FORT WORTH, Texas, July 27, 2017 /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, 2017.
Basic emerged from its Chapter 11 bankruptcy pursuant to a
prepackaged plan of reorganization on December 23, 2016. Upon emergence from the
Chapter 11 bankruptcy, the Company adopted fresh start accounting,
which resulted in Basic becoming a new entity for accounting and
financial reporting purposes upon emergence. As such, the
application of fresh start accounting was reflected in Basic's
balance sheet as of December 31, 2016
and all fresh start accounting adjustments were included in its
consolidated statement of operations for the year ended
December 31, 2016. Due to these
adjustments, the financial statements as of June 30, 2017 are not comparable with information
provided for periods prior to December 31,
2016.
SECOND QUARTER 2017 HIGHLIGHTS
Second quarter 2017 revenue increased 17% to $213.3 million from $182.0
million in the first quarter of 2017, as rising drilling rig
count and overall activity levels continued to rise throughout most
geographic areas. This recovery in oilfield-related services led
our customers to expedite postponed maintenance work and complete
more wells located throughout our footprint. In the second quarter
of 2016, Basic generated $120.0
million in revenue.
For the second quarter of 2017, Basic reported a net loss of
$23.9 million, or a loss of
$0.92 per basic and diluted share.
This is compared to a net loss of $38.6
million, or $1.49 per basic
share and diluted share for the first quarter of 2017, and a net
loss of $89.9 million, or
$2.11 per basic and diluted share in
the second quarter of 2016.
|
Three months ended
June 30, 2017
|
|
(in
millions)
|
|
EPS
|
Special Items
(adjusted for tax)
|
(Unaudited)
|
Net
loss, as reported
|
$
|
(23.9)
|
|
$
|
(0.92)
|
Restructuring expense
|
|
0.7
|
|
0.03
|
Valuation allowance on federal deferred tax assets
|
8.5
|
|
0.32
|
Adjusted
net loss
|
$
|
(14.7)
|
|
$
|
(0.57)
|
Excluding the impact of these special items listed above, Basic
reported a net loss of $14.7 million,
or a loss of $0.57 per basic and
diluted share in the second quarter of 2017. The restructuring
expenses are professional fees associated with Basic's Chapter 11
Restructuring incurred in 2017. Excluding special items, the
Company reported a net loss of $22.6
million, or a loss of $0.87
per basic and diluted share, in the first quarter of 2017 and a net
loss of $57.0 million, or a loss of
$1.34 per basic and diluted share in
the second quarter of 2016.
Roe Patterson, Basic's
President and Chief Executive Officer, stated, "We were pleased
with our second quarter results as we delivered a second
consecutive 17% increase in revenue driven by a recovery in all of
our oil-related business segments. This increased level of activity
that started in the Permian Basin and the SCOOP/STACK plays in
Oklahoma, is now spreading into
the Niobrara, California, and
Eagle Ford markets. Additionally, improvements in other
non-conventional basins are strengthening our base of business as
well.
"Our customers benefitted from higher oil prices in the second
quarter and took advantage of competitively priced oilfield
services to accelerate drilling, completion and well maintenance
activity. Most have increased their capital expenditures programs
thus far this year. From an EBITDA standpoint, we are now clearly
in positive territory and we expect that to continue for the
remainder of 2017. While pricing has improved, especially on the
completion side of the business, most markets remain competitive
with only limited pricing improvement. Nevertheless, increased
activity and improved pricing allowed us to deliver a sequential
560 basis point expansion in gross margin.
"This improved performance was led by our pressure pumping, coil
tubing, and other completion and remedial product lines, with all
of our frac horsepower operating during the quarter. Half of the
74,000 HHP we recently purchased was placed in service during the
latter part of the second quarter and the remaining half will be
operational in this quarter. A delay in the delivery of new
software control parts from a manufacturer postponed the activation
of this HHP. In addition, this quarter we will activate our two
newest large diameter coil units that were delivered in early July.
We are also experiencing a ramp-up in activity in our well
servicing business with increased utilization and increased revenue
per rig hour. Fluid services was relatively flat in terms of truck
count and utilization, as weather and holiday capped activity
levels. Revenue per truck hour did improve slightly on some small
pricing increases improving margins slightly.
