HOUSTON, Aug. 20, 2018 (GLOBE NEWSWIRE) -- National Energy Services Reunited Corp. (“NESR”) (NASDAQ: NESR)
(NASDAQ: NESRW), a national, industry-leading provider of integrated energy services in the Middle East and North Africa (“MENA”)
region, today reported results for the second quarter ended June 30, 2018.
Operating and Financial Highlights
|
● |
Successfully completed the business combination with National
Petroleum Services (“NPS”) and Gulf Energy Services (“GES”) on June 6, 2018. |
|
|
|
|
● |
As described below, the reporting is in a Predecessor/Successor
format whereby NPS standalone is the Predecessor for periods prior to the completion of the business combination transaction
and NESR, including NPS and GES, is the Successor for post-transaction periods. |
|
|
|
|
● |
Revenue growth particularly strong for Predecessor (NPS) in the
second quarter of 2018, represented through sequential growth of 21% over the first quarter of 2018, 36% over the same period
in 2017, and 38% for the year to date period ending June 30, 2018 as compared to prior year. |
|
|
|
|
● |
Awarded new contracts worth $360 million in the second quarter of
2018. |
|
|
|
|
● |
Year to date Successor and Predecessor period through June 30,
2018 reflects net income of $2.8 million as per U.S. GAAP, inclusive of intangible amortization and transaction costs, and
Adjusted EBITDA (see reconciliation below) of $66 million for the combined entities. |
|
|
|
|
● |
Integration activities are on track and are anticipated to yield
significant incremental revenue synergies across all subsidiaries in the second half of 2018. |
“We are excited to report earnings for the first time as a combined, fully operational oil and gas services
company,” said Sherif Foda, Chairman of the Board and CEO of NESR. “We combined two exceptional service companies to form the first
and only listed national services provider in the MENA region. I would like to thank our employees for all of their hard work
during this transition and for their passion and support as we make NESR a world-class services company.”
Mr. Foda continued, “We are proud to be the largest regionally-focused OFS player, and we believe there are many
opportunities to grow over the coming years due to a special set of competitive strengths. We are a comprehensive integrated
service provider with unique exposure to the high-growth MENA region. Our customer base is strong and comprised of both national
and international players. We have a track record of solid growth, both organically and through acquisitions and we have a
motivated and proven management team that is committed to growing our business and creating shareholder value. Post combination,
NESR has already signed new contracts moving us toward our vision for significant growth and presence in the region.”
Predecessor/Successor Accounting Treatment
The quarterly information included in the 6-K filed today includes accounting treatment for the combination
designating the NPS subsidiary as Predecessor accounting entity and a combined Successor accounting entity beginning June
7th. The one month of successor company results totaled a loss of $4.0 million which was influenced by transaction costs
triggered at the time of combination as well as monthly amortization associated with our customer intangible. These two items had
an impact on net income of $8.8 million. The NPS predecessor accounting period includes net income of $6.7 million through May of
2018. Due to the unique accounting treatment involved, neither the NESR parent company nor the GES results of operations for April
and May 2018 are reflected in the statement of operations.
Production Services Segment Results
Production Services contributed $76.6 million to consolidated revenue for the combined 2018 Successor second
quarter period and 2018 Predecessor second quarter period, an increase of $18.1 million from $58.5 million for the 2017 Predecessor
second quarter. This increase was due primarily to higher coiled tubing activity in Saudi, Qatar, Iraq, and the United Arab
Emirates as well as the results of combined company activity in the Successor period. See “Business Combination Accounting and
Presentation of Results of Operations” section below for additional information on current reporting conventions.
|
|
Successor (NESR) |
|
|
Predecessor
(NPS) |
|
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
|
June 7, 2018 To
June 30, 2018 |
|
|
April 1 To June
6 |
|
|
January 1 To June
6 |
|
|
April 1 To June
30 |
|
|
January 1 To June
30 |
|
Revenue |
|
$ |
28,602 |
|
|
$ |
48,032 |
|
|
$ |
112,295 |
|
|
$ |
58,545 |
|
|
$ |
105,329 |
|
Segment EBITDA |
|
$ |
8,770 |
|
|
$ |
15,112 |
|
|
$ |
36,836 |
|
|
$ |
20,864 |
|
|
$ |
37,211 |
|
Drilling and Evaluation Services Segment Results
Drilling and Evaluation Services contributed $28.5 million to consolidated revenue for the combined 2018
Successor second quarter period and 2018 Predecessor second quarter period, an increase of $18.5 million from $10.0 million for the
2017 Predecessor second quarter. Apart from the impact of the GES acquisition, this increase was primarily driven by increased well
testing in Saudi and Iraq, further enhanced by an increase in logging and well testing activity in Saudi Arabia.
