HOUSTON, Nov. 3, 2020 /PRNewswire/ -- NexTier Oilfield
Solutions Inc. (NYSE: NEX) ("NexTier" or the "Company") today
reported third quarter 2020 financial and operational
results.
Third Quarter 2020 Results and Recent Highlights
- Generated total revenue of $163.7
million in Q3 2020, compared to $196.2 million in Q2 2020
- Reported fracturing and bundled wireline revenue of
$141.3 million in Q3 2020, compared
to $169.5 million in Q2 2020
- Reported net loss of $102.4
million in Q3 2020, compared to net loss of $112.5 million in Q2 2020
- Reported SG&A of $25.5
million in Q3 2020, reflecting a decrease of 33% versus Q2
2020
- Reported Adjusted SG&A(1) of $19.8 million in Q3 2020, reflecting a decrease
of 36% versus Q2 2020
- Reported Adjusted EBITDA(1) of $(2.4) million in Q3 2020, compared to
$1.7 million in Q2 2020
- Averaged 11 fully-utilized fleets in Q3 2020 and exited with 13
fully-utilized and 14 deployed fleets
- Further reducing marketed hydraulic fracturing fleet by 0.4
million diesel-powered horsepower
- Total liquidity of $370.8 million
exiting Q3 2020, including $305.2
million of cash; no term loan maturities through 2025
Management Commentary
"Despite COVID-19 market challenges and a fiercely competitive
landscape, NexTier deployed 5 additional fleets during the third
quarter," said Robert Drummond,
President and Chief Executive Officer of NexTier. "We benefited
from our market readiness strategy and effectively re-deployed
fleets with minimal start-up costs. The strong momentum gained with
customers during the third quarter is carrying over into the fourth
quarter, where we have 15 fully-utilized fleets working today,
nearly doubling our fully-utilized fleet count exiting the second
quarter."
"NexTier delivered third quarter Adjusted EBITDA decrementals
ahead of our outlook due to strong operational performance and
continued reduction of costs," said Kenny
Pucheu, Executive Vice President and Chief Financial Officer
of NexTier. "Despite the depths of the downturn, we did not cut to
the trough, nor did we size NexTier to operate at current deployed
fleet counts. Instead, we are positioning the company to
participate and lead in the eventual market recovery, anchored by
our fortified balance sheet, including liquidity in excess of
$370 million."
"NexTier is executing its strategy to harvest pent-up earnings
power as the market continues to recover," said Mr. Drummond. "We
continue to reduce our carbon footprint by strategically growing
the clean, natural gas-powered portion of our fleet via existing
fleet conversions, while proactively taking actions that
responsibly utilize our assets and capital. Further, our digital
capabilities enable our strategy to increase work scope at the frac
well site and improve the overall value proposition for our
customers, including reducing costs associated with logistics
services. Currently, the growth rate of NexTier's new cutting edge
logistics support capabilities is outpacing the growth seen in the
rest of NexTier's business."
Quarter 2020 Financial Results
Revenue totaled $163.7
million in the third quarter of 2020, compared to $196.2 million in the second quarter of 2020. The
sequential decrease was primarily driven by reduced calendar
utilization and lower pricing in Completion Services and Well
Construction and Intervention services segments, combined with the
impact of a relatively strong April
2020, partially offset by efficiency gains.
Net loss totaled $102.4 million,
or $0.48 per diluted share, in the
third quarter of 2020, compared to $112.5
million, or $0.53 per diluted
share in the second quarter of 2020. Adjusted net
loss(1) totaled $82.0
million, or $0.38 per
diluted share, in the third quarter of 2020, compared to Adjusted
net loss of $79.4 million, or
$0.37 per diluted share, in the
second quarter of 2020.
Selling, general and administrative expense ("SG&A") totaled
$25.5 million in the third
quarter of 2020, compared to SG&A of $38.0 million in the second quarter of 2020.
Adjusted SG&A(1) totaled $19.8 million in the third quarter of 2020,
compared to Adjusted SG&A of $31.0 million in the second quarter of
2020.
Adjusted EBITDA totaled $(2.4)
million in the third quarter of 2020, compared to Adjusted
EBITDA of $1.7 million in the
second quarter of 2020.
