HOUSTON, Feb. 15,
2023 /PRNewswire/ -- NexTier Oilfield Solutions
Inc. (NYSE: NEX) ("NexTier" or the "Company") today reported fourth
quarter and full year 2022 financial and operational
results.
Shareholder return program
- Repurchased 11.5 million shares for $113.0 million in the fourth quarter of 2022
- Including fourth quarter of 2022 repurchases and through
February 14, 2023, repurchased a
total of 14.4 million shares for $139.2
million, representing 5.8% of shares outstanding prior to
commencement of the program in October
2022
Full Year 2022 Results
- Total Revenue of $3.24 billion,
up 128% year-over-year
- Net Income of $315.0 million
($1.26 per diluted share) compared to
a Net Loss of $119.4 million
($0.53 per diluted share) in the
previous year
- Adjusted Net Income(1) of $394.6 million ($1.58 per diluted share) compared to Adjusted Net
Loss of $96.5 million ($0.43 per diluted share) in the previous
year
- Adjusted EBITDA(1) of $656.8
million compared to $114.0
million in the previous year
- Net cash provided by operating activities of $454.4 million
- Free Cash Flow(1) of $294.9
million
- Ended 2022 with total liquidity of $633.8 million, including $218.5 million of cash and undrawn ABL; no term
loan maturities until 2025
Fourth Quarter 2022 Results & Recent Highlights
- Total Revenue of $870.9 million,
down 3% sequentially
- Net Income of $133.0 million
($0.54 per diluted share) compared to
$104.7 million ($0.42 per diluted share) in the previous
quarter
- Adjusted Net Income of $145.8
million ($0.59 per diluted
share) compared to $129.5 million
($0.52 per diluted share) in the
previous quarter
- Adjusted EBITDA of $212.7 million
compared to $194.8 million in the
previous quarter, with increased profitability across all product
and service lines
- Net cash provided by operating activities of $144.1 million
- Free Cash Flow of $93.2
million
Management Commentary
"Operationally, NexTier delivered another very strong quarter
with improved profitability and returns, even in a counter-seasonal
period," said Robert Drummond,
President and Chief Executive Officer of NexTier. "We believe
demand for our services continues to exceed supply, and our natural
gas fueled fleet is creating significant value by lowering fuel
costs. As a result, pricing is still moving higher. The sold out
nature of the frac industry is putting a premium on service
quality, and we are confident that our wellsite integration
strategy offers a superior product for our customers and should
continue to earn a premium return for NexTier investors."
"For 2023, our outlook remains as strong as what we saw in
2022," Mr. Drummond continued. "We expect oil drilling rig count to
only increase slightly throughout the year, but believe there is
already current unmet demand of 20-25 frac fleets in oil basins at
the current rig count, which will likely be sufficient to absorb
all newbuilds and reactivations this year, as well as nearly all
capacity that might free up if near term demand weakens in natural
gas basins. In addition, lower natural gas prices place an even
greater premium on our natural gas powered fleet and our Power
Solutions natural gas fueling business."
Mr. Drummond concluded, "I would like to thank all of our
hard-working employees for their efforts in a pivotal year for
NexTier. We are excited about our prospects for 2023, and we look
forward to delivering another year of strong results for our
employees, our customers, and our investors."
"We have remained steadfast in our strategy to prioritize strong
returns and free cash flow, and our success is very apparent in our
2022 financial performance," said Kenny
Pucheu, Executive Vice President & Chief Financial
Officer of NexTier. "Fundamentals in the oilfield services sector
have improved significantly over the past couple of years, and our
intense focus on timely investments and capital discipline has
allowed us to generate industry leading returns. We see additional
upside in 2023. We believe that a balanced focus on returns, free
cash flow, and growth is the best strategy for our company, and our
growing operating margins are proof that our strategy is
working."
"We remain committed to return at least half of our free cash
flow to our investors," continued Mr. Pucheu. "Following our Q3
2022 earnings, we initiated a shareholder return program. In just
over three months, we have repurchased nearly 6% of the shares that
were outstanding prior to commencement of the program. This should
demonstrate conviction in our outlook on the industry, as well as
conviction in our strategy. We are very excited about the
opportunities for the Company over the next several years, and we
will continue to prudently deploy every dollar of capital to the
highest return project while rewarding our shareholders through the
entire cycle."
Full Year 2022 Financial Results
Revenue totaled $3.24 billion for
the year ended December 31, 2022,
compared to $1.42 billion for the
year ended December 31, 2021. The
revenue increase was primarily driven by higher demand for our
services including an increase in frac activity, further
penetration of our wellsite integration strategy, and higher
pricing relative to the prior year. Additionally, 2022 included a
full year of Alamo revenue
compared to only four months in 2021. Net income was $315.0 million, or $1.26 per diluted share, for the year ended
December 31, 2022, compared to a net
loss of $119.4 million, or
$0.53 per diluted share, for the year
ended December 31, 2021.
Fourth Quarter 2022 Financial Results
Revenue totaled $870.9 million in
the fourth quarter of 2022, compared to $896.0 million in the third quarter of 2022.
Demand for our services remained strong and pricing continued to
strengthen during the quarter, which was offset by normal seasonal
headwinds as well as lower product sales as we saw a mix shift to
lower revenue, higher return work relative to the third
quarter.
