Nuverra Announces Second Quarter And Year-To-Date 2017 Results
SCOTTSDALE, Ariz., Aug. 11, 2017 /PRNewswire/ -- Nuverra Environmental Solutions, Inc. ("Nuverra," the "Company," "we," "us" or "our") today announced financial and operating results for the second quarter and six months ended June 30, 2017.
SUMMARY OF QUARTERLY RESULTS
-- Second quarter revenue was $41.5 million, an increase of approximately
5.9%, or $2.3 million, when compared with revenue of $39.2 million in
the first quarter of 2017.
-- Total costs and expenses, adjusted for special items, were $51.6
million, or a 2.8% decrease when compared with $53.0 million in the
first quarter of 2017.
-- Loss from continuing operations for the second quarter was $19.6
million, or a loss of $0.13 per diluted share, compared with a loss from
continuing operations of $36.0 million, or a loss of $0.24 per diluted
share, in the first quarter of 2017.
-- Adjusted EBITDA from continuing operations for the second quarter was
$2.1 million, an increase of $2.9 million compared with adjusted EBITDA
from continuing operations of $(0.8) million in the first quarter of
2017.
SECOND QUARTER 2017 RESULTS
Second quarter revenue was $41.5 million, an increase of $2.3 million, or 5.9%, from $39.2 million in the first quarter of 2017. In the second quarter of 2016, the Company reported revenue of $34.0 million. Due to oil prices becoming more stable in 2017, demand has increased in all divisions as compared to the same period in the prior year. The primary driver of the increase in demand was a 111% increase in the number of average operating oil rigs in the basins we serve from those operating in the same period in the prior year.
Total costs and expenses, adjusted for special items, were $51.6 million, a 2.8% decrease compared with total costs and expenses, adjusted for special items, of $53.0 million in the first quarter of 2017. The Company reported total costs and expenses, adjusted for special items, of $48.9 million in the second quarter of 2016.
For the second quarter of 2017, the Company reported a net loss from continuing operations of $19.6 million, or a loss of $0.13 per diluted share. Special items in the second quarter totaled approximately $4.3 million and included $9.5 million for capital reorganization costs, partially offset by a $5.6 million gain on the change in fair value of the derivative warrant liability. Additionally, special items included the gain on the sale of underutilized assets, non-recurring legal and professional fees, and stock-based compensation expense. Excluding the impact of these special items, second quarter 2017 adjusted loss from continuing operations was $15.3 million, or a loss of $0.10 per diluted share. This compares with a loss from continuing operations, adjusted for special items, of $27.9 million, or a loss of $0.18 per diluted share, in the first quarter of 2017. The Company reported a loss from continuing operations, adjusted for special items, of $29.4 million, or a loss of $0.43 per diluted share, in the second quarter of 2016.
Adjusted EBITDA from continuing operations for the second quarter was $2.1 million, an increase of $2.9 million compared with $(0.8) million in the first quarter of 2017. Second quarter adjusted EBITDA margin from continuing operations was 5.1%, compared with (2.0)% in the first quarter of 2017. The Company reported adjusted EBITDA from continuing operations of $0.3 million and an adjusted EBITDA margin from continuing operations of 0.9% in the second quarter of 2016.
YEAR-TO-DATE RESULTS FOR THE SIX MONTHS ENDED JUNE 30, 2017 ("YTD")
YTD revenue was $80.8 million, a decrease of $0.2 million from $81.0 million for the same period in 2016. Although rig counts have increased in 2017 compared to those operating during the same period in 2016, there is a lag in revenue relative to newly added rigs, reactivating equipment, and rehiring drivers. Additionally, revenues in early 2016 were still influenced by higher rig counts at the end of 2015. These factors have led to revenue being nearly flat as compared to the same period in the prior year.
