NexTier Announces Fourth Quarter and Full Year 2019 Financial and Operational Results

HOUSTON, March 10, 2020 /PRNewswire/ -- NexTier Oilfield Solutions Inc. (NYSE: NEX) ("NexTier" or the "Company") today reported fourth quarter and full year 2019 financial and operational results. On October 31, 2019, NexTier completed its previously announced merger between Keane Group Inc. ("Keane") and C&J Energy Services, Inc. ("C&J"), and concurrent with closing, Keane, as the parent company, was renamed NexTier Oilfield Solutions Inc. Given the merger close date of October 31, 2019, GAAP financial results for the fourth quarter of 2019 include the full quarterly results of legacy Keane, and legacy C&J results from November 1, 2019 through December 31, 2019. Pro forma financial results((1)) for the third and fourth quarters of 2019 include the full quarterly results of both Keane and C&J giving effect to the merger as if it had closed on January 1, 2019.

Full Year 2019 Results

    --  Reported GAAP revenue of $1.8 billion and pro forma revenue of $3.4
        billion for the year ended December 31, 2019
    --  Reported GAAP net loss of $106.2 million and pro forma net loss of
        $196.6 million for the year ended December 31, 2019
    --  Achieved total pro forma Adjusted EBITDA((2)) of $446.3 million for the
        year ended December 31, 2019

Fourth Quarter 2019 Results and Recent Highlights

    --  Reported GAAP revenue of $528.2 million, compared to $444.0 million of
        GAAP revenue in the third quarter of 2019; pro forma revenue totaled
        $648.4 million, compared to pro forma revenue of $896.6 million in the
        third quarter of 2019
    --  Reported GAAP net loss of $82.9 million, compared to GAAP net income of
        $3.6 million in the third quarter of 2019; pro forma net loss totaled
        $106.6 million, compared to pro forma net loss of $10.4 million in the
        third quarter of 2019
    --  Achieved total pro forma Adjusted EBITDA((2)) of $77.6 million, compared
        to total pro forma Adjusted EBITDA of $137.8 million in the third
        quarter of 2019
    --  Averaged 25 pro forma fully-utilized fracturing fleets in the fourth
        quarter of 2019; forecasting an average of 28 fully-utilized fracturing
        fleets in the first quarter of 2020
    --  Generated Completion Services segment Adjusted Gross Profit of $105.1
        million, compared to $109.3 million in the third quarter of 2019
    --  Achieved Adjusted Gross Profit, when taking only fracturing and bundled
        wireline into account, of $99.2 million, compared to Adjusted Gross
        Profit of $109.3 million in the third quarter of 2019; pro forma
        Adjusted Gross Profit totaled $97.7 million, compared to pro forma
        Adjusted Gross Profit of $153.6 million in the third quarter of 2019
    --  Generated pro forma annualized adjusted gross profit per fully-utilized
        fracturing fleet, when only taking fracturing and bundled wireline into
        account, of $15.6 million, compared to pro forma annualized adjusted
        gross profit per fully-utilized fracturing fleet of $18.6 million in the
        third quarter of 2019
    --  On pace to capture previously announced targeted annualized run rate
        cost synergies of $125 million by the end of the second quarter of 2020;
        identified approximately $80 million of incremental cash synergies with
        estimated capture by year-end 2020
    --  Exited the fourth quarter with $255 million in cash and $304 million of
        available borrowing capacity under our asset-based credit facility
    --  Divested our Well Support Services segment on March 9, 2020 to Basic
        Energy Services for $93.7 million in total consideration, including
        $59.35 million of cash consideration before transaction costs and
        escrowed amounts

Fourth Quarter 2019 Financial Results


                (USD in
                 thousands,
                 except per
                 share amounts) 
            
             Three Months Ended                     
           
              Previously Disclosed
                                                                                                    Guidance for the
                                                                                                   Three Months Ended
                                                                                                   December 31, 2019



                                 December 31, 2019                           September 30, 2019



     GAAP revenue                                   $
            528,216                           $
            443,953


     GAAP net income
      (loss)                              (82,928)                       3,558


     GAAP net income
      (loss) per
      share                                          $
            (0.47)                             $
            0.03




     Pro forma
      revenue                                       $
            648,434                           $
            896,616                 
       $640,000 ¯ $660,000


     Pro forma net
      loss                               (106,553)                    (10,410)


     Pro forma net
      loss per share                                 $
            (0.50)                           $
            (0.05)




     Pro forma
      Adjusted
      EBITDA                                         $
            77,564                           $
            137,764                   
       $73,000 ¯ $78,000


     Pro forma
      Adjusted net
      income (loss)                       (19,069)                      41,523


     Pro forma
      Adjusted net
      income (loss)
      per share                                      $
            (0.09)                             $
            0.20

GAAP revenue totaled $528.2 million in the fourth quarter of 2019 compared to GAAP revenue of $444.0 million in the third quarter of 2019. Pro forma revenue totaled $648.4 million in the fourth quarter of 2019, compared to our previously disclosed guidance range of $640 million to $660 million. This compared to pro forma revenue of $896.6 million in the third quarter of 2019.

GAAP net loss totaled $82.9 million, or $0.47 per diluted share, in the fourth quarter of 2019, compared to GAAP net income of $3.6 million, or $0.03 per diluted share, in the third quarter of 2019. Pro forma net loss totaled $106.6 million, or $0.50 per diluted share, in the fourth quarter of 2019, compared to pro forma net loss of $10.4 million, or $0.05 per diluted share, in the third quarter of 2019. Pro forma Adjusted net loss((2)) totaled $19.1 million, or $0.09 per diluted share, in the fourth quarter of 2019, compared to pro forma Adjusted net income of $41.5 million, or $0.20 per diluted share, in the third quarter of 2019.

GAAP selling, general and administrative expense ("SG&A") totaled $42.7 million in the fourth quarter of 2019, compared to GAAP SG&A of $26.6 million in the third quarter of 2019. Pro forma SG&A totaled $70.1 million in the fourth quarter of 2019, compared to pro forma SG&A of $102.4 million in the third quarter of 2019. Excluding management adjustments, pro forma Adjusted SG&A totaled $54.2 million in the fourth quarter of 2019, compared to pro forma Adjusted SG&A of $65.8 million in the third quarter of 2019.

Total pro forma Adjusted EBITDA totaled $77.6 million in the fourth quarter of 2019, compared to our previously disclosed guidance range of $73 million to $78 million. This compared to total pro forma Adjusted EBITDA of $137.8 million in the third quarter of 2019.

"I am pleased that our fourth quarter financial results exceeded the initial outlook on profitability provided just after closing the merger with C&J," said Robert Drummond, President and Chief Executive Officer of NexTier. "Despite a challenging market backdrop, we stayed focused on our partnership model of working closely with our customers, managing what was in our direct control, and driving costs out of operations. Our focus enabled us to achieve better than expected operational efficiency and commendable relative profitability during a quarter with challenging market-driven obstacles. We continue to make swift progress with the integration process and the resulting improved cost efficiency."

"Notwithstanding the recent oil price volatility, NexTier will remain nimble and is uniquely positioned to effectively navigate these challenges. This includes a strong balance sheet and liquidity position that allows us to be offensive and defensive, with plenty of runway on our debt maturity through 2025, alignment with a base of resilient customers, and a track record of adjusting our cost structure in response to challenging market conditions."

