FORT WORTH, Texas, Oct. 22, 2015 /PRNewswire/ -- Basic Energy
Services, Inc. (NYSE: BAS) ("Basic") today announced its financial
and operating results for the third quarter and nine months ended
September 30, 2015.
THIRD QUARTER 2015 HIGHLIGHTS
Third quarter 2015 revenue declined 2% to $189.2 million from $193.6
million in the second quarter of 2015, on an as-reported
basis, as all lines of services continued to experience renewed
pricing pressure and diminished activity levels driven by volatile
commodity prices and the reduced rig count. The second quarter of
2015 included an after-tax charge of $2.9
million, or $0.07 per basic
and diluted share, related to a credit given to a customer
resulting from the settlement of an audit, which impacted both
revenue and earnings. Excluding this special item, Basic reported
revenues of $198.1 million in the
second quarter of 2015. In the third quarter of 2014, Basic
generated $394.0 million in
revenue.
For the third quarter of 2015, Basic reported a net loss of
$105.6 million, or a loss of
$2.63 per basic and diluted share.
The third quarter of 2015 includes a tax-effected, non-cash charge
of $55.1 million ($81.9 million before tax), or $1.37 per basic and diluted share, for impairment
of all of the goodwill associated with the completion and remedial
segment. Excluding this special item, Basic reported a net
loss of $50.6 million, or
$1.26 per basic and diluted share.
This compares to a net loss of $48.3
million, or a loss of $1.20
per basic and diluted share, reported in the second quarter of
2015. Excluding the second quarter 2015 special item mentioned
above, Basic reported a net loss of $45.4
million, or a loss of $1.13
per basic and diluted share, in the second quarter of 2015.
In the third quarter of 2014, Basic reported net income of
$9.9 million, or $0.24 per basic and diluted share.
Roe Patterson, Basic's President and Chief Executive Officer,
stated, "Our third quarter results reflect the impact of the
additional decline in the U.S. drilling rig count that took place
during the quarter, and its effect on demand and pricing for our
services. We continue to take defensive measures to maximize
utilization and control costs under the current environment,
focusing on generating cash flow and preserving liquidity.
"Third quarter margins declined across the board, with our
completion and remedial services being impacted the most, due to
the continuing decline in rig count and the amount of excess
equipment available in most stimulation markets. Our fluid services
business has been the most resilient due to our integrated strategy
that benefits from our extensive salt water disposal well network,
especially in markets like the Permian Basin, which allows us to
keep costs low and efficiencies high. Our business lines that
support ongoing production such as well servicing, fluid services
and rental and fishing tools have maintained relatively stable
utilization rates. Given that some customers reduced activity
and some competitors have exited the marketplace, we feel we have
most likely gained market share.
"Pricing in all of our markets and lines of business has been
lowered in order to maintain activity levels and protect market
share. Recently, in markets where stimulation pricing has fallen to
levels causing cash margins at the field level to be uneconomical,
we have either relocated this frac equipment to other markets or
stacked it.
"Looking forward, we expect the fourth quarter to be challenging
due to the combination of reduced customer spending and the normal
seasonal conditions, including less daylight hours and the impact
of holidays and weather. Based on these conditions, we
currently anticipate that our fourth quarter revenue will be down
13% to 15% sequentially. In response to this, we expect to further
reduce costs, lower capital spending accordingly and make
appropriate adjustments to preserve and increase our
liquidity. We believe these efforts have and will continue to
pay dividends and we will emerge from this downturn in a strong
position."
Adjusted EBITDA decreased to ($1.6
million), or (1%) of revenues, for the third quarter of 2015
from $6.1 million, or 3% of revenues,
in the second quarter of 2015. In the third quarter of 2014,
Basic generated Adjusted EBITDA of $88.5
million, or 23% of revenues. Adjusted EBITDA is
defined as net income before interest, taxes, depreciation and
amortization, loss on goodwill impairment, loss on legal
settlements, loss on customer audit settlements, and the net gain
or loss from the disposal of assets. EBITDA and Adjusted
EBITDA, which are not measures determined in accordance with
United States generally accepted
accounting principles ("GAAP"), are defined and reconciled in note
3 under the accompanying financial tables.