Third Quarter 2020 Management Adjustments
Adjusted EBITDA for the third quarter includes management
adjustments of approximately $20.4
million, consisting primarily of $7.3
million of merger and integration costs, $4.7 million of non-cash stock compensation
expense, $3.8 million for an
accounting loss associated with a make-whole provision on the Basic
notes received as part of the Well Support Services divestiture in
March, $2.7 million of an inventory
impairment, and $1.4 million of
market-driven severance and restructuring costs. The Company does
not anticipate material future merger and integration costs going
forward.
Completion Services
Revenue in our Completion Services segment totaled $154.0 million in the third quarter of 2020,
compared to $179.0 million in the
second quarter of 2020. Activity steadily increased throughout the
third quarter of 2020, which was partially offset by challenging
pricing and calendar utilization. Adjusted Gross Profit totaled
$15.1 million in the third quarter of
2020, compared to $31.7 million in
the second quarter of 2020. Net loss totaled $50.9 million in the third quarter of 2020,
compared to net loss of $46.9 million
in the second quarter of 2020.
The Company had an average of 11 fully-utilized fracturing
fleets in the third quarter of 2020, and exited the third quarter
of 2020 with 13 fully-utilized and 14 deployed fleets. When taking
only fracturing and bundled wireline into account, annualized
Adjusted Gross Profit per fully-utilized fracturing fleet totaled
$5.5 million in the third quarter of
2020, compared to $11.4 million
in the second quarter of 2020.
Well Construction and Intervention Services
Revenue in our Well Construction and Intervention ("WC&I")
Services segment, totaled $9.7
million in the third quarter of 2020, compared to
$17.3 million in the second quarter
of 2020. The sequential decrease in revenue was primarily driven by
a further reduction in the Company's footprint of its cementing and
coil tubing services lines. Adjusted Gross Loss totaled
$0.8 million in the third
quarter of 2020, compared to Adjusted Gross Profit of $0.8 million in the second quarter of 2020. Net
loss totaled $4.0 million in the
third quarter of 2020, compared to net loss of $6.2 million in the second quarter of 2020.
Balance Sheet and Capital
Total debt outstanding as of September
30, 2020 totaled $336.1
million, net of debt discounts and deferred finance costs
and excluding lease obligations. As of September 30, 2020, total available liquidity was
$370.8 million, comprised of cash of
$305.2 million, and $65.6 million of available borrowing capacity
under our asset-based credit facility.
Total cash used in operations was $27.7
million and cash used in investing activities was
$3.4 million, resulting in a cash use
of $31.1 million in the third quarter
of 2020. Excluding cash used for merger and integration related
costs of $7.4 million, and for market
related severance and restructuring cash costs of $1.2 million, combined Adjusted free cash
flow(1) totaled $22.6
million in the third quarter of 2020.
NexTier expects its 2020 total capital expenditures to be
between $120 million and
$130 million, compared to a previous guidance range of between
$100 and $120
million. The revision is driven by investments in converting
Tier 4 equipment currently in the fleet to produce additional dual
fuel capabilities, with expected delivery in the fourth quarter of
2020.
Strategic Updates
NexTier has announced that it will further reduce its marketed
hydraulic fracturing fleet by approximately 0.4 million horsepower,
resulting in a total hydraulic fracturing fleet of approximately
1.8 million horsepower. NexTier will utilize the major components
from the retired equipment over time to support its maintenance
inventory. Combined with the horsepower retirements announced in
November 2019, NexTier will have
removed approximately 0.65 million Tier-2 diesel-powered
horsepower from the market since the merger of Keane and
C&J.
NexTier has also announced that in 2021, it will launch NexTier
Power Solutions, the Company's natural gas treatment and delivery
business that will power NexTier's fleet with field gas or CNG. The
launch supplements the Company's ongoing initiatives in growing its
natural gas powered horsepower and other ESG technologies, and
positions NexTier as the fully integrated natural gas provider of
the oilfield.
"We are experiencing growing customer interest in our carbon
emissions reducing solutions as operators recognize our leadership
position in providing ESG friendly technologies and the value
achievable through aligning with NexTier as a preferred service
provider," stated Mr. Drummond.
