National Energy Services Reunited Corp. Reports Fourth Quarter 2020 Financial Results
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National Energy Services Reunited Corp. Reports Fourth Quarter 2020 Financial Results

Wednesday, February 24, 2021 5:00 AM
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HOUSTON, TX / ACCESSWIRE / February 24, 2021 / National Energy Services Reunited Corp. ("NESR" or the "Company") (NASDAQ:NESR)(NASDAQ:NESRW), a national, industry-leading provider of integrated energy services in the Middle East and North Africa ("MENA") and Asia Pacific regions, today reported its financial results for the quarter ended December 31, 2020. The Company posted the following results for the periods presented:

  • Revenue for the full year 2020 is $834 million, growing 27% year-over-year
  • Revenue for the fourth quarter of 2020 is $213 million, growing 15% year-over-year and decreased 2% quarter-over-quarte
  • Free cash flow (a non-GAAP measure) for the fourth quarter of 2020 is $33 million, improving $25 million over the sequential quarter and $7 million year-over-year*
  • Net Income for the fourth quarter of 2020 is $17 million, growing 344% year-over-year and 42% over the sequential quarter
  • Adjusted Net Income (a non-GAAP measure) for the fourth quarter of 2020 is $18 million*
  • Adjusted EBITDA (a non-GAAP measure) is $55 million, an increase of 6% year-over-year*
  • Diluted Earnings per Share ("EPS") for the fourth quarter of 2020 is $0.18
  • Adjusted Diluted EPS (a non-GAAP measure) for the fourth quarter of 2020 is $0.20*
 
 
Three Months Ended
 
 
Variance
 
(in thousands except per share amounts and percentages)
 
December 31,
2020
 
 
September 30,
2020
 
 
December 31,
2019
 
 
Sequential
 
 
Year-over-year
 
                             
Revenue
  $ 213,175     $ 218,423     $ 185,176       (2 )%     15 %
Net income
    16,518       11,666       3,724       42 %     344 %
Adjusted net income (non-GAAP)*
    18,454       14,165       18,948       30 %     (3 )%
Adjusted EBITDA (non-GAAP)*
    54,615       55,803       51,749       (2 )%     6 %
Diluted EPS
    0.18       0.13       0.04       38 %     350 %
Adjusted Diluted EPS (non-GAAP)*
    0.20       0.16       0.21       25 %     (5 )%
Free cash flow (non-GAAP)*
    33,290       8,668       26,027       24,622       7,263  

*The Company presents its financial results in accordance with generally accepted accounting principles in the United States of America ("GAAP"). However, management believes that using additional non-GAAP measures will enhance the evaluation of the profitability of the Company and its ongoing operations. Please see Tables 1, 2, 3, 4, 5 and 6 below for reconciliations of GAAP to non-GAAP financial measures.

Sherif Foda, Chairman of the Board and CEO of NESR, said, "NESR delivered another solid quarter despite ongoing regional and global turbulence from the coronavirus pandemic. Commercially, our team's focus on free cash flow and strengthening our balance sheet resulted in incremental free cash flow on both a year-over-year and sequential quarter basis. Operationally, we continue to demonstrate our core values of being the National Champion for MENA and generating In-Country value with the announcements of a well testing win in Kuwait and a partnership with a significant customer in Oman to create 600 new jobs for Omanis, respectively."

Mr. Foda continued, "Additionally, last month, NESR participated in the 2021 Future Investment Initiative in Riyadh, Saudi Arabia, where we announced the creation of our ESG Impact Segment. The announcement highlighted NESR's commitment to improving the industry ESG performance and delivering services that seek to mitigate climate change, enhance water management and conservation, minimize environmental waste in the industry, and provide innovative energy solutions."

Net Income Results

Net income for the fourth quarter of 2020 is $16.5 million. Adjusted net income for the fourth quarter of 2020 is $18.5 million and includes adjustments totaling $1.9 million (collectively, "Total Charges and Credits") mainly related to integration costs associated with the acquisition of SAPESCO in Egypt and restructuring activities. A complete list of the adjusting items and the associated reconciliation from GAAP has been provided in Table 1 below in the section entitled "Reconciliation of Net Income and Adjusted Net Income."

