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EX-99.2 - PRESENTATION - Nuverra Environmental Solutions, Inc.d313266dex992.htm
EX-99.1 - PRESS RELEASE - Nuverra Environmental Solutions, Inc.d313266dex991.htm
8-K - FORM 8-K - Nuverra Environmental Solutions, Inc.d313266d8k.htm

Exhibit 99.3

 

LOGO

Heckmann Corporation Announces

Full Year 2011 and Fourth Quarter Financial Results

Acquisition of Thermo Fluids Inc. Expands Heckmann’s Total Environmental

Solutions Services Offering

Introduces 2012 Pro-Forma Financial Guidance of $400 to $420 Million in Revenues and $95 to $105 Million in

Adjusted EBITDA

Pittsburgh, PA — March 8, 2012 — Heckmann Corporation (NYSE: HEK) today announced financial results for the full year and fourth quarter ended December 31, 2011.1

For 2011, the Company reported record revenues of $156.8 million, adjusted EBITDA of $28.6 million and a net loss from continuing operations of $(0.1) million. The Company indicated that its fourth quarter 2011 results were negatively impacted by unusual or non-recurring losses and expenses totaling $12.3 million, including: approximately $4.1 million related to the impact of the significant slowdown in the Haynesville Shale area including the relocation of personnel, equipment and temporary costs related to the change in business conditions in the dry gas industry; $2.5 million for additions to the bad debt reserve in anticipation of collection issues related to the overall industry slowdown; $2.1 million for start-up and commissioning of the Company’s fiberglass pipeline; $1.4 million for integration and transaction-related costs, including the installation of a financial and accounting system, implementation of a comprehensive safety and compliance program, consolidation of branch operations and liquefied natural gas (“LNG”) fleet expansion; $1.1 million for final legal costs related to the divestiture of China Water & Drinks, Inc.; and $1.1 million related to the start-up of new significant long-term contracts, primarily in the Marcellus Shale area.

“Where our customers deploy their resources impacts our strategic asset allocation,” said Mr Richard J. Heckmann, Chairman and CEO of Heckmann Corporation. “In line with the industry’s transition away from dry gas activity, we began moving a significant portion of our assets from Haynesville into the Eagle Ford, Marcellus/Utica and Permian Basin Shale areas. Although this repositioning was based on changing natural gas market conditions, the related effect on asset utilization negatively affected our bottom line during the fourth quarter. Our expected revenue growth in the first quarter of 2012 is an indication that we have successfully navigated our company through the turmoil. We are taking advantage of the growing oil and wet gas hydrofracking opportunities with new and existing customers and by the end of the first quarter, we will have completed the reallocation of our mobile assets and employees.

“We expect strong growth in 2012 with a diversified revenue stream and increasing contribution from oil and wet gas production. In the first quarter of 2011, 100% of our $18.2 million in revenues was generated from our operations in the Haynesville Shale area. In 2012, we expect to deliver approximately $54 million in revenues in the first quarter and $100 million in the second quarter, with our Haynesville Shale area operations accounting for 37% and 19% of revenues, respectively.

 

 

1 

On September 30, 2011 Heckmann completed the divestiture of China Water & Drinks, Inc., which formed the Company’s bottled water business segment. The Company has reclassified its bottled water segment as discontinued operations in 2011 and its comparable period results to reflect this change.


Heckmann Corporation

Page 2 of 10

 

“With the close of the acquisition of Thermo Fluids Inc. announced today, we will add a complementary business to our current operations that incorporates recovered and reprocessed used oil handling and other environmental services. For 2012, we expect HWR’s total water solutions segment to generate revenues between $260 and $275 million. Our newest segment, Heckmann Environmental Solutions (“HES”), is expected to generate revenues between $105 and $115 million for the nine-month period following the closing of the transaction, expected in April.”

2011 and Fourth Quarter Highlights

 

   

Record revenues from Heckmann Water Resources (“HWR”) of $156.8 million for 2011, compared with $15.2 million in 2010.

 

   

Net loss from continuing operations improved to $(0.1) million in 2011, compared with $(10.3) million in 2010.

