SCOTTSDALE, Ariz., Nov. 7, 2016 /PRNewswire/ -- Nuverra Environmental Solutions, Inc. NESC ("Nuverra" or the "Company") today announced financial and operating results for the third quarter and nine months ended September 30, 2016.
SUMMARY OF QUARTERLY RESULTS
- Third quarter revenue was $35.4 million, an increase of approximately 4.3%, or $1.4 million, when compared with revenue of $34.0 million in the second quarter of 2016, and a 53.7% decrease, or $41.1 million, when compared with revenue of $76.5 million in the third quarter of 2015.
- Total costs and expenses, adjusted for special items, were $47.5 million, or a 2.8% decrease when compared with $48.9 million in the second quarter of 2016; 45.3% reduction in total costs and expenses, adjusted for special items, when compared with the third quarter of 2015.
- Loss from continuing operations for the third quarter was $38.4 million, or a loss of $0.30 per diluted share, compared with a loss from continuing operations of $40.6 million, or a loss of $0.60 per diluted share, in the second quarter of 2016.
- Adjusted EBITDA from continuing operations for the third quarter was $3.4 million, an increase of $3.1 million compared with adjusted EBITDA from continuing operations of $0.3 million in the second quarter of 2016.
- Total liquidity as of September 30, 2016 was $8.9 million.
THIRD QUARTER 2016 RESULTS
Third quarter revenue was $35.4 million, an increase of $1.4 million, or 4.3%, from $34.0 million in the second quarter of 2016. Revenue increased sequentially across all three operating divisions based upon a mix of pricing and activity improvement as rig counts began to rebound from second quarter lows. In the third quarter of 2015, the Company reported revenue of $76.5 million.
The Company continued to reduce costs and expenses in the third quarter as a result of proactive cost-management initiatives in response to the prolonged depression in oil and natural gas prices and corresponding impact on our business operations. Total costs and expenses, adjusted for special items, were $47.5 million, a 2.8% decrease compared with total costs and expenses, adjusted for special items, of $48.9 million in the second quarter of 2016. The Company reported total costs and expenses, adjusted for special items, of $87.0 million in the third quarter of 2015.
On a year-over-year comparison with the third quarter of 2015, the $39.5 million reduction in total costs and expenses, adjusted for special items, included:
- Approximately $18.8 million in lower payroll and related expenses, reflecting a 43.0% year-over-year reduction in headcount;
- Approximately $3.5 million in lower fuel expense;
- Approximately $3.9 million, or 44.7%, in lower general and administrative expenses;
- Approximately $1.7 million in lower depreciation and amortization expenses; with,
- The balance of $11.6 million related to reductions in all other direct operating expenses.
For the third quarter of 2016, the Company reported a net loss from continuing operations of $38.4 million, or a loss of $0.30 per diluted share. Special items in the third quarter totaled approximately $12.1 million and primarily included $7.8 million for asset impairment charges, partially offset by a $1.6 million gain on the change in fair value of the derivative warrant liability. Additionally, special items included the loss on the sale of underutilized assets, non-recurring legal and professional fees, and stock-based compensation expense. Excluding the impact of these special items, third quarter loss from continuing operations was $26.3 million, or a loss of $0.20 per diluted share. This compares with a loss from continuing operations, adjusted for special items, of $29.4 million, or a loss of $0.43 per diluted share in the second quarter of 2016. The Company reported a loss from continuing operations, adjusted for special items, of $22.5 million, or a loss of $0.81 per diluted share, in the third quarter of 2015.
Adjusted EBITDA from continuing operations for the third quarter was $3.4 million, an increase of $3.1 million compared with adjusted EBITDA of $0.3 million in the second quarter of 2016. Third quarter adjusted EBITDA margin from continuing operations was 9.7%, compared with an adjusted EBITDA margin of 0.9% in the second quarter of 2016. The Company reported adjusted EBITDA from continuing operations of $6.3 million and an adjusted EBITDA margin of 8.2% in the third quarter of 2015.
YEAR-TO-DATE RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2016 ("YTD")
YTD revenue was $116.4 million, a decrease of $171.7 million, or 59.6%, from $288.1 million for the same period in 2015. The decrease was attributable to lower overall drilling and completion activities coupled with continued pricing pressures in all divisions.
YTD net loss from continuing operations was $106.3 million, or a loss of $1.41 per diluted share, compared with a loss of $160.8 million, or a loss of $5.82 per diluted share, for the same period in 2015. Excluding special items, YTD adjusted loss from continuing operations was $82.1 million, or a loss of $1.09 per diluted share, compared with adjusted loss from continuing operations of $52.3 million, or a loss of $1.89 per diluted share in 2015. The $24.2 million in YTD special items primarily included $10.3 million in legal and professional fees associated with the Company's exchange offer and related debt restructuring activities, $10.5 million for asset impairment charges, partially offset by a $1.7 million gain on the sale of Underground Solutions, Inc., and a $2.6 million gain on the change in fair value of the derivative warrant liability. Additionally, special items included the loss on the sale of underutilized assets, severance-related charges, stock-based compensation expense, and the write off of a portion of the unamortized deferred financing costs associated with an amendment to the asset-based revolving credit facility (the "ABL Facility").
