Quintana Energy Services Reports Second Quarter 2018 Results HOUSTON
Quintana Energy Services Inc. (NYSE: QES) (“QES” or the “Company”) today
reported financial and operating results for the second quarter ended
June 30, 2018.
Second Quarter 2018 Financial Highlights
Second quarter 2018 revenue grew 7.9% to $152.5 million, up from $141.3
million in the first quarter of 2018. Second quarter 2018 net income was
$2.1 million and Adjusted EBITDA was $17.9 million, compared to a net
loss of $16.4 million and Adjusted EBITDA of $15.5 million for the first
quarter of 2018. In the second quarter of 2017, revenue was $108.5
million, net loss was $3.1 million and Adjusted EBITDA was $11.7
million. See “Non-GAAP Financial Measures” at the end of this release
for a discussion of Adjusted EBITDA and its reconciliation to the most
directly comparable financial measure calculated and presented in
accordance with U.S. generally accepted accounting principles (“GAAP”).
Rogers Herndon, QES’ President and Chief Executive Officer, stated, “We
entered the second quarter looking to increase profitability through
strong operational execution and higher activity levels, and I am
pleased to report we achieved both. Compared to our first quarter
results, consolidated revenue and Adjusted EBITDA grew 7.9% and 15.5%,
respectively. Two of our segments demonstrated significant operating
leverage during the second quarter. Directional Drilling revenue grew
16.0% and Adjusted EBITDA grew over 100.0%, primarily due to pricing and
utilization. Pressure Control revenue increased 14.3% and Adjusted
EBITDA grew approximately 51.4% as a result of improvements in pricing,
utilization, full quarter impact from large diameter coiled tubing unit
converted in Q1 and increased well control activity during the quarter.
Additionally, Pressure Pumping deployed its fourth hydraulic fracturing
fleet into service on schedule and below budget in June 2018."
“We are excited about our future and believe we are well positioned for
continued growth. Operationally, we are in process of converting two
additional large diameter coiled tubing units by the fourth quarter of
this year and still plan to take delivery of a new 2.625" coil unit in
late Q3. In the meantime, we will continue to focus on operational
execution, build on the diversification of our four operating platforms,
actively manage our capital expenditure allocation program, improve cash
flows, and leverage future acquisition opportunities,” added Herndon.
Business Segment Results
The following business segments comprise the Company’s primary services:
Directional Drilling, Pressure Pumping, Pressure Control and Wireline.
Directional Drilling
The Directional Drilling segment provides the highly-technical and
essential services of guiding horizontal and directional drilling
operations for exploration and production (“E&P”) companies. Revenue was
$43.6 million in the second quarter of 2018, up approximately 16.0%
compared to revenue of $37.6 million in the first quarter of 2018 and up
17.5% from the second quarter of 2017. Second quarter 2018 Adjusted
EBITDA was $5.2 million, compared to Adjusted EBITDA of $2.6 million for
the first quarter of 2018. The sequential increases in revenue and
Adjusted EBITDA were primarily due to pricing and utilization. In the
second quarter of 2017, revenue was $37.1 million and Adjusted EBITDA
was $4.8 million.
Pressure Pumping
The Pressure Pumping segment primarily provides hydraulic fracturing
services to E&P companies. Revenue for the segment grew 6.2% to $56.7
million in the second quarter of 2018, up from $53.4 million in the
first quarter of 2018. The sequential increase in revenue was primarily
driven by performing larger hydraulic fracturing stages for certain
customers during the second quarter of 2018 compared to the prior
quarter. Second quarter 2018 Adjusted EBITDA was $8.9 million, compared
to Adjusted EBITDA of $9.9 million for the first quarter of 2018. The
sequential decrease in Adjusted EBITDA was primarily due to a 13.0%
increase in direct operating expenses in the second quarter of 2018
compared to the prior quarter. In addition, revenue per cement job
decreased 16.8% in the second quarter of 2018 compared to the prior
quarter. In the second quarter of 2017, revenue was $37.7 million and
Adjusted EBITDA was $7.8 million.