"Looking forward to the second half of 2017, we continue to
expect a gradual improvement in pricing and utilization across most
lines of business. We currently anticipate additional margin
expansion in the third quarter as activity is spreading to more
basins and longer daylight hours will benefit our utilization
levels. We are also seeing a healthy level of inquiries regarding
equipment and crew availability for well maintenance and repair
activity. These are clear indicators of future demand. However, we
are keeping a close eye on oil prices. Our current view is
predicated on oil pricing trading at current levels or
higher. Customers, especially those with stretched balance
sheets or those that have not hedged their production, have quickly
responded to fluctuation in oil prices: slowing down spending when
prices linger below $45 per barrel
and ramping up significantly when prices show stickiness above
$50 per barrel. Likewise for natural
gas prices, customers in gassier markets have ramped activity when
pricing stabilizes above $3 per
million cubic feet. As a result of our belief that commodity
pricing will slowly improve in the coming quarters, we currently
expect to generate a sequential increase of 6-10% in quarterly
revenues in the third quarter. This guidance could change quickly
if commodity pricing ramps at a much faster pace or retraces recent
lows.
"For the third quarter and beyond, we will be changing the name
of our Fluid Services segment to Water Logistics. The change
reflects the growing holistic approach to water management by our
entire fluids business and our customers' needs. Recycling,
pipelining, fresh water sourcing, water storage and chemical
treatment are growing sub-segments of this business. Our commercial
salt water disposal well network, one of the nation's largest, and
our best in class fluid truck fleet finish out the nation's largest
and most comprehensive fleet of assets dedicated to water logistics
in the U.S. onshore oil and gas industry."
Adjusted EBITDA was $12.0 million,
or 6% of revenues, for the second quarter of 2017 compared to
($1.2) million, or (1)% of revenues,
in the first quarter of 2017. In the second quarter of 2016,
Basic generated Adjusted EBITDA of ($11.5)
million, or (10)% of revenues. Adjusted EBITDA is
defined as net income before interest, taxes, depreciation and
amortization ("EBITDA"), the net gain or loss from the disposal of
assets, retention expense, and restructuring expense. 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.
2017 First Six Months Highlights
Revenues for the first half of 2017 rose 58% to $395.3 million from $250.4
million in the first six months of 2016.
Adjusted EBITDA for the first six months of 2017 was
$10.8 million, or 3% of revenues,
compared to ($22.6 million), or (9%)
of revenues, for the first six months of 2016. Adjusted
EBITDA excludes the special items discussed above for both 2017 and
2016. Adjusted EBITDA is reconciled in note 2 under the
accompanying financial tables.
For the first half of 2017, Basic reported a net loss of
$62.6 million, or $2.41 per basic and diluted share, compared to a
net loss of $173.2 million, or
$4.14 per basic and diluted share,
for the first half of 2016. Excluding special items in both
2017 and 2016, Basic generated an adjusted net loss of $36.6 million, or $1.42 per basic and diluted share for the first
half of 2017 compared to an adjusted net loss of $111.8 million, or $2.67 per basic and diluted share in the first
six months of 2016.
Business Segment Results
Completion and Remedial Services
Completion and remedial services revenue increased 34% to
$107.4 million in the second quarter
of 2017 from $80.4 million in the
prior quarter. The sequential increase in revenue was
primarily due to higher activity levels as customers took advantage
of improved pricing to reduce the inventory of drilled but
uncompleted wells outstanding, offset by significant weather
impacts of approximately $4.2 million
during the second quarter. In the second quarter of 2016,
this segment generated $36.2 million
in revenue.
At June 30, 2017, Basic had
approximately 518,000 hydraulic horsepower ("HHP"), up from 444,000
HHP both at the end of the previous quarter and as of June 30, 2016. This includes 430,000 of frac
HHP. Of the previously announced purchase of 74,000 frac HHP,
half was deployed in mid-May. The remainder of this
horsepower is planned to be deployed in August. Weighted average
total HHP for the second quarter of 2017 was 488,000, up from
444,000 in the first quarter of 2017. Weighted average frac
HHP was 406,000 for the second quarter of 2016.
Segment profit in the second quarter of 2017 almost doubled to
$26.2 million compared to
$13.2 million in the prior
quarter. Segment margin for the second quarter of 2017
increased 800 basis points to 24% compared to 16% during the
previous quarter, driven predominantly by the positive impact of
incremental margins on the higher revenue base and improved
pricing. Second quarter margin also benefitted from the elimination
of the impact of the annual unemployment tax reset, which occurred
during the first quarter. During the second quarter of 2016,
segment profit was $3.4 million, or
9% of segment revenue.