YTD net loss from continuing operations was $55.5 million, or a loss of $0.37 per diluted share, compared with a loss of $67.9 million, or a loss of $1.42 per diluted share, for the same period in 2016. Excluding special items, YTD adjusted net loss from continuing operations was $43.2 million, or a loss of $0.29 per diluted share, compared with adjusted net loss from continuing operations of $55.9 million, or a loss of $1.17 per diluted share in 2016. The $12.4 million in YTD special items primarily included $15.2 million for capital reorganization costs and $1.0 million in legal and professional fees, partially offset by a $4.0 million gain on the change in fair value of the derivative warrant liability. Additionally, special items included the gain on the sale of underutilized assets and stock-based compensation expense.
YTD adjusted EBITDA from continuing operations was $1.3 million, a decrease of 28.9% when compared with the same period in 2016. Adjusted EBITDA margin for the 2017 YTD period was 1.7%, compared with 2.3% in 2016.
CASH FLOW AND LIQUIDITY
Net cash used in operating activities from continuing operations for the six months ended June 30, 2017 was $13.3 million, while capital expenditures net of asset sales from continuing operations provided cash of $0.7 million. For the six months ended June 30, 2017, free cash flow (defined as net cash used in or provided by operating activities, less purchases of property, plant and equipment net of proceeds received from sales of property, plant and equipment) was negative at $(12.6) million, compared with negative free cash flow of $(8.7) million during the six months ended June 30, 2016.
As of June 30, 2017, total debt outstanding was $519.9 million, including $40.4 million under our 9.875% Senior Notes due 2018 (the "2018 Notes"), $357.1 million under our 12.5%/10.0% Senior Secured Second Lien Notes due 2021 (the "2021 Notes"), $80.7 million under a term loan (the "Term Loan"), $24.4 million under a debtor in possession revolving credit facility, $7.5 million under a debtor in possession term loan (collectively with the debtor in possession revolving credit facility, the "DIP Facilities"), $9.8 million in capital leases for vehicle financings and a note payable for the purchase of the remaining interest in Appalachian Water Services, LLC.
EMERGENCE FROM CHAPTER 11 BANKRUPTCY PROCEEDINGS
On August 7, 2017 (the "Effective Date"), the Company and its material subsidiaries emerged from Bankruptcy protection under chapter 11 of the United States Bankruptcy Code. Pursuant to their Amended Joint Plans of Reorganization (collectively, the "Plan"), which were confirmed by the United States Bankruptcy Court for the District of Delaware (the "Bankruptcy Court"), the Company eliminated over $500 million of previously outstanding debt and entered into a new $45 million First Lien Credit Agreement and a new $26.8 million Second Lien Term Loan Agreement. Among other uses, the Company will use the loans under the First Lien Credit Agreement and the Second Lien Term Loan Agreement to repay obligations outstanding under the Company's pre-Effective Date asset based lending facility, make certain payments as provided in the Plan, and for working capital, transaction expenses, and other general corporate purposes.
The order confirming the Plan was entered by the Bankruptcy Court on July 25, 2017 (the "Confirmation Order"). On July 26, 2017, an individual holder of 2018 Notes appealed the Confirmation Order to the District Court for the District of Delaware and filed a motion for a stay pending appeal from the District Court. On August 3, 2017, the District Court denied the motion for a stay pending appeal, concluding that: "The Bankruptcy Court's ruling is consistent with existing precedent . . . ." Notwithstanding the denial of the motion for stay pending appeal, the appeal remains pending in the District Court. The Company will seek dismissal or denial of the appeal, but it makes no assurances about the outcome of the appeal or the effects of the appeal on our businesses.
About Nuverra
Nuverra Environmental Solutions, Inc. is among the largest companies in the United States dedicated to providing comprehensive, full-cycle environmental solutions to customers in the energy market. Nuverra focuses on the delivery, collection, treatment, recycling, and disposal of restricted solids, water, wastewater, waste fluids, and hydrocarbons. The Company provides its suite of environmentally compliant and sustainable solutions to customers who demand stricter environmental compliance and accountability from their service providers. Find additional information about Nuverra in documents filed with the U.S. Securities and Exchange Commission ("SEC") at http://www.sec.gov.