Net income totaled $133.0 million,
or $0.54 per diluted share, in the
fourth quarter of 2022, compared to net income of $104.7 million, or $0.42 per diluted share in the third quarter of
2022. Adjusted net income totaled $145.8
million, or $0.59 per diluted
share, in the fourth quarter of 2022, compared to adjusted net
income of $129.5 million, or
$0.52 per diluted share, in the third
quarter of 2022.
Selling, general and administrative expense ("SG&A") totaled
$36.9 million in the fourth quarter
of 2022, compared to SG&A of $37.4
million in the third quarter of 2022. Adjusted
SG&A(1) totaled $29.7
million in the fourth quarter of 2022, compared to adjusted
SG&A of $29.2 million in the
third quarter of 2022.
Adjusted EBITDA totaled $212.7
million in the fourth quarter of 2022, compared to adjusted
EBITDA of $194.8 million in the third
quarter of 2022.
Fourth Quarter 2022 Management Adjustments
EBITDA(1) for the fourth quarter of 2022 was
$199.9 million. When excluding net
management adjustments of $12.8 million, adjusted EBITDA for the
fourth quarter of 2022 was $212.7
million. Management adjustments included $7.1 million in stock compensation expense and a
net $5.7 million in other
adjustments, which includes the finalization of the last earnout
for the Alamo Acquisition.
Completion Services
Revenue in our Completion Services segment totaled $829.8 million in the fourth quarter of 2022,
compared to $857.8 million in the
third quarter of 2022. The sequential decline was due to normal
seasonal headwinds and a mix shift to lower revenue, higher return
work, partially offset by continued strong demand and additional
pricing improvements. Adjusted gross profit(1) totaled
$227.5 million in the fourth quarter
of 2022, compared to $205.7 million
in the third quarter of 2022.
Well Construction and Intervention Services
Revenue in our Well Construction and Intervention ("WC&I")
Services segment, totaled $41.1
million in the fourth quarter of 2022, compared to
$38.3 million in the third quarter of
2022. The sequential improvement was primarily driven by increased
customer activity and pricing in our Cement product line. Adjusted
gross profit totaled $10.5 million in
the fourth quarter of 2022, compared to adjusted gross profit of
$7.6 million in the third quarter of
2022.
Balance Sheet and Capital
Total debt outstanding as of December 31,
2022 was $361.4 million, net
of unamortized deferred financing costs and unamortized debt
discount, excluding finance lease obligations. As of December 31, 2022, total available liquidity was
$633.8 million, comprised of
cash of $218.5 million, and
$415.3 million of available borrowing
capacity under our asset-based credit facility, which remains
undrawn.
Total cash provided by operating activities during the fourth
quarter of 2022 was $144.1 million
and cash used by investing activities was $50.8 million, resulting in a free cash flow of
$93.2 million in the fourth quarter
of 2022.
Investor Presentation and CEO Message
NexTier published an updated Investor Presentation to be viewed
alongside this earnings release and also released a message from
our President and CEO Robert
Drummond. To access the Investor Presentation and message
from our President and CEO, please visit our Investor Relations
page at www.nextierofs.com. The contents of the website, the
Investor Presentation and the CEO's message are not incorporated by
reference into this release.
Outlook
For the first quarter of 2023, we expect revenue will be up at
least 6%, sequentially. Customer demand remains strong and we have
had an encouraging start to the year, with limited impact from
startup inefficiencies after the holiday break. Winter weather will
have an impact on our Q1 results, although the expected impact is
included in the guidance.
Consistent with prior guidance, our 2023 capital expenditure
budget remains $350 million, in line
with our 8-9% of revenue commitment, with spending weighted towards
the first half of the year.
We expect to generate at least $500
million of free cash flow in 2023.
Mr. Drummond concluded, "Frac fundamentals are as strong as they
have been in many years. The world is looking to limit the societal
impacts of energy and commodity inflation, and doing so will
require an increase in oil and gas production even as the world
builds out new energy solutions. US shale will undoubtedly play a
critical role in solving the world's long-term energy needs. In
order for US shale to maintain its competitiveness, the oilfield
services sector will need to invest responsibly to attract capital
and drive the next leg of efficiency. The next phase in shale's
development will require a strong and profitable OFS sector, and
NexTier is prepared to do our part to help the industry responsibly
move forward."
Conference Call Information
On February 16, 2023, NexTier will
hold a conference call for investors at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss fourth
quarter and full year 2022 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 telephonic replay is 7728864 and
will be available until February 23,
2023. 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 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 management believes is useful to analysts and investors to
evaluate our ongoing results of operations, when considered
alongside GAAP measures such as net income and operating income.
You should not consider them in isolation from, or as a substitute
for, analysis of our results under GAAP.
Non-GAAP financial measures include EBITDA,
adjusted EBITDA, adjusted EBITDA per deployed fleet, annualized
adjusted EBITDA per deployed fleet, adjusted gross profit, adjusted
net income (loss), adjusted net income (loss) per share, free cash
flow, cash flow conversion, adjusted SG&A, net debt, invested
capital, average invested capital, return on invested capital,
annualized return on invested capital, total capital, average total
capital, and return on total capital. 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 EBITDA, adjusted EBITDA, adjusted EBITDA per
deployed fleet, annualized adjusted EBITDA per deployed fleet,
adjusted gross profit, adjusted net income (loss), adjusted net
income (loss) per share, and adjusted SG&A 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, free cash flow conversion, and net debt
provide investors a useful measure to assess management's
effectiveness in the areas of profitability and capital management.
