SCOTTSDALE, Ariz., Nov. 5, 2015 /PRNewswire/ -- Nuverra
Environmental Solutions, Inc. (NYSE: NES) ("Nuverra" or the
"Company") announced financial and operating results today for the
third quarter and nine months ended September 30, 2015.
SUMMARY OF THIRD-QUARTER RESULTS
- Revenue from continuing operations was $76.5 million, a decrease of $63.1 million, or 45.2% from the third quarter of
2014. On a sequential comparison with the second quarter, revenue
decreased 17.2%.
- Excluding special items, third-quarter net loss from continuing
operations was $22.5 million, or a
loss of $0.81 per diluted share,
compared with a net loss of $6.3
million, or a loss of $0.24
per diluted share, in the third quarter of 2014. Reported
third-quarter net loss from continuing operations was $128.1 million, or a loss of $4.61 per share, compared with a net loss from
continuing operations of $99.4
million, or a loss of $3.73
per share in the third quarter of 2014.
- Special items included a non-cash goodwill impairment charge
recorded in the third quarter of $104.7
million. This accounting impairment was triggered by
commodity price declines and a reduction in the market price of the
Company's common stock.
- Adjusted EBITDA from continuing operations was $6.3 million, a decrease of $21.8 million, or 77.7% from the third quarter of
2014.
- Year-to-date net cash provided by operating activities from
continuing operations for the period ended September 30, 2015 was $55.7 million; year-to-date free cash flow was
$51.4 million. This reflects
significant cost reductions, which contributed to lower
year-over-year costs and expenses excluding special items of
$46.6 million, or 34.9%, compared
with the third quarter of 2014. Year-to-date, total costs and
expenses excluding special items were down $85.5 million, or 22.0% compared with 2014.
- Reached agreement with banks to amend credit facility on
November 2, 2015, reducing lender
commitments to $125.0 million and
providing for carve-out of midstream subsidiary to advance
transformative water infrastructure investments.
Mark D. Johnsrud, Chairman of the
Board and Chief Executive Officer, commented, "The third quarter
saw volume and pricing headwinds as customers reduced drilling and
completion activities. To position the company to weather these
trends, which we expect to continue into 2016, we continued to
focus on our cost-management and efficiency initiatives with a goal
of operating within our cash flow as we work to complete the next
steps to transform our business.
"In the recent amendments to our credit facility, our banks
agreed to carve out our midstream subsidiary from our corporate
capital structure. This is an important step toward advancing our
long-term midstream strategy because it opens the door to
project-level financing. Our objective is to seek long-term
customer contracts that can reduce our overall economic exposure to
fluctuations in commodity prices and well-activity levels."
THIRD-QUARTER 2015 RESULTS
Third-quarter 2015 revenue from continuing operations was
$76.5 million, a decrease of
approximately $63.1 million or 45.2%,
compared with third-quarter 2014 revenue from continuing operations
of $139.6 million. The decrease was
primarily related to declines in overall customer drilling and
completion activities and service pricing erosion, both of which
drove lower revenue from water logistics, salt water disposal,
solids management and rental services, offset in part by higher
revenue related to salt water recycling services in the Northeast
Division.
Adjusted for special items, total costs and expenses were down
34.9% compared with the third quarter of 2014. These reductions
included approximately $17 million in
lower payroll and related expenses, approximately $8 million in fuel savings, and approximately
$5 million in lower depreciation and
amortization expense, with the remainder related primarily to
reductions in all other direct operating costs. Total costs and
expenses excluding special items were down 22.0% in the first nine
months of 2015 compared with the same period in 2014.
During the third quarter, continued declines in global crude oil
prices, coupled with a reduction in the market price of the
Company's common stock, required the Company to record a pre-tax,
non-cash goodwill impairment charge of $104.7 million.
Excluding special items, third-quarter net loss from continuing
operations was $22.5 million, or a
loss of $0.81 per diluted share,
compared with net loss of $6.3
million, or a loss of $0.24
per diluted share, in the third quarter of 2014. Reported
third-quarter net loss from continuing operations was $128.1 million, or a loss of $4.61 per share, compared with a net loss from
continuing operations of $99.4
million, or a loss of $3.73
per share in the third quarter of 2014.
Third-quarter adjusted EBITDA from continuing operations was
$6.3 million, a 77.7% decrease
compared with adjusted EBITDA from continuing operations of
$28.0 million in the third quarter of
2014. Third-quarter adjusted EBITDA margin was 8.2%, compared with
20.1% for the third quarter of 2014. The year-over-year margin
variance was due primarily to lower overall revenues associated
with reduced customer drilling and completion-related activities,
offset in part by lower total costs and expenses.
YEAR-TO-DATE RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2015 ("YTD")
YTD revenue from continuing operations was $288.1 million, a decrease of $106.5 million or 27.0%, compared with
$394.5 million for the same period in
2014. The decrease was primarily related to significant overall
declines in customer drilling and completion activities during the
period. These declines resulted in lower revenues for water
logistics, solids management and rentals in the Rocky Mountain
Division and a reduction in water logistics and fresh water
transfer services in the Southern Division, offset in part by
increases in revenue related to water logistics and salt water
recycling services in the Northeast Division.
Excluding special items, YTD net loss from continuing operations
was $52.3 million, or a loss of
$1.89 per diluted share, compared
with a loss of $29.3 million, or a
loss of $1.14 per diluted share, for
the same period in 2014. Reported YTD net loss from continuing
operations was $160.8 million, or a
loss of $5.82 per diluted share,
compared with a loss of $136.1
million, or a loss of $5.28
per diluted share, for the same period in 2014.
