Quintana Energy Services Inc. (NYSE: QES) (“QES” or the
“Company”) today announced preliminary fourth quarter 2018
results.
Fourth quarter 2018 revenue is expected to range between $158.1
million to $161.3 million, fourth quarter 2018 net loss is expected
to range between $(1.8) million to $(1.5) million1 and fourth
quarter 2018 Adjusted EBITDA(1) is expected to range between $13.2
million to $14.5 million. In the fourth quarter, QES weathered a
tough macro environment and is expecting to record a 6% sequential
increase in revenue, a 31% sequential decrease in net loss and an
8% sequential increase in Adjusted EBITDA(2).
Rogers Herndon, QES President and Chief Executive Officer,
stated, “I’m pleased to report that revenue increased sequentially
at three of our four segments despite the market headwinds
experienced in the fourth quarter. The sequential increase in
revenue was largely driven by increased utilization in our
Directional Drilling segment, and increased utilization and stages
pumped in our Pressure Pumping segment, offset by reduced pricing
driven by market dynamics. The sequential decrease in net loss and
increase in Adjusted EBITDA was largely driven by improved results
in our Directional Drilling segment.
“Additionally, we deployed two incremental large diameter coiled
tubing units and executed on our previously announced Wireline
segment reorganization late in the fourth quarter and believe the
benefits of this reorganization will prove out in the first quarter
of 2019. We will discuss our results and market outlook in more
detail when we release earnings on March 6, 2019.”
QES will release actual fourth quarter 2018 and full year
financial results on March 6, 2019, after the market closes. The
Company has scheduled a conference call to discuss its financial
results on Thursday, March 7, 2019, at 9:00 a.m. Central Time
(10:00 a.m. Eastern Time).
About Quintana Energy Services
QES is a growth-oriented provider of diversified oilfield
services to leading onshore oil and natural gas exploration and
production companies operating in both conventional and
unconventional plays in all of the active major basins throughout
the U.S. The Company’s primary services include: directional
drilling, pressure pumping, pressure control and wireline services.
The Company offers a complementary suite of products and services
to a broad customer base that is supported by in-house
manufacturing, repair and maintenance capabilities. More
information is available at www.quintanaenergyservices.com.
Forward-Looking Statements and Cautionary Statements
This news release (and any oral statements made regarding the
subjects of this release, including on the conference call
announced herein) contains certain statements and information that
may constitute “forward-looking statements.” All statements, other
than statements of historical fact, which address activities,
events or developments that we expect, believe or anticipate will
or may occur in the future are forward-looking statements. The
words “anticipate,” “believe,” “expect,” “plan,” “forecasts,”
“will,” “could,” “may,” and similar expressions that convey the
uncertainty of future events or outcomes, and the negative thereof,
are intended to identify forward-looking statements.
Forward-looking statements contained in this news release, which
are not generally historical in nature, include those that express
a belief, expectation or intention regarding our future activities,
plans and goals and our current expectations with respect to, among
other things: our fourth quarter 2018 financial results; our
operating cash flows, the availability of capital and our
liquidity; our future revenue, income and operating performance;
our ability to sustain and improve our utilization, revenue and
margins; our ability to maintain acceptable pricing for our
services; future capital expenditures; our ability to finance
equipment, working capital and capital expenditures; our ability to
execute our long-term growth strategy; our ability to successfully
develop our research and technology capabilities and implement
technological developments and enhancements; and the timing and
success of strategic initiatives and special projects.
Forward-looking statements are not assurances of future
performance and actual results could differ materially from our
historical experience and our present expectations or projections.
These forward-looking statements are based on management’s current
expectations and beliefs, forecasts for our existing operations,
experience, expectations and perception of historical trends,
current conditions, anticipated future developments and their
effect on us, and other factors believed to be appropriate.
Although management believes the expectations and assumptions
reflected in these forward-looking statements are reasonable as and
when made, no assurance can be given that these assumptions are
accurate or that any of these expectations will be achieved (in
full or at all). Our forward-looking statements involve significant
risks, contingencies and uncertainties, most of which are difficult
to predict and many of which are beyond our control. Known material
factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to, risks associated with the following: a decline in
demand for our services, including due to declining commodity
prices, overcapacity and other competitive factors affecting our
industry; the cyclical nature and volatility of the oil and gas
industry, which impacts the level of exploration, production and
development activity and spending patterns by E&P companies; a
decline in, or substantial volatility of, crude oil and gas
commodity prices, which generally leads to decreased spending by
our customers and negatively impacts drilling, completion and
production activity; and other risks and uncertainties listed in
our filings with the U.S. Securities and Exchange Commission,
including our Current Reports on Form 8-K that we file from time to
time, Quarterly Reports on Form 10-Q and Annual Report on Form
10-K. Readers are cautioned not to place undue reliance on
forward-looking statements, which speak only as of the date hereof.