2015 NINE MONTHS HIGHLIGHTS
Including the revenue adjustment in the second quarter of 2015,
revenues for the first nine months of 2015 were $649.1 million. This represents a 40% decrease
from revenue of $1.1 billion during
the comparable period of 2014.
For the first nine months of 2015, Basic reported a net loss of
$186.6 million, or a loss of
$4.61 per basic and diluted share.
Excluding the special items mentioned above, Basic generated an
adjusted net loss of $128.6 million,
or a loss of $3.18 per basic and
diluted share. For the first nine months of 2014, Basic reported
net income of $10.5 million, or
$0.25 per basic and diluted
share. Excluding a special item in last year's second
quarter, Basic generated adjusted net income of $13.4 million, or $0.32 per basic and diluted share.
Adjusted EBITDA for the first nine months of 2015 decreased 86%
to $31.8 million, or 5% of revenue,
compared to $232.3 million, or 21% of
revenue, for the first nine months of 2014. Adjusted EBITDA
excludes the special items discussed above for both 2015 and 2014.
Adjusted EBITDA is reconciled in note 3 under the accompanying
financial tables.
Business Segment Results
Completion and Remedial Services
Completion and remedial services revenue dropped by 9% to
$67.2 million in the third quarter of
2015 from $73.6 million in the prior
quarter, excluding the special item from the second quarter of 2015
mentioned above. The sequential decline in revenue was due to
continued pricing pressure for our stimulation services, and the
reduction in completion activity from sustained lower oil prices.
In the third quarter of 2014, this segment generated $193.7 million in revenue.
At September 30, 2015, Basic had
approximately 444,000 hydraulic horsepower ("HHP"), up slightly
compared to the end of the previous quarter but up 8% from 413,000
HHP as of September 30, 2014.
Weighted average HHP for the third quarter of 2015 was 442,000
essentially flat with the second quarter of 2015.
Segment profit in the third quarter of 2015 decreased 30% to
$11.1 million compared to
$15.9 million in the prior quarter,
excluding the special item mentioned above. Segment margin
for the third quarter 2015 decreased 510 basis points to 16%
compared to the previous quarter, driven predominantly by pricing
concessions given to customers as well as lower stimulation and
coil tubing utilization. During the third quarter of 2014,
segment profit was $74.6 million, or
38% of revenue.
Fluid Services
Fluid services revenue in the third quarter of 2015 decreased 2%
to $62.6 million compared to
$63.7 million in the prior
quarter. During the third quarter of 2014, this segment
generated $92.9 million in
revenue.
The weighted average number of fluid services trucks increased
slightly to 1,012 during the third quarter of 2015, compared to
1,011 during the second quarter of 2015, but was down from 1,025
during the third quarter of 2014. Truck hours of 565,000
during the third quarter of 2015 represented a decrease of 1% from
the 574,000 generated in the second quarter of 2015 and a decrease
of 12% compared to 646,000 in the same period in 2014.
The average revenue per fluid service truck decreased to
$62,000 from $63,000 in the second quarter of 2015. In the
comparable quarter of 2014, average revenue per fluid truck was
$91,000.
Segment profit in the third quarter of 2015 was $14.9 million, compared to a profit of
$15.3 million in the prior quarter.
Segment profit margin remained flat at 24%, despite the lower
revenue base. Segment profit in the same period in 2014 was
$26.7 million, or 29% of
revenue.
Well Servicing
Well servicing revenues decreased 2% to $55.5 million during the third quarter of 2015
compared to $56.5 million in the
prior quarter. This slight decline was due to pricing pressure on
sequentially flat activity levels, resulting from a highly
competitive market environment. Well servicing revenues were
$91.1 million in the third quarter of
2014. Revenues from the Taylor manufacturing operations were
$4.1 million in the third quarter of
2015 compared to $2.2 million in the
prior quarter and $3.0 million in the
third quarter of 2014.
