FORT WORTH, Texas, Nov. 2, 2017 /PRNewswire/ -- Basic Energy
Services, Inc. (NYSE: BAS) ("Basic" or the "Company") today
announced its financial and operating results for the third quarter
ended September 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 September 30, 2017 are not comparable with
information provided for periods prior to December 31, 2016.
THIRD QUARTER 2017 HIGHLIGHTS
Third quarter 2017 revenue increased 9.5% to $233.5 million from $213.3
million in the second quarter of 2017, as the drilling rig
count and completion activity levels continued to increase.
However, third quarter was negatively impacted by an estimated loss
of $3.0 million in revenue related to
Hurricane Harvey. In the third quarter of 2016, Basic generated
$141.6 million in revenue.
For the third quarter of 2017, Basic reported a net loss of
$13.8 million, or a loss of
$0.53 per basic and diluted share,
which compares to a net loss of $23.9
million, or a loss of $0.92
per basic and diluted share for the second quarter of 2017, and a
net loss of $92.1 million, or a loss
of $2.16 per basic and diluted share
in the third quarter of 2016.
|
Three months ended
September 30, 2017
|
|
(in
millions)
|
|
EPS
|
Special Items
(adjusted for tax)
|
(Unaudited)
|
Net
loss, as reported
|
$
|
(13.8)
|
|
|
$
|
(0.53)
|
|
Due
diligence for business development
activities
|
|
2.4
|
|
|
0.09
|
|
AMT tax
credit utilization
|
1.7
|
|
|
0.06
|
|
Valuation allowance on federal deferred tax assets
|
3.6
|
|
|
0.14
|
|
Adjusted
net loss
|
$
|
(6.1)
|
|
|
$
|
(0.24)
|
|
Excluding the impact of these special items listed above, Basic
reported a net loss of $6.1 million,
or a loss of $0.24 per basic and
diluted share in the third quarter of 2017. Excluding special
items, the Company 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.
Roe Patterson, Basic's President and Chief Executive Officer,
stated, "We are very pleased with our third quarter results as we
delivered a better than anticipated increase in revenue driven by a
continued recovery in all of our oil-related business segments,
especially in the completion and remedial services segment. While
the 9.5% increase in revenue was ahead of our expectations, we
suffered weather interruptions of $6.6
million during the third quarter, of which Hurricane Harvey
represented approximately $3
million.
"Though we continue to see some rate traction on our
production-oriented services, and more on the completion side of
the business, most markets remain highly competitive. Our customers
are taking advantage of more stable oil prices and have maintained
steady drilling, completion and well maintenance activities. From
an adjusted earnings standpoint, the third quarter delivered
sequentially greater monthly results despite the impact of severe
weather during the quarter. Increased activity and improved
pricing allowed us to deliver an adjusted EBITDA of $26.5 million in the third quarter, which was
significantly higher than the $12
million of adjusted EBITDA we posted in the second quarter.
The adjusted EBITDA run-rate as we exited the quarter in September
was the highest we experienced for the quarter.
"This improved performance was led by our pressure pumping,
coiled tubing, and other completion and remedial product lines,
with all of our frac horsepower operating by the end of the
quarter. The remaining half of the 74,000 HHP we purchased in the
second quarter was placed in service in late August. We also
activated our two newest large diameter coil units that were
delivered in early July and deployed in the field in early August.
In addition to introducing this new equipment, we saw improvements
in revenue and margin as we continued to transition our frac fleets
to work where we provide all sourcing and logistics to our
customers. A few remaining frac programs existed in the first and
second quarters in which customers self-sourced most inputs. Our
fleets perform best when we can manage all logistics and maximize
efficiencies at the field level so we have reoriented this work
accordingly. This shift provides our customers with superior
service, reduces the potential for downtime and improves our
financial performance. On the production services side, we are
experiencing some modest increase in activity in both our well
servicing and water logistics businesses as well as increased
utilization and revenue per rig and truck hour.
"Based on current and near-term projected oil prices, we expect
the fourth quarter of 2017 to be very similar to the third quarter
in terms of pricing traction and utilization across all lines of
business. Preliminary feedback from our customers indicates that
they currently plan to maintain steady activity levels during the
holidays. As a result, the typical seasonal slowdown during
the fourth quarter should be offset somewhat by strong demand for
our services. Weather interruptions can always alter these future
results.
