Delaware | 001-33816 | 26-0287117 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
¨ | Emerging growth company |
¨ | If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. |
Item 2.02 | Results of Operations and Financial Condition. |
Item 9.01 | Financial Statements and Exhibits. |
Exhibit Number | Description | ||
99.1 | Press Release, dated March 11, 2019 |
Exhibit Number | Description | ||
99.1 |
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. | ||||||
Date: March 11, 2019 | By: | /s/ Joseph M. Crabb | ||||
Name: | Joseph M. Crabb | |||||
Title: | Executive Vice President and Chief Legal Officer |
• | Fourth quarter revenue was $49.2 million, a decrease of approximately 0.9%, or $0.5 million, when compared to the third quarter of 2018 which was primarily due to lower activity levels at the end of the year due to the holidays. |
• | When compared to the same period in the prior year, fourth quarter revenue increased 6.0%, or $2.8 million, as a result of increases in both activity and pricing and the acquisition of Clearwater Solutions on October 5, 2018. These increases were offset by a decrease in revenue during the fourth quarter due to the exit of the Eagle Ford shale area in the first quarter of 2018. |
• | Full year 2018 revenue was $197.5 million, an increase of $21.4 million, or 12.2%, when compared with $176.1 million for 2017. The increase was primarily due to a 14.4% improvement in activity and a 2.8% improvement in pricing, offset by a decrease in revenue due to the exit of the Eagle Ford shale area. |
• | Net loss for the fourth quarter was $8.8 million as compared to $7.1 million in the third quarter of 2018 and $30.9 million in the fourth quarter of 2017. |
• | Adjusted EBITDA for the fourth quarter was $6.1 million, an increase of 55.0% when compared with the $3.9 million reported in the third quarter of 2018. The acquisition of Clearwater Solutions represented $1.7 million of the increase, with the remaining increase attributable to increases in pricing, offset by decreases in activity. |
• | Fourth quarter 2018 adjusted EBITDA increased by $1.0 million, or 18.6%, over the same period in the prior year which was mainly driven by the Clearwater Solutions acquisition, offset by a decrease in activity. |
• | Total liquidity available for capital spending and other purposes of $25.5 million as of December 31, 2018. |
Successor | |||||||
Three Months Ended | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
Revenue: | |||||||
Service revenue | $ | 45,252 | $ | 41,775 | |||
Rental revenue | 3,949 | 4,655 | |||||
Total revenue | 49,201 | 46,430 | |||||
Costs and expenses: | |||||||
Direct operating expenses | 38,447 | 40,967 | |||||
General and administrative expenses | 7,327 | 5,687 | |||||
Depreciation and amortization | 9,703 | 21,230 | |||||
Impairment of long-lived assets | 252 | 2,500 | |||||
Other, net | 2 | — | |||||
Total costs and expenses | 55,731 | 70,384 | |||||
Loss from operations | (6,530 | ) | (23,954 | ) | |||
Interest expense, net | (2,278 | ) | (1,409 | ) | |||
Other income, net | 213 | 117 | |||||
Reorganization items, net | (70 | ) | (6,037 | ) | |||
Loss before income taxes | (8,665 | ) | (31,283 | ) | |||
Income tax (expense) benefit | (138 | ) | 381 | ||||
Net loss | $ | (8,803 | ) | $ | (30,902 | ) | |
Earnings per common share: | |||||||
Net loss per basic common share | $ | (0.72 | ) | $ | (2.64 | ) | |
Net loss per diluted common share | $ | (0.72 | ) | $ | (2.64 | ) | |
Weighted average shares outstanding: | |||||||
Basic | 12,226 | 11,696 | |||||
Diluted | 12,226 | 11,696 |
Successor | Predecessor | |||||||||||