At September 30, 2015, the well
servicing rig count was 421, the same as the end of the prior
quarter and at September 30, 2014.
Rig hours were 154,100 in the third quarter of 2015, essentially
flat to 154,700 in the previous quarter and down from 217,500 hours
in the comparable quarter of last year. Rig utilization was 50% in
the third quarter of 2015, down slightly from 51% in the prior
quarter and down from 71% in the third quarter of
2014.
Excluding revenues associated with the Taylor manufacturing
operations, revenue per well servicing rig hour was $334 in the third quarter of 2015, compared to
$351 in the previous quarter and to
$405 reported in the third quarter of
2014. The sequential decline was due to pricing concessions given
to customers to maintain utilization in all operating markets.
Segment profit in the third quarter of 2015 was $7.7 million, compared to $9.5 million in the prior quarter and
$23.5 million during the same period
in 2014. Segment profit margin decreased by 290 basis points to 14%
in the third quarter of 2015 from 17% in the previous quarter.
Third quarter profit margin was negatively impacted by the
decremental margins from a lower revenue base with additional rate
concessions to our customers. In the third quarter of 2014,
segment profit was 26% of revenue. Segment profit from the Taylor
manufacturing operations was $311,000
in the third quarter of 2015 compared to $64,000 in the prior quarter.
Contract Drilling
Contract drilling revenue decreased by 11% to $3.8 million during the third quarter of 2015
from $4.3 million in the prior
quarter. During the third quarter of 2014, this segment generated
$16.3 million in revenue. Basic
operated 12 drilling rigs during the third quarter of 2015, the
same number of rigs as in the previous quarter as well as the third
quarter of 2014. However, only three rigs were active during
the majority of the third quarter. Revenue per drilling day in the
third quarter of 2015 was $15,300,
down from $15,500 in the previous
quarter and down from $16,800 in the
third quarter of 2014.
Rig operating days during the third quarter of 2015 decreased by
10% to 252 compared to 280 in the prior quarter, resulting in rig
utilization of 23% during the third quarter of 2015 compared to 26%
during the prior quarter. Rig operating days declined due to
diminishing capital and operating spending by our customers.
In the comparable period in 2014, rig operating days were 968,
producing a utilization of 88%.
Segment profit in the third quarter of 2015 was $661,000, a 22% decrease compared to profit of
$848,000 in the prior quarter and a
decrease from $5.1 million in the
third quarter of 2014. Segment margin for the third quarter
of 2015 was 17% of revenues compared to 20% from the prior quarter,
due to decremental margins on lower revenues. Last year in
the comparable period, segment margin was 31%.
G&A Expense
General and administrative ("G&A") expense in the third
quarter of 2015 was $36.0 million, or
19% of revenue, compared to $35.7
million, or 18% of revenue, in the prior quarter. This
slight increase in G&A expense was primarily due to severance
costs incurred as the result of corporate restructurings and higher
bad debt expense, which was offset by lower personnel expense from
cost cutting initiatives and lower incentive compensation.
G&A expense in the third quarter of 2014 was $41.5 million, or 10% of revenue.
Goodwill Impairment
In the third quarter of 2015, Basic concluded that the goodwill
in its completion and remedial segment was impaired in its
entirety, and accordingly, recorded a pre-tax goodwill impairment
charge of $81.9 million.
Tax Benefit
Basic's tax benefit for the third quarter of 2015 was
$56.5 million, compared to a tax
benefit of $27.2 million in the
second quarter of 2015. Excluding the special items mentioned
above, the tax benefit would be $29.7
million for the third quarter, compared to the tax benefit
for the second quarter of $25.6
million. The tax benefit in the third quarter of 2015,
excluding the goodwill writedown, had an effective rate of 37%,
compared to the prior quarter's effective tax adjusted benefit rate
of 36%. The tax expense of $6.2
million in the third quarter of 2014 translated into an
effective tax rate of 39%.
