HOUSTON, April 25,
2023 /PRNewswire/ -- NexTier Oilfield Solutions Inc.
(NYSE: NEX) ("NexTier" or the "Company") today reported first
quarter 2023 financial and operational results.
Shareholder return program
- Repurchased 5.9 million shares for $53.4
million in the first quarter of 2023
- Through Q1, repurchased a total of 17.4 million shares for
$166.4 million, representing 7% of
shares outstanding prior to commencement of the program in
October 2022
First Quarter 2023 Results and Recent Highlights
- Total revenue of $935.7 million,
a 7% sequential increase
- Net income of $254.0 million, or
$1.07 per diluted share, compared to
$133.0 million, or $0.54 per diluted share in the prior quarter. Net
income for the first quarter is inclusive of a tax valuation
allowance release of $107.4
million
- Adjusted net income(1) of $156.4 million, or $0.66 per diluted share, compared to $145.8 million, or $0.59 per diluted share in the prior quarter
- Adjusted EBITDA(1) of $227.6
million, compared to $212.7
million in the prior quarter
- Net cash from operations of $173.3
million and free cash flow(1) of $76.3 million
- Exited first quarter of 2023 with total liquidity of
$630.5 million, including
$218.5 million of cash and undrawn
ABL; no term loan maturities until 2025
Management Commentary
"As anticipated, the first quarter for NexTier was very strong.
We delivered another quarter of improved operational and financial
performance, demonstrating both the resiliency and consistency of
our strategy," commented Robert
Drummond, President and Chief Executive Officer of NexTier.
"Our views on the long-term commodity markets are unchanged from
prior updates, and we continue to believe US land will be called
upon to fill a significant share of the growing global oil and
natural gas demand over the long-term. Our customers are taking
this longer-term view with regards to their own capital deployment,
and thus we have not seen a material demand response to recent
volatility in the markets. Absent a more severe macro event than
what is being predicted today, we do not anticipate any material
change in their behavior."
Mr. Drummond concluded, "This consistent discipline from our
customer base is yet another sign that the US land oil and gas
industry has matured from prior cycles. We believe this steady
approach by our customers, combined with similar discipline by the
service companies, creates long-term value for both and provides
return on investments that can support the long-term steady
transition of the frac fleet to natural gas fueled power, as well
as cash for returns for our mutual shareholders. This disciplined
win-win model was not part of the prior cycle playbooks."
"We once again saw our returns step higher, while
generating meaningful free cash flow despite normal seasonal
working capital headwinds," said Kenny Pucheu, Executive Vice President and Chief
Financial Officer of NexTier. "Our strategy to maximize free cash
flow and returns has remained very consistent since the start of
the cycle. We delivered another quarter of meaningful capital
returns to shareholders, and we will continue to use our buyback
program to take advantage of the current share price. We see our
free cash flow accelerating significantly as we progress through
the year and we will continue to invest in the highest return
projects, including through potential value creating M&A."
First Quarter 2023 Financial Results
Revenue totaled $935.7 million in
the first quarter of 2023, compared to $870.9 million in the fourth quarter of 2022. The
7% sequential improvement in revenue was primarily driven by
improved net and gross pricing compared to the fourth quarter and
very strong execution to start the year, with continued progress in
our wellsite integration strategy.
Net income totaled $254.0 million,
or $1.07 per diluted share, in
the first quarter of 2023, compared to net income of $133.0 million, or $0.54 per diluted share, in the fourth quarter of
2022. The Company recognized a $107.4
million non-cash tax benefit related to the partial release
of a valuation allowance on our deferred tax assets. This release
reflects improved market conditions and the Company's expectation
to utilize these deferred tax assets in the coming years. Adjusted
net income totaled $156.4 million, or
$0.66 per diluted share, in the
first quarter of 2023, compared to adjusted net income of
$145.8 million, or $0.59 per diluted share, in the fourth quarter of
2022.
Selling, general and administrative expense ("SG&A") of
$39.7 million in the first quarter of
2023, compared to $36.9 million in
the fourth quarter of 2022. Adjusted SG&A(1) totaled
$30.3 million in the first quarter of
2023, compared to adjusted SG&A of $29.7
million in the fourth quarter of 2022.
