HOUSTON, March 10, 2020 /PRNewswire/ -- NexTier
Oilfield Solutions Inc. (NYSE: NEX) ("NexTier" or the "Company")
today reported fourth quarter and full year 2019 financial and
operational results. On October 31,
2019, NexTier completed its previously announced merger
between Keane Group Inc. ("Keane") and C&J Energy Services,
Inc. ("C&J"), and concurrent with closing, Keane, as the parent
company, was renamed NexTier Oilfield Solutions Inc. Given
the merger close date of October 31,
2019, GAAP financial results for the fourth quarter of 2019
include the full quarterly results of legacy Keane, and legacy
C&J results from November 1, 2019
through December 31, 2019. Pro
forma financial results(1) for the third and fourth
quarters of 2019 include the full quarterly results of both Keane
and C&J giving effect to the merger as if it had closed on
January 1, 2019.
Full Year 2019 Results
- Reported GAAP revenue of $1.8
billion and pro forma revenue of $3.4
billion for the year ended December
31, 2019
- Reported GAAP net loss of $106.2
million and pro forma net loss of $196.6 million for the year ended December 31, 2019
- Achieved total pro forma Adjusted EBITDA(2) of
$446.3 million for the year ended
December 31, 2019
Fourth Quarter 2019 Results and Recent Highlights
- Reported GAAP revenue of $528.2
million, compared to $444.0
million of GAAP revenue in the third quarter of 2019; pro
forma revenue totaled $648.4 million,
compared to pro forma revenue of $896.6
million in the third quarter of 2019
- Reported GAAP net loss of $82.9
million, compared to GAAP net income of $3.6 million in the third quarter of 2019; pro
forma net loss totaled $106.6
million, compared to pro forma net loss of $10.4 million in the third quarter of 2019
- Achieved total pro forma Adjusted EBITDA(2) of
$77.6 million, compared to total pro
forma Adjusted EBITDA of $137.8
million in the third quarter of 2019
- Averaged 25 pro forma fully-utilized fracturing fleets in the
fourth quarter of 2019; forecasting an average of 28 fully-utilized
fracturing fleets in the first quarter of 2020
- Generated Completion Services segment Adjusted Gross Profit of
$105.1 million, compared to
$109.3 million in the third quarter
of 2019
- Achieved Adjusted Gross Profit, when taking only fracturing and
bundled wireline into account, of $99.2
million, compared to Adjusted Gross Profit of $109.3 million in the third quarter of 2019; pro
forma Adjusted Gross Profit totaled $97.7
million, compared to pro forma Adjusted Gross Profit of
$153.6 million in the third quarter
of 2019
- Generated pro forma annualized adjusted gross profit per
fully-utilized fracturing fleet, when only taking fracturing and
bundled wireline into account, of $15.6
million, compared to pro forma annualized adjusted gross
profit per fully-utilized fracturing fleet of $18.6 million in the third quarter of 2019
- On pace to capture previously announced targeted annualized run
rate cost synergies of $125 million
by the end of the second quarter of 2020; identified approximately
$80 million of incremental cash
synergies with estimated capture by year-end 2020
- Exited the fourth quarter with $255
million in cash and $304
million of available borrowing capacity under our
asset-based credit facility
- Divested our Well Support Services segment on March 9, 2020 to Basic Energy Services for
$93.7 million in total consideration,
including $59.35 million of cash
consideration before transaction costs and escrowed amounts
Fourth Quarter 2019 Financial Results
(USD in thousands,
except per share amounts)
|
|
Three Months
Ended
|
|
Previously
Disclosed
Guidance for the
Three Months Ended
December 31, 2019
|
|
|
December 31,
2019
|
|
September 30,
2019
|
|
GAAP
revenue
|
|
$
|
528,216
|
|
|
$
|
443,953
|
|
|
|
GAAP net income
(loss)
|
|
(82,928)
|
|
|
3,558
|
|
|
|
GAAP net income
(loss) per share
|
|
$
|
(0.47)
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
|
|
|
Pro forma
revenue
|
|
$
|
648,434
|
|
|
$
|
896,616
|
|
|
$640,000 ¯
$660,000
|
Pro forma net
loss
|
|
(106,553)
|
|
|
(10,410)
|
|
|
|
Pro forma net loss
per share
|
|
$
|
(0.50)
|
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
Pro forma Adjusted
EBITDA
|
|
$
|
77,564
|
|
|
$
|
137,764
|
|
|
$73,000 ¯
$78,000
|
Pro forma Adjusted
net income (loss)
|
|
(19,069)
|
|
|
41,523
|
|
|
|
Pro forma Adjusted
net income (loss) per share
|
|
$
|
(0.09)
|
|
|
$
|
0.20
|
|
|
|
GAAP revenue totaled $528.2
million in the fourth quarter of 2019 compared to GAAP
revenue of $444.0 million in the
third quarter of 2019. Pro forma revenue totaled $648.4 million in the fourth quarter of 2019,
compared to our previously disclosed guidance range of $640 million to $660
million. This compared to pro forma revenue of
$896.6 million in the third quarter
of 2019.
GAAP net loss totaled $82.9
million, or $0.47 per diluted
share, in the fourth quarter of 2019, compared to GAAP net income
of $3.6 million, or $0.03 per diluted share, in the third quarter of
2019. Pro forma net loss totaled $106.6 million, or $0.50 per diluted share, in the fourth quarter of
2019, compared to pro forma net loss of $10.4 million, or $0.05 per diluted share, in the third quarter of
2019. Pro forma Adjusted net loss(2) totaled
$19.1 million, or $0.09 per diluted share, in the fourth quarter of
2019, compared to pro forma Adjusted net income of $41.5 million, or $0.20 per diluted share, in the third quarter of
2019.
GAAP selling, general and administrative expense ("SG&A")
totaled $42.7 million in the fourth
quarter of 2019, compared to GAAP SG&A of $26.6 million in the third quarter of 2019.
Pro forma SG&A totaled $70.1
million in the fourth quarter of 2019, compared to pro forma
SG&A of $102.4 million in the
third quarter of 2019. Excluding management adjustments, pro
forma Adjusted SG&A totaled $54.2
million in the fourth quarter of 2019, compared to pro forma
Adjusted SG&A of $65.8
million in the third quarter of 2019.
Total pro forma Adjusted EBITDA totaled $77.6 million in the fourth quarter of 2019,
compared to our previously disclosed guidance range of $73 million to $78
million. This compared to total pro forma Adjusted
EBITDA of $137.8 million in the third
quarter of 2019.
"I am pleased that our fourth quarter financial results exceeded
the initial outlook on profitability provided just after closing
the merger with C&J," said Robert
Drummond, President and Chief Executive Officer of
NexTier. "Despite a challenging market backdrop, we stayed
focused on our partnership model of working closely with our
customers, managing what was in our direct control, and driving
costs out of operations. Our focus enabled us to achieve
better than expected operational efficiency and commendable
relative profitability during a quarter with challenging
market-driven obstacles. We continue to make swift progress
with the integration process and the resulting improved cost
efficiency."
"Notwithstanding the recent oil price volatility, NexTier will
remain nimble and is uniquely positioned to effectively navigate
these challenges. This includes a strong balance sheet and
liquidity position that allows us to be offensive and defensive,
with plenty of runway on our debt maturity through 2025, alignment
with a base of resilient customers, and a track record of adjusting
our cost structure in response to challenging market
conditions."
Fourth Quarter 2019 Management Adjustments
Total pro forma Adjusted EBITDA in the fourth quarter of 2019
includes management adjustments of $87.5
million consisting of $55.0
million of merger and integration related costs primarily
driven by severance and accelerated non-cash stock compensation
expense, $12.3 million of non-cash
impairment expense mostly associated with the retirement of the
Keane trade name, $5.6 million of
non-cash stock compensation expense, and $14.5 million of other costs driven by tax and
litigation reserves and facility closures.