Cash and Total Liquidity
On September 30, 2015, Basic had
cash and cash equivalents of approximately $56.0 million, down from $91.8 million at June 30,
2015 and $57.5 million on
September 30, 2014. The cash balance
at September 30, 2015 does not
include $7.5 million of
reimbursements we expect to receive in the fourth quarter for
equipment that we paid for in the third quarter that will be
converted to capital leases in the fourth quarter. At
September 30, 2015, total liquidity
was approximately $167 million, which
included $111 million of availability
under Basic's $250 million revolving
credit facility.
Capital Expenditures and Acquisitions
Total capital expenditures during the first nine months of 2015
were approximately $61.0
million (including capital leases of $13.7 million), comprised of $19.3 million for expansion projects,
$36.7 million for sustaining and
replacement projects and $5.0 million
for other projects. Expansion capital spending included
$8.7 million for the completion and
remedial services segment, $7.1
million for the well servicing segment, $2.2 million for the fluid services
segment, and $1.3 million for the
contact drilling segment. Other capital expenditures were
mainly for facilities and IT infrastructure.
Basic paid $16.7 million for three
acquisitions that were completed in the third quarter of 2015.
Conference Call
Basic will host a conference call to discuss its third quarter
2015 results on Friday, October 23,
2015, at 9:00 a.m. Eastern
Time (8:00 a.m.
Central). To access the call, please dial (412) 902-0003 and
ask for the "Basic Energy Services" call at least 10 minutes prior
to the start time. The conference call will also be broadcast
live via the Internet and can be accessed through the investor
relations section of Basic's corporate website,
www.basicenergyservices.com.
A telephonic replay of the conference call will be available
until November 6, 2015 and may be
accessed by calling (201) 612-7415 and using pass code
13620102#. A webcast archive will be available at
www.basicenergyservices.com shortly after the call and will be
accessible for approximately 30 days.
About Basic Energy Services
Basic Energy Services provides well site services essential to
maintaining production from the oil and gas wells within its
operating area. The company employs more than 4,200 employees
in more than 100 service points throughout the major oil and gas
producing regions in Texas,
Louisiana, Oklahoma, New
Mexico, Arkansas,
Kansas, and the Rocky Mountain and
Appalachian regions. Additional information on Basic Energy
Services is available on the Company's website at
www.basicenergyservices.com.
Safe Harbor Statement
This release includes forward-looking statements and
projections, made in reliance on the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Basic has
made every reasonable effort to ensure that the information and
assumptions on which these statements and projections are based are
current, reasonable, and complete. However, a variety of
factors could cause actual results to differ materially from the
projections, anticipated results or other expectations expressed in
this release, including (i) changes in demand for our services and
any related material impact on our pricing and utilizations rates,
(ii) Basic's ability to execute, manage and integrate acquisitions
successfully, (iii) changes in our expenses, including labor or
fuel costs and financing costs, (iv) continued volatility of oil or
natural gas prices, and any related changes in expenditures by our
customers, and (v) competition within our industry.
Additional important risk factors that could cause actual results
to differ materially from expectations are disclosed in Item 1A of
Basic's Form 10-K for the year ended December 31, 2014 and subsequent Form 10-Qs filed
with the SEC. While Basic makes these statements and
projections in good faith, neither Basic nor its management can
guarantee that anticipated future results will be achieved.
Basic assumes no obligation to publicly update or revise any
forward-looking statements made herein or any other forward-looking
statements made by Basic, whether as a result of new information,
future events, or otherwise.
