HOUSTON, May 12, 2022
/PRNewswire/ -- KLX Energy Services Holdings, Inc. (Nasdaq:
KLXE) ("KLXE" or the "Company") today reported financial
results for the first quarter ended March 31, 2022. We also
make reference to the two months ended December 31, 2021
("Transition Fourth Quarter"), the three months ended
December 31, 2021 ("Pro Forma Prior Year Fourth Quarter") and
the three months ended March 31, 2021
("Pro Forma Prior Year First Quarter").
Highlights
- First quarter 2022 revenue of $152.3
million increased 5% sequentially
- Generated first quarter 2022 net loss of $19.9 million and Adjusted EBITDA of $4.9 million
- Exited the first quarter of 2022 on a strong monthly run-rate,
generating March revenue of $57.7
million, net loss of $6.0
million and Adjusted EBITDA of $3.8 million
- Increasing 2022 revenue guidance to a range of $690
million to $710 million
- Ended the first quarter of 2022 with $54.6 million of available liquidity, consisting
of $19.4 million of cash and
$35.2 million of available borrowing
capacity on the March 31, 2022 ABL
Facility Borrowing Base Certificate (net of $12.4 million fixed charge coverage ratio
("FCCR") holdback)
See "Non-GAAP Financial Measures" at the end of this release
for a discussion of Adjusted EBITDA, Adjusted EBITDA margin, free
cash flow, net working capital and their reconciliation to the most
directly comparable financial measure calculated and presented in
accordance with U.S. generally accepted accounting principles
("GAAP"). We have not provided reconciliations of our future
expectations as to Adjusted EBITDA or Adjusted EBITDA margin as
such reconciliation is not available without unreasonable efforts.
In addition, for comparative purposes, we have also presented Pro
Forma Operating Income (Loss) and Adjusted EBITDA for the three
months ended March 31, 2021 and
December 31, 2021 in the Additional Selected Operating Data
section below.
Chris Baker, President and Chief
Executive Officer of KLXE, stated, "We are excited about our
positioning and the strength of the market as we exited Q1. As we
previously disclosed in our 2021 fourth quarter release and
conference call, the first quarter of 2022 got off to a slow start
due to seasonally slow activity in January, magnified by Omicron
quarantines, and weather-related issues in early February. We then
quickly accelerated into a more active market in late February and
March and are bullish about our prospects for the second quarter
and the remainder of 2022 as the pricing environment for the bulk
of our services is rapidly improving. Driven by the constructive
current market backdrop, we expect sequential revenue growth of 16%
to 20% and Q2 Adjusted EBITDA margins of 7% to 9%, as well as
continued improvement as we progress through the remainder of the
second quarter and 2022."
First Quarter 2022 Financial
Results
Revenue for the first quarter of 2022 totaled $152.3 million, an increase of 61% compared to
Transition Fourth Quarter revenue of $94.4
million. The increase in revenue reflects one less month in
the transition quarter. On a product line basis, drilling,
completion, production and intervention services contributed
approximately 28.2%, 50.5%, 11.7% and 9.6%, respectively, to the
first quarter of 2022.
Net loss for the first quarter of 2022 was $19.9 million, compared to Transition Fourth
Quarter net loss of $13.2 million.
Adjusted EBITDA for the first quarter of 2022 was $4.9 million, compared to Transition Fourth
Quarter Adjusted EBITDA of $3.6
million.
First Quarter 2022 Segment
Results
The Company reports revenue and Adjusted EBITDA through three
geographic business segments: Rocky Mountains, Southwest and
Northeast/Mid-Con.
The following is a tabular summary of revenue, operating loss
and Adjusted EBITDA for the first quarter ended March 31, 2022
and Transition Fourth Quarter ended December 31, 2021 ($ in
millions). Note for comparability between the first quarter and
Transition Fourth Quarter that there is one less month in the
Transition Fourth Quarter.
|
|
Three Months Ended
|
|
Two Months Ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Revenue:
|
|
|
|
|
Rocky Mountains
|
|
$
43.3
|
|
$
23.8
|
Southwest
|
|
51.9
|
|
34.0
|
Northeast/Mid-Con
|
|
57.1
|
|
36.6
|
Total
Revenue
|
|
$
152.3
|
|
$
94.4
|
|
|
|
Three Months Ended
|
|
Two Months Ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Operating income (loss):
|
|
|
|
|
Rocky Mountains
|
|
$
(0.8)
|
|
$
(2.4)
|
Southwest
|
|
(0.4)
|
|
—
|
Northeast/Mid-Con
|
|
(0.8)
|
|
0.1
|
Corporate and
other
|
|
(9.5)
|
|
(5.5)
|
Total operating
loss
|
|
$
(11.5)
|
|
$
(7.8)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Two Months Ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Adjusted EBITDA
|
|
|
|
|
Rocky Mountains
|
|
$
4.7
|
|
$
1.8
|
Southwest
|
|
4.2
|
|
3.5
|
Northeast/Mid-Con
|
|
2.7
|
|
2.6
|
Segment
Total
|
|
11.6
|
|
7.9
|
Corporate and
other
|
|
(6.7)
|
|
(4.3)
|
Total Adjusted EBITDA
(loss)(1)
|
|
$
4.9
|
|
$
3.6
|
|
|
(1)
|
Excludes one-time
costs, as defined in the Reconciliation of Consolidated Net Loss to
Adjusted EBITDA (loss) table below, non-cash compensation expense
and non-cash asset impairment expense.
|
First Quarter 2022 Financial
Results Compared to Pro Forma Prior Year Fourth Quarter
2021
Revenue for the first quarter of 2022 totaled $152.3 million, an increase of 5% compared to Pro
Forma Prior Year Fourth Quarter revenue of $145.0 million. The increase in revenue reflects
the overall increase in activity and pricing that the Company has
experienced in the quarter.