Year Ended | Five Months Ended | Seven Months Ended | ||||||||||
December 31, | December 31, | July 31, | ||||||||||
2018 | 2017 | 2017 | ||||||||||
Revenue: | ||||||||||||
Service revenue | $ | 181,793 | $ | 72,395 | $ | 86,564 | ||||||
Rental revenue | 15,681 | 7,793 | 9,319 | |||||||||
Total revenue | 197,474 | 80,188 | 95,883 | |||||||||
Costs and expenses: | ||||||||||||
Direct operating expenses | 158,896 | 67,077 | 81,010 | |||||||||
General and administrative expenses | 38,510 | 10,615 | 22,552 | |||||||||
Depreciation and amortization | 46,434 | 38,551 | 28,981 | |||||||||
Impairment of long-lived assets | 4,815 | 4,904 | — | |||||||||
Other, net | 1,119 | — | — | |||||||||
Total costs and expenses | 249,774 | 121,147 | 132,543 | |||||||||
Operating loss | (52,300 | ) | (40,959 | ) | (36,660 | ) | ||||||
Interest expense, net | (5,973 | ) | (2,187 | ) | (22,792 | ) | ||||||
Other income, net | 896 | 411 | 4,247 | |||||||||
Reorganization items, net | (1,679 | ) | (5,507 | ) | 223,494 | |||||||
(Loss) income before income taxes | (59,056 | ) | (48,242 | ) | 168,289 | |||||||
Income tax (expense) benefit | (207 | ) | 347 | 322 | ||||||||
Net (loss) income | $ | (59,263 | ) | $ | (47,895 | ) | $ | 168,611 | ||||
Earnings per common share: | ||||||||||||
Net (loss) income per basic common share | $ | (5.01 | ) | $ | (4.09 | ) | $ | 1.12 | ||||
Net (loss) income per diluted common share | $ | (5.01 | ) | $ | (4.09 | ) | $ | 0.97 | ||||
Weighted average shares outstanding: | ||||||||||||
Basic | 11,829 | 11,696 | 150,940 | |||||||||
Diluted | 11,829 | 11,696 | 174,304 |
Successor | |||||||
December 31, | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash | $ | 7,302 | $ | 5,488 | |||
Restricted cash | 656 | 1,296 | |||||
Accounts receivable, net | 31,392 | 30,965 | |||||
Inventories | 3,358 | 4,089 | |||||
Prepaid expenses and other receivables | 2,435 | 8,594 | |||||
Other current assets | 1,582 | 226 | |||||
Assets held for sale | 2,782 | 2,765 | |||||
Total current assets | 49,507 | 53,423 | |||||
Property, plant and equipment, net | 215,640 | 229,874 | |||||
Equity investments | 41 | 48 | |||||
Intangibles, net | 1,112 | 547 | |||||
Goodwill | 29,518 | 27,139 | |||||
Deferred income taxes | — | 84 | |||||
Other assets | 118 | 207 | |||||
Total assets | $ | 295,936 | $ | 311,322 | |||
Liabilities and Shareholders’ Equity | |||||||
Accounts payable | $ | 9,061 | $ | 7,946 | |||
Accrued liabilities | 16,670 | 13,939 | |||||
Current contingent consideration | 500 | 500 | |||||
Current portion of long-term debt | 38,305 | 5,525 | |||||
Derivative warrant liability | 34 | 477 | |||||
Total current liabilities | 64,570 | 28,387 | |||||
Deferred income taxes | 181 | — | |||||
Long-term debt | 27,628 | 33,524 | |||||
Other long-term liabilities | 7,130 | 6,438 | |||||
Total liabilities | 99,509 | 68,349 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Preferred stock | — | — | |||||
Common stock | 122 | 117 | |||||
Additional paid-in capital | 303,463 | 290,751 | |||||
Accumulated deficit | (107,158 | ) | (47,895 | ) | |||
Total shareholders’ equity | 196,427 | 242,973 | |||||
Total liabilities and shareholders’ equity | $ | 295,936 | $ | 311,322 |
Successor | Predecessor | |||||||||||
Year Ended | Five Months Ended | Seven Months Ended | ||||||||||
December 31, | December 31, | July 31, | ||||||||||
2018 | 2017 | 2017 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net (loss) income | $ | (59,263 | ) | $ | (47,895 | ) | $ | 168,611 | ||||
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||||||||||||
Depreciation and amortization of intangible assets | 46,434 | 38,551 | 28,981 | |||||||||
