HOUSTON, Feb. 21, 2022 /PRNewswire/ — NexTier Oilfield Solutions Inc. (NYSE: NEX) (“NexTier” or the “Company”) today announced its fourth quarter and full year 2021 results. financial and operating results.
“We are pleased with our solid fourth quarter results as we continue to improve our financial performance, demonstrating our strong position in a stronger market,” said NexTier President and CEO Robert Drummond. During the recent economic downturn, we took several important steps, including the acquisition of Alamo Pressure Pumping, to accelerate our strategy and strengthen our position as a leader in natural gas powered fracturing technology and a strong position in the Permian Basin.”
“Looking into 2022, we expect the pace of the market recovery to remain positive and we are well positioned to take advantage of the near-term cyclical recovery,” Mr. Drummond continued.“Commodity prices give our customers the confidence to increase their consumption of our services in a market where the utilization of available fracturing equipment is already high. It is important to be aware of capital constraints, coupled with extended lead times for new equipment, which limit fracturing Split-service NexTier is uniquely positioned to benefit from this constructive market environment, which we believe will deliver differentiated returns on our countercyclical investments in 2022 and beyond.
Mr. Drummond concluded: “I would like to thank our employees for their tireless efforts to overcome challenges and achieve our goals to move the company forward. We look forward to another year supporting our customers as we advance our low-cost, low-emissions strategy. And deliver it to shareholders in 2022.”
“NexTier’s revenue growth outpaced market activity growth for the third consecutive quarter, even before counting Alamo’s entire quarter versus a month in Q3,” said Kenny Pucheu, NexTier’s executive vice president and chief financial officer. “Overall, our fourth-quarter profitability benefited from increased scale and scale, as well as improved asset efficiency and utilization. We saw modest benefits from price recovery in the fourth quarter, but we expect, Improved pricing should have an even bigger impact as we move into 2022. Free cash flow generation is a top priority this year, and over time we expect this to accelerate as well.”
Total revenue for the year ended December 31, 2021 was $1.4 billion, compared to $1.2 billion for the year ended December 31, 2020.The increase in revenue was primarily due to an increase in the number of deployed fleets and Alamo’s four-month revenue.Net loss for the year ended December 31, 2021 was $119.4 million, or $0.53 per diluted share, compared to a net loss of $346.9 million, or $1.62 per diluted share, for the year ended December 31, 2020 .
Revenue totaled $509.7 million in the fourth quarter of 2021, compared to $393.2 million in the third quarter of 2021.The sequential increase in revenue was due to the inclusion of Alamo in the full quarter rather than a month in the third quarter, as well as increased activity in our Completions and Well Construction and Intervention Services segment.
Net income for the fourth quarter of 2021 totaled $10.9 million, or $0.04 per diluted share, compared to a net loss of $44 million, or $0.20 per diluted share, in the third quarter of 2021.Adjusted net income (1) totaled $19.8 million, or $0.08 per diluted share, in the fourth quarter of 2021, compared with an adjusted net loss of $24.3 million, or $0.11 per diluted share, in the third quarter of 2021.
Selling, general and administrative expenses (“SG&A”) in the fourth quarter of 2021 totaled $35.1 million, compared to $37.5 million in SG&A in the third quarter of 2021.Adjusted SG&A(1) totaled $27.5 million compared to Q4 2021 Adjusted SG&A was $22.8 million in Q3 2021.
Adjusted EBITDA(1) for the fourth quarter of 2021 totaled $80.2 million, compared to adjusted EBITDA(1) of $27.8 million for the third quarter of 2021.Reported Adjusted EBITDA(1) for the fourth quarter of 2021 included $21.2 million of proceeds from the sale of assets.
Fourth quarter EBITDA(1) was $71.3 million.Excluding net management adjustments of $8.9 million, adjusted EBITDA(1) for the fourth quarter was $80.2 million.Management adjustments included stock-based compensation expense of $7.2 million and other items net of approximately $1.7 million.