Forward-Looking Statements
This press release contains forward-looking statements within the meaning of Section 27A of the United States Securities Act of 1933, as amended, or the "Securities Act," and Section 21E of the United States Securities Exchange Act of 1934, as amended, or the "Exchange Act." These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements, and any forward-looking statements contained herein are based on information available to us as of the date of this press release and our current expectations, forecasts and assumptions, and involve a number of risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing our views as of any subsequent date. Future performance cannot be ensured, and actual results may differ materially from those in the forward-looking statements. Some factors that could cause actual results to differ include, among others: the effects of the restructuring on the Company and the interests of various constituents; risks and uncertainties associated with the restructuring process, including the outcome of a pending appeal of the order confirming the Plan and our ability to execute the requirements of the Plan subsequent to the Effective Date; our ability to obtain approval of the Bankruptcy Court with respect to motions or other requests made to the Bankruptcy Court; the Bankruptcy Court's rulings in our chapter 11 cases and the outcome of our chapter 11 cases in general; our ability to comply with the covenants and other terms of our credit facilities; potential impact of litigation; uncertainty relating to successful negotiation, execution and consummation of all necessary definitive agreements in connection with our strategic initiatives; whether certain markets grow as anticipated; pricing pressures; current and projected future uncertainties in commodities markets, including low oil and/or natural gas prices; changes in customer drilling and completion activities and capital expenditure plans; shifts in production in shale areas where we operate and/or shale areas where we currently do not have operations; control of costs and expenses, including uncertainty regarding the ability to successfully implement cost-management initiatives; liquidity and access to capital; compliance with the terms of agreements governing our financing; and the competitive and regulatory environment. The forward-looking statements contained, or incorporated by reference, herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's filings with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's views as of the date of this press release. The Company undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events, changes in expectations or otherwise. Additional risks and uncertainties are disclosed from time to time in the Company's filings with the SEC, including the Annual Report on Form 10-K for the fiscal year ended December 31, 2016, as well as Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.
Nuverra Environmental Solutions, Inc.
602-903-7802
ir@nuverra.com
- Tables to Follow -
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Revenue:
Non-rental revenue $37,538 $31,369 $72,956 $75,395
Rental revenue 4,000 2,609 7,805 5,558
Total revenue 41,538 33,978 80,761 80,953
Costs and expenses:
Direct operating expenses 34,825 30,283 69,114 68,900
General and administrative expenses 8,867 14,204 21,226 21,656
Depreciation and amortization 12,107 15,206 24,978 31,051
Impairment of long-lived assets - 2,664 - 2,664
Total costs and expenses 55,799 62,357 115,318 124,271
Operating loss (14,261) (28,379) (34,557) (43,318)
Interest expense, net (5,338) (13,973) (19,546) (26,018)
Other income, net 5,698 2,771 4,240 2,929
Loss on extinguishment of debt - (284) - (674)
Reorganization items, net (5,704) - (5,704) -
Loss from continuing operations before
income taxes (19,605) (39,865) (55,567) (67,081)
Income tax benefit (expense) 18 (773) 18 (828)
Loss from continuing operations (19,587) (40,638) (55,549) (67,909)
Loss from discontinued operations, net of
income taxes - (1,290) - (1,235)
Net loss attributable to common
shareholders $(19,587) $(41,928) $(55,549) $(69,144)
Net loss per common share attributable to
common shareholders:
Basic and diluted loss from continuing
operations $(0.13) $(0.60) $(0.37) $(1.42)
