SCOTTSDALE, Ariz., March 16, 2015 /PRNewswire/ -- Nuverra
Environmental Solutions, Inc. (NYSE: NES) ("Nuverra" or the
"Company") announced financial results today for the fourth quarter
and full fiscal year ended December 31,
2014.
Summary of Results
- Revenue from continuing operations increased 10.4% over the
prior year to $141.8 million for the
quarter and was up 2% to $536.3
million for the year.
- Net loss from continuing operations of $(321.1) million for the quarter; adjusted net
loss of $(9.6) million. For the
year, net loss from continuing operations was $(457.2) million; adjusted net loss of
$(40.7) million.
- Results include a non-cash, pre-tax impairment charge against
goodwill and intangibles of $315.7
million in the fourth quarter.
- Fourth-quarter Adjusted EBITDA from continuing operations up
9.0% year-over-year to $25.4
million.
- Full-year Adjusted EBITDA from continuing operations of
$95.2 million.
- Cash flow from continuing operations of $17.4 million for the year.
- Total liquidity at Dec. 31, 2014
was $39.3 million, comprised of
$13.4 million cash and $25.9 million of availability under the Company's
credit facility.
Mark D. Johnsrud, Chairman of the
Board and Chief Executive Officer, said, "Our fourth-quarter
results reflected solid growth in revenue and adjusted EBITDA. We
remain highly focused on managing the business efficiently and
delivering on our strategy to provide high-quality, cost-effective
environmental solutions to our customers. Our regional divisions
supported a steady stream of activity throughout the fourth quarter
as operators executed against their 2014 budgets, enabling us to
retain competitive market positions."
Mr. Johnsrud commented on the progress made toward completing
the sale of Thermo Fluids Inc., the Company's used motor oil
collection business to Clean Harbors, Inc., in an $85-million cash transaction that the companies
jointly announced in February. "Both companies are looking forward
to closing the TFI transaction as soon as possible, subject to
final regulatory sign-off. Clean Harbors and its Safety-Kleen
division are an excellent strategic fit for the TFI business and
its dedicated employees. We look forward to the added financial
flexibility this transaction will provide to reduce debt and
further evaluate the optimal capital structure for our business
going forward.
"When we evaluate the overall macro environment, fourth-quarter
demand was more resilient than many had forecast. However, with
declining rig counts into the first quarter and a longer-term view
for a challenging 2015, we are taking the necessary steps to
effectively manage our cost structure through this period," Mr.
Johnsrud said. "Nuverra's advantage lies in the strength and
resources of our customers, our geographic mix, and that more than
40 percent of our revenue in 2014 was derived from services
provided during the long-term, production phase of wells. We expect
this favorable mix to somewhat offset declines in new drilling and
completion work.
"Throughout 2015, we intend to proactively manage the business
within operating cash flows. The scalability of our operations
demonstrates we can respond quickly to activity levels in our
basins, maximizing the utilization of our fleet and labor
resources. In addition, we are actively reducing our overall cost
structure. Cash flow in 2014 was impacted by several large growth
initiatives, which will not be necessary this year. In 2015, total
capex is currently expected to be in the range of $10-$15 million, driven primarily by maintenance
capex comparable to 2014 maintenance capex levels," concluded Mr.
Johnsrud.
FOURTH QUARTER 2014
Consolidated revenue from continuing operations for the quarter
was $141.8 million, an increase of
$13.4 million or 10.4%, compared with
$128.4 million in the fourth quarter
of 2013. Revenue increases were primarily driven by increased
logistics and disposal activities for both fluids and solids, as
operators completed their 2014 drilling and completion programs,
full run-rate contribution from the landfill and the addition of
water transfer services in the Rocky Mountain division, as well as
improved pricing on logistics and disposal services in the Southern
and Northeast divisions. This was partly offset by a decline in
revenue from drilling and completion activities in the Rocky
Mountain division and Southern divisions.
