SAN FRANCISCO--(BUSINESS WIRE)--CAI International, Inc. (“CAI” or the “Company”) (NYSE: CAI), one of the world’s leading transportation finance and logistics companies, today reported results for the second quarter of 2020.
Summary
Additional information on CAI's results, as well as comments on market trends, is available in a presentation posted today on the "Investors" section of CAI's website, www.capps.com.
Timothy Page, Interim President and Chief Executive Officer of CAI, commented, “We are very pleased with our results during the second quarter. Net income from continuing operations attributable to CAI common stockholders was $13.7 million, or $0.78 per fully diluted share. The quarter began with a great deal of uncertainty as we were in the depths of the COVID-19 global pandemic. As the quarter progressed, markets began to stabilize, liquidity returned and expectations for recovery improved. The global container shipping industry right sized fleets, rationalized pricing and moved to profitability. Consequently, the Company did not experience any meaningful payment delays or credit issues and we have been generating strong free cash flow. As we have entered the third quarter, utilization is increasing, and we are experiencing strong demand from our customers for both depot and new equipment.
“During the first half of 2020, we saw limited customer demand for leased containers. Consequently, the Company took delivery of only $41 million, or 30,000 TEU, of containers in the first two quarters of 2020. However, demand has been particularly strong since mid-June and we have commitments from customers to lease approximately 70,000 TEU of containers, all of which we expect to be picked up before the end of the third quarter. Additionally, we have lease commitments for approximately 50,000 TEU of containers for delivery in the fourth quarter of 2020. All of these transactions have attractive returns associated with them. As a result of this strong customer demand, we expect our core container business to generate increasing net income in the coming quarters.
“CAI’s operating performance during the quarter was supported by the strong 98.0% utilization of our owned container fleet. Utilization increased towards the end of June and currently stands at 98.2%. We expect a continuation in the trend of increasing utilization in the coming months as global demand increases. Our continuing strong performance in utilization reflects the long-term nature of our contracts, tight redelivery restrictions and ongoing fleet management, all of which underscore the long-term committed nature of our cash flow.
“Our average cash interest rate in the second quarter was 2.88%. In early July we completed an interest rate hedging transaction swapping one month LIBOR for a fixed rate of 0.29% on $500 million of our floating rate debt for a term of five years. Approximately 77% of the Company’s debt is now fixed rate. Going forward, we plan to maintain fixed rate debt between 75% and 85% of our total debt.
“During the second quarter, we terminated our previously announced strategic review process and made a decision to focus on our container business and divest our non-core businesses. We have accounted for the logistics business in the second quarter as a discontinued operation. Under accounting rules for discontinued operations, the logistics business reported a net loss for the quarter of $16.6 million, or $0.94 per fully diluted share, primarily due to the non-cash impairment of goodwill and intangible assets arising from the reclassification of logistics assets as assets held for sale. We are pleased to report that we are engaged in advanced discussions with a potential purchaser of our logistics business. We continue to explore disposing of our rail investments in the most beneficial manner for shareholders.
“We also are pleased to announce that we have initiated a program of returning capital to our shareholders through the payment of regular quarterly dividends, the first of which is a dividend of $0.25 per share payable on September 25, 2020 to common shareholders of record as of September 11, 2020.”
Mr. Page concluded, “We are focused on deploying our capital to increase shareholder value, whether that be through regular shareholder dividends, investing in containers during periods when returns are attractive, or share repurchases when container returns don’t meet our investment return thresholds. We believe the actions taken and the decisions we have made during the second quarter will provide the momentum to position CAI to achieve enhanced shareholder returns.”
| CAI International, Inc. | ||||||||
| Consolidated Balance Sheets | ||||||||
| (In thousands, except share information) | ||||||||
| (UNAUDITED) | ||||||||
| June 30, | December 31, | |||||||
2020 |
2019 |
|||||||
| Assets | ||||||||
| Current assets | ||||||||
| Cash | $ |
20,159 |
|
$ |
19,870 |
|
||
| Cash held by variable interest entities |
|
27,703 |
|
|
26,594 |
|
||
| Accounts receivable, net of allowance for doubtful accounts of $3,942 and $7,671 | ||||||||
| at June 30, 2020 and December 31, 2019, respectively |
|
70,020 |
|
|
72,984 |
|
||
| Current portion of net investment in finance leases |
|
75,906 |
|
|
71,274 |
|
||
| Prepaid expenses and other current assets |
|
14,880 |
|
|
9,606 |
|
||
| Assets held for sale |
|
13,143 |
|
|
37,781 |
|
||
| Total current assets |
|
221,811 |
|
|
238,109 |
|
||
| Restricted cash |
|
22,188 |
|
|
26,775 |
|
||
| Rental equipment, net of accumulated depreciation of $660,418 and $620,990 at June 30, 2020 and December 31, 2019, respectively |
|
1,978,826 |
|
|
2,102,839 |
|
||
| Net investment in finance leases |
|
463,251 |
|
|
496,094 |
|
||
| Financing receivable |
|
53,821 |
|
|
30,693 |
|
||
| Other non-current assets |
|
6,036 |
|
|
7,255 |
|
||
| Total assets | $ |
2,745,933 |
|
$ |
2,901,765 |
|
||
| Liabilities and Stockholders' Equity | ||||||||
| Current liabilities | ||||||||
| Accounts payable | $ |
4,557 |
|
$ |
4,534 |
|
||
| Accrued expenses and other current liabilities |
|
24,365 |
|
|
25,206 |
|
||
| Unearned revenue |
|
6,802 |
|
|
6,405 |
|
||
| Current portion of debt |
|
251,250 |
|
|
218,094 |
|
||
| Rental equipment payable |
|
3,356 |
|
|
25,137 |
|
||
| Liabilities held for sale |
|
6,517 |
|
|
8,752 |
|
||
| Total current liabilities |
|
296,847 |
|
|
288,128 |
|
||
| Debt |
|
1,728,310 |
|
|
1,880,122 |
|
||
| Deferred income tax liability |
|
29,161 |
|
|
35,376 |
|
||
| Other non-current liabilities |
|
4,148 |
|
|
4,899 |
|
||
| Total liabilities |
|
2,058,466 |
|
|
2,208,525 |
|
||
| Stockholders' equity | ||||||||
| Preferred stock, par value $.0001 per share; authorized 10,000,000 | ||||||||
| 8.50% Series A fixed-to-floating rate cumulative redeemable perpetual preferred stock, issued and outstanding 2,199,610 shares, at liquidation preference |
|
54,990 |
|
|
54,990 |
|
||
| 8.50% Series B fixed-to-floating rate cumulative redeemable perpetual preferred stock, issued and outstanding 1,955,000 shares, at liquidation preference |
|
48,875 |
|
|
48,875 |
|
||
| Common stock: par value $.0001 per share; authorized 84,000,000 shares; issued and outstanding 17,553,491 and 17,479,127 shares at June 30, 2020 and December 31, 2019, respectively |
|
2 |
|
|
2 |
|
||
| Additional paid-in capital |
|
103,342 |
|
|
102,709 |
|
||
| Accumulated other comprehensive loss |
|
(6,666 |
) |
|
(6,630 |
) |
||
| Retained earnings |
|
486,924 |
|
|
493,294 |
|
||
| Total stockholders' equity |
|
687,467 |
|
|
693,240 |
|
||
| Total liabilities and stockholders' equity | $ |
2,745,933 |
|
$ |
2,901,765 |
|
||
| CAI International, Inc. | ||||||||||||||||
| Consolidated Statements of Operations | ||||||||||||||||
| (In thousands, except per share data) | ||||||||||||||||
| (UNAUDITED) | ||||||||||||||||
| Three Months Ended | Six Months Ended | |||||||||||||||
| June 30, | June 30, | |||||||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||||||
| Revenue | ||||||||||||||||
| Container lease revenue | $ |
69,443 |
|
$ |
74,286 |
|
$ |
138,556 |
|
$ |
149,797 |
|
||||
| Rail lease revenue |
|
6,282 |
|
|
6,462 |
|
|
12,085 |
|
|
14,343 |
|
||||
| Total revenue |
|
75,725 |
|
|
80,748 |
|
|
150,641 |
|
|
164,140 |
|
||||
| Operating expenses | ||||||||||||||||
| Depreciation of rental equipment |
|
28,846 |
|
|
29,816 |
|
|
55,894 |
|
|
61,599 |
|
||||
| Impairment of rental equipment |
|
557 |
|
|
7,323 |
|
|
19,724 |
|
|
7,323 |
|
||||
| Storage, handling and other expenses |
|
6,474 |
|
|
5,199 |
|
|
12,222 |
|
|
10,319 |
|
||||
| Gain on sale of rental equipment |
|
(2,108 |
) |
|
(265 |
) |
|
(3,722 |
) |
|
(9,097 |
) |
||||
| Administrative expenses |
|
7,389 |
|
|
8,049 |
|
|
15,053 |
|
|
17,223 |
|
||||
| Total operating expenses |
|
41,158 |
|
|
50,122 |
|
|
99,171 |
|
|
87,367 |
|
||||
| Operating income |
|
34,567 |
|
|
30,626 |
|
|
51,470 |
|
|
76,773 |
|
||||
| Other expenses | ||||||||||||||||
| Net interest expense |
|
17,595 |
|
|
23,209 |
|
|
37,974 |
|
|
47,063 |
|
||||
| Other (income) expense |
|
(97 |
) |
|
119 |
|
|
149 |
|
|
157 |
|
||||
| Total other expenses |
|
17,498 |
|
|
23,328 |
|
|
38,123 |
|
|
47,220 |
|
||||
| Income before income taxes |
|
17,069 |
|
|
7,298 |
|
|
13,347 |
|
|
29,553 |
|
||||
| Income tax expense (benefit) |
|
1,113 |
|
|
583 |
|
|
(1,943 |
) |
|
2,732 |
|
||||
| Income from continuing operations |
|
15,956 |
|
|
6,715 |
|
|
15,290 |
|
|
26,821 |
|
||||
| Loss from discontinued operations, net of income taxes |
|
(16,582 |
) |
|
(1,221 |
) |
|
(17,246 |
) |
|
(2,753 |
) |
||||
| Net (loss) income |
|
(626 |
) |
|
5,494 |
|
|
(1,956 |
) |
|
24,068 |
|
||||
| Preferred stock dividends |
|
2,207 |
|
|
2,207 |
|
|
4,414 |
|
|
4,414 |
|
||||
| Net (loss) income attributable to CAI common stockholders | $ |
(2,833 |
) |
$ |
3,287 |
|
$ |
(6,370 |
) |
$ |
19,654 |
|
||||
| Net income from continuing operations attributable to CAI common shareholders | $ |
13,749 |
|
$ |
4,508 |
|
$ |
10,876 |
|
$ |
22,407 |
|
||||
| Net loss from discontinued operations attributable to CAI common shareholders |
|
(16,582 |
) |
|
(1,221 |
) |
|
(17,246 |
) |
|
(2,753 |
) |
||||
| Net (loss) income attributable to CAI common stockholders | $ |
(2,833 |
) |
$ |
3,287 |
|
$ |
(6,370 |
) |
$ |
19,654 |
|
||||
| Net (loss) income per share attributable to CAI common stockholders | ||||||||||||||||
| Basic | ||||||||||||||||
| Continuing operations | $ |
0.79 |
|
$ |
0.26 |
|
$ |
0.62 |
|
$ |
1.24 |
|
||||
| Discontinued operations |
|
(0.95 |
) |
|
(0.07 |
) |
|
(0.99 |
) |
|
(0.15 |
) |
||||
| Total basic | $ |
(0.16 |
) |
$ |
0.19 |
|
$ |
(0.37 |
) |
$ |
1.09 |
|
||||
| Diluted | ||||||||||||||||
| Continuing operations | $ |
0.78 |
|
$ |
0.25 |
|
$ |
0.62 |
|
$ |
1.22 |
|
||||
| Discontinued operations |
|
(0.94 |
) |
|
(0.07 |
) |
|
(0.98 |
) |
|
(0.15 |
) |
||||
| Total diluted | $ |
(0.16 |
) |
$ |
0.18 |
|
$ |
(0.36 |
) |
$ |
1.07 |
|
||||
| Weighted average shares outstanding | ||||||||||||||||
| Basic |
|
17,470 |
|
|
17,648 |
|
|
17,451 |
|
|
18,098 |
|
||||
| Diluted |
|
17,601 |
|
|
17,926 |
|
|
17,641 |
|
18,401 |
||||||
| CAI International, Inc. | ||||||||
| Consolidated Statements of Cash Flows | ||||||||
| (In thousands, except per share data) | ||||||||
| (UNAUDITED) | ||||||||
| Six Months Ended June 30, |
||||||||
2020 |
2019 |
|||||||
| Cash flows from operating activities | ||||||||
| Net (loss) income | $ |
(1,956 |
) |
$ |
24,068 |
|
||
| Loss from discontinued operations, net of income taxes |
|
(17,246 |
) |
|
(2,753 |
) |
||
| Income from continuing operations |
|
15,290 |
|
|
26,821 |
|
||
| Adjustments to reconcile income from continuing operations to net cash provided by operating activities: | ||||||||
| Depreciation |
|
56,299 |
|
|
61,623 |
|
||
| Impairment of rental equipment |
|
19,724 |
|
|
7,323 |
|
||
| Amortization of debt issuance costs |
|
2,312 |
|
|
2,394 |
|
||
| Stock-based compensation expense |
|
801 |
|
|
1,421 |
|
||
| Unrealized loss on foreign exchange |
|
63 |
|
|
90 |
|
||
| Gain on sale of rental equipment |
|
(3,722 |
) |
|
(9,097 |
) |
||
| Deferred income taxes |
|
(3,127 |
) |
|
2,135 |
|
||
| Bad debt (recovery) expense |
|
(3,582 |
) |
|
687 |
|
||
| Changes in other operating assets and liabilities: | ||||||||
| Accounts receivable |
|
4,441 |
|
|
1,200 |
|
||
| Prepaid expenses and other assets |
|
606 |
|
|
(2,114 |
) |
||
| Net investment in finance leases |
|
35,746 |
|
|
32,824 |
|
||
| Accounts payable, accrued expenses and other liabilities |
|
(1,146 |
) |
|
(3,568 |
) |
||
| Unearned revenue |
|
(394 |
) |
|
(1,862 |
) |
||
| Net cash provided by operating activities of continuing operations |
|
123,311 |
|
|
119,877 |
|
||
| Net cash provided by (used in) operating activities of discontinued operations |
|
2,315 |
|
|
(1,984 |
) |
||
| Net cash provided by operating activities |
|
125,626 |
|
|
117,893 |
|
||
| Cash flows from investing activities | ||||||||
| Purchase of rental equipment |
|
(32,620 |
) |
|
(231,595 |
) |
||
| Purchase of financing receivable |
|
(30,846 |
) |
|
(36,379 |
) |
||
| Proceeds from sale of rental equipment |
|
58,467 |
|
|
220,403 |
|
||
| Purchase of furniture, fixtures and equipment |
|
(310 |
) |
|
(136 |
) |
||
| Receipt of principal payments from financing receivable |
|
2,225 |
|
|
973 |
|
||
| Net cash used in investing activities of continuing operations |
|
(3,084 |
) |
|
(46,734 |
) |
||
| Net cash used in investing activities of discontinued operations |
|
(1 |
) |
|
(114 |
) |
||
| Net cash used in investing activities |
|
(3,085 |
) |
|
(46,848 |
) |
||
| Cash flows from financing activities | ||||||||
| Proceeds from debt |
|
227,000 |
|
|
468,082 |
|
||
| Principal payments on debt |
|
(348,331 |
) |
|
(490,319 |
) |
||
| Debt issuance costs |
|
(25 |
) |
|
(496 |
) |
||
| Proceeds from issuance of common stock |
|
116 |
|
|
- |
|
||
| Repurchase of common stock |
|
- |
|
|
(34,118 |
) |
||
| Dividends paid to preferred stockholders |
|
(4,414 |
) |
|
(4,414 |
) |
||
| Exercise of stock options |
|
113 |
|
|
335 |
|
||
| Net cash provided by financing activities of continuing operations |
|
(125,541 |
) |
|
(60,930 |
) |
||
| Net cash used in financing activities of discontinued operations |
|
- |
|
|
- |
|
||
| Net cash used in financing activities |
|
(125,541 |
) |
|
(60,930 |
) |
||
| Effect on cash of foreign currency translation |
|
(189 |
) |
|
(77 |
) |
||
| Net (decrease) increase in cash and restricted cash |
|
(3,189 |
) |
|
10,038 |
|
||
| Cash and restricted cash at beginning of the period |
|
73,239 |
|
|
75,983 |
|
||
| Cash and restricted cash at end of the period | $ |
70,050 |
|
$ |
86,021 |
|
||
| CAI International, Inc. | ||||||||||||
| Fleet Data | ||||||||||||
| (UNAUDITED) | ||||||||||||
| As of June 30, | ||||||||||||
2020 |
2019 |
|||||||||||
| Owned container fleet in TEUs | 1,597,898 |
|
1,553,231 |
|
||||||||
| Managed container fleet in TEUs | 63,757 |
|
69,805 |
|
||||||||
| Total container fleet in TEUs | 1,661,655 |
|
1,623,036 |
|
||||||||
| Owned container fleet in CEUs | 1,630,054 |
|
1,584,456 |
|
||||||||
| Managed container fleet in CEUs | 79,643 |
|
63,492 |
|
||||||||
| Total container fleet in CEUs | 1,709,697 |
|
1,647,948 |
|
||||||||
| Owned railcar fleet in units | 5,276 |
|
5,631 |
|
||||||||
| Three Months Ended | Six Months Ended | |||||||||||
| June 30, | June 30, | |||||||||||
2020 |
2019 |
2020 |
2019 |
|||||||||
| Average Utilization | ||||||||||||
| Container fleet utilization in CEUs | 98.0 |
% |
98.8 |
% |
98.1 |
% |
98.8 |
% |
||||
| Owned container fleet utilization in CEUs | 98.0 |
% |
98.8 |
% |
98.2 |
% |
98.8 |
% |
||||
| Railcar fleet utilization in units - excluding new units not yet leased | 89.6 |
% |
88.1 |
% |
87.3 |
% |
89.3 |
% |
||||
| Railcar fleet utilization in units - including new units not yet leased | 86.6 |
% |
84.5 |
% |
84.3 |
% |
85.7 |
% |
||||
| As of June 30, | ||||||||||||
2020 |
2019 |
|||||||||||
| Period Ending Utilization | ||||||||||||
| Container fleet utilization in CEUs | 97.8 |
% |
98.8 |
% |
||||||||
| Owned container fleet utilization in CEUs | 97.9 |
% |
98.8 |
% |
||||||||
| Railcar fleet utilization in units - excluding new units not yet leased | 88.3 |
% |
85.9 |
% |
||||||||
| Railcar fleet utilization in units - including new units not yet leased | 85.3 |
% |
82.4 |
% |
||||||||
| Utilization of containers is computed by dividing the total units on lease in CEUs (cost equivalent units), by the total units in our fleet in CEUs. |
| The total container fleet excludes new units not yet leased and off-hire units designated for sale. |
| Utilization of railcars is computed by dividing the total number of railcars on lease by the total number of railcars in our fleet. |
| The impact on utilization of including new units not yet leased in the total railcar fleet has been included in the table above. |
| CEU is a ratio used to convert the actual number of containers in our fleet to a figure based on the relative purchase prices of our |
| various equipment types to that of a standard 20 foot dry van container. For example, the CEU ratio for a standard 40 foot dry van |
| container is 1.6, and a 40 foot high cube container is 1.7. |
Conference Call
A conference call to discuss the financial results for the second quarter of 2020 will be held on Thursday, August 6, 2020 at 5:00 p.m. ET. The dial-in number for the teleconference is 1-855-327-6837; outside of the U.S., call 1-631-891-4304. The call may be accessed live over the internet (listen only) under the “Investors” section of CAI’s website, www.capps.com, by selecting “Q2 2020 Earnings Conference Call.” A webcast replay will be available for 30 days on the “Investors” section of our website.
Earnings Presentation
A presentation summarizing our second quarter 2020 results is available on the “Investors” section of our website, www.capps.com.
About CAI International, Inc.
CAI is one of the world’s leading transportation finance and logistics companies. As of June 30, 2020, CAI operated a worldwide fleet of approximately 1.7 million CEUs of containers, and owned a fleet of 5,276 railcars that it leases within North America. CAI operates through 22 offices located in 12 countries including the United States.
Forward-Looking Statements
This press release contains forward-looking statements regarding future events and the future performance of CAI, including but not limited to: management’s business outlook for the container leasing business, management’s decision to divest of CAI’s non-core businesses and management's outlook for growth of CAI’s leasing investments. These statements and others herein are forward-looking statements within the meaning of the safe harbor provisions of Section 21E of the Securities Exchange Act of 1934, as amended, and involve risks and uncertainties that could cause actual results of operations and other performance measures to differ materially from current expectations including, but not limited to: utilization rates, expected economic conditions, expected growth of international trade, availability of credit on commercially favorable terms or at all, customer demand, container investment levels, container prices, lease rates, increased competition, volatility in exchange rates, growth in world trade and world container trade, the ability of CAI to convert letters of intent with its customers to binding contracts, potential to sell CAI’s securities to the public and others.
CAI refers you to the documents that it has filed with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2019, its Quarterly Reports on Form 10-Q and its Current Reports on Form 8-K. These documents contain additional important factors that could cause actual results to differ from current expectations and from forward-looking statements contained in this press release. Furthermore, CAI is under no obligation to (and expressly disclaims any such obligation to) update or alter any of the forward-looking statements contained in this press release whether as a result of new information, future events or otherwise, unless required by law.
Tim Page, Interim President and Chief Executive Officer
(415) 788-0100
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AKRON, Ohio--(BUSINESS WIRE)--$BW #BabcockWilcox--Babcock & Wilcox Enterprises, Inc. (NYSE:BW) (B&W or the “Company”) expects to host a conference call and webcast on Thursday, August 13, 2020 at 5 p.m. ET.
B&W Chief Executive Officer Kenneth Young and B&W Chief Financial Officer Louis Salamone will discuss the Company’s second quarter 2020 results. A news release detailing the results is expected to be issued before the market opens on Thursday, August 13, 2020.
The listen-only audio of the conference call will be broadcast live via the Internet on B&W’s Investor Relations site. The dial-in number for participants in the U.S. is (833) 513-0549; the dial-in number for participants outside the U.S. is (778) 560-2572. The conference ID for all participants is 7096328. A replay of this conference call will remain accessible in the investor relations section of the Company's website for a limited time.
About B&W
Headquartered in Akron, Ohio, Babcock & Wilcox is a global leader in energy and environmental technologies and services for the power and industrial markets. Follow us on Twitter @BabcockWilcox and learn more at www.babcock.com.
Investor Contact:
Megan Wilson
Vice President, Corporate Development & Investor Relations
Babcock & Wilcox
704.625.4944
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Media Contact:
Ryan Cornell
Public Relations
Babcock & Wilcox
330.860.1345
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IRVING, Texas--(BUSINESS WIRE)--Montage Resources Corporation (NYSE:MR) (the “Company” or “Montage Resources”) today announced its second quarter 2020 operational and financial results and updated full year 2020 guidance. In addition, the Company will be posting an updated investor presentation to its corporate website.
Second Quarter 2020 Highlights:
| 1 | Non-GAAP measure. See reconciliation for details |
||
John Reinhart, President and CEO, commented on the Company’s operational and financial results, “This was another solid earnings report which illustrated our consistent focus on execution and efficiency. The continued outperformance of our wells along with our operating cadence, has allowed us to maintain our full year outlook on production expectations, despite the meaningful curtailment of production during the second quarter. The Company’s swift response to market conditions early in the year with the adjustment in our development plan towards increased dry gas production allows us to capture the benefits of the improving natural gas macro conditions during the second half of 2020 and 2021. Our strong operational performance driven by our robust planning process has allowed the Company to realize additional savings on our all-in drilling and completion costs from our initial 2020 plan. Our most recent dry gas Utica pad achieved costs of approximately $808 per foot when normalized to a 13,000 foot lateral length, and the Company set new internal records for completions stages, averaging 11.5 stages per day on our most recent pad and setting a single day record of 15 stages in one day. Despite a significant amount of commodity price volatility during the second quarter 2020, we have again been able to deliver a strong natural gas realized price with our ability to optimize this production to buyers needing to fill unutilized capacity and continue to view this opportunity as a competitive advantage, given the highly uncommitted nature and flexibility of our production base. Our ongoing financial discipline has strengthened our balance sheet and liquidity position, which would be further enhanced by the closing of our recently announced non-binding letter of intent to sell our non-core gathering assets in Ohio. Our proven track record of execution throughout 2019 and into 2020 has solidified our position not just as a cost and efficiency leader, but also as a team with a winning strategy that remains well positioned to leverage our experience to achieve our goals of free cash flow generation and debt reduction.”
Operational Discussion
The Company’s net production for the three and six months ended June 30, 2020 and 2019 is set forth in the following table:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Production: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (MMcf) |
|
|
41,720.8 |
|
|
|
39,119.0 |
|
|
|
86,019.4 |
|
|
|
66,324.0 |
|
NGLs (Mbbls) |
|
|
973.9 |
|
|
|
1,033.3 |
|
|
|
2,192.1 |
|
|
|
2,013.8 |
|
Oil (Mbbls) |
|
|
440.1 |
|
|
|
569.0 |
|
|
|
1,101.8 |
|
|
|
1,167.0 |
|
Total (MMcfe) |
|
|
50,204.8 |
|
|
|
48,732.8 |
|
|
|
105,782.8 |
|
|
|
85,408.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average daily production volume: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas (Mcf/d) |
|
|
458,470 |
|
|
|
429,879 |
|
|
|
472,634 |
|
|
|
366,431 |
|
NGLs (Bbls/d) |
|
|
10,702 |
|
|
|
11,355 |
|
|
|
12,045 |
|
|
|
11,126 |
|
Oil (Bbls/d) |
|
|
4,836 |
|
|
|
6,253 |
|
|
|
6,054 |
|
|
|
6,448 |
|
Total (MMcfe/d) |
|
|
551.7 |
|
|
|
535.5 |
|
|
|
581.2 |
|
|
|
471.9 |
|
Financial Discussion
Revenue for the three months ended June 30, 2020 totaled $90.7 million, compared to $155.5 million for the three months ended June 30, 2019. Adjusted Revenue2, which includes the impact of cash settled commodity derivatives and excludes brokered natural gas and marketing revenue and other revenue, totaled $107.9 million for the three months ended June 30, 2020 compared to $145.9 million for the three months ended June 30, 2019. Net Loss for the three months ended June 30, 2020 was ($68.9) million, or $(1.92) per share, compared to Net Income of $27.5 million, or $0.77 per share, for the three months ended June 30, 2019. Adjusted Net Income (Loss)2 for the three months ended June 30, 2020 was $(20.6) million, or $(0.57) per share, compared to $14.6 million, or $0.41 per share for the three months ended June 30, 2019. Adjusted EBITDAX2 was $37.5 million for the three months ended June 30, 2020 compared to $70.9 million for the three months ended June 30, 2019.
