Keane Group, Inc. ("Keane" or the "Company") today reported
third quarter 2017 financial results.
Results and Recent Highlights
- Reported third quarter 2017 revenue of
$477.3 million, compared to second quarter 2017 of $323.1
million
- Reported third quarter 2017 net income
of $4.1 million, compared to second quarter 2017 net loss of $11.9
million
- Achieved third quarter 2017 Adjusted
EBITDA of $71.6 million, compared to second quarter 2017 of $36.0
million
- Averaged 24.7 deployed hydraulic
fracturing fleets during third quarter 2017; exited quarter with 25
deployed fleets
- Increased annualized Adjusted Gross
Profit per fleet to $14.2 million, compared to second quarter 2017
of $10.5 million
Third Quarter 2017 Financial Results
Revenue for the third quarter of 2017 totaled $477.3 million, an
increase of 48% compared to revenue for the second quarter of 2017
of $323.1 million. Reported net income for the third quarter of
2017 totaled $4.1 million, compared to a net loss of $11.9 million
for the second quarter of 2017. Excluding one-time items and other
adjustments further discussed below, net income for the third
quarter of 2017 was $17.4 million, compared to net loss of $2.0
million for the second quarter of 2017.
Adjusted EBITDA for the third quarter of 2017 totaled $71.6
million, compared to $36.0 million for the second quarter of 2017.
Adjusted Gross Profit for the third quarter of 2017 was $89.7
million, compared to $47.8 million for the second quarter of
2017.
Selling, general and administrative expenses for the third
quarter of 2017 totaled $28.6 million, compared to $22.3 million
for the second quarter of 2017. Excluding one-time items, selling,
general and administrative expenses for the third quarter of 2017
totaled $17.5 million compared to $11.9 million for the second
quarter of 2017.
“We delivered another strong quarter, including attractive
sequential growth, the deployment of one additional fleet and the
successful completion and integration of our RockPile acquisition,”
said James Stewart, Chairman and Chief Executive Officer of Keane.
“Robust demand for our services, along with strong activity across
our operational footprint, has allowed us to achieve full
utilization on our fleet with the deployment of a 26th hydraulic
fracturing fleet in early October 2017. Our year to date results
underscore the quality of our assets, the ability of our team to
execute and the benefits of our approach to partnering with the
most efficient customers, driving continued momentum into the
fourth quarter and beyond.”
“Our financial performance continues to advance as evidenced by
yet another quarterly stair-step sequential increase in our
Adjusted EBITDA from $36 million to approximately $72 million, and
attractive growth in our annualized Adjusted Gross Profit per fleet
to $14.2 million,” said Greg Powell, President and Chief Financial
Officer of Keane. “We have realized significant financial
improvements and remain optimistic about the market backdrop and
prospects. Leading-edge pricing, however, is not yet reflective of
newbuild economics and we remain committed to maintaining capital
discipline with regard to future growth.”
Completion Services
Revenue for Completion Services totaled $468.5 million for the
third quarter of 2017, an increase of 45% compared to the second
quarter of 2017 of $323.1 million, driven by contributions from the
RockPile Energy Services, LLC ("RockPile") acquisition, an
additional fleet deployment and price increases from contract
re-openers on a portion of our portfolio. Keane averaged 24.7
deployed hydraulic fracturing fleets for the third quarter of 2017,
of which, 81% was bundled with wireline. Keane exited the third
quarter of 2017 with 25 hydraulic fracturing fleets deployed.
Adjusted Gross Profit in Completion Services totaled $87.9
million for the third quarter of 2017, compared to $47.8 million
for the second quarter of 2017.
Annualized revenue per average deployed hydraulic fracturing
fleet for the third quarter of 2017 was $75.9 million, compared to
$70.6 million for the second quarter of 2017. Annualized Adjusted
Gross Profit per fleet totaled $14.2 million, an increase of 36% as
compared to $10.5 million for the second quarter of 2017.
Other Services
Revenue in Other Services for the third quarter of 2017 was $8.8
million, compared to zero for the second quarter of 2017. Financial
results for Other Services during the third quarter of 2017 reflect
further optimization of the cementing assets acquired as part of
the RockPile acquisition.