Pressure Control
The Pressure Control segment consists of coiled tubing, rig-assisted
snubbing, nitrogen, and well control services. Revenue for the segment
grew approximately 14.3% to $32.0 million in the second quarter of 2018,
up from $28.0 million in the first quarter of 2018. Second quarter 2018
Adjusted EBITDA was $5.6 million, compared to Adjusted EBITDA of $3.7
million for the first quarter of 2018. The sequential increases in
revenue and Adjusted EBITDA were primarily due to pricing, utilization
and the addition of a large diameter coiled tubing unit. In the second
quarter of 2017, revenue was $22.3 million and Adjusted EBITDA was $1.9
million.
Wireline
The Wireline segment primarily provides cased-hole wireline services to
E&P companies. Revenue for the segment decreased to $20.3 million in the
second quarter of 2018 from $22.3 million in the first quarter of 2018.
Second quarter 2018 Adjusted EBITDA was $0.8 million, compared to
Adjusted EBITDA of $2.6 million for the first quarter of 2018. The
sequential decreases in revenue and Adjusted EBITDA were primarily due
to timing and scheduling of certain projects during the quarter. In the
second quarter of 2017, revenue was $11.3 million and Adjusted EBITDA
was a loss of $0.7 million.
Other Financial Information
General and administrative ("G&A") expense for the second quarter of
2018 was $22.5 million, compared to $29.9 million for the first quarter
of 2018 and $16.0 million for the second quarter of 2017. The sequential
decrease in G&A expenses was primarily related to a non-cash stock
compensation expense of approximately $9.9 million in the first quarter
of 2018, related to the IPO, that did not reoccur.
Capital expenditures including deposits totaled $28.8 million during the
second quarter of 2018, compared to capital expenditures of $12.4
million in the first quarter of 2018, and $4.5 million in the second
quarter of 2017. The increase in capital expenditures was driven by the
previously announced deployment of our fourth hydraulic fracturing fleet.
Second quarter interest expense was $0.4 million, down from $10.2
million in the first quarter and $2.8 million in the second quarter of
2017. The second quarter decrease in interest expense was primarily due
to IPO financing costs of approximately $8.5 million to extinguish our
former revolving credit facility and term loan during the first quarter
of 2018 and a lower debt outstanding balance during the second quarter
of 2018.
With the closing of the IPO subsequent to the end of the fiscal year,
the Company’s debt structure has improved meaningfully. QES ended the
second quarter of 2018 with a total debt balance of $31.0 million, $8.2
million of cash on hand, and $59.1 million of net availability under its
new senior secured asset-based revolving credit facility.
Share Repurchase Plan
On August 8, 2018, QES’s Board of Directors approved a stock repurchase
program authorizing the repurchase, at the discretion of senior
management, of up to $6.0 million of the Company’s common stock in open
market transactions, subject to market conditions, corporate, regulatory
and other considerations. Repurchases may be commenced or suspended at
any time without notice. The program does not obligate QES to purchase
any particular number of shares of common stock during any period or at
all, and the program may be modified or suspended at any time in the
Company’s discretion.
Conference Call Information
QES has scheduled a conference call for 9:00 a.m. Central Time (10:00
a.m. Eastern Time) on Thursday, August 8, 2018, to review reported
results. You may access the call by telephone at 1-201-389-0867 and
asking for the QES 2018 Second Quarter Conference Call. The webcast of
the call may also be accessed through the Investor Relations section of
the Company’s website at https://ir.quintanaenergyservices.com/ir-calendar.
A replay of the call can be accessed on the Company’s website for 90
days and will be available by telephone through August 16, 2018, at
(201) 612-7415, access code 13681322#.
About Quintana Energy Services
QES is a growth-oriented provider of diversified oilfield services to
leading onshore oil and natural gas exploration and production companies
operating in both conventional and unconventional plays in all of the
active major basins throughout the U.S. QES’ primary services include:
directional drilling, pressure pumping, pressure control and wireline
services. The Company offers a complementary suite of products and
services to a broad customer base that is supported by in-house
manufacturing, repair and maintenance capabilities. More information is
available at www.quintanaenergyservices.com.