"We also continue to experience a healthy level of inquiries
regarding equipment and crew availability for all services into
2018. For the completion and remedial segment, most assets and
fleets are being booked well into the second quarter of next year.
Therefore, we remain optimistic that our activity levels will
remain robust in 2018 if oil prices can remain in their current
trading ranges."
Adjusted EBITDA increased 121% to $26.5
million, or 11% of revenues, for the third quarter of 2017
compared to $12.0 million, or 6% of
revenues, in the second quarter of 2017. In the third quarter
of 2016, Basic generated Adjusted EBITDA of ($4.7) million, or (3)% of revenues.
Adjusted EBITDA is defined as net loss before interest, taxes,
depreciation and amortization ("EBITDA"), the net gain or loss from
the disposal of assets, retention expense, due diligence on
business development activities, 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.
Business Segment Results
Completion and Remedial Services
Completion and remedial services revenue increased 15% to
$123.7 million in the third quarter
of 2017 from $107.4 million in the
prior quarter. The sequential increase in revenue was
primarily due to higher activity levels as we activated the
remaining 37,000 HHP that was purchased in the first quarter of
2017 and two newbuild coil tubing units during the quarter.
Customers also took advantage of stabilized pricing to reduce the
inventory of drilled but uncompleted wells outstanding. In
addition, we benefitted from rate increases across all business
lines and a seasonal pick-up in rental and fishing revenues. In the
third quarter of 2016, this segment generated $49.4 million in revenue.
At September 30, 2017, Basic had
approximately 523,000 hydraulic horsepower ("HHP"), up from 518,000
HHP at the end of the previous quarter and 444,000 HHP as of
September 30, 2016. This included
413,000 of frac HHP. The entirety of the previously announced
74,000 frac HHP was fully deployed in mid-August. Weighted
average total HHP for the third quarter of 2017 was 520,000, up
from 488,000 in the second quarter of 2017. Weighted average
frac HHP was 394,000 for the third quarter of 2017.
Segment profit in the third quarter of 2017 increased by 50% to
$39.2 million compared to
$26.2 million in the prior
quarter. Segment margin for the third quarter of 2017
increased 730 basis points to 32% compared to 24% during the
previous quarter, driven predominantly by the impact of incremental
margins on the higher revenue base, improved customer mix driving
better profitability and the increase in hydraulic horsepower in
the field. During the third quarter of 2016, segment profit was
$9.1 million, or 18% of segment
revenue.
Water Logistics
Water Logistics revenue in the third quarter of 2017 increased
3% to $52.3 million compared to
$50.7 million in the prior
quarter. Segment revenues grew driven by seasonal
improvements and improved pricing, as well as an increase in
pipeline utilization and improved disposal utilization.
These improvements were partially offset by weather impacts,
including the effects of Hurricane Harvey.
The weighted average number of water logistics trucks increased
to 947 during the third quarter of 2017, compared to 943 during the
second quarter of 2017 and declined from 962 during the third
quarter of 2016. Truck hours were 483,300 in the third quarter, up
2% from 473,500 in the second quarter of 2017. Revenue per truck
was $55,300 compared to $53,800 in the second quarter as disposal
utilization increased with trucking activity. In the comparable
quarter of 2016, average revenue per truck was $49,100.
Segment profit in the third quarter of 2017 increased by 21% to
$11.1 million, compared to a profit
of $9.2 million in the second quarter
of 2017. Margins improved 300 basis points on the incremental
impact of higher revenues, offset by weather impacts of
approximately 75 basis points related to Hurricane Harvey. Segment
profit in the same period in 2016 was $7.9
million, or 17% of segment revenue.
Well Servicing
Well servicing revenues increased 3% to $54.6 million during the third quarter of 2017
compared to $53.1 million in the
prior quarter led by stable utilization rates partially offset by
weather impact of approximately $1.2
million in the third quarter. Well servicing revenues were
$43.2 million in the third quarter of
2016. Net revenues from the Taylor manufacturing operations were
$300,000 in the third quarter of 2017
compared to $905,000 in the prior
quarter and $380,000 in the third
quarter of 2016.