Business Segment Results
Completion Services
GAAP revenue in our Completion Services segment totaled
$440.3 million in the fourth quarter
of 2019, compared to GAAP revenue of $437.3
million in the third quarter of 2019. Pro forma
revenue in our Completion Services segment totaled $509.8 million in the fourth quarter of 2019,
compared to pro forma revenue of $735.2
million in the third quarter of 2019. The sequential
decrease in pro forma revenue was driven by reduced asset
deployment and decreased customer activity levels due to year-end
seasonality and budget exhaustion. Adjusted Gross Profit totaled
$105.1 million in the fourth quarter
of 2019, compared to Adjusted Gross Profit of $109.3 million in the third quarter of
2019. Pro forma Adjusted Gross Profit totaled $105.6 million in the fourth quarter of 2019,
compared to pro forma Adjusted Gross Profit of $168.9 million in the third quarter of
2019. Pro forma net loss totaled $21.5
million, resulting in pro forma Adjusted EBITDA of
$83.3 million in the fourth quarter
of 2019, compared to pro forma net income of $54.5 million, resulting in pro forma Adjusted
EBITDA of $141.3 million in the third
quarter of 2019.
The Company had an average of 25 pro forma fully-utilized
fracturing fleets in the fourth quarter of 2019. When taking
only fracturing and bundled wireline into account, annualized pro
forma Adjusted Gross Profit per fully-utilized fracturing fleet
totaled $15.6 million in the fourth
quarter of 2019, compared to annualized pro forma Adjusted Gross
Profit per fully-utilized fracturing fleet of $18.6 million in the third quarter of 2019.
Well Construction and Intervention Services
GAAP revenue in our Well Construction and Intervention
("WC&I") Services segment, totaled $39.4
million in the fourth quarter of 2019, compared to GAAP
revenue of $6.6 million in the third
quarter of 2019. Pro forma revenue in our WC&I segment
totaled $57.7 million in the fourth
quarter of 2019, compared to pro forma revenue of $66.9 million in the third quarter of 2019.
Adjusted Gross Profit totaled $6.8
million in the fourth quarter of 2019, compared to Adjusted
Gross Profit of $1.2 million in the
third quarter of 2019. Pro forma Adjusted Gross Profit
totaled $9.1 million in the fourth
quarter of 2019, compared to pro forma Adjusted Gross Profit of
$13.2 million in the third quarter of
2019. Pro forma net income totaled $0.3 million, resulting in pro forma Adjusted
EBITDA of $7.2 million in the fourth
quarter of 2019, compared to pro forma net income of $2.3 million, resulting in pro forma Adjusted
EBITDA of $9.1 million in the third
quarter of 2019.
Well Support Services
GAAP revenue in our Well Support Services segment, which only
includes the period after the completion of the merger on
October 31, 2019, totaled
$48.6 million in the fourth quarter
of 2019. Pro forma revenue in our Well Support Services
segment totaled $80.9 million in the
fourth quarter of 2019, compared to pro forma revenue of
$94.5 million in the third quarter of
2019. Adjusted Gross Profit totaled $8.0
million in the fourth quarter of 2019. Pro forma
Adjusted Gross Profit totaled $14.9
million in the fourth quarter of 2019, compared to pro forma
Adjusted Gross Profit of $14.3
million in the third quarter of 2019. The sequential
decrease in pro forma revenue mostly pertained to the divestiture
of the majority of our fluids management assets in West and
South Texas on July 31, 2019. Pro forma net income totaled
$5.3 million, resulting in pro forma
Adjusted EBITDA of $9.2 million in
the fourth quarter of 2019, compared to a pro forma net income of
$2.3 million, resulting in pro forma
Adjusted EBITDA of $12.4 million in
the third quarter of 2019.
Balance Sheet and Capital
Total debt outstanding as of December 31,
2019 totaled $338 million, net
of debt discounts and deferred finance costs and excluding lease
obligations. As of December 31,
2019, cash and equivalents totaled $255 million, and total available liquidity was
$559 million, which included
$304 million of available borrowing
capacity under our asset-based credit facility.
Total operating cash flow was $80
million and cash flow used in investing activities was
$44 million, resulting in free cash
flow of $36 million in the fourth
quarter of 2019. Combined operating cash flow, which includes
the full quarterly results for both legacy Keane and C&J, was
$48 million and cash flow used in
investing activities was $54 million
resulting in combined free cash flow usage of $6 million in the fourth quarter of
2019. Excluding cash used for merger and integration related
costs of $61 million, combined
Adjusted free cash flow totaled $55
million in the fourth quarter of 2019.
On March 9, 2020, we divested our
Well Support Services segment to Basic Energy Services for
approximately $93.7 million in total
consideration that included $59.35
million in cash consideration before transaction costs,
escrowed amounts, and subject to customary working capital
adjustments.
First Quarter 2020 Update
For the first quarter of 2020, the Company expects to deploy an
average of 28 fully-utilized fracturing fleets compared to 25
fully-utilized fracturing fleets deployed in the fourth
quarter. We expect increased activity levels to be offset by
lower overall pricing and the divestiture of our Well Support
Service segment on March 9, 2020.
"In light of the ongoing market and commodity price volatility,
NexTier is taking the necessary steps to protect our business,"
said Kenneth Pucheu, Senior Vice
President and Chief Financial Officer of NexTier. "NexTier is
well fortified with a strong balance sheet, further enhanced
liquidity position, and an experienced management team to navigate
through these challenging market headwinds."
Conference Call Information
The Company's executive management team will host a conference
call on Wednesday, March 11, 2020 at
8:30 a.m. ET / 7:30 a.m. CT to discuss our fourth quarter 2019
financial and operating results. Interested parties may
listen to the conference call via a live webcast accessible on our
website at www.nextierofs.com or by calling U.S. (Toll Free):
1-855-560-2574 or International: 1-412-542-4160 and asking for the
"NexTier Oilfield Solutions' Earnings Call." Please dial-in
ten to fifteen minutes before the scheduled call time to
avoid any delays entering the earnings call. An archive of
the webcast will be available shortly after the call on our website
at www.nextierofs.com for twelve months following the call. A
replay of the call will also be available for one week by calling
U.S. (Toll Free): 1-877-344-7529 or International: 1-412-317-0088,
using the access code: 10138991.
About NexTier Oilfield Solutions
Headquartered in Houston,
Texas, NexTier is an industry-leading U.S. land oilfield
service company, with a diverse set of well completion and
production services across the most active and demanding
basins. Our integrated solutions approach delivers efficiency
today, and our ongoing commitment to innovation helps our customers
better address what is coming next. NexTier is differentiated
through four points of distinction, including safety performance,
efficiency, partnership and innovation. At NexTier, we
believe in living our core values from the basin to the boardroom,
and helping customers win by safely unlocking affordable, reliable
and plentiful sources of energy.
Pro forma information and Non-GAAP Financial Measures
(1)
|
Pro forma information
before management adjustments was determined in accordance with
Article 11 of Regulation S-X and is presented to enhance
comparability to the prior quarter pre-merger operating results by
adjusting for the merger of Keane and C&J.
|
|
|
(2)
|
The Company has
included in this press release certain non-GAAP financial measures,
some of which are calculated on a consolidated basis, segment
basis, product line basis, combined basis or pro forma basis,
including Adjusted EBITDA, Adjusted Gross Profit, Adjusted Net
Income (loss), free cash flow, Adjusted free cash flow, Adjusted
SG&A and annualized adjusted gross profit per fully-utilized
fracturing fleet. These measurements provide supplemental
information which the Company believes is useful to analysts and
investors to evaluate its ongoing results of operations, when
considered alongside GAAP measures such as net income and operating
income. These non-GAAP financial measures exclude the
financial impact of items management does not consider in assessing
the Company's ongoing operating performance, and thereby facilitate
review of the Company's operating performance on a period-to-period
basis. Other companies may have different capital structures,
and comparability to the Company's results of operations may be
impacted by the effects of acquisition accounting on its
depreciation and amortization. As a result of the effects of
these factors and factors specific to other companies, the Company
believes Adjusted EBITDA, Adjusted Gross Profit, Adjusted SG&A
and Adjusted Net Income provide helpful information to analysts and
investors to facilitate a comparison of its operating performance
to that of other companies. The Company believes free cash
flow and Adjusted free cash flow is important to investors in that
it provides a useful measure to assess management's effectiveness
in the areas of profitability and capital management.