Basic and diluted loss from discontinued
operations - (0.02) - (0.03)
Net loss per basic and diluted common share $(0.13) $(0.62) $(0.37) $(1.45)
Weighted average shares outstanding used in
computing net loss per basic and diluted
common share 150,941 67,699 150,938 47,803
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
June 30, December 31,
2017 2016
---- ----
Assets
Cash and cash equivalents $1,205 $994
Restricted cash 4,828 1,420
Accounts receivable, net 28,215 23,795
Inventories 3,980 2,464
Prepaid expenses and other receivables 3,244 3,516
Other current assets 6,163 107
Assets held for sale 631 1,182
Total current assets 48,266 33,478
------
Property, plant and equipment, net 268,785 294,179
Equity investments 59 73
Intangibles, net 13,268 14,310
Other assets 339 564
Total assets $330,717 $342,604
========
Liabilities and Shareholders' Deficit
Accounts payable $6,293 $4,047
Accrued liabilities 27,351 18,787
Current portion of long-term debt 35,230 465,835
Derivative warrant liability - 4,298
Total current liabilities 68,874 492,967
------
Deferred income taxes 495 495
Long-term debt 2,517 5,956
Long-term contingent consideration - 8,500
Other long-term liabilities 3,689 3,752
Liabilities subject to compromise 479,338 -
Total liabilities 554,913 511,670
-------
Commitments and contingencies
Shareholders' deficit:
Common stock 152 152
Additional paid-in capital 1,408,288 1,407,867
Treasury stock (19,809) (19,807)
Accumulated deficit (1,612,827) (1,557,278)
Total shareholders' deficit (224,196) (169,066)
---------
Total liabilities and shareholders' deficit $330,717 $342,604
========
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Six Months Ended
June 30,
--------
2017 2016
---- ----
Cash flows from operating activities:
Net loss $(55,549) $(69,144)
Adjustments to reconcile net loss to net
cash used in operating activities:
Loss on the sale of TFI - 1,235
Depreciation and amortization of
intangible assets 24,978 31,051
Amortization of debt issuance costs, net 2,135 2,587
Accrued interest added to debt principal 8,575 -
Stock-based compensation 421 656
Impairment of long-lived assets - 2,664
Gain on the sale of UGSI - (1,694)
(Gain) loss on disposal of property,
plant and equipment (223) 727
Bad debt expense 784 254
Change in fair value of derivative
warrant liability (4,025) (1,023)
Loss on extinguishment of debt - 674
Deferred income taxes - 48
Other, net 106 (33)
Changes in operating assets and
liabilities:
Accounts receivable (5,204) 21,938
Prepaid expenses and other receivables 710 (146)
Accounts payable and accrued liabilities 13,882 118
Other assets and liabilities, net 135 (2,506)
Net cash used in operating activities (13,275) (12,594)
Cash flows from investing activities:
Proceeds from the sale of property,
plant and equipment 3,027 5,995
Purchases of property, plant and
equipment (2,319) (2,133)
Proceeds from the sale of UGSI - 4,979
Change in restricted cash (3,408) (1,254)
Net cash (used in) provided by investing
activities (2,700) 7,587
Cash flows from financing activities:
Proceeds from revolving credit facility 76,072 76,979
Payments on revolving credit facility (79,866) (130,667)
Proceeds from term loan 15,700 24,000
Proceeds from DIP term loan 6,875 -
Payments for debt issuance costs - (985)
Payments on vehicle financing and other
financing activities (2,595) (3,326)
Net cash provided by (used in) financing
activities 16,186 (33,999)
Net increase (decrease) in cash and cash
equivalents 211 (39,006)
Cash and cash equivalents -beginning of
period 994 39,309
Cash and cash equivalents -end of
period $1,205 $303
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS
(In thousands)
(Unaudited)
This press release contains non-GAAP financial measures as defined by the rules and regulations of the United States Securities and Exchange Commission. A non-GAAP
financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject
to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in
the statements of operations or balance sheets of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are
excluded from the most directly comparable measure so calculated and presented. Reconciliations of these non-GAAP financial measures to their comparable GAAP financial
measures are included in the attached financial tables.
