Document


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
August 6, 2019
Date of Report (Date of earliest event reported)
Frank’s International N.V.
(Exact name of Registrant as specified in its charter)
The Netherlands
001-36053
98-1107145
(State or other jurisdiction
of incorporation)
(Commission
File Number)
(IRS Employer
Identification Number)
 
 
 
 
Mastenmakersweg 1
1786 PB Den Helder, The Netherlands
 
(Address of principal executive offices)
 
 
 
 
+31 (0)22 367 0000
 
(Registrant’s telephone number, including area code)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading Symbol(s)
Name of each exchange on which registered
Common Stock, €0.01 par value
FI
New York Stock Exchange
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o






Item 2.02
Results of Operations and Financial Condition.
On August 6, 2019, Frank’s International N.V. (the “Company”) announced its results for the quarter ended June 30, 2019. A copy of the Company’s press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
The information in this Item 2.02 (including the exhibit) shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act of 1933, as amended (the “Securities Act”), or the Exchange Act.
Item 7.01
Regulation FD Disclosure.
In addition, on August 6, 2019, the Company posted a presentation on the Company’s website, www