Adjusted EBITDA from continuing operations for the YTD period
was $37.3 million and a margin of
12.9%, compared with adjusted EBITDA from continuing operations of
$69.8 million and a margin of 17.7%
for the same period in 2014. The year-over-year margin variance was
due primarily to lower overall revenues associated with reduced
customer drilling and completion-related activities, offset in part
by lower total costs and expenses.
CASH & LIQUIDITY
Net cash provided by operating activities from continuing
operations through September 30, 2015
was $55.7 million. Year-to-date net
cash capital expenditures from continuing operations (or purchases
of property, plant and equipment net of proceeds received from
sales of property, plant and equipment) were $4.2 million. The Company generated $51.4 million in free cash flow for the
nine-month period.
As of September 30, 2015, total
debt outstanding, excluding $0.5
million of discounts and premiums, was $522.3 million, consisting of $400.0 million of 2018 Notes, $101.8 million outstanding under the revolving
credit facility, and $20.5 million in
capital leases and notes payable.
On November 2, 2015, the Company
amended its credit facility following a periodic redetermination of
its borrowing base, reducing lender commitments to $125.0 million from $195.0
million, reflecting lower appraisal values for machinery and
equipment used in determining the borrowing base. As of
November 2, 2015, after giving effect
to the amendment and appraisal, $101.8
million was outstanding under the credit facility and
estimated availability under the facility was less than
$5 million, net of required reserves,
with cash on hand of approximately $31.6
million.
Additionally, as the Company prepared for next steps in its
water infrastructure investment strategy, the amendment releases
Nuverra Rocky Mountain Pipeline, LLC ("RMP"), a wholly-owned
subsidiary of the Company, from all obligations under the credit
facility, including as guarantor and a grantor under the guaranty
and security agreement to the credit facility. The agreement with
the banks releases all liens on the assets of RMP and equity
interests in RMP to the extent they are transferred to a
third-party investor and establishes a separate permitted
investment basket allowing for additional aggregate investments of
up to $5.0 million in RMP. The
Company concurrently designated RMP as an Unrestricted Subsidiary
under the indenture governing its 9.875% Senior Notes due 2018 and
removing RMP as a guarantor thereunder.
DIVISION RESULTS SUMMARY
Three Months Ended
September 30, 2015
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
41,325
|
|
$ 19,825
|
|
$ 15,378
|
|
$
-
|
|
$ 76,528
|
Operating
loss
|
|
(104,710)
|
|
(1,421)
|
|
(4,441)
|
|
(5,497)
|
|
(116,069)
|
Operating
Margin %
|
|
(253.4%)
|
|
(7.2%)
|
|
(28.9%)
|
|
NA
|
|
(151.7%)
|
Adjusted
EBITDA
|
|
8,442
|
|
2,606
|
|
740
|
|
(5,524)
|
|
6,264
|
Adjusted
EBITDA Margin %
|
|
20.4%
|
|
13.1%
|
|
4.8%
|
|
NA
|
|
8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
87,596
|
|
$ 25,759
|
|
$ 26,288
|
|
$
-
|
|
$ 139,643
|
Operating income
(loss)
|
|
14,112
|
|
(33,917)
|
|
(68,217)
|
|
(2,775)
|
|
(90,797)
|
Operating
Margin %
|
|
16.1%
|
|
(131.7%)
|
|
(259.5%)
|
|
NA
|
|
(65.0%)
|
Adjusted
EBITDA
|
|
27,439
|
|
4,063
|
|
2,292
|
|
(5,760)
|
|
28,034
|
Adjusted
EBITDA Margin %
|
|
31.3%
|
|
15.8%
|
|
8.7%
|
|
NA
|
|
20.1%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2015
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
158,336
|
|
$ 74,549
|
|
$ 55,182
|
|
$
-
|
|
$ 288,067
|
Operating
loss
|
|
(93,147)
|
|
(1,224)
|
|
(9,923)
|
|
(19,096)
|
|
(123,390)
|
Operating
Margin %
|
|
(58.8%)
|
|
(1.6%)
|
|
(18.0%)
|
|
NA
|
|
(42.8%)
|
Adjusted
EBITDA
|
|
37,560
|
|
11,052
|
|
4,983
|
|
(16,342)
|
|
37,253
|
Adjusted
EBITDA Margin %
|
|
23.7%
|
|
14.8%
|
|
9.0%
|
|
NA
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
246,981
|
|
$ 67,418
|
|
$ 80,120
|
|
$
-
|
|
$ 394,519
|
Operating income
(loss)
|
|
32,865
|
|
(41,227)
|
|
(77,326)
|
|
(22,100)
|
|
(107,788)
|
Operating
Margin %
|
|
13.3%
|
|
(61.2%)
|
|
(96.5%)
|
|
NA
|
|
(27.3%)
|
Adjusted
EBITDA
|
|
72,167
|
|
7,577
|
|
6,200
|
|
(16,122)
|
|
69,822
|
Adjusted
EBITDA Margin %
|
|
29.2%
|
|
11.2%
|
|
7.7%
|
|
NA
|
|
17.7%
|
Rocky Mountain Division (Bakken)
Rocky Mountain Division revenue for the third quarter was
$41.3 million, a decrease of 52.8%
compared with the third quarter of 2014. The year-over-year
difference was related primarily to further declines in customer
drilling and completion activities and continued pricing pressures,
which drove lower revenue for water logistics, solids management
and equipment rental services. YTD revenue for the division was
$158.3 million, a decrease of 35.9%
when compared with year-to-date revenue of $247.0 million for the same period in 2014.