Net loss for the first quarter of 2022 was $19.9 million, compared to Pro Forma Prior Year
Fourth Quarter net loss of $18.6
million. Adjusted EBITDA for the first quarter of 2022 was
$4.9 million, which represents a
decrease of 27% compared to Pro Forma Prior Year Fourth Quarter
Adjusted EBITDA of $6.7 million. This
decrease is due to seasonality, weather and employee-related costs
including the previously disclosed reinstatement of the 401(k)
match, certain stand-up costs to procure equipment and employees
incurred by the Company in anticipation of the activity increase in
March, COVID-19 quarantine costs and cost inflation associated with
labor, raw materials and finished goods. The Company exited the
first quarter of 2022 on a 6.6% monthly Adjusted EBITDA margin
run-rate.
First Quarter 2022 Segment Results
Compared to Pro Forma Prior Year Fourth Quarter 2021
The Company reports revenue and Adjusted EBITDA through three
geographic business segments: Rocky Mountains, Southwest and
Northeast/Mid-Con.
- Rocky Mountains: Revenue, operating loss and Adjusted EBITDA
for the Rocky Mountains segment was $43.3
million, $0.8 million and
$4.7 million, respectively, for the
first quarter of 2022. Revenue represents a 23% increase over Pro
Forma Prior Year Fourth Quarter of 2021 largely driven by an
increase in activity throughout the DJ Basin and Wyoming in coiled tubing, fishing, rentals,
wireline and dissolvable plugs sales.
- Southwest: Revenue, operating loss and Adjusted EBITDA for the
Southwest segment, which includes the Permian and South Texas, was $51.9
million, $0.4 million and
$4.2 million, respectively, for the
first quarter of 2022. Revenue represents a 3% increase over the
Pro Forma Prior Year Fourth Quarter of 2021 largely driven by an
increase across service lines, with directional drilling, frac
rentals and fishing experiencing the largest increases.
- Northeast/Mid-Con: Revenue, operating loss and Adjusted EBITDA
for the Northeast/Mid-Con segment was $57.1
million, $0.8 million and
$2.7 million, respectively, for the
first quarter of 2022. Revenue represents a 4% decrease over Pro
Forma Prior Year Fourth Quarter of 2021 largely due to comparative
declines in directional drilling and dissolvable plugs sales in the
region.
The following is a tabular summary of revenue, operating loss
and Adjusted EBITDA for the first quarter ended March 31, 2022
and Pro Forma Prior Year Fourth Quarter ended December 31,
2021 ($ in millions):
|
|
|
|
Pro Forma
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Revenue:
|
|
|
|
|
Rocky Mountains
|
|
$
43.3
|
|
$
35.3
|
Southwest
|
|
51.9
|
|
50.2
|
Northeast/Mid-Con
|
|
57.1
|
|
59.5
|
Total
Revenue
|
|
$
152.3
|
|
$
145.0
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Operating income (loss):
|
|
|
|
|
Rocky Mountains
|
|
$
(0.8)
|
|
$
(3.8)
|
Southwest
|
|
(0.4)
|
|
(1.0)
|
Northeast/Mid-Con
|
|
(0.8)
|
|
2.1
|
Corporate and
other
|
|
(9.5)
|
|
(7.6)
|
Total operating
loss
|
|
$
(11.5)
|
|
$
(10.3)
|
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
|
Three Months Ended
|
|
Three Months Ended
|
|
|
March 31, 2022
|
|
December 31, 2021
|
Adjusted EBITDA
|
|
|
|
|
Rocky Mountains
|
|
$
4.7
|
|
$
2.3
|
Southwest
|
|
4.2
|
|
4.2
|
Northeast/Mid-Con
|
|
2.7
|
|
6.2
|
Segment
Total
|
|
11.6
|
|
12.7
|
Corporate and
other
|
|
(6.7)
|
|
(6.0)
|
Total Adjusted EBITDA
(loss)(1)
|
|
$
4.9
|
|
$
6.7
|
|
|
(1)
|
Excludes one-time
costs, as defined in the Reconciliation of Consolidated Net Loss to
Adjusted EBITDA (loss) table below, non-cash compensation expense
and non-cash asset impairment expense.
|
Balance Sheet and
Liquidity
Total debt outstanding as of March 31, 2022 was
$275.1 million, compared to
$274.8 million as of
December 31, 2021. The increase in total debt was driven by
amortization of debt issuance costs. As of March 31, 2022,
cash and equivalents totaled $19.4
million. Total liquidity as of March 31, 2022 was
$67.0 million and available liquidity
was $54.6 million, including net
availability of $35.2 million
available on the March 31, 2022 ABL Facility Borrowing Base
Certificate, net of $12.4 million
FCCR holdback. The Senior Secured Notes bear interest at an annual
rate of 11.5%, payable semi-annually in arrears on May 1st and November 1st. Accrued interest as of
March 31, 2022 was $12.0 million for the Senior Secured Notes and
$0.3 million related to the ABL
facility. As of April 30, 2022, cash
and available liquidity balances were $38.8
million and $57.7 million on
the April 30, 2022 ABL Facility
Borrowing Base Certificate (net of $13.1
million FCCR holdback), respectively.