The Company reported $0.18 of diluted earnings per share ("EPS") for the fourth quarter of 2020. Adjusted for the impact of Total Charges and Credits, Adjusted Diluted EPS, a non-GAAP measure described in Table 1 below, for the fourth quarter of 2020 is $0.20.

Adjusted EBITDA Results

The Company produced Adjusted EBITDA of $54.6 million during the fourth quarter of 2020, growing 6% as compared to $51.7 million in the fourth quarter of 2019. Fourth quarter 2020 Adjusted EBITDA includes adjustments for certain Total Charges and Credits (those not related to interest, taxes, and/or depreciation and amortization) of $1.9 million. Included in our results are gains of $9.6 million on lower realized earnout payments on the recent transaction and an unfavorable non-cash charge of $3 million for end of service liabilities. The Company posted the following results for the periods presented.

(in thousands)
 
Quarter ended
December 31, 2020
   
Quarter ended
September 30, 2020
   
Quarter ended
December 31, 2019
 
Revenue
  $ 213,175     $ 218,423     $ 185,176  
Adjusted EBITDA
  $ 54,615     $ 55,803     $ 51,749  

Production Services Segment Results

The Production Services segment contributed $135.6 million to consolidated revenue for the fourth quarter of 2020, an improvement of 12% from $121.0 million in the fourth quarter of 2019. Segment Adjusted EBITDA, a non-GAAP measure, was $38.7 million for the fourth quarter of 2020. Adjusted EBITDA margins were substantially flat on a sequential quarter basis and down slightly year-over-year due to product mix. The Production Services segment posted the following results for the periods presented.

(in thousands)
 
Quarter ended
December 31, 2020
   
Quarter ended
September 30, 2020
   
Quarter ended
December 31, 2019
 
Revenue
  $ 135,605     $ 148,292     $ 121,023  
Operating income
  $ 11,502     $ 21,425     $ 14,610  
Adjusted EBITDA
  $ 38,705     $ 42,891     $ 40,434  

Drilling and Evaluation Services Segment Results

The Drilling and Evaluation ("D&E") Services segment contributed $77.6 million to consolidated revenue, a one-quarter record, for the fourth quarter of 2020. D&E segment revenue increased 11% as compared to the sequential quarter and 21% as compared to the prior year quarter. Segment Adjusted EBITDA, a non-GAAP measure, totaled $19.6 million in the fourth quarter of 2020, growing 19% as compared to $16.5 million in the third quarter of 2020 and 44% as compared to $13.6 million in the fourth quarter of 2019. Adjusted EBITDA Margins improved on both a sequential quarter and year-over-year basis from 24% and 21%, respectively, to 25%, on the strength of revenue growth.

The D&E Services segment posted the following results for the periods presented.

(in thousands)
 
Quarter ended
December 31, 2020
   
Quarter ended
September 30, 2020
   
Quarter ended
December 31, 2019
 
Revenue
  $ 77,570     $ 70,131     $ 64,153  
Operating income
  $ 8,812     $ 7,377     $ 4,956  
Adjusted EBITDA
  $ 19,588     $ 16,492     $ 13,645  

Offsetting both the Production Services segment and D&E Services segment results were certain corporate costs, which are not allocated to segment operations.

Balance Sheet

Cash and cash equivalents are $75.0 million as of December 31, 2020, compared to $73.2 million as of December 31, 2019.

Total debt as of December 31, 2020 is $398.5 million with $89.9 million of such debt classified as short-term. Working capital totaled $160.0 million as of December 31, 2020. Free cash flow, a non-GAAP measure, for the fourth quarter of 2020 is $33.3 million, improving by $24.6 million as compared to the third quarter of 2020 and $7.3 million as compared to the fourth quarter of 2019. Net Debt, which is the sum of our recorded Current installments of long-term debt, Short-term borrowings, and Long-term debt less Cash and cash equivalents, totaled $323.5 million as of December 31, 2020 as compared to $349.4 million as of September 30, 2020 and $310.3 million as of December 31, 2019. Net Debt has decreased quarter-over-quarter due to improved free cash flows and debt payments. Year-over-year, Net Debt has increased to fund the SAPESCO acquisition and working capital growth. A reconciliation of the comparable GAAP measures to Net Debt is provided in Table 6 below, entitled "Reconciliation to Net Debt."