Fourth Quarter 2019 Management Adjustments

Total pro forma Adjusted EBITDA in the fourth quarter of 2019 includes management adjustments of $87.5 million consisting of $55.0 million of merger and integration related costs primarily driven by severance and accelerated non-cash stock compensation expense, $12.3 million of non-cash impairment expense mostly associated with the retirement of the Keane trade name, $5.6 million of non-cash stock compensation expense, and $14.5 million of other costs driven by tax and litigation reserves and facility closures.

Business Segment Results

Completion Services

GAAP revenue in our Completion Services segment totaled $440.3 million in the fourth quarter of 2019, compared to GAAP revenue of $437.3 million in the third quarter of 2019. Pro forma revenue in our Completion Services segment totaled $509.8 million in the fourth quarter of 2019, compared to pro forma revenue of $735.2 million in the third quarter of 2019. The sequential decrease in pro forma revenue was driven by reduced asset deployment and decreased customer activity levels due to year-end seasonality and budget exhaustion. Adjusted Gross Profit totaled $105.1 million in the fourth quarter of 2019, compared to Adjusted Gross Profit of $109.3 million in the third quarter of 2019. Pro forma Adjusted Gross Profit totaled $105.6 million in the fourth quarter of 2019, compared to pro forma Adjusted Gross Profit of $168.9 million in the third quarter of 2019. Pro forma net loss totaled $21.5 million, resulting in pro forma Adjusted EBITDA of $83.3 million in the fourth quarter of 2019, compared to pro forma net income of $54.5 million, resulting in pro forma Adjusted EBITDA of $141.3 million in the third quarter of 2019.

The Company had an average of 25 pro forma fully-utilized fracturing fleets in the fourth quarter of 2019. When taking only fracturing and bundled wireline into account, annualized pro forma Adjusted Gross Profit per fully-utilized fracturing fleet totaled $15.6 million in the fourth quarter of 2019, compared to annualized pro forma Adjusted Gross Profit per fully-utilized fracturing fleet of $18.6 million in the third quarter of 2019.

Well Construction and Intervention Services

GAAP revenue in our Well Construction and Intervention ("WC&I") Services segment, totaled $39.4 million in the fourth quarter of 2019, compared to GAAP revenue of $6.6 million in the third quarter of 2019. Pro forma revenue in our WC&I segment totaled $57.7 million in the fourth quarter of 2019, compared to pro forma revenue of $66.9 million in the third quarter of 2019. Adjusted Gross Profit totaled $6.8 million in the fourth quarter of 2019, compared to Adjusted Gross Profit of $1.2 million in the third quarter of 2019. Pro forma Adjusted Gross Profit totaled $9.1 million in the fourth quarter of 2019, compared to pro forma Adjusted Gross Profit of $13.2 million in the third quarter of 2019. Pro forma net income totaled $0.3 million, resulting in pro forma Adjusted EBITDA of $7.2 million in the fourth quarter of 2019, compared to pro forma net income of $2.3 million, resulting in pro forma Adjusted EBITDA of $9.1 million in the third quarter of 2019.

Well Support Services

GAAP revenue in our Well Support Services segment, which only includes the period after the completion of the merger on October 31, 2019, totaled $48.6 million in the fourth quarter of 2019. Pro forma revenue in our Well Support Services segment totaled $80.9 million in the fourth quarter of 2019, compared to pro forma revenue of $94.5 million in the third quarter of 2019. Adjusted Gross Profit totaled $8.0 million in the fourth quarter of 2019. Pro forma Adjusted Gross Profit totaled $14.9 million in the fourth quarter of 2019, compared to pro forma Adjusted Gross Profit of $14.3 million in the third quarter of 2019. The sequential decrease in pro forma revenue mostly pertained to the divestiture of the majority of our fluids management assets in West and South Texas on July 31, 2019. Pro forma net income totaled $5.3 million, resulting in pro forma Adjusted EBITDA of $9.2 million in the fourth quarter of 2019, compared to a pro forma net income of $2.3 million, resulting in pro forma Adjusted EBITDA of $12.4 million in the third quarter of 2019.

Balance Sheet and Capital

Total debt outstanding as of December 31, 2019 totaled $338 million, net of debt discounts and deferred finance costs and excluding lease obligations. As of December 31, 2019, cash and equivalents totaled $255 million, and total available liquidity was $559 million, which included $304 million of available borrowing capacity under our asset-based credit facility.

Total operating cash flow was $80 million and cash flow used in investing activities was $44 million, resulting in free cash flow of $36 million in the fourth quarter of 2019. Combined operating cash flow, which includes the full quarterly results for both legacy Keane and C&J, was $48 million and cash flow used in investing activities was $54 million resulting in combined free cash flow usage of $6 million in the fourth quarter of 2019. Excluding cash used for merger and integration related costs of $61 million, combined Adjusted free cash flow totaled $55 million in the fourth quarter of 2019.

On March 9, 2020, we divested our Well Support Services segment to Basic Energy Services for approximately $93.7 million in total consideration that included $59.35 million in cash consideration before transaction costs, escrowed amounts, and subject to customary working capital adjustments.

First Quarter 2020 Update

For the first quarter of 2020, the Company expects to deploy an average of 28 fully-utilized fracturing fleets compared to 25 fully-utilized fracturing fleets deployed in the fourth quarter. We expect increased activity levels to be offset by lower overall pricing and the divestiture of our Well Support Service segment on March 9, 2020.

"In light of the ongoing market and commodity price volatility, NexTier is taking the necessary steps to protect our business," said Kenneth Pucheu, Senior Vice President and Chief Financial Officer of NexTier. "NexTier is well fortified with a strong balance sheet, further enhanced liquidity position, and an experienced management team to navigate through these challenging market headwinds."

Conference Call Information

The Company's executive management team will host a conference call on Wednesday, March 11, 2020 at 8:30 a.m. ET / 7:30 a.m. CT to discuss our fourth quarter 2019 financial and operating results. Interested parties may listen to the conference call via a live webcast accessible on our website at www.nextierofs.com or by calling U.S. (Toll Free): 1-855-560-2574 or International: 1-412-542-4160 and asking for the "NexTier Oilfield Solutions' 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.nextierofs.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: 10138991.

About NexTier Oilfield Solutions

Headquartered in Houston, Texas, NexTier is an industry-leading U.S. land oilfield service company, with a diverse set of well completion and production services across the most active and demanding basins. Our integrated solutions approach delivers efficiency today, and our ongoing commitment to innovation helps our customers better address what is coming next. NexTier is differentiated through four points of distinction, including safety performance, efficiency, partnership and innovation. At NexTier, we believe in living our core values from the basin to the boardroom, and helping customers win by safely unlocking affordable, reliable and plentiful sources of energy.

Pro forma information and Non-GAAP Financial Measures



     (1) Pro forma information before management
            adjustments was determined in accordance with
            Article 11 of Regulation S-X and is
            presented to enhance comparability to the
            prior quarter pre-merger operating results
            by adjusting for the merger of Keane and C&J.