|
|
Successor (NESR) |
|
|
Predecessor
(NPS) |
|
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
|
June 7, 2018 To
June 30, 2018 |
|
|
April 1 To June
6 |
|
|
January 1 To June
6 |
|
|
April 1 To June
30 |
|
|
January 1 To June
30 |
|
Revenue |
|
$ |
16,384 |
|
|
$ |
12,153 |
|
|
$ |
24,732 |
|
|
$ |
10,044 |
|
|
$ |
17,999 |
|
Segment EBITDA |
|
$ |
1,275 |
|
|
$ |
1,217 |
|
|
$ |
3,267 |
|
|
$ |
1,602 |
|
|
$ |
1,659 |
|
Net Income and Consolidated Adjusted EBITDA Results
The company had Successor period net income for the month of June totaling a loss of $4.0 million including
transaction costs as a result of the combination. Predecessor net income for the first five months of the year was $6.7 million and
Predecessor net income was $1.3 million for the periods of April and May pre-business combination. Net income presented includes
the effect of transaction and integration costs incurred during those periods. On a combined basis, the Company had adjusted EBITDA
of $65.8 million for the 2018 year to date period compared to $62.9 million for the same 2017 period. Adjustments to EBITDA include
transaction and integration costs of $23 million for the 2018 year to date period.
Balance Sheet
Cash and cash equivalents were $36.9 million as of June 30, 2018 (Successor), compared to $27.5 million as of
December 31, 2017 (Predecessor). The Company had $305.7 million in debt as of June 30, 2018 including a $50 million convertible
loan facility with an implied conversion price of 11.244 per share. During July, a refinancing of the bridge loan facility in place
on June 30, 2018 was completed and also entered into a new facility for $50 million of which $25 million has been drawn to date and
the remaining $25 million is available.
About National Energy Services Reunited Corp.
NESR is one of the largest oil and gas services providers in the MENA region. NESR began as a special purpose
acquisition corporation, or SPAC, focused on investing in global oil & gas services space in May 2017. In November 2017, NESR
announced the acquisition of two of the most prominent oilfield services companies in the MENA region: GES and NPS. These
transactions and the formation of NESR as an operating entity were completed in June 2018.
Business Combination Accounting and Presentation of Results of Operations
As a result of the Business Combination, NESR was determined to be the accounting acquirer and NPS was
determined to be the predecessor for SEC reporting purposes. Pursuant to Accounting Standard Codification (“ASC”) 805, Business
Combinations (“ASC 805”), a preliminary assessment was made as of the acquisition-date fair value of the purchase consideration
paid by NESR to effect the Business Combination was allocated to the assets acquired and the liabilities assumed based on their
estimated fair values. As a result of the application of the acquisition method of accounting resulting from the Business
Combination, the financial statements and certain footnote presentations separate our presentations into two distinct sets of
reporting periods, the periods before the consummation of the transaction (“Predecessor Periods”) and the period after that date
(“Successor Period”), to indicate the application of the different basis of accounting between the periods presented. The
Predecessor Periods reflect the historical financial information of NPS prior to the Business Combination, while the Successor
Period reflects our consolidated financial information, including the results of NPS and GES, after the Business Combination. The
Successor Period is from June 7, 2018 to June 30, 2018 and the Predecessor Periods are from April 1, 2018 to June 6, 2018, for the
three months ended June 30, 2017, January 1, 2018 to June 6, 2018 and for the six months ended June 30, 2017.