Division revenues for the fourth quarter were as follows (in
thousands):
|
|
Three Months
Ended
December 31,
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
$
Change
|
|
%
Change
|
|
Rocky
Mountain
|
|
$ 87,789
|
|
$ 80,743
|
|
$ 7,046
|
|
8.7%
|
|
Northeast
|
|
28,159
|
|
21,579
|
|
6,580
|
|
30.5%
|
|
Southern
|
|
25,815
|
|
26,066
|
|
(251)
|
|
-1.0%
|
|
Total
Revenue
|
|
$ 141,763
|
|
$ 128,388
|
|
$ 13,375
|
|
10.4%
|
|
During the fourth quarter, significant declines in global crude
oil prices, coupled with a reduction in the market price of the
Company's common stock, required the Company to conduct further
impairment testing, which resulted in pre-tax, non-cash charges
totaling $315.7 million.
The Company reported a fourth-quarter 2014 loss from continuing
operations of $321.1 million, or
$(11.84) per share, compared with a
loss of $10.4 million, or
$(0.42) per share in the fourth
quarter of 2013. These results included items primarily related to
the impairment of goodwill and intangibles. Excluding such items,
fourth quarter adjusted net loss from continuing operations was
$9.6 million, or $(0.35) per share.
Adjusted EBITDA from continuing operations for the fourth
quarter was $25.4 million, an
increase of $2.1 million or 9.0%,
compared with $23.3 million in the
fourth quarter of 2013. A reconciliation of excluded items and
adjusted EBITDA to the most directly comparable GAAP financial
measure can be found in the financial tables included with this
press release.
Income tax expense was less than $0.1
million for the fourth quarter 2014, at an effective tax
rate of near 0%, due to the impact of the impairment of goodwill
and an increased valuation allowance on deferred tax assets.
FULL YEAR 2014
Revenue from continuing operations for the full year was
$536.3 million, an increase of
$10.5 million or 2.0%, compared with
$525.8 million in 2013. Revenue
increases for the year were driven by improved pricing in the Rocky
Mountain Division, as well as higher revenues from the management
of solid waste at the Company's Bakken landfill. A portion of the
increase was offset by decreased activity levels in the Southern
Division, and to a lesser extent the Northeast Division, which was
impacted negatively by severe winter weather in early 2014, as well
as the interruption of operations due to an accident that affected
our largest customer in the region. Overall rental revenue
decreased 13.7% compared with the prior year, primarily due to
declines in drilling and completion activities in the Rocky
Mountain Division.
Division revenues for 2014 were as follows (in thousands):
|
|
Year
Ended
|
|
|
|
|
|
|
|
December
31,
|
|
|
|
|
|
|
|
2014
|
|
2013
|
|
$
Change
|
|
%
Change
|
|
Rocky
Mountain
|
|
$ 334,770
|
|
$ 304,182
|
|
$ 30,588
|
|
10.1%
|
|
Northeast
|
|
95,577
|
|
95,085
|
|
492
|
|
0.5%
|
|
Southern
|
|
105,935
|
|
126,549
|
|
(20,614)
|
|
-16.3%
|
|
Total
Revenue
|
|
$ 536,282
|
|
$ 525,816
|
|
$ 10,466
|
|
2.0%
|
|
Adjusted EBITDA from continuing operations for the full year was
$95.2 million, a decrease of
$6.3 million or 6.2%, compared with
$101.5 million in 2013. The
difference was driven primarily by declines in higher-margin rental
revenue.
Income tax benefit was $12.5
million for the full year, at an effective tax rate of near
2.7%, due to the impact of the impairment of goodwill and an
increased valuation allowance on deferred tax assets.
The Company reported a 2014 loss from continuing operations of
$457.2 million, or $(17.52) per share, compared with a loss from
continuing operations of $134.0
million, or $(5.47) per share
in 2013. These results included items primarily related to
impairment of goodwill and long-lived assets, legal expenses and
write-off of deferred financing costs. Excluding such items,
adjusted loss from continuing operations for 2014 was $40.7 million, or $(1.56) per share.
