Increased Efficiency Helps Drive Q2 Adjusted
EBITDA to ~$96 Million and Related Margin of Almost 21%
ProPetro Holding Corp. (“ProPetro” or “the Company”) (NYSE:
PUMP) today announced record financial and operational results for
the second quarter of 2018.
Second Quarter 2018 and Recent Highlights
- Total revenue for the quarter increased
approximately 19% to $459.9 million, compared to $385.2 million for
the first quarter of 2018.
- Net income for the quarter was $39.1
million, or $0.45 per diluted share, as compared to $36.7 million,
or $0.42 per diluted share, for the first quarter of 2018.
- Adjusted EBITDA for the quarter was
$96.0 million, up 25% from $76.7 million for the first quarter of
2018.
- Frac fleet remained fully utilized,
including deployment of one new-build fleet during the quarter.
Period ending capacity was 860,000 HHP, or 19 fleets – more than a
5% increase as compared to 815,000 HHP at the end of the first
quarter of 2018.
- As previously announced, the Company
plans to take delivery of and deploy one additional fleet in the
fourth quarter of 2018. This addition will increase total frac
fleet capacity to 905,000 HHP, or 20 fleets.
Adjusted EBITDA is a Non-GAAP financial measure and is described
and reconciled to net income (loss) in the table under “Non-GAAP
Financial Measures.”
Dale Redman, Chief Executive Officer, commented, “Our success
during the second quarter was a direct result of our continued
collaboration with a blue-chip customer base that remains focused
on driving efficiencies in their completion techniques coupled with
the outstanding execution of our operations team. As we have
discussed previously, we anticipate Permian completions to further
evolve into a manufacturing approach for the foreseeable future.
Through leveraging our proven business model and fully-utilized
fleet, we believe ProPetro is solidly positioned for continued
success in this environment.”
Second Quarter 2018 Financial Summary
Revenue for the second quarter of 2018 was $459.9 million, or
19% higher than $385.2 million for the first quarter of 2018. The
increase was primarily attributable to increased fleet size as well
as a more efficient job mix than the prior quarter. During the
second quarter of 2018, 96.9% of total revenue was associated with
pressure pumping services, compared to 97.4% in the first
quarter.
Costs of services excluding depreciation and amortization for
the second quarter of 2018 increased to $351.9 million from $298.1
million during the first quarter of 2018 primarily due to higher
activity levels, increased fleet size, as well as an associated
increase in headcount. As a percentage of pressure pumping segment
revenues, pressure pumping costs of services remained relatively
unchanged as compared to the first quarter of 2018.
General and administrative expense was $14.2 million as compared
to $11.9 million in the first quarter of 2018. The increase was
primarily attributable to higher payroll costs and stock
compensation expense. General and administrative expense, exclusive
of stock-based compensation and deferred IPO bonus, was $12.0
million or 2.6% of revenue for the second quarter of 2018.
Net income for the second quarter of 2018 totaled $39.1 million,
or $0.45 per diluted share, versus $36.7 million, or $0.42 per
diluted share, for the first quarter of 2018.
Adjusted EBITDA increased approximately 25% to $96.0 million for
the second quarter of 2018 from $76.7 million in the previous
quarter. Adjusted EBITDA margin for the second quarter of 2018 was
21%, as compared to the approximately 20% for the first quarter of
2018.
Operational Highlights and Fleet Expansion
Active HHP deployed during the quarter averaged 852,500, or 18.8
fleets, and active HHP at quarter end was 860,000, or 19 fleets,
including an additional new-build 45,000 HHP fleet that commenced
operations in April with a dedicated customer. As previously
announced, to support continued demand for pressure pumping
services, ProPetro plans to expand its fracturing capacity by an
additional 45,000 HHP, or one fleet, in the fourth quarter of 2018,
bringing 2018 year-end capacity to 905,000 HHP, or 20 fleets. This
fleet will also work under a dedicated agreement with an existing
customer.
The Company also deployed one new build cementing unit in July
bringing total cementing capacity to 18 units. To support growing
demand, ProPetro plans to further expand its cementing fleet
capacity with two additional new-build units that are targeted to
commence operations later this year.
Liquidity and Capital Spending
As of June 30, 2018, total cash was $27.1 million and total debt
was $105.7 million. Total liquidity at the end of the second
quarter of 2018 was $131.3 million, including cash and $104.2
million of capacity under the Company’s $200 million revolving
credit facility.
Capital expenditures incurred during the second quarter of 2018
were $70.5 million, which reflects spending on ProPetro’s growth
initiatives as well as maintenance capital.
Outlook
Mr. Redman concluded, “While there is significant discussion
concerning transitory crude takeaway infrastructure constraints in
the Permian, we believe we are best positioned for ongoing
long-term outperformance given our industry-leading execution and
service differentiation. Supported by our unique Permian focus,
deep relationships and a best-in-class, fully-utilized frac fleet,
we have a solid outlook well into 2019. As a result, we will
continue to evaluate opportunities to prudently invest in our
business to support the needs of our customers and produce value
for shareholders.”