Annualized Gross Profit per fully-utilized fracturing fleet is used
to evaluate the operating performance of the business line for
comparable periods, and the Company believes it is important as an
indicator of operating performance of our fracturing and bundled
wireline product line because it excludes the effects of the
capital structure and certain non-cash items from the product
line's operating results. For a reconciliation of these
non-GAAP measures, please see the tables at the end of this press
release.
|
|
|
(3)
|
Non-GAAP Measure
Definitions: Adjusted EBITDA is defined as net income (loss)
adjusted to eliminate the impact of interest, income taxes,
depreciation and amortization, along with certain items management
does not consider in assessing ongoing performance. Adjusted Gross
Profit is defined as revenue less cost of services, further
adjusted to eliminate items in cost of services that management
does not consider in assessing ongoing performance. Adjusted Gross
Profit at the segment level is not considered to be a non-GAAP
financial measure as it is our segment measure of profit or loss
and is required to be disclosed under GAAP pursuant to ASC 280.
Adjusted Net Income (Loss) is defined as net income (loss) plus the
after-tax amount of merger/transaction-related costs and other
non-routine items. Adjusted SG&A is defined as selling, general
and administrative expenses adjusted for severance and business
divestiture costs, merger/transaction-related costs, and other
non-routine items. Free cash flow is defined as the net increase
(decrease) in cash and cash equivalents before financing
activities, including share repurchase activity. Adjusted free cash
flow adjusts free cash flow for certain management adjustments.
Annualized Adjusted Gross Profit per fully-utilized fleet, is a
non-GAAP measure and is defined as (i) revenue less cost of
services attributable to the fracturing and bundled wireline
product line, further adjusted to eliminate items in cost of
services that management does not consider in assessing ongoing
performance for the fracturing and bundled wireline product line,
(ii) divided by the fully-utilized fracturing and bundled wireline
fleets (average deployed fleets multiplied by fleet utilization)
per quarter, and then (iii) multiplied by four.
|
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties and are made pursuant
to the safe harbor provisions of Section 27A of the Securities Act
of 1993, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended. Where a forward-looking statement expresses or
implies an expectation or belief as to future events or results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. The words "believe," "continue,"
"could," "expect," "anticipate," "intends," "estimate," "forecast,"
"project," "should," "may," "will," "would" or the negative thereof
and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions and involve known and unknown risks and
uncertainties, many of which are beyond the Company's control.
Statements in this press release regarding the Company that are
forward-looking, including projections as to the amount and timing
of synergies from C&J merger and the Company's 2020 guidance
and outlook information, are based on management's estimates,
assumptions and projections, and are subject to significant
uncertainties and other factors, many of which are beyond the
Company's control. These factors and risks include, but are not
limited to, (i) the competitive nature of the industry in which the
Company conducts its business, including pricing pressures; (ii)
the ability to meet rapid demand shifts; (iii) the impact of
pipeline capacity constraints and adverse weather conditions in oil
or gas producing regions; (iv) the ability to obtain or renew
customer contracts and changes in customer requirements in the
markets the Company serves; (v) the ability to identify, effect and
integrate acquisitions, joint ventures or other transactions; (vi)
the ability to protect and enforce intellectual property rights;
(vii) the effect of environmental and other governmental
regulations on the Company's operations; (viii) the effect of a
loss of, or interruption in operations of, one or more key
suppliers, including resulting from product defects, recalls or
suspensions; (ix) the variability of crude oil and natural gas
commodity prices; (x) the market price and availability of
materials or equipment; (xi) the ability to obtain permits,
approvals and authorizations from governmental and third parties;
(xii) the Company's ability to employ a sufficient number of
skilled and qualified workers to combat the operating hazards
inherent in the Company's industry; (xiii) fluctuations in the
market price of the Company's stock; (xiv) the level of, and
obligations associated with, the Company's indebtedness; (xv) the
duration, impact and severity of the novel coronavirus (COVID-19)
outbreak; and (xvi) other risk factors and additional information.
In addition, material risks that could cause actual results to
differ from forward-looking statements include: the inherent
uncertainty associated with financial or other projections; the
prompt and effective integration of C&J's businesses into the
Company and the ability to achieve the anticipated synergies and
value-creation contemplated in connection with the merger. For a
more detailed discussion of such risks and other factors, see the
Company's filings with the Securities and Exchange Commission (the
"SEC"), including under the heading "Risk Factors" in Item 1A of
the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 available on the
SEC website or www.NexTierOFS.com. The Company assumes no
obligation to update any forward-looking statements or information,
which speak as of their respective dates, to reflect events or
circumstances after the date of this Current Report on Form 8-K, or
to reflect the occurrence of unanticipated events, except as may be
required under applicable securities laws. Investors should not
assume that any lack of update to a previously issued
"forward-looking statement" constitutes a reaffirmation of that
statement.
Coronavirus Monitoring and Planning
The Company is monitoring the spread and impact of the
coronavirus closely, and is implementing measures in accordance
with local directives, as well as internal policies, to protect
employees and limit business interruption. These measures
include restrictions on travel and employee contact in certain
regions, employee education, enhanced customer and supplier
communication, alternative sourcing, and other measures. The
Company is also preparing mitigation plans for further or prolonged
impact from the coronavirus.
Merger of Equals
On October 31, 2019, Keane and
C&J completed their merger and concurrent with closing, Keane,
as the parent company, was renamed NexTier. In accordance
with the terms of the Agreement and Plan of Merger, dated as of
June 16, 2019, by and among NexTier,
C&J and King Merger Sub Corp., a wholly owned subsidiary of
NexTier ("Merger Sub"), Merger Sub merged with and into C&J,
with C&J surviving the merger as a wholly owned subsidiary of
NexTier. Immediately following the merger, C&J was merged
with and into King Merger Sub II LLC ("LLC Sub"), with LLC Sub
continuing as the surviving entity as a wholly-owned subsidiary of
NexTier and as the successor to C&J. Keane was determined
to be the accounting acquirer in the merger, and as a result, the
historical financial statements of Keane, prepared under U.S.
generally accepted accounting principles ("GAAP"), for the periods
prior to the merger are considered to be the historical financial
statements of NexTier.
Unaudited Pro Forma Financial Information
In order to provide the most meaningful comparison of results of
operations and results by segment, supplemental unaudited pro forma
financial information has been included in the following financial
schedules. The unaudited pro forma financial information is based
on the historical consolidated financial statements and
accompanying notes of both Keane and C&J and has been prepared
to illustrate the effects of the merger, assuming the merger had
been consummated on January 1, 2019.
For all periods presented, adjustments have been made for (1) the
preliminary acquisition accounting impact, (2) accounting policy
alignment, and (3) the elimination of the impact from events that
are directly attributable to the Agreement and Plan of Merger
(e.g., non-routine merger and integration costs). The
unaudited pro forma financial information was based on and should
be read in conjunction with the separate historical financial
statements and accompanying notes contained in each of the Keane
and C&J Quarterly Reports on Form 10-Q and Annual Reports on
Form 10-K for the applicable periods. The pro forma financial
statements were prepared in accordance with Article 11 of
Regulation S-X. The unaudited pro forma financial information
has been presented for informational purposes only and is not
necessarily indicative of what NexTier's results of operations
actually would have been had the merger been completed on
January 1, 2019, nor is it indicative
of the future operating results of NexTier. The unaudited pro
forma financial information does not reflect any cost or growth
synergies that NexTier may achieve as a result of the merger,
future costs to combine the operations of Keane and C&J or the
costs necessary to achieve any cost or growth synergies.
