FORT WORTH, Texas, July 21, 2016 /PRNewswire/ -- Basic Energy
Services, Inc. (NYSE: BAS) ("Basic" or the "Company") today
announced its financial and operating results for the second
quarter ended June 30, 2016.
SECOND QUARTER 2016 HIGHLIGHTS
Second quarter 2016 revenues declined 8% to $120.0 million from $130.4
million in the first quarter of 2016, as continued low
levels of activity driven by weak and volatile energy prices and
significant weather impact during the first two months of the
quarter drove our customers to further delay a growing inventory of
maintenance and workover projects. In the second quarter of 2015,
Basic generated $193.6 million in
revenues.
For the second quarter of 2016, Basic reported a net loss of
$89.9 million, or a loss of
$2.11 per basic and diluted share.
This includes a non-cash charge of $32.9
million, or $0.77 per basic
and diluted share, related to a valuation allowance on federal
deferred tax assets. Excluding this valuation allowance,
Basic reported a net loss of $57.0
million, or $1.34 per basic
and diluted share for the second quarter of 2016. For the
first quarter of 2016, Basic reported a net loss of $83.3 million, or a loss of $2.00 per basic and diluted share, which included
a tax-effected, non-cash charge of $1.3
million, or $0.03 per basic
and diluted share pertaining to the early extinguishment of
deferred debt costs related to the amendment of Basic's revolving
credit facility and a non-cash charge of $27.3 million, or $0.66 per share, related to a valuation allowance
on federal deferred tax assets. Excluding the impact of these
special items, Basic reported a net loss of $54.8 million, or a loss of $1.32 per basic and diluted share for the first
quarter of 2016. In the second quarter of 2015, Basic reported a
net loss of $48.3 million, or a loss
of $1.20 per basic and diluted share.
Excluding a special item related to a credit given to a customer
resulting from the settlement of an audit, Basic reported a net
loss of $45.4 million, or
$1.13 per basic and diluted share for
the second quarter of 2015.
Roe Patterson, Basic's President and Chief Executive Officer,
stated, "While revenue came in slightly better than our modified
guidance and we believe activity levels probably reached the bottom
of this cycle during the month of May, our second quarter results
continued to reflect the uncertainty and volatility in oil prices;
forcing our customers to further curtail their capital spending
programs. In addition, unprecedented rainy conditions in the first
two months of the quarter, which represented approximately three
percentage points of the total sequential revenue drop, added to
the challenges we faced.
"While margins for the quarter reflect the continued competitive
pricing environment, our utilization numbers have held up well
compared to the overall softening market conditions. For this
reason, we believe we have gained market share in our production
oriented business lines such as well servicing and fluid services.
Should the improved activity levels we saw in June, and early July,
continue for the remainder of the year, we will fall back on this
higher market share to drive our business during the recovery.
"We made further progress in the quarter to adjust both our
operational infrastructure and our general & administrative
costs to address the prolonged weak market conditions. We continue
to look for ways to operate in a cost effective manner to get the
company to cash flow break-even or better by the end of the second
half of 2016. This will be difficult to achieve without continued
improvements in overall activity levels.
"Improving our capital structure remains a primary focus for our
company. We have retained the firm of Moelis & Company and the
law firm of Weil, Gotshal, & Manges LLP to assist us in
discussions with certain creditors to achieve our goals. These
discussions are ongoing at this time."
Adjusted EBITDA decreased to ($11.5
million), or (10%) of revenues, for the second quarter of
2016 from ($11.1 million), or (9%) of
revenues, in the first quarter of 2016. In the second quarter
of 2015, Basic generated Adjusted EBITDA of $6.1 million, or 3% of revenues. Adjusted
EBITDA is defined as net income before interest, taxes,
depreciation and amortization ("EBITDA"), 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 2 under the accompanying
financial tables.
2016 FIRST SIX MONTHS HIGHLIGHTS
Revenues for the half of 2016 declined 45% to $250.4 million from $455.3
million for the first six months of 2015.
