Results and Recent Highlights
- Reported third quarter 2017 revenue of
$477.3 million , compared to second quarter 2017 of$323.1 million - Reported third quarter 2017 net income of
$4.1 million , compared to second quarter 2017 net loss of$11.9 million - Achieved third quarter 2017 Adjusted EBITDA of
$71.6 million , compared to second quarter 2017 of$36.0 million - Averaged 24.7 deployed hydraulic fracturing fleets during third quarter 2017; exited quarter with 25 deployed fleets
- Increased annualized Adjusted Gross Profit per fleet to
$14.2 million , compared to second quarter 2017 of$10.5 million
Third Quarter 2017 Financial Results
Revenue for the third quarter of 2017 totaled
Adjusted EBITDA for the third quarter of 2017 totaled
Selling, general and administrative expenses for the third quarter of 2017 totaled
“We delivered another strong quarter, including attractive sequential growth, the deployment of one additional fleet and the successful completion and integration of our RockPile acquisition,” said James Stewart, Chairman and Chief Executive Officer of Keane. “Robust demand for our services, along with strong activity across our operational footprint, has allowed us to achieve full utilization on our fleet with the deployment of a 26th hydraulic fracturing fleet in early October 2017. Our year to date results underscore the quality of our assets, the ability of our team to execute and the benefits of our approach to partnering with the most efficient customers, driving continued momentum into the fourth quarter and beyond.”
“Our financial performance continues to advance as evidenced by yet another quarterly stair-step sequential increase in our Adjusted EBITDA from
Completion Services
Revenue for Completion Services totaled
Adjusted Gross Profit in Completion Services totaled
Annualized revenue per average deployed hydraulic fracturing fleet for the third quarter of 2017 was
Other Services
Revenue in Other Services for the third quarter of 2017 was
As part of Keane’s ongoing portfolio management, the company executed the sale of 6 of its 12 workover rigs late in the third quarter of 2017, generating approximately
Third Quarter 2017 One-Time Items and Other Adjustments
Adjusted EBITDA for the third quarter of 2017 excludes
Balance Sheet and Capital
Total debt outstanding as of September 30, 2017 was
As of September 30, 2017, cash and equivalents totaled
“The conservative approach we take to running our business and maintaining our balance sheet is evident in our execution,” said Mr.
Fourth Quarter 2017 Outlook
Revenue for the fourth quarter of 2017 is expected to increase between 5% and 15% sequentially. The sequential growth in revenue is driven by contributions from an additional hydraulic fracturing fleet deployed in the third quarter and a second in October 2017, in addition to price increases from contract re-openers on a portion of our portfolio. Keane expects to exit the fourth quarter of 2017 at full utilization with 26 active hydraulic fracturing fleets.
Keane expects annualized Adjusted Gross Profit per fleet for its portfolio to increase to between
Cementing and workover operations together represent a current annual revenue on a run rate basis of
Conference Call
On Thursday, November 2, 2017, Keane will hold a conference call for investors at 7:30 a.m. Central Time (8:30 a.m. Eastern Time) to discuss Keane’s third quarter 2017 results. Hosting the call will be James C. Stewart, Chairman and Chief Executive Officer and Gregory L.
About Keane Group, Inc.
Headquartered in
Definitions of Non-GAAP Financial Measures and Other Items
Keane has included both financial measures compiled in accordance with GAAP and certain non-GAAP financial measures in this press release, including Adjusted EBITDA and Adjusted Gross Profit and ratios based on these financial measures. These measurements provide supplemental information which Keane believes is useful to analysts and investors to evaluate its ongoing results of operations, when considered alongside GAAP measures such as net income and operating income. These non-GAAP financial measures exclude the financial impact of items management does not consider in assessing Keane’s ongoing operating performance, and thereby facilitate review of Keane’s operating performance on a period-to-period basis. Other companies may have different capital structures, and comparability to Keane’s results of operations may be impacted by the effects of acquisition accounting on its depreciation and amortization. As a result of the effects of these factors and factors specific to other companies, Keane believes Adjusted EBITDA and Adjusted Gross Profit provide helpful information to analysts and investors to facilitate a comparison of its operating performance to that of other companies.