Operating cash flows from continuing operations were
$17.4 million for the full year. Net
cash capital expenditures from continuing operations for the full
year were $45.5 million, primarily
related to construction of the Company's new solids management
facility in the Bakken.
At December 31, 2014, cash and
cash equivalents were $13.4 million.
Total debt, excluding $0.6 million of
discounts and premiums, was $597.9
million, consisting of $400.0
million of 2018 Notes, $183.1
million under the Company's revolving credit facility, and
$14.9 million in capital
leases. As of December 31,
2014, the borrowing base under the Company's $245 million credit facility would support
additional borrowings of up to $25.9
million. As of March 13, 2015,
the outstanding balance under the ABL facility was approximately
$176.5 million, with $25 million cash on hand. Total liquidity
was approximately $52.2 million.
Division Highlights
Rocky Mountain (Bakken)
In the Rocky Mountain Division, fourth-quarter revenue increased
8.7% to $87.8 million, compared with
$80.7 million in the prior year. The
increase was due primarily to logistics and disposal activities
driven by higher produced water volumes from production activities,
full-quarter contribution from the landfill, as well as the
introduction of the Company's water transfer services in 2014. For
the full year, revenue increased 10.1% to $334.8 million, compared to $304.2 million in 2013.
Northeast (Marcellus, Utica)
In the Northeast Division, fourth-quarter revenue was up 30.5%
to $28.2 million, compared with
$21.6 million in the prior year. This
increase was due to higher levels of logistics and recycling
services during the quarter. During the first
quarter, Nuverra began a new contract to provide water logistics
and disposal services for a significant customer that holds more
than 300,000 acres in the Utica. Full-year revenue for the division
was up slightly at $95.6 million,
compared with $95.1 million in
2013.
Southern (Haynesville, Eagle Ford)
In the Southern Division, fourth-quarter revenue declined 1.0%
to $25.8 million, compared with
$26.1 million in the prior year. The
difference was primarily attributable to a decline in MidCon
activity and Eagle Ford disposal volumes, offset partly by
increases in water transfer activities and solids management
services. Full-year revenue for the division decreased to
$105.9 million, compared with
$126.5 million in 2013. During the
quarter, Nuverra continued to take steps to improve the economics
of its midstream water pipeline assets, which currently consists of
a 60-mile, integrated pipeline and disposal network with a capacity
of approximately 85,000 barrels per day.
Fourth-Quarter 2014 Conference Call & Webcast
The Company will host a conference call and webcast to discuss
fourth quarter and fiscal 2014 full-year results at 4:30 p.m. ET, 1:30 p.m.
PT on Monday, March 16, 2015.
To participate, please dial +1-877-407-0784 (US) or +1-201-689-8560
(International) and reference conference ID 13602289. A slide
presentation will accompany the call. To access the webcast, go to
http://public.viavid.com/index.php?id=113289.
An audio replay of the call will be available approximately one
hour following the conclusion of the call through March 23, 2015. The audio replay can be accessed
by dialing +1-877-870-5176 (US) or +1-858-384-5517 (International)
and entering access code 13602289. The call will be webcast live
and a replay available by accessing the "Investors" section of the
Company's web site at www.nuverra.com.
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 the energy market. Nuverra focuses on the delivery,
collection, treatment, recycling, and disposal of restricted
solids, water, wastewater, 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 information contained herein includes certain
forward-looking statements within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements may include
forecasts of growth, revenues, business activity, adjusted EBITDA,
pipeline and solids treatment initiatives, and landfill and
treatment facility activities, as well as statements regarding
possible divestitures, timing of such divestitures, acquisitions,
financings, business growth and expansion opportunities,
availability of capital, ability to access capital markets,
expected outcome of litigation and other statements that are not
historical facts. Actual results may differ materially from
results expressed or implied by these forward-looking statements.