YTD adjusted EBITDA from continuing operations was $5.3 million, a decrease of 85.8% when compared with the same period in 2015. Adjusted EBITDA margin for the 2016 YTD period was 4.6%, compared with 12.9% in the same period of 2015.
CASH FLOW AND LIQUIDITY
Net cash used in operating activities from continuing operations during nine months ended September 30, 2016 was $19.3 million, while asset sales net of capital expenditures from continuing operations provided proceeds of $7.3 million. For the nine months ended September 30, 2016, free cash flow was negative at $12.0 million, compared with positive free cash flow of $51.4 million in the same period in 2015.
Total liquidity as of September 30, 2016, consisting almost entirely of available borrowings under the ABL Credit Facility, was $8.9 million.
As of September 30, 2016, total debt outstanding was $469.9 million, including $40.4 million of 2018 Notes, $346.0 million of 2021 Notes, $25.5 million under a term loan, $43.9 million under the ABL Facility, and $14.1 million in capital leases and notes payable. The Company made cumulative payments, net of proceeds received, during the nine months ended September 30, 2016 of $57.9 million to reduce total debt outstanding under the ABL Facility.
About Nuverra
Nuverra Environmental Solutions is among the largest companies in the United States dedicated to providing comprehensive, full-cycle environmental solutions to customers in the energy market. Nuverra focuses on the delivery, collection, treatment, recycling, and disposal of restricted solids, water, wastewater, waste fluids and hydrocarbons. The Company provides its suite of environmentally compliant and sustainable solutions to customers who demand stricter environmental compliance and accountability from their service providers. Find additional information about Nuverra in documents filed with the U.S. Securities and Exchange Commission (SEC) at http://www.sec.gov.
Forward-Looking Statements
This press release contains "forward-looking" statements, including, without limitation, those that involve risks and uncertainties, including statements regarding (i) the expected timing and benefits of any future restructuring transactions and alternatives to improve our long-term capital structure and (ii) the expected timing for completing the refinancing of our asset-based revolving credit facility. These statements relate to our expectations for future events and time periods. All statements other than statements of historical fact are statements that could be deemed to be forward-looking statements. Forward-looking statements may be identified by the use of words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "might," "will," "should," "would," "could," "potential," "future," "continue," "ongoing," "forecast," "project," "target," or similar expressions, and variations or negatives of these words. There can be no assurance that all or any portion of any future restructuring transactions will be consummated on the terms summarized herein or at all, and any such restructuring transactions may not permit us to meet scheduled debt service obligations, which would cause us to default on our debt obligations. In the event we cannot meet our scheduled debt service obligations or otherwise default on our debt obligations, we may need to seek relief under the United States Bankruptcy Code. The forward-looking statements contained, or incorporated by reference, herein are also subject generally to other risks and uncertainties that are described from time to time in the Company's filings with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which reflect management's views as of the filing date. The Company undertakes no obligation to update any such forward-looking statements, whether as a result of new information, future events, changes in expectations or otherwise.
602-903-7802
ir@nuverra.com
- Tables to Follow -
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | ||||||||||
|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||||
|
(In thousands, except per share amounts) | ||||||||||
|
(Unaudited) | ||||||||||
|
Three Months Ended |
Nine Months Ended | |||||||||
|
September 30, |
September 30, | |||||||||
|