Net working capital as of March 31,
2022 was $45.9 million, which
was up 13% from December 31,
2021 levels, driven by a reduction in days payable outstanding
as we mitigated supply chain concerns, and was offset by a
reduction in days sales outstanding.
Other Financial
Information
Capital expenditures were $5.8
million during the first quarter of 2022, an increase of
$2.3 million, or 66% compared to
capital expenditures of $3.5 million
in the Transition Fourth Quarter of 2021. Capital spending during
the first quarter was driven primarily by maintenance capital
expenditures across our segments. KLXE continues to expect fiscal
year 2022 capital spending to be between $25.0 and $30.0
million and will be primarily focused on maintenance capital
spending. As of March 31, 2022, we had $1.9 million of assets held for sale and, in the
second quarter of 2022, we expect to increase the balance of assets
held for sale by $4.0 to $6.0 million, as we look to further optimize our
real estate footprint. We will continue to evaluate the market
conditions and adjust maintenance capital spending based on changes
in activity.
Environmental, Social and
Governance
We are currently working to selectively electrify our core
equipment fleet of wireline and coiled tubing assets and we believe
we are a market leader in each of these areas. In the first quarter
of 2022, we placed a factory order for electric vehicles accounting
for 100% of our city-oriented fleet. The vehicles have expected
delivery in the fourth quarter of 2022 and will replace internal
combustion engine vehicles in the current KLXE fleet. Additionally,
we are operating two electric hybrid wireline units, with two
additional unit conversions being planned for 2022, one electric
hybrid coiled tubing unit, and one electric hybrid snubbing
unit.
Conference Call
Information
KLXE has scheduled a conference call for 9:00 a.m. Central Time (10:00 a.m. Eastern Time) on Friday, May 13, 2022, to review reported results.
You may access the call by telephone at 1-201-389-0867 and ask for
the KLXE 2022 First Quarter Conference Call. The webcast of the
call may also be accessed through the Investor Relations section of
the Company's website at
https://investor.klxenergy.com/events-and-presentations/events. A
replay of the call can be accessed on the Company's website for 90
days and will be available by telephone through May 27, 2022, at 1-201-612-7415, access code
13729162#.
About KLX Energy
Services
KLXE is a growth-oriented provider of diversified oilfield
services to leading onshore oil and natural gas exploration and
production companies operating in both conventional and
unconventional plays in all of the active major basins throughout
the United States. The Company
delivers mission critical oilfield services focused on drilling,
completion, production, and intervention activities for technically
demanding wells from over 60 service and support facilities located
throughout the United States.
KLXE's complementary suite of proprietary products and specialized
services is supported by technically skilled personnel and a broad
portfolio of innovative in-house manufacturing, repair and
maintenance capabilities. More information is available at
www.klxenergy.com.
Forward-Looking Statements and
Cautionary Statements
The Private Securities Litigation Reform Act of 1995 provides a
"safe harbor" for forward-looking statements to encourage companies
to provide prospective information to investors. This news release
(and any oral statements made regarding the subjects of this
release, including on the conference call announced herein)
includes forward-looking statements that reflect our current
expectations and projections about our future results, performance
and prospects. Forward-looking statements include all statements
that are not historical in nature and are not current facts. When
used in this news release (and any oral statements made regarding
the subjects of this release, including on the conference call
announced herein), the words "believe," "expect," "plan," "intend,"
"anticipate," "estimate," "predict," "potential," "continue,"
"may," "might," "should," "could," "will" or the negative of these
terms or similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking
statements are based on our current expectations and assumptions
about future events and are based on currently available
information as to the outcome and timing of future events with
respect to, among other things: our operating cash flows; the
availability of capital and our liquidity; our ability to renew and
refinance our debt; our future revenue, income and operating
performance; our ability to sustain and improve our utilization,
revenue and margins; our ability to maintain acceptable pricing for
our services; future capital expenditures; our ability to finance
equipment, working capital and capital expenditures; our ability to
execute our long-term growth strategy and to integrate our
acquisitions; our ability to successfully develop our research and
technology capabilities and implement technological developments
and enhancements; and the timing and success of strategic
initiatives and special projects.
Forward-looking statements are not assurances of future
performance and actual results could differ materially from our
historical experience and our present expectations or projections.
