SCOTTSDALE, Ariz., May 11, 2015 /PRNewswire/ -- Nuverra
Environmental Solutions, Inc. (NYSE: NES) ("Nuverra" or the
"Company") announced financial and operating results today for the
first quarter ended March 31,
2015.
SUMMARY OF RESULTS
- Revenue from continuing operations was $119.1 million, compared with $128.0 million in the first quarter of 2014, due
to declines in the Rocky Mountain and Southern Divisions, partly
offset by growth in the Northeast Division.
- Net loss from continuing operations was $12.0 million for the quarter, or a loss of
$0.44 per diluted share, compared
with a net loss from continuing operations of $11.9 million, or a loss of $0.48 per diluted share, for the first quarter of
2014.
- Adjusted net loss from continuing operations, excluding special
items, was $11.3 million for the
quarter, or a loss of $0.41 per
diluted share, compared with adjusted net loss from continuing
operations of $8.1 million, or a loss
of $0.32 per share in the first
quarter of 2014.
- First-quarter Adjusted EBITDA from continuing operations was
$18.7 million, a 15.7% margin,
compared with $18.9 million, a 14.8%
margin, in 2014.
- Net cash provided by operating activities from continuing
operations was $34.8 million for the
quarter; free cash flow of $30.6
million.
- Days sales outstanding at 65 days at the end of Q1, compared to
71 days at the end of 2014.
Mark D. Johnsrud, Chairman of the
Board and Chief Executive Officer, commented, "First-quarter
results reflected a decline in drilling and completion activities,
primarily in the Bakken, Eagle Ford and Haynesville Shale regions,
coupled with some targeted pricing pressures at our larger
customers. We anticipated this downturn and prepared by
implementing multiple cost-savings initiatives in the first quarter
that have contributed to a reduction in overall operating expenses
by 10.7% compared with the prior-year period.
"During the quarter, our Rocky Mountain Division experienced the
greatest impact from declines in drilling and completion
activities, in addition to large customers seeking pricing
concessions. Even on reduced revenue, we held Adjusted EBITDA
margins steady in the Bakken at 26.4% by actively managing our
operating costs," Mr. Johnsrud explained. "Our Southern Division
showed margin improvement, despite decreases in drilling and
completion-related revenue, which were offset by growth in water
transfer services. The Northeast Division remained level
sequentially through the first quarter, with considerable growth
year-over-year in revenue and Adjusted EBITDA, reflecting increased
activity levels with existing and new customers.
"We continue to operate in a challenging environment, with U.S.
drilling activity experiencing an unprecedented decline during the
first quarter and into the current quarter. Despite these
headwinds, we generated $34.8 million
in cash flow from operations and $30.6
million in free cash flow in Q1. We improved our
Adjusted EBITDA margin by 90 basis points to 15.7% compared with
the same quarter of 2014. While this downturn will continue to put
pressure on service providers like Nuverra, we believe our
production focus provides us a competitive advantage, and the
longer-term outlook for a recovery remains intact," Mr. Johnsrud
said. "Until then, we remain highly focused on optimally managing
those things we can control, including targeted cost-saving
measures, judicious use of capital and delivering the industry's
best services and safety practices to our customers."
FIRST QUARTER 2015 HIGHLIGHTS
First-quarter 2015 revenue from continuing operations was
$119.1 million, a decrease of
$8.9 million or 7.0%, compared with
$128.0 million in the first quarter
of 2014. The difference was primarily a result of lower water
logistics and rental activities in the Rocky Mountain and Southern
Divisions, partly offset by increases in water logistics and
recycling activities in the Northeast Division, as well as an
increase in water transfer activity in the Eagle Ford Shale
region.
Proactive cost-management initiatives across the organization
contributed to a $14.2 million
reduction in total expenses in the quarter, or a 10.7%
year-over-year decline compared with the first quarter of 2014.
Total operating expenses for the first quarter 2015 were
$118.9 million, compared with
$133.1 million in the first quarter
of 2014. Savings were primarily attributable to $3.0 million in lower payroll and related
expenses with an associated 8% decline in total headcount,
$5.6 million in fuel savings, and
$3.6 million in lower amortization
expense.