Outlook
For the fourth quarter of 2020, NexTier currently expects a
sequential increase in revenue of between 10% and 15% and positive
Adjusted EBITDA. The Company's outlook for the fourth quarter
of 2020 is based on current visibility and assuming no improvement
in pricing.
Coronavirus Monitoring and Planning
The Company is monitoring the spread and impact of the
coronavirus closely, and is implementing measures in accordance
with local directives, as well as internal policies, to protect
employees and limit business interruption. These measures include
restriction on travel and employee contact in certain regions,
employee education, enhanced customer and supplier communication,
alternative sourcing, and other measures. The Company continues to
assess its mitigation plans for further and prolonged impact from
the coronavirus. Additional information on the Company's response
to the coronavirus can be found in its periodic reports that are
filed with the Securities and Exchange Commission.
Conference Call Information
On November 4, 2020, NexTier will
hold a conference call for investors at 7:30
a.m. Central Time (8:30 a.m. Eastern
Time) to discuss third quarter 2020 financial and operating
results. Hosting the call will be management of NexTier, including
Robert Drummond, President and Chief
Executive Officer and Kenny Pucheu,
Executive Vice President and Chief Financial Officer. The call can
be accessed via a live webcast accessible on the IR Event Calendar
page in the Investor Relations section of our website at
www.nextierofs.com or live over the telephone by dialing (855)
560-2574, or for international callers, (412) 542-4160. A 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 10148197. The replay will
be available until November 11, 2020.
An archive of the webcast will be available shortly after the call
on our website at www.nextierofs.com for twelve months following
the call.
About NexTier Oilfield Solutions
Headquartered in Houston,
Texas, NexTier is an industry-leading U.S. land oilfield
service company, with a diverse set of well completion and
production services across the most active and demanding
basins. Our integrated solutions approach delivers efficiency
today, and our ongoing commitment to innovation helps our customers
better address what is coming next. NexTier is differentiated
through four points of distinction, including safety performance,
efficiency, partnership and innovation. At NexTier, we
believe in living our core values from the basin to the boardroom,
and helping customers win by safely unlocking affordable, reliable
and plentiful sources of energy.
(1)
|
Non-GAAP Financial
Measures. The Company has included in this press release or
discussed on the conference call described above certain non-GAAP
financial measures, some of which are calculated on segment basis
or product line basis. These measurements provide supplemental
information which the Company believes is useful to analysts and
investors to evaluate its ongoing results of operations, when
considered alongside GAAP measures such as net income and operating
income.
|
|
|
|
Non-GAAP financial
measures include Adjusted EBITDA, Adjusted Gross Profit, Adjusted
Net Income (loss), free cash flow, Adjusted free cash flow,
Adjusted SG&A, annualized Adjusted gross profit per
fully-utilized fracturing fleet, and Adjusted EBITDA decremental.
These non-GAAP financial measures exclude the financial impact of
items management does not consider in assessing the Company's
ongoing operating performance, and thereby facilitate review of the
Company's operating performance on a period-to-period basis.
Other companies may have different capital structures, and
comparability to the Company's results of operations may be
impacted by the effects of acquisition accounting on its
depreciation and amortization. As a result of the effects of
these factors and factors specific to other companies, the Company
believes Adjusted EBITDA, Adjusted Gross Profit, Adjusted SG&A,
Adjusted Net Income(loss) and Adjusted EBITDA decremental provide
helpful information to analysts and investors to facilitate a
comparison of its operating performance to that of other
companies. The Company believes free cash flow and Adjusted
free cash flow is important to investors in that it provides a
useful measure to assess management's effectiveness in the areas of
profitability and capital management. Annualized Gross Profit
per fully-utilized fracturing fleet is used to evaluate the
operating performance of the business line for comparable periods,
and the Company believes it is important as an indicator of
operating performance of our fracturing and bundled wireline
product line because it excludes the effects of the capital
structure and certain non-cash items from the product line's
operating results. For a reconciliation of these non-GAAP
measures, please see the tables at the end of this press
release.
|
|
|
|
Non-GAAP Measure
Definitions: Adjusted EBITDA is defined as net income (loss)
adjusted to eliminate the impact of interest, income taxes,
depreciation and amortization, along with certain items management
does not consider in assessing ongoing performance. Adjusted Gross
Profit is defined as revenue less cost of services, further
adjusted to eliminate items in cost of services that management
does not consider in assessing ongoing performance. Adjusted Gross
Profit at the segment level is not considered to be a non-GAAP
financial measure as it is our segment measure of profit or loss
and is required to be disclosed under GAAP pursuant to ASC 280.