2016 |
2015 |
2016 |
2015 | |||||||
|
Revenue: |
||||||||||
|
Non-rental revenue |
$ 32,143 |
$ 71,000 |
$ 107,538 |
$ 263,540 | ||||||
|
Rental revenue |
3,298 |
5,528 |
8,856 |
24,527 | ||||||
|
Total revenue |
35,441 |
76,528 |
116,394 |
288,067 | ||||||
|
Costs and expenses: |
||||||||||
|
Direct operating expenses |
32,122 |
62,482 |
101,022 |
222,055 | ||||||
|
General and administrative expenses |
6,323 |
8,705 |
27,979 |
31,102 | ||||||
|
Depreciation and amortization |
15,019 |
16,687 |
46,070 |
52,465 | ||||||
|
Impairment of long-lived assets |
7,788 |
- |
10,452 |
- | ||||||
|
Impairment of goodwill |
- |
104,721 |
- |
104,721 | ||||||
|
Other, net |
- |
2 |
- |
1,114 | ||||||
|
Total costs and expenses |
61,252 |
192,597 |
185,523 |
411,457 | ||||||
|
Operating loss |
(25,811) |
(116,069) |
(69,129) |
(123,390) | ||||||
|
Interest expense, net |
(14,656) |
(12,097) |
(40,674) |
(37,137) | ||||||
|
Other income, net |
2,095 |
22 |
5,024 |
743 | ||||||
|
Loss on extinguishment of debt |
- |
- |
(674) |
(1,011) | ||||||
|
Loss from continuing operations before income taxes |
(38,372) |
(128,144) |
(105,453) |
(160,795) | ||||||
|
Income tax (expense) benefit |
(24) |
31 |
(852) |
40 | ||||||
|
Loss from continuing operations |
(38,396) |
(128,113) |
(106,305) |
(160,755) | ||||||
|
Gain (loss) from discontinued operations, net of income taxes |
- |
350 |
(1,235) |
(818) | ||||||
|
Net loss attributable to common shareholders |
$ (38,396) |
$ (127,763) |
$ (107,540) |
$ (161,573) | ||||||
|
Net loss per common share attributable to common shareholders: |
||||||||||
|
Basic and diluted loss from continuing operations |
$ (0.30) |
$ (4.61) |
$ (1.41) |
$ (5.82) | ||||||
|
Basic and diluted income (loss) from discontinued operations |
- |
0.01 |
(0.02) |
(0.03) | ||||||
|
Net loss per basic and diluted common share |
$ (0.30) |
$ (4.60) |
$ (1.43) |
$ (5.85) | ||||||
|
Weighted average shares outstanding used in computing net loss per basic and diluted common share |
129,669 |
27,807 |
75,291 |
27,634 | ||||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | ||||
|
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||
|
(In thousands) | ||||
|
(Unaudited) | ||||
|
September 30, |
December 31, | |||
|
2016 |
2015 | |||
|
Assets |
(Note 1) | |||
|
Cash and cash equivalents |
$ 587 |
$ 39,309 | ||
|
Restricted cash |
1,087 |
4,250 | ||
|
Accounts receivable, net |
22,188 |
42,188 | ||
|
Inventories |
2,580 |
2,985 | ||
|
Prepaid expenses and other receivables |
3,468 |
3,377 | ||
|
Other current assets |
958 |
2,372 | ||
|
Assets held for sale |
582 |
- | ||
|
Total current assets |
31,450 |
94,481 | ||
|
Property, plant and equipment, net |
340,797 |
406,188 | ||
|
Equity investments |
573 |
3,750 | ||
|
Intangibles, net |
14,905 |
16,867 | ||
|
Other assets |
573 |
1,333 | ||
|
Total assets |
$ 388,298 |
$ 522,619 | ||
|
Liabilities and Shareholders' Deficit |
||||
|
Accounts payable |
$ 4,206 |
$ 6,907 | ||
|
Accrued liabilities |
18,281 |
29,843 | ||
|
Current contingent consideration |
- |
8,628 | ||
|
Current portion of long-term debt |
51,315 |
499,709 | ||
|
Derivative warrant liability |
4,426 |
- | ||
|
Total current liabilities |
78,228 |
545,087 | ||
|
Deferred income taxes |
340 |
270 | ||
|
Long-term debt |
405,461 |
11,758 | ||
|
Long-term contingent consideration |
8,500 |
- | ||
|
Other long-term liabilities |
3,738 |
3,775 | ||
|
Total liabilities |
496,267 |
560,890 | ||
|
Commitments and contingencies |
||||
|
Shareholders' deficit: |
||||
|
Common stock |
152 |
30 | ||
|
Additional paid-in capital |
1,407,650 |
1,369,921 | ||
|
Treasury stock |
(19,809) |
(19,800) | ||
|
Accumulated deficit |
(1,495,962) |
(1,388,422) | ||
|
Total shareholders' deficit |
(107,969) |
(38,271) | ||
|
Total liabilities and shareholders' deficit |
$ 388,298 |
$ 522,619 | ||
|
Note 1: The condensed consolidated balance sheet at December 31, 2015 has been derived from the audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2015. | ||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | ||||
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||
|
(In thousands) | ||||
|
(Unaudited) | ||||
|
Nine Months Ended | ||||
|
September 30, | ||||
|
2016 |
2015 | |||