2 |
Adjusted Revenue, Adjusted Net Income and Adjusted EBITDAX are non-GAAP financial measures. Tables reconciling Adjusted Revenue, Adjusted Net Income and Adjusted EBITDAX to the most directly comparable GAAP measures can be found at the end of the financial statements included in this press release. |
Average realized price calculations for the three and six months ended June 30, 2020 and 2019 are set forth in the table below:
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Average realized price (excluding cash settled commodity derivatives and firm transportation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.57 |
|
|
$ |
2.41 |
|
|
$ |
1.68 |
|
|
$ |
2.66 |
|
NGLs ($/Bbl) |
|
|
8.18 |
|
|
|
18.77 |
|
|
|
12.09 |
|
|
|
20.18 |
|
Oil ($/Bbl) |
|
|
21.66 |
|
|
|
52.14 |
|
|
|
32.46 |
|
|
|
50.07 |
|
Total average prices ($/Mcfe) |
|
|
1.65 |
|
|
|
2.94 |
|
|
|
1.96 |
|
|
|
3.22 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled commodity derivatives, excluding firm transportation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.98 |
|
|
$ |
2.47 |
|
|
$ |
2.07 |
|
|
$ |
2.63 |
|
NGLs ($/Bbl) |
|
|
8.67 |
|
|
|
19.11 |
|
|
|
12.50 |
|
|
|
20.46 |
|
Oil ($/Bbl) |
|
|
38.38 |
|
|
|
51.68 |
|
|
|
40.11 |
|
|
|
50.65 |
|
Total average prices ($/Mcfe) |
|
|
2.15 |
|
|
|
2.99 |
|
|
|
2.36 |
|
|
|
3.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including firm transportation, excluding cash settled commodity derivatives) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.06 |
|
|
$ |
1.95 |
|
|
$ |
1.21 |
|
|
$ |
2.15 |
|
NGLs ($/Bbl) |
|
|
8.18 |
|
|
|
18.77 |
|
|
|
12.09 |
|
|
|
20.18 |
|
Oil ($/Bbl) |
|
|
21.66 |
|
|
|
52.14 |
|
|
|
32.46 |
|
|
|
50.07 |
|
Total average prices ($/Mcfe) |
|
|
1.23 |
|
|
|
2.57 |
|
|
|
1.58 |
|
|
|
2.83 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled commodity derivatives and firm transportation) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas ($/Mcf) |
|
$ |
1.47 |
|
|
$ |
2.01 |
|
|
$ |
1.61 |
|
|
$ |
2.12 |
|
NGLs ($/Bbl) |
|
|
8.67 |
|
|
|
19.11 |
|
|
|
12.50 |
|
|
|
20.46 |
|
Oil ($/Bbl) |
|
|
38.38 |
|
|
|
51.68 |
|
|
|
40.11 |
|
|
|
50.65 |
|
Total average prices ($/Mcfe) |
|
|
1.72 |
|
|
|
2.62 |
|
|
|
1.98 |
|
|
|
2.82 |
|
*rounded to the nearest penny |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The Company’s cash production costs (which include lease operating, transportation, gathering and compression, production and ad valorem taxes) are shown in the table below. Per unit cash production costs, which include $0.42 per Mcfe of firm transportation expense, were $1.25 per Mcfe for the second quarter of 2020, a decrease of approximately 7% compared to the second quarter of 2019.
General and administrative expense (including one-time merger-related expenses and severance) was $11.6 million and $13.6 million for the three months ended June 30, 2020 and 2019, respectively, and is shown in the table below. Cash general and administrative expense3 (excluding merger-related expenses, severance and stock-based compensation expense) was $7.4 million and $9.1 million for the three months ended June 30, 2020 and 2019, respectively. General and administrative expense per Mcfe (including one-time merger-related expenses and severance) was $0.23 in the three months ended June 30, 2020 compared to $0.28 in the three months ended June 30, 2019. Cash general and administrative expense3 per Mcfe (excluding merger-related expenses, severance and stock-based compensation expense) decreased approximately 26% to $0.14 in the three months ended June 30, 2020 compared to $0.19 in the three months ended June 30, 2019.
3 |
Cash general and administrative expense is a non-GAAP financial measure. A table reconciling cash general and administrative expense to the most directly comparable GAAP measure can be found under “Cash General and Administrative Expense” in this press release. |
|
|
Three Months Ended June 30, |
|
|
Six Months Ended June 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
Operating expenses (in thousands): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
9,900 |
|
|
$ |
10,141 |
|
|
$ |
21,943 |
|
|
$ |
17,666 |
|
Transportation, gathering and compression |
|
|
51,387 |
|
|
|
51,870 |
|
|
|
105,512 |
|
|
|
93,038 |
|
Production and ad valorem taxes |
|
|
1,600 |
|
|
|
4,009 |
|
|
|
6,468 |
|
|
|
6,857 |
|
Total cash production costs |
|
$ |
62,887 |
|
|
$ |
66,020 |
|
|
$ |
133,923 |
|
|
$ |
117,561 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
42,768 |
|
|
|
38,597 |
|
|
|
86,903 |
|
|
|
68,494 |
|
General and administrative1 |
|
|
11,569 |
|
|
|
13,564 |
|
|
|
21,450 |
|
|
|
42,494 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses per Mcfe: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
$ |
0.20 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
|
$ |
0.21 |
|
Transportation, gathering and compression |
|
|
1.02 |
|
|
|
1.06 |
|
|
|
0.99 |
|
|
|
1.09 |
|
Production and ad valorem taxes |
|
|
0.03 |
|
|
|
0.08 |
|
|
|
0.06 |
|
|
|
0.08 |
|
Total cash production costs |
|
$ |
1.25 |
|
|
$ |
1.35 |
|
|
$ |
1.26 |
|
|
$ |
1.38 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation, depletion, amortization and accretion |
|
|
0.85 |
|
|
|
0.79 |
|
|
|
0.82 |
|
|
|
0.80 |
|
General and administrative2 |
|
|
0.23 |
|
|
|
0.28 |
|
|
|
0.20 |
|
|
|
0.50 |
|
1 |
Includes stock-based compensation, merger-related expenses and severance of $ 4.2 million and $ 4.5 million for the three months ended June 30, 2020 and 2019, respectively, and $ 5.5 million and $ 25.1 million for the six months ended June 30, 2020 and 2019, respectively |
|
2 |
Includes stock-based compensation, merger-related expenses and severance of $ 0.09 per Mcfe and $ 0.09 per Mcfe for the three months ended June 30, 2020 and 2019, respectively, and $ 0.05 per Mcfe and $ 0.30 per Mcfe for the six months ended June 30, 2020 and 2019, respectively |
Cash Margins
The Company’s cash margins are detailed in the table below:
|
|
Three Months Ended |
|
|
Three Months Ended |
|
||||||
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
|
March 31, 2020 |
|
|||
(per Mcfe) |
|
|
|
|
|
|
|
|
|
|
|
|
Average realized price (including cash settled commodity derivatives, excluding firm transportation) |
|
$ |
2.15 |
|
|
$ |
2.99 |
|
|
$ |
2.56 |
|
Total cash production costs1 |
|
|
1.25 |
|
|
|
1.35 |
|
|
|
1.28 |
|
Cash production margin |
|
$ |
0.90 |
|
|
$ |
1.64 |
|
|
$ |
1.28 |
|
Cash production margin % |
|
|
42 |
% |
|
|
55 |
% |
|
|
50 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash production margin |
|
$ |
0.90 |
|
|
$ |
1.64 |
|
|
$ |
1.28 |
|
Cash general and administrative expenses2 |
|
|
0.14 |
|
|
|
0.19 |
|
|
|
0.15 |
|
Cash operating margin |
|
$ |
0.76 |
|
|
$ |
1.45 |
|
|
$ |
1.13 |
|
Cash operating margin % |
|
|
35 |
% |
|
|
48 |
% |
|
|
44 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash operating margin |
|
$ |
0.76 |
|
|
$ |
1.45 |
|
|
$ |
1.13 |
|
Interest expense |
|
|
0.30 |
|
|
|
0.31 |
|
|
|
0.27 |
|
Corporate cash operating margin3 |
|
$ |
0.46 |
|
|
$ |
1.14 |
|
|
$ |
0.86 |
|
Corporate cash operating margin % |
|
|
22 |
% |
|
|
38 |
% |
|
|
34 |
% |
1 |
Includes lease operating, transportation, gathering and compression, and production and ad valorem taxes |
|
2 |
Cash general and administrative expense is a non-GAAP financial measure which excludes stock-based compensation expense, merger related expenses and severance. See reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release |
|
3 |
Includes lease operating, transportation, gathering and compression, production and ad valorem taxes, cash general & administrative expense and interest expense. Cash general and administrative expense is a non-GAAP financial measure which excludes stock-based compensation expense, merger related expenses and severance See reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release |
Capital Expenditures
Second quarter 2020 capital expenditures were $29.1 million, including $27.6 million for drilling and completions, $1.4 million for land-related expenditures and $0.1 million for other expenditures.
During the second quarter of 2020, the Company commenced drilling 5 gross (3.4 net) operated wells, commenced completions of 7 gross (5.4 net) operated wells and turned to sales 7 gross (6.1 net) operated wells.
Financial Position and Liquidity
As of June 30, 2020, the Company’s liquidity was $295.0 million, consisting of $9.2 million in cash and cash equivalents and $285.8 million in available borrowing capacity under the Company’s revolving credit facility (after giving effect to outstanding letters of credit issued by the Company of $29.2 million and $160.0 million in outstanding borrowings).
Michael Hodges, Executive Vice President and Chief Financial Officer, commented, “We are very proud of the results in the second quarter of 2020 that have allowed the Company to solidify its financial strength despite a volatile commodity price environment. We believe that the flexibility of our portfolio and our continued improvement in operating costs will allow us to navigate the current operating environment without adding stress to our balance sheet. Finally, our strong hedge book remains a key element of our strategy, with approximately 70% of our natural gas hedged and approximately 60% of our oil hedged (based on our revised production profile) for 2020, providing us with a high level of cash flow certainty and confidence in the long-term health of our balance sheet.”
Commodity Derivatives
The Company engages in a number of different commodity trading program strategies as a risk management tool to attempt to mitigate the potential negative impact on cash flows caused by price fluctuations in natural gas, NGL and oil prices. Below is a table that illustrates the Company’s hedging activities as of June 30, 2020:
Natural Gas Derivatives:
Description |
|
Volume (MMBtu/d) |
|
|
Production Period |
|
Weighted Average Price ($/MMBtu) |
|
||
Natural Gas Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
60,000 |
|
|
July 2020 – September 2020 |
|
$ |
2.32 |
|
|
|
|
80,000 |
|
|
July 2020 – December 2020 |
|
$ |
2.64 |
|
|
|
|
95,000 |
|
|
July 2020 – March 2021 |
|
$ |
2.54 |
|
|
|
|
50,000 |
|
|
August 2020 – December 2020 |
|
$ |
2.06 |
|
|
|
|
50,000 |
|
|
October 2020 – March 2021 |
|
$ |
2.65 |
|
|
|
|
50,000 |
|
|
January 2021 – March 2022 |
|
$ |
2.51 |
|
|
|
|
25,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.47 |
|
Natural Gas Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
25,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.15 |
|
Ceiling sold price (call) |
|
|
25,000 |
|
|
January 2021 – December 2021 |
|
$ |
3.03 |
|
Natural Gas Three-way Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
80,000 |
|
|
July 2020 – December 2020 |
|
$ |
2.60 |
|
Floor sold price (put) |
|
|
80,000 |
|
|
July 2020 – December 2020 |
|
$ |
1.90 |
|
Ceiling sold price (call) |
|
|
80,000 |
|
|
July 2020 – December 2020 |
|
$ |
2.94 |
|
Floor purchase price (put) |
|
|
45,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.55 |
|
Floor sold price (put) |
|
|
45,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.25 |
|
Ceiling sold price (call) |
|
|
45,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.81 |
|
Floor purchase price (put) |
|
|
20,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.62 |
|
Floor sold price (put) |
|
|
20,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.20 |
|
Ceiling sold price (call) |
|
|
20,000 |
|
|
April 2021 – March 2022 |
|
$ |
3.10 |
|
Natural Gas Call/Put Options: |
|
|
|
|
|
|
|
|
|
|
Floor sold price (put) |
|
|
15,000 |
|
|
July 2020 – September 2020 |
|
$ |
1.60 |
|
Floor sold price (put) |
|
|
50,000 |
|
|
July 2020 – December 2020 |
|
$ |
2.30 |
|
Swaption sold price (call) |
|
|
50,000 |
|
|
January 2021 – December 2021 |
|
$ |
2.75 |
|
Swaption sold price (call) |
|
|
50,000 |
|
|
January 2022 – December 2022 |
|
$ |
3.00 |
|
Floor sold price (put) |
|
|
50,000 |
|
|
January 2021 – March 2022 |
|
$ |
2.00 |
|
Ceiling sold price (call) |
|
|
50,000 |
|
|
January 2022 – December 2022 |
|
$ |
3.00 |
|
Ceiling sold price (call) |
|
|
80,000 |
|
|
January 2023 – December 2023 |
|
$ |
3.00 |
|
Basis Swaps: |
|
|
|
|
|
|
|
|
|
|
Appalachia - Dominion |
|
|
12,500 |
|
|
July 2020 – October 2020 |
|
$ |
(0.52 |
) |
Appalachia - Dominion |
|
|
20,000 |
|
|
July 2020 – December 2020 |
|
$ |
(0.59 |
) |
Oil Derivatives:
Description |
|
Volume (Bbls/d) |
|
|
Production Period |
|
Weighted Average Price ($/Bbl) |
|
||
Oil Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
2,500 |
|
|
July 2020 – December 2020 |
|
$ |
57.41 |
|
|
|
|
250 |
|
|
July 2020 – March 2021 |
|
$ |
53.20 |
|
|
|
|
250 |
|
|
January 2021 – March 2021 |
|
$ |
53.00 |
|
Oil Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
1,000 |
|
|
July 2020 – December 2020 |
|
$ |
51.00 |
|
Ceiling sold price (call) |
|
|
1,000 |
|
|
July 2020 – December 2020 |
|
$ |
62.00 |
|
Oil Three-way Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
31.25 |
|
Floor sold price (put) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
22.50 |
|
Ceiling sold price (call) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
45.00 |
|
Oil Call/Put Options: |
|
|
|
|
|
|
|
|
|
|
Floor sold price (put) |
|
|
500 |
|
|
July 2020 – December 2020 |
|
$ |
45.00 |
|
Swaption sold price (call) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
42.50 |
|
NGL Derivatives:
Description |
|
Volume (Bbls/d) |
|
|
Production Period |
|
Weighted Average Price ($/Bbl) |
|
||
Propane Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
1,500 |
|
|
July 2020 – December 2020 |
|
$ |
20.68 |
|
|
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
18.01 |
|
Subsequent to the End of the Second Quarter:
The below table illustrates the Company’s hedging activities subsequent to the end of the second quarter 2020:
Natural Gas Derivatives:
Description |
|
Volume (MMBtu/d) |
|
|
Production Period |
|
Weighted Average Price ($/MMBtu) |
|
||
Natural Gas Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
30,000 |
|
|
April 2021 – March 2022 |
|
$ |
2.40 |
|
Ceiling sold price (call) |
|
|
30,000 |
|
|
April 2021 – March 2022 |
|
$ |
3.05 |
|
Basis Swaps: |
|
|
|
|
|
|
|
|
|
|
Appalachia - Dominion |
|
|
30,000 |
|
|
August 2020 – October 2020 |
|
$ |
(0.50 |
) |
Oil Derivatives:
Description |
|
Volume (Bbls/d) |
|
|
Production Period |
|
Weighted Average Price ($/Bbl) |
|
||
Oil Collars: |
|
|
|
|
|
|
|
|
|
|
Floor purchase price (put) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
37.50 |
|
Ceiling sold price (call) |
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
45.50 |
|
NGL Derivatives:
Description |
|
Volume (Bbls/d) |
|
|
Production Period |
|
Weighted Average Price ($/Bbl) |
|
||
Propane Swaps: |
|
|
|
|
|
|
|
|
|
|
|
|
|
500 |
|
|
August 2020 – December 2020 |
|
$ |
21.74 |
|
|
|
|
500 |
|
|
January 2021 – December 2021 |
|
$ |
19.74 |
|
Guidance
The Company is providing its initial third quarter and updated full year 2020 guidance as set forth in the table below (updated guidance in italics).
|
|
Q3 2020 |
|
FY 2020 |
Production MMcfe/d |
|
580 - 600 |
|
565 - 585 |
% Gas |
|
81% - 83% |
|
81% - 83% |
% NGL |
|
11% - 13% |
|
10% - 12% |
% Oil |
|
5% - 7% |
|
6% - 8% |
Gas Price Differential ($/Mcf)1,2 |
|
$(0.15) - $(0.30) |
|
$(0.15) - $(0.25) |
Oil Differential ($/Bbl)1,3 |
|
$(9.00) - $(11.00) |
|
$(6.50) - $(7.50) |
NGL Prices (% of WTI)1 |
|
27% - 32% |
|
30% - 35% |
Cash Production Costs ($/Mcfe)4 |
|
$1.25 - $1.35 |
|
$1.25 - $1.35 |
Cash G&A ($mm)5 |
|
$6 - $8 |
|
$29 - $32 |
CAPEX ($mm) |
|
|
|
$120 - $140 |
1 |
Excludes impact of hedges |
|
2 |
Excludes the cost of firm transportation |
|
3 |
Full year 2020 amount (FY 2020) includes the impact of declining WTI price on reported oil differential in first quarter of 2020 |
|
4 |
Includes lease operating, transportation, gathering and compression, production and ad valorem taxes |
|
5 |
Non-GAAP financial measure which excludes stock-based compensation expense, merger related expenses and severance. See reconciliation to the most comparable GAAP measure under “Cash General and Administrative Expense” in this press release |
Conference Call
A conference call to review the Company’s second quarter 2020 financial and operational results is scheduled for Friday, August 7, 2020, at 10:00 a.m. Eastern Time. To participate in the call, please dial 877-709-8150 or 201-689-8354 for international callers and reference Montage Resources Second Quarter 2020 Earnings Call. A replay of the call will be available through October 7, 2020. To access the phone replay, dial 877-660-6853 or 201-612-7415 for international callers. The conference ID is 13707434. A live webcast of the call may be accessed through the Investor Center on the Company’s website at www.montageresources.com. The webcast will be archived for replay on the Company’s website for six months.
MONTAGE RESOURCES CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share and per share amounts) (Unaudited) |
||||||||
|
|
June 30, 2020 |
|
|
December 31, 2019 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
CURRENT ASSETS |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
9,221 |
|
|
$ |
12,056 |
|
Accounts receivable |
|
|
59,804 |
|
|
|
77,402 |
|
Assets held for sale |
|
|
1,115 |
|
|
|
1,047 |
|
Other current assets |
|
|
36,609 |
|
|
|
35,509 |
|
Total current assets |
|
|
106,749 |
|
|
|
126,014 |
|
|
|
|
|
|
|
|
|
|
PROPERTY AND EQUIPMENT |
|
|
|
|
|
|
|
|
Oil and natural gas properties, successful efforts method: |
|
|
|
|
|
|
|
|
Unproved properties |
|
|
487,066 |
|
|
|
508,576 |
|
Proved oil and gas properties, net |
|
|
1,248,999 |
|
|
|
1,251,105 |
|
Other property and equipment, net |
|
|
10,638 |
|
|
|
11,226 |
|
Total property and equipment, net |
|
|
1,746,703 |
|
|
|
1,770,907 |
|
|
|
|
|
|
|
|
|
|
OTHER NONCURRENT ASSETS |
|
|
|
|
|
|
|
|
Other assets |
|
|
5,688 |
|
|
|
7,616 |
|
Operating lease right-of-use assets |
|
|
33,692 |
|
|
|
36,975 |
|
Assets held for sale |
|
|
3,430 |
|
|
|
9,665 |
|
TOTAL ASSETS |
|
$ |
1,896,262 |
|
|
$ |
1,951,177 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
CURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
133,741 |
|
|
$ |
119,907 |
|
Accrued capital expenditures |
|
|
19,510 |
|
|
|
43,500 |
|
Accrued liabilities |
|
|
29,283 |
|
|
|
53,866 |
|
Accrued interest payable |
|
|
22,282 |
|
|
|
21,308 |
|
Liabilities associated with assets held for sale |
|
|
4,052 |
|
|
|
2,815 |
|
Operating lease liability |
|
|
13,826 |
|
|
|
12,666 |
|
Total current liabilities |
|
|
222,694 |
|
|
|
254,062 |
|
|
|
|
|
|
|
|
|
|
NONCURRENT LIABILITIES |
|
|
|
|
|
|
|
|
Debt, net of unamortized discount and debt issuance costs |
|
|
501,928 |
|
|
|
500,541 |
|
Revolving credit facility |
|
|
160,000 |
|
|
|
130,000 |
|
Asset retirement obligations |
|
|
29,952 |
|
|
|
29,877 |
|
Other liabilities |
|
|
21,240 |
|
|
|
8,029 |
|
Operating lease liability |
|
|
20,247 |
|
|
|
24,569 |
|
Liabilities associated with assets held for sale |
|
|
6,978 |
|
|
|
7,013 |
|
Total liabilities |
|
|
963,039 |
|
|
|
954,091 |
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Preferred stock, 50,000,000 authorized, no shares issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock, $0.01 par value, 1,000,000,000 authorized, 36,034,837 and 35,770,934 shares issued and outstanding, respectively |
|
|
386 |
|
|
|
383 |
|
Additional paid in capital |
|
|
2,354,929 |
|
|
|
2,352,309 |
|
Treasury stock, shares at cost; 2,600,672 and 2,508,485 shares, respectively |
|
|
(10,511 |
) |
|
|
(10,049 |
) |
Accumulated deficit |
|
|
(1,411,581 |
) |
|
|
(1,345,557 |
) |
Total stockholders’ equity |
|
|
933,223 |
|
|
|
997,086 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
1,896,262 |
|
|
$ |
1,951,177 |
|
MONTAGE RESOURCES CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) (In thousands, except per share data) (Unaudited) |
||||||||||||||||
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
|
2019 |
|
||||
REVENUES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Natural gas, oil and natural gas liquids sales |
|
$ |
83,082 |
|
|
$ |
143,429 |
|
|
$ |
206,953 |
|
|
$ |
275,257 |
|
Brokered natural gas and marketing revenue |
|
|
7,540 |
|
|
|
11,989 |
|
|
|
17,028 |
|
|
|
21,519 |
|
Other revenue |
|
|
62 |
|
|
|
122 |
|
|
|
127 |
|
|
|
261 |
|
Total revenues |
|
|
90,684 |
|
|
|
155,540 |
|
|
|
224,108 |
|
|
|
297,037 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease operating |
|
|
9,900 |
|
|
|
10,141 |
|
|
|
21,943 |
|
|
|
17,666 |
|
Transportation, gathering and compression |
|
|
51,387 |
|
|
|
51,870 |
|
|
|
105,512 |
|
|
|
93,038 |
|
Production and ad valorem taxes |
|
|
1,600 |
|
|
|
4,009 |
|
|
|
6,468 |
|
|
|
6,857 |
|
Brokered natural gas and marketing expense |
|
|
7,746 |
|
|
|
11,983 |
|
|
|
17,004 |
|
|
|
21,443 |
|
Depreciation, depletion, amortization and accretion |
|
|
42,768 |
|
|
|
38,597 |
|
|
|
86,903 |
|
|
|
68,494 |
|
Exploration |
|
|
9,073 |
|
|
|
15,193 |
|
|
|
22,344 |
|
|
|
31,981 |
|
General and administrative |
|
|
11,569 |
|
|
|
13,564 |
|
|
|
21,450 |
|
|
|
42,494 |
|
(Gain) loss on sale of assets |
|
|
(1,911 |
) |
|
|
1 |
|
|
|
(1,357 |
) |
|
|
2 |
|
Other expense |
|
|
19 |
|
|
|
12 |
|
|
|
34 |
|
|
|
38 |
|
Total operating expenses |
|
|
132,151 |
|
|
|
145,370 |
|
|
|
280,301 |
|
|
|
282,013 |
|
OPERATING INCOME (LOSS) |
|
|
(41,467 |
) |
|
|
10,170 |
|
|
|
(56,193 |
) |
|
|
15,024 |
|
OTHER INCOME (EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain (loss) on derivative instruments |
|
|
(10,925 |
) |
|
|
29,738 |
|
|
|
29,207 |
|
|
|
24,808 |
|
Interest expense, net |
|
|
(14,930 |
) |
|
|
(15,109 |
) |
|
|
(29,764 |
) |
|
|
(28,949 |
) |
Other income |
|
|
4 |
|
|
|
8 |
|
|
|
17 |
|
|
|
8 |
|
Total other income (expense), net |
|
|
(25,851 |
) |
|
|
14,637 |
|
|
|
(540 |
) |
|
|
(4,133 |
) |
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES |
|
|
(67,318 |
) |
|
|
24,807 |
|
|
|
(56,733 |
) |
|
|
10,891 |
|
Income tax benefit (expense) |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
INCOME (LOSS) FROM CONTINUING OPERATIONS |
|
|
(67,318 |
) |
|
|
24,807 |
|
|
|
(56,733 |
) |
|
|
10,891 |
|
Income (loss) from discontinued operations, net of income tax |
|
|
(1,533 |
) |
|
|
2,705 |
|
|
|
(9,291 |
) |
|
|
2,523 |
|
NET INCOME (LOSS) |
|
$ |
(68,851 |
) |
|
$ |
27,512 |
|
|
$ |
(66,024 |
) |
|
$ |
13,414 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EARNINGS (LOSS) PER SHARE OF COMMON STOCK |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding |
|
|
35,856 |
|
|
|
35,678 |
|
|
|
35,816 |
|
|
|
30,645 |
|
Income (loss) from continuing operations |
|
$ |
(1.88 |
) |
|
$ |
0.69 |
|
|
$ |
(1.58 |
) |
|
$ |
0.36 |
|
Income (loss) from discontinued operations |
|
|
(0.04 |
) |
|
|
0.08 |
|
|
|
(0.26 |
) |
|
|
0.08 |
|
Net income (loss) |
|
$ |
(1.92 |
) |
|
$ |
0.77 |
|
|
$ |
(1.84 |
) |
|
$ |
0.44 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common stock outstanding |
|
|
35,856 |
|
|
|
35,826 |
|
|
|
35,816 |
|
|
|
30,830 |
|
Income (loss) from continuing operations |
|
$ |
(1.88 |
) |
|
$ |
0.69 |
|
|
$ |
(1.58 |
) |
|
$ |
0.36 |
|
Income (loss) from discontinued operations |
|
|
(0.04 |
) |
|
|
0.08 |
|
|
|
(0.26 |
) |
|
|
0.08 |
|
Net income (loss) |
|
$ |
(1.92 |
) |
|
$ |
0.77 |
|
|
$ |
(1.84 |
) |
|
$ |
0.44 |
|
Montage Resources Corporation
Douglas Kris, Investor Relations
469-444-1736
This email address is being protected from spambots. You need JavaScript enabled to view it.
TULSA, Okla.--(BUSINESS WIRE)--NGL Energy Partners LP (NYSE: NGL) (“NGL” or the “Partnership”) announced today that the Partnership signed a new long-term produced water transportation and disposal agreement with a leading independent producer operating in Eddy and Lea Counties within the Delaware Basin. This agreement includes a 10 year acreage dedication totaling approximately 10,000 acres and an additional area of mutual interest (AMI) for future growth. The producer currently has a 53,000 acre position within the AMI which includes all of Eddy and Lea counties in New Mexico. As it has with other recent dedications, the Partnership plans to use its existing infrastructure and significant disposal capacity to service this new contract. “We are pleased to announce this agreement that allows us to continue to grow with this customer as it develops its resource and increase our dedicated acreage portfolio in the Northern Delaware Basin,” said Doug White, EVP Water Solutions.
NGL owns and operates the largest integrated network of large diameter produced water pipelines, recycling facilities and disposal wells in the Northern Delaware Basin. The Partnership’s Water Solutions segment operates in a number of the most prolific crude oil and natural gas producing areas including the Delaware Basin in New Mexico and Texas, the Midland Basin in Texas, the DJ Basin in Colorado and the Eagleford Basin in Texas.
Forward-Looking Statements
Certain matters contained in this press release include “forward-looking statements.” All statements, other than statements of historical fact, included in this press release may constitute forward-looking statements. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, the risk factors discussed from time to time in each of our documents and reports filed with the SEC.
Readers are cautioned not to place undue reliance on any forward-looking statements contained in this press release, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements.
About NGL Energy Partners LP
NGL Energy Partners LP, a Delaware limited partnership, is a diversified midstream energy company that transports, stores, markets and provides other logistics services for crude oil, natural gas liquids and other products and transports, treats and disposes of produced water generated as part of the oil and natural gas production process. For further information, visit the Partnership’s website at www.nglenergypartners.com.
