In a release issued under the same headline earlier today
by U.S. Well Services, Inc. (NASDAQ: USWS) please
note that in the Conference Call section, the time of the
conference call was incorrectly stated as 10:00 am Central / 9:00
am Eastern Time, but it is at 10:00 am Central / 11:00 am Eastern
Time. The corrected release follows:
U.S. Well Services, Inc. (the “Company”, “U.S.
Well Services” or “we”) (NASDAQ: USWS) today reported second
quarter 2020 financial and operational results.
Second Quarter 2020
Highlights
- Averaged 3.4 fully-utilized fleets
compared to 8.9 fully-utilized fleets during the first quarter of
2020
- Total revenue of $39.8 million
compared to $112.0 million in the first quarter of 2020
- Net loss attributable to the
Company of $18.1 million compared to net loss of $172.4 million in
the first quarter of 2020
- Adjusted EBITDA(1) of $8.5 million
compared to $12.7 million in the first quarter of 2020
- Reported annualized Adjusted EBITDA
per fully-utilized fleet of $10.0 million compared to $4.3 million
for the first quarter of 2020(2)
- Total liquidity, consisting of cash
and availability under the Company’s asset-backed revolving credit
facility, was $13.4 million as of June 30, 2020
- Each of Adjusted EBITDA and
Adjusted EBITDA margin is a Non-GAAP financial measure. Please read
“Non-GAAP Financial Measures.”
- Adjusted EBITDA per fully-utilized
fleet equivalent is defined as Adjusted EBITDA divided by the
product of average active fleets during the quarter and the
utilization rate for active fleets during the quarter.
“U.S. Well Services demonstrated its resiliency
during the second quarter, posting solid results despite the
unprecedented disruption of the global economy by the COVID-19
pandemic,” said Joel Broussard, President and CEO of U.S. Well
Services. “Our performance this quarter is a testament to
both the hard work and dedication of the U.S. Well Services team as
well as the superior value proposition we offer to our
customers.”
“We responded rapidly to the deterioration in
U.S. completion activity by rightsizing our business and working to
reduce costs across the board, and as such, we believe U.S. Well
Services is well positioned to capitalize on any market
recovery. Moreover, the utilization of our all-electric frac
fleets during the second quarter far surpassed industry-wide
utilization of conventional diesel-powered frac fleets, evidencing
the continued demand for electric frac services. Our team
will continue to be disciplined in evaluating opportunities to
redeploy fleets on terms that offer attractive returns.”
Outlook
While commodity prices have improved
significantly from trough pricing experienced following the global
economic shutdown early in the second quarter of 2020, the recovery
in completion activity for U.S. producers has only just
begun. We expect demand for frac services to increase in the
second half of 2020, but to remain muted relative to historical
levels.
U.S. Well Services is well positioned to
redeploy idled fleets in a recovering market environment, as
customers high-grade their service providers to capitalize on
best-in-class service quality, safety performance and technological
innovation. The rationalization of the Company’s cost
structure over the last two quarters provides U.S. Well Services
with significant flexibility as well as an improved ability to
generate profits amidst challenging market conditions.
Second Quarter 2020 Financial
Summary
Revenue for the second quarter of 2020 decreased
64% to $39.8 million versus $112.0 million in the first quarter of
2020, driven by a sharp decrease in activity levels resulting from
the COVID-19 pandemic. U.S. Well Services averaged 4.3 active
fleets during the quarter, as compared to 10.7 for the first
quarter of 2020. Utilization of the Company’s active fleets
averaged 79% during the second quarter, resulting in a
fully-utilized equivalent of 3.4 fleets. This compares to 84%
utilization and a fully-utilized equivalent of 8.9 fleets for the
first quarter of 2020.
Costs of services, excluding depreciation and
amortization, for the second quarter of 2020 decreased to $29.0
million from $85.2 million during the first quarter of 2020,
primarily as a result of reduced activity levels, continued
customer self-sourcing of consumables and a benefit from the
proactive cost cutting initiatives implemented by the Company
beginning in the first quarter of 2020.
Selling, general and administrative expense
(“SG&A”) decreased to $5.2 million in the second quarter of
2020 from $19.1 million in the first quarter of 2020.
