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) |
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | 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 March 26, 2018. |
PROPETRO HOLDING CORP. |
/s/ Mark Howell |
Mark Howell General Counsel |
Exhibit Number | Description of Exhibit | |
99.1 |
• | Grew year-end fleet capacity by 64% to 690,000 hydraulic horsepower (“HHP”), or 16 fleets, from 420,000 HHP, or ten fleets, at the end of 2016; |
• | Maintained 100% fleet utilization throughout the year; |
• | Purchased 86 Tier 2 engines estimated to yield approximately $30 million in savings; |
• | Implemented and completed transition from carbon steel to stainless steel fluid ends; |
• | Expanded operations to the Delaware Basin, and |
• | Maintained safety and performance metrics while growing employee head count nearly 100%. |
• | Successfully completed initial public offering to fund growth initiatives and strengthen balance sheet; |
• | Increased total revenue by 125% to $981.9 million from $436.9 million in 2016; |
• | Reported net income of $12.6 million as compared to a net loss of $53.1 million in 2016; and |
• | Grew adjusted EBITDA(1) to $137.4 million from $7.8 million in 2016 - more than a 1,600% increase. |
• | Increased total revenue by 11% to $313.7 million from $282.7 million in the third quarter of 2017; |
• | Posted net income of $10.1 million and adjusted EBITDA(1) of $42.8 million; and |
• | Deployed one new-build fleet (45,000 HHP). |
(1) | Adjusted EBITDA is a Non-GAAP financial measure and is described and reconciled to net income (loss) in the table under “Non-GAAP Financial Measures.” |
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||||||||||
SELECTED FINANCIAL AND OPERATING DATA | ||||||||||||||
(In thousands, except per share, total HHP and fleet count data) | ||||||||||||||
(Unaudited) | ||||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||||
December 31 | September 30 | December 31 | ||||||||||||
2017 | 2017 | 2016 | 2017 | 2016 | ||||||||||
Revenue | $ 313,712 | $ 282,730 | $ 163,921 | $ 981,865 | $ 436,920 | |||||||||
Operating income (loss) | $ 14,188 | $ 22,704 | $ | (22,295 | ) | $ 24,113 | $ (67,386) | |||||||
Net income (loss) | $ 10,078 | $ 21,965 | $ (17,315) | $ 12,613 | $ (53,147) | |||||||||
Net income (loss) per diluted common share | $ 0.12 | $ 0.25 | $ (0.33) | $ 0.16 | $ (1.19) | |||||||||
Adjusted EBITDA | $ 42,790 | $ 47,768 | $ 6,246 | $ 137,443 | $ 7,816 | |||||||||
Total HHP (end of period) | 690,000 | 645,000 | 420,000 | 690,000 | 420,000 | |||||||||
Total HHP (average for period) | 677,900 | 575,400 | 420,000 | 533,800 | 420,000 | |||||||||
Fleet count (end of period) | 16.0 | 15.0 | 10.0 | 16.0 | 10.0 | |||||||||
Fleet count (average for period) | 15.7 | 13.5 | 10.0 | 12.5 | 10.0 |
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||||
(In thousands, except per share data) | ||||||||||||
(Unaudited) | ||||||||||||
Three Months Ended | Twelve Months Ended | |||||||||||
December 31 | September 30 | December 31 | ||||||||||
2017 | 2017 | 2016 | 2017 | 2016 | ||||||||
REVENUE - Service revenue | $ 313,712 | $ 282,730 | $ 163,921 | $ 981,865 | $ 436,920 | |||||||
COSTS AND EXPENSES | ||||||||||||
Cost of services (exclusive of depreciation and amortization) | 262,048 | 225,433 | 148,779 | 813,823 | 404,140 | |||||||