Revenue from our Completed Services segment totaled $481 million in the fourth quarter of 2021, compared to $366.1 million in the third quarter of 2021.Adjusted gross profit totaled $83.9 million in the fourth quarter of 2021, compared to $46.2 million in the third quarter of 2021.
In the fourth quarter, the company operated an average of 30 deployed fleets and 29 fully used fleets, up from 25 and 24 in the third quarter, respectively.Revenues were $461.1 million when only frac and combined cables were considered, while annualized adjusted gross profit per fully utilized fracking fleet(1) totaled $11.4 million in the fourth quarter of 2021, while each fully utilized The fracturing fleet revenue and annualized adjusted gross profit for the third quarter of 2021 used the fracturing fleet of $339.3 million and $7.3 million, respectively (1).Compared to the third quarter of 2021, the increase was primarily due to improved calendar efficiency and a modest recovery in pricing.
Additionally, in the fourth quarter, the company further reduced its fleet of sold hydraulic fracturing equipment by 200,000 hp of diesel power through international sales and continued decommissioning programs.
Revenue from our Well Construction and Intervention (“WC&I”) Services segment totaled $28.7 million in the fourth quarter of 2021, compared to $27.1 million in the third quarter of 2021.The quarter-over-quarter improvement was primarily due to increased activity in our coil customer activity for our tubing and cement product lines.Adjusted gross profit totaled $2.7 million in the fourth quarter of 2021, compared to adjusted gross profit of $2.9 million in the third quarter of 2021.
As of December 31, 2021, total outstanding debt was $374.9 million, net of debt discounts and deferred financing costs, excluding finance lease obligations, including an additional portion of equipment finance loan secured in Q4 2021 of $3.4 million Dollar.As of December 31, 2021, total available liquidity was $316.3 million, including $110.7 million in cash, and $205.6 million in available borrowing capacity under our asset-based credit facility, which remains undrawn .
Fourth quarter 2021 total cash used in operating activities was $31.5 million and cash used in investing activities was $7.4 million, excluding cash used to acquire businesses, resulting in a free cash flow(1) use of $38.9 million in the fourth quarter 2021.
With the rapidly tightening oil and gas market and years of underinvestment in global energy production, our industry has entered an upswing, and the company is well positioned to deliver differentiated value to customers and investors in 2022.With customers reacting to strong commodity prices and a constructive market backdrop for completion services, NexTier is focused on identifying and strengthening the right long-term partnerships for its major fleet of natural gas-powered equipment in 2022 and beyond.
By the first quarter of 2022, NexTier expects to operate an average fleet of 31 deployed fracs and intends to deploy an additional fleet of upgraded Tier IV dual-fuel fracs by the end of the first quarter and 32 by the end of the quarter fleet.
While the market continues to signal a powered up cycle as we enter 2022, our first quarter results are expected to be impacted by post-holiday start-up disruptions, increased downtime due to sand shortages, and weather-related delays.In addition, supply chain lead times delayed the deployment of our 32nd fleet to the end of the first quarter, when we had expected an early first quarter deployment.
Based on the deployed fleet as described above and the recapture of pricing benefits in the first quarter, we expect mid-to-low teen revenue to grow sequentially on a percentage basis.Despite persistent supply chain challenges and inflationary pressures, we expect annualized adjusted EBITDA per deployed fracking fleet to be in the double digits in the first quarter (1).We expect to exit the first quarter with continued momentum as the market backdrop continues to strengthen.
Capex in the first half of 2022 is expected to be around $9-100 million, before falling to a lower level in the second half.Our full-year 2022 maintenance capex is expected to increase year-over-year to support activity earnings and our commitment to service quality.Nonetheless, we expect total capex in full year 2022 to be lower than in full year 2021.
We expect to generate more than $100 million in free cash flow in 2022, a trend that will accelerate towards the end of the year as capex and working capital headwinds decline over time.