At September 30, 2017, the well
servicing rig count was 421, the same as the end of the prior
quarter and at September 30, 2016.
Rig hours were 165,200 in the third quarter of 2017, up 2% compared
to 162,300 hours in the second quarter of 2017 and up 21% from
136,600 hours in the comparable quarter of last year. Rig
utilization was 55% in the third quarter of 2017, compared to 54%
in the prior quarter and up from 45% in the third quarter of
2016.
Excluding revenues associated with the Taylor manufacturing
operations, revenue per well servicing rig hour was $329 in the third quarter of 2017, 2% higher
compared to $321 in the previous
quarter and up 5% from $313 reported
in the third quarter of 2016.
Segment profit in the third quarter of 2017 improved slightly to
$11.4 million, compared to
$11.3 million in the prior quarter
and increased 40% from $8.1 million
during the same period in 2016. Segment profit margin was 21% in
the third quarter of 2017, as well as in the prior quarter. Margins
remained consistent as seasonal increases in activity were offset
by the weather impact from Hurricane Harvey. In the third
quarter of 2016, segment profit was 19% of segment revenue. Segment
profit from the Taylor manufacturing operations was $14,000 in the third quarter of 2017 compared to
$89,000 in the previous quarter.
Contract Drilling
Contract drilling revenues increased by 35% to $2.8 million during the third quarter of 2017
from $2.1 million in the prior
quarter. During the third quarter of 2016, this segment generated
$1.8 million in revenue. Basic
marketed 11 drilling rigs during the third quarter of 2017, down
one from 12 in the previous quarter as well as the third quarter of
2016. Only one rig was active through the entire third
quarter. Revenue per drilling day in the third quarter of 2017 was
up 33% to $31,000 compared to
$23,300 in the previous quarter and
up from $20,100 in the third quarter
of 2016 on higher contract drilling trucking revenues.
Rig operating days during the third quarter of 2017 increased to
92 compared to 91 in the prior quarter, resulting in rig
utilization of 9% during the third quarter of 2017 compared to 8%
during the prior quarter. In the comparable period in 2016,
rig operating days were 92, producing a utilization of 8%.
Segment profit in the third quarter of 2017 was $301,000 compared to $254,000 in the prior quarter and $164,000 in the third quarter of 2016.
Segment margin for the third quarter of 2017 was 11% of segment
revenues compared to 12% in the prior quarter. Last year in
the comparable period, segment margin was 9%.
G&A Expense
Reported general and administrative ("G&A") expense for the
third quarter of 2017 was $39.2
million compared to a reported G&A expense for the
second quarter of 2017 of $36.0
million. Excluding costs associated with business
development activity, G&A expense in the third quarter of 2017
was $35.5 million, or 15% of revenue,
compared to $35.0 million, or 16% of
revenue, in the prior quarter. G&A expense in the third quarter
of 2016 was $30.1 million, or 21% of
revenue.
Interest Expense
Net interest expense for the third quarter of 2017 was
$8.9 million compared to $9.2 million in the second quarter of 2017.
These amounts include interest on Basic's term loan facility and
capital leases, as well as approximately $1.9 million of non-cash interest expense related
to the accretion of fair value discounts on the Company's
debt. Net interest expense was $24.0
million in the third quarter of 2016.
Tax Benefit
Basic's tax benefit for the third quarter of 2017 was
$1.7 million compared to $0 in the second quarter of 2017. The benefit is
a result of accelerating the utilization of alternative minimum tax
credits. The third quarter of 2017 represents an effective
tax benefit rate of 11%, compared to 0% in the prior quarter.
Excluding the valuation allowance related to the temporary
impairments of the deferred tax assets of $3.4 million, the operating effective tax benefit
of $5.7 million in the third quarter
of 2017 translated into an effective tax benefit rate of 48%.
Cash and Total Liquidity
On September 30, 2017, Basic had
cash and cash equivalents of approximately $43.1 million, compared to $34.2 million at June 30,
2017 and $34.3 million on
September 30, 2016.
On September 29, 2017, Basic
terminated its existing $75 million
credit facility and entered into a new $100
million accounts receivable securitization facility
("ABL"). This ABL is secured by Basic's accounts receivable,
with the ability to increase the size by $50
million.