Investor Contact:
Daniel Jenkins
Vice President - Investor Relations
(713) 325-6000
investors@nextierofs.com
Marc Silverberg
Managing Director (ICR)
marc.silverberg@icrinc.com
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
(LOSS)
|
(unaudited, amounts
in thousands, except per share data)
|
|
|
Three Months
Ended December 31,
|
|
Three Months
Ended
September 30,
|
|
2019
|
|
2018
|
|
2019
|
|
|
|
|
|
|
Revenue
|
$
|
528,216
|
|
|
$
|
486,549
|
|
|
$
|
443,953
|
|
Operating costs and
expenses:
|
|
|
|
|
|
Cost of
services
|
408,345
|
|
|
372,654
|
|
|
333,438
|
|
Depreciation and
amortization
|
82,080
|
|
|
71,403
|
|
|
68,708
|
|
Selling, general and
administrative expenses
|
42,698
|
|
|
28,466
|
|
|
26,579
|
|
Merger and
integration
|
55,972
|
|
|
—
|
|
|
6,651
|
|
(Gain) loss on
disposal of assets
|
3,640
|
|
|
(122)
|
|
|
679
|
|
Impairment
|
12,346
|
|
|
—
|
|
|
—
|
|
Total operating costs
and expenses
|
605,081
|
|
|
472,401
|
|
|
436,055
|
|
Operating
income
|
(76,865)
|
|
|
14,148
|
|
|
7,898
|
|
Other income
(expenses):
|
|
|
|
|
|
Other income
(expense), net
|
(7)
|
|
|
(2,386)
|
|
|
55
|
|
Interest
expense
|
(5,769)
|
|
|
(6,219)
|
|
|
(5,215)
|
|
Total other income
(expense)
|
(5,776)
|
|
|
(8,605)
|
|
|
(5,160)
|
|
Income (loss) before
income taxes
|
(82,641)
|
|
|
5,543
|
|
|
2,738
|
|
Income tax benefit
(expense)
|
(287)
|
|
|
585
|
|
|
820
|
|
Net income
(loss)
|
(82,928)
|
|
|
6,128
|
|
|
3,558
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
Foreign currency
translation adjustments
|
(87)
|
|
|
(77)
|
|
|
—
|
|
Hedging
activities
|
1,036
|
|
|
(4,309)
|
|
|
(2,120)
|
|
Total
comprehensive income (loss)
|
$
|
(81,979)
|
|
|
$
|
1,742
|
|
|
$
|
1,438
|
|
|
|
|
|
|
|
Net income (loss) per
share: basic
|
$
|
(0.47)
|
|
|
$
|
0.06
|
|
|
$
|
0.03
|
|
Net income (loss) per
share: diluted
|
$
|
(0.47)
|
|
|
$
|
0.06
|
|
|
$
|
0.03
|
|
|
|
|
|
|
|
Weighted-average
shares: basic
|
177,149
|
|
|
105,265
|
|
|
104,899
|
|
Weighted-average
shares: diluted
|
177,149
|
|
|
105,566
|
|
|
105,259
|
|
|
Note: The
condensed consolidated statements of operations & comprehensive
income (loss) for the three month periods ended December 31, 2019,
December 31, 2018, and September 30, 2019, reflect the results of
legacy Keane for all periods presented and the results of legacy
C&J for the period beginning on and after November 1,
2019.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
(LOSS)
|
(amounts in
thousands, except per share data)
|
|
|
Year
Ended
December
31,
|
|
2019
|
|
2018
|
|
(Unaudited)
|
|
|
Revenue
|
$
|
1,821,556
|
|
|
$
|
2,137,006
|
|
Operating costs and
expenses:
|
|
|
|
Cost of
services
|
1,403,932
|
|
|
1,660,546
|
|
Depreciation and
amortization
|
292,150
|
|
|
259,145
|
|
Selling, general and
administrative expenses
|
123,676
|
|
|
113,810
|
|
Merger and
integration
|
68,731
|
|
|
448
|
|
Loss on disposal of
assets
|
4,470
|
|
|
5,047
|
|
Impairment
|
12,346
|
|
|
—
|
|
Total operating costs
and expenses
|
1,905,305
|
|
|
2,038,996
|
|
Operating income
(loss)
|
(83,749)
|
|
|
98,010
|
|
Other income
(expenses):
|
|
|
|
Other income,
net
|
453
|
|
|
(905)
|
|
Interest
expense
|
(21,856)
|
|
|
(33,504)
|
|
Total other
expenses
|
(21,403)
|
|
|
(34,409)
|
|
Income (loss) before
income taxes
|
(105,152)
|
|
|
63,601
|
|
Income tax
expense
|
(1,005)
|
|
|
(4,270)
|
|
Net income
(loss)
|
(106,157)
|
|
|
59,331
|
|
Other comprehensive
income (loss):
|
|
|
|
Foreign currency
translation adjustments
|
(116)
|
|
|
(114)
|
|
Hedging
activities
|
(7,628)
|
|
|
(880)
|
|
Total
comprehensive income (loss)
|
$
|
(113,901)
|
|
|
$
|
58,337
|
|
|
|
|
|
Net income (loss) per
share: basic
|
$
|
(0.86)
|
|
|
$
|
0.54
|
|
Net income (loss) per
share: diluted
|
$
|
(0.86)
|
|
|
$
|
0.54
|
|
|
|
|
|
Weighted-average
shares, basic
|
122,977
|
|
|
109,335
|
|
Weighted-average
shares, diluted
|
122,977
|
|
|
109,660
|
|
|
Note: The
condensed consolidated statements of operations & comprehensive
income (loss) for the years ended December 31, 2019 and 2018,
reflect the results of legacy Keane for all periods presented and
the results of legacy C&J for the period beginning on and after
November 1, 2019.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands)
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2019
|
|
2018
|
ASSETS
|
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
255,015
|
|
|
$
|
80,206
|
|
Accounts
receivable
|
|
350,765
|
|
|
210,428
|
|
Inventories,
net
|
|
61,641
|
|
|
35,669
|
|
Assets held for
sale
|
|
141
|
|
|
176
|
|
Prepaid and other
current assets
|
|
20,492
|
|
|
5,784
|
|
Total current
assets
|
|
688,054
|
|
|
332,263
|
|
Operating lease
right-of-use assets
|
|
54,503
|
|
|
—
|
|
Finance lease
right-of-use assets
|
|
9,511
|
|
|
—
|
|
Property and
equipment, net
|
|
709,404
|
|
|
531,319
|
|
Goodwill
|
|
137,458
|
|
|
132,524
|
|
Intangible
assets
|
|
55,021
|
|
|
51,904
|
|
Other noncurrent
assets
|
|
10,956
|
|
|
6,569
|
|
Total
assets
|
|
$
|
1,664,907
|
|
|
$
|
1,054,579
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
115,251
|
|
|
$
|
106,702
|
|
Accrued
expenses
|
|
234,895
|
|
|
101,539
|
|
Current maturities of
operating lease liabilities
|
|
23,473
|
|
|
—
|
|
Current maturities of
finance lease liabilities
|
|
4,594
|
|
|
4,928
|
|
Current maturities of
long-term debt
|
|
2,311
|
|
|
2,776
|
|
Stock based
compensation
|
|
—
|
|
|
4,281
|
|
Other current
liabilities
|
|
5,670
|
|
|
354
|
|
Total current
liabilities
|
|
386,194
|
|
|
220,580
|
|
Long-term operating
lease liabilities, less current maturities
|
|
35,123
|
|
|
—
|
|
Long-term finance
lease liabilities, less current maturities
|
|
4,844
|
|
|
5,581
|
|
Long-term debt, net
less current maturities
|
|
335,312
|
|
|
337,954
|
|
Other non-current
liabilities
|
|
16,662
|
|
|
3,283
|
|
Total non-current
liabilities
|
|
391,941
|
|
|
346,818
|
|
Total
liabilities
|
|
778,135
|
|
|
567,398
|
|
Shareholders'
equity:
|
|
|
|
|
Common
stock
|
|
2,124
|
|
|
1,038
|
|
Paid-in capital in
excess of par value
|
|
966,762
|
|
|
455,447
|
|
Retained earnings
(deficit)
|
|
(73,333)
|
|
|
31,494
|
|
Accumulated other
comprehensive loss
|
|
(8,781)
|
|
|
(798)
|
|
Total shareholders'
equity
|
|
886,772
|
|
|
487,181
|
|
Total liabilities
and shareholders' equity
|
|
$
|
1,664,907
|
|
|
$
|
1,054,579
|
|
|
Note: The
condensed consolidated balance sheet at December 31, 2019, reflects
the financial position of NexTier Oilfield Solutions Inc. The
condensed consolidated balance sheet at December 31, 2018, solely
reflects the financial position of legacy Keane.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA CONDENSED CONSOLIDATED STATEMENTS
OF
|
OPERATIONS
|
(amounts in
thousands)
|
|
|
Three Months
Ended
|
|
December 31,
2019
|
|
September 30,
2019
|
|
|
|
|
Revenue
|
$
|
648,434
|
|
|
$
|
896,616
|
|