“Much of our 2022 capex forecast is directly related to maintaining our fleet and making profitable, quick-payback investments in our existing fleet and our power solutions business,” Mr. Pucheu noted.
Mr. Drummond concluded: “We expect momentum in the U.S. land completion market to continue into the second quarter and throughout 2022. As the recovery accelerates, we are closing the counter-cyclical investment portion of our strategy, which we believe enables us to achieve attractive Strong target future cycle returns and free cash flow. These investments provide NexTier with a differentiated competitive advantage in fleet technology, digital systems and logistics optimization, which will deliver strong returns today, throughout 2022 and in the years to come . We plan to conduct self-disciplined flows of our free cash and expect we can exit 2022 with a net debt to adjusted EBITDA ratio below one lap.”
NexTier plans to hold a virtual investor day on Thursday, March 3, 2022 from 9:00 am to 1:00 pm CT.The day will provide an immersive experience featuring our key business leaders who will highlight the benefits of our comprehensive completion services strategy, including reducing costs and emissions at the well site.We believe our strategy has and will continue to create significant value for NexTier investors and customers.We are excited to share with you how this strategy will positively impact NexTier’s future profitability.The management presentation will be followed by a question and answer session with the NexTier executive team.Investors are encouraged to register for this event.
On February 22, 2022, NexTier will host an investor conference call at 9:00 am CT (10:00 am ET) to discuss fourth quarter and full year 2021 financial and operating results.Moderating the conference call will be NexTier’s management, including President and Chief Executive Officer Robert Drummond and Executive Vice President and Chief Financial Officer Kenny Pucheu.The call can be accessed via a live webcast on the IR Events Calendar page of the Investor Relations section of our website at www.nextierofs.com, or by calling (855) 560-2574 for a live call, or for international calls, (412) 542 -4160.A replay will be available shortly after the call and can be accessed by dialing (877) 344-7529 or international callers at (412) 317-0088.The passcode for the phone replay is 8748097 and is valid until March 2, 2022.An archive of the webcast will be available on our website www.nextierofs.com for a period of twelve months shortly after the conference call.
Headquartered in Houston, Texas, NexTier is an industry-leading U.S. onshore oilfield services company providing diverse completion and production services in active and demanding basins.Our integrated solutions approach delivers efficiencies today, and our ongoing commitment to innovation helps our customers better prepare for tomorrow.NexTier is differentiated by four differentiating points, including safety performance, efficiency, partnership and innovation.At NexTier, we believe in living our core values from the basin to the boardroom and helping our customers win by safely releasing affordable, reliable and abundant energy.
Non-GAAP financial measures.The company has discussed certain non-GAAP financial measures, some of which are calculated by segment or product line, in this press release or in the conference call mentioned above.When considered in conjunction with GAAP measures such as net income and operating income, these measures provide supplemental information that the company believes helps analysts and investors assess its continuing operating performance.
Non-GAAP financial measures include EBITDA, adjusted EBITDA, adjusted gross profit, adjusted net income (loss), free cash flow, adjusted SG&A, adjusted EBITDA per deployed fleet, annualized adjusted EBITDA, net debt, adjusted EBITDA margin, and annualized adjusted gross profit per fully utilized fracturing fleet.These non-GAAP financial measures exclude the financial impact of items not considered by management in assessing the company’s performance from continuing operations, thereby facilitating a period-by-period review of the company’s operating performance.Other companies may have different capital structures, and comparability with the company’s operating performance may be affected by acquisition accounting for its depreciation and amortization.As a result of these and other company-specific factors, the company considers EBITDA, adjusted EBITDA, adjusted gross profit, adjusted EBITDA per deployed fleet, adjusted SG&A, adjusted EBITDA margin and adjusted The subsequent net income (loss) is provided to help provide information to analysts and investors in order to compare its operating performance with that of other companies.The company believes that free cash flow is important to investors because it provides a useful measure of management’s effectiveness in areas of profitability and capital management.The annualized adjusted gross utilization per fully used frac fleet is used to assess the operating performance of the business lines for the comparable period and is considered by the company as an important indicator of the operating performance of our frac and integrated cable product lines as it excludes capital structure and certain The impact of some non-cash items on the operating results of the product line.For a reconciliation of these non-GAAP measures, please see the table at the end of this press release.It is not possible to compare forward-looking non-GAAP financial measures to comparable GAAP measures are reconciled.Subject to market volatility, reconciliation cannot be performed without unreasonable effort.