Adjusted EBITDA is defined as net income (loss) adjusted to eliminate the impact of interest, income taxes, depreciation and amortization, along with certain items management does not consider in assessing ongoing performance. Adjusted Gross Profit is defined as Adjusted EBITDA, further adjusted to eliminate the impact of all activities in the Corporate segment, such as selling, general and administrative expenses, along with cost of services that management does not consider in assessing ongoing performance.
Forward-Looking Statements
The statements contained in this release that are not historical facts are forward-looking statements as defined in the Private Securities Litigation Reform Act of 1995.Words such as “may,” “will,” “could,” “should,” “expect,” “plan,” “project,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” “pursuant,” “target,” “continue,” and similar expressions are intended to identify such forward-looking statements. The statements in this press release that are not historical statements, including statements regarding the Company’s plans, objectives, future opportunities for the Company’s services, future financial performance and operating results and any other statements regarding Keane's future expectations, beliefs, plans, objectives, financial conditions, assumptions or future events or performance that are not historical facts, are forward-looking statements within the meaning of the federal securities laws. These statements are subject to numerous risks and uncertainties, many of which are beyond Keane's control, which could cause actual results to differ materially from the results expressed or implied by the statements. These risks and uncertainties include, but are not limited to the operations of Keane; the effects of the business combination of Keane and RockPile, including the combined Company’s future financial condition, results of operations, strategy and plans; potential adverse reactions or changes to business relationships resulting from the completion of the RockPile transaction; expected synergies and other benefits from the transaction and the ability of Keane to realize such synergies and other benefits; results of litigation, settlements and investigations; actions by third parties, including governmental agencies; volatility in customer spending and in oil and natural gas prices, which could adversely affect demand for Keane's services and their associated effect on rates, utilization, margins and planned capital expenditures; global economic conditions; excess availability of pressure pumping equipment, including as a result of low commodity prices, reactivation or construction; liabilities from operations; weather; decline in, and ability to realize, backlog; equipment specialization and new technologies; shortages, delays in delivery and interruptions of supply of equipment and materials; ability to hire and retain personnel; loss of, or reduction in business with, key customers; difficulty with growth and in integrating acquisitions; product liability; political, economic and social instability risk; ability to effectively identify and enter new markets; cybersecurity risk; dependence on our subsidiaries to meet our long-term debt obligations; variable rate indebtedness risk; and anti-takeover measures in our charter documents.
Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in Keane's Securities and Exchange Commission (“SEC”) filings, including the most recently filed Forms 10-Q and 10-K. Keane's filings may be obtained by contacting Keane or the SEC or through Keane's website at http://www.keanegrp.com or through the SEC's Electronic Data Gathering and Analysis Retrieval System (EDGAR) at http://www.sec.gov. Keane undertakes no obligation to publicly update or revise any forward-looking statement.
|
KEANE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS & COMPREHENSIVE INCOME (LOSS) (in thousands, except per share data) |
