Liberty Oilfield Services Inc. (NYSE: LBRT; “Liberty” or the
“Company”) announced today first quarter 2021 financial and
operational results.
Summary Results and Highlights
- Revenue of $552 million and net loss1 of $39 million, or $0.21
fully diluted loss per share, for the quarter ended March 31,
2021
- Adjusted EBITDA2 of $32 million
- Completed the first full quarter after the OneStim®
acquisition, integration proceeding well
- Enhanced our platform as a fully integrated completion
services, engineering and diagnostics company, doubling our size
with expanded services, basins and entering Canada
- digiFrac™ field testing to commence with key partner next month
following successful high-pressure durability testing in the first
quarter
- Implemented next generation of proprietary SonicStrap chemical
management automation system
- Launched FracSense™ diagnostic service
“Liberty delivered an excellent first quarter. The highly
accretive acquisition of Schlumberger’s North American frac,
pumpdown-perforating wireline and Permian frac sand businesses
(OneStim®) strengthened our business and technology leadership. Our
team handled the challenges of a large-scale integration and
delivered a seamless transition for our customers. We were pleased
to see early benefits from leveraging our full suite of completions
services, including frac, wireline and sand, along with our top
tier engineering and diagnostics tools, driving increased
engagement with customers. I am proud of the Liberty team for
executing at the highest level,” commented Chris Wright, Chief
Executive Officer.
Mr. Wright continued, “The acquisition is transformative for
Liberty and the oilfield services industry. We plan to build on the
success of the first quarter with our technological advantages, an
integrated suite of completion services and a highly motivated team
of men and women at Liberty rising to the challenge. The
investments we made through the cycle further accelerate our
ability to support our customers in the next stage of the shale
revolution. We are excited to bolster our frac technology
leadership with rapid progress on our new electric frac fleet,
digiFrac, expanded frac automation, and a new downhole real-time
frac measurement service, FracSense. A year on from the onset of
the global pandemic, the fundamentals of our industry are on an
upward trajectory, and we believe our compelling strategy will
drive the next phase of the Liberty story.”
Outlook
Buoyed by worldwide vaccine distribution campaigns together with
fiscal and monetary stimulus, global economic growth expectations
are increasingly more constructive. A rise in energy demand has
paralleled the economic recovery, with strong leading economic
indicators suggesting that these trends should continue. There is
still risk driven by the resurgent virus spread in India, Brazil
and several European countries which has led to a reinstatement of
containment measures, unlike the U.S. and U.K. where another wave
of the Covid pandemic has been kept at bay. A tightening in oil
supply and demand has developed, with a steady draw of global oil
inventory signifying that increased OPEC+ production is largely
being absorbed by higher global demand.
Over the last three quarters North American frac activity has
rapidly increased towards supporting maintenance production levels.
Hence public exploration and production (“E&P”) companies have
now reached roughly maintenance run-rate frac activity for 2021.
Private E&P companies, on the other hand, are more responsive
to current oil and gas prices which continue to support modestly
increasing demand for frac services, in line with their recent rise
in rig activity. Importantly, E&P companies are maintaining
capital discipline and moderating long-term growth aiming to
increase commodity price stability and enhance sector
attractiveness. This fundamental change in philosophy should impact
positively the entire value chain, leading to a disciplined phase
in North American energy development.
As E&P economics have substantially improved with WTI crude
oil prices stabilizing in the $60 range, Liberty’s customers are
becoming more comfortable with the necessity to incorporate a
phased approach to price increases. Frac industry underinvestment
has accelerated attrition of older equipment. Importantly, the
market for next generation equipment has tightened, and the market
for next generation equipment with industry leading operations and
technology innovation is even tighter.
“The economic realities of the last twelve months has led
E&P companies to demand higher performing frac partners with
top notch expertise, operational efficiency, technology, and ESG
leadership. As the leading technology-centric service provider, we
see a pathway to normalized margins at some point in 2022 for
Liberty,” commented Mr. Wright. “The demand pull for next
generation equipment with engineering and diagnostics is strong.
Pricing dynamics are improving, technology-driven efficiency gains
in automation and design are rising, and underinvestment in
equipment and technology has led to a more concentrated market of
service companies that can accommodate the sophisticated needs of
our E&P partners. We are excited to lead the industry into the
next phase of innovation in the completions sector.”
First Quarter Results
For the first quarter of 2021, revenue increased 114% to $552
million from $258 million in the fourth quarter of 2020.
Net loss before income taxes totaled $46 million for the first
quarter of 2021 compared to net loss before income taxes of $58
million for the fourth quarter of 2020.
Net loss1 (after taxes) totaled $39 million for the first
quarter of 2021 compared to net loss1 (after taxes) of $48 million
in the fourth quarter of 2020.
Adjusted EBITDA2 increased 345% to $32 million from $7 million
in the fourth quarter. Please refer to the reconciliation of
Adjusted EBITDA (a non-GAAP measure) to net income (a GAAP measure)
in this earnings release.
Fully diluted loss per share was $0.21 for the first quarter of
2021 compared to $0.41 for the fourth quarter of 2020.