Additionally, working capital improvements in the first quarter
totaled more than $27.0 million, led
by strong collections from our fourth and first quarter activities.
The Company's continued disciplined capital spending and
expense controls provided $30.6
million in free cash flow during the quarter, compared to a
negative $6.7 million in the same
period in 2014.
During the first quarter, the Company incurred pre-tax
restructuring and exit costs of $0.7
million, related primarily to its previously disclosed exit
from the MidCon region and other facility closures.
Pre-tax operating income for the first quarter was $0.2 million, representing a $5.3 million improvement when compared with an
operating loss of $5.1 million in the
first quarter of 2014.
First-quarter 2015 net loss from continuing operations was
$12.0 million, or a loss of
$0.44 per diluted share, compared
with a loss of $11.9 million, or a
loss of $0.48 per diluted share, in
the first quarter of 2014. Adjusted net loss from continuing
operations, excluding special items, was $11.3 million for the quarter, or a loss of
$0.41 per diluted share, compared
with adjusted net loss from continuing operations of $8.1 million, or a loss of $0.32 per share in the first quarter of 2014. Due
to the valuation allowance against deferred tax assets, the Company
does not record tax benefits attributable to its pre-tax loss.
Adjusted EBITDA from continuing operations for the first quarter
was $18.7 million, a decrease of 1.0%
compared with Adjusted EBITDA from continuing operations of
$18.9 million in the first quarter of
2014. Adjusted EBITDA margin for the first quarter was 15.7%,
compared with 14.8% in the first quarter of 2014. Margins improved
due to proactive cost containment activities during 2015. 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.
First-quarter income tax benefit was $24,000 at an effective tax rate near 0%, due to
the ongoing valuation allowance on deferred tax assets.
Net cash provided by operating activities from continuing
operations was $34.8 million in the
first quarter of 2015. Net cash capital expenditures from
continuing operations for the period were $4.2 million, and related primarily to targeted
investments in the TerrafficientSM solids recycling
facility and other transportation-related equipment in the Rocky
Mountain Division.
As of March 31, 2015, total debt
outstanding, excluding $0.6 million
of discounts and premiums, was $592.9
million, consisting of $400.0
million of 2018 Notes, $176.5
million outstanding under the revolving credit facility, and
$16.4 million in capital leases.
Total liquidity was $57.9 million,
comprised of $22.4 of net
availability under the revolving credit facility and $35.5 million cash on hand.
The Company closed the sale of its subsidiary Thermo Fluids Inc.
to Clean Harbors Inc. on April 11,
2015. Net proceeds at closing of $74.6 million from that transaction were applied
to pay down a portion of the Company's revolving credit facility.
Following the close of TFI, total debt outstanding was $518.1 million, consisting of $400.0 million of 2018 Notes, $101.8 million outstanding under the amended
credit facility, and $16.3 million in
capital leases.
On April 13, 2015, the Company
entered into an amendment to its credit facility to reduce maximum
availability to $195.0 million and
removed the accordion feature. Pricing remained the same and
no amendment fees were incurred.
As of April 17, 2015, total
liquidity was $77.3 million,
comprised of $55.4 million of net
availability under the revolving credit facility and $21.9 million cash on hand.