|||||||||||||
|
Three Months Ended September 30, |
Three Months Ended June 30, |
||||||||||||
| 2017 | 2016(1) | 2017 | |||||||||||
| (Unaudited) | (Unaudited) | (Unaudited) | |||||||||||
| Revenue | $ | 477,302 | $ | 116,753 | $ | 323,136 | |||||||
| Operating costs and expenses: | |||||||||||||
| Cost of services | 391,089 | 120,480 | 278,384 | ||||||||||
| Depreciation and amortization | 46,204 | 28,114 | 32,739 | ||||||||||
| Selling, general and administrative expenses | 28,592 | 9,218 | 22,337 | ||||||||||
| (Gain) loss on disposal of assets | 302 | 176 | (5 | ) | |||||||||
| Total operating costs and expenses | 466,187 | 157,988 | 333,455 | ||||||||||
| Operating income (loss) | 11,115 | (41,235 | ) | (10,319 | ) | ||||||||
| Other income (expenses): | |||||||||||||
| Other income (expense), net | 942 | (470 | ) | 3,701 | |||||||||
| Interest expense | (7,195 | ) | (9,962 | ) | (4,349 | ) | |||||||
| Total other expenses | (6,253 | ) | (10,432 | ) | (648 | ) | |||||||
| Income (loss) before income taxes | 4,862 | (51,667 | ) | (10,967 | ) | ||||||||
| Income tax (expenses) | (797 | ) | — | (931 | ) | ||||||||
| Net income (loss) | 4,065 | (51,667 | ) | (11,898 | ) | ||||||||
| Other comprehensive income (loss): | |||||||||||||
| Foreign currency translation adjustments | 64 | (8 | ) | 31 | |||||||||
| Hedging activities | (178 | ) | 104 | — | |||||||||
| Total comprehensive income (loss) | $ | 3,951 | $ | (51,571 | ) | $ | (11,867 | ) | |||||
| Net loss per share, basic | $ | 0.04 | NM | $ | (0.12 | ) | |||||||
| Weighted average shares, basic | 111,509 | NM | 103,013 | ||||||||||
|
________________________________ |
|
(1) Condensed Consolidated and Combined Financial Statements of Keane Group Holdings, LLC and Subsidiaries. |
| NM – Not measured as Keane Group, Inc. did not consummate its initial public offering ("IPO") until 1/25/2017. |
|
KEANE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF OPERATIONS & COMPREHENSIVE (LOSS) (in thousands, except per share data) |
||||||||||
| For the Nine Months Ended
September 30, |
||||||||||
| 2017 | 2016(1) | |||||||||
| (Unaudited) | (Unaudited) | |||||||||
| Revenue | $ | 1,040,591 | $ | 269,537 | ||||||
| Operating costs and expenses: | ||||||||||
| Cost of services | 893,465 | 273,364 | ||||||||
| Depreciation and amortization | 109,316 | 71,943 | ||||||||
| Selling, general and administrative expenses | 68,915 | 45,207 | ||||||||
| (Gain) loss on disposal of assets | (137 | ) | (297 | ) | ||||||
| Total operating costs and expenses | 1,071,559 | 390,217 | ||||||||
| Operating (loss) | (30,968 | ) | (120,680 | ) | ||||||
| Other income (expenses): | ||||||||||
| Other income (expense), net | 4,647 | 536 | ||||||||
| Interest expense | (51,905 | ) | (28,407 | ) | ||||||
| Total other expenses | (47,258 | ) | (27,871 | ) | ||||||
| (Loss) before income taxes | (78,226 | ) | (148,551 | ) | ||||||
| Income tax (expenses) | (1,862 | ) | — | |||||||
| Net (loss) | (80,088 | ) | (148,551 | ) | ||||||
| Other comprehensive income (loss): | ||||||||||
| Foreign currency translation adjustments | 108 | 57 | ||||||||
| Hedging activities | 6 | 1,338 | ||||||||
| Total comprehensive (loss) | $ | (79,974 | ) | $ | (147,156 | ) | ||||
| Net loss per share, basic | $ | (0.77 | ) | NM | ||||||
| Weighted average shares, basic | 104,496 | NM | ||||||||
|
________________________________ |
|
(1) Condensed Consolidated and Combined Financial Statements of Keane Group Holdings, LLC and Subsidiaries. |
| NM – Not measured as Keane Group, Inc. did not consummate its IPO until 1/25/2017. |
|
KEANE GROUP, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (in thousands) |
||||||||||
| ASSETS | September 30, | December 31, | ||||||||
| 2017 | 2016(1) | |||||||||
| (Unaudited) | (Audited) | |||||||||
| Current Assets: | ||||||||||
| Cash and cash equivalents | $ | 71,729 | $ | 48,920 | ||||||