Adjusted EBITDA for the first six months of 2016 decreased to
($22.6 million), or (9%) of revenues
from $33.4 million, or 7% of revenue,
for the first six months of 2015. Adjusted EBITDA excludes
the special items discussed above for both 2016 and 2015. Adjusted
EBITDA is reconciled in note 2 under the accompanying financial
tables.
For the first half of 2016, Basic reported a net loss of
$173.2 million, or $4.14 per basic and diluted share, compared to
$80.9 million, or a loss of
$2.00 per basic and diluted share in
the first half of 2015. Excluding special items in both 2016 and
2015, Basic generated an adjusted net loss of $111.8 million, or $2.67 per basic and diluted share in the first
half of 2016 compared to $78.1
million, or a loss of $1.93
per basic and diluted share in the first half of 2015.
Business Segment Results
Completion and Remedial Services
Completion and remedial services revenue dropped by 9% to
$36.2 million from $39.7 million in the prior quarter. The
sequential decline in revenue for the segment was led by lower
activity levels in almost all the service lines and by continued
rate reductions due to severe competition in several basins of the
Company's footprint. In the second quarter of 2015, this
segment generated $69.1 million in
revenue.
At June 30, 2016, Basic had
approximately 444,000 hydraulic horsepower ("HHP"), essentially
flat compared to the end of the previous quarter and up slightly
from 442,000 HHP as of June 30, 2015.
Weighted average HHP for the second quarter of 2016 was 444,000,
equal to the first quarter of 2016. As of June 30, 2016, 192,000 HHP was stacked, as
additional frac operations were shut down during the quarter due to
pricing remaining below cash flow breakeven levels in some
basins.
Segment profit in the second quarter of 2016 decreased to
$3.4 million compared to $4.9 million in the prior quarter. Segment
margin for the second quarter of 2016 decreased to 9% compared to
12% during the previous quarter, driven predominantly by lower
utilization and continued pricing pressure, as well as the negative
impact of decremental margins on the lower revenue base.
During the second quarter of 2015, excluding a special item,
segment profit was $15.9 million, or
22% of segment revenue.
Fluid Services
Fluid services revenue in the second quarter of 2016 decreased
9% to $45.5 million from $50.3 million in the prior quarter. Segment
revenues declined driven by the estimated weather impact of
approximately $1.2 million, along
with continuing decreases in trucking operations and disposal
utilization. During the second quarter of 2015, this segment
generated $63.7 million in
revenue.
The weighted average number of fluid services trucks decreased
1% to 976 during the second quarter of 2016, compared to 985 during
the first quarter of 2016 and declined 3% compared to 1,011 during
the second quarter of 2015. Truck hours of 474,400 during the
second quarter of 2016 represented a decline of 9% from 521,500
during the first quarter of 2016 and a decrease of 17% compared to
573,700 in the same period in 2015.
The average revenue per fluid service truck decreased 9% to
$46,600 during the second quarter
from $51,000 in the first quarter of
2016, as disposal utilization and hot oiling revenues dropped with
trucking activity. In the comparable quarter of 2015, average
revenue per fluid truck was $63,000.
Segment profit in the second quarter of 2016 decreased to
$6.9 million from $9.1 million in the prior quarter. Segment profit
margin decreased 300 basis points to 15% due to the impact of
decremental margins on the lower revenue base, inclement weather
and pricing pressure. Segment profit in the same period in 2015 was
$15.3 million, or 24% of segment
revenue.
Well Servicing
Well servicing revenues decreased 5% to $36.8 million during the second quarter of 2016
compared to $38.9 million in the
prior quarter driven by lower Taylor manufacturing revenues and
lower levels of plugging activity, despite a quarterly increase in
rig hours. Well servicing revenue was $56.5
million in the second quarter of 2015. Revenues from the
Taylor manufacturing operations were $1.8
million compared to $4.1
million in the first quarter of 2016 and $2.2 million in the second quarter of 2015.