Contacts:
|
Alan
Krenek,
|
|
Chief Financial
Officer
|
|
Basic Energy
Services, Inc.
|
|
817-334-4100
|
|
|
|
Jack Lascar/Stephanie
Smith
|
|
Dennard - Lascar
Associates
|
|
713-529-6600
|
-Tables to Follow-
Basic Energy
Services, Inc.
|
Consolidated
Statements of Operations and Other Financial Data
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement
Data:
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Completion and remedial
services
|
$
|
67,240
|
|
$
|
193,699
|
|
$
|
249,070
|
|
$
|
495,550
|
Fluid
services
|
|
62,631
|
|
|
92,852
|
|
|
200,138
|
|
|
276,001
|
Well
servicing
|
|
55,533
|
|
|
91,119
|
|
|
175,701
|
|
|
273,660
|
Contract
drilling
|
|
3,843
|
|
|
16,285
|
|
|
19,655
|
|
|
45,162
|
Total
revenues
|
|
189,247
|
|
|
393,955
|
|
|
644,564
|
|
|
1,090,373
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Completion and remedial
services
|
|
56,165
|
|
|
119,138
|
|
|
195,086
|
|
|
308,235
|
Fluid
services
|
|
47,706
|
|
|
66,121
|
|
|
150,218
|
|
|
197,958
|
Well
servicing
|
|
47,877
|
|
|
67,636
|
|
|
147,314
|
|
|
202,144
|
Contract
drilling
|
|
3,182
|
|
|
11,225
|
|
|
14,197
|
|
|
30,900
|
General and
administrative (1)
|
|
35,984
|
|
|
41,516
|
|
|
110,861
|
|
|
124,028
|
Depreciation and
amortization
|
|
60,328
|
|
|
54,485
|
|
|
181,488
|
|
|
157,975
|
Goodwill
impairment
|
|
81,877
|
|
|
—
|
|
|
81,877
|
|
|
—
|
Loss on disposal of
assets
|
|
1,128
|
|
|
979
|
|
|
1,119
|
|
|
1,216
|
Total
expenses
|
|
334,247
|
|
|
361,100
|
|
|
882,160
|
|
|
1,022,456
|
Operating income
(loss)
|
|
(145,000)
|
|
|
32,855
|
|
|
(237,596)
|
|
|
67,917
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(17,242)
|
|
|
(16,828)
|
|
|
(50,945)
|
|
|
(50,253)
|
Interest
income
|
|
7
|
|
|
11
|
|
|
17
|
|
|
37
|
Other income
|
|
114
|
|
|
139
|
|
|
449
|
|
|
612
|
Income (loss) before
income taxes
|
|
(162,121)
|
|
|
16,177
|
|
|
(288,075)
|
|
|
18,313
|
Income tax benefit
(expense)
|
|
56,479
|
|
|
(6,246)
|
|
|
101,514
|
|
|
(7,846)
|
Net income
(loss)
|
$
|
(105,642)
|
|
$
|
9,931
|
|
$
|
(186,561)
|
|
$
|
10,467
|
Earnings (loss) per
share of common stock:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(2.63)
|
|
$
|
0.24
|
|
$
|
(4.61)
|
|
$
|
0.25
|
Diluted
|
$
|
(2.63)
|
|
$
|
0.24
|
|
$
|
(4.61)
|
|
$
|
0.25
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (3)
|
$
|
(84,558)
|
|
$
|
87,479
|
|
$
|
(55,659)
|
|
$
|
226,504
|
Adjusted EBITDA
(3)
|
|
(1,553)
|
|
|
88,458
|
|
|
31,837
|
|
|
232,333
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
|
16,730
|
|
|
16,090
|
|
|
16,730
|
|
|
16,090
|
Property and
equipment
|
|
12,465
|
|
|
77,541
|
|
|
47,288
|
|
|
184,925
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
|
|
September 30,
2015
|
|
September 30,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
55,972
|
|
$
|
57,450
|
|
|
|
|
|
|
Net property and
equipment
|
|
895,659
|
|
|
981,910
|
|
|
|
|
|
|
Total
assets
|
|
1,250,339
|
|
|
1,605,849
|
|
|
|
|
|
|
Total long-term
debt
|
|
842,311
|
|
|
865,708
|
|
|
|
|
|
|
Total stockholders'
equity
|
|
159,665
|
|
|
364,108
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Segment Data:
|
(Unaudited)
|
|
(Unaudited)
|
Completion and
Remedial Services
|
|
|
|
|
|
|
|
|
|
|
|
Segment profits as a
percent of revenue
|
|
16.5%
|
|
|
38.5%
|
|
|
21.7%