|
Cash flows from operating activities: |
||||
|
Net loss |
$ (107,540) |
$ (161,573) | ||
|
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: |
||||
|
Income from discontinued operations, net of income taxes |
- |
(906) | ||
|
Loss on the sale of TFI |
1,235 |
1,724 | ||
|
Depreciation and amortization of intangible assets |
46,070 |
52,465 | ||
|
Amortization of debt issuance costs, net |
4,329 |
3,638 | ||
|
Accrued interest added to debt principal |
20,240 |
- | ||
|
Stock-based compensation |
908 |
1,858 | ||
|
Impairment of long-lived assets |
10,452 |
- | ||
|
Impairment of goodwill |
- |
104,721 | ||
|
Gain on sale of UGSI |
(1,747) |
- | ||
|
Loss (gain) on disposal of property, plant and equipment |
3,298 |
(1,198) | ||
|
Bad debt expense |
(516) |
(695) | ||
|
Change in fair value of derivative warrant liability |
(2,574) |
- | ||
|
Loss on extinguishment of debt |
674 |
1,011 | ||
|
Deferred income taxes |
70 |
21 | ||
|
Other, net |
5 |
364 | ||
|
Changes in operating assets and liabilities: |
||||
|
Accounts receivable |
20,516 |
58,985 | ||
|
Prepaid expenses and other receivables |
(227) |
(1,294) | ||
|
Accounts payable and accrued liabilities |
(14,379) |
(4,805) | ||
|
Other assets and liabilities, net |
(136) |
1,342 | ||
|
Net cash (used in) provided by operating activities from continuing operations |
(19,322) |
55,658 | ||
|
Net cash used in operating activities from discontinued operations |
- |
(708) | ||
|
Net cash (used in) provided by operating activities |
(19,322) |
54,950 | ||
|
Cash flows from investing activities: |
||||
|
Proceeds from the sale of TFI |
- |
78,897 | ||
|
Proceeds from the sale of property, plant and equipment |
9,954 |
12,339 | ||
|
Purchases of property, plant and equipment |
(2,613) |
(16,564) | ||
|
Proceeds from the sale of UGSI |
5,032 |
- | ||
|
Change in restricted cash |
3,163 |
(4,250) | ||
|
Net cash provided by investing activities from continuing operations |
15,536 |
70,422 | ||
|
Net cash used in investing activities from discontinued operations |
- |
(181) | ||
|
Net cash provided by investing activities |
15,536 |
70,241 | ||
|
Cash flows from financing activities: |
||||
|
Proceeds from revolving credit facility |
118,533 |
- | ||
|
Payments on revolving credit facility |
(176,428) |
(81,647) | ||
|
Proceeds from term loan |
24,000 |
- | ||
|
Payments for deferred financing costs |
(1,084) |
- | ||
|
Issuance of stock |
5,000 |
- | ||
|
Payments on vehicle financing and other financing activities |
(4,957) |
(9,468) | ||
|
Net cash used in financing activities of continuing operations |
(34,936) |
(91,115) | ||
|
Net cash used in financing activities of discontinued operations |
- |
(105) | ||
|
Net cash used in financing activities |
(34,936) |
(91,220) | ||
|
Net (decrease) increase in cash and cash equivalents |
(38,722) |
33,971 | ||
|
Cash and cash equivalents - beginning of period |
39,309 |
15,416 | ||
|
Cash and cash equivalents - end of period |
587 |
49,387 | ||
|
Less: cash and cash equivalents of discontinued operations - end of period |
- |
- | ||
|
Cash and cash equivalents of continuing operations - end of period |
$ 587 |
$ 49,387 | ||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES |
||||||||||
|
NON-GAAP RECONCILIATIONS |
||||||||||
|
(In thousands) |
||||||||||
|
(Unaudited) |
||||||||||
|
This press release contains non-GAAP financial measures as defined by the rules and regulations of the United States Securities and Exchange Commission. A non-GAAP financial measure is a numerical measure of a company's historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations or balance sheets of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are included in the attached financial tables. |
||||||||||
|
Reconciliation of Loss from Continuing Operations to EBITDA, Adjusted EBITDA from Continuing Operations and Total Adjusted EBITDA: |
||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||
|
September 30, |
September 30, |
|||||||||
|
2016 |
2015 |
2016 |
2015 |
|||||||
|
Loss from continuing operations |
$ (38,396) |
$ (128,113) |
$ (106,305) |
$ (160,755) |
||||||
|
Depreciation and amortization |
15,019 |
16,687 |
46,070 |
52,465 |
||||||
|
Interest expense, net |