Invested capital, average invested capital, return on invested
capital, annualized return on invested capital, total capital,
average total capital, and return on total capital are presented
based on the Company's belief that these non-GAAP measures are
useful information to investors and management when comparing
profitability and the efficiency with which capital has been
employed over time relative to other companies.
For a reconciliation of these non-GAAP measures,
please see the tables at the end of this press release.
Reconciliations of forward-looking non-GAAP financial measures to
comparable GAAP measures are not available due to the challenges
and impracticability with estimating some of the items,
particularly with estimates for certain contingent liabilities, and
estimating non-cash unrealized fair value losses and gains which
are subject to market variability and therefore a reconciliation is
not available without unreasonable effort.
Non-GAAP Measure Definitions: EBITDA is defined
as net income (loss) adjusted to eliminate the impact of interest,
income taxes, depreciation and amortization. Adjusted EBITDA is
defined as EBITDA as further adjusted with certain items management
does not consider in assessing ongoing performance. Management uses
adjusted EBITDA to set targets and to assess the performance of the
Company. Adjusted EBITDA per deployed fleet is defined as (i)
adjusted EBITDA for a given quarter, (ii) divided by number
of fleets deployed. Annualized adjusted EBITDA per deployed fleet
is defined as (i) Adjusted EBITDA per deployed fleet for a given
quarter (ii) multiplied by four quarters. 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 net income
(loss) is defined as net income (loss) adjusted with certain items
management does not consider in assessing ongoing performance.
Adjusted net income (loss) per share is defined as (i) adjusted net
income, (ii) divided by the number of weighted average shares
outstanding. Free cash flow is defined as the net increase
(decrease) in cash and cash equivalents before financing
activities, excluding any acquisitions. When presenting free cash
flow conversion on a historical basis we define it as (i) free cash
flow, (ii) divided by adjusted EBITDA; when presenting free cash
flow conversion on a forward-looking basis we define it as (i) free
cash flow, (ii) divided by EBITDA. 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. Net
debt is defined as (i) total debt, net of unamortized debt discount
and unamortized deferred financing costs, (ii) subtracting cash and
cash equivalents. Invested capital is defined as the sum of (a)
long-term operating lease liabilities, less current maturities, (b)
plus long-term finance lease liabilities, less current maturities,
(c) plus long-term debt, net of unamortized deferred financing cost
and unamortized debt discounts, less current maturities (d) plus
total stockholder's equity. Average invested capital is defined as
the average of the beginning and ending invested capital. Return on
invested capital is defined as (i) net income (loss), (ii) divided
by average invested capital during the period. Annualized return on
invested capital is defined as (i) net income (loss) for a given
quarter, (ii) multiplied by four, (iii) divided by average invested
capital during the period. Total capital is defined as the sum of
(i) total debt, finance leases, operating leases, and total
stockholders' equity. Average total capital is defined as the
average of the beginning and ending total capital. Return on total
capital is defined as (i) revenue less the (ii) sum of (a)
cost of services, (b) depreciation and amortization, and (c)
selling, general and administrative expenses (iii) divided by
average total capital.
Forward-Looking Statements and Where to Find Additional
Information
This press release and discussion in the conference call
described above contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(the "PSLRA"). 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 or made during the conference call described above,
including guidance for 2023 and beyond and other outlook
information (including with respect to the industry in which
NexTier conducts its business), statements regarding our future
operating results, financial position, business strategy, plans and
objectives of management for future operations, and expectation
regarding the capabilities and impact of our products and services
on our operating results and financial position, are
forward-looking statements within the meaning of the PSLRA.
Statements of assumptions underlying or relating to our
forward-looking statements are also forward-looking statements.