At June 30, 2016, the well
servicing rig count was 421, the same as of the end of the prior
quarter and at June 30, 2015. Rig
hours increased 5% to 113,700 in the second quarter of 2016,
compared to 108,400 in the previous quarter and were down 27% from
154,700 hours in the comparable quarter of last year. Rig
utilization was 38% in the second quarter of 2016, up from 36% in
the prior quarter and down from 51% in the second quarter of
2015.
Excluding revenues associated with the Taylor manufacturing
operations, revenue per well servicing rig hour was $308 in the second quarter of 2016, down 4%
compared to $321 in the previous
quarter and down 12% from $351
reported in the second quarter of 2015. The lower rig rate per hour
reflects pricing concessions granted to customers, along with a
decrease in plugging activity in the second quarter, which carries
a higher rate.
Segment profit in the second quarter of 2016 increased 12% to
$5.0 million compared to $4.4 million in the prior quarter and
$9.5 million during the same period
in 2015. Segment profit margin increased to 14% in the second
quarter of 2016 from 11% in the prior quarter. Margins improved led
by higher utilization and activity levels, and the impact of cost
savings initiatives. In the second quarter of 2015, segment profit
was 17% of segment revenue. Segment profit from the Taylor
manufacturing operations improved 5% to $107,000 in the second quarter of 2016 compared
to $102,000 in the first quarter of
2016.
Contract Drilling
Contract drilling revenue was essentially flat at $1.5 million during the second quarter of 2016
compared to the prior quarter. During the second quarter of 2015,
this segment generated $4.3 million
in revenue. Basic marketed 12 drilling rigs during the second
quarter of 2016, the same number of rigs as in the previous quarter
as well as in the second quarter of 2015. However, only one
rig was active during the entire second quarter. Revenue per
drilling day in the second quarter of 2016 decreased to
$16,100 compared to $16,500 in the previous quarter, but up from
$15,500 in the second quarter of
2015.
Rig operating days during the second quarter remained flat at 91
compared to the first quarter of 2016, resulting in a rig
utilization of 8% during both the second and first quarters of
2016. Rig operating days remained weak due to the lack of capital
spending by our customers. In the comparable period in 2015,
rig operating days were 280, producing a utilization of
26%.
Segment profit in the second quarter of 2016 increased to
$93,000 compared to a loss of
$57,000 in the prior quarter and
decreased from $848,000 in the second
quarter of 2015. Segment margin for the second quarter of
2016 was 6% of segment revenues compared to (4%) in the prior
quarter, due to cost reduction initiatives. For the second
quarter of 2015, segment margin was 20%.
G&A Expense
General and administrative ("G&A") expense in the second
quarter of 2016 declined 8% to $27.1
million, or 23% of revenue from $29.6
million, or 23% of revenue, in the prior quarter. G&A
expense in the second quarter of 2015 was $35.7 million, or 18% of revenue. The 24%
decrease in G&A expense from last year's second quarter was
primarily the result of headcount reductions, lower incentive
compensation and other cost savings initiatives implemented over
the past 12 months, including the first half of 2016.
Tax Benefit
Basic's tax expense for the second quarter of 2016 was
$662,000, compared to a tax benefit
of $4.5 million in the first quarter
of 2016. In the second quarter of 2016, Basic recognized a
valuation allowance of $32.9 million
related to deferred tax assets available to be used in future
periods. Excluding the impact of the valuation allowance, the
operating effect tax benefit is $32.3
million, for an operating tax benefit rate of 36%. In
the first quarter of 2016, Basic recognized a similar deferred tax
valuation allowance of $27.3 million.
Excluding the effect of the valuation allowance and the write-down
of the deferred debt cost discussed previously, the operating
effective tax benefit for the first quarter of 2016 was
$31.1 million, for an operating
effective tax benefit rate of 36%. The adjusted effective tax
benefit of $25.6 million in the
second quarter of 2015 translated into an effective tax benefit
rate of 36%.
