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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, $0.01 par value | NES | NYSE American |
¨ | 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 November 5, 2019 |
Exhibit Number | Description | ||
99.1 |
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. | ||||||
Date: November 5, 2019 | By: | /s/ Joseph M. Crabb | ||||
Name: | Joseph M. Crabb | |||||
Title: | Executive Vice President and Chief Legal Officer |
• | Third quarter revenue was $43.1 million, a decrease of approximately 4.7%, or $2.1 million, when compared with revenue of $45.2 million in the second quarter of 2019. |
• | When compared to the same period in the prior year, third quarter revenue decreased 13.2%, or $6.6 million. |
• | Net loss for the third quarter was $6.1 million as compared to net losses of $5.0 million in the second quarter of 2019 and $7.1 million in the third quarter of 2018. |
• | Adjusted EBITDA for the third quarter was $4.6 million, a decrease of $0.7 million compared with $5.3 million in the second quarter of 2019. |
• | Adjusted EBITDA for the third quarter increased by $0.6 million over the same period in the prior year. |
• | Total liquidity available as of September 30, 2019 was $19.9 million. |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Revenue: | |||||||||||||||
Service revenue | $ | 38,862 | $ | 45,694 | $ | 119,101 | $ | 136,541 | |||||||
Rental revenue | 4,236 | 3,962 | 11,864 | 11,732 | |||||||||||
Total revenue | 43,098 | 49,656 | 130,965 | 148,273 | |||||||||||
Costs and expenses: | |||||||||||||||
Direct operating expenses | 34,297 | 39,753 | 101,371 | 120,449 | |||||||||||
General and administrative expenses | 4,774 | 5,849 | 15,529 | 31,183 | |||||||||||
Depreciation and amortization | 8,928 | 10,018 | 27,340 | 36,731 | |||||||||||
Impairment of long-lived assets | 120 | 100 | 237 | 4,563 | |||||||||||
Other, net | (4 | ) | 49 | (10 | ) | 1,117 | |||||||||
Total costs and expenses | 48,115 | 55,769 | 144,467 | 194,043 | |||||||||||
Operating loss | (5,017 | ) | (6,113 | ) | (13,502 | ) | (45,770 | ) | |||||||
Interest expense, net | (1,279 | ) | (1,241 | ) | (3,997 | ) | (3,695 | ) | |||||||
Other income, net | 280 | 169 | 457 | 683 | |||||||||||
Reorganization items, net | 10 | 137 | (200 | ) | (1,609 | ) | |||||||||
Loss before income taxes | (6,006 | ) | (7,048 | ) | (17,242 | ) | (50,391 | ) | |||||||
Income tax expense | (46 | ) | (69 | ) | (171 | ) | (69 | ) | |||||||
Net loss | $ | (6,052 | ) | $ | (7,117 | ) | $ | (17,413 | ) | $ | (50,460 | ) | |||
Earnings per common share: | |||||||||||||||
Net loss per basic common share | $ | (0.39 | ) | $ | (0.61 | ) | $ | (1.11 | ) | $ | (4.31 | ) | |||
Net loss per diluted common share | $ | (0.39 | ) | $ | (0.61 | ) | $ | (1.11 | ) | $ | (4.31 | ) | |||
Weighted average shares outstanding: | |||||||||||||||
Basic | 15,715 | 11,696 | 15,657 | 11,696 | |||||||||||
Diluted | 15,715 | 11,696 | 15,657 | 11,696 |
September 30, | December 31, | ||||||
2019 | 2018 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 3,028 | $ | 7,302 | |||
Restricted cash | 1,384 | 656 | |||||
Accounts receivable, net | 31,045 | 31,392 | |||||
Inventories | 3,137 | 3,358 | |||||
Prepaid expenses and other receivables | 3,224 | 2,435 | |||||
Other current assets | 386 | 1,582 | |||||
Assets held for sale | 4,502 | 2,782 | |||||
Total current assets | 46,706 | 49,507 | |||||