Division Highlights
A summary of division results follows:
|
Three Months Ended
March 31, 2015
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
|
Revenue
|
|
$
69,410
|
|
$ 27,313
|
|
$ 22,389
|
|
$
-
|
|
$ 119,112
|
|
Operating income
(loss)
|
|
10,192
|
|
(98)
|
|
(3,014)
|
|
(6,832)
|
|
248
|
|
Operating Margin
%
|
|
14.7%
|
|
(0.4)%
|
|
(13.5)%
|
|
NA
|
|
0.2%
|
|
Adjusted
EBITDA
|
|
18,354
|
|
3,779
|
|
2,304
|
|
(5,731)
|
|
18,706
|
|
Adjusted EBITDA
Margin %
|
|
26.4%
|
|
13.8%
|
|
10.3%
|
|
NA
|
|
15.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
|
Revenue
|
|
$
81,906
|
|
$ 19,175
|
|
$ 26,933
|
|
$
-
|
|
$ 128,014
|
|
Operating income
(loss)
|
|
8,795
|
|
(3,048)
|
|
(2,232)
|
|
(8,586)
|
|
(5,071)
|
|
Operating Margin
%
|
|
10.7%
|
|
(15.9)%
|
|
(8.3)%
|
|
NA
|
|
(4.0)%
|
|
Adjusted
EBITDA
|
|
21,731
|
|
1,513
|
|
1,541
|
|
(5,886)
|
|
18,899
|
|
Adjusted EBITDA
Margin %
|
|
26.5%
|
|
7.9%
|
|
5.7%
|
|
NA
|
|
14.8%
|
Rocky Mountain Division (Bakken)
In the Rocky Mountain Division, first-quarter revenue decreased
15.3% to $69.4 million, compared with
$81.9 million in the first quarter of
2014. The decrease was primarily related to lower overall drilling
and completion activities in the Bakken region, which significantly
reduced the demand for equipment rentals, as well as water
logistics services
First-quarter Adjusted EBITDA for the Rocky Mountain Division
was $18.4 million, a 15.5% decrease,
compared with $21.7 million in 2014.
First-quarter Adjusted EBITDA margin was 26.4%, compared with a
margin of 26.5% in first-quarter 2014.
Northeast Division (Marcellus, Utica)
In the Northeast Division, first-quarter revenue was up 42.4% to
$27.3 million, compared with
$19.2 million in the first quarter of
2014. The increase was due to overall higher levels of logistics
and recycling services, primarily driven by the activities of
several large customers in the Marcellus, as well as the addition
of a new customer in the Utica.
First-quarter Adjusted EBITDA for the Northeast Division was
$3.8 million, a 150% increase,
compared with $1.5 million in the
first quarter of 2014. First-quarter Adjusted EBITDA margin
improved 590 basis points to 13.8%, compared with 7.9% in 2014.
Southern Division (Haynesville, Eagle Ford, Mississippian,
Permian)
In the Southern Division, first-quarter revenue decreased 16.9%
to $22.4 million, compared with
$26.9 million in the first quarter of
2014. The difference was primarily related to an overall decline in
fluid logistics and rental services in the MidCon and Haynesville
regions, partly offset by an increase in disposal and water
midstream services in the Haynesville region, as well as an
increase in water transfer activities in the Permian region.
First-quarter Adjusted EBITDA for the Southern Division
increased 49.5% to $2.3 million,
compared with $1.5 million in the
first quarter of fiscal 2014. First-quarter Adjusted EBITDA margin
improved 460 basis points to 10.3%, compared with 5.7% in 2014.
Conference Call & Webcast
The Company will host a conference call and webcast to discuss
first quarter 2015 results at 12:00 p.m.
ET, 9:00 a.m. PT on
Monday, May 11, 2015. To participate,
please dial +1-877-407-0784 (US) or +1-201-689-8560 (International)
and reference conference ID 13608133. The call will be webcast
live, and a slide presentation will accompany the call. To access
the webcast, go to
http://public.viavid.com/index.php?id=114312.