As part of Keane’s ongoing portfolio management, the company
executed the sale of 6 of its 12 workover rigs late in the third
quarter of 2017, generating approximately $7 million of cash
proceeds. Keane will continue to evaluate strategic alternatives
with regard to its remaining workover assets.
Third Quarter 2017 One-Time Items and Other
Adjustments
Adjusted EBITDA for the third quarter of 2017 excludes $13.3
million of one-time items, primarily comprised of acquisition and
integration costs associated with the RockPile transaction,
commissioning costs from the redeployment of an additional
hydraulic fracturing fleet and non-cash stock compensation
expense.
Balance Sheet and Capital
Total debt outstanding as of September 30, 2017 was $275.6
million, net of unamortized debt discounts and unamortized deferred
charges and excluding capital lease obligations, compared to $144.9
million as of June 30, 2017. Effective July 3, 2017, Keane entered
into additional term loan financing of $131.1 million, net of
unamortized debt discounts and unamortized deferred charges, to
finance the cash portion of our RockPile acquisition.
As of September 30, 2017, cash and equivalents totaled $71.7
million, compared to $75.6 million as of June 30, 2017. Total
available liquidity as of September 30, 2017 was approximately
$217.8 million, which included availability under our asset-based
credit facility. Total operating cash flow for the third quarter of
2017 was approximately $19.8 million.
“The conservative approach we take to running our business and
maintaining our balance sheet is evident in our execution,” said
Mr. Powell. “We remain disciplined with regard to acquisitions and
portfolio management, as demonstrated through the recent sale of a
portion of our workover assets. Our discipline, combined with our
execution, position us to maximize shareholder value over the near
and long-term.”
Fourth Quarter 2017 Outlook
Revenue for the fourth quarter of 2017 is expected to increase
between 5% and 15% sequentially. The sequential growth in revenue
is driven by contributions from an additional hydraulic fracturing
fleet deployed in the third quarter and a second in October 2017,
in addition to price increases from contract re-openers on a
portion of our portfolio. Keane expects to exit the fourth quarter
of 2017 at full utilization with 26 active hydraulic fracturing
fleets.
Keane expects annualized Adjusted Gross Profit per fleet for its
portfolio to increase to between $16 and $18 million on an
exit-rate basis by the end of the fourth quarter of 2017, driven by
constructive supply and demand dynamics. Keane continues to expect
its portfolio of hydraulic fracturing fleets to progress from an
average of $14.2 million in the third quarter of 2017 to these
exit-rate margins ratably throughout the fourth quarter of
2017.
Cementing and workover operations together represent a current
annual revenue on a run rate basis of $35 million to 40 million,
with 15% to 20% gross margins. Keane intends to further evaluate
these businesses with regard to opportunities for optimization and
growth, including the potential to activate its remaining idle
cementing assets.
Conference Call
On Thursday, November 2, 2017, Keane will hold a conference call
for investors at 7:30 a.m. Central Time (8:30 a.m. Eastern Time) to
discuss Keane’s third quarter 2017 results. Hosting the call will
be James C. Stewart, Chairman and Chief Executive Officer and
Gregory L. Powell, President and Chief Financial Officer. The call
can be accessed live over the telephone by dialing (877) 407-9208,
or for international callers, (201) 493-6784. A replay will be
available shortly after the call and can be accessed by dialing
(844) 512-2921, or for international callers (412) 317-6671. The
passcode for the replay is 13671193. The replay will be available
until November 16, 2017.
About Keane Group, Inc.
Headquartered in Houston, Texas, Keane is one of the largest
pure-play providers of integrated well completion services in the
U.S., with a focus on complex, technically demanding completion
solutions. Keane's primary service offerings include horizontal and
vertical fracturing, wireline perforation and logging, engineered
solutions, and cementing, as well as other value-added service
offerings. Keane owns approximately 1.2 million hydraulic
fracturing horsepower and 31 wireline trucks and provides
engineered solutions. Keane’s broad geographic footprint spans the
most prolific U.S. shale basins including the Permian, Bakken,
Marcellus/Utica, and SCOOP/STACK. Keane prides itself on its
outstanding employee culture, its efficiency and its ability to
meet and exceed the expectations of its customers and communities
in which it operates.