Conference Call Information

NESR will host a conference call on Wednesday, February 24, 2021, to discuss fourth quarter financial results. The call will begin at 8:00 AM Eastern Time.

Investors, analysts and members of the media interested in listening to the conference call are encouraged to participate by dialing in to the U.S. toll-free line at 1-877-407-0312 or the international line at 1-201-389-0899. A live, listen-only webcast will also be available under the "Investors" section of the Company's website at www.nesr.com. A replay of the conference call will be available after the event under the "Investors" section of the Company's website.

About National Energy Services Reunited Corp.

Founded in 2017, NESR is one of the largest national oilfield services providers in the MENA and Asia Pacific regions. With over 5,000 employees, representing more than 60 nationalities in over 15 countries, the Company helps its customers unlock the full potential of their reservoirs by providing Production Services such as Hydraulic Fracturing, Cementing, Coiled Tubing, Filtration, Completions, Stimulation, Pumping and Nitrogen Services. The Company also helps its customers to access their reservoirs in a smarter and faster manner by providing Drilling and Evaluation Services such as Drilling Downhole Tools, Directional Drilling, Fishing Tools, Testing Services, Wireline, Slickline, Drilling Fluids and Rig Services.

Forward-Looking Statements

This communication contains forward-looking statements (as such term is defined in Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended). Any and all statements contained in this communication that are not statements of historical fact, including statements regarding the impact of the COVID-19 pandemic and the Company's response to COVID-19, may be deemed forward-looking statements. Terms such as "may," "might," "would," "should," "could," "project," "estimate," "predict," "potential," "strategy," "anticipate," "attempt," "develop," "plan," "help," "believe," "continue," "intend," "expect," "future," and terms of similar import (including the negative of any of these terms) may identify forward-looking statements. However, not all forward-looking statements may contain one or more of these identifying terms. Forward-looking statements in this communication may include, without limitation, the plans and objectives of management for future operations, projections of income or loss, earnings or loss per share, capital expenditures, dividends, capital structure or other financial items, the Company's future financial performance, expansion plans and opportunities, completion and integration of acquisitions including the closed SAPESCO acquisition, and the assumptions underlying or relating to any such statement.

The forward-looking statements are not meant to predict or guarantee actual results, performance, events or circumstances and may not be realized because they are based upon the Company's current projections, plans, objectives, beliefs, expectations, estimates and assumptions and are subject to a number of risks and uncertainties and other influences, many of which the Company has no control over. Actual results and the timing of certain events and circumstances may differ materially from those described by the forward-looking statements as a result of these risks and uncertainties. Factors that may influence or contribute to the accuracy of the forward-looking statements or cause actual results to differ materially from expected or desired results may include, without limitation: changing commodity prices, market volatility and other market trends that affect our customers' demand for our services; disruptions to economic and market conditions caused by the coronavirus (COVID-19) and other public health crises and threats; [the level of capital spending and access to capital markets by oil and gas companies;] political, market, financial and regulatory risks, including those related to the geographic concentration of our customers; our operations, including maintenance, upgrades and refurbishment of our assets, may require significant capital expenditures, which may or may not be available to us; operating hazards inherent in our industry and the ability to secure sufficient indemnities and insurance; our ability to successfully integrate acquisitions; [the impact of industry consolidation on our results]; competition, including for capital and technological advances; and other risks and uncertainties set forth in the Company's most recent Annual Report on Form 20-F filed with the Securities and Exchange Commission (the "SEC").