All forward-looking statements involve risks and uncertainties,
including, 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
disclosed by the Company from time to time in its filings with the
Securities and Exchange Commission, including the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 2014, as well as its Quarterly
Reports on Form 10-Q and its Current Reports on Form 8-K.
Nuverra Environmental Solutions, Inc.
Liz Merritt, VP-Investor Relations
& Communications
480-878-7452
ir@nuverra.com
Logo - http://photos.prnewswire.com/prnh/20141008/150889
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
(In thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Year
Ended
|
|
|
December
31,
|
|
December
31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
|
(Unaudited)
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Non-rental
revenue
|
|
$ 123,801
|
|
$ 106,778
|
|
$ 463,418
|
|
$ 441,421
|
Rental
revenue
|
|
17,962
|
|
21,610
|
|
72,864
|
|
84,395
|
Total revenue
|
|
141,763
|
|
128,388
|
|
536,282
|
|
525,816
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Direct
operating expenses
|
|
101,393
|
|
94,466
|
|
384,813
|
|
379,160
|
General and
administrative expenses
|
|
12,527
|
|
20,365
|
|
66,832
|
|
84,280
|
Depreciation
and amortization
|
|
22,014
|
|
19,415
|
|
85,880
|
|
99,236
|
Impairment of
long-lived assets
|
|
112,436
|
|
-
|
|
112,436
|
|
111,900
|
Impairment of
goodwill
|
|
203,259
|
|
-
|
|
303,975
|
|
-
|
Other,
net
|
|
-
|
|
(554)
|
|
-
|
|
899
|
Total costs and expenses
|
|
451,629
|
|
133,692
|
|
953,936
|
|
675,475
|
Loss from
operations
|
|
(309,866)
|
|
(5,304)
|
|
(417,654)
|
|
(149,659)
|
Interest expense,
net
|
|
(12,942)
|
|
(13,573)
|
|
(50,917)
|
|
(53,703)
|
Other income
(expense), net
|
|
1,734
|
|
1,484
|
|
2,107
|
|
(3,773)
|
Loss on
extinguishment of debt
|
|
-
|
|
-
|
|
(3,177)
|
|
-
|
Loss from
continuing operations before income taxes
|
|
(321,074)
|
|
(17,393)
|
|
(469,641)
|
|
(207,135)
|
Income tax (expense)
benefit
|
|
(50)
|
|
7,021
|
|
12,463
|
|
73,095
|
Loss from
continuing operations
|
|
(321,124)
|
|
(10,372)
|
|
(457,178)
|
|
(134,040)
|
Loss from
discontinued operations, net of income taxes
|
|
(14,770)
|
|
(2,700)
|
|
(58,426)
|
|
(98,251)
|
Net loss
attributable to common stockholders
|
|
$(335,894)
|
|
$ (13,072)
|
|
$(515,604)
|
|
$(232,291)
|
|
|
|
|
|
|
|
|
|
Net loss per common
share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
|
$ (11.84)
|
|
$ (0.42)
|
|
$ (17.52)
|
|
$ (5.47)
|
Basic and diluted
loss from discontinued operations
|
|
(0.54)
|
|
(0.11)
|
|
(2.24)
|
|
(4.01)
|
Net loss per basic
and diluted share
|
|
$ (12.38)
|
|
$ (0.53)
|
|
$ (19.76)
|
|
$ (9.48)
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in computing net loss per basic and diluted
common share
|
|
27,122
|
|
24,952
|
|
26,090
|
|
24,492
|
|
|
|
|
|
|
|
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(In
thousands)
|
|
|
|
December
31,
|
|
2014
|
|
2013
|
Assets
|
|
|
|
Cash and cash
equivalents
|
$ 13,367
|
|
$ 8,783
|
Restricted
cash
|
114
|
|
110
|
Accounts receivable,
net
|