These forward-looking statements are based on management's current
expectations and beliefs, forecasts for our existing operations,
experience, expectations and perception of historical trends,
current conditions, anticipated future developments and their
effect on us and other factors believed to be appropriate. Although
management believes the expectations and assumptions reflected in
these forward-looking statements are reasonable as and when made,
no assurance can be given that these assumptions are accurate or
that any of these expectations will be achieved (in full or at
all). Our forward-looking statements involve significant risks,
contingencies and uncertainties, most of which are difficult to
predict and many of which are beyond our control. Known material
factors that could cause actual results to differ materially from
those in the forward-looking statements include, but are not
limited to, risks associated with the following: a decline in
demand for our services, including due to the ongoing COVID-19
pandemic, declining commodity prices, overcapacity and other
competitive factors affecting our industry; the cyclical nature and
volatility of the oil and gas industry, which impacts the level of
exploration, production and development activity and spending
patterns by E&P companies; a decline in, or substantial
volatility of, crude oil and gas commodity prices, which generally
leads to decreased spending by our customers and negatively impacts
drilling, completion and production activity; and other risks and
uncertainties listed in our filings with the U.S. Securities and
Exchange Commission, including our Current Reports on Form 8-K that
we file from time to time, Quarterly Reports on Form 10-Q and
Transition Report on Form 10-K. Readers are cautioned not to place
undue reliance on forward-looking statements, which speak only as
of the date hereof. We undertake no obligation to publicly update
or revise any forward-looking statements after the date they are
made, whether as a result of new information, future events or
otherwise, except as required by law.
Contacts:
|
KLX Energy Services
Holdings, Inc.
|
|
Keefer M. Lehner, EVP
& CFO
|
|
832-930-8066
|
|
IR@klxenergy.com
|
|
|
|
Dennard Lascar Investor
Relations
|
|
Ken Dennard / Natalie
Hairston
|
|
713-529-6600
|
|
KLXE@dennardlascar.com
|
KLX Energy
Services Holdings, Inc. Condensed Consolidated Statements
of Operations (In millions of U.S. dollars and shares,
except per share
amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro
Forma
|
|
Three Months
Ended
|
|
Two Months
Ended
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
April 30,
2021
|
|
December 31,
2021
|
|
March 31,
2021
|
Revenues
|
$
152.3
|
|
$
94.4
|
|
$
90.8
|
|
$
145.0
|
|
$
85.7
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
Cost of
sales
|
135.0
|
|
81.4
|
|
88.7
|
|
124.7
|
|
83.0
|
Depreciation and amortization
|
13.7
|
|
10.1
|
|
15.4
|
|
14.8
|
|
16.4
|
Selling,
general and administrative
|
15.0
|
|
10.6
|
|
14.9
|
|
15.7
|
|
17.2
|
Research
and development costs
|
0.1
|
|
0.1
|
|
0.1
|
|
0.1
|
|
0.1
|
Impairment
and other charges
|
—
|
|
—
|
|
0.6
|
|
—
|
|
0.3
|
Bargain
purchase gain
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.5)
|
Operating
loss
|
(11.5)
|
|
(7.8)
|
|
(28.9)
|
|
(10.3)
|
|
(29.8)
|
Non-operating
expense:
|
|
|
|
|
|
|
|
|
|
Interest
expense, net
|
8.3
|
|
5.5
|
|
7.8
|
|
8.2
|
|
8.0
|
Loss before income
tax
|
(19.8)
|
|
(13.3)
|
|
(36.7)
|
|
(18.5)
|
|
(37.8)
|
Income tax
expense
|
0.1
|
|
(0.1)
|
|
0.1
|
|
0.1
|
|
0.1
|
Net loss
|
$
(19.9)
|
|
$
(13.2)
|
|
$
(36.8)
|
|
$
(18.6)
|
|
$
(37.9)
|
|
|
|
|
|
|
|
|
|
|
Net loss per common
share:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
(1.98)
|
|
$
(1.36)
|
|
$
(4.41)
|
|
$
(1.98)
|
|
$
(4.55)
|
Diluted
|
$
(1.98)
|
|
$
(1.36)
|
|
$
(4.41)
|
|
$
(1.98)
|
|
$
(4.55)
|
|
|
|
|
|
|
|
|
|
|
Weighted average common
shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
10.1
|
|
9.7
|
|
8.3
|
|
9.4
|
|
8.3
|
Diluted
|
10.1
|
|
9.7
|
|
8.3
|
|
9.4
|
|
8.3
|
KLX Energy
Services Holdings, Inc. Condensed Consolidated Balance
Sheets (In millions of U.S. dollars and shares, except
per share data) (Unaudited)
|
|
|
March 31, 2022
|
|
December 31, 2021
|
ASSETS
|
Current
assets:
|
|
|
|
Cash and
cash equivalents
|
$
19.4
|
|
$
28.0
|
Accounts
receivable–trade, net of allowance of $6.2 and $6.2
|
107.0
|
|
103.2
|
Inventories, net
|
24.3
|
|
22.4
|
Other
current assets
|
11.4
|
|