An audio replay of the call will be available approximately one
hour following the conclusion of the call. The audio replay can be
accessed telephonically through May 18,
2015 by dialing +1-877-870-5176 (US) or +1-858-384-5517
(International) and entering access code 13608133, and a replay
will be 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. Find additional information about Nuverra on the
Company's website, http://www.nuverra.com, and in documents filed
with the U.S. Securities and Exchange Commission (SEC) 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 acquisitions, divestitures, financings, business growth
and expansion opportunities, availability of capital, ability to
access capital markets, cost-savings initiatives, 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; 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; current and projected
future uncertainties in commodities markets, including low oil
and/or natural gas prices; changes in customer drilling and
completion activities and capital expenditure plans; shifts in
production in shale areas where we operate and/or shale areas where
we currently do not have operations; control of costs and expenses;
and the competitive and regulatory environment. Additional risks
and uncertainties are disclosed from time to time in the Company's
filings with the SEC, including the Annual Report on Form 10-K for
the fiscal year ended December 31,
2014, as well as Quarterly Reports on Form 10-Q and 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
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
(In thousands, except
per share amounts)
|
|
|
|
|
Three Months
Ended
|
|
|
|
March
31,
|
|
|
|
2015
|
|
2014
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
Non-rental
revenue
|
|
|
$ 107,010
|
|
$ 109,844
|
|
Rental
revenue
|
|
|
12,102
|
|
18,170
|
|
Total
revenue
|
|
|
119,112
|
|
128,014
|
|
Costs and
expenses:
|
|
|
|
|
|
|
Direct operating
expenses
|
|
|
87,999
|
|
95,379
|
|
General and
administrative expenses
|
|
|
12,700
|
|
16,795
|
|
Depreciation and
amortization
|
|
|
17,482
|
|
20,911
|
|
Other, net
|
|
|
683
|
|
-
|
|
Total costs
and expenses
|
|
|
118,864
|
|
133,085
|
|
Operating income
(loss)
|
|
|
248
|
|
(5,071)
|
|
Interest expense,
net
|
|
|
(12,588)
|
|
(12,050)
|
|
Other income
(expense), net
|
|
|
321
|
|
(420)
|
|
Loss on
extinguishment of debt
|
|
|
-
|
|
(3,177)
|
|
Loss from continuing
operations before income taxes
|
|
|
(12,019)
|
|
(20,718)
|
|
Income tax
benefit
|
|
|
24
|
|
8,804
|
|
Loss from continuing
operations
|
|
|
(11,995)
|
|
(11,914)
|
|
Income from
discontinued operations, net of income taxes
|
|
|
921
|
|
459
|
|
Net loss attributable
to common stockholders
|
|
|
$ (11,074)
|
|
$ (11,455)
|
|
|
|
|
|
|
|
Net loss per common
share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
|
|
$ (0.44)
|
|
$ (0.48)
|
|
Basic and diluted
income from discontinued operations
|
|
|
0.03
|
|
0.02
|
|
Net loss per basic
and diluted share
|
|
|
$ (0.41)
|
|
$ (0.46)
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in computing net loss per basic and diluted
common share
|
|
|
27,412
|
|
25,020
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
|
(In
thousands)
|
|
|
|
March
31,
|
|
December
31,
|
|
2015
|
|
2014
|
|
Assets
|
(Unaudited)
|
|
(Note 1)
|
|
Cash and cash
equivalents
|
$ 35,486
|
|
$
13,367
|
|
Restricted
cash
|
-
|
|
114
|
|
Accounts receivable,
net
|
86,393
|
|
108,813
|
|
Inventories
|
4,131
|
|
4,413
|
|
Prepaid expenses and
