Delaware | 001-38035 | 26-3685382 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||
1706 S. Midkiff, Bldg. B Midland, TX | 79701 | |||
(Address of principal executive offices) | (Zip Code) |
¨ | 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 | ý |
Exhibit Number | Description of Exhibit | |
99.1 | Press Release dated November 1, 2017. |
PROPETRO HOLDING CORP. |
/s/ Mark Howell |
Mark Howell General Counsel |
Exhibit Number | Description of Exhibit | |
99.1 |
• | Total revenue for the quarter increased 32% to $282.7 million, compared to $213.5 million for the second quarter of 2017. |
• | Net income for the quarter was $22.0 million, or $0.25 per diluted share, as compared to $4.9 million, or $0.06 per diluted share, for the second quarter of 2017. |
• | Adjusted EBITDA for the quarter was $47.8 million, up 56% from $30.7 million for the second quarter of 2017. Adjusted EBITDA margin for the third quarter was 16.9% --- a substantial increase from 14.4% in the preceding quarter. |
• | Frac fleet remained fully utilized, including deployment of three new-build fleets, ending the period with total capacity of 645,000 hydraulic horsepower (“HHP”) --- more than a 26% increase as compared to the end of the second quarter of 2017. |
• | Recently took delivery and immediately commenced operations of an additional frac fleet bringing total deployed capacity to 690,000 HHP. The Company plans to build and deploy one additional fleet in the first quarter of 2018, which will increase total frac fleet capacity to 735,000 HHP, or 17 fleets. |
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(In thousands, except per share data) | ||||||||
(Unaudited) | ||||||||
Three Months Ended | ||||||||
September 30 | June 30 | September 30 | ||||||
2017 | 2017 | 2016 | ||||||
REVENUE - Service revenue | $ 282,730 | $ 213,492 | $ 116,904 | |||||
COSTS AND EXPENSES | ||||||||
Cost of services (exclusive of depreciation and amortization) | 225,433 | 176,777 | 110,223 | |||||
General and administrative (inclusive of stock-based compensation) | 11,106 | 7,916 | 5,856 | |||||
Depreciation and amortization | 14,745 | 12,706 | 10,790 | |||||
Loss on disposal of assets | 8,742 | 9,787 | 5,923 | |||||
Total costs and expenses | 260,026 | 207,186 | 132,792 | |||||
OPERATING INCOME (LOSS) | 22,704 | 6,306 | (15,888) | |||||
OTHER INCOME (EXPENSE): | ||||||||
Interest expense | (644) | (650) | (4,550) | |||||
Other expense | (191) | (627) | (106) | |||||
Total other income (expense) | (835) | (1,277) | (4,656) | |||||
INCOME (LOSS) BEFORE INCOME TAXES | 21,869 | 5,029 | (20,544) | |||||
INCOME TAX BENEFIT/(EXPENSE) | 96 | (108) | 6,946 | |||||
NET INCOME (LOSS) | $ 21,965 | $ 4,921 | $ (13,598) | |||||
NET INCOME (LOSS) PER COMMON SHARE: | ||||||||
Basic | $ 0.26 | $ 0.06 | $ (0.26) | |||||
Diluted | $ 0.25 | $ 0.06 | $ (0.26) | |||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
Basic | 83,040 | 83,040 | 52,975 | |||||
Diluted | 86,264 | 86,279 | 52,975 | |||||
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(In thousands, except share data) | ||||||||||
(Unaudited) | ||||||||||
September 30, 2017 | December 31, 2016 | |||||||||
ASSETS | ||||||||||
CURRENT ASSETS: | ||||||||||
Cash and cash equivalents | $ | 51,008 | $ | 133,596 | ||||||
Accounts receivable - net of allowance for doubtful accounts of $335 and $552, respectively | 160,047 | 115,179 | ||||||||
Inventories | 9,148 | 4,713 | ||||||||
Prepaid expenses | 5,543 | 4,608 | ||||||||
Other current assets | 975 | 6,684 | ||||||||
Total current assets | 226,721 | 264,780 | ||||||||
PROPERTY AND EQUIPMENT - Net of accumulated depreciation | 399,268 | 263,862 | ||||||||
OTHER NONCURRENT ASSETS: | ||||||||||
Goodwill | 9,425 | 9,425 | ||||||||
Intangible assets - net of amortization | 373 | 589 | ||||||||
Deferred revenue rebate - net of amortization | 1,077 | 2,462 | ||||||||
Other noncurrent assets | 1,727 | 304 | ||||||||
Total other noncurrent assets | 12,602 | 12,780 | ||||||||
TOTAL ASSETS | $ | 638,591 | $ | 541,422 | ||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
CURRENT LIABILITIES: | ||||||||||
Accounts payable | $ | 181,660 | $ | 129,093 | ||||||
Accrued liabilities | 11,074 | 13,619 | ||||||||
Current portion of long-term debt | 7,441 | 16,920 | ||||||||
Accrued interest payable | 86 | 109 | ||||||||