 

   

Adjusted EBITDA from continuing operations increased to $28.6 million for 2011, compared with $1.7 million for 2010.

 

   

Record revenues from HWR of $51.7 million for the fourth quarter of 2011, compared with $8.7 million in the fourth quarter of 2010.

 

   

Net loss from continuing operations was $(2.5) million for the fourth quarter of 2011, compared with $(1.3) million in the fourth quarter of 2010.

 

   

Adjusted EBITDA from continuing operations for the fourth quarter of 2011 increased to $4.1 million, compared with $(2.3) million in the fourth quarter of 2010.

 

   

Increased produced water pipeline production to 40,000 average barrels of water per day in the fourth quarter from 30,000 in the third quarter of 2011.

 

   

Expanded water solutions for energy development business with the completion of six acquisitions in 2011.

 

   

Began operating the largest LNG-powered fleet in the United States.

 

   

Expanded leadership team with the addition of four senior executives with significant experience in the water business to support business development, fleet and pipeline operations and finance.

Operational Update

“In line with our strategy to reduce our assets in the Haynesville Shale area by the end of the second quarter, we expect to have approximately 175 trucks, or 28% of our energy-related fleet, positioned in this area. Ninety of these trucks are LNG-powered, which provides additional fuel cost advantages,” Mr. Heckmann stated. “Haynesville accounts for approximately 7% of the natural gas production in our country and is the largest natural gas field in the United States. HWR maintains the most comprehensive infrastructure for produced and flowback water in the Haynesville Shale area, which positions us well when prices normalize and drilling activity returns to the area. In the Marcellus/Utica Shale area, we have secured key contracts with major global energy companies. We will also increase activity in the Eagle Ford Shale area and have now established operations in the Permian Basin and Tuscaloosa Marine Shale areas.”

HWR owns and operates the only third party produced water pipeline in the Haynesville Shale area and the only disposal capability connected to the pipeline, which will be approximately 70 miles long when completed. The majority of HWR’s produced water disposal capacity is located geographically adjacent to the Haynesville Shale area. In mid-December, Heckmann also began transporting water through its fresh water pipeline, representing the largest fresh water pipeline system in the Haynesville Shale area.

 


Heckmann Corporation

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In the fourth quarter of 2011, the Company’s produced water pipeline averaged throughput of 40,000 barrels per day, compared to 30,000 barrels per day in the third quarter of 2011.

Heckmann currently owns and operates 25 salt water disposal wells with a permitted capacity of approximately 400,000 barrels per day. The Company owns and operates a fleet of approximately 600 trucks, 450 trailers and 1100 frac tanks. Heckmann has taken delivery of 90 LNG-powered trucks and expects to take delivery of a total of 200 LNG vehicles.

Heckmann currently owns approximately 200 miles of portable poly and aluminum pipe and associated pumps used for above ground transportation of water.

As of December 31, 2011, Heckmann’s domestic headcount increased to approximately 1,200 employees from less than 30 employees as of September 30, 2010.

Financial Guidance

Giving effect for a full year of results of the acquired entity, Heckmann expects to achieve pro-forma total revenues of between $400.0 million and $420.0 million, and pro-forma adjusted EBITDA of between $95.0 million and $105.0 million.

For the first quarter of 2012, Heckmann expects total revenues of approximately $54.0 million, with approximately 37% of revenues from the Haynesville Shale area. With the continued organic growth throughout HWR and the addition of the newly acquired HES business segment, second quarter revenue is expected to be approximately $100.0 million, with the Haynesville Shale area accounting for approximately 19% of revenues.

At the end of the second quarter, Heckmann expects approximately 35% of revenues to be related to wet gas and oil production from the Eagle Ford, Utica, Permian, Tuscaloosa Marine and Eaglebine Shale areas; approximately 33% of revenues to be related to dry natural gas from the Haynesville, Barnett and Marcellus Shale areas; and approximately 32% of revenues to be related to recovered and reprocessed used oil and other environmental services from Thermo Fluids Inc.

Full Year 2011 Financial Results

HWR revenues for the year ended December 31, 2011 totaled $156.8 million, compared with $15.2 million for 2010.