Amortization of debt issuance costs, net | 186 | — | 2,135 | |||||||||
Accrued interest added to debt principal | 119 | 473 | 11,474 | |||||||||
Stock-based compensation | 12,717 | 677 | 457 | |||||||||
Impairment of long-lived assets | 4,815 | 4,904 | — | |||||||||
Gain on sale of UGSI | (75 | ) | (76 | ) | — | |||||||
Loss (gain) on disposal of property, plant and equipment | (895 | ) | 5,695 | (258 | ) | |||||||
Bad debt (recoveries) expense | (328 | ) | 91 | 788 | ||||||||
Change in fair value of derivative warrant liability | (443 | ) | (239 | ) | (4,025 | ) | ||||||
Deferred income taxes | 265 | (242 | ) | (337 | ) | |||||||
Other, net | 355 | 4,503 | (11,295 | ) | ||||||||
Reorganization items, non-cash | — | — | (218,600 | ) | ||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | 1,798 | (3,521 | ) | (4,528 | ) | |||||||
Prepaid expenses and other receivables | 800 | (312 | ) | 472 | ||||||||
Accounts payable and accrued liabilities | 3,634 | (5,034 | ) | 3,682 | ||||||||
Other assets and liabilities, net | (670 | ) | (4,036 | ) | 3,494 | |||||||
Net cash provided by (used in) operating activities | 9,449 | (6,461 | ) | (18,949 | ) | |||||||
Cash flows from investing activities: | ||||||||||||
Proceeds from the sale of property, plant and equipment | 19,140 | 4,034 | 3,083 | |||||||||
Purchases of property, plant and equipment | (12,241 | ) | (2,231 | ) | (3,149 | ) | ||||||
Proceeds from the sale of UGSI | 75 | 76 | — | |||||||||
Cash paid for acquisitions, net of cash acquired | (42,292 | ) | — | — | ||||||||
Net cash (used in) provided by investing activities | (35,318 | ) | 1,879 | (66 | ) | |||||||
Cash flows from financing activities: | ||||||||||||
Proceeds from Predecessor revolving credit facility | — | — | 106,785 | |||||||||
Payments on Predecessor revolving credit facility | — | — | (129,964 | ) | ||||||||
Proceeds from Predecessor term loan | — | — | 15,700 | |||||||||
Proceeds from debtor in possession term loan | — | — | 6,875 | |||||||||
Proceeds from Successor First and Second Lien Term Loans | 10,000 | — | 36,053 | |||||||||
Payments on Successor First and Second Lien Term Loans | (13,434 | ) | (1,241 | ) | — | |||||||
Proceeds from Successor revolving facility | 226,371 | 79,464 | — | |||||||||
Payments on Successor revolving facility | (226,371 | ) | (79,464 | ) | — | |||||||
Proceeds from Bridge Term Loan | 32,500 | — | — | |||||||||
Payments for debt issuance costs | (167 | ) | — | (1,053 | ) | |||||||
Payments on vehicle financing and other financing activities | (1,856 | ) | (2,391 | ) | (2,797 | ) | ||||||
Net cash provided by (used in) financing activities | 27,043 | (3,632 | ) | 31,599 | ||||||||
Change in cash and restricted cash | 1,174 | (8,214 | ) | 12,584 | ||||||||
Cash, beginning of period | 5,488 | 7,193 | 994 | |||||||||
Restricted cash, beginning of period | 1,296 | 7,805 | 1,420 | |||||||||
Cash and restricted cash, beginning of period | 6,784 | 14,998 | 2,414 | |||||||||
Cash, end of period | 7,302 | 5,488 | 7,193 | |||||||||
Restricted cash, end of period | 656 | 1,296 | 7,805 | |||||||||
Cash and restricted cash, end of period | $ | 7,958 | $ | 6,784 | $ | 14,998 |
Three Months Ended | Year Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 [1] | ||||||||||||
Net (loss) income | $ | (8,803 | ) | $ | (30,902 | ) | $ | (59,263 | ) | $ | 120,716 | ||||
Depreciation and amortization | 9,703 | 21,230 | 46,434 | 67,532 | |||||||||||
Interest expense, net | 2,278 | 1,409 | 5,973 | 24,979 | |||||||||||
Income tax expense (benefit) | 138 | (381 | ) | 207 | (669 | ) | |||||||||