Adjusted Net Income (Loss) is defined as net income (loss) plus the
after-tax amount of merger/transaction-related costs and other
non-routine items. Adjusted SG&A is defined as selling, general
and administrative expenses adjusted for severance and business
divestiture costs, merger/transaction-related costs, and other
non-routine items. Free cash flow is defined as the net increase
(decrease) in cash and cash equivalents before financing
activities, including share repurchase activity. Adjusted free cash
flow adjusts free cash flow for certain management adjustments.
Annualized Adjusted Gross Profit per fully-utilized fleet, is a
non-GAAP measure and is defined as (i) revenue less cost of
services attributable to the fracturing and bundled wireline
product line, further adjusted to eliminate items in cost of
services that management does not consider in assessing ongoing
performance for the fracturing and bundled wireline product line,
(ii) divided by the fully-utilized fracturing and bundled wireline
fleets (average deployed fleets multiplied by fleet utilization)
per quarter, and then (iii) multiplied by four. Adjusted EBITDA
decremental is calculated by dividing (i) the difference between
second quarter Adjusted EBITDA and third quarter Adjusted EBITDA;
by (ii) the difference between second quarter Revenue and third
quarter Revenue.
|
Forward-Looking Statements
This press release contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of 1995
that are subject to risks and uncertainties and are made pursuant
to the safe harbor provisions of Section 27A of the Securities Act
of 1993, as amended and Section 21E of the Securities Exchange Act
of 1934, as amended. Where a forward-looking statement expresses or
implies an expectation or belief as to future events or results,
such expectation or belief is expressed in good faith and believed
to have a reasonable basis. The words "believe," "continue,"
"could," "expect," "anticipate," "intends," "estimate," "forecast,"
"project," "should," "may," "will," "would" or the negative thereof
and similar expressions are intended to identify such
forward-looking statements. These forward-looking statements are
only predictions and involve known and unknown risks and
uncertainties, many of which are beyond the Company's control.
Statements in this press release regarding the Company that are
forward-looking, including projections as to the amount and timing
of synergies from C&J merger and the Company's 2020 guidance
and outlook information, are based on management's estimates,
assumptions and projections, and are subject to significant
uncertainties and other factors, many of which are beyond the
Company's control. These factors and risks include, but are not
limited to, (i) the competitive nature of the industry in which the
Company conducts its business, including pricing pressures; (ii)
the ability to meet rapid demand shifts; (iii) the impact of
pipeline capacity constraints and adverse weather conditions in oil
or gas producing regions; (iv) the ability to obtain or renew
customer contracts and changes in customer requirements in the
markets the Company serves; (v) the ability to identify, effect and
integrate acquisitions, joint ventures or other transactions; (vi)
the ability to protect and enforce intellectual property rights;
(vii) the effect of environmental and other governmental
regulations on the Company's operations; (viii) the effect of a
loss of, or interruption in operations of, one or more key
suppliers, including resulting from product defects, recalls or
suspensions; (ix) the variability of crude oil and natural gas
commodity prices; (x) the market price and availability of
materials or equipment; (xi) the ability to obtain permits,
approvals and authorizations from governmental and third parties;
(xii) the Company's ability to employ a sufficient number of
skilled and qualified workers to combat the operating hazards
inherent in the Company's industry; (xiii) fluctuations in the
market price of the Company's stock; (xiv) the level of, and
obligations associated with, the Company's indebtedness; (xv) the
duration, impact and severity of the COVID-19 pandemic and the
evolving response thereto, including the impact of social
distancing, shelter-in-place, shutdowns of non-essential businesses
and similar measures imposed or undertaken by governments, private
businesses or others; and (xvi) other risk factors and additional
information. In addition, material risks that could cause actual
results to differ from forward-looking statements include: the
inherent uncertainty associated with financial or other
projections; the effectiveness of the integration of C&J's
businesses into the Company and the ability to continue to achieve
the anticipated synergies and value-creation contemplated in
connection with the merger. For a more detailed discussion of such
risks and other factors, see the Company's filings with the
Securities and Exchange Commission (the "SEC"), including under the
heading "Risk Factors" in Item 1A of the Company's Annual Report on
Form 10-K for the fiscal year ended December
31, 2019, and in our subsequently filed Quarterly Report on
Form 10-Q, both available on the SEC website or www.NexTierOFS.com.