Adjusted EBITDA totaled $227.6
million in the first quarter of 2023, compared to adjusted
EBITDA of $212.7 million in the
fourth quarter of 2022.
First Quarter 2023 Management Adjustments
EBITDA(1) for the first quarter of 2023 was
$217.8 million. When excluding net
management adjustments of $9.8
million, adjusted EBITDA for the first quarter was
$227.6 million. Management
adjustments included $8.9 million in
non-cash stock compensation expense and a net $0.9 million in other adjustments.
Adjusted net income of $156.4
million includes a management adjustment for the partial
release of the valuation allowance of $107.4
million.
Completion Services
Revenue in our Completion Services segment totaled $895.6 million in the first quarter of 2023,
compared to $829.8 million in the
fourth quarter of 2022. Adjusted gross profit(1) in this
segment totaled $252.6 million in the
first quarter of 2023, compared to $227.5
million in the fourth quarter of 2022.
Well Construction and Intervention Services
Revenue in our Well Construction and Intervention Services
segment, totaled $40.1 million in the
first quarter of 2023, compared to $41.1
million in the fourth quarter of 2022. Adjusted gross profit
in this segment totaled $9.1 million
in the first quarter of 2023, compared to adjusted gross profit of
$10.5 million in the fourth quarter
of 2022.
Balance Sheet and Capital
Total debt outstanding as of March 31,
2023 was $358.0 million, net
of debt discounts and deferred financing costs and excluding
finance lease obligations. As of March 31,
2023, total available liquidity was $630.5 million, comprised of cash of
$218.5 million and $412.0 million of available borrowing capacity
under our asset-based credit facility, which remains undrawn.
Total cash provided by operating activities during the first
quarter of 2023 was $173.3 million and cash used by investing
activities was $96.9 million,
resulting in free cash flow of $76.3 million in the first quarter of
2023.
Outlook
For the second quarter of 2023, we expect moderate
sequential revenue growth, with adjusted EBITDA expected to improve
once again. We expect our frac equipment to remain sold out,
with strong demand for our services continuing in oil basins. Given
very high industry frac equipment utilization and the widening
service quality bifurcation we are seeing amongst our peer group,
we do not anticipate that we will have a need to change our pricing
strategy.
Consistent with prior guidance, our 2023 capital expenditure
budget remains within our guide at 8-9% of revenue with spending
weighted towards the first half of the year.
We expect to generate approximately $500
million of free cash flow in 2023.
Mr. Drummond concluded, "Despite recent commodity volatility,
our 2023 outlook is essentially unchanged from the prior update.
Demand for our services remains very strong in oil basins, and our
high-end customer base is increasingly recognizing the value we are
creating, as we continuously look for new ways to lower completion
costs and raise efficiency, while also lowering emissions. We see
this as the best path forward for the industry as we strive to help
our customers maximize their financial returns without sacrificing
our own returns."
Conference Call Information
On April, 26, 2023, NexTier will hold a conference call for
investors at 10:00 a.m. Central Time
(11:00 a.m. Eastern Time) to discuss
first quarter 2023 financial and operating results. Hosting the
call will be Robert Drummond,
President and Chief Executive Officer, Kenneth Pucheu, Executive Vice President and
Chief Financial Officer, and Matt
Gillard, Executive Vice President and Chief Operating
Officer. The call can be accessed via a live webcast accessible on
the IR Event Calendar page in the Investor Relations section of our
website at www.nextierofs.com, or live over the telephone by
dialing (855) 560-2574, or for international callers, (412)
542-4160 and referencing NexTier Oilfield Solutions. A replay will
be available shortly after the call and can be accessed by dialing
(877) 344-7529, or for international callers, (412) 317-0088. The
passcode for the replay is 7828455. The replay will be available
until May 3, 2023. 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.
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 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.
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(1)
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Non-GAAP Financial
Measures. The Company has included in this press release or
discussed on the conference call described above certain non-GAAP
financial measures, some of which are calculated on segment basis
or product line basis. These measurements provide supplemental
information which management believes is useful to analysts and
investors to evaluate our ongoing results of operations, when
considered alongside GAAP measures such as net income and operating
income. You should not consider them in isolation from, or as a
substitute for, analysis of our results under GAAP.