Excluding stock-based compensation and non-recurring transaction
costs, SG&A in the second quarter of 2020 was $4.1 million
compared to $8.4 million in the first quarter of 2020. This
sequential decrease was primarily attributable to the reduction in
compensation and professional fees.
Net loss attributable to the Company decreased
sequentially to $18.1 million in the second quarter of 2020 from
$172.4 million in the first quarter of 2020. Adjusted EBITDA
decreased 34% in the second quarter of 2020 to $8.5 million from
$12.7 million in the first quarter of 2020. Annualized
Adjusted EBITDA per fully-utilized fleet was $10.0 million.
Adjusted EBITDA margin increased to 21% from 11% in the first
quarter of 2020.(1)
Operational Highlights
U.S. Well Services exited the second quarter
with 4 active frac fleets, of which three were new-generation
electric fleets. Two of our fleets were working in the
Appalachian Basin, one fleet was in the Eagle Ford and one fleet
was in the Permian Basin. The Company recently redeployed a
new-generation electric frac fleet to work for a previous customer
in the Permian Basin, and now has all of its new-generation
electric frac fleets working.
U.S. Well Services’ operating efficiency
increased sequentially, with stage count per fully-utilized fleet
increasing by approximately 2%, completing 1,957 frac stages during
the second quarter of 2020, or 576 stages per fully-utilized fleet,
as compared to 5,006 frac stages, or 562 stages per fully-utilized
fleet, during the first quarter of 2020. Pumping hours per
day decreased approximately 6% sequentially. USWS pumped for
3,158 hours during 267 frac days, as compared to 9,631 hours during
742 frac days in the first quarter of 2020.
U.S. Well Services continues to be the market
leader in electric fracturing, with 14,667 electric fracturing
stages completed since the deployment of our first Clean Fleet® in
2014. The Company continued to expand its intellectual
property portfolio during the second quarter, and currently has 38
patents, with 149 patents pending.
Balance Sheet and Capital
Spending
As of June 30, 2020, total liquidity was $13.4
million, consisting of $3.9 million of cash on the Company’s
balance sheet and $9.5 million of availability under the Company’s
asset-backed revolving credit facility, and net debt was $261.3
million.
Capital expenditures, on an accrual basis, were
$4.0 million during the second quarter of 2020. The capital
expenditures consisted of $0.5 million for growth initiatives and
$3.5 million for maintenance capital expenditures, which equates to
an annualized rate of $4.2 million per fully-utilized fleet.
Conference Call Information
The Company will host a conference call at 10:00
am Central / 11:00 am Eastern Time on Thursday, August 6, 2020 to
discuss financial and operating results for the second quarter of
2020 and recent developments. This call will also be webcast and an
investor presentation will be available on U.S. Well Services’
website at
http://ir.uswellservices.com/events-and-presentations/events.
To access the conference call, please dial 201-389-0872 and ask for
the U.S. Well Services call at least 10 minutes prior to the start
time or listen to the call live over the Internet by logging on to
the Company’s website from the link above. A telephonic
replay of the conference call will be available through August 13,
2020 and may be accessed by calling 201-612-7415 using passcode
13707596#. A webcast archive will also be available at the
link above shortly after the call and will be accessible for
approximately 90 days.
About U.S. Well Services,
Inc.
U.S. Well Services, Inc. is a leading provider
of hydraulic fracturing services and a market leader in electric
fracture stimulation. The Company’s patented electric frac
technology provides one of the first fully electric, mobile well
stimulation systems powered by locally supplied natural gas
including field gas sourced directly from the wellhead. The
Company’s electric frac technology dramatically decreases emissions
and sound pollution while generating exceptional operational
efficiencies including significant customer fuel cost savings
versus conventional diesel fleets. For more information visit:
www.uswellservices.com. The information on our website is not
part of this release.