Forward-Looking Statements and Cautionary Statements
This news release (and any oral statements made regarding the subjects
of this release, including on the conference call announced herein)
contains certain statements and information that may constitute
“forward-looking statements.” All statements, other than statements of
historical fact, which address activities, events or developments that
we expect, believe or anticipate will or may occur in the future are
forward-looking statements. The words “anticipate,” “believe,” “expect,”
“plan,” “forecasts,” “will,” “could,” “may,” and similar expressions
that convey the uncertainty of future events or outcomes, and the
negative thereof, are intended to identify forward-looking statements.
Forward-looking statements contained in this news release, which are not
generally historical in nature, include those that express a belief,
expectation or intention regarding our future activities, plans and
goals and our current expectations with respect to, among other things:
our operating cash flows, the availability of capital and our liquidity;
our future revenue, income and operating performance; our ability to
sustain and improve our utilization, revenue and margins; our ability to
maintain acceptable pricing for our services; future capital
expenditures; our ability to finance equipment, working capital and
capital expenditures; our ability to execute our long-term growth
strategy; our ability to successfully develop our research and
technology capabilities and implement technological developments and
enhancements; and the timing and success of strategic initiatives and
special projects.
Forward-looking statements are not assurances of future performance and
actual results could differ materially from our historical experience
and our present expectations or projections. These forward-looking
statements are based on management’s current expectations and beliefs,
forecasts for our existing operations, experience, expectations and
perception of historical trends, current conditions, anticipated future
developments and their effect on us, and other factors believed to be
appropriate. Although management believes the expectations and
assumptions reflected in these forward-looking statements are reasonable
as and when made, no assurance can be given that these assumptions are
accurate or that any of these expectations will be achieved (in full or
at all). Our forward-looking statements involve significant risks,
contingencies and uncertainties, most of which are difficult to predict
and many of which are beyond our control. Known material factors that
could cause actual results to differ materially from those in the
forward-looking statements include, but are not limited to, risks
associated with the following: a decline in demand for our services,
including due to declining commodity prices, overcapacity and other
competitive factors affecting our industry; the cyclical nature and
volatility of the oil and gas industry, which impacts the level of
exploration, production and development activity and spending patterns
by E&P companies; a decline in, or substantial volatility of, crude oil
and gas commodity prices, which generally leads to decreased spending by
our customers and negatively impacts drilling, completion and production
activity; and other risks and uncertainties listed in our filings with
the U.S. Securities and Exchange Commission, including our Current
Reports on Form 8-K that we file from time to time, Quarterly Reports on
Form 10-Q and Annual Report on Form 10-K. Readers are cautioned not to
place undue reliance on forward-looking statements, which speak only as
of the date hereof. We undertake no obligation to publicly update or
revise any forward-looking statements after the date they are made,
whether as a result of new information, future events or otherwise,
except as required by law.
|
Quintana Energy Services Inc.
|
Condensed Consolidated Statements of Operations
|
(in thousands of dollars and units, except per share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
June 30, 2017
|
Revenues:
|
|
|
|
|
|
$
|
152,536
|
|
|
|
$
|
141,268
|
|
|
|
$
|
108,457
|
|
Costs and expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Direct operating costs
|
|
|
|
|
|
116,581
|
|
|
|
106,492
|
|
|
|
81,667
|
|
General and administrative
|
|
|
|
|
|
22,500
|
|
|
|
29,917
|
|
|
|
16,024
|
|
Depreciation and amortization
|
|
|
|
|
|
11,155
|
|
|
|
11,078
|
|
|
|
11,432
|
|
Gain on disposition of assets
|
|
|
|
|
|
(594
|
)
|
|
|
(106
|
)
|
|
|
(332
|
)
|
Operating income (loss)
|
|
|
|
|
|
2,894
|
|
|
|
(6,113
|
)
|
|
|
(334
|
)
|
Non-operating expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense
|
|
|
|
|
|
(433
|
)
|
|
|
(10,192
|
)
|
|
|
(2,788
|
)
|
Income (loss) before income tax
|
|
|
|
|
|
2,461
|
|
|
|
(16,305
|
)
|
|
|
(3,122
|
)
|
Income tax (expense) benefit
|
|
|
|
|
|
(326
|
)
|
|
|
(51
|
)
|
|
|
9
|
|
Net income (loss)
|
|
|
|
|
|
2,135
|
|
|
|
(16,356
|
)
|
|
|
(3,113
|
)
|
Net loss attributable to predecessor
|
|
|
|
|
|
—
|
|
|
|
(1,546
|
)
|
|
|
—
|
|
Net income (loss) attributable to Quintana Energy Services Inc.