Non-GAAP Measurement Definition: EBITDA is defined as net income (loss) adjusted to eliminate the effects of interest, income taxes, depreciation and amortization.Adjusted EBITDA is defined as further adjusted EBITDA with certain items not considered by management in assessing ongoing performance.Adjusted gross profit is defined as revenue less service costs, further adjusted to remove service cost items not considered by management in assessing ongoing performance.Adjusted gross profit at the segment level is not considered a non-GAAP financial measure because it is our measure of segment profit or loss and must be disclosed under GAAP under ASC 280.Adjusted net income (loss) is defined as the after-tax amount of net income (loss) plus merger/transaction related expenses and other unconventional items.Adjusted SG&A is defined as selling, general and administrative expenses adjusted for severance and divestiture costs, merger/transaction-related costs and other unconventional items.Free cash flow is defined as the net increase (decrease) in cash and cash equivalents before financing activities, excluding any acquisitions.Annualized Adjusted Gross Profit per fully utilized fleet is defined as (i) revenue less service costs attributable to the fracturing and integrated cable product lines, further adjusted to remove service cost items not considered by management in assessing ongoing performance Fracturing and composite cable product lines, (ii) divided by the fully utilized fracking and composite cable fleet per quarter (average deployed fleet multiplied by fleet utilization), then (iii) multiplied by four.Adjusted EBITDA per deployed fleet is defined as (i) Adjusted EBITDA divided by (ii) deployed fleet.Adjusted EBITDA margin is defined as (i) Adjusted EBITDA divided by (i) revenue.Annualized Adjusted EBITDA per deployed fleet is defined as (i) Adjusted EBITDA, (ii) divided by the number of fleets deployed, and then (iii) multiplied by four.Net debt is defined as (i) total debt, less unamortized debt discount and debt issuance costs, and (ii) less cash and cash equivalents.
The discussions in this press release and the aforementioned conference call contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.If forward-looking statements express or imply expectations or beliefs about future events or results, such expectations or beliefs are expressed in good faith and are believed to have a reasonable basis.”believe”, “continue”, “may”, “anticipate”, “anticipate”, “intend”, “estimate”, “forecast”, “project”, “should”, “may”, “will” “will” , “plan,” “target,” “forecast,” “potential,” “outlook,” and “reflect” or their negatives and similar expressions are intended to identify such forward-looking statements.These forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond the company’s control.Forward-looking statements made in this press release or during the aforementioned conference call, including forecasts for the company’s 2022 guidance and other forward-looking information, including regarding the industries in which the company operates are based on management’s estimates, assumptions and projections, and Subject to significant uncertainties and other factors, many of which are beyond the Company’s control.These factors and risks include, but are not limited to (i) the competitive nature of the industry in which the company operates, including pricing pressure; (ii) the ability to meet rapid demand changes; (iii) pipeline capacity constraints and severe weather conditions in oil or gas production areas. impact; (iv) the ability to obtain or renew customer contracts and changes in customer requirements in the markets the company serves; (v) the ability to identify, implement and integrate acquisitions, joint ventures or other transactions; (vi) the ability to protect and enforce intellectual property ; (vii) the impact of environmental and other government regulations on company operations; (viii) the impact of company losses or disruptions to operations of one or more key suppliers or customers, including due to inflation, COVID-19 resurgence, product defects, recalls or suspension; (ix) variability in crude oil and natural gas commodity prices; (x) market prices (including inflation) and timely supply of materials or equipment; (xi) obtaining licenses, approvals and authorized capacity; (xii) the company’s ability to employ a sufficient number of skilled and qualified workers; (xiii) debt levels and obligations associated therewith; (xiv) volatility in the company’s stock market prices; (xv) the impact of the COVID-19 pandemic Ongoing effects (including due to the emergence of new virus variants and strains, such as Delta and Omicron) and changing responses by