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Non-GAAP financial
measures include EBITDA, adjusted EBITDA, adjusted gross
profit, adjusted net income, adjusted net income per share, free
cash flow, adjusted SG&A, net debt, invested capital, average
invested capital, return on invested capital, annualized return on
invested capital, and adjusted annualized return on invested
capital. 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 EBITDA, adjusted EBITDA, adjusted gross profit, adjusted
net income, adjusted net income per share, and adjusted SG&A
provide helpful information to analysts and investors to facilitate
a comparison of its operating performance to that of other
companies. Management also uses adjusted EBITDA to set targets and
to assess the performance of the Company. The Company believes free
cash flow, and net debt provide investors a useful measure to
assess management's effectiveness in the areas of profitability and
capital management. Invested capital, average invested capital,
return on invested capital, annualized return on invested capital,
and adjusted annualized return on invested capital are presented
based on the Company's belief that these non-GAAP measures are
useful information to investors and management when comparing
profitability and the efficiency with which capital has been
employed over time relative to other companies.
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For a reconciliation of
these non-GAAP measures, please see the tables at the end of this
press release. Reconciliations of forward-looking non-GAAP
financial measures to comparable GAAP measures are not available
due to the challenges and impracticability with estimating some of
the items, particularly with estimates for certain contingent
liabilities, and estimating non-cash unrealized fair value losses
and gains which are subject to market variability and therefore a
reconciliation is not available without unreasonable
effort.
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Non-GAAP Measure
Definitions: EBITDA is defined as net income adjusted to eliminate
the impact of interest, income taxes, depreciation and
amortization. Adjusted EBITDA is defined as EBITDA as further
adjusted 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 net income is defined as net income
adjusted with certain items management does not consider in
assessing ongoing performance. Adjusted net income per share is
defined as (i) adjusted net income, (ii) divided by the number of
weighted average shares outstanding. Free cash flow is defined as
the net increase (decrease) in cash and cash equivalents before
financing activities, excluding any acquisitions. Adjusted SG&A
is defined as selling, general and administrative expenses adjusted
for non-cash stock compensation and other non-routine items. Net
debt is defined as (i) total debt, net of unamortized debt discount
and unamortized deferred financing costs, (ii) subtracting cash and
cash equivalents. Invested capital is defined as the sum of (a)
long-term operating lease liabilities, less current maturities, (b)
plus long-term finance lease liabilities, less current maturities,
(c) plus long-term debt, net of unamortized deferred financing cost
and unamortized debt discounts, less current maturities (d) plus
total stockholder's equity. Average invested capital is defined as
the average of the beginning and ending invested capital. Return on
invested capital is defined as (i) net income, (ii) divided by
average invested capital during the period. Annualized return on
invested capital is defined as (i) annualized net income for a
given quarter (ii) divided by average invested capital during the
period. Adjusted annualized return on invested capital is defined
as (i) annualized adjusted net income for a given quarter, (ii)
divided by average invested capital during the period.
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Forward-Looking Statements and Where to Find Additional
Information
This press release and discussion in the conference call
described above contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995
(the "PSLRA"). 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 or made during the conference call described above,
including guidance for 2023 and beyond and other outlook
information (including with respect to the industry in which
NexTier conducts its business), statements regarding our future
operating results, financial position, business strategy, plans and
objectives of management for future operations, and expectation
regarding the capabilities and impact of our products and services
on our operating results and financial position, are
forward-looking statements within the meaning of the PSLRA.
Statements of assumptions underlying or relating to our
forward-looking statements are also forward-looking statements.