Definitions of Non-GAAP Financial Measures and Other
Items
Keane has included both financial measures compiled in
accordance with GAAP and certain non-GAAP financial measures in
this press release, including Adjusted EBITDA and Adjusted Gross
Profit and ratios based on these financial measures. These
measurements provide supplemental information which Keane believes
is useful to analysts and investors to evaluate its ongoing results
of operations, when considered alongside GAAP measures such as net
income and operating income. These non-GAAP financial measures
exclude the financial impact of items management does not consider
in assessing Keane’s ongoing operating performance, and thereby
facilitate review of Keane’s operating performance on a
period-to-period basis. Other companies may have different capital
structures, and comparability to Keane’s results of operations may
be impacted by the effects of acquisition accounting on its
depreciation and amortization. As a result of the effects of these
factors and factors specific to other companies, Keane believes
Adjusted EBITDA and Adjusted Gross Profit provide helpful
information to analysts and investors to facilitate a comparison of
its operating performance to that of other companies.
Adjusted EBITDA is defined as net income (loss) adjusted to
eliminate the impact of interest, income taxes, depreciation and
amortization, along with certain items management does not consider
in assessing ongoing performance. Adjusted Gross Profit is defined
as Adjusted EBITDA, further adjusted to eliminate the impact of all
activities in the Corporate segment, such as selling, general and
administrative expenses, along with cost of services that
management does not consider in assessing ongoing performance.
Forward-Looking Statements
The statements contained in this release that are not historical
facts are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. Words such as “may,”
“will,” “could,” “should,” “expect,” “plan,” “project,” “intend,”
“anticipate,” “believe,” “estimate,” “predict,” “potential,”
“pursuant,” “target,” “continue,” and similar expressions are
intended to identify such forward-looking statements. The
statements in this press release that are not historical
statements, including statements regarding the Company’s plans,
objectives, future opportunities for the Company’s services, future
financial performance and operating results and any other
statements regarding Keane's future expectations, beliefs, plans,
objectives, financial conditions, assumptions or future events or
performance that are not historical facts, are forward-looking
statements within the meaning of the federal securities laws. These
statements are subject to numerous risks and uncertainties, many of
which are beyond Keane's control, which could cause actual results
to differ materially from the results expressed or implied by the
statements. These risks and uncertainties include, but are not
limited to the operations of Keane; the effects of the business
combination of Keane and RockPile, including the combined Company’s
future financial condition, results of operations, strategy and
plans; potential adverse reactions or changes to business
relationships resulting from the completion of the RockPile
transaction; expected synergies and other benefits from the
transaction and the ability of Keane to realize such synergies and
other benefits; results of litigation, settlements and
investigations; actions by third parties, including governmental
agencies; volatility in customer spending and in oil and natural
gas prices, which could adversely affect demand for Keane's
services and their associated effect on rates, utilization, margins
and planned capital expenditures; global economic conditions;
excess availability of pressure pumping equipment, including as a
result of low commodity prices, reactivation or construction;
liabilities from operations; weather; decline in, and ability to
realize, backlog; equipment specialization and new technologies;
shortages, delays in delivery and interruptions of supply of
equipment and materials; ability to hire and retain personnel; loss
of, or reduction in business with, key customers; difficulty with
growth and in integrating acquisitions; product liability;
political, economic and social instability risk; ability to
effectively identify and enter new markets; cybersecurity risk;
dependence on our subsidiaries to meet our long-term debt
obligations; variable rate indebtedness risk; and anti-takeover
measures in our charter documents.
Additional information concerning factors that could cause
actual results to differ materially from those in the
forward-looking statements is contained from time to time in
Keane's Securities and Exchange Commission (“SEC”) filings,
including the most recently filed Forms 10-Q and 10-K. Keane's
filings may be obtained by contacting Keane or the SEC or through
Keane's website at http://www.keanegrp.com or through the SEC's
Electronic Data Gathering and Analysis Retrieval System (EDGAR) at
http://www.sec.gov. Keane undertakes no obligation to publicly
update or revise any forward-looking statement.