NGL Energy Partners LP
Commercial:
Christian Holcomb, 303-815-1010
Senior Vice President & Chief Operating Officer – NGL Water Solutions
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Investor Relations:
Trey Karlovich, 918-481-1119
Executive Vice President & Chief Financial Officer
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or
Linda Bridges, 918-481-1119
Senior Vice President - Finance and Treasurer
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LUXEMBOURG--(BUSINESS WIRE)--Pacific Drilling S.A. (NYSE: PACD) (“Pacific Drilling” or the “Company”) today reported results for the second quarter of 2020. Net loss for second-quarter 2020 was $87.4 million or $1.16 per diluted share, compared to net loss of $61.0 million or $0.81 per diluted share in first-quarter 2020.
Pacific Drilling CEO Bernie Wolford commented, “In the second quarter, our crews and leadership continued to exemplify our commitment to safe and efficient operations, including adopting measures to manage risks associated with COVID-19 transmission, delivering exceptional results for our clients, efficiently preserving the value of our assets and significantly reducing overhead costs.”
Mr. Wolford continued, “Although oil prices began to rebound during the second quarter, clients have generally reduced their drilling investments, as evidenced by Equinor’s decision to cancel the previously exercised third firm well for Pacific Khamsin, and Murphy’s decision to cancel the two well Mexico contract for the Pacific Sharav. In both cases our clients chose to pay a termination fee rather than perform the drilling programs. We expect the current contract for Pacific Khamsin to end in September 2020. Despite these headwinds for 2020, we are actively pursuing opportunities for contracts and are proud to extend our relationship with Murphy through a new contract for Pacific Sharav for 10 firm wells and 5 option wells in the U.S. Gulf of Mexico, which we expect to commence in the second quarter of 2021.”
Mr. Wolford concluded, “Although we currently see more contract opportunities for 2021, compared to 2020, contract durations remain relatively short, on average, and we expect excess rig supply to maintain downward pressure on dayrates. We have no debt maturities until 2023, and cash in excess of $252 million as of June 30, 2020. We project that we have sufficient liquidity to fund our cash needs over the next 12 months. However, due to current market conditions and our outlook for contracting opportunities through 2020 and 2021, we do not believe our current capital structure will be sustainable. We have engaged financial and legal advisors to assist us in evaluating various alternatives to address our longer-term liquidity outlook and capital structure, which may include a negotiated restructuring of our debt that is implemented under the protection of Chapter 11 of the U.S. Bankruptcy Code. We are currently engaged in discussions with a group of our creditors seeking to reach acceptable terms for a restructuring. Any such agreement that we may reach may include the equitization of all or certain of the Company’s indebtedness, which would place our common shareholders at significant risk of losing all of their interests in the Company. While we evaluate our strategic alternatives to address our liquidity outlook and current capital structure, we continue to deliver the safe, efficient and high-quality drilling services for which Pacific Drilling is recognized in our industry.”
Second-Quarter 2020 Operational and Financial Commentary
Contract drilling revenue for second-quarter 2020 was $38.9 million, which included $6.6 million in reimbursable revenue. This compared to first-quarter 2020 contract drilling revenue of $89.4 million, which included $6.4 million in reimbursable revenue. The decrease in revenue resulted primarily from the Pacific Sharav and the Pacific Bora completing their contracts in early April, and the Pacific Santa Ana earning a lower force majeure rate in April and a reduced standby rate for the reminder of the second quarter.
Operating expenses for second-quarter 2020 were $61.9 million, which included $4.5 million in reimbursable expenses. This compared to first-quarter 2020 operating expenses of $86.5 million, which included $5.8 million in reimbursable expenses. The decrease in operating expenses was due to the ramp down of costs on rigs transitioning from operating to standby and idle status.
General and administrative expenses for the second quarter of 2020 were $10.9 million, as compared to $9.6 million for the first quarter of 2020. The increase was due to advisory fees of $2.6 million and severance costs of $0.3 million incurred in the second quarter of 2020. Excluding the impact of such charges, the decrease in general and administrative expenses for the second quarter of 2020 resulted from a reduction in force implemented in May 2020 and a decrease in salaries for all employees.
Adjusted EBITDA(a) for second-quarter 2020 was $(31.1) million, compared to $(1.8) million in first-quarter 2020.
Capital expenditures for the second quarter of 2020 were $1.0 million compared to $5.9 million in the first quarter of 2020. The decrease was from deferral or elimination of rig projects with resulting second-quarter activity limited to required sustaining capital expenditures.
Footnotes
(a) |
EBITDA and Adjusted EBITDA are non-GAAP financial measures. For a definition of EBITDA and Adjusted EBITDA and a reconciliation to net loss, please refer to the schedule included in this release. Management uses this operational metric to track company results and believes that this measure provides additional information that highlights the impact of our operating efficiency as well as the operating and support costs incurred in achieving the revenue performance. |
Conference Call
Pacific Drilling will conduct a conference call at 10 a.m. Central time on Friday, August 7, 2020 to discuss second-quarter 2020 results. To access the conference call, participants are invited to register in advance by visiting bit.ly/Register2Q2020Call. Once registered an email will be immediately sent with dial-in and access code details. A replay of the call will be available the following day on the company’s website or by dialing +1 866-583-1035 and providing access code 9928370#.
About Pacific Drilling
With its best-in-class drillships and highly experienced team, Pacific Drilling is committed to exceeding our customers’ expectations by delivering the safest, most efficient and reliable deepwater drilling services in the industry. Pacific Drilling’s fleet of seven drillships represents one of the youngest and most technologically advanced fleets in the world. Pacific Drilling has principal offices in Luxembourg and Houston. For more information about Pacific Drilling, including our current Fleet Status, please visit our website at www.pacificdrilling.com.
Forward-Looking Statements
Certain statements and information contained in this press release constitute “forward-looking statements” within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, and are generally identifiable by their use of words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “forecast,” “intend,” “our ability to,” “may,” “plan,” “potential,” “predict,” “project,” “projected,” “should,” “will,” “would”, or other similar words which are not generally historical in nature. The forward-looking statements speak only as of the date hereof, and 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.
Our forward-looking statements express our current expectations or forecasts of possible future results or events, including the future impact of the COVID-19 pandemic on our business, future financial and operational performance and cash balances; the potential outcome of our discussions with our creditors and evaluation of our alternatives regarding our liquidity outlook and capital structure; our future liquidity position and future efforts to improve our liquidity position; revenue efficiency levels; market outlook; forecasts of trends; future client contract opportunities; future contract dayrates; our business strategies and plans or objectives of management; estimated duration of client contracts; backlog; expected capital expenditures; projected costs and savings; expectations regarding our two subsidiaries’ application to appeal the arbitration award against them related to the drillship known as the Pacific Zonda in favor of Samsung Heavy Industries Co. Ltd. (“SHI”), the outcome of such subsidiaries’ ongoing bankruptcy proceedings and the potential impact of the Tribunal’s decision on our future operations, financial position, result of operations and liquidity.
Although we believe that the assumptions and expectations reflected in our forward-looking statements are reasonable and made in good faith, these statements are not guarantees, and actual future results may differ materially due to a variety of factors. These statements are subject to a number of risks and uncertainties and are based on a number of judgments and assumptions as of the date such statements are made about future events, many of which are beyond our control. Actual events and results may differ materially from those anticipated, estimated, projected or implied by us in such statements due to a variety of factors, including if one or more of these risks or uncertainties materialize, or if our underlying assumptions prove incorrect.
Important factors that could cause actual results to differ materially from our expectations include: evolving risks from the COVID-19 pandemic and resulting significant disruption in international economies, and international financial and oil markets, including a substantial decline in the price of oil during 2020; the willingness and ability of existing lenders and holders of our notes to agree to any modifications to the terms of our long-term debt that we may request; whether additional capital at a reasonable cost becomes available to us; the global oil and gas market and its impact on demand for our services; the offshore drilling market, including changes in capital expenditures by our clients; changes in worldwide oil and gas supply and demand; rig availability and supply and demand for high-specification drillships and other drilling rigs competing with our fleet; our ability to enter into and negotiate favorable terms for new drilling contracts or extensions; our ability to successfully negotiate and consummate definitive contracts and satisfy other customary conditions with respect to letters of intent and letters of award that we receive for our drillships; actual contract commencement dates; possible cancellation, renegotiation, termination or suspension of drilling contracts as a result of force majeure, mechanical difficulties, performance, market changes or other reasons; costs related to stacking of rigs and costs to reactivate a stacked rig; downtime and other risks associated with offshore rig operations, including unscheduled repairs or maintenance, relocations, severe weather or hurricanes or accidents; our small fleet and reliance on a limited number of clients; the risks of litigation in foreign jurisdictions and delays caused by third parties in connection with such litigation; the outcome of our two subsidiaries’ bankruptcy proceedings and any actions that SHI or others may take in the bankruptcy or other proceedings against the Company and its subsidiaries; the risk that our common shares could be delisted from trading on the New York Stock Exchange should we fail to regain compliance with the minimum share price continued listing standard during the cure period, or fail to meet other continued listing criteria; and the other risk factors described in our 2019 Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on March 12, 2020 and our subsequent filings with the SEC. These documents are available through our website at www.pacificdrilling.com or through the SEC’s website at www.sec.gov.
PACIFIC DRILLING S.A. AND SUBSIDIARIES |
||||||||||||||||||||
Condensed Consolidated Statements of Operations |
||||||||||||||||||||
(in thousands, except per share information) (unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
||||||||||
|
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Contract drilling |
|
$ |
38,910 |
|
|
$ |
89,433 |
|
|
$ |
76,415 |
|
|
$ |
128,343 |
|
|
$ |
142,331 |
|
Costs and expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Operating expenses |
|
|
61,854 |
|
|
|
86,475 |
|
|
|
52,254 |
|
|
|
148,329 |
|
|
|
104,550 |
|
General and administrative expenses |
|
|
10,857 |
|
|
|
9,643 |
|
|
|
10,010 |
|
|
|
20,500 |
|
|
|
21,256 |
|
Depreciation and amortization expense |
|
|
26,811 |
|
|
|
26,931 |
|
|
|
59,330 |
|
|
|
53,742 |
|
|
|
118,229 |
|
Loss from unconsolidated subsidiaries |
|
|
— |
|
|
— |
|
|
700 |
|
|
|
— |
|
|
2,024 |
|
|||
|
|
|
99,522 |
|
|
|
123,049 |
|
|
|
122,294 |
|
|
|
222,571 |
|
|
|
246,059 |
|
Operating loss |
|
|
(60,612 |
) |
|
|
(33,616 |
) |
|
|
(45,879 |
) |
|
|
(94,228 |
) |
|
|
(103,728 |
) |
Other income (expense) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
|
(26,607 |
) |
|
|
(25,127 |
) |
|
|
(24,406 |
) |
|
|
(51,734 |
) |
|
|
(48,445 |
) |
Reorganization items |
|
|
(248 |
) |
|
|
(114 |
) |
|
|
(878 |
) |
|
|
(362 |
) |
|
|
(1,881 |
) |
Interest income |
|
|
520 |
|
|
|
807 |
|
|
|
1,665 |
|
|
|
1,327 |
|
|
|
3,637 |
|
Other income (expense) |
|
|
1 |
|
|
|
(213 |
) |
|
|
(220 |
) |
|
|
(212 |
) |
|
|
(311 |
) |
Loss before income taxes |
|
|
(86,946 |
) |
|
|
(58,263 |
) |
|
|
(69,718 |
) |
|
|
(145,209 |
) |
|
|
(150,728 |
) |
Income tax expense |
|
|
452 |
|
|
|
2,700 |
|
|
|
3,868 |
|
|
|
3,152 |
|
|
|
6,837 |
|
Net loss |
|
$ |
(87,398 |
) |
|
$ |
(60,963 |
) |
|
$ |
(73,586 |
) |
|
$ |
(148,361 |
) |
|
$ |
(157,565 |
) |
Loss per common share, basic |
|
$ |
(1.16 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.98 |
) |
|
$ |
(1.97 |
) |
|
$ |
(2.10 |
) |
Weighted average shares outstanding, basic |
|
|
75,199 |
|
|
|
75,184 |
|
|
|
75,001 |
|
|
|
75,191 |
|
|
|
75,016 |
|
Loss per common share, diluted |
|
$ |
(1.16 |
) |
|
$ |
(0.81 |
) |
|
$ |
(0.98 |
) |
|
$ |
(1.97 |
) |
|
$ |
(2.10 |
) |
Weighted average shares outstanding, diluted |
|
|
75,199 |
|
|
|
75,184 |
|
|
|
75,001 |
|
|
|
75,191 |
|
|
|
75,016 |
|
PACIFIC DRILLING S.A. AND SUBSIDIARIES |
||||||||||||
Condensed Consolidated Balance Sheets |
||||||||||||
(in thousands) (unaudited) |
||||||||||||
|
|
|
|
|
|
|
|
|
|
|||
|
|
June 30, |
|
March 31, |
|
December 31, |
||||||
|
|
2020 |
|
2020 |
|
2019 |
||||||
Assets: |
|
|
|
|
|
|
|
|
|
|||
Cash and cash equivalents |
|
$ |
246,311 |
|
|
$ |
273,957 |
|
|
$ |
278,620 |
|
Restricted cash |
|
|
6,106 |
|
|
|
6,106 |
|
|
|
6,089 |
|
Accounts receivable, net |
|
|
27,084 |
|
|
|
65,629 |
|
|
|
29,252 |
|
Materials and supplies |
|
|
45,101 |
|
|
|
45,577 |
|
|
|
43,933 |
|
Deferred costs, current |
|
|
8,441 |
|
|
|
10,979 |
|
|
|
16,961 |
|
Prepaid expenses and other current assets |
|
|
13,196 |
|
|
|
21,532 |
|
|
|
15,732 |
|
Total current assets |
|
|
346,239 |
|
|
|
423,780 |
|
|
|
390,587 |
|
Property and equipment, net |
|
|
1,790,927 |
|
|
|
1,816,969 |
|
|
|
1,842,549 |
|
Other assets |
|
|
29,777 |
|
|
|
26,158 |
|
|
|
23,423 |
|
Total assets |
|
$ |
2,166,943 |
|
|
$ |
2,266,907 |
|
|
$ |
2,256,559 |
|
|
|
|
|
|
|
|
|
|
|
|||
Liabilities and shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|||
Accounts payable |
|
$ |
19,046 |
|
|
$ |
24,017 |
|
|
$ |
24,223 |
|
Accrued expenses |
|
|
23,738 |
|
|
|
25,733 |
|
|
|
27,924 |
|
Accrued interest |
|
|
15,703 |
|
|
|
31,406 |
|
|
|
15,703 |
|
Deferred revenue, current |
|
|
4,129 |
|
|
|
5,428 |
|
|
|
7,567 |
|
Total current liabilities |
|
|
62,616 |
|
|
|
86,584 |
|
|
|
75,417 |
|
Long-term debt |
|
|
1,142,431 |
|
|
|
1,132,826 |
|
|
|
1,073,734 |
|
Other long-term liabilities |
|
|
38,052 |
|
|
|
38,061 |
|
|
|
38,577 |
|
Total liabilities |
|
|
1,243,099 |
|
|
|
1,257,471 |
|
|
|
1,187,728 |
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
|
|||
Common shares |
|
|
752 |
|
|
|
752 |
|
|
|
751 |
|
Additional paid-in capital |
|
|
1,656,054 |
|
|
|
1,654,248 |
|
|
|
1,652,681 |
|
Treasury shares, at cost |
|
|
(652 |
) |
|
|
(652 |
) |
|
|
(652 |
) |
Accumulated deficit |
|
|
(732,310 |
) |
|
|
(644,912 |
) |
|
|
(583,949 |
) |
Total shareholders’ equity |
|
|
923,844 |
|
|
|
1,009,436 |
|
|
|
1,068,831 |
|
Total liabilities and shareholders’ equity |
|
$ |
2,166,943 |
|
|
$ |
2,266,907 |
|
|
$ |
2,256,559 |
|
PACIFIC DRILLING S. A. AND SUBSIDIARIES |
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
(in thousands) (unaudited) |
||||||||
|
|
|
|
|
|
|
||
|
|
Six Months Ended |
||||||
|
|
June 30, |
|
June 30, |
||||
|
|
2020 |
|
2019 |
||||
|
|
|
|
|
|
|
||
Cash flow from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
(148,361 |
) |
|
$ |
(157,565 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization expense |
|
|
53,742 |
|
|
|
118,229 |
|
Amortization of deferred revenue |
|
|
(8,943 |
) |
|
|
(1,146 |
) |
Amortization of deferred costs |
|
|
15,422 |
|
|
|
586 |
|
Amortization of deferred financing costs |
|
|
269 |
|
|
|
— |
|
Amortization of debt premium, net |
|
|
(332 |
) |
|
|
(221 |
) |
Interest paid-in-kind |
|
|
19,029 |
|
|
|
16,923 |
|
Deferred income taxes |
|
|
82 |
|
|
|
4,760 |
|
Share-based compensation expense |
|
|
3,654 |
|
|
|
3,064 |
|
Loss on unconsolidated subsidiaries |
|
|
— |
|
|
2,024 |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts receivable |
|
|
2,168 |
|
|
|
(24,854 |
) |
Materials and supplies |
|
|
(1,168 |
) |
|
|
(2,012 |
) |
Deferred costs |
|
|
(12,713 |
) |
|
|
(4,347 |
) |
Prepaid expenses and other assets |
|
|
3,460 |
|
|
|
(12,906 |
) |
Accounts payable and accrued expenses |
|
|
(5,041 |
) |
|
|
3,155 |
|
Deferred revenue |
|
|
5,505 |
|
|
|
2,444 |
|
Net cash used in operating activities |
|
|
(73,227 |
) |
|
|
(51,866 |
) |
Cash flow from investing activities: |
|
|
|
|
|
|
||
Capital expenditures |
|
|
(6,967 |
) |
|
|
(21,454 |
) |
Net cash used in investing activities |
|
|
(6,967 |
) |
|
|
(21,454 |
) |
Cash flow from financing activities: |
|
|
|
|
|
|
||
Payments for shares issued under share-based compensation plan |
|
|
(280 |
) |
|
|
— |
|
Proceeds from long-term debt |
|
|
50,000 |
|
|
|
— |
|
Payments for financing costs |
|
|
(1,818 |
) |
|
|
(1,115 |
) |
Purchases of treasury shares |
|
|
— |
|
|
(652 |
) |
|
Net cash provided by (used in) financing activities |
|
|
47,902 |
|
|
|
(1,767 |
) |
Net decrease in cash and cash equivalents |
|
|
(32,292 |
) |
|
|
(75,087 |
) |
Cash, cash equivalents and restricted cash, beginning of period |
|
|
284,709 |
|
|
|
389,075 |
|
Cash, cash equivalents and restricted cash, end of period |
|
$ |
252,417 |
|
|
$ |
313,988 |
|
EBITDA and Adjusted EBITDA Reconciliation
EBITDA is defined as earnings before interest expense, taxes, depreciation and amortization. Beginning with the fourth quarter of 2019, management has redefined EBITDA for the current and comparative periods to exclude amortization of deferred revenue and deferred costs, which are included in contract drilling revenues and operating expenses respectively in the statements of operations. Management believes such measure of EBITDA is consistent with the conventional definition of EBITDA, allows for greater transparency of the Company’s core operating performance, and is in line with historical treatment by certain other major offshore drilling contractors and supply vessel owners. Adjusted EBITDA is defined as EBITDA before loss from unconsolidated subsidiaries and reorganization items. EBITDA and Adjusted EBITDA do not represent and should not be considered an alternative to net income, operating income, cash flow from operations or any other measure of financial performance presented in accordance with U.S. generally accepted accounting principles (“GAAP”) and our calculation of EBITDA and Adjusted EBITDA may not be comparable to that reported by other companies. EBITDA and Adjusted EBITDA are included herein because they are used by management to measure the Company’s operations. Management believes that EBITDA and Adjusted EBITDA present useful information to investors regarding the Company’s operating performance.
PACIFIC DRILLING S.A. AND SUBSIDIARIES |
||||||||||||||||||||
Supplementary Data—Reconciliation of Net Loss to Non-GAAP EBITDA and Adjusted EBITDA |
||||||||||||||||||||
(in thousands) (unaudited) |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||||||
|
|
June 30, |
|
March 31, |
|
June 30, |
|
June 30, |
|
June 30, |
||||||||||
|
|
2020 |
|
2020 |
|
2019 |
|
2020 |
|
2019 |
||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net loss |
|
$ |
(87,398 |
) |
|
$ |
(60,963 |
) |
|
$ |
(73,586 |
) |
|
$ |
(148,361 |
) |
|
$ |
(157,565 |
) |
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Interest expense |
|
|
26,607 |
|
|
|
25,127 |
|
|
|
24,406 |
|
|
|
51,734 |
|
|
|
48,445 |
|
Depreciation and amortization expense |
|
|
26,811 |
|
|
|
26,931 |
|
|
|
59,330 |
|
|
|
53,742 |
|
|
|
118,229 |
|
Other amortization, net (a) |
|
|
2,146 |
|
|
|
4,333 |
|
|
|
(423 |
) |
|
|
6,479 |
|
|
|
(560 |
) |
Income tax expense |
|
|
452 |
|
|
|
2,700 |
|
|
|
3,868 |
|
|
|
3,152 |
|
|
|
6,837 |
|
EBITDA (b) |
|
$ |
(31,382 |
) |
|
$ |
(1,872 |
) |
|
$ |
13,595 |
|
|
$ |
(33,254 |
) |
|
$ |
15,386 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Add: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Loss from unconsolidated subsidiaries |
|
|
— |
|
|
— |
|
|
700 |
|
|
|
— |
|
|
2,024 |
|
|||
Reorganization items |
|
|
248 |
|
|
|
114 |
|
|
|
878 |
|
|
|
362 |
|
|
|
1,881 |
|
Adjusted EBITDA (b) |
|
$ |
(31,134 |
) |
|
$ |
(1,758 |
) |
|
$ |
15,173 |
|
|
$ |
(32,892 |
) |
|
$ |
19,291 |
|
(a) |
Other amortization, net includes amortization of deferred costs less amortization of deferred revenue. |
|
(b) |
EBITDA and Adjusted EBITDA include $2.6 million in advisory fees and $2.5 million in severance for both the three and six months ended June 30, 2020; advisory fees are included in general and administrative expenses, $0.3 million of severance is included in general and administrative expenses and the balance of severance is in operating expenses. |
Investor:
James Harris
Pacific Drilling S.A.
+713 334 6662
This email address is being protected from spambots. You need JavaScript enabled to view it.
Media:
Amy Roddy
Pacific Drilling S.A.
+713 334 6662
This email address is being protected from spambots. You need JavaScript enabled to view it.
LONDON--(BUSINESS WIRE)--#GlobalHeavyFuelOilMarket--Technavio has been monitoring the heavy fuel oil market and it is expected to decrease by USD 52.68 billion during 2020-2024. The report offers an up-to-date analysis regarding the current market scenario, latest trends and drivers, and the overall market environment.
Technavio suggests three forecast scenarios (optimistic, probable, and pessimistic) considering the impact of COVID-19. Please Request Free Sample Report on COVID-19 Impact
Frequently Asked Questions-
The market is fragmented, and the degree of fragmentation will decelerate during the forecast period. BP Plc, Chevron Corp., Exxon Mobil Corp., Indian Oil Corp. Ltd., Neste Oyj, PetroChina Co. Ltd., Qatar Petroleum, Rosneft Oil Co., Royal Dutch Shell Plc, and TOTAL SA are some of the major market participants. To make the most of the opportunities, market vendors should focus more on the growth prospects in the fast-growing segments, while maintaining their positions in the slow-growing segments.
Rising seaborne trade activities have been instrumental in driving the growth of the market.
Heavy Fuel Oil Market 2020-2024: Segmentation
Heavy Fuel Oil Market is segmented as below:
To learn more about the global trends impacting the future of market research, download a free sample: https://www.technavio.com/talk-to-us?report=IRTNTR40330
Heavy Fuel Oil Market 2020-2024: Scope
Technavio presents a detailed picture of the market by the way of study, synthesis, and summation of data from multiple sources. Our heavy fuel oil market report covers the following areas:
This study identifies the adoption of scrubber technology as one of the prime reasons driving the heavy fuel oil market growth during the next few years.
Heavy Fuel Oil Market 2020-2024: Vendor Analysis
We provide a detailed analysis of vendors operating in the heavy fuel oil market, including some of the vendors such as BP Plc, Chevron Corp., Exxon Mobil Corp., Indian Oil Corp. Ltd., Neste Oyj, PetroChina Co. Ltd., Qatar Petroleum, Rosneft Oil Co., Royal Dutch Shell Plc, and TOTAL SA. Backed with competitive intelligence and benchmarking, our research reports on the heavy fuel oil market are designed to provide entry support, customer profile and M&As as well as go-to-market strategy support.
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Heavy Fuel Oil Market 2020-2024: Key Highlights
Table of Contents:
PART 01: EXECUTIVE SUMMARY
PART 02: SCOPE OF THE REPORT
PART 03: MARKET LANDSCAPE
PART 04: MARKET SIZING
PART 05: FIVE FORCES ANALYSIS
PART 06: MARKET SEGMENTATION BY END-USER
PART 07: CUSTOMER LANDSCAPE
PART 08: GEOGRAPHIC LANDSCAPE
PART 09: DECISION FRAMEWORK
PART 10: DRIVERS AND CHALLENGES
PART 11: MARKET TRENDS
PART 12: VENDOR LANDSCAPE
PART 13: VENDOR ANALYSIS
PART 14: APPENDIX
PART 15: EXPLORE TECHNAVIO
About Us
Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions. With over 500 specialized analysts, Technavio’s report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio’s comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.
Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
Website: www.technavio.com/
OKLAHOMA CITY--(BUSINESS WIRE)--Enable Midstream Partners, LP (NYSE: ENBL) announced today that members of its senior management are scheduled to meet with investors at the following upcoming virtual investor conferences:
The presentation materials used at these conferences will be available for download on the investor page of Enable’s website at investors.enablemidstream.com.
ABOUT ENABLE MIDSTREAM PARTNERS
Enable owns, operates and develops strategically located natural gas and crude oil infrastructure assets. Enable’s assets include approximately 14,000 miles of natural gas, crude oil, condensate and produced water gathering pipelines, approximately 2.6 Bcf/d of natural gas processing capacity, approximately 7,800 miles of interstate pipelines (including Southeast Supply Header, LLC of which Enable owns 50 percent), approximately 2,200 miles of intrastate pipelines and seven natural gas storage facilities comprising 84.5 billion cubic feet of storage capacity. For more information, visit www.enablemidstream.com.
Media
Leigh Ann Williams
(405) 553-6947
Investor
Matt Beasley
(405) 558-4600
ANAHEIM, Calif.--(BUSINESS WIRE)--Willdan Group, Inc. (NASDAQ: WLDN) announced today that it has been selected by two Washington School Districts – Entiat School District 127 (Entiat Schools) and Vancouver Public Schools – to perform a total of $13 million in two design-build projects.
In Entiat Schools, Willdan will improve facility comfort while also reducing building energy use of a combined high school and middle school through the replacement of aging packaged rooftop units with new VRF and DOAS and the redesign and replacement of roofing and windows. The facilities will also receive an upgrade to its Building Automation System. These improvements will ensure easy, accurate temperature control in classrooms and multipurpose facilities, reducing annual operating and maintenance costs.
“We’ve appreciated Willdan’s turnkey approach to projects,” said Miles Caples, Superintendent of Entiat Schools. “Their assistance with public communications helped us to pass a $6 million bond for our upgrade projects. Willdan’s guaranteed construction cost and guaranteed savings has given us peace of mind that we can achieve more comfortable, energy-efficient classrooms with minimal risk on our end.”
Working closely with Vancouver Public Schools (VPS), Willdan will perform a full HVAC system redesign and upgrade, single pane window replacement, and lead abatement at Hough Elementary. The project also includes replacing a boiler plant with high efficiency options and controls upgrades at two other elementary schools. The proposed upgrades will reduce VPS’ maintenance costs, improve air quality and classroom comfort, eliminate exposure to environmental toxins, and save energy. This is Willdan’s fourth phase of major construction work with VPS and is expected to be completed by the end of 2020.