11.1
|
Total current assets
|
162.1
|
|
164.7
|
Property and equipment,
net
|
168.4
|
|
171.0
|
Operating lease
asset
|
44.6
|
|
47.4
|
Intangible assets,
net
|
2.1
|
|
2.2
|
Other assets
|
2.3
|
|
2.4
|
Total assets
|
$
379.5
|
|
$
387.7
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
71.9
|
|
$
72.1
|
Accrued
interest
|
12.3
|
|
5.0
|
Accrued
liabilities
|
24.9
|
|
24.1
|
Current
portion of operating lease obligations
|
15.3
|
|
15.9
|
Current
portion of finance lease obligations
|
6.7
|
|
5.6
|
Total current liabilities
|
131.1
|
|
122.7
|
Long-term
debt
|
275.1
|
|
274.8
|
Long-term operating
lease obligations
|
29.0
|
|
31.5
|
Long-term finance lease
obligations
|
11.1
|
|
9.1
|
Other non-current
liabilities
|
0.4
|
|
1.0
|
Commitments,
contingencies and off-balance sheet arrangements
|
|
|
|
Stockholders'
equity:
|
|
|
|
Common stock, $0.01 par
value; 110.0 authorized; 11.4 and 10.5 issued
|
0.1
|
|
0.1
|
Additional
paid-in capital
|
482.5
|
|
478.1
|
Treasury stock, at
cost, 0.4 shares and 0.3 shares
|
(4.6)
|
|
(4.3)
|
Accumulated deficit
|
(545.2)
|
|
(525.3)
|
Total
stockholders' equity
|
(67.2)
|
|
(51.4)
|
Total liabilities and stockholders' equity
|
$
379.5
|
|
$
387.7
|
KLX Energy
Services Holdings, Inc. Condensed Consolidated Statements
of Cash Flows (In millions of U.S.
dollars) (Unaudited)
|
|
|
Three Months Ended
|
|
March 31, 2022
|
|
April 30, 2021
|
Cash flows from operating
activities:
|
|
|
|
Net loss
|
$
(19.9)
|
|
$
(36.8)
|
Adjustments to
reconcile net loss to net cash flows used in operating
activities
|
|
|
|
Depreciation and
amortization
|
13.7
|
|
15.4
|
Impairment and other
charges
|
—
|
|
0.6
|
Non-cash
compensation
|
0.7
|
|
0.8
|
Amortization of
deferred financing fees
|
0.3
|
|
0.3
|
Provision for inventory
reserve
|
0.1
|
|
—
|
Gain on disposal of
property, equipment and other
|
(2.0)
|
|
(1.8)
|
Changes in operating
assets and liabilities:
|
|
|
|
Accounts
receivable
|
(3.8)
|
|
(3.2)
|
Inventories
|
(2.0)
|
|
(0.2)
|
Other
current and non-current assets
|
4.2
|
|
2.8
|
Accounts
payable
|
(1.5)
|
|
6.6
|
Other
current and non-current liabilities
|
4.0
|
|
4.2
|
Net cash flows used in
operating activities
|
(6.2)
|
|
(11.3)
|
Cash flows from investing
activities:
|
|
|
|
Purchases of property
and equipment
|
(5.8)
|
|
(2.2)
|
Proceeds from sale of
property and equipment
|
2.6
|
|
6.1
|
Net cash flows (used in)
provided by investing activities
|
(3.2)
|
|
3.9
|
Cash flows from financing
activities:
|
|
|
|
Purchase of treasury
stock
|
(0.3)
|
|
(0.3)
|
Proceeds from stock
issuance, net of costs
|
3.0
|
|
—
|
Payments on finance
lease obligations
|
(1.5)
|
|
(0.5)
|
Change to financed
payables
|
(0.4)
|
|
(1.0)
|
Net cash flows provided by
(used in) financing activities
|
0.8
|
|
(1.8)
|
Net decrease in cash and
cash equivalents
|
(8.6)
|
|
(9.2)
|
Cash and cash
equivalents, beginning of period
|
28.0
|
|
47.1
|
Cash and cash equivalents, end of
period
|
$
19.4
|
|
$
37.9
|
|
|
|
|
Supplemental disclosures of cash flow
information:
|
|
|
|
Cash paid during period
for:
|
|
|
|
Income taxes paid, net
of refunds
|
$
—
|
|
$
(0.2)
|
Interest
|
0.7
|
|
0.2
|
Supplemental schedule of non-cash
activities:
|
|
|
|
Accrued capital
expenditures
|
$
1.3
|
|
$
2.5
|
KLX Energy Services Holdings,
Inc.
Additional Selected Operating
Data
(Unaudited)
Non-GAAP Financial
Measures
This release includes Adjusted EBITDA, free cash flow, and net
working capital measures. Each of the metrics are "non-GAAP
financial measures" as defined in Regulation G of the Securities
Exchange Act of 1934.
Adjusted EBITDA is a supplemental non-GAAP financial measure
that is used by management and external users of our financial
statements, such as industry analysts, investors, lenders and
rating agencies. Adjusted EBITDA is not a measure of net earnings
or cash flows as determined by GAAP. We define Adjusted EBITDA as
net earnings (loss) before interest, taxes, depreciation and
amortization, further adjusted for (i) goodwill and/or long-lived
asset impairment charges, (ii) stock-based compensation expense,
(iii) restructuring charges, (iv) transaction and integration costs
related to acquisitions, (v) costs incurred related to the COVID-19
pandemic and (vi) other expenses or charges to exclude certain
items that we believe are not reflective of ongoing performance of
our business. Adjusted EBITDA is used to calculate the Company's
leverage ratio, consistent with the terms of the Company's ABL
facility.