     (2) The Company has included in this press release
            certain non-GAAP financial measures, some of
            which are calculated on a consolidated basis,
            segment basis, product line basis, combined
            basis or pro forma basis, including Adjusted
            EBITDA, Adjusted Gross Profit, Adjusted Net
            Income (loss), free cash flow, Adjusted free
            cash flow, Adjusted SG&A and annualized
            adjusted gross profit per fully-utilized
            fracturing fleet.  These measurements provide
            supplemental information which the Company
            believes is useful to analysts and investors
            to evaluate its ongoing results of
            operations, when considered alongside GAAP
            measures such as net income and operating
            income.  These non-GAAP financial measures
            exclude the financial impact of items
            management does not consider in assessing the
            Company's ongoing operating performance, and
            thereby facilitate review of the Company's
            operating performance on a period-to-period
            basis.  Other companies may have different
            capital structures, and comparability to the
            Company's results of operations may be
            impacted by the effects of acquisition
            accounting on its depreciation and
            amortization.  As a result of the effects of
            these factors and factors specific to other
            companies, the Company believes Adjusted
            EBITDA, Adjusted Gross Profit, Adjusted SG&A
            and Adjusted Net Income provide helpful
            information to analysts and investors to
            facilitate a comparison of its operating
            performance to that of other companies.  The
            Company believes free cash flow and Adjusted
            free cash flow is important to investors in
            that it provides a useful measure to assess
            management's effectiveness in the areas of
            profitability and capital management.
            Annualized Gross Profit per fully-utilized
            fracturing fleet is used to evaluate the
            operating performance of the business line
            for comparable periods, and the Company
            believes it is important as an indicator of
            operating performance of our fracturing and
            bundled wireline product line because it
            excludes the effects of the capital structure
            and certain non-cash items from the product
            line's operating results.  For a
            reconciliation of these non-GAAP measures,
            please see the tables at the end of this
            press release.





     (3) Non-GAAP Measure Definitions: Adjusted EBITDA
            is defined as net income (loss) adjusted to
            eliminate the impact of interest, income
            taxes, depreciation and amortization, along
            with certain items management does not
            consider in assessing ongoing performance.
            Adjusted Gross Profit is defined as revenue
            less cost of services, further adjusted to
            eliminate items in cost of services that
            management does not consider in assessing
            ongoing performance. Adjusted Gross Profit at
            the segment level is not considered to be a
            non-GAAP financial measure as it is our
            segment measure of profit or loss and is
            required to be disclosed under GAAP pursuant
            to ASC 280. Adjusted Net Income (Loss) is
            defined as net income (loss) plus the after-
            tax amount of merger/transaction-related
            costs and other non-routine items. Adjusted
            SG&A is defined as selling, general and
            administrative expenses adjusted for
            severance and business divestiture costs,
            merger/transaction-related costs, and other
            non-routine items. Free cash flow is defined
            as the net increase (decrease) in cash and
            cash equivalents before financing activities,
            including share repurchase activity. Adjusted
            free cash flow adjusts free cash flow for
            certain management adjustments. Annualized
            Adjusted Gross Profit per fully-utilized
            fleet, is a non-GAAP measure and is defined
            as (i) revenue less cost of services
            attributable to the fracturing and bundled
            wireline product line, further adjusted to
            eliminate items in cost of services that
            management does not consider in assessing
            ongoing performance for the fracturing and
            bundled wireline product line, (ii) divided
            by the fully-utilized fracturing and bundled
            wireline fleets (average deployed fleets
            multiplied by fleet utilization) per quarter,
            and then (iii) multiplied by four.

Forward-Looking Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties and are made pursuant to the safe harbor provisions of Section 27A of the Securities Act of 1993, as amended and Section 21E of the Securities Exchange Act of 1934, as amended. Where a forward-looking statement expresses or implies an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. The words "believe," "continue," "could," "expect," "anticipate," "intends," "estimate," "forecast," "project," "should," "may," "will," "would" or the negative thereof and similar expressions are intended to identify such forward-looking statements. These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the Company's control. Statements in this press release regarding the Company that are forward-looking, including projections as to the amount and timing of synergies from C&J merger and the Company's 2020 guidance and outlook information, are based on management's estimates, assumptions and projections, and are subject to significant uncertainties and other factors, many of which are beyond the Company's control. These factors and risks include, but are not limited to, (i) the competitive nature of the industry in which the Company conducts its business, including pricing pressures; (ii) the ability to meet rapid demand shifts; (iii) the impact of pipeline capacity constraints and adverse weather conditions in oil or gas producing regions; (iv) the ability to obtain or renew customer contracts and changes in customer requirements in the markets the Company serves; (v) the ability to identify, effect and integrate acquisitions, joint ventures or other transactions; (vi) the ability to protect and enforce intellectual property rights; (vii) the effect of environmental and other governmental regulations on the Company's operations; (viii) the effect of a loss of, or interruption in operations of, one or more key suppliers, including resulting from product defects, recalls or suspensions; (ix) the variability of crude oil and natural gas commodity prices; (x) the market price and availability of materials or equipment; (xi) the ability to obtain permits, approvals and authorizations from governmental and third parties; (xii) the Company's ability to employ a sufficient number of skilled and qualified workers to combat the operating hazards inherent in the Company's industry; (xiii) fluctuations in the market price of the Company's stock; (xiv) the level of, and obligations associated with, the Company's indebtedness; (xv) the duration, impact and severity of the novel coronavirus (COVID-19) outbreak; and (xvi) other risk factors and additional information. In addition, material risks that could cause actual results to differ from forward-looking statements include: the inherent uncertainty associated with financial or other projections; the prompt and effective integration of C&J's businesses into the Company and the ability to achieve the anticipated synergies and value-creation contemplated in connection with the merger. For a more detailed discussion of such risks and other factors, see the Company's filings with the Securities and Exchange Commission (the "SEC"), including under the heading "Risk Factors" in Item 1A of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2019 available on the SEC website or www.NexTierOFS.com. The Company assumes no obligation to update any forward-looking statements or information, which speak as of their respective dates, to reflect events or circumstances after the date of this Current Report on Form 8-K, or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws. Investors should not assume that any lack of update to a previously issued "forward-looking statement" constitutes a reaffirmation of that statement.

Coronavirus Monitoring and Planning

The Company is monitoring the spread and impact of the coronavirus closely, and is implementing measures in accordance with local directives, as well as internal policies, to protect employees and limit business interruption. These measures include restrictions on travel and employee contact in certain regions, employee education, enhanced customer and supplier communication, alternative sourcing, and other measures. The Company is also preparing mitigation plans for further or prolonged impact from the coronavirus.

Merger of Equals

On October 31, 2019, Keane and C&J completed their merger and concurrent with closing, Keane, as the parent company, was renamed NexTier. In accordance with the terms of the Agreement and Plan of Merger, dated as of June 16, 2019, by and among NexTier, C&J and King Merger Sub Corp., a wholly owned subsidiary of NexTier ("Merger Sub"), Merger Sub merged with and into C&J, with C&J surviving the merger as a wholly owned subsidiary of NexTier. Immediately following the merger, C&J was merged with and into King Merger Sub II LLC ("LLC Sub"), with LLC Sub continuing as the surviving entity as a wholly-owned subsidiary of NexTier and as the successor to C&J. Keane was determined to be the accounting acquirer in the merger, and as a result, the historical financial statements of Keane, prepared under U.S. generally accepted accounting principles ("GAAP"), for the periods prior to the merger are considered to be the historical financial statements of NexTier.