14,656 |
12,097 |
40,674 |
37,137 |
||||||
|
Income tax expense (benefit) |
24 |
(31) |
852 |
(40) |
||||||
|
EBITDA |
(8,697) |
(99,360) |
(18,709) |
(71,193) |
||||||
|
Adjustments: |
||||||||||
|
Transaction-related costs, including earnout adjustments, net |
- |
(13) |
(117) |
(145) |
||||||
|
Stock-based compensation |
252 |
342 |
908 |
1,858 |
||||||
|
Change in fair value of derivative warrant liability |
(1,551) |
- |
(2,574) |
- |
||||||
|
Legal and environmental costs, net |
3,387 |
134 |
13,504 |
538 |
||||||
|
Impairment of long-lived assets |
7,788 |
- |
10,452 |
- |
||||||
|
Impairment of goodwill |
- |
104,721 |
- |
104,721 |
||||||
|
Restructuring, exit and other costs |
(266) |
326 |
(379) |
1,661 |
||||||
|
Loss on extinguishment of debt |
- |
- |
674 |
1,011 |
||||||
|
Gain on sale of UGSI |
(53) |
- |
(1,747) |
- |
||||||
|
Loss (gain) on disposal of assets |
2,566 |
114 |
3,293 |
(1,198) |
||||||
|
Adjusted EBITDA from continuing operations |
3,426 |
6,264 |
5,305 |
37,253 |
||||||
|
Adjusted EBITDA from discontinued operations |
- |
- |
- |
1,197 |
||||||
|
Total Adjusted EBITDA |
$ 3,426 |
$ 6,264 |
$ 5,305 |
$ 38,450 |
||||||
|
Reconciliation of Loss from Discontinued Operations to EBITDA from Discontinued Operations and Adjusted EBITDA from Discontinued Operations: |
||||||||||
|
Three Months Ended |
Nine Months Ended |
|||||||||
|
September 30, |
September 30, |
|||||||||
|
2016 |
2015 |
2016 |
2015 |
|||||||
|
Loss from discontinued operations |
$ - |
$ 350 |
$ (1,235) |
$ (818) |
||||||
|
Income tax expense |
- |
- |
- |
265 |
||||||
|
EBITDA from discontinued operations |
- |
350 |
(1,235) |
(553) |
||||||
|
Adjustments: |
||||||||||
|
Transaction-related costs |
- |
- |
- |
26 |
||||||
|
Loss on sale of TFI |
- |
(350) |
1,235 |
1,724 |
||||||
|
Adjusted EBITDA from discontinued operations |
$ - |
$ - |
$ - |
$ 1,197 |
||||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | |||||||||||
|
NON-GAAP RECONCILIATIONS (continued) | |||||||||||
|
(In thousands) | |||||||||||
|
(Unaudited) | |||||||||||
|
Reconciliation of QTD Segment Performance to Adjusted EBITDA | |||||||||||
|
Three Months Ended September 30, 2016 |
Rocky Mountain |
Northeast |
Southern |
Corporate |
Total | ||||||
|
Revenue |
$ 19,166 |
$ 7,877 |
$ 8,398 |
$ - |
$ 35,441 | ||||||
|
Direct operating expenses |
13,890 |
9,311 |
8,921 |
- |
32,122 | ||||||
|
General and administrative expenses |
1,211 |
346 |
455 |
4,311 |
6,323 | ||||||
|
Depreciation and amortization |
7,554 |
3,281 |
4,121 |
63 |
15,019 | ||||||
|
Operating loss |
(3,489) |
(10,733) |
(7,215) |
(4,374) |
(25,811) | ||||||
|
Operating margin % |
(18.2%) |
(136.3%) |
(85.9%) |
NA |
(72.8%) | ||||||
|
Loss from continuing operations before income taxes |
(3,618) |
(10,384) |
(7,265) |
(17,105) |
(38,372) | ||||||
|
Loss from continuing operations |
(3,618) |
(10,384) |
(7,311) |
(17,083) |
(38,396) | ||||||
|
Depreciation and amortization |
7,554 |
3,281 |
4,121 |
63 |
15,019 | ||||||
|
Interest expense, net |
150 |
118 |
53 |
14,335 |
14,656 | ||||||
|
Income tax expense (benefit) |
- |
- |
46 |
(22) |
24 | ||||||
|
EBITDA |
$ 4,086 |
$ (6,985) |
$ (3,091) |
$ (2,707) |
$ (8,697) | ||||||
|
Adjustments, net |
(206) |
7,094 |
4,746 |
489 |
12,123 | ||||||
|
Adjusted EBITDA from continuing operations |
$ 3,880 |
$ 109 |
$ 1,655 |
$ (2,218) |
$ 3,426 | ||||||
|
Adjusted EBITDA margin % |
20.2% |
1.4% |
19.7% |
NA |
9.7% | ||||||
|
Three Months Ended September 30, 2015 |
Rocky Mountain |
Northeast |
Southern |
Corporate |
Total | ||||||
|
Revenue |
$ 41,325 |
$ 19,825 |
$ 15,378 |
$ - |
$ 76,528 | ||||||
|
Direct operating expenses |
30,938 |
16,414 |
15,130 |
- |
62,482 | ||||||
|
General and administrative expenses |
1,823 |
791 |
703 |
5,388 |
8,705 | ||||||
|
Depreciation and amortization |
8,553 |
4,041 |
3,985 |
108 |
16,687 | ||||||
|
Operating loss |
(104,710) |
(1,421) |
(4,441) |
(5,497) |
(116,069) | ||||||
|
Operating margin % |
(253.4%) |
(7.2%) |
(28.9%) |
NA |
(151.7%) | ||||||
|
Loss from continuing operations before income taxes |
(104,811) |
(1,569) |
(4,474) |
(17,290) |
(128,144) | ||||||
|
Loss from continuing operations |
(104,811) |
(1,563) |
(4,470) |
(17,269) |
(128,113) | ||||||
