates a decrease in revenue in Canada
between 25% and 35% compared to the same period in 2012. In Canada, 2013 as
whole remains highly uncertain due to the market conditions described, including
the risk of additional delays or cancellations in major upstream projects in
Canada and continually depressed natural gas prices. 


Opportunities for expansion and growth continue to appear strongest in the US.
According to the Baker Hughes Rig Count(5), drilling activity in the Eagle Ford
and Permian basins remains close to the highest levels experienced in the last
10 years, although in both basins, rig counts have stabilized roughly at the
same levels as the previous year as of the first week of March 2012. The high
activity levels have allowed Aveda to grow significantly in these areas, with
the opening of two new branches (Pleasanton and Midland) in 2012. In contrast,
the Mineral Wells branch has faced a significant decline in rig counts in the
Dallas/Ft. Worth Basin (Barnett Shale play), and the Company is working to
minimize revenue and EBITDA declines by focusing efforts at acquiring new
customers in higher activity areas. However, the terminal still faces
significant decreases in revenue compared to 2012, and no major recovery is
expected due to the significant reductions in rig counts in the region (40% to
50% decline in rig counts) and a portion of the revenue from this branch shifted
to the Midland branch. Pennsylvania's early results, on the other hand, show a
strong recovery both in revenue and EBITDA compared to the same period in 2012 -
this despite the 30% decline in active rigs. These results, however, are subject
to strong downward price pressures stemming from a fierce competitive
environment and a shrinking market size. The Company continues to make efforts
to obtain the best possible results under these circumstances. It is expected
that rig counts will continue the downward trend in Pennsylvania gas plays,
however management believes the decline may be partially offset by the
relocation of rigs to oil plays further west in the state.




(5) Baker Hughes Rig Count, accessed on March 7, 2013, at                   
    http://investor.shareholder.com/bhi/rig_counts/rc_index.cfm             



The Midland branch, Aveda's newest, continues to increase its activities as it
is established within the Permian Basin client base. The terminal is expected to
realize its full potential in mid-2013.


As discussed earlier, when utilizing third party equipment the Company charges
its customers a minimal markup. A significant portion of the Company's third
party revenue is derived from the US. By utilizing more Company owned equipment
instead of hiring third party contractors, the Company anticipates being able to
enjoy better gross margin contribution going forward in 2013.


In contrast with Canada, in the US, Aveda expects an increase in revenue between
40% and 50% in the first quarter of 2013, compared to the same period in 2012.
The anticipated revenue increase should result in higher EBITDA both on an
absolute basis and as a percentage of revenue as compared to the first quarter
of 2012. The year as whole, however, remains uncertain due to the market
conditions of natural gas focused plays such as the ones serviced by the Mineral
Wells and Pennsylvania branches.


The North American economy faces several macro-economic uncertainties, such as
the anemic gross domestic product growth rate, and political uncertainties that
relates to the oil and gas industries. It is not clear at this time what impact,
if any, these uncertainties will have on the North American oil and gas industry
and conversely on the operations of the Company. The Company is monitoring these
macro-economic issues through feedback from its customers and will adjust its
operations as necessary.


Due to the uncertainties discussed above, the Company does not expect
considerable capital expenditures in 2013. Excluding acquisitions the Company
anticipates investing $2.0-$5.0 million on its 2013 capital expenditure program.



About Aveda Transportation and Energy Services

Aveda provides specialized transportation of products, materials, supplies 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 and Pennsylvania.
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 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, Slave Lake, AB, Leduc, AB,
Sylvan Lake, AB Mineral Wells, TX, Pleasanton, TX, Midland, TX and Williamsport,
PA. 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 expectation to maintain revenue 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: 




--  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. 



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, 2012 (the "MD&A"). 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 and Adjusted EBITDA which are
defined in the MD&A. EBITDA and Adjusted EBITDA as presented do not have any
standardized meaning prescribed by international financial reporting standards
(IFRS) and therefore may not be comparable with the calculation of similar
measures for other entities. Management uses Adjusted EBITDA to analyze the
operating performance of the business. Adjusted 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.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Aveda Transportation and Energy Services Inc.
Bharat Mahajan, CA
Vice President, Finance and Chief Financial Officer
[phone]
[e-mail]
www.avedaenergy.com