Cash and Total Liquidity
On June 30, 2016, Basic had cash
and cash equivalents of approximately $86.1
million, up from $75.1 million
at March 31, 2016 and $91.8 million on June 30,
2015. An additional amount of $30.2
million is classified as restricted cash, and $19 million of this amount may be released upon
satisfaction of pre-determined conditions related to the perfection
of collateral assets by August 31,
2016. However, if conditions may not be satisfied by
August 31, 2016, the Company would
seek an extension of the deadline for satisfaction of such
conditions. The Company cannot predict whether the Term Loan
Agreement lenders would agree to extend the deadline for the
satisfaction of such conditions. In addition, the Term Loan
Agreement also includes a delayed draw provision for borrowings in
an aggregate principal amount not to exceed $15.0 million.
At June 30, 2016, total liquidity
was approximately $138.4 million,
which included $22.1 million of
availability under Basic's $100
million revolving credit facility.
Basic's senior management and Board are evaluating potential
strategic alternatives, such as refinancing or restructuring of the
Company's capital structure or available financing options to
address the Company's liquidity position and high debt
levels. Basic has engaged financial and legal advisors, and
is actively working with its advisors and negotiating with certain
creditors and their advisors with respect to alternatives to the
Company's current capital structure. While the Company is
optimistic that ongoing negotiations with its creditors will lead
to satisfactory resolution of these issues, the Company cannot
provide any assurance that these negotiations will be
successful. If the Company is unable to find acceptable
alternatives to its current capital structure to better fund future
capital needs, or if the Company is unable to finance its
operations on acceptable terms or at all, the Company's business,
financial condition and results of operations may be materially and
adversely affected.
Capital Expenditures
Total capital expenditures during the first six months of 2016
were approximately $13.8 million
(including capital leases of $2.2
million), comprised of $1.6
million for expansion projects, $9.7
million for sustaining and replacement projects and
$2.5 million for other
projects. Expansion capital spending included $840,000 for the well servicing segment,
$754,000 for the fluid services
segment, and $24,000 for the
completion and remedial services segment. Other capital
expenditures were mainly for facilities and IT infrastructure.
Basic currently anticipates 2016 capital expenditures to be
under $30.0 million, including
$10.0 million of capital leases.
Conference Call
Basic will host a conference call to discuss its second quarter
2016 results on Friday, July 22,
2016, 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 August 5, 2016 and may be
accessed by calling (201) 612-7415 and using pass code
13639548#. 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 3,300 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, 2015 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.
-Tables to Follow-
Basic Energy
Services, Inc.
|
Consolidated
Statements of Operations and Other Financial Data
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
Income Statement
Data:
|
(Unaudited)
|
|
