C&J Energy Services Announces First Quarter 2019 Results
HOUSTON, May 7, 2019 /PRNewswire/ -- C&J Energy Services, Inc. ("C&J" or the "Company") (NYSE: CJ) today announced financial and operating results for the first quarter ended March 31, 2019.
First Quarter 2019 Highlights and Recent Developments
-- Grew consolidated revenue 4% sequentially to $510.8 million resulting in
a net loss of $23.6 million with consolidated Adjusted EBITDA((1)) of
$49.6 million
-- Increased fracturing utilization resulting in revenue growth of 22% and
annualized Adjusted EBITDA per fleet((3)) expansion to $10.2 million
-- Improving customer activity levels across our service lines set the
stage for expected revenue growth in the second quarter of 2019
First Quarter 2019 Financial Results
(USD in thousands, except per share amounts)
Three Months Ended
Change
March 31, 2019 December 31, 2018 March 31, 2018 Sequential Year-on-
year
Revenue $
510,769 $
490,644 $
553,000 4.1 (7.6)
% %
Net income (23,573) (189,527) 20,594 87.6 (214.5)
(loss) % %
Adjusted
net income % %
(loss)(1) (18,530) (17,850) 28,584 (3.8) (164.8)
Operating
income % %
(loss) (22,771) (191,583) 20,342 88.1 (211.9)
Adjusted 49,557 52,564 78,558 (5.7) (36.9)
EBITDA(1) % %
EPS $
(0.36) $
(2.87) $
0.31 87.5 (216.1)
% %
Adjusted $
(0.28) $
(0.27) $
0.42 (3.7) (166.7)
EPS(1) % %
"The sequential improvement in our consolidated revenue was driven by the strong operational execution of our fracturing business. The momentum from increasing our dedicated fleet count at the end of 2018 positioned us well as we entered the new year. We capitalized on refreshed E&P capital budgets from our customers that drove utilization improvement across our deployed fracturing fleets. This increase in utilization coupled with customer efficiencies resulted in a 22% sequential increase in fracturing revenue with solid improvement in profitability per deployed fleet. As we communicated when announcing our fourth quarter 2018 earnings in late February, our other service lines were negatively impacted by inclement weather and lower activity levels for much of the first quarter. These businesses also experienced varying degrees of pricing pressure, and we had unexpected downtime with several of our large diameter coiled tubing units. Since March, activity levels have been increasing, supported by better weather conditions and growth in the drilling rig count. We currently expect to deliver improved sequential results in all of our operating segments in the second quarter. We continue to focus on driving utilization by partnering with high efficiency customers who value our superior service quality and the safety record of our operations. As always, and regardless of market conditions, we are committed to creating long-term value for our shareholders by executing a disciplined capital deployment strategy to achieve superior returns, maintaining a strong balance sheet and generating free cash flow," commented C&J's President and Chief Executive Officer, Don Gawick.
For the first quarter of 2019, revenue totaled $510.8 million, a decrease of 7.6% compared to the first quarter of 2018, but an increase of 4.1% compared to the fourth quarter of 2018. We reported a net loss of $23.6 million, or $(0.36) per diluted share, in the first quarter of 2019, which included $3.3 million, or $0.05 per diluted share, of severance and business divestiture costs, as well as $1.7 million, or $0.03 per diluted share, of other non-routine items. This compared to net income of $20.6 million, or $0.31 per diluted share, in the first quarter of 2018, and a net loss of $189.5 million, or $(2.87) per diluted share, in the fourth quarter of 2018, which included a $146.0 million impairment of goodwill and a $21.4 million loss on the retirement of certain assets.
We reported an Adjusted Net Loss((1)) of $18.5 million, or $(0.28) per diluted share, for the first quarter of 2019, compared to Adjusted Net Income of $28.6 million, or $0.42 per diluted share, for the first quarter of 2018, and an Adjusted Net Loss of $17.9 million, or $(0.27) per diluted share, in the fourth quarter of 2018. During the first quarter of 2019, Adjusted EBITDA((1)) totaled $49.6 million compared to Adjusted EBITDA of $78.6 million in the first quarter of 2018, and Adjusted EBITDA of $52.6 million in the fourth quarter of 2018.
