Nuverra Environmental Solutions, Inc. (NYSE American: NES)
(“Nuverra,” the “Company,” “we,” “us” or “our”) today announced
financial and operating results for the first quarter ended March
31, 2020.
SUMMARY OF FINANCIAL RESULTS
- Revenue for the first quarter of 2020 was $37.9 million
compared to $42.6 million for the first quarter of 2019.
- Net loss for the first quarter of 2020 was $23.0 million
compared to a net loss of $6.4 million for the first quarter of
2019, primarily a result of $15.6 million long-lived asset
impairment charges taken in the first quarter of 2020.
- For the first quarter of 2020, adjusted EBITDA decreased $2.6
million to $1.9 million versus $4.5 million for the first quarter
of 2019 due to reduced activity and volumes mostly attributable to
lower levels of spending by our customers stemming from a
significantly lower commodity price environment.
- During the first quarter of 2020, the Company generated net
cash provided by operating activities of $7.4 million primarily
from an increase in operating assets and liabilities.
- Principal payments on debt and finance leases during the first
quarter of 2020 totaled $1.4 million.
- The Company invested $1.4 million in gross capital expenditures
during the first quarter of 2020. This is expected to satisfy a
significant portion of our anticipated 2020 capital expenditure
spending needs.
- Safety scores in the first quarter of 2020 continued to reflect
the safe operational trend achieved throughout 2019.
“Leading up to the COVID-19 pandemic and the mid-March crude oil
price collapse, our business had been slowing. We noticed reduced
customer drilling and completion activity in November of 2019 and
began taking steps to adjust the cost structure of the business.
The first quarter of 2020 was softer than the first quarter of
2019, but we generated cash from operations and from working
capital and maintained stable liquidity. However, the reality of
what has happened since mid-March paints a very different story,
and companies like Nuverra that provide services for E&P
companies are facing challenging times. Crude oil prices in U.S.
markets have dropped significantly, oil logistics and storage have
been challenged, customers have filed for bankruptcy, E&P
companies in the Bakken shale region are estimated to have shut-in
approximately 35% of daily crude oil production, and the domestic
land rig count fell to 266 on June 19th. Debt and equity investors
are carefully scrutinizing all companies in the sector. We are
fortunate to have operations in two of the gassier basins
(Haynesville and Marcellus/Utica). Those businesses have stayed
relatively steady during the recent crisis. Recently, oil prices
have improved and some producers are turning wells back on, but we
have not noticed any appreciable pick-up in the activity that
drives our business.
Starting in the first quarter of 2020 and continuing to the
present, we have been focused on the following key objectives:
i) executing our work efficiently and providing consistently
high levels of customer service;
ii) managing costs aggressively and focusing on liquidity;
and
iii) identifying new commercial opportunities as some of our
competitors falter and leave the market.
It is stormy like most of us have never seen, and we are working
hard to be a strong and integral partner to our customers. We have
strong and well-recognized franchises in each of our markets and
our customers have in many cases been relying on us more,” said
Charlie Thompson, Chief Executive Officer.
FIRST QUARTER 2020 RESULTS
When compared to the first quarter of 2019, first quarter of
2020 revenue decreased by 11.0%, or $4.7 million, due to lower
activity levels in water transport services and disposal services
across all three divisions. Primary drivers for this decrease were
lower commodity prices for both oil and natural gas, which
decreased 66% and 37%, respectively, over this time period, leading
to a decline in overall customer activity.
In the Rocky Mountain division, revenue declined approximately
5.7% in the first quarter of 2020 compared to the first quarter of
2019 as a result of a general slowdown in the region. The largest
contributors to the decline in revenue consisted of declines in
water transport revenues from lower trucking volumes with fewer
rigs operating in the area, a 2.5% decrease in average barrels per
day disposed in our salt water disposal wells and a 3.4% decline in
rental revenues due to lower utilization. This was partially offset
by disposal volumes at our landfill, which increased by 3,844 tons
(or 8%) during the current year as we experienced drilling activity
in close proximity to our facility.
In the Northeast division, revenue declined approximately 17.3%,
or $2.0 million, in the first quarter of 2020 compared to the first
quarter of 2019 due to decreases in disposal services. The lower
activity levels are driven by both the significant decline in
natural gas prices and the continued industry trend of water reuse.
Water reuse inherently reduces trucking activity due to shorter
hauling distances as water is being transported between well sites
rather than to disposal wells and additionally decreases overall
disposal volumes. For our trucking services, the average number of
drivers during the quarter decreased 15% from the prior year and
total billable hours were down 4.0% from the prior year.