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 "anticipate," "believe,"
"contemplate," "continue," "could," "estimate," "expect,"
"forecast," "future," "goal," "intend," "may," "outlook," "plan,"
"potential," "predict," "project," "reflect," "see," "should,"
"target," "will," and "would," or the negative or plural thereof,
and similar expressions, are intended to identify such
forward-looking statements. Any forward-looking statements
contained in this presentation or in oral statements made in
connection with this presentation speak only as of the date on
which we make them and are based upon our historical performance
and on current plans, estimates and expectations. These factors and
risks include, but are not limited to, (i) NexTier's business
strategy, plans, objectives, expectations and intentions; (ii)
NexTier's future operating results; (iii) dependence on capital
spending and well completion by the onshore oil and natural gas
industry and demand for services in the industry in which NexTier
conducts its business; (iv) the variability of crude oil and
natural gas commodity prices; (v) changing regional, national or
global economic conditions, including oil and gas supply and demand
and the impact of geopolitical conditions on those prices; (vi) the
competitive nature of the industry in which NexTier conducts its
business, including pricing pressures; (vii) the impact of pipeline
capacity constraints and adverse weather conditions in oil or gas
producing regions; (viii) the effect of government regulation,
including regulations of hydraulic fracturing, and the operating
hazards of NexTier's business; (ix) the effect of a loss of, or the
financial distress of, or interruption in operations of one or more
NexTier suppliers, materials or customers; (x) the ability to
maintain the right level of commitments under NexTier's supply
agreements; (xi) impact of new technology on NexTier's business;
(xii) impact of any legal proceedings, liability claims and
external investigations; (xiii) the ability to obtain permits,
approvals and authorizations from governmental and third parties;
(xiv) the ability to identify, effect and integrate acquisitions,
divestitures and future capital expenditures and the impact of such
transactions; (xv) environmental, social, and governance matters,
including investor focus and industry perception; (xvi) the ability
to employ a sufficient number of skilled and qualified workers;
(xvii) the ability to service debt obligations and access capital;
(xviii) the market volatility of our stock; (xix) the impact of our
stock buyback program, (xx) our ability to maintain effective
information technology systems and the impact of cybersecurity
incidents on our business, (xxi) the impact of inflation on our
business, and (xxii) other risks detailed in Nex Tier's latest Annual Report on Form 10-K,
including, but not limited to "Part I, Item 1A. Risk Factors" and
"Part II, Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations," and our other filings with
the Securities and Exchange Commission (the "SEC"), which are
available on the SEC website or www.NexTierOFS.com.
"Forward-looking statements" also include, among other things, (a)
statements about NexTier's ability to participate in any
shareholder return program and (b) statements regarding NexTier's
business strategy, its business and operation plan (including its
ability to execute on its well site integration strategy), its
future performance (including expected financial results), and its
capital allocation strategy. There may be other factors of which
NexTier is currently unaware or deem immaterial that may cause its
actual results to differ materially from the forward-looking
statements. NexTier 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 laws. Investors should
not assume that any lack of update to a previously issued
"forward-looking statement" constitutes a reaffirmation of that
statement. The contents of any website referenced in this
presentation are not incorporated herein by reference.
Additional information about the Company, including information
on the Company's response to Covid-19, can be found in its periodic
reports that are filed with the SEC, available www.sec.gov or
www.NexTierOFS.com.
Investor Contact:
Kenneth Pucheu
Executive Vice President - Chief Financial Officer
Michael Sabella
Vice President - Investor Relations and Business Development
michael.sabella@nextierofs.com
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in
thousands, except per share data)
|
|
|
Three Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 31,
2022
|
|
|
|
|
|
|
|
|
Revenue
|
870,857
|
|
$
896,010
|
|
$
842,912
|
|
$
635,043
|
Operating costs and