Forward-Looking
Statements
The information above includes “forward-looking
statements” within the meaning of Section 27A of the Securities Act
of 1933, as amended, and Section 21E of the Securities Exchange Act
of 1934, as amended. All statements, other than statements of
historical facts, included herein concerning, among other things,
availability under the Company’s credit facilities, benefits
obtained from the Company’s strategic financing transactions, the
Company’s financial position and liquidity, business strategy and
objectives for future operations, results of discussions with
potential customers, benefits obtained from the Company’s
patent-pending PowerPath technology, potential new contract
opportunities and planned deployment and operation of fleets, are
forward-looking statements. These forward-looking statements may be
identified by their use of terms and phrases such as “may,”
“expect,” “guidance,” “estimate,” “project,” “plan,” “believe,”
“intend,” “achievable,” “anticipate,” “will,” “continue,”
“potential,” “should,” “could,” “target” and similar terms and
phrases. Although the Company believes that the expectations
reflected in these forward-looking statements are reasonable, they
do involve certain assumptions, risks and uncertainties. These
forward-looking statements represent the Company’s current
expectations or beliefs concerning future events, and it is
possible that the results described in this release will not be
achieved. These forward-looking statements are subject to certain
risks, uncertainties and assumptions, including those identified in
this release or disclosed from time to time in the Company’s
filings with the Securities and Exchange Commission (the “SEC”).
Factors that could cause actual results to differ from the
Company’s expectations include changes in market conditions,
changes in commodity prices, changes in supply and demand for oil
and gas, changes in demand for our services, availability of
financing and capital, the Company’s liquidity, the Company’s
compliance with covenants under its credit agreements, actions by
customers and potential customers, geopolitical events,
availability of equipment and personnel and other factors described
in the Company’s public disclosures and filings with the SEC,
including those described under “Risk Factors” in our annual report
on Form 10-K filed on March 5, 2020 and in our quarterly reports on
Form 10-Q. As a result of these factors, actual results may differ
materially from those indicated or implied by forward-looking
statements.
Any forward-looking statement speaks only as of
the date on which it is made, and, except as required by law, the
Company does not undertake any obligation to update or revise any
forward-looking statement, whether as a result of new information,
future events or otherwise.
Contacts:
U.S. Well Services Josh Shapiro, VP, Finance and Investor
Relations (832) 562-3730IR@uswellservices.com
Dennard Lascar Investor RelationsKen Dennard / Lisa Elliott(713)
529-6600USWS@dennardlascar.com
|
|
|
|
|
|
|
|
|
|
|
U.S. WELL
SERVICES, INC. |
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
|
(unaudited and
amounts in thousands except for active fleets and per share
amounts) |
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
|
June 30, |
|
March 31, |
|
June 30, |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