Net loss from continuing operations for the year ended December 31, 2011 was $(0.1) million, or breakeven per share based on 114.6 million weighted average shares outstanding. For 2010, the Company’s net loss from continuing operations was $(10.3) million, or $(0.09) per share based on 108.8 million weighted average shares outstanding.

Adjusted EBITDA for the year ended December 31, 2011 totaled $28.6 million, compared with adjusted EBITDA of $1.7 million for 2010. (A reconciliation of 2011 and 2010 adjusted EBITDA to net loss is included in the tables below.)

As of December 31, 2011, Heckmann Corporation’s cash and cash equivalents, investments and marketable securities totaled approximately $85.4 million, total assets were $539.7 million, and equity totaled $341.8 million.

 


Heckmann Corporation

Page 4 of 10

 

Conference Call and Webcast

Heckmann Corporation will conduct a conference call today at 4:30 p.m. ET (1:30 p.m. PT) to provide commentary on its 2011 operational performance and discuss 2012 plans and objectives. To participate on the conference call, please dial 1-877-941-8416 or 1-480-629-9808 and reference conference ID 4515309.

An audio replay of the conference call will be available approximately one hour after the conclusion of the call through March 22, 2012. The audio replay can be accessed by dialing 1-800-406-7325 or 1-303-590-3030 and entering access code 4515309.

The call will be webcast live and the replay will be available for 12 months. Both will be available on the “For Investors” section of the Heckmann Corporation web site at www.heckmanncorp.com.

Upcoming Investor Conferences

Mr. Heckmann will deliver an updated investor presentation at two upcoming conferences and participate in one-on-one and group meetings with institutional investors according to the following schedule:

 

   

ROTH Capital Partners: 24th Annual OC Growth Stock Conference

Panel: Beyond the Fracking Debate: The Future of Natural Gas in the U.S.

Sunday, March 11, 2012

4:00 p.m. PDT

The Ritz-Carlton, Laguna Niguel, California

Investor presentation:

Monday, March 12, 2012

9:00 a.m. PDT

The Ritz-Carlton, Laguna Niguel, California

 

   

Credit Suisse: 14th Annual Global Services Conference

Tuesday, March 13, 2012

10:30 a.m. PDT

The Phoenician, Scottsdale, Arizona

About Non-GAAP Financial Measures

This press release contains non-GAAP financial measures as defined by the rules and regulations of the United States Securities and Exchange Commission. A non-GAAP financial measure is a numerical measure of a company’s historical or future financial performance, financial position or cash flows that excludes amounts, or is subject to adjustments that have the effect of excluding amounts, that are included in the most directly comparable measure calculated and presented in accordance with GAAP in the statements of operations, balance sheets, or statements of cash flows of the Company; or includes amounts, or is subject to adjustments that have the effect of including amounts, that are excluded from the most directly comparable measure so calculated and presented. Reconciliations of these non-GAAP financial measures to their comparable GAAP financial measures are included in the attached financial tables.

 


Heckmann Corporation

Page 5 of 10

 

These non-GAAP financial measures are provided because management of the Company uses these financial measures in maintaining and evaluating the Company’s ongoing financial results and trends. Management uses this non-GAAP information as an indicator of business performance, and evaluates overall management with respect to such indicators. Management believes that excluding items such as acquisition expenses, amortization of intangible assets and stock-based compensation, among other items that are inconsistent in amount and frequency (as with acquisition expenses), or determined pursuant to complex formulas that incorporate factors, such as market volatility, that are beyond our control (as with stock-based compensation), for purposes of calculating these non-GAAP financial measures facilitates a more meaningful evaluation of the Company’s current operating performance and comparisons to the past and future operating performance. The Company believes that providing non-GAAP financial measures such as EBITDA, adjusted EBITDA, adjusted net income, and adjusted net income per share, in addition to related GAAP financial measures, provides investors with greater transparency to the information used by the Company’s management in its financial and operational decision-making. These non-GAAP measures should be considered in addition to, but not as a substitute for, measures of financial performance prepared in accordance with GAAP.