Third-quarter adjusted EBITDA for the Rocky Mountain Division
was $8.4 million, a margin of 20.4%
compared with adjusted EBITDA of $27.4
million and a margin of 31.3% in the third quarter of 2014.
YTD adjusted EBITDA for this division was $37.6 million, a margin of 23.7% compared with
adjusted EBITDA of $72.2 million and
a margin of 29.2% for the same period in 2014.
Northeast Division (Marcellus, Utica)
Northeast Division revenue for the third quarter was
$19.8 million, a decrease of 23.0%
compared with the third quarter of 2014. The year-over-year
decrease was primarily due to a reduction in water logistics and
salt water disposal revenue driven by an overall ramp-down in
activities among several key customers in the region, offset in
part by increases in water recycling services revenue. YTD,
Northeast Division revenue was $74.5
million, an increase of 10.6%, when compared with
year-to-date revenue of $67.4 million
in the same period of 2014. The year-over-year increase for the
nine-month period was primarily related to earlier period 2015
growth in market share from the addition of several new customers
in the region.
Third-quarter adjusted EBITDA for the Northeast Division was
$2.6 million and a margin of 13.1%,
compared with adjusted EBITDA of $4.1
million and a margin of 15.8% in the third quarter of 2014.
YTD adjusted EBITDA for this division improved to $11.1 million and a margin of 14.8%, compared
with adjusted EBITDA of $7.6 million
and a margin of 11.2% for the same period in 2014.
The quarterly decrease in adjusted EBITDA and margin relate
primary to lower water logistics and salt water disposal
activities, as well as pricing pressures, offset in part by reduced
operating costs and expenses. YTD improvements in adjusted EBITDA
and margin were primarily due to an overall gain in market share
earlier during the year, which drove higher revenue, coupled with
reduced operating costs and expenses. These YTD improvements were
offset in part by lower water logistics and salt water disposal
activities, as well as continued pricing pressures.
Southern Division (Haynesville, Eagle Ford, Mississippian,
Permian)
Southern Division revenue for the third quarter was $15.4 million, a decrease of 41.5% compared with
the third quarter of 2014. The year-over-year decrease was
primarily related to overall declines in drilling and completion
activities, which were pronounced in the Eagle Ford Shale region.
This resulted in lower water logistics, salt water disposal, water
transfer, and rental services revenue in the Eagle Ford region when
compared with the third quarter of 2014, offset in part by
increases in the Haynesville region in water logistics, salt water
disposal and water infrastructure revenue. YTD, Southern Division
revenue was $55.2 million, a decrease
of 31.1%, when compared with year-to-date revenue of $80.1 million in the same period of 2014.
Third-quarter adjusted EBITDA for the Southern Division was
$0.7 million, a margin of 4.8%
compared with adjusted EBITDA of $2.3
million and a margin of 8.7% in the third quarter of 2014.
YTD adjusted EBITDA for this division was $5.0 million, a margin of 9.0%, compared with
adjusted EBITDA of $6.2 million and a
margin of 7.7% for the same period in 2014. YTD margin improvement
was due primarily to increases in water logistics, salt water
disposal and water infrastructure revenue in the Haynesville region
and lower overall costs and expenses in both the Haynesville and
Eagle Ford regions.
Conference Call & Webcast
The Company will host a conference call and webcast to discuss
third quarter 2015 results at 11:00 a.m.
ET, 8:00 a.m. PT on
Thursday, November 5, 2015. To
participate, please dial +1-877-407-0784 (US) or +1-201-689-8560
(International) and reference conference ID 13623082. A live
webcast and a slide presentation will accompany the call. To access
the webcast, go to
http://public.viavid.com/index.php?id=116812.
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 November 12,
2015 by dialing +1-877-870-5176 (US) or +1-858-384-5517
(International) and entering access code 13623082. A webcast 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, 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 provides 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
The 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, pricing, 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, liquidity, availability of capital,
ability to access capital markets, cost-management 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,
including uncertainty regarding the ability to successfully
implement cost-management initiatives; liquidity and access to
capital; compliance with the terms of agreements governing our
indebtedness; 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.
Source: Nuverra Environmental Solutions,
Inc.