expenses:
|
|
|
|
|
|
|
|
Cost of
services
|
632,890
|
|
682,683
|
|
649,866
|
|
524,656
|
Depreciation and
amortization
|
58,760
|
|
56,542
|
|
58,794
|
|
55,163
|
Selling, general and
administrative expenses
|
36,867
|
|
37,415
|
|
35,855
|
|
35,859
|
Merger and
integration
|
3,000
|
|
27,521
|
|
23,682
|
|
9,232
|
Gain on disposal of
assets
|
(4,456)
|
|
(10,471)
|
|
(866)
|
|
(823)
|
Total operating costs
and expenses
|
727,061
|
|
793,690
|
|
767,331
|
|
624,087
|
Operating
income
|
143,796
|
|
102,320
|
|
75,581
|
|
10,956
|
Other income
(expense):
|
|
|
|
|
|
|
|
Other income
(expense), net
|
(2,697)
|
|
11,124
|
|
1,461
|
|
5,370
|
Interest expense,
net
|
(6,514)
|
|
(7,150)
|
|
(7,344)
|
|
(7,374)
|
Total other income
(expense)
|
(9,211)
|
|
3,974
|
|
(5,883)
|
|
(2,004)
|
Income before income
taxes
|
134,585
|
|
106,294
|
|
69,698
|
|
8,952
|
Income tax
expense
|
(1,600)
|
|
(1,560)
|
|
(1,240)
|
|
(160)
|
Net
income
|
$
132,985
|
|
$
104,734
|
|
$
68,458
|
|
8,792
|
|
|
|
|
|
|
|
|
Net income per share:
basic
|
$
0.55
|
|
$
0.43
|
|
$
0.28
|
|
$
0.04
|
Net income per share:
diluted
|
$
0.54
|
|
$
0.42
|
|
$
0.27
|
|
$
0.04
|
|
|
|
|
|
|
|
|
Weighted-average
shares: basic
|
241,519
|
|
244,686
|
|
243,969
|
|
243,269
|
Weighted-average
shares: diluted
|
247,980
|
|
250,821
|
|
250,775
|
|
247,705
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited, amounts in
thousands, except per share data)
|
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
|
|
|
|
Revenue
|
$
3,244,822
|
|
$
1,423,441
|
Operating costs and
expenses:
|
|
|
|
Cost of
services
|
2,490,095
|
|
1,255,321
|
Depreciation and
amortization
|
229,259
|
|
184,164
|
Selling, general and
administrative expenses
|
145,996
|
|
109,404
|
Merger and
integration
|
63,435
|
|
8,709
|
Gain on disposal of
assets
|
(16,616)
|
|
(28,898)
|
Total operating costs
and expenses
|
2,912,169
|
|
1,528,700
|
Operating income
(loss)
|
332,653
|
|
(105,259)
|
Other
expense:
|
|
|
|
Other income,
net
|
15,258
|
|
12,131
|
Interest expense,
net
|
(28,382)
|
|
(24,609)
|
Total other
expense
|
(13,124)
|
|
(12,478)
|
Income (loss) before
income taxes
|
319,529
|
|
(117,737)
|
Income tax
expense
|
(4,560)
|
|
(1,686)
|
Net income
(loss)
|
314,969
|
|
(119,423)
|
Other comprehensive
income (loss):
|
|
|
|
Foreign currency
translation adjustments
|
1,118
|
|
407
|
Hedging
activities
|
12,067
|
|
1,703
|
Total comprehensive
income (loss)
|
$
328,154
|
|
$
(117,313)
|
|
|
|
|
Net income (loss) per
share: basic
|
$
1.29
|
|
$
(0.53)
|
Net income (loss) per
share: diluted
|
$
1.26
|
|
$
(0.53)
|
|
|
|
|
Weighted-average
shares: basic
|
243,360
|
|
224,401
|
Weighted-average
shares: diluted
|
249,346
|
|
224,401
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE
SHEETS
(unaudited, amounts in
thousands)
|
|
|
|
December
31,
|
|
December
31,
|
|
|
2022
|
|
2021
|
ASSETS
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
|
$
218,476
|
|
$
110,695
|
Trade and other
accounts receivable, net
|
|
397,197
|
|
301,740
|
Inventories,
net
|
|
66,395
|
|
38,094
|
Assets held for
sale
|
|
—
|
|
1,555
|
Prepaid and other
current assets
|
|
43,947
|
|
55,625
|
Total current
assets
|
|
726,015
|
|
507,709
|
Operating lease
right-of-use assets
|
|
18,659
|
|
21,767
|
Finance lease
right-of-use assets
|
|
43,714
|
|
41,537
|
Property and equipment,
net
|
|
679,513
|
|
620,865
|
Goodwill
|
|
192,780
|
|
192,780
|
Intangible assets,
net
|
|
50,586
|
|
64,961
|
Other noncurrent
assets
|
|
15,901
|
|
7,962
|
Total
assets
|
|
$
1,727,168
|
|
$
1,457,581
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
|
$
202,936
|
|
$
190,963
|
Accrued
expenses
|
|
281,715
|
|
213,923
|
Customer contract
liabilities
|
|
19,377
|
|
23,729
|
Current maturities of
operating lease liabilities
|
|
6,083
|
|
7,452
|
Current maturities of
finance lease liabilities
|
|
19,855
|
|
11,906
|
Current maturities of
long-term debt
|
|
14,004
|
|
13,384
|
Other current
liabilities
|
|
9,368
|
|
10,346
|
Total current
liabilities
|
|
553,338
|
|
471,703
|
Long-term operating
lease liabilities, less current maturities
|
|
13,267
|
|
20,446
|
Long-term finance lease
liabilities, less current maturities
|
|
11,925
|
|
26,873
|
Long-term debt, net of
unamortized deferred financing costs
and unamortized debt discount, less current maturities
|
|
347,425
|
|
361,501
|
Other non-current
liabilities
|
|
11,294
|
|
30,041
|
Total non-current
liabilities
|
|
383,911
|
|
438,861
|
Total
liabilities
|
|
937,249
|
|
910,564
|
Stockholders'
equity:
|
|
|
|
|
Common
stock
|
|
2,340
|
|
2,420
|
Paid-in capital in
excess of par value
|
|
1,007,492
|
|
1,094,020
|
Retained
deficit
|
|
(226,195)
|
|
(541,164)
|
Accumulated other
comprehensive loss