2020 |
|
|
|
2020 |
|
|
|
2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Statement of Operations Data: |
|
|
|
|
|
|
|
|
|
|
Revenue |
$ |
39,837 |
|
|
$ |
151,419 |
|
|
$ |
112,035 |
|
|
$ |
151,872 |
|
|
$ |
291,190 |
|
|
Costs and
expenses: |
|
|
|
|
|
|
|
|
|
|
Cost of services (excluding depreciation and amortization) |
|
29,011 |
|
|
|
107,369 |
|
|
|
85,153 |
|
|
|
114,165 |
|
|
|
217,048 |
|
|
Depreciation and amortization |
|
17,358 |
|
|
|
40,322 |
|
|
|
32,008 |
|
|
|
49,366 |
|
|
|
78,165 |
|
|
Selling, general and administrative expenses |
|
5,220 |
|
|
|
7,638 |
|
|
|
19,058 |
|
|
|
24,277 |
|
|
|
16,258 |
|
|
Impairment loss on long-lived assets |
|
- |
|
|
|
- |
|
|
|
147,543 |
|
|
|
147,543 |
|
|
|
- |
|
|
Loss on disposal of assets |
|
853 |
|
|
|
4,003 |
|
|
|
4,244 |
|
|
|
5,097 |
|
|
|
10,908 |
|
|
Income
(loss) from operations |
|
(12,605 |
) |
|
|
(7,913 |
) |
|
|
(175,971 |
) |
|
|
(188,576 |
) |
|
|
(31,189 |
) |
|
Interest expense, net |
|
(5,661 |
) |
|
|
(7,820 |
) |
|
|
(7,952 |
) |
|
|
(13,613 |
) |
|
|
(12,935 |
) |
|
Loss on extinguishment of debt |
|
- |
|
|
|
(12,558 |
) |
|
|
- |
|
|
|
- |
|
|
|
(12,558 |
) |
|
Other income |
|
45 |
|
|
|
1,686 |
|
|
|
6 |
|
|
|
51 |
|
|
|
1,712 |
|
|
Loss before
income taxes |
|
(18,221 |
) |
|
|
(26,605 |
) |
|
|
(183,917 |
) |
|
|
(202,138 |
) |
|
|
(54,970 |
) |
|
Income tax expense |
|
13 |
|
|
|
306 |
|
|
|
(750 |
) |
|
|
(737 |
) |
|
|
430 |
|
|
Net
loss |
|
(18,234 |
) |
|
|
(26,911 |
) |
|
|
(183,167 |
) |
|
|
(201,401 |
) |
|
|
(55,400 |
) |
|
Net loss attributable to noncontrolling interest |
|
(97 |
) |
|
|
(5,432 |
) |
|
|
(10,800 |
) |
|
|
(10,897 |
) |
|
|
(11,649 |
) |
|
Net loss
attributable to U.S. Well Services, Inc. |
|
(18,137 |
) |
|
|
(21,479 |
) |
|
|
(172,367 |
) |
|
|
(190,504 |
) |
|
|
(43,751 |
) |
|
Dividends
accrued on Series A preferred stock |
|
(1,845 |
) |
|
|
(660 |
) |
|
|
(1,751 |
) |
|
|
(3,596 |
) |
|
|
(660 |
) |
|
Dividends
accrued on Series B preferred stock |
|
(666 |
) |
|
|
- |
|
|
|
- |
|
|
|
(666 |
) |
|
|
- |
|
|
Deemed and
imputed dividends on Series A preferred stock |
|
(4,504 |
) |
|
|
(1,560 |
) |
|
|
(6,249 |
) |
|
|
(10,753 |
) |
|
|
(1,560 |
) |
|
Net loss
attributable to U.S. Well Services, Inc. common stockholders |
$ |
(25,152 |
) |
|
$ |
(23,699 |
) |
|
$ |
(180,367 |
) |
|
$ |
(205,519 |
) |
|
$ |
(45,971 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
Net lost attributable to U.S. Well Services, Inc. stockholders per
common share: |
|
|
|
|
|
|
|
Basic and diluted |
|
(0.38 |
) |
|
|
(0.46 |
) |
|
|
(3.00 |
) |
|
|
(3.25 |
) |
|
|
(0.92 |
) |
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
65,011 |
|
|
|
49,846 |
|
|
|
58,620 |
|
|
|
61,815 |
|
|
|
48,631 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Financial and Operational Data |
|
|
|
|
|
|
|
|
|
|
Capital
Expenditures (1) |
|
3,993 |
|
|
|
87,645 |
|
|
|
23,302 |
|
|
|
27,295 |
|
|
|
242,756 |
|
|
Adjusted
EBITDA (2) |
|
8,466 |
|
|
|
42,584 |
|
|
|
12,748 |
|
|
|
21,214 |
|
|
|
70,568 |
|
|
Average
Active Fleets |
|
4.3 |
|
|
|
11.3 |
|
|
|
10.7 |
|
|
|
7.5 |
|
|
|
11.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Capital
expenditures presented above are shown on an accrual basis,
including capital expenditures in accounts payable, accrued