In the Southern division, revenue declined approximately 20.8%,
or $1.2 million, in the first quarter of 2020 compared to the first
quarter of 2019 mostly as a result of lower disposal revenues for
wells, both connected and not connected to pipelines. Volumes
received in our disposal wells not connected to our pipeline
decreased by an average of 7,091 barrels per day (or 22.1%) versus
the prior year, and volumes received in the disposal wells
connected to the pipeline decreased by an average of 10,569 barrels
per day (or 21.9%) versus the prior year.
Total costs and expenses for the first quarter of 2020 and 2019
were $60.0 million and $47.3 million, respectively. Total costs and
expenses, adjusted for special items, for the first quarter of 2020
were $44.1 million, or a 6.9% decrease, when compared with $47.3
million in the first quarter of 2019. This is primarily a result of
lower activity levels for water transport services, resulting in
decreases in compensation costs and fleet-related expenses.
Net loss for the first quarter of 2020 was $23.0 million, an
increase of $16.7 million as compared to a net loss for the first
quarter of 2019 of $6.4 million. For the first quarter of 2020, the
Company reported a net loss, adjusted for special items, of $7.3
million. This compares with a net loss, adjusted for special items,
of $6.1 million in the first quarter of 2019.
Adjusted EBITDA for the first quarter of 2020 was $1.9 million,
a decrease of $2.6 million as compared to adjusted EBITDA for the
first quarter of 2019 of $4.5 million. The decrease is a function
of the reasons discussed previously, with primary drivers being the
loss of a sizable customer’s pipeline volumes in the Southern
region and lower saltwater disposal volumes and rental equipment
utilization in the Rocky Mountain region, all of which are higher
margin lines of business relative to trucking. First quarter of
2020 adjusted EBITDA margin was 4.9%, compared with 10.6% in the
first quarter of 2019 driven primarily by lower margin work in 2020
and property tax reductions in 2019 that were not repeated in
2020.
Net cash provided by operating activities for the first quarter
of 2020 was $7.4 million, while capital expenditures net of asset
sales consumed cash of $1.2 million. Asset sales were related to
unused or under-utilized assets. Gross capital expenditures for the
first quarter of 2020 were $1.4 million. Net cash used in financing
activities was $1.4 million in the first quarter of 2020,
consisting primarily of principal and interest payments on debt and
finance lease payments.
About Nuverra
Nuverra Environmental Solutions, Inc. provides water logistics
and oilfield services to customers focused on the development and
ongoing production of oil and natural gas from shale formations in
the United States. Our services include the delivery, collection,
and disposal of solid and liquid materials that are used in and
generated by the drilling, completion, and ongoing production of
shale oil and natural gas. We provide a suite of solutions to
customers who demand safety, environmental compliance and
accountability from their service providers. Find additional
information about Nuverra in documents filed with the U.S.
Securities and Exchange Commission (“SEC”) at
http://www.sec.gov.
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of Section 27A of the United States Securities Act of
1933, as amended, and Section 21E of the United States Securities
Exchange Act of 1934, as amended. You can identify these and other
forward-looking statements by the use of words such as
“anticipates,” “expects,” “intends,” “plans,” “predicts,”
“believes,” “seeks,” “estimates,” “may,” “might,” “will,” “should,”
“would,” “could,” “potential,” “future,” “continue,” “ongoing,”
“forecast,” “project,” “target” or similar expressions, and
variations or negatives of these words.
These statements relate to our expectations for future events
and time periods. All statements other than statements of
historical fact are statements that could be deemed to be
forward-looking statements, and any forward-looking statements
contained herein are based on information available to us as of the
date of this press release and our current expectations, forecasts
and assumptions, and involve a number of risks and uncertainties.
Accordingly, forward-looking statements should not be relied upon
as representing our views as of any subsequent date. Future
performance cannot be ensured, and actual results may differ
materially from those in the forward-looking statements. Some
factors that could cause actual results to differ include, among
others: the severity, magnitude and duration of the coronavirus
disease 2019 ("COVID-19") pandemic and oil price declines,
including impacts on our business, results of operations and
financial condition; financial results that may be volatile and may
not reflect historical trends due to, among other things, changes
in commodity prices or general market conditions, acquisition and
disposition activities, fluctuations in consumer trends, pricing
pressures, transportation costs, changes in raw material or labor
prices or rates related to our business and changing regulations or
political developments in the markets in which we operate; risks
associated with our indebtedness, including changes to interest
rates, decreases in our borrowing availability, our ability to
manage our liquidity needs and to comply with covenants under our
credit facilities, including as a result of COVID-19 and oil price
declines; the loss of one or more of our larger customers;
difficulties in successfully executing our growth initiatives,
including identifying and completing acquisitions and divestitures,
successfully integrating acquired business operations, and
identifying and managing risks inherent in acquisitions and
divestitures, as well as differences in the type and availability
of consideration or financing for such acquisitions and
divestitures; natural disasters, such as hurricanes, earthquakes
and floods, pandemics (including COVID-19) or acts of terrorism, or
extreme weather conditions, that may impact our business locations,
assets, including wells or pipelines, distribution channels, or
which otherwise disrupt our or our customers' operations or the
markets we serve; our ability to attract and retain key executives
and qualified employees in strategic areas of our business; our
ability to attract and retain a sufficient number of qualified
truck drivers in light of industry-wide driver shortages and
high-turnover; the availability of less favorable credit and
payment terms due to changes in industry condition or our financial
condition, which could constrain our liquidity and reduce
availability under our revolving credit facility; higher than
forecasted capital expenditures to maintain and repair our fleet of
trucks, tanks, equipment and disposal wells; control of costs and
expenses; changes in customer drilling, completion and production
activities, operating methods and capital expenditure plans,
including impacts due to low oil and/or natural gas prices or the
economic or regulatory environment; risks associated with the
limited trading volume of our common stock on the NYSE American
Stock Exchange, including potential fluctuation in the trading
prices of our common stock; the effects of our completed
restructuring on the Company and the interest of various
constituents; risks and uncertainties associated with our completed
restructuring process, including the outcome of a pending appeal of
the order confirming the plan of reorganization; risks associated
with the reliance on third-party analyst and expert market
projections and data for the markets in which we operate; present
and possible future claims, litigation or enforcement actions or
investigations; risks associated with changes in industry practices
and operational technologies and the impact on our business; risks
associated with the operation, construction, development and
closure of saltwater disposal wells, solids and liquids
transportation assets, landfills and pipelines, including access to
additional locations and rights-of-way, permitting and licensing,
environmental remediation obligations, unscheduled delays or
inefficiencies and reductions in volume due to micro- and
macro-economic factors or the availability of less expensive
alternatives; the effects of competition in the markets in which we
operate, including the adverse impact of competitive product
announcements or new entrants into our markets and transfers of
resources by competitors into our markets; changes in economic
conditions in the markets in which we operate or in the world
generally, including as a result of political uncertainty; reduced
demand for our services due to regulatory or other influences
related to extraction methods such as hydraulic fracturing, shifts
in production among shale areas in which we operate or into shale
areas in which we do not currently have operations; the unknown
future impact of changes in laws and regulation on waste management
and disposal activities, including those impacting the delivery,
storage, collection, transportation, treatment and disposal of
waste products, as well as the use or reuse of recycled or treated
products or byproducts; and risks involving developments in
environmental or other governmental laws and regulations in the
markets in which we operate and our ability to effectively respond
to those developments including laws and regulations relating to
oil and natural gas extraction businesses, particularly relating to
water usage, and the disposal and transportation of liquid and
solid wastes.
The forward-looking statements contained, or incorporated by
reference, herein are also subject generally to other risks and
uncertainties that are described from time to time in the Company’s
filings with the SEC. Readers are cautioned not to place undue
reliance on these forward-looking statements, which reflect
management’s views as of the date of this press release. The
Company undertakes no obligation to update any such forward-looking
statements, whether as a result of new information, future events,
changes in expectations or otherwise. Additional risks and
uncertainties are disclosed from time to time in the Company’s
filings with the SEC, including our Annual Reports on Form 10-K,
Quarterly Reports on Form 10-Q, and Current Reports on Form
8-K.
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share amounts)
(Unaudited)
Three Months Ended
March 31,
2020
2019
Revenue:
Service revenue
$
34,471
$
39,001
Rental revenue
3,471
3,626
Total revenue
37,942
42,627
Costs and expenses:
Direct operating expenses
31,476
32,557
General and administrative expenses
4,924
5,475
Depreciation and amortization
7,989
9,135
Impairment of long-lived assets
15,579
117
Total costs and expenses
59,968
47,284
Operating loss
(22,026
)
(4,657
)
Interest expense, net
(1,160
)
(1,421
)
Other income, net
142
25
Reorganization items, net
—
(223
)
Loss before income taxes
(23,044
)
(6,276
)
Income tax expense
—
(79
)
Net loss
$
(23,044
)
$
(6,355
)
Loss per common share:
Net loss per basic common share
$
(1.46
)
$
(0.41
)
Net loss per diluted common share
$
(1.46
)
$
(0.41
)
Weighted average shares outstanding:
Basic
15,754
15,550
Diluted
15,754
15,550
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands)
(Unaudited)
March 31,
December 31,
2020
2019
Assets
Cash and cash equivalents
$
9,888
$
4,788
Restricted cash
579
922
Accounts receivable, net
22,703
26,493
Inventories
3,045
3,177
Prepaid expenses and other receivables
3,065
3,264
Other current assets
46
231
Assets held for sale
2,013
2,664
Total current assets
41,339
41,539
Property, plant and equipment, net
169,959
190,817
Operating lease assets
2,446
2,886
Equity investments
35
39
Intangibles, net
526
640
Other assets
149
178
Total assets
$
214,454
$
236,099
Liabilities and Shareholders’
Equity
Accounts payable
$
6,098
$
5,633
Accrued and other current liabilities
11,908
10,064
Current portion of long-term debt
19,871
6,430
Total current liabilities
37,877
22,127
Long-term debt
15,344
30,005
Noncurrent operating lease liabilities
1,387
1,457
Deferred income taxes
90
91
Long-term contingent consideration
500
500
Other long-term liabilities
7,619
7,487
Total liabilities
62,817
61,667
Commitments and contingencies
Shareholders’ equity:
Preferred stock
—
—
Common stock
158
158
Additional paid-in capital
337,918
337,628
Treasury stock
(477
)
(436
)
Accumulated deficit
(185,962
)
(162,918
)
Total shareholders’ equity
151,637
174,432
Total liabilities and shareholders’
equity
$
214,454
$
236,099
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31,
2020
2019
Cash flows from operating
activities:
Net loss
$
(23,044
)
$
(6,355
)
Adjustments to reconcile net loss to net
cash provided by (used in) operating activities:
Depreciation and amortization
7,989
9,135
Amortization of debt issuance costs,
net
41
206
Stock-based compensation
290
852
Impairment of long-lived assets
15,579
117
Gain on disposal of property, plant and
equipment
(100
)
(858
)
Bad debt recoveries
—
(141
)
Change in fair value of derivative warrant
liability
—
41
Deferred income taxes
—
70
Other, net
246
29
Changes in operating assets and
liabilities:
Accounts receivable
3,790
2,944
Prepaid expenses and other receivables
199
(1,104
)
Accounts payable and accrued
liabilities
2,139
(6,735
)
Other assets and liabilities, net
284
1,294
Net cash provided by (used in) operating
activities
7,413
(505
)
Cash flows from investing
activities:
Proceeds from the sale of property, plant
and equipment
176
3,665
Purchases of property, plant and
equipment
(1,413
)
(3,626
)
Net cash (used in) provided by investing
activities
(1,237
)
39
Cash flows from financing
activities:
Payments on First and Second Lien Term
Loans
(823
)
(1,102
)
Proceeds from Revolving Facility
43,281
51,037
Payments on Revolving Facility
(43,281
)
(51,037
)
Payments on Bridge Term Loan
—
(31,382
)
Proceeds from the issuance of stock
—
31,057
Payments on finance leases and other
financing activities
(596
)
(787
)
Net cash used in financing activities
(1,419
)
(2,214
)
Change in cash, cash equivalents and
restricted cash
4,757
(2,680
)
Cash and cash equivalents, beginning of
period
4,788
7,302
Restricted cash, beginning of period
922
656
Cash, cash equivalents and restricted
cash, beginning of period
5,710
7,958
Cash and cash equivalents, end of
period
9,888
3,949
Restricted cash, end of period
579
1,329
Cash, cash equivalents and restricted
cash, end of period
$
10,467
$
5,278
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND
SUBSIDIARIES NON-GAAP RECONCILIATIONS (In thousands)
(Unaudited)
This press release contains non-GAAP financial measures as
defined by the rules and regulations of the United States
Securities and Exchange Commission. A non-GAAP financial measure is
a numerical measure of a company’s historical or future financial
performance, financial position or cash flows that excludes
amounts, or is subject to adjustments that have the effect of
excluding amounts, that are included in the most directly
comparable measure calculated and presented in accordance with GAAP
in the statements of operations or balance sheets of the Company;
or includes amounts, or is subject to adjustments that have the
effect of including amounts, that are excluded from the most
directly comparable measure so calculated and presented.