KEANE GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED
STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS)
(in thousands, except per share data)
Three Months Ended
September 30,
Three Months
Ended June 30,
2017 2016(1) 2017 (Unaudited)
(Unaudited) (Unaudited) Revenue $ 477,302 $ 116,753 $ 323,136
Operating costs and expenses: Cost of services 391,089 120,480
278,384 Depreciation and amortization 46,204 28,114 32,739 Selling,
general and administrative expenses 28,592 9,218 22,337 (Gain) loss
on disposal of assets 302 176 (5 ) Total operating
costs and expenses 466,187 157,988 333,455
Operating income (loss) 11,115 (41,235 ) (10,319 ) Other income
(expenses): Other income (expense), net 942 (470 ) 3,701 Interest
expense (7,195 ) (9,962 ) (4,349 ) Total other expenses (6,253 )
(10,432 ) (648 ) Income (loss) before income taxes 4,862 (51,667 )
(10,967 ) Income tax (expenses) (797 ) — (931 )
Net
income (loss) 4,065 (51,667 )
(11,898 ) Other comprehensive income (loss): Foreign
currency translation adjustments 64 (8 ) 31 Hedging activities (178
) 104 —
Total comprehensive income (loss)
$ 3,951 $ (51,571 )
$ (11,867 ) Net loss per share, basic
$ 0.04 NM $ (0.12 )
Weighted average shares, basic
111,509 NM
103,013
________________________________
(1) Condensed Consolidated and Combined
Financial Statements of Keane Group Holdings, LLC and
Subsidiaries.
NM – Not measured as Keane Group, Inc. did not consummate its
initial public offering ("IPO") until 1/25/2017.
KEANE GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED
STATEMENTS OF OPERATIONS & COMPREHENSIVE (LOSS)
(in thousands, except per share data)
For the Nine Months Ended
September 30,
2017 2016(1) (Unaudited)
(Unaudited) Revenue $ 1,040,591 $ 269,537 Operating costs and
expenses: Cost of services 893,465 273,364 Depreciation and
amortization 109,316 71,943 Selling, general and administrative
expenses 68,915 45,207 (Gain) loss on disposal of assets (137 )
(297 ) Total operating costs and expenses 1,071,559 390,217
Operating (loss) (30,968 ) (120,680 ) Other income
(expenses): Other income (expense), net 4,647 536 Interest expense
(51,905 ) (28,407 ) Total other expenses (47,258 ) (27,871 ) (Loss)
before income taxes (78,226 ) (148,551 ) Income tax (expenses)
(1,862 ) —
Net (loss) (80,088 )
(148,551 ) Other comprehensive income (loss): Foreign
currency translation adjustments 108 57 Hedging activities 6
1,338
Total comprehensive (loss) $
(79,974 ) $ (147,156 )
Net loss per share, basic
$ (0.77 ) NM
Weighted average shares, basic
104,496 NM
________________________________
(1) Condensed Consolidated and Combined
Financial Statements of Keane Group Holdings, LLC and
Subsidiaries.
NM – Not measured as Keane Group, Inc. did not consummate its IPO
until 1/25/2017.
KEANE GROUP, INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED AND COMBINED
BALANCE SHEETS
(in thousands)
ASSETS September
30, December 31, 2017 2016(1)
(Unaudited) (Audited) Current Assets: Cash and cash equivalents $
71,729 $ 48,920 Accounts receivable 219,166 66,277 Inventories, net
39,381 15,891 Assets held for sale 9,148 — Prepaid and other
current assets 19,415 14,618 Total current assets 358,839 145,706
Property and equipment, net 440,602 294,209 Goodwill 144,875 50,478
Intangible assets 59,314 44,015 Other noncurrent assets 5,597 2,532
Total Assets $ 1,009,227 $
536,940 LIABILITIES AND OWNERS’ EQUITY Current
liabilities: Accounts payable $ 110,299 $ 48,484 Accrued expenses
124,066 42,892 Current maturities of capital lease obligations
2,575 2,633 Current maturities of long-term debt 1,396 2,512 Stock
based compensation - current 4,281 — Deferred revenue 10,009 —
Other current liabilities 1,525 3,171 Total current liabilities
254,151 99,692 Capital lease obligations, less current maturities
5,063 5,442 Long-term debt, net(2) less current maturities 274,172
267,238 Stock based compensation – non-current 4,281 — Other
non-current liabilities 6,607 2,316 Total non-current liabilities
290,123 274,996
Total liabilities 544,274
374,688 Owners’ equity: Members’ equity — 453,810
Stockholders’ equity 538,945 — Retained (deficit) (71,319)
(288,771) Accumulated other comprehensive (loss) (2,673) (2,787)
Total owners’ equity 464,953 162,252 Total
liabilities and owners’ equity $ 1,009,227
$ 536,940
________________________________
(1) Condensed Consolidated and Combined Financial Statements
of Keane Group Holdings, LLC and Subsidiaries. (2) Net of
unamortized deferred financing costs and unamortized debt
discounts.