EBITDA | 3,316 | (8,644 | ) | (6,649 | ) | 212,558 | |||||||||
Adjustments: | |||||||||||||||
Transaction-related costs, including earnout adjustments, net | 846 | — | 1,291 | — | |||||||||||
Stock-based compensation | 1,225 | 496 | 12,717 | 1,134 | |||||||||||
Change in fair value of derivative warrant liability | (120 | ) | (379 | ) | (443 | ) | (4,264 | ) | |||||||
Capital reorganization costs [2] | — | — | — | 9,448 | |||||||||||
Reorganization items, net [3] | 70 | 6,036 | 1,679 | (217,987 | ) | ||||||||||
Legal and environmental costs, net | 111 | 124 | (341 | ) | 2,168 | ||||||||||
Impairment of long-lived assets | 252 | 2,500 | 4,815 | 4,904 | |||||||||||
Restructuring, exit and other costs | 2 | — | 1,119 | — | |||||||||||
Gain on the sale of UGSI | — | — | (75 | ) | (76 | ) | |||||||||
Integration, severance and rebranding costs | 371 | — | 3,308 | — | |||||||||||
Loss on disposal of assets | 24 | 5,008 | (895 | ) | 5,437 | ||||||||||
Total Adjusted EBITDA | $ | 6,097 | $ | 5,141 | $ | 16,526 | $ | 13,322 |
[1] | For illustrative purposes, the Company has combined the Successor and Predecessor periods to derive combined results for the year ended December 31, 2017. |
[2] | Capital reorganization costs in 2017 represent costs related to the chapter 11 filing incurred prior to the May 1, 2017 filing date. |
[3] | Reorganization items, net represents the costs related to the chapter 11 filing incurred after the May 1, 2017 filing date. |
Three months ended December 31, 2018 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 30,424 | $ | 13,598 | $ | 5,179 | $ | — | $ | 49,201 | ||||||||||
Direct operating expenses | 24,153 | 10,964 | 3,330 | — | 38,447 | |||||||||||||||
General and administrative expenses | 1,096 | 1,024 | 302 | 4,905 | 7,327 | |||||||||||||||
Depreciation and amortization | 4,916 | 2,583 | 2,192 | 12 | 9,703 | |||||||||||||||
Loss from operations | 259 | (973 | ) | (899 | ) | (4,917 | ) | (6,530 | ) | |||||||||||
Operating margin % | 0.9 | % | (7.2 | )% | (17.4 | )% | NA | (13.3 | )% | |||||||||||
Loss before income taxes | 252 | (1,063 | ) | (930 | ) | (6,924 | ) | (8,665 | ) | |||||||||||
Net income (loss) | 252 | (1,055 | ) | (924 | ) | (7,076 | ) | (8,803 | ) | |||||||||||
Depreciation and amortization | 4,916 | 2,583 | 2,192 | 12 | 9,703 | |||||||||||||||
Interest expense, net | 100 | 90 | 31 | 2,057 | 2,278 | |||||||||||||||
Income tax (benefit) expense | — | (8 | ) | (6 | ) | 152 | 138 | |||||||||||||
EBITDA | $ | 5,268 | $ | 1,610 | $ | 1,293 | $ | (4,855 | ) | $ | 3,316 | |||||||||
Adjustments, net | 112 | (8 | ) | 308 | 2,369 | 2,781 | ||||||||||||||
Adjusted EBITDA | $ | 5,380 | $ | 1,602 | $ | 1,601 | $ | (2,486 | ) | $ | 6,097 | |||||||||
Adjusted EBITDA margin % | 17.7 | % | 11.8 | % | 30.9 | % | NA | 12.4 | % |
Three months ended December 31, 2017 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 25,920 | $ | 10,075 | $ | 10,435 | $ | — | $ | 46,430 | ||||||||||
Direct operating expenses | 24,457 | 8,874 | 7,636 | — | 40,967 | |||||||||||||||
General and administrative expenses | 1,362 | 696 | 745 | 2,884 | 5,687 | |||||||||||||||
Depreciation and amortization | 10,088 | 5,982 | 5,112 | 48 | 21,230 | |||||||||||||||
Loss from operations | (12,487 | ) | (5,477 | ) | (3,058 | ) | (2,932 | ) | (23,954 | ) | ||||||||||
Operating margin % | (48.2 | )% | (54.4 | )% | (29.3 | )% | NA | (51.6 | )% | |||||||||||
Loss before income taxes | (13,029 | ) | (5,792 | ) | (3,362 | ) | (9,100 | ) | (31,283 | ) | ||||||||||
Net loss | (13,029 | ) | (5,791 | ) | (3,361 | ) | (8,721 | ) | (30,902 | ) | ||||||||||