|
|
|
|
|
|
$
|
2,135
|
|
|
|
$
|
(14,810
|
)
|
|
|
$
|
(3,113
|
)
|
Net income (loss) per common share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
$
|
0.06
|
|
|
|
$
|
(0.44
|
)
|
|
|
$
|
—
|
|
Diluted
|
|
|
|
|
|
$
|
0.06
|
|
|
|
$
|
(0.44
|
)
|
|
|
$
|
—
|
|
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
|
|
|
33,631
|
|
|
|
33,318
|
|
|
|
—
|
|
Diluted
|
|
|
|
|
|
35,227
|
|
|
|
33,318
|
|
|
|
—
|
|
|
|
Quintana Energy Services Inc.
|
Condensed Consolidated Balance Sheets
|
(in thousands, except per share and share amounts)
|
(Unaudited)
|
|
|
|
|
|
|
|
June 30, 2018
|
|
|
December 31, 2017
|
ASSETS
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
$
|
8,244
|
|
|
|
$
|
8,751
|
|
Accounts receivable, net of allowance of $1,244 and $776
|
|
|
|
|
|
95,432
|
|
|
|
83,325
|
|
Unbilled receivables
|
|
|
|
|
|
12,849
|
|
|
|
9,645
|
|
Inventories
|
|
|
|
|
|
27,744
|
|
|
|
22,693
|
|
Prepaid expenses and other current assets
|
|
|
|
|
|
4,598
|
|
|
|
9,520
|
|
Total current assets
|
|
|
|
|
|
148,867
|
|
|
|
133,934
|
|
Property, plant and equipment, net
|
|
|
|
|
|
151,391
|
|
|
|
128,518
|
|
Intangible assets, net
|
|
|
|
|
|
9,925
|
|
|
|
10,832
|
|
Other assets
|
|
|
|
|
|
1,719
|
|
|
|
2,375
|
|
Total assets
|
|
|
|
|
|
$
|
311,902
|
|
|
|
$
|
275,659
|
|
LIABILITIES AND SHAREHOLDERS' EQUITY
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
|
|
|
$
|
40,499
|
|
|
|
$
|
36,027
|
|
Accrued liabilities
|
|
|
|
|
|
34,834
|
|
|
|
33,825
|
|
Current portion of debt and capital lease obligations
|
|
|
|
|
|
388
|
|
|
|
79,443
|
|
Total current liabilities
|
|
|
|
|
|
75,721
|
|
|
|
149,295
|
|
Deferred income taxes
|
|
|
|
|
|
—
|
|
|
|
185
|
|
Long-term debt, net of deferred financing costs of $0 and $1,709
|
|
|
|
|
|
31,000
|
|
|
|
37,199
|
|
Long-term capital lease obligations
|
|
|
|
|
|
3,631
|
|
|
|
3,829
|
|
Other long-term liabilities
|
|
|
|
|
|
167
|
|
|
|
183
|
|
Total liabilities
|
|
|
|
|
|
110,519
|
|
|
|
190,691
|
|
Commitments and contingencies
|
|
|
|
|
|
|
|
|
|
Shareholders’ and members’ equity
|
|
|
|
|
|
|
|
|
|
Members’ equity
|
|
|
|
|
|
—
|
|
|
|
212,630
|
|
Preferred shares, $0.01 par value, 10,000,000 authorized; none
issued and outstanding
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Common shares, $0.01 par value, 150,000,000 authorized; 33,765,486
issued; 33,630,934 outstanding
|
|
|
|
|
|
340
|
|
|
|
—
|
|
Additional paid-in-capital
|
|
|
|
|
|
344,013
|
|
|
|
—
|
|
Treasury stock, at cost, 134,552 common shares
|
|
|
|
|
|
(1,271
|
)
|
|
|
—
|
|
Accumulated deficit
|
|
|
|
|
|
(141,699
|
)
|
|
|
(127,662
|
)
|
Total shareholders’ and members’ equity
|
|
|
|
|
|
201,383
|
|
|
|
84,968
|
|
Total liabilities, shareholders’ and members’ equity
|
|
|
|
|
|
$
|
311,902
|
|
|
|
$
|
275,659
|
|
|
|
Quintana Energy Services Inc.