Property, plant and equipment, net | 197,911 | 215,640 | |||||
Operating lease assets | 3,133 | — | |||||
Equity investments | 38 | 41 | |||||
Intangibles, net | 765 | 1,112 | |||||
Goodwill | 29,518 | 29,518 | |||||
Other assets | 99 | 118 | |||||
Total assets | $ | 278,170 | $ | 295,936 | |||
Liabilities and Shareholders’ Equity | |||||||
Accounts payable | $ | 6,745 | $ | 9,061 | |||
Accrued and other current liabilities | 13,023 | 16,704 | |||||
Current portion of long-term debt | 6,657 | 38,305 | |||||
Current contingent consideration | 500 | 500 | |||||
Total current liabilities | 26,925 | 64,570 | |||||
Long-term debt | 30,134 | 27,628 | |||||
Noncurrent operating lease liabilities | 1,479 | — | |||||
Deferred income taxes | 385 | 181 | |||||
Other long-term liabilities | 7,577 | 7,130 | |||||
Total liabilities | 66,500 | 99,509 | |||||
Commitments and contingencies | |||||||
Shareholders’ equity: | |||||||
Common stock | 158 | 122 | |||||
Additional paid-in capital | 337,342 | 303,463 | |||||
Treasury stock | (436 | ) | — | ||||
Accumulated deficit | (125,394 | ) | (107,158 | ) | |||
Total shareholders’ equity | 211,670 | 196,427 | |||||
Total liabilities and shareholders’ equity | $ | 278,170 | $ | 295,936 |
Nine Months Ended | |||||||
September 30, | |||||||
2019 | 2018 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (17,413 | ) | $ | (50,460 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 27,340 | 36,731 | |||||
Amortization of debt issuance costs, net | 287 | — | |||||
Accrued interest added to debt principal | — | 119 | |||||
Stock-based compensation | 1,740 | 11,492 | |||||
Impairment of long-lived assets | 237 | 4,563 | |||||
Gain on sale of UGSI | — | (75 | ) | ||||
Gain on disposal of property, plant and equipment | (1,828 | ) | (919 | ) | |||
Bad debt recoveries | (65 | ) | (164 | ) | |||
Change in fair value of derivative warrant liability | (32 | ) | (323 | ) | |||
Deferred income taxes | 204 | 11 | |||||
Other, net | 322 | 541 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 412 | 1,423 | |||||
Prepaid expenses and other receivables | (689 | ) | 487 | ||||
Accounts payable and accrued liabilities | (7,240 | ) | 1,028 | ||||
Other assets and liabilities, net | 1,320 | (234 | ) | ||||
Net cash provided by operating activities | 4,595 | 4,220 | |||||
Cash flows from investing activities: | |||||||
Proceeds from the sale of property, plant and equipment | 4,826 | 19,066 | |||||
Purchases of property, plant and equipment | (7,341 | ) | (9,687 | ) | |||
Proceeds from the sale of UGSI | — | 75 | |||||
Net cash (used in) provided by investing activities | (2,515 | ) | 9,454 | ||||
Cash flows from financing activities: | |||||||
Payments on First and Second Lien Term Loans | (3,600 | ) | (2,132 | ) | |||
Proceeds from Revolving Facility | 139,661 | 172,336 | |||||
Payments on Revolving Facility | (139,661 | ) | (172,336 | ) | |||
Payments on Bridge Term Loan | (31,382 | ) | — | ||||
Proceeds from the issuance of stock | 31,057 | — | |||||
Payments on finance leases and other financing activities | (1,701 | ) | (1,399 | ) | |||
Net cash used in financing activities | (5,626 | ) | (3,531 | ) | |||
Change in cash, cash equivalents and restricted cash | (3,546 | ) | 10,143 | ||||
Cash and cash equivalents, beginning of period | 7,302 | 5,488 | |||||
Restricted cash, beginning of period | 656 | 1,296 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 7,958 | 6,784 | |||||
