HOUSTON, Aug. 3, 2020 /PRNewswire/ -- NexTier
Oilfield Solutions Inc. (NYSE: NEX) ("NexTier" or the "Company")
today reported second quarter 2020 financial and operational
results.
Second Quarter 2020 Results and Recent Highlights
- Reported revenue of $196.2
million in the second quarter of 2020, compared to
$627.6 million in the first quarter
of 2020
- Reported net loss of $112.5
million in the second quarter of 2020, compared to net loss
of $71.8 million in the first quarter
of 2020
- Reported SG&A of $38.0
million in the second quarter of 2020, compared to
$56.9 million in the first quarter of
2020. Reported adjusted SG&A(1) of $31.0 million in the second quarter of 2020,
reflecting a decrease of 35% compared to $47.9 million in the first quarter of 2020
- Adjusted EBITDA(1) of $1.7
million in the second quarter of 2020, compared to
$72.0 million in the first quarter of
2020
- Averaged 11 fully-utilized fracturing fleets in the second
quarter of 2020 compared to 27 average fully-utilized fracturing
fleets in the first quarter of 2020; deployed a second completion
fleet internationally
- Reported revenue of $169.5
million in the second quarter of 2020 when considering only
fracturing and bundled wireline, compared to $460.4 million in the first quarter of 2020
- Generated annualized adjusted gross profit per fully-utilized
fracturing fleet(1) of $11.4
million in the second quarter of 2020, compared to
$13.4 million in the first quarter of
2020
- Advanced digital initiative program, including the successful
deployment of NexHub on all deployed U.S. fleets
- Exited the second quarter of 2020 with total liquidity of
$430.5 million, including cash of
$337.1 million and no term loan
maturities through 2025
Management Commentary
"NexTier's second quarter performance in an extremely
challenging market demonstrates we can consistently deliver on our
commitments through solid execution," said Robert Drummond, President and Chief Executive
Officer of NexTier. "During the quarter, U.S. producers abruptly
halted much of their activity and production in response to
economic shutdowns resulting from COVID-19. Our quick and decisive
actions around cost control, continued focus on service quality,
and the enhanced strength of our overall platform through the
deployment of NexHub, our integrated digital technologies including
remote monitoring capabilities, are evident in our financial
performance. As we continue to navigate the current market
environment, our proactive actions to improve service delivery,
increase efficiency and reduce costs further differentiate NexTier
and enhance its ability to compete in any environment."
"We delivered adjusted EBITDA decrementals that were
meaningfully ahead of our guidance, completion fleet market share
at the high-end of our forecast, and increased our cash balance by
$23 million," said Kenny Pucheu, Executive Vice President and Chief
Financial Officer. "As the market rapidly changed, we reacted
quickly to restructure our organization to be even more lean and
nimble, enhancing NexTier's ability to generate free cash flow and
leading returns as the market eventually recovers. Our results and
financial health demonstrate that NexTier is a business partner our
customers can rely on over the long haul."
"While future activity remains highly uncertain, we are managing
what is within our control, while maintaining an intense focus on
NexTier's market readiness," continued Mr. Drummond. "Our ability
to respond quickly and efficiently in a recovery is led by the
capabilities of our world-class team, flexibility of our balance
sheet, readiness of our asset base, and the further evolution of
our innovation program. With the hard work and commitment of our
entire team, we are further evolving NexTier's position as a
leading completions platform."
Second Quarter 2020 Financial Results
Revenue totaled $196.2
million in the second quarter of 2020, compared to
$627.6 million in the first quarter
of 2020.
Net loss totaled $112.5 million,
or $0.53 per diluted share, in the
second quarter of 2020, compared to $71.8
million, or $0.34 per diluted
share in the first quarter of 2020. Adjusted net
loss(1) totaled $79.4
million, or $0.37 per
diluted share, in the second quarter of 2020, compared to Adjusted
net loss of $20.1 million, or
$0.09 per diluted share, in the first
quarter of 2020.
Selling, general and administrative expense ("SG&A") totaled
$38.0 million in the second
quarter of 2020, compared to SG&A of $56.9 million in the first quarter of 2020.
Adjusted SG&A(1) totaled $31.0 million in the second quarter of 2020,
compared to Adjusted SG&A of $47.9 million in the first quarter of
2020.
Adjusted EBITDA totaled $1.7
million in the second quarter of 2020, compared to
Adjusted EBITDA of $72.0 million
in the first quarter of 2020.