Note
This communication includes certain statements that may constitute “forward-looking statements” for purposes of
the federal securities laws. Forward-looking statements include, but are not limited to, statements that refer to projections,
forecasts or other characterizations of future events or circumstances, including any underlying assumptions. The words
“anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intends,” “may,” “might,” “plan,” “possible,” “potential,”
“predict,” “project,” “should,” “would” and similar expressions may identify forward-looking statements, but the absence of these
words does not mean that a statement is not forward-looking. Forward-looking statements may include, among others, statements about
the benefits and synergies of the recently completed business combination transaction. These forward-looking statements are based
on information available as of the date of this communication, and current expectations, forecasts and assumptions, and involve a
number of judgments, risks and uncertainties. Accordingly, forward-looking statements should not be relied upon as representing
NESR’s views as of any subsequent date, and NESR does not undertake any obligation to update forward-looking statements to reflect
events or circumstances after the date they were made, whether as a result of new information, future events or otherwise, except
as may be required under applicable securities laws. You should not place undue reliance on these forward-looking statements. As a
result of a number of known and unknown risks and uncertainties, NESR’s actual results or performance may be materially different
from those expressed or implied by these forward-looking statements. Some factors that could cause actual results to differ include
NESR’s ability to recognize the anticipated benefits of the transaction, which may be affected by, among other things, competition
and the ability of NESR to grow and manage growth profitably following the transaction; changes in applicable laws or regulations;
the possibility that NESR may be adversely affected by other economic, business, and/or competitive factors; and other risks and
uncertainties indicated in NESR’s public filings with the Securities and Exchange Commission.
NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
|
|
Successor (NESR) |
|
|
Predecessor (NPS) |
|
|
|
June 30,
2018 |
|
|
December 31,
2017 |
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
|
36,901 |
|
|
|
27,545 |
|
Accounts receivable |
|
|
86,764 |
|
|
|
58,174 |
|
Unbilled revenue |
|
|
94,195 |
|
|
|
24,167 |
|
Inventories |
|
|
63,503 |
|
|
|
32,313 |
|
Other current assets |
|
|
32,957 |
|
|
|
19,656 |
|
Total current assets |
|
|
314,320 |
|
|
|
161,855 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment |
|
|
324,379 |
|
|
|
264,269 |
|
Intangible assets |
|
|
176,474 |
|
|
|
10 |
|
Goodwill |
|
|
475,663 |
|
|
|
182,053 |
|
Other assets |
|
|
10,021 |
|
|
|
11,385 |
|
Total assets |
|
$ |
1,300,857 |
|
|
$ |
619,572 |
|
|
|
|
|
|
|
|
|
|
Liabilities and equity |
|
|
|
|
|
|
|
|
Accounts payable |
|
|
75,244 |
|
|
|
25,132 |
|
Accrued expenses |
|
|
62,922 |
|
|
|
23,324 |
|
Current portion of loans and borrowings |
|
|
16,368 |
|
|
|
- |
|
Short-term borrowings |
|
|
118,411 |
|
|
|
8,773 |
|
Other current liabilities |
|
|
39,909 |
|
|
|
5,228 |
|
Total current liabilities |
|
|
312,854 |
|
|
|
62,457 |
|
|
|
|
|
|
|
|
|
|
Loans and borrowings |
|
|
170,890 |
|
|
|
147,024 |
|
Other liabilities |
|
|
25,095 |
|
|
|
20,662 |
|
Total liabilities |
|
|
508,839 |
|
|
|
230,143 |
|
|
|
|
|
|
|
|
|
|
Commitments |
|
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Successor preferred shares, no par value; unlimited shares authorized; none issued
and outstanding |
|
|
- |
|
|
|
- |
|
Predecessor common stock, par value $1; 370,000,000 shares authorized; 342,250,000
shares issued and outstanding at December 31, 2017 |
|
|
- |
|
|
|
342,250 |
|
Successor common stock, no par value; unlimited shares authorized; 85,562,769
shares issued and outstanding at June 30, 2018 |
|
|
801,545 |
|
|
|
- |
|
Predecessor convertible redeemable shares |
|
|
- |
|
|
|
27,750 |
|
Additional paid in capital |
|
|
- |
|
|
|
3,345 |
|
Retained earnings (accumulated deficit) |
|
|
(7,362 |
) |
|
|
18,480 |
|
Accumulated other comprehensive (loss) income |
|
|
- |
|
|
|
(436 |
) |
Total shareholders’ equity |
|
|
794,183 |
|
|
|
391,389 |
|
Non-controlling interests |
|
|
(2,165 |
) |
|
|
(1,960 |
) |
Total equity |
|
|
792,018 |
|
|
|
389,429 |
|
Total liabilities and equity |
|
$ |
1,300,857 |
|
|
$ |
619,572 |
|
The accompanying notes are an integral part of the unaudited condensed consolidated financial
statements.
NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(In thousands, except share data)
|
|
Successor (NESR) |
|
|
Predecessor
(NPS) |
|
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
|
Period from
June 7 to
June 30, 2018 |
|
|
Period from
April 1 to
June 6 |
|
|
Period from
January 1 to
June 6 |
|
|
Period from
April 1 to
June 30 |
|
|
Period from
January 1 to
June 30 |
|
Revenues |
|
|
44,986 |
|
|
|
60,185 |
|
|
|
137,027 |
|
|
|
68,589 |
|
|
|
123,328 |
|
Cost of product and services |
|
|
(37,055 |
) |
|
|
(46,070 |
) |
|
|
(104,242 |
) |
|
|
(50,418 |
) |
|
|
(92,171 |
) |
Gross profit |
|
|
7,931 |
|
|
|
14,115 |
|
|
|
32,785 |
|
|
|
18,171 |
|
|
|
31,157 |
|
Selling, general and administrative expense |
|
|
(9,021 |
) |
|
|
(10,469 |
) |
|
|
(19,969 |
) |
|
|
(7,642 |
) |
|
|
(15,338 |
) |
Amortization |
|
|
(1,536 |
) |
|
|
(10 |
) |
|
|
(10 |
) |
|
|
(73 |
) |
|
|
(146 |
) |
Operating income (loss) |
|
|
(2,626 |
) |
|
|
3,636 |
|
|
|
12,806 |
|
|
|
10,456 |
|
|
|
15,673 |
|
Interest expense, net |
|
|
(1,900 |
) |
|
|
(1,265 |
) |
|
|
(4,090 |
) |
|
|
(1,700 |
) |
|
|
(3,273 |
) |
Other (expense) income, net |
|
|
(468 |
) |
|
|
271 |
|
|
|
362 |
|
|
|
(297 |
) |
|
|
(188 |
) |
Income (loss) before income taxes |
|
|
(4,994 |
) |
|
|
2,642 |
|
|
|
9,078 |
|
|
|
8,459 |
|
|
|
12,212 |
|
Income taxes |
|
|
1,029 |
|
|
|
(1,359 |
) |
|
|
(2,342 |
) |
|
|
(1,043 |
) |
|
|
(1,954 |
) |
Net income (loss) |
|
|
(3,965 |
) |
|
|
1,283 |
|
|
|
6,736 |
|
|
|
7,416 |
|
|
|
10,258 |
|
Net income (loss) attributable to non-controlling interests |
|
|
(219 |
) |
|
|
(541 |
) |
|
|
(881 |
) |
|
|
(640 |
) |
|
|
(1,213 |
) |
Net income (loss) attributable to shareholders |
|
|
(3,746 |
) |
|
|
1,824 |
|
|
|
7,617 |
|
|
|
8,056 |
|
|
|
11,471 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
85,562,769 |
|
|
|
348,524,566 |
|
|
|
348,524,566 |
|
|
|
342,250,000 |
|
|
|
342,250,000 |
|
Diluted |
|
|
85,562,769 |
|
|
|
370,000,000 |
|
|
|
370,000,000 |
|
|
|
370,000,000 |
|
|
|
370,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net earnings (loss) per share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
(0.05 |
) |
|
|
0.00 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.03 |
|
Diluted |
|
|
(0.05 |
) |
|
|
0.00 |
|
|
|
0.02 |
|
|
|
0.02 |
|
|
|
0.03 |
|
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF
COMPREHENSIVE INCOME (LOSS)
(Unaudited)
(In thousands)
|
|
Successor (NESR) |
|
|
Predecessor
(NPS) |
|
|
|
2018 |
|
|
2018 |
|
|
2017 |
|
|
|
Period from
June 7 to
June 30, 2018 |
|
|
Period from April 1 to
June 6 |
|
|
Period from January 1
to June 6 |
|
|
Period from April 1 to
June 30 |
|
|
Period from January 1
to June 30 |
|
Net income (loss) |
|
|
(3,965 |
) |
|
|
1,283 |
|
|
|
6,736 |
|
|
|
7,416 |
|
|
|
10,258 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss), net of taxes: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustments |
|
|
- |
|
|
|
(17 |
) |
|
|
(16 |
) |
|
|
(26 |
) |
|
|
(26 |
) |
Other comprehensive earnings (loss) |
|
|
(3,965 |
) |
|
|
1,266 |
|
|
|
6,720 |
|
|
|
7,390 |
|
|
|
10,232 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive earnings (loss) |
|
|
(3,965 |
) |
|
|
1,266 |
|
|
|
6,720 |
|
|
|
7,390 |
|
|
|
10,232 |
|
The accompanying notes are an integral part of the unaudited condensed consolidated financial statements.
NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS SHAREHOLDERS' EQUITY
(In thousands, except share data)
Predecessor (NPS) |
|
Shares
Outstanding |
|
|
Common
Stock |
|
|
Redeemable Convertible
Shares Outstanding |
|
|
Redeemable Convertible
Shares |
|
|
Additional Paid In
Capital |
|
|
Accumulated Other
Comprehensive Income (Loss) |
|
|
Retained Earnings
(Accumulated Deficit) |
|
|
Total
Company Stockholders’ Equity |
|
|
Non-
controlling Interests |
|
|
Total Stockholders’
Equity |
|
Balance at January 1, 2018 |
|
|
342,250,000 |
|
|
$ |
342,250 |
|
|
|
27,750,000 |
|
|
$ |
27,750 |
|
|
$ |
3,345 |
|
|
$ |
(436 |
) |
|
$ |
18,480 |
|
|
$ |
391,389 |
|
|
$ |
(1,960 |
) |
|
$ |
389,429 |
|
Net income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7,617 |
|
|
|
7,617 |
|
|
|
(881 |
) |
|
|
6,736 |
|
Foreign currency translation adjustments |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(16 |
) |
|
|
|
|
|
|
(16 |
) |
|
|
|
|
|
|
(16 |
) |
Conversion of redeemable shares |
|
|
6,274,566 |
|
|
|
6,275 |
|
|
|
(6,274,566 |
) |
|
|
(6,275 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
- |
|
Dividends paid |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(48,210 |
) |
|
|
(48,210 |
) |
|
|
|
|
|
|
(48,210 |
) |
Amount of provision for Zakat |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(766 |
) |
|
|
(766 |
) |
|
|
|
|
|
|
(766 |
) |
Balance at June 6, 2018 |
|
|
348,524,566 |
|
|
$ |
348,525 |
|
|
|
21,475,434 |
|
|
$ |
21,475 |
|
|
$ |
3,345 |
|
|
$ |
(452 |
) |
|
$ |
(22,879 |
) |
|
$ |
350,014 |
|
|
$ |
(2,841 |
) |
|
$ |
347,173 |
|
|
|
Ordinary
Shares |
|
|
Redeemable Convertible Shares |
|
|
Additional Paid In |
|
|
Accumulated Other Comprehensive |
|
|
Retained Earnings (Accumulated |
|
|
Total Shareholders’ |
|
|
Non-
controlling |
|
|
Total |
|
Successor (NESR) |
|
Shares |
|
|
Amount |
|
|
Outstanding |
|
|
Capital |
|
|
Income
(Loss) |
|
|
Deficit) |
|
|
Equity |
|
|
Interests |
|
|
Equity |
|
Balance at June 7, 2018 |
|
|
11,730,425 |
|
|
$ |
56,602 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$ |
(4,611 |
) |
|
$ |
51,991 |
|
|
|
|
|
|
$ |
51,991 |
|
Reclassification of shares previously subject to redemption |
|
|
16,921,700 |
|
|
|
165,188 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
165,188 |
|
|
|
|
|
|
|
165,188 |
|
Redeemed shares |
|
|
(1,916,511 |
) |
|
|
(19,380 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(19,380 |
) |
|
|
|
|
|
|
(19,380 |
) |
Shares issued to acquire NPS |
|
|
25,077,277 |
|
|
|
255,537 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
255,537 |
|
|
|
|
|
|
|
255,537 |
|
Shares issued to acquire GES |
|
|
28,346,229 |
|
|
|
288,848 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
288,848 |
|
|
|
|
|
|
|
288,848 |
|
Shares issued to related party for loan fee and transaction costs |
|
|
266,809 |
|
|
|
2,719 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2,719 |
|
|
|
|
|
|
|
2,719 |
|
Shares issued to Backstop Investor |
|
|
4,829,375 |
|
|
|
48,294 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
48,294 |
|
|
|
|
|
|
|
48,294 |
|
Shares issued for IPO underwriting fees |
|
|
307,465 |
|
|
|
3,737 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
3,737 |
|
|
|
|
|
|
|
3,737 |
|
Non-controlling interest |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
|
|
(951 |
) |
|
|
(951 |
) |
Acquisition of non-controlling interest during the period |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
995 |
|
|
|
995 |
|
|
|
(995 |
) |
|
|
- |
|
Net Income (loss) through June 30, 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(3,746 |
) |
|
|
(3,746 |
) |
|
|
(219 |
) |
|
|
(3,965 |
) |
Balance at June 30, 2018 |
|
|
85,562,769 |
|
|
$ |
801,545 |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
- |
|
|
$ |
(7,362 |
) |
|
$ |
794,183 |
|
|
$ |
(2,165 |
) |
|
$ |
792,018 |
|
The accompanying notes are an integral part of the condensed consolidated interim financial statements.
NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
|
|
Successor
(NESR) |
|
|
Predecessor
(NPS) |
|
|
|
Period from
June 7 to
June 30, 2018 |
|
|
Period from January 1
to
June 6, 2018 |
|
|
Period from January 1
to
June 30, 2017 |
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) |
|
|
(3,965 |
) |
|
|
6,736 |
|
|
|
10,258 |
|
Adjustments to reconcile net income (loss) to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
6,460 |
|
|
|
17,284 |
|
|
|
18,570 |
|
Shares issued for transaction costs |
|
|
2,175 |
|
|
|
- |
|
|
|
- |
|
Gain (loss) on disposal of assets, net |
|
|
(281 |
) |
|
|
- |
|
|
|
(73 |
) |
Allowance for doubtful accounts |
|
|
- |
|
|
|
2,402 |
|
|
|
83 |
|
Accrued interest |
|
|
1,899 |
|
|
|
3,350 |
|
|
|
3,273 |
|
Other, net |
|
|
603 |
|
|
|
1,442 |
|
|
|
887 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
(Increase) decrease in accounts receivable |
|
|
801 |
|
|
|
(15 |
) |
|
|
(6,430 |
) |
(Increase) decrease in inventories |
|
|
(35 |
) |
|
|
(2,080 |
) |
|
|
(3,268 |
) |
(Increase) decrease in prepaid expenses |
|
|
462 |
|
|
|
(759 |
) |
|
|
(903 |
) |
(Increase) decrease in other current assets and unbilled revenue |
|
|
(8,387 |
) |
|
|
(16,257 |
) |
|
|
3,590 |
|
Increase) decrease in other long term assets |
|
|
2,039 |
|
|
|
(544 |
) |
|
|
(6,875 |
) |
(Decrease) increase accounts payable and accrued liabilities |
|
|
13,397 |
|
|
|
7,335 |
|
|
|
3,748 |
|
Increase (decrease) in other current liabilities |
|
|
(844 |
) |
|
|
1,932 |
|
|
|
1,397 |
|
Net cash provided by operating activities |
|
|
14,324 |
|
|
|
20,826 |
|
|
|
24,257 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from the Company’s Trust account |
|
|
231,782 |
|
|
|
- |
|
|
|
- |
|
Capital expenditures |
|
|
(2,157 |
) |
|
|
(9,861 |
) |
|
|
(20,192 |
) |
Acquisition of business, net of cash acquired |
|
|
(282,190 |
) |
|
|
(1,098 |
) |
|
|
(625 |
) |
Other investing activities |
|
|
330 |
|
|
|
- |
|
|
|
73 |
|
Net cash used in investing activities |
|
|
(52,235 |
) |
|
|
(10,959 |
) |
|
|
(20,744 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Redemption of ordinary shares |
|
|
(19,380 |
) |
|
|
- |
|
|
|
- |
|
Proceeds from issuance of shares |
|
|
48,294 |
|
|
|
- |
|
|
|
- |
|
Proceeds from borrowings |
|
|
- |
|
|
|
47,063 |
|
|
|
- |
|
Payment of deferred underwriting fees |
|
|
(5,333 |
) |
|
|
(164 |
) |
|
|
(2,885 |
) |
Proceeds from lines of credit and other debt |
|
|
50,000 |
|
|
|
- |
|
|
|
923 |
|
Dividend paid |
|
|
- |
|
|
|
(48,210 |
) |
|
|
- |
|
Other financing activities, net |
|
|
1,185 |
|
|
|
(4,429 |
) |
|
|
(1,240 |
) |
Net cash provided by (used in) financing activities |
|
|
74,766 |
|
|
|
(5,740 |
) |
|
|
(3,202 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
- |
|
|
|
(16 |
) |
|
|
(26 |
) |
Net increase in cash |
|
|
36,855 |
|
|
|
4,111 |
|
|
|
285 |
|
Cash, beginning of period |
|
|
46 |
|
|
|
27,545 |
|
|
|
25,534 |
|
Cash, end of period |
|
|
36,901 |
|
|
|
31,656 |
|
|
|
25,819 |
|
Supplemental disclosures of cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
Cash payments during the year: |
|
|
|
|
|
|
|
|
|
|
|
|
Interest |
|
|
143 |
|
|
|
3,636 |
|
|
|
3,090 |
|
Income taxes |
|
|
3,061 |
|
|
|
345 |
|
|
|
482 |
|
NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