Liz Merritt, VP-Investor
Relations & Communications
480-878-7452
ir@nuverra.com
- Tables to Follow –
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(In thousands,
except per share amounts)
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Nine Months
Ended
|
|
|
September
30,
|
|
September
30,
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Revenue:
|
|
|
|
|
|
|
|
|
Non-rental
revenue
|
$ 71,000
|
|
$ 122,474
|
|
$ 263,540
|
|
$ 339,617
|
|
Rental
revenue
|
5,528
|
|
17,169
|
|
24,527
|
|
54,902
|
|
Total revenue
|
76,528
|
|
139,643
|
|
288,067
|
|
394,519
|
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
Direct
operating expenses
|
62,482
|
|
98,791
|
|
222,055
|
|
289,125
|
|
General and
administrative expenses
|
8,705
|
|
9,348
|
|
31,102
|
|
48,600
|
|
Depreciation
and amortization
|
16,687
|
|
21,585
|
|
52,465
|
|
63,866
|
|
Impairment of
goodwill
|
104,721
|
|
100,716
|
|
104,721
|
|
100,716
|
|
Other,
net
|
2
|
|
-
|
|
1,114
|
|
-
|
|
Total
costs and expenses
|
192,597
|
|
230,440
|
|
411,457
|
|
502,307
|
|
Operating
loss
|
(116,069)
|
|
(90,797)
|
|
(123,390)
|
|
(107,788)
|
|
Interest expense,
net
|
(12,097)
|
|
(12,956)
|
|
(37,137)
|
|
(37,975)
|
|
Other income,
net
|
22
|
|
321
|
|
743
|
|
373
|
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
(1,011)
|
|
(3,177)
|
|
Loss from
continuing operations before income taxes
|
(128,144)
|
|
(103,432)
|
|
(160,795)
|
|
(148,567)
|
|
Income tax
benefit
|
31
|
|
4,014
|
|
40
|
|
12,513
|
|
Loss from
continuing operations
|
(128,113)
|
|
(99,418)
|
|
(160,755)
|
|
(136,054)
|
|
Income (loss) from
discontinued operations, net of income taxes
|
350
|
|
(45,568)
|
|
(818)
|
|
(43,656)
|
|
Net loss
attributable to common stockholders
|
$(127,763)
|
|
$(144,986)
|
|
$(161,573)
|
|
$(179,710)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share attributable to common stockholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$ (4.61)
|
|
$ (3.73)
|
|
$ (5.82)
|
|
$ (5.28)
|
|
Basic and diluted
income (loss) from discontinued operations
|
0.01
|
|
(1.71)
|
|
(0.03)
|
|
(1.70)
|
|
Net loss per basic
and diluted share
|
$ (4.60)
|
|
$ (5.44)
|
|
$ (5.85)
|
|
$ (6.98)
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding used in computing net loss per basic and diluted
common share
|
27,807
|
|
26,665
|
|
27,634
|
|
25,742
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(In
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
2015
|
|
2014
|
Assets
|
(Unaudited)
|
|
(Note 1)
|
Cash and cash
equivalents
|
$
49,387
|
|
$
13,367
|
Restricted
cash
|
4,250
|
|
114
|
Accounts receivable,
net
|
50,523
|
|
108,813
|
Inventories
|
2,933
|
|
4,413
|
Prepaid expenses and
other receivables
|
5,213
|
|
4,147
|
Deferred income
taxes
|
3,172
|
|
3,179
|
Other current
assets
|
152
|
|
173
|
Current assets held
for sale
|
-
|
|
20,466
|
Total current
assets
|
115,630
|
|
154,672
|
Property, plant and
equipment, net
|
432,310
|
|
475,982
|
Equity
investments
|
3,777
|
|
3,814
|
Intangibles,
net
|
17,667
|
|
19,757
|
Goodwill
|
-
|
|
104,721
|
Other
assets
|
13,250
|
|
17,688
|
Long-term assets held
for sale
|
-
|
|
94,938
|
Total
assets
|
$
582,634
|
|
$
871,572
|
Liabilities and
Equity
|
|
|
|
Accounts
payable
|
$
8,999
|
|
$
18,859
|
Accrued
liabilities
|
40,668
|
|
43,395
|
Current portion of
contingent consideration
|
8,770
|
|
9,274
|
Current portion of
long-term debt
|
7,238
|
|
4,863
|
Financing obligation
to acquire non-controlling interest
|
-
|
|
11,000
|
Current liabilities
of discontinued operations
|
-
|
|
8,802
|
Total current
liabilities
|
65,675
|
|
96,193
|
Deferred income
taxes
|
3,462
|
|
3,448
|
Long-term portion of
debt
|
514,590
|
|
592,455
|
Long-term portion of
contingent consideration
|
-
|
|
550
|
Other long-term
liabilities
|
3,770
|
|
3,874
|
Long-term liabilities
of discontinued operations
|
-
|
|
22,105
|
Total
liabilities
|
587,497
|
|
718,625
|
Commitments and
contingencies
|
|
|
|
Common
stock
|
30
|
|
29
|
Additional paid-in
capital
|
1,369,447
|
|
1,365,537
|
Treasury
stock
|
(19,799)
|
|
(19,651)
|
Accumulated
deficit
|
(1,354,541)
|
|
(1,192,968)
|
Total equity of
Nuverra Environmental Solutions, Inc.
|
(4,863)
|
|
152,947
|
Total liabilities and
equity
|
$
582,634
|
|
$
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
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
Nine Months
Ended
September 30,
|
|
|
2015
|
|
2014
|
Cash flows from
operating activities:
|
|
|
|
|
Net loss
|
|
$(161,573)
|
|
$(179,710)
|
Adjustments to
reconcile net loss to net cash provided by (used in) operating
activities:
|
|
|
|
|
Income from
discontinued operations, net of income taxes
|
|
(906)
|
|
43,656
|
Loss on the sale of
TFI
|
|
1,724
|
|
-
|
Depreciation and
