– On July 18th, announced definitive merger agreement with Rockwater Energy Solutions, giving Select a pro forma market capitalization in excess of $1.5 billion at current stock price
Aug. 3, 2017 / PRNewswire/ — Select Energy Services, Inc. (NYSE: WTTR) (“Select” or “the Company”), a leading provider of total water solutions to the U.S. unconventional oil and gas industry, today announced results for the second quarter ended June 30, 2017. Revenue for the second quarter of 2017 was $134.4 million, a 35% increase compared to the $99.9 million in the first quarter of 2017 and a 114% increase compared to the $62.9 million in the second quarter of 2016. Net loss for the second quarter was $10.5 million as compared to a net loss of $12.3 million in the first quarter of 2017 and a net loss of $228.2 million in the second quarter of 2016. This net loss of $10.5 million for the second quarter of 2017 includes $12.5 million of one-time phantom equity and other IPO-related compensation expenses. Adjusted EBITDA was $27.3 million in the second quarter of 2017 compared to $13.8 million in the first quarter of 2017 and $0.6 million in the second quarter of 2016. Please refer to the reconciliation of Adjusted EBITDA (a non-GAAP measure) to net loss (a GAAP measure) in this release.John Schmitz, Select’s Chairman & CEO, stated, “In our second quarter, we saw continued momentum in completion-related activity as additional frac spreads were deployed into the market. Even with that, the population of drilled, uncompleted wells (DUC’s) continues to grow, and is now over 6,000 per the EIA, which indicates that completion activity has yet to catch up to the growth in drilling rigs and this DUC population will provide us with a sizable backlog of future work.”Subsequent to the end of the second quarter, Select entered into a definitive merger agreement with privately-held Rockwater Energy Solutions, Inc. (“Rockwater”) in a stock-for-stock transaction on July 18, 2017. Schmitz added, “This transaction represents a very exciting opportunity to combine two companies that are highly-focused on the challenge of providing world-class water-related services to the major shale basins. We are well underway on completing all of the required regulatory steps, but at the same time, are working to ensure that both companies remain focused on the near-term opportunities at hand.”The transaction is targeted to close in the third quarter of 2017, subject to customary closing conditions, including U.S. governmental approval under the Hart-Scott-Rodino Act.
Select has scheduled a conference call on Friday, August 4, 2017 at 10:00 a.m. eastern time. Please dial 201-389-0872 and ask for the Select Energy Services call at least 10 minutes prior to the start time, or live over the Internet by logging on to the web at the address http://investors.selectenergyservices.com/events-and-presentations. A telephonic replay of the conference call will be available through August 11, 2017 and may be accessed by calling 201-612-7415 using passcode 13665037#. A webcast archive will also be available at the link above shortly after the call and will be accessible for approximately 90 days.
About Select Energy Services, Inc.
Select is a leading provider of total water solutions to the U.S. unconventional oil and gas industry. Select provides for the sourcing and transfer of water (both by permanent pipeline and temporary pipe) prior to its use in the drilling and completion activities associated with hydraulic fracturing, as well as complementary water-related services that support oil and gas well completion and production activities, including containment, monitoring, treatment, flowback, hauling, and disposal. For more information, please visit https://www.selectenergy.com.
Forward Looking Statements
All statements in this news release other than statements of historical facts are forward-looking statements which contain our current expectations about our future results. We have attempted to identify any forward-looking statements by using words such as “expect”, “will”, “estimate” and other similar expressions. Although we believe that the expectations reflected, and the assumptions or bases underlying our forward-looking statements are reasonable, we can give no assurance that such expectations will prove to be correct. Such statements are not guarantees of future performance or events and are subject to known and unknown risks and uncertainties that could cause our actual results, events or financial position to differ materially from those included within or implied by such forward-looking statements.
Factors that could cause our actual results to differ materially from the results contemplated by such forward-looking statements include, but are not limited to the factors discussed or referenced in the “Risk Factors” section of the prospectus we filed with the U.S. Securities and Exchange Commission on April 24, 2017, relating to our recently completed initial public offering.
You should not place undue reliance on our forward-looking statements. Any forward-looking statement speaks only as of the date on which such statement is made, and we undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events, changed circumstances or otherwise, unless required by law.
Additional Information and Where to Find It
In connection with the proposed merger transaction mentioned, Select intends to file relevant materials with the Securities and Exchange Commission (the “SEC”), including Select’s information statement in preliminary and definitive form. Stockholders are advised to read all relevant documents filed with the SEC, including Select’s information statement, because they will contain important information about the proposed transaction. These documents will be available at no charge on the SEC’s website at www.sec.gov. In addition, documents will also be available for free from Select by contacting the Company at 1820 N I-35, Gainesville, TX76240 or (940)-668-1818.
Comparison of Non-GAAP Financial Measures
We view EBITDA and Adjusted EBITDA as important indicators of performance. We define EBITDA as net income, plus taxes, interest expense, and depreciation and amortization. We define Adjusted EBITDA as EBITDA plus/(minus) loss/(income) from discontinued operations, plus any impairment charges or asset write-offs pursuant to GAAP, plus/(minus) non-cash losses/(gains) on the sale of assets or subsidiaries, non-recurring compensation expense, non-cash compensation expense, and non-recurring or unusual expenses or charges, including severance expenses, transaction costs, or facilities-related exit and disposal-related expenditures.
Our board of directors, management and investors use EBITDA and Adjusted EBITDA to assess our financial performance because it allows them to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization) and items outside the control of our management team. We present EBITDA and Adjusted EBITDA because we believe they provide useful information regarding the factors and trends affecting our business in addition to measures calculated under GAAP.
EBITDA and Adjusted EBITDA are not financial measures presented in accordance with GAAP. We believe that the presentation of these non-GAAP financial measures will provide useful information to investors in assessing our financial performance and results of operations. Net income is the GAAP measure most directly comparable to EBITDA and Adjusted EBITDA. Our non-GAAP financial measures should not be considered as alternatives to the most directly comparable GAAP financial measure. Each of these non-GAAP financial measures has important limitations as an analytical tool due to exclusion of some but not all items that affect the most directly comparable GAAP financial measures. You should not consider EBITDA or Adjusted EBITDA in isolation or as substitutes for an analysis of our results as reported under GAAP. Because EBITDA and Adjusted EBITDA may be defined differently by other companies in our industry, our definitions of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.
The following table presents a reconciliation of EBITDA and Adjusted EBITDA to our net income (loss), which is the most directly comparable GAAP measure for the periods presented:
Select Energy Services
Gary Gillette, CFO & SVP
Justin Briscoe, VP, Corporate Development
Dennard – Lascar Associates
Ken Dennard / Lisa Elliott
SOURCE Select Energy Services, Inc