You are cautioned not to place undue reliance on forward-looking statements because of the risks and uncertainties related to them and to the risk factors. The Company disclaims any obligation to update the forward-looking statements contained in this communication to reflect any new information or future events or circumstances or otherwise, except as required by law. You should read this communication in conjunction with other documents which the Company may file or furnish from time to time with the SEC.

The preliminary financial results for the Company's fourth quarter ended December 31, 2020 included in this press release represent the most current information available to management. The Company's actual results when disclosed in its Periodic Report on Form 6-K for the quarter ended December 31, 2020 may differ from these preliminary results as a result of the completion of the Company's financial statement closing procedures, final adjustments, completion of the independent registered public accounting firm's review procedures, and other developments that may arise between now and the disclosure of the final results.

NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS

(In US$ thousands, except share data)

 
  December 31, 2020     December 31, 2019  
 
           
Assets
           
Current assets
           
Cash and cash equivalents
  $ 75,017     $ 73,201  
Accounts receivable, net
    117,303       98,799  
Unbilled revenue
    158,457       76,347  
Service inventories, net
    94,263       78,841  
Prepaid assets
    11,320       9,590  
Retention withholdings
    36,773       40,970  
Other receivables
    19,094       14,019  
Other current assets
    4,025       11,442  
Total current assets
    516,252       403,209  
Non-current assets
               
Property, plant and equipment, net
    434,374       419,307  
Intangible assets, net
    110,376       122,714  
Goodwill
    619,778       574,764  
Other assets
    2,797       2,370  
Total assets
  $ 1,683,577     $ 1,522,364  
 
               
Liabilities and equity
               
Liabilities
               
Accounts payable
    141,021       65,704  
Accrued expenses
    73,627       69,137  
Current installments of long-term debt
    47,500       15,000  
Short-term borrowings
    42,360       37,963  
Income taxes payable
    9,539       7,542  
Other taxes payable
    11,289       7,189  
Other current liabilities
    30,926       25,601  
Total current liabilities
    356,262       228,136  
 
               
Long-term debt
    308,614       330,564  
Deferred tax liabilities
    21,600       26,217  
Employee benefit liabilities
    21,515       16,745  
Other liabilities
    31,168       34,230  
Total liabilities
    739,159       635,892  
 
               
Commitments and contingencies
    -       -  
 
               
Equity
               
Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at December 31, 2020 and December 31, 2019, respectively
    -       -  
Common stock and additional paid in capital, no par value; unlimited shares authorized; 87,777,553 and 87,187,289 shares issued and outstanding at December 31, 2020 and December 31, 2019, respectively
    826,614       818,782  
Retained earnings
    117,748       67,661  
Accumulated other comprehensive income
    64       29  
Total shareholders' equity
    944,426       886,472  
Non-controlling interests
    (8 )     -  
Total equity
    944,418       886,472  
Total liabilities and equity
  $ 1,683,577     $ 1,522,364  

NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS

(In US$ thousands, except share data and per share amounts)

 
  Quarter ended     Year-to-date period ended  
Description
  December 31,
2020
    December 31,
2019
    December 31,
2020
    December 31,
2019
 
 
                       
Revenues
  $ 213,175     $ 185,176     $ 834,146     $ 658,385  
Cost of services
    (178,154 )     (154,083 )     (678,720 )     (506,799 )
Gross profit
    35,021       31,093       155,426       151,586  
Selling, general and administrative expenses
    (18,887 )     (17,248 )     (72,077 )     (63,840 )
Amortization
    (3,962 )     (3,896 )     (15,817 )     (15,932 )
Operating income
    12,172       9,949       67,532       71,814  
Interest expense, net
    (3,411 )     (4,280 )     (15,879 )     (18,971 )
Other income / (expense), net
    9,522       221       9,139       (408 )
Income before income tax
    18,283       5,890       60,792       52,435  
Income tax expense
    (1,765 )     (2,166 )     (10,705 )     (13,071 )
Net income
    16,518       3,724       50,087       39,364  
Net income / (loss) attributable to non-controlling interests
    -       -       -       -  
Net income attributable to shareholders
  $ 16,518     $ 3,724     $ 50,087     $ 39,364  
 