governments, private industry or others to contain the spread of the virus and its variants or to deal with their effects, and As the economy emerges from the COVID-19 pandemic, the likelihood of inflation, travel restrictions, accommodation shortages or other macroeconomic challenges increases; (xvi) other risk factors and additional information.In addition, material risks that could cause actual results to differ from forward-looking statements include: the inherent uncertainties associated with financial or other projections; the efficient integration of Alamo’s businesses and the ability to realize the expected synergies and value creation envisaged by the proposed transaction; and Unexpected difficulties or expenses related to the transaction, customer and supplier responses or retention due to transaction announcements and/or closings; and transfer of administrative time on transaction-related issues.For a more detailed discussion of such risks and other factors, please see the Company’s filings with the Securities and Exchange Commission (“SEC”), including the headings “Part I, Item 1A. Risk Factors” and “Part II, Section 7 Item”. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s most recent Annual Report on Form 10-K, which is available on the SEC’s website or at www.NexTierOFS.com. The Company undertakes no obligation to update any forward-looking statements or information. Obligations, these statements or information are as of their respective dates to reflect events or circumstances after the date hereof, or to reflect the occurrence of unanticipated events, except as applicable securities may require by law. Investors should not assume that previously issued “forward-looking statements” do not An update constitutes a restatement of that statement.
Additional information about the company, including information on the company’s response to Covid-19, can be found in its periodic reports filed with the SEC, available at www.sec.gov or www.NexTierOFS.com.
Long-term debt, net of unamortized deferred financing costs and unamortized discounted debt, less current maturity
Represents market-driven severance payments, leased facility closures and restructuring costs resulting from a sharp drop in crude oil prices due to demand destruction due to the COVID-19 pandemic and global oversupply.
Represents final cash-settled gain on base notes received as part of the sale of Well Support Services in the first quarter of 2021, bad debt charges and contingent liabilities recognized in the second, third and fourth quarters of 2021. the bankruptcy filing of Basic Energy Services.
Represents realized and unrealized (gain) losses on investments in equity securities consisting primarily of common stock of public companies.
Represents an increase in accruals related to contingencies acquired in business acquisitions or special significant events.
Represents a reduction in the company’s accruals related to tax audits obtained in business acquisitions.
Represents market-driven severance payments, leased facility closures and restructuring costs resulting from a sharp drop in crude oil prices due to demand destruction due to the COVID-19 pandemic and global oversupply.
Represents final cash-settled gain on base notes received as part of the sale of Well Support Services in the first quarter of 2021, bad debt charges and contingent liabilities recognized in the second, third and fourth quarters of 2021. the bankruptcy filing of Basic Energy Services.
Represents realized and unrealized (gain) losses on investments in equity securities consisting primarily of common stock of public companies.
Represents an increase in accruals related to contingencies acquired in business acquisitions or special significant events.
Represents a reduction in the company’s accruals related to tax audits obtained in business acquisitions.
Represents the non-cash amortization of equity awards issued under the Company’s Incentive Award Program, excluding accelerations related to market-driven costs or acquisition, integration and expansion costs.
Represents impairment of goodwill and writing down the carrying value of inventories to their net realisable value.
Represents market-driven severance payments, leased facility closures and restructuring costs resulting from a sharp drop in crude oil prices due to demand destruction due to the COVID-19 pandemic and global oversupply.
Represents the net proceeds from the sale of the Well Support Services segment and the increase in fair value of the underlying notes and full suite of derivatives received as part of the sale.
Represents realized and unrealized gains on investments in equity securities consisting primarily of the common stock of public companies.