RECONCILIATION OF ADJUSTED EBITDA TO NET INCOME
(Unaudited)
(In thousands)
The Company uses and presents certain key non-GAAP financial measures to evaluate its business and trends,
measure performance, prepare financial projections and make strategic decisions. Included in this earnings release are discussions
of earnings before interest, income tax and depreciation and amortization adjusted for certain non-recurring and non-core expenses
(“Adjusted EBITDA”), as well a reconciliation of this non-GAAP measure to net income in accordance with U.S. GAAP.
The Company believes that the presentation of Adjusted EBITDA provides useful information to investors in
assessing its financial performance and results of operations as the Company’s board of directors, management and investors use
Adjusted EBITDA to compare the Company’s operating performance on a consistent basis across periods by removing the effects of
changes in capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization and
impairment), items that do not impact the ongoing operations (Business Combination transaction expenses and related integration
costs) and items outside the control of its management team. Adjusted EBITDA should not be considered as an alternative to net
income, the most directly comparable GAAP financial measure. Non-GAAP financial measures have important limitations as analytical
tools because they exclude some but not all items that affect the most directly comparable GAAP financial measure. You should not
consider non-GAAP measures in isolation or as a substitute for an analysis of the Company’s results as reported under U.S.
GAAP.
|
|
Successor (NESR) |
|
|
Predecessor (NPS) |
|
|
NESR and GES |
|
|
Combined |
|
|
|
June 7, 2018 to June
30, 2018 |
|
|
January 1 To June 6,
2018 |
|
|
January 1 To June 6,
2018 |
|
|
YTD January 1 To June
30, 2018 |
|
Net Income (loss) |
|
|
(3,965 |
) |
|
|
6,736 |
|
|
|
(2,191 |
) |
|
|
580 |
|
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
Income Taxes |
|
|
(1,029 |
) |
|
|
2,342 |
|
|
|
1,363 |
|
|
|
2,676 |
|
Interest Expense, net |
|
|
1,900 |
|
|
|
4,090 |
|
|
|
1,106 |
|
|
|
7,096 |
|
Depreciation and Amortization |
|
|
6,460 |
|
|
|
17,284 |
|
|
|
8,791 |
|
|
|
32,535 |
|
Transaction and Integration Costs |
|
|
7,832 |
|
|
|
8,333 |
|
|
|
6,894 |
|
|
|
23,059 |
|
Total Adjusted EBITDA |
|
|
11,198 |
|
|
|
38,785 |
|
|
|
15,963 |
|
|
|
65,946 |
|
Conference Call Information
NESR will host a conference call on Monday, August 20, 2018, to discuss the second quarter 2018 financial
results. The call will begin at 8:00 AM Central Time (9:00 AM Eastern Time).
Investors, analysts and members of the media interested in listening to the call are encouraged to participate
by dialing into the toll-free line at 1-888-204-4368 or the international line at 1-323-994-2082. A live, listen-only webcast will
also be available in the investors section of www.nesr.com. To hear a replay of the call, please dial into
the toll-free line at 1-844-512-2921 or the international line at 1-412-317-6671 and enter pin number 2303276.
For inquiries regarding NESR, please contact: Dhiraj Dudeja NESR Corp. 832-925-3777 info@nesrco.com or Joseph Caminiti or Steve Calk Alpha IR Group 312-445-2870 NESR@alpha-ir.com