Second Quarter 2020 Management Adjustments
Adjusted EBITDA in the second quarter of 2020 includes
management adjustments of approximately $33.1 million consisting primarily of
$18.9 million in market-driven
severance and restructuring costs incurred as a result of
significant declines in crude oil prices resulting from demand
destruction from the COVID-19 pandemic and global oversupply,
$5.1 million of non-cash stock
compensation expense, $14.0 million
of merger and integration costs, partially offset by gains of
$5.0 million, which includes a
net gain associated with the make-whole provision on the Basic
notes received as part of the Well Support Services divestiture
completed in March 2020.
Completion Services
Revenue in our Completion Services segment totaled $179.0 million in the second quarter of 2020,
compared to $512.9 million in the
first quarter of 2020. A sharp decrease in utilization,
combined with price reductions in all basins, led to a significant
decline in revenue in all service lines due to the global oil
supply and demand imbalance and the impact of the COVID-19
pandemic. Adjusted Gross Profit totaled $31.7 million in the second quarter of 2020,
compared to $97.9 million in the
first quarter of 2020. Net loss totaled $46.9 million in the second quarter of 2020,
compared to net loss of $13.1 million
in the first quarter of 2020.
The Company had an average of 11 fully-utilized fracturing
fleets in the second quarter of 2020. When taking only
fracturing and bundled wireline into account, annualized Adjusted
Gross Profit per fully-utilized fracturing fleet totaled
$11.4 million in the second quarter
of 2020, compared to $13.4 million in the first quarter of
2020.
Well Construction and Intervention Services
Revenue in our Well Construction and Intervention ("WC&I")
Services segment, totaled $17.3
million in the second quarter of 2020, compared to
$56.8 million in the first quarter of
2020. Revenue decreased 70% as a result of a sharp declines in
activity in both our Coil Tubing and Cementing services lines,
combined with pricing reductions in all basins, resulting from
unprecedented declines in market activity. Adjusted Gross
Profit totaled $0.8 million in
the second quarter of 2020, compared to $8.8
million in the first quarter of 2020. Net loss totaled
$6.2 million in the second quarter of
2020, compared to net income of $3.0
million in the first quarter of 2020.
Well Support Services
The Company completed the divestiture of its Well Support
Services segment on March 9, 2020. As
a result, there was no contribution from this business during the
second quarter of 2020, and results for the first quarter of 2020
for this segment reflect operations from January 1, 2020 through the date of sale.
Subsequent to this divestiture, the Company's reportable segments
are (i) Completion Services and (ii) Well Construction and
Intervention Services.
Balance Sheet and Capital
Total debt outstanding as of June 30,
2020 totaled $336.7 million,
net of debt discounts and deferred finance costs and excluding
lease obligations. As of June 30,
2020, total available liquidity was $430.5 million, comprised of cash and equivalents
of $337.1 million, and $93.4 million of available borrowing capacity
under our asset-based credit facility.
Total operating cash flow was $61.9
million and cash flow used in investing activities was
$36.4 million, resulting in free cash
flow of $25.5 million in the second
quarter of 2020. Excluding cash used for merger and
integration related costs of $13.0
million, and for market related severance and restructuring
cash costs of $14.6 million, combined
Adjusted free cash flow(1) totaled $53.0 million in the second quarter of 2020.
NexTier continues to expect its 2020 total capital expenditures
to be between $100 million and
$120 million, subject to market conditions. Capital
expenditures in 2020 will be driven by strategic innovation
investments and maintenance capital expenditures. Capital
expenditures during the first half of 2020 were primarily driven by
the delivery of certain strategic innovation investments, with
second half of 2020 spending expected to be mainly driven by
maintenance.
Integration Update
On October 31, 2019, Keane and
C&J completed their business combination and concurrent with
closing, Keane, as the parent company, was renamed NexTier.
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.
The Company has now fully completed its integration
program related to the merger between Keane and C&J. The
Company's targeted run-rate cost synergies of $125 million were achieved in April 2020, and ERP system integration was
completed in the second quarter of 2020.
"I commend our team for completing a world-class integration
process, including the achievement of increased target cost
synergies more than 6 months ahead of original schedule, all while
upholding our commitment to customers," said Mr.
Drummond.
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
restriction on travel and employee contact in certain regions,
employee education, enhanced customer and supplier communication,
alternative sourcing, and other measures. The Company continues to
assess its mitigation plans for further and prolonged impact from
the coronavirus. Additional information on the Company's response
to the coronavirus can be found in its periodic reports that are
filed with the Securities and Exchange Commission.