other receivables
|
5,420
|
|
4,147
|
|
Deferred income
taxes
|
3,033
|
|
3,179
|
|
Other current
assets
|
181
|
|
173
|
|
Current assets held
for sale
|
17,711
|
|
20,466
|
|
Total current
assets
|
152,355
|
|
154,672
|
|
Property, plant and
equipment, net
|
466,414
|
|
475,982
|
|
Equity
investments
|
3,793
|
|
3,814
|
|
Intangibles,
net
|
19,046
|
|
19,757
|
|
Goodwill
|
104,721
|
|
104,721
|
|
Other
assets
|
16,501
|
|
17,688
|
|
Long-term assets held
for sale
|
97,617
|
|
94,938
|
|
Total
assets
|
$ 860,447
|
|
$
871,572
|
|
Liabilities and
Equity
|
|
|
|
|
Accounts
payable
|
$ 14,118
|
|
$
18,859
|
|
Accrued
liabilities
|
53,216
|
|
43,395
|
|
Current portion of
contingent consideration
|
9,409
|
|
9,274
|
|
Current portion of
long-term debt
|
5,128
|
|
4,863
|
|
Financing obligation
to acquire non-controlling interest
|
11,000
|
|
11,000
|
|
Current liabilities
of discontinued operations
|
6,924
|
|
8,802
|
|
Total current
liabilities
|
99,795
|
|
96,193
|
|
Deferred income
taxes
|
3,303
|
|
3,448
|
|
Long-term portion of
debt
|
587,158
|
|
592,455
|
|
Long-term portion of
contingent consideration
|
106
|
|
550
|
|
Other long-term
liabilities
|
3,874
|
|
3,874
|
|
Long-term liabilities
of discontinued operations
|
22,332
|
|
22,105
|
|
Total
liabilities
|
716,568
|
|
718,625
|
|
Commitments and
contingencies
|
|
|
|
|
Common
stock
|
29
|
|
29
|
|
Additional paid-in
capital
|
1,367,618
|
|
1,365,537
|
|
Treasury
stock
|
(19,726)
|
|
(19,651)
|
|
Accumulated
deficit
|
(1,204,042)
|
|
(1,192,968)
|
|
Total equity of
Nuverra Environmental Solutions, Inc.
|
143,879
|
|
152,947
|
|
Total liabilities and
equity
|
$ 860,447
|
|
$
871,572
|
|
|
|
|
|
|
|
Note 1: The condensed
consolidated balance sheet at December 31, 2014 has been
derived from the audited consolidated financial statements included
in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 2014.
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
|
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
|
2015
|
|
2014
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
Net loss
|
|
$ (11,074)
|
|
$ (11,455)
|
|
|
Adjustments to
reconcile net loss to net cash provided by operating
activities:
|
|
|
|
|
|
|
Income from
discontinued operations, net of income taxes
|
|
(921)
|
|
(459)
|
|
|
Depreciation
|
|
16,771
|
|
16,607
|
|
|
Amortization
of intangible assets
|
|
711
|
|
4,304
|
|
|
Amortization
of deferred financing costs
|
|
1,207
|
|
523
|
|
|
Amortization
of original issue discounts and premiums, net
|
|
40
|
|
36
|
|
|
Stock-based
compensation
|
|
789
|
|
293
|
|
|
Gain on
disposal of property, plant and equipment
|
|
(654)
|
|
(1,255)
|
|
|
Bad debt
expense
|
|
732
|
|
773
|
|
|
Loss on
extinguishment of debt
|
|
-
|
|
3,177
|
|
|
Deferred
income taxes
|
|
1
|
|
(8,804)
|
|
|
Other,
net
|
|
(418)
|
|
463
|
|
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
21,688
|
|
(14,902)
|
|
|
Prepaid
expenses and other receivables
|
|
(1,273)
|
|
(1,982)
|
|
|
Accounts
payable and accrued liabilities
|
|
6,949
|
|
12,523
|
|
|
Other assets
and liabilities, net
|
|
202
|
|
(215)
|
|
|
Net cash provided by
(used in) operating activities from continuing
operations
|
|
34,750
|
|
(373)
|
|
|
Net cash provided by
operating activities from discontinued operations
|
|
867
|
|
3,409
|
|
|
Net cash provided by
operating activities
|
|
35,617
|
|
3,036
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
Proceeds from the
sale of property, plant and equipment
|
|
1,968
|