Depreciation and amortization | 10,088 | 5,982 | 5,112 | 48 | 21,230 | |||||||||||||||
Interest expense, net | 102 | 113 | 114 | 1,080 | 1,409 | |||||||||||||||
Income tax benefit | — | (1 | ) | (1 | ) | (379 | ) | (381 | ) | |||||||||||
EBITDA | $ | (2,839 | ) | $ | 303 | $ | 1,864 | $ | (7,972 | ) | $ | (8,644 | ) | |||||||
Adjustments, net | 7,026 | 97 | 1,095 | 5,567 | 13,785 | |||||||||||||||
Adjusted EBITDA | $ | 4,187 | $ | 400 | $ | 2,959 | $ | (2,405 | ) | $ | 5,141 | |||||||||
Adjusted EBITDA margin % | 16.2 | % | 4.0 | % | 28.4 | % | NA | 11.1 | % |
Year Ended December 31, 2018 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 127,758 | $ | 43,564 | $ | 26,152 | $ | — | $ | 197,474 | ||||||||||
Direct operating expenses | 101,855 | 37,660 | 19,381 | — | 158,896 | |||||||||||||||
General and administrative expenses | 5,859 | 2,746 | 1,237 | 28,668 | 38,510 | |||||||||||||||
Depreciation and amortization | 22,826 | 12,148 | 11,397 | 63 | 46,434 | |||||||||||||||
Loss from operations | (2,782 | ) | (9,059 | ) | (11,396 | ) | (29,063 | ) | (52,300 | ) | ||||||||||
Operating margin % | (2.2 | )% | (20.8 | )% | (43.6 | )% | NA | (26.5 | )% | |||||||||||
Loss before income taxes | (2,781 | ) | (9,370 | ) | (11,576 | ) | (35,329 | ) | (59,056 | ) | ||||||||||
Net loss | (2,781 | ) | (9,370 | ) | (11,576 | ) | (35,536 | ) | (59,263 | ) | ||||||||||
Depreciation and amortization | 22,826 | 12,148 | 11,397 | 63 | 46,434 | |||||||||||||||
Interest expense, net | 370 | 312 | 187 | 5,104 | 5,973 | |||||||||||||||
Income tax expense | — | — | — | 207 | 207 | |||||||||||||||
EBITDA | $ | 20,415 | $ | 3,090 | $ | 8 | $ | (30,162 | ) | $ | (6,649 | ) | ||||||||
Adjustments, net | (157 | ) | (1,857 | ) | 6,409 | 18,780 | 23,175 | |||||||||||||
Adjusted EBITDA | $ | 20,258 | $ | 1,233 | $ | 6,417 | $ | (11,382 | ) | $ | 16,526 | |||||||||
Adjusted EBITDA margin % | 15.9 | % | 2.8 | % | 24.5 | % | NA | 8.4 | % |
Year Ended December 31, 2017 [1] | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 103,033 | $ | 37,985 | $ | 35,053 | $ | — | $ | 176,071 | ||||||||||
Direct operating expenses | 87,073 | 35,953 | 25,061 | — | 148,087 | |||||||||||||||
General and administrative expenses | 6,517 | 3,073 | 3,258 | 20,319 | 33,167 | |||||||||||||||
Depreciation and amortization | 34,072 | 16,168 | 17,075 | 217 | 67,532 | |||||||||||||||
Loss from operations | (29,295 | ) | (17,209 | ) | (10,579 | ) | (20,536 | ) | (77,619 | ) | ||||||||||
Operating margin % | (28.4 | )% | (45.3 | )% | (30.2 | )% | NA | (44.1 | )% | |||||||||||
(Loss) income before income taxes | (35,073 | ) | 10,375 | 11,544 | 133,201 | 120,047 | ||||||||||||||
Net (loss) income | (35,073 | ) | 10,376 | 11,545 | 133,868 | 120,716 | ||||||||||||||
Depreciation and amortization | 34,072 | 16,168 | 17,075 | 217 | 67,532 | |||||||||||||||
Interest expense, net | 363 | 333 | 257 | 24,026 | 24,979 | |||||||||||||||
Income tax benefit | — | (1 | ) | (1 | ) | (667 | ) | (669 | ) | |||||||||||
EBITDA | $ | (638 | ) | $ | 26,876 | $ | 28,876 | $ | 157,444 | $ | 212,558 | |||||||||
Adjustments, net | 15,542 | (27,258 | ) | (20,694 | ) | (166,826 | ) | (199,236 | ) | |||||||||||
Adjusted EBITDA | $ | 14,904 | $ | (382 | ) | $ | 8,182 | $ | (9,382 | ) | $ | 13,322 | ||||||||
Adjusted EBITDA margin % | 14.5 | % | (1.0 | )% | 23.3 | % | NA | 7.6 | % |
[1] | For illustrative purposes, the Company has combined the Successor and Predecessor periods to derive combined results for the year ended December 31, 2017. |
Three months ended December 31, 2018 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 49,201 | $ | — | $ | 49,201 | ||||||