|
|
6,282
|
|
(8,259)
|
Total stockholders'
equity
|
|
789,919
|
|
547,017
|
Total liabilities
and stockholders' equity
|
|
$
1,727,168
|
|
$
1,457,581
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
ADDITIONAL SELECTED
FINANCIAL AND OPERATING DATA
(unaudited, amounts in
thousands)
|
|
|
Three Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
Completion
Services:
|
|
|
|
Revenue
|
$
829,800
|
|
$
857,751
|
Cost of
services
|
602,326
|
|
652,021
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
50,194
|
|
51,153
|
Net income
|
177,280
|
|
154,577
|
Adjusted gross
profit(1)
|
$
227,474
|
|
$
205,730
|
|
|
|
|
Well Construction
and Intervention Services:
|
|
|
|
Revenue
|
$
41,057
|
|
$
38,259
|
Cost of
services
|
30,564
|
|
30,662
|
Depreciation,
amortization, (gain) loss on sale of assets, and
impairment
|
699
|
|
(9,692)
|
Net income
|
9,794
|
|
17,289
|
Adjusted gross
profit(1)
|
$
10,493
|
|
$
7,597
|
|
|
(1)
|
The Company uses
adjusted gross profit(1) as its measure of profitability
for segment reporting.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands)
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 30,
2022
|
Net
income
|
|
$
132,985
|
|
$
104,734
|
|
$
68,458
|
|
$
8,792
|
Interest expense,
net
|
|
6,514
|
|
7,150
|
|
7,344
|
|
7,374
|
Income tax
expense
|
|
1,600
|
|
1,560
|
|
1,240
|
|
160
|
Depreciation and
amortization
|
|
58,760
|
|
56,542
|
|
58,794
|
|
55,163
|
EBITDA
|
|
$
199,859
|
|
$
169,986
|
|
$
135,836
|
|
$
71,489
|
Plus management
adjustments:
|
|
|
|
|
|
|
|
|
Acquisition,
integration and expansion(1)
|
|
3,000
|
|
$
27,521
|
|
23,682
|
|
9,232
|
Non-cash stock
compensation(2)
|
|
7,114
|
|
7,119
|
|
7,547
|
|
7,815
|
Divestiture of
business(3)
|
|
(27)
|
|
1,090
|
|
905
|
|
541
|
(Gain) loss on equity
security investment(4)
|
|
196
|
|
132
|
|
(2,111)
|
|
(5,606)
|
Litigation(5)
|
|
—
|
|
(179)
|
|
416
|
|
—
|
Insurance recovery,
net(6)
|
|
2,480
|
|
(11,044)
|
|
—
|
|
—
|
Other
|
|
67
|
|
138
|
|
(390)
|
|
22
|
Adjusted
EBITDA
|
|
$
212,689
|
|
$
194,763
|
|
$
165,885
|
|
$
83,493
|
|
|
|
|
|
|
|
|
|
Annualized Adjusted
EBITDA
|
|
850,756
|
|
779,052
|
|
663,540
|
|
333,972
|
Deployed
Fleets
|
|
34
|
|
33
|
|
34
|
|
33
|
Annualized adjusted
EBITDA per deployed fleet
|
|
25,022
|
|
23,608
|
|
19,516
|
|
10,120
|
|
|
(1)
|
Represents transaction
and integration costs, including earnout payments, related to
acquisitions.
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
(3)
|
Represents bad debt
expense on the sale of the Well Support Services segment to, and
related to the bankruptcy filing of Basic Energy
Services.
|
(4)
|
Represents the realized
and unrealized (gain) loss on an equity security investment
composed primarily of common equity shares in a public
company.
|
(5)
|
Represents increases
(decreases) in accruals related to contingencies acquired in
business acquisitions.
|
(6)
|
Represents a gain on
insurance recovery in excess of book value due to a fire incident
and losses associated with assets that were damaged in the fire and
ultimately could not be repaired or recovered.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands)
|
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
Net income
(loss)
|
314,969
|
|
(119,423)
|
Interest expense,
net
|
28,382
|
|
24,609
|
Income tax
expense
|
4,560
|
|
1,686
|
Depreciation and
amortization
|
229,259
|
|
184,164
|
EBITDA
|
577,170
|
|
91,036
|
Plus management
adjustments:
|
|
|
|
Acquisition,
integration and expansion(1)
|
63,435
|
|
8,709
|
Non-cash stock
compensation(2)
|
29,595
|
|
24,677
|
Market-driven
costs(3)
|
—
|
|
8,755
|
Divestiture of
business(4)
|
2,509
|
|
7,849
|
Gain on equity
security investment, net(5)
|
(7,389)
|
|
(157)
|
Litigation(6)
|
237
|
|
7,875
|
Tax
audit(7)
|
—
|
|
(24,877)
|
Insurance recovery,
net(8)
|
(8,564)
|
|
(10,409)
|
Other
|
(163)
|
|
504
|
Adjusted
EBITDA
|
656,830
|
|
113,962
|
|
|
(1)
|
Represents transaction
and integration costs, including earnout payments, related to
acquisitions.
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
(3)
|
Represents
market-driven severance, leased facility closures, 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 bad debt
expense on the sale of the Well Support Services segment to, and
related to the bankruptcy filing of Basic Energy
Services.
|
(5)
|
Represents the realized
and unrealized (gain) loss on an equity security investment
composed primarily of common equity shares in a public
company.
|
(6)
|
Represents increases,
net in accruals related to contingencies acquired in business
acquisitions.
|
(7)
|
Represents a reduction
of the Company's accrual related to a tax audits acquired in
business acquisitions or exceptional events.