On October 27, 2017, Basic entered
into an agreement to increase the aggregate commitments of the new
ABL facility by $20 million, to a
total of $120 million.
In addition, Basic had restricted cash in the amount of
$48 million at September 30, 2017.
The borrowing base of the ABL was $95
million at September 30,
2017. Borrowings under the ABL were $64 million, including $45
million for the cash collateralization of letters of credit,
$15 million for working capital
purposes, and $4 million for fees
associated with the ABL.
Availability under the ABL at September
30 was $31 million, which was
not subject to covenant restrictions.
At September 30, 2017, total
liquidity was approximately $74
million, which included the $31
million of availability under Basic's ABL previously
discussed.
Capital Expenditures
Total capital expenditures during the third quarter of 2017 were
approximately $28.9 million
(including capital leases and other financing of $11.8 million), comprised of $1.6 million for expansion projects, $26.6 million for sustaining and replacement
projects and $672,000 for other
projects. Expansion capital spending included $1.1 million for the well servicing segment,
$461,000 for the completion and
remedial services segment, and $68,000 for the water logistics segment.
Other capital expenditures were mainly for facilities and IT
infrastructure.
Basic currently anticipates 2017 capital expenditures of
$135 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
Further details are provided in the presentation for our
quarterly conference call to review third quarter 2017 results,
available in the investor relations section of our corporate
website, www.basicenergyservices.com. Basic will host a conference
call to discuss its third quarter 2017 results on Friday, November 3, 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 November 17, 2017 and may be
accessed by calling (201) 612-7415 and using pass code
13670801#. 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 4,000 employees in
more than 100 service points throughout the major oil and gas
producing regions in Texas,
Louisiana, Oklahoma, New
Mexico, Arkansas,
Kansas, California 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.
-Tables to Follow-
|
|
|
|
|
|
Basic Energy
Services, Inc.
|
Consolidated
Statements of Operations and Other Financial Data
|
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2017
|
2016
|
|
2017
|
2016
|
|
Successor
|
Predecessor
|
|
Successor
|
Predecessor
|
|
(Unaudited)
|
|
(Unaudited)
|
Income Statement
Data:
|
|
|
|
|
|
Revenues:
|
|
|
|
|
|
Completion and
remedial services
|
123,650
|
|
49,425
|
|
|
311,466
|
|
125,348
|
|
Water
logistics
|
52,333
|
|
47,178
|
|
|
153,279
|
|
142,919
|
|
Well
servicing
|
54,629
|
|
43,160
|
|
|
156,302
|
|
118,891
|
|
Contract
drilling
|
2,848
|
|
1,847
|
|
|
7,728
|
|
4,812
|
|
Total
revenues
|
233,460
|
|
141,610
|
|
|
628,775
|
|
391,970
|
|
Expenses:
|
|
|
|
|
|
Completion and
remedial services
|
84,481
|
|
40,292
|
|
|
232,932
|
|
107,941
|
|
Water
logistics
|
41,281
|
|
39,268
|
|
|
124,399
|
|
119,053
|
|
Well
servicing
|
43,219
|
|
35,028
|
