NESR - National Energy Services Reunited Corp.

04/30/2024 | Press release | Distributed by Public on 04/30/2024 04:21

National Energy Services Reunited Corp. Reports Full Year 2023 Financial Results

For The Year EndedVariance
(in thousands except per share amounts and percentages)
December 31, 2023December 31, 2022SequentialYear-over- year
Revenue
$ 1,145,915 $ 909,517 $ 236,398 26.0 %
Net income
12,580 (36,420 ) 49,000 134.5 %
Adjusted net income (non-GAAP)*
50,221 (2,991 ) 53,212 1779.1 %
Adjusted EBITDA (non-GAAP)*
262,306 162,868 99,438 61.1 %
Diluted EPS
0.13 (0.39 ) 0.52 133.3 %
Adjusted Diluted EPS (non-GAAP)*
0.53 (0.03 ) 0.56 1747.4 %
Operating cash flows
176,959 92,576 84,383 91.1 %
Free cash flows (non-GAAP)*
108,769 (29,839 ) 138,608 464.5 %
(in thousands)
Year ended
December 31, 2023
Year ended
December 31, 2022
Revenue
$ 1,145,915 $ 909,517
Adjusted EBITDA
$ 262,306 $ 162,868 December 31, 2023December 31, 2022
Assets
Current assets
Cash and cash equivalents
$ 67,821 78,853
Accounts receivable, net
171,269 148,709
Unbilled revenue
95,997 110,186
Service inventories
98,434 110,521
Prepaid assets
9,238 337
Retention withholdings
48,419 34,268
Other receivables
39,778 38,271
Other current assets
10,759 16,669
Total current assets
541,715537,814
Non-current assets
Property, plant and equipment, net
442,666 461,061
Intangible assets, net
84,304 102,914
Goodwill
645,095 645,095
Operating lease right-of-use assets
31,628 29,970
Other assets
52,332 51,473
Total assets
$1,797,740$1,828,327
Liabilities and equity
Liabilities
Accounts payable and accrued expenses
351,240 353,536
Current installments of long-term debt
71,744 53,352
Short-term borrowings
48,889 89,885
Income taxes payable
8,421 7,262
Other taxes payable
14,674 7,604
Operating lease liabilities
7,406 6,263
Other current liabilities
31,073 26,166
Total current liabilities
533,447544,068
Long-term debt
331,565 391,863
Deferred tax liabilities
- -
Employee benefit liabilities
28,935 24,382
Non-current operating lease liabilities
25,145 25,051
Other liabilities
57,154 40,615
Total liabilities
976,2461,025,979
Equity
Preferred shares, no par value; unlimited shares authorized; none issued and outstanding at December 31, 2023 and December 31, 2022, respectively
- -
Common stock and additional paid in capital, no par value; unlimited shares authorized; 94,996,397 and 94,012,752 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively
883,865 877,299
Retained (deficit) / earnings
(62,440 ) (75,020 )
Accumulated other comprehensive income
69 69
Total equity
821,494802,348
Total liabilities and equity
$1,797,740$1,828,327Year Ended
Description
December 31, 2023December 31, 2022December 31, 2021
Revenues
$ 1,145,915 $ 909,517 $ 876,729
Cost of services
(997,265 ) (844,039 ) (873,948 )
Gross profit
148,65065,4782,781
Selling, general and administrative expenses (excluding
Amortization)
(49,173 ) (47,530 ) (28,071 )
Amortization
(18,774 ) (18,865 ) (18,042 )
Operating income / (loss)
80,703(917)(43,332)
Interest expense, net
(45,826 ) (34,126 ) (15,174 )
Other (expense) / income, net
(5,031 ) 5,242 (2,073 )
Income / (loss) before income tax
29,846(29,801)(60,579)
Income tax expense
(17,266 ) (6,619 ) (3,989 )
Net income / (loss)
$12,580$(36,420)$(64,568)
Weighted average shares outstanding:
Basic
94,748,324 92,962,048 91,043,830
Diluted
94,748,324 92,962,048 91,043,830
Net earnings per share:
Basic
$ 0.13 $ (0.39 ) $ (0.71 )
Diluted
$ 0.13 $ (0.39 ) $ (0.71 ) Year EndedDecember 31, 2023December 31, 2022December 31, 2021
Cash flows from operating activities:
Net (loss) / income
$ 12,580 $ (36,420 ) $ (64,568 )
Adjustments to reconcile net (loss) / income to net cash provided by operating activities:
Depreciation and amortization
142,230 115,845 122,125
Share-based compensation expense
6,763 9,269 9,759
Loss (Gain) on disposal of assets
487 (60 ) 333
Non-cash interest (income) expense
1,549 8,087 3,041
Deferred tax expense / (benefit)
(3,753 ) (10,261 ) (12,140 )
Allowance for (reversal of) doubtful receivables
410 8,185 1,114
Charges on obsolete service inventories
137 100 3,610
Earn-outs on business combinations
- - 1,767
Impairments and other charges
7,917 - -
(Gain) on Buyer Stock Adjustment Amount
- (4,236 ) -
Other operating activities, net
933 837 (75 )
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable
(22,971 ) (29,252 ) (8,289 )
(Increase) decrease in unbilled revenue
14,189 (1,704 ) 56,088
(Increase) decrease in retention withholdings
(14,151 ) 6,837 (4,000 )
(Increase) decrease in inventories
11,951 (16,756 ) (3,236 )
(Increase) decrease in prepaid expenses
(8,901 ) 6,164 (884 )
(Increase) decrease in other current assets
2,817 (13,711 ) (16,717 )
(Increase) decrease in other long-term assets and liabilities
16,259 6,075 8,854
Increase (decrease) in accounts payable and accrued expenses
(3,365 ) 33,651 31,221
Increase (decrease) in other current liabilities
11,878 9,926 (260 )
Net cash provided by operating activities
176,95992,576127,743
Cash flows from investing activities:
Capital expenditures
(68,190 ) (122,415 ) (107,076 )
IPM investments
(16,031 ) (17,367 ) -
Proceeds from disposal of assets
1,758 626 2,760
Acquisition of business, net of cash acquired
- - (51,921 )
Other investing activities
(1,000 ) (7,552 ) (8,299 )
Net cash used in investing activities
(83,463)(146,708)(164,536)
Cash flows from financing activities:
Proceeds from long-term debt
11,300 3,194 527,488
Repayments of long-term debt
(54,763 ) (78,755 ) (360,000 )
Proceeds from short-term borrowings
94,506 139,482 123,787
Repayments of short-term borrowings
(137,402 ) (119,165 ) (78,983 )
Payments on capital leases
(2,403 ) (3,108 ) (21,361 )
Payments on seller-provided financing for capital expenditures
(15,569 ) (14,443 ) (15,333 )
Other financing activities, net
(197 ) - (8,054 )
Net cash provided by (used in) financing activities
(104,528)(72,795)167,544
Effect of exchange rate changes on cash
- 8 9
Net increase (decrease) in cash
(11,032)(126,919)130,760
Cash and cash equivalents, beginning of period
78,853 205,772 75,012
Cash and cash equivalents, end of period
$67,821$78,853$205,772Year Ended December 31, 2023Year Ended December 31, 2022Net IncomeDiluted EPSNet IncomeDiluted EPS
Net Income
$ 12,580 $ 0.13 $ (36,420 ) $ (0.39 )
Add Charges and Credits:
Restatement costs (professional fees and bonuses)
23,702 0.25 17,263 0.19
Other than temporary impairment on equity method investment
6,991 0.07 - -
Current Expected Credit Loss Provisions
- - 6,664 0.07
Litigation provisions for non-employee matters
2,500 0.03 1,210 0.01
Integration and restructuring projects
- - 3,783 0.04
Other write-offs and provisions
4,448 0.05 4,509 0.05
Total Charges and Credits (1)
37,641 0.40 33,429 0.36
Total Adjusted Net Income
$50,221$0.53$(2,991)$(0.03)(1)