Cash and cash equivalents, end of period | 3,028 | 15,077 | |||||
Restricted cash, end of period | 1,384 | 1,850 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 4,412 | $ | 16,927 |
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2019 | 2018 | 2019 | 2018 | ||||||||||||
Net loss | $ | (6,052 | ) | $ | (7,117 | ) | $ | (17,413 | ) | $ | (50,460 | ) | |||
Depreciation and amortization | 8,928 | 10,018 | 27,340 | 36,731 | |||||||||||
Interest expense, net | 1,279 | 1,241 | 3,997 | 3,695 | |||||||||||
Income tax expense | 46 | 69 | 171 | 69 | |||||||||||
EBITDA | 4,201 | 4,211 | 14,095 | (9,965 | ) | ||||||||||
Adjustments: | |||||||||||||||
Transaction-related costs, net | 65 | 393 | (86 | ) | 445 | ||||||||||
Stock-based compensation | 325 | 98 | 1,740 | 11,492 | |||||||||||
Change in fair value of derivative warrant liability | (4 | ) | (34 | ) | (32 | ) | (323 | ) | |||||||
Reorganization items, net [1] | (10 | ) | (137 | ) | 200 | 1,609 | |||||||||
Legal and environmental costs, net | — | (81 | ) | 53 | (452 | ) | |||||||||
Impairment of long-lived assets | 120 | 100 | 237 | 4,563 | |||||||||||
Restructuring, exit and other costs | (4 | ) | 49 | (10 | ) | 1,117 | |||||||||
Gain on sale of UGSI | — | — | — | (75 | ) | ||||||||||
Executive and severance costs | — | — | — | 2,937 | |||||||||||
Gain on disposal of assets | (122 | ) | (665 | ) | (1,828 | ) | (919 | ) | |||||||
Total Adjusted EBITDA | $ | 4,571 | $ | 3,934 | $ | 14,369 | $ | 10,429 |
Three months ended September 30, 2019 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 27,996 | $ | 10,605 | $ | 4,497 | $ | — | $ | 43,098 | ||||||||||
Direct operating expenses | 22,023 | 8,750 | 3,524 | — | 34,297 | |||||||||||||||
General and administrative expenses | 1,377 | 647 | 72 | 2,678 | 4,774 | |||||||||||||||
Depreciation and amortization | 4,191 | 2,667 | 2,063 | 7 | 8,928 | |||||||||||||||
Operating income (loss) | 285 | (1,459 | ) | (1,158 | ) | (2,685 | ) | (5,017 | ) | |||||||||||
Operating margin % | 1.0 | % | (13.8 | )% | (25.8 | )% | N/A | (11.6 | )% | |||||||||||
Income (loss) before income taxes | 136 | (1,355 | ) | (1,215 | ) | (3,572 | ) | (6,006 | ) | |||||||||||
Net income (loss) | 136 | (1,355 | ) | (1,215 | ) | (3,618 | ) | (6,052 | ) | |||||||||||
Depreciation and amortization | 4,191 | 2,667 | 2,063 | 7 | 8,928 | |||||||||||||||
Interest expense, net | 192 | 129 | 57 | 901 | 1,279 | |||||||||||||||
Income tax expense | — | — | — | 46 | 46 | |||||||||||||||
EBITDA | $ | 4,519 | $ | 1,441 | $ | 905 | $ | (2,664 | ) | $ | 4,201 | |||||||||
Adjustments, net | 204 | (134 | ) | (76 | ) | 376 | 370 | |||||||||||||
Adjusted EBITDA | $ | 4,723 | $ | 1,307 | $ | 829 | $ | (2,288 | ) | $ | 4,571 | |||||||||
Adjusted EBITDA margin % | 16.9 | % | 12.3 | % | 18.4 | % | N/A | 10.6 | % |
Three months ended September 30, 2018 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 33,399 | $ | 11,247 | $ | 5,010 | $ | — | $ | 49,656 | ||||||||||
Direct operating expenses | 25,757 | 10,372 | 3,624 | — | 39,753 | |||||||||||||||
General and administrative expenses | 1,605 | 442 | 106 | 3,696 | 5,849 | |||||||||||||||
Depreciation and amortization | 5,698 | 1,976 | 2,331 | 13 | 10,018 | |||||||||||||||
Operating income (loss) | 339 | (1,543 | ) | (1,200 | ) | (3,709 | ) | (6,113 | ) | |||||||||||
Operating margin % | 1.0 | % | (13.7 | )% | (24.0 | )% | N/A | (12.3 | )% | |||||||||||