Unaudited Pro Forma Financial Information

In order to provide the most meaningful comparison of results of operations and results by segment, supplemental unaudited pro forma financial information has been included in the following financial schedules. The unaudited pro forma financial information is based on the historical consolidated financial statements and accompanying notes of both Keane and C&J and has been prepared to illustrate the effects of the merger, assuming the merger had been consummated on January 1, 2019. For all periods presented, adjustments have been made for (1) the preliminary acquisition accounting impact, (2) accounting policy alignment, and (3) the elimination of the impact from events that are directly attributable to the Agreement and Plan of Merger (e.g., non-routine merger and integration costs). The unaudited pro forma financial information was based on and should be read in conjunction with the separate historical financial statements and accompanying notes contained in each of the Keane and C&J Quarterly Reports on Form 10-Q and Annual Reports on Form 10-K for the applicable periods. The pro forma financial statements were prepared in accordance with Article 11 of Regulation S-X. The unaudited pro forma financial information has been presented for informational purposes only and is not necessarily indicative of what NexTier's results of operations actually would have been had the merger been completed on January 1, 2019, nor is it indicative of the future operating results of NexTier. The unaudited pro forma financial information does not reflect any cost or growth synergies that NexTier may achieve as a result of the merger, future costs to combine the operations of Keane and C&J or the costs necessary to achieve any cost or growth synergies.

Investor Contact:

Daniel Jenkins
Vice President - Investor Relations
(713) 325-6000
investors@nextierofs.com

Marc Silverberg
Managing Director (ICR)
marc.silverberg@icrinc.com


                                                           
            
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                
            
            CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS)


                                                             
            (unaudited, amounts in thousands, except per share data)




                                                                        Three Months Ended                                                  Three Months Ended
                                                        
          
              December 31,                                            September 30,



                                                  2019                                               2018                                                     2019

                                                                                                                                                             ---




     Revenue                                                    $
              528,216                                                  $
              486,549                 $
       443,953



     Operating costs and expenses:



     Cost of services                         408,345                                              372,654                                                    333,438


      Depreciation and amortization             82,080                                               71,403                                                     68,708


      Selling, general and
       administrative expenses                  42,698                                               28,466                                                     26,579


      Merger and integration                    55,972                                                                                                          6,651


      (Gain) loss on disposal of
       assets                                    3,640                                                (122)                                                       679



     Impairment                                12,346


      Total operating costs and
       expenses                                605,081                                              472,401                                                    436,055




     Operating income                        (76,865)                                              14,148                                                      7,898



     Other income (expenses):


      Other income (expense), net                  (7)                                             (2,386)                                                         55



     Interest expense                         (5,769)                                             (6,219)                                                    (5,215)


      Total other income (expense)             (5,776)                                             (8,605)                                                    (5,160)



      Income (loss) before income
       taxes                                  (82,641)                                               5,543                                                      2,738


      Income tax benefit (expense)               (287)                                                 585                                                        820



                   Net income (loss)          (82,928)                                               6,128                                                      3,558



     Other comprehensive income (loss):


      Foreign currency translation
       adjustments                                (87)                                                (77)



     Hedging activities                         1,036                                              (4,309)                                                    (2,120)


                   Total comprehensive income
                    (loss)                             $
          
                (81,979)                                      $
              
                1,742               $
     
         1,438





      Net income (loss) per share:
       basic                                                      $
              (0.47)                                                    $
              0.06                    $
       0.03


      Net income (loss) per share:
       diluted                                                    $
              (0.47)                                                    $
              0.06                    $
       0.03




      Weighted-average shares:
       basic                                   177,149                                              105,265                                                    104,899


      Weighted-average shares:
       diluted                                 177,149                                              105,566                                                    105,259



               Note:  The condensed consolidated
                statements of operations &
                comprehensive income (loss) for the
                three month periods ended December
                31, 2019, December 31, 2018, and
                September 30, 2019, reflect the
                results of legacy Keane for all
                periods presented and the results of
                legacy C&J for the period beginning
                on and after November 1, 2019.


                                             
        
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                               
              
          CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS)


                                               
              (amounts in thousands, except per share data)




                                                                 
              
                Year Ended

                                                               
              
                December 31,


                                                             2019                                                        2018

                                                                                                                         ---

                                                      (Unaudited)



     Revenue                                                                    $
              1,821,556                             $
        2,137,006



     Operating costs and expenses:



     Cost of services                                  1,403,932                                                     1,660,546


      Depreciation and amortization                       292,150                                                       259,145


      Selling, general and
       administrative expenses                            123,676                                                       113,810


      Merger and integration                               68,731                                                           448


      Loss on disposal of assets                            4,470                                                         5,047



     Impairment                                           12,346


      Total operating costs and
       expenses                                         1,905,305                                                     2,038,996



      Operating income (loss)                            (83,749)                                                       98,010



     Other income (expenses):



     Other income, net                                       453                                                         (905)



     Interest expense                                   (21,856)                                                     (33,504)


      Total other expenses                               (21,403)                                                     (34,409)



      Income (loss) before income
       taxes                                            (105,152)                                                       63,601



     Income tax expense                                  (1,005)                                                      (4,270)



                   Net income (loss)                    (106,157)                                                       59,331



     Other comprehensive income (loss):


      Foreign currency translation
       adjustments                                          (116)                                                        (114)



     Hedging activities                                  (7,628)                                                        (880)


                   Total comprehensive income
                    (loss)                                          $
              
                (113,901)                          $
      
          58,337





      Net income (loss) per share:
       basic                                                                        $
              (0.86)                                $
         0.54


      Net income (loss) per share:
       diluted                                                                      $
              (0.86)                                $
         0.54




      Weighted-average shares,
       basic                                              122,977                                                       109,335


      Weighted-average shares,
       diluted                                            122,977                                                       109,660



               Note:  The condensed consolidated
                statements of operations &
                comprehensive income (loss) for the
                years ended December 31, 2019 and
                2018, reflect the results of legacy
                Keane for all periods presented and
                the results of legacy C&J for the
                period beginning on and after
                November 1, 2019.


                                                              
       
         NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                
       
             CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                      
            (amounts in thousands)




                                                                                December 31,                                              December 31,



                                                                                        2019                                       2018




     
                ASSETS                                                 (Unaudited)



     Current assets:



     Cash and cash equivalents                                                                               $
              255,015                           $
        80,206



     Accounts receivable                                                            350,765                                      210,428



     Inventories, net                                                                61,641                                       35,669



     Assets held for sale                                                               141                                          176



     Prepaid and other current assets                                                20,492                                        5,784




     Total current assets                                                           688,054                                      332,263



     Operating lease right-of-use assets                                             54,503



     Finance lease right-of-use assets                                                9,511



     Property and equipment, net                                                    709,404                                      531,319



     Goodwill                                                                       137,458                                      132,524



     Intangible assets                                                               55,021                                       51,904



     Other noncurrent assets                                                         10,956                                        6,569



     
                Total assets                                                                $
              
                1,664,907                     $
     
         1,054,579



                   LIABILITIES AND SHAREHOLDERS' EQUITY



     Current liabilities:



     Accounts payable                                                                                        $
              115,251                          $
        106,702



     Accrued expenses                                                               234,895                                      101,539


      Current maturities of operating lease liabilities                               23,473


      Current maturities of finance lease liabilities                                  4,594                                        4,928



     Current maturities of long-term debt                                             2,311                                        2,776



     Stock based compensation                                                                                                     4,281



     Other current liabilities                                                        5,670                                          354



     Total current liabilities                                                      386,194                                      220,580



      Long-term operating lease liabilities, less current
       maturities                                                                     35,123


      Long-term finance lease liabilities, less current
       maturities                                                                      4,844                                        5,581



     Long-term debt, net less current maturities                                    335,312                                      337,954



     Other non-current liabilities                                                   16,662                                        3,283



     Total non-current liabilities                                                  391,941                                      346,818




     
                Total liabilities                                                 778,135                                      567,398



     
                Shareholders' equity:



     Common stock                                                                     2,124                                        1,038



     Paid-in capital in excess of par value                                         966,762                                      455,447



     Retained earnings (deficit)                                                   (73,333)                                      31,494



     Accumulated other comprehensive loss                                           (8,781)                                       (798)




     
                Total shareholders' equity                                        886,772                                      487,181


                   Total liabilities and shareholders' equity                                  $
              
                1,664,907                     $
     
         1,054,579



               Note:  The condensed
                consolidated balance sheet at
                December 31, 2019, reflects the
                financial position of NexTier
                Oilfield Solutions Inc.  The
                condensed consolidated balance
                sheet at December 31, 2018,
                solely reflects the financial
                position of legacy Keane.