Conference Call Information
The Company will host a conference call at 8:00 AM Central Time
on Wednesday, August 8, 2018 to discuss financial and operating
results for the second quarter of 2018 and recent developments.
This call will also be webcast, along with a presentation slide
deck on ProPetro’s website at www.propetroservices.com. The slide
deck will be published on the website the morning of the call. To
access the conference call, U.S. callers may dial toll free
1-844-340-9046 and international callers may dial 1-412-858-5205.
Please call ten minutes ahead of the scheduled start time to ensure
a proper connection. A replay of the conference call will be
available for one week following the call and can be accessed toll
free by dialing 1-877-344-7529 for U.S. callers, 1-855-669-9658 for
Canadian callers, as well as 1-412-317-0088 for international
callers. The access code for the replay is 10120970.
About ProPetro
ProPetro Holding Corp. is a Midland, Texas-based oilfield
services company providing pressure pumping and other complementary
services to leading upstream oil and gas companies engaged in the
exploration and production of North American unconventional oil and
natural gas resources.
Forward-Looking Statements
The information above includes forward-looking statements within
the meaning of the Securities Act of 1933 and the Securities
Exchange Act of 1934. These forward-looking statements are subject
to certain risks, uncertainties and assumptions identified above or
as disclosed from time to time in the Company’s filings with the
Securities and Exchange Commission. As a result of these factors,
actual results may differ materially from those indicated or
implied by such forward-looking statements.
PROPETRO HOLDING CORP. AND
SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS (In thousands, except per share data)
(Unaudited) Three Months Ended June 30
March 31 June 30 2018
2017 2017 REVENUE - Service
revenue $ 459,888 $ 385,219 $ 213,492 COSTS AND EXPENSES Cost of
services (exclusive of depreciation and amortization) 351,888
298,122 176,777 General and administrative (inclusive of
stock-based compensation) 14,178 11,944 7,916 Depreciation and
amortization 21,276 18,936 12,706 Loss on disposal of assets
18,990 7,665 9,787 Total costs
and expenses 406,332 336,667 207,186 OPERATING INCOME (LOSS) 53,556
48,552 6,306 OTHER INCOME (EXPENSE): Interest expense (2,231 )
(1,261 ) (650 ) Other expense (182 ) (230 )
(627 ) Total other income (expense) (2,413 ) (1,491 ) (1,277 )
INCOME (LOSS) BEFORE INCOME TAXES 51,143 47,061 5,029 INCOME TAX
(EXPENSE)/BENEFIT (12,052 ) (10,353 ) (108 )
NET INCOME (LOSS) $ 39,091 $ 36,708 $ 4,921
NET INCOME (LOSS) PER COMMON SHARE: Basic $ 0.47 $ 0.44
$ 0.06 Diluted $ 0.45 $ 0.42 $ 0.06
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic
83,447 83,081 83,040 Diluted
86,878 86,848 86,279
PROPETRO HOLDING CORP. AND
SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS (In
thousands, except share data) (Unaudited) June
30, 2018 December 31, 2017 ASSETS CURRENT ASSETS:
Cash and cash equivalents $ 27,103 $ 23,949 Accounts receivable -
net of allowance for doubtful accounts of $457 and $443,
respectively 316,498 199,656 Inventories 7,744 6,184 Prepaid
expenses 3,451 5,123 Other current assets 1,131
748 Total current assets 355,927 235,660 PROPERTY AND
EQUIPMENT - Net of accumulated depreciation 551,253 470,910 OTHER
NONCURRENT ASSETS: Goodwill 9,425 9,425 Intangible assets - net of
amortization 157 301 Deferred revenue rebate - net of amortization
- 615 Other noncurrent assets 2,253 2,121
Total other noncurrent assets 11,835
12,462 TOTAL ASSETS $ 919,015 $ 719,032
LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES:
Accounts payable $ 268,562 $ 211,149 Accrued liabilities 26,329
16,607 Current portion of long-term debt 10,716 15,764 Accrued
interest payable 506 76 Total current
liabilities 306,113 243,596 DEFERRED INCOME TAXES 26,473 4,881
LONG-TERM DEBT 95,000 57,178 OTHER LONG-TERM LIABILITIES 126
125 Total liabilities 427,712 305,780
COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY: Common stock,
$0.001 par value, 200,000,000 shares authorized, 83,543,646 and
83,039,854 shares issued, respectively 84 83 Additional paid-in
capital 609,717 607,466 Accumulated deficit (118,498 )
(194,297 ) Total shareholders’ equity 491,303