|
1,551
|
|
|
Purchases of
property, plant and equipment
|
|
(6,163)
|
|
(7,743)
|
|
|
Net cash used in
investing activities from continuing operations
|
|
(4,195)
|
|
(6,192)
|
|
|
Net cash used in
investing activities from discontinued operations
|
|
(161)
|
|
(1,050)
|
|
|
Net cash used in
investing activities
|
|
(4,356)
|
|
(7,242)
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
Proceeds from
revolving credit facility
|
|
-
|
|
17,725
|
|
|
Payments on revolving
credit facility
|
|
(7,000)
|
|
(8,000)
|
|
|
Payments for deferred
financing costs
|
|
-
|
|
(343)
|
|
|
Payments on notes
payable and capital leases
|
|
(1,361)
|
|
(1,429)
|
|
|
Other financing
activities
|
|
(75)
|
|
25
|
|
|
Net cash (used in)
provided by financing activities of continuing
operations
|
|
(8,436)
|
|
7,978
|
|
|
Net cash provided by
financing activities of discontinued operations
|
|
38
|
|
-
|
|
|
Net cash (used in)
provided by financing activities
|
|
(8,398)
|
|
7,978
|
|
|
Net increase in cash
and cash equivalents
|
|
22,863
|
|
3,772
|
|
|
Cash and cash
equivalents - beginning of period
|
|
15,416
|
|
9,212
|
|
|
Cash and cash
equivalents - end of period
|
|
38,279
|
|
12,984
|
|
|
Less: cash and cash
equivalents of discontinued operations - end of period
|
|
2,793
|
|
2,788
|
|
|
Cash and cash
equivalents of continuing operations - end of period
|
|
$ 35,486
|
|
$ 10,196
|
|
|
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
March 31,
|
|
|
2015
|
|
2014
|
|
|
Loss from continuing
operations
|
$
(11,995)
|
|
$
(11,914)
|
|
|
Depreciation of
property, plant and equipment
|
16,771
|
|
16,607
|
|
|
Amortization of
intangible assets
|
711
|
|
4,304
|
|
|
Interest expense,
net
|
12,588
|
|
12,050
|
|
|
Income tax
benefit
|
(24)
|
|
(8,804)
|
|
|
EBITDA
|
18,051
|
|
12,243
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
Transaction-related
costs, including earnout adjustments, net
|
(309)
|
|
513
|
|
|
Stock-based
compensation
|
789
|
|
293
|
|
|
Legal and
environmental costs, net
|
7
|
|
1,856
|
|
|
Restructuring, exit
and other costs
|
822
|
|
-
|
|
|
Loss on
extinguishment of debt
|
-
|
|
3,177
|
|
|
Integration,
severance and rebranding costs
|
-
|
|
2,072
|
|
|
Gain on disposal of
assets
|
(654)
|
|
(1,255)
|
|
|
Adjusted EBITDA from
continuing operations
|
18,706
|
|
18,899
|
|
|
Adjusted EBITDA from
discontinued operations
|
1,190
|
|
3,098
|
|
|
Total Adjusted
EBITDA
|
$
19,896
|
|
$
21,997
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income from Discontinued Operations to EBITDA from Discontinued
Operations and Adjusted EBITDA from Discontinued
Operations:
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014
|
|
|
Income from
discontinued operations
|
$
921
|
|
$
459
|
|
|
Income tax
expense
|
265
|
|
1,696
|
|
|
EBITDA from
discontinued operations
|
1,186
|
|
2,155
|
|
|
Adjustments:
|
|
|
|
|
|
Transaction-related
costs
|
4
|
|
1,024
|
|
|
Gain on disposal of
assets
|
-
|
|
(81)
|
|
|
Adjusted EBITDA from
discontinued operations
|
$
1,190
|
|
$
3,098
|
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
|
|
UNAUDITED NON-GAAP
RECONCILIATIONS (continued)
|
|
|
(In
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Segment Performance to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
|
|
Three Months Ended
March 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
Revenue
|
$ 69,410
|
|
$ 27,313
|
|
$ 22,389
|
|
$ -
|
|
$ 119,112
|
|
|
Direct operating
expenses
|
48,425
|
|
21,496
|
|
18,078
|
|
-
|
|
87,999