| Accounts receivable | 219,166 | 66,277 | ||||||||
| Inventories, net | 39,381 | 15,891 | ||||||||
| Assets held for sale | 9,148 | — | ||||||||
| Prepaid and other current assets | 19,415 | 14,618 | ||||||||
| Total current assets | 358,839 | 145,706 | ||||||||
| Property and equipment, net | 440,602 | 294,209 | ||||||||
| Goodwill | 144,875 | 50,478 | ||||||||
| Intangible assets | 59,314 | 44,015 | ||||||||
| Other noncurrent assets | 5,597 | 2,532 | ||||||||
| Total Assets | $ | 1,009,227 | $ | 536,940 | ||||||
| LIABILITIES AND OWNERS’ EQUITY | ||||||||||
| Current liabilities: | ||||||||||
| Accounts payable | $ | 110,299 | $ | 48,484 | ||||||
| Accrued expenses | 124,066 | 42,892 | ||||||||
| Current maturities of capital lease obligations | 2,575 | 2,633 | ||||||||
| Current maturities of long-term debt | 1,396 | 2,512 | ||||||||
| Stock based compensation - current | 4,281 | — | ||||||||
| Deferred revenue | 10,009 | — | ||||||||
| Other current liabilities | 1,525 | 3,171 | ||||||||
| Total current liabilities | 254,151 | 99,692 | ||||||||
| Capital lease obligations, less current maturities | 5,063 | 5,442 | ||||||||
| Long-term debt, net(2) less current maturities | 274,172 | 267,238 | ||||||||
| Stock based compensation – non-current | 4,281 | — | ||||||||
| Other non-current liabilities | 6,607 | 2,316 | ||||||||
| Total non-current liabilities | 290,123 | 274,996 | ||||||||
| Total liabilities | 544,274 | 374,688 | ||||||||
| Owners’ equity: | ||||||||||
| Members’ equity | — | 453,810 | ||||||||
| Stockholders’ equity | 538,945 | — | ||||||||
| Retained (deficit) | (71,319) | (288,771) | ||||||||
| Accumulated other comprehensive (loss) | (2,673) | (2,787) | ||||||||
| Total owners’ equity | 464,953 | 162,252 | ||||||||
| Total liabilities and owners’ equity | $ | 1,009,227 | $ | 536,940 | ||||||
|
________________________________ |
|||
| (1) | Condensed Consolidated and Combined Financial Statements of Keane Group Holdings, LLC and Subsidiaries. | ||
| (2) | Net of unamortized deferred financing costs and unamortized debt discounts. | ||
|
KEANE GROUP, INC. AND SUBSIDIARIES ADDITIONAL SELECTED FINANCIAL AND OPERATING DATA (unaudited, amounts in thousands, except for non-financial statistics) |
|||||||||||||||
| Three Months Ended
September 30, |
Three Months |
||||||||||||||
| 2017 | 2016 | 2017 | |||||||||||||
| Completion Services: |
|
||||||||||||||
| Revenues | $ | 468,479 | $ | 115,694 | $ | 323,136 | |||||||||
| Cost of services | 384,007 | 117,653 | 278,384 | ||||||||||||
| Gross profit | 84,472 | (1,959 | ) | 44,752 | |||||||||||
| Depreciation, amortization and administrative expenses, and impairment | 41,542 | 24,245 | 28,534 | ||||||||||||
| Operating income (loss) | $ | 42,362 | $ | (26,667 | ) | $ | 15,770 | ||||||||
| Average hydraulic fracturing fleets deployed | 24.7 | 13.0 | 18.3 | ||||||||||||
| Average hydraulic fracturing fleet utilization | 99 | % | 57 | % | 80 | % | |||||||||
| Wireline - fracturing fleet bundling percentages | 81 | % | 46 | % | 64 | % | |||||||||
| Average annualized revenue per fleet deployed | $ | 75,867 | $ | 35,598 | $ | 70,631 | |||||||||
| Average annualized adjusted gross profit per fleet deployed | $ | 14,239 | $ | 255 | $ | 10,450 | |||||||||
| Adjusted gross profit | $ | 87,926 | $ | 830 | $ | 47,807 | |||||||||
| Other Services (1): | |||||||||||||||
| Revenues | $ | 8,823 | $ | 1,059 | $ | — | |||||||||
| Cost of services | 7,082 | 2,827 | — | ||||||||||||
| Gross profit (loss) | 1,741 | (1,768 | ) | — | |||||||||||
| Depreciation, amortization and administrative expenses, and impairment | 1,586 | 630 | 1,254 | ||||||||||||
| Operating income (loss) | $ | 1,055 | $ | (2,398 | ) | $ | (1,247 | ) | |||||||
| Adjusted gross profit (loss) | $ | 1,798 | $ | (804 | ) | $ | — | ||||||||
| Number of working days - coiled tubing | NM | $ | 73 | NM | |||||||||||