Conference Call Information
On August 4, 2020, NexTier will
hold a conference call for investors at 7:00
a.m. Central Time (8:00 a.m. Eastern
Time) to discuss second quarter 2020 financial and operating
results. Hosting the call will be management of NexTier, including
Robert Drummond, President and Chief
Executive Officer and Kenny Pucheu,
Executive Vice President and Chief Financial Officer. The call can
be accessed via a live webcast accessible on the IR Event Calendar
page in the Investor Relations section of our website at
www.nextierofs.com or live over the telephone by dialing (855)
560-2574, or for international callers, (412) 542-4160. A replay
will be available shortly after the call and can be accessed by
dialing (877) 344-7529, or for international callers, (412)
317-0088. The passcode for the replay is 10146668. The replay will
be available until August 11, 2020.
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.
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.
(1)
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Non-GAAP Financial
Measures. The Company has included in this press release or
discussed on the conference call described above certain non-GAAP
financial measures, some of which are calculated on segment basis
or product line basis. 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.
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Non-GAAP financial
measures include Adjusted EBITDA, Adjusted Gross Profit, Adjusted
Net Income (loss), free cash flow, Adjusted free cash flow,
adjusted SG&A, annualized adjusted gross profit per
fully-utilized fracturing fleet, and adjusted EBITDA decremental.
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,
Adjusted Net Income(loss) and adjusted EBITDA decremental 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.
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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. Adjusted EBITDA
decremental is calculated by dividing (i) the difference between
first quarter Adjusted EBITDA and second quarter Adjusted EBITDA;
by (ii) the difference between first quarter Revenue and second
quarter Revenue.
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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 COVID-19 pandemic and the
evolving response thereto, including the impact of social
distancing, shelter-in-place, shutdowns of non-essential businesses
and similar measures imposed or undertaken by governments, private
businesses or others; 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 effectiveness of the integration of C&J's
businesses into the Company and the ability to continue 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, and in our subsequently filed Quarterly Report on
Form 10-Q, both 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 hereof, 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.
Investor Contact:
Kenneth Pucheu
Executive Vice President - Chief Financial Officer
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
June 30, 2020
|
|
Three Months
Ended
March 31, 2020
|
|
|
|
|
Revenue
|
$
|
196,227
|
|
|
$
|
627,625
|
|
Operating costs and
expenses:
|
|
|
|
Cost of
services
|
178,771
|
|
|
512,226
|
|
Depreciation and
amortization
|
75,260
|
|
|
85,821
|
|
Selling, general and
administrative expenses
|
38,024
|
|
|
56,884
|
|
Merger and
integration
|
14,028
|
|
|
12,182
|
|
Gain on disposal of
assets
|
(953)
|
|
|
(7,962)
|
|
Impairment
expense
|
—
|
|
|
34,327
|
|
Total operating costs
and expenses
|
305,130
|
|
|
693,478
|
|
Operating
income
|
(108,903)
|
|
|
(65,853)
|
|
Other income
(expenses):
|
|
|
|
Other income
(expense), net
|
2,259
|
|
|
416
|
|
Interest
expense
|
(5,353)
|
|
|
(6,066)
|
|
Total other income
(expense)
|
(3,094)
|
|
|
(5,650)
|
|
Loss before income
taxes
|
(111,997)
|
|
|
(71,503)
|
|
Income tax benefit
(expense)
|
(491)
|
|
|
(253)
|
|
Net
loss
|
(112,488)
|
|
|
(71,756)
|
|
Other comprehensive