The Company assumes no obligation to update any forward-looking
statements or information, which speak as of their respective
dates, to reflect events or circumstances after the date hereof, or
to reflect the occurrence of unanticipated events, except as may be
required under applicable securities laws. Investors should not
assume that any lack of update to a previously issued
"forward-looking statement" constitutes a reaffirmation of that
statement.
Investor Contact:
Kenneth Pucheu
Executive Vice President - Chief Financial Officer
investors@nextierofs.com
Marc Silverberg
Managing Director (ICR)
marc.silverberg@icrinc.com
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME
(LOSS)
|
(unaudited, amounts
in thousands, except per share data)
|
|
|
Three Months
Ended
September 30, 2020
|
|
Three Months
Ended
June 30, 2020
|
|
|
|
|
Revenue
|
$
|
163,675
|
|
|
$
|
196,227
|
|
Operating costs and
expenses:
|
|
|
|
Cost of
services
|
150,066
|
|
|
178,771
|
|
Depreciation and
amortization
|
73,570
|
|
|
75,260
|
|
Selling, general and
administrative expenses
|
25,521
|
|
|
38,024
|
|
Merger and
integration
|
7,288
|
|
|
14,028
|
|
Gain on disposal of
assets
|
(3,027)
|
|
|
(953)
|
|
Impairment
expense
|
2,681
|
|
|
—
|
|
Total operating costs
and expenses
|
256,099
|
|
|
305,130
|
|
Operating
loss
|
(92,424)
|
|
|
(108,903)
|
|
Other income
(expense):
|
|
|
|
Other income
(expense), net
|
(3,978)
|
|
|
2,259
|
|
Interest expense,
net
|
(5,524)
|
|
|
(5,353)
|
|
Total other
expense
|
(9,502)
|
|
|
(3,094)
|
|
Loss before income
taxes
|
(101,926)
|
|
|
(111,997)
|
|
Income tax
expense
|
(507)
|
|
|
(491)
|
|
Net
loss
|
(102,433)
|
|
|
(112,488)
|
|
Other comprehensive
loss:
|
|
|
|
Foreign currency
translation adjustments
|
(157)
|
|
|
(354)
|
|
Hedging
activities
|
(453)
|
|
|
(2,654)
|
|
Total
comprehensive loss
|
$
|
(103,043)
|
|
|
$
|
(115,496)
|
|
|
|
|
|
Net loss per share:
basic
|
$
|
(0.48)
|
|
|
$
|
(0.53)
|
|
Net loss per share:
diluted
|
$
|
(0.48)
|
|
|
$
|
(0.53)
|
|
|
|
|
|
Weighted-average
shares: basic
|
214,251
|
|
|
213,760
|
|
Weighted-average
shares: diluted
|
214,251
|
|
|
213,760
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(amounts in
thousands)
|
|
|
|
September
30,
|
|
December
31,
|
|
|
2020
|
|
2019
|
ASSETS
|
|
(Unaudited)
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
305,212
|
|
|
$
|
255,015
|
|
Trade and other
accounts receivable, net
|
|
96,740
|
|
|
350,765
|
|
Inventories,
net
|
|
30,199
|
|
|
61,641
|
|
Assets held for
sale
|
|
—
|
|
|
141
|
|
Prepaid and other
current assets
|
|
56,164
|
|
|
20,492
|
|
Total current
assets
|
|
488,315
|
|
|
688,054
|
|
Operating lease
right-of-use assets
|
|
42,165
|
|
|
54,503
|
|
Finance lease
right-of-use assets
|
|
2,396
|
|
|
9,511
|
|
Property and equipment,
net
|
|
514,264
|
|
|
709,404
|
|
Goodwill
|
|
104,198
|
|
|
137,458
|
|
Intangible
assets
|
|
52,945
|
|
|
55,021
|
|
Other noncurrent
assets
|
|
6,895
|
|
|
10,956
|
|
Total
assets
|
|
$
|
1,211,178
|
|
|
$
|
1,664,907
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
|
52,598
|
|
|
$
|
115,251
|
|
Accrued
expenses