“These projects mark an expansion in our relationships with K-12 schools in Washington,” said Tom Brisbin, Willdan’s CEO and Chairman. “We’re pleased to continue growing our geographic footprint in the Pacific Northwest as more school districts see the advantage in Willdan’s turnkey approach and become long-term partners.”
About Entiat School District 127 (Entiat Schools)
Entiat Schools is a public school district located in Entiat, WA. It provides students with the necessary knowledge, skills, and attitudes to be productive and responsible citizens. It has 300+ students from grades pre-K through 12. For more information, visit www.entiatschools.org or follow Entiat Schools on Facebook.
About Vancouver Public Schools (VPS)
Formed in 1852, VPS is a school district in Vancouver, WA. Its mission is to provide an innovative learning environment that engages and empowers each student to develop the knowledge and essential skills to become a competent, responsible, and compassionate citizen. It educates 23,500 students across 21 elementary schools, six middle schools, and five high schools. For more information visit www.vansd.org or follow VPS on Facebook, Twitter, YouTube, or Instagram.
About Willdan
Willdan is a nationwide provider of professional technical and consulting services to utilities, government agencies, and private industry. Willdan’s service offerings span a broad set of complementary disciplines that include electric grid solutions, energy efficiency and sustainability, engineering and planning, and municipal financial consulting. For additional information, visit Willdan's website at www.willdan.com.
Forward-Looking Statements
Statements in this press release that are not purely historical, including statements regarding Willdan’s intentions, hopes, beliefs, expectations, representations, projections, estimates, plans, or predictions of the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The forward-looking statements involve risks and uncertainties including, but not limited to, the risk that Willdan will not be able to reduce costs and preserve liquidity to maintain its operations during the continuation of this pandemic nor be able to resume its growth trajectory once pandemic-related restrictions are lifted and the economy begins to recover. It is important to note that Willdan’s actual results could differ materially from those in any such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, the ultimate impact of the COVID-19 pandemic on Willdan’s results, prospects, and opportunities; Willdan’s ability to adequately complete projects in a timely manner; Willdan’s ability to compete successfully in the highly competitive energy efficiency services market; changes in state, local, and regional economies and government budgets; Willdan’s ability to win new contracts, to renew existing contracts, and to compete effectively for contract awards through bidding processes; and Willdan’s ability to successfully integrate its acquisitions and execute on its growth strategy. Willdan’s business could be affected by a number of other factors, including the risk factors listed from time to time in Willdan’s reports filed with the Securities and Exchange Commission, including, but not limited to, the Annual Report on Form 10-K filed for the year ended December 27, 2019. Willdan cautions investors not to place undue reliance on the forward-looking statements contained in this press release. Willdan disclaims any obligation to, and does not undertake to, update or revise any forward-looking statements in this press release.
Stacy McLaughlin
Chief Financial Officer
714-940-6300
This email address is being protected from spambots. You need JavaScript enabled to view it.
Al Kaschalk
VP Investor Relations
310-922-5642
This email address is being protected from spambots. You need JavaScript enabled to view it.
NEWPORT BEACH, Calif.--(BUSINESS WIRE)--Clean Energy Fuels Corp. (NASDAQ: CLNE) (“Clean Energy” or the “Company”) today announced its operating results for the second quarter of 2020.
Andrew J. Littlefair, Clean Energy’s President and Chief Executive Officer, stated, “Our second quarter results were better than expected given the COVID-19 circumstances. I am very proud of our workforce for their dedication to performing their jobs safely and with the same quality as always. We also ended the quarter with $96 million in cash and investments and $37 million of debt. And more recently we signed another important agreement with another world class energy major, Chevron, that will expand the use of clean carbon-negative RNG for trucks in the ports of Los Angeles and Long Beach. This partnership reflects further and continued recognition of the powerful clean air solution RNG represents, which is available today to fuel near-zero natural gas trucks.”
The Company delivered 89.5 million gallons in the second quarter of 2020, a 10% decrease from 99.6 million in the second quarter of 2019. This decrease was due to a slowdown in activity in the second quarter of 2020 as a result of COVID-19, which was primarily experienced in the airports (fleet services), public transit and government fleet customer markets.
The Company’s revenue for the second quarter of 2020 was $59.9 million, a decrease of 17.2% compared to $72.3 million for the second quarter of 2019. Revenue for the second quarter of 2020 included $4.4 million from U.S. federal excise tax credits for alternative fuels ("AFTC"), which applied to vehicle fuel sales made from April 1, 2020 through June 30, 2020, and an unrealized loss of $1.5 million on commodity swap and customer fueling contracts relating to the Company’s Zero Now truck financing program. Revenue for the second quarter of 2019 included an unrealized gain of $0.6 million on commodity swap and customer fueling contracts relating to the Company’s Zero Now program. Excluding the AFTC revenue in the second quarter of 2020 and the unrealized loss and gain on commodity swap and customer fueling contracts in the second quarter of both 2020 and 2019, respectively, revenue for the second quarter of 2020 decreased by 20.6% to $57.0 million compared to $71.7 million for the second quarter of 2019. This decrease was principally due to lower volumes and lower effective fuel prices resulting from lower natural gas prices and the fuel price mix, which is based on the variation of fuel types and locations where we deliver fuel. Station construction revenue was $5.3 million for the second quarter of 2020 compared to $5.9 million for the second quarter of 2019.
The Company’s revenue for the six months ended June 30, 2020 was $145.9 million, a decrease of 2.8% compared to $150.0 million for the six months ended June 30, 2019. Revenue for the six months ended June 30, 2020 included $9.8 million from AFTC revenue, which applied to vehicle fuel sales made from January 1, 2020 through June 30, 2020, and an unrealized gain of $4.2 million on commodity swap and customer fueling contracts relating to the Company’s Zero Now truck financing program. Revenue for the six months ended June 30, 2019 included an unrealized loss of $4.4 million on commodity swap and customer fueling contracts relating to the Company’s Zero Now program. Excluding the AFTC revenue in the six months ended June 30, 2020 and the unrealized gain and loss on commodity swap and customer fueling contracts in both the 2020 and 2019 periods, revenue for the six months ended June 30, 2020 decreased by 14.6% to $131.9 million compared to $154.4 million for the six months ended June 30, 2019. This was principally due to lower effective fuel prices resulting from lower natural gas prices and the fuel price mix, which is based on the variation of fuel types and locations where we deliver fuel, and lower volumes. The decrease in revenue from lower effective fuels price and volumes was partially offset by higher station construction revenue, which was $10.8 million for the six months ended June 30, 2020 compared to $9.1 million for the six months ended June 30, 2019.
On a GAAP (as defined below) basis, net loss attributable to Clean Energy for the second quarter of 2020 was $(6.7) million, or $(0.03) per share, compared to $(5.4) million, or $(0.03) per share, for the second quarter of 2019. The second quarter of 2020 was positively affected by AFTC revenue and negatively affected by the unrealized loss on commodity swap and customer fueling contracts, while the comparable 2019 period was positively affected by the unrealized gain on commodity swap and customer fueling contracts.
On a GAAP basis, net loss attributable to Clean Energy for the six months ended June 30, 2020 was $(5.0) million, or $(0.02) per share, compared to $(16.3) million, or $(0.08) per share, for the six months ended June 30, 2019. The six months ended June 30, 2020 was positively affected by AFTC revenue and the unrealized gain on commodity swap and customer fueling contracts, while the comparable 2019 period was negatively affected by the unrealized loss on commodity swap and customer fueling contracts.
Non-GAAP loss per share and Adjusted EBITDA (each as defined below) for the second quarter of 2020 was $(0.02) and $9.2 million, respectively. Non-GAAP loss per share and Adjusted EBITDA for the second quarter of 2019 was $(0.02) and $8.9 million, respectively.
Non-GAAP loss per share and Adjusted EBITDA for the six months ended June 30, 2020 was $(0.03) and $20.5 million, respectively. Non-GAAP loss per share and Adjusted EBITDA for the six months ended June 30, 2019 was $(0.04) and $20.1 million, respectively.
Non-GAAP loss per share and Adjusted EBITDA are described below and reconciled to GAAP net loss per share attributable to Clean Energy and GAAP net loss attributable to Clean Energy, respectively.
Non-GAAP Financial Measures
To supplement the Company’s unaudited condensed consolidated financial statements presented in accordance with accounting principles generally accepted in the United States of America (“GAAP”), the Company uses non-GAAP financial measures that it calls non-GAAP income (loss) per share (“non-GAAP income (loss) per share”) and adjusted EBITDA (“Adjusted EBITDA”). Management presents non-GAAP income (loss) per share and Adjusted EBITDA because it believes these measures provide meaningful supplemental information about the Company’s performance, for the following reasons: (1) these measures allow for greater transparency with respect to key metrics used by management to assess the Company’s operating performance and make financial and operational decisions; (2) these measures exclude the effect of items that management believes are not directly attributable to the Company’s core operating performance and may obscure trends in the business; and (3) these measures are used by institutional investors and the analyst community to help analyze the Company’s business. In future quarters, the Company may make adjustments for other expenditures, charges or gains to present non-GAAP financial measures that the Company’s management believes are indicative of the Company’s core operating performance.
Non-GAAP financial measures are limited as an analytical tool and should not be considered in isolation from, or as a substitute for, the Company’s GAAP results. The Company expects to continue reporting non-GAAP financial measures, adjusting for the items described below (and/or other items that may arise in the future as the Company’s management deems appropriate), and the Company expects to continue to incur expenses, charges or gains similar to the non-GAAP adjustments described below. Accordingly, unless expressly stated otherwise, the exclusion of these and other similar items in the presentation of non-GAAP financial measures should not be construed as an inference that these costs are unusual, infrequent or non-recurring. Non-GAAP income (loss) per share and Adjusted EBITDA are not recognized terms under GAAP and do not purport to be an alternative to GAAP income (loss), GAAP income (loss) per share or any other GAAP measure as an indicator of operating performance. Moreover, because not all companies use identical measures and calculations, the Company’s presentation of non-GAAP income (loss) per share and Adjusted EBITDA may not be comparable to other similarly titled measures used by other companies.
Non-GAAP Income (Loss) Per Share
Non-GAAP income (loss) per share, which the Company presents as a non-GAAP measure of its performance, is defined as net income (loss) attributable to Clean Energy Fuels Corp., plus stock-based compensation expense, plus (minus) loss (income) from equity method investments, and plus (minus) any loss (gain) from changes in the fair value of derivative instruments, the total of which is divided by the Company’s weighted-average common shares outstanding on a diluted basis. The Company’s management believes excluding non-cash expenses related to stock-based compensation provides useful information to investors regarding the Company’s performance because of the varying available valuation methodologies, the volatility of the expense (which depends on market forces outside of management’s control), the subjectivity of the assumptions and the variety of award types that a company can use, which may obscure trends in a company’s core operating performance. Similarly, the Company believes excluding the non-cash results from equity method investments is useful to investors because these charges are not part of or representative of the core operations of the Company. In addition, the Company’s management believes excluding the non-cash loss (gain) from changes in the fair value of derivative instruments is useful to investors because the valuation of the derivative instruments is based on a number of subjective assumptions, the amount of the loss or gain is derived from market forces outside of management’s control, and the exclusion of these amounts enables investors to compare the Company’s performance with other companies that do not use, or use different forms of, derivative instruments.
The table below shows GAAP and non-GAAP loss attributable to Clean Energy per share and also reconciles GAAP net loss attributable to Clean Energy to an adjusted net loss figure used in the calculation of non-GAAP loss per share:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
(in thousands, except share and per share data) |
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
||||
Net loss attributable to Clean Energy Fuels Corp. |
|
$ |
(5,383 |
) |
|
$ |
(6,736 |
) |
|
$ |
(16,329 |
) |
|
$ |
(5,032 |
) |
Stock-based compensation |
|
|
918 |
|
|
|
760 |
|
|
|
2,164 |
|
|
|
1,814 |
|
Loss from equity method investments |
|
|
33 |
|
|
|
502 |
|
|
|
500 |
|
|
|
357 |
|
Loss (gain) from change in fair value of derivative instruments |
|
|
(582 |
) |
|
|
1,022 |
|
|
|
5,992 |
|
|
|
(4,205 |
) |
Adjusted (non-GAAP) net loss |
|
$ |
(5,014 |
) |
|
$ |
(4,452 |
) |
|
$ |
(7,673 |
) |
|
$ |
(7,066 |
) |
Diluted weighted-average common shares outstanding |
|
|
204,653,723 |
|
|
|
200,670,137 |
|
|
|
204,426,459 |
|
|
|
202,831,346 |
|
GAAP loss attributable to Clean Energy Fuels Corp. per share |
|
$ |
(0.03 |
) |
|
$ |
(0.03 |
) |
|
$ |
(0.08 |
) |
|
$ |
(0.02 |
) |
Non-GAAP loss attributable to Clean Energy Fuels Corp. per share |
|
$ |
(0.02 |
) |
|
$ |
(0.02 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.03 |
) |
Adjusted EBITDA
Adjusted EBITDA, which the Company presents as a non-GAAP measure of its performance, is defined as net income (loss) attributable to Clean Energy, plus (minus) income tax expense (benefit), plus interest expense, minus interest income, plus depreciation and amortization expense, plus stock-based compensation expense, plus (minus) loss (income) from equity method investments, and plus (minus) any loss (gain) from changes in the fair value of derivative instruments. The Company’s management believes Adjusted EBITDA provides useful information to investors regarding the Company’s performance for the same reasons discussed above with respect to non-GAAP income (loss) per share. In addition, management internally uses Adjusted EBITDA to determine elements of executive and employee compensation.
The table below shows Adjusted EBITDA and also reconciles this figure to GAAP net loss attributable to Clean Energy:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
|
Three Months Ended |
|
Six Months Ended |
||||||||||||
|
|
June 30, |
|
June 30, |
||||||||||||
(in thousands, except share and per share data) |
|
2019 |
|
|
2020 |
|
|
2019 |
|
|
2020 |
|
||||
Net loss attributable to Clean Energy Fuels Corp. |
|
$ |
(5,383 |
) |
|
$ |
(6,736 |
) |
|
$ |
(16,329 |
) |
|
$ |
(5,032 |
) |
Income tax expense |
|
|
66 |
|
|
|
78 |
|
|
|
126 |
|
|
|
156 |
|
Interest expense |
|
|
1,842 |
|
|
|
1,841 |
|
|
|
3,733 |
|
|
|
4,051 |
|
Interest income |
|
|
(567 |
) |
|
|
(273 |
) |
|
|
(1,147 |
) |
|
|
(654 |
) |
Depreciation and amortization |
|
|
12,605 |
|
|
|
12,050 |
|
|
|
25,084 |
|
|
|
23,974 |
|
Stock-based compensation |
|
|
918 |
|
|
|
760 |
|
|
|
2,164 |
|
|
|
1,814 |
|
Loss from equity method investments |
|
|
33 |
|
|
|
502 |
|
|
|
500 |
|
|
|
357 |
|
Loss (gain) from change in fair value of derivative instruments |
|
|
(582 |
) |
|
|
1,022 |
|
|
|
5,992 |
|
|
|
(4,205 |
) |
Adjusted EBITDA |
|
$ |
8,932 |
|
|
$ |
9,244 |
|
|
$ |
20,123 |
|
|
$ |
20,461 |
|
Definition of “Gallons Delivered”
The Company defines “gallons delivered” as its gallons sold as compressed natural gas (“CNG”) and liquefied natural gas (“LNG”), along with its gallons associated with providing operations and maintenance services, in each case delivered to its customers in the applicable period, plus the Company’s proportionate share of gallons delivered by joint ventures in the applicable period. RNG sold as vehicle fuel, is sold under the brand name Redeem™ and is included in the CNG or LNG amounts as applicable based on the form in which it was sold.
The table below shows gallons delivered for the three and six months ended June 30, 2019 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
June 30, |
|
June 30, |
||||||||
Gallons Delivered (in millions) |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
||||
CNG |
|
|
83.8 |
|
|
73.6 |
|
|
162.3 |
|
|
157.7 |
LNG |
|
|
15.8 |
|
|
15.9 |
|
|
32.5 |
|
|
31.1 |
Total |
|
|
99.6 |
|
|
89.5 |
|
|
194.8 |
|
|
188.8 |
Sources of Revenue
The following table shows the Company's sources of revenue for the three and six months ended June 30, 2019 and 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended |
|
Six Months Ended |
||||||||
|
|
June 30, |
|
June 30, |
||||||||
Revenue (in millions) |
|
2019 |
|
2020 |
|
2019 |
|
2020 |
||||
Volume-related (1) |
|
$ |
66.3 |
|
$ |
50.2 |
|
$ |
140.8 |
|
$ |
125.3 |
Station construction sales |
|
|
5.9 |
|
|
5.3 |
|
|
9.1 |
|
|
10.8 |
AFTC (2) |
|
|
— |
|
|
4.4 |
|
|
— |
|
|
9.8 |
Other |
|
|
0.1 |
|
|
— |
|
|
0.1 |
|
|
— |
Total revenue |
|
$ |
72.3 |
|
$ |
59.9 |
|
$ |
150.0 |
|
$ |
145.9 |
| ________________________ | ||
(1) |
For the three and six months ended June 30, 2020, volume-related revenue includes an unrealized gain (loss) from the change in fair value of commodity swap and customer fueling contracts of $(1.5) million and $4.2 million, respectively. For the three and six months ended June 30, 2019, volume-related revenue includes an unrealized gain (loss) from the change in fair value of commodity swap and customer contracts of $0.6 million and $(4.4) million, respectively. | |
(2) |
In 2019, we recognized AFTC revenue for the vehicle fuel we sold in 2018 and 2019 in the three months ended December 31, 2019. | |
2020 Outlook
We revised our 2020 outlook on May 7, 2020 (the “revised 2020 outlook”) due to the evolving uncertainties surrounding the impact of the COVID-19 pandemic on the economy, and to our company, as well as the volatility in oil markets. During the second quarter of 2020, we saw an overall decline in volumes of 10% compared to the same period in 2019, principally around airports and transit authorities with year-over-year declines ranging from 25% to 45%, with refuse and over-the-road trucking growing between 2% and 7%. Our revised 2020 outlook assumed the overall declining volumes would extend through June 30, 2020 with a gradual recovery going into the third quarter of 2020 toward flat to low single digit percentage overall volume increases on a year-over-year basis. While we believe the overall volume decline curve hit bottom during the second quarter and has flattened out exiting the second quarter, the effects of the COVID-19 pandemic have been prolonged further than our revised 2020 outlook contemplated. We now assume such prolonged impact of COVID-19 will delay and flatten the curve of the gradual recovery we contemplated in our revised 2020 outlook. This will also delay and flatten the recovery of AFTC eligible volumes, AFTC revenue and volume related gross profit margins on those sectors experiencing the effects of the prolonged economic slowdown. However, we have also experienced lower operating expenses than what was contemplated in our revised 2020 outlook due to lower spending as a result of reduced business activities. We expect this trend of lower spending to continue, which will help mitigate the prolonged reduction in gross profit margins associated with prolonged year-over-year declines in our overall volume. We also recorded a $2.5 million station asset disposal gain during the second quarter, which helped mitigate the negative impact of COVID-19 on our 2020 financial results. We believe the lower gross profit margins from lower volumes can be sufficiently mitigated by our continued lower operating expenses and the station asset disposal gain, such that we are not changing our revised 2020 outlook for our GAAP net loss or Adjusted EBITDA at this time. As such, our GAAP net income (loss) for 2020 is still expected to be approximately a loss of $11.0 million, assuming no unrealized gains or losses on commodity swap and customer fueling contracts. Changes in diesel and natural gas market conditions resulting in unrealized gains or losses on the Company’s commodity swap contracts could significantly impact the Company’s estimated GAAP net income for 2020. Adjusted EBITDA for 2020 is still expected to be approximately $45.0 million. These expectations also exclude the impact of any acquisitions, divestitures, transactions or other extraordinary events including a deterioration in or lack of any recovery from the COVID-19 pandemic. Additionally, the expectations regarding 2020 Adjusted EBITDA assume the calculation of this non-GAAP financial measure in the same manner as described above and without adjustments for any other items that may arise during 2020 and that management deems appropriate to exclude. These expectations are forward-looking statements and are qualified by the statement under “Safe Harbor Statement” below.
|
|
|
|
|
(in thousands) |
|
2020 Outlook |
||
GAAP Net income (loss) attributable to Clean Energy Fuels Corp. |
|
$ |
(11,000 |
) |
Income tax expense (benefit) |
|
|
— |
|
Interest expense |
|
|
5,500 |
|
Interest income |
|
|
(2,000 |
) |
Depreciation and amortization |
|
|
48,500 |
|
Stock-based compensation |
|
|
4,000 |
|
Loss (income) from equity method investments |
|
|
— |
|
Loss (gain) from change in fair value of derivative instruments |
|
|
— |
|
Adjusted EBITDA |
|
$ |
45,000 |
|
Today’s Conference Call
The Company will host an investor conference call today at 4:30 p.m. Eastern time (1:30 p.m. Pacific). Investors interested in participating in the live call can dial 1.877.407.4018 from the U.S. and international callers can dial 1.201.689.8471. A telephone replay will be available approximately two hours after the call concludes through Sunday, September 6, 2020, by dialing 1.844.512.2921 from the U.S., or 1.412.317.6671 from international locations, and entering Replay Pin Number 13706388. There also will be a simultaneous, live webcast available on the Investor Relations section of the Company’s web site at www.cleanenergyfuels.com, which will be available for replay for 30 days.
About Clean Energy Fuels Corp.
Clean Energy Fuels Corp. is North America’s leading provider of the cleanest fuel for the transportation market. Through its sales of Redeem™ renewable natural gas (RNG), which is derived from biogenic methane produced by the breakdown of organic waste, Clean Energy helps thousands of vehicles, from airport shuttles to city buses to waste and heavy-duty trucks, to reduce their amount of climate-harming greenhouse gas by at least 70% and up to 300% depending on the RNG feedstock. Clean Energy can deliver Redeem through compressed natural gas (CNG) and liquefied natural gas (LNG) to its network of approximately 550 fueling stations across the U.S. and Canada. Clean Energy builds and operates CNG and LNG fueling stations for the transportation market, owns natural gas liquefaction facilities in California and Texas, and transports bulk CNG and LNG to non-transportation customers around the U.S. For more information, visit www.CleanEnergyFuels.com.
Safe Harbor Statement
This press release contains 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, including statements about, among other things, the Company’s outlook for fiscal 2020, the expected impact of the COVID-19 pandemic on the Company’s business, including volumes delivered, and liquidity, and the effect, if any, of the foregoing on the Company’s performance, financial condition and ability to execute its strategic initiatives.
Forward-looking statements are statements other than historical facts and relate to future events or circumstances or the Company’s future performance, and they are based on the Company’s current assumptions, expectations and beliefs concerning future developments and their potential effect on the Company and its business. As a result, actual results, performance or achievements and the timing of events could differ materially from those anticipated in or implied by these forward-looking statements as a result of many factors including, among others: the COVID-19 pandemic and the measures taken to prevent its spread and the related impact on our operations, liquidity and financial condition; the Company’s history of net losses and the possibility the Company incurs additional net losses in the future; the willingness of fleets and other consumers to adopt natural gas as a vehicle fuel, and the rate and level of any such adoption; future supply, demand, use and prices of crude oil, gasoline, diesel, natural gas, and other vehicle fuels, including overall levels of and volatility in these factors; natural gas vehicle and engine cost, fuel usage, availability, quality, safety, convenience, design, performance and residual value, as well as operator perception with respect to these factors, in general and in the Company’s key customer markets, including heavy-duty trucking; the Company’s ability to execute its Zero Now truck financing program, a key strategic initiative related to the market for natural gas heavy-duty trucks, and the effect of this initiative on the Company’s business, prospects, performance and liquidity; the Company’s ability to capture a substantial share of the market for alternative vehicle fuels and vehicle fuels generally and otherwise compete successfully in these markets, including in the event of improvements in or perceived advantages of non-natural gas vehicle fuels or engines powered by these fuels or other competitive developments; the availability of environmental, tax and other government regulations, programs and incentives that promote natural gas, such as AFTC, or other alternatives as a vehicle fuel, including long-standing support for gasoline- and diesel-powered vehicles and growing support for electric and hydrogen-powered vehicles that could result in programs or incentives that favor these or other vehicles or vehicle fuels over natural gas; future availability of capital, which may include equity or debt financing, in the amounts and at the times needed to fund any growth in the Company’s business and the repayment of its debt obligations (whether at or before their due dates) or other expenditures, as well as the terms and other effects of any such capital-raising transaction; the effect of, or potential for changes to greenhouse gas emissions requirements or other environmental regulations applicable to vehicles powered by gasoline, diesel, natural gas or other vehicle fuels and crude oil and natural gas fueling, drilling, production, transportation or use; the Company’s ability to manage and grow its RNG business, including its ability to continue to receive revenue from sales of tradable credits the Company generates by selling conventional and renewable natural gas as vehicle fuel and the effect of any increase in competition for RNG supply; the Company’s ability to manage and grow its business of transporting and selling CNG for non-vehicle purposes via virtual natural gas pipelines and interconnects; the Company’s ability to accurately predict natural gas vehicle fuel demand in the geographic and customer markets in which it operates and effectively calibrate its strategies, timing and levels of investments to be consistent with this demand; the Company’s ability to recognize the anticipated benefits of its CNG and LNG fueling station network; construction, permitting and other factors that could cause delays or other problems at station construction projects; the Company’s ability to manage the safety and environmental risks inherent in its operations; the Company’s compliance with all applicable government regulations; the Company’s ability to execute and realize the intended benefits of any acquisitions, divestitures, investments or other strategic relationships or transactions; and general political, regulatory, economic and market conditions.
Investor Contact:
This email address is being protected from spambots. You need JavaScript enabled to view it.
News Media Contact:
Raleigh Gerber
Manager of Corporate Communications
949.437.1397
GREENWICH, Conn.--(BUSINESS WIRE)--Diamond S Shipping Inc. (NYSE: DSSI) (the “Company”) announced today that the Company plans to release second quarter 2020 earnings before the market opens on Thursday August 13, 2020. The Company will host a conference call for investors at 8:00 AM ET on the same day.
Conference Call Details
Date: Thursday August 13, 2020
Time: 8:00 AM ET
US Dial-In Number: +1 866 211-4137
International Dial-In Number: +1 647 689-6723
Conference ID: 3179296
A live webcast of the conference call will be available from the Company’s website at www.diamondsshipping.com.
An audio replay of the conference call will be available starting at 11 AM ET on Thursday August 13, 2020 through Thursday August 20, 2020 by dialing +1 800 585-8367 or +1 416 621-4642 and entering the passcode 3179296.
About Diamond S Shipping Inc.
Diamond S Shipping Inc. (NYSE Ticker: DSSI) owns and operates 66 vessels on the water, including 15 Suezmax vessels, one Aframax and 50 medium-range (MR) product tankers. Diamond S Shipping is one of the largest energy shipping companies providing seaborne transportation of crude oil and refined petroleum products in the international shipping markets. The Company is headquartered in Greenwich, CT. More information about the Company can be found at www.diamondsshipping.com.
Investor Relations Inquiries:
Robert Brinberg
Tel: +1-212-517-0810
E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.
DALLAS--(BUSINESS WIRE)--San Mateo Black River Oil Pipeline, LLC (San Mateo), a wholly-owned subsidiary of San Mateo Midstream, LLC, announces its binding open season to gauge shipper interest in committed crude oil interstate transportation service on the Stebbins Expansion Crude Oil Pipeline Project (Expansion Project), a proposed expansion of the existing San Mateo pipeline system in Eddy County, New Mexico. The Expansion Project is a proposed expansion of the San Mateo system further north in Eddy County consisting of approximately 19 miles of various diameter crude pipelines from certain points of origin in Eddy County to the existing San Mateo interconnect with Plains Pipeline, L.P. in Eddy County. Commencement of commercial operations of the Expansion Project is targeted for the third quarter of 2020.