liabilities and under equipment financing arrangements. |
|
|
|
|
(2) Adjusted EBITDA is
a Non-GAAP Financial Measure. See the tables entitled
"Reconciliation and Calculation of Non-GAAP Financial and
Operational Measures" below. |
|
|
|
|
|
|
|
|
|
|
|
|
U.S. WELL
SERVICES, INC. |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
(unaudited, amounts
in thousands except share and per share amounts) |
|
|
|
|
|
|
|
June 30, 2020 |
|
December 31, 2019 |
ASSETS |
|
|
|
CURRENT
ASSETS: |
|
|
|
Cash and cash equivalents |
$ |
3,423 |
|
|
$ |
33,794 |
|
Restricted cash |
|
519 |
|
|
|
7,610 |
|
Accounts receivable (net of allowance for doubtful accounts of |
|
|
|
$9,000 and $22 as of June 30, 2020 and December 31, 2019,
respectively) |
|
38,459 |
|
|
|
79,542 |
|
Inventory, net |
|
7,779 |
|
|
|
9,052 |
|
Prepaids and other current assets |
|
9,590 |
|
|
|
13,332 |
|
Total current assets |
|
59,770 |
|
|
|
143,330 |
|
Property and
equipment, net |
|
258,729 |
|
|
|
441,610 |
|
Intangible
assets, net |
|
13,937 |
|
|
|
21,826 |
|
Goodwill |
|
4,971 |
|
|
|
4,971 |
|
Deferred
financing costs, net |
|
1,425 |
|
|
|
1,045 |
|
TOTAL
ASSETS |
$ |
338,832 |
|
|
$ |
612,782 |
|
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
(DEFICIT) |
|
|
|
|
|
CURRENT
LIABILITIES: |
|
|
|
Accounts payable |
$ |
48,427 |
|
|
$ |
70,170 |
|
Accrued expenses and other current liabilities |
|
13,075 |
|
|
|
40,481 |
|
Notes payable |
|
3,959 |
|
|
|
8,068 |
|
Current portion of long-term equipment financing |
|
3,424 |
|
|
|
5,564 |
|
Current portion of long-term capital lease obligation |
|
7,658 |
|
|
|
10,474 |
|
Current portion of long-term debt |
|
- |
|
|
|
6,250 |
|
Total current liabilities |
|
76,543 |
|
|
|
141,007 |
|
Long-term
equipment financing |
|
11,129 |
|
|
|
10,501 |
|
Long-term
debt |
|
239,065 |
|
|
|
274,391 |
|
Other
long-term liabilities |
|
1,332 |
|
|
|
215 |
|
TOTAL LIABILITIES |
|
328,069 |
|
|
|
426,114 |
|
|
|
|
|
MEZZANINE
EQUITY |
|
|
|
Series A Redeemable Convertible Preferred Stock, par value $0.0001
per share; |
|
|
|
55,000 shares authorizes, issued and outstanding as of June 30,
2020 and |
|
|
|
December 31, 2019; aggregate liquidation preference of $62,646 and
$59,050 |
|
|
|
as of June 30, 2020 and December 31, 2019, respectively |
|
53,277 |
|
|
|
38,928 |
|
|
|
|
|
Series B Redeemable Convertible Preferred Stock, par value $0.0001
per share; |
|
|
|
22,050 shares authorized, issued and outstanding as of June 30,
2020; |
|
|
|
aggregate liquidation preference of $22,716 as of June 30,
2020 |
|
21,312 |
|
|
|
- |
|
|
|
|
|
STOCKHOLDERS' EQUITY (DEFICIT) |
|
|
|
Class A Common Stock, par value of $0.0001 per share; 400,000,000
shares |
|
|
|
authorized; 68,361,213 shares and 62,857,624 shares issued and
outstanding as of June 30, 2020 and December 31, 2019,
respectively |
|
7 |
|
|
|
5 |
|
Class B Common Stock, par value of $0.0001 per share; 20,000,000
shares |
|
|
|
authorized; 5,014,897 shares and 5,500,692 shares issued and
outstanding as of June 30, 2020 and December 31, 2019,
respectively |
|
- |
|
|
|
1 |
|
Additional paid in capital |
|
237,872 |
|
|
|
248,302 |
|
Accumulated deficit |
|
(301,705 |
) |
|
|
(111,201 |
) |
Total stockholders' equity (deficit) attributable to U.S. Well
Services, Inc. |
|
(63,826 |
) |
|
|
137,107 |
|
Noncontrolling interest |
|
- |
|
|
|
10,633 |
|