|
|
|
37.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid
Services
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of fluid service trucks
|
|
1,012
|
|
|
1,025
|
|
|
1,023
|
|
|
1,015
|
Truck hours
(000's)
|
|
565.4
|
|
|
645.8
|
|
|
1,734.2
|
|
|
1,883.9
|
Revenue per fluid
services truck (000's)
|
$
|
62
|
|
$
|
91
|
|
$
|
196
|
|
$
|
272
|
Segment profits per
fluid services truck (000's)
|
$
|
15
|
|
$
|
26
|
|
$
|
49
|
|
$
|
77
|
Segment profits as a
percent of revenue
|
|
23.8%
|
|
|
28.8%
|
|
|
24.9%
|
|
|
28.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
Well Servicing
(2)
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
|
421
|
|
|
421
|
|
|
421
|
|
|
421
|
Rig hours
(000's)
|
|
154.1
|
|
|
217.5
|
|
|
472.7
|
|
|
649.1
|
Rig utilization
rate
|
|
50%
|
|
|
71%
|
|
|
52%
|
|
|
72%
|
Revenue per rig hour,
excluding manufacturing
|
$
|
334
|
|
$
|
405
|
|
$
|
354
|
|
$
|
411
|
Well servicing rig
profit per rig hour
|
$
|
50
|
|
$
|
108
|
|
$
|
60
|
|
$
|
110
|
Segment profits as a
percent of revenue
|
|
13.8%
|
|
|
25.8%
|
|
|
16.2%
|
|
|
26.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
Contract
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
|
12
|
|
|
12
|
|
|
12
|
|
|
12
|
Rig operating
days
|
|
252
|
|
|
968
|
|
|
1,206
|
|
|
2,731
|
Revenue per
day
|
$
|
15,300
|
|
$
|
16,800
|
|
$
|
16,300
|
|
$
|
16,500
|
Drilling rig profit
per day
|
$
|
2,600
|
|
$
|
5,200
|
|
$
|
4,500
|
|
$
|
5,200
|
Segment profits as a
percent of revenue
|
|
17.2%
|
|
|
31.1%
|
|
|
27.8%
|
|
|
31.6%
|
(1)
|
Includes
approximately $4,242,000 and $3,991,000 of non-cash compensation
expense for the three months ended September 30, 2015 and 2014,
respectively, and $13,290,000 and $11,472,000 for the nine months
ended September 30, 2015 and 2014, respectively.
|
|
|
(2)
|
Excludes Basic's
barge rig operations that were sold on March 31, 2014.
|
|
|
(3)
|
This earnings release
contains references to the non-GAAP financial measure of earnings
(net income) before interest, taxes, depreciation and amortization,
or "EBITDA." This earnings release also contains references
to the non-GAAP financial measure of earnings (net income) before
interest, taxes, depreciation, amortization, loss on goodwill
impairment, loss on legal settlements, loss on customer audit
settlements, and the gain or loss on disposal of assets or
"Adjusted EBITDA." EBITDA and Adjusted EBITDA should not be
considered in isolation or as a substitute for operating income,
net income or loss, cash flows provided by operating, investing and
financing activities, or other income or cash flow statement data
prepared in accordance with GAAP. However, Basic believes
EBITDA and Adjusted EBITDA are useful supplemental financial
measures used by its management and directors and by external users
of its financial statements, such as investors, to
assess:
|
|
|
•
|
The financial
performance of its assets without regard to financing methods,
capital structure or historical cost basis;
|
•
|
The ability of its
assets to generate cash sufficient to pay interest on its
indebtedness; and
|
•
|
Its operating
performance and return on invested capital as compared to those of
other companies in the well servicing industry, without regard to
financing methods and capital structure.
