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This presentation contains certain statements that may be deemed "forward-looking statements". All
statements in this document, other than statements of historical fact, that address events or
developments that Lonestar West Inc. (“the Company”) expects to occur, are forward looking
statements. Forward looking statements are statements that are not historical facts and are generally,
but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends",
"estimates", "projects", "potential" and similar expressions, or that events or conditions "will",
"would", "may", "could" or "should" occur.
Although the Company believes the expectations expressed in such forward-looking statements are
based on reasonable assumptions, such statements are not guarantees of future performance and
actual results may differ materially from those in the forward- looking statements. Factors that could
cause the actual results to differ materially from those in forward looking statements include, failure
to successfully negotiate or subsequently close such transactions, inability to obtain required
shareholder or regulatory approvals, uncertainty with respect to findings under exploration programs
and general economic, market or business conditions. Investors are cautioned that any such
statements are not guarantees of future performance and actual results or developments may differ
materially from those projected in the forward-looking statements. Forward looking statements are
based on the beliefs, estimates and opinions of the Company's management on the date the
statements are made. The Company undertakes no obligation to update these forward-looking
statements in the event that management's beliefs, estimates or opinions, or other factors, should
change.
Forward-Looking Statements
Page 2
Lonestar Service Area
HEAD OFFICE:
Sylvan Lake, Alberta
CANADA:
Fort McMurray, Alberta
Bonnyville, Alberta
Edmonton, Alberta
Whitecourt, Alberta
Carlyle, Saskatchewan
Moose Jaw, Saskatchewan
Melita, Manitoba
Toronto, Ontario
U.S.A.:
Sacramento, California
Witchita, Kansas
Lake Charles, Louisiana
Minot, North Dakota
Elk City, Oklahoma
Cushing, Oklahoma
Nashville, Tennessee
Beaumont, Texas
Dallas, Texas
Odessa, Texas
San Antonio, Texas
Page 3
Sacramento
San Antonio
Dallas
Odessa
Elk City
Witchita
Nashville
California
Texas
Kansas
Tennessee
Oklahoma
Fort McMurray
Bonnyville
Edmonton
Sylvan Lake
Whitecourt
Carlyle
Moose Jaw
Alberta
Saskatchewan
Manitoba
Ontario
Toronto
Tulsa
Louisiana
North Dakota
Lake Charles
Melita
Beaumont
Minot
What Is Hydro-Excavation?
The process of excavating rock and soil
to expose underground utilities and
pipelines.
Uses pressurized water to agitate the
earth, and a powerful vacuum to
remove the soil and debris.
Non-destructive method of excavating
which replaces a conventional backhoe
and manual digging.
Page 4
Benefits Of HVAC Excavation?
Safer and faster than traditional
excavation methods when operating
around sensitive infrastructure.
Can excavate frozen ground because
of onboard water heaters.
Reduces environmental liability and
potential restoration costs.
Page 5
HVAC Truck
A new HVAC truck
costs $475,000.
Lonestar currently operates
53 HVAC trucks in Canada
and 41 in the U.S.
6Page 6
HVAC Applications
Oil & Gas Industry
• Tank cleaning
• Pipeline trenching
• Facility maintenance
Utility Sector
• Piling & pole hole excavation
Communication Companies
• Uncovering buried utilities
Environmental Cleanup
• Debris removal & cleanouts
Construction Industry
• Shoring & slot trenching
Page 7
HVAC Competitors
• 80 HVAC trucks (estimated)
• 80 HVAC trucks (estimated)
• 56 HVAC trucks (estimated)
• North America’s largest
provider of non-destructive
daylighting services
• 410 HVAC trucks
in Canada
• 588 HVAC trucks
in the U.S.
Page 8
Vacuum “VAC” Truck
A new VAC truck costs
~$400,000.
Lonestar currently
operates 23 VAC trucks in
Canada; and 7 in the U.S.
Broad based
competition.
Page 9
VAC Applications
• Fuel tank cleaning
• Spill cleanup
• Car wash
• Flood damage
• Septic tanks
• Sewers
Well Sites
• Remove drilling fluids
• Disposing of fluids in either spread
fields or authorized disposal facilities
Industrial
• Fuel tank cleaning
• Spill cleanup
• Car wash
Pipeline
• Non-destructive testing
Other
• Flood damage
• Septic Tanks
• Sewers
Page 10
Safety Record
• Strong Health, Safety & Environmental
Program (HSE).