|
Depreciation and amortization |
8,553 |
4,041 |
3,985 |
108 |
16,687 | ||||||
|
Interest expense, net |
110 |
146 |
48 |
11,793 |
12,097 | ||||||
|
Income tax benefit |
- |
(6) |
(4) |
(21) |
(31) | ||||||
|
EBITDA |
$ (96,148) |
$ 2,618 |
$ (441) |
$ (5,389) |
$ (99,360) | ||||||
|
Adjustments, net |
104,590 |
(12) |
1,181 |
(135) |
105,624 | ||||||
|
Adjusted EBITDA from continuing operations |
$ 8,442 |
$ 2,606 |
$ 740 |
$ (5,524) |
$ 6,264 | ||||||
|
Adjusted EBITDA margin % |
20.4% |
13.1% |
4.8% |
NA |
8.2% | ||||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | |||||||||||
|
NON-GAAP RECONCILIATIONS (continued) | |||||||||||
|
(In thousands) | |||||||||||
|
(Unaudited) | |||||||||||
|
Reconciliation of YTD Segment Performance to Adjusted EBITDA | |||||||||||
|
Nine Months Ended September 30, 2016 |
Rocky Mountain |
Northeast |
Southern |
Corporate |
Total | ||||||
|
Revenue |
$ 63,023 |
$ 28,342 |
$ 25,029 |
$ - |
$ 116,394 | ||||||
|
Direct operating expenses |
49,680 |
29,005 |
22,337 |
- |
101,022 | ||||||
|
General and administrative expenses |
4,758 |
1,875 |
2,348 |
18,998 |
27,979 | ||||||
|
Depreciation and amortization |
23,425 |
10,590 |
11,854 |
201 |
46,070 | ||||||
|
Operating loss |
(14,840) |
(21,153) |
(13,937) |
(19,199) |
(69,129) | ||||||
|
Operating margin % |
(23.5%) |
(74.6%) |
(55.7%) |
NA |
(59.4%) | ||||||
|
Loss from continuing operations before income taxes |
(15,088) |
(20,984) |
(14,016) |
(55,365) |
(105,453) | ||||||
|
Loss from continuing operations |
(15,088) |
(20,984) |
(14,062) |
(56,171) |
(106,305) | ||||||
|
Depreciation and amortization |
23,425 |
10,590 |
11,854 |
201 |
46,070 | ||||||
|
Interest expense, net |
354 |
368 |
139 |
39,813 |
40,674 | ||||||
|
Income tax expense |
- |
- |
46 |
806 |
852 | ||||||
|
EBITDA |
$ 8,691 |
$ (10,026) |
$ (2,023) |
$ (15,351) |
$ (18,709) | ||||||
|
Adjustments, net |
2,508 |
8,820 |
4,548 |
8,138 |
24,014 | ||||||
|
Adjusted EBITDA from continuing operations |
$ 11,199 |
$ (1,206) |
$ 2,525 |
$ (7,213) |
$ 5,305 | ||||||
|
Adjusted EBITDA margin % |
17.8% |
(4.3%) |
10.1% |
NA |
4.6% | ||||||
|
Nine Months Ended September 30, 2015 |
Rocky Mountain |
Northeast |
Southern |
Corporate |
Total | ||||||
|
Revenue |
$ 158,336 |
$ 74,549 |
$ 55,182 |
$ - |
$ 288,067 | ||||||
|
Direct operating expenses |
115,470 |
59,906 |
46,679 |
- |
222,055 | ||||||
|
General and administrative expenses |
5,201 |
3,716 |
4,000 |
18,185 |
31,102 | ||||||
|
Depreciation and amortization |
26,091 |
12,028 |
13,828 |
518 |
52,465 | ||||||
|
Operating loss |
(93,147) |
(1,224) |
(9,923) |
(19,096) |
(123,390) | ||||||
|
Operating margin % |
(58.8%) |
(1.6%) |
(18.0%) |
NA |
(42.8%) | ||||||
|
Loss from continuing operations before income taxes |
(92,909) |
(1,756) |
(10,037) |
(56,093) |
(160,795) | ||||||
|
Loss from continuing operations |
(92,909) |
(1,756) |
(10,037) |
(56,053) |
(160,755) | ||||||
|
Depreciation and amortization |
26,091 |
12,028 |
13,828 |
518 |
52,465 | ||||||
|
Interest expense, net |
363 |
646 |
142 |
35,986 |
37,137 | ||||||
|
Income tax benefit |
- |
- |
- |
(40) |
(40) | ||||||
|
EBITDA |
$ (66,455) |
$ 10,918 |
$ 3,933 |
$ (19,589) |
$ (71,193) | ||||||
|
Adjustments, net |
104,015 |
134 |
1,050 |
3,247 |
108,446 | ||||||
|
Adjusted EBITDA from continuing operations |
$ 37,560 |
$ 11,052 |
$ 4,983 |
$ (16,342) |
$ 37,253 | ||||||
|
Adjusted EBITDA margin % |
23.7% |
14.8% |
9.0% |
NA |
12.9% | ||||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | |||||||||
|
NON-GAAP RECONCILIATIONS (continued) | |||||||||
|
(In thousands) | |||||||||
|
(Unaudited) | |||||||||
|
Reconciliation of Special Items to Adjusted Loss from Continuing Operations and to EBITDA and Adjusted EBITDA from Continuing Operations | |||||||||
|
Three Months Ended September 30, 2016 |
|||||||||
|
As Reported |
Special Items |
As Adjusted |
|||||||
|
Revenue |
$ 35,441 |
$ - |
$ 35,441 |
||||||
|
Direct operating expenses |
32,122 |
(4,394) |
[A] |
27,728 |
|||||
|
General and administrative expenses |
6,323 |
(1,545) |
[B] |
4,778 |
|||||
|
Total costs and expenses |
61,252 |
(13,727) |
[C] |
47,525 |
|||||
|
Operating loss |
(25,811) |
13,727 |
[C] |
(12,084) |
|||||
|
Loss from continuing operations |