This open season provides an opportunity for shippers to support the Expansion Project by making acreage dedications and volume commitments for priority (firm) service, or acreage dedications for non-firm committed service, thereby becoming committed shippers for the term of their transportation services agreements. The final volume of capacity for both committed and uncommitted service on the Expansion Project will be determined by San Mateo in part based on the results of this open season.
The binding open season begins August 7, 2020 at 8:00 a.m. Central Time, and ends on September 6, 2020 at 5:00 p.m. Central Time. For more information about the Expansion Project and the open season documents, please visit www.sanmateomidstream.com or contact San Mateo’s Vice President of Business Development, Corey Lothamer at This email address is being protected from spambots. You need JavaScript enabled to view it..
About San Mateo Midstream, LLC
San Mateo Midstream, LLC is a strategic joint venture formed in February 2017 by a subsidiary of Matador Resources Company (NYSE: MTDR) and a subsidiary of Five Point Energy LLC. San Mateo provides an all-inclusive approach to midstream services for the three main product streams produced by oil and natural gas activities, including salt water gathering and disposal services, natural gas gathering, compression, treating and processing services, and oil gathering, transportation and blending services. San Mateo owns and operates oil, natural gas and water gathering and transportation systems in Eddy County, New Mexico and Loving County, Texas, the Black River Processing Plant in Eddy County, New Mexico with a designed inlet capacity of 260 million cubic feet of natural gas per day and eight commercial salt water disposal wells in Eddy County, New Mexico and Loving County, Texas. San Mateo serves as one of the primary midstream solutions for multiple customers across the northern Delaware Basin, including its anchor customer, Matador Resources Company.
For more information, visit San Mateo Midstream, LLC at www.sanmateomidstream.com.
Corey Lothamer
Vice President of Business Development
San Mateo Midstream
(972) 587-4635
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HOUSTON--(BUSINESS WIRE)--Whiting USA Trust II (the “Trust”) (OTC:WHZT) announced today that it determined there will be no distribution made to unitholders in the third quarter of 2020. This is due to the net profits interest generating a net loss of $0.9 million during the second quarterly payment period of 2020 primarily due to the dramatic decline in oil prices in April 2020 which prices have remained suppressed into the third quarter. Lower commodity prices during the quarterly payment period caused operating and development costs to exceed the proceeds from production.
Sales volumes, net profits and selected performance metrics for the quarterly payment period (mainly affected by April 2020 through June 2020 oil prices and March 2020 through May 2020 gas prices) were:
|
|
|
|
|
|
|
|
|
|
Sales volumes: |
|
|
|
|
Oil (Bbl)(1) |
|
|
186,554 |
|
Natural gas (Mcf) |
|
|
242,503 |
|
Total (BOE)(2) |
|
|
226,971 |
|
Gross proceeds: |
|
|
|
|
Oil sales(1) |
|
$ |
3,850,730 |
|
Natural gas sales |
|
|
223,401 |
|
Total gross proceeds(2) |
|
$ |
4,074,131 |
|
Costs: |
|
|
|
|
Lease operating expenses |
|
$ |
6,212,319 |
|
Production taxes(3) |
|
|
134,801 |
|
Development costs |
|
|
308,052 |
|
Cash settlements on commodity derivatives(4) |
|
|
- |
|
Reserve for expenditures(5) |
|
|
(1,625,295 |
) |
Total costs |
|
$ |
5,029,877 |
|
Net losses |
|
$ |
(955,746 |
) |
Percentage allocable to Trust’s Net Profits Interest |
|
|
90 |
% |
Total cash available for the Trust |
|
$ |
(860,171 |
) |
Provision for estimated Trust expenses |
|
|
- |
|
Montana state income taxes withheld |
|
|
- |
|
Net cash losses(6) |
|
$ |
(860,171 |
) |
Trust units outstanding |
|
|
18,400,000 |
|
Cash loss per Trust unit(6) |
|
$ |
(0.046748 |
) |
Selected performance metrics: |
|
|
|
|
Crude oil average realized price (per Bbl)(1)(2) |
|
$ |
20.64 |
|
Natural gas average realized price (per Mcf)(7) |
|
$ |
0.92 |
|
Lease operating expenses (per BOE) |
|
$ |
27.37 |
|
Production tax rate (percent of total gross proceeds)(3) |
|
|
3.3 |
% |
| __________ | |
(1) |
Oil includes natural gas liquids. |
(2) |
Total production decreased 39 MBOE (or 15%) and total gross proceeds decreased $6.1 million (or 60%) during the second quarterly payment period of 2020 as compared to the first quarterly payment period of 2020. The decline in production between periods is primarily due to differences in timing associated with revenues received from non-operated properties and certain wells being shut-in for a portion of the second quarterly payment period. The decrease in total gross proceeds was mainly due to the significantly lower realized oil price which decreased 52% primarily as a result of the decline in the NYMEX price between periods. |
(3) |
Production taxes and production taxes as a percent of total gross proceeds decreased during the second quarterly payment period of 2020 when compared to the first quarterly payment period of 2020 primarily due to certain wells within the Garland Unit being granted a “stripper well” production tax exemption, which reduced the tax rate for production volumes from these wells and resulted in the receipt of tax refunds related to prior periods during the third quarter. |
(4) |
All costless collar hedge contracts terminated as of December 31, 2014, and no additional hedges are allowed to be placed on Trust assets. Consequently, there are no further cash settlements on commodity hedges for inclusion in the Trust’s computation of net profits (or net losses, as the case may be), and the Trust has increased exposure to oil and natural gas price volatility. |
(5) |
As provided in the terms of the Trust’s net profits interest (“NPI”), a reserve for expenditures of $1.6 million was established by Whiting Petroleum Corporation (“Whiting”) during the first quarterly payment period of 2020 in response to an expectation that future gross proceeds from the underlying properties may be insufficient to cover the future operating costs of the underlying properties. In the second quarterly payment period of 2020, the $1.6 million reserve was released and applied by Whiting to qualifying expenses incurred during the period. Accordingly, there is no remaining reserve for expenditures to offset future development, maintenance or operating expenses on the underlying properties and related activities. |
(6) |
When net losses are generated under the net profits interest, the Trust receives no payment from Whiting; however, neither the Trust nor the Trust unitholders are liable for any such losses. All such net losses, plus accrued interest at the prevailing money market rate, will be deducted from gross proceeds in future computation periods for purposes of determining net proceeds (or net losses as the case may be) until the negative net proceeds, including interest, have been recovered in full. The Trust will make no further distributions until that occurs. |
(7) |
A portion of the natural gas volumes produced by the underlying properties have a “liquids-rich” content; however, such liquids did not result in a premium to the average NYMEX natural gas price in the second quarterly payment period primarily due to a decline in liquids prices during the period. |
The Trust’s NPI, which is the only asset of the Trust other than cash reserves held for future Trust expenses, represents the right to receive 90% of the net proceeds from Whiting’s interests in certain existing oil and natural gas properties located primarily in the Rocky Mountains, Permian Basin, Gulf Coast and Mid-Continent regions of the United States.
Status of the Trust
Oil and natural gas prices have declined significantly in 2020, dropping below negative $37.00 per Bbl in April 2020 and have remained depressed into August 2020. As a result of the decline in commodity prices, the net profits interest generated a net loss during the second quarterly payment period of 2020. This dramatic decline in pricing was primarily in response to Saudi Arabia’s announcement of plans to abandon previously agreed upon output restraints and the economic effects of the coronavirus (“COVID-19”) pandemic on the demand for oil and natural gas. The Trust is unable to predict future commodity prices or future performance; however, it appears likely that the depressed oil prices and economic effects of the COVID-19 pandemic will negatively impact future Trust quarterly payment periods, resulting in reduced net proceeds that the Trust is entitled to, which could materially reduce or completely eliminate the amount of cash available for distribution to Trust unitholders.
Due to these uncertainties and as provided in the terms of the NPI, a $1.6 million reserve for future development, maintenance or operating expenses was established and the quarterly payment period’s provision for estimated Trust expenses was increased during the first quarterly payment period of 2020. During the second quarterly payment period, Whiting released this $1.6 million reserve and applied it against qualifying expenses incurred during the period. Additionally, in the current commodity price environment, the Trust’s distributions have increased sensitivity to fluctuations in operating and capital expenditures and commodity price differentials. If the NPI continues to generate net losses or limited net proceeds, the net profits interest may not provide sufficient funds to the Trustee to enable it to pay all of the Trust’s administrative expenses, which expenses may be in excess of the provision for Trust expenses. As of July 31, 2020, the Trust had cash reserves of $0.7 million for the payment of its administrative expenses.
Trust Termination
The Trust will wind up its affairs and terminate shortly after the earlier of (a) the NPI termination date or (b) the sale of the net profits interest. The NPI termination date is the later to occur of (1) December 31, 2021, or (2) the time when 11.79 MMBOE (10.61 MMBOE to the 90% net profits interest) have been produced from the underlying properties and sold, which is estimated to be December 31, 2021 based on the Trust’s year-end 2019 reserve report. After the termination of the Trust, it will pay no further distributions.
The market price of the Trust units will decline to zero at the termination of the Trust, which will occur around or shortly after the termination or sale of the net profits interest. As described in the Trust’s public filings, since the assets of the Trust are depleting assets, a portion of each cash distribution paid on the Trust units, if any, should be considered by investors as a return of capital, with the remainder being considered as a return on investment.
Net Profits Interest Overview
As of June 30, 2020, on a cumulative accrual basis, 10.37 MMBOE (98%) of the Trust’s total 10.61 MMBOE have been produced and sold or divested. Based on the Trust’s reserve report for the underlying properties as of December 31, 2019, the Trust’s 10.61 MMBOE are projected to be produced prior to December 31, 2021, and assuming that occurs, the Trust would terminate shortly after December 31, 2021. The 2019 year-end reserve report reflects expected year-over-year production decline rates of approximately 8.5% for oil and 13.6% for gas between 2020 and 2021. However, the Trust’s 2019 reserve report was derived from NYMEX oil and gas prices of $55.69 per Bbl and $2.58 per MMBtu pursuant to current SEC and FASB guidelines, whereas the average NYMEX oil and gas prices for the month of July 2020 were $40.77 per Bbl and $1.69 per MMBtu, respectively.
Lower commodity prices are likely to cause a reduction in the amount of oil, natural gas and natural gas liquids that is economic to produce from the underlying properties, which may cause operators of the underlying properties to voluntarily curtail production and in turn extend the length of time required to produce the Trust’s 10.61 MMBOE. Alternatively, higher commodity prices may potentially result in an increase in the amount of oil, natural gas and natural gas liquids that is economic to produce from the underlying properties, however, higher prices could result in increases to the cost of materials, services and personnel. Furthermore, cash distributions to unitholders may decline at a faster rate than the rate of production due to industry-specific risks and uncertainties such as (i) oil and gas price declines, (ii) fixed and semi-variable costs not decreasing as fast as production volumes, (iii) expected future development being delayed, reduced or cancelled or (iv) increased operating or capital expenditures for non-operated properties that are outside the control of Whiting or the Trust.
Forward-Looking Statements
This press release contains forward-looking statements, including all statements made in this press release other than statements of historical fact. No assurances can be given that such statements will prove to be correct. The estimated time when the Trust will terminate is based on the Trust’s reserve report of the underlying properties as of December 31, 2019 and is subject to the assumptions contained therein. Additionally, the estimated time when the market price of the Trust units should decline to zero is based on the economic rights of the Trust units. The trading price of the Trust units is affected by factors outside of the control of the Trust or Whiting, including actions of market participants, among others. Other important factors that could cause actual results to differ materially include expenses of the Trust, fluctuations in oil and natural gas prices, the effect, impact, potential duration or other implications of the COVID-19 pandemic, or any government response to such pandemic, actions of the Organization of Petroleum Exporting Countries, uncertainty of estimates of oil and natural gas reserves and production, uncertainty as to the timing of any such production, risks inherent in the operation, production and development of oil and gas, future production and development costs and other risks described in the Trust’s Annual Report on Form 10-K for the year ended December 31, 2019, its Quarterly Report on Form 10-Q for the period ended March 31, 2020 and in its other filings with the Securities and Exchange Commission (the “SEC”). The Trust’s annual, quarterly and other reports filed under the Securities Exchange Act of 1934, as amended, are available electronically from the website maintained by the SEC at http://www.sec.gov. Statements made in this press release are qualified by the cautionary statements made in this press release. The Trustee does not intend, and assumes no obligation, to update any of the statements included in this press release.
Whiting USA Trust II
The Bank of New York Mellon Trust Company, N.A., as Trustee
Mike Ulrich
(512) 236-6599
ANNAPOLIS, Md.--(BUSINESS WIRE)--$HASI #earnings--Hannon Armstrong Sustainable Infrastructure Capital, Inc. ("Hannon Armstrong," "we," "our" or the "Company") (NYSE: HASI), a leading investor in climate change solutions, today reported results for the second quarter of 2020.
Recent Highlights
"We closed another strong quarter with 33% year-on-year growth in core earnings and remain on track for our full year guidance," said Jeffrey W. Eckel, Hannon Armstrong Chairman and Chief Executive Officer.
"Despite COVID-19, Hannon Armstrong continues to execute and support our clients’ rapid penetration of climate change solutions, such as wind, solar, and efficiency. These assets are performing and proving durable during this historic crisis."
A summary of our results is shown in the tables below:
|
For the three months ended June 30, 2020 |
|
For the three months ended June 30, 2019 |
||||||||||||
|
$ in thousands |
|
Per Share (Diluted) |
|
$ in thousands |
|
Per Share (Diluted) |
||||||||
GAAP Net Income |
$ |
12,008 |
|
|
$ |
0.16 |
|
|
$ |
12,740 |
|
|
$ |
0.19 |
|
Core Earnings (1) |
27,058 |
|
|
0.36 |
|
|
19,773 |
|
|
0.30 |
|
||||
(1) |
Includes a provision for loss on receivables of $2.5 million related to the new credit loss standard, which we may refer to in this press release as CECL or Topic 326. On a pre-CECL provision basis comparable to last year, the per share core earnings are $0.40 for the three months ended June 30, 2020. A reconciliation of our GAAP net income to core earnings is included in this press release. |
For the six months ended June 30, 2020 |
|
For the six months ended June 30, 2019 |
|||||||||||||
|
$ in thousands |
|
Per Share (Diluted) |
|
$ in thousands |
|
Per Share (Diluted) |
||||||||
GAAP Net Income |
$ |
36,317 |
|
|
$ |
0.51 |
|
|
$ |
26,386 |
|
|
$ |
0.41 |
|
Core Earnings (1) |
57,258 |
|
|
0.79 |
|
|
40,707 |
|
|
0.63 |
|
||||
(1) |
Includes a provision for loss on receivables of $3.2 million for the adoption of CECL. On a pre-CECL provision basis comparable to last year, the per share core earnings are $0.84 for the six months ended June 30, 2020. A reconciliation of our GAAP net income to core earnings is included in this press release. |
Financial Results
"In the second quarter, we demonstrated the strength of our dual revenue model, achieving growth in recurring core net investment income generated from our balance sheet portfolio and our public capital raising - while simultaneously recording significant gain on sale revenue utilizing our traditional securitization counterparties," said Hannon Armstrong Chief Financial Officer Jeffrey A. Lipson.
"With over $500 million in available cash on our balance sheet, we remain well-positioned to fund the ENGIE co-investment and other near-term anticipated transactions."
Comparison of the three months ended June 30, 2020 to the same period in 2019
Total revenue increased by approximately $17 million, or 55%. Gain on sale and fee income increased by approximately $11 million and interest and rental income increased by approximately $6 million. These increases were primarily due to higher-yielding assets with a higher average balance as well as a change in the mix of assets being securitized.
Interest expense increased approximately $7 million as a result of a higher outstanding balance and cost of debt, including as a result of the new $400 million debt offering in April 2020. We recorded an approximate $3 million provision for loss on receivables as a result of the potential economic impacts resulting from the COVID-19 pandemic and loan commitments made during the period. Other expenses (compensation and benefits and general and administrative expenses) increased by $3 million primarily due to an increase in our employee headcount and incentive compensation.
For the quarter, we recognized a $1 million loss using the hypothetical liquidation at book value method (HLBV) for our equity method investments. This compared to $8 million of HLBV income in the same period last year when income was higher as the result of tax attribute allocations which had the impact of increasing earnings.
GAAP net income was $12 million, or a decrease of $1 million. Core earnings was $27 million, or an increase of $7 million, or 37%, primarily due to the higher interest income, gain on sale and fee income, and core equity method income offset partially by higher interest expense.
A reconciliation of our GAAP net income to core earnings is included in this press release.
Leverage
The calculation of our fixed-rate debt and leverage ratios as of June 30, 2020 and 2019 are shown in the chart below:
|
June 30, 2020 |
|
% of Total |
|
June 30, 2019 |
|
% of Total |
||||||
|
($ in millions) |
|
|
|
($ in millions) |
|
|
||||||
Floating-rate borrowings (1) |
$ |
30 |
|
|
2 |
% |
|
$ |
269 |
|
|
24 |
% |
Fixed-rate debt (2) |
1,687 |
|
|
98 |
% |
|
830 |
|
|
76 |
% |
||
Total |
$ |
1,717 |
|
|
100 |
% |
|
$ |
1,099 |
|
|
100 |
% |
Leverage (3) |
|
1.6 to 1 |
|
|
|
|
|
1.2 to 1 |
|
|
|
||
| (1) | Floating-rate borrowings include borrowings under our floating-rate credit facilities and approximately $59 million of non-recourse debt with floating rate exposure as of June 30, 2019. |
| (2) | Fixed-rate debt also includes the present notional value of non-recourse debt that is hedged using interest rate swaps. Debt excludes securitizations that are not consolidated on our balance sheet. |
| (3) | Leverage, as measured by our debt-to-equity ratio. This calculation excludes securitizations that are not consolidated on our balance sheet (where the collateral is typically financing receivables with U.S. government obligors). |
Portfolio
Our Portfolio totaled approximately $2.1 billion as of June 30, 2020, which included approximately $1.3 billion of behind-the-meter assets and approximately $0.8 billion of grid-connected assets. The following is an analysis of the performance our Portfolio as of June 30, 2020:
|
Portfolio Performance |
|
|
||||||||||||||||||||||||
|
1 (1) |
|
2 (2) |
|
3 (3) |
|
Total |
||||||||||||||||||||
|
(dollars in millions) |
||||||||||||||||||||||||||
|
Government |
|
Commercial |
|
Government |
|
Commercial |
|
Government |
|
Commercial |
|
|
||||||||||||||
Total receivables |
257 |
|
|
853 |
|
|
— |
|
|
10 |
|
|
— |
|
|
8 |
|
|
1,128 |
|
|||||||
Less: Allowance for loss on receivables |
— |
|
|
(18 |
) |
|
— |
|
|
(3 |
) |
|
— |
|
|
(8 |
) |
|
(29 |
) |
|||||||
Net receivables (4) |
257 |
|
|
835 |
|
|
— |
|
|
7 |
|
|
— |
|
|
— |
|
|
1,099 |
|
|||||||
Investments |
35 |
|
|
11 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
46 |
|
|||||||
Real estate |
— |
|
|
361 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
361 |
|
|||||||
Equity method (5) investments |
— |
|
|
532 |
|
|
— |
|
|
24 |
|
|
— |
|
|
— |
|
|
556 |
|
|||||||
Total |
$ |
292 |
|
|
$ |
1,739 |
|
|
$ |
— |
|
|
$ |
31 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
2,062 |
|
Percent of Portfolio |
14 |
% |
|
84 |
% |
|
— |
% |
|
2 |
% |
|
— |
% |
|
— |
% |
|
100 |
% |
|||||||
Average remaining balance (6) |
$ |
7 |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
11 |
|
|
$ |
— |
|
|
$ |
4 |
|
|
$ |
10 |
|
(1) |
This category includes our assets where based on our credit criteria and performance to date we believe that our risk of not receiving our invested capital remains low. |
(2) |
This category includes our assets where based on our credit criteria and performance to date we believe there is a moderate level of risk to not receiving some or all of our invested capital. |
(3) |
This category includes our assets where based on our credit criteria and performance to date, we believe there is substantial doubt regarding our ability to recover some or all of our invested capital. Included in this category are two commercial receivables with a combined total carrying value of approximately $8 million as of June 30, 2020 which we consider impaired and have held on non-accrual status since 2017. We recorded an allowance for the entire asset amounts as described in our Annual Report on Form 10-K filed with the SEC on February 25, 2020. We expect to continue to pursue our legal claims with regards to these assets. |
(4) |
Total reconciles to the total of the government receivables and commercial receivables lines of the consolidated balance sheets. |
(5) |
Some of the individual projects included in portfolios that make up our equity method investments have government off takers. As they are part of large portfolios, they are not classified separately. |
(6) |
Average remaining balance is calculated gross of allowance for loss on receivables and excludes approximately 130 transactions each with outstanding balances that are less than $1 million and that in the aggregate total $49 million. |
Guidance
The Company expects that annual core earnings per share in 2020 (pre-CECL provision) will exceed the previously communicated guidance midpoint of $1.43, reflecting 2018 to 2020 annual Core EPS growth above the midpoint of the 2% to 6% from the 2017 baseline. This guidance reflects the Company’s estimates of (i) yield on its existing Portfolio; (ii) yield on incremental Portfolio investments, inclusive of the Company’s existing pipeline; (iii) the volume and profitability of securitization transactions; (iv) amount, timing, and costs of debt and equity capital to fund new investments; (v) changes in costs and expenses reflective of the Company’s forecasted operations, (vi) the ongoing impact of the current outbreak of COVID-19 and (vii) the general interest rate and market environment. All guidance is based on current expectations of the future impact of COVID-19 and the economic conditions, the regulatory environment, the dynamics of the markets in which we operate and the judgment of the Company’s management team. We do not undertake a duty to update such guidance. The Company has not provided GAAP guidance as discussed in the Forward-Looking Statements section of this press release.
Dividend
The Company is announcing today that its Board of Directors approved a quarterly cash dividend of $0.34 per share of common stock. This dividend will be paid on October 9, 2020, to stockholders of record as of October 2, 2020.
Conference Call and Webcast Information
Hannon Armstrong will host an investor conference call today, Thursday, August 6, 2020, at 5:00 p.m. eastern time. The conference call can be accessed live over the phone by dialing 1-866-652-5200 or for international callers, 1-412-317-6016. Please ask to be connected to the Hannon Armstrong call. A replay will be available two hours after the call and can be accessed by dialing 1-877-344-7529, or for international callers, 1-412-317-0088. The passcode for the replay is 10146124. The replay will be available until August 13, 2020.
Interested investors and other parties may also listen to a simultaneous webcast of the conference call by logging onto the Investor Relations section of the Company's website at www.hannonarmstrong.com. The online replay will be available for a limited time beginning immediately following the call.
About Hannon Armstrong
Hannon Armstrong (NYSE: HASI) is the first U.S. public company solely dedicated to investments in climate change solutions, providing capital to leading companies in energy efficiency, renewable energy, and other sustainable infrastructure markets. With more than $6 billion in managed assets as of June 30, 2020. Hannon Armstrong’s core purpose is to make climate-positive investments with superior risk-adjusted returns. For more information, please visit www.hannonarmstrong.com. Follow Hannon Armstrong on LinkedIn and Twitter @HannonArmstrong.
Forward-Looking Statements:
Some of the information contained in this press release is 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 that are subject to risks and uncertainties. For these statements, we claim the protections of the safe harbor for forward-looking statements contained in such Sections. These forward-looking statements include information about possible or assumed future results of our business, financial condition, liquidity, results of operations, plans and objectives. When we use the words "believe," "expect," "anticipate," "estimate," "plan," "continue," "intend," "should," "may" or similar expressions, we intend to identify forward-looking statements.
Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements include those discussed under the caption “Risk Factors” included in our most recent Annual Report on Form 10-K as well as in other periodic reports that we file with the U.S. Securities and Exchange Commission.
Other important factors that we think could cause our actual results to differ materially from expected results are summarized below. One of the most significant factors, however, is the ongoing impact of the current outbreak of the novel coronavirus (COVID-19), on the U.S., regional and global economies, the U.S. sustainable infrastructure market and the broader financial markets. The current outbreak of COVID-19 has also impacted, and is likely to continue to impact, directly or indirectly, many of the other important factors below and the risks described in the Form 10-K and in our subsequent filings under the Securities Exchange Act of 1934, as amended. Other factors besides those listed could also adversely affect us. In addition, we cannot assess the impact of each factor on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. In particular, it is difficult to fully assess the impact of COVID-19 at this time due to, among other factors, uncertainty regarding the severity and duration of the outbreak domestically and internationally, uncertainty regarding the effectiveness of federal, state and local governments’ efforts to contain the spread of COVID-19 and respond to its direct and indirect impact on the U.S. economy and economic activity.
Statements regarding the following subjects, among others, may be forward-looking:
The risks included here are not exhaustive. Forward-looking statements are based on beliefs, assumptions and expectations as of the date of this press release. Any forward- looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict those events or how they may affect us. Except as required by law, we are not obligated to, and do not intend to, update or revise any forward-looking statements after the date of this earnings release, whether as a result of new information, future events or otherwise.
The Company has not provided GAAP guidance as forecasting a comparable GAAP financial measure, such as net income, would require that the Company apply the HLBV method to these investments. In order to forecast under the HLBV method, the Company would be required to make various assumptions related to expected changes in the net asset value of the various entities and how such changes would be allocated under HLBV. GAAP HLBV earnings over a period of time are very sensitive to these assumptions especially in regard to when a partnership transaction flips and thus the liquidation scenarios change materially. The Company believes that these assumptions would require unreasonable efforts to complete and if completed, the wide variation in projected GAAP earnings based upon a range of scenarios would not be meaningful to investors. Accordingly, the Company has not included a GAAP reconciliation table related to any core earnings guidance.
Estimated carbon savings are calculated using the estimated kilowatt hours, gallons of fuel oil, million British thermal units of natural gas and gallons of water saved as appropriate, for each project. The energy savings are converted into an estimate of metric tons of CO2 equivalent emissions based upon the project’s location and the corresponding emissions factor data from the U.S. Government and International Energy Agency. Portfolios of projects are represented on an aggregate basis.
HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) |
||||||||||||||
|
|
|
|
|||||||||||
|
For the Three Months Ended June 30, |
|
For the Six Months Ended June 30, |
|||||||||||
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|||||||
Revenue |
|
|
|
|
|
|
|
|||||||
Interest income |
$ |
23,649 |
|
|
$ |
17,294 |
|
|
$ |
47,539 |
|
|
$ |
34,949 |
Rental income |
6,469 |
|
|
6,469 |
|
|
12,939 |
|
|
12,945 |
||||
Gain on sale of receivables and investments |
15,916 |
|
|
2,167 |
|
|
20,820 |
|
|
9,006 |
||||
Fee income |
2,561 |
|
|
5,338 |
|
|
8,130 |
|
|
7,511 |
||||
Total revenue |
48,595 |
|
|
31,268 |
|
|
89,428 |
|
|
64,411 |
||||
Expenses |
|
|
|
|
|
|
|
|||||||
Interest expense |
21,664 |
|
|
14,869 |
|
|
39,798 |
|
|
30,300 |
||||
Provision for loss on receivables |
2,523 |
|
|
— |
|
|
3,171 |
|
|
— |
||||
Compensation and benefits |
9,314 |
|
|
6,650 |
|
|
18,212 |
|
|
14,089 |
||||
General and administrative |
3,853 |
|
|
3,739 |
|
|
7,262 |
|
|
7,080 |
||||
Total expenses |
37,354 |
|
|
25,258 |
|
|
68,443 |
|
|
51,469 |
||||
Income before equity method investments |
11,241 |
|
|
6,010 |
|
|
20,985 |
|
|
12,942 |
||||
Income (loss) from equity method investments |
(590 |
) |
|
7,624 |
|
|
15,999 |
|
|
12,131 |
||||
Income (loss) before income taxes |
10,651 |
|
|
13,634 |
|
|
36,984 |
|
|
25,073 |
||||
Income tax (expense) benefit |
1,407 |
|
|
(839 |
) |
|
(515 |
) |
|
1,430 |
||||
Net income (loss) |
$ |
12,058 |
|
|
$ |
12,795 |
|
|
$ |
36,469 |
|
|
$ |
26,503 |
Net income (loss) attributable to non-controlling interest holders |
50 |
|
|
55 |
|
|
152 |
|
|
117 |
||||
Net income (loss) attributable to controlling stockholders |
$ |
12,008 |
|
|
$ |
12,740 |
|
|
$ |
36,317 |
|
|
$ |
26,386 |
Basic earnings (loss) per common share |
$ |
0.16 |
|
|
$ |
0.20 |
|
|
$ |
0.51 |
|
|
$ |
0.41 |
Diluted earnings (loss) per common share |
$ |
0.16 |
|
|
$ |
0.19 |
|
|
$ |
0.51 |
|
|
$ |
0.41 |
Weighted average common shares outstanding—basic |
72,914,145 |
|
|
63,772,549 |
|
|
70,043,125 |
|
|
62,766,318 |
||||
Weighted average common shares outstanding—diluted |
73,382,217 |
|
|
64,429,155 |
|
|
70,662,377 |
|
|
63,394,220 |
||||
HANNON ARMSTRONG SUSTAINABLE INFRASTRUCTURE CAPITAL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA) |
|||||||
|
|
|
|
||||
|
June 30, 2020 |
|
December 31, 2019 |
||||
Assets |
|
|
|
||||
Cash and cash equivalents |
$ |
541,825 |
|
|
$ |
6,208 |
|
Equity method investments |
556,450 |
|
|
498,631 |
|
||
Government receivables |
255,757 |
|
|
263,175 |
|
||
Commercial receivables, net of allowance of $29 million and $8 million, respectively |
843,223 |
|
|
896,432 |
|
||
Real estate |
360,720 |
|
|
362,265 |
|
||
Investments |
45,926 |
|
|
74,530 |
|
||
Securitization assets |
139,793 |
|
|
123,979 |
|
||
Other assets |
93,246 |
|
|
162,054 |
|
||
Total Assets |
$ |
2,836,940 |
|
|
$ |
2,387,274 |
|
Liabilities and Stockholders’ Equity |
|
|
|
||||
Liabilities: |
|
|
|
||||
Accounts payable, accrued expenses and other |
$ |
52,123 |
|
|
$ |
54,351 |
|
Credit facilities |
30,377 |
|
|
31,199 |
|
||
Non-recourse debt (secured by assets of $800 million and $921 million, respectively) |
625,884 |
|
|
700,225 |
|
||
Senior unsecured notes |
910,665 |
|
|
512,153 |
|
||
Convertible notes |
149,927 |
|
|
149,434 |
|
||
Total Liabilities |
1,768,976 |
|
|
1,447,362 |
|
||
Stockholders’ Equity: |
|
|
|
||||
Preferred stock, par value $0.01 per share, 50,000,000 shares authorized, no shares issued and outstanding |
— |
|
|
— |
|
||
Common stock, par value $0.01 per share, 450,000,000 shares authorized, 73,318,552 and 66,338,120 shares issued and outstanding, respectively |
733 |
|
|
663 |
|
||
Additional paid in capital |
1,250,976 |
|
|
1,102,303 |
|
||
Accumulated deficit |
(198,719 |
) |
|
(169,786 |
) |
||
Accumulated other comprehensive income (loss) |
9,619 |
|
|
3,300 |
|
||
Non-controlling interest |
5,355 |
|
|
3,432 |
|
||
Total Stockholders’ Equity |
1,067,964 |
|
|
939,912 |
|
||
Total Liabilities and Stockholders’ Equity |
$ |
2,836,940 |
|
|
$ |
2,387,274 |
|
EXPLANATORY NOTES
Non-GAAP Financial Measures
Core Earnings
We calculate core earnings as GAAP net income (loss) excluding non-cash equity compensation expense, certain provisions for loss on receivables, amortization of intangibles, any one-time acquisition related costs or non-cash tax charges and the earnings attributable to our non-controlling interest of our Operating Partnership.
Investor Relations:
Chad Reed
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410-571-6189
Media:
Gil Jenkins
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443-321-5753
HOUSTON--(BUSINESS WIRE)--Forum Energy Technologies, Inc. (NYSE: FET) today announced second quarter 2020 revenue of $113 million, a decrease of $69 million from the first quarter 2020. Net loss for the quarter was $5 million, or $0.05 per diluted share, compared to a net loss of $37 million, or $0.33 per diluted share, for the first quarter 2020. Excluding $27 million, or $0.24 per share of special items, adjusted net loss was $0.29 per diluted share in the second quarter 2020, compared to an adjusted net loss of $0.20 per diluted share in the first quarter 2020. Adjusted EBITDA was $(11.6) million in the second quarter 2020, a decrease of approximately $16.1 million from the first quarter 2020.
Special items in the second quarter 2020, on a pre-tax basis, included a $36 million gain on extinguishment of debt, repurchased by the company at a substantial discount, partially offset by $4 million of restructuring and other charges, $4 million of inventory and other impairments and $1 million of foreign exchange losses. See Tables 1-3 for a reconciliation of GAAP to non-GAAP financial information.
Cris Gaut, Chairman and Chief Executive Officer, remarked, “The dislocation caused by the COVID-19 pandemic and the resulting collapse in energy demand has been dramatic. With little ongoing work for drilling and completions services, customer spending has been exceptionally weak, impacting demand for many of Forum’s products.
“In response to these challenges, our management team moved swiftly to restructure the company to weather the storm. Early in the second quarter, we completed significant structural cost reductions, which represent a step change in the rate of continuous cost actions undertaken since the downturn began in 2014. Our results reflect the impact of removing approximately $100 million of cost on an annualized basis in the second quarter 2020 compared to the immediately preceding quarter. On a year-over-year basis, the cost reductions on an annualized basis are close to $150 million. This swift and significant action allowed Forum to significantly offset lower sales volume and pricing limiting our decremental margins to 23% compared to the first quarter. We now have a much leaner cost structure to weather the downturn and benefit from any incremental activity increases.
“Earlier this week, Forum successfully closed the exchange offer for our outstanding notes. This transaction extends our maturity to 2025 and maintains our current cash interest cost. In addition, the new notes preserve equity value for our current shareholders and provide a deleveraging opportunity through a partial, mandatory conversion to equity at a significant premium to the current stock price. Forum now has ample runway to take advantage of the opportunities a market recovery will present.”
Segment Results
Drilling & Downhole segment revenue was $47 million, a decrease of $29 million, or 38%, from the first quarter 2020, due to lower sales of drilling and downhole products in North America, resulting from the significant slowdown in drilling and completions activity. Orders in the second quarter were $42 million, a 40% decrease from the first quarter, primarily due to lower orders for downhole and drilling consumable short cycle products. Segment adjusted EBITDA was $(3) million, down $10 million from the first quarter, resulting primarily from the significant decline in revenues partially offset by cost reduction actions taken in the second quarter. Drilling & Downhole operations focus primarily on capital equipment and consumable products for global drilling, well construction, artificial lift and subsea markets.
Completions segment revenue was $18 million, a sequential decrease of $33 million, or 65%, due to the severe slowdown in well completions activity and cannibalization of equipment by our service company customers. Orders in the second quarter were $14 million, a decrease of $36 million, or 72%, from the first quarter 2020. Segment adjusted EBITDA was $(6) million, down $10 million from the first quarter, as a result of the loss of operating leverage on lower sales volumes partially offset by significant cost reductions implemented in the second quarter. The Completions segment designs and manufactures products for the coiled tubing, stimulation and intervention markets.
Production segment revenue was $49 million, a decrease of $7 million, or 13% from the first quarter 2020, due to lower sales for our Valve Solutions product line. Orders in the second quarter were $29 million, a 43% decrease sequentially, due to lower orders for surface production equipment as operators slowed their completions activity and fewer bookings from our valve distribution customers due to their ongoing inventory destocking. Segment adjusted EBITDA was $2.1 million, an increase of $2 million sequentially, as a result of cost reductions from restructuring actions implemented in the second quarter. The Production segment manufactures land well site production equipment, desalination process equipment, and a wide range of valves for upstream, midstream and process industry customers.
Forum Energy Technologies is a global oilfield products company, serving the drilling, downhole, subsea, completions and production sectors of the oil and natural gas industry. The Company’s products include highly engineered capital equipment as well as products that are consumed in the drilling, well construction, production and transportation of oil and natural gas. Forum is headquartered in Houston, TX with manufacturing and distribution facilities strategically located around the globe. For more information, please visit www.f-e-t.com.
Forward Looking Statements and Other Legal Disclosure
This press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include the expectations of plans, strategies, objectives and anticipated financial and operating results of the Company, including any statement about the Company's future financial position, liquidity and capital resources, operations, performance, acquisitions, returns, capital expenditure budgets, new product development activities, costs and other guidance included in this press release.
These statements are based on certain assumptions made by the Company based on management's experience and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. Among other things, these include the severity and duration of the COVID-19 pandemic and related repercussions resulting from the negative impact on demand for oil and gas, the volatility of oil and natural gas prices, oilfield development activity levels, the availability of raw materials and specialized equipment, the Company's ability to deliver backlog in a timely fashion, the availability of skilled and qualified labor, competition in the oil and gas industry, governmental regulation and taxation of the oil and natural gas industry, the Company's ability to implement new technologies and services, the availability and terms of capital, and uncertainties regarding environmental regulations or litigation and other legal or regulatory developments affecting the Company's business, and other important factors that could cause actual results to differ materially from those projected as described in the Company's filings with the U.S. Securities and Exchange Commission.
Any forward-looking statement speaks only as of the date on which such statement is made and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law.
Forum Energy Technologies, Inc. |
||||||||||||
Condensed consolidated statements of income (loss) |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
||||||||||
|
|
Three months ended |
||||||||||
|
|
June 30, |
|
March 31, |
||||||||
(in millions, except per share information) |
|
2020 |
|
2019 |
|
2020 |
||||||
Revenue |
|
$ |
113.3 |
|
|
$ |
245.6 |
|
|
$ |
182.6 |
|
Cost of sales |
|
100.4 |
|
|
182.4 |
|
|
160.5 |
|
|||
Gross profit |
|
12.9 |
|
|
63.2 |
|
|
22.1 |
|
|||
Operating expenses |
|
|
|
|
|
|
||||||
Selling, general and administrative expenses |
|
48.3 |
|
|
62.9 |
|
|
60.2 |
|
|||
Transaction expenses |
|
0.2 |
|
|
0.1 |
|
|
— |
|
|||
Impairments of intangibles, property and equipment |
|
0.1 |
|
|
— |
|
|
17.3 |
|
|||
Loss (gain) on disposal of assets and other |
|
(0.7 |
) |
|
0.1 |
|
|
— |
|
|||
Total operating expenses |
|
47.9 |
|
|
63.1 |
|
|
77.5 |
|
|||
Earnings from equity investment |
|
— |
|
|
0.6 |
|
|
— |
|
|||
Operating income (loss) |
|
(35.0 |
) |
|
0.7 |
|
|
(55.4 |
) |
|||
Other expense (income) |
|
|
|
|
|
|
||||||
Interest expense |
|
6.4 |
|
|
8.2 |
|
|
6.7 |
|
|||
Gain on extinguishment of debt |
|
(36.3 |
) |
|
— |
|
|
(7.5 |
) |
|||
Deferred loan costs written off |
|
0.1 |
|
|
— |
|
|
1.8 |
|
|||
Foreign exchange losses (gains) and other, net |
|
0.7 |
|
|
(2.2 |
) |
|
(4.9 |
) |
|||
Total other (income) expense, net |
|
(29.1 |
) |
|
6.0 |
|
|
(3.9 |
) |
|||
Loss before income taxes |
|
(5.9 |
) |
|
(5.3 |
) |
|
(51.5 |
) |
|||
Income tax expense (benefit) |
|
(0.4 |
) |
|
8.4 |
|
|
(14.4 |
) |
|||
Net loss (1) |
|
$ |
(5.5 |
) |
|
$ |
(13.7 |
) |
|
$ |
(37.1 |
) |
|
|
|
|
|
|
|
||||||
Weighted average shares outstanding |
|
|
|
|
|
|
||||||
Basic |
|
111.6 |
|
|
110.0 |
|
|
111.2 |
|
|||
Diluted |
|
111.6 |
|
|
110.0 |
|
|
111.2 |
|
|||
|
|
|
|
|
|
|
||||||
Loss per share |
|
|
|
|
|
|
||||||
Basic |
|
$ |
(0.05 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.33 |
) |
Diluted |
|
$ |
(0.05 |
) |
|
$ |
(0.12 |
) |
|
$ |
(0.33 |
) |
|
|
|
|
|
|
|
||||||
(1) Refer to Table 1 for schedule of adjusting items. |
||||||||||||
Forum Energy Technologies, Inc. |
||||||||
Condensed consolidated statements of income (loss) |
||||||||
(Unaudited) |
||||||||
|
|
|
||||||
|
|
Six months ended |
||||||
|
|
June 30, |
||||||
(in millions, except per share information) |
|
2020 |
|
2019 |
||||
Revenue |
|
$ |
295.9 |
|
|
$ |
517.5 |
|
Cost of sales |
|
260.9 |
|
|
384.2 |
|
||
Gross profit |
|
35.0 |
|
|
133.3 |
|
||
Operating expenses |
|
|
|
|
||||
Selling, general and administrative expenses |
|
108.5 |
|
|
131.8 |
|
||
Transaction expenses |
|
0.2 |
|
|
0.7 |
|
||
Impairments of goodwill, intangibles, property and equipment |
|
17.4 |
|
|
— |
|
||
Contingent consideration benefit |
|
— |
|
|
(4.6 |
) |
||
Loss (gain) on disposal of assets and other |
|
(0.7 |
) |
|
0.1 |
|
||
Total operating expenses |
|
125.4 |
|
|
128.0 |
|
||
Loss from equity investment |
|
— |
|
|
(0.3 |
) |
||
Operating income (loss) |
|
(90.4 |
) |
|
5.0 |
|
||
Other expense (income) |
|
|
|
|
||||
Interest expense |
|
13.1 |
|
|
16.4 |
|
||
Foreign exchange losses (gains) and other, net |
|
(4.4 |
) |
|
0.1 |
|
||
Gain on extinguishment of debt |
|
(43.7 |
) |
|
— |
|
||
Deferred loan costs written off |
|
2.0 |
|
|
— |
|
||
Total other (income) expense, net |
|
(33.0 |
) |
|
16.5 |
|
||
Loss before income taxes |
|
(57.4 |
) |
|
(11.5 |
) |
||
Income tax expense (benefit) |
|
(14.8 |
) |
|
10.1 |
|
||
Net income (loss) (1) |
|
$ |
(42.6 |
) |
|
$ |
(21.6 |
) |
|
|
|
|
|
||||
Weighted average shares outstanding |
|
|
|
|
||||
Basic |
|
111.4 |
|
|
109.8 |
|
||
Diluted |
|
111.4 |
|
|
109.8 |
|
||
|
|
|
|
|
||||
Loss per share |
|
|
|
|
||||
Basic |
|
$ |
(0.38 |
) |
|
$ |
(0.20 |
) |
Diluted |
|
$ |
(0.38 |
) |
|
$ |
(0.20 |
) |
|
|
|
|
|
||||
(1) Refer to Table 2 for schedule of adjusting items. |
||||||||
Forum Energy Technologies, Inc. |
|||||
Condensed consolidated balance sheets |
|||||
(Unaudited) |
|||||
|
|
|
|
||
(in millions of dollars) |
June 30, 2020 |
|
December 31, 2019 |
||
Assets |
|
|
|
||
Current assets |
|
|
|
||
Cash and cash equivalents |
$ |
109.7 |
|
$ |
57.9 |
Accounts receivable—trade, net |
89.3 |
|
154.2 |
||
Inventories, net |
377.6 |
|
414.6 |
||
Other current assets |
53.2 |
|
39.2 |
||
Total current assets |
629.8 |
|
665.9 |
||
Property and equipment, net of accumulated depreciation |
131.5 |
|
154.8 |
||
Operating lease assets |
35.5 |
|
48.7 |
||
Intangible assets, net |
253.0 |
|
272.3 |
||
Other long-term assets |
17.1 |
|
18.3 |
||
Total assets |
$ |
1,066.9 |
|
$ |
1,160.0 |
Liabilities and equity |
|
|
|
||
Current liabilities |
|
|
|
||
Current portion of long-term debt |
$ |
1.3 |
|
$ |
0.7 |
Other current liabilities |
146.9 |
|
196.2 |
||
Total current liabilities |
148.2 |
|
196.9 |
||
Long-term debt, net of current portion |
412.4 |
|
398.9 |
||
Other long-term liabilities |
65.3 |
|
78.2 |
||
Total liabilities |
625.9 |
|
674.0 |
||
Total equity |
441.0 |
|
486.0 |
||
Total liabilities and equity |
$ |
1,066.9 |
|
$ |
1,160.0 |
Forum Energy Technologies, Inc. |
||||||||
Condensed consolidated cash flow information |
||||||||
(Unaudited) |
||||||||
|
|
Six Months Ended June 30, |
||||||
(in millions of dollars) |
|
2020 |
|
2019 |
||||
Cash flows from operating activities |
|
|
|
|
||||
Net loss |
|
$ |
(42.6 |
) |
|
$ |
(21.6 |
) |
Impairments of intangible assets, property and equipment |
|
17.4 |
|
|
— |
|
||
Depreciation and amortization |
|
26.7 |
|
|
32.7 |
|
||
Impairments of operating lease assets |
|
9.3 |
|
|
2.0 |
|
||
Inventory write down |
|
16.4 |
|
|
1.6 |
|
||
Gain on extinguishment of debt |
|
(43.7 |
) |
|
— |
|
||
Other noncash items and changes in working capital |
|
14.4 |
|
|
26.1 |
|
||
Net cash provided by (used in) operating activities |
|
(2.1 |
) |
|
40.8 |
|
||
|
|
|
|
|
||||
Cash flows from investing activities |
|
|
|
|
||||
Capital expenditures for property and equipment |
|
(1.5 |
) |
|
(9.2 |
) |
||
Proceeds from sale of business, property and equipment |
|
1.3 |
|
|
0.4 |
|
||
Net cash used in investing activities |
|
(0.2 |
) |
|
(8.8 |
) |
||
|
|
|
|
|
||||
Cash flows from financing activities |
|
|
|
|
||||
Borrowings of debt |
|
85.0 |
|
|
82.0 |
|
||
Repayments of debt |
|
(28.2 |
) |
|
(123.1 |
) |
||
Repurchases of stock |
|
(0.1 |
) |
|
(1.0 |
) |
||
Deferred financing costs |
|
(2.3 |
) |
|
— |
|
||
Net cash provided by (used in) financing activities |
|
54.4 |
|
|
(42.1 |
) |
||
|
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
(0.3 |
) |
|
0.2 |
|
||
Net increase (decrease) in cash, cash equivalents and restricted cash |
|
$ |
51.8 |
|
|
$ |
(9.9 |
) |
Forum Energy Technologies, Inc. |
||||||||||||||||||||||||
Supplemental schedule - Segment information |
||||||||||||||||||||||||
(Unaudited) |
||||||||||||||||||||||||
|
|
|
|
|
||||||||||||||||||||
|
|
As Reported |
|
As Adjusted (4) |
||||||||||||||||||||
|
|
Three months ended |
|
Three months ended |
||||||||||||||||||||
(in millions of dollars) |
|
June 30, 2020 |
|
June 30, 2019 |
|
March 31, 2020 |
|
June 30, 2020 |
|
June 30, 2019 |
|
March 31, 2020 |
||||||||||||
Revenue |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Drilling & Downhole |
|
$ |
47.2 |
|
|
$ |
82.4 |
|
|
$ |
76.6 |
|
|
$ |
47.2 |
|
|
$ |
82.4 |
|
|
$ |
76.6 |
|
Completions |
|
17.6 |
|
|
81.5 |
|
|
50.8 |
|
|
17.6 |
|
|
81.5 |
|
|
50.8 |
|
||||||
Production |
|
48.6 |
|
|
83.3 |
|
|
55.6 |
|
|
48.6 |
|
|
83.3 |
|
|
55.6 |
|
||||||
Eliminations |
|
(0.1 |
) |
|
(1.6 |
) |
|
(0.4 |
) |
|
(0.1 |
) |
|
(1.6 |
) |
|
(0.4 |
) |
||||||
Total revenue |
|
$ |
113.3 |
|
|
$ |
245.6 |
|
|
$ |
182.6 |
|
|
$ |
113.3 |
|
|
$ |
245.6 |
|
|
$ |
182.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating income (loss) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Drilling & Downhole (1) |
|
$ |
(9.4 |
) |
|
$ |
1.3 |
|
|
$ |
(4.1 |
) |
|
$ |
(7.8 |
) |
|
$ |
2.0 |
|
|
$ |
1.0 |
|
Operating income margin % |
|
(19.9 |
)% |
|
1.6 |
% |
|
(5.4 |
)% |
|
(16.5 |
)% |
|
2.4 |
% |
|
1.3 |
% |
||||||
Completions |
|
(17.8 |
) |
|
2.8 |
|
|
(17.3 |
) |
|
(13.2 |
) |
|
2.9 |
|
|
(4.2 |
) |
||||||
Operating income margin % |
|
(101.1 |
)% |
|
3.4 |
% |
|
(34.1 |
)% |
|
(75.0 |
)% |
|
3.6 |
% |
|
(8.3 |
)% |
||||||
Production |
|
(1.1 |
) |
|
3.6 |
|
|
(8.2 |
) |
|
(0.7 |
) |
|
3.6 |
|
|
(2.2 |
) |
||||||
Operating income margin % |
|
(2.3 |
)% |
|
4.3 |
% |
|
(14.7 |
)% |
|
(1.4 |
)% |
|
4.3 |
% |
|
(4.0 |
)% |
||||||
Corporate |
|
(7.2 |
) |
|
(6.8 |
) |
|
(8.5 |
) |
|
(5.7 |
) |
|
(6.7 |
) |
|
(7.5 |
) |
||||||
Total segment operating income (loss) |
|
(35.5 |
) |
|
0.9 |
|
|
(38.1 |
) |
|
(27.4 |
) |
|
1.8 |
|
|
(12.9 |
) |
||||||
Other items not in segment operating income (2) |
|
0.5 |
|
|
(0.2 |
) |
|
(17.3 |
) |
|
0.7 |
|
|
0.1 |
|
|
— |
|
||||||
Total operating income (loss) |
|
$ |
(35.0 |
) |
|
$ |
0.7 |
|
|
$ |
(55.4 |
) |
|
$ |
(26.7 |
) |
|
$ |
1.9 |
|
|
$ |
(12.9 |
) |
Operating income margin % |
|
(30.9 |
)% |
|
0.3 |
% |
|
(30.3 |
)% |
|
(23.6 |
)% |
|
0.8 |
% |
|
(7.1 |
)% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
EBITDA (3) |
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Drilling & Downhole |
|
$ |
(5.3 |
) |
|
$ |
8.1 |
|
|
$ |
(1.0 |
) |
|
$ |
(3.2 |
) |
|
$ |
8.1 |
|
|
$ |
6.5 |
|
EBITDA Margin % |
|
(11.2 |
)% |
|
9.8 |
% |
|
(1.3 |
)% |
|
(6.8 |
)% |
|
9.8 |
% |
|
8.5 |
% |
||||||
Completions |
|
(11.9 |
) |
|
11.3 |
|
|
(19.9 |
) |
|
(6.2 |
) |
|
12.7 |
|
|
3.7 |
|
||||||
EBITDA Margin % |
|
(67.6 |
)% |
|
13.9 |
% |
|
(39.2 |
)% |
|
(35.2 |
)% |
|
15.6 |
% |
|
7.3 |
% |
||||||
Production |
|
1.3 |
|
|
5.2 |
|
|
(6.5 |
) |
|
2.1 |
|
|
6.1 |
|
|
0.3 |
|
||||||
EBITDA Margin % |
|
2.7 |
% |
|
6.2 |
% |
|
(11.7 |
)% |
|
4.3 |
% |
|
7.3 |
% |
|
0.5 |
% |
||||||
Corporate |
|
28.9 |
|
|
(5.4 |
) |
|
(3.2 |
) |
|
(4.3 |
) |
|
(4.2 |
) |
|
(6.0 |
) |
||||||
Total EBITDA |
|
$ |
13.0 |
|
|
$ |
19.2 |
|
|
$ |
(30.6 |
) |
|
$ |
(11.6 |
) |
|
$ |
22.7 |
|
|
$ |
4.5 |
|
EBITDA Margin % |
|
11.5 |
% |
|
7.8 |
% |
|
(16.8 |
)% |
|
(10.2 |
)% |
|
9.2 |
% |
|
2.5 |
% |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
(1) Includes earnings (loss) from equity investment for the three months ended June 30, 2019. |
||||||||||||||||||||||||
(2) Includes transaction expenses, gain/(loss) on disposal of assets, and impairments of intangibles, property and equipment. |
||||||||||||||||||||||||
(3) The Company believes that the presentation of EBITDA is useful to the Company's investors because EBITDA is an appropriate measure of evaluating the Company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, EBITDA is a widely used benchmark in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information. |
||||||||||||||||||||||||
(4) Refer to Table 1 for schedule of adjusting items. |
||||||||||||||||||||||||
Forum Energy Technologies, Inc. |
||||||||||||||||
Supplemental schedule - Segment information |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
|
|
|
|
||||||||||||
|
|
As Reported |
|
As Adjusted (4) |
||||||||||||
|
|
Six months ended |
|
Six months ended |
||||||||||||
(in millions of dollars) |
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
||||||||
Revenue |
|
|
|
|
|
|
|
|
||||||||
Drilling & Downhole |
|
$ |
123.8 |
|
|
$ |
168.3 |
|
|
$ |
123.8 |
|
|
$ |
168.3 |
|
Completions |
|
68.4 |
|
|
176.2 |
|
|
68.4 |
|
|
176.2 |
|
||||
Production |
|
104.2 |
|
|
175.3 |
|
|
104.2 |
|
|
175.3 |
|
||||
Eliminations |
|
(0.5 |
) |
|
(2.3 |
) |
|
(0.5 |
) |
|
(2.3 |
) |
||||
Total revenue |
|
$ |
295.9 |
|
|
$ |
517.5 |
|
|
$ |
295.9 |
|
|
$ |
517.5 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating income (loss) |
|
|
|
|
|
|
|
|
||||||||
Drilling & Downhole (1) |
|
$ |
(13.5 |
) |
|
$ |
(1.2 |
) |
|
$ |
(6.7 |
) |
|
$ |
2.3 |
|
Operating income margin % |
|
(10.9 |
)% |
|
(0.7 |
)% |
|
(5.4 |
)% |
|
1.4 |
% |
||||
Completions |
|
(35.1 |
) |
|
9.7 |
|
|
(17.4 |
) |
|
10.5 |
|
||||
Operating income margin % |
|
(51.3 |
)% |
|
5.5 |
% |
|
(25.4 |
)% |
|
6.0 |
% |
||||
Production |
|
(9.2 |
) |
|
7.9 |
|
|
(2.9 |
) |
|
8.2 |
|
||||
Operating income margin % |
|
(8.8 |
)% |
|
4.5 |
% |
|
(2.8 |
)% |
|
4.7 |
% |
||||
Corporate |
|
(15.7 |
) |
|
(15.2 |
) |
|
(13.3 |
) |
|
(14.1 |
) |
||||
Total segment operating income (loss) |
|
(73.5 |
) |
|
1.2 |
|
|
(40.3 |
) |
|
6.9 |
|
||||
Other items not in segment operating income (loss) (2) |
|
(16.9 |
) |
|
3.8 |
|
|
0.7 |
|
|
0.2 |
|
||||
Total operating income (loss) |
|
$ |
(90.4 |
) |
|
$ |
5.0 |
|
|
$ |
(39.6 |
) |
|
$ |
7.1 |
|
Operating income margin % |
|
(30.6 |
)% |
|
1.0 |
% |
|
(13.4 |
)% |
|
1.4 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
EBITDA (3) |
|
|
|
|
|
|
|
|
||||||||
Drilling & Downhole |
|
$ |
(6.2 |
) |
|
$ |
10.1 |
|
|
$ |
3.3 |
|
|
$ |
14.4 |
|
EBITDA Margin % |
|
(5.0 |
)% |
|
6.0 |
% |
|
(3.6 |
)% |
|
8.6 |
% |
||||
Completions |
|
(31.8 |
) |
|
26.9 |
|
|
(2.5 |
) |
|
30.1 |
|
||||
EBITDA Margin % |
|
(46.5 |
)% |
|
15.3 |
% |
|
(3.7 |
)% |
|
17.1 |
% |
||||
Production |
|
(5.3 |
) |
|
11.6 |
|
|
2.4 |
|
|
13.1 |
|
||||
EBITDA Margin % |
|
(5.1 |
)% |
|
6.6 |
% |
|
2.3 |
% |
|
7.5 |
% |
||||
Corporate |
|
25.7 |
|
|
(11.0 |
) |
|
(10.3 |
) |
|
(9.3 |
) |
||||
Total EBITDA |
|
$ |
(17.6 |
) |
|
$ |
37.6 |
|
|
$ |
(7.1 |
) |
|
$ |
48.3 |
|
EBITDA Margin % |
|
(5.9 |
)% |
|
7.3 |
% |
|
(2.4 |
)% |
|
9.3 |
% |
||||
|
|
|
|
|
|
|
|
|
||||||||
(1) Includes earnings (loss) from equity investment for the six months ended June 30, 2019. |
||||||||||||||||
(2) Includes transaction expenses, gain (loss) on disposal of assets, contingent consideration benefit, and impairments of intangibles, property and equipment. |
||||||||||||||||
(3) The Company believes that the presentation of EBITDA is useful to the Company's investors because EBITDA is an appropriate measure of evaluating the Company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, EBITDA is a widely used benchmark in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information. |
||||||||||||||||
(4) Refer to Table 2 for schedule of adjusting items. |
||||||||||||||||
Forum Energy Technologies, Inc. |
||||||||||||
Supplemental schedule - Orders information |
||||||||||||
(Unaudited) |
||||||||||||
|
|
|
||||||||||
|
|
|
||||||||||
|
|
Three months ended |
||||||||||
(in millions of dollars) |
|
June 30, 2020 |
|
June 30, 2019 |
|
March 31, 2020 |
||||||
Orders |
|
|
|
|
|
|
||||||
Drilling & Downhole |
|
$ |
42.3 |
|
|
$ |
78.3 |
|
|
$ |
70.0 |
|
Completions |
|
14.2 |
|
|
70.7 |
|
|
49.9 |
|
|||
Production |
|
29.1 |
|
|
75.6 |
|
|
50.7 |
|
|||
Total orders |
|
$ |
85.6 |
|
|
$ |
224.6 |
|
|
$ |
170.6 |
|
|
|
|
|
|
|
|
||||||
Revenue |
|
|
|
|
|
|
||||||
Drilling & Downhole |
|
$ |
47.2 |
|
|
$ |
82.4 |
|
|
$ |
76.6 |
|