|
|
125,931
|
|
101,345
|
|
Contract
drilling
|
2,547
|
|
1,683
|
|
|
6,818
|
|
4,612
|
|
General and
administrative (1)
|
39,235
|
|
30,065
|
|
|
109,478
|
|
86,706
|
|
Depreciation and
amortization
|
29,478
|
|
53,142
|
|
|
80,846
|
|
164,141
|
|
Restructuring
Costs
|
—
|
|
10,470
|
|
|
—
|
|
10,470
|
|
(Gain) loss on
disposal of assets
|
26
|
|
(128)
|
|
|
(664)
|
|
133
|
|
Goodwill
Impairment
|
—
|
|
646
|
|
|
—
|
|
646
|
|
Total
expenses
|
240,267
|
|
210,466
|
|
|
679,740
|
|
595,047
|
|
Operating
loss
|
(6,807)
|
|
(68,856)
|
|
|
(50,965)
|
|
(203,077)
|
|
Other income
(expense):
|
|
|
|
|
|
Interest
expense
|
(8,892)
|
|
(23,953)
|
|
|
(27,181)
|
|
(67,188)
|
|
Interest
income
|
5
|
|
14
|
|
|
23
|
|
23
|
|
Bargain purchase gain
on acquisition
|
—
|
|
662
|
|
|
—
|
|
662
|
|
Other
income
|
109
|
|
37
|
|
|
344
|
|
378
|
|
Loss before income
taxes
|
(15,585)
|
|
(92,096)
|
|
|
(77,779)
|
|
(269,202)
|
|
Income tax benefit
(expense)
|
1,740
|
|
(1)
|
|
|
1,366
|
|
3,883
|
|
Net loss
|
(13,845)
|
|
(92,097)
|
|
|
(76,413)
|
|
(265,319)
|
|
Loss per share of
common stock:
|
|
|
|
|
|
Basic
|
(0.53)
|
|
(2.16)
|
|
|
(2.94)
|
|
(6.32)
|
|
Diluted
|
(0.53)
|
|
(2.16)
|
|
|
(2.94)
|
|
(6.32)
|
|
|
|
|
|
|
|
Other Financial
Data:
|
|
|
|
|
|
EBITDA (2)
|
22,780
|
|
(15,015)
|
|
|
30,225
|
|
(37,896)
|
|
Adjusted EBITDA
(2)
|
26,543
|
|
(4,673)
|
|
|
37,319
|
|
(27,293)
|
|
Capital
expenditures:
|
|
|
|
|
|
Property and
equipment
|
14,550
|
|
11,346
|
|
|
48,295
|
|
22,907
|
|
|
|
|
|
|
|
|
As
of
|
|
|
|
|
September
30,
|
December
31,
|
|
|
|
|
2017
|
2016
|
|
|
|
|
(Unaudited)
|
(Audited)
|
|
|
|
Balance Sheet
Data:
|
|
|
|
|
|
Cash and cash
equivalents
|
43,168
|
|
98,875
|
|
|
|
|
Net property and
equipment
|
516,371
|
|
488,848
|
|
|
|
|
Total
assets
|
861,145
|
|
768,160
|
|
|
|
|
Total long-term
debt
|
269,330
|
|
184,752
|
|
|
|
|
Total stockholders'
equity
|
354,572
|
|
414,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
Segment
Data:
|
(Unaudited)
|
|
(Unaudited)
|
Completion and
Remedial Services
|
|
|
|
|
|
|
|
Segment profits as a
percent of revenue
|
32
|
%
|
|
18
|
%
|
|
25
|
%
|
|
14
|
%
|
|
|
|
|
|
|
|
|
Water
Logistics
|
|
|
|
|
|
|
|
Weighted average
number of fluid service trucks
|
947
|
|
|
962
|
|
|
942
|
|
|
974
|
|
Truck hours
(000's)
|
483.3
|
|
|
499.9
|
|
|
1,441.1
|
|
|
1,495.8
|
|
Revenue per fluid
services truck (000's)
|
$
|
55
|
|
|
$
|
49
|
|
|
$
|
163
|
|
|
$
|
147
|
|
Segment profits per
fluid services truck (000's)
|
$
|
12
|
|
|
$
|
8
|
|
|
$
|
31
|
|
|
$
|
25
|
|
Segment profits as a
percent of revenue
|
21
|
%
|
|
17
|
%
|
|
19
|
%
|
|
17
|
%
|
|
|
|
|
|
|
|
|
Well
Servicing
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
421
|
|
|
421
|
|
|
421
|
|
|
421
|
|
Rig hours
(000's)
|
165.2
|
|
|
136.6
|
|
|
485.1
|
|
|
358.7
|
|
Rig utilization
rate
|
55
|
%
|
|
45
|
%
|
|
54
|
%
|
|
40
|
%
|
Revenue per rig hour,
excluding manufacturing
|
$
|
329
|
|
|
$
|
313
|
|
|
$
|
319
|
|
|
$
|
314
|
|
Well servicing rig
profit per rig hour
|
$
|
69
|
|
|
$
|
60
|
|
|
$
|
62
|
|
|
$
|
49
|
|
Segment profits as a
percent of revenue
|
21
|
%
|
|
19
|
%