Other Financial Information
Our selling, general and administrative ("SG&A") expense in the first quarter of 2019 was $53.7 million, compared to $65.9 million in the first quarter of 2018, and $49.8 million in the fourth quarter of 2018. The sequential increase in SG&A expense was the result of higher incentive compensation expense including non-cash share-based compensation and higher payroll taxes that are typical during the first quarter.
Depreciation and amortization expense in the first quarter of 2019 was $59.8 million, compared to $46.3 million in the first quarter of 2018, and $63.4 million in the fourth quarter of 2018. The sequential decrease was primarily driven by the disposition of certain assets in the fourth quarter of 2018.
Liquidity and Capital Expenditures
As of March 31, 2019, we had a cash balance of $88.8 million and no borrowings drawn on our credit facility. We exited the first quarter with borrowing capacity of $274.7 million, resulting in $363.5 million of total liquidity as of March 31, 2019. Capital expenditures totaled $48.3 million during the first quarter of 2019, compared to $63.0 million in the first quarter of 2018, and $66.8 million in the fourth quarter of 2018.
During the first quarter, free cash flow((1)) usage totaled $42.7 million mostly to fund capital expenditures and other items that are typical during the first quarter such as annual incentive compensation payments, property taxes and the reset of payroll taxes. In addition, as a result of increased activity levels, our accounts receivable balance increased by $47.8 million, which we expect will result in increased cash conversion in the second quarter, positioning the Company for free cash flow generation in 2019.
Business Segment Results
Completion Services
In our Completion Services segment, we generated first quarter 2019 revenue of $327.1 million, a decrease of 12.6% compared to revenue of $374.1 million generated in the first quarter of 2018, and an increase of 11.5% compared to fourth quarter 2018 revenue of $293.3 million. For the first quarter of 2019, we reported net income of $10.6 million resulting in Adjusted EBITDA((2)) of $54.4 million. This is compared to net income of $58.1 million resulting in Adjusted EBITDA of $81.8 million for the first quarter of 2018, and a net loss of $17.0 million, which included a $16.3 million loss on the disposition of certain assets and a $6.1 million inventory reserve largely associated with a previously divested business, resulting in Adjusted EBITDA of $44.2 million for the fourth quarter of 2018.
Revenue and profitability in our Completion Services segment increased sequentially due to the strong performance of our fracturing operations. The operational momentum created by the increase in our dedicated fleet count as we exited 2018, combined with improved customer activity levels and efficiencies in the first quarter, resulted in improved utilization levels and enhanced profitability in our fracturing business. In our wireline and pumpdown businesses, delayed completion activity in our largest operating area that includes the Bakken and the Rocky Mountains, inclement weather in all of our core operating basins, and a more competitive pricing environment resulted in both revenue and profitability decreasing sequentially. With the challenging conditions of the first quarter, we worked to increase efficiencies and streamline costs in our wireline and pumpdown businesses, including reallocating assets to more profitable locations and closing select operating districts in line with our disciplined returns focused strategy.
Well Construction and Intervention Services
In our Well Construction and Intervention Services ("WC&I") segment, we generated first quarter 2019 revenue of $79.1 million, a decrease of 9.5% compared to revenue of $87.4 million generated in the first quarter of 2018, and a decrease of 15.4% compared to revenue of $93.5 million generated in the fourth quarter of 2018. For the first quarter of 2019, we reported a net loss of $3.4 million resulting in Adjusted EBITDA((2)) of $6.5 million. This is compared to net income of $5.4 million resulting in Adjusted EBITDA of $16.3 million for the first quarter of 2018, and a net loss of $141.7 million, which included a $146.0 million goodwill impairment charge and a $2.3 million loss on the retirement of certain assets, resulting in Adjusted EBITDA of $15.9 million for the fourth quarter of 2018.
Revenue and profitability decreased sequentially in our WC&I segment primarily due to lower customer activity levels, inclement weather and reduced asset deployment. These factors, together with the lower overall drilling rig count from smaller public and private customers in West Texas and a more competitive pricing environment in West Texas and the Mid-Continent, negatively impacted our cementing business throughout the first quarter. In our coiled tubing business, we experienced unexpected downtime with some of our large diameter units, several of which were warrantied by the manufacturer, and all but one returned to service early in the second quarter of 2019. Additionally, slower than expected completion activity levels in South Texas and the Mid-Continent resulted in lower overall utilization in our coiled tubing business during the first quarter.
