Market Overview

FTS International Reports Second Quarter Financial and Operational Results


FTS International, Inc. (NYSE:FTSI) (the "Company") today reported its
financial and operational results for the second quarter of 2018.

Second Quarter 2018 Highlights Compared to the First Quarter 2018

  • Revenue was $493.3 million, up from $467.5 million in the first quarter
  • Net income was $103.6 million, up from $78.7 million in the first
  • Earnings per common share were $0.95
  • Adjusted EBITDA was $141.3 million, up from $129.1 million in the
    first quarter
  • Annualized adjusted EBITDA per fleet was $20.2 million, up from $18.8
    million in the first quarter
  • Repaid $100 million of debt in the second quarter of 2018 and an
    additional $30 million subsequent to the end of the quarter

Operational Update

FTSI completed 9,356 stages during the second quarter of 2018, or 334
stages per active fleet. This compares to 8,152 stages in the first
quarter of 2018, or 296 stages per active fleet. The higher efficiencies
drove annualized adjusted EBITDA per fleet back above $20 million per
average active fleet.

Average active fleets during the second quarter of 2018 were 28, up from
27.5 in the first quarter of 2018.

The Company reported that certain of its customers reduced their
completions activity going into the third quarter due to changes in
their capital budgets and higher than expected completions efficiencies.
As a result, the Company has decided to reduce its active fleets and
currently expects to average 24 fleets in the third quarter.

"Due to temporary reductions in activity levels by our customer base,
we face increased uncertainty in the second half of 2018 in terms of
pricing and utilization. However, recent conversations with both
existing and target customers indicate they are gearing up for a strong
start to 2019 and even the fourth quarter of this year, and we will
remain ready. Despite these near-term headwinds, we will continue
generating substantial cash flow and reducing our net debt. We have
repeatedly demonstrated our fiscal discipline and ability to react
quickly to changing conditions and will continue to do so."

Michael Doss, Chief Executive Officer

Liquidity and Capital Resources

Capital expenditures were $28.5 million for the second quarter of 2018.
Due to changes in the Company's fleet activation schedule, it now
expects total capital expenditures in 2018 will range from $105 million
to $115 million, a $30 million reduction from previous estimates.

During the second quarter, the Company repaid $100 million of its term
loan due 2021 to bring total debt outstanding to $635 million as of June
30, 2018. Subsequent to June 30, FTSI repaid an additional $30 million.

FTSI ended the second quarter of 2018 with $126.3 million of cash and
$229.5 million in availability under its revolving credit facility,
which had no borrowings outstanding.

The Company expects to end the third quarter of 2018 with net debt (long
term debt less cash) of approximately $400 million.

Conference Call

FTSI will host a conference call with its management team to discuss the
second quarter 2018 financial results at 9:00 a.m. Central Time (10:00
a.m. Eastern Time) on Wednesday, August 1, 2018. Presenting the
Company's results will be Michael Doss, Chief Executive Officer; Buddy
Petersen, Chief Operating Officer; and Lance Turner, Chief Financial

Individuals wishing to participate in the conference call should dial
(800) 734-4208 or (303) 223-0118 for international callers. For
interested individuals unable to join by telephone, a replay will be
available shortly after the call and can be accessed by dialing (800)
633-8284, or for international callers (402) 977-9140, and entering the
passcode 21892023. Interested parties are encouraged to dial in 10-15
minutes prior to the start of the conference call. The replay will be
available for 3 weeks.

About FTS International, Inc.

FTS International, Inc. (NYSE:FTSI) is one of the largest providers of
hydraulic fracturing services in North America. The Company's services
enhance hydrocarbon flow from oil and natural gas wells drilled by
exploration and production companies in shale and other unconventional
resource formations.

Non-GAAP Financial Measures

Adjusted EBITDA is a non-GAAP financial measure that FTSI defines as
earnings before interest; income taxes; and depreciation and
amortization, as well as, the following items, if applicable: gain or
loss on disposal of assets; debt extinguishment gains or losses;
inventory write-downs, asset and goodwill impairments; gain on insurance
recoveries; acquisition earn-out adjustments; stock-based compensation;
and acquisition or disposition transaction costs. The most comparable
financial measure to Adjusted EBITDA under GAAP is net income or loss.
Adjusted EBITDA is used by management to evaluate the operating
performance of the business for comparable periods and it is a metric
used for management incentive compensation. Adjusted EBITDA should not
be used by investors or others as the sole basis for formulating
investment decisions, as it excludes a number of important items. The
Company believes Adjusted EBITDA is an important indicator of operating
performance because it excludes the effects of its capital structure and
certain non-cash items from its operating results. Adjusted EBITDA is
also commonly used by investors in the oilfield services industry to
measure a company's operating performance, although FTSI's definition of
Adjusted EBITDA may differ from other industry peer companies.

Forward-Looking and Cautionary Statements

This press release contains "forward-looking statements" within the
meaning of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements regarding customer
activity in 2018 and 2019, the reduction of active fleets and other
statements identified by words such as "could," "may," "might," "will,"
"likely," "anticipates," "intends," "plans," "seeks," "believes,"
"estimates," "expects," "continues," "projects" and similar references
to future periods. Forward-looking statements are based on FTSI's
current expectations and assumptions regarding capital market
conditions, FTSI's business, the economy and other future conditions.
Because forward-looking statements relate to the future, by their
nature, they are subject to inherent uncertainties, risks and changes in
circumstances that are difficult to predict. As a result, FTSI's actual
results may differ materially from those contemplated by the
forward-looking statements. Important factors that could cause actual
results to differ materially from those in the forward-looking
statements include regional, national or global political, economic,
business, competitive, market and regulatory conditions, and FTSI's
competitive environment. Any forward-looking statement made in this
press release speaks only as of the date on which it is made. FTSI
undertakes no obligation to publicly update or revise any
forward-looking statement, whether as a result of new information,
future developments or otherwise, except as required by law.