About Heckmann Corporation

Heckmann Corporation (NYSE: HEK) is a services-based company focused on total water solutions for shale or “unconventional” oil and gas exploration. The Company’s water solutions segment is called Heckmann Water Resources, or HWR, and includes water disposal, trucking, fluids handling, treatment and pipeline transport facilities, and water infrastructure services for oil and gas exploration and production companies. Through these operations, HWR offers an integrated and efficient full service water program for hydraulic fracturing operations.

Interested parties can access additional information about Heckmann on the Company’s web site at http://www.heckmanncorp.com, and in documents filed with the United States Securities and Exchange Commission, on the SEC’s web site at http://www.sec.gov.

Forward-Looking Statements

This press release may contain “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Words such as “expect,” “estimate,” “project,” “budget,” “forecast,” “anticipate,” “intend,” “plan,” “may,” “will,” “could,” “should,” “believes,” “predicts,” “potential,” “continue,” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements in the press release include, without limitation forecasts of growth, revenues, adjusted EBITDA and pipeline expansion, and other matters that involve known and unknown risks, uncertainties and other factors that may cause results, levels of activity, performance or achievements to differ materially from results expressed or implied by this press release. Such risk factors include, among others: difficulties encountered in acquiring and integrating businesses, including Thermo Fluids Inc.; whether certain markets grow as anticipated; and the competitive and regulatory environment. Additional risks and uncertainties are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2011, as well as the Company’s other reports filed with the United States Securities and Exchange Commission and are available at http://www.sec.gov/ as well as the Company’s website at http://heckmanncorp.com/. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this presentation. All forward-looking statements are qualified in their entirety by this cautionary statement. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

 


Heckmann Corporation

Page 6 of 10

 

Investor Relations Contact:

Brandi Piacente

The Piacente Group, Inc.

Tel. +1 212-481-2050

heckmann@tpg-ir.com

– tables to follow –

 


Heckmann Corporation

Page 7 of 10

 

HECKMANN CORPORATION AND SUBSIDIARIES

Consolidated Balance Sheets

(In thousands, except share data)

 

     December 31,
2011
     December 31,
2010
 

ASSETS

     

Current Assets

     

Cash and cash equivalents

   $ 80,194       $ 80,752   

Certificates of deposit

     —           11,830   

Marketable securities

     5,169         75,554   

Accounts receivable, net

     47,985         13,616   

Inventories, net

     760         151   

Prepaid expenses and other receivables

     4,519         2,070   

Income tax receivable

     —           1,980   

Other current assets

     1,044         68   

Current assets held for sale

     —           17,218   
  

 

 

    

 

 

 

Total current assets

     139,671         203,239   
  

 

 

    

 

 

 

Property, plant and equipment, net

     270,054         85,696   

Marketable securities

     —           14,619   

Equity investments

     7,682         7,628   

Intangible assets, net

     29,489         20,605   

Goodwill

     90,008         41,008   

Other

     2,777         94   

Long-term assets held for sale

     —           28,364   
  

 

 

    

 

 

 

TOTAL ASSETS

   $ 539,681       $ 401,253   
  

 

 

    

 

 

 

LIABILITIES AND EQUITY

     

Current Liabilities

     

Accounts payable

   $ 19,992       $ 7,238   

Accrued expenses

     11,693         5,024   

Current portion of contingent consideration

     5,730         7,316   

Current portion of long-term debt

     11,914         11,221   

Current liabilities held for sale

     —           23,823   
  

 

 

    

 

 

 

Total current liabilities

     49,329         54,622   
  

 

 

    

 

 

 

Deferred income taxes

     6,880         8,773   

Long-term debt, less current portion

     132,156         20,474   

Long-term contingent consideration

     7,867         6,384   

Other long-term liabilities

     1,639         6,250   

Long-term liabilities held for sale

     —           1,673   

Commitments and contingencies

     

 


Heckmann Corporation

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Equity:

    

Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares issued or outstanding

     —          —     

Common stock, $0.001 par value: 500,000,000 authorized at December 31, 2011 and 2010, 139,163,067 shares issued and 124,854,504 shares outstanding at December 31, 2011 and 127,489,387 shares issued and 114,180,184 shares outstanding at December 31, 2010