|
(8)
|
Represents a gain on
estimated insurance recovery in excess of book value due to a fire
incident and net of losses associated with assets that were damaged
in the fire and ultimately could not be repaired or
recovered.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands)
|
|
|
Three Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
Selling, general and
administrative expenses
|
$
36,867
|
|
$
37,415
|
Less management
adjustments:
|
|
|
|
Non-cash stock
compensation
|
(7,114)
|
|
(7,119)
|
Divestiture of
business
|
27
|
|
(1,090)
|
Other
|
(67)
|
|
(138)
|
Adjusted selling,
general and administrative expenses
|
$
29,713
|
|
$
29,247
|
|
Three Months Ended
December 31, 2022
|
|
Completion
Services
|
|
WC&I
|
|
Total
|
Revenue
|
$
829,800
|
|
$
41,057
|
|
$
870,857
|
Cost of
services
|
602,326
|
|
30,564
|
|
632,890
|
Gross profit
excluding depreciation and amortization
|
227,474
|
|
10,493
|
|
237,967
|
Management adjustments
associated with cost of services
|
—
|
|
—
|
|
—
|
Adjusted gross
profit
|
$
227,474
|
|
$
10,493
|
|
$
237,967
|
|
Three Months Ended
September 30, 2022
|
|
Completion
Services
|
|
WC&I
|
|
Total
|
Revenue
|
$
857,751
|
|
$
38,259
|
|
$
896,010
|
Cost of
services
|
652,021
|
|
30,662
|
|
682,683
|
Gross profit
excluding depreciation and amortization
|
205,730
|
|
7,597
|
|
213,327
|
Management adjustments
associated with cost of services
|
—
|
|
—
|
|
—
|
Adjusted gross
profit
|
$
205,730
|
|
$
7,597
|
|
$
213,327
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands, except per share data)
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 31,
2022
|
Net cash used in
operating activities
|
|
$
144,070
|
|
$
163,821
|
|
$
117,834
|
|
$
28,666
|
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities(1) :
|
|
|
|
|
|
|
|
|
Capital
expenditures
|
|
(79,478)
|
|
(58,943)
|
|
(56,859)
|
|
(29,838)
|
Proceeds from disposal
of assets
|
|
14,129
|
|
26,875
|
|
6,401
|
|
2,822
|
Proceeds from insurance
recoveries
|
|
14,506
|
|
825
|
|
—
|
|
20
|
Net cash used in
investing activities
|
|
(50,843)
|
|
(31,243)
|
|
(50,458)
|
|
(26,996)
|
|
|
|
|
|
|
|
|
|
Free cash
flow
|
|
$
93,227
|
|
$
132,578
|
|
$
67,376
|
|
$
1,670
|
|
|
(1)
|
Third quarter ended
September 30, 2022 excludes $27.2 million from the acquisition from
Continental Intermodal Group LP. First quarter ended March 31, 2022
excludes $0.5 million due to net working capital adjustments in
connection with the acquisition of Alamo Pressure Pumping
("Alamo").
|
|
Year
Ended
|
|
December 31,
2022
|
Net cash used in
operating activities
|
$
454,391
|
|
|
Net cash used in
investing activities(1) :
|
|
Capital
expenditures
|
(225,118)
|
Proceeds from disposal
of assets
|
50,227
|
Proceeds from
insurance recoveries
|
15,351
|
Net cash used in
investing activities
|
(159,540)
|
|
|
Free cash
flow
|
$
294,851
|
|
|
(1)
|
Excludes $27.2 million
from the acquisition from Continental Intermodal Group LP and $0.5
million due to net working capital adjustments in connection with
the acquisition of Alamo Pressure Pumping ("Alamo").
|
|
Year
Ended
|
|
December 31,
2022
|
Free cash
flow
|
$
294,851
|
Adjusted
EBITDA
|
$
656,830
|
|
|
Free cash flow
conversion
|
45 %
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands, except per share data)
|
|
|
Three Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
Net
income
|
$
132,985
|
|
$
104,734
|
Plus management
adjustments:
|
|
|
|
Acquisition,
integration and expansion(1)
|
3,000
|
|
$
27,521
|
Non-cash stock
compensation(2)
|
7,114
|
|
7,119
|
Divestiture of
business(3)
|
(27)
|
|
1,090
|
(Gain) loss on equity
security investment, net(4)
|
196
|
|
132
|
Litigation(5)
|
—
|
|
(179)
|
Insurance recovery,
net(6)
|
2,480
|
|
(11,044)
|
Other
|
67
|
|
138
|
Adjusted net
income
|
$
145,815
|
|
$
129,511
|
|
|
|
|
Adjusted net income
per share, basic
|
$
0.60
|
|
$
0.53
|
Adjusted net income
per share, diluted
|
$
0.59
|
|
$
0.52
|
|
|
|
|
Weighted-average
shares, basic
|
241,519
|
|
244,686
|
Weighted-average
shares, diluted
|
247,980
|
|
250,821
|
|
|
(1)
|
Represents transaction
and integration costs, including earnout payments, related to
acquisitions.
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
(3)
|
Represents bad debt
expense on the sale of the Well Support Services segment to, and
related to the bankruptcy filing of Basic Energy
Services.
|
(4)
|
Represents the realized
and unrealized (gain) loss on an equity security investment
composed primarily of common equity shares in a public
company.
|
(5)
|
Represents increases
(decreases) in accruals related to contingencies acquired in
business acquisitions.
|
(6)
|
Represents a gain on
insurance recovery in excess of book value due to a fire incident
and losses associated with assets that were damaged in the fire and
ultimately could not be repaired or recovered.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands, except per share data)
|
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
Net income
(loss)
|
314,969
|
|
(119,423)
|
Plus management
adjustments:
|
|
|
|
Acquisition,
integration and expansion(1)
|
63,435
|
|
8,709
|
Non-cash stock
compensation(2)
|
29,595
|
|
24,677
|
Market-driven
costs(3)
|
—
|
|
8,755
|
Divestiture of
business(4)
|
2,509
|
|
7,849
|
Gain on equity
security investment, net(5)
|
(7,389)
|
|
(157)
|
Litigation(6)
|
237
|
|
7,875
|
Tax
audit(7)
|
—
|
|
(24,877)
|
Insurance recovery,
net(8)
|
(8,564)
|
|
(10,409)
|
Other
|
(163)
|
|
504
|
Adjusted net income
(loss)
|
$
394,629
|
|
$
(96,497)
|
|
|
|
|
Adjusted net income
(loss) per share, basic
|
$
1.62
|
|
$
(0.43)
|
Adjusted net income
(loss) per share, diluted
|
$
1.58
|
|
$
(0.43)
|
|
|
|
|
Weighted-average
shares, basic
|
243,360
|
|
224,401
|
Weighted-average
shares, diluted
|
249,346
|
|
224,401
|
|
|
(1)
|
Represents transaction
and integration costs, including earnout payments, related to
acquisitions.