amortization of intangible assets
|
|
52,465
|
|
63,866
|
Amortization of
deferred financing costs and debt discounts, net
|
|
3,638
|
|
2,930
|
Stock-based
compensation
|
|
1,858
|
|
2,305
|
Impairment of
goodwill
|
|
104,721
|
|
100,716
|
Gain on disposal of
property, plant and equipment
|
|
(1,198)
|
|
(4,752)
|
Bad debt
expense
|
|
(695)
|
|
2,464
|
Loss on
extinguishment of debt
|
|
1,011
|
|
3,177
|
Deferred income
taxes
|
|
21
|
|
(11,320)
|
Other, net
|
|
364
|
|
1,555
|
Changes in operating
assets and liabilities:
|
|
|
|
|
Accounts
receivable
|
|
58,985
|
|
(21,675)
|
Prepaid expenses and
other receivables
|
|
(1,294)
|
|
5,309
|
Accounts payable and
accrued liabilities
|
|
(4,805)
|
|
5,859
|
Other assets and
liabilities, net
|
|
1,342
|
|
(1,435)
|
Net cash
provided by operating activities from continuing
operations
|
|
55,658
|
|
12,945
|
Net cash
(used in) provided by operating activities from discontinued
operations
|
|
(708)
|
|
4,754
|
Net cash
provided by operating activities
|
|
54,950
|
|
17,699
|
Cash flows from
investing activities:
|
|
|
|
|
Proceeds from the
sale of TFI
|
|
78,897
|
|
-
|
Proceeds from the
sale of property, plant and equipment
|
|
12,339
|
|
9,295
|
Purchases of
property, plant and equipment
|
|
(16,564)
|
|
(43,018)
|
Change in restricted
cash
|
|
(4,250)
|
|
-
|
Net cash
provided by (used in) investing activities from continuing
operations
|
|
70,422
|
|
(33,723)
|
Net cash
used in investing activities from discontinued
operations
|
|
(181)
|
|
(2,043)
|
Net cash
provided by (used in) investing activities
|
|
70,241
|
|
(35,766)
|
Cash flows from
financing activities:
|
|
|
|
|
Proceeds from
revolving credit facility
|
|
-
|
|
68,725
|
Payments on revolving
credit facility
|
|
(81,647)
|
|
(48,700)
|
Payments for deferred
financing costs
|
|
-
|
|
(796)
|
Payments on vehicle
financing and other financing activities
|
|
(9,468)
|
|
(5,020)
|
Net cash
(used in) provided by financing activities of continuing
operations
|
|
(91,115)
|
|
14,209
|
Net cash
used in financing activities of discontinued operations
|
|
(105)
|
|
-
|
Net cash
(used in) provided by financing activities
|
|
(91,220)
|
|
14,209
|
Net increase
(decrease) in cash and cash equivalents
|
|
33,971
|
|
(3,858)
|
Cash and cash
equivalents - beginning of period
|
|
15,416
|
|
9,212
|
Cash and cash
equivalents - end of period
|
|
49,387
|
|
5,354
|
Less: cash and cash
equivalents of discontinued operations - end of period
|
|
-
|
|
3,140
|
Cash and cash
equivalents of continuing operations - end of period
|
|
$ 49,387
|
|
$ 2,214
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS
|
(In
thousands)
|
(Unaudited)
|
|
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 results, and
evaluates overall performance 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. These non-GAAP financial measures are not
substitutes for measures of performance or liquidity calculated in
accordance with GAAP and may not necessarily be indicative of the
Company's liquidity or ability to fund cash needs. Not all
companies calculate non-GAAP financial measures in the same manner,
and our presentation may not be comparable to the presentations of
other companies.
|
|
Reconciliation of
Loss from Continuing Operations to EBITDA, Adjusted EBITDA from
Continuing Operations and Total Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Loss from continuing
operations
|
$(128,113)
|
|
$ (99,418)
|
|
$(160,755)
|
|
$(136,054)
|
Depreciation and
amortization
|
16,687
|
|
21,585
|
|
52,465
|
|
63,866
|
Interest expense,
net
|
12,097
|
|
12,956
|
|
37,137
|
|
37,975
|
Income tax
benefit
|
(31)
|
|
(4,014)
|
|
(40)
|
|
(12,513)
|
EBITDA
|
(99,360)
|
|
(68,891)
|
|
(71,193)
|
|
(46,726)
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
Transaction-related
costs, including earnout adjustments, net
|
(13)
|
|
-
|
|
(145)
|
|
513
|
Stock-based
compensation
|
342
|
|
897
|
|
1,858
|
|
2,305
|
Legal and
environmental costs, net
|
134
|
|
(2,326)
|
|
538
|
|
12,312
|
Impairment of
goodwill
|
104,721
|
|
100,716
|
|
104,721
|
|
100,716
|
Restructuring, exit
and other costs
|
326
|
|
142
|
|
1,661
|
|
205
|
Loss on
extinguishment of debt
|
-
|
|
-
|
|
1,011
|
|
3,177
|
Integration,
severance and rebranding costs
|
-
|
|
-
|
|
-
|
|
2,072
|
Loss (gain) on
disposal of assets
|
114
|
|
(2,504)
|
|
(1,198)
|
|
(4,752)
|
Adjusted EBITDA from
continuing operations
|
6,264
|
|
28,034
|
|
37,253
|
|
69,822
|
Adjusted EBITDA from
discontinued operations
|
-
|
|
3,374
|
|
1,197
|
|
9,488
|
Total Adjusted
EBITDA
|
$ 6,264
|
|
$ 31,408
|
|
$ 38,450
|
|
$ 79,310
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Income (Loss) from Discontinued Operations to EBITDA from
Discontinued Operations and Adjusted EBITDA from Discontinued