|
|
|
General and
administrative expenses
|
2,056
|
|
1,904
|
|
2,078
|
|
6,662
|
|
12,700
|
|
|
Depreciation and
amortization
|
8,737
|
|
3,927
|
|
4,648
|
|
170
|
|
17,482
|
|
|
Operating income
(loss)
|
10,192
|
|
(98)
|
|
(3,014)
|
|
(6,832)
|
|
248
|
|
|
Operating margin
%
|
14.7%
|
|
(0.4)%
|
|
(13.5)%
|
|
NA
|
|
0.2%
|
|
|
Income (loss) from
continuing operations before income taxes
|
10,097
|
|
13
|
|
(2,935)
|
|
(19,194)
|
|
(12,019)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$ 10,097
|
|
$ 13
|
|
$ (2,935)
|
|
$ (19,170)
|
|
$ (11,995)
|
|
|
Depreciation and
amortization
|
8,737
|
|
3,927
|
|
4,648
|
|
170
|
|
17,482
|
|
|
Interest expense,
net
|
109
|
|
64
|
|
53
|
|
12,362
|
|
12,588
|
|
|
Income tax
benefit
|
-
|
|
-
|
|
-
|
|
(24)
|
|
(24)
|
|
|
EBITDA
|
$ 18,943
|
|
$ 4,004
|
|
$ 1,766
|
|
$ (6,662)
|
|
$ 18,051
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments,
net
|
(589)
|
|
(225)
|
|
538
|
|
931
|
|
655
|
|
|
Adjusted EBITDA from
continuing operations
|
$ 18,354
|
|
$ 3,779
|
|
$ 2,304
|
|
$ (5,731)
|
|
$ 18,706
|
|
|
Adjusted EBITDA
margin %
|
26.4%
|
|
13.8%
|
|
10.3%
|
|
NA
|
|
15.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
|
|
Revenue
|
$ 81,906
|
|
$ 19,175
|
|
$ 26,933
|
|
$ -
|
|
$ 128,014
|
|
|
Direct operating
expenses
|
57,347
|
|
16,425
|
|
21,607
|
|
-
|
|
95,379
|
|
|
General and
administrative expenses
|
3,095
|
|
1,924
|
|
3,353
|
|
8,423
|
|
16,795
|
|
|
Depreciation and
amortization
|
12,669
|
|
3,873
|
|
4,206
|
|
163
|
|
20,911
|
|
|
Operating income
(loss)
|
8,795
|
|
(3,048)
|
|
(2,232)
|
|
(8,586)
|
|
(5,071)
|
|
|
Operating margin
%
|
10.7%
|
|
(15.9)%
|
|
(8.3)%
|
|
NA
|
|
(4.0)%
|
|
|
Income (loss) from
continuing operations before income taxes
|
8,683
|
|
(3,235)
|
|
(2,667)
|
|
(23,499)
|
|
(20,718)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
$ 8,683
|
|
$ (3,235)
|
|
$ (2,667)
|
|
$ (14,695)
|
|
$ (11,914)
|
|
|
Depreciation and
amortization
|
12,669
|
|
3,873
|
|
4,206
|
|
163
|
|
20,911
|
|
|
Interest expense,
net
|
136
|
|
73
|
|
105
|
|
11,736
|
|
12,050
|
|
|
Income tax
benefit
|
-
|
|
-
|
|
-
|
|
(8,804)
|
|
(8,804)
|
|
|
EBITDA
|
$ 21,488
|
|
$ 711
|
|
$ 1,644
|
|
$ (11,600)
|
|
$ 12,243
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments,
net
|
243
|
|
802
|
|
(103)
|
|
5,714
|
|
6,656
|
|
|
Adjusted EBITDA from
continuing operations
|
$ 21,731
|
|
$ 1,513
|
|
$ 1,541
|
|
$ (5,886)
|
|
$ 18,899
|
|
|
Adjusted EBITDA
margin %
|
26.5%
|
|
7.9%
|
|
5.7%
|
|
NA
|
|
14.8%
|
|
|
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
March 31, 2015
|
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
|
Revenue
|
$ 119,112
|
|
$
-
|
|
$ 119,112
|
|
|
Direct operating
expenses
|
87,999
|
|
654
|
[A]
|
88,653
|
|
|
General and
administrative expenses
|
12,700
|
|
(935)
|
[B]
|
11,765
|
|
|
Operating
income
|
248
|
|
964
|
[C]
|
1,212
|
|
|
Loss from continuing
operations
|
(11,995)
|
|
654
|
[D]
|
(11,341)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$
(0.44)
|
|
|
|
$
(0.41)
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (11,995)
|
|
|
|
$ (11,341)
|
|
|
Depreciation and
amortization
|
17,482
|
|
|
|
17,482
|
|
|
Interest expense,
net
|
12,588
|
|
|
|
12,588
|
|
|
Income tax
benefit
|
(24)
|
|
|
|
(23)
|
|
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ 18,051
|
|
|
|
$ 18,706
|
|
|
|
Description of
2015 Special Items:
|
|
[A]
|
Special items include
a gain on sale related to the disposal of certain transportation
related assets.