|
|
|
EBITDA and Adjusted
EBITDA each have limitations as an analytical tool and should not
be considered an alternative to net income, operating income, cash
flow from operating activities or any other measure of financial
performance or liquidity presented in accordance with GAAP. EBITDA
and Adjusted EBITDA exclude some, but not all, items that affect
net income and operating income, and these measures may vary among
other companies. Limitations to using EBITDA as an analytical tool
include:
|
|
•
|
EBITDA does not
reflect its current or future requirements for capital expenditures
or capital commitments;
|
•
|
EBITDA does not
reflect changes in, or cash requirements necessary, to service
interest or principal payments on, its debt;
|
•
|
EBITDA does not
reflect income taxes;
|
•
|
Although depreciation
and amortization are non-cash charges, the assets being depreciated
and amortized will often have to be replaced in the future, and
EBITDA does not reflect any cash requirements for such
replacements; and
|
•
|
Other companies in
its industry may calculate EBITDA differently than Basic does,
limiting its usefulness as a comparative measure.
|
|
|
In addition to each
of the limitations with respect to EBITDA noted above, the
limitations to using Adjusted EBITDA as an analytical tool
include:
|
|
•
|
Adjusted EBITDA does
not reflect Basic's gain or loss on disposal of assets;
|
•
|
Adjusted EBITDA does
not reflect Basic's loss on goodwill impairment;
|
•
|
Adjusted EBITDA does
not reflect Basic's loss on legal settlements;
|
•
|
Adjusted EBITDA does
not reflect Basic's loss on customer audit settlements;
and
|
•
|
Other companies in
our industry may calculate Adjusted EBITDA differently than Basic
does, limiting its usefulness as a comparative measure.
|
The following table presents a reconciliation of net income to
EBITDA, which is the most comparable GAAP performance measure, for
each of the periods indicated:
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Reconciliation of
Net Income (Loss) to EBITDA:
|
(Unaudited)
|
|
(Unaudited)
|
Net income /
(loss)
|
$
|
(105,642)
|
|
$
|
9,931
|
|
$
|
(186,561)
|
|
$
|
10,467
|
Income
taxes
|
|
(56,479)
|
|
|
6,246
|
|
|
(101,514)
|
|
|
7,846
|
Net
interest expense
|
|
17,235
|
|
|
16,817
|
|
|
50,928
|
|
|
50,216
|
Depreciation and amortization
|
|
60,328
|
|
|
54,485
|
|
|
181,488
|
|
|
157,975
|
EBITDA
|
$
|
(84,558)
|
|
$
|
87,479
|
|
$
|
(55,659)
|
|
$
|
226,504
|
The following table presents a reconciliation of net income to
"Adjusted EBITDA," which means our EBITDA excluding the gain or
loss on disposal of assets, loss on goodwill impairment, loss on
legal settlements, and loss on customer audit settlements:
|
Three months
ended
September 30,
|
|
Nine months
ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA:
|
(Unaudited)
|
|
(Unaudited)
|
Net income /
(loss)
|
$
|
(105,642)
|
|
$
|
9,931
|
|
$
|
(186,561)
|
|
$
|
10,467
|
Income
taxes
|
|
(56,479)
|
|
|
6,246
|
|
|
(101,514)
|
|
|
7,846
|
Net
interest expense
|
|
17,235
|
|
|
16,817
|
|
|
50,928
|
|
|
50,216
|
Depreciation and amortization
|
|
60,328
|
|
|
54,485
|
|
|
181,488
|
|
|
157,975
|
Goodwill
impairment
|
|
81,877
|
|
|
—
|
|
|
81,877
|
|
|
—
|
Loss on disposal of
assets
|
|
1,128
|
|
|
979
|
|
|
1,119
|
|
|
1,216
|
Loss on legal
settlements
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4,613
|
Loss on customer audit
settlement
|
|
—
|
|
|
—
|
|
|
4,500
|
|
|
—
|
Adjusted
EBITDA
|
$
|
(1,553)
|
|
$
|
88,458
|
|
$
|
31,837
|
|
$
|
232,333
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/basic-energy-services-reports-third-quarter-2015-results-300165197.html
SOURCE Basic Energy Services, Inc.