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 "anticipate," "believe,"
"contemplate," "continue," "could," "estimate," "expect,"
"forecast," "future," "goal," "intend," "may," "outlook," "plan,"
"potential," "predict," "project," "reflect," "see," "should,"
"target," "will," and "would," or the negative or plural thereof,
and similar expressions, are intended to identify such
forward-looking statements. Any forward-looking statements
contained in this presentation or in oral statements made in
connection with this presentation speak only as of the date on
which we make them and are based upon our historical performance
and on current plans, estimates and expectations. These factors and
risks include, but are not limited to, (i) NexTier's business
strategy, plans, objectives, expectations and intentions; (ii)
NexTier's future operating results; (iii) dependence on capital
spending and well completion by the onshore oil and natural gas
industry and demand for services in the industry in which NexTier
conducts its business; (iv) the variability of crude oil and
natural gas commodity prices; (v) changing regional, national or
global economic conditions, including oil and gas supply and demand
and the impact of geopolitical conditions on those prices; (vi) the
competitive nature of the industry in which NexTier conducts its
business, including pricing pressures; (vii) the impact of pipeline
capacity constraints and adverse weather conditions in oil or gas
producing regions; (viii) the effect of government regulation,
including regulations of hydraulic fracturing, and the operating
hazards of NexTier's business; (ix) the effect of a loss of, or the
financial distress of, or interruption in operations of one or more
NexTier suppliers, materials or customers; (x) the ability to
maintain the right level of commitments under NexTier's supply
agreements; (xi) impact of new technology on NexTier's business;
(xii) impact of any legal proceedings, liability claims and
external investigations; (xiii) the ability to obtain permits,
approvals and authorizations from governmental and third parties;
(xiv) the ability to identify, effect and integrate acquisitions,
divestitures and future capital expenditures and the impact of such
transactions; (xv) environmental, social, and governance matters,
including investor focus and industry perception; (xvi) the ability
to employ a sufficient number of skilled and qualified workers;
(xvii) the ability to service debt obligations and access capital;
(xviii) the market volatility of our stock; (xix) the impact of our
stock buyback program, (xx) our ability to maintain effective
information technology systems and the impact of cybersecurity
incidents on our business, (xxi) the impact of inflation on our
business, and (xxii) other risks detailed in NexTier's latest
Annual Report on Form 10-K, including, but not limited to "Part I,
Item 1A. Risk Factors" and "Part II, Item 7. Management's
Discussion and Analysis of Financial Condition and Results of
Operations," and our other filings with the Securities and Exchange
Commission (the "SEC"), which are available on the SEC website or
www.NexTierOFS.com. "Forward-looking statements" also include,
among other things, (a) statements about NexTier's ability to
participate in any shareholder return program and (b) statements
regarding NexTier's business strategy, its business and operation
plan (including its ability to execute on its well site integration
strategy), its future performance (including expected financial
results), and its capital allocation strategy. There may be other
factors of which NexTier is currently unaware or deem immaterial
that may cause its actual results to differ materially from the
forward-looking statements. NexTier 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 hereof, or to reflect the occurrence of unanticipated
events, except as may be required under applicable laws. Investors
should not assume that any lack of update to a previously issued
"forward-looking statement" constitutes a reaffirmation of that
statement. The contents of any website referenced in this
presentation are not incorporated herein by reference.
Additional information about the Company can be found in its
periodic reports and other filings with the SEC, available at
www.sec.gov or www.NexTierOFS.com. The contents of the Company's
website is not incorporated herein by reference.
Investor Contact:
Kenneth Pucheu
Executive Vice President - Chief Financial Officer
Michael Sabella
Vice President - Investor Relations and Business Development
michael.sabella@nextierofs.com
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS
(unaudited, amounts
in thousands, except per share data)
|
|
|
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Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
|
|
|
|
|
Revenue
|
|
$
935,672
|
|
$
870,857
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|
Operating costs and
expenses:
|
|
|
|
|
|
Cost of
services
|
|
673,944
|
|
632,890
|
|
Depreciation and
amortization
|
|
58,645
|
|
58,760
|
|
Selling, general and
administrative expenses
|
|
39,681
|
|
36,867
|
|
Merger and
integration
|
|
161
|
|
3,000
|
|
Loss (gain) on
disposal of assets
|
|
3,770
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|
(4,456)
|
|
Total operating costs
and expenses
|
|
776,201
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|
727,061
|
|
Operating
income
|
|
159,471
|
|
143,796
|
|
Other
expense:
|
|
|
|
|
|
Other expense,
net
|
|
(280)
|
|
(2,697)
|
|
Interest expense,
net
|
|
(6,198)
|
|
(6,514)
|
|
Total other
expense
|
|
(6,478)
|
|
(9,211)
|
|
Income before income
taxes
|
|
152,993
|
|
134,585
|
|
Income tax benefit
(expense)(1)
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|
101,000
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|
(1,600)
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|
Net income
|
|
$
253,993
|
|
$
132,985
|
|
|
|
|
|
|
Net income per share:
basic
|
|
$
1.09
|
|
$
0.55
|
|
Net income per share:
diluted
|
|
$
1.07
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|
$
0.54
|
|
|
|
|
|
|
Weighted-average
shares: basic
|
|
233,158
|
|
241,519
|
|
Weighted-average
shares: diluted
|
|
237,072
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|
247,980
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(1)
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During the three months
ended March 31, 2023, the Company recognized a $107.4 million tax
benefit associated with the partial release of a valuation
allowance on its deferred tax assets based on improved market
conditions and the Company's expectation to utilize these deferred
tax assets in the coming years.