|
Condensed Consolidated Statements of Cash Flows
|
(in thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
Six Months Ended
|
|
|
|
|
|
|
June 30, 2018
|
|
|
|
June 30, 2017
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
|
|
|
$
|
(14,222
|
)
|
|
|
|
$
|
(14,786
|
)
|
Adjustments to reconcile net loss to net cash used in operating
activities
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
|
|
|
22,233
|
|
|
|
|
23,026
|
|
Gain on disposition of assets
|
|
|
|
|
|
(3,068
|
)
|
|
|
|
(6,625
|
)
|
Non-cash interest expense
|
|
|
|
|
|
855
|
|
|
|
|
2,945
|
|
Loss on debt extinguishment
|
|
|
|
|
|
8,594
|
|
|
|
|
—
|
|
Provision for doubtful accounts
|
|
|
|
|
|
460
|
|
|
|
|
90
|
|
Deferred income tax benefit
|
|
|
|
|
|
—
|
|
|
|
|
(26
|
)
|
Stock-based compensation
|
|
|
|
|
|
12,826
|
|
|
|
|
—
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
|
|
|
(12,567
|
)
|
|
|
|
(22,719
|
)
|
Unbilled receivables
|
|
|
|
|
|
(3,204
|
)
|
|
|
|
(7,084
|
)
|
Inventories
|
|
|
|
|
|
(5,051
|
)
|
|
|
|
(544
|
)
|
Prepaid expenses and other current assets
|
|
|
|
|
|
1,331
|
|
|
|
|
(1,071
|
)
|
Other noncurrent assets
|
|
|
|
|
|
(176
|
)
|
|
|
|
168
|
|
Accounts payable
|
|
|
|
|
|
3,413
|
|
|
|
|
(2,114
|
)
|
Accrued liabilities
|
|
|
|
|
|
1,009
|
|
|
|
|
11,961
|
|
Other long-term liabilities
|
|
|
|
|
|
(15
|
)
|
|
|
|
(33
|
)
|
Net cash provided by (used in) operating activities
|
|
|
|
|
|
12,418
|
|
|
|
|
(16,812
|
)
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment
|
|
|
|
|
|
(41,194
|
)
|
|
|
|
(8,689
|
)
|
Proceeds from sale of property, plant and equipment
|
|
|
|
|
|
3,911
|
|
|
|
|
31,131
|
|
Net cash (used in) provided by investing activities
|
|
|
|
|
|
(37,283
|
)
|
|
|
|
22,442
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
|
|
|
Proceeds from revolving debt
|
|
|
|
|
|
33,000
|
|
|
|
|
2,485
|
|
Payments on revolving debt
|
|
|
|
|
|
(81,071
|
)
|
|
|
|
(13,414
|
)
|
Proceeds from term loans
|
|
|
|
|
|
—
|
|
|
|
|
5,000
|
|
Payments on term loans
|
|
|
|
|
|
(11,225
|
)
|
|
|
|
—
|
|
Payments on capital lease obligations
|
|
|
|
|
|
(182
|
)
|
|
|
|
(142
|
)
|
Payment of deferred financing costs
|
|
|
|
|
|
(1,416
|
)
|
|
|
|
—
|
|
Prepayment premiums on early debt extinguishment
|
|
|
|
|
|
(1,346
|
)
|
|
|
|
—
|
|
Payments for treasury shares
|
|
|
|
|
|
(1,271
|
)
|
|
|
|
—
|
|
Proceeds from new shares issuance, net of underwriting commission
costs
|
|
|
|
|
|
90,542
|
|
|
|
|
—
|
|
Costs incurred for stock issuance
|
|
|
|
|
|
(2,673
|
)
|
|
|
|
—
|
|
Net cash provided by (used in) financing activities
|
|
|
|
|
|
24,358
|
|
|
|
|
(6,071
|
)
|
Net decrease in cash and cash equivalents
|
|
|
|
|