Fluid Services (Water Logistics)
Fluid services revenue in the second quarter of 2017 increased
1% to $50.7 million compared to
$50.2 million in the prior
quarter. The slight increase in revenues was mainly driven by
higher activity levels, offset by weather impacts, seasonal
declines in hot oiling and a decrease in disposal utilization.
The weighted average number of fluid services trucks increased
1% to 943 during the second quarter of 2017, compared to 935 during
the first quarter of 2017 and declined 3% compared to 976 during
the second quarter of 2016. Truck hours were 473,500 in the second
quarter, down 2% from 484,300 in the first quarter of 2017, as
weather impacted fluid service revenues by $800,000 during the quarter. Revenue per
truck was $53,800 compared to
$53,700 in the first quarter on
improved pricing and the ramp in activity. In the comparable
quarter of 2016, average revenue per fluid truck was $46,600.
Segment profit in the second quarter of 2017 increased by 6% to
$9.2 million, compared to a profit of
$8.7 million in the first quarter of
2017. Margins improved 80 basis points on higher revenues and
pricing, as well as the elimination of the unemployment tax reset
impact of 160 basis points experienced in the first quarter.
Second quarter margins in 2017 were negatively impacted by
approximately 300 basis points due to an insurance accrual from an
October 2016 event. Weather
also negatively impacted margins by 30 basis points. Segment
profit in the same period in 2016 was $6.9
million, or 15% of segment revenue.
Well Servicing
Well servicing revenues increased 9% to $53.1 million during the second quarter of 2017
compared to $48.6 million in the
prior quarter led by increased utilization rates and improved
pricing during the quarter. Well servicing revenues were
$36.8 million in the second quarter
of 2016. Net revenues from the Taylor manufacturing operations were
$904,000 in the second quarter of
2017 compared to $230,000 in the
prior quarter and $1.8 million in the
second quarter of 2016.
At June 30, 2017, the well
servicing rig count was 421, the same as the end of the prior
quarter and at June 30, 2016. Rig
hours were 162,300 in the second quarter of 2017, up 3% compared to
157,600 hours in the first quarter of 2017 and up 43% from 113,700
hours in the comparable quarter of last year. Rig utilization was
54% in the second quarter of 2017, compared to 52% in the prior
quarter and up from 38% in the second quarter of 2016.
Excluding revenues associated with the Taylor manufacturing
operations, revenue per well servicing rig hour was $321 in the second quarter of 2017, 5% higher
compared to $307 in the previous
quarter and up 4% from $308 reported
in the second quarter of 2016. The sequential increase was due
mainly to improved pricing during the quarter.
Segment profit in the second quarter of 2017 increased 46% to
$11.3 million, compared to
$7.7 million in the prior quarter and
increased 126% from $5.0 million
during the same period in 2016. Segment profit margin increased to
21% in the second quarter of 2017 from 16% in the prior quarter led
by increased activity and a full quarter's impact of rate increases
that were put into place in the late first and early second
quarters, as well as the lack of the unemployment tax reset that
was incurred in the first quarter of 2017. In the second
quarter of 2016, segment profit was 14% of segment revenue. Segment
profit from the Taylor manufacturing operations was $89,000 in the second quarter of 2017 compared to
a $17,000 in the previous
quarter.
Contract Drilling
Contract drilling revenues decreased by 23% to $2.1 million during the second quarter of 2017
from $2.8 million in the prior
quarter. During the second quarter of 2016, this segment generated
$1.5 million in revenue. Basic
marketed 11 drilling rigs during the second quarter of 2017, down
one from 12 in the previous quarter as well as the second quarter
of 2016. Only one rig was active through the entire second
quarter. Revenue per drilling day in the second quarter of 2017 was
up 14% to $23,300 compared to
$20,500 in the previous quarter and
up from $16,100 in the second quarter
of 2016 on higher contract drilling trucking revenues.
Rig operating days during the second quarter of 2017 decreased
to 91 compared to 135 in the prior quarter, resulting in rig
utilization of 8% during the second quarter of 2017 compared to 12%
during the prior quarter. In the comparable period in 2016,
rig operating days were 91, producing a utilization of 8%.
Segment profit in the second quarter of 2017 was $254,000 compared to $355,000 in the prior quarter and $93,000 in the second quarter of 2016.