                               
Weighted average shares outstanding:
                               
Basic
    90,017,834       87,168,937       88,845,618       86,997,554  
Diluted
    90,162,873       87,168,937       88,990,657       86,997,554  
 
                               
Net earnings per share:
                               
Basic
  $ 0.18     $ 0.04     $ 0.56     $ 0.45  
Diluted
  $ 0.18     $ 0.04     $ 0.56     $ 0.45  

NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In US$ thousands)

 
  Year-to date period ended     Quarter ended  
 
  December 31, 2020     December 31, 2019     December 31, 2019  
 
                 
Cash flows from operating activities:
                 
Net income
  $ 50,087     $ 39,364     $ 16,518  
Adjustments to reconcile net income to net cash provided by operating activities:
                       
Depreciation and amortization
    120,778       88,111       28,995  
Shares issued for transaction costs
    -       -       -  
Share-based compensation expense
    7,832       5,654       1,990  
Loss (Gain) on disposal of assets
    1,946       (1,659 )     1,258  
Non-cash interest expense
    (271 )     1,884       (153 )
Deferred tax expense (benefit)
    (4,617 )     (3,935 )     (1,285 )
Allowance for doubtful receivables
    188       1,771       285  
Provision for obsolete service inventories
    1,071       622       250  
Equity stock-earn outs
    (9,619 )     -       (9,619 )
Other operating activities, net
    579       90       763  
Changes in operating assets and liabilities:
                       
(Increase) decrease in accounts receivable
    (2,565 )     (39,176 )     10,658  
(Increase) decrease in Unbilled revenue
    (74,455 )     19,171       (950 )
(Increase) decrease in Retention withholdings
    6,367       (18,960 )     (7,514 )
(Increase) in inventories
    (12,535 )     (21,312 )     (1,780 )
(Increase) in prepaid expenses
    (1,051 )     (2,573 )     (3,053 )
(Increase) decrease in other current assets
    (438 )     374       (2,662 )
(Increase) decrease in other long-term assets and liabilities
    (5,933 )     8,623       (187 )
Increase in accounts payable and accrued expenses
    55,323       19,438       14,353  
Increase (decrease) in other current liabilities
    2,639       (8,396 )     1,405  
Net cash provided by operating activities
    135,326       89,091       49,272  
 
                       
Cash flows from investing activities:
                       
Capital expenditures
    (91,430 )     (107,938 )     (15,982 )
Proceeds from disposal of assets
    (1,363 )     1,625       (2,853 )
Proceeds from the Company's Trust account
    -       -       -  
Acquisition of business, net of cash acquired
    (13,218 )     -       (1,958 )
Other investing activities
    (574 )     (1,025 )     54  
Net cash used in investing activities
    (106,585)       (107,338)       (20,739)  
 
                       
Cash flows from financing activities:
                       
Proceeds from long-term debt
    15,000       365,000       -  
Repayments of long-term debt
    (25,972 )     (285,048 )     (7,500 )
Proceeds from short-term borrowings
    33,753       49,305       18,825  
Repayments of short-term borrowings
    (27,433 )     (56,965 )     (11,604 )
Payments on capital leases
    (19,581 )     -       (3,902 )
Payments on seller-provided financing for capital expenditures
    (2,727 )     -       178  
Proceeds from issuance of shares
    -       -       -  
Redemption of ordinary shares
    -       -       -  
Payment of deferred underwriting fees
    -       -       -  
Dividend paid
    -       -       -  
Other financing activities, net
    -       (5,717 )     -  
Net cash provided by (used in) financing activities
    (26,960)       66,575       (4,003)  
 
                       
Effect of exchange rate changes on cash
    35       (19 )     -  
Net increase (decrease) in cash
    1,816       48,309       24,530  
Cash and cash equivalents, beginning of period
    73,201       24,892       50,487  
Cash and cash equivalents, end of period
  $ 75,017     $ 73,201     $ 75,017  
 
                       
Supplemental disclosure of cash flow information:
                       