Well Support Services
In our Well Support Services segment, we generated first quarter 2019 revenue of $104.6 million, an increase of 14.4% compared to revenue of $91.4 million generated in the first quarter of 2018, and an increase of 0.7% compared to revenue of $103.9 million generated in the fourth quarter of 2018. For the first quarter of 2019, we reported a net loss of $4.5 million resulting in Adjusted EBITDA((2)) of $7.0 million. This is compared to a net loss of $8.6 million resulting in Adjusted EBITDA of $5.6 million for first quarter of 2018, and a net loss of $4.0 million, which included a $2.8 million loss on the retirement of certain assets, resulting in Adjusted EBITDA of $13.1 million for the fourth quarter of 2018.
Segment revenue was essentially flat, but segment profitability declined sequentially due to inclement weather across our operating basins and higher overall labor costs. In our rig services business, we benefited from the full quarter impact of rate increases implemented in the fourth quarter of 2018, which were offset by multiple instances of harsh weather conditions throughout the back half of the quarter, especially in our largest operating basin of California. Weather-driven delays also inhibited our ability to get equipment to location to meet continued strong customer demand for plug and abandonment services, which resulted in special services revenue and profitability decreasing sequentially. In our fluids management business, customer demand continued to improve, but weather-driven delays in our largest operating basins and higher labor costs caused profitability to decline sequentially.
Forward Outlook
Focusing on the second quarter of 2019, we currently expect improved financial results in each of our operating segments. At the end of the first quarter, we experienced a rebound in activity levels and many of the challenges experienced earlier in the quarter subsided. In our Completion Services segment, customer demand for our fracturing operations is stable, and wireline and pumpdown activity levels have improved nicely off the bottom reached during the first quarter. While the pricing environment remains challenged in our cementing business, we believe the drilling rig count with our smaller public and private customers in West Texas will continue to recover from the low point reached late in the first quarter. Our WC&I segment is expected to also benefit from the deployment of all our large diameter coiled tubing fleet during the second quarter. Now that the seasonally driven weather delays that are typical in both the fourth and first quarters have passed, our Well Support Services segment is experiencing steady customer demand for workover and well maintenance services. Clearly, the outlook is more favorable, and we are well positioned to grow both revenue and profitability across our service lines and for each of our operating segments. With that said, the oilfield services environment remains extremely competitive and customers remain very price sensitive. We will remain focused on the things that we can control and stay committed to generating targeted returns, maintaining capital spending discipline, and generating free cash flow in 2019.
Conference Call Information
We will host a conference call on Tuesday, May 7, 2019 at 10:00 a.m. ET / 9:00 a.m. CT to discuss our first quarter 2019 financial and operating results. Interested parties may listen to the conference call via a live webcast accessible on our website at www.cjenergy.com or by calling U.S. (Toll Free): 1-855-560-2574 or International: 1-412-542-4160 and asking for the "C&J Energy Services' Earnings Call." Please dial-in ten to fifteen minutes before the scheduled call time to avoid any delays entering the earnings call. An archive of the webcast will be available shortly after the call on our website at www.cjenergy.com for twelve months following the call. A replay of the call will also be available for one week by calling U.S. (Toll Free): 1-877-344-7529 or International: 1-412-317-0088, using the access code: 10130830.
About C&J Energy Services
C&J Energy Services is a leading provider of well construction and intervention, well completion, well support and other complementary oilfield services and technologies to independent and major oilfield companies engaged in the exploration, production and development of oil and gas properties in onshore basins throughout the continental United States. We offer a diverse, integrated suite of services across the life cycle of the well, including hydraulic fracturing, cased-hole wireline and pumpdown, cementing, coiled tubing, rig services, fluids management, other completions logistics, and specialty well site support services. We are headquartered in Houston, Texas and operate across all active onshore basins of the continental United States. For additional information about C&J, please visit www.cjenergy.com.