Total Stockholders' Equity (Deficit) |
|
(63,826 |
) |
|
|
147,740 |
|
TOTAL
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS' EQUITY
(DEFICIT) |
$ |
338,832 |
|
|
$ |
612,782 |
|
|
|
|
|
U.S. WELL
SERVICES, INC. |
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS |
SIX MONTHS
ENDED JUNE 30, 2020 AND 2020 |
(unaudited and
amounts in thousands) |
|
|
|
|
|
|
|
|
2020 |
|
|
|
2019 |
|
CASH
FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
Net
loss |
|
$ |
(201,401 |
) |
|
$ |
(55,400 |
) |
Adjustments
to reconcile net loss to cash provided by |
|
|
|
|
operating
activities: |
|
|
|
|
Depreciation
and amortization |
|
|
49,366 |
|
|
|
78,165 |
|
Impairment
of long-lived assets |
|
|
147,543 |
|
|
|
- |
|
Provision
for losses on accounts receivable |
|
|
9,031 |
|
|
|
285 |
|
Loss on
disposal of assets |
|
|
5,097 |
|
|
|
10,908 |
|
Share-based
compensation expense |
|
|
3,481 |
|
|
|
3,366 |
|
Loss on
extinguishment of debt |
|
|
- |
|
|
|
12,558 |
|
Other
noncash items |
|
|
2,331 |
|
|
|
1,855 |
|
Changes in
working capital |
|
|
6,065 |
|
|
|
(37,726 |
) |
Net
cash provided by operating activities |
|
|
21,513 |
|
|
|
14,011 |
|
CASH
FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
Purchase of
property and equipment |
|
|
(40,756 |
) |
|
|
(144,889 |
) |
Proceeds
from sale of property and equipment |
|
|
15,036 |
|
|
|
- |
|
Net
cash used in investing activities |
|
|
(25,720 |
) |
|
|
(144,889 |
) |
CASH
FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
Proceeds
from issuance of revolving credit facility |
|
|
11,250 |
|
|
|
49,025 |
|
Repayments
of revolving credit facility |
|
|
(33,381 |
) |
|
|
(65,000 |
) |
Proceeds
from issuance of long-term debt |
|
|
- |
|
|
|
285,000 |
|
Repayments
of long-term debt |
|
|
(2,500 |
) |
|
|
(75,000 |
) |
Loss on
extinguishment of debt |
|
|
- |
|
|
|
(6,560 |
) |
Repayments
of note payable |
|
|
(4,109 |
) |
|
|
(4,387 |
) |
Repayments
of amounts under equipment financing |
|
|
(1,513 |
) |
|
|
(63,186 |
) |
Principal
payments under finance lease obligation |
|
|
(2,816 |
) |
|
|
(8,389 |
) |
Proceeds
from issuance of preferred stock and warrants, net |
|
|
19,875 |
|
|
|
54,524 |
|
Deferred
financing costs |
|
|
(20,061 |
) |
|
|
(13,451 |
) |
Net
cash provided (used) by financing activities |
|
|
(33,255 |
) |
|
|
152,576 |
|
Net increase
(decrease) in cash and cash equivalents and restricted cash |
|
|
(37,462 |
) |
|
|
21,698 |
|
Cash and
cash equivalents and restricted cash, beginning of period |
|
|
41,404 |
|
|
|
30,036 |
|
Cash and
cash equivalents and restricted cash, end of period |
|
$ |
3,942 |
|
|
$ |
51,734 |
|
|
|
|
|
|
Non-GAAP Financial Measures
The Company reports its financial results in
accordance with GAAP. The Company believes, however, that certain
non-GAAP performance measures allow external users of its
consolidated financial statements, such as industry analysts,
investors, lenders and rating agencies, to more effectively
evaluate its operating performance and compare the results of its
operations from period to period and against the Company’s peers
without regard to the Company’s financing methods, hedging
positions or capital structure. Additionally, the Company believes
the use of certain non-GAAP measures highlights trends in the
Company’s business that may not otherwise be apparent when relying
solely on GAAP measures.