We believe Adjusted EBITDA is useful because it allows us to
more effectively evaluate our operating performance and compare the
results of our operations from period to period without regard to
our financing methods or capital structure. We exclude the items
listed above in arriving at Adjusted EBITDA because these amounts
can vary substantially from company to company within our industry
depending upon accounting methods and book values of assets,
capital structures and the method by which the assets were
acquired. Adjusted EBITDA should not be considered as an
alternative to, or more meaningful than, net income as determined
in accordance with GAAP, or as an indicator of our operating
performance or liquidity. Certain items excluded from Adjusted
EBITDA are significant components in understanding and assessing a
company's financial performance, such as a company's cost of
capital and tax structure, as well as the historic costs of
depreciable assets, none of which are components of Adjusted
EBITDA. Our computations of Adjusted EBITDA may not be comparable
to other similarly titled measures of other companies.
We define free cash flow as net cash provided by operating
activities less capital expenditures and proceeds from sale of
property and equipment. Our management uses free cash flow to
assess the Company's liquidity and ability to repay maturing debt,
fund operations and make additional investments. We believe that
free cash flow provides useful information to investors because it
is an important indicator of the Company's liquidity, including its
ability to reduce net debt, make strategic investments and
repurchase stock.
Net working capital is calculated as current assets, excluding
cash, less current liabilities, excluding accrued interest and
finance lease obligations. We believe that net working capital
provides useful information to investors because it is an important
indicator of the Company's liquidity.
The following tables present a reconciliation of the non-GAAP
financial measures of Adjusted EBITDA and free cash flow to the
most directly comparable GAAP financial measure for the periods
indicated:
KLX Energy
Services Holdings, Inc. Reconciliation of Consolidated
Net Loss to Adjusted EBITDA (Loss) (In
millions of U.S.
dollars) (Unaudited)
|
|
|
Pro
Forma
|
|
|
|
Three Months
Ended
|
|
Two Months
Ended
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
One Month
Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
April 30,
2021
|
|
December 31,
2021
|
|
March 31,
2021
|
|
March 31,
2022
|
Consolidated net loss
(2)
|
$
(19.9)
|
|
$
(13.2)
|
|
$
(36.8)
|
|
$
(18.6)
|
|
$
(37.9)
|
|
$
(6.0)
|
Income tax
expense (benefit)
|
0.1
|
|
(0.1)
|
|
0.1
|
|
0.1
|
|
0.1
|
|
0.1
|
Interest
expense, net
|
8.3
|
|
5.5
|
|
7.8
|
|
8.2
|
|
8.0
|
|
2.9
|
Operating
loss
|
(11.5)
|
|
(7.8)
|
|
(28.9)
|
|
(10.3)
|
|
(29.8)
|
|
(3.0)
|
Bargain
purchase gain
|
—
|
|
—
|
|
—
|
|
—
|
|
(1.5)
|
|
—
|
Impairment
and other charges (1)
|
—
|
|
—
|
|
—
|
|
—
|
|
0.3
|
|
—
|
One-time
costs, excluding impairment and other charges
(1)
|
2.0
|
|
0.8
|
|
3.3
|
|
1.4
|
|
1.3
|
|
1.8
|
Adjusted operating
loss
|
(9.5)
|
|
(7.0)
|
|
(25.6)
|
|
(8.9)
|
|
(29.7)
|
|
(1.2)
|
Depreciation and amortization
|
13.7
|
|
10.1
|
|
15.4
|
|
14.8
|
|
16.4
|
|
4.8
|
Non-cash
compensation
|
0.7
|
|
0.5
|
|
0.8
|
|
0.8
|
|
0.6
|
|
0.2
|
Adjusted EBITDA
(loss)
|
$
4.9
|
|
$
3.6
|
|
$
(9.4)
|
|
$
6.7
|
|
$
(12.7)
|
|
$
3.8
|
|
|
*
|
Previously announced
quarterly numbers may not sum to the year-end total due to
rounding.
|
(1)
|
The one-time costs
during the first quarter of 2022 relate to non-recurring legal
costs, sales tax accrual costs, costs related to testing and
treatment of COVID-19, and additional non-recurring
costs.
|
(2)
|
Monthly cost of sales
includes $0.7 million of lease expense associated with five coiled
tubing unit leases.
|
KLX Energy
Services Holdings, Inc. Consolidated
Adjusted EBITDA Margin (1) (In
millions of U.S.