|
|
|
|
|
|
|
|
|
|
[B]
|
Primarily
attributable to stock-based compensation, and certain refinancing
costs associated with our ABL Facility.
|
|
|
|
|
|
|
|
|
|
[C]
|
Primarily includes
the aforementioned adjustments, and a charge of approximately $0.7
million associated with Company's restructuring initiative
and other exit related costs from certain shale
basins.
|
|
|
|
|
|
|
|
|
|
[D]
|
Primarily includes
the aforementioned adjustments, including a net reduction related
to a prior acquisition earnout reserve of $0.3 million.
Additionally, the Company's effective tax rate for the three months
ended March 31, 2015 was zero percent and has been applied to the
special items accordingly.
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
March 31, 2014
|
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
|
|
Revenue
|
$ 128,014
|
|
$
-
|
|
$ 128,014
|
|
|
Direct operating
expenses
|
95,379
|
|
1,255
|
[E]
|
96,634
|
|
|
General and
administrative expenses
|
16,795
|
|
(4,318)
|
[F]
|
12,477
|
|
|
Operating
loss
|
(5,071)
|
|
3,063
|
|
(2,008)
|
|
|
Loss from continuing
operations
|
(11,914)
|
|
3,827
|
[G]
|
(8,087)
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$
(0.48)
|
|
|
|
$
(0.32)
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (11,914)
|
|
|
|
$ (8,087)
|
|
|
Depreciation and
amortization
|
20,911
|
|
|
|
20,911
|
|
|
Interest expense,
net
|
12,050
|
|
|
|
12,050
|
|
|
Income tax
benefit
|
(8,804)
|
|
|
|
(5,975)
|
|
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ 12,243
|
|
|
|
$ 18,899
|
|
|
|
Description of
2014 Special Items:
|
|
[E]
|
Special items include
a gain on sale related to the disposal of certain transportation
related assets.
|
|
|
|
|
|
|
|
|
|
[F]
|
Primarily
attributable to costs incurred as a result of our accounting and
administrative integration efforts, stock-based compensation, and
certain legal expenses associated with our Texas Cases
litigation.
|
|
|
|
|
|
|
|
|
|
[G]
|
Primarily includes
the aforementioned adjustments, along with a charge of $3.2 million
in connection with a write-off of a portion of the unamortized
deferred financing costs associated with our Amended Revolving
Credit Facility, and a charge of $0.4 million associated with a
prior acquisition earnout reserve. Additionally, the
Company's effective tax rate for the three months ended March 31,
2014 was -42.5% and has been applied to the special items
accordingly.
|
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
|
UNAUDITED NON-GAAP
RECONCILIATIONS (continued)
|
|
(In
thousands)
|
|
|
|
|
|
|
Reconciliation of
Free Cash Flow from Continuing Operations
|
|
|
|
|
|
|
|
Three Months Ended
March 31,
|
|
|
2015
|
|
2014
|
|
Net cash provided by
(used in) operating activities from continuing
operations
|
|
$ 34,750
|
|
$
(373)
|
|
Less: net cash
capital expenditures
|
|
(4,195)
|
|
(6,192)
|
|
Free Cash
Flow
|
|
$ 30,555
|
|
$
(6,565)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/nuverra-reports-first-quarter-2015-results-300080458.html
SOURCE Nuverra Environmental Solutions, Inc.