|
(507
|
)
|
|
|
|
(441
|
)
|
Cash and cash equivalents beginning of period
|
|
|
|
|
|
8,751
|
|
|
|
|
12,219
|
|
Cash and cash equivalents end of period
|
|
|
|
|
|
$
|
8,244
|
|
|
|
|
$
|
11,778
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information
|
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
|
|
|
|
1,119
|
|
|
|
|
2,289
|
|
Income taxes paid
|
|
|
|
|
|
151
|
|
|
|
|
167
|
|
Supplemental noncash investing and financing activities
|
|
|
|
|
|
|
|
|
|
|
Noncash proceeds from sale of assets held for sale
|
|
|
|
|
|
—
|
|
|
|
|
3,990
|
|
Fixed asset purchases in accounts payable and accrued liabilities
|
|
|
|
|
|
570
|
|
|
|
|
—
|
|
Non cash payment for property, plant and equipment
|
|
|
|
|
|
3,279
|
|
|
|
|
—
|
|
Debt conversion of term loan to equity
|
|
|
|
|
|
33,631
|
|
|
|
|
—
|
|
Issuance of common shares for members’ equity
|
|
|
|
|
|
212,630
|
|
|
|
|
—
|
|
Stock issuance cost included in accounts payable
|
|
|
|
|
|
501
|
|
|
|
|
—
|
|
|
|
Quintana Energy Services Inc.
|
Additional Selected Operating Data
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
June 30, 2017
|
|
|
|
|
|
|
(Unaudited)
|
Other Operational Data:
|
|
|
|
|
|
|
|
|
|
|
|
|
Directional Drilling rig days (1) (2)
|
|
|
|
|
|
4,108
|
|
|
|
3,706
|
|
|
|
3,667
|
Average monthly Directional Drilling rigs on revenue (3)
|
|
|
|
|
|
61
|
|
|
|
57
|
|
|
|
57
|
Total hydraulic fracturing stages
|
|
|
|
|
|
945
|
|
|
|
963
|
|
|
|
715
|
Average hydraulic fracturing revenue per stage
|
|
|
|
|
|
$
|
56,000
|
|
|
|
$
|
52,477
|
|
|
|
$
|
48,173
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Rig days represent the number of days we are providing services to
rigs and are earning revenues during the period, including days that
standby revenues are earned.
|
|
|
(2)
|
|
Rigs on revenue represents the number of rigs earning revenues
during a time period, including days that standby revenues are
earned.
|
|
|
(3)
|
|
Includes unconventional stages and conventional jobs, the latter are
counted as a single stage.
|
Non-GAAP Financial Measures
Adjusted EBITDA is a supplemental non-GAAP financial measure that is
used by management and external users of our financial statements, such
as industry analysts, investors, lenders and rating agencies.
Adjusted EBITDA is not a measure of net income or cash flows as
determined by GAAP. We define Adjusted EBITDA as net income or (loss)
plus income taxes, net interest expense, depreciation and amortization,
impairment charges, net (gain) or loss on disposition of assets, stock
based compensation, transaction expenses, rebranding expenses,
settlement expenses, severance expenses and equipment standup expense.