Segment margin for the second quarter of 2017 was 12% of segment
revenues compared to 13% in the prior quarter. The decline in
margin is due to only one rig being active throughout the quarter
compared to two active rigs during the majority of the first
quarter. Last year in the comparable period, segment margin was
6%.
G&A Expense
Reported general and administrative ("G&A") expense for the
second quarter of 2017 was $36.0
million compared to a reported G&A expense for the first
quarter of 2017 of $34.2
million. Excluding costs associated with the
bankruptcy and restructuring expenses incurred in 2017, G&A
expense in the second quarter of 2017 was $35.0 million, or 16% of revenue, compared to
$31.2 million, or 17% of revenue, in
the prior quarter. Expense was higher due to a $1.7 million increase from the first quarter of
2017 in non-cash stock compensation expense, associated with the
Company's stock grants. G&A expense in the second quarter
of 2016 was $27.1 million, or 23% of
revenue.
Interest Expense
Net interest expense for the second quarter of 2017 was
$9.2 million compared to $9.1 million in the first quarter of 2017.
These amounts include interest on Basic's term loan facility and
capital leases, as well as approximately $2.3 million of non-cash interest expense related
to the accretion of fair value discounts on the Company's
debt. Net interest expense was $22.5
million in the second quarter of 2016.
Tax Benefit
Basic's tax expense for the second quarter of 2017 was
$0 compared to $375,000 in the first quarter of 2017. The second
quarter of 2017 represents an effective tax rate of 0%, compared to
1% in the prior quarter. Excluding the valuation allowance related
to the temporary impairments of the deferred tax assets of
$9.6 million, the operating effective
tax benefit of $8.5 million in the
second quarter of 2017 translated into an effective tax benefit
rate of 36%.
Cash and Total Liquidity
On June 30, 2017, Basic had cash
and cash equivalents of approximately $34.2
million, compared to $50.6
million at March 31, 2017 and
$86.1 million on June 30, 2016.
At June 30, 2017, total liquidity
was approximately $55 million, which
included $20 million of availability
under Basic's amended and restated $75
million revolving credit facility.
In July 2017, Basic was successful
in reducing insurance collateral by $12
million as a result of the renewal of their insurance
programs. Pro forma for this reduction in required letters of
credit, total liquidity at June 30,
2017 would have been $67
million.
Capital Expenditures
Total capital expenditures during the second quarter of 2017
were approximately $40.8 million
(including capital leases and other financing of $26.8 million), comprised of $15.4 million for expansion projects,
$23.6 million for sustaining and
replacement projects and $1.8 for
other projects. Expansion capital spending included
$15.3 million for the completion and
remedial services segment, $145,000
for the well servicing segment, and $11,000 for the fluid services segment.
Other capital expenditures were mainly for facilities and IT
infrastructure.
Basic currently anticipates 2017 capital expenditures of
$115 million, including $70 million of capital leases and other
financings. This includes committed expansion capital expenditures
of $45 million in 2017. The expansion
capital consists of $43 million for
completion and remedial services and $2
million for the well servicing segment.
Conference Call
Basic will host a conference call to discuss its second quarter
2017 results on Friday, July 28,
