Delaware | 001-38383 | 82-1221944 | ||
(State or Other Jurisdiction of Incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
1415 Louisiana Street, Suite 2900 Houston, Texas | 77002 | |
(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 |
Item 2.02. | Results of Operations and Financial Condition |
Item 7.01. | Regulation FD Disclosure |
Item 9.01. | Financial Statements and Exhibits |
(d) | Exhibits |
* | Furnished herewith. |
QUINTANA ENERGY SERVICES INC. | |||||
By: | /s/ D. Rogers Herndon | ||||
Name: | D. Rogers Herndon | ||||
Title: | Chief Executive Officer, President and Director |
Three Months Ended | ||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
Revenues: | $ | 150,897 | $ | 152,536 | $ | 113,274 | ||||||
Costs and expenses: | ||||||||||||
Direct operating costs | 118,525 | 116,581 | 89,910 | |||||||||
General and administrative | 22,540 | 22,500 | 18,613 | |||||||||
Depreciation and amortization | 12,033 | 11,155 | 11,238 | |||||||||
Gain on disposition of assets | (629 | ) | (594 | ) | (310 | ) | ||||||
Operating (loss) income | (1,572 | ) | 2,894 | (6,177 | ) | |||||||
Non-operating (expense) income: | ||||||||||||
Interest expense | (574 | ) | (433 | ) | (2,901 | ) | ||||||
Other income | — | — | 724 | |||||||||
(Loss) income before income tax | (2,146 | ) | 2,461 | (8,354 | ) | |||||||
Income tax expense | (207 | ) | (326 | ) | (84 | ) | ||||||
Net loss attributable to predecessor | — | — | (8,438 | ) | ||||||||
Net (loss) income attributable to Quintana Energy Services Inc. | $ | (2,353 | ) | $ | 2,135 | $ | — | |||||
Net (loss) income per common share: | ||||||||||||
Basic | $ | (0.07 | ) | $ | 0.06 | $ | — | |||||
Diluted | $ | (0.07 | ) | $ | 0.06 | $ | — | |||||
Weighted average common shares outstanding: | ||||||||||||
Basic | 33,631 | 33,631 | — | |||||||||
Diluted | 33,631 | 35,227 | — |
September 30, 2018 | December 31, 2017 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 22,070 | $ | 8,751 | ||||
Accounts receivable, net of allowance of $1,214 and $776 | 86,738 | 83,325 | ||||||
Unbilled receivables | 9,480 | 9,645 | ||||||
Inventories | 26,502 | 22,693 | ||||||
Prepaid expenses and other current assets | 3,991 | 9,520 | ||||||
Total current assets | 148,781 | 133,934 | ||||||
Property, plant and equipment, net | 151,864 | 128,518 | ||||||
Intangible assets, net | 9,472 | 10,832 | ||||||
Other assets | 1,612 | 2,375 | ||||||
Total assets | $ | 311,729 | $ | 275,659 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current liabilities | ||||||||
Accounts payable | $ | 42,162 | $ | 36,027 | ||||
Accrued liabilities | 33,724 | 33,825 | ||||||
Current portion of debt and capital lease obligations | 413 | 79,443 | ||||||
Total current liabilities | 76,299 | 149,295 | ||||||
Deferred income taxes | 134 | 185 | ||||||
Long-term debt, net of deferred financing costs of $0 and $1,709 | 30,000 | 37,199 | ||||||
Long-term capital lease obligations | 3,560 | 3,829 | ||||||
Other long-term liabilities | 136 | 183 | ||||||
Total liabilities | 110,129 | 190,691 | ||||||
Commitments and contingencies | ||||||||
Shareholders’ and members’ equity | ||||||||
Members’ equity | — | 212,630 | ||||||
Preferred shares, $0.01 par value, 10,000,000 authorized; none issued and outstanding | — | — | ||||||
Common shares, $0.01 par value, 150,000,000 authorized; 33,765,486 issued; 33,630,934 outstanding | 342 | — | ||||||
Additional paid-in-capital | 346,580 | — | ||||||
Treasury stock, at cost, 134,552 common shares | (1,271 | ) | — | |||||