These non-GAAP financial measures are provided because management of the Company uses these financial measures in evaluating the Company's ongoing financial results and
trends. Management uses this non-GAAP information as an indicator of business results, and evaluates overall performance with respect to such indicators. Management
believes that excluding items such as acquisition expenses, amortization of intangible assets, stock-based compensation, asset impairments, restructuring charges,
expenses related to litigation and resolution of lawsuits, and other charges, which may or may not be non-recurring, among other items that are inconsistent in amount
and frequency (as with acquisition expenses), or determined pursuant to complex formulas that incorporate factors, such as market volatility, that are beyond our control
(as with stock-based compensation), for purposes of calculating these non-GAAP financial measures facilitates a more meaningful evaluation of the Company's current
operating performance and comparisons to the past and future operating performance. The Company believes that providing non-GAAP financial measures such as EBITDA,
adjusted EBITDA, adjusted net income (loss), and adjusted net income (loss) per share, in addition to related GAAP financial measures, provides investors with greater
transparency to the information used by the Company's management. These non-GAAP financial measures are not substitutes for measures of performance or liquidity
calculated in accordance with GAAP and may not necessarily be indicative of the Company's liquidity or ability to fund cash needs. Not all companies calculate non-GAAP
financial measures in the same manner, and our presentation may not be comparable to the presentations of other companies.
Reconciliation of Loss from Continuing Operations to EBITDA, Adjusted EBITDA from Continuing Operations and Total Adjusted EBITDA:
----------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Loss from continuing
operations $(19,587) $(40,638) $(55,549) $(67,909)
Depreciation and amortization 12,107 15,206 24,978 31,051
Interest expense, net 5,338 13,973 19,546 26,018
Income tax (benefit) expense (18) 773 (18) 828
EBITDA (2,160) (10,686) (11,043) (10,012)
Adjustments:
Transaction-related costs,
including earnout
adjustments, net - 2 - (117)
Stock-based compensation 112 288 421 656
Change in fair value of
derivative warrant liability (5,643) (1,023) (4,025) (1,023)
Capital reorganization costs
(a) 9,450 8,391 15,152 8,404
Legal and environmental
costs, net 635 251 1,054 1,713
Impairment of long-lived
assets - 2,664 - 2,664
Restructuring, exit and other
costs - 59 - (113)
Loss on extinguishment of
debt - 284 - 674
Gain on the sale of UGSI - (1,694) - (1,694)
(Gain) loss on disposal of
assets (272) 1,784 (223) 727
Adjusted EBITDA from
continuing operations 2,122 320 1,336 1,879
Adjusted EBITDA from
discontinued operations - - - -
Total Adjusted EBITDA $2,122 $320 $1,336 $1,879
====== ==== ====== ======
(a) Capital reorganization costs in 2017 represent costs incurred for the Company's chapter 11 reorganization. Capital reorganization costs in 2016 represent costs
incurred for the debt exchange executed in 2016.
Reconciliation of Loss from Discontinued Operations to EBITDA from Discontinued Operations and Adjusted EBITDA from Discontinued Operations:
--------------------------------------------------------------------------------------------------------------------------------------------
Three Months Ended Six Months Ended
June 30, June 30,
-------- --------
2017 2016 2017 2016
---- ---- ---- ----
Loss from discontinued
operations $ - $(1,290) $ - $(1,235)
Income tax expense - - - -
EBITDA from discontinued
operations - (1,290) - (1,235)
Adjustments:
Transaction-related costs - - - -
Loss on sale of TFI - 1,290 - 1,235
Adjusted EBITDA from
discontinued operations $ - $ - $ - $ -
========== ========== ========== ==========
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS (continued)
(In thousands)
(Unaudited)