Direct operating expenses | 38,447 | (24 | ) | [A] | 38,423 | |||||||
General and administrative expenses | 7,327 | (2,553 | ) | [B] | 4,774 | |||||||
Total costs and expenses | 55,731 | (2,831 | ) | [C] | 52,900 | |||||||
Loss from operations | (6,530 | ) | 2,831 | [C] | (3,699 | ) | ||||||
Net loss | (8,803 | ) | 2,825 | [D] | (5,978 | ) | ||||||
Net loss | $ | (8,803 | ) | $ | (5,978 | ) | ||||||
Depreciation and amortization | 9,703 | 9,703 | ||||||||||
Interest expense, net | 2,278 | 2,278 | ||||||||||
Income tax expense | 138 | 94 | ||||||||||
EBITDA and Adjusted EBITDA | $ | 3,316 | $ | 6,097 |
Description of 2018 Special Items: | |
[A] | Special items primarily includes the loss on sale of underutilized assets. |
[B] | Primarily attributable to $0.8 million in transaction costs related to our acquisition of Clearwater Solutions on October 5, 2018, $1.3 million in severance and stock-based compensation costs for the departure of our former CFO, non-routine litigation expenses and non-routine professional fees. |
[C] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $0.3 million for assets classified as held-for-sale in the Southern division. |
[D] | Primarily includes the aforementioned adjustments along with $0.1 million of capital reorganization costs incurred after the chapter 11 filing recorded to “Reorganization items, net,” offset by a gain of $0.1 million associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the three months ended December 31, 2018 was (1.6)% and has been applied to the special items accordingly. |
Three months ended December 31, 2017 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 46,430 | $ | — | $ | 46,430 | ||||||
Direct operating expenses | 40,967 | (5,018 | ) | [E] | 35,949 | |||||||
General and administrative expenses | 5,687 | (610 | ) | [F] | 5,077 | |||||||
Total costs and expenses | 70,384 | (8,128 | ) | [G] | 62,256 | |||||||
Loss from operations | (23,954 | ) | 8,128 | [G] | (15,826 | ) | ||||||
Net loss | (30,902 | ) | 13,617 | [H] | (17,285 | ) | ||||||
Net loss | $ | (30,902 | ) | $ | (17,285 | ) | ||||||
Depreciation and amortization | 21,230 | 21,230 | ||||||||||
Interest expense, net | 1,409 | 1,409 | ||||||||||
Income tax benefit | (381 | ) | (213 | ) | ||||||||
EBITDA and Adjusted EBITDA | $ | (8,644 | ) | $ | 5,141 |
Description of 2017 Special Items: | |
[E] | Special items primarily includes the loss on sale of underutilized assets. |
[F] | Primarily attributable to stock-based compensation and non-routine litigation expenses. |
[G] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $2.5 million for assets classified as held-for-sale primarily in the Rocky Mountain division. |
[H] | Primarily includes the aforementioned adjustments along with $6.0 million of capital reorganization costs incurred after the chapter 11 filing recorded to “Reorganization items, net,” offset by a gain of $0.4 million associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the three months ended December 31, 2017 was (1.2)% and has been applied to the special items accordingly. |
Year Ended December 31, 2018 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 197,474 | $ | — | $ | 197,474 | ||||||
Direct operating expenses | 158,896 | 694 | [A] | 159,590 | ||||||||
General and administrative expenses | 38,510 | (16,774 | ) | [B] | 21,736 | |||||||
Total costs and expenses | 249,774 | (22,014 | ) | [C] | 227,760 | |||||||
Loss from operations | (52,300 | ) | 22,014 | [C] | (30,286 | ) | ||||||
Net loss | (59,263 | ) | 23,256 | [D] | (36,007 | ) | ||||||
Net loss | $ | (59,263 | ) | $ | (36,007 | ) | ||||||
Depreciation and amortization | 46,434 | 46,434 | ||||||||||