Accumulated deficit | (144,051 | ) | (127,662 | ) | ||||
Total shareholders’ and members’ equity | 201,600 | 84,968 | ||||||
Total liabilities, shareholders’ and members’ equity | $ | 311,729 | $ | 275,659 |
Nine Months Ended | ||||||||
September 30, 2018 | September 30, 2017 | |||||||
Cash flows from operating activities: | ||||||||
Net loss | $ | (16,574 | ) | $ | (23,224 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
Depreciation and amortization | 34,265 | 34,264 | ||||||
Gain on disposition of assets | (5,256 | ) | (8,812 | ) | ||||
Non-cash interest expense | 944 | 4,522 | ||||||
Loss on debt extinguishment | 8,594 | — | ||||||
Provision for doubtful accounts | 573 | (48 | ) | |||||
Deferred income tax expense | 134 | 59 | ||||||
Stock-based compensation | 15,395 | — | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (3,986 | ) | (43,889 | ) | ||||
Unbilled receivables | 164 | 818 | ||||||
Inventories | (3,809 | ) | (2,747 | ) | ||||
Prepaid expenses and other current assets | 2,538 | 1,772 | ||||||
Other noncurrent assets | (9 | ) | (1,675 | ) | ||||
Accounts payable | 4,158 | 4,549 | ||||||
Accrued liabilities | (101 | ) | 16,013 | |||||
Other long-term liabilities | (46 | ) | (44 | ) | ||||
Net cash provided by (used in) operating activities | 36,984 | (18,442 | ) | |||||
Cash flows from investing activities: | ||||||||
Purchases of property, plant and equipment | (53,112 | ) | (13,519 | ) | ||||
Proceeds from sale of property, plant and equipment | 6,836 | 33,679 | ||||||
Net cash (used in) provided by investing activities | (46,276 | ) | 20,160 | |||||
Cash flows from financing activities: | ||||||||
Proceeds from revolving debt | 37,000 | 6,485 | ||||||
Payments on revolving debt | (86,071 | ) | (17,414 | ) | ||||
Proceeds from term loans | — | 5,000 | ||||||
Payments on term loans | (11,225 | ) | — | |||||
Payments on capital lease obligations | (280 | ) | (219 | ) | ||||
Payment of deferred financing costs | (1,564 | ) | — | |||||
Prepayment premiums on early debt extinguishment | (1,346 | ) | — | |||||
Payments for treasury shares | (1,271 | ) | — | |||||
Proceeds from new shares issuance, net of underwriting commission costs | 90,542 | — | ||||||
Costs incurred for stock issuance | (3,174 | ) | — | |||||
Net cash provided by (used in) financing activities | 22,611 | (6,148 | ) | |||||
Net increase (decrease) in cash and cash equivalents | 13,319 | (4,430 | ) | |||||
Cash and cash equivalents beginning of period | 8,751 | 12,219 | ||||||
Cash and cash equivalents end of period | $ | 22,070 | $ | 7,789 | ||||
Supplemental cash flow information | ||||||||
Cash paid for interest | 1,608 | 3,502 | ||||||
Income taxes paid, net of refund | 90 | 9 | ||||||
Supplemental non-cash investing and financing activities | ||||||||
Non-cash proceeds from sale of assets held for sale | — | 3,990 | ||||||
Fixed asset purchases in accounts payable and accrued liabilities | 1,989 | — | ||||||
Non-cash capital lease additions | 53 | 70 | ||||||
Non-cash payment for property, plant and equipment | 3,279 | — | ||||||
Debt conversion of term loan to equity | 33,631 | — | ||||||
Issuance of common shares for members’ equity | 212,630 | — |
Three Months Ended | ||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
(Unaudited) | ||||||||||||
Other Operational Data: | ||||||||||||
Directional Drilling rig days (1) (2) | 4,874 | 4,108 | 3,711 | |||||||||
Average monthly Directional Drilling rigs on revenue (3) | 77 | 61 | 61 | |||||||||
Total hydraulic fracturing stages | 908 | 945 | 636 | |||||||||