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NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(amounts in
thousands)
|
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
|
(Unaudited)
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|
ASSETS
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
218,501
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|
$
218,476
|
|
Trade and other
accounts receivable, net
|
|
487,905
|
|
397,197
|
|
Inventories,
net
|
|
66,261
|
|
66,395
|
|
Prepaid and other
current assets
|
|
40,936
|
|
43,947
|
|
Total current
assets
|
|
813,603
|
|
726,015
|
|
Operating lease
right-of-use assets
|
|
26,471
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|
18,659
|
|
Finance lease
right-of-use assets
|
|
79,324
|
|
43,714
|
|
Property and equipment,
net
|
|
764,310
|
|
679,513
|
|
Goodwill
|
|
192,780
|
|
192,780
|
|
Intangible
assets
|
|
48,395
|
|
50,586
|
|
Deferred income
taxes
|
|
107,426
|
|
—
|
|
Other noncurrent
assets
|
|
13,611
|
|
15,901
|
|
Total assets
|
|
$
2,045,920
|
|
$
1,727,168
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LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
Accounts
payable
|
|
$
335,417
|
|
$
202,936
|
|
Accrued
expenses
|
|
234,379
|
|
281,715
|
|
Customer contract
liabilities
|
|
19,377
|
|
19,377
|
|
Current maturities of
operating lease liabilities
|
|
8,588
|
|
6,083
|
|
Current maturities of
finance lease liabilities
|
|
54,409
|
|
19,855
|
|
Current maturities of
long-term debt
|
|
14,086
|
|
14,004
|
|
Other current
liabilities
|
|
7,572
|
|
9,368
|
|
Total current
liabilities
|
|
673,828
|
|
553,338
|
|
Long-term operating
lease liabilities, less current maturities
|
|
17,267
|
|
13,267
|
|
Long-term finance lease
liabilities, less current maturities
|
|
10,172
|
|
11,925
|
|
Long-term debt, net of
unamortized deferred financing costs and unamortized debt discount,
less current maturities
|
|
343,895
|
|
347,425
|
|
Other non-current
liabilities
|
|
12,642
|
|
11,294
|
|
Total non-current
liabilities
|
|
383,976
|
|
383,911
|
|
Total liabilities
|
|
1,057,804
|
|
937,249
|
|
Stockholders'
equity:
|
|
|
|
|
|
Common
stock
|
|
2,305
|
|
2,340
|
|
Paid-in capital in
excess of par value
|
|
952,951
|
|
1,007,492
|
|
Retained earnings
(deficit)
|
|
27,798
|
|
(226,195)
|
|
Accumulated other
comprehensive income
|
|
5,062
|
|
6,282
|
|
Total stockholders' equity
|
|
988,116
|
|
789,919
|
|
Total liabilities and stockholders'
equity
|
|
$
2,045,920
|
|
$
1,727,168
|
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
ADDITIONAL SELECTED FINANCIAL AND OPERATING
DATA
(unaudited, amounts
in thousands)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Completion Services:
|
|
|
|
|
|
Revenue
|
|
$
895,564
|
|
$
829,800
|
|
Cost of
services
|
|
642,929
|
|
602,326
|
|
Depreciation and
amortization and (gain) loss on sale of assets, net
|
|
58,823
|
|
50,194
|
|
Net income
|
|
193,812
|
|
177,280
|
|
Adjusted gross
profit(1)
|
|
$
252,635
|
|
$
227,474
|
|
|
|
|
|
|
Well Construction and Intervention
Services:
|
|
|
|
|
|
Revenue
|
|
$
40,108
|
|
$
41,057
|
|
Cost of
services
|
|
31,015
|
|
30,564
|
|
Depreciation and
amortization and (gain) loss on sale of assets, net
|
|
603
|
|
699
|
|
Net income
|
|
8,490
|
|
9,794
|
|
Adjusted gross
profit(1)
|
|
$
9,093
|
|
$
10,493
|
|
|
|
(1)
|
The Company uses
adjusted gross profit as its measure of profitability for segment
reporting.
