- Activity levels in the Shale Solutions segment lagged the Company’s internal forecast, as customers increased activity at a slower pace than originally anticipated, pushing revenue into the second half of 2013 and 2014.
- Unusually harsh weather conditions in the Bakken Shale area, the Company’s largest region of operations, adversely impacted customer completion activity, as high levels of snow and rain hampered vehicle access to roads.
- Operational issues in the Eagle Ford Shale area, a key 2013 growth area for the Company, caused business operations to decline sequentially. Nuverra has taken measures to remedy the situation by bringing in a new management team with significant industry experience and restructuring operations in the region.
- Stronger than anticipated customer demand in the Marcellus/Utica Shale area led to an increased utilization of subcontractors, resulting in lower overall margins. To address the increased customer activity, Nuverra has been aggressively hiring drivers in the region to meet demand and reduce the use of subcontractors. The Company also recently completed an acquisition in the Utica Shale area to expand operations and build on its existing presence in a basin that is very strategic to the Company’s growth plans.
- In the Industrial Solutions segment, higher collection and rail logistics costs coupled with stagnant demand in asphalt markets compressed margins and resulted in lower than anticipated financial results.
Nuverra Environmental Solutions, Inc. (NYSE: NES) (“Nuverra” or the “Company”) today announced certain preliminary financial results for the second quarter ended June 30, 2013. 1 Nuverra expects to report revenues for the second quarter of approximately $165.5 million and adjusted EBITDA 2 in the range of $32.8 million to $33.6 million. The Company expects cash capital expenditures during the quarter to be approximately $8.2 million. These preliminary results are based on management’s current analysis of operations for the second quarter, are forward-looking statements, and remain subject to final completion. The Company will discuss the final results of the second quarter and provide an update to its annual guidance and capital expenditure plans in its second quarter earnings press release on August 8, 2013. The second quarter was impacted by the following factors: