ProPetro Holding Corp. ("ProPetro" or "the Company") (NYSE:
PUMP) today announced financial and operational results for the
first quarter of 2021.
First Quarter 2021 and Recent Highlights
- Total revenue for the quarter was $161 million compared to $154
million for the fourth quarter of 2020.
- Net loss for the quarter was $20 million, or $0.20 per diluted
share, compared to net loss of $44 million, or $0.44 per diluted
share, for the fourth quarter of 2020.
- Adjusted EBITDA(1) for the quarter was $20 million compared to
$24 million for the fourth quarter of 2020.
- Financial results were negatively impacted by eight days of
lost revenue during extreme winter weather in Texas during
February, and the Company absorbing certain operational costs,
including expenses related to fleet reactivations.
- Effective utilization for the first quarter was 10.3 fleets
compared to 9.6 fleets for the fourth quarter of 2020.
- Net cash provided by operating activities for the quarter of
$17 million as compared to $21 million for the fourth quarter of
2020.
- Negative Free Cash Flow(2) of approximately $5 million as
compared to positive Free Cash Flow of approximately $9 million for
the fourth quarter of 2020. (1) Adjusted EBITDA is a Non-GAAP
financial measure and is described and reconciled to net income
(loss) in the table under “Non-GAAP Financial Measures.” (2) Free
cash flow ("FCF") is a Non-GAAP financial measure and is defined as
net cash flow provided from operating activities less net cash used
in investing activities. During the quarter ended March 31, 2021,
net cash provided by operating activities of $17 million less net
cash used in investing activities of $22 million resulted in free
cash flow of $(5) million. During the quarter ended December 31,
2020, net cash provided by operating activities of $21 million less
net cash used in investing activities of $12 million resulted in
free cash flow of $9 million.
Phillip Gobe, Chief Executive Officer, commented, “Despite
challenges posed by extreme weather, our customer-focused culture
once again drove our operational efficiencies to new heights
through the continued strong collaboration between our teammates
and customers as we began 2021. The best-in-class ProPetro
operating team delivered another quarter of excellent execution at
the wellhead, further proving our competitive advantage in the
premier oil play in the United States, the Permian Basin.”
First Quarter 2021 Financial Summary
Revenue for the first quarter of 2021 was $161 million compared
to revenue of $154 million for fourth quarter of 2020. The 5%
increase was primarily attributable to increased effectively
utilized fleet count, which was partially offset by approximately
$16 million of lost revenue during the eight days of suspended
operations during the freeze in February.
Cost of services, excluding depreciation and amortization of
approximately $33 million, for the first quarter of 2021 increased
slightly to $123 million from $116 million during the fourth
quarter of 2020. Contributing to the increase were higher activity
levels, direct labor and certain other operational costs that were
not passed through to customers as a result of downtime from severe
weather along with additional fleet reactivation costs.
General and administrative expense of $20 million for the first
quarter of 2021 was flat with the fourth quarter of 2020. General
and administrative expense, exclusive of $2 million of
non-recurring items, was $18 million, or 11% of revenue, for the
first quarter of 2021 compared to $15 million in the fourth quarter
of 2020, or 10% of revenue. The slight increase in general and
administrative expense, net of non-recurring items, of
approximately $3 million was a result of an increase in certain
costs, including insurance and compensation-related expenses.
Net loss for the first quarter of 2021 totaled $20 million, or
$0.20 per diluted share, versus net loss of $44 million, or $0.44
per diluted share, for the fourth quarter of 2020. The fourth
quarter 2020 financial results were impacted by an approximate $21
million impairment expense.
Adjusted EBITDA decreased to $20 million for the first quarter
of 2021 from $24 million for the fourth quarter of 2020. The
sequential decline in Adjusted EBITDA was primarily attributable to
lost profitability during the extreme winter weather event in
February and fleet reactivation costs, which we believe adversely
impacted Adjusted EBITDA by approximately $5 million.
Liquidity and Capital Spending
As of March 31, 2021, total cash was $56 million and the Company
remained debt free. Total liquidity at the end of the first quarter
of 2021 was $114 million including cash and $58 million of
available capacity under the Company’s revolving credit facility.
As of May 3, 2021 total cash was $51 million and had no debt
outstanding. Total liquidity as of May 3, 2021 was $111 million
including cash and $60 million of available capacity under the
Company’s revolving credit facility.
Capital expenditures incurred during the first quarter of 2021
were $32 million, $18 million of which was maintenance spending,
with the remainder allocated to Tier IV DGB purchases and
conversions. Capital expenditures paid (as appears in the Investing
Activities section of the Statement of Cash Flows) in the first
quarter were $22 million. Based on our current and projected
activity levels for 2021, and consistent with prior guidance, which
is highly dependent on market conditions, the Company expects full
year 2021 incurred capital expenditures to be between $115 million
and $130 million. Our full year incurred capital expenditure
guidance includes approximately $37 million allocated to our
investment in 90,000 HHP of Tier IV DGB dual-fuel equipment and the
remainder mostly comprised of maintenance spending. Full Year
capital expenditures paid may differ slightly due to the timing of
payments.
Outlook
Mr. Gobe concluded, “As the COVID-19 vaccine rollout continues
to progress, the strengthening outlook for crude oil demand has
positive implications for the oilfield services sector. While we
are excited to see signs of improvement in the broader economy, we
remain disciplined in our approach to enhancing shareholder value.
Our conservative, debt-free balance sheet, combined with our unique
advantages in collaboration and wellsite execution, will continue
to differentiate our Company as we move through the remainder of
the year and into a multi-year recovery in the Permian Basin.
Supporting this outlook is our unwavering commitment to efficient
operations and sustainability in support of our customers'
long-term goals. ProPetro remains positioned as a premier oilfield
services partner for leading operators in the Permian Basin.”
Updated Conference Call Information
The Company will host a conference call at 8:30 AM Central Time
on Wednesday, May 5, 2021 to discuss financial and operating
results for the first quarter of 2021. The call will also be
webcast on ProPetro’s website at www.propetroservices.com. To
access the conference call, U.S. callers may dial toll free
1-844-340-9046 and international callers may dial 1-412-858-5205.
Please call ten minutes ahead of the scheduled start time to ensure
a proper connection. A replay of the conference call will be
available for one week following the call and can be accessed toll
free by dialing 1-877-344-7529 for U.S. callers, 1-855-669-9658 for
Canadian callers, as well as 1-412-317-0088 for international
callers. The access code for the replay is 10155044.
About ProPetro
ProPetro Holding Corp. is a Midland, Texas-based oilfield
services company providing pressure pumping and other complementary
services to leading upstream oil and gas companies engaged in the
exploration and production of North American unconventional oil and
natural gas resources. For more information visit
www.propetroservices.com.
Forward-Looking Statements
Except for historical information contained herein, the
statements and information in this news release are forward-looking
statements that are made pursuant to the Safe Harbor Provisions of
the Private Securities Litigation Reform Act of 1995. Statements
that are predictive in nature, that depend upon or refer to future
events or conditions or that include the words “may,” “could,”
“plan,” “project,” “budget,” “predict,” “pursue,” “target,” “seek,”
“objective,” “believe,” “expect,” “anticipate,” “intend,”
“estimate,” and other expressions that are predictions of, or
indicate, future events and trends and that do not relate to
historical matters identify forward‑looking statements. Our
forward‑looking statements include, among other matters, statements
about our business strategy, industry, future profitability,
expected fleet utilization, sustainability efforts, the future
performance of newly improved technology (such as our DuraStim®
fleets), expected capital expenditures and the impact of such
expenditures on our performance and capital programs. A
forward‑looking statement may include a statement of the
assumptions or bases underlying the forward‑looking statement. We
believe that we have chosen these assumptions or bases in good
faith and that they are reasonable.
Although forward‑looking statements reflect our good faith
beliefs at the time they are made, forward-looking statements are
subject to a number of risks and uncertainties that may cause
actual events and results to differ materially from the
forward-looking statements. Such risks and uncertainties include
the volatility of and recent declines in oil prices, the
operational disruption and market volatility resulting from the
COVID-19 pandemic and other factors described in the Company's
Annual Report on Form 10-K and Quarterly Reports on Form 10-Q,
particularly the “Risk Factors” sections of such filings, and other
filings with the Securities and Exchange Commission (the “SEC”). In
addition, the Company may be subject to currently unforeseen risks
that may have a materially adverse impact on it, including matters
related to shareholder litigation and the SEC investigation.