We believe Adjusted EBITDA is useful because it allows us to more
effectively evaluate our operating performance and compare the results
of our operations from period to period without regard to our financing
methods or capital structure. We exclude the items listed above in
arriving at Adjusted EBITDA because these amounts can vary substantially
from company to company within our industry depending upon accounting
methods and book values of assets, capital structures and the method by
which the assets were acquired. Adjusted EBITDA should not be considered
as an alternative to, or more meaningful than, net income as determined
in accordance with GAAP, or as an indicator of our operating performance
or liquidity. Certain items excluded from Adjusted EBITDA are
significant components in understanding and assessing a company’s
financial performance, such as a company’s cost of capital and tax
structure, as well as the historic costs of depreciable assets, none of
which are components of Adjusted EBITDA. Our computations of Adjusted
EBITDA may not be comparable to other similarly titled measures of other
companies.
The following tables present reconciliations of Adjusted EBITDA to the
most directly comparable GAAP financial measure for the periods
indicated:
|
Quintana Energy Services Inc.
|
Reconciliation of Net Income (Loss) to adjusted EBITDA
|
(In thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
June 30, 2017
|
Adjustments to reconcile Adjusted EBITDA to net loss:
|
|
|
|
|
|
|
|
|
|
|
|
Net Income (loss)
|
|
|
|
|
$
|
2,135
|
|
|
|
$
|
(16,356
|
)
|
|
|
$
|
(3,113
|
)
|
Income tax expense (benefit)
|
|
|
|
|
326
|
|
|
|
51
|
|
|
|
(9
|
)
|
Interest expense
|
|
|
|
|
433
|
|
|
|
10,192
|
|
|
|
2,788
|
|
Depreciation and amortization expense
|
|
|
|
|
11,155
|
|
|
|
11,078
|
|
|
|
11,432
|
|
Gain on disposition of assets, net
|
|
|
|
|
(594
|
)
|
|
|
(106
|
)
|
|
|
(332
|
)
|
Non-cash stock based compensation
|
|
|
|
|
2,940
|
|
|
|
9,886
|
|
|
|
—
|
|
Rebranding expense(1)
|
|
|
|
|
53
|
|
|
|
—
|
|
|
|
—
|
|
Settlement expense(2)
|
|
|
|
|
166
|
|
|
|
223
|
|
|
|
913
|
|
Severance expense(3)
|
|
|
|
|
53
|
|
|
|
—
|
|
|
|
20
|
|
Equipment and standup expense(4)
|
|
|
|
|
1,251
|
|
|
|
515
|
|
|
|
1
|
|
Adjusted EBITDA
|
|
|
|
|
$
|
17,918
|
|
|
|
$
|
15,483
|
|
|
|
$
|
11,700
|
|
|
(1) Relates to expenses incurred in connection with rebranding our
business segments.
(2) For 2017, represents professional fees related to investment
banking, accounting and legal services associated with entering into the
Former Term Loan that were recorded in general and administrative
expenses. For 2018, represents lease buyouts, legal fees and settlement
costs for FLSA claims, facility closures and other non-recurring
expenses that were recorded in general and administrative expenses.
(3) Relates to severance expenses in 2017 incurred in connection with a
program implemented to reduce headcount in connection with the industry
downturn. In our performance for the three months ended June 30, 2018
and 2017, $0.1 million and none was recorded in direct operating
expenses, respectively, and the remainder was recorded in general and
administrative expenses.