KEANE GROUP, INC. AND
SUBSIDIARIES
ADDITIONAL SELECTED FINANCIAL AND
OPERATING DATA
(unaudited, amounts in thousands, except
for non-financial statistics)
Three Months Ended
September 30,
Three MonthsEndedJune
30,
2017 2016 2017 Completion
Services:
Revenues $ 468,479 $ 115,694 $ 323,136 Cost of services 384,007
117,653 278,384 Gross profit 84,472 (1,959 ) 44,752 Depreciation,
amortization and administrative expenses, and impairment 41,542
24,245 28,534 Operating income (loss) $ 42,362 $ (26,667 ) $ 15,770
Average hydraulic fracturing fleets deployed 24.7 13.0 18.3
Average hydraulic fracturing fleet utilization 99 % 57 % 80 %
Wireline - fracturing fleet bundling percentages 81 % 46 % 64 %
Average annualized revenue per fleet deployed $ 75,867 $ 35,598 $
70,631 Average annualized adjusted gross profit per fleet deployed
$ 14,239 $ 255 $ 10,450 Adjusted gross profit $ 87,926 $ 830 $
47,807
Other Services (1): Revenues $
8,823 $ 1,059 $ — Cost of services 7,082 2,827 — Gross profit
(loss) 1,741 (1,768 ) — Depreciation, amortization and
administrative expenses, and impairment 1,586 630 1,254 Operating
income (loss) $ 1,055 $ (2,398 ) $ (1,247 ) Adjusted gross
profit (loss) $ 1,798 $ (804 ) $ — Number of working days - coiled
tubing NM $ 73 NM Revenue per working days - coiled tubing NM $ 15
NM
________________________________
(1) Other Services segment includes
workover rigs and cementing divisions.
NM - Not meaningful to be disclosed.
KEANE GROUP, INC. AND
SUBSIDIARIES
ADDITIONAL SELECTED FINANCIAL AND
OPERATING DATA
(unaudited, amounts in thousands, except
for non-financial statistics)
For the Nine Months Ended
September 30,
2017 2016 Completion Services:
Revenues $ 1,031,768 $ 262,881 Cost of services 886,383 262,265
Gross profit 145,385 616 Depreciation, amortization and
administrative expenses, and impairment 96,674 65,469 Operating
income (loss) $ 49,807 $ (65,093 ) Average hydraulic
fracturing fleets deployed 19.5 9.6 Average hydraulic fracturing
fleet utilization 78 % 42 % Wireline - fracturing fleet bundling
percentages 69 % 49 % Average annualized revenue per fleet deployed
$ 70,548 $ 36,511 Average annualized adjusted gross profit per
fleet deployed $ 10,944 $ 2,510 Adjusted gross profit $ 160,059 $
18,071
Other Services (1): Revenues $
8,823 $ 6,656 Cost of services 7,082 11,099 Gross profit (loss)
1,741 (4,443 ) Depreciation, amortization and administrative
expenses, and impairment 4,323 1,985 Operating (loss) $ (1,894 ) $
(6,428 ) Adjusted gross profit (loss) $ 1,798 $ (3,479 )
Number of working days - coiled tubing NM 255 Revenue per working
days - coiled tubing NM 26
________________________________
(1) Other Services segment includes coiled
tubing, workover rigs and cementing divisions.