Operations:
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30,
|
|
Nine Months
Ended September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
Income (loss) from
discontinued operations
|
$ 350
|
|
$ (45,568)
|
|
$ (818)
|
|
$ (43,656)
|
Income tax (benefit)
expense
|
-
|
|
(329)
|
|
265
|
|
1,336
|
EBITDA from
discontinued operations
|
350
|
|
(45,897)
|
|
(553)
|
|
(42,320)
|
Adjustments:
|
|
|
|
|
|
|
|
Transaction-related
costs
|
-
|
|
3,806
|
|
26
|
|
5,737
|
Legal and
environmental costs
|
-
|
|
-
|
|
-
|
|
733
|
Impairment of
goodwill
|
-
|
|
45,463
|
|
-
|
|
45,463
|
(Gain) loss on
disposal of assets
|
(350)
|
|
2
|
|
1,724
|
|
(125)
|
Adjusted EBITDA from
discontinued operations
|
$
-
|
|
$ 3,374
|
|
$ 1,197
|
|
$ 9,488
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS (continued)
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
QTD Segment Performance to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2015
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
41,325
|
|
$ 19,825
|
|
$ 15,378
|
|
$
-
|
|
$ 76,528
|
Direct operating
expenses
|
|
30,938
|
|
16,414
|
|
15,130
|
|
-
|
|
62,482
|
General and
administrative expenses
|
|
1,823
|
|
791
|
|
703
|
|
5,388
|
|
8,705
|
Depreciation and
amortization
|
|
8,553
|
|
4,041
|
|
3,985
|
|
108
|
|
16,687
|
Operating
loss
|
|
(104,710)
|
|
(1,421)
|
|
(4,441)
|
|
(5,497)
|
|
(116,069)
|
Operating margin
%
|
|
(253.4%)
|
|
(7.2%)
|
|
(28.9%)
|
|
NA
|
|
(151.7%)
|
Loss from continuing
operations before income taxes
|
|
(104,811)
|
|
(1,569)
|
|
(4,474)
|
|
(17,290)
|
|
(128,144)
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
|
(104,811)
|
|
(1,563)
|
|
(4,470)
|
|
(17,269)
|
|
(128,113)
|
Depreciation and
amortization
|
|
8,553
|
|
4,041
|
|
3,985
|
|
108
|
|
16,687
|
Interest expense,
net
|
|
110
|
|
146
|
|
48
|
|
11,793
|
|
12,097
|
Income tax
benefit
|
|
-
|
|
(6)
|
|
(4)
|
|
(21)
|
|
(31)
|
EBITDA
|
|
$
(96,148)
|
|
$ 2,618
|
|
$ (441)
|
|
$ (5,389)
|
|
$ (99,360)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments,
net
|
|
104,590
|
|
(12)
|
|
1,181
|
|
(135)
|
|
105,624
|
Adjusted EBITDA from
continuing operations
|
|
$
8,442
|
|
$ 2,606
|
|
$ 740
|
|
$ (5,524)
|
|
$ 6,264
|
Adjusted EBITDA
margin %
|
|
20.4%
|
|
13.1%
|
|
4.8%
|
|
NA
|
|
8.2%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
September 30, 2014
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
87,596
|
|
$ 25,759
|
|
$ 26,288
|
|
$
-
|
|
$ 139,643
|
Direct operating
expenses
|
|
57,429
|
|
20,419
|
|
20,943
|
|
-
|
|
98,791
|
General and
administrative expenses
|
|
2,955
|
|
1,563
|
|
2,226
|
|
2,604
|
|
9,348
|
Depreciation and
amortization
|
|
13,100
|
|
3,863
|
|
4,451
|
|
171
|
|
21,585
|
Operating income
(loss)
|
|
14,112
|
|
(33,917)
|
|
(68,217)
|
|
(2,775)
|
|
(90,797)
|
Operating margin
%
|
|
16.1%
|
|
(131.7%)
|
|
(259.5%)
|
|
NA
|
|
(65.0%)
|
Income (loss) from
continuing operations before income taxes
|
|
14,220
|
|
(33,996)
|
|
(68,609)
|
|
(15,047)
|
|
(103,432)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
14,220
|
|
(33,996)
|
|
(68,609)
|
|
(11,033)
|
|
(99,418)
|
Depreciation and
amortization
|
|
13,100
|
|
3,863
|
|
4,451
|
|
171
|
|
21,585
|
Interest expense,
net
|
|
181
|
|
398
|
|
104
|
|
12,273
|
|
12,956
|
Income tax
benefit
|
|
-
|
|
-
|
|
-
|
|
(4,014)
|
|
(4,014)
|
EBITDA
|
|
$
27,501
|
|
$ (29,735)
|
|
$ (64,054)
|
|
$ (2,603)
|
|
$ (68,891)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments,
net
|
|
(62)
|
|
33,798
|
|
66,346
|
|
(3,157)
|
|
96,925
|
Adjusted EBITDA from
continuing operations
|
|
$
27,439
|
|
$ 4,063
|
|
$ 2,292
|
|
$ (5,760)
|
|
$ 28,034
|
Adjusted EBITDA
margin %
|
|
31.3%
|
|
15.8%
|
|
8.7%
|
|
NA
|
|
20.1%
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS (continued)
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
YTD Segment Performance to Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2015
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
158,336
|
|
$ 74,549
|
|
$ 55,182
|
|
$
-
|
|
$ 288,067
|
Direct operating
expenses
|
|
115,470
|
|
59,906
|
|
46,679
|
|
-
|
|
222,055
|
General and
administrative expenses
|
|
5,201
|
|
3,716
|
|
4,000
|
|
18,185
|
|
31,102
|
Depreciation and
amortization
|
|
26,091
|
|
12,028
|
|
13,828
|
|
518
|
|
52,465
|
Operating
loss
|
|
(93,147)
|
|
(1,224)
|
|
(9,923)
|
|
(19,096)
|
|
(123,390)
|
Operating margin
%
|
|
(58.8%)
|
|
(1.6%)
|
|
(18.0%)
|
|
NA
|
|
(42.8%)
|
Loss from continuing
operations before income taxes
|
|
(92,909)
|
|
(1,756)
|
|
(10,037)
|
|
(56,093)
|
|
(160,795)
|
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
|
(92,909)
|
|
(1,756)
|
|
(10,037)
|
|
(56,053)
|
|
(160,755)
|
Depreciation and
amortization
|
|
26,091
|
|
12,028
|
|
13,828
