KLX Energy Services Reports Fiscal Second Quarter 2021 Results

Source: www.gulfoilandgas.com 9/9/2021, Location: North America

KLX Energy Services Holdings, Inc. reported its financial results for the fiscal second quarter ended July 31, 2021.

Fiscal Second Quarter 2021 Highlights
- Fiscal second quarter 2021 revenue of $111.9 million increased $21.1 million, or 23.2%, sequentially from the fiscal first quarter 2021
- Revenue has improved every month during fiscal 2021
- Fiscal second quarter 2021 net loss was $25.0 million, decreasing 32.1% compared to $36.8 million for the fiscal first quarter 2021
- Fiscal second quarter 2021 Adjusted EBITDA of $0.6 million was positive for the first time since fiscal first quarter 2020 and increased $10.0 million sequentially from fiscal first quarter 2021
- Ended fiscal second quarter 2021 with an available liquidity position of $57.2 million, including $39.4 million in cash
- Fully implemented additional $4.4 million of annualized cost savings during the fiscal second quarter 2021 and expect to realize the full quarterly benefit beginning in the fiscal third quarter 2021

Chris Baker, President and Chief Executive Officer of KLXE, stated, "We are very pleased that our fiscal second quarter revenue grew 23% sequentially, exceeding our guidance of 15% to 20%. This sequential improvement was supported by higher activity levels and increased pricing across many of our service lines. Fueled by our improved topline, our merger synergies and additional incremental cost savings realized during the fiscal second quarter, we grew Adjusted EBITDA sequentially by $10 million from fiscal first quarter 2021 levels and generated positive Adjusted EBITDA for the first time since fiscal first quarter 2020.

"Looking forward, we believe improved pricing and activity will continue to drive positive results, with fiscal third quarter revenue expected to increase between 8% to 12%," concluded Baker.

Cost Reduction Update
The Company previously announced the successful implementation of $46.0 million of annualized merger synergies. The fiscal second quarter 2021 was the first fiscal quarter in which the full quarterly impact of the annualized $46.0 million of synergies benefited the cost structure.

During the fiscal first quarter 2021, we consolidated corporate offices in Houston, Texas and identified approximately $4.4 million of additional annualized fixed cost savings associated with headcount, facilities, changes to management processes and reduction in the size of the board from nine directors to seven directors. These cost savings were fully implemented by the end of the fiscal second quarter and we expect to realize the full quarterly benefit beginning in the fiscal third quarter 2021.

Fiscal Second Quarter 2021 Financial Results
Revenue for the fiscal second quarter 2021 totaled $111.9 million, an increase of 23.2%, compared to fiscal first quarter 2021 revenue of $90.8 million. The sequential increase in revenue reflects the impact of an improvement in drilling, completion, production and intervention activity. Additionally, we expanded market share in several product service lines driven partially by the cross-sell opportunities created by the Merger. On a product line basis, Drilling, Completion, Production and Intervention products and services contributed approximately 28.6%, 45.8%, 14.9% and 10.7% to revenue, respectively, for the fiscal second quarter 2021.

Net loss for the fiscal second quarter 2021 was $25.0 million, compared to a fiscal first quarter 2021 net loss of $36.8 million. Adjusted EBITDA was $0.6 million for the fiscal second quarter 2021, compared to a fiscal first quarter 2021 Adjusted EBITDA loss of $9.4 million. The improvement in Adjusted EBITDA was the result of improved pricing and utilization along with operating leverage associated with fixed cost savings benefiting margins. Cost of sales includes $2.1 million of lease expense associated with five coiled tubing unit leases, which potentially impacts the comparability of our results to peers.

Fiscal Second Quarter 2021 Segment Results
The Company reports results through its three geographic business segments: Rocky Mountains, Southwest and Northeast/Mid-Con.