C&J Energy Services Investor Contact
Daniel E. Jenkins
Vice President - Investor Relations
investors@cjenergy.com
1-713-260-9986
This news release (and any oral statements made regarding the subjects of this release, including those that may be made on the conference call announced herein) contains certain statements and information that may constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. All statements that address circumstances, activities, events or developments that we expect, believe or anticipate will or may occur in the future are forward-looking statements. In addition, words such as "anticipate," "believe," "ensure," "expect," "if," "once" "intend," "plan," "focus," "estimate," "project," "forecasts," "predict," "outlook," "will," "could," "should," "potential," "would," "may," "probable," "likely," variations of such words and similar expressions that convey the uncertainty of future events or outcomes are intended to identify forward-looking statements. Forward-looking statements contained in this news release, which are not generally historical in nature, include those that express a belief, expectation or intention regarding our future activities, plans and goals and our current expectations with respect to, among other things: our ability to successfully integrate acquisitions; our operating cash flows, the availability of capital and our liquidity; our future revenue, income and operating performance; our ability to sustain and improve our utilization, revenue and margins; our ability to maintain acceptable pricing for our services; future capital expenditures; our ability to finance equipment, working capital and capital expenditures; our ability to execute our long-term growth strategy; our ability to successfully develop our research and technology capabilities and implement technological developments and enhancements; and the timing and success of strategic initiatives and special projects.
Forward-looking statements are not assurances of future performance and actual results could differ materially from our historical experience and our present expectations or projections. These forward-looking statements are based on management's current expectations and beliefs, forecasts for our existing operations, experience, expectations and perception of historical trends, current conditions, anticipated future developments and their effect on us, and other factors believed to be appropriate. Although management believes the expectations and assumptions reflected in these forward-looking statements are reasonable as and when made, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all). Our forward-looking statements involve significant risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. Known material factors that could cause actual results to differ materially from those in the forward-looking statements include, but are not limited to, risks associated with the following: a decline in demand for our services, including due to supply of oil and gas, declining or perceived instability of commodity prices, overcapacity of supply, constrained pipeline capacity and other competitive factors affecting our industry; the cyclical nature and volatility of the oil and gas industry, which may impact the level of drilling, completion and production activity and spending patterns by our customers; a decline in, or substantial volatility of, crude oil and gas commodity prices, which generally leads to decreased spending by our customers and negatively impacts drilling, completion and production activity; pressure on pricing for our services, including due to competition and industry and/or economic conditions, which impacts, among other things, our ability to implement price increases or maintain pricing and margin on our services; the loss of, or interruption or delay in operations by, one or more customers; the failure by one or more of our customers to pay amounts when due, or at all; changes in customer requirements in the markets or industries we serve; costs, delays, compliance requirements and other difficulties in executing our short-and long-term business plans and growth strategies; the effects of recent or future acquisitions or customer opportunities on our business, including our ability to successfully integrate our operations and the costs incurred in doing so and the costs and potential liabilities associated with new or expanded areas of operational risks (such as offshore or international operations); business growth outpacing the capabilities of our infrastructure; the loss of, or interruption or delay in operations by, one or more of our key suppliers, including resulting from product defects, recalls or suspensions; adverse weather conditions in oil and gas producing regions; operating hazards inherent in our industry, including the possibility of accidents resulting in personal injury or death, property damage or environmental damage; the effect of environmental and other governmental regulations on our operations, including the risk that future changes in the regulation of hydraulic fracturing could reduce or eliminate demand for our hydraulic fracturing services; the incurrence of significant costs and liabilities resulting from litigation or governmental proceedings; the incurrence of significant costs and liabilities or severe restrictions on our operations or the inability to perform certain operations or provide certain services resulting from a failure to comply, or our compliance with, new or existing regulations; the effect of new or existing regulations, industry and/or commercial conditions on the availability of and costs for raw materials, consumables and equipment; our ability to implement new technologies and services; the loss of, or inability to attract, key management and other competent personnel; a shortage of qualified workers; damage to or malfunction of equipment; our ability to maintain sufficient liquidity and/or obtain adequate financing to allow us to execute our business plan; and our ability to comply with covenants under our credit facility.
C&J cautions that the foregoing list of factors is not exclusive. For additional information regarding known material factors that could cause our actual results to differ from our present expectations and projected results, please see our filings with the U.S. Securities and Exchange Commission, including our Current Reports on Form 8-K that we file from time to time, Quarterly Reports on Form 10-Q and Annual Report on Form 10-K. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date hereof. We undertake no obligation to publicly update or revise any forward-looking statements after the date they are made, whether as a result of new information, future events or otherwise, except as required by law.