dollars) (Unaudited)
|
|
|
Pro Forma
|
|
|
|
Three Months Ended
|
|
Two Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
One Month Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
April 30, 2021
|
|
December 31, 2021
|
|
March 31, 2021
|
|
March 31, 2022
|
Adjusted EBITDA
(loss)
|
$
4.9
|
|
$
3.6
|
|
$
(9.4)
|
|
$
6.7
|
|
$
(12.7)
|
|
$
3.8
|
Revenue
|
152.3
|
|
94.4
|
|
90.8
|
|
145.0
|
|
85.7
|
|
57.7
|
Adjusted EBITDA Margin
Percentage
|
3.2 %
|
|
3.8 %
|
|
(10.4) %
|
|
4.6 %
|
|
(14.8) %
|
|
6.6 %
|
|
|
(1)
|
Adjusted EBITDA Margin
is defined as the quotient of Adjusted EBITDA (loss) and total
revenue. Adjusted EBITDA is operating income (loss) excluding
one-time costs (as defined above), depreciation and amortization
expense, non-cash compensation expense and non-cash asset
impairment expense.
|
Reconciliation of
Rocky Mountains Operating Loss to
Adjusted EBITDA (Loss) (In millions of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Three Months Ended
|
|
Two Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
April 30, 2021
|
|
December 31, 2021
|
|
March 31, 2021
|
Rocky Mountains
operating loss
|
$
(0.8)
|
|
$
(2.4)
|
|
$
(7.1)
|
|
$
(3.8)
|
|
$
(4.2)
|
One-time
costs (1)
|
0.1
|
|
0.2
|
|
0.3
|
|
0.2
|
|
—
|
Adjusted
operating loss
|
(0.7)
|
|
(2.2)
|
|
(6.8)
|
|
(3.6)
|
|
(4.2)
|
Depreciation and amortization expense
|
5.4
|
|
4.0
|
|
5.1
|
|
5.9
|
|
5.2
|
Non-cash
compensation
|
—
|
|
—
|
|
0.1
|
|
—
|
|
0.1
|
Rocky Mountains
Adjusted EBITDA (loss)
|
$
4.7
|
|
$
1.8
|
|
$
(1.6)
|
|
$
2.3
|
|
$
1.1
|
|
|
(1)
|
One-time costs are
defined in the Reconciliation of Consolidated Net Loss to Adjusted
EBITDA (loss) table above. For purposes of segment reconciliation,
one-time costs also includes impairment and other
charges.
|
Reconciliation of
Southwest Operating Income (Loss) to
Adjusted EBITDA (Loss) (In millions of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Three Months Ended
|
|
Two Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
April 30, 2021
|
|
December 31, 2021
|
|
March 31, 2021
|
Southwest operating
income (loss)
|
$
(0.4)
|
|
$
—
|
|
$
(7.5)
|
|
$
(1.0)
|
|
$
(7.5)
|
One-time
costs (1)
|
0.1
|
|
0.2
|
|
0.9
|
|
0.3
|
|
0.2
|
Adjusted
operating income (loss)
|
(0.3)
|
|
0.2
|
|
(6.6)
|
|
(0.7)
|
|
(7.3)
|
Depreciation and amortization expense
|
4.5
|
|
3.3
|
|
5.8
|
|
4.9
|
|
6.5
|
Non-cash
compensation
|
—
|
|
—
|
|
0.1
|
|
—
|
|
0.1
|
Southwest Adjusted
EBITDA (loss)
|
$
4.2
|
|
$
3.5
|
|
$
(0.7)
|
|
$
4.2
|
|
$
(0.7)
|
|
|
(1)
|
One-time costs are
defined in the Reconciliation of Consolidated Net Loss to Adjusted
EBITDA (loss) table above. For purposes of segment reconciliation,
one-time costs also includes impairment and other
charges.
|
Reconciliation of
Northeast/Mid-Con Operating Income (Loss) to
Adjusted EBITDA (Loss) (In millions of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Three Months Ended
|
|
Two Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
April 30, 2021
|
|
December 31, 2021
|
|
March 31, 2021
|
Northeast/Mid-Con
operating income (loss)
|
$
(0.8)
|
|
$
0.1
|
|
$
(6.8)
|
|
$
2.1
|
|
$
(12.2)
|
One-time
costs (1)
|
0.1
|
|
0.2
|
|
0.7
|
|
0.6
|
|
0.5
|
Adjusted
operating income (loss)
|
(0.7)
|
|
0.3
|
|
(6.1)
|
|
2.7
|
|
(11.7)
|
Depreciation and amortization expense
|
3.4
|
|
2.2
|
|
3.8
|
|
3.4
|
|
4.1
|
Non-cash
compensation
|
—
|
|
0.1
|
|
0.2
|
|
0.1
|
|
0.2
|
Northeast/Mid-Con
Adjusted EBITDA (loss)
|
$
2.7
|
|
$
2.6
|
|
$
(2.1)
|
|
$
6.2
|
|
$
(7.4)
|
|
|
(1)
|
One-time costs are
defined in the Reconciliation of Consolidated Net Loss to Adjusted
EBITDA (loss) table above. For purposes of segment reconciliation,
one-time costs also includes impairment and other
charges.