income (loss):
|
|
|
|
Foreign currency
translation adjustments
|
(354)
|
|
|
1,107
|
|
Hedging
activities
|
(2,654)
|
|
|
(2,620)
|
|
Total
comprehensive loss
|
$
|
(115,496)
|
|
|
$
|
(73,269)
|
|
|
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Net loss per share:
basic
|
$
|
(0.53)
|
|
|
$
|
(0.34)
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Net loss per share:
diluted
|
$
|
(0.53)
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|
|
$
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(0.34)
|
|
|
|
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Weighted-average
shares: basic
|
213,760
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|
|
212,842
|
|
Weighted-average
shares: diluted
|
213,760
|
|
|
212,842
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NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED
BALANCE SHEETS (amounts in thousands)
|
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|
June
30,
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December
31,
|
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|
2020
|
|
2019
|
ASSETS
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|
(Unaudited)
|
|
|
Current
assets:
|
|
|
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Cash and cash
equivalents
|
|
$
|
337,147
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|
|
$
|
255,015
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|
Trade and other
accounts receivable, net
|
|
86,570
|
|
|
350,765
|
|
Inventories,
net
|
|
43,153
|
|
|
61,641
|
|
Assets held for
sale
|
|
—
|
|
|
141
|
|
Prepaid and other
current assets
|
|
51,342
|
|
|
20,492
|
|
Total current
assets
|
|
518,212
|
|
|
688,054
|
|
Operating lease
right-of-use assets
|
|
47,098
|
|
|
54,503
|
|
Finance lease
right-of-use assets
|
|
2,743
|
|
|
9,511
|
|
Property and equipment,
net
|
|
575,094
|
|
|
709,404
|
|
Goodwill
|
|
104,198
|
|
|
137,458
|
|
Intangible
assets
|
|
54,881
|
|
|
55,021
|
|
Other noncurrent
assets
|
|
7,360
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|
|
10,956
|
|
Total
assets
|
|
$
|
1,309,586
|
|
|
$
|
1,664,907
|
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LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
37,765
|
|
|
$
|
115,251
|
|
Accrued
expenses
|
|
144,747
|
|
|
234,895
|
|
Customer contract
liabilities
|
|
—
|
|
|
60
|
|
Current maturities of
operating lease liabilities
|
|
19,673
|
|
|
23,473
|
|
Current maturities of
finance lease liabilities
|
|
1,363
|
|
|
4,594
|
|
Current maturities of
long-term debt
|
|
2,303
|
|
|
2,311
|
|
Other current
liabilities
|
|
2,816
|
|
|
5,610
|
|
Total current
liabilities
|
|
208,667
|
|
|
386,194
|
|
Long-term operating
lease liabilities, less current maturities
|
|
32,986
|
|
|
35,123
|
|
Long-term finance lease
liabilities, less current maturities
|
|
1,479
|
|
|
4,844
|
|
Long-term debt, net of
unamortized deferred financing costs and unamortized
debt discount, less current maturities
|
|
334,375
|
|
|
335,312
|
|
Other non-current
liabilities
|
|
20,490
|
|
|
16,662
|
|
Total non-current
liabilities
|
|
389,330
|
|
|
391,941
|
|
Total
liabilities
|
|
597,997
|
|
|
778,135
|
|
Shareholders'
equity:
|
|
|
|
|
Common
stock
|
|
2,141
|
|
|
2,124
|
|
Paid-in capital in
excess of par value
|
|
981,204
|
|
|
966,762
|
|
Retained
deficit
|
|
(259,102)
|
|
|
(73,333)
|
|
Accumulated other
comprehensive loss
|
|
(12,654)
|
|
|
(8,781)
|
|
Total shareholders'
equity
|
|
711,589
|
|
|
886,772
|
|
Total liabilities
and shareholders' equity
|
|
$
|
1,309,586
|
|
|
$
|
1,664,907
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES ADDITIONAL SELECTED
FINANCIAL AND OPERATING DATA (unaudited, amounts in
thousands)
|
|
|
Three Months
Ended
|
|
June 30,
2020
|
|
March 31,
2020
|
Completion
Services:
|
|
|
|
Revenue
|
$
|
178,977
|
|
|
$
|
512,871
|
|
Cost of
services
|
159,149
|
|
|
417,382
|
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
66,746
|
|
|
108,591
|
|
Net loss