Operating costs and
expenses:
|
|
|
|
Cost of
services
|
518,893
|
|
|
700,131
|
|
Depreciation and
amortization
|
89,794
|
|
|
91,846
|
|
Selling, general and
administrative expenses
|
70,104
|
|
|
102,414
|
|
Merger and
integration
|
55,023
|
|
|
7,170
|
|
Loss on disposal of
assets
|
2,335
|
|
|
416
|
|
Impairment
|
12,346
|
|
|
—
|
|
Total operating costs
and expenses
|
748,495
|
|
|
901,977
|
|
Operating
loss
|
(100,061)
|
|
|
(5,361)
|
|
Other income
(expenses):
|
|
|
|
Other income,
net
|
347
|
|
|
(654)
|
|
Interest
expense
|
(5,769)
|
|
|
(5,215)
|
|
Total other
expenses
|
(5,422)
|
|
|
(5,869)
|
|
Loss before income
taxes
|
(105,483)
|
|
|
(11,230)
|
|
Income tax benefit
(expense)
|
(1,070)
|
|
|
820
|
|
Net loss
|
$
|
(106,553)
|
|
|
$
|
(10,410)
|
|
|
|
|
|
Net loss per share:
basic
|
$
|
(0.50)
|
|
|
$
|
(0.05)
|
|
Net loss per share:
diluted
|
$
|
(0.50)
|
|
|
$
|
(0.05)
|
|
|
|
|
|
Weighted-average
shares, basic
|
211,909
|
|
|
210,098
|
|
Weighted-average
shares, diluted
|
211,909
|
|
|
210,098
|
|
|
Note: The pro
forma condensed consolidated statements of operations for the three
month periods ended December 31, 2019 and September 30, 2019,
reflect the results of operations of legacy Keane and legacy
C&J assuming the merger had occurred on January 1,
2019. See full unaudited pro forma condensed
consolidated statements of operations for the three months ended
December 31, 2019 and September 30, 2019, as well as the unaudited
pro forma condensed consolidated statements of operations for the
year ended December 31, 2019, below.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
ADDITIONAL
SELECTED FINANCIAL AND OPERATING DATA
|
(unaudited, amounts
in thousands)
|
|
|
Three Months
Ended
|
|
December 31,
2019
|
|
September 30,
2019
|
Completion
Services:
|
|
|
|
Revenue
|
$
|
440,253
|
|
|
$
|
437,343
|
|
Cost of
services
|
335,157
|
|
|
328,029
|
|
Depreciation,
amortization and administrative expenses, and impairment
|
76,728
|
|
|
64,735
|
|
Net income
|
28,367
|
|
|
43,505
|
|
Adjusted gross
profit(1)
|
$
|
105,096
|
|
|
$
|
109,314
|
|
|
|
|
|
Well Construction
and Intervention Services:
|
|
|
|
Revenue
|
$
|
39,380
|
|
|
$
|
6,610
|
|
Cost of
services
|
32,572
|
|
|
5,409
|
|
Depreciation,
amortization and administrative expenses, and impairment
|
1,950
|
|
|
502
|
|
Net income
|
4,858
|
|
|
699
|
|
Adjusted gross
profit(1)
|
$
|
6,808
|
|
|
$
|
1,201
|
|
|
|
|
|
Well Support
Services:
|
|
|
|
Revenue
|
$
|
48,583
|
|
|
—
|
|
Cost of
services
|
40,616
|
|
|
$
|
—
|
|
Depreciation,
amortization and administrative expenses, and impairment
|
1,008
|
|
|
—
|
|
Net income
|
6,959
|
|
|
—
|
|
Adjusted gross
profit(1)
|
$
|
7,967
|
|
|
$
|
—
|
|
|
Note: The
financial and operating data for the three months ended December
31, 2019 and September 30, 2019, reflect the results of legacy
Keane for all periods presented and the results of legacy C&J
for the period beginning on and after November 1, 2019.
|
|
|
(1)
|
The Company uses
adjusted gross profit as its measure of profitability for segment
reporting.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
ADDITIONAL
SELECTED UNAUDITED PRO FORMA FINANCIAL AND OPERATING
DATA
|
(amounts in
thousands)
|
|
|
Three Months
Ended
|
|
December 31,
2019
|
|
September 30,
2019
|
Completion
Services:
|
|
|
|
Revenue
|
$
|
509,845
|
|
|
$
|
735,166
|
|
Cost of
services
|
404,235
|
|
|
566,230
|
|
Depreciation,
amortization, administrative expenses, and impairment
|
127,086
|
|
|
114,481
|
|
Operating income
(loss)
|
(21,476)
|
|
|
54,455
|
|
Pro forma adjusted
gross profit(1)
|
$
|
105,610
|
|
|
$
|
168,936
|
|
|
|
|
|
Well Construction
and Intervention Services:
|
|
|
|
Revenue
|
$
|
57,650
|
|
|
$
|
66,927
|
|
Cost of
services
|
48,579
|
|
|
53,701
|
|
Depreciation,
amortization, administrative expenses, and impairment
|
8,750
|
|
|
10,885
|
|
Operating income
(loss)
|
321
|
|
|
2,341
|
|
Pro forma adjusted
gross profit(1)
|
$
|
9,071
|
|
|
$
|
13,226
|
|
|
|
|
|
Well Support
Services:
|
|
|
|
Revenue
|
$
|
80,939
|
|
|
$
|
94,523
|
|
Cost of
services
|
66,079
|
|
|
80,200
|
|
Depreciation,
amortization, administrative expenses, and impairment
|
9,540
|
|
|
11,990
|
|
Operating income
(loss)
|
5,320
|
|
|
2,333
|
|
Pro forma adjusted
gross profit(1)
|
$
|
14,860
|
|
|
$
|
14,323
|
|
|
Note: The pro
forma financial and operating data reflect the results of legacy
Keane and legacy C&J assuming the merger had occurred on
January 1, 2019.
|
|
|
(1)
|
The Company uses
adjusted gross profit as its measure of profitability for segment
reporting.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA NON-GAAP FINANCIAL MEASURES
|
(amounts in
thousands)
|
|
|
Three Months Ended
December 31, 2019
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Corporate
and Other
|
|
NexTier
|
Pro forma net
income (loss)(1)
|
$
|
(21,476)
|
|
|
$
|
321
|
|
|
$
|
5,320
|
|
|
$
|
(90,718)
|
|
|
$
|
(106,553)
|
|
Interest expense,
net
|
—
|
|
|
—
|
|
|
—
|
|
|
5,769
|
|
|
5,769
|
|
Income tax
benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
1,070
|
|
|
1,070
|
|
Depreciation and
amortization
|
79,243
|
|
|
2,801
|
|
|
2,123
|
|
|
5,627
|
|
|
89,794
|
|
Pro forma
EBITDA
|
$
|
57,767
|
|
|
$
|
3,122
|
|
|
$
|
7,443
|
|
|
$
|
(78,252)
|
|
|
$
|
(9,920)
|
|
Plus Management
Adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisition,
integration and expansion(2)
|
22,676
|
|
|
391
|
|
|
76
|
|
|
31,880
|
|
|
55,023
|
|
Non-cash stock
compensation(3)
|
363
|
|
|
25
|
|
|
626
|
|
|
4,632
|
|
|
5,646
|
|
Inventory
adjustment
|
2,218
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,218
|
|
Facility
closure
|
308
|
|
|
635
|
|
|
1,043
|
|
|
—
|
|
|
1,986
|
|
Litigation
accrual
|
—
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
Tax audit
|
|
|
|
|
|
|
7,000
|
|
|
7,000
|
|
Impairment of
assets
|
—
|
|
|
—
|
|
|
—
|
|
|
12,346
|
|
|
12,346
|
|
Restructuring costs
and other
|
—
|
|
|
—
|
|
|
—
|
|
|
265
|
|
|
265
|
|
Pro forma Adjusted
EBITDA (1)
|
$
|
83,332
|
|
|
$
|
7,173
|
|
|
$
|
9,188
|
|
|
$
|
(22,129)
|
|
|
$
|
77,564
|
|
|
|
|
|
Three Months
Ended
December 31, 2019
|
Pro forma selling,
general and administrative expenses(1)
|
|
$
|
70,104
|
|
Less Management
Adjustments:
|
|
|
Non-cash stock
compensation(3)
|
|
5,615
|
|
Litigation
accrual
|
|
3,000
|
|
Tax audit
|
|
7,000
|
|
Restructuring
costs
|
|
265
|
|
Pro forma adjusted
selling, general and administrative
|
|
$
|
54,224
|
|
|
|
(1)
|
The pro forma net
income (loss), pro forma Adjusted EBITDA and pro forma selling,
general and administrative expenses, reflect the results of
operations of legacy Keane and legacy C&J assuming the merger
had occurred on January 1, 2019. Pro forma Adjusted EBITDA is
calculated using NexTier management adjustment methodology;
historical C&J amounts have been conformed
accordingly.