413,252 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY $
919,015 $ 719,032
PROPETRO HOLDING CORP. AND SUBSIDIARY CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands)
(Unaudited) Six Months Ended June 30,
2018 2017 CASH FLOWS FROM
OPERATING ACTIVITIES: Net income (loss) $ 75,799 $ (19,431 )
Adjustments to reconcile net income (loss) to net cash provided by
(used in) operating activities: Depreciation and amortization
40,211 23,857 Deferred income tax benefit 21,592 111 Amortization
of deferred revenue rebate 615 923 Amortization of deferred debt
issuance costs 191 3,240 Stock-based compensation 2,201 7,978 Loss
on disposal of assets 27,804 20,229 (Gain) on interest rate swap -
(199 ) Changes in operating assets and liabilities: Accounts
receivable (116,843 ) (32,641 ) Other current assets (383 ) 3,423
Inventories (1,559 ) (107 ) Prepaid expenses 1,708 (2,321 )
Accounts payable 59,109 (2,812 ) Accrued liabilities and other
current liabilities 12,941 (2,605 ) Accrued interest 1,056
(108 ) Net cash provided by operating activities
124,442 (463 ) CASH FLOWS FROM INVESTING
ACTIVITIES: Capital expenditures (152,191 ) (112,630 ) Proceeds
from sale of assets 2,282 1,229 Net
cash used in investing activities (149,909 ) (111,401
) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from borrowings
57,378 232 Repayments of borrowings (25,230 ) (163,128 ) Repayments
of insurance financing (3,218 ) (2,476 ) Payment of debt issuance
costs (360 ) (1,653 ) Proceeds from exercise of equity awards 51
Proceeds from IPO - 185,500 Payment of deferred IPO costs -
(15,099 ) Net cash provided by financing activities
28,621 3,376 NET INCREASE (DECREASE) IN
CASH AND CASH EQUIVALENTS 3,154 (108,488 ) CASH AND CASH
EQUIVALENTS — Beginning of period 23,949
133,596 CASH AND CASH EQUIVALENTS — End of period $ 27,103
$ 25,108
Reportable Segment Information Three
Months Ended June 30, 2018 March 31, 2018 ($
in thousands)
PressurePumping
All Other Total
PressurePumping
All Other Total Service revenue
$
445,805 $ 14,083
$ 459,888 $
375,045 $ 10,174
$ 385,219 Adjusted EBITDA $ 97,818 $
(1,850 ) $ 95,968 $ 79,063 $ (2,319 ) $ 76,744 Depreciation and
amortization $ 20,042 $ 1,234 $ 21,276 $ 17,763 $ 1,173
$ 18,936 Capital expenditures $ 68,106 $ 2,437 $
70,543 $ 77,435 $ 2,519 $ 79,954
Non-GAAP Financial Measures
Adjusted EBITDA is not a financial measure presented in
accordance with GAAP. We believe that the presentation of this
non-GAAP financial measure provides useful information to investors
in assessing our financial condition and results of operations. Net
income is the GAAP measure most directly comparable to Adjusted
EBITDA. Non-GAAP financial measures should not be considered as
alternatives to the most directly comparable GAAP financial
measure. Non-GAAP financial measures have important limitations as
analytical tools because they exclude some, but not all, items that
affect the most directly comparable GAAP financial measures. You
should not consider Adjusted EBITDA in isolation or as a substitute
for an analysis of our results as reported under GAAP. Because
Adjusted EBITDA may be defined differently by other companies in
our industry, our definitions of this non-GAAP financial measure
may not be comparable to similarly titled measures of other
companies, thereby diminishing their utility.
Reconciliation of Net Income (Loss) to Adjusted EBITDA
Three Months Ended June 30, 2018 March 31,
2018 ($ in thousands)
PressurePumping
All Other Total
PressurePumping
All Other Total Net income (loss) $ 57,524 $
(18,433 ) $ 39,091 $ 52,934 $ (16,226 ) $ 36,708 Depreciation and
amortization 20,042 1,234 21,276 17,763 1,173 18,936 Interest
expense - 2,231 2,231 - 1,261 1,261 Income tax expense - 12,052
12,052 - 10,353 10,353 Loss on disposal of assets 19,823 (833 )
18,990 7,828 (163 ) 7,665 Stock-based compensation - 1,443 1,443 -
758 758 Other expense and legal settlement 2 198 200 - 231 231
Deferred IPO bonus expense 427 258 685
538 294 832 Adjusted EBITDA $ 97,818 $
(1,850 ) $ 95,968 $ 79,063 $ (2,319 ) $ 76,744
View source
version on businesswire.com: https://www.businesswire.com/news/home/20180807005857/en/
ProPetro Holding CorpSam Sledge, 432-688-0012Director of
Investor Relationssam.sledge@propetroservices.com
ProPetro (NYSE:PUMP)
Historical Stock Chart
From Mar 2024 to Apr 2024
ProPetro (NYSE:PUMP)
Historical Stock Chart
From Apr 2023 to Apr 2024