General and administrative (inclusive of stock-based compensation) | 10,335 | 11,106 | 9,412 | 49,215 | 26,613 | |||||||
Depreciation and amortization | 17,026 | 14,745 | 10,873 | 55,628 | 43,542 | |||||||
Property and equipment impairment expense | 0 | 0 | 6,305 | 0 | 6,305 | |||||||
Goodwill impairment expense | 0 | 0 | 1,177 | 0 | 1,177 | |||||||
Loss on disposal of assets | 10,115 | 8,742 | 9,670 | 39,086 | 22,529 | |||||||
Total costs and expenses | 299,524 | 260,026 | 186,216 | 957,752 | 504,306 | |||||||
OPERATING INCOME (LOSS) | 14,188 | 22,704 | (22,295) | 24,113 | (67,386) | |||||||
Interest expense | (878) | (644) | (4,445) | (7,347) | (20,387) | |||||||
Gain on extinguishment of debt | 0 | 0 | 0 | 0 | 6,975 | |||||||
Other expense | (232) | (191) | 97 | (1,025) | (321) | |||||||
Total other income (expense) | (1,110) | (835) | (4,348) | (8,372) | (13,733) | |||||||
INCOME (LOSS) BEFORE INCOME TAXES | 13,078 | 21,869 | (26,643) | 15,741 | (81,119) | |||||||
INCOME TAX (EXPENSE)/BENEFIT | (3,000) | 96 | 9,328 | (3,128) | 27,972 | |||||||
NET INCOME (LOSS) | $ 10,078 | $ 21,965 | $ (17,315) | $ 12,613 | $ (53,147) | |||||||
NET INCOME (LOSS) PER COMMON SHARE: | ||||||||||||
Basic | $ 0.12 | $ 0.26 | $ (0.33) | $ 0.17 | $ (1.19) | |||||||
Diluted | $ 0.12 | $ 0.25 | $ (0.33) | $ 0.16 | $ (1.19) | |||||||
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||||||
Basic | 83,040 | 83,040 | 52,628 | 76,371 | 44,787 | |||||||
Diluted | 86,818 | 86,264 | 52,628 | 79,583 | 44,787 |
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||
(In thousands, except share data) | ||||||
(Unaudited) | ||||||
December 31, 2017 | December 31, 2016 | |||||
ASSETS | ||||||
CURRENT ASSETS: | ||||||
Cash and cash equivalents | $ 23,949 | $ 133,596 | ||||
Accounts receivable - net of allowance for doubtful accounts of $443 and $552, respectively | 199,656 | 115,179 | ||||
Inventories | 6,184 | 4,713 | ||||
Prepaid expenses | 5,123 | 4,608 | ||||
Other current assets | 748 | 6,684 | ||||
Total current assets | 235,660 | 264,780 | ||||
PROPERTY AND EQUIPMENT - Net of accumulated depreciation | 470,910 | 263,862 | ||||
OTHER NONCURRENT ASSETS: | ||||||
Goodwill | 9,425 | 9,425 | ||||
Intangible assets - net of amortization | 301 | 589 | ||||
Deferred revenue rebate - net of amortization | 615 | 2,462 | ||||
Other noncurrent assets | 2,121 | 304 | ||||
Total other noncurrent assets | 12,462 | 12,780 | ||||
TOTAL ASSETS | $ 719,032 | $ 541,422 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||
CURRENT LIABILITIES: | ||||||
Accounts payable | $ 211,149 | $ 129,093 | ||||
Accrued liabilities | 16,607 | 13,619 | ||||
Current portion of long-term debt | 15,764 | 16,920 | ||||
Accrued interest payable | 76 | 109 | ||||
Total current liabilities | 243,596 | 159,741 | ||||
DEFERRED INCOME TAXES | 4,881 | 1,148 | ||||
LONG-TERM DEBT | 57,178 | 159,407 | ||||
OTHER LONG-TERM LIABILITIES | 125 | 117 | ||||
Total liabilities | 305,780 | 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 | 0 | 17 | ||||
Preferred stock, additional paid-in capital | 0 | 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 | 607,466 | 265,355 | ||||
Accumulated deficit | (194,297) | (206,910) | ||||
Total shareholders’ equity | 413,252 | 221,009 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | $ 719,032 | $ 541,422 |
PROPETRO HOLDING CORP. AND SUBSIDIARY | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(In thousands) | ||||||||