|
|
|
|
|
|
|
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(unaudited, amounts
in thousands)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Net income
|
|
$
253,993
|
|
132,985
|
|
Interest expense,
net
|
|
6,198
|
|
6,514
|
|
Income tax (benefit)
expense
|
|
(101,000)
|
|
1,600
|
|
Depreciation and
amortization
|
|
58,645
|
|
58,760
|
|
EBITDA
|
|
$
217,836
|
|
199,859
|
|
Plus management
adjustments:
|
|
|
|
|
|
Acquisition,
integration and expansion(1)
|
|
$
161
|
|
3,000
|
|
Non-cash stock
compensation(2)
|
|
8,853
|
|
7,114
|
|
Divestiture of
business(3)
|
|
547
|
|
(27)
|
|
Loss on equity
security investment(4)
|
|
—
|
|
196
|
|
Insurance recovery,
net(5)
|
|
204
|
|
2,480
|
|
Other
|
|
22
|
|
67
|
|
Adjusted EBITDA
|
|
$
227,623
|
|
$
212,689
|
|
|
|
(1)
|
Represents transaction
and integration costs, including earnout payments, related to
acquisitions.
|
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
|
(3)
|
Represents bad debt
expense on the sale of the Well Support Services segment to, and
related to the bankruptcy filing of Basic Energy
Services.
|
|
(4)
|
Represents a realized
loss on an equity security investment composed primarily of common
equity shares in a public company.
|
|
(5)
|
Represents losses
associated with assets that were damaged in the fire that occurred
in the third quarter of 2022 and ultimately could not be repaired
or recovered.
|
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(unaudited, amounts
in thousands)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Selling, general and administrative
expenses
|
|
$
39,681
|
|
$
36,867
|
|
Less management
adjustments:
|
|
|
|
|
|
Non-cash stock
compensation
|
|
(8,853)
|
|
(7,114)
|
|
Divestiture of
business
|
|
(547)
|
|
27
|
|
Other
|
|
(22)
|
|
(67)
|
|
Adjusted selling, general and administrative
expenses
|
|
$
30,259
|
|
$
29,713
|
|
|
Three Months Ended March 31,
2023
|
|
|
Completion
Services
|
|
WC&I
|
|
Total
|
|
Revenue
|
|
$
895,564
|
|
$
40,108
|
|
$
935,672
|
|
Cost of
services
|
|
642,929
|
|
31,015
|
|
673,944
|
|
Gross profit excluding depreciation and
amortization
|
|
252,635
|
|
9,093
|
|
261,728
|
|
Management adjustments
associated with cost of services
|
|
—
|
|
—
|
|
—
|
|
Adjusted gross profit
|
|
$
252,635
|
|
$
9,093
|
|
$
261,728
|
|
|
|
Three Months Ended December 31,
2022
|
|
|
Completion
Services
|
|
WC&I
|
|
Total
|
|
Revenue
|
|
$
829,800
|
|
$
41,057
|
|
$
870,857
|
|
Cost of
services
|
|
602,326
|
|
30,564
|
|
632,890
|
|
Gross profit excluding depreciation and
amortization
|
|
227,474
|
|
10,493
|
|
237,967
|
|
Management adjustments
associated with cost of services
|
|
—
|
|
—
|
|
—
|
|
Adjusted gross profit
|
|
$
227,474
|
|
$
10,493
|
|
$
237,967
|
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(unaudited, amounts
in thousands)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Net cash provided by
operating activities
|
|
$
173,253
|
|
$
144,070
|
|
|
|
|
|
|
Net cash used in
investing activities:
|
|
|
|
|
|
Capital
expenditures
|
|
(99,121)
|
|
(79,478)
|
|
Proceeds from disposal
of assets
|
|
2,102
|
|
14,129
|
|
Proceeds from insurance
recoveries
|
|
104
|
|
14,506
|
|
Net cash used in
investing activities
|
|
(96,915)
|
|
(50,843)
|
|
|
|
|
|
|
Free cash flow
|
|
$
76,338
|
|
$
93,227
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Total debt, net of
unamortized debt discount and debt issuance costs
|
|
$
357,981
|
|
$
361,429
|
|
Cash and cash
equivalents
|
|
218,501