|
(46,918)
|
|
|
(13,102)
|
|
Adjusted gross
profit(1)
|
$
|
31,655
|
|
|
$
|
97,876
|
|
|
|
|
|
Well Construction
and Intervention Services:
|
|
|
|
Revenue
|
$
|
17,250
|
|
|
$
|
56,825
|
|
Cost of
services
|
19,622
|
|
|
49,253
|
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
3,858
|
|
|
4,561
|
|
Net income
(loss)
|
(6,230)
|
|
|
3,011
|
|
Adjusted gross
profit(1)
|
$
|
812
|
|
|
$
|
8,784
|
|
|
|
|
|
Well Support
Services:
|
|
|
|
Revenue
|
$
|
—
|
|
|
$
|
57,929
|
|
Cost of
services
|
—
|
|
|
45,591
|
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
—
|
|
|
1,398
|
|
Net income
|
—
|
|
|
10,940
|
|
Adjusted gross
profit(1)
|
$
|
—
|
|
|
$
|
12,338
|
|
|
(1)
The Company uses adjusted gross profit as its measure of
profitability for segment reporting.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES ADDITIONAL SELECTED
FINANCIAL AND OPERATING DATA (unaudited, amounts in
thousands)
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2020
|
|
March 31,
2020
|
Net
loss
|
|
$
|
(112,488)
|
|
|
$
|
(71,756)
|
|
Interest expense,
net
|
|
5,353
|
|
|
6,066
|
|
Income tax
benefit
|
|
491
|
|
|
253
|
|
Depreciation and
amortization
|
|
75,260
|
|
|
85,821
|
|
EBITDA
|
|
$
|
(31,384)
|
|
|
$
|
20,384
|
|
Plus Management
Adjustments:
|
|
|
|
|
Acquisition,
integration and expansion(1)
|
|
14,028
|
|
|
12,759
|
|
Non-cash stock
compensation(2)
|
|
5,141
|
|
|
5,451
|
|
Impairment of
assets
|
|
—
|
|
|
34,327
|
|
Market-driven
costs(3)
|
|
18,925
|
|
|
8,611
|
|
Divestiture of
business(4)
|
|
(3,775)
|
|
|
(8,045)
|
|
Other
|
|
(1,253)
|
|
|
(1,460)
|
|
Adjusted
EBITDA
|
|
$
|
1,682
|
|
|
$
|
72,027
|
|
|
|
|
|
|
(1)
|
Represents
transaction and integration costs related to the merger.
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan, excluding accelerations associated with market-driven
costs or acquisition, integration, and expansion costs.
|
(3)
|
Represents
market-driven severance and restructuring costs incurred as a
result of significant declines in crude oil prices resulting from
demand destruction from the COVID-19 pandemic and global
oversupply.
|
(4)
|
Represents net gain
on the sale of Well Support Services segment and increase fair
value of the Basic notes and make-whole derivative received as part
of the sale.
|
|
|
Three Months
Ended
|
|
Variance
|
|
|
June 30,
2020
|
|
March 31,
2020
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
1,682
|
|
|
$
|
72,027
|
|
|
$
|
(70,345)
|
|
Revenue
|
|
$
|
196,227
|
|
|
$
|
627,625
|
|
|
$
|
(431,398)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
decremental(1)
|
|
|
|
|
|
16
|
%
|
|
|
|
|
|
|
|
(1)
|
Adjusted EBITDA
decremental is calculated by dividing (i) the difference between
first quarter Adjusted EBITDA and second quarter Adjusted EBITDA;
by (ii) the difference between first quarter Revenue and second
quarter Revenue.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES ADDITIONAL SELECTED
FINANCIAL AND OPERATING DATA (unaudited, amounts in
thousands)
|
|
|
|
Three Months
Ended
June 30, 2020
|
Selling, general
and administrative expenses
|
|
$
|
38,024
|
|
Less Management
Adjustments:
|
|
|
Non-cash stock
compensation
|
|
(5,141)
|
|
Market-driven
costs
|
|
(3,914)
|
|
Divestiture of
Business
|
|
728
|
|
Other
|
|
1,253
|
|
Adjusted selling,
general and administrative
|
|
$
|
30,950
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
March 31, 2020
|
Selling, general
and administrative expenses
|
|
$
|
56,884
|
|
Less Management
Adjustments:
|
|
|
Non-cash stock
compensation
|
|
(5,451)
|
|
Market-driven
costs
|
|
(5,011)
|
|
Other
|
|
1,460
|
|
Adjusted selling,
general and administrative
|
|
$
|
47,882
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES NON-GAAP FINANCIAL
MEASURES (amounts in thousands)
|
|
|
Three Months Ended
June 30, 2020
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Total
|
Revenue
|
$
|
178,977
|
|
|
$
|
17,250
|
|
|
$
|
—
|
|
|
$
|
196,227
|
|
Cost of
services
|