Completions |
|
17.6 |
|
|
81.5 |
|
|
50.8 |
|
|||
Production |
|
48.6 |
|
|
83.3 |
|
|
55.6 |
|
|||
Eliminations |
|
(0.1 |
) |
|
(1.6 |
) |
|
(0.4 |
) |
|||
Total revenue |
|
$ |
113.3 |
|
|
$ |
245.6 |
|
|
$ |
182.6 |
|
|
|
|
|
|
|
|
||||||
Book to bill ratio (1) |
|
|
|
|
|
|
||||||
Drilling & Downhole |
|
0.90 |
|
|
0.95 |
|
|
0.91 |
|
|||
Completions |
|
0.81 |
|
|
0.87 |
|
|
0.98 |
|
|||
Production |
|
0.60 |
|
|
0.91 |
|
|
0.91 |
|
|||
Total book to bill ratio |
|
0.76 |
|
|
0.91 |
|
|
0.93 |
|
|||
|
|
|
|
|
|
|
||||||
(1) The book-to-bill ratio is calculated by dividing the dollar value of orders received in a given period by the revenue earned in that same period. The Company believes that this ratio is useful to investors because it provides an indication of whether the demand for our products, in the markets in which the Company operates, is strengthening or declining. A ratio of greater than one is indicative of improving market demand, while a ratio of less than one would suggest weakening demand. In addition, the Company believes the book-to-bill ratio provides more meaningful insight into future revenues for our business than other measures, such as order backlog, because the majority of the Company's products are activity based consumable items or shorter cycle capital equipment, neither of which are typically ordered by customers far in advance. |
||||||||||||
Forum Energy Technologies, Inc. |
|||||||||||||||||||||||||||||||||||
Reconciliation of GAAP to non-GAAP financial information |
|||||||||||||||||||||||||||||||||||
(Unaudited) |
|||||||||||||||||||||||||||||||||||
Table 1 - Adjusting items |
|||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||
|
Three months ended |
||||||||||||||||||||||||||||||||||
|
June 30, 2020 |
|
June 30, 2019 |
|
March 31, 2020 |
||||||||||||||||||||||||||||||
(in millions, except per share information) |
Operating
|
|
EBITDA (1) |
|
Net
|
|
Operating
|
|
EBITDA (1) |
|
Net
|
|
Operating
|
|
EBITDA (1) |
|
Net
|
||||||||||||||||||
As reported |
$ |
(35.0) |
|
|
$ |
13.0 |
|
|
$ |
(5.5) |
|
|
$ |
0.7 |
|
|
$ |
19.2 |
|
|
$ |
(13.7) |
|
|
$ |
(55.4) |
|
|
$ |
(30.6) |
|
|
$ |
(37.1) |
|
% of revenue |
(30.9) |
% |
|
11.5 |
% |
|
|
|
0.3 |
% |
|
7.8 |
% |
|
|
|
(30.3) |
% |
|
(16.8) |
% |
|
|
||||||||||||
Restructuring charges and other |
4.1 |
|
|
4.1 |
|
|
4.1 |
|
|
1.0 |
|
|
1.0 |
|
|
1.0 |
|
|
5.4 |
|
|
5.4 |
|
|
5.4 |
|
|||||||||
Transaction expenses |
0.2 |
|
|
0.2 |
|
|
0.2 |
|
|
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
|||||||||
Inventory and other working capital adjustments |
4.1 |
|
|
4.1 |
|
|
4.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
10.3 |
|
|
10.3 |
|
|
10.3 |
|
|||||||||
Impairments of intangibles, property and equipment |
0.1 |
|
|
0.1 |
|
|
0.1 |
|
|
— |
|
|
— |
|
|
— |
|
|
17.3 |
|
|
17.3 |
|
|
17.3 |
|
|||||||||
Stock-based compensation expense |
— |
|
|
2.6 |
|
|
— |
|
|
— |
|
|
4.4 |
|
|
— |
|
|
— |
|
|
3.2 |
|
|
— |
|
|||||||||
Impairments of operating lease assets |
(0.2) |
|
|
(0.2) |
|
|
(0.2) |
|
|
(0.5) |
|
|
(0.5) |
|
|
(0.5) |
|
|
9.5 |
|
|
9.5 |
|
|
9.5 |
|
|||||||||
Amortization of basis difference for equity method investment (2) |
— |
|
|
— |
|
|
— |
|
|
0.5 |
|
|
0.5 |
|
|
0.5 |
|
|
— |
|
|
— |
|
|
— |
|
|||||||||
Gain on extinguishment of debt |
— |
|
|
(36.2) |
|
|
(36.2) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7.5) |
|
|
(7.5) |
|
|||||||||
Deferred loan costs written off |
— |
|
|
0.2 |
|
|
0.2 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1.8 |
|
|
1.8 |
|
|||||||||
Loss (gain) on foreign exchange, net (3) |
— |
|
|
0.5 |
|
|
0.5 |
|
|
— |
|
|
(2.1) |
|
|
(2.1) |
|
|
— |
|
|
(4.9) |
|
|
(4.9) |
|
|||||||||
Impact of U.S. CARES Act |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(16.6) |
|
|||||||||
Valuation allowance on deferred tax assets |
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5.9 |
|
|
— |
|
|
— |
|
|
— |
|
|||||||||
As adjusted (1) |
$ |
(26.7) |
|
|
$ |
(11.6) |
|
|
$ |
(32.7) |
|
|
$ |
1.8 |
|
|
$ |
22.6 |
|
|
$ |
(8.8) |
|
|
$ |
(12.9) |
|
|
$ |
4.5 |
|
|
$ |
(21.8) |
|
% of revenue |
(23.6) |
% |
|
(10.2) |
% |
|
|
|
0.7 |
% |
|
9.2 |
% |
|
|
|
(7.1) |
% |
|
2.5 |
% |
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted shares outstanding as reported |
|
|
|
|
111.6 |
|
|
|
|
|
|
110.0 |
|
|
|
|
|
|
111.2 |
|
|||||||||||||||
Diluted shares outstanding as adjusted |
|
|
|
|
111.6 |
|
|
|
|
|
|
110.0 |
|
|
|
|
|
|
111.2 |
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
Diluted EPS - as reported |
|
|
|
|
$ |
(0.05) |
|
|
|
|
|
|
$ |
(0.12) |
|
|
|
|
|
|
$ |
(0.33) |
|
||||||||||||
Diluted EPS - as adjusted |
|
|
|
|
$ |
(0.29) |
|
|
|
|
|
|
$ |
(0.08) |
|
|
|
|
|
|
$ |
(0.20) |
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||
(1) The Company believes that the presentation of EBITDA, adjusted EBITDA, adjusted operating income, adjusted net income and adjusted diluted EPS are useful to the Company's investors because (i) each of these financial metrics are useful to investors to assess and understand operating performance, especially when comparing those results with previous and subsequent periods or forecasting performance for future periods, primarily because management views the excluded items to be outside of the Company's normal operating results and (ii) EBITDA is an appropriate measure of evaluating the Company's operating performance and liquidity that reflects the resources available for strategic opportunities including, among others, investing in the business, strengthening the balance sheet, repurchasing the Company's securities and making strategic acquisitions. In addition, these benchmarks are widely used in the investment community. See the attached separate schedule for the reconciliation of GAAP to non-GAAP financial information. |
|||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
(2) The difference between the fair value of our interest in Ashtead and the book value of the underlying net assets resulted in a basis difference non-operating gain, which was allocated to fixed assets, intangible assets and goodwill based on their respective fair values as of the transaction date. This amount represents the amortization of the basis difference gain associated with intangible assets and property, plant and equipment which is included in equity earnings (loss) over the estimated life of the respective assets. |
|||||||||||||||||||||||||||||||||||
|
|||||||||||||||||||||||||||||||||||
(3) Foreign exchange, net primarily relates to cash and receivables denominated in U.S. dollars by some of our non-U.S. subsidiaries that report in a local currency, and therefore the loss has no economic impact in dollar terms. |
|||||||||||||||||||||||||||||||||||
Lyle Williams
Executive Vice President and Chief Financial Officer
713.351.7920
This email address is being protected from spambots. You need JavaScript enabled to view it.
MINNEAPOLIS--(BUSINESS WIRE)--C.H. Robinson Worldwide, Inc. (“C.H. Robinson”) (Nasdaq: CHRW) announced that its Board of Directors today declared a regular quarterly cash dividend of 51 cents ($0.51) per share, payable on September 30, 2020, to shareholders of record on September 4, 2020.
C.H. Robinson has distributed regular dividends for more than twenty-five years. As of August 6, 2020, there were approximately 135,157,964 shares outstanding.
About C.H. Robinson
C.H. Robinson solves logistics problems for companies across the globe and across industries, from the simple to the most complex. With nearly $20 billion in freight under management and 18 million shipments annually, we are one of the world’s largest logistics platforms. Our global suite of services accelerates trade to seamlessly deliver the products and goods that drive the world’s economy. With the combination of our multimodal transportation management system and expertise, we use our information advantage to deliver smarter solutions for our more than 119,000 customers and 78,000 contract carriers. Our technology is built by and for supply chain experts to bring faster, more meaningful improvements to our customers’ businesses. As a responsible global citizen, we are also proud to contribute millions of dollars to support causes that matter to our company, our Foundation and our employees. For more information, visit us at www.chrobinson.com (Nasdaq: CHRW).
Source: C.H. Robinson
CHRW-IR
Chuck Ives, Director of Investor Relations
Email: This email address is being protected from spambots. You need JavaScript enabled to view it.
DALLAS--(BUSINESS WIRE)--Pioneer Natural Resources Company (NYSE: PXD) (“Pioneer” or “the Company”) today announced that it has priced a public offering of $1.1 billion of 1.90% Senior Notes that will mature August 15, 2030 (the “Notes”), pursuant to an effective shelf registration statement that was previously filed with the Securities and Exchange Commission. The price to the public for the Notes is 99.205% of the principal amount.
The Company intends to use the net proceeds of approximately $1.08 billion from the offering, after deducting underwriting discounts (excluding fees and expenses of the offering), for general corporate purposes, which may include, but are not limited to, the repayment or repurchase of the Company’s 3.45% senior notes due 2021, 3.95% senior notes due 2022, or other corporate obligations.
Interest on the Notes will be payable on February 15 and August 15 of each year. The first interest payment will be due on February 15, 2021, and will consist of interest from closing to that date. The offering is expected to close on August 11, 2020, subject to the satisfaction of customary closing conditions.
BofA Securities, Inc., J.P. Morgan Securities LLC, Wells Fargo Securities, LLC, Barclays Capital Inc., BMO Capital Markets Corp., Citigroup Global Markets Inc., Morgan Stanley & Co. LLC, MUFG Securities Americas Inc. and TD Securities (USA) LLC are acting as Joint Book-Running Managers for the offering. Credit Suisse (USA) LLC, Goldman Sachs & Co. LLC, RBC Capital Markets, LLC, Scotia Capital (USA) Inc. and U.S. Bancorp Investments, Inc. are acting as Senior Co-Managers and BBVA Securities Inc., CIBC World Markets Corp., Citizens Capital Markets, Inc., PNC Capital Markets LLC and Truist Securities, Inc. are acting as Co-Managers for the offering. When available, a copy of the prospectus supplement and accompanying base prospectus relating to the offering may be obtained from: BofA Securities, Inc. at 200 North College Street, 3rd Floor, Charlotte, NC 28255, Attn: Prospectus Department, Email: This email address is being protected from spambots. You need JavaScript enabled to view it., Toll-Free: 1-800-294-1322; J.P. Morgan Securities LLC at: 383 Madison Avenue, New York, NY 10179, Attn: Investment Grade Syndicate Desk-3rd Floor or by calling collect at (212) 834-4533; or Wells Fargo Securities, LLC at: 608 2nd Avenue South, Suite 1000, Minneapolis, MN 55402, Attn: WFS Customer Service, Email: This email address is being protected from spambots. You need JavaScript enabled to view it., Toll-Free: 1-800-645-3751.
An electronic copy of the preliminary prospectus supplement and accompanying base prospectus may also be obtained at no charge at the Securities and Exchange Commission’s website at www.sec.gov.
This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities described herein, nor shall there be any sale of these securities in any jurisdiction in which such an offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. The offering may be made only by means of a prospectus and prospectus supplement meeting the requirements of Section 10 of the Securities Act of 1933, as amended. The offering will be made pursuant to an effective shelf registration statement, which was previously filed by Pioneer with the Securities and Exchange Commission, and a prospectus supplement and accompanying prospectus, which will be filed by Pioneer with the Securities and Exchange Commission.
Pioneer is a large independent oil and gas exploration and production company, headquartered in Dallas, Texas, with operations in the United States.
Except for historical information contained herein, the statements in this news release are forward-looking statements that are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements and the business prospects of Pioneer are subject to a number of risks and uncertainties that may cause Pioneer’s actual results in future periods to differ materially from the forward-looking statements. These risks and uncertainties include, among other things, volatility of commodity prices, product supply and demand, the impact of a widespread outbreak of an illness, such as the COVID-19 pandemic on global and U.S. economic activity, competition, the ability to obtain environmental and other permits and the timing thereof, other government regulation or action, litigation, the costs and results of drilling and operations, availability of equipment, services, resources and personnel required to perform the Company’s drilling and operating activities, access to and availability of transportation, processing, fractionation, refining, storage and export facilities, Pioneer’s ability to implement its business plans or complete its development activities as scheduled, the financial strength of counterparties to Pioneer’s credit facility, investment instruments and derivative contracts and purchasers of Pioneer’s oil, natural gas liquids and gas production, environmental and weather risks, including the possible impacts of climate change, cybersecurity risks, and acts of war or terrorism. These and other risks are described in Pioneer’s Annual Report on Form 10-K for the year ended December 31, 2019, Quarterly Reports on Form 10-Q for the quarters ended March 31, 2020 and June 30, 2020, and other filings with the Securities and Exchange Commission. In addition, Pioneer may be subject to currently unforeseen risks that may have a materially adverse impact on it. Accordingly, no assurances can be given that the actual events and results will not be materially different than the anticipated results described in the forward-looking statements. Pioneer undertakes no duty to publicly update these statements except as required by law.
Pioneer Natural Resources Contacts:
Investors
Neal Shah – 972-969-3900
Tom Fitter – 972-969-1821
Michael McNamara – 972-969-3592
Media and Public Affairs
Tadd Owens – 972-969-5760
ST. PAUL, Minn.--(BUSINESS WIRE)--PolyMet Mining Corp (“PolyMet” or the “company”) TSX: POM; NYSE American: PLM – today reported that it has filed its financial results for the three and six months ended June 30, 2020.
The financial statements have been filed at www.polymetmining.com and on SEDAR and EDGAR and have been prepared in accordance with International Financial Reporting Standards. All amounts are in U.S. funds. Copies can be obtained free of charge by contacting the company at First Canadian Place, 100 King Street West, Suite 5700, Toronto, Ontario M5X 1C7 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it.
In the most recent quarter, the company continued to progress through the legal process in defense of its operating permits. A number of legal challenges have been filed contesting various aspects of federal and state decisions; the company has received favorable final decisions in six cases to date. Five cases remain outstanding.
In two of the pending cases, the company was successful in petitioning the Minnesota Supreme Court to review lower court decisions. In June, the Supreme Court agreed to hear PolyMet’s appeal regarding our air permit. This was preceded in March by the Supreme Court granting our appeal regarding our Permit to Mine and dam safety permits. Oral arguments for both cases have not yet been scheduled by the court, however, the company anticipates both cases to be heard before the end of the year.
In addition to successfully defending legal challenges to our permits, project optimization and engineering efforts that continued in earnest through the second quarter are expected to remain points of emphasis for the company through the remainder of the year.
Key Balance Sheet Statistics
(in ‘000 US dollars)
|
June 30, 2020 |
|
December 31, 2019 |
|||
|
|
|
|
|
||
Cash & equivalents |
$ |
6,473 |
$ |
7,401 |
||
Working capital |
|
1,116 |
|
3,043 |
||
Total assets |
|
460,818 |
|
457,315 |
||
Total liabilities |
|
86,218 |
|
73,175 |
||
Shareholders’ equity |
$ |
374,600 |
$ |
384,140 |
Key Income and Cash Flow Statement Statistics
(in ‘000 US dollars, except per share amounts)
|
|
Three months ended |
|
Six months ended |
||||||||
|
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
||||
General & administrative expense |
$ |
6,582 |
$ |
1,021 |
$ |
11,789 |
$ |
3,765 |
||||
Other (Income) expenses: |
|
|
|
|
|
|
|
|
||||
Finance (income) expense & other |
(1,047) |
(519) |
630 |
103 |
||||||||
Non-cash rehabilitiation accretion |
516 |
418 |
1,041 |
856 |
||||||||
Non-cash (gain) loss on debenture modification |
- |
(10) |
- |
2,004 |
||||||||
Loss for the period: |
|
6,051 |
|
910 |
|
13,460 |
|
6,728 |
||||
Loss per share |
|
0.01 |
|
0.00 |
|
0.01 |
|
0.02 |
||||
Cash used in investing activities: |
|
|
|
|
|
|
|
|
||||
NorthMet property |
$ |
2,450 |
$ |
4,488 |
$ |
5,003 |
$ |
10,209 |
||||
Weighted average shares outstanding |
1,006,383,162 |
344,737,881 |
1,006,132,963 |
333,456,972 |
||||||||
About PolyMet
PolyMet is a mine development company that owns 100% of the NorthMet Project, the first large-scale project to be permitted within the Duluth Complex in northeastern Minnesota, one of the world’s major, undeveloped mining regions. NorthMet has significant proven and probable reserves of copper, nickel and palladium – metals vital to global carbon reduction efforts – in addition to marketable reserves of cobalt, platinum and gold. When operational, NorthMet will become one of the leading producers of nickel, palladium and cobalt in the U.S., providing a much needed, responsibly mined source of these critical and essential metals.
Located in the Mesabi Iron Range, the project will provide economic diversity while leveraging the region’s established supplier network and skilled workforce, and generate a level of activity that will have a significant effect in the local economy. For more information: www.polymetmining.com.
PolyMet Disclosures
This news release contains certain forward-looking statements concerning anticipated developments in PolyMet’s operations in the future. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimates,” “potential,” “possible,” “projects,” “plans,” and similar expressions, or statements that events, conditions or results “will,” “may,” “could,” or “should” occur or be achieved or their negatives or other comparable words. These forward-looking statements may include statements regarding the ability to receive environmental and operating permits, job creation, and the effect on the local economy, or other statements that are not a statement of fact. Forward-looking statements address future events and conditions and therefore involve inherent known and unknown risks and uncertainties. Actual results may differ materially from those in the forward-looking statements due to risks facing PolyMet or due to actual facts differing from the assumptions underlying its predictions.
PolyMet’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made, and PolyMet does not assume any obligation to update forward-looking statements if circumstances or management’s beliefs, expectations and opinions should change.
Specific reference is made to risk factors and other considerations underlying forward-looking statements discussed in PolyMet’s most recent Annual Report on Form 40-F for the fiscal year ended December 31, 2019, and in our other filings with Canadian securities authorities and the U.S. Securities and Exchange Commission.
The Annual Report on Form 40-F also contains the company’s mineral resource and other data as required under National Instrument 43-101.
The TSX has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.
Media
Bruce Richardson
Corporate Communications
Tel: +1 (651) 389-4111
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Investor Relations
Tony Gikas
Investor Relations
Tel: +1 (651) 389-4110
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Ascent MS optimizes power delivery and lowers costs for crystalline silicon PECVD processes in the production of solar cells
DENVER--(BUSINESS WIRE)--Advanced Energy (Nasdaq: AEIS) – a global leader in highly engineered, precision power conversion, measurement and control solutions – today introduces its new industry-leading Ascent® MS multi-output power supply system. Designed to enable the lowest system and infrastructure costs in the industry for solar photovoltaic (PV) plasma-enhanced chemical vapor deposition (PECVD) systems, the Ascent MS builds on Advanced Energy’s long legacy of bringing power system innovation to the manufacturing of advanced solar cells.
The Ascent MS supports up to five independent chambers of passivated emitter and rear contact (PERC) PECVD processes in a single unit, optimizing power delivery and simplifying the deposition system design. The power system’s quick-connect power outputs, single point of control and minimized need for water and input power connections make for an optimized coater infrastructure. This enables faster coater installation, higher manufacturing line reliability and lower cost per coater. By supporting multiple tubes, the Ascent MS allows solar PV equipment manufacturers to develop more cost-effective systems that require less electrical and mechanical infrastructure than existing solutions.
“The manufacturing of PERC solar cells is an exceptionally competitive market,” said Dave McAninch, director of strategic marketing, Advanced Energy. “Our Ascent MS takes the economics of power delivery to a new level by delivering a system-level solution designed specifically for today's market needs."
PERC has become the dominant solar cell technology shipped in the past few years and has driven down the levelized cost of energy (LCOE) significantly. By providing the industry with system solutions that continue to deliver better economics to the market, Advanced Energy has long been a leader in the solar PV manufacturing equipment market and is well-positioned to meet the evolving technology demands of the solar cell market, including heterojunction with intrinsic thin-layer technology (HIT), with a broad portfolio of market-leading solutions, including RF, AC, DC and remote plasma source technologies.
Features of the Ascent MS include:
For detailed technical specifications, visit https://www.advancedenergy.com/products/plasma-power-generators/low-mid-frequency-power-systems/ascent-ms/.
About Advanced Energy
Advanced Energy (Nasdaq: AEIS) is a global leader in the design and manufacturing of highly engineered, precision power conversion, measurement and control solutions for mission-critical applications and processes. AE’s power solutions enable customer innovation in complex applications for a wide range of industries including semiconductor equipment, industrial, manufacturing, telecommunications, data center computing and healthcare. With engineering know-how and responsive service and support around the globe, the company builds collaborative partnerships to meet technology advances, propel growth for its customers and innovate the future of power. Advanced Energy has devoted more than three decades to perfecting power for its global customers and is headquartered in Denver, Colorado, USA. For more information, visit www.advancedenergy.com.
Advanced Energy | Precision. Power. Performance.
Lora Wilson
Global Results Communications for Advanced Energy Industries, Inc.
This email address is being protected from spambots. You need JavaScript enabled to view it.
+1 949.306.0276
HOUSTON--(BUSINESS WIRE)--Geospace Technologies (NASDAQ: GEOS) (the “Company”) today announced a net loss of $2.3 million, or $0.17 per diluted share, on revenue of $22.7 million for its third quarter ended June 30, 2020. This compares to a net loss of $3.7 million, or $0.27 per diluted share, on revenues of $22.9 million for the third quarter of the prior year.
For the nine months ended June 30, 2020, the Company recorded revenue of $66.3 million compared to revenue of $66.9 million during the prior year period. The Company reported a net loss of $15.4 million, or $1.14 per diluted share compared to a net loss of $8.8 million, or $0.66 per diluted share for the prior year period.
Walter R. (“Rick”) Wheeler, President and CEO of Geospace Technologies (the “Company”) said, “We are pleased to report that our employees, as well as third quarter operations were minimally impacted by COVID-19, the pandemic that has gripped both our country and the worldwide markets. To date, our heightened safety protocols have created a safe working environment for our employees and proved effective as our valued staff has been minimally impacted by the pandemic. Moreover, while our operations have not escaped the full brunt of the negative impact of the coronavirus, we are pleased to report that our revenue for the three-and nine-month periods ended June 30, 2020 totaled $22.7 million and $66.3 million respectively, similar to last year’s three-and nine-month totals.”
Wheeler further noted, “Continued strong demand for our ocean-bottom marine nodal recording systems fueled both our third quarter and nine-month results. Increased demand for these systems further countered some of the weakness we experienced in other parts of our oil and gas segments as well as in our adjacent markets business, each of which were negatively impacted by the effects of COVID-19. Not included in reported revenue are additional timely payments of $3.8 million received from a customer through the third quarter of fiscal year 2020 toward its promissory note securing the purchase of a 30,000 channel GCL land recording system. These paid-in amounts are included on the balance sheet as part of non-current deferred revenue and are intended to be recognized as revenue at a later date when collection of the note is determined to be likely.”
Oil and Gas Markets Segment
For the three months ended June 30, 2020, revenue from the Company’s oil and gas markets segment totaled $17.5 million, an increase of $3.1 million, or 21% over last year’s same period. For the nine-month period similarly ended, revenue totaled $47.5 million, an increase of $3.3 million, or 8% compared to the equivalent nine months a year-ago. The increases in both periods are attributed to increased demand for the Company’s OBX ocean-bottom nodal recording systems, partially offset by reductions in demand for the Company’s other oil and gas segment product lines.