                                                     
       
          NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                   
       
        UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF


                                                           
              
                OPERATIONS


                                                           
              (amounts in thousands)




                                                                                              
              
               Three Months Ended


                                                                                                  December 31, 2019                                  September 30, 2019

                                                                                                                                              ---




     Revenue                                                                                                          $
              648,434                          $
        896,616



     Operating costs and expenses:



     Cost of services                                                                                      518,893                          700,131



     Depreciation and amortization                                                                          89,794                           91,846



     Selling, general and administrative expenses                                                           70,104                          102,414



     Merger and integration                                                                                 55,023                            7,170



     Loss on disposal of assets                                                                              2,335                              416



     Impairment                                                                                             12,346



     Total operating costs and expenses                                                                    748,495                          901,977




     Operating loss                                                                                      (100,061)                         (5,361)



     Other income (expenses):



     Other income, net                                                                                         347                            (654)



     Interest expense                                                                                      (5,769)                         (5,215)



     Total other expenses                                                                                  (5,422)                         (5,869)




     Loss before income taxes                                                                            (105,483)                        (11,230)



     Income tax benefit (expense)                                                                          (1,070)                             820



     Net loss                                                                                                       $
              (106,553)                        $
        (10,410)






     Net loss per share: basic                                                                                         $
              (0.50)                          $
        (0.05)



     Net loss per share: diluted                                                                                       $
              (0.50)                          $
        (0.05)





     Weighted-average shares, basic                                                                        211,909                          210,098



     Weighted-average shares, diluted                                                                      211,909                          210,098



               Note:  The pro forma condensed
                consolidated statements of
                operations for the three month
                periods ended December 31, 2019
                and September 30, 2019, reflect
                the results of operations of
                legacy Keane and legacy C&J
                assuming the merger had
                occurred on January 1, 2019.
                See full unaudited pro forma
                condensed consolidated
                statements of operations for
                the three months ended December
                31, 2019 and September 30,
                2019, as well as the unaudited
                pro forma condensed
                consolidated statements of
                operations for the year ended
                December 31, 2019, below.


                                      
              
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                      
              
                ADDITIONAL SELECTED FINANCIAL AND OPERATING DATA


                                                    
              (unaudited, amounts in thousands)




                                                                                    Three Months Ended


                                                               December 31, 2019                                        September 30, 2019

                                                                                                                  ---


     
                Completion Services:



     Revenue                                                                      $
              440,253                                    $
       437,343


      Cost of services                                                   335,157                                 328,029


      Depreciation,
       amortization and
       administrative expenses,
       and impairment                                                     76,728                                  64,735



     Net income                                                          28,367                                  43,505


      Adjusted gross profit(1)                                                     $
              105,096                                    $
       109,314




                   Well Construction and Intervention Services:



     Revenue                                                                       $
              39,380                                      $
       6,610


      Cost of services                                                    32,572                                   5,409


      Depreciation,
       amortization and
       administrative expenses,
       and impairment                                                      1,950                                     502



     Net income                                                           4,858                                     699


      Adjusted gross profit(1)                                                       $
              6,808                                      $
       1,201




                   Well Support Services:



     Revenue                                                                       $
              48,583


      Cost of services                                                    40,616                               
           $


      Depreciation,
       amortization and
       administrative expenses,
       and impairment                                                      1,008



     Net income                                                           6,959


      Adjusted gross profit(1)                                                       $
              7,967                     
              $



               Note: The financial and operating data
                for the three months ended December 31,
                2019 and September 30, 2019, reflect the
                results of legacy Keane for all periods
                presented and the results of legacy C&J
                for the period beginning on and after
                November 1, 2019.





              
                (1)              The Company uses adjusted
                                               gross profit as its measure
                                               of profitability for
                                               segment reporting.


                                     
              
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                           
              
                ADDITIONAL SELECTED UNAUDITED PRO FORMA FINANCIAL AND OPERATING DATA


                                                        
              (amounts in thousands)




                                                          
              
                Three Months Ended


                                                               December 31, 2019                                               September 30, 2019

                                                                                                                        ---


     
                Completion Services:



     Revenue                                                                      $
              509,845                                        $
      735,166


      Cost of services                                                   404,235                                       566,230


      Depreciation,
       amortization,
       administrative expenses,
       and impairment                                                    127,086                                       114,481


      Operating income (loss)                                           (21,476)                                       54,455


      Pro forma adjusted gross
       profit(1)                                                                   $
              105,610                                        $
      168,936




                   Well Construction and Intervention Services:



     Revenue                                                                       $
              57,650                                         $
      66,927


      Cost of services                                                    48,579                                        53,701


      Depreciation,
       amortization,
       administrative expenses,
       and impairment                                                      8,750                                        10,885


      Operating income (loss)                                                321                                         2,341


      Pro forma adjusted gross
       profit(1)                                                                     $
              9,071                                         $
      13,226




                   Well Support Services:



     Revenue                                                                       $
              80,939                                         $
      94,523


      Cost of services                                                    66,079                                        80,200


      Depreciation,
       amortization,
       administrative expenses,
       and impairment                                                      9,540                                        11,990


      Operating income (loss)                                              5,320                                         2,333


      Pro forma adjusted gross
       profit(1)                                                                    $
              14,860                                         $
      14,323



               Note:  The pro forma financial and
                operating data reflect the results of
                legacy Keane and legacy C&J assuming
                the merger had occurred on January 1,
                2019.





              
                (1)              The Company uses adjusted
                                               gross profit as its measure
                                               of profitability for
                                               segment reporting.


                                                                                                                         
            
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                                                                          
            
                UNAUDITED PRO FORMA NON-GAAP FINANCIAL MEASURES


                                                                                                                                           
              (amounts in thousands)




                                                                                                                       
            
                Three Months Ended December 31, 2019


                                                                                        Completion                          WC&I                                     Well Support                                        Corporate                       NexTier
                                                                               Services                                                                    Services                                            and Other

                                                                                                                                                                                                                                                    ---

                   Pro forma net income
                    (loss)
                (1)                                                         $
       
         (21,476)                                                                $
              
        321                         $
     
          5,320                         $
     
        (90,718)  $
        
         (106,553)


      Interest expense, net                                                                      -                                                                                                                                          5,769                 5,769


      Income tax benefit                                                                         -                                                                                                                                          1,070                 1,070


      Depreciation and
       amortization                                                                         79,243                                    2,801                                                                     2,123                          5,627                89,794



      Pro forma EBITDA                                                                                     $
       57,767                                                                            $
      3,122                             $
        7,443                             $
      (78,252)          $
        (9,920)



     Plus Management Adjustments:


      Acquisition, integration
       and expansion(2)                                                                     22,676                                      391                                                                        76                         31,880                55,023


      Non-cash stock
       compensation(3)                                                                         363                                       25                                                                       626                          4,632                 5,646


      Inventory adjustment                                                                   2,218                                                                                                                                                                2,218


      Facility closure                                                                         308                                      635                                                                     1,043                                               1,986


      Litigation accrual                                                                         -                                   3,000                                                                                                                        3,000



     Tax audit                                                                                                                                                                                             7,000                                  7,000


      Impairment of assets                                                                       -                                                                                                                                         12,346                12,346


      Restructuring costs and
       other                                                                                     -                                                                                                                                            265                   265


                   Pro forma Adjusted EBITDA
                    (1)                                                                             $
       
         83,332                                                               $
              
        7,173                         $
     
          9,188                         $
     
        (22,129)     $
       
          77,564







                                                                                                                                                                                                                                                                                                                        Three Months Ended
                                                                                                                                                                                                                                                                                                             December 31, 2019



     
                Pro forma selling, general and administrative expenses
     (1)                       $
       
         70,104



     Less Management Adjustments:



     Non-cash stock compensation(3)                                                         5,615



     Litigation accrual                                                                     3,000



     Tax audit                                                                              7,000



     Restructuring costs                                                                      265



     
                Pro forma adjusted selling, general and administrative                            $
       
         54,224




     
     (1) The pro forma net income (loss),
              pro forma Adjusted EBITDA and pro
              forma selling, general and
              administrative expenses, reflect
              the results of operations of
              legacy Keane and legacy C&J
              assuming the merger had occurred
              on January 1, 2019.  Pro forma
              Adjusted EBITDA is calculated
              using NexTier management
              adjustment methodology; historical
              C&J amounts have been conformed
              accordingly.



     
     (2) Represents transaction costs
              related to the merger.



     
     (3) Represents non-cash amortization
              of equity awards issued under the
              Company's Incentive Award Plan.


                                                                                                                         
            
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                                                                          
            
                UNAUDITED PRO FORMA NON-GAAP FINANCIAL MEASURES


                                                                                                                                           
              (amounts in thousands)




                                                                                                                       
            
               Three Months Ended September 30, 2019


                                                                                         Completion                         WC&I                                    Well Support                                      Corporate                         NexTier
                                                                                Services                                                                  Services                                          and Other

                                                                                                                                                                                                                                                    ---

                   Pro forma net income
                    (loss)
                (1)                                                            $
       
        54,455                                                              $
              
        2,341                        $
       
          2,333                        $
      
        (69,539) $
     
        (10,410)


      Interest expense, net                                                                       -                                                                                                                                         5,215                5,215


      Income tax benefit                                                                          -                                                                                                                                         (820)               (820)


      Depreciation and
       amortization                                                                          81,169                                  3,460                                                                   2,122                             5,095               91,846



      Pro forma EBITDA                                                                                     $
      135,624                                                                           $
      5,801                              $
        4,455                             $
      (60,049)      $
       85,831



     Plus Management Adjustments:


      Acquisition, integration
       and expansion (2)                                                                      2,449                                                                                                           801                             3,919                7,169


      Non-cash stock
       compensation (3)                                                                         794                                    276                                                                     413                             8,375                9,858



     Severance                                                                                   6                                     47                                                                   5,206                               335                5,594


      Inventory adjustment                                                                    2,448                                                                                                                                                              2,448


      Facility closure                                                                            -                                                                                                        1,568                                                 1,568


      Litigation accrual                                                                          -                                 3,000                                                                                                                        3,000



     Tax audit                                                                                   -                                                                                                                                        22,160               22,160


      Restructuring costs and
       other                                                                                      -                                                                                                                                           136                  136


                   Pro forma Adjusted EBITDA
                    (1)                                                                             $
       
        141,321                                                              $
              
        9,124                       $
       
          12,443                        $
      
        (25,124)  $
     
        137,764







                                                                                                                                                                                                                                                                                                                  Three Months Ended
                                                                                                                                                                                                                                                                                                      September 30, 2019



     
                Pro forma selling, general and administrative expenses 
     (1)                      $
       
        102,414



     Less Management Adjustments:



     Non-cash stock compensation (3)                                                         9,692



     Litigation accrual                                                                      3,000



     Tax audit                                                                              22,160



     Restructuring costs                                                                       136



     Severance                                                                               1,583




     
                Pro forma adjusted selling, general and administrative                             $
       
        65,843




     
     (1) The pro forma net income (loss),
              pro forma Adjusted EBITDA and pro
              forma selling, general and
              administrative expenses, reflect
              the results of operations of
              legacy Keane and legacy C&J
              assuming the merger had occurred
              on January 1, 2019.  Pro forma
              Adjusted EBITDA is calculated
              using NexTier management
              adjustment methodology; historical
              C&J amounts have been conformed
              accordingly.



     
     (2) Represents transaction costs
              related to the merger.



     
     (3) Represents non-cash amortization
              of equity awards issued under the
              Company's Incentive Award Plan.


                   
              
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                   
              
                UNAUDITED PRO FORMA NON-GAAP FINANCIAL MEASURES


                                      
              (amounts in thousands)




                                                                        Year Ended
                                                         December 31, 2019


                   Pro forma net loss
                          (1)                                                       $
          
       (196,577)


      Interest expense, net                                                 21,856


      Income tax expense                                                     1,643


      Depreciation and
       amortization                                                        369,276



      Pro forma EBITDA                                                     196,198



     Plus Management Adjustments:


      Acquisition, integration
       and expansion                                                        67,516


      Non-cash stock
       compensation                                                         36,242


      Impairment of assets                                                  92,281


      Severance and stock
       compensation
       acceleration                                                          5,594


      Facility Closures                                                      3,554


      Inventory Adjustments                                                  4,666



     Legal                                                                  6,600



     Tax Audit                                                             29,160



     Other                                                                  4,527



                   Pro forma Adjusted EBITDA
                    (1)(2)                                                             $
         
        446,338




     
     (1) The pro forma net loss and pro
              forma Adjusted EBITDA reflect the
              results of operations of legacy
              Keane and legacy C&J assuming the
              merger had occurred on January 1,
              2019.



     
     (2) Pro forma Adjusted EBITDA is
              calculated using NexTier
              management adjustment
              methodology; historical C&J
              amounts have been conformed
              accordingly.


                                                                           
              
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                            
              
                UNAUDITED PRO FORMA NON-GAAP FINANCIAL MEASURES


                                                                                               
              (amounts in thousands)






                                                               
        
         Three Months Ended December 31, 2019


                                              Completion                                     WC&I                                       Well Support     Total
                                     Services                                                                   Services

                                                                                                                                                     ---

     Pro forma revenue
      (1)                                                   $
       509,845                                              $
              57,650                           $
     80,939                 $
     648,434


     Pro forma cost of
      services (1)                               404,235                        48,579                                                       66,079                    518,893



     Pro forma gross
      profit excluding
      depreciation and
      amortization                               105,610                         9,071                                                       14,860                    129,541


     Management
      adjustments
      associated with
      cost of services                                 -


                  Pro forma adjusted
                   gross profit                          $
     
         105,610                                  $
              
                9,071                       $
     
       14,860             $
     
       129,541







                                                               
        
         Three Months Ended September 30, 2019


                                              Completion                                     WC&I                                       Well Support     Total
                                     Services                                                                   Services

                                                                                                                                                     ---

     Pro forma revenue
      (1)                                                   $
       735,166                                              $
              66,927                 94,523                $
     896,616


     Pro forma cost of
      services (1)                               566,230                        53,701                                                       80,200                    700,131


     Pro forma gross
      profit excluding
      depreciation and
      amortization                               168,936                        13,226                                                       14,323                    196,485


     Management
      adjustments
      associated with
      cost of services                                 -


                  Pro forma adjusted
                   gross profit                          $
     
         168,936                                 $
              
                13,226                       $
     
       14,323             $
     
       196,485




              
                (1)              The pro forma revenue and
                                               pro forma cost of services
                                               reflects the results of
                                               operations of legacy Keane
                                               and legacy C&J assuming
                                               the merger had occurred on
                                               January 1, 2019.