(Unaudited) | ||||||||
Twelve Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income (loss) | $ 12,613 | $ (53,147) | ||||||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization | 55,628 | 43,542 | ||||||
Gain on extinguishment of debt | 0 | (6,975) | ||||||
Property and equipment impairment expense | 0 | 6,305 | ||||||
Goodwill impairment expense | 0 | 1,177 | ||||||
Deferred income tax benefit | 3,430 | (27,972) | ||||||
Amortization of deferred revenue rebate | 1,846 | 1,846 | ||||||
Amortization of deferred debt issuance costs | 3,403 | 2,091 | ||||||
Stock‑based compensation | 9,489 | 1,649 | ||||||
Loss on disposal of assets | 39,086 | 22,529 | ||||||
(Gain) loss on interest rate swap | (251) | (205) | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (84,477) | (24,888) | ||||||
Other current assets | 3,304 | (563) | ||||||
Inventories | (1,472) | 3,859 | ||||||
Prepaid expenses | (468) | (62) | ||||||
Accounts payable | 64,228 | 37,049 | ||||||
Accrued liabilities | 2,930 | 4,392 | ||||||
Accrued interest | (32) | 32 | ||||||
Net cash provided by (used in) operating activities | 109,257 | 10,659 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Capital expenditures | (285,891) | (42,832) | ||||||
Proceeds from sale of assets | 4,422 | 1,144 | ||||||
Net cash used in investing activities | (281,469) | (41,688) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from borrowings | 60,045 | 0 | ||||||
Repayments of borrowings | (166,546) | (41,295) | ||||||
Proceeds from insurance financing | 4,125 | 4,126 | ||||||
Repayments of insurance financing | (3,807) | (4,527) | ||||||
Extinguishment of debt | 0 | (30,000) | ||||||
Payment of debt extinguishment costs | 0 | (525) | ||||||
Payment of debt issuance costs | (1,653) | (140) | ||||||
Proceeds from additional common equity capitalization | 0 | 40,425 | ||||||
Proceeds from preferred equity capitalization | 0 | 170,000 | ||||||
Payment of preferred equity capitalization costs | 0 | (7,489) | ||||||
Proceeds from IPO | 185,500 | 0 | ||||||
Payment of deferred IPO costs | (15,099) | (260) |
Net cash provided by (used in) financing activities | 62,565 | 130,315 | ||||||
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | (109,647) | 99,286 | ||||||
CASH AND CASH EQUIVALENTS — Beginning of year | 133,596 | 34,310 | ||||||
CASH AND CASH EQUIVALENTS — End of year | $ 23,949 | $ 133,596 |
Reportable Segment Information | |||||||||||||||||||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||||||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||||||||||||||||||||||||||||
($ in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | ||||||||||||||||||||||||||||
Service revenue | 305,685 | $ 8,027 | $ | 313,712 | $ | 271,924 | $ | 10,806 | $ | 282,730 | $ | 157,604 | $6,317 | $ | 163,921 | ||||||||||||||||||||||
Adjusted EBITDA | $ 46,826 | $ (4,036) | $ 42,790 | $ 50,013 | $ | (2,245 | ) | $ 47,768 | $ 9,155 | $ | (2,909 | ) | $ 6,246 | ||||||||||||||||||||||||
Depreciation and amortization | $ 15,927 | $ 1,099 | $ 17,026 | $ 13,637 | $ 1,108 | $ 14,745 | $ 9,378 | $1,495 | $ 10,873 | ||||||||||||||||||||||||||||
Capital expenditures | $ 97,310 | $ 1,662 | $ 98,972 | $ 61,752 | $ 765 | $ 62,517 | $ 23,891 | $ 223 | $ 24,114 | ||||||||||||||||||||||||||||