(1) Adjusted Net
Income (Loss)
is defined as
net income
(loss) plus
the after-tax
amount of
acquisition-
related costs
and other non-
routine items.
Adjusted Net
Income (Loss)
per diluted
share is
calculated as
Adjusted Net
Income (Loss)
divided by
diluted
weighted
average common
shares
outstanding.
Adjusted
EBITDA is
defined as
earnings
before net
interest
expense,
income taxes,
depreciation
and
amortization,
other income
(expense),
gain or loss
on disposal of
assets,
acquisition-
related costs,
non-cash
share-based
compensation
expense 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.
Management
believes that
Adjusted Net
Income (Loss),
Adjusted
EBITDA on a
consolidated
basis are
useful to
investors to
assess and
understand
operating
performance,
especially
when comparing
those results
with previous
and subsequent
periods or
forecasting
performance
for future
periods,
primarily
because
management
views the
excluded items
to be outside
of the
Company's
normal
operating
results.
Management
believes 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.
For a
reconciliation
of net income
(loss) to each
of Adjusted
Net Income
(Loss),
Adjusted
EBITDA and for
a
reconciliation
of net
increases
(decreases) in
cash and cash
equivalents to
free cash
flow, please
see the tables
at the end of
this press
release.
(2) Adjusted EBITDA
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.
Reconciliations
of Adjusted
EBITDA from
net income at
a segment
level are
being provided
as
supplemental
financial
information.
(3) Adjusted EBITDA
per fleet on
an annualized
basis, is a
non-GAAP
measure and is
defined as (i)
the earnings
before net
interest
expense,
income taxes,
depreciation
and
amortization,
other income
(expense),
gain or loss
on disposal of
assets,
acquisition-
related costs,
non-cash
share-based
compensation
expense and
other non-
routine items
for the
fracturing
product line,
(ii) divided
by the active
fleets per
quarter, and
then (iii)
multiplied by
four. Adjusted
EBITDA per
fleet on an
annualized
basis is used
by management
to evaluate
the operating
performance of
the business
for comparable
periods, and
the Company
believes it is
important as
an indicator
of operating
performance of
our fracturing
product line
because it
excludes the
effects of the
capital
structure and
certain non-
cash items
from the
fracturing
product line's
operating
results. For a
reconciliation
of Adjusted
EBITDA per
fleet on an
annualized
basis, please
see the tables
at the end of
this press
release.
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, 2019 December 31, 2018 March 31, 2018
---
Revenue $
510,769 $
490,644 $
553,000
Costs and expenses:
Direct costs 416,339 396,642 418,997
Selling, general and
administrative expenses 53,684 49,797 65,935
Research and development 1,805 1,438 1,872
Depreciation and amortization 59,756 63,389 46,343
Impairment expense - 146,015
(Gain) loss on disposal of
assets 1,956 24,946 (489)
Operating income (loss) (22,771) (191,583) 20,342
Other income (expense):
Interest expense, net (347) (617) (428)
Other income, net 465 2,716 620
Total other income (expense) 118 2,099 192
Income (loss) before income
taxes (22,653) (189,484) 20,534
Income tax expense (benefit) 920 43 (60)
Net income (loss) $
(23,573) $
(189,527) $
20,594
Net income (loss) per common share:
Basic $
(0.36) $
(2.87) $
0.31
Diluted $
(0.36) $
(2.87) $
0.31
Weighted average common shares outstanding:
Basic 65,030 66,138 67,186
Diluted 65,030 66,138 67,266
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
March 31, 2019 December 31, 2018
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $
88,830 $
135,746
Accounts receivable, net of allowance of $6,052 at March 31, 2019
and $4,877 at December 31, 2018 355,745 309,104
Inventories, net 61,328 62,633
Prepaid and other current assets 16,749 22,357
Total current assets 522,652 529,840
Property, plant and equipment, net of accumulated depreciation of