NM - Not meaningful to be disclosed.
KEANE GROUP, INC. AND
SUBSIDIARIES
NON-U.S. GAAP FINANCIAL
MEASURES
(unaudited, in thousands)
Three Months Ended September
30, 2017
Completion
Services
Other
Services
Corporate and
Other
Total Net Income (loss) $ 42,362
$ 1,055 $ (39,352 ) $
4,065 Interest expense, net — — 7,195 7,195 Income tax
(benefits) expense — — 797 797 Depreciation and amortization 41,542
1,586 3,076 46,204
EBITDA $
83,904 $ 2,641 $ (28,284
) $ 58,261 Plus Management Adjustments:
Acquisition, integration and expansion (1) 1,835 57 5,998 7,890
IPO-related (2) — — 98 98 Fleet commissioning costs 1,619 — — 1,619
Non-cash stock compensation (3) — — 3,263 3,263 Other (4) — —
470 470
Adjusted EBITDA $
87,358 $ 2,698 $ (18,455
) $ 71,601 Other income (expense) — — (942 )
(942 ) (Gain) loss on disposal of assets 568 (900 ) 634 302
Selling, general and administrative — — 28,592 28,592 Less
Management Adjustments not associated with Cost of Services — —
(9,829 ) (9,829 )
Adjusted gross profit $
87,926 $ 1,798 $ — $
89,724
________________________________
(1) Represents primarily professional fees, integration
costs, lease termination costs, severance and other costs
associated with our acquisition and integration of RockPile. (2)
Represents fees related to the organizational (legal entities)
restructuring to ready the Company for its IPO. These expenses were
recorded in selling, general and administrative expenses. (3)
Represents non-cash amortization of equity awards issued under
Keane Group, Inc.’s Equity and Incentive Award Plan (“Plan”).
According to the Plan, the Compensation Committee of the Board of
Directors can approve awards in the form of restricted stock,
restricted stock units, and/or other deferred compensation.
Consistent with prior policy, amortization of awards is made
ratably over the vesting periods, beginning with the grant date,
based on the total fair value determined on grant date and recorded
in selling, general and administrative expenses. (4) Represents an
adjustment to a contingent accrual and readiness costs associated
with Keane’s initial internal controls design documentation for
Sarbanes-Oxley compliance, using COSO 2013 framework, beginning in
2018. These costs were recorded in selling, general and
administrative expenses. Also represents net (gain) loss on
disposals of assets, which is recorded in (gain) loss on disposal
of assets.
KEANE GROUP, INC. AND
SUBSIDIARIES
NON-U.S. GAAP FINANCIAL
MEASURES
(unaudited, in thousands)
Three Months Ended June 30,
2017
Completion
Services
Other
Services
Corporate
and Other
Total Net Income (loss) $ 15,770
$ (1,247 ) $ (26,421 )
$ (11,898 ) Interest expense, net — — 4,349
4,349 Income tax (benefits) expense — — 931 931 Depreciation and
amortization 28,534 1,254 2,951 32,739
EBITDA $ 44,304 $ 7 $
(18,190 ) $ 26,121 Plus Management
Adjustments: Acquisition, integration and expansion (1) — — (1,194
) (1,194 ) IPO-related (2) — — 109 109 Fleet commissioning costs
3,055 — — 3,055 Non-cash stock compensation (3) — — 2,933 2,933
Other (4) — — 4,970 4,970
Adjusted
EBITDA $ 47,359 $ 7 $
(11,372 ) $ 35,994 Other income
(expense) — — (3,701 ) (3,701 ) (Gain) loss on disposal of assets
448 (7 ) (445 ) (4 ) Selling, general and administrative — — 22,337
22,337 Less Management Adjustments not associated with Cost of
Services — — (6,819 ) (6,819 )
Adjusted gross profit
$ 47,807 $ — $ — $
47,807
________________________________
(1) Represents professional fees, integration costs, lease
termination costs, severance, start-up and other costs associated
with the acquisition and integration of RockPile and a one-time
indemnification receipt related to the acquisition of a majority of
the U.S. assets and assumed certain liabilities of Trican Well
Service, L.P. (2) Represents miscellaneous costs associated with
the marketing of the IPO for Keane Group, Inc. (3) Represents
non-cash amortization of equity awards issued under Keane Group,
Inc.’s Equity and Incentive Award Plan (“Plan”). According to the
Plan, the Compensation Committee of the Board of Directors can
approve awards in the form of restricted stock, restricted stock
units, and/or other deferred compensation. Consistent with prior
policy, amortization of awards is made ratably over the vesting
periods, beginning with the grant date, based on the total fair
value determined on grant date and recorded in selling, general and
administrative expenses. (4) Represents contingency accruals
related to certain litigation claims. These costs were recorded in
selling, general and administrative expenses.