|
|
130,585
|
|
|
234,895
|
|
Customer contract
liabilities
|
|
745
|
|
|
60
|
|
Current maturities of
operating lease liabilities
|
|
19,555
|
|
|
23,473
|
|
Current maturities of
finance lease liabilities
|
|
1,549
|
|
|
4,594
|
|
Current maturities of
long-term debt
|
|
2,263
|
|
|
2,311
|
|
Other current
liabilities
|
|
2,672
|
|
|
5,610
|
|
Total current
liabilities
|
|
209,967
|
|
|
386,194
|
|
Long-term operating
lease liabilities, less current maturities
|
|
28,999
|
|
|
35,123
|
|
Long-term finance lease
liabilities, less current maturities
|
|
1,167
|
|
|
4,844
|
|
Long-term debt, net of
unamortized deferred financing costs and unamortized debt discount,
less current maturities
|
|
333,844
|
|
|
335,312
|
|
Other non-current
liabilities
|
|
23,283
|
|
|
16,662
|
|
Total non-current
liabilities
|
|
387,293
|
|
|
391,941
|
|
Total
liabilities
|
|
597,260
|
|
|
778,135
|
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
2,144
|
|
|
2,124
|
|
Paid-in capital in
excess of par value
|
|
985,900
|
|
|
966,762
|
|
Retained
deficit
|
|
(361,535)
|
|
|
(73,333)
|
|
Accumulated other
comprehensive loss
|
|
(12,591)
|
|
|
(8,781)
|
|
Total stockholders'
equity
|
|
613,918
|
|
|
886,772
|
|
Total liabilities
and stockholders' equity
|
|
$
|
1,211,178
|
|
|
$
|
1,664,907
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
ADDITIONAL
SELECTED FINANCIAL AND OPERATING DATA
|
(unaudited, amounts
in thousands)
|
|
|
Three Months
Ended
|
|
September 30,
2020
|
|
June 30,
2020
|
Completion
Services:
|
|
|
|
Revenue
|
$
|
154,016
|
|
|
$
|
178,977
|
|
Cost of
services
|
139,477
|
|
|
159,149
|
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
65,468
|
|
|
66,746
|
|
Net loss
|
(50,929)
|
|
|
(46,918)
|
|
Adjusted gross
profit(1)
|
$
|
15,145
|
|
|
$
|
31,655
|
|
|
|
|
|
Well Construction
and Intervention Services:
|
|
|
|
Revenue
|
$
|
9,659
|
|
|
$
|
17,250
|
|
Cost of
services
|
10,589
|
|
|
19,622
|
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
3,093
|
|
|
3,858
|
|
Net loss
|
(4,023)
|
|
|
(6,230)
|
|
Adjusted gross profit
(loss)(1)
|
$
|
(785)
|
|
|
$
|
812
|
|
|
|
(1)
|
The Company uses
Adjusted gross profit as its measure of profitability for segment
reporting.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
ADDITIONAL
SELECTED FINANCIAL AND OPERATING DATA
|
(unaudited, amounts
in thousands)
|
|
|
Three Months
Ended
|
|
September 30,
2020
|
|
June 30,
2020
|
Net
loss
|
$
|
(102,433)
|
|
|
$
|
(112,488)
|
|
Interest expense,
net
|
5,524
|
|
|
5,353
|
|
Income tax
expense
|
507
|
|
|
491
|
|
Depreciation and
amortization
|
73,570
|
|
|
75,260
|
|
EBITDA
|
$
|
(22,832)
|
|
|
$
|
(31,384)
|
|
Plus management
adjustments:
|
|
|
|
Acquisition,
integration and expansion(1)
|
7,288
|
|
|
14,028
|
|
Non-cash stock
compensation(2)
|
4,748
|
|
|
5,141
|
|
Impairment of assets
(5)
|
2,681
|
|
|
—
|
|
Market-driven
costs(3)
|
1,422
|
|
|
18,925
|
|
Divestiture of
business(4)
|
3,848
|
|
|
(3,775)
|
|
Other
|
430
|
|
|
(1,253)
|
|
Adjusted
EBITDA
|
$
|
(2,415)
|
|
|
$
|
1,682
|
|
|
|
(1)
|
Represents
transaction and integration costs related to the merger.