We undertake no obligation to publicly update or revise any
forward-looking statements after the date they are made, whether as
a result of new information, future events or otherwise, except as
required by law.
Information Regarding Preliminary Results:
The preliminary estimated financial information contained in
this news release reflects management’s estimates based solely upon
information available to it as of the date of this news release and
is not a comprehensive statement of the Company’s financial results
for the three months ended December 31, 2018. The information
presented herein should not be considered a substitute for full
unaudited financial statements for the three months ended December
31, 2018 once they become available and should not be regarded as a
representation by the Company or its management as to its actual
financial results for the three months ended December 31, 2018. The
ranges for the preliminary estimated financial results described
above constitute forward-looking statements. The preliminary
estimated financial information presented herein is subject to
change, and the Company’s actual financial results may differ from
such preliminary estimates and such differences could be material.
Accordingly, you should not place undue reliance upon these
preliminary estimates.
Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental non-GAAP financial
measure that is used by management and external users of our
financial statements, such as industry analysts, investors, lenders
and rating agencies.
Adjusted EBITDA is not a measure of net income or cash flows as
determined in accordance with GAAP. We define Adjusted EBITDA as
net income or (loss) plus income taxes, net interest expense,
depreciation and amortization, impairment charges, net (gain) or
loss on disposition of assets, stock based compensation,
transaction expenses, rebranding expenses, settlement expenses,
severance expenses and equipment standup expense.
We believe Adjusted EBITDA is useful because it allows us to
more effectively evaluate our operating performance and compare the
results of our operations from period to period without regard to
our financing methods or capital structure. We exclude the items
listed above in arriving at Adjusted EBITDA because these amounts
can vary substantially from company to company within our industry
depending upon accounting methods and book values of assets,
capital structures and the method by which the assets were
acquired. Adjusted EBITDA should not be considered as an
alternative to, or more meaningful than, net income as determined
in accordance with GAAP, or as an indicator of our operating
performance or liquidity. Certain items excluded from Adjusted
EBITDA are significant components in understanding and assessing a
company’s financial performance, such as a company’s cost of
capital and tax structure, as well as the historic costs of
depreciable assets, none of which are components of Adjusted
EBITDA. Our computations of Adjusted EBITDA may not be comparable
to other similarly titled measures of other companies.
(1) See “Non-GAAP Financial Measures” below for a discussion of
Adjusted EBITDA and its reconciliation to the most directly
comparable financial measure calculated and presented in accordance
with U.S. generally accepted accounting principles (“GAAP”).(2)
Assuming midpoint of range.
The following tables present reconciliations of Adjusted EBITDA
to the most directly comparable GAAP financial measure for the
fourth quarter of 2018:
Quintana Energy Services Inc.
Fourth Quarter 2018 Estimated
Reconciliation of Net Income (Loss) to adjusted EBITDA
(In millions of dollars)
(Unaudited)
Low High Net (loss) income $(1.8) $(1.5)
Income tax expense 0.0 0.0 Interest expense 0.6 0.7 Depreciation
and amortization expense 12.0 12.8 Gain on disposition of assets,
net (1.0) (1.1) Non-cash stock based compensation 2.4 2.6
Rebranding expense (1) 0.1 0.1 Settlement and other expense (2) 0.3
0.3 Severance expense (3) 0.1 0.1 Equipment and standup expense (4)
0.5 0.5
Adjusted EBITDA $13.2 $14.5
(1) Relates to expenses incurred in connection with rebranding
our business segments.(2) Represents lease buyouts, legal fees and
settlement costs for FLSA claims, facility closures and other
non-recurring expenses that were recorded in general and
administrative expenses.(3) Relates to severance expenses incurred
in connection with a program implemented to reduce headcount. 70%
of the expenses were recorded in general and administrative
expenses, and 30% of the expenses were recorded in direct operating
expenses(4) Relates to a inventory write down recorded in direct
operating expenses.
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version on businesswire.com: https://www.businesswire.com/news/home/20190225006015/en/
Quintana Energy ServicesKeefer M.
Lehner, EVP & CFO832-518-4094IR@qesinc.com
Dennard Lascar Investor
RelationsKen Dennard / Natalie
Hairston713-529-6600QES@dennardlascar.com
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