Reconciliation of QTD Segment Performance to Adjusted EBITDA
------------------------------------------------------------
Three Months Ended June 30, 2017 Rocky Mountain Northeast Southern Corporate Total
-------------------------------- -------------- --------- -------- --------- -----
Revenue $23,759 $9,570 $8,209 $ - $41,538
Direct operating expenses 19,171 9,831 5,823 - 34,825
General and administrative expenses 1,505 817 650 5,895 8,867
Depreciation and amortization 6,803 2,182 3,068 54 12,107
Operating loss (3,720) (3,260) (1,332) (5,949) (14,261)
Operating margin % (15.7%) (34.1%) (16.2%) NA (34.3%)
Loss from continuing operations before income taxes (4,209) (3,325) (1,406) (10,665) (19,605)
Loss from continuing operations (4,209) (3,325) (1,406) (10,647) (19,587)
Depreciation and amortization 6,803 2,182 3,068 54 12,107
Interest expense, net 81 43 36 5,178 5,338
Income tax benefit - - - (18) (18)
EBITDA $2,675 $(1,100) $1,698 $(5,433) $(2,160)
Adjustments, net 931 67 (234) 3,518 4,282
Adjusted EBITDA from continuing operations $3,606 $(1,033) $1,464 $(1,915) $2,122
Adjusted EBITDA margin % 15.2% (10.8%) 17.8% NA 5.1%
Three Months Ended June 30, 2016 Rocky Mountain Northeast Southern Corporate Total
-------------------------------- -------------- --------- -------- --------- -----
Revenue $18,952 $7,688 $7,338 $ - $33,978
Direct operating expenses 16,232 8,126 5,925 - 30,283
General and administrative expenses 1,695 339 973 11,197 14,204
Depreciation and amortization 7,792 3,426 3,919 69 15,206
Operating loss (6,767) (6,556) (3,790) (11,266) (28,379)
Operating margin % (35.7%) (85.3%) (51.6%) NA (83.5%)
Loss from continuing operations before income taxes (6,818) (6,669) (3,825) (22,553) (39,865)
Loss from continuing operations (6,818) (6,669) (3,825) (23,326) (40,638)
Depreciation and amortization 7,792 3,426 3,919 69 15,206
Interest expense, net 106 109 38 13,720 13,973
Income tax expense - - - 773 773
EBITDA $1,080 $(3,134) $132 $(8,764) $(10,686)
Adjustments, net 2,528 2,009 150 6,319 11,006
Adjusted EBITDA from continuing operations $3,608 $(1,125) $282 $(2,445) $320
Adjusted EBITDA margin % 19.0% (14.6%) 3.8% NA 0.9%
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS (continued)
(In thousands)
(Unaudited)
Reconciliation of YTD Segment Performance to Adjusted EBITDA
------------------------------------------------------------
Six Months Ended June 30, 2017 Rocky Mountain Northeast Southern Corporate Total
------------------------------ -------------- --------- -------- --------- -----
Revenue $48,044 $17,327 $15,390 $ - $80,761
Direct operating expenses 40,403 17,788 10,923 - 69,114
General and administrative expenses 3,452 1,586 1,681 14,507 21,226
Depreciation and amortization 13,588 4,695 6,587 108 24,978
Operating loss (9,399) (6,742) (3,801) (14,615) (34,557)
Operating margin % (19.6%) (38.9%) (24.7%) NA (42.8%)
Loss from continuing operations before income taxes (9,910) (6,927) (3,933) (34,797) (55,567)
Loss from continuing operations (9,910) (6,927) (3,933) (34,779) (55,549)
Depreciation and amortization 13,588 4,695 6,587 108 24,978
Interest expense, net 163 163 94 19,126 19,546
Income tax benefit - - - (18) (18)
EBITDA $3,841 $(2,069) $2,748 $(15,563) $(11,043)
Adjustments, net 1,121 115 (12) 11,155 12,379
Adjusted EBITDA from continuing operations $4,962 $(1,954) $2,736 $(4,408) $1,336
Adjusted EBITDA margin % 10.3% (11.3%) 17.8% NA 1.7%
Six Months Ended June 30, 2016 Rocky Mountain Northeast Southern Corporate Total
------------------------------ -------------- --------- -------- --------- -----
Revenue $43,857 $20,465 $16,631 $ - $80,953
Direct operating expenses 35,790 19,694 13,416 - 68,900
General and administrative expenses 3,547 1,529 1,893 14,687 21,656
Depreciation and amortization 15,871 7,309 7,733 138 31,051
Operating loss (11,351) (10,420) (6,722) (14,825) (43,318)
Operating margin % (25.9%) (50.9%) (40.4%) NA (53.5%)
Loss from continuing operations
before income taxes (11,470) (10,600) (6,751) (38,260) (67,081)