KEANE GROUP, INC. AND
SUBSIDIARIES
NON-U.S. GAAP FINANCIAL
MEASURES
(unaudited, in thousands)
Three Months Ended September
30, 2016
Completion
Services
Other
Services
Corporate and
Other
Total Net Income (loss) $ (26,667
) $ (2,398 ) $ (22,602
) $ (51,667 ) Interest expense, net — —
9,962 9,962 Income tax (benefits) expense — — — — Depreciation and
amortization 24,245 630 3,239 28,114
EBITDA $ (2,422 ) $
(1,768 ) $ (9,401 ) $
(13,591 ) Plus Management Adjustments: Acquisition,
integration and expansion (1) (1,378 ) 225 1,607 454 IPO-related
(2) — — 232 232 Fleet commissioning costs 4,167 739 — 4,906
Non-cash stock compensation (3) — — (15 ) (15 )
Adjusted EBITDA $ 367 $ (804
) $ (7,577 ) $ (8,014
) Other income (expense) — — 470 470 (Gain) loss on disposal
of assets 463 — (287 ) 176 Selling, general and administrative — —
9,218 9,218 Less Management Adjustments not associated with Cost of
Services — — (1,824 ) (1,824 )
Adjusted gross
profit $ 830 $ (804 )
$ — $ 26
________________________________
(1) Represents professional fees, integration costs, lease
termination costs, and other costs associated with the acquisition
and integration of a majority of the U.S. assets and assumed
certain liabilities of Trican Well Service, L.P. (2) Represents
fees and other miscellaneous expenses required to carry out the
reporting, prior years' audits and organizational (legal entities)
restructuring to ready the Company for its initial public offering
and the eventual consummation of the offering. These expenses were
recorded in selling, general and administrative expenses. (3)
Represents adjustments to the non-cash profit interests related to
Keane Group Holdings, LLC in 2016. These costs were recorded in
selling, general and administrative expenses.
KEANE GROUP, INC. AND
SUBSIDIARIES
NON-U.S. GAAP FINANCIAL
MEASURES
(unaudited, in thousands)
Nine Months Ended
September 30, 2017
Completion
Services
Other
Services
Corporate and
Other
Total Net Income (loss) $ 49,807
$ (1,894 ) $ (128,001 )
$ (80,088 ) Interest expense, net — — 51,905
51,905 Income tax (benefits) expense — — 1,862 1,862 Depreciation
and amortization 96,674 4,323 8,319 109,316
EBITDA $ 146,481 $ 2,429
$ (65,915 ) $ 82,995 Plus
Management Adjustments: Acquisition, integration and expansion (1)
1,835 57 5,786 7,678 IPO-related (2) 1,266 — 4,619 5,885 Fleet
commissioning costs 11,574 — 197 11,771 Non-cash stock compensation
(3) — — 7,334 7,334 Other (4) — — 5,031 5,031
Adjusted EBITDA $ 161,156 $
2,486 $ (42,948 ) $
120,694 Other income (expense) — — (4,647 ) (4,647 ) (Gain)
loss on disposal of assets (1,096 ) (688 ) 1,647 (137 ) Selling,
general and administrative — — 68,915 68,915 Less Management
Adjustments not associated with Cost of Services — —
(22,967 ) (22,967 )
Adjusted gross profit $
160,060 $ 1,798 $ — $
161,858
________________________________
(1) Represents primarily professional fees, due diligence
expenses and other costs associated with the acquisition of
RockPile, the acquisition of a majority of the U.S. assets and
assumed certain liabilities of Trican Well Service, L.P. and costs
associated with the wind-down of certain other acquisitions. (2)
Represents fees and other miscellaneous expenses required to carry
out the reporting, prior years' audits and organizational (legal
entities) restructuring to ready the Company for its IPO and the
eventual consummation of the offering. These expenses were recorded
in selling, general and administrative expenses. Also represents
one-time IPO bonuses paid out to key operational and corporate
employees; recorded $1.3 million as cost of services for operations
employees, while the remaining was recorded in selling, general and
administration expenses. The bonuses were paid out during the first
quarter of 2017. (3) Represents non-cash amortization of equity
awards issued under Keane Group, Inc.’s Equity and Incentive Award
Plan (“Plan”). According to the Plan, the Compensation Committee of
the Board of Directors can approve awards in the form of restricted
stock, restricted stock units, and/or other deferred compensation.