108,813
|
|
87,086
|
Inventories
|
4,413
|
|
3,328
|
Prepaid expenses and
other receivables
|
4,147
|
|
10,457
|
Deferred income
taxes
|
3,179
|
|
30,072
|
Other current
assets
|
173
|
|
409
|
Current assets held
for sale
|
20,466
|
|
21,446
|
Total current
assets
|
154,672
|
|
161,691
|
Property, plant and
equipment, net
|
475,982
|
|
498,541
|
Equity
investments
|
3,814
|
|
4,032
|
Intangibles,
net
|
19,757
|
|
149,363
|
Goodwill
|
104,721
|
|
408,696
|
Other
assets
|
17,688
|
|
21,136
|
Long-term assets held
for sale
|
94,938
|
|
167,304
|
Total
assets
|
$ 871,572
|
|
$ 1,410,763
|
Liabilities and
Equity
|
|
|
|
Accounts
payable
|
$ 18,859
|
|
$ 33,229
|
Accrued
liabilities
|
43,395
|
|
63,431
|
Current portion of
contingent consideration
|
9,274
|
|
13,113
|
Current portion of
long-term debt
|
4,863
|
|
5,464
|
Financing obligation
to acquire non-controlling interest
|
11,000
|
|
-
|
Current liabilities
of discontinued operations
|
8,802
|
|
9,301
|
Total current
liabilities
|
96,193
|
|
124,538
|
Deferred income
taxes
|
3,448
|
|
42,982
|
Long-term portion of
debt
|
592,455
|
|
549,713
|
Long-term portion of
contingent consideration
|
550
|
|
2,344
|
Financing obligation
to acquire non-controlling interest
|
-
|
|
10,104
|
Other long-term
liabilities
|
3,874
|
|
4,324
|
Long-term liabilities
of discontinued operations
|
22,105
|
|
32,389
|
Total
liabilities
|
718,625
|
|
766,394
|
Commitments and
contingencies
|
|
|
|
Common
stock
|
29
|
|
27
|
Additional paid-in
capital
|
1,365,537
|
|
1,341,209
|
Treasury
stock
|
(19,651)
|
|
(19,503)
|
Accumulated
deficit
|
(1,192,968)
|
|
(677,364)
|
Total equity of
Nuverra Environmental Solutions, Inc.
|
152,947
|
|
644,369
|
Total liabilities and
equity
|
$ 871,572
|
|
$ 1,410,763
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
|
|
|
|
|
|
Year Ended
December 31,
|
|
|
2014
|
|
2013
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
$(515,604)
|
|
$(232,291)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
Loss from discontinued
operations, net of income taxes
|
|
58,426
|
|
98,251
|
Depreciation
|
|
68,710
|
|
78,812
|
Amortization of
intangible assets
|
|
17,170
|
|
20,424
|
Amortization of
deferred financing costs
|
|
4,038
|
|
4,492
|
Amortization of
original issue discounts and premiums, net
|
|
150
|
|
142
|
Stock-based
compensation
|
|
2,971
|
|
3,708
|
Impairment of property,
plant and equipment
|
|
112,436
|
|
111,900
|
Impairment of
goodwill
|
|
303,975
|
|
-
|
(Gain) loss on disposal
of property, plant and equipment
|
|
(4,773)
|
|
708
|
Bad debt
expense
|
|
3,833
|
|
3,275
|
Loss on extinguishment
of debt
|
|
3,177
|
|
-
|
Deferred income
taxes
|
|
(12,641)
|
|
(68,599)
|
Write-down of cost
method investments
|
|
-
|
|
4,300
|
Other, net
|
|
176
|
|
894
|
Changes in operating
assets and liabilities, net of business acquisitions and purchase
price adjustments:
|
|
|
|
|
Accounts
receivable
|
|
(25,560)
|
|
15,492
|
Prepaid
expenses and other receivables
|
|
6,310
|
|
(2,864)
|
Accounts
payable and accrued liabilities
|
|
(4,213)
|
|
27,331
|
Other assets
and liabilities, net
|