Interest expense, net | 5,973 | 5,973 | ||||||||||
Income tax expense | 207 | 126 | ||||||||||
EBITDA and Adjusted EBITDA | $ | (6,649 | ) | $ | 16,526 |
Description of 2018 Special Items: | |
[A] | Special items primarily includes the gain on the sale of underutilized assets. |
[B] | Primarily attributable to $15.3 million in severance and stock-based compensation expense related to the departure of former CEO and CFO, $1.3 million in transaction costs related to the acquisition of Clearwater Solutions, non-routine litigation expenses and non-routine professional fees. |
[C] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $4.8 million for assets classified as held-for-sale in the Southern, Northeast and Corporate divisions, as well as exit costs of $1.1 million for management’s decision to exit the Eagle Ford shale area as of March 1, 2018. |
[D] | Primarily includes the aforementioned adjustments along with $1.7 million of capital reorganization costs incurred after the chapter 11 filing recorded to “Reorganization items, net,” offset by a gain of $0.4 million associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the year ended December 31, 2018 was (0.4)% and has been applied to the special items accordingly. |
Year Ended December 31, 2017 [1] | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 176,071 | $ | — | $ | 176,071 | ||||||
Direct operating expenses | 148,087 | (6,032 | ) | [E] | 142,055 | |||||||
General and administrative expenses | 33,167 | (12,155 | ) | [F] | 21,012 | |||||||
Total costs and expenses | 253,690 | (23,091 | ) | [G] | 230,599 | |||||||
Loss from operations | (77,619 | ) | 23,091 | [G] | (54,528 | ) | ||||||
Net income (loss) | 120,716 | (200,346 | ) | [H] | (79,630 | ) | ||||||
Net income (loss) | $ | 120,716 | $ | (79,630 | ) | |||||||
Depreciation and amortization | 67,532 | 67,532 | ||||||||||
Interest expense, net | 24,979 | 24,979 | ||||||||||
Income tax (benefit) expense | (669 | ) | 441 | |||||||||
EBITDA and Adjusted EBITDA | $ | 212,558 | $ | 13,322 |
[1] | For illustrative purposes, the Company has combined the Successor and Predecessor periods to derive combined results for the year ended December 31, 2017. |
Description of 2017 Special Items: | |
[E] | Special items primarily includes capital reorganization costs incurring prior to the chapter 11 filing and the loss on the sale of underutilized assets. |
[F] | Primarily attributable to capital reorganization costs of $8.8 million incurred prior to the chapter 11 filing, as well as stock-based compensation, non-routine litigation expenses, and non-routine professional fees. |
[G] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $4.9 million for assets classified as held-for-sale primarily in the Rocky Mountain division. |
[H] | Primarily includes the aforementioned adjustments, along with $218.0 million of capital reorganization costs incurred in connection with the application of fresh start accounting and after emergence from chapter 11 recorded to “Reorganization items, net,” offset by a gain of $4.3 million associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the year ended December 31, 2017 was (0.6)% and has been applied to the special items accordingly. |
Year Ended | ||||||||
December 31, | ||||||||
2018 | 2017 [1] | |||||||
Net cash used in operating activities from continuing operations | $ | 9,449 | $ | (25,410 | ) | |||
Less: net cash capital expenditures [2] | 6,899 | 1,737 | ||||||
Free Cash Flow | $ | 16,348 | $ | (23,673 | ) |
[1] | For illustrative purposes, the Company has combined the Successor and Predecessor periods to derive combined results for the year ended December 31, 2017. |