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan, excluding accelerations associated with market-driven
costs or acquisition, integration, and expansion costs.
|
(3)
|
Represents
market-driven severance and restructuring costs incurred as a
result of significant declines in crude oil prices resulting from
demand destruction from the COVID-19 pandemic and global
oversupply.
|
(4)
|
Represents net
(gain)/loss on the sale of Well Support Services segment and
(increase)/decrease in fair value of the Basic notes and make-whole
derivative received as part of the sale.
|
(5)
|
Represents write-down
in inventory carrying value down to its net realizable
value.
|
|
|
Three Months
Ended
|
|
Variance
|
|
|
September 30,
2020
|
|
June 30,
2020
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA
|
|
$
|
(2,415)
|
|
|
$
|
1,682
|
|
|
$
|
(4,097)
|
|
Revenue
|
|
$
|
163,675
|
|
|
$
|
196,227
|
|
|
$
|
(32,552)
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
decremental(1)
|
|
|
|
|
|
13
|
%
|
|
|
(1)
|
Adjusted EBITDA
decremental is calculated by dividing (i) the difference between
second quarter Adjusted EBITDA and third quarter Adjusted EBITDA;
by (ii) the difference between second quarter Revenue and third
quarter Revenue.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
ADDITIONAL
SELECTED FINANCIAL AND OPERATING DATA
|
(unaudited, amounts
in thousands)
|
|
|
|
Three Months
Ended
September 30, 2020
|
Selling, general
and administrative expenses
|
|
$
|
25,521
|
|
Less management
adjustments:
|
|
|
Non-cash stock
compensation
|
|
(4,748)
|
|
Market-driven
costs
|
|
(671)
|
|
Other
|
|
(301)
|
|
Adjusted selling,
general and administrative
|
|
$
|
19,801
|
|
|
|
|
|
Three Months
Ended
June 30, 2020
|
Selling, general
and administrative expenses
|
|
$
|
38,024
|
|
Less management
adjustments:
|
|
|
Non-cash stock
compensation
|
|
(5,141)
|
|
Market-driven
costs
|
|
(3,914)
|
|
Divestiture of
business
|
|
728
|
|
Other
|
|
1,253
|
|
Adjusted selling,
general and administrative
|
|
$
|
30,950
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURES
|
(amounts in
thousands)
|
|
|
Three Months Ended
September 30, 2020
|
|
Completion
Services
|
|
WC&I
|
|
Total
|
Revenue
|
$
|
154,016
|
|
|
$
|
9,659
|
|
|
$
|
163,675
|
|
Cost of
services
|
139,477
|
|
|
10,589
|
|
|
150,066
|
|
Gross profit
(loss) excluding depreciation and amortization
|
14,539
|
|
|
(930)
|
|
|
13,609
|
|
Management
adjustments associated with cost of services
|
606
|
|
|
145
|
|
|
751
|
|
Adjusted gross
profit (loss)
|
$
|
15,145
|
|
|
$
|
(785)
|
|
|
$
|
14,360
|
|
|
|
|
Three Months Ended
June 30, 2020
|
|
Completion
Services
|
|
WC&I
|
|
Total
|
Revenue
|
$
|
178,977
|
|
|
$
|
17,250
|
|
|
$
|
196,227
|
|
Cost of
services
|
159,149
|
|
|
19,622
|
|
|
$
|
178,771
|
|
Gross profit
(loss) excluding depreciation and amortization
|
19,828
|
|
|
(2,372)
|
|
|
17,456
|
|
Management
adjustments associated with cost of services
|
11,827
|
|
|
3,184
|
|
|
$
|
15,011
|
|
Adjusted gross
profit
|
$
|
31,655
|
|
|
$
|
812
|
|
|
$
|
32,467
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2020
|
|
|
Frac & Bundled
Wireline
|
Revenue
|
|
$
|
141,331
|
|
Cost of
services
|
|
126,705
|
|