(38,396) |
12,131 |
[D] |
(26,265) |
|||||
|
Basic and diluted loss from continuing operations |
$ (0.30) |
$ (0.20) |
|||||||
|
Loss from continuing operations |
$ (38,396) |
$ (26,265) |
|||||||
|
Depreciation and amortization |
15,019 |
15,019 |
|||||||
|
Interest expense, net |
14,656 |
14,656 |
|||||||
|
Income tax expense |
24 |
16 |
|||||||
|
EBITDA and Adjusted EBITDA from continuing operations |
$ (8,697) |
$ 3,426 |
|||||||
|
Description of 2016 Special Items: | |||||||||
|
[A] |
Special items primarily includes the loss on sale of underutilized assets, offset by severance and environmental clean-up charges. | ||||||||
|
[B] |
Primarily attributable to stock-based compensation, non-routine legal and professional fees offset by a settlement for the Rocky Mountain division. | ||||||||
|
[C] |
Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $2.1 million for assets classified as assets-held-for-sale in the Southern division and $5.7 million for assets determined to be impaired in the Northeast division. | ||||||||
|
[D] |
Primarily includes the aforementioned adjustments along with a gain of $1.6 million associated with the change in fair value of the derivative warrant liability. Additionally, our effective tax rate for the three months ended September 30, 2016 was 0.06% and has been applied to the special items accordingly. | ||||||||
|
Three Months Ended September 30, 2015 |
|||||||||
|
As Reported |
Special Items |
As Adjusted |
|||||||
|
Revenue |
$ 76,528 |
$ - |
$ 76,528 |
||||||
|
Direct operating expenses |
62,482 |
(846) |
[E] |
61,636 |
|||||
|
General and administrative expenses |
8,705 |
(68) |
[F] |
8,637 |
|||||
|
Total costs and expenses |
192,597 |
(105,637) |
[G] |
86,960 |
|||||
|
Operating loss |
(116,069) |
105,637 |
[G] |
(10,432) |
|||||
|
Loss from continuing operations |
(128,113) |
105,624 |
[H] |
(22,489) |
|||||
|
Basic and diluted loss from continuing operations |
$ (4.61) |
$ (0.81) |
|||||||
|
Loss from continuing operations |
$ (128,113) |
$ (22,489) |
|||||||
|
Depreciation and amortization |
16,687 |
16,687 |
|||||||
|
Interest expense, net |
12,097 |
12,097 |
|||||||
|
Income tax benefit |
(31) |
(31) |
|||||||
|
EBITDA and Adjusted EBITDA from continuing operations |
$ (99,360) |
$ 6,264 |
|||||||
|
Description of 2015 Special Items: | |||||||||
|
[E] |
Special items include a gain on sale related to the disposal of certain transportation related assets. | ||||||||
|
[F] |
Primarily attributable to stock-based compensation, non-routine litigation expenses, and a gain related to the sale of assets. | ||||||||
|
[G] |
Primarily includes the aforementioned adjustments, and approximately $104.7 million associated with a goodwill impairment charge recorded for the Rocky Mountain division. | ||||||||
|
[H] |
Primarily includes the aforementioned adjustments. Additionally, our effective tax rate for the three months ended September 30, 2015 was near zero percent and has been applied to the special items accordingly. | ||||||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | |||||||||
|
NON-GAAP RECONCILIATIONS (continued) | |||||||||
|
(In thousands) | |||||||||
|
(Unaudited) | |||||||||
|
Reconciliation of Special Items to Adjusted Loss from Continuing Operations and to EBITDA and Adjusted EBITDA from Continuing Operations | |||||||||
|
Nine Months Ended September 30, 2016 |
|||||||||
|
As Reported |
Special Items |
As Adjusted |
|||||||
|
Revenue |
$ 116,394 |
$ - |
$ 116,394 |
||||||
|
Direct operating expenses |
101,022 |
(5,633) |
[A] |
95,389 |
|||||
|
General and administrative expenses |
27,979 |
(11,704) |
[B] |
16,275 |
|||||
|
Total costs and expenses |
185,523 |
(27,789) |
[C] |
157,734 |
|||||
|
Operating loss |
(69,129) |
27,789 |
[C] |
(41,340) |
|||||
|
Loss from continuing operations |
(106,305) |
24,208 |
[D] |
(82,097) |
|||||
|
Basic and diluted loss from continuing operations |
$ (1.41) |
$ (1.09) |
|||||||
|
Loss from continuing operations |
$ (106,305) |
$ (82,097) |
|||||||
|
Depreciation and amortization |
46,070 |
46,070 |
|||||||
|
Interest expense, net |
40,674 |
40,674 |
|||||||
|
Income tax expense |
852 |
658 |
|||||||
|
EBITDA and Adjusted EBITDA from continuing operations |
$ (18,709) |