Twelve Months Ended | |||||||||||||||||||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||||||||||||||||||
($ in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | |||||||||||||||||||||||||||||||
Service revenue | $ | 945,040 | $36,825 | $ | 981,865 | $ | 409,014 | $ | 27,906 | $ | 436,920 | ||||||||||||||||||||||||||
Adjusted EBITDA | $ | 145,122 | $ (7,679) | $ | 137,443 | $ 15,656 | $ | (7,840 | ) | $ 7,816 | |||||||||||||||||||||||||||
Depreciation and amortization | $ 51,155 | $ 4,473 | $ 55,628 | $ 37,282 | $ 6,260 | $ 43,542 | |||||||||||||||||||||||||||||||
Capital expenditures | $ | 300,406 | $ 4,893 | $ | 305,299 | 0 | $ 6,305 | $ 6,305 |
Reconciliation of Net Income (Loss) to Adjusted EBITDA | |||||||||||||||||||||
Three Months Ended | |||||||||||||||||||||
December 31, 2017 | September 30, 2017 | December 31, 2016 | |||||||||||||||||||
($ in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | ||||||||||||
Net income (loss) | $ 20,330 | $ (10,252) | $ 10,078 | $ 28,372 | $ (6,407) | $ 21,965 | $ (10,501) | $ (6,816) | $ (17,317) | ||||||||||||
Depreciation and amortization | 15,927 | 1,099 | 17,026 | 13,637 | 1,108 | 14,745 | 9,377 | 1,496 | 10,873 | ||||||||||||
Interest expense | 0 | 878 | 878 | 0 | 644 | 644 | 0 | 4,445 | 4,445 | ||||||||||||
Income tax expense | 0 | 3,000 | 3,000 | 0 | (96) | (96) | 0 | (9,328) | (9,328) | ||||||||||||
Loss on disposal of assets | 10,117 | 0 | 10,117 | 7,552 | 1,190 | 8,742 | 10,279 | (610) | 9,669 | ||||||||||||
Stock-based compensation | 0 | 759 | 759 | 0 | 751 | 751 | 0 | 519 | 519 | ||||||||||||
Property and equipment impairment | 0 | 0 | 0 | 0 | 751 | 751 | 0 | 6,305 | 6,305 | ||||||||||||
Goodwill impairment | 0 | 0 | 0 | 0 | 751 | 751 | 0 | 1,177 | 1,177 | ||||||||||||
Other expense and legal settlement | 0 | 233 | 233 | 0 | 340 | 340 | 0 | (97) | (97) | ||||||||||||
Deferred IPO bonus expense | 452 | 247 | 699 | 452 | 225 | 677 | 0 | 0 | 0 | ||||||||||||
Adjusted EBITDA | $ 46,826 | $ (4,036) | $ 42,790 | $ 50,013 | $ (2,245) | $ 47,768 | $ 9,155 | $ (2,909) | $ 6,246 | ||||||||||||
Twelve Months Ended | |||||||||||||||||||||
December 31, 2017 | December 31, 2016 | ||||||||||||||||||||
($ in thousands) | Pressure Pumping | All Other | Total | Pressure Pumping | All Other | Total | |||||||||||||||
Net income (loss) | $ 50,417 | $ (37,804) | $ 12,613 | $ (45,316) | $ (7,831) | $ (53,147) | |||||||||||||||
Depreciation and amortization | 51,155 | 4,473 | 55,628 | 37,282 | 6,260 | 43,542 | |||||||||||||||
Interest expense | 0 | 7,347 | 7,347 | 0 | 20,387 | 20,387 | |||||||||||||||
Income tax expense (benefit) | 0 | 3,128 | 3,128 | 0 | (27,972) | (27,972) | |||||||||||||||
Loss (gain) on disposal of assets | 38,059 | 1,027 | 39,086 | 23,690 | (1,161) | 22,529 | |||||||||||||||
Stock-based compensation | 0 | 9,489 | 9,489 | 0 | 1,649 | 1,649 | |||||||||||||||
Property and equipment impairment | 0 | 0 | 0 | 0 | 6,305 | 6,305 | |||||||||||||||
Goodwill impairment | 0 | 0 | 0 | 0 | 1,177 | 1,177 | |||||||||||||||
Other expense | 0 | 1,025 | 1,025 | 0 | 321 | 321 | |||||||||||||||
Legal settlement expense | 0 | 722 | 722 | 0 | 0 | 0 | |||||||||||||||
Gain on extiguishment of debt | 0 | 0 | 0 | 0 | (6,975) | (6,975) | |||||||||||||||
Deferred IPO bonus expense | 5,491 | 2,914 | 8,405 | 0 | 0 | 0 | |||||||||||||||
Adjusted EBITDA | $ 145,122 | $ (7,679) | $ 137,443 | $ 15,656 | $ (7,840) | $ 7,816 |