2017, 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 11, 2017 and may be
accessed by calling (201) 612-7415 and using pass code
13665022#. 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 over 3,900 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, 2016 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
|
|
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
June 30,
|
|
Six months ended
June 30,
|
|
|
|
|
2017
|
2016
|
|
2017
|
2016
|
|
|
|
|
Successor
|
Predecessor
|
|
Successor
|
Predecessor
|
|
|
|
|
(Unaudited)
|
|
(Unaudited)
|
Income Statement
Data:
|
|
|
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
|
|
|
Completion and
remedial services
|
|
|
|
$
|
107,385
|
|
$
|
36,228
|
|
|
$
|
187,817
|
|
$
|
75,924
|
|
Fluid
services
|
|
|
|
50,740
|
|
45,491
|
|
|
100,946
|
|
95,741
|
|
Well
servicing
|
|
|
|
53,054
|
|
36,824
|
|
|
101,672
|
|
75,731
|
|
Contract
drilling
|
|
|
|
2,117
|
|
1,461
|
|
|
4,880
|
|
2,965
|
|
Total
revenues
|
|
|
|
213,296
|
|
120,004
|
|
|
395,315
|
|
250,361
|
|
Expenses:
|
|
|
|
|
|
|
|
|
Completion and
remedial services
|
|
|
|
81,199
|
|
32,860
|
|
|
148,451
|
|
67,648
|
|
Fluid
services
|
|
|
|
41,580
|
|
38,619
|
|
|
83,118
|
|
79,786
|
|
Well
servicing
|
|
|
|
41,796
|
|
31,847
|
|
|
82,712
|
|
66,318
|
|
Contract
drilling
|
|
|
|
1,863
|
|
1,368
|
|
|
4,271
|
|
2,929
|
|
General and
administrative (1)
|
|
|
|
36,037
|
|
27,078
|
|
|
70,241
|
|
56,640
|
|
Depreciation and
amortization
|
|
|
|
25,956
|
|
54,847
|
|
|
51,369
|
|
110,999
|
|
(Gain) loss on
disposal of assets
|
|
|
|
(223)
|
|
336
|
|
|
(690)
|
|
261
|
|
Total
expenses
|
|
|
|
228,208
|
|
186,955
|
|
|
439,472
|
|
384,581
|
|
Operating
loss
|
|
|
|
(14,912)
|
|
(66,951)
|
|
|
(44,157)
|
|
(134,220)
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
Interest
expense
|
|
|
|
(9,179)
|
|
(22,521)
|
|
|
(18,289)
|
|
(43,235)
|
|
Interest
income
|
|
|
|
6
|
|
7
|
|
|
18
|
|
9
|
|
Other
income
|
|
|
|
144
|
|
244
|
|
|
235
|
|
340
|
|
Loss before income
taxes
|
|
|
|
(23,941)
|
|
(89,221)
|
|
|
(62,193)
|
|
(177,106)
|
|
Income tax benefit
(expense)
|
|
|
|
—
|
|
(662)
|
|
|
(374)
|
|
3,884
|
|
Net loss
|
|
|
|
$
|
(23,941)
|
|
$
|
(89,883)
|
|
|
$
|
(62,567)
|
|
$
|
(173,222)
|
|
Loss per share of
common stock:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
$
|
(0.92)
|
|
$
|
(2.11)
|
|
|
$
|
(2.41)
|
|
$
|
(4.14)
|
|
Diluted
|
|
|
|
$
|
(0.92)
|
|
$
|
(2.11)
|
|
|
$
|
(2.41)
|
|
$
|
(4.14)
|
|
|
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
|
|
|
EBITDA (2)
|
|
|
|
$
|
11,188
|
|
$
|
(11,860)
|
|
|
$
|
7,447
|
|
$
|
(22,881)
|
|
Adjusted EBITDA
(2)
|
|
|
|
12,008
|
|
(11,524)
|
|
|
10,778
|
|
(22,620)
|
|
Capital
expenditures:
|
|
|
|
|
|
|
|
|
Property and
equipment
|
|
|
|
7,815
|
|
6,984
|
|
|
33,745
|
|
11,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
|
|
|
June
30,
|
December
31,
|
|
|
|
|
|
|
|
2017
|
2016
|
|
|
|
|
|
|
|
(Unaudited)
|
(Audited)
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
$
|
34,244
|
|
$
|
98,875
|
|
|
|
|
Net property and
equipment
|
|
|
|
520,575
|
|
488,848
|
|
|
|
|
Total
assets
|
|
|
|
786,366
|
|
768,160
|
|
|
|
|
Total long-term
debt
|
|
|
|
207,487
|
|
184,752
|
|
|
|
|
Total stockholders'
equity
|
|
|
|
362,526
|
|
414,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Segment
Data:
|
|
(Unaudited)
|
|
(Unaudited)
|
Completion and
Remedial Services
|
|
|
|
|
|
|
|
|
Segment Profits as a
percent of revenue
|
|
24
|
%
|
|
9
|
%
|
|
21
|
%
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
Fluid
Services
|
|
|
|
|
|
|
|
|
Weighted average