|
(1,205)
|
|
693
|
Net cash provided by
operating activities from continuing operations
|
|
17,376
|
|
66,668
|
Net cash provided by
operating activities from discontinued operations
|
|
3,966
|
|
3,589
|
Net cash provided by
operating activities
|
|
21,342
|
|
70,257
|
Cash flows from
investing activities:
|
|
|
|
|
Cash paid for
acquisitions, net of cash acquired
|
|
-
|
|
(10,570)
|
Proceeds from the
sale of property, plant and equipment
|
|
10,192
|
|
2,308
|
Purchases of
property, plant and equipment
|
|
(55,731)
|
|
(46,593)
|
Proceeds from
acquisition-related working capital adjustment
|
|
-
|
|
2,067
|
Net cash used in
investing activities from continuing operations
|
|
(45,539)
|
|
(52,788)
|
Net cash used in
investing activities from discontinued operations
|
|
(2,451)
|
|
(4,195)
|
Net cash used in
investing activities
|
|
(47,990)
|
|
(56,983)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
revolving credit facility
|
|
107,725
|
|
98,501
|
Payments on revolving
credit facility
|
|
(67,500)
|
|
(109,501)
|
Payments for deferred
financing costs
|
|
(1,030)
|
|
(855)
|
Payments on notes
payable and capital leases
|
|
(5,289)
|
|
(5,416)
|
Other financing
activities
|
|
(1,159)
|
|
(2,602)
|
Net cash provided by
(used in) financing activities of continuing operations
|
|
32,747
|
|
(19,873)
|
Net cash provided by
(used in) financing activities of discontinued
operations
|
|
105
|
|
(400)
|
Net cash provided by
(used in) financing activities
|
|
32,852
|
|
(20,273)
|
Net increase
(decrease) in cash and cash equivalents
|
|
6,204
|
|
(6,999)
|
Cash and cash
equivalents - beginning of year
|
|
9,212
|
|
16,211
|
Cash and cash
equivalents - end of year
|
|
15,416
|
|
9,212
|
Less: cash and cash
equivalents of discontinued operations - end of year
|
|
2,049
|
|
429
|
Cash and cash
equivalents of continuing operations - end of year
|
|
$ 13,367
|
|
$ 8,783
|
|
|
|
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
UNAUDITED NON-GAAP
RECONCILIATIONS
|
(In
thousands)
|
|
This press release
contains non-GAAP financial measures as defined by the rules and
regulations of the United States Securities and Exchange
Commission. A non-GAAP financial measure is a numerical measure of
a company's historical or future financial performance, financial
position or cash flows that excludes amounts, or is subject to
adjustments that have the effect of excluding amounts, that are
included in the most directly comparable measure calculated and
presented in accordance with GAAP in the statements of operations
or balance sheets of the Company; or includes amounts, or is
subject to adjustments that have the effect of including amounts,
that are excluded from the most directly comparable measure so
calculated and presented. Reconciliations of these non-GAAP
financial measures to their comparable GAAP financial measures are
included in the attached financial tables.
These non-GAAP financial measures are provided because management
of the Company uses these financial measures in maintaining and
evaluating the Company's ongoing financial results and trends.