Balance Sheet and Liquidity
As of March 31, 2021, Liberty had cash on hand of $70 million,
approximately flat from fourth quarter levels, and total debt of
$106 million, net of deferred financing costs and original issue
discount. There were no borrowings drawn on the ABL credit
facility, and total liquidity, including availability under the
credit facility, was $258 million based on the financial statements
as of March 31, 2021.
Conference Call
Liberty will host a conference call to discuss the results at
8:00 a.m. Mountain Time (10:00 a.m. Eastern Time) on Wednesday,
April 28, 2021. Presenting Liberty’s results will be Chris Wright,
Chief Executive Officer, Ron Gusek, President, and Michael Stock,
Chief Financial Officer.
Individuals wishing to participate in the conference call should
dial (833) 255-2827, or for international callers (412) 902-6704.
Participants should ask to join Liberty’s call. A live webcast will
be available at http://investors.libertyfrac.com. The webcast can
be accessed for 90 days following the call. A telephone replay will
be available shortly after the call and can be accessed by dialing
(877) 344-7529, or for international callers (412) 317-0088. The
passcode for the replay is 10148920. The replay will be available
until May 5, 2021.
About Liberty
Liberty is a leading North American oilfield services firm that
offers one of the most innovative suites of completion services and
technologies to onshore oil and natural gas exploration and
production companies. Liberty was founded in 2011 with a relentless
focus on developing and delivering next generation technology for
the sustainable development of unconventional energy resources in
partnership with our customers. Liberty is headquartered in Denver,
Colorado. For more information about Liberty, please contact
Investor Relations at IR@libertyfrac.com.
1
Net loss attributable to controlling and
non-controlling interests.
2
“Adjusted EBITDA” is not presented in
accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”). Please see the supplemental financial
information in the table under “Reconciliation of Net Income to
EBITDA and Adjusted EBITDA” at the end of this earnings release for
a reconciliation of the non-GAAP financial measure of Adjusted
EBITDA to its most directly comparable GAAP financial measure.
Non-GAAP Financial Measures
This earnings release includes unaudited non-GAAP financial and
operational measures, including EBITDA, Adjusted EBITDA and Pre-Tax
Return on Capital Employed. We believe that the presentation of
these non-GAAP financial and operational measures provides useful
information about our financial performance and results of
operations. Non-GAAP financial and operational measures do not have
any standardized meaning and are therefore unlikely to be
comparable to similar measures presented by other companies. The
presentation of non-GAAP financial and operational measures is not
intended to be a substitute for, and should not be considered in
isolation from, the financial measures reported in accordance with
U.S. GAAP. See the tables entitled Reconciliation and Calculation
of Non-GAAP Financial and Operational Measures for a reconciliation
or calculation of the non-GAAP financial or operational measures to
the most directly comparable GAAP measure.
Forward-Looking and Cautionary Statements
The information above includes “forward-looking statements”
within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. All statements, other than statements of historical facts,
included herein concerning, among other things, the deployment of
fleets in the future, planned capital expenditures, future cash
flows and borrowings, pursuit of potential acquisition
opportunities, our financial position, return of capital to
stockholders, business strategy and objectives for future
operations, are forward-looking statements. These forward-looking
statements are identified by their use of terms and phrases such as
“may,” “expect,” “estimate,” “outlook,” “project,” “plan,”
“believe,” “intend,” “achievable,” “anticipate,” “will,”
“continue,” “potential,” “likely,” “should,” “could,” and similar
terms and phrases. Although we believe that the expectations
reflected in these forward-looking statements are reasonable, they
do involve certain assumptions, risks and uncertainties. These
forward-looking statements represent our expectations or beliefs
concerning future events, and it is possible that the results
described in this earnings release will not be achieved. These
forward-looking statements are subject to certain risks,
uncertainties and assumptions identified above or as disclosed from
time to time in Liberty's filings with the Securities and Exchange
Commission. As a result of these factors, actual results may differ
materially from those indicated or implied by such forward-looking
statements.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, we do not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for us to predict all such factors. When considering these
forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in “Item 1A. Risk Factors”
included in our Annual Report on Form 10-K for the year ended
December 31, 2020 as filed with the SEC on February 24, 2021 and in
our other public filings with the SEC. These and other factors
could cause our actual results to differ materially from those
contained in any forward-looking statements.
Liberty Oilfield Services Inc.