Accordingly, no assurances can be given that the actual events and
results will not be materially different than the anticipated
results described in the forward-looking statements. Readers are
cautioned not to place undue reliance on such forward-looking
statements and are urged to carefully review and consider the
various disclosures made in the Company’s Annual Report on Form
10-K, Quarterly Reports on Form 10-Q and other filings made with
the SEC from time to time that disclose risks and uncertainties
that may affect the Company’s business. The forward-looking
statements in this news release are made as of the date of this
news release. ProPetro does not undertake, and expressly disclaims,
any duty to publicly update these statements, whether as a result
of new information, new developments or otherwise, except to the
extent that disclosure is required by law.
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(In thousands, except per
share data)
(Unaudited)
Three Months Ended
March 31, 2021
December 31, 2020
March 31, 2020
REVENUE - Service revenue
$
161,458
154,343
395,069
COSTS AND EXPENSES
Cost of services (exclusive of
depreciation and amortization)
123,378
115,646
300,848
General and administrative (inclusive of
stock-based compensation)
20,201
19,681
24,937
Depreciation and amortization
33,478
35,445
40,205
Impairment Expense
—
21,349
16,654
Loss on disposal of assets
13,052
18,262
19,854
Total costs and expenses
190,109
210,382
402,498
OPERATING LOSS
(28,651
)
(56,039
)
(7,429
)
OTHER INCOME (EXPENSE):
Interest expense
(176
)
(174
)
(1,281
)
Other income (expense)
1,789
(291
)
(3
)
Total other income (expense)
1,613
(465
)
(1,284
)
LOSS BEFORE INCOME TAXES
(27,038
)
(56,504
)
(8,713
)
INCOME TAX EXPENSE
6,663
12,393
909
NET LOSS
(20,375
)
(44,111
)
(7,804
)
NET LOSS PER COMMON SHARE:
Basic
$
(0.20
)
$
(0.44
)
$
(0.08
)
Diluted
$
(0.20
)
$
(0.44
)
$
(0.08
)
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic
101,550
100,897
100,687
Diluted
101,550
100,897
100,687
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(In thousands, except share
data)
(Unaudited)
March 31, 2021
December 31, 2020
ASSETS
CURRENT ASSETS:
Cash and cash equivalents
$
55,859
$
68,772
Accounts receivable - net of allowance for
credit losses of $0 and $1,497, respectively
110,386
84,244
Inventories
2,329
2,729
Prepaid expenses
7,853
11,199
Other current assets
14
782
Total current assets
176,441
167,726
PROPERTY AND EQUIPMENT - net of
accumulated depreciation
866,050
880,477
OPERATING LEASE RIGHT-OF-USE ASSETS
636
709
OTHER NONCURRENT ASSETS:
Other noncurrent assets
1,656
1,827
Total other noncurrent assets
1,656
1,827
TOTAL ASSETS
$
1,044,783
$
1,050,739
LIABILITIES AND SHAREHOLDERS’
EQUITY
CURRENT LIABILITIES:
Accounts payable
$
108,931
$
79,153
Accrued and other current liabilities
19,186
24,676
Operating lease liabilities
342
334
Total current liabilities
128,459
104,163
DEFERRED INCOME TAXES
68,677
75,340
NONCURRENT OPERATING LEASE LIABILITIES
378
465
Total liabilities
$
197,514
$
179,968
COMMITMENTS AND CONTINGENCIES (Note
10)
SHAREHOLDERS’ EQUITY:
Preferred stock, $0.001 par value,
30,000,000 shares authorized, none issued, respectively
—
—
Common stock, $0.001 par value,
200,000,000 shares authorized, 102,057,815 and 100,912,777 shares
issued, respectively
102
101
Additional paid-in capital
831,987
835,115
Retained earnings
15,180
35,555
Total shareholders’ equity
847,269
870,771
TOTAL LIABILITIES AND SHAREHOLDERS’
EQUITY
$
1,044,783
$
1,050,739
PROPETRO HOLDING CORP.