Management uses this non-GAAP information as an indicator of
business performance, and evaluates overall management with respect
to such indicators. Management believes that excluding items such
as acquisition expenses, amortization of intangible assets,
stock-based compensation, asset impairments, restructuring charges,
expenses related to litigation and resolution of lawsuits, and
other charges, which may or may not be non-recurring, among other
items that are inconsistent in amount and frequency (as with
acquisition expenses), or determined pursuant to complex formulas
that incorporate factors, such as market volatility, that are
beyond our control (as with stock-based compensation), for purposes
of calculating these non-GAAP financial measures facilitates a more
meaningful evaluation of the Company's current operating
performance and comparisons to the past and future operating
performance. The Company believes that providing non-GAAP financial
measures such as EBITDA, adjusted EBITDA, adjusted net income
(loss), adjusted net income (loss) per share, and operating working
capital, in addition to related GAAP financial measures, provides
investors with greater transparency to the information used by the
Company's management.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Loss from Continuing Operations to EBITDA, Adjusted EBITDA from
Continuing Operations and Total Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Loss from continuing
operations
|
$(321,124)
|
|
$ (10,372)
|
|
$ (457,178)
|
|
$ (134,040)
|
|
Depreciation of
property, plant and equipment
|
17,751
|
|
14,520
|
|
68,710
|
|
78,812
|
|
Amortization of
intangible assets
|
4,263
|
|
4,895
|
|
17,170
|
|
20,424
|
|
Interest expense,
net
|
12,942
|
|
13,573
|
|
50,917
|
|
53,703
|
|
Income tax expense
(benefit)
|
50
|
|
(7,021)
|
|
(12,463)
|
|
(73,095)
|
|
EBITDA
|
(286,118)
|
|
15,595
|
|
(332,844)
|
|
(54,196)
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Transaction-related
costs, including earnout adjustments, net
|
(1,274)
|
|
(1,995)
|
|
(761)
|
|
(116)
|
|
Stock-based
compensation
|
666
|
|
413
|
|
2,971
|
|
3,708
|
|
Legal and
environmental costs, net
|
(3,555)
|
|
7,010
|
|
8,757
|
|
26,480
|
|
Impairment of
long-lived assets
|
112,436
|
|
-
|
|
112,436
|
|
111,900
|
|
Impairment of
goodwill
|
203,259
|
|
-
|
|
303,975
|
|
-
|
|
Restructuring, exit
and other costs
|
-
|
|
(554)
|
|
205
|
|
899
|
|
Write-off of cost
method investments
|
-
|
|
-
|
|
-
|
|
4,300
|
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
3,177
|
|
-
|
|
Integration,
severance and rebranding costs
|
-
|
|
2,512
|
|
2,072
|
|
8,198
|
|
(Gain) loss on
disposal of assets
|
(21)
|
|
326
|
|
(4,773)
|
|
326
|
|
Adjusted EBITDA from
continuing operations
|
25,393
|
|
23,307
|
|
95,215
|
|
101,499
|
|
Adjusted EBITDA from
discontinued operations
|
2,626
|
|
2,420
|
|
12,114
|
|
14,672
|
|
Total Adjusted
EBITDA
|
$ 28,019
|
|
$ 25,727
|
|
$ 107,329
|
|
$ 116,171
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Loss from Discontinued Operations to EBITDA from Discontinued
Operations and Adjusted EBITDA from Discontinued
Operations:
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
December 31,
|
|
Year Ended
December 31,
|
|
|
2014
|
|
2013
|
|
2014
|
|
2013
|
|
Loss from
discontinued operations
|
$ (14,770)
|
|
$ (2,700)
|
|
$ (58,426)
|
|
$ (98,251)
|
|
Depreciation of
property, plant and equipment
|
-
|
|
469
|
|
-
|
|
2,502
|
|
Amortization of
intangible assets
|
-
|
|
1,785
|
|
-
|
|
9,787
|
|
Interest
expense
|
-
|
|
-
|
|
-
|
|
14
|
|
Income tax (benefit)
expense
|
(11,168)
|
|
2,858
|
|
(9,832)
|
|
14
|
|
EBITDA from
discontinued operations
|
(25,938)
|
|
2,412
|
|
(68,258)
|
|
(85,934)