The Company’s traditional seismic products generated $1.2 million and $5.6 million respectively in the three- and nine-month periods ended June 30, 2020. Compared to the corresponding three- and nine-month periods a year ago, these figures reflect reductions of 46% and 38% respectively. The declines in revenue in both periods are attributed to lower demand for seismic sensors as a result of fewer seismic exploration and imaging projects being performed by oil and gas companies. Due to low oil prices, oversupplies of crude, and the large drop in global demand for oil and gas amidst the COVID-19 pandemic, revenue from these products is expected to remain challenged for the foreseeable future.
The Company’s wireless seismic products produced total revenue of $16.1 million and $41.1 million in the three- and nine-month periods ended June 30, 2020. This compares with $11.9 million and $32.8 million for the equivalent three- and nine-month periods last year, reflecting respective increases of 36% and 25%. In both periods, the increases are a direct result of expanded rentals of the Company’s OBX marine nodal recording systems, partially offset by lower sales of its wireless land products. As a reminder, the Company has not yet recorded any revenue from the delivery of the aforementioned 30,000 channel GCL system having a sales value of $12.5 million. Growth in demand for the Company’s OBX systems derives from a renewed focus by many oil and gas companies to better leverage existing offshore resources in the recovery of discovered nearby fields. The superior geological images afforded by ocean bottom seismic surveys, which often utilize the Company’s OBX systems, increase the likelihood of success in these endeavors. The frequency and extent of such surveys fluctuate with weather and seasonal changes and may also be negatively impacted by declines in global demand for oil and gas due to the COVID-19 pandemic.
The Company’s reservoir seismic products generated revenue of $271,000 and $826,000 respectively in the three- and nine-month periods ended June 30, 2020. This compares with $447,000 and $2.4 million in the respective year-ago three- and nine-month periods. The reductions in both periods are a consequence of lower sales of the Company’s borehole seismic tools and lesser demand for performed services. The Company believes that contracts for the manufacture and installation of permanent reservoir monitoring (PRM) systems hold the largest opportunity for meaningful revenue from this product category. Although the COVID-19 pandemic disrupted some discussions with oil and gas companies interested in such systems, most remained ongoing or have since resumed. Based on these discussions, management currently believes that a tender for a PRM system is likely to be released in calendar year 2020 or soon thereafter. Should such a tender occur, and a contract be subsequently awarded to Geospace, the Company would not expect to recognize revenue related to the contract until later in its 2021 fiscal year or beyond. Management further believes that its broad portfolio of PRM accomplishments and its diversity of PRM products, including both electrical and OptoSeis® fiber optic sensing technologies, maximize its ability to be awarded a released PRM tender.
Adjacent Markets Segment
The Company’s adjacent markets segment produced revenue of $5.1 million and $18.3 million in the three- and nine-month periods ended June 30, 2020. This compares with $8.2 million and $22.1 million for the corresponding three- and nine-month periods a year ago and reflects a reduction of 38% and 17% respectively. The reductions in both periods are the result of lower demand for the Company’s industrial sensors and contract manufacturing services, as well as lower sales of the Company’s graphic imaging film products. In addition, lower demand for the Company’s water meter connectors and cables further contributed to the reduction over the reported three-month period. In all cases, the Company believes that lower demand for these products is primarily attributed to the economic impact of the COVID-19 pandemic on its customers.
Emerging Markets Segment
The Company’s emerging markets segment generated revenue of $88,000 and $557,000 respectively for the three- and nine-month periods ended June 30, 2020. This compares with $11,000 and $145,000 for the similar three- and nine-month periods of the previous year. The increase in the three months period is due to revenue recognition from site preparation and engineering efforts related to the U.S. Customs and Border Protection, U.S. Border Patrol contract. The increase in the nine-month period is further attributable to the sale of border and perimeter security products to a commercial customer. In April 2020, the Company’s Quantum subsidiary was awarded a $10 million contract to provide a technology solution to the Department of Homeland Security for the U.S. Customs and Border Protection, U.S. Border Patrol. Current execution of the contract is progressing on schedule. However, the Company does not expect significant revenue from the contract until the first quarter of its 2021 fiscal year, ending December 31, 2020. The acquisition of Quantum represents a key strategy of the Company to leverage its core competencies in the design and manufacture of seismic acoustic technology in combination with advanced analytics to create products that expand revenue from diversified markets apart from its oil and gas segment.
Revision of Fiscal Year 2020 Q1 and Q2 Results
In its Form 10-Q for the quarter ended June 30, 2020 and in the financial statements contained herein, The Company corrected an accounting error in its consolidated financial statements for the quarterly periods ended December 31, 2019 and March 31, 2020. The financial information for the nine months ended June 30, 2020 was adjusted to reflect the correction of the accounting error. Specifically, the accounting error relates to the recording of an $8.0 million reserve against an operating lease receivable. The Company has determined in accordance with recently changed accounting guidance, when collection of an operating lease revenue is less than probable, rental revenue is limited to the amount of cash collected to date. Accordingly, the Company must record a reserve against any existing operating lease receivables as a charge to, or reduction of, rental revenue in the same period. The Company reported its December 31, 2019 Form 10-Q that collection of future operating lease revenue was less than probable; however, the Company, failed to record the reversal of the $8.0 million operating lease receivable in the same period. The Company subsequently reported the impairment of the operating lease receivable in its March 31, 2020 Form 10-Q, but incorrectly recorded the adjustment as a charge to bad debt expense and not as a reduction to rental revenue. There is no effect on the previously reported net loss for the six months period ended March 31, 2020. In the future the Company will adjust its accounting for operating leases as directed in the accounting guidance.
Balance Sheet and Liquidity
Over the nine months ended June 30, 2020, Geospace generated $12.4 million in cash and cash equivalents from operating activities. The Company used $4.5 million of cash for investment activities that included (i) $5.4 million invested in its rental equipment primarily to expand its OBX rental fleet, and (ii) $2.6 million for additions to property, plant, and equipment. These uses were partially offset by (i) $3.3 million of proceeds for the sale of rental equipment, and (ii) $0.2 million of proceeds from the sale of property, plant, and equipment. As of June 30, 2020, the Company had $26.7 million in cash, cash equivalents, and short-term investments, and maintained an additional borrowing availability of $17.9 million under its bank credit agreement with no borrowings outstanding. Thus, as of June 30, 2020, the Company’s total liquidity stood at $44.6 million. The Company additionally owns unencumbered property and real estate in both domestic and international locations.
Subsequent Events
In July 2020, the Company initiated actions to reduce its operating costs in light of decreased demand for products in its Oil and Gas Markets and Adjacent Markets segments. The cost reductions were primarily realized through a reduction of approximately 100 employees from the Company’s workforce and a reduction in the cash compensation of named executives and Company directors. In connection with the workforce reduction, the Company will incur approximately $0.8 million of termination costs in the fourth quarter of fiscal year 2020. The termination costs will be included as a component of both cost of revenue and operating expenses in the Company’s consolidated statement of operations. The Company expects it will realize annual savings of $ 2.0 million or more as a result of the cost cutting measures.
Wheeler concluded, “As the world grapples with all the ramifications of COVID-19, demand for certain products in our oil and gas and adjacent markets segments will continue to be negatively impacted. Curtailed travel and social activities, combined with lower factory outputs, will continue to keep global energy demands at below normal levels. Thus, continued balancing of supplies and pricing poses ongoing challenges to the oil and gas companies and energy service providers who are our major customers. However, we believe that our products serving this market stand out as the preferred instruments of choice within a recovering energy market. In addition, we believe our executed diversification strategy is already demonstrating successful mitigation of the volatility in our oil and gas markets segment, as evidenced by our contract with U.S. Border Patrol. Furthermore, we believe our recent cost reduction efforts and our longstanding financial discipline keep us optimally positioned to thrive in a post COVID-19 world ahead.”
Conference Call Information
Geospace Technologies will host a conference call to review its fiscal year 2020 third quarter financial results on August 7, 2020 at 10:00 a.m. Eastern Time (9 a.m. Central). Participants can access the call at (877) 876-9173 (US) or (785) 424-1667 (International). Please reference the conference ID: GEOSQ320 prior to the start of the conference call. A replay will be available for approximately 60 days and may be accessed through the Investor tab of our website at www.geospace.com.
About Geospace Technologies
Geospace principally designs and manufactures seismic instruments and equipment. These seismic products are marketed to the oil and gas industry and used to locate, characterize and monitor hydrocarbon producing reservoirs. We also market our seismic products to other industries for vibration monitoring, border and perimeter security and various geotechnical applications. We design and manufacture other products of a non-seismic nature, including water meter products, imaging equipment and offshore cables.
Forward Looking Statements
This press release contains “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. These forward-looking statements can be identified by terminology such as “may”, “will”, “should”, “could”, “intend”, “expect”, “plan”, “budget”, “forecast”, “anticipate”, “believe”, “estimate”, “predict”, “potential”, “continue”, “evaluating” or similar words. Statements that contain these words should be read carefully because they discuss our future expectations, contain projections of our future results of operations or of our financial position or state other forward-looking information. Examples of forward-looking statements include, among others, statements that we make regarding our expected operating results, the results and success of our transactions with Quantum and the OptoSeis® technology, the adoption and sale of our products in various geographic regions, potential tenders for PRM systems, future demand for OBX systems, the completion of new orders for channels of our GCL system, the fulfillment of customer payment obligations, the impact of the coronavirus (or COVID-19) pandemic, the Company’s ability to manage changes and the continued health or availability of management personnel, volatility and direction of oil prices, anticipated levels of capital expenditures and the sources of funding therefore, and our strategy for growth, product development, market position, financial results and the provision of accounting reserves. These forward-looking statements reflect our current judgment about future events and trends based on the information currently available to us. However, there will likely be events in the future that we are not able to predict or control. The factors listed under the caption “Risk Factors” and elsewhere in our most recent Annual Report on Form 10-K, which is on file with the Securities and Exchange Commission, as well as other cautionary language in any subsequent Quarterly Report on Form 10-Q, or in our other periodic reports, provide examples of risks, uncertainties and events that may cause our actual results to differ materially from the expectations we describe in our forward-looking statements. Such examples include, but are not limited to, the failure of the Quantum or OptoSeis® technology transactions to yield positive operating results, decreases in commodity price levels, including risks related to the recent collapse in oil prices, which could reduce demand for our products, the failure of our products to achieve market acceptance, despite substantial investment by us, our sensitivity to short term backlog, delayed or cancelled customer orders, product obsolescence resulting from poor industry conditions or new technologies, bad debt write-offs associated with customer accounts, lack of further orders for our OBX systems, failure of our Quantum products to be adopted by the border and security perimeter market, infringement or failure to protect intellectual property. The occurrence of the events described in these risk factors and elsewhere in our most recent Annual Report on Form 10-K or in our other periodic reports could have a material adverse effect on our business, results of operations and financial position, and actual events and results of operations may vary materially from our current expectations. We assume no obligation to revise or update any forward-looking statement, whether written or oral, that we may make from time to time, whether as a result of new information, future developments or otherwise.
GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) |
||||||||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
June 30, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
||||||||
Revenue: |
|
|
|
|
|
|
|
|
||||||||
Products |
|
$ |
6,975 |
|
|
$ |
12,153 |
|
|
$ |
25,575 |
|
|
$ |
34,457 |
|
Rental |
|
|
15,728 |
|
|
|
10,720 |
|
|
|
40,740 |
|
|
|
32,414 |
|
Total revenue |
|
|
22,703 |
|
|
|
22,873 |
|
|
|
66,315 |
|
|
|
66,871 |
|
Cost of revenue: |
|
|
|
|
|
|
|
|
||||||||
Products |
|
|
8,660 |
|
|
|
10,508 |
|
|
|
28,285 |
|
|
|
32,967 |
|
Rental |
|
|
5,979 |
|
|
|
4,775 |
|
|
|
19,564 |
|
|
|
12,873 |
|
Total cost of revenue |
|
|
14,639 |
|
|
|
15,283 |
|
|
|
47,849 |
|
|
|
45,840 |
|
|
|
|
|
|
|
|
|
|
||||||||
Gross profit |
|
|
8,064 |
|
|
|
7,590 |
|
|
|
18,466 |
|
|
|
21,031 |
|
|
|
|
|
|
|
|
|
|
||||||||
Operating expenses: |
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative |
|
|
5,704 |
|
|
|
6,050 |
|
|
|
17,767 |
|
|
|
17,493 |
|
Research and development |
|
|
4,014 |
|
|
|
4,246 |
|
|
|
12,535 |
|
|
|
11,315 |
|
Change in estimated fair value of contingent consideration |
|
|
662 |
|
|
— |
|
|
|
1,634 |
|
|
— |
|
||
Bad debt expense |
|
|
248 |
|
|
|
629 |
|
|
|
406 |
|
|
|
599 |
|
Total operating expenses |
|
|
10,628 |
|
|
|
10,925 |
|
|
|
32,342 |
|
|
|
29,407 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss from operations |
|
|
(2,564 |
) |
|
|
(3,335 |
) |
|
|
(13,876 |
) |
|
|
(8,376 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Other income (expense): |
|
|
|
|
|
|
|
|
||||||||
Interest expense |
|
|
(8 |
) |
|
|
(28 |
) |
|
|
(31 |
) |
|
|
(85 |
) |
Interest income |
|
|
574 |
|
|
|
446 |
|
|
|
924 |
|
|
|
898 |
|
Foreign exchange gains (losses), net |
|
|
307 |
|
|
|
(1 |
) |
|
|
283 |
|
|
|
185 |
|
Other, net |
|
|
(21 |
) |
|
|
(54 |
) |
|
|
(78 |
) |
|
|
(183 |
) |
Total other income, net |
|
|
852 |
|
|
|
363 |
|
|
|
1,098 |
|
|
|
815 |
|
|
|
|
|
|
|
|
|
|
||||||||
Loss before income taxes |
|
|
(1,712 |
) |
|
|
(2,972 |
) |
|
|
(12,778 |
) |
|
|
(7,561 |
) |
Income tax expense |
|
|
573 |
|
|
|
700 |
|
|
|
2,600 |
|
|
|
1,257 |
|
Net loss |
|
$ |
(2,285 |
) |
|
$ |
(3,672 |
) |
|
$ |
(15,378 |
) |
|
$ |
(8,818 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Loss per common share: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
$ |
(0.17 |
) |
|
$ |
(0.27 |
) |
|
$ |
(1.14 |
) |
|
$ |
(0.66 |
) |
Diluted |
|
$ |
(0.17 |
) |
|
$ |
(0.27 |
) |
|
$ |
(1.14 |
) |
|
$ |
(0.66 |
) |
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
||||||||
Basic |
|
|
13,545,340 |
|
|
|
13,405,504 |
|
|
|
13,517,387 |
|
|
|
13,381,789 |
|
Diluted |
|
|
13,545,340 |
|
|
|
13,405,504 |
|
|
|
13,517,387 |
|
|
|
13,381,789 |
|
GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (in thousands except share amounts) (unaudited) |
||||||||
|
|
June 30, 2020 |
|
September 30, 2019 |
||||
ASSETS |
|
|
|
|
||||
Current assets: |
|
|
|
|
||||
Cash and cash equivalents |
|
$ |
26,669 |
|
|
$ |
18,925 |
|
Trade accounts and financing receivables, net |
|
|
14,619 |
|
|
|
27,426 |
|
Inventories |
|
|
21,531 |
|
|
|
23,855 |
|
Property held for sale |
|
|
603 |
|
|
— |
|
|
Prepaid expenses and other current assets |
|
|
1,426 |
|
|
|
1,008 |
|
Total current assets |
|
|
64,848 |
|
|
|
71,214 |
|
|
|
|
|
|
||||
Non-current inventories |
|
|
13,581 |
|
|
|
21,524 |
|
Rental equipment, net |
|
|
58,571 |
|
|
|
62,062 |
|
Property, plant and equipment, net |
|
|
30,511 |
|
|
|
31,474 |
|
Goodwill |
|
|
5,008 |
|
|
|
5,008 |
|
Other intangible assets, net |
|
|
8,764 |
|
|
|
10,063 |
|
Deferred cost of revenue and other assets |
|
|
8,108 |
|
|
|
663 |
|
Total assets |
|
$ |
189,391 |
|
|
$ |
202,008 |
|
|
|
|
|
|
||||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
||||
Current liabilities: |
|
|
|
|
||||
Accounts payable trade |
|
$ |
2,394 |
|
|
$ |
4,051 |
|
Deferred revenue and other current liabilities |
|
|
7,172 |
|
|
|
9,119 |
|
Total current liabilities |
|
|
9,566 |
|
|
|
13,170 |
|
|
|
|
|
|
||||
Contingent consideration |
|
|
11,574 |
|
|
|
9,940 |
|
Non-current deferred revenue and other liabilities |
|
|
3,785 |
|
|
|
51 |
|
Total liabilities |
|
|
24,925 |
|
|
|
23,161 |
|
|
|
|
|
|
||||
Commitments and contingencies |
|
|
|
|
||||
|
|
|
|
|
||||
Stockholders’ equity: |
|
|
|
|
||||
Preferred stock, 1,000,000 shares authorized, no shares issued and outstanding |
|
— |
|
|
— |
|
||
Common stock, $.01 par value, 20,000,000 shares authorized, 13,664,614 |
|
|
|
|
||||
13,630,666 shares issued and outstanding |
|
|
137 |
|
|
|
136 |
|
Additional paid-in capital |
|
|
90,342 |
|
|
|
88,660 |
|
Retained earnings |
|
|
90,430 |
|
|
|
105,808 |
|
Accumulated other comprehensive loss |
|
|
(16,443 |
) |
|
|
(15,757 |
) |
Total stockholders’ equity |
|
|
164,466 |
|
|
|
178,847 |
|
Total liabilities and stockholders’ equity |
|
$ |
189,391 |
|
|
$ |
202,008 |
|
GEOSPACE TECHNOLOGIES CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) |
||||||||
|
|
Nine Months Ended |
||||||
|
|
June 30, 2020 |
|
June 30, 2019 |
||||
Cash flows from operating activities: |
|
|
|
|
||||
Net loss |
|
$ |
(15,378 |
) |
|
$ |
(8,818 |
) |
Adjustments to reconcile net loss to net cash provided by operating activities: |
|
|
|
|
||||
Deferred income tax expense (benefit) |
|
|
195 |
|
|
|
(22 |
) |
Rental equipment depreciation |
|
|
13,643 |
|
|
|
9,703 |
|
Property, plant and equipment depreciation |
|
|
3,029 |
|
|
|
3,012 |
|
Amortization of intangible assets |
|
|
1,299 |
|
|
|
1,228 |
|
Amortization of premiums on short-term investments |
|
— |
|
|
|
(9 |
) |
|
Stock-based compensation expense |
|
|
1,682 |
|
|
|
1,781 |
|
Bad debt expense |
|
|
406 |
|
|
|
599 |
|
Inventory obsolescence expense |
|
|
2,853 |
|
|
|
3,013 |
|
Change in estimate of collectability of rental revenue |
|
|
7,993 |
|
|
— |
|
|
Change in estimated fair value of contingent consideration |
|
|
1,634 |
|
|
— |
|
|
Gross profit from sale of used rental equipment |
|
|
(698 |
) |
|
|
(244 |
) |
Gain on disposal of property, plant and equipment |
|
|
(151 |
) |
|
|
(90 |
) |
Realized loss on short-term investments |
|
— |
|
|
|
66 |
|
|
Effects of changes in operating assets and liabilities: |
|
|
|
|
||||
Trade accounts and other receivables |
|
|
2,059 |
|
|
|
(82 |
) |
Inventories |
|
|
898 |
|
|
|
(4,036 |
) |
Deferred cost of revenue and other assets |
|
|
(8,178 |
) |
|
|
171 |
|
Accounts payable trade |
|
|
(1,654 |
) |
|
|
601 |
|
Deferred revenue and other liabilities |
|
|
2,811 |
|
|
|
(740 |
) |
Net cash provided by operating activities |
|
|
12,443 |
|
|
|
6,133 |
|
|
|
|
|
|
||||
Cash flows from investing activities: |
|
|
|
|
||||
Purchase of property, plant and equipment |
|
|
(2,559 |
) |
|
|
(1,426 |
) |
Proceeds from the sale of property, plant and equipment |
|
|
204 |
|
|
|
130 |
|
Investment in rental equipment |
|
|
(5,448 |
) |
|
|
(28,728 |
) |
Proceeds from the sale of used rental equipment |
|
|
3,258 |
|
|
|
3,388 |
|
Proceeds from the sale of short-term investments |
|
— |
|
|
|
25,606 |
|
|
Business acquisition |
|
— |
|
|
|
(1,819 |
) |
|
Payments for damages related to insurance claim |
|
— |
|
|
|
(650 |
) |
|
Proceeds from insurance claim |
|
— |
|
|
|
1,166 |
|
|
Net cash used in investing activities |
|
|
(4,545 |
) |
|
|
(2,333 |
) |
|
|
|
|
|
||||
Cash flows from financing activities: |
|
|
|
|
||||
Proceeds from the exercise of stock options |
|
— |
|
|
|
215 |
|
|
Net cash provided by financing activities |
|
— |
|
|
|
215 |
|
|
|
|
|
|
|
||||
Effect of exchange rate changes on cash |
|
|
(154 |
) |
|
|
(351 |
) |
Increase in cash and cash equivalents |
|
|
7,744 |
|
|
|
3,664 |
|
Cash and cash equivalents, beginning of fiscal year |
|
|
18,925 |
|
|
|
11,934 |
|
Cash and cash equivalents, end of fiscal period |
|
$ |
26,669 |
|
|
$ |
15,598 |
|
|
|
|
|
|
||||
SUPPLEMENTAL CASH FLOW INFORMATION: |
|
|
|
|
||||
Cash paid for interest |
|
$ |
31 |
|
|
$ |
85 |
|
Cash paid for income taxes |
|
|
2,454 |
|
|
|
1,249 |
|
Inventory transferred to rental equipment |
|
|
6,220 |
|
|
|
1,810 |
|
Rick Wheeler
President and CEO
TEL: 713.986.4444
FAX: 713.986.4445
SAN JOSE, Calif.--(BUSINESS WIRE)--Bloom Energy Corporation (NYSE: BE) today announced the pricing of its offering of $200.0 million aggregate principal amount of 2.50% green convertible senior notes due 2025 (the “notes”) in a private offering to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”). The offering size was increased from the previously announced offering size of $135.0 million aggregate principal amount of notes. The issuance and sale of the notes is scheduled to settle on August 11, 2020, subject to customary closing conditions. Bloom Energy also granted the initial purchaser of the notes an option to purchase, for settlement within a period of 13 days from, and including, the date notes are first issued, up to an additional $30.0 million principal amount of notes.
The notes will be senior, unsecured obligations of Bloom Energy and will accrue interest at a rate of 2.50% per annum, payable semi-annually in arrears on February 15 and August 15 of each year, beginning on February 15, 2021. The notes will mature on August 15, 2025, unless earlier repurchased, redeemed or converted. Before May 15, 2025, noteholders will have the right to convert their notes only upon the occurrence of certain events. From and after May 15, 2025, noteholders may convert their notes at any time at their election until the close of business on the second scheduled trading day immediately before the maturity date. Bloom Energy will settle conversions by paying or delivering, as applicable, cash, shares of its Class A common stock or a combination of cash and shares of its Class A common stock, at Bloom Energy’s election. The initial conversion rate is 61.6808 shares of Class A common stock per $1,000 principal amount of notes, which represents an initial conversion price of approximately $16.21 per share of Class A common stock. The initial conversion price represents a premium of approximately 25.0% over the last reported sale price of $12.97 per share of Bloom Energy’s Class A common stock on August 6, 2020. The conversion rate and conversion price will be subject to adjustment upon the occurrence of certain events. If a “make-whole fundamental change” (as defined in the indenture for the notes) occurs, Bloom Energy will, in certain circumstances, increase the conversion rate for a specified time for holder who convert their notes in connection with that make-whole fundamental change.
The notes will be redeemable, in whole or in part, for cash at Bloom Energy’s option at any time, and from time to time, on or after August 21, 2023 and on or before the 26th scheduled trading day immediately before the maturity date, but only if the last reported sale price per share of Bloom Energy’s Class A common stock exceeds 130% of the conversion price for a specified period of time. The redemption price will be equal to the principal amount of the notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the redemption date. If Bloom Energy calls any or all notes for redemption, holders of notes called for redemption may convert their notes during the related redemption conversion period, and any such conversion will also constitute a “make-whole fundamental change” with respect to the notes so converted.
If a “fundamental change” (as defined in the indenture for the notes) occurs, then, subject to a limited exception, noteholders may require Bloom Energy to repurchase their notes for cash. The repurchase price will be equal to the principal amount of the notes to be repurchased, plus accrued and unpaid interest, if any, to, but excluding, the applicable repurchase date.
Bloom Energy estimates that the net proceeds from this offering will be approximately $193.1 million (or approximately $222.2 million if the initial purchaser exercises its option to purchase additional notes in full), after deducting the initial purchaser’s discounts and commissions and its estimated offering expenses. Bloom Energy intends to use (i) approximately $96.6 million of the net proceeds from this offering to offer to redeem a portion of its outstanding 10% Convertible Promissory Notes due 2021 (assuming no exercise of the initial purchaser’s option to purchase additional notes), and (ii) approximately $82.2 million of the net proceeds from this offering to redeem its outstanding 10% Senior Secured Notes due 2024. Bloom Energy intends to use the remainder of the net proceeds of this offering for other business purposes, including research and development and sales and marketing activities, general and administrative matters and capital expenditures. Pursuant to the indenture governing the 10% Convertible Promissory Notes due 2021, Bloom Energy is required to use 50% of the net proceeds from this offering to offer to redeem the 10% Convertible Promissory Notes due 2021. Because holders can convert the 10% Convertible Promissory Notes due 2021 prior to the redemption date or can decline to have such notes redeemed in connection with such redemption offer, Bloom Energy may not use the entire amount of approximately $96.6 million to redeem the 10% Convertible Promissory Notes due 2021, in which case Bloom Energy will use any additional proceeds for other business purposes as noted above.
In addition, Bloom Energy intends to allocate an amount equal to the net proceeds to refinance or finance, in whole or in part, new or on-going renewable projects that meet the “Eligibility Criteria” (as defined in the offering disclosure in respect of the notes).
The offer and sale of the notes and any shares of Class A common stock issuable upon conversion of the notes have not been, and will not be, registered under the Securities Act or any other securities laws, and the notes and any such shares cannot be offered or sold except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and any other applicable securities laws. This press release does not constitute an offer to sell, or the solicitation of an offer to buy, the notes or any shares of Class A common stock issuable upon conversion of the notes, nor will there be any sale of the notes or any such shares, in any state or other jurisdiction in which such offer, sale or solicitation would be unlawful.
About Bloom Energy
Bloom Energy’s mission is to make clean, reliable energy affordable for everyone in the world. Bloom Energy’s product, the Bloom Energy Server, delivers highly reliable and resilient, always-on electric power that is clean, cost-effective, and ideal for microgrid applications. Bloom’s customers include many Fortune 100 companies and leaders in manufacturing, data centers, healthcare, retail, higher education, utilities, and other industries.
Forward-Looking Statements
This press release includes forward-looking statements, including statements regarding the completion of the offering and the expected amount and intended use of the net proceeds. Forward-looking statements represent Bloom Energy’s current expectations regarding future events and are subject to known and unknown risks and uncertainties that could cause actual results to differ materially from those implied by the forward-looking statements. Among those risks and uncertainties are market conditions, the satisfaction of the closing conditions related to the offering and risks relating to Bloom Energy’s business, including those described in periodic reports that Bloom Energy files from time to time with the Securities Exchange Commission. Bloom Energy may not consummate the offering described in this press release and, if the offering is consummated, cannot provide any assurances regarding its ability to effectively apply the net proceeds as described above. The forward-looking statements included in this press release speak only as of the date of this press release, and Bloom Energy does not undertake to update the statements included in this press release for subsequent developments, except as may be required by law.
Investor Relations:
Mark Mesler
Bloom Energy
+1 (408) 543-1743
This email address is being protected from spambots. You need JavaScript enabled to view it.
Media:
Erica Osian
Bloom Energy
+1 (401) 714-6883
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