(Unaudited)
|
Revenues:
|
|
|
|
|
|
|
|
|
|
|
|
Completion and remedial
services
|
$
|
36,228
|
|
$
|
69,056
|
|
$
|
75,924
|
|
$
|
181,831
|
Fluid
services
|
|
45,491
|
|
|
63,704
|
|
|
95,741
|
|
|
137,506
|
Well
servicing
|
|
36,824
|
|
|
56,500
|
|
|
75,731
|
|
|
120,168
|
Contract
drilling
|
|
1,461
|
|
|
4,336
|
|
|
2,965
|
|
|
15,812
|
Total
revenues
|
|
120,004
|
|
|
193,596
|
|
|
250,361
|
|
|
455,317
|
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
Completion and remedial
services
|
|
32,860
|
|
|
57,670
|
|
|
67,648
|
|
|
138,921
|
Fluid
services
|
|
38,619
|
|
|
48,381
|
|
|
79,786
|
|
|
102,512
|
Well
servicing
|
|
31,847
|
|
|
47,035
|
|
|
66,318
|
|
|
99,437
|
Contract
drilling
|
|
1,368
|
|
|
3,488
|
|
|
2,929
|
|
|
11,014
|
General and
administrative (1)
|
|
27,078
|
|
|
35,673
|
|
|
56,640
|
|
|
74,877
|
Depreciation and
amortization
|
|
54,847
|
|
|
60,231
|
|
|
110,999
|
|
|
121,160
|
(Gain) loss on disposal
of assets
|
|
336
|
|
|
(57)
|
|
|
261
|
|
|
(9)
|
Total
expenses
|
|
186,955
|
|
|
252,421
|
|
|
384,581
|
|
|
547,912
|
Operating
loss
|
|
(66,951)
|
|
|
(58,825)
|
|
|
(134,220)
|
|
|
(92,595)
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
(22,521)
|
|
|
(16,841)
|
|
|
(43,235)
|
|
|
(33,704)
|
Interest
income
|
|
7
|
|
|
4
|
|
|
9
|
|
|
10
|
Other income
|
|
244
|
|
|
215
|
|
|
340
|
|
|
335
|
Loss before income
taxes
|
|
(89,221)
|
|
|
(75,447)
|
|
|
(177,106)
|
|
|
(125,954)
|
Income tax benefit
(expense)
|
|
(662)
|
|
|
27,152
|
|
|
3,884
|
|
|
45,035
|
Net loss
|
$
|
(89,883)
|
|
$
|
(48,295)
|
|
$
|
(173,222)
|
|
$
|
(80,919)
|
Loss per share of
common stock:
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(2.11)
|
|
$
|
(1.20)
|
|
$
|
(4.14)
|
|
$
|
(2.00)
|
Diluted
|
$
|
(2.11)
|
|
$
|
(1.20)
|
|
$
|
(4.14)
|
|
$
|
(2.00)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA (2)
|
$
|
(11,860)
|
|
$
|
1,621
|
|
$
|
(22,881)
|
|
$
|
28,900
|
Adjusted EBITDA
(2)
|
|
(11,524)
|
|
|
6,064
|
|
|
(22,620)
|
|
|
33,391
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
|
|
|
Acquisitions, net of
cash acquired
|
|
-
|
|
|
-
|
|
|
-
|
|
|
-
|
Property and
equipment
|
|
6,984
|
|
|
8,962
|
|
|
11,561
|
|
|
34,823
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
|
|
June 30,
2016
|
|
June 30,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
86,100
|
|
$
|
91,822
|
|
|
|
|
|
|
Net property and
equipment
|
|
751,070
|
|
|
925,738
|
|
|
|
|
|
|
Total
assets
|
|
1,078,358
|
|
|
1,402,074
|
|
|
|
|
|
|
Total long-term
debt
|
|
961,416
|
|
|
850,887
|
|
|
|
|
|
|
Total stockholders'
equity (deficit)
|
|
(62,407)
|
|
|
262,256
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
|
Six months ended
June 30,
|
|
2016
|
|
2015
|
|
|
2016
|
|
2015
|
Segment
Data:
|
(Unaudited)
|
|
|
(Unaudited)
|
Completion and
Remedial Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment Profits as a
percent of revenue
|
|
9.3%
|
|
|
21.6%
|
|
|
|
10.9%
|
|
|
25.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fluid
Services
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of fluid service trucks
|
|
976
|
|
|
1,011
|
|
|
|
980
|
|
|
1,029
|
Truck hours
(000's)
|
|
474.4
|
|
|
573.7
|
|
|
|
995.9
|
|
|
1,168.8
|
Revenue per fluid
services truck (000's)
|
$
|
47
|
|
$
|
63
|
|
|
$
|
98
|
|
$
|
134
|
Segment profits per
fluid services truck (000's)
|
$
|
7
|
|
$
|
15
|
|
|
$
|
16
|
|
$
|
34