Interest paid
    12,667       17,290       2,515  
Income taxes paid
    15,641       19,192       2,999  

NATIONAL ENERGY SERVICES REUNITED CORP. AND SUBSIDIARIES
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(Unaudited)

(In US$ thousands except per share amounts)

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 release are discussions of earnings before interest, income tax and depreciation and amortization adjusted for certain non-recurring and non-core expenses ("Adjusted EBITDA"), net income and diluted earnings per share ("EPS") adjusted for certain non-recurring and non-core expenses ("Adjusted Net Income" and "Adjusted Diluted EPS," respectively), as well as a reconciliation of these non-GAAP measures to operating income, net income, and diluted EPS, respectively, in accordance with GAAP. The Company also discusses the non-GAAP balance sheet measure of the sum of our recorded current installments of long-term debt, short-term borrowings, and long-term debt less cash and cash equivalents ("Net Debt") in this release and provides a reconciliation to the GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings, and long-term debt to Net Debt.

The Company believes that the presentation of Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS 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, Adjusted Net Income, and Adjusted Diluted EPS 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), items that do not impact the ongoing operations (transaction, integration, and startup costs) and items outside the control of its management team. Similarly, Net Debt is used by management as a liquidity measure used to illustrate the Company's debt level absent variability in cash and cash equivalents, and the Company believes that the presentation of Net Debt provides useful information to investors in assessing its financial leverage. Adjusted EBITDA, Adjusted Net Income, and Adjusted Diluted EPS should not be considered as an alternative to operating income, net income, or diluted EPS, respectively, the most directly comparable GAAP financial measures. Net Debt also should not be considered as an alternative to GAAP measures of cash and cash equivalents, current installments of long-term debt, short-term borrowings, and long-term debt. Finally, Free Cash Flow is used by management as a liquidity measure to illustrate the Company's ability to produce cash that is available to be distributed in a discretionary manner, after excluding investments in capital assets. Free Cash Flow should not be considered as an alternative to Net cash provided by (used in) operations or Net cash provided by (used in) investing activities, respectively, the most directly comparable GAAP financial measures. 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 GAAP.

Information regularly reviewed by the chief operating decision maker for evaluating the financial performance of operating segments is focused on the timing of when the services are performed during a well's lifecycle. Production Services are services performed during the production stage of a well's lifecycle. Drilling and Evaluation Services are services performed during the pre-production stages of a well's lifecycle. The Company believes that the presentation of Segment EBITDA provides useful information to investors in assessing its financial performance and results of operations.

Table 1 - Reconciliation of Net Income and Diluted EPS to Adjusted Net Income and Adjusted Diluted EPS

 
 
Quarter ended
December 31, 2020
   
Quarter ended
September 30, 2020
   
Quarter ended
December 31, 2019
 
 
 
Net
Income
   
Diluted
EPS
    Net Income    
Diluted
EPS
    Net Income    
Diluted
EPS
 
 
                                   
Net Income
  16,518     0.18     11,666     0.13     3,724     0.04  
Add Charges and Credits:
                                               
Transaction and other costs
    1,936       0.02       2,499       0.03       15,224       0.17  
Total Charges and Credits(1)
    1,936       0.20       2,499       0.03       15,224       0.17  
Total Adjusted Net Income
  18,454     0.20     14,165     0.16     18,948     0.21  

 

 

(1)

In the fourth quarter of 2020, Total Charges and Credits included $1.9 million mainly related to integration costs associated with the acquisition of SAPESCO in Egypt and restructuring activities. In the third quarter of 2020, Total Charges and Credits included $2.5 million mainly related to nonrecurring transaction and integration costs associated with the acquisition of SAPESCO in Egypt. Similarly, in the fourth quarter of 2019, Total Charges and Credits included $15.2 million mainly related to integration and restructuring costs, higher startup and qualifying costs in conjunction with new contracts, specifically the unconventional stimulation services contract setup in Saudi Arabia, and other discrete provisions that included non-cash actuarial adjustments and tax reserve charges.