$375,253 at March 31, 2019 and $320,134 at December 31, 2018 738,590 737,292
Other assets:
Intangible assets, net 112,885 115,072
Deferred financing costs, net of accumulated amortization of
$3,174 at March 31, 2019 and $2,932 at December 31, 2018 4,333 4,574
Right-of-use asset, net 27,413
Other noncurrent assets 18,583 37,676
Total assets $
1,424,456 $
1,424,454
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $
146,525 $
140,109
Payroll and related costs 40,344 48,873
Accrued expenses 52,224 55,430
Current portion of lease liability 6,834
Total current liabilities 245,927 244,412
Long-term lease liability 17,527
Other long-term liabilities 26,320 26,713
Total liabilities 289,774 271,125
Commitments and contingencies
Stockholders' equity
Common stock, par value of $0.01, 1,000,000,000 shares
authorized, 66,052,053 and 66,120,015 issued and outstanding at
March 31, 2019 and December 31, 2018, respectively 661 661
Additional paid-in capital 1,278,493 1,273,524
Accumulated other comprehensive loss (191) (148)
Retained deficit (144,281) (120,708)
Total stockholders' equity 1,134,682 1,153,329
Total liabilities and stockholders' equity $
1,424,456 $
1,424,454
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2019 March 31, 2018
Cash flows from operating activities:
Net income (loss) $
(23,573) $
20,594
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization 59,756 46,343
Provision for doubtful accounts 1,173 1,261
(Gain) loss on disposal of assets 1,956 (489)
Share-based compensation expense 5,852 6,526
Amortization of deferred financing costs 262 147
Right-of-use asset expense 2,194
Changes in operating assets and liabilities:
Accounts receivable (47,773) (25,683)
Inventories 1,358 (6,184)
Prepaid expenses and other current assets 4,309 4,446
Accounts payable 12,510 16,088
Payroll related costs and accrued expenses (14,836) (31,459)
Income taxes 1,320 3,637
Other 229 429
Net cash provided by operating activities 4,737 35,656
Cash flows from investing activities:
Purchases of and deposits on property, plant
and equipment (48,341) (63,028)
Proceeds from disposal of property, plant and
equipment and non-core service lines 904 3,641
Net cash used in investing activities (47,437) (59,387)
Cash flows from financing activities:
Financing costs (82)
Employee tax withholding on restricted stock
vesting (883) (2,185)
Shares repurchased and retired (3,298)
Net cash used in financing activities (4,181) (2,267)
Effect of exchange rate changes on cash (35) 88
Net decrease in cash and cash equivalents (46,916) (25,910)
Cash and cash equivalents, beginning of period 135,746 113,887
Cash and cash equivalents, end of period $
88,830 $
87,977
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF SG&A TO ADJUSTED SG&A
(In thousands)
(Unaudited)
Three Months Ended
March 31, 2019 December 31, 2018 March 31, 2018
---
SG&A $
53,684 $
49,797 $
65,935
Severance and business
divestiture costs (1,079) (4,974)
Restructuring costs and
other (261) (521) (623)
Acquisition-related and
other transaction costs - (727)
Legal settlements (600) (500)
Adjusted SG&A $
51,744 $
49,276 $
59,111
Revenue $
510,769 $
490,644 $
553,000
Adjusted SG&A as a
percentage of revenue 10.1
% 10.0
% 10.7
%
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED
NET INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands, except per share data)
(Unaudited)
Three Months Ended
March 31, 2019 December 31, 2018 March 31, 2018
---
Net income (loss) $
(23,573) $
(189,527) $
20,594
Adjustments, net of tax:
Severance and business
divestiture costs 3,336 6,140
Bad debt reserve 846
Legal settlements 600 500
Impairment expense - 146,015
Asset impairment - 21,410
Inventory reserve - 6,131
Financial restructuring
settlement - (2,400)
Acquisition-related and other
transaction costs - 727
Restructuring costs and other 261 521 623
Adjusted net income (loss) $
(18,530) $
(17,850) $
28,584
Depreciation and amortization 59,756 63,389 46,343
(Gain) loss on disposal of