| Revenue per working days - coiled tubing | NM | $ | 15 | NM | |||||||||||
|
________________________________ |
|
(1) Other Services segment includes workover rigs and cementing divisions. |
| NM - Not meaningful to be disclosed. |
|
KEANE GROUP, INC. AND SUBSIDIARIES ADDITIONAL SELECTED FINANCIAL AND OPERATING DATA (unaudited, amounts in thousands, except for non-financial statistics) |
|||||||||||
| For the Nine Months Ended
September 30, |
|||||||||||
| 2017 | 2016 | ||||||||||
| Completion Services: | |||||||||||
| Revenues | $ | 1,031,768 | $ | 262,881 | |||||||
| Cost of services | 886,383 | 262,265 | |||||||||
| Gross profit | 145,385 | 616 | |||||||||
| Depreciation, amortization and administrative expenses, and impairment | 96,674 | 65,469 | |||||||||
| Operating income (loss) | $ | 49,807 | $ | (65,093 | ) | ||||||
| Average hydraulic fracturing fleets deployed | 19.5 | 9.6 | |||||||||
| Average hydraulic fracturing fleet utilization | 78 | % | 42 | % | |||||||
| Wireline - fracturing fleet bundling percentages | 69 | % | 49 | % | |||||||
| Average annualized revenue per fleet deployed | $ | 70,548 | $ | 36,511 | |||||||
| Average annualized adjusted gross profit per fleet deployed | $ | 10,944 | $ | 2,510 | |||||||
| Adjusted gross profit | $ | 160,059 | $ | 18,071 | |||||||
| Other Services (1): | |||||||||||
| Revenues | $ | 8,823 | $ | 6,656 | |||||||
| Cost of services | 7,082 | 11,099 | |||||||||
| Gross profit (loss) | 1,741 | (4,443 | ) | ||||||||
| Depreciation, amortization and administrative expenses, and impairment | 4,323 | 1,985 | |||||||||
| Operating (loss) | $ | (1,894 | ) | $ | (6,428 | ) | |||||
| Adjusted gross profit (loss) | $ | 1,798 | $ | (3,479 | ) | ||||||
| Number of working days - coiled tubing | NM | 255 | |||||||||
| Revenue per working days - coiled tubing | NM | 26 | |||||||||
|
________________________________ |
|
(1) Other Services segment includes coiled tubing, workover rigs and cementing divisions. |
| NM - Not meaningful to be disclosed. |
|
KEANE GROUP, INC. AND SUBSIDIARIES NON- (unaudited, in thousands) |
||||||||||||||||||
| Three Months Ended September 30, 2017 | ||||||||||||||||||
|
Completion Services |
Other Services |
Corporate and Other |
Total | |||||||||||||||
| Net Income (loss) | $ | 42,362 | $ | 1,055 | $ | (39,352 | ) | $ | 4,065 | |||||||||
| Interest expense, net | — | — | 7,195 | 7,195 | ||||||||||||||
| Income tax (benefits) expense | — | — | 797 | 797 | ||||||||||||||
| Depreciation and amortization | 41,542 | 1,586 | 3,076 | 46,204 | ||||||||||||||
| EBITDA | $ | 83,904 | $ | 2,641 | $ | (28,284 | ) | $ | 58,261 | |||||||||
| Plus Management Adjustments: | ||||||||||||||||||
| Acquisition, integration and expansion (1) | 1,835 | 57 | 5,998 | 7,890 | ||||||||||||||
| IPO-related (2) | — | — | 98 | 98 | ||||||||||||||
| Fleet commissioning costs | 1,619 | — | — | 1,619 | ||||||||||||||
| Non-cash stock compensation (3) | — | — | 3,263 | 3,263 | ||||||||||||||
| Other (4) | — | — | 470 | 470 | ||||||||||||||
| Adjusted EBITDA | $ | 87,358 | $ | 2,698 | $ | (18,455 | ) | $ | 71,601 | |||||||||
| Other income (expense) | — | — | (942 | ) | (942 | ) | ||||||||||||
| (Gain) loss on disposal of assets | 568 | (900 | ) | 634 | 302 | |||||||||||||
| Selling, general and administrative | — | — | 28,592 | 28,592 | ||||||||||||||
| Less Management Adjustments not associated with Cost of Services | — | — | (9,829 | ) | (9,829 | ) | ||||||||||||
| Adjusted gross profit | $ | 87,926 | $ | 1,798 | $ | — | $ | 89,724 | ||||||||||
|
________________________________ |
|||
| (1) | Represents primarily professional fees, integration costs, lease termination costs, severance and other costs associated with our acquisition and integration of RockPile. | ||
| (2) | Represents fees related to the organizational (legal entities) restructuring to ready the Company for its IPO. These expenses were recorded in selling, general and administrative expenses. | ||