                                                                                                            
             
                NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                                                                     
              
                NON-GAAP FINANCIAL MEASURES


                                                                                                                         
              (unaudited, amounts in thousands)




                                                                                                  
          
               Year Ended December 31, 2019


                                                                                   Completion                                                 WC&I                                       Well Support         Total
                                                                          Services                                                                               Services

                                                                                                                                                                                                      ---


     Pro forma revenue (1)                                                                        $
          2,726,869                                                   $
              293,430                   $
          385,989                                                 $
          3,406,288


      Pro forma cost of services (1)                                                2,126,654                                   245,870                                                       318,720               2,691,244



      Pro forma gross profit excluding
       depreciation and amortization                                                  600,215                                    47,560                                                        67,269                 715,044


      Management adjustments
       associated with cost of
       services                                                                             -


                   Pro forma Adjusted gross profit                                            $
        
            600,215                                       $
              
                47,560                $
     
            67,269                                       $
             
            715,044







                                                                                                                                                                                                                                             Three Months Ended


                                                                                                                                                                                                                              December 31,                            September 30,
                                                                                                                                                                                                                                      2019                                      2019



                                                                                                                                                                                                                                           Frac & Bundled Wireline



     Revenue                                                                                        $
          403,862                                                   $
              437,343



     Cost of services                                                                304,670                                   328,029




     Gross profit excluding depreciation and amortization                             99,192                                   109,314



     Management adjustments associated with cost of services



     
                Adjusted gross profit                                                       $
        
            99,192                                      $
              
                109,314







                                                                                                                                                                                                                                             Three Months Ended


                                                                                                                                                                                                                              December 31,                            September 30,
                                                                                                                                                                                                                                      2019                                      2019



                                                                                                                                                                                                                                           Frac & Bundled Wireline



     Pro forma revenue (1)                                                                          $
          449,707                                                   $
              654,313



     Pro forma cost of services (1)                                                  351,968                                   500,743




     Pro forma gross profit excluding depreciation and amortization                   97,739                                   153,570



     Management adjustments associated with cost of services



     
                Pro forma adjusted gross profit                                             $
        
            97,739                                      $
              
                153,570






     Average hydraulic fracturing fleets deployed                                         30                                        38



     Fully-utilized hydraulic fracturing fleets                                           25                                        33



     Pro forma annualized adjusted gross profit per fully-utilized fleet                             $
          15,638                                                    $
              18,615




              
                (1)              The pro forma revenue and
                                               pro forma cost of services
                                               reflects the results of
                                               operations of legacy Keane
                                               and legacy C&J assuming
                                               the merger had occurred on
                                               January 1, 2019.


                                            
        
           NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                 
         
                NON-GAAP FINANCIAL MEASURES


                                                   
          (unaudited, amounts in thousands)




                        NexTier                                        C&J                                                Combined
                                                     Historical                                           Three Months
                      Three Months                                                                              Ended
                                                                 Month Ended
                         Ended

                                                                                                                                   ---



                   December 31, 2019                            October 31, 2019                                     December 31, 2019

                                                                                                                                   ---

     Net cash
      provided by
      (used in)
      operating
      activities                      $
      79,884                                                                                       $
       (32,285)             $
     47,599


     Cash flows
      used in
      investing
      activities
      (1)                  (44,102)                                                (9,660)                                                           (53,762)


     Combined free
      cash flow
      generation
      (usage)                 35,782                                                (41,945)                                                             (6,163)


     Merger and
      integration
      costs                   54,993                                                   5,979                                                              60,972


     Adjusted
      combined
      free cash
      flow
      generation
      (usage)                         $
      90,775                                                                                       $
       (35,966)             $
     54,809







                        NexTier                                        C&J                                                Combined
                                                     Historical                                            Year Ended
                       Year Ended
                                                                 Ten Months
                                                        Ended

                                                                                                                                   ---



                   December 31, 2019                            October 31, 2019                                     December 31, 2019

                                                                                                                                   ---

     Net cash
      provided by
      operating
      activities                     $
      305,463                                                                                        $
       103,545             $
     409,008


     Cash flows
      used in
      investing
      activities
      (1)                 (182,907)                                               (98,151)                                                           (281,058)


     Combined free
      cash flow
      generation             122,556                                                   5,394                                                             127,950


     Merger and
      integration
      costs                   61,918                                                   9,738                                                              71,656


     Adjusted
      combined
      free cash
      flow
      generation                     $
      184,474                                                                                         $
       15,132             $
     199,606




              
                (1)              Excludes the $68.8
                                               million of legacy C&J
                                               cash on hand as of the
                                               merger date.


                                   
       
           NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                     
         
            PRO FORMA NON-GAAP FINANCIAL MEASURES


                                         
          (unaudited, amounts in thousands)




                                             
             
                Three Months Ended


                                                December 31, 2019                                       September 30, 2019

                                                                                                 ---

      Pro forma net loss                                            $
              (106,553)                            $
         (10,410)



     Plus Management Adjustments:


      Acquisition, integration
       and expansion                                       55,023                                 7,169


      Non-cash stock
       compensation                                         5,646                                 9,858


      Severance and stock
       compensation
       acceleration                                             -                                5,594


      Inventory adjustment                                  2,218                                 2,448


      Facility closure                                      1,986                                 1,568


      Litigation accrual                                    3,000                                 3,000



     Tax audit                                             7,000                                22,160


      Impairment of assets                                 12,346



     Other                                                   265                                   136



      Pro forma adjusted net
       income (loss)                                                 $
              (19,069)                              $
         41,523





      Pro forma adjusted net
       income (loss) per share,
       basic and diluted                                               $
              (0.09)                                $
         0.20




      Weighted-average shares,
       basic and diluted                                  211,909                               210,098


                                                                                                       
         
             NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                                                   
           
           UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF


                                                                                                                  
              
                OPERATIONS


                                                                                                         
         
             FOR THE THREE MONTHS ENDED DECEMBER 31, 2019


                                                                                                           
         (amounts in thousands, except per share amounts)




                                                                                                                                                Adjustments


                                                    NexTier (1)                               Historical                                Reclass (3)                         Pro forma (4)             Pro Forma
                                                                              C&J (2)




     Revenue                                                    $
       528,216                                      $
              120,218                                          
              $                    
             $               $
        648,434


      Operating costs and expenses:



     Cost of services                                  408,345                       115,516                                               (4,968)                                                                 518,893


      Depreciation and amortization                      82,081                        17,673                                                                                                 (9,960)                89,794


      Selling, general and administrative
       expenses                                          42,698                        22,007                                                 5,399                                                                   70,104



     Merger and integration                             55,972                        30,978                                                                                                (31,927)                55,023



     Research and development                                                           431                                                 (431)



