Nuverra Environmental Solutions, Inc. (NYSE: NES)
today announced financial results for the second quarter ended June 30, 2013.
Comments on the Second Quarter
- Revenues for the second quarter of 2013 were $165.5 million.
- Adjusted EBITDA 1 was $33.3 million for the second quarter of 2013. The Company incurred adjustments to EBITDA in the second quarter of $9.9 million, which included non-recurring integration and corporate rebranding expenses of approximately $2.3 million, and a charge of $5.0 million related to the restructuring of business operations and cost cutting initiatives in the legacy Heckmann Water Resources business.
- Net loss was $(12.8) million in the second quarter of 2013.
- The Company expects second half 2013 revenues to be between $350 and $400 million, second half 2013 adjusted EBITDA to be between $75 and $85 million and second half 2013 capital expenditures of $25 to $30 million.
Mark D. Johnsrud, Chief Executive Officer of Nuverra Environmental Solutions, stated, “We made progress in the second quarter, as evidenced by the increase in revenues and improvement in adjusted EBITDA on a sequential basis. However, the financial results fell short of our expectations due to slower ramp up by E&P operators across all shale areas; extraordinarily cold and wet weather conditions in the Bakken Shale area; execution issues in the Eagle Ford Shale; hiring challenges in the Marcellus/Utica Shale areas; and underperformance in our Industrial Solutions business.
“We were encouraged by signs of increased activity in our Shale Solutions segment in the second quarter, and believe the Bakken and Marcellus/Utica regions, in particular, will continue to show sequential growth this year. We are seeing more E&P customers move toward multi-well pads in the Bakken and in the Marcellus, and customers are increasing the number of stages on horizontal wells. We believe this type of activity will help to drive demand for our services in the second half of this year. Activity in the Haynesville Shale remains challenging, where despite some encouraging activity in June, a general lack of new drilling coupled with production decline rates translated to lower than expected financial results. In the Eagle Ford, we have hired an experienced general manager with more than 30 years of experience in operations, completions, production and business development to restructure that operation and expand our solutions offering to better meet customer needs in the region. We are seeing early indications of a turnaround in the region in July.