number of fluid service trucks
|
|
943
|
|
|
976
|
|
|
939
|
|
|
980
|
|
Truck hours
(000's)
|
|
473.5
|
|
|
474.4
|
|
|
957.8
|
|
|
995.9
|
|
Revenue per fluid
services truck (000's)
|
|
$
|
54
|
|
|
$
|
47
|
|
|
$
|
108
|
|
|
$
|
98
|
|
Segment profits per
fluid services truck (000's)
|
|
$
|
10
|
|
|
$
|
7
|
|
|
$
|
19
|
|
|
$
|
16
|
|
Segment profits as a
percent of revenue
|
|
18
|
%
|
|
15
|
%
|
|
18
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
|
Well
Servicing
|
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
|
421
|
|
|
421
|
|
|
421
|
|
|
421
|
|
Rig hours
(000's)
|
|
162.3
|
|
|
113.7
|
|
|
319.9
|
|
|
222.1
|
|
Rig utilization
rate
|
|
54
|
%
|
|
38
|
%
|
|
53
|
%
|
|
37
|
%
|
Revenue per rig hour,
excluding manufacturing
|
|
$
|
321
|
|
|
$
|
308
|
|
|
$
|
314
|
|
|
$
|
314
|
|
Well servicing rig
profit per rig hour
|
|
$
|
69
|
|
|
$
|
44
|
|
|
$
|
59
|
|
|
$
|
42
|
|
Segment profits as a
percent of revenue
|
|
21
|
%
|
|
14
|
%
|
|
19
|
%
|
|
12
|
%
|
|
|
|
|
|
|
|
|
|
Contact
Drilling
|
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
|
11
|
|
|
12
|
|
|
12
|
|
|
12
|
|
Rig operating
days
|
|
91
|
|
|
91
|
|
|
226
|
|
|
182
|
|
Drilling utilization
rate
|
|
8
|
%
|
|
8
|
%
|
|
10
|
%
|
|
8
|
%
|
Revenue per
day
|
|
$
|
23,300
|
|
|
$
|
16,100
|
|
|
$
|
21,600
|
|
|
$
|
16,300
|
|
Drilling rig profit
per day
|
|
$
|
2,800
|
|
|
$
|
1,000
|
|
|
$
|
2,700
|
|
|
$
|
200
|
|
Segment profits as a
percent of revenue
|
|
12
|
%
|
|
6
|
%
|
|
12
|
%
|
|
1
|
%
|
|
|
(1) Includes approximately
$6,575,000 and $2,044,000 of non-cash compensation expense for the
three months ended June 30, 2017 and 2016, respectively, and
$11,445,000 and $5,302,000 for the six months ended June 30, 2017
and 2016, 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 retention
expense;
|
Adjusted EBITDA does not reflect Basic's restructuring costs;
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,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Successor
|
|
Predecessor
|
|
Successor
|
|
Predecessor
|
Reconciliation of
Net Loss to EBITDA:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(23,941)
|
|
|
$
|
(89,883)
|
|
|
$
|
(62,567)
|
|
|
$
|
(173,222)
|
|
Income
taxes
|
—
|
|
|
662
|
|
|
374
|
|
|
(3,884)
|
|
Net
interest expense
|
9,173
|
|
|
22,514
|
|
|
18,271
|
|
|
43,226
|
|
Depreciation and amortization
|
25,956
|
|
|
54,847
|
|
|
51,369
|
|
|
110,999
|
|
EBITDA
|
$
|
11,188
|
|
|
$
|
(11,860)
|
|
|
$
|
7,447
|
|
|
$
|
(22,881)
|
|
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, retention expense, and restructuring
expense:
|
Three months ended
June 30,
|
|
Six months ended
June 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Successor
|
|
Predecessor
|
|
Successor
|
|
Predecessor
|
Reconciliation of
Net Loss to Adjusted EBITDA:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(23,941)
|
|
|
$
|
(89,883)
|
|
|
$
|
(62,567)
|
|
|
$
|
(173,222)
|
|
Income
taxes
|
—
|
|
|
662
|
|
|
374
|
|
|
(3,884)
|
|
Net
interest expense
|
9,173
|
|
|
22,514
|
|
|
18,271
|
|
|
43,226
|
|
Depreciation and amortization
|
25,956
|
|
|
54,847
|
|
|
51,369
|
|
|
110,999
|
|
(Gain)
loss on disposal of assets
|
(223)
|
|
|
336
|
|
|
(690)
|
|
|
261
|
|
Retention expense
|
—
|
|
|
—
|
|
|
1,357
|
|
|
—
|
|
Restructuring expense
|
1,043
|
|
|
—
|
|
|
2,664
|
|
|
—
|
|
Adjusted
EBITDA
|
$
|
12,008
|
|
|
$
|
(11,524)
|
|
|
$
|
10,778
|
|
|
$
|
(22,620)
|
|
View original
content:http://www.prnewswire.com/news-releases/basic-energy-services-reports-second-quarter-2017-results-300495814.html
SOURCE Basic Energy Services, Inc.