|
Segment profits as a
percent of revenue
|
|
15.1%
|
|
|
24.1%
|
|
|
|
16.7%
|
|
|
25.4%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Well
Servicing
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
|
421
|
|
|
421
|
|
|
|
421
|
|
|
421
|
Rig hours
(000's)
|
|
113.7
|
|
|
154.7
|
|
|
|
222.1
|
|
|
318.6
|
Rig utilization
rate
|
|
38%
|
|
|
51%
|
|
|
|
37%
|
|
|
53%
|
Revenue per rig hour,
excluding manufacturing
|
$
|
308
|
|
$
|
351
|
|
|
$
|
314
|
|
$
|
364
|
Well servicing rig
profit per rig hour
|
$
|
44
|
|
$
|
61
|
|
|
$
|
42
|
|
$
|
65
|
Segment profits as a
percent of revenue
|
|
13.5%
|
|
|
16.8%
|
|
|
|
12.4%
|
|
|
17.3%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Contact
Drilling
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
|
12
|
|
|
12
|
|
|
|
12
|
|
|
12
|
Rig operating
days
|
|
91
|
|
|
280
|
|
|
|
182
|
|
|
954
|
Revenue per
day
|
$
|
16,100
|
|
$
|
15,500
|
|
|
$
|
16,300
|
|
$
|
16,600
|
Drilling rig profit
per day
|
$
|
1,000
|
|
$
|
3,000
|
|
|
$
|
200
|
|
$
|
5,000
|
Segment profits as a
percent of revenue
|
|
6.4%
|
|
|
19.6%
|
|
|
|
1.2%
|
|
|
30.3%
|
|
|
(1)
|
Includes
approximately $2,044,000 and $4,516,000 of non-cash compensation
expense for the three months ended June 30, 2016 and 2015,
respectively, and $5,302,000 and $9,047,000 for the six months
ended June 30, 2016 and 2015 respectively.
|
|
|
(2)
|
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 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 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 loss
to EBITDA, which is the most comparable GAAP performance measure,
for each of the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Reconciliation of
Net Income (Loss) to EBITDA:
|
(Unaudited)
|
|
(Unaudited)
|
Net income /
(loss)
|
$
|
(89,883)
|
|
$
|
(48,295)
|
|
$
|
(173,222)
|
|
$
|
(80,919)
|
Income
taxes
|
|
662
|
|
|
(27,152)
|
|
|
(3,884)
|
|
|
(45,035)
|
Net
interest expense
|
|
22,514
|
|
|
16,837
|
|
|
43,226
|
|
|
33,694
|
Depreciation and amortization
|
|
54,847
|
|
|
60,231
|
|
|
110,999
|
|
|
121,160
|
EBITDA
|
$
|
(11,860)
|
|
$
|
1,621
|
|
$
|
(22,881)
|
|
$
|
28,900
|
The following table presents a reconciliation of net loss
to "Adjusted EBITDA," which means our EBITDA excluding the gain or
loss on disposal of assets, and loss on customer audit
settlements:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2016
|
|
2015
|
|
2016
|
|
2015
|
Reconciliation of
Net Income (Loss) to Adjusted EBITDA:
|
(Unaudited)
|
|
(Unaudited)
|
Net income /
(loss)
|
$
|
(89,883)
|
|
$
|
(48,295)
|
|
$
|
(173,222)
|
|
$
|
(80,919)
|
Income
taxes
|
|
662
|
|
|
(27,152)
|
|
|
(3,884)
|
|
|
(45,035)
|
Net
interest expense
|
|
22,514
|
|
|
16,837
|
|
|
43,226
|
|
|
33,694
|
Depreciation and amortization
|
|
54,847
|
|
|
60,231
|
|
|
110,999
|
|
|
121,160
|
(Gain) loss on disposal
of assets
|
|
336
|
|
|
(57)
|
|
|
261
|
|
|
(9)
|
Loss on customer audit
settlement
|
|
-
|
|
|
4,500
|
|
|
-
|
|
|
4,500
|
Adjusted
EBITDA
|
$
|
(11,524)
|
|
$
|
6,064
|
|
$
|
(22,620)
|
|
$
|
33,391
|
Contacts:
|
Alan
Krenek,
|
|
Chief Financial
Officer
|
|
Basic Energy
Services, Inc.
|
|
817-334-4100
|
|
|
|
Jack
Lascar
|
|
Dennard ▪ Lascar
Associates
|
|
713-529-6600
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/basic-energy-services-reports-second-quarter-2016-results-300302532.html
SOURCE Basic Energy Services, Inc.