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
(3)
|
Represents
market-driven severance, leased facility closures, 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 bad debt
expense on the sale of the Well Support Services segment to, and
related to the bankruptcy filing of Basic Energy
Services.
|
(5)
|
Represents the realized
and unrealized (gain) loss on an equity security investment
composed primarily of common equity shares in a public
company.
|
(6)
|
Represents increases,
net in accruals related to contingencies acquired in business
acquisitions.
|
(7)
|
Represents a reduction
of the Company's accrual related to a tax audits acquired in
business acquisitions or exceptional events.
|
(8)
|
Represents a gain on
estimated insurance recovery in excess of book value due to a fire
incident and net of losses associated with assets that were damaged
in the fire and ultimately could not be repaired or
recovered.
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands)
|
|
|
|
Three Months
Ended
|
|
|
December 31,
2022
|
|
September 30,
2022
|
|
June 30,
2022
|
|
March 31,
2022
|
Total debt, net of
unamortized
deferred financing costs and
unamortized debt discount
|
|
$
361,429
|
|
$
364,835
|
|
$
368,194
|
|
$
371,636
|
Cash and cash
equivalents
|
|
218,476
|
|
250,207
|
|
158,136
|
|
99,788
|
Net
debt
|
|
$
142,953
|
|
$
114,628
|
|
$
210,058
|
|
$
271,848
|
|
Year
Ended
|
|
December 31,
2022
|
|
December 31,
2021
|
Net income
(loss)
|
$
314,969
|
|
|
|
|
|
|
Long-term operating
lease liabilities, less current maturities
|
13,267
|
|
20,446
|
Long-term finance
lease liabilities, less current maturities
|
11,925
|
|
26,873
|
Long-term debt, net of
unamortized deferred financing costs
and unamortized debt discount, less current maturities
|
347,425
|
|
361,501
|
Total stockholders'
equity
|
789,919
|
|
547,017
|
Invested
capital
|
$
1,162,536
|
|
$
955,837
|
|
|
|
|
Average invested
capital
|
$
1,059,187
|
|
|
|
|
|
|
Return on invested
capital
|
30 %
|
|
|
|
Three Months
Ended
|
|
December 31,
2022
|
|
September 30,
2022
|
Net
income
|
$
132,985
|
|
|
Annualized net
income
|
$
531,940
|
|
|
|
|
|
|
Long-term operating
lease liabilities, less current maturities
|
13,267
|
|
12,823
|
Long-term finance
lease liabilities, less current maturities
|
11,925
|
|
17,335
|
Long-term debt, net of
unamortized deferred financing costs
and unamortized debt discount, less current maturities
|
347,425
|
|
350,986
|
Total stockholders'
equity
|
789,919
|
|
762,926
|
Invested
capital
|
$
1,162,536
|
|
$
1,144,070
|
|
|
|
|
Average invested
capital
|
$
1,153,303
|
|
|
|
|
|
|
Annualized return on
invested capital
|
46 %
|
|
|
NEXTIER OILFIELD
SOLUTIONS INC. AND SUBSIDIARIES
NON-GAAP FINANCIAL
MEASURES
(unaudited, amounts in
thousands)
|
|
|
|
Year
Ended
|
|
|
December 31,
2022
|
|
December 31,
2021
|
Revenue
|
|
$
3,244,822
|
|
$
1,423,441
|
Cost of
services
|
|
2,490,095
|
|
1,255,321
|
Depreciation and
amortization
|
|
229,259
|
|
184,164
|
Selling, general and
administrative expense
|
|
145,996
|
|
109,404
|
Operating income
(loss) before gain/loss on
sale of assets and other unusual items
|
|
$
379,472
|
|
$
(125,448)
|
|
|
|
|
|
Total debt
|
|
361,429
|
|
$
374,885
|
Finance
leases
|
|
31,780
|
|
38,779
|
Operating
leases
|
|
19,350
|
|
27,898
|
Total stockholders'
equity
|
|
789,919
|
|
547,017
|
Total
Capital
|
|
$
1,202,478
|
|
$
988,579
|
|
|
|
|
|
Average Total
Capital
|
|
$
1,095,529
|
|
|
|
|
|
|
|
Return on Total
Capital
|
|
35 %
|
|
|
View original content to download
multimedia:https://www.prnewswire.com/news-releases/nextier-announces-fourth-quarter-and-full-year-2022-financial-and-operational-results-301748053.html
SOURCE NexTier Oilfield Solutions