assets 1,956 3,536 (489)
Interest expense, net 347 617 428
Other income, net (465) (316) (620)
Income tax expense (benefit) 920 43 (60)
Non-cash share-based
compensation, excluding
severance 5,573 3,145 4,372
Adjusted EBITDA $
49,557 $
52,564 $
78,558
Per common share:
Net income (loss) diluted $
(0.36) $
(2.87) $
0.31
Adjusted net income (loss)
diluted $
(0.28) $
(0.27) $
0.42
Diluted weighted average
common shares outstanding 65,030 66,138 67,266
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF FRACTURING NET INCOME (LOSS) TO FRACTURING ADJUSTED EBITDA
(In thousands, except average active fleet data)
(Unaudited)
Three Months Ended
March 31, 2019 December 31, 2018
---
Fracturing net income (loss) $
10,423 $
(19,748)
Adjustments, net of tax:
Depreciation and
amortization 29,172 26,107
Loss on disposal of assets 2,058 19,027
Non-cash share-based
compensation 209 107
Fracturing adjusted EBITDA $
41,862 $
25,493
Average active fleets 16.4 16.3
Annualized Adjusted EBITDA
per fleet $
10,210 $
6,256
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(In
thousands)
(Unaudited)
Three Months Ended March 31, 2019
Completion WC&I Well Support Corporate /
Services Elimination Total
Services
Net income (loss) $
10,603 $
(3,374) $
(4,468) $
(26,334) $
(23,573)
Depreciation and amortization 39,837 7,885 10,248 1,786 59,756
(Gain) loss on disposal of assets 2,035 (14) (64) (1) 1,956
Interest expense, net 33 314 347
Other (income) expense, net 184 (375) (274) (465)
Income tax expense 920 920
Severance and business divestiture
costs 1,128 284 1,110 814 3,336
Restructuring costs and other 261 261
Non-cash share-based
compensation, excluding severance 1,163 372 504 3,534 5,573
Bad debt reserve (515) 1,361 846
Legal settlements 600 600
Adjusted EBITDA $
54,435 $
6,514 $
6,988 $
(18,380) $
49,557
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended December 31, 2018
Completion WC&I Well Support Corporate /
Services Elimination Total
Services
Net loss $
(17,023) $
(141,650) $
(4,013) $
(26,841) $
(189,527)
Depreciation and amortization 37,848 9,952 13,155 2,434 63,389
Impairment expense 146,015 146,015
Loss on disposal of assets 20,202 1,364 3,379 1 24,946
Interest expense, net 28 589 617
Other (income) expense, net (3,170) 306 148 (2,716)
Income tax expense 43 43
Inventory reserve 6,131 6,131
Non-cash share-based
compensation, excluding severance 252 219 275 2,399 3,145
Restructuring costs and other 521 521
Adjusted EBITDA $
44,240 $
15,900 $
13,130 $
(20,706) $
52,564
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET INCOME (LOSS) TO ADJUSTED EBITDA
(In thousands)
(Unaudited)
Three Months Ended March 31, 2018
Completion WC&I Well Support Corporate /
Services Elimination Total
Services
Net income (loss) $
58,139 $
5,351 $
(8,583) $
(34,313) $
20,594
Depreciation and amortization 22,872 10,037 12,275 1,159 46,343
Gain on disposal of assets (364) (30) (95) (489)
Interest expense, net 5 18 405 428
Other income, net (68) (1) (202) (349) (620)
Income tax benefit (60) (60)
Severance and business divestiture
costs 315 1,665 4,160 6,140
Restructuring costs and other (59) 682 623
Acquisition-related and other
transaction costs 639 88 727
Non-cash share-based
compensation, excluding severance 879 304 506 2,683 4,372
Legal settlements 500 500
Adjusted EBITDA $
81,773 $
16,305 $
5,613 $
(25,133) $
78,558
C&J ENERGY SERVICES, INC. AND SUBSIDIARIES
RECONCILIATION OF NET DECREASE IN CASH AND CASH
EQUIVALENTS TO FREE CASH FLOW USAGE
(In thousands)
(Unaudited)
Three Months
Ended
March 31, 2019
Net
decrease
in
cash
and
cash
equivalents $
(46,916)
Share
repurchases
(1) 3,298
Other
financing
activities 918
Free
Cash
Flow
usage $
(42,700)
(1) Share repurchases were
transacted in December 2018 and
settled in cash in January
2019.
View original content to download multimedia:http://www.prnewswire.com/news-releases/cj-energy-services-announces-first-quarter-2019-results-300844841.html
SOURCE C&J Energy Services, Inc.