Selected Financial
Data
(unaudited)
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Statement of Income Data:
(amounts in thousands, except
for per share data)
Revenue
$
552,032
$
257,586
$
472,344
Costs of services, excluding depreciation
and amortization shown separately
498,935
236,510
392,716
General and administrative
26,359
20,114
28,613
Transaction, severance and other costs
7,621
9,395
—
Depreciation and amortization
62,056
45,826
44,831
(Gain) loss on disposal of assets
(720
)
109
(102
)
Total operating expenses
594,251
311,954
466,058
Operating (loss) income
(42,219
)
(54,368
)
6,286
Interest expense, net
3,754
3,646
3,608
Net (loss) income before taxes
(45,973
)
(58,014
)
2,678
Income tax (benefit) expense
(7,357
)
(9,783
)
261
Net (loss) income
(38,616
)
(48,231
)
2,417
Less: Net (loss) income attributable to
noncontrolling interests
(4,411
)
(11,201
)
697
Net (loss) income attributable to Liberty
Oilfield Services Inc. stockholders
$
(34,205
)
$
(37,030
)
$
1,720
Net (loss) income attributable to Liberty
Oilfield Services Inc. stockholders per common share:
Basic
$
(0.21
)
$
(0.41
)
$
0.02
Diluted
$
(0.21
)
$
(0.41
)
$
0.02
Weighted average common shares
outstanding:
Basic
163,207
91,026
81,651
Diluted (1)
163,207
91,026
114,952
Other Financial and Operational
Data
Capital expenditures (2)
$
41,938
$
23,961
$
32,888
Adjusted EBITDA (3)
$
31,685
$
7,124
$
57,662
(1)
In accordance with U.S. GAAP, diluted
weighted average common shares outstanding for the three months
ended March 31, 2021 and December 31, 2020, exclude weighted
average shares of Class B common stock (16,333 and 21,970,
respectively), restricted shares (0 and 79, respectively) and
restricted stock units (3,326 and 2,507, respectively) outstanding
during the period.
(2)
Capital expenditures presented above are
shown on an as incurred basis, including capital expenditures in
accounts payable and accrued liabilities.
(3)
Adjusted EBITDA is a non-GAAP financial
measure. See the tables entitled “Reconciliation and Calculation of
Non-GAAP Financial and Operational Measures” below.
Liberty Oilfield Services
Inc.
Condensed Consolidated Balance
Sheets
(unaudited, amounts in
thousands)
March 31,
December 31,
2021
2020
Assets
Current assets:
Cash and cash equivalents
$
69,534
$
68,978
Accounts receivable and unbilled
revenue
336,464
313,949
Inventories
129,338
118,568
Prepaids and other current assets
47,887
65,638
Total current assets
583,223
567,133
Property and equipment, net
1,105,938
1,120,950
Operating and finance lease right-of-use
assets
106,151
114,611
Deferred tax asset
43,514
5,360
Other assets
77,949
81,888
Total assets
$
1,916,775
$
1,889,942
Liabilities and Equity
Current liabilities:
Accounts payable
$
184,799
$
193,338
Accrued liabilities
166,193
118,383
Current portion of operating and finance
lease liabilities
42,187
44,061
Current portion of long-term debt, net of
discount
370
364
Total current liabilities
393,549
356,146
Long-term debt, net of discount
105,317
105,411
Long-term operating and finance lease
liabilities
55,506
61,748
Payable pursuant to tax receivable
agreement
84,668
56,594
Total liabilities
639,040
579,899
Stockholders’ equity:
Common Stock
1,795
1,795
Additional paid in capital
1,212,354
1,125,554
(Accumulated deficit) retained
earnings
(10,915
)
23,288
Accumulated other comprehensive income
1,318
—
Total stockholders’ equity
1,204,552
1,150,637
Noncontrolling interest
73,183
159,406
Total equity
1,277,735
1,310,043
Total liabilities and equity
$
1,916,775
$
1,889,942
Liberty Oilfield Services
Inc.
Reconciliation and Calculation
of Non-GAAP Financial and Operational Measures
(unaudited, amounts in
thousands)
Reconciliation of Net Income to EBITDA
and Adjusted EBITDA
Three Months Ended
March 31,
December 31,
March 31,
2021
2020
2020
Net (loss) income
$
(38,616
)
$
(48,231
)
$
2,417
Depreciation and amortization
62,056
45,826
44,831
Interest expense, net
3,754
3,646
3,608
Income tax (benefit) expense
(7,357
)
(9,783
)
261
EBITDA
$
19,837
$
(8,542
)
$
51,117
Stock based compensation expense
4,947
4,245
4,124
Fleet start-up and lay-down costs
—
1,718
—
Asset acquisition costs
7,621
6,997
—
(Gain) loss on disposal of assets
(720
)
109
(102
)
Provision for credit losses
—
199
2,523
Non-recurring payroll expense
—
2,398
—
Adjusted EBITDA
$
31,685
$
7,124
$
57,662
Calculation of Pre-Tax Return on
Capital Employed
Twelve Months Ended
March 31, 2021
2021
2020
Net loss
$
(201,707
)
Add back: Income tax benefit
(38,475
)
Pre-tax net loss
$
(240,182
)
Capital Employed
Total debt, net of discount
$
105,687
$
106,039
Total equity
1,277,735
781,453
Total Capital Employed
$
1,383,422
$
887,492
Average Capital Employed (1)
$
1,135,457
Pre-Tax Return on Capital Employed (2)
(21
)
%
(1)
Average Capital Employed is the simple
average of Total Capital Employed as of March 31, 2021 and
2020.
(2)
Pre-tax Return on Capital Employed is the
ratio of pre-tax net loss for the twelve months ended March 31,
2021 to Average Capital Employed.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210427006222/en/
Michael Stock Chief Financial Officer 303-515-2851
IR@libertyfrac.com
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