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended March
31,
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss
$
(20,375)
$
(7,804)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization
33,478
40,205
Impairment expense
—
16,654
Deferred income tax benefit
(6,663)
(1,312)
Amortization of deferred debt issuance
costs
134
135
Stock-based compensation
2,487
471
Provision for credit losses
—
4,291
Loss on disposal of assets
13,052
19,854
Changes in operating assets and
liabilities:
Accounts receivable
(25,698)
(14,486)
Other current assets
325
1,138
Inventories
401
(860)
Prepaid expenses
3,383
2,920
Accounts payable
18,579
10,080
Accrued and other current liabilities
(2,095)
(9,431)
Accrued interest
—
(131)
Net cash provided by operating
activities
17,008
61,724
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures
(22,494)
(47,290)
Proceeds from sale of assets
224
733
Net cash used in investing activities
(22,270)
(46,557)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments of borrowings
—
(20,000)
Payment of finance lease obligation
—
(30)
Repayments of insurance financing
(2,037)
—
Tax withholdings paid for net settlement
of equity awards
(5,614)
(456)
Net cash used in financing activities
(7,651)
(20,486)
NET DECREASE IN CASH AND CASH
EQUIVALENTS
(12,913)
(5,319)
CASH AND CASH EQUIVALENTS - Beginning of
period
68,772
149,036
CASH AND CASH EQUIVALENTS - End of
period
$
55,859
$
143,717
Reportable Segment Information
Three Months Ended
March 31, 2021
December 31, 2020
Pressure
Pumping
All Other
Total
Pressure
Pumping
All Other
Total
($ In thousands)
Service revenue
$
158,191
$
3,267
$
161,458
$
151,418
$
2,925
$
154,343
Adjusted EBITDA
31,870
(11,853
)
20,017
34,672
(10,896
)
23,776
Depreciation and amortization
32,513
965
33,478
34,453
992
35,445
Capital expenditures
$
30,023
$
2,305
$
32,328
$
21,109
$
48
$
21,158
Non-GAAP Financial Measures
Adjusted EBITDA is not a financial measure presented in
accordance with GAAP. We believe that the presentation of this
non-GAAP financial measure provides useful information to investors
in assessing our financial condition and results of operations. Net
income (loss) is the GAAP measure most directly comparable to
Adjusted EBITDA. Non-GAAP financial measures should not be
considered as alternatives to the most directly comparable GAAP
financial measure. Non-GAAP financial measures have important
limitations as analytical tools because they exclude some, but not
all, items that affect the most directly comparable GAAP financial
measures. You should not consider Adjusted EBITDA in isolation or
as a substitute for an analysis of our results as reported under
GAAP. Because Adjusted EBITDA may be defined differently by other
companies in our industry, our definitions of this non-GAAP
financial measure may not be comparable to similarly titled
measures of other companies, thereby diminishing their utility.
Reconciliation of Net Loss to Adjusted
EBITDA
Three Months Ended
March 31, 2021
December 31, 2020
Pressure
Pumping
All Other
Total
Pressure
Pumping
All Other
Total
Net loss
$
(13,675
)
$
(6,700
)
$
(20,375
)
$
(38,130
)
$
(5,981
)
$
(44,111
)
Depreciation and amortization
32,513
965
33,478
34,453
992
35,445
Impairment expense
—
—
—
21,349
—
21,349
Interest expense
—
176
176
—
174
174
Income tax benefit
—
(6,663
)
(6,663
)
—
(12,393
)
(12,393
)
Loss on disposal of assets
13,032
20
13,052
17,000
1,261
18,262
Stock-based compensation
—
2,487
2,487
—
3,132
3,132
Other expense
—
(1,789
)
(1,789
)
—
291
291
Other general and administrative expense,
net (1)
—
(961
)
(961
)
—
620
620
Severance expense
—
612
612
—
1,007
1,007
Adjusted EBITDA
$
31,870
$
(11,853
)
$
20,017
$
34,672
$
(10,896
)
$
23,776
(1) Other general and administrative
expense, (net) relates to nonrecurring professional fees paid to
external consultants in connection with the Company's pending SEC
investigation and shareholder litigation, net of insurance
recoveries.
Three Months Ended
($ In thousands)
March 31, 2021
December 31, 2020
Cash from Operating Activities
$
17,008
$
21,098
Cash used in Investing Activities
(22,270
)
(12,038
)
Free Cash Flow
$
(5,262
)
$
9,060
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210504006160/en/
ProPetro Holding Corp David Schorlemer, 432-688-0012
Chief Financial Officer investors@propetroservices.com
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