|
(2)
|
Represents
transaction costs related to the merger.
|
(3)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA NON-GAAP FINANCIAL MEASURES
|
(amounts in
thousands)
|
|
|
Three Months Ended
September 30, 2019
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Corporate
and Other
|
|
NexTier
|
Pro forma net
income (loss)(1)
|
$
|
54,455
|
|
|
$
|
2,341
|
|
|
$
|
2,333
|
|
|
$
|
(69,539)
|
|
|
$
|
(10,410)
|
|
Interest expense,
net
|
—
|
|
|
—
|
|
|
—
|
|
|
5,215
|
|
|
5,215
|
|
Income tax
benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
(820)
|
|
|
(820)
|
|
Depreciation and
amortization
|
81,169
|
|
|
3,460
|
|
|
2,122
|
|
|
5,095
|
|
|
91,846
|
|
Pro forma
EBITDA
|
$
|
135,624
|
|
|
$
|
5,801
|
|
|
$
|
4,455
|
|
|
$
|
(60,049)
|
|
|
$
|
85,831
|
|
Plus Management
Adjustments:
|
|
|
|
|
|
|
|
|
|
Acquisition,
integration and expansion (2)
|
2,449
|
|
|
—
|
|
|
801
|
|
|
3,919
|
|
|
7,169
|
|
Non-cash stock
compensation (3)
|
794
|
|
|
276
|
|
|
413
|
|
|
8,375
|
|
|
9,858
|
|
Severance
|
6
|
|
|
47
|
|
|
5,206
|
|
|
335
|
|
|
5,594
|
|
Inventory
adjustment
|
2,448
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,448
|
|
Facility
closure
|
—
|
|
|
—
|
|
|
1,568
|
|
|
—
|
|
|
1,568
|
|
Litigation
accrual
|
—
|
|
|
3,000
|
|
|
—
|
|
|
—
|
|
|
3,000
|
|
Tax audit
|
—
|
|
|
—
|
|
|
—
|
|
|
22,160
|
|
|
22,160
|
|
Restructuring costs
and other
|
—
|
|
|
—
|
|
|
—
|
|
|
136
|
|
|
136
|
|
Pro forma Adjusted
EBITDA (1)
|
$
|
141,321
|
|
|
$
|
9,124
|
|
|
$
|
12,443
|
|
|
$
|
(25,124)
|
|
|
$
|
137,764
|
|
|
|
|
|
Three Months
Ended
September 30, 2019
|
Pro forma selling,
general and administrative expenses (1)
|
|
$
|
102,414
|
|
Less Management
Adjustments:
|
|
|
Non-cash stock
compensation (3)
|
|
9,692
|
|
Litigation
accrual
|
|
3,000
|
|
Tax audit
|
|
22,160
|
|
Restructuring
costs
|
|
136
|
|
Severance
|
|
1,583
|
|
Pro forma adjusted
selling, general and administrative
|
|
$
|
65,843
|
|
|
|
(1)
|
The pro forma net
income (loss), pro forma Adjusted EBITDA and pro forma selling,
general and administrative expenses, reflect the results of
operations of legacy Keane and legacy C&J assuming the merger
had occurred on January 1, 2019. Pro forma Adjusted EBITDA is
calculated using NexTier management adjustment methodology;
historical C&J amounts have been conformed
accordingly.
|
(2)
|
Represents
transaction costs related to the merger.
|
(3)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA NON-GAAP FINANCIAL MEASURES
|
(amounts in
thousands)
|
|
|
Year Ended
December 31, 2019
|
Pro forma net
loss (1)
|
$
|
(196,577)
|
|
Interest expense,
net
|
21,856
|
|
Income tax
expense
|
1,643
|
|
Depreciation and
amortization
|
369,276
|
|
Pro forma
EBITDA
|
196,198
|
|
Plus Management
Adjustments:
|
|
Acquisition,
integration and expansion
|
67,516
|
|
Non-cash stock
compensation
|
36,242
|
|
Impairment of
assets
|
92,281
|
|
Severance and stock
compensation acceleration
|
5,594
|
|
Facility
Closures
|
3,554
|
|
Inventory
Adjustments
|
4,666
|
|
Legal
|
6,600
|
|
Tax Audit
|
29,160
|
|
Other
|
4,527
|
|
Pro forma Adjusted
EBITDA (1)(2)
|
$
|
446,338
|
|
|
|
(1)
|
The pro forma net
loss and pro forma Adjusted EBITDA reflect the results of
operations of legacy Keane and legacy C&J assuming the merger
had occurred on January 1, 2019.