Loss from continuing operations (11,470) (10,600) (6,751) (39,088) (67,909)
Depreciation and amortization 15,871 7,309 7,733 138 31,051
Interest expense, net 204 250 86 25,478 26,018
Income tax expense - - - 828 828
EBITDA $4,605 $(3,041) $1,068 $(12,644) $(10,012)
Adjustments, net 2,713 1,726 (198) 7,650 11,891
Adjusted EBITDA from continuing operations $7,318 $(1,315) $870 $(4,994) $1,879
Adjusted EBITDA margin % 16.7% (6.4%) 5.2% NA 2.3%
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS (continued)
(In thousands)
(Unaudited)
Reconciliation of Special Items to Adjusted Loss from
Continuing Operations and to EBITDA and Adjusted EBITDA from
Continuing Operations
-------------------------------------------------------------
Three Months Ended June 30, 2017
--------------------------------
As Reported Special Items As Adjusted
----------- ------------- -----------
Revenue $41,538 $ - $41,538
Direct operating expenses 34,825 (372) [A] 34,453
General and administrative expenses 8,867 (3,849) [B] 5,018
Total costs and expenses 55,799 (4,221) [C] 51,578
Operating loss (14,261) 4,221 [C] (10,040)
Loss from continuing operations (19,587) 4,278 [D] (15,309)
Basic and diluted loss from continuing
operations $(0.13) $(0.10)
Loss from continuing operations $(19,587) $(15,309)
Depreciation and amortization 12,107 12,107
Interest expense, net 5,338 5,338
Income tax benefit (18) (14)
EBITDA and Adjusted EBITDA from
continuing operations $(2,160) $2,122
======= ======
Description of 2017
Special Items:
--------------------
[A] Special items primarily includes capital reorganization
costs, offset by the gain on the sale of underutilized
assets.
[B] Primarily attributable to $3.1 million for capital
reorganization costs incurred prior to the chapter 11
filing, as well as stock-based compensation, non-routine
litigation expenses and non-routine professional fees.
[C] Primarily includes the aforementioned adjustments.
[D] Primarily includes the aforementioned adjustments along
with $5.7 million of capital reorganization costs incurred
after the chapter 11 filing recorded to "Reorganization
items, net," offset by a gain of $5.6 million associated
with the change in fair value of the derivative warrant
liability. Additionally, our effective tax rate for the
three months ended June 30, 2017 was near zero and has
been applied to the special items accordingly.
Three Months Ended June 30, 2016
--------------------------------
As Reported Special Items As Adjusted
----------- ------------- -----------
Revenue $33,978 $ - $33,978
Direct operating expenses 30,283 (1,842) [E] 28,441
General and administrative expenses 14,204 (8,933) [F] 5,271
Total costs and expenses 62,357 (13,439) [G] 48,918
Operating loss (28,379) 13,439 [G] (14,940)
Loss from continuing operations (40,638) 11,215 [H] (29,423)
Basic and diluted loss from continuing
operations $(0.60) $(0.43)
Loss from continuing operations $(40,638) $(29,423)
Depreciation and amortization 15,206 15,206
Interest expense, net 13,973 13,973
Income tax expense 773 564
EBITDA and Adjusted EBITDA from
continuing operations $(10,686) $320
======== ====
Description of 2016
Special Items:
--------------------
[E] Special items primarily includes the loss on sale of
underutilized assets, and severance and environmental
clean-up charges.
[F] Primarily attributable to stock-based compensation and
non-routine legal and professional fees incurred in
connection with the 2016 debt exchange.
[G] Primarily includes the aforementioned adjustments along
with a long-lived asset impairment charge for assets
classified as held-for-sale of $2.7 million.
[H] Primarily includes the aforementioned adjustments along
with a gain of $1.0 million associated with the change in
fair value of the derivative warrant liability, and a gain
on the sale of Underground Solutions, Inc. of $1.7 million
in the three months ended June 30, 2016. Additionally,
our effective tax rate for the three months ended June 30,
2016 was 1.94% and has been applied to the special items
accordingly.