Gross profit
excluding depreciation and amortization
|
|
14,626
|
|
Management
adjustments associated with cost of services
|
|
549
|
|
Adjusted gross
profit
|
|
$
|
15,175
|
|
|
|
|
Average hydraulic
fracturing fleets deployed
|
|
13
|
|
Fully-utilized
hydraulic fracturing fleets
|
|
11
|
|
Annualized adjusted
gross profit per fully-utilized fleet
|
|
$
|
5,518
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2020
|
|
|
Frac & Bundled
Wireline
|
Revenue
|
|
$
|
169,470
|
|
Cost of
services
|
|
148,326
|
|
Gross profit
excluding depreciation and amortization
|
|
21,144
|
|
Management
adjustments associated with cost of services
|
|
10,260
|
|
Adjusted gross
profit
|
|
$
|
31,404
|
|
|
|
|
Average hydraulic
fracturing fleets deployed
|
|
13
|
|
Fully-utilized
hydraulic fracturing fleets
|
|
11
|
|
Annualized adjusted
gross profit per fully-utilized fleet
|
|
$
|
11,420
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURES
|
(unaudited, amounts
in thousands)
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
September 30,
2020
|
Net cash provided
(used) in operating activities
|
|
$
|
(27,738)
|
|
Net cash used in
investing activities (1)
|
|
(3,397)
|
|
Free cash flow
use
|
|
(31,135)
|
|
Acquisition,
integration and expansion(2)
|
|
7,373
|
|
Market-driven
costs(2)
|
|
1,193
|
|
Adjusted free cash
flow use
|
|
$
|
(22,569)
|
|
|
|
(1)
|
Excludes proceeds
from the WSS working capital settlement.
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
June 30,
2020
|
Net cash provided
(used) by operating activities
|
|
$
|
61,927
|
|
Net cash used in
investing activities
|
|
(36,436)
|
|
Free cash flow
generation
|
|
25,491
|
|
Acquisition,
integration and expansion(2)
|
|
12,968
|
|
Market-driven
costs(2)
|
|
14,559
|
|
Adjusted free cash
flow generation
|
|
$
|
53,018
|
|
|
|
(2)
|
Acquisition,
integration and expansion and market-driven costs in the
reconciliation to Adjusted free cash flow differs from those
included in the reconciliation to Adjusted EBITDA due to cash paid
in the quarter related to management adjustments.
|
|
|
|
|
|
Three Months
Ended
|
|
September 30,
2020
|
Net loss
|
$
|
(102,433)
|
|
Plus management
adjustments:
|
|
Acquisition,
integration and expansion
|
7,288
|
|
Non-cash stock
compensation
|
4,748
|
|
Impairment of
assets
|
2,681
|
|
Market-driven
costs
|
1,422
|
|
Divestiture of
business
|
3,848
|
|
Other
|
430
|
|
Adjusted net
loss
|
$
|
(82,016)
|
|
|
|
Adjusted net loss per
share, basic and diluted
|
$
|
(0.38)
|
|
|
|
Weighted-average
shares, basic and diluted
|
214,251
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
|
NON-GAAP FINANCIAL
MEASURES
|
(unaudited, amounts
in thousands)
|
|
|
Three Months
Ended
|
|
June 30,
2020
|
Net loss
|
$
|
(112,488)
|
|
Plus management
adjustments:
|
|
Acquisition,
integration and expansion
|
14,028
|
|
Non-cash stock
compensation
|
5,141
|
|
Market-driven
costs
|
18,925
|
|
Divestiture of
business
|
(3,775)
|
|
Other
|
(1,253)
|
|
Adjusted net
loss
|
$
|
(79,422)
|
|
|
|
Adjusted net loss per
share, basic and diluted
|
$
|
(0.37)
|
|
|
|
Weighted-average
shares, basic and diluted
|
213,760
|
|
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SOURCE NexTier Oilfield Solutions