|
(2)
|
Pro forma Adjusted
EBITDA is calculated using NexTier management adjustment
methodology; historical C&J amounts have been conformed
accordingly.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA NON-GAAP FINANCIAL MEASURES
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31, 2019
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Total
|
Pro forma revenue
(1)
|
$
|
509,845
|
|
|
$
|
57,650
|
|
|
$
|
80,939
|
|
|
$
|
648,434
|
|
Pro forma cost of
services (1)
|
404,235
|
|
|
48,579
|
|
|
66,079
|
|
|
518,893
|
|
Pro forma gross
profit excluding depreciation and amortization
|
105,610
|
|
|
9,071
|
|
|
14,860
|
|
|
129,541
|
|
Management
adjustments associated with cost of services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pro forma adjusted
gross profit
|
$
|
105,610
|
|
|
$
|
9,071
|
|
|
$
|
14,860
|
|
|
$
|
129,541
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2019
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Total
|
Pro forma revenue
(1)
|
$
|
735,166
|
|
|
$
|
66,927
|
|
|
94,523
|
|
|
$
|
896,616
|
|
Pro forma cost of
services (1)
|
566,230
|
|
|
53,701
|
|
|
80,200
|
|
|
700,131
|
|
Pro forma gross
profit excluding depreciation and amortization
|
168,936
|
|
|
13,226
|
|
|
14,323
|
|
|
196,485
|
|
Management
adjustments associated with cost of services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pro forma adjusted
gross profit
|
$
|
168,936
|
|
|
$
|
13,226
|
|
|
$
|
14,323
|
|
|
$
|
196,485
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
The pro forma revenue
and pro forma cost of services reflects the results of operations
of legacy Keane and legacy C&J assuming the merger had occurred
on January 1, 2019.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURES
|
(unaudited, amounts
in thousands)
|
|
|
Year Ended
December 31, 2019
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Total
|
Pro forma revenue
(1)
|
$
|
2,726,869
|
|
|
$
|
293,430
|
|
|
$
|
385,989
|
|
|
$
|
3,406,288
|
|
Pro forma cost of
services (1)
|
2,126,654
|
|
|
245,870
|
|
|
318,720
|
|
|
2,691,244
|
|
Pro forma gross
profit excluding depreciation and amortization
|
600,215
|
|
|
47,560
|
|
|
67,269
|
|
|
715,044
|
|
Management
adjustments associated with cost of services
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Pro forma Adjusted
gross profit
|
$
|
600,215
|
|
|
$
|
47,560
|
|
|
$
|
67,269
|
|
|
$
|
715,044
|
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2019
|
|
September 30,
2019
|
|
|
Frac & Bundled
Wireline
|
Revenue
|
|
$
|
403,862
|
|
|
$
|
437,343
|
|
Cost of
services
|
|
304,670
|
|
|
328,029
|
|
Gross profit
excluding depreciation and amortization
|
|
99,192
|
|
|
109,314
|
|
Management
adjustments associated with cost of services
|
|
—
|
|
|
—
|
|
Adjusted gross
profit
|
|
$
|
99,192
|
|
|
$
|
109,314
|
|
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2019
|
|
September 30,
2019
|
|
|
Frac & Bundled
Wireline
|
Pro forma revenue
(1)
|
|
$
|
449,707
|
|
|
$
|
654,313
|
|
Pro forma cost of
services (1)
|
|
351,968
|
|
|
500,743
|
|
Pro forma gross
profit excluding depreciation and amortization
|
|
97,739
|
|
|
153,570
|
|
Management
adjustments associated with cost of services
|
|
—
|
|
|
—
|
|
Pro forma adjusted
gross profit
|
|
$
|
97,739
|
|
|
$
|
153,570
|
|
|
|
|
|
|
Average hydraulic
fracturing fleets deployed
|
|
30
|
|
|
38
|
|
Fully-utilized
hydraulic fracturing fleets
|
|
25
|
|
|
33
|
|
Pro forma annualized
adjusted gross profit per fully-utilized fleet
|
|
$
|
15,638
|
|
|
$
|
18,615
|
|
|
|
(1)
|
The pro forma revenue
and pro forma cost of services reflects the results of operations
of legacy Keane and legacy C&J assuming the merger had occurred
on January 1, 2019.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURES
|
(unaudited, amounts
in thousands)
|
|
|
NexTier
Three
Months
Ended
|
|
C&J
Historical
Month
Ended
|
|
Combined
Three Months
Ended
|
|
|
|
December 31,
2019
|
|
October 31,
2019
|
|
December 31,
2019
|
Net cash provided by
(used in) operating activities
|
$
|
79,884
|
|
|
$
|
(32,285)
|
|
|
$
|
47,599
|
|
Cash flows used in
investing activities (1)
|
(44,102)
|
|
|
(9,660)
|
|
|
(53,762)
|
|
Combined free cash
flow generation (usage)
|
35,782
|
|
|
(41,945)
|
|
|
(6,163)
|
|
Merger and
integration costs
|
54,993
|
|
|
5,979
|
|
|
60,972
|
|
Adjusted combined
free cash flow generation (usage)
|
$
|
90,775
|
|
|
$
|
(35,966)
|
|
|
$
|
54,809
|
|
|
|
|
NexTier
Year
Ended
|
|
C&J
Historical
Ten Months
Ended
|
|
Combined
Year Ended
|
|
|
|
December 31,
2019
|
|
October 31,
2019
|
|
December 31,
2019
|
Net cash provided by
operating activities
|
$
|
305,463
|
|
|
$
|
103,545
|
|
|
$
|
409,008
|
|
Cash flows used in
investing activities (1)
|
(182,907)
|
|
|
(98,151)
|
|
|
(281,058)
|
|
Combined free cash
flow generation
|
122,556
|
|
|
5,394
|
|
|
127,950
|
|
Merger and
integration costs
|
61,918
|
|
|
9,738
|
|
|
71,656
|
|
Adjusted combined
free cash flow generation
|
$
|
184,474
|
|
|
$
|
15,132
|
|
|
$
|
199,606
|
|
|
|
(1)
|
Excludes the $68.8
million of legacy C&J cash on hand as of the merger
date.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
PRO FORMA NON-GAAP
FINANCIAL MEASURES
|
(unaudited, amounts
in thousands)
|
|
|
Three Months
Ended
|
|
December 31,
2019
|
|
September 30,
2019
|
Pro forma net
loss
|
$
|
(106,553)
|
|
|
$
|
(10,410)
|
|
Plus Management
Adjustments:
|
|
|
|
Acquisition,
integration and expansion
|
55,023
|
|
|
7,169
|
|
Non-cash stock
compensation
|
5,646
|
|
|
9,858
|
|
Severance and stock
compensation acceleration
|
—
|
|
|
5,594
|
|
Inventory
adjustment
|
2,218
|
|
|
2,448
|
|
Facility
closure
|
1,986
|
|
|
1,568
|
|
Litigation
accrual
|
3,000
|
|
|
3,000
|
|
Tax audit
|
7,000
|
|
|
22,160
|
|
Impairment of
assets
|
12,346
|
|
|
—
|
|
Other
|
265
|
|
|
136
|
|
Pro forma adjusted
net income (loss)
|
$
|
(19,069)
|
|
|
$
|
41,523
|
|
|
|
|
|
Pro forma adjusted
net income (loss) per share, basic and diluted
|
$
|
(0.09)
|
|
|
$
|
0.20
|
|
|
|
|
|
Weighted-average
shares, basic and diluted
|
211,909
|
|
|
210,098
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA CONDENSED CONSOLIDATED STATEMENTS
OF
|
OPERATIONS
|
FOR THE THREE
MONTHS ENDED DECEMBER 31, 2019
|
(amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
NexTier
(1)
|
|
Historical
C&J (2)
|
|
Reclass
(3)
|
|
Pro forma
(4)
|
|
Pro
Forma
|
Revenue
|
|
$
|
528,216
|
|
|
$
|
120,218
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
648,434
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
408,345
|
|
|
115,516
|
|
|
(4,968)
|
|
|
—
|
|
|
518,893
|
|
Depreciation and
amortization
|
|
82,081
|
|
|
17,673
|
|
|
—
|
|
|
(9,960)
|
|
|
89,794
|
|
Selling, general and
administrative expenses
|
|
42,698
|
|
|
22,007
|
|
|
5,399
|
|
|
—
|
|
|
70,104
|
|
Merger and
integration
|
|
55,972
|
|
|
30,978
|
|
|
—
|
|
|
(31,927)
|
|
|
55,023
|
|
Research and
development
|
|
—
|
|
|
431
|
|
|
(431)
|
|
|
—
|
|
|
—
|
|
Impairment
|
|
12,346
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,346
|
|
(Gain) loss on
disposal of assets
|
|
3,639
|
|
|
(1,304)
|
|
|
—
|
|
|
—
|
|
|
2,335
|
|
Total operating costs
and expenses
|
|
605,081
|
|
|
185,301
|
|
|
—
|
|
|
(41,887)
|
|
|
748,495
|
|
Operating
loss
|
|
(76,865)
|
|
|
(65,083)
|
|
|
—
|
|
|
41,887
|
|
|
(100,061)
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
(6)
|
|
|
353
|
|
|
—
|
|
|
—
|
|
|
347
|
|
Interest
expense
|
|
(5,769)
|
|
|
(55)
|
|
|
—
|
|
|
55
|
|
|
(5,769)
|
|
Total other
expenses
|
|
(5,775)
|
|
|
298
|
|
|
—
|
|
|
55
|
|
|
(5,422)
|
|
Loss before income
taxes
|
|
(82,640)
|
|
|
(64,785)
|
|
|
—
|
|
|
41,942
|
|
|
(105,483)
|
|
Income tax
expense
|
|
(287)
|
|
|
(783)
|
|
|
—
|
|
|
—
|
|
|
(1,070)
|
|
Net
loss
|
|
$
|
(82,927)
|
|
|
$
|
(65,568)
|
|
|
$
|
—
|
|
|
$
|
41,942
|
|
|
$
|
(106,553)
|
|
|
|
Net loss per
share:
|
|
|
Basic net loss per
share
|
|
$
|
(0.50)
|
|
Diluted net loss per
share
|
|
$
|
(0.50)
|
|
|
Weighted-average
shares outstanding - basic
|
|
211,909
|
|
Weighted-average
shares outstanding - diluted
|
|
211,909
|
|
|
|
(1)
|
The condensed
consolidated statements of operations for the three months ended
December 31, 2019, reflects the results of legacy Keane for the
period presented and the results of legacy C&J for the period
beginning on and after November 1, 2019.