In the year ended December 31, 2023, Total Charges and Credits included $23.7 million of professional (legal and accounting) and employee (bonus and retention) costs associated with the matters identified in our Annual Report on Form 20-F for the year ended December 31, 2022, relating to restatement of our previously issued audited financial statements as of and for the year-ended December 31, 2020, $7.0 million related to an other than temporary impairment on an equity method investment, $2.5 million in provisions for litigation unrelated to employee matters, and $4.4 million related to other write-offs and provisions. In the year ended December 31, 2022, Total Charges and Credits included $17.3 million of professional (legal and accounting) costs associated with the matters identified in our Annual Report on Form 20-F for the year ended December 31, 2022, relating to restatement of our previously issued audited financial statements as of and for the year-ended December 31, 2020, $6.7 million related to current expected credit loss provisions, $1.2 million in provisions for litigation unrelated to employee matters, $3.8 million related to integration and restricting projects, and $4.5 million related to other write-offs and provisions.

Year Ended
December 31, 2023
Year Ended
December 31, 2022
Net Income
$ 12,580 $ (36,420 )
Add:
Income Taxes
17,266 6,619
Interest Expense, net
45,826 34,126
Depreciation and Amortization
148,993 125,114
Total Charges and Credits impacting Adjusted EBITDA (2)
37,641 33,429
Total Adjusted EBITDA
$262,306$162,868(2)

Charges and Credits impacting Adjusted EBITDA are described in Table 1 above. Charges and Credits impacting Adjusted EBITDA exclude items related to interest, income tax and depreciation and amortization.

December 31, 2023December 31, 2022
Net cash provided by operating activities
$ 176,959 $ 92,576
Less:
Capital expenditures
(68,190 ) (122,415 )
Free cash flow
$108,769$(29,839)December 31, 2023December 31, 2022
Current installments of long-term debt
$ 71,744 $ 53,352
Short-term borrowings
48,889 89,885
Long-term debt
331,565 391,863
Less:
Cash and cash equivalents
(67,821 ) (78,853 )
Net Debt
$384,377$456,247