|
|
19
|
%
|
|
15
|
%
|
|
|
|
|
|
|
|
|
Contact
Drilling
|
|
|
|
|
|
|
|
Weighted average
number of rigs
|
11
|
|
|
12
|
|
|
11
|
|
|
12
|
|
Rig operating
days
|
92
|
|
|
92
|
|
|
318
|
|
|
274
|
|
Drilling utilization
rate
|
9
|
%
|
|
8
|
%
|
|
9
|
%
|
|
8
|
%
|
Revenue per
day
|
$
|
31,000
|
|
|
$
|
20,100
|
|
|
$
|
24,300
|
|
|
$
|
17,600
|
|
Drilling rig profit
per day
|
$
|
3,300
|
|
|
$
|
1,800
|
|
|
$
|
2,900
|
|
|
$
|
700
|
|
Segment profits as a
percent of revenue
|
11
|
%
|
|
9
|
%
|
|
12
|
%
|
|
4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes approximately
$6,302,000 and $2,550,000 of non-cash compensation expense for the
three months ended September 30, 2017 and 2016, respectively, and
$17,748,000 and $7,853,000 for the nine months ended September 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 loss) before interest, taxes, depreciation,
amortization, retention expense, due diligence for M&A
activities, restructuring costs, 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 due diligence for business
development activities;
|
|
|
•
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
September 30,
|
|
Nine months ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Successor
|
|
Predecessor
|
|
Successor
|
|
Predecessor
|
Reconciliation of
Net Loss to EBITDA:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(13,845)
|
|
|
$
|
(92,097)
|
|
|
$
|
(76,413)
|
|
|
$
|
(265,319)
|
|
Income
taxes
|
(1,740)
|
|
|
1
|
|
|
(1,366)
|
|
|
(3,883)
|
|
Net
interest expense
|
8,887
|
|
|
23,939
|
|
|
27,158
|
|
|
67,165
|
|
Depreciation and amortization
|
29,478
|
|
|
53,142
|
|
|
80,846
|
|
|
164,141
|
|
EBITDA
|
$
|
22,780
|
|
|
$
|
(15,015)
|
|
|
$
|
30,225
|
|
|
$
|
(37,896)
|
|
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, due diligence
on business development activities, and restructuring
expense:
|
Three months ended
September 30,
|
|
Nine months ended
September 30,
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
Successor
|
|
Predecessor
|
|
Successor
|
|
Predecessor
|
Reconciliation of
Net Loss to Adjusted EBITDA:
|
|
|
|
|
|
|
|
Net loss
|
$
|
(13,845)
|
|
|
$
|
(92,097)
|
|
|
$
|
(76,413)
|
|
|
$
|
(265,319)
|
|
Income
taxes
|
(1,740)
|
|
|
1
|
|
|
(1,366)
|
|
|
(3,883)
|
|
Net
interest expense
|
8,887
|
|
|
23,939
|
|
|
27,158
|
|
|
67,165
|
|
Depreciation and amortization
|
29,478
|
|
|
53,142
|
|
|
80,846
|
|
|
164,141
|
|
(Gain)
loss on disposal of assets
|
26
|
|
|
(128)
|
|
|
(664)
|
|
|
133
|
|
Retention expense
|
—
|
|
|
—
|
|
|
1,357
|
|
|
—
|
|
Due
diligence for
business development activities
|
3,737
|
|
|
—
|
|
|
3,737
|
|
|
—
|
|
Restructuring expense
|
—
|
|
|
10,470
|
|
|
2,664
|
|
|
10,470
|
|
Adjusted
EBITDA
|
$
|
26,543
|
|
|
$
|
(4,673)
|
|
|
$
|
37,319
|
|
|
$
|
(27,293)
|
|
Contacts:
|
Trey
Stolz,
|
|
VP Investor
Relations
|
|
Basic Energy
Services, Inc.
|
|
817-334-4100
|
|
|
|
Jack Lascar/ Kaitlin
Ross
|
|
Dennard ▪ Lascar
Associates
|
|
713-529-6600
|
View original
content:http://www.prnewswire.com/news-releases/basic-energy-services-reports-third-quarter-2017-results-300548994.html
SOURCE Basic Energy Services, Inc.