Reconciliations of these non-GAAP financial measures to their
comparable GAAP financial measures are included in the attached
financial tables.
These non-GAAP financial measures are provided because
management of the Company uses these financial measures in
evaluating the Company’s ongoing financial results and trends.
Management uses this non-GAAP information as an indicator of
business results, and evaluates overall performance with respect to
such indicators. Management believes that excluding items such as
acquisition expenses, amortization of intangible assets,
stock-based compensation, asset impairments, restructuring charges,
expenses related to litigation and resolution of lawsuits, and
other charges, which may or may not be non-recurring, among other
items that are inconsistent in amount and frequency (as with
acquisition expenses), or determined pursuant to complex formulas
that incorporate factors, such as market volatility, that are
beyond our control (as with stock-based compensation), for purposes
of calculating these non-GAAP financial measures facilitates a more
meaningful evaluation of the Company’s current operating
performance and comparisons to the past and future operating
performance. The Company believes that providing non-GAAP financial
measures such as EBITDA, adjusted EBITDA, adjusted net income
(loss), and adjusted net income (loss) per share, in addition to
related GAAP financial measures, provides investors with greater
transparency to the information used by the Company’s management.
These non-GAAP financial measures are not substitutes for measures
of performance or liquidity calculated in accordance with GAAP and
may not necessarily be indicative of the Company’s liquidity or
ability to fund cash needs. Not all companies calculate non-GAAP
financial measures in the same manner, and our presentation may not
be comparable to the presentations of other companies.
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(continued)
(In thousands)
(Unaudited)
Reconciliation of Net Loss to EBITDA and Total Adjusted
EBITDA:
Three Months Ended
March 31,
2020
2019
Net loss
$
(23,044
)
$
(6,355
)
Depreciation and amortization
7,989
9,135
Interest expense, net
1,160
1,421
Income tax expense
—
79
EBITDA
(13,895
)
4,280
Adjustments:
Transaction-related costs, net
(26
)
(208
)
Stock-based compensation
290
852
Change in fair value of derivative warrant
liability
—
41
Reorganization items, net [1]
—
223
Legal and environmental costs, net
(118
)
53
Impairment of long-lived assets
15,579
117
Executive and severance costs
146
—
Gain on disposal of assets
(100
)
(858
)
Total Adjusted EBITDA
$
1,876
$
4,500
[1] Reorganization items, net represents the costs related to
the chapter 11 filing incurred after the May 1, 2017 filing
date.
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(continued)
(In thousands)
(Unaudited)
Reconciliation of QTD Segment Performance to Adjusted
EBITDA
Three months ended March 31,
2020
Rocky Mountain
Northeast
Southern
Corporate
Total
Revenue
$
23,468
$
9,794
$
4,680
$
—
$
37,942
Direct operating expenses
19,551
8,371
3,554
—
31,476
General and administrative expenses
1,489
634
270
2,531
4,924
Depreciation and amortization
3,465
2,551
1,969
4
7,989
Operating loss
(13,220
)
(1,762
)
(4,509
)
(2,535
)
(22,026
)
Operating margin %
(56.3
)%
(18.0
)%
(96.3
)%
N/A
(58.1
)%
Loss before income taxes
(13,255
)
(1,875
)
(4,563
)
(3,351
)
(23,044
)
Net loss
(13,255
)
(1,875
)
(4,563
)
(3,351
)
(23,044
)
Depreciation and amortization
3,465
2,551
1,969
4
7,989
Interest expense, net
177
113
54
816
1,160
Income tax expense
—
—
—
—
—
EBITDA
$
(9,613
)
$
789
$
(2,540
)
$
(2,531
)
$
(13,895
)
Adjustments, net
12,185
(61
)
3,383
264
15,771
Adjusted EBITDA
$
2,572
$
728
$
843
$
(2,267
)
$
1,876
Adjusted EBITDA margin %
11.0
%
7.4
%
18.0
%
N/A
4.9
%
Three months ended March 31,
2019
Rocky Mountain
Northeast
Southern
Corporate
Total
Revenue
$
24,877
$
11,840
$
5,910
$
—
$
42,627
Direct operating expenses
19,828
9,715
3,014
—
32,557
General and administrative expenses