| (3) | Represents non-cash amortization of equity awards issued under Keane Group, Inc.’s Equity and Incentive Award Plan (“Plan”). According to the Plan, the Compensation Committee of the Board of Directors can approve awards in the form of restricted stock, restricted stock units, and/or other deferred compensation. Consistent with prior policy, amortization of awards is made ratably over the vesting periods, beginning with the grant date, based on the total fair value determined on grant date and recorded in selling, general and administrative expenses. | ||
| (4) | Represents an adjustment to a contingent accrual and readiness costs associated with Keane’s initial internal controls design documentation for Sarbanes-Oxley compliance, using COSO 2013 framework, beginning in 2018. These costs were recorded in selling, general and administrative expenses. Also represents net (gain) loss on disposals of assets, which is recorded in (gain) loss on disposal of assets. | ||
|
KEANE GROUP, INC. AND SUBSIDIARIES NON- (unaudited, in thousands) |
|||||||||||||||||
| Three Months Ended June 30, 2017 | |||||||||||||||||
|
Completion Services |
Other Services |
Corporate and Other |
Total | ||||||||||||||
| Net Income (loss) | $ | 15,770 | $ | (1,247 | ) | $ | (26,421 | ) | $ | (11,898 | ) | ||||||
| Interest expense, net | — | — | 4,349 | 4,349 | |||||||||||||
| Income tax (benefits) expense | — | — | 931 | 931 | |||||||||||||
| Depreciation and amortization | 28,534 | 1,254 | 2,951 | 32,739 | |||||||||||||
| EBITDA | $ | 44,304 | $ | 7 | $ | (18,190 | ) | $ | 26,121 | ||||||||
| Plus Management Adjustments: | |||||||||||||||||
| Acquisition, integration and expansion (1) | — | — | (1,194 | ) | (1,194 | ) | |||||||||||
| IPO-related (2) | — | — | 109 | 109 | |||||||||||||
| Fleet commissioning costs | 3,055 | — | — | 3,055 | |||||||||||||
| Non-cash stock compensation (3) | — | — | 2,933 | 2,933 | |||||||||||||
| Other (4) | — | — | 4,970 | 4,970 | |||||||||||||
| Adjusted EBITDA | $ | 47,359 | $ | 7 | $ | (11,372 | ) | $ | 35,994 | ||||||||
| Other income (expense) | — | — | (3,701 | ) | (3,701 | ) | |||||||||||
| (Gain) loss on disposal of assets | 448 | (7 | ) | (445 | ) | (4 | ) | ||||||||||
| Selling, general and administrative | — | — | 22,337 | 22,337 | |||||||||||||
| Less Management Adjustments not associated with Cost of Services | — | — | (6,819 | ) | (6,819 | ) | |||||||||||
| Adjusted gross profit | $ | 47,807 | $ | — | $ | — | $ | 47,807 | |||||||||
|
________________________________ |
|||
| (1) | Represents professional fees, integration costs, lease termination costs, severance, start-up and other costs associated with the acquisition and integration of RockPile and a one-time indemnification receipt related to the acquisition of a majority of the |
||
| (2) | Represents miscellaneous costs associated with the marketing of the IPO for Keane Group, Inc. | ||
| (3) | Represents non-cash amortization of equity awards issued under Keane Group, Inc.’s Equity and Incentive Award Plan (“Plan”). According to the Plan, the Compensation Committee of the Board of Directors can approve awards in the form of restricted stock, restricted stock units, and/or other deferred compensation. Consistent with prior policy, amortization of awards is made ratably over the vesting periods, beginning with the grant date, based on the total fair value determined on grant date and recorded in selling, general and administrative expenses. | ||
| (4) | Represents contingency accruals related to certain litigation claims. These costs were recorded in selling, general and administrative expenses. | ||
|
KEANE GROUP, INC. AND SUBSIDIARIES NON- (unaudited, in thousands) |
|||||||||||||||||
| Three Months Ended September 30, 2016 | |||||||||||||||||
|
Completion Services |
Other Services |
Corporate and Other |