Total current liabilities | 200,261 | 159,741 | ||||||||
DEFERRED INCOME TAXES | 1,315 | 1,148 | ||||||||
LONG-TERM DEBT | 34,476 | 159,407 | ||||||||
OTHER LONG-TERM LIABILITIES | 124 | 117 | ||||||||
Total liabilities | 236,176 | 320,413 | ||||||||
COMMITMENTS AND CONTINGENCIES | ||||||||||
SHAREHOLDERS’ EQUITY: | ||||||||||
Preferred stock, $0.001 par value, 30,000,000 shares authorized, 0 and 16,999,990 shares issued, respectively | — | 17 | ||||||||
Preferred stock, additional paid-in capital | — | 162,494 | ||||||||
Common stock, $0.001 par value, 200,000,000 shares authorized, 83,039,854 and 52,627,652 shares issued, respectively | 83 | 53 | ||||||||
Additional paid-in capital | 606,707 | 265,355 | ||||||||
Accumulated deficit | (204,375 | ) | (206,910 | ) | ||||||
Total shareholders’ equity | 402,415 | 221,009 | ||||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ | 638,591 | $ | 541,422 |
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Nine Months Ended September 30, | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ 2,535 | $ (35,830) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 38,602 | 32,669 | ||||||
Gain on extinguishment | 0 | (6,975) | ||||||
Deferred income tax expense (benefit) | 166 | (18,644) | ||||||
Amortization of deferred revenue rebate | 1,385 | 1,385 | ||||||
Amortization of deferred debt issuance costs | 3,322 | 1,806 | ||||||
Stock-based compensation | 8,730 | 1,130 | ||||||
Loss on disposal of assets | 28,971 | 12,859 | ||||||
Gain on interest rate swap | (226) | (54) | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (44,868) | 3,255 | ||||||
Other current assets | 3,271 | (4) | ||||||
Inventories | (4,435) | 1,579 | ||||||
Prepaid expenses | (910) | 2,845 | ||||||
Accounts payable | 41,564 | (2,294) | ||||||
Accrued liabilities | 589 | 620 | ||||||
Accrued interest | (23) | 1 | ||||||
Net cash provided by (used in) operating activities | 78,673 | (5,652) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (193,820) | (18,631) | ||||||
Proceeds from sale of assets | 4,237 | 475 | ||||||
Net cash used in investing activities | (189,583) | (18,156) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from borrowings | 27,112 | 0 | ||||||
Repayments of borrowings | (164,638) | (42,166) | ||||||
Repayments of insurance financing | (2,900) | (2,833) | ||||||
Debt extinguishment cost | 0 | (525) | ||||||
Payment of debt issuance costs | (1,653) | (115) | ||||||
Equity capitalization | 0 | 40,425 | ||||||
Proceeds from IPO | 185,500 | 0 | ||||||
Payment of IPO costs | (15,099) | 0 | ||||||
Net cash provided by (used in) financing activities | 28,322 | (5,214) | ||||||
NET DECREASE IN CASH AND CASH EQUIVALENTS | (82,588) | (29,022) | ||||||
CASH AND CASH EQUIVALENTS - Beginning of period | 133,596 | 34,310 | ||||||
CASH AND CASH EQUIVALENTS - End of period | $ 51,008 | $ 5,288 |
Reportable Segment Information | |||||||||||||
Three Months Ended | |||||||||||||
September 30, 2017 | June 30, 2017 | ||||||||||||
($ in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | |||||||
Service revenue | $ 271,924 | $ 10,806 | $ 282,730 | $ 203,591 | $ 9,901 | $ 213,492 | |||||||
Adjusted EBITDA | $ 50,013 | $ (2,245) | $ 47,768 | $ 31,362 | $ (706) | $ 30,656 | |||||||
Depreciation and amortization | $ 13,637 | $ 1,108 | $ 14,745 | $ 11,596 | $ 1,110 | $ 12,706 | |||||||
Capital expenditures | $ 61,752 | $ 765 | $ 62,517 | $ 86,302 | $ 1,047 | $ 87,349 |
Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||||
Three Months Ended | |||||||||||||
September 30, 2017 | June 30, 2017 | ||||||||||||
($ in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | |||||||
Net income (loss) | $ 28,372 | $ (6,407) | $ 21,965 | $ 9,633 | $ (4,712) | $ 4,921 | |||||||
Depreciation and amortization | 13,637 | 1,108 | 14,745 | 11,596 | 1,110 | 12,706 | |||||||
Interest expense | 0 | 644 | 644 | 0 | 650 | 650 | |||||||
Income tax (benefit) expense | 0 | (96) | (96) | 0 | 108 | 108 | |||||||
Loss on disposal of assets | 7,552 | 1,190 | 8,742 | 9,681 | 106 | 9,787 | |||||||
Stock-based compensation | 0 | 751 | 751 | 0 | 609 | 609 | |||||||
Other expense and legal settlement | 0 | 340 | 340 | 0 | 1,199 | 1,199 | |||||||
Deferred IPO bonus expense | 452 | 225 | 677 | 452 | 224 | 676 | |||||||
Adjusted EBITDA | $ 50,013 | $ (2,245) | $ 47,768 | $ 31,362 | $ (706) | $ 30,656 |