|
|
218,476
|
|
Net debt
|
|
$
139,480
|
|
$
142,953
|
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(unaudited, amounts
in thousands, except per share data)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Net income
|
|
$
253,993
|
|
$
132,985
|
|
Plus management
adjustments:
|
|
|
|
|
|
Acquisition,
integration and expansion(1)
|
|
$
161
|
|
$
3,000
|
|
Non-cash stock
compensation(2)
|
|
8,853
|
|
7,114
|
|
Divestiture of
business(3)
|
|
547
|
|
(27)
|
|
Loss on equity
security investment(4)
|
|
—
|
|
196
|
|
Insurance recovery,
net(5)
|
|
204
|
|
2,480
|
|
Income tax
benefit(6)
|
|
(107,426)
|
|
—
|
|
Other
|
|
22
|
|
67
|
|
Adjusted net income
|
|
$
156,354
|
|
$
145,815
|
|
|
|
|
|
|
Adjusted net income per
share: basic
|
|
$
0.67
|
|
$
0.60
|
|
Adjusted net income per
share: diluted
|
|
$
0.66
|
|
$
0.59
|
|
|
|
|
|
|
Weighted-average
shares: basic
|
|
233,158
|
|
241,519
|
|
Weighted-average
shares: diluted
|
|
237,072
|
|
247,980
|
|
|
|
(1)
|
Represents transaction
and integration costs, including earnout payments, related to
acquisitions.
|
|
(2)
|
Represents non-cash
amortization of equity awards issued under the Company's Incentive
Award Plan.
|
|
(3)
|
Represents bad debt
expense on the sale of the Well Support Services segment to, and
related to the bankruptcy filing of Basic Energy
Services.
|
|
(4)
|
Represents a realized
loss on an equity security investment composed primarily of common
equity shares in a public company.
|
|
(5)
|
Represents losses
associated with assets that were damaged in the fire that occurred
in the third quarter of 2022 and ultimately could not be repaired
or recovered.
|
|
(6)
|
Represents tax benefit
recognized by the Company related to the partial release of a
valuation allowance on our deferred tax asset. This release
reflects improved market conditions and the Company's expectation
to utilize these deferred tax assets in the coming
years.
|
|
NEXTIER OILFIELD SOLUTIONS INC. AND
SUBSIDIARIES
NON-GAAP FINANCIAL MEASURES
(unaudited, amounts
in thousands)
|
|
|
|
Three Months Ended
|
|
|
March 31, 2023
|
|
December 31, 2022
|
|
Net income
|
|
$
253,993
|
|
|
|
Annualized net income
|
|
1,015,972
|
|
|
|
|
|
|
|
|
Adjusted net income
|
|
156,354
|
|
|
|
Annualized adjusted net income
|
|
$
625,416
|
|
|
|
|
|
|
|
|
Long-term operating
lease liabilities, less current maturities
|
|
17,267
|
|
13,267
|
|
Long-term finance
lease liabilities, less current maturities
|
|
10,172
|
|
11,925
|
|
Long-term debt, net of
unamortized deferred financing costs and unamortized debt discount,
less current maturities
|
|
343,895
|
|
347,425
|
|
Total stockholders'
equity
|
|
988,116
|
|
789,919
|
|
Invested capital
|
|
$
1,359,450
|
|
$
1,162,536
|
|
|
|
|
|
|
Average invested
capital(1)
|
|
$
1,260,993
|
|
|
|
|
|
|
|
|
Annualized return on invested
capital(2)
|
|
81 %
|
|
|
|
Adjusted annualized return on invested
capital(3)
|
|
50 %
|
|
|
|
|
|
(1)
|
Average invested
capital is defined as the average of the beginning and ending
invested capital.
|
|
(2)
|
Annualized return on
invested capital is defined as (i) annualized net income for a
given quarter, (ii) divided by average invested capital during the
period.
|
|
(3)
|
Adjusted annualized
return on invested capital is defined as (i) annualized adjusted
net income for a given quarter, (ii) divided by average invested
capital during the period.
|
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SOURCE NexTier Oilfield Solutions