Average hydraulic fracturing revenue per stage | $ | 50,119 | $ | 56,000 | $ | 56,530 |
(1) | Rig days represent the number of days we are providing services to rigs and are earning revenues during the period, including days that standby revenues are earned. |
(2) | Rigs on revenue represents the number of rigs earning revenues during a time period, including days that standby revenues are earned. |
(3) | Includes unconventional stages and conventional jobs, the latter are counted as a single stage. |
Three Months Ended | |||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | |||||||||
Adjustments to reconcile Adjusted EBITDA to net (loss) income: | |||||||||||
Net (loss) income | $ | (2,353 | ) | $ | 2,135 | $ | (8,438 | ) | |||
Income tax expense | 207 | 326 | 84 | ||||||||
Interest expense | 574 | 433 | 2,901 | ||||||||
Other income | — | — | (724 | ) | |||||||
Depreciation and amortization expense | 12,033 | 11,155 | 11,238 | ||||||||
Gain on disposition of assets, net | (629 | ) | (594 | ) | (310 | ) | |||||
Non-cash stock based compensation | 2,569 | 2,940 | — | ||||||||
Rebranding expense (1) | 193 | 53 | 8 | ||||||||
Settlement expense (2) | 133 | 166 | 1,142 | ||||||||
Severance expense (3) | 74 | 53 | — | ||||||||
Equipment and standup expense (4) | 97 | 1,251 | 871 | ||||||||
Adjusted EBITDA | $ | 12,898 | $ | 17,918 | $ | 6,772 |
Three Months Ended | ||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
Directional Drilling | $ | 6,452 | $ | 5,242 | $ | 3,423 | ||||||
Pressure Pumping | 5,795 | 8,884 | 5,791 | |||||||||
Pressure Control | 4,421 | 5,602 | 835 | |||||||||
Wireline | (738 | ) | 788 | (1,166 | ) | |||||||
Corporate and Other | (6,098 | ) | (7,061 | ) | (4,132 | ) | ||||||
Income tax expense | (207 | ) | (326 | ) | (84 | ) | ||||||
Interest expense | (574 | ) | (433 | ) | (2,901 | ) | ||||||
Other income | — | — | 724 | |||||||||
Depreciation and amortization | (12,033 | ) | (11,155 | ) | (11,238 | ) | ||||||
Gain on disposition of assets, net | 629 | 594 | 310 | |||||||||
Net (loss) income | $ | (2,353 | ) | $ | 2,135 | $ | (8,438 | ) |
Three Months Ended | ||||||||||||
September 30, 2018 | June 30, 2018 | September 30, 2017 | ||||||||||
Segment Adjusted EBITDA Margin(1) | ||||||||||||
Directional Drilling | ||||||||||||
Adjusted EBITDA | $ | 6,452 | $ | 5,242 | $ | 3,423 | ||||||
Revenue | 50,919 | 43,605 | 38,704 | |||||||||
Adjusted EBITDA Margin Percentage | 12.7 | 12.0 | 8.8 | |||||||||
Pressure Pumping | ||||||||||||
Adjusted EBITDA | 5,795 | 8,884 | 5,791 | |||||||||
Revenue | 49,987 | 56,702 | 39,446 | |||||||||
Adjusted EBITDA Margin Percentage | 11.6 | 15.7 | 14.7 | |||||||||
Pressure Control | ||||||||||||
Adjusted EBITDA | 4,421 | 5,602 | 835 | |||||||||
Revenue | 31,138 | 31,965 | 22,533 | |||||||||
Adjusted EBITDA Margin Percentage | 14.2 | 17.5 | 3.7 | |||||||||
Wireline | ||||||||||||
Adjusted EBITDA | (738 | ) | 788 | (1,166 | ) | |||||||
Revenue | 18,853 | $ | 20,264 | 12,591 | ||||||||
Adjusted EBITDA Margin Percentage | (3.9 | ) | 3.9 | (9.3 | ) |
(1) | Segment Adjusted EBITDA Margin is defined as the quotient of Segment Adjusted EBITDA and total segment revenue. Segment Adjusted EBITDA is net income (loss) plus income taxes, net interest expense, depreciation and amortization, impairment charges, net (gain) loss on disposition of assets, stock based compensation, transaction expenses, rebranding expenses, settlement expenses, severance expenses and equipment standup expense. |
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