Income (loss) before income taxes | 372 | (1,628 | ) | (1,240 | ) | (4,552 | ) | (7,048 | ) | |||||||||||
Net income (loss) | 372 | (1,636 | ) | (1,246 | ) | (4,607 | ) | (7,117 | ) | |||||||||||
Depreciation and amortization | 5,698 | 1,976 | 2,331 | 13 | 10,018 | |||||||||||||||
Interest expense, net | 102 | 85 | 40 | 1,014 | 1,241 | |||||||||||||||
Income tax expense | — | 8 | 6 | 55 | 69 | |||||||||||||||
EBITDA | $ | 6,172 | $ | 433 | $ | 1,131 | $ | (3,525 | ) | $ | 4,211 | |||||||||
Adjustments, net | (203 | ) | (264 | ) | (130 | ) | 320 | (277 | ) | |||||||||||
Adjusted EBITDA | $ | 5,969 | $ | 169 | $ | 1,001 | $ | (3,205 | ) | $ | 3,934 | |||||||||
Adjusted EBITDA margin % | 17.9 | % | 1.5 | % | 20.0 | % | N/A | 7.9 | % |
Nine months ended September 30, 2019 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 81,866 | $ | 33,165 | $ | 15,934 | $ | — | $ | 130,965 | ||||||||||
Direct operating expenses | 64,205 | 27,072 | 10,094 | — | 101,371 | |||||||||||||||
General and administrative expenses | 3,629 | 2,222 | 825 | 8,853 | 15,529 | |||||||||||||||
Depreciation and amortization | 12,797 | 8,152 | 6,359 | 32 | 27,340 | |||||||||||||||
Operating income (loss) | 1,115 | (4,398 | ) | (1,334 | ) | (8,885 | ) | (13,502 | ) | |||||||||||
Operating margin % | 1.4 | % | (13.3 | )% | (8.4 | )% | N/A | (10.3 | )% | |||||||||||
Income (loss) before income taxes | 819 | (4,510 | ) | (1,500 | ) | (12,051 | ) | (17,242 | ) | |||||||||||
Net income (loss) | 819 | (4,510 | ) | (1,500 | ) | (12,222 | ) | (17,413 | ) | |||||||||||
Depreciation and amortization | 12,797 | 8,152 | 6,359 | 32 | 27,340 | |||||||||||||||
Interest expense, net | 488 | 345 | 166 | 2,998 | 3,997 | |||||||||||||||
Income tax expense | — | — | — | 171 | 171 | |||||||||||||||
EBITDA | $ | 14,104 | $ | 3,987 | $ | 5,025 | $ | (9,021 | ) | $ | 14,095 | |||||||||
Adjustments, net | (556 | ) | (590 | ) | (402 | ) | 1,822 | 274 | ||||||||||||
Adjusted EBITDA | $ | 13,548 | $ | 3,397 | $ | 4,623 | $ | (7,199 | ) | $ | 14,369 | |||||||||
Adjusted EBITDA margin % | 16.5 | % | 10.2 | % | 29.0 | % | N/A | 11.0 | % |
Nine months ended September 30, 2018 | Rocky Mountain | Northeast | Southern | Corporate | Total | |||||||||||||||
Revenue | $ | 97,334 | $ | 29,966 | $ | 20,973 | $ | — | $ | 148,273 | ||||||||||
Direct operating expenses | 77,702 | 26,696 | 16,051 | — | 120,449 | |||||||||||||||
General and administrative expenses | 4,763 | 1,722 | 935 | 23,763 | 31,183 | |||||||||||||||
Depreciation and amortization | 17,910 | 9,565 | 9,205 | 51 | 36,731 | |||||||||||||||
Operating loss | (3,041 | ) | (8,086 | ) | (10,497 | ) | (24,146 | ) | (45,770 | ) | ||||||||||
Operating margin % | (3.1 | )% | (27.0 | )% | (50.1 | )% | N/A | (30.9 | )% | |||||||||||
Loss before income taxes | (3,033 | ) | (8,307 | ) | (10,646 | ) | (28,405 | ) | (50,391 | ) | ||||||||||
Net loss | (3,033 | ) | (8,315 | ) | (10,652 | ) | (28,460 | ) | (50,460 | ) | ||||||||||
Depreciation and amortization | 17,910 | 9,565 | 9,205 | 51 | 36,731 | |||||||||||||||
Interest expense, net | 270 | 222 | 156 | 3,047 | 3,695 | |||||||||||||||
Income tax benefit | — | 8 | 6 | 55 | 69 | |||||||||||||||
EBITDA | $ | 15,147 | $ | 1,480 | $ | (1,285 | ) | $ | (25,307 | ) | $ | (9,965 | ) | |||||||
Adjustments, net | (269 | ) | (1,849 | ) | 6,101 | 16,411 | 20,394 | |||||||||||||
Adjusted EBITDA | $ | 14,878 | $ | (369 | ) | $ | 4,816 | $ | (8,896 | ) | $ | 10,429 | ||||||||