     Impairment                                         12,346                                                                                                                                                     12,346


      (Gain) loss on disposal of assets                   3,639                       (1,304)                                                                                                                        2,335



      Total operating costs and expenses                605,081                       185,301                                                                                                (41,887)               748,495



     Operating loss                                   (76,865)                     (65,083)                                                                                                  41,887              (100,061)




     Other income (expenses):



     Other income, net                                     (6)                          353                                                                                                                           347



     Interest expense                                  (5,769)                         (55)                                                                                                     55                (5,769)




     Total other expenses                              (5,775)                          298                                                                                                      55                (5,422)




     Loss before income taxes                         (82,640)                     (64,785)                                                                                                  41,942              (105,483)



     Income tax expense                                  (287)                        (783)                                                                                                                      (1,070)



     
                Net loss                                     $
       (82,927)                                    $
              (65,568)                                         
              $                                   $
     41,942 $
        (106,553)








     Net loss per share:



     Basic net loss per share                                    $
       (0.50)



     Diluted net loss per share                                  $
       (0.50)





     Weighted-average shares outstanding - basic       211,909



     Weighted-average shares outstanding - diluted     211,909




     
     (1) The condensed consolidated statements
              of operations for the three months
              ended December 31, 2019, reflects the
              results of legacy Keane for the period
              presented and the results of legacy
              C&J for the period beginning on and
              after November 1, 2019.



     
     (2) Reflects legacy C&J activity for the
              period from October 1, 2019 to October
              31, 2019.



     
     (3) Certain reclassifications were made to
              historical C&J to conform to NexTier
              presentation.



     
     (4) Certain pro forma adjustments were made
              to illustrate the estimated effects of
              the merger, assuming the merger had
              been consummated on January 1, 2019.


                                                                                                                
         
             NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                                                            
           
           UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF


                                                                                                                           
              
                OPERATIONS


                                                                                                                 
         
             FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2019


                                                                                                                   
         (amounts in thousands, except per share amounts)




                                                                                                                                                        Adjustments


                                                              Historical                              Historical                                Reclass (3)                          Pro forma (4)             Pro Forma
                                                    Keane (1)                         C&J (2)




     Revenue                                                            $
       443,953                                      $
              452,663                                           
              $                    
            $             $
      896,616


      Operating costs and expenses:



     Cost of services                                           333,438                      372,842                                               (6,149)                                                                 700,131


      Depreciation and amortization                               68,708                       51,124                                                                                                 (27,986)               91,846


      Selling, general and administrative
       expenses                                                   26,579                       68,234                                                 7,601                                                                  102,414



     Merger and integration                                       6,651                        8,205                                                                                                  (7,686)                7,170



     Research and development                                                                 1,452                                               (1,452)


      (Gain) loss on disposal of assets                              679                        (263)                                                                                                                          416



      Total operating costs and expenses                         436,055                      501,594                                                                                                 (35,672)              901,977



     Operating income (loss)                                      7,898                     (48,931)                                                                                                   35,672               (5,361)




     Other income (expenses):



     Other income, net                                               55                        (709)                                                                                                                        (654)



     Interest expense                                           (5,215)                       (253)                                                                                                     253               (5,215)




     Total other expenses                                       (5,160)                       (962)                                                                                                     253               (5,869)



      Income (loss) before income taxes                            2,738                     (49,893)                                                                                                   35,925              (11,230)



     Income tax benefit                                             820                                                                                                                                                       820


                   Net income (loss)                                       $
       3,558                                     $
              (49,893)                                          
              $                                 $
     35,925 $
      (10,410)








     Net loss per share:



     Basic net loss per share                                            $
       (0.05)



     Diluted net loss per share                                          $
       (0.05)





     Weighted-average shares outstanding - basic                210,098



     Weighted-average shares outstanding - diluted              210,098




     
     (1) The condensed consolidated statements
              of operations for the three months
              ended September 30, 2019, reflects the
              results of legacy Keane for the period
              presented.



     
     (2) See the condensed consolidated
              statements of operations included as
              exhibit 99.1 in NexTier's form 8-K
              filed with the SEC on November 21,
              2019.



     
     (3) Certain reclassifications were made to
              historical C&J to conform to NexTier
              presentation.



     
     (4) Certain pro forma adjustments were made
              to illustrate the estimated effects of
              the merger, assuming the merger had
              been consummated on January 1, 2019.


                                                                                                          
        
            NEXTIER OILFIELD SOLUTIONS INC. AND SUBSIDIARIES


                                                                                                      
          
          UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENTS OF


                                                                                                                   
              
                OPERATIONS


                                                                                                            
        
                FOR THE YEAR ENDED DECEMBER 31, 2019


                                                                                                            
        (amounts in thousands, except per share amounts)




                                                                                                                                                 Adjustments


                                                    NexTier (1)                                 Historical                              Reclass (3)                          Pro forma (4)               Pro Forma
                                                                                C&J (2)




     Revenue                                                   $
        1,821,556                                   $
              1,584,732                                           
              $                     
             $              $
      3,406,288


      Operating costs and expenses:



     Cost of services                                1,403,932                       1,313,211                                             (25,899)                                                                 2,691,244


      Depreciation and amortization                     292,150                         186,646                                                                                                (109,520)               369,276


      Selling, general and administrative
       expenses                                         123,676                         190,581                                               31,283                                                                    345,540



     Merger and integration                             68,731                          47,089                                                                                                 (48,304)                67,516



     Research and development                                                           5,384                                              (5,384)



     Impairment                                         12,346                          79,935                                                                                                                         92,281


      (Gain) loss on disposal of assets                   4,470                           9,151                                                                                                                         13,621



      Total operating costs and expenses              1,905,305                       1,831,997                                                                                                (157,824)             3,579,478



     Operating loss                                   (83,749)                      (247,265)                                                                                                  157,824              (173,190)




     Other income (expenses):



     Other income, net                                     453                           (341)                                                                                                                           112



     Interest expense                                 (21,856)                        (1,097)                                                                                                   1,097               (21,856)




     Total other expenses                             (21,403)                        (1,438)                                                                                                   1,097               (21,744)




     Loss before income taxes                        (105,152)                      (248,703)                                                                                                  158,921              (194,934)



     Income tax expense                                (1,005)                          (638)                                                                                                                       (1,643)



     
                Net loss                                     $
        (106,157)                                  $
              (249,341)                                          
              $                                    $
     158,921 $
      (196,577)








     Net loss per share:



     Basic net loss per share                                     $
        (0.93)



     Diluted net loss per share                                   $
        (0.93)





     Weighted-average shares outstanding - basic       211,376



     Weighted-average shares outstanding - diluted     211,376




     
     (1) The condensed consolidated statement of
              operations for the year ended December
              31, 2019, reflects the results of
              legacy Keane for the period presented
              and the results of legacy C&J for the
              period beginning on and after November
              1, 2019.



     
     (2) Reflects legacy C&J's activity for the
              period from January 1, 2019 to October
              31, 2019.



     
     (3) Certain reclassifications were made to
              historical C&J to conform to NexTier
              presentation.



     
     (4) Certain pro forma adjustments were made
              to illustrate the estimated effects of
              the merger, assuming the merger had
              been consummated on January 1, 2019.

View original content to download multimedia:http://www.prnewswire.com/news-releases/nextier-announces-fourth-quarter-and-full-year-2019-financial-and-operational-results-301021075.html

SOURCE NexTier Oilfield Solutions