Reconciliation of Net Income to Adjusted
EBITDA
EBITDA and Adjusted EBITDA are non-GAAP
financial measures and should not be considered as a substitute for
net income (loss), operating income (loss) or any other performance
measure derived in accordance with GAAP or as an alternative to net
cash provided by operating activities as a measure of the Company’s
profitability or liquidity. The Company’s management believes
EBITDA and Adjusted EBITDA are useful because they allow external
users of its consolidated financial statements, such as industry
analysts, investors, lenders and rating agencies, to more
effectively evaluate the Company’s operating performance, compare
the results of its operations from period to period and against the
Company’s peers without regard to the Company’s financing methods,
hedging positions or capital structure and because it highlights
trends in the Company’s business that may not otherwise be apparent
when relying solely on GAAP measures. The Company believes EBITDA
and Adjusted EBITDA are important supplemental measures of its
performance that are frequently used by others in evaluating
companies in its industry. Because EBITDA and Adjusted EBITDA
exclude some, but not all, items that affect net income (loss) and
may vary among companies, the EBITDA and Adjusted EBITDA that the
Company presents may not be comparable to similarly titled measures
of other companies.
The Company defines EBITDA as earnings before
interest, income taxes, depreciation and amortization. The Company
defines Adjusted EBITDA as EBITDA excluding the following: loss on
disposal of assets; share-based compensation; impairments; and
other items that the Company believes to be non-recurring in
nature. The Company defines Adjusted EBITDA margin as
Adjusted EBITDA as a percentage of Revenue.
U.S. WELL SERVICES, INC. |
|
|
|
RECONCILIATION OF NET INCOME (GAAP) TO EBITDA AND ADJUSTED
EBITDA (NON-GAAP) |
|
|
|
(unaudited, amounts in thousands) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
|
June 30, |
|
March 31, |
|
June 30, |
|
2020 |
|
2019 |
|
2020 |
|
2020 |
|
2019 |
Net loss |
$ |
(18,234) |
|
$ |
(26,911) |
|
$ |
(183,167) |
|
$ |
(201,401) |
|
$ |
(55,400) |
Interest expense, net |
5,661 |
|
7,820 |
|
7,952 |
|
13,613 |
|
12,935 |
Income tax expense |
13 |
|
306 |
|
(750) |
|
(737) |
|
430 |
Depreciation and amortization |
17,358 |
|
40,322 |
|
32,008 |
|
49,366 |
|
78,165 |
EBITDA |
4,798 |
|
21,537 |
|
(143,957) |
|
(139,159) |
|
36,130 |
Loss on disposal of assets (a) |
853 |
|
4,003 |
|
4,244 |
|
5,097 |
|
10,908 |
Share based compensation (b) |
1,403 |
|
2,307 |
|
2,078 |
|
3,481 |
|
3,366 |
Impairment loss (c) |
- |
|
- |
|
147,543 |
|
147,543 |
|
- |
Fleet start-up, relocation and reactivation costs (d) |
573 |
|
3,170 |
|
- |
|
573 |
|
7,162 |
Restructuring and transaction related costs (e) |
- |
|
303 |
|
- |
|
- |
|
1,738 |
Severance and Business Restructuring (f) |
839 |
|
- |
|
2,840 |
|
3,679 |
|
- |
Loss on extinguishment of debt (g) |
- |
|
12,558 |
|
- |
|
- |
|
12,558 |
Fleet 6 fire (h) |
- |
|
(1,294) |
|
- |
|
- |
|
(1,294) |
Adjusted EBITDA |
$ |
8,466 |
|
$ |
42,584 |
|
$ |
12,748 |
|
$ |
21,214 |
|
$ |
70,568 |
|
|
|
|
|
|
|
|
|
|
(a) Represents net
losses on the disposal of property and equipment. |
|
|
|
|
|
|
|
|
(b) Represents non-cash
share-based compensation. |
|
|
|
|
|
|
|
|
|
(c) Represents non-cash impairment charge on long-lived assets |
|
|
|
(d) Represents costs related to the start-up, relocation and / or
reactivation of hydraulic fracturing fleets. |
|
|
|
|
|
|
(e) Represents
third-party professional fees and other costs including costs
related to financing transactions, the capital restructuring and
the potential sale of U.S. Well Services, LLC. |
(f) Represents
severance and restructuring cost related to reductions in force and
facility closures |
|
|
|
|
|
|
(g) Represents costs related
to debt extinguishment. |
|
|
|
|
|
|
|
|
|
(h) Represents
insurance reimbursement of costs related to a fleet fire previously
reported as an add-back. |
|
|
|
|
|
|
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