[2] | Purchases of property, plant and equipment, net of proceeds received from sales of property, plant and equipment |
Revenue | Adjusted EBITDA | |||||||||||||
Q4 2018 vs Q3 2018 | Q4 2018 vs Q3 2018 | |||||||||||||
Breakdown of (Decline) Growth: | ||||||||||||||
Price | $ | 1,037 | 2.1 | % | $ | 972 | 24.7 | % | ||||||
Activity | (4,080 | ) | (8.2 | ) | (1,227 | ) | (31.2 | ) | ||||||
Acquisition/Closure | 2,588 | 5.2 | 1,698 | 43.2 | ||||||||||
Corporate | — | — | 719 | 18.3 | ||||||||||
Total Sequential (Decline) Growth | $ | (455 | ) | (0.9 | )% | $ | 2,162 | 55.0 | % |
Three Months Ended | Year Ended | |||||||||||||
December 31, 2018 | December 31, 2018 [1] | |||||||||||||
Breakdown of Total Revenue Growth: | ||||||||||||||
Price | $ | 71 | 0.2 | % | $ | 4,851 | 2.8 | % | ||||||
Activity | 3,722 | 8.0 | 25,354 | 14.4 | ||||||||||
Acquisition/Closure | (1,022 | ) | (2.2 | ) | (8,802 | ) | (5.0 | ) | ||||||
Total Revenue Growth | $ | 2,771 | 6.0 | % | $ | 21,403 | 12.2 | % |
[1] | The annual 2018 growth was calculated based upon the combined the Successor and Predecessor periods for the year ended December 31, 2017. |
Three Months Ended | Year Ended | |||||||||||||
December 31, 2018 | December 31, 2018 [1] | |||||||||||||
Breakdown of Total Adjusted EBITDA Growth: | ||||||||||||||
Price | $ | (36 | ) | (0.7 | )% | $ | 4,072 | 30.6 | % | |||||
Activity/Expense | (564 | ) | (11.0 | ) | (101 | ) | (0.8 | ) | ||||||
Acquisition/Closure | 1,637 | 31.8 | 1,235 | 9.3 | ||||||||||
Corporate | (81 | ) | (1.5 | ) | (2,002 | ) | (15.0 | ) | ||||||
Total Adjusted EBITDA Growth | $ | 956 | 18.6 | % | $ | 3,204 | 24.1 | % |
[1] | The annual 2018 growth was calculated based upon the combined the Successor and Predecessor periods for the year ended December 31, 2017. |
Three Months Ended | |||
December 31, 2018 | |||
Water Trucks: | |||
Count (approximate) | 470 | ||
% Utilized [1] | 50.0 | % | |
Salt Water Disposal Wells: | |||
Count | 48 | ||
% Utilized [2] | 50.0 | % | |
Haynesville Pipeline: | |||
% Utilized [2] [3] | 55% - 61% |
[1] | Trucking utilization assumes a five day work-week and running twelve hours per day. |
[2] | Salt Water Disposal Well and Pipeline utilization is calculated based on functional capacity rather than permitted capacity. Functional capacity reflects any factors limiting volume such as pressure limits, pump or tank capacity, etc. and can potentially be increased with additional capital investment. |
[3] | The range of utilization for the Haynesville Pipeline represents the high and low for the period. |
Average for the Three Months Ended* | Year-Over-Year | ||||||||||
December 31, 2018 | December 31, 2017 | Growth % | |||||||||
Pricing: | |||||||||||
Oil price per barrel [1] | $ | 59.97 | $ | 55.27 | 8.5 | % | |||||
Natural gas price per tcf [2] | $ | 3.77 | $ | 2.91 | 29.6 | % | |||||
Operating Rigs [3] | 180 | 165 | 9.1 | % | |||||||
Oil Production (barrels in thousands) [4] | 1,617 | 1,346 | 20.1 | % | |||||||
Natural Gas Production (Mcf/d) [4] | 42,854 | 35,477 | 20.8 | % | |||||||
Wells Completed [4] | 946 | 702 | 34.8 | % | |||||||
Drilled Uncompleted Ending Inventory [4] | 1,453 | 1,605 | (9.5 | )% |
* | Excludes the Eagle Ford shale area as the Company exited the basin during the first quarter of 2018. |
[1] | Source: West Texas Intermediate (“WTI”) Crude Oil Spot Price |
[2] | Source: Henry Hub (“HH”) Natural Gas Spot Price |
[3] | Source: Baker Hughes |
[4] | Source: US Energy Information Association (“EIA”) |
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