 

Table 2 - Reconciliation of Net Income to Adjusted EBITDA

 
 
Quarter ended
December 31, 2020
   
Quarter ended
September 30, 2020
   
Quarter ended
December 31, 2019
 
 
                 
Net Income
  16,518     11,666     3,724  
Add:
                       
Income Taxes
    1,765       3,565       2,166  
Interest Expense, net
    3,411       3,793       4,280  
Depreciation and Amortization
    30,985       34,280       29,980  
Charges and Credits impacting Adjusted EBITDA(2)
    1,936       2,499       11,599  
Total Adjusted EBITDA
  54,615     55,803     51,749  

 

 

(2)

Charges and Credits impacting Adjusted EBITDA are described in Table 1 above.

 

Table 3 - Reconciliation of Segment EBITDA to Adjusted EBITDA

 
  Quarter ended
December 31, 2020
    Quarter ended
September 30, 2020
    Quarter ended
December 31, 2019
 
 
  EBITDA     Charges and Credits impacting Adjusted EBITDA     Adjusted EBITDA     EBITDA     Charges and Credits impacting Adjusted EBITDA     Adjusted EBITDA     EBITDA     Charges and Credits impacting Adjusted EBITDA     Adjusted EBITDA  
Production Services
  37,555     1,150     38,705     41,705     1,186     42,891     32,832     7,602     40,434  
Drilling & Evaluation
    19,363       225       19,588       15,538       954       16,492       12,093       1,552       13,645  
Unallocated
    (4,239 )     561       (3,678 )     (3,939 )     359       (3,580 )     (2,445 )     2,445       (2,330 )
Total
  52,679     1,936     54,615     53,304     2,499     55,803     40,150     11,599     51,749  

 

Table 4 - Reconciliation of Segment EBITDA to Segment Operating Income

 
  Quarter ended December 31, 2020     Quarter ended September 30, 2020     Quarter ended December 31, 2019  
Production Services:
                 
Segment EBITDA
  37,555     41,705     32,832  
Depreciation and amort.
    (19,736 )     (20,222 )     (19,290 )
Other (income)/expense, net
    (6,317 )     (58 )     1,068  
Segment Operating Income
    11,502       21,425       14,610  
Drilling and Evaluation Services:
                       
Segment EBITDA
    19,363       15,538       12,093  
Depreciation and amort.
    (7,477 )     (8,153 )     (6,313 )
Other (income)/expense, net
    (3,074 )     (8 )     (824 )
Segment Operating Income
    8,812       7,377       4,956  
Unallocated:
                       
Segment EBITDA
    (4,239 )     (3,939 )     (4,775 )
Share-based compensation
    (1,990 )     (2,082 )     (1,597 )
Depreciation and amort.
    (1,782 )     (3,823 )     (2,780 )
Other (income)/expense, net
    (131 )     29       (465 )
Unallocated Operating Income
    (8,142 )     (9,815 )     (9,617 )
Total Operating Income
  12,172     18,987     9,949  

 

Table 5 - Reconciliation of Net cash provided by (used in) operating activities to Free Cash Flow

 
  Quarter Ended  
 
  December 31, 2020     September 30, 2020     December 31, 2019  
 
                 
Net cash provided by (used in) operating activities
  49,272     33,455     43,801  
Less:
                       
Capital expenditures
    (15,982 )     (24,787 )     (17,774 )
Free cash flow
  33,290     8,668     26,027  

 

Table 6 - Reconciliation to Net Debt

 
  December 31, 2020     September 30, 2020     December 31, 2019  
 
                 
Current installments of long-term debt
  47,500     43,750     15,000  
Short-term borrowings
    42,360       36,392       37,963  
Long-term debt
    308,614       319,738       330,564  
Less:
                       
Cash and cash equivalents
    75,017       50,487       73,201  
Net Debt
  323,457     349,393     310,326  

For inquiries regarding NESR, please contact:
Christopher L. Boone
National Energy Services Reunited Corp.
832-925-3777
[email protected]

SOURCE: National Energy Services Reunited Corp

National Energy Services Reunited Corp
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