(4) Relates to equipment standup costs incurred in connection with the
mobilization and redeployment of assets. In our performance for the
three months ended June 30, 2018, approximately $1.2 million was
recorded in direct operating expenses and approximately $0.1 million was
recorded in general and administration expenses. In our performance for
the three months ended June 30, 2017, a nominal amount was recorded in
direct operating expenses and none was recorded in general and
administration expenses.
|
Quintana Energy Services Inc.
|
Reconciliation of Segment Adjusted EBITDA to Net Income
|
(In thousands of dollars)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
June 30, 2017
|
Directional Drilling
|
|
|
|
|
|
$
|
5,242
|
|
|
|
$
|
2,580
|
|
|
|
$
|
4,808
|
|
Pressure Pumping
|
|
|
|
|
|
8,884
|
|
|
|
9,889
|
|
|
|
7,799
|
|
Pressure Control
|
|
|
|
|
|
5,602
|
|
|
|
3,650
|
|
|
|
1,860
|
|
Wireline
|
|
|
|
|
|
788
|
|
|
|
2,564
|
|
|
|
(743
|
)
|
Corporate and Other
|
|
|
|
|
|
(7,061
|
)
|
|
|
(13,824
|
)
|
|
|
(2,958
|
)
|
Income tax (expense) benefit
|
|
|
|
|
|
(326
|
)
|
|
|
(51
|
)
|
|
|
9
|
|
Interest expense
|
|
|
|
|
|
(433
|
)
|
|
|
(10,192
|
)
|
|
|
(2,788
|
)
|
Depreciation and amortization
|
|
|
|
|
|
(11,155
|
)
|
|
|
(11,078
|
)
|
|
|
(11,432
|
)
|
Gain on disposition of assets, net
|
|
|
|
|
|
594
|
|
|
|
106
|
|
|
|
332
|
|
Net income (loss)
|
|
|
|
|
|
$
|
2,135
|
|
|
|
$
|
(16,356
|
)
|
|
|
$
|
(3,113
|
)
|
|
|
Quintana Energy Services Inc.
|
Segment Adjusted EBITDA Margin
|
(In thousands of dollars, except percentages)
|
(Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
June 30, 2018
|
|
|
March 31, 2018
|
|
|
June 30, 2017
|
Segment Adjusted EBITDA Margin(1)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Directional Drilling
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
$
|
5,242
|
|
|
|
$
|
2,580
|
|
|
|
$
|
4,808
|
|
Revenue
|
|
|
|
|
|
43,605
|
|
|
|
37,602
|
|
|
|
37,099
|
|
Adjusted EBITDA Margin Percentage
|
|
|
|
|
|
12.0
|
|
|
|
6.9
|
|
|
|
13.0
|
|
Pressure Pumping
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
8,884
|
|
|
|
9,889
|
|
|
|
7,799
|
|
Revenue
|
|
|
|
|
|
56,702
|
|
|
|
53,400
|
|
|
|
37,687
|
|
Adjusted EBITDA Margin Percentage
|
|
|
|
|
|
15.7
|
|
|
|
18.5
|
|
|
|
20.7
|
|
Pressure Control
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
5,602
|
|
|
|
3,650
|
|
|
|
1,860
|
|
Revenue
|
|
|
|
|
|
31,965
|
|
|
|
27,961
|
|
|
|
22,335
|
|
Adjusted EBITDA Margin Percentage
|
|
|
|
|
|
17.5
|
|
|
|
13.1
|
|
|
|
8.3
|
|
Wireline
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA
|
|
|
|
|
|
788
|
|
|
|
2,564
|
|
|
|
(743
|
)
|
Revenue
|
|
|
|
|
|
20,264
|
|
|
|
$
|
22,305
|
|
|
|
11,336
|
|
Adjusted EBITDA Margin Percentage
|
|
|
|
|
|
3.9
|
|
|
|
11.5
|
|
|
|
(6.6
|
)
|
|
(1) Segment Adjusted EBITDA Margin is defined as the quotient of Segment
Adjusted EBITDA and total segment revenue. Segment Adjusted EBITDA is
net income (loss) plus income taxes, net interest expense, depreciation
and amortization, impairment charges, net (gain) loss on disposition of
assets, stock based compensation, transaction expenses, rebranding
expenses, settlement expenses, severance expenses and equipment standup
expense.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180808005818/en/ Copyright Business Wire 2018
Source: Business Wire
(August 8, 2018 - 4:59 PM EDT)
News by QuoteMedia
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