Nuverra Environmental Solutions (NYSE:NES) (“Nuverra” or “the
Company”) today provided an update on the status of its previously
announced agreement to divest Thermo Fluids, Inc. (“TFI”), as well
as an interim update on key initiatives.
TFI Sale Update
Nuverra has been informed by representatives of VeroLube USA,
Inc. (“VeroLube”) and its financial advisor that VeroLube is
proposing a reduction in the purchase price for TFI from the
previously agreed total of $175 million to a revised total purchase
price of $145 million. Nuverra was further informed that the
proposed revised purchase price of $145 million would include a
stock component that may be greater than the previously agreed upon
$10 million. VeroLube has proposed a revised transaction closing
date of September 30, 2014.
VeroLube and its financial advisor informed Nuverra that they
have finalized the debt component of their financing strategy, and
believe they could finalize the equity component in the next
several weeks.
Nuverra is currently evaluating the revised VeroLube proposal.
The exclusivity period with VeroLube, which prohibits Nuverra from
negotiating with other interested parties, ends on August 29,
2014.
Interim Update
Nuverra also provided mid-quarter business commentary and an
update on certain strategic initiatives. As previously disclosed,
the Company undertook an initiative in the second quarter of 2014
to rationalize revenue, which resulted in some lost revenue in the
second quarter with the anticipation that revenue growth would
re-commence as the effect of price increases, stronger customer
relationships in certain basins, and a revised business mix took
effect.
Based on actual unaudited July results and preliminary unaudited
interim results in August, the Company has seen an increase in
activity in its core Shale Solutions Segment sequentially relative
to the second quarter. Revenues in the Shale Solutions Segment in
July increased in excess of 10% relative to average monthly revenue
in the second quarter, with a more pronounced increase in the
Bakken Shale area. The Company has also continued to see strong
growth in disposal volumes, and a gradual improvement in rental
activity following late second quarter weakness in the Bakken Shale
area.
The Company has advanced contractual discussions on the pipeline
project discussed in its second quarter earnings release, and
remains on track to open its solid treatment facility in the Bakken
Shale in the fourth quarter of 2014.
The Company’s TFI segment, which had been impacted this year by
a fire which shut down the re-refinery that is one of TFI’s largest
contracted offtake partners, has seen business improve, as the
re-refinery re-opened in July and is currently forecasted to
operate at full capacity in September. While seasonality can impact
the business, Adjusted EBITDA for the segment in the month of July
reached its best levels of the year, supported by strong collection
volumes as well as improved margins due to the sale of more product
to the newly re-opened re-refinery.
The mid-quarter information provided herin is based upon
preliminary, unaudited financial results and is not indicative of
future performance for the remainder of the fiscal quarter. The
Company undertakes no obligation to publicly update or revise the
mid-quarter information provided herein.
About Nuverra
Nuverra Environmental Solutions is among the largest companies
in the United States dedicated to providing comprehensive and
full-cycle environmental solutions to customers in energy and
industrial end-markets. Nuverra focuses on the delivery,
collection, treatment, recycling, and disposal of restricted
solids, water, wastewater, used motor oil, spent antifreeze, waste
fluids and hydrocarbons. The Company continues to expand its suite
of environmentally compliant and sustainable solutions to customers
who demand stricter environmental compliance and accountability
from their service providers. Interested parties can access
additional information about Nuverra on the Company's web site at
http://www.nuverra.com, and in documents filed with the United
States Securities and Exchange Commission, on the SEC's web site at
http://www.sec.gov.
Forward-Looking
Statements
This press release may contain "forward-looking statements"
within the meaning of the safe harbor provisions of the United
States Private Securities Litigation Reform Act of 1995. Words such
as "expect," "estimate," "project," "budget," "forecast,"
"anticipate," "intend," "plan," "may," "will," "could," "should,"
"believes," "predicts," "potential," "continue," “confident,” and
similar expressions are intended to identify such forward-looking
statements. Forward-looking statements in the press release
include, without limitation, forecasts of growth, revenues,
business activity, adjusted EBITDA, pipeline and solids treatment
initiatives, disposal volumes, rental activity, collection volumes,
margins, and landfill and treatment facility activities, as well as
statements regarding possible divestitures, timing and terms of
such divestitures, acquisitions, financings, business growth and
expansion opportunities, availability of capital, ability to access
capital markets, and other matters that involve known and unknown
risks, uncertainties and other factors that may cause results,
levels of activity, performance or achievements to differ
materially from results expressed or implied by this press release.
Such risk factors include, among others: difficulties encountered
in acquiring and integrating businesses; uncertainties in
evaluating goodwill and long-lived assets for potential impairment;
potential impact of litigation; risks of successfully consummating
expected transactions within the timeframes or on the terms
contemplated, including risks that such transactions may fail to
close due to unsatisfied closing conditions; uncertainty relating
to successful negotiation, execution and consummation of all
necessary definitive agreements in connection with our strategic
initiatives; whether certain markets grow as anticipated; pricing
pressures; risks associated with our indebtedness; low oil and or
natural gas prices; changes in customer drilling and completion
activities and capital expenditure plans; shifts in production
among shale areas in which we operate and/or into shale areas in
which we currently do not have operations; control of costs and
expenses; and the competitive and regulatory environment.
Additional risks and uncertainties are set forth in the Company's
Form 10-Q for the three months ended June 30, 2014, its Annual
Report on Form 10-K for the fiscal year ended December 31, 2013, as
well as the Company's other reports filed with the United States
Securities and Exchange Commission, which are available at
http://www.sec.gov and the Company's web site at
http://www.nuverra.com. As a result of the foregoing considerations
and the other limitations of non-GAAP measures described elsewhere
herein, you are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
presentation. All forward-looking statements are qualified in their
entirety by this cautionary statement. The Company undertakes no
obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Nuverra Environmental Solutions, Inc.Liz Merritt,
602-903-7802VP-Investor Relations &
Communicationsir@nuverra.com