     139        127   

Additional paid-in capital

     814,875        747,187   

Purchased warrants

     (6,844     (6,844

Treasury stock

     (19,503     (15,089

Accumulated deficit

     (446,865     (423,859

Accumulated other comprehensive income

     8        99   
  

 

 

   

 

 

 

Total equity of Heckmann Corporation

     341,810        301,621   
  

 

 

   

 

 

 

Noncontrolling interest

     —          1,456   
  

 

 

   

 

 

 

TOTAL EQUITY

     341,810        303,077   
  

 

 

   

 

 

 

TOTAL LIABILITIES AND EQUITY

   $ 539,681      $ 401,253   
  

 

 

   

 

 

 

 


Heckmann Corporation

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HECKMANN CORPORATION AND SUBSIDIARIES

Consolidated Statements of Operations

(In thousands)

 

     Three Months
Ended December 31,
    Twelve Months
Ended December 31,
 
     2011     2010     2011     2010  

Revenue

   $ 51,671      $ 8,701      $ 156,837      $ 15,208   

Cost of sales

     44,843        6,175        123,509        11,337   
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     6,828        2,526        33,328        3,871   

Operating expenses:

        

General and administrative expenses

     13,672        5,701        36,651        11,554   

Pipeline start-up and commissioning

     2,089        (1,765     2,089        11,830   
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     15,761        3,936        38,740        23,384   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from operations

     (8,933     (1,410     (5,412     (19,513

Interest income (expense), net

     (1,673     419        (4,243     2,087   

Loss from equity method investment

     —          (390     (462     (689

Other, net

     3,356        (51     6,232        4,411   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations before income taxes

     (7,250     (1,432     (3,885     (13,704

Income tax benefit

     4,770        142        3,777        3,404   
  

 

 

   

 

 

   

 

 

   

 

 

 

Loss from continuing operations

     (2,480     (1,290     (108     (10,300

Income (loss) from discontinued operations, net of income taxes

     —          1,569        (22,898     (4,393
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss) attributable to Heckmann Corporation

   $ (2,480   $ 279      $ (23,006   $ (14,693
  

 

 

   

 

 

   

 

 

   

 

 

 

 


Heckmann Corporation

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Heckmann Corporation and Subsidiaries

Adjusted EBITDA from continuing operations

(millions)

 

     Three Months Ended
December 31, 2011
    Twelve months Ended
December 31, 2011
 

Net loss from continuing operations

   $ (2.5   $ (0.1

Less: income tax benefit

     (4.8     (3.7

Add: interest expense

     1.7        4.2   

depreciation

     6.4        21.4   

amortization

     2.1        3.9   
  

 

 

   

 

 

 

EBITDA

     2.9        25.7   
  

 

 

   

 

 

 

Earn-out adjustments

     (3.2     (5.8

Transaction costs

     0.3        2.6   

Stock based compensation

     0.9        2.1   

Pipeline start-up

     2.1        2.1   

China litigation

     1.1        1.9   
  

 

 

   

 

 

 

Adjusted EBITDA from continuing operations

   $ 4.1      $ 28.6   
  

 

 

   

 

 

 

 

     Three Months Ended
December 31, 2010
    Twelve Months Ended
December 31, 2010
 

Net loss from continuing operations

   $ (1.3   $ (10.3

Less: income tax benefit

     (0.1     (3.4

Less: interest income

     (0.4     (2.1

depreciation

     1.5        3.3   

amortization

     0.4        1.3   
  

 

 

   

 

 

 

EBITDA

     0.1        (11.2
  

 

 

   

 

 

 

Earn-out adjustments

     (4.1     (4.1

Transaction costs

     0.9        2.1   

Stock based compensation

     0.9        0.9   

Pipeline start-up

     (1.8     11.2   

China litigation

     1.7        2.8   
  

 

 

   

 

 

 

Adjusted EBITDA from continuing operations

   $ (2.3   $ 1.7   
  

 

 

   

 

 

 

# # #