|
|
518
|
|
52,465
|
Interest expense,
net
|
|
363
|
|
646
|
|
142
|
|
35,986
|
|
37,137
|
Income tax
benefit
|
|
-
|
|
-
|
|
-
|
|
(40)
|
|
(40)
|
EBITDA
|
|
$
(66,455)
|
|
$ 10,918
|
|
$ 3,933
|
|
$ (19,589)
|
|
$ (71,193)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments,
net
|
|
104,015
|
|
134
|
|
1,050
|
|
3,247
|
|
108,446
|
Adjusted EBITDA from
continuing operations
|
|
$
37,560
|
|
$ 11,052
|
|
$ 4,983
|
|
$ (16,342)
|
|
$ 37,253
|
Adjusted EBITDA
margin %
|
|
23.7%
|
|
14.8%
|
|
9.0%
|
|
NA
|
|
12.9%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30, 2014
|
|
Rocky
Mountain
|
|
Northeast
|
|
Southern
|
|
Corporate
|
|
Total
|
Revenue
|
|
$
246,981
|
|
$ 67,418
|
|
$ 80,120
|
|
$
-
|
|
$ 394,519
|
Direct operating
expenses
|
|
168,028
|
|
55,277
|
|
65,820
|
|
-
|
|
289,125
|
General and
administrative expenses
|
|
7,554
|
|
7,847
|
|
11,597
|
|
21,602
|
|
48,600
|
Depreciation and
amortization
|
|
38,534
|
|
11,691
|
|
13,143
|
|
498
|
|
63,866
|
Operating income
(loss)
|
|
32,865
|
|
(41,227)
|
|
(77,326)
|
|
(22,100)
|
|
(107,788)
|
Operating margin
%
|
|
13.3%
|
|
(61.2%)
|
|
(96.5%)
|
|
NA
|
|
(27.3%)
|
Income (loss) from
continuing operations before income taxes
|
|
32,807
|
|
(39,885)
|
|
(80,016)
|
|
(61,473)
|
|
(148,567)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
continuing operations
|
|
32,807
|
|
(39,885)
|
|
(80,016)
|
|
(48,960)
|
|
(136,054)
|
Depreciation and
amortization
|
|
38,534
|
|
11,691
|
|
13,143
|
|
498
|
|
63,866
|
Interest expense,
net
|
|
502
|
|
901
|
|
376
|
|
36,196
|
|
37,975
|
Income tax
benefit
|
|
-
|
|
-
|
|
-
|
|
(12,513)
|
|
(12,513)
|
EBITDA
|
|
$
71,843
|
|
$ (27,293)
|
|
$(66,497)
|
|
$ (24,779)
|
|
$ (46,726)
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments,
net
|
|
324
|
|
34,870
|
|
72,697
|
|
8,657
|
|
116,548
|
Adjusted EBITDA from
continuing operations
|
|
$
72,167
|
|
$ 7,577
|
|
$ 6,200
|
|
$ (16,122)
|
|
$ 69,822
|
Adjusted EBITDA
margin %
|
|
29.2%
|
|
11.2%
|
|
7.7%
|
|
NA
|
|
17.7%
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS (continued)
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Reconciliation of
Special Items to Adjusted Net Loss and to EBITDA and Adjusted
EBITDA from Continuing Operations
|
|
|
Three Months Ended
September 30, 2015
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Revenue
|
$ 76,528
|
|
$ -
|
|
|
$ 76,528
|
Direct operating
expenses
|
62,482
|
|
(846)
|
[A]
|
|
61,636
|
General and
administrative expenses
|
8,705
|
|
(68)
|
[B]
|
|
8,637
|
Total costs and
expenses
|
192,597
|
|
(105,637)
|
[C]
|
|
86,960
|
Operating
loss
|
(116,069)
|
|
105,637
|
[C]
|
|
(10,432)
|
Loss from continuing
operations
|
(128,113)
|
|
105,624
|
[D]
|
|
(22,489)
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$
(4.61)
|
|
|
|
|
$
(0.81)
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (128,113)
|
|
|
|
|
$ (22,489)
|
Depreciation and
amortization
|
16,687
|
|
|
|
|
16,687
|
Interest expense,
net
|
12,097
|
|
|
|
|
12,097
|
Income tax
benefit
|
(31)
|
|
|
|
|
(31)
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ (99,360)
|
|
|
|
|
$ 6,264
|
|
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, non-routine litigation
expenses, and a gain related to the sale of assets.
|
[C]
|
Primarily includes
the aforementioned adjustments, and approximately $104.7 million
associated with a goodwill impairment charge recorded for the Rocky
Mountain division.
|
[D]
|
Primarily includes
the aforementioned adjustments. Additionally, our effective tax
rate for the three months ended September 30, 2015 was near zero
percent and has been applied to the special items
accordingly.
|
|
Three Months Ended
September 30, 2014
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Revenue
|
$ 139,643
|
|
$ -
|
|
|
$ 139,643
|
Direct operating
expenses
|
98,791
|
|
642
|
[E]
|
|
99,433
|
General and
administrative expenses
|
9,348
|
|
3,149
|
[F]
|
|
12,497
|
Total costs and
expenses
|
230,440
|
|
(96,925)
|
[G]
|
|
133,515
|
Operating (loss)
income
|
(90,797)
|
|
96,925
|
[G]
|
|
6,128
|
Loss from continuing
operations
|
(99,418)
|
|
93,145
|
[H]
|
|
(6,273)
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$
(3.73)
|
|
|
|
|
$
(0.24)
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (99,418)
|
|
|
|
|
$ (6,273)
|
Depreciation and
amortization
|
21,585
|
|
|
|
|
21,585
|
Interest expense,
net
|
12,956
|
|
|
|
|
12,956
|
Income tax
benefit
|
(4,014)
|
|
|
|
|
(234)
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ (68,891)
|
|
|
|
|
$ 28,034
|
|
Description of
2014 Special Items:
|
[E]
|
Special items include
a gain on sale related to the disposal of certain transportation
related assets, offset by a charge of $1.9 million related to
a contract settlement.