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS (continued)
(In thousands)
(Unaudited)
Reconciliation of Special Items to Adjusted Loss from
Continuing Operations and to EBITDA and Adjusted EBITDA from
Continuing Operations
-------------------------------------------------------------
Six Months Ended June 30, 2017
------------------------------
As Reported Special Items As Adjusted
----------- ------------- -----------
Revenue $80,761 $ - $80,761
Direct operating expenses 69,114 (421) [A] 68,693
General and administrative expenses 21,226 (10,279) [B] 10,947
Total costs and expenses 115,318 (10,700) [C] 104,618
Operating loss (34,557) 10,700 [C] (23,857)
Loss from continuing operations (55,549) 12,375 [D] (43,174)
Basic and diluted loss from continuing
operations $(0.37) $(0.29)
Loss from continuing operations $(55,549) $(43,174)
Depreciation and amortization 24,978 24,978
Interest expense, net 19,546 19,546
Income tax benefit (18) (14)
EBITDA and Adjusted EBITDA from
continuing operations $(11,043) $1,336
======== ======
Description of 2017
Special Items:
--------------------
[A] Special items primarily includes capital reorganization
costs, offset by the gain on the sale of underutilized
assets.
[B] Primarily attributable to capital reorganization costs of
$8.8 million incurred prior to the chapter 11 filing, as
well as stock-based compensation, non-routine litigation
expenses, and non-routine professional fees.
[C] Primarily includes the aforementioned adjustments.
[D] Primarily includes the aforementioned adjustments along
with $5.7 million of capital reorganization costs incurred
after the chapter 11 filing recorded to "Reorganization
items, net," offset by a gain of $4.0 million associated
with the change in fair value of the derivative warrant
liability. Additionally, our effective tax rate for the
six months ended June 30, 2017 was near zero and has been
applied to the special items accordingly.
Six Months Ended June 30, 2016
------------------------------
As Reported Special Items As Adjusted
----------- ------------- -----------
Revenue $80,953 $ - $80,953
Direct operating expenses 68,900 (1,239) [E] 67,661
General and administrative expenses 21,656 (10,159) [F] 11,497
Total costs and expenses 124,271 (14,062) [G] 110,209
Operating loss (43,318) 14,062 [G] (29,256)
Loss from continuing operations (67,909) 12,034 [H] (55,875)
Basic and diluted loss from continuing
operations $(1.42) $(1.17)
Loss from continuing operations $(67,909) $(55,875)
Depreciation and amortization 31,051 31,051
Interest expense, net 26,018 26,018
Income tax expense 828 685
EBITDA and Adjusted EBITDA from
continuing operations $(10,012) $1,879
======== ======
Description of 2016
Special Items:
--------------------
[E] Special items primarily includes the loss on sale of
underutilized assets, and severance and environmental
clean-up charges.
[F] Primarily attributable to stock-based compensation and
non-routine legal and professional fees incurred in
connection with the 2016 debt exchange.
[G] Primarily includes the aforementioned adjustments along
with a long-lived asset impairment charge for assets
classified as assets-held-for-sale of $2.7 million.
[H] Primarily includes the aforementioned adjustments, along
with a charge of $0.7 million in connection with the
write-off of a portion of the unamortized deferred
financing costs as a result of an amendment to our ABL
Facility, a gain of $1.0 million associated with the
change in fair value of the derivative warrant liability,
and a gain on the sale of Underground Solutions, Inc. for
$1.7 million in the three months ended June 30, 2016.
Additionally, our effective tax rate for the six months
ended June 30, 2016 was 1.23% and has been applied to the
special items accordingly.
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES
NON-GAAP RECONCILIATIONS (continued)
(In thousands)
(Unaudited)
Reconciliation of Free Cash Flow
--------------------------------
Six Months Ended
June 30,
--------
2017 2016
---- ----
Net cash used in operating
activities $(13,275) $(12,594)
Less: net cash capital
expenditures [1] 708 3,862
Free Cash Flow $(12,567) $(8,732)
[1] Purchases of property, plant and
equipment, net of proceeds received from
sales of property, plant and equipment
View original content with multimedia:http://www.prnewswire.com/news-releases/nuverra-announces-second-quarter-and-year-to-date-2017-results-300503404.html
SOURCE Nuverra Environmental Solutions, Inc.