- Rocky Mountains: Revenue, Operating loss and Adjusted EBITDA for the Rocky Mountains segment, which includes WyCo and the Bakken, was $33.6 million, ($2.2) million and $3.1 million, respectively, for the fiscal second quarter 2021. Revenue increased 38.3% and Adjusted EBITDA increased $4.7 million from the fiscal first quarter 2021. The sequential improvements in Revenue, Operating loss and Adjusted EBITDA were driven by stronger utilization and pricing across all product lines, primarily led by fishing, rentals, cementing, coiled tubing, directional drilling, and wireline.
- Southwest: Revenue, Operating loss and Adjusted EBITDA for the Southwest segment, which includes the Permian and South Texas, was $43.0 million, ($3.7) million and $1.8 million, respectively, for the fiscal second quarter 2021. Revenue increased 13.2% and Adjusted EBITDA increased $2.5 million from the fiscal first quarter 2021. The sequential improvements in Revenue, Operating loss and Adjusted EBITDA were driven by stronger utilization and pricing across the vast majority of product lines, primarily led by directional drilling, wireline, and rentals.
- Northeast/Mid-Con: Revenue, Operating loss and Adjusted EBITDA for the Northeast/Mid-Con segment was $35.3 million, ($3.8) million and $0.5 million, respectively, for the fiscal second quarter 2021. Revenue increased 23.9% and Adjusted EBITDA increased $2.6 million from the fiscal first quarter 2021. The sequential improvements in Revenue, Operating loss and Adjusted EBITDA were driven by stronger utilization and pricing across the vast majority of product lines, primarily led by fishing, coiled tubing and directional drilling.
Balance Sheet and Liquidity
Total debt outstanding as of July 31, 2021 was $274.4 million, compared to $243.9 million as of January 31, 2021. The increase in total debt was driven by borrowings under the ABL Facility. As of July 31, 2021, cash and equivalents totaled $39.4 million. Total available liquidity as of July 31, 2021 was approximately $57.2 million, including $17.8 million available on the July 31, 2021 ABL Facility Borrowing Base Certificate, net of $10.0 million FCCR holdback. The Senior Secured Notes bear interest at an annual rate of 11.5%, payable semi-annually in arrears on May 1 and November 1. Accrued interest as of July 31, 2021 was $7.2 million for the Senior Secured Notes and $0.2 million related to the ABL facility.

Net working capital as of July 31, 2021 was $40.3 million, an increase of $10.1 million as compared with April 30, 2021. The increase in net working capital was driven by the sequential increase in activity from fiscal first quarter to fiscal second quarter.

Other Financial Information
Year to date in fiscal 2021, the Company has incurred approximately $0.6 million in costs related to testing and treatment of COVID-19, including $0.1 million incurred in the fiscal second quarter.

Our capital expenditures were $3.5 million during the fiscal second quarter 2021, an increase of $1.3 million compared to capital expenditures of $2.2 million in the fiscal first quarter 2021. Capital spending during the fiscal first and second quarters of 2021 was driven primarily by maintenance capital expenditures across our segments and product lines. Based on year-to-date spend of $5.7 million, the Company continues to expect total capital spending to be between $14 and $16 million for the year ending January 31, 2022, and focused primarily on maintenance capital spending.

Modification of Fiscal Year-End
On September 3, 2021, the Board of Directors of the Company adopted the Fourth Amended and Restated Bylaws of the Company, effective as of such date, to change the Company's fiscal year-end from January 31 to December 31, effective beginning with the year ended December 31, 2021. As a result, the Company's current fiscal year 2021 will be shortened from 12 months to 11 months and end on December 31, 2021. The Company is undertaking this change in an effort to normalize our fiscal year-end and improve comparability with our peers.


Norway >>  10/14/2021 - DNO ASA, the Norwegian oil and gas operator, will publish its Q3 2021 operating and interim financial results on Thursday, 4 November 2021. The Compan...
United Kingdom >>  10/14/2021 - Lundin Energy AB (Lundin Energy) will publish its financial report for the third quarter 2021 on Friday, 29 October 2021. For the third quarter 2021, ...

United Kingdom >>  10/14/2021 - Hurricane Energy plc, the UK based oil and gas company focused on hydrocarbon resources in naturally fractured basement reservoirs, provides its 2021 ...
Norway >>  10/11/2021 - based on a preliminary review, PGS expects to report Revenues and Other Income As Reported* according to IFRS for Q3 2021 of approximately $142 millio...

Netherlands/Holland >>  10/7/2021 - The following is an update to the third quarter 2021 outlook. Impacts presented may vary from the actual results and are subject to finalization of th...
United Kingdom >>  10/6/2021 - Stolt-Nielsen Limited reported unaudited results for the third quarter and first nine months of 2021. The Company reported a third-quarter net profit ...




Gulf Oil and Gas
Copyright 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.