Adjusted EBITDA margin % | 15.3 | % | (1.2 | )% | 23.0 | % | N/A | 7.0 | % |
Three months ended September 30, 2019 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 43,098 | $ | — | $ | 43,098 | ||||||
Direct operating expenses | 34,297 | 118 | [A] | 34,415 | ||||||||
General and administrative expenses | 4,774 | (386 | ) | [B] | 4,388 | |||||||
Total costs and expenses | 48,115 | (384 | ) | [C] | 47,731 | |||||||
Operating loss | (5,017 | ) | 384 | [C] | (4,633 | ) | ||||||
Net loss | (6,052 | ) | 373 | [D] | (5,679 | ) | ||||||
Net loss | $ | (6,052 | ) | $ | (5,679 | ) | ||||||
Depreciation and amortization | 8,928 | 8,928 | ||||||||||
Interest expense, net | 1,279 | 1,279 | ||||||||||
Income tax expense | 46 | 43 | ||||||||||
EBITDA and Adjusted EBITDA | $ | 4,201 | $ | 4,571 |
Description of 2019 Special Items: | ||||
[A] | Special items relates to the gain on the sale of underutilized assets. | |||
[B] | Primarily attributable to stock-based compensation. | |||
[C] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $0.1 million for assets classified as held-for-sale in the Rocky Mountain division. | |||
[D] | Primarily includes the aforementioned adjustments along with a gain of $4.0 thousand associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the three months ended September 30, 2019 was (0.8%) percent and was applied to the special items accordingly. |
Three months ended September 30, 2018 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 49,656 | $ | — | $ | 49,656 | ||||||
Direct operating expenses | 39,753 | 526 | [E] | 40,279 | ||||||||
General and administrative expenses | 5,849 | (271 | ) | [F] | 5,578 | |||||||
Total costs and expenses | 55,769 | 106 | [G] | 55,875 | ||||||||
Operating loss | (6,113 | ) | (106 | ) | [G] | (6,219 | ) | |||||
Net loss | (7,117 | ) | (280 | ) | [H] | (7,397 | ) | |||||
Net loss | $ | (7,117 | ) | $ | (7,397 | ) | ||||||
Depreciation and amortization | 10,018 | 10,018 | ||||||||||
Interest expense, net | 1,241 | 1,241 | ||||||||||
Income tax expense | 69 | 72 | ||||||||||
EBITDA and Adjusted EBITDA | $ | 4,211 | $ | 3,934 |
Description of 2018 Special Items: | ||||
[E] | Special items primarily relates to the gain on the sale of underutilized assets. | |||
[F] | Primarily attributable to transaction costs related to the acquisition of Clearwater Solutions that closed on October 5, 2018 and stock-based compensation. | |||
[G] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $0.1 million for assets classified as held-for-sale in the Southern division. | |||
[H] | Primarily includes the aforementioned adjustments along with a gain of $34 thousand associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the three months ended September 30, 2018 was (1.0%) percent and was applied to the special items accordingly. |
Nine months ended September 30, 2019 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 130,965 | $ | — | $ | 130,965 | ||||||
Direct operating expenses | 101,371 | 1,824 | [A] | 103,195 | ||||||||
General and administrative expenses | 15,529 | (1,703 | ) | [B] | 13,826 | |||||||
Total costs and expenses | 144,467 | (106 | ) | [C] | 144,361 | |||||||
Operating loss | (13,502 | ) | 106 | [C] | (13,396 | ) | ||||||
Net loss | (17,413 | ) | 277 | [D] | (17,136 | ) | ||||||
Net loss | $ | (17,413 | ) | $ | (17,136 | ) | ||||||
Depreciation and amortization | 27,340 | 27,340 | ||||||||||
Interest expense, net | 3,997 | 3,997 | ||||||||||