Consistent with prior policy, amortization of awards is made
ratably over the vesting periods, beginning with the grant date,
based on the total fair value determined on grant date and recorded
in selling, general and administrative expenses. (4) Represents
contingency accruals related to certain litigation claims and
readiness costs associated with Keane’s initial internal controls
design documentation for Sarbanes-Oxley compliance, using COSO 2013
framework, beginning in 2018. These costs were recorded in selling,
general and administrative expenses. Also represents net (gain)
loss on disposals of assets, which is recorded in (gain) loss on
disposal of assets.
KEANE GROUP, INC. AND
SUBSIDIARIES
NON-U.S. GAAP FINANCIAL
MEASURES
(unaudited, in thousands)
Nine Months Ended September
30, 2016
Completion
Services
Other
Services
Corporate and
Other
Total Completions Other Corporate
Consolidated Net Income (loss) $
(65,093 ) $ (6,428 ) $
(77,030 ) $ (148,551 ) Interest
expense, net — — 28,407 28,407 Income tax (benefits) expense — — —
— Depreciation and amortization 65,469 1,985 4,489
71,943
EBITDA $ 376 $
(4,443 ) $ (44,134 ) $
(48,201 ) Plus Management Adjustments: Acquisition,
integration and expansion (1) 13,155 225 24,580 37,960 IPO-related
(2) — — 262 262 Fleet commissioning costs 4,299 739 — 5,038
Non-cash stock compensation (3) — — 1,826 1,826 Other (4) —
— (1,099 ) (1,099 )
Adjusted EBITDA $
17,830 $ (3,479 ) $
(18,565 ) $ (4,214 ) Other
income (expense) — — (536 ) (536 ) (Gain) loss on disposal of
assets 239 — (536 ) (297 ) Selling, general and administrative — —
45,207 45,207 Less Management Adjustments not associated with Cost
of Services — — (25,570 ) (25,570 )
Adjusted gross
profit $ 18,069 $ (3,479 )
$ — $ 14,590
________________________________
(1) Represents primarily professional fees, integration
costs, lease termination costs, severance, start-up and other costs
associated with the acquisition of a majority of the U.S. assets
and assumed certain liabilities of Trican Well Service, L.P. We
also incurred costs associated with the wind-down of our Canadian
operations in the earlier months of 2016. (2) Represents fees and
other miscellaneous expenses required to carry out the reporting,
prior years' audits and organizational (legal entities)
restructuring to ready the Company for its IPO and the eventual
consummation of the offering. These expenses were recorded in
selling, general and administrative expenses. (3) Represents
recognition of the grants of non-cash profit interests related to
Keane Group Holdings, LLC in 2016. (4) Represents net (gain) loss
from the disposals of assets, which is recorded in (gain) loss on
disposal of assets.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20171101006963/en/
Investor Relations(713) 893-3602Marc Silverberg,
ICRmarc.silverberg@icrinc.com
Keane (NYSE:FRAC)
Historical Stock Chart
From Mar 2024 to Apr 2024
Keane (NYSE:FRAC)
Historical Stock Chart
From Apr 2023 to Apr 2024