|
(2)
|
Reflects legacy
C&J activity for the period from October 1, 2019 to October 31,
2019.
|
(3)
|
Certain
reclassifications were made to historical C&J to conform to
NexTier presentation.
|
(4)
|
Certain pro forma
adjustments were made to illustrate the estimated effects of the
merger, assuming the merger had been consummated on January 1,
2019.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA CONDENSED CONSOLIDATED STATEMENTS
OF
|
OPERATIONS
|
FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 2019
|
(amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
Historical
Keane (1)
|
|
Historical
C&J (2)
|
|
Reclass
(3)
|
|
Pro forma
(4)
|
|
Pro
Forma
|
Revenue
|
|
$
|
443,953
|
|
|
$
|
452,663
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
896,616
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
333,438
|
|
|
372,842
|
|
|
(6,149)
|
|
|
—
|
|
|
700,131
|
|
Depreciation and
amortization
|
|
68,708
|
|
|
51,124
|
|
|
—
|
|
|
(27,986)
|
|
|
91,846
|
|
Selling, general and
administrative expenses
|
|
26,579
|
|
|
68,234
|
|
|
7,601
|
|
|
—
|
|
|
102,414
|
|
Merger and
integration
|
|
6,651
|
|
|
8,205
|
|
|
—
|
|
|
(7,686)
|
|
|
7,170
|
|
Research and
development
|
|
—
|
|
|
1,452
|
|
|
(1,452)
|
|
|
—
|
|
|
—
|
|
(Gain) loss on
disposal of assets
|
|
679
|
|
|
(263)
|
|
|
—
|
|
|
—
|
|
|
416
|
|
Total operating costs
and expenses
|
|
436,055
|
|
|
501,594
|
|
|
—
|
|
|
(35,672)
|
|
|
901,977
|
|
Operating income
(loss)
|
|
7,898
|
|
|
(48,931)
|
|
|
—
|
|
|
35,672
|
|
|
(5,361)
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
55
|
|
|
(709)
|
|
|
—
|
|
|
—
|
|
|
(654)
|
|
Interest
expense
|
|
(5,215)
|
|
|
(253)
|
|
|
—
|
|
|
253
|
|
|
(5,215)
|
|
Total other
expenses
|
|
(5,160)
|
|
|
(962)
|
|
|
—
|
|
|
253
|
|
|
(5,869)
|
|
Income (loss) before
income taxes
|
|
2,738
|
|
|
(49,893)
|
|
|
—
|
|
|
35,925
|
|
|
(11,230)
|
|
Income tax
benefit
|
|
820
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
820
|
|
Net income
(loss)
|
|
$
|
3,558
|
|
|
$
|
(49,893)
|
|
|
$
|
—
|
|
|
$
|
35,925
|
|
|
$
|
(10,410)
|
|
|
|
Net loss per
share:
|
|
|
Basic net loss per
share
|
|
$
|
(0.05)
|
|
Diluted net loss per
share
|
|
$
|
(0.05)
|
|
|
Weighted-average
shares outstanding - basic
|
|
210,098
|
|
Weighted-average
shares outstanding - diluted
|
|
210,098
|
|
|
|
(1)
|
The condensed
consolidated statements of operations for the three months ended
September 30, 2019, reflects the results of legacy Keane for the
period presented.
|
(2)
|
See the condensed
consolidated statements of operations included as exhibit 99.1 in
NexTier's form 8-K filed with the SEC on November 21,
2019.
|
(3)
|
Certain
reclassifications were made to historical C&J to conform to
NexTier presentation.
|
(4)
|
Certain pro forma
adjustments were made to illustrate the estimated effects of the
merger, assuming the merger had been consummated on January 1,
2019.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
UNAUDITED PRO
FORMA CONDENSED CONSOLIDATED STATEMENTS
OF
|
OPERATIONS
|
FOR THE YEAR ENDED
DECEMBER 31, 2019
|
(amounts in
thousands, except per share amounts)
|
|
|
|
|
|
|
|
Adjustments
|
|
|
|
|
NexTier
(1)
|
|
Historical
C&J (2)
|
|
Reclass
(3)
|
|
Pro forma
(4)
|
|
Pro
Forma
|
Revenue
|
|
$
|
1,821,556
|
|
|
$
|
1,584,732
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,406,288
|
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
Cost of
services
|
|
1,403,932
|
|
|
1,313,211
|
|
|
(25,899)
|
|
|
—
|
|
|
2,691,244
|
|
Depreciation and
amortization
|
|
292,150
|
|
|
186,646
|
|
|
—
|
|
|
(109,520)
|
|
|
369,276
|
|
Selling, general and
administrative expenses
|
|
123,676
|
|
|
190,581
|
|
|
31,283
|
|
|
—
|
|
|
345,540
|
|
Merger and
integration
|
|
68,731
|
|
|
47,089
|
|
|
—
|
|
|
(48,304)
|
|
|
67,516
|
|
Research and
development
|
|
—
|
|
|
5,384
|
|
|
(5,384)
|
|
|
—
|
|
|
—
|
|
Impairment
|
|
12,346
|
|
|
79,935
|
|
|
—
|
|
|
—
|
|
|
92,281
|
|
(Gain) loss on
disposal of assets
|
|
4,470
|
|
|
9,151
|
|
|
—
|
|
|
—
|
|
|
13,621
|
|
Total operating costs
and expenses
|
|
1,905,305
|
|
|
1,831,997
|
|
|
—
|
|
|
(157,824)
|
|
|
3,579,478
|
|
Operating
loss
|
|
(83,749)
|
|
|
(247,265)
|
|
|
—
|
|
|
157,824
|
|
|
(173,190)
|
|
Other income
(expenses):
|
|
|
|
|
|
|
|
|
|
|
Other income,
net
|
|
453
|
|
|
(341)
|
|
|
—
|
|
|
—
|
|
|
112
|
|
Interest
expense
|
|
(21,856)
|
|
|
(1,097)
|
|
|
—
|
|
|
1,097
|
|
|
(21,856)
|
|
Total other
expenses
|
|
(21,403)
|
|
|
(1,438)
|
|
|
—
|
|
|
1,097
|
|
|
(21,744)
|
|
Loss before income
taxes
|
|
(105,152)
|
|
|
(248,703)
|
|
|
—
|
|
|
158,921
|
|
|
(194,934)
|
|
Income tax
expense
|
|
(1,005)
|
|
|
(638)
|
|
|
—
|
|
|
—
|
|
|
(1,643)
|
|
Net
loss
|
|
$
|
(106,157)
|
|
|
$
|
(249,341)
|
|
|
$
|
—
|
|
|
$
|
158,921
|
|
|
$
|
(196,577)
|
|
|
|
Net loss per
share:
|
|
|
Basic net loss per
share
|
|
$
|
(0.93)
|
|
Diluted net loss per
share
|
|
$
|
(0.93)
|
|
|
Weighted-average
shares outstanding - basic
|
|
211,376
|
|
Weighted-average
shares outstanding - diluted
|
|
211,376
|
|
|
|
(1)
|
The condensed
consolidated statement of operations for the year ended December
31, 2019, reflects the results of legacy Keane for the period
presented and the results of legacy C&J for the period
beginning on and after November 1, 2019.
|
(2)
|
Reflects legacy
C&J's activity for the period from January 1, 2019 to October
31, 2019.
|
(3)
|
Certain
reclassifications were made to historical C&J to conform to
NexTier presentation.
|
(4)
|
Certain pro forma
adjustments were made to illustrate the estimated effects of the
merger, assuming the merger had been consummated on January 1,
2019.
|
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SOURCE NexTier Oilfield Solutions