Income tax expense | 171 | 168 | ||||||||||
EBITDA and Adjusted EBITDA | $ | 14,095 | $ | 14,369 |
Description of 2019 Special Items: | ||||
[A] | Special items relates to the gain on the sale of underutilized assets. | |||
[B] | Primarily attributable to stock-based compensation and non-routine legal expenses, offset by an adjustment to capitalize certain of our transaction costs for our acquisition of Clearwater Solutions in the fourth quarter of 2018. | |||
[C] | Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $0.2 million for assets classified as held-for-sale in the Northeast and Rocky Mountain divisions. | |||
[D] | Primarily includes the aforementioned adjustments along with continued reorganization costs from our 2017 chapter 11 filing, and a gain of $32.0 thousand associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the nine months ended September 30, 2019 was (1.0%) percent and was applied to the special items accordingly. |
Nine months ended September 30, 2018 | ||||||||||||
As Reported | Special Items | As Adjusted | ||||||||||
Revenue | $ | 148,273 | $ | — | $ | 148,273 | ||||||
Direct operating expenses | 120,449 | 718 | [E] | 121,167 | ||||||||
General and administrative expenses | 31,183 | (14,221 | ) | [F] | 16,962 | |||||||
Total costs and expenses | 194,043 | (19,183 | ) | [G] | 174,860 | |||||||
Operating loss | (45,770 | ) | 19,183 | [G] | (26,587 | ) | ||||||
Net loss | (50,460 | ) | 20,422 | [H] | (30,038 | ) | ||||||
Net loss | $ | (50,460 | ) | $ | (30,038 | ) | ||||||
Depreciation and amortization | 36,731 | 36,731 | ||||||||||
Interest expense, net | 3,695 | 3,695 | ||||||||||
Income tax expense | 69 | 41 | ||||||||||
EBITDA and Adjusted EBITDA | $ | (9,965 | ) | $ | 10,429 |
Description of 2018 Special Items: | ||||
[E] | Special items primarily relates to the gain on the sale of underutilized assets. | |||
[F] | Primarily attributable to severance, transaction costs associated with the acquisition of Clearwater Solutions that closed on October 5, 2018, stock-based compensation and non-routine litigation expenses. | |||
[G] | Primarily includes the aforementioned adjustments along with $1.1 million in restructuring costs related to the exit of the Eagle Ford Shale area, and long-lived asset impairment charges of $4.6 million for assets classified as held-for-sale in the Southern, Northeast and Corporate divisions. | |||
[H] | Primarily includes the aforementioned adjustments along with $1.6 million of continued reorganization costs from our 2017 chapter 11 filing, offset by a gain of $0.3 million associated with the change in the fair value of the derivative warrant liability. Additionally, our effective tax rate for the nine months ended September 30, 2018 was (0.1%) percent and was applied to the special items accordingly. |
Nine Months Ended | |||||||
September 30, | |||||||
2019 | 2018 | ||||||
Net cash provided by (used in) operating activities | $ | 4,595 | $ | 4,220 | |||
Net cash capital expenditures [1] | (2,515 | ) | 9,379 | ||||
Free Cash Flow | $ | 2,080 | $ | 13,599 |
[1] | Net cash capital expenditures is defined as proceeds received from sales of property, plant and equipment, net of purchases of property, plant and equipment. |
Revenue | Adjusted EBITDA | ||||||||||||
Q3 2019 vs Q2 2019 | Q3 2019 vs Q2 2019 | ||||||||||||
Breakdown of Decrease: | |||||||||||||
Price | $ | (626 | ) | (1.3 | )% | $ | (649 | ) | (12.2 | )% | |||