|
[F]
|
Primarily
attributable to a $3.7 million reduction in litigation costs
related to a decline in market value of the 0.8 million shares
issued during the period in connection with the settlement of
Shareholder Litigation. This reduction was offset by
stock-based compensation and other non-routine litigation
expenses.
|
[G]
|
Primarily includes
the aforementioned adjustments, and approximately $100.7 million
associated with a goodwill impairment charge for the Northeast and
Southeast divisions.
|
[H]
|
Primarily includes
the aforementioned adjustments. Additionally, our effective
tax rate for the three months ended September 30, 2014 was 3.9% and
has been applied to the special items accordingly.
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS (continued)
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
|
|
Reconciliation of
Special Items to Adjusted Net Loss and to EBITDA and Adjusted
EBITDA from Continuing Operations
|
|
|
Nine Months Ended
September 30, 2015
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Revenue
|
$ 288,067
|
|
$ -
|
|
|
$ 288,067
|
Direct operating
expenses
|
222,055
|
|
469
|
[A]
|
|
222,524
|
General and
administrative expenses
|
31,102
|
|
(2,214)
|
[B]
|
|
28,888
|
Total costs and
expenses
|
411,457
|
|
(107,580)
|
[C]
|
|
303,877
|
Operating
loss
|
(123,390)
|
|
107,580
|
[C]
|
|
(15,810)
|
Loss from continuing
operations
|
(160,755)
|
|
108,446
|
[D]
|
|
(52,309)
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$
(5.82)
|
|
|
|
|
$
(1.89)
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (160,755)
|
|
|
|
|
$ (52,309)
|
Depreciation and
amortization
|
52,465
|
|
|
|
|
52,465
|
Interest expense,
net
|
37,137
|
|
|
|
|
37,137
|
Income tax
benefit
|
(40)
|
|
|
|
|
(40)
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ (71,193)
|
|
|
|
|
$ 37,253
|
|
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, non-routine litigation
expenses, certain refinancing costs associated with our ABL
Facility and a gain related to the sale of assets.
|
[C]
|
Primarily includes
the aforementioned adjustments, and a charge of approximately $1.1
million associated our restructuring initiative and other exit
related costs from certain shale basins and approximately $104.7
million associated with a goodwill impairment charge recorded for
the Rocky Mountain division.
|
[D]
|
Primarily includes
the aforementioned adjustments, along with a charge of $1.0 million
in connection with a write-off of a portion of the unamortized
deferred financing costs associated with our ABL Facility and a net
reduction related to a prior acquisition earnout reserve of $0.1
million. Additionally, our effective tax rate for the nine months
ended September 30, 2015 was zero percent and has been applied to
the special items accordingly.
|
|
Nine Months Ended
September 30, 2014
|
|
As
Reported
|
|
Special
Items
|
|
As
Adjusted
|
Revenue
|
$ 394,519
|
|
$ -
|
|
|
$ 394,519
|
Direct operating
expenses
|
289,125
|
|
1,629
|
[E]
|
|
290,754
|
General and
administrative expenses
|
48,600
|
|
(13,869)
|
[F]
|
|
34,731
|
Total costs and
expenses
|
502,307
|
|
(112,956)
|
[G]
|
|
389,351
|
Operating (loss)
income
|
(107,788)
|
|
112,956
|
[G]
|
|
5,168
|
Loss from continuing
operations
|
(136,054)
|
|
106,758
|
[H]
|
|
(29,296)
|
|
|
|
|
|
|
|
Basic and diluted
loss from continuing operations
|
$
(5.28)
|
|
|
|
|
$
(1.14)
|
|
|
|
|
|
|
|
Loss from continuing
operations
|
$ (136,054)
|
|
|
|
|
$ (29,296)
|
Depreciation and
amortization
|
63,866
|
|
|
|
|
63,866
|
Interest expense,
net
|
37,975
|
|
|
|
|
37,975
|
Income tax
benefit
|
(12,513)
|
|
|
|
|
(2,723)
|
EBITDA and Adjusted
EBITDA from continuing operations
|
$ (46,726)
|
|
|
|
|
$ 69,822
|
|
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 and
Shareholder litigation.
|
[G]
|
Primarily includes
the aforementioned adjustments, and approximately $100.7 million
associated with a goodwill impairment charge for the Northeast and
Southeast divisions.
|
[H]
|
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, our effective tax
rate for the nine months ended September 30, 2014 was 8.4% and has
been applied to the special items accordingly.
|
NUVERRA
ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
|
NON-GAAP
RECONCILIATIONS (continued)
|
(In
thousands)
|
(Unaudited)
|
|
|
|
|
|
Reconciliation of
Free Cash Flow from Continuing Operations
|
|
|
|
|
|
|
|
|
|
|
|
Nine Months Ended
September 30,
|
|
|
2015
|
|
2014
|
Net cash provided by
operating activities from continuing operations
|
|
$ 55,658
|
|
$ 12,945
|
Less: net cash
capital expenditures, [1]
|
|
(4,225)
|
|
(33,723)
|
Free Cash
Flow
|
|
$ 51,433
|
|
$(20,778)
|
|
[1] Purchases of
property, plant and equipment net of proceeds received from sales
of property, plant and equipment
|
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SOURCE Nuverra Environmental Solutions, Inc.