When considering these forward-looking statements, you should keep in
mind the risk factors and other cautionary statements in FTSI's filings
with the SEC. The risk factors and other factors noted in FTSI's filings
with the SEC could cause the Company's actual results to differ
materially from those contained in any forward-looking statement.

Consolidated Statements of Operations (unaudited)

    Three Months Ended       Six Months Ended
(In millions, except per share amounts)  

June 30,


March 31,


June 30,

June 30,     June 30,
            2018     2017
Revenue $ 456.7 $ 425.1 $ 304.4 $ 881.8 $ 496.3
Revenue from related parties   36.6     42.4     40.5     79.0     62.1  
Total revenue   493.3     467.5     344.9     960.8     558.4  
Operating expenses
Costs of revenue 329.4 312.2 236.3 641.6 411.1
Selling, general and administrative 20.8 25.8 20.8 46.6 40.3
Depreciation and amortization 20.7 20.6 21.3 41.3 43.1
Impairments and other charges 4.0 2.0 1.2 6.0 1.3
(Gain) loss on disposal of assets, net (0.2 ) 0.5 (0.4 ) 0.3 (0.8 )
Gain on insurance recoveries           (0.3 )       (2.9 )
Total operating expenses   374.7     361.1     278.9     735.8     492.1  
Operating income 118.6 106.4 66.0 225.0 66.3
Interest expense, net (12.1 ) (17.4 ) (21.5 ) (29.5 ) (42.7 )
Loss on extinguishment of debt, net (0.8 ) (9.3 ) (10.1 )
Equity in net (loss) income of joint venture affiliate   (1.2 )       0.2     (1.2 )   1.1  
Income before income taxes 104.5 79.7 44.7 184.2 24.7
Income tax expense   0.9     1.0     0.4     1.9     0.5  
Net income $ 103.6   $ 78.7   $ 44.3   $ 182.3   $ 24.2  
Net income (loss) attributable to common stockholders (a) $ 103.6   $ 501.9   $ (10.5 ) $ 605.5   $ (81.9 )
Basic and diluted earnings (loss) per share attributable to common
$ 0.95   $ 5.68   $ (0.20 ) $ 6.12   $ (1.58 )
Shares used in computing basic and diluted earnings (loss) per share   109.3     88.4     51.8     98.9     51.8  
(a)   Net loss attributable to common stockholders for 2017, was
calculated by subtracting an accreted value attributable to FTSI's
convertible preferred stock from net income or loss. The accretion
amount was $54.8 million and $106.1 million for the three and six
month periods ended June 30, 2017, respectively. Net income
attributable to common stockholders for the first quarter and the
first six months of 2018 included a $423.2 million reversal of
accretion expense previously recognized upon the conversion of
FTSI's convertible preferred stock into shares of common stock in
February 2018.

Consolidated Balance Sheets (unaudited)

    June 30,     December 31,
(In millions)     2018     2017
Current assets
Cash and cash equivalents $ 126.3 $ 208.1
Accounts receivable, net 285.8 231.1
Accounts receivable from related parties 22.3 3.0
Inventories 61.6 44.5
Prepaid expenses and other current assets   9.4     19.9  
Total current assets 505.4 506.6
Property, plant, and equipment, net 285.0 270.9
Intangible assets, net 29.5 29.5
Investment in joint venture affiliate 20.3 21.0
Other assets   7.5     3.0  
Total assets $ 847.7   $ 831.0  
Current liabilities
Accounts payable $ 153.4 $ 138.3
Accrued expenses and other current liabilities   42.6     44.4  
Total current liabilities 196.0 182.7
Long-term debt 628.5 1,116.4
Other liabilities   1.4     0.4  
Total liabilities   825.9     1,299.5  
Series A convertible preferred stock (a)       349.8  
Stockholders' equity (deficit)
Common stock 36.4 35.9
Additional paid-in capital 4,369.4 3,712.1
Accumulated deficit   (4,384.0 )   (4,566.3 )
Total stockholders' equity (deficit)   21.8     (818.3 )
Total liabilities and stockholders' equity (deficit) $ 847.7   $ 831.0  

Recapitalized to common stock directly prior to FTSI's initial
public offering. See FTSI's SEC filings located on the Company's
website (
or the SEC EDGAR database (
for details on this recapitalization.


Reconciliation of Net Income to Adjusted EBITDA

    Three Months Ended       Six Months Ended
(In millions)  

June 30,


March 31,


June 30,

June 30,     June 30,
            2018     2017
Net income $ 103.6   $ 78.7   $ 44.3 $ 182.3 $ 24.2
Interest expense, net 12.1 17.4 21.5 29.5 42.7
Income tax expense 0.9 1.0 0.4 1.9 0.5
Depreciation and amortization 20.7 20.6 21.3 41.3 43.1
(Gain) loss on disposal of assets, net (0.2 ) 0.5 (0.4 ) 0.3 (0.8 )
Loss on extinguishment of debt, net 0.8 9.3 10.1
Stock-based compensation 3.4 1.6 5.0
Gain on insurance recoveries         (0.3 )     (2.9 )
Adjusted EBITDA $ 141.3   $ 129.1 $ 86.8   $ 270.4 $ 106.8  

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