Activity | (1,516 | ) | (3.4 | ) | (123 | ) | (2.3 | ) | |||||
Acquisition/Closure | — | — | — | — | |||||||||
Corporate | — | — | 45 | 0.8 | |||||||||
Total Sequential Decrease | $ | (2,142 | ) | (4.7 | )% | $ | (727 | ) | (13.7 | )% |
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, 2019 | September 30, 2019 | ||||||||||||
Breakdown of Total Revenue Decline: | |||||||||||||
Price | $ | (535 | ) | (1.1 | )% | $ | (1,504 | ) | (1.0 | )% | |||
Activity | (8,173 | ) | (16.4 | ) | (19,973 | ) | (13.5 | ) | |||||
Acquisition/Closure (a) | 2,150 | 4.3 | 4,169 | 2.8 | |||||||||
Total Revenue Decline | $ | (6,558 | ) | (13.2 | )% | $ | (17,308 | ) | (11.7 | )% |
(a) | Represents the combined impact of the Clearwater Solutions acquisition on October 5, 2018 and management’s decision to exit the Eagle Ford Shale area as of March 1, 2018. |
Three Months Ended | Nine Months Ended | ||||||||||||
September 30, 2019 | September 30, 2019 | ||||||||||||
Breakdown of Total Adjusted EBITDA Growth: | |||||||||||||
Price | $ | (502 | ) | (12.8 | )% | $ | (1,454 | ) | (13.9 | )% | |||
Activity/Expense | (1,536 | ) | (39.0 | ) | (2,792 | ) | (26.8 | ) | |||||
Acquisition/Closure (a) | 1,758 | 44.7 | 5,838 | 56.0 | |||||||||
Corporate | 917 | 23.3 | 2,348 | 22.5 | |||||||||
Total Adjusted EBITDA Growth | $ | 637 | 16.2 | % | $ | 3,940 | 37.8 | % |
(a) | Represents the combined impact of the Clearwater Solutions acquisition on October 5, 2018 and management’s decision to exit the Eagle Ford Shale area as of March 1, 2018. |
Three Months Ended | ||
September 30, 2019 | ||
Water Trucks: | ||
Count (approximate) | 438 | |
% Utilized [1] | 50 | % |
Salt Water Disposal Wells: | ||
Count | 49 | |
% Utilized [2] | 53 | % |
Haynesville Pipeline: | ||
% Utilized [2] [3] | 57% - 62% |
[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 daily 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 September 30, | Year-Over-Year | |||||||||
2019 | 2018 | Growth (Decline) % | ||||||||
Pricing: | ||||||||||
Oil price per barrel [1] | $ | 56.34 | $ | 69.69 | (19.2 | )% | ||||
Natural gas price per tcf [2] | $ | 2.38 | $ | 2.93 | (18.8 | )% | ||||
Total Operating Rigs [3] | 171 | 179 | (4.5 | )% | ||||||
Rocky Mountain Division | 51 | 55 | (7.3 | )% | ||||||
Northeast Division | 69 | 76 | (9.2 | )% | ||||||
Southern Division | 50 | 49 | 2.0 | % | ||||||
Total Oil Production (barrels in thousands) [4] | 1,648 | 1,485 | 11.0 | % | ||||||
Rocky Mountain Division | 1,459 | 1,321 | 10.4 | % | ||||||
Northeast Division | 147 | 123 | 19.5 | % | ||||||
Southern Division | 42 | 41 | 2.4 | % | ||||||
Total Natural Gas Production (Mcf/d) [4] | 46,607 | 40,686 | 14.6 | % | ||||||
Rocky Mountain Division | 2,985 | 2,491 | 19.8 | % | ||||||
Northeast Division | 32,297 | 28,911 | 11.7 | % | ||||||
Southern Division | 11,325 | 9,285 | 22.0 | % | ||||||
Total Wells Completed [4] | 899 | 923 | (2.6 | )% | ||||||
Rocky Mountain Division | 365 | 406 | (10.1 | )% | ||||||
Northeast Division | 395 | 394 | 0.3 | % | ||||||
Southern Division | 140 | 123 | 13.8 | % | ||||||
Total Drilled Uncompleted Ending Inventory [4] | 1,355 | 1,593 | (14.9 | )% | ||||||
Rocky Mountain Division | 652 | 759 | (14.1 | )% | ||||||
Northeast Division | 517 | 629 | (17.8 | )% | ||||||
Southern Division | 186 | 205 | (9.3 | )% |
[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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