• AASP approved Certificate of
Recognition (COR).
• Prequalified by ISNetworld,
Complyworks, Canqual & PIC’s Auditing
as a low-risk supplier.
• Continuously evolving HSE program to
stay ahead of changes in the industry.
• GPS monitoring enhances safety.
• Low lost-time incident frequency.
Page 11
Lonestar Advantage
• Increased efficiency, saving time and money.
Superior Trucks
• Qualified for major corporate accounts.
Superior Safety Record
• Trained to be safe and efficient.
Top Crews
• Over 100 years combined management experience.
Experienced Managers
• Founding management.
Operating 15+ Years
Page 12
Capital Structure
Issued:
• Insiders: 8.3 m
• CEO (insider) 7.3 m
• Public float 20.9 m
Total Issued: 29.2 m
• Unexercised options: 574,909
Fully Diluted: 29.7 m
Financings:
• June/14 $20.0m @ $3.30
• July/13 $10.1m @ $2.60
• Nov/12 $3.04m @ $1.40
• Aug/11 $1.2m @ $0.60
• Dec/08 $1.2m IPO @ $0.50
Page 13
U.S. Expansion
Page 14
• U.S. growth – Continually adding to U.S. fleet.
• Key management hires.
• Growing revenue per truck.
• Increased sales by 210% in 2014.
• California has fewer Hydrovac trucks than are located in Edmonton!
What We Have Accomplished
Fleet Growth
• 153 – April 2015
• 65 – October 2013
Platform Growth
• 20 Bases – April 2015
• 9 Bases – October 2013
• U.S. operations gaining traction.
• Bought Deal Financing at a premium to recent trading for $20 m.
• Recent close of Vamp acquisition.
Page 15
Clear Growth TrendLonestar West: TSX-V LSI
(Full fiscal year changed to Dec 31 from Jun 30 as of 2014)$ Thousand
Page 16
-550
450
1,450
2,450
3,450
4,450
5,450
6,450
7,450
8,450
9,450
10,450
11,450
12,450
13,450
Q4F12 Q1F13 Q2F13 Q3F13 Q4F13 Q1F14 Q2F14 Q2 14 Q3 14 Q4 14 Q1 15
Revenue 4,442 6,156 6,750 8,777 6,212 8,301 9,281 9,555 13,016 13,161 13,312
Net Earnings (loss) -198 664 624 762 -448 92 -280 -132 771 -400 210
EBITDAC 381 1,267 1,145 1,556 209 912 420 808 2,442 1,168 2,242
Revenue
Leadership TeamOfficers
James Horvath – President & Chief Executive Officer
David Prussky - Chairman
Kristin York – Vice President
Mark Kearl – V.P. Finance & Chief Financial Officer
Directors
James Horvath – President & Chief Executive Officer
Tracy Graf – CEO, Carfinco Financial Group Inc.
Joe MacLean – President and CEO, AOI Capital, LLC
Maurice Kagan – CEO, Danika Associates Limited
David Prussky – Director, Patica Securities Limited
Senior Managers20 senior HVAC and Vacuum managers(includes U.S. Business Development, U.S. & Canadian Operations Managers and all Base Managers)
Page 17
Key Investment Highlights
Large and growing client base
Diversified
U.S. Expansion
Quickly becoming a noted competitor
in the Canadian HVAC industry
Energy, infrastructure &
mining
South Central U.S.
California (utilities & infrastructure)
Page 18
Key Investment Highlights
Strong projected growth.
Superior safety record.
Highly experienced management
with field experience.
28% inside ownership.
Page 19
Analyst Coverage
Target
Price
BUY
$4.25
BUY
$4.00
Strong BUY
$3.75
Outperform
$4.00
Forecast
Revenue
2015
$72.2
Million
$81.5
Million
$56.0
Million
$63.4
Million
Forecast
EBITDA
2014 / 8.7 m
2015 / 14.3 m
2014 / 7.7 m
2015 / 15.1 m
2014 / 6.4 m
2015 / 10.0 m
2014 / 8.4 m
2015 / 10.8 m
Page 20