Total | ||||||||||||||
| Net Income (loss) | $ | (26,667 | ) | $ | (2,398 | ) | $ | (22,602 | ) | $ | (51,667 | ) | |||||
| Interest expense, net | — | — | 9,962 | 9,962 | |||||||||||||
| Income tax (benefits) expense | — | — | — | — | |||||||||||||
| Depreciation and amortization | 24,245 | 630 | 3,239 | 28,114 | |||||||||||||
| EBITDA | $ | (2,422 | ) | $ | (1,768 | ) | $ | (9,401 | ) | $ | (13,591 | ) | |||||
| Plus Management Adjustments: | |||||||||||||||||
| Acquisition, integration and expansion (1) | (1,378 | ) | 225 | 1,607 | 454 | ||||||||||||
| IPO-related (2) | — | — | 232 | 232 | |||||||||||||
| Fleet commissioning costs | 4,167 | 739 | — | 4,906 | |||||||||||||
| Non-cash stock compensation (3) | — | — | (15 | ) | (15 | ) | |||||||||||
| Adjusted EBITDA | $ | 367 | $ | (804 | ) | $ | (7,577 | ) | $ | (8,014 | ) | ||||||
| Other income (expense) | — | — | 470 | 470 | |||||||||||||
| (Gain) loss on disposal of assets | 463 | — | (287 | ) | 176 | ||||||||||||
| Selling, general and administrative | — | — | 9,218 | 9,218 | |||||||||||||
| Less Management Adjustments not associated with Cost of Services | — | — | (1,824 | ) | (1,824 | ) | |||||||||||
| Adjusted gross profit | $ | 830 | $ | (804 | ) | $ | — | $ | 26 | ||||||||
|
________________________________ |
|||
|
|
|||
| (1) | Represents professional fees, integration costs, lease termination costs, and other costs associated with the acquisition and integration of a majority of the |
||
| (2) | Represents fees and other miscellaneous expenses required to carry out the reporting, prior years' audits and organizational (legal entities) restructuring to ready the Company for its initial public offering and the eventual consummation of the offering. These expenses were recorded in selling, general and administrative expenses. | ||
| (3) | Represents adjustments to the non-cash profit interests related to Keane Group Holdings, LLC in 2016. These costs were recorded in selling, general and administrative expenses. | ||
|
KEANE GROUP, INC. AND SUBSIDIARIES NON- (unaudited, in thousands) |
||||||||||||||||||
| Nine Months Ended September 30, 2017 | ||||||||||||||||||
|
Completion Services |
Other Services |
Corporate and Other |
Total | |||||||||||||||
| Net Income (loss) | $ | 49,807 | $ | (1,894 | ) | $ | (128,001 | ) | $ | (80,088 | ) | |||||||
| Interest expense, net | — | — | 51,905 | 51,905 | ||||||||||||||
| Income tax (benefits) expense | — | — | 1,862 | 1,862 | ||||||||||||||
| Depreciation and amortization | 96,674 | 4,323 | 8,319 | 109,316 | ||||||||||||||
| EBITDA | $ | 146,481 | $ | 2,429 | $ | (65,915 | ) | $ | 82,995 | |||||||||
| Plus Management Adjustments: | ||||||||||||||||||
| Acquisition, integration and expansion (1) | 1,835 | 57 | 5,786 | 7,678 | ||||||||||||||
| IPO-related (2) | 1,266 | — | 4,619 | 5,885 | ||||||||||||||
| Fleet commissioning costs | 11,574 | — | 197 | 11,771 | ||||||||||||||
| Non-cash stock compensation (3) | — | — | 7,334 | 7,334 | ||||||||||||||
| Other (4) | — | — | 5,031 | 5,031 | ||||||||||||||
| Adjusted EBITDA | $ | 161,156 | $ | 2,486 | $ | (42,948 | ) | $ | 120,694 | |||||||||
| Other income (expense) | — | — | (4,647 | ) | (4,647 | ) | ||||||||||||
| (Gain) loss on disposal of assets | (1,096 | ) | (688 | ) | 1,647 | (137 | ) | |||||||||||
| Selling, general and administrative | — | — | 68,915 | 68,915 | ||||||||||||||
| Less Management Adjustments not associated with Cost of Services | — | — | (22,967 | ) | (22,967 | ) | ||||||||||||
| Adjusted gross profit | $ | 160,060 | $ | 1,798 | $ | — | $ | 161,858 | ||||||||||
|
________________________________ |
|||
| (1) | Represents primarily professional fees, due diligence expenses and other costs associated with the acquisition of RockPile, the acquisition of a majority of the |
||