|
KLX Energy
Services Holdings, Inc. Segment
Adjusted EBITDA Margin (1) (In
millions of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Three Months Ended
|
|
Two Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
April 30, 2021
|
|
December 31, 2021
|
|
March 31, 2021
|
Rocky Mountains
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
$
4.7
|
|
$
1.8
|
|
$
(1.6)
|
|
$
2.3
|
|
$
1.1
|
Revenue
|
43.3
|
|
23.8
|
|
24.3
|
|
35.3
|
|
26.4
|
Adjusted EBITDA Margin
Percentage
|
10.9 %
|
|
7.6 %
|
|
(6.6) %
|
|
6.5 %
|
|
4.2 %
|
Southwest
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
4.2
|
|
3.5
|
|
(0.7)
|
|
4.2
|
|
(0.7)
|
Revenue
|
51.9
|
|
34.0
|
|
38.0
|
|
50.2
|
|
34.3
|
Adjusted EBITDA Margin
Percentage
|
8.1 %
|
|
10.3 %
|
|
(1.8) %
|
|
8.4 %
|
|
(2.0) %
|
Northeast/Mid-Con
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
(loss)
|
2.7
|
|
2.6
|
|
(2.1)
|
|
6.2
|
|
(7.4)
|
Revenue
|
57.1
|
|
36.6
|
|
28.5
|
|
59.5
|
|
25.0
|
Adjusted EBITDA Margin
Percentage
|
4.7 %
|
|
7.1 %
|
|
(7.4) %
|
|
10.4 %
|
|
(29.6) %
|
|
|
(1)
|
Segment Adjusted EBITDA
Margin is defined as the quotient of Segment Adjusted EBITDA (loss)
income and total segment revenue. Segment Adjusted EBITDA is
segment operating income (loss) excluding one-time costs (as
defined above), non-cash compensation expense and non-cash asset
impairment expense.
|
|
|
The following table presents a reconciliation of the non-GAAP
financial measure of free cash flow to the most directly comparable
GAAP financial measure for the periods indicated:
KLX Energy
Services Holdings, Inc. Reconciliation of Net Cash Flow
Provided by Operating Activities to Free Cash Flow (In
millions of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro Forma
|
|
Three Months Ended
|
|
Two Months Ended
|
|
Three Months Ended
|
|
Three Months Ended
|
|
March 31, 2022
|
|
December 31, 2021
|
|
April 30, 2021
|
|
December 31, 2021
|
|
March 31, 2021
|
Net cash flow used in
operating activities
|
$
(6.2)
|
|
$
(12.4)
|
|
$
(11.3)
|
|
$
(12.1)
|
|
$
(7.5)
|
Capital
expenditures
|
(5.8)
|
|
(3.5)
|
|
(2.2)
|
|
(3.5)
|
|
(2.8)
|
Proceeds from sale of
property and equipment
|
2.6
|
|
1.8
|
|
$
6.1
|
|
3.6
|
|
5.3
|
Free cash
flow
|
$
(9.4)
|
|
$
(14.1)
|
|
$
(7.4)
|
|
$
(12.0)
|
|
$
(5.0)
|
The following table presents a reconciliation of the non-GAAP
financial measure of net working capital to the most directly
comparable GAAP financial measure for the periods indicated:
KLX Energy
Services Holdings, Inc. Reconciliation of Current Assets
and Current Liabilities to Net Working Capital (In
millions of U.S.
dollars) (Unaudited)
|
|
|
As of
|
|
March 31, 2022
|
|
December 31, 2021
|
|
|
Current
assets
|
$
162.1
|
|
$
164.7
|
|
|
Less: Cash
|
19.4
|
|
28.0
|
|
|
Net current
assets
|
142.7
|
|
136.7
|
|
|
Current
liabilities
|
131.1
|
|
122.7
|
|
|
Less: Accrued
interest
|
12.3
|
|
5.0
|
|
|
Less: Operating lease
obligations
|
15.3
|
|
15.9
|
|
|
Less: Capital lease
obligations
|
6.7
|
|
5.6
|
|
|
Net current
liabilities
|
96.8
|
|
96.2
|
|
|
Net Working
Capital
|
$
45.9
|
|
$
40.5
|
|
|
KLX Energy
Services Holdings, Inc. Consolidated SG&A
Margin (1) (In millions of U.S.
dollars) (Unaudited)
|
|
|
|
|
|
|
|
|
Pro
Forma
|
|
Three Months
Ended
|
|
Two Months
Ended
|
|
Three Months
Ended
|
|
Three Months
Ended
|
|
March 31,
2022
|
|
December 31,
2021
|
|
April 30,
2021
|
|
December 31,
2021
|
|
March 31,
2021
|
Selling, general and
administrative expenses
|
$
15.0
|
|
$
10.5
|
|
$
14.9
|
|
$
15.7
|
|
$
17.2
|
Revenue
|
152.3
|
|
94.4
|
|
$
90.8
|
|
145.0
|
|
85.7
|
SG&A Margin
Percentage
|
9.8 %
|
|
11.1 %
|
|
16.4 %
|
|
10.8 %
|
|
20.1 %
|
|
|
(1)
|
SG&A Margin is
defined as the quotient of Selling, general and administrative
expenses and total revenue.
|
View original
content:https://www.prnewswire.com/news-releases/klx-energy-services-holdings-inc-reports-first-quarter-2022-results-301546580.html
SOURCE KLX Energy Services Holdings, Inc.