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
Transaction-related
costs
|
(336)
|
|
-
|
|
5,401
|
|
383
|
|
Legal and
environmental costs
|
-
|
|
-
|
|
733
|
|
1,715
|
|
Impairment of
long-lived assets
|
26,363
|
|
-
|
|
26,363
|
|
-
|
|
Impairment of
goodwill
|
2,537
|
|
-
|
|
48,000
|
|
98,500
|
|
Loss (gain) on
disposal of assets
|
-
|
|
8
|
|
(125)
|
|
8
|
|
Adjusted EBITDA from
discontinued operations
|
$ 2,626
|
|
$ 2,420
|
|
$ 12,114
|
|
$ 14,672
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
UNAUDITED NON-GAAP
RECONCILIATIONS (continued)
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Special Items to Adjusted Net Loss to EBITDA from Continuing
Operations
|
|
|
|
|
Three Months Ended
December 31, 2014
|
|
Year Ended
December 31, 2014
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 141,763
|
|
$
-
|
|
$ 141,763
|
|
$ 536,282
|
|
$
-
|
|
$ 536,282
|
Direct operating
expenses
|
101,393
|
|
301
|
[A]
|
101,694
|
|
384,813
|
|
1,930
|
[A]
|
386,743
|
General and
administrative expenses
|
12,527
|
|
2,160
|
[B]
|
14,687
|
|
66,832
|
|
(11,503)
|
[B]
|
55,329
|
Loss from continuing
operations
|
(321,124)
|
|
311,511
|
[C]
|
(9,613)
|
|
(457,178)
|
|
416,501
|
[D]
|
(40,677)
|
Net loss attributable
to common stockholders
|
(335,894)
|
|
328,907
|
|
(6,987)
|
|
(515,604)
|
|
487,041
|
|
(28,563)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (321,124)
|
|
|
|
$ (9,613)
|
|
$ (457,178)
|
|
|
|
$ (40,677)
|
Depreciation and
amortization
|
22,014
|
|
|
|
22,014
|
|
85,880
|
|
|
|
85,880
|
Interest expense,
net
|
12,942
|
|
|
|
12,942
|
|
50,917
|
|
|
|
50,917
|
Income tax expense
(benefit)
|
50
|
|
|
|
50
|
|
(12,463)
|
|
|
|
(905)
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ (286,118)
|
|
|
|
$ 25,393
|
|
$ (332,844)
|
|
|
|
$ 95,215
|
Description of
Special Items:
|
[A]
|
Special items include
gain on sale related to the disposal of certain transportation
assets, offset by a charge related to a contract settlement and
environmental reserve adjustments primarily attributed to business
in the Southern division.
|
|
|
[B]
|
Primarily
attributable to litigation, stock-based compensation and
integration and rebranding expenses.
|
|
|
[C]
|
Includes $112.4
million of long-lived asset impairment charge related to the
write-off of the Company's customer relationship intangible asset
attributable to business in the Rocky Mountain division and $203.3
million of goodwill impairment charge attributable to
business in the Rocky Mountain division for the three months ended
December 31, 2014. Additionally, the Company recorded a net
reduction related to a prior acquisition earnout reserve of $1.7
million in the three months ended December 31, 2014. The Company's
effective tax rate for the three months ended December 31, 2014 was
zero percent and has been applied to the special items
accordingly.
|
|
|
[D]
|
Includes goodwill
impairment charges totaling $203.3 million, $33.8 million and $66.9
million attributable to business in the Rocky Mountain, Northeast,
and Southern division, respectively, for the full-year ended
December 31, 2014. In March 2014, the Company wrote-off a
portion of the unamortized deferred financing costs associated with
its Amended Revolving Credit Facility of approximately $3.2
million. Additionally, the Company recorded a net reduction
related to a prior acquisition earnout reserve of $1.3 million for
the full year ended December 31, 2014. The Company's
effective tax rate for the year ended December 31, 2014 of 2.7% and
has been applied to the special items accordingly.
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nuverra-reports-fourth-quarter-and-full-year-2014-results-300051170.html
SOURCE Nuverra Environmental Solutions, Inc.