| (2) | Represents fees and other miscellaneous expenses required to carry out the reporting, prior years' audits and organizational (legal entities) restructuring to ready the Company for its IPO and the eventual consummation of the offering. These expenses were recorded in selling, general and administrative expenses. Also represents one-time IPO bonuses paid out to key operational and corporate employees; recorded |
||
| (3) | Represents non-cash amortization of equity awards issued under Keane Group, Inc.’s Equity and Incentive Award Plan (“Plan”). According to the Plan, the Compensation Committee of the Board of Directors can approve awards in the form of restricted stock, restricted stock units, and/or other deferred compensation. Consistent with prior policy, amortization of awards is made ratably over the vesting periods, beginning with the grant date, based on the total fair value determined on grant date and recorded in selling, general and administrative expenses. | ||
| (4) | Represents contingency accruals related to certain litigation claims and readiness costs associated with Keane’s initial internal controls design documentation for Sarbanes-Oxley compliance, using COSO 2013 framework, beginning in 2018. These costs were recorded in selling, general and administrative expenses. Also represents net (gain) loss on disposals of assets, which is recorded in (gain) loss on disposal of assets. | ||
|
KEANE GROUP, INC. AND SUBSIDIARIES NON- (unaudited, in thousands) |
|||||||||||||||||
| Nine Months Ended September 30, 2016 | |||||||||||||||||
|
Completion Services |
Other Services |
Corporate and Other |
Total | ||||||||||||||
| Completions | Other | Corporate | Consolidated | ||||||||||||||
| Net Income (loss) | $ | (65,093 | ) | $ | (6,428 | ) | $ | (77,030 | ) | $ | (148,551 | ) | |||||
| Interest expense, net | — | — | 28,407 | 28,407 | |||||||||||||
| Income tax (benefits) expense | — | — | — | — | |||||||||||||
| Depreciation and amortization | 65,469 | 1,985 | 4,489 | 71,943 | |||||||||||||
| EBITDA | $ | 376 | $ | (4,443 | ) | $ | (44,134 | ) | $ | (48,201 | ) | ||||||
| Plus Management Adjustments: | |||||||||||||||||
| Acquisition, integration and expansion (1) | 13,155 | 225 | 24,580 | 37,960 | |||||||||||||
| IPO-related (2) | — | — | 262 | 262 | |||||||||||||
| Fleet commissioning costs | 4,299 | 739 | — | 5,038 | |||||||||||||
| Non-cash stock compensation (3) | — | — | 1,826 | 1,826 | |||||||||||||
| Other (4) | — | — | (1,099 | ) | (1,099 | ) | |||||||||||
| Adjusted EBITDA | $ | 17,830 | $ | (3,479 | ) | $ | (18,565 | ) | $ | (4,214 | ) | ||||||
| Other income (expense) | — | — | (536 | ) | (536 | ) | |||||||||||
| (Gain) loss on disposal of assets | 239 | — | (536 | ) | (297 | ) | |||||||||||
| Selling, general and administrative | — | — | 45,207 | 45,207 | |||||||||||||
| Less Management Adjustments not associated with Cost of Services | — | — | (25,570 | ) | (25,570 | ) | |||||||||||
| Adjusted gross profit | $ | 18,069 | $ | (3,479 | ) | $ | — | $ | 14,590 | ||||||||
|
________________________________ |
|||
| (1) | Represents primarily professional fees, integration costs, lease termination costs, severance, start-up and other costs associated with the acquisition of a majority of the |
||
| (2) | Represents fees and other miscellaneous expenses required to carry out the reporting, prior years' audits and organizational (legal entities) restructuring to ready the Company for its IPO and the eventual consummation of the offering. These expenses were recorded in selling, general and administrative expenses. | ||
| (3) | Represents recognition of the grants of non-cash profit interests related to Keane Group Holdings, LLC in 2016. | ||
| (4) | Represents net (gain) loss from the disposals of assets, which is recorded in (gain) loss on disposal of assets. | ||
View source version on businesswire.com: http://www.businesswire.com/news/home/20171101006963/en/
Investor Relations
(713) 893-3602
Marc Silverberg, ICR
marc.silverberg@icrinc.com