1,046
846
399
3,184
5,475
Depreciation and amortization
4,299
2,664
2,160
12
9,135
Operating (loss) income
(296
)
(1,502
)
337
(3,196
)
(4,657
)
Operating margin %
(1.2
)%
(12.7
)%
5.7
%
N/A
(10.9
)%
(Loss) income before income taxes
(358
)
(1,595
)
291
(4,614
)
(6,276
)
Net (loss) income
(358
)
(1,595
)
291
(4,693
)
(6,355
)
Depreciation and amortization
4,299
2,664
2,160
12
9,135
Interest expense, net
128
93
46
1,154
1,421
Income tax expense
—
—
—
79
79
EBITDA
$
4,069
$
1,162
$
2,497
$
(3,448
)
$
4,280
Adjustments, net
(746
)
(95
)
153
908
220
Adjusted EBITDA
$
3,323
$
1,067
$
2,650
$
(2,540
)
$
4,500
Adjusted EBITDA margin %
13.4
%
9.0
%
44.8
%
N/A
10.6
%
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(continued)
(In thousands)
(Unaudited)
Reconciliation of Special Items to Net loss and to EBITDA
and Adjusted EBITDA
Three months ended March 31,
2020
As Reported
Special Items
As Adjusted
Revenue
$
37,942
$
—
$
37,942
Direct operating expenses
31,476
(5
)
[A]
31,471
General and administrative expenses
4,924
(305
)
[B]
4,619
Total costs and expenses
59,968
(15,889
)
[C]
44,079
Operating loss
(22,026
)
15,889
[C]
(6,137
)
Net loss
(23,044
)
15,771
[D]
(7,273
)
Net loss
$
(23,044
)
$
(7,273
)
Depreciation and amortization
7,989
7,989
Interest expense, net
1,160
1,160
Income tax expense
—
—
EBITDA and Adjusted EBITDA
$
(13,895
)
$
1,876
Description of 2020 Special
Items:
[A]
Special items relates to severance costs
and gain on the sale of underutilized assets.
[B]
Primarily attributable to stock-based
compensation expense, severance costs and reversal of certain prior
year transaction costs related to the exploration of strategic
opportunities.
[C]
Primarily includes the aforementioned
adjustments along with long-lived asset impairment charges of $15.6
million for assets associated with the landfill in the Rocky
Mountain division, trucking equipment in the Southern division and
property classified as held-for-sale in the Rocky Mountain
division.
[D]
Primarily includes the aforementioned
adjustments. Additionally, our effective tax rate for the three
months ended March 31, 2020 was zero percent and was applied to the
special items accordingly.
NUVERRA ENVIRONMENTAL
SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(continued)
(In thousands)
(Unaudited)
Reconciliation of Special Items to Net loss and to EBITDA
and Adjusted EBITDA
Three months ended March 31,
2019
As Reported
Special Items
As Adjusted
Revenue
$
42,627
$
—
$
42,627
Direct operating expenses
32,557
858
[E]
33,415
General and administrative expenses
5,475
(697
)
[F]
4,778
Total costs and expenses
47,284
44
[G]
47,328
Operating loss
(4,657
)
(44
)
[G]
(4,701
)
Net loss
(6,355
)
223
[H]
(6,132
)
Net loss
$
(6,355
)
$
(6,132
)
Depreciation and amortization
9,135
9,135
Interest expense, net
1,421
1,421
Income tax expense
79
76
EBITDA and Adjusted EBITDA
$
4,280
$
4,500
Description of 2019 Special
Items:
[E]
Special items primarily relates to the
gain on the sale of underutilized assets.
[F]
Primarily attributable to stock-based
compensation and non-routine litigation expenses, offset by an
adjustment to capitalize certain of our transaction costs for our
acquisition of Clearwater Solutions in the fourth quarter of
2018.
[G]
Primarily includes the aforementioned
adjustments along with long-lived asset impairment charges of $0.1
million for assets classified as held-for-sale in the Northeast
division.
[H]
Primarily includes the aforementioned
adjustments along with $0.2 million of continued reorganization
costs from our 2017 chapter 11 filing and a loss of $41.0 thousand
associated with the change in fair value of the derivative warrant
liability. Additionally, our effective tax rate for the three
months ended March 31, 2019 was (1.3%) percent and was applied to
the special items accordingly.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200629005794/en/
Nuverra Environmental Solutions, Inc. Investor Relations
602-903-7802 ir@nuverra.com
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