159,149
|
|
|
19,622
|
|
|
—
|
|
|
178,771
|
|
Gross profit
excluding depreciation and amortization
|
19,828
|
|
|
(2,372)
|
|
|
—
|
|
|
17,456
|
|
Management
adjustments associated with cost of services
|
11,827
|
|
|
3,184
|
|
|
—
|
|
|
15,011
|
|
Adjusted gross
profit
|
$
|
31,655
|
|
|
$
|
812
|
|
|
$
|
—
|
|
|
$
|
32,467
|
|
|
|
|
Three Months Ended
March 31, 2020
|
|
Completion
Services
|
|
WC&I
|
|
Well Support
Services
|
|
Total
|
Revenue
|
$
|
512,871
|
|
|
$
|
56,825
|
|
|
$
|
57,929
|
|
|
$
|
627,625
|
|
Cost of
services
|
417,382
|
|
|
49,253
|
|
|
45,591
|
|
|
512,226
|
|
Gross profit
excluding depreciation and amortization
|
95,489
|
|
|
7,572
|
|
|
12,338
|
|
|
115,399
|
|
Management
adjustments associated with cost of services
|
2,387
|
|
|
1,212
|
|
|
—
|
|
|
3,599
|
|
Adjusted gross
profit
|
$
|
97,876
|
|
|
$
|
8,784
|
|
|
$
|
12,338
|
|
|
$
|
118,998
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2020
|
|
|
Frac & Bundled
Wireline
|
Revenue
|
|
$
|
169,470
|
|
Cost of
services
|
|
148,326
|
|
Gross profit
excluding depreciation and amortization
|
|
21,144
|
|
Management
adjustments associated with cost of services
|
|
10,260
|
|
Adjusted gross
profit
|
|
$
|
31,404
|
|
|
|
|
Average hydraulic
fracturing fleets deployed
|
|
13
|
|
Fully-utilized
hydraulic fracturing fleets
|
|
11
|
|
Annualized adjusted
gross profit per fully-utilized fleet
|
|
$
|
11,420
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
March 31,
2020
|
|
|
Frac & Bundled
Wireline
|
Revenue
|
|
$
|
460,372
|
|
Cost of
services
|
|
371,817
|
|
Gross profit
excluding depreciation and amortization
|
|
88,555
|
|
Management
adjustments associated with cost of services
|
|
2,115
|
|
Adjusted gross
profit
|
|
$
|
90,670
|
|
|
|
|
Average hydraulic
fracturing fleets deployed
|
|
29
|
|
Fully-utilized
hydraulic fracturing fleets
|
|
27
|
|
Annualized adjusted
gross profit per fully-utilized fleet
|
|
$
|
13,433
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES (unaudited, amounts in thousands)
|
|
|
|
Three Months
Ended
|
|
|
|
|
June 30,
2020
|
Net cash provided by
operating activities
|
|
$
|
61,927
|
|
Cash flows used in
investing activities (1)
|
|
36,436
|
|
Free cash flow
generation
|
|
25,491
|
|
Acquisition,
integration and expansion
|
|
12,968
|
|
Market-driven
costs
|
|
14,559
|
|
Adjusted combined
free cash flow generation
|
|
$
|
53,018
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
March 31,
2020
|
Net cash provided by
operating activities
|
|
$
|
48,487
|
|
Cash flows used in
investing activities (1)
|
|
39,142
|
|
Free cash flow
generation
|
|
9,345
|
|
Acquisition,
integration and expansion
|
|
14,665
|
|
Market-driven
costs
|
|
137
|
|
Adjusted combined
free cash flow generation
|
|
$
|
24,147
|
|
|
(1)
Excludes the $53.3 million of proceeds from the WSS
Sale.
|
|
|
|
Three Months
Ended
|
|
June 30,
2020
|
Net loss
|
(112,488)
|
|
Plus Management
Adjustments:
|
|
Acquisition,
integration and expansion
|
14,028
|
|
Non-cash stock
compensation
|
5,141
|
|
Market-driven
costs
|
18,925
|
|
Divestiture of
business
|
(3,775)
|
|
Other
|
(1,253)
|
|
Adjusted net
loss
|
$
|
(79,422)
|
|
|
|
Adjusted net loss per
share, basic and diluted
|
$
|
(0.37)
|
|
|
|
Weighted-average
shares, basic and diluted
|
213,760
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES NON-GAAP FINANCIAL
MEASURES (unaudited, amounts in thousands)
|
|
|
Three Months
Ended
|
|
March 31,
2020
|
Net loss
|
(71,756)
|
|
Plus Management
Adjustments:
|
|
Acquisition,
integration and expansion
|
12,759
|
|
Non-cash stock
compensation
|
5,451
|
|
Impairment of
assets
|
34,327
|
|
Market-driven
costs
|
8,611
|
|
Divestiture of
business
|
(8,045)
|
|
Other
|
(1,460)
|
|
Adjusted net
loss
|
$
|
(20,113)
|
|
|
|
Adjusted net loss per
share, basic and diluted
|
$
|
(0.09)
|
|
|
|
Weighted-average
shares, basic and diluted
|
212,842
|
|
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SOURCE NexTier Oilfield Solutions