$ 5,305 |
|||||||
|
Description of 2016 Special Items: | |||||||||
|
[A] |
Special items primarily includes the loss on sale of underutilized assets, offset by severance and environmental clean-up charges. | ||||||||
|
[B] |
Primarily attributable to stock-based compensation and non-routine legal and professional fees incurred in connection with the execution of management's plan to restructure our indebtedness. | ||||||||
|
[C] |
Primarily includes the aforementioned adjustments along with long-lived asset impairment charges of $4.8 million for assets classified as assets-held-for-sale in the Northeast and Southern divisions and $5.7 million for assets determined to be impaired in the Northeast division. | ||||||||
|
[D] |
Primarily includes the aforementioned adjustments along with a charge of $0.7 million in connection with the write-off of a portion of the unamortized deferred financing costs as a result of amendments to the ABL Facility, a gain of $2.6 million associated with the change in fair value of the derivative warrant liability, and a gain on the sale of Underground Solutions, Inc. of $1.7 million. Additionally, our effective tax rate for the nine months ended September 30, 2016 was 0.8% and has been applied to the special items accordingly. | ||||||||
|
Nine Months Ended September 30, 2015 |
|||||||||
|
As Reported |
Special Items |
As Adjusted |
|||||||
|
Revenue |
$ 288,067 |
$ - |
$ 288,067 |
||||||
|
Direct operating expenses |
222,055 |
469 |
[E] |
222,524 |
|||||
|
General and administrative expenses |
31,102 |
(2,214) |
[F] |
28,888 |
|||||
|
Total costs and expenses |
411,457 |
(107,580) |
[G] |
303,877 |
|||||
|
Operating loss |
(123,390) |
107,580 |
[G] |
(15,810) |
|||||
|
Loss from continuing operations |
(160,755) |
108,446 |
[H] |
(52,309) |
|||||
|
Basic and diluted loss from continuing operations |
$ (5.82) |
$ (1.89) |
|||||||
|
Loss from continuing operations |
$ (160,755) |
$ (52,309) |
|||||||
|
Depreciation and amortization |
52,465 |
52,465 |
|||||||
|
Interest expense, net |
37,137 |
37,137 |
|||||||
|
Income tax benefit |
(40) |
(40) |
|||||||
|
EBITDA and Adjusted EBITDA from continuing operations |
$ (71,193) |
$ 37,253 |
|||||||
|
Description of 2015 Special Items: | |||||||||
|
[E] |
Special items include a gain on sale related to the disposal of certain transportation related assets. | ||||||||
|
[F] |
Primarily attributable to stock-based compensation, non-routine litigation expenses, certain refinancing costs associated with our ABL Facility and a gain related to the sale of assets. | ||||||||
|
[G] |
Primarily includes the aforementioned adjustments, along with a charge of approximately $1.1 million associated our restructuring initiative and other exit related costs from certain shale basins, and approximately $104.7 million associated with a goodwill impairment charge recorded for the Rocky Mountain division. | ||||||||
|
[H] |
Primarily includes the aforementioned adjustments, along with a charge of $1.0 million in connection with the write-off of a portion of the unamortized deferred financing costs as a result of an amendment to our ABL Facility, and a net reduction related to a prior acquisition earnout reserve of $0.1 million. Additionally, our effective tax rate for the nine months ended September 30, 2015 was near zero percent and has been applied to the special items accordingly. | ||||||||
|
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. AND SUBSIDIARIES | ||||||
|
NON-GAAP RECONCILIATIONS (continued) | ||||||
|
(In thousands) | ||||||
|
(Unaudited) | ||||||
|
Reconciliation of Free Cash Flow from Continuing Operations | ||||||
|
Nine Months Ended |
||||||
|
September 30, |
||||||
|
2016 |
2015 |
|||||
|
Net cash (used in) provided by operating activities from continuing operations |
$ (19,322) |
$ 55,658 |
||||
|
Less: net cash capital expenditures [1] |
7,341 |
(4,225) |
||||
|
Free Cash Flow |
$ (11,981) |
$ 51,433 |
||||
|
[1] Purchases of property, plant and equipment net of proceeds received from sales of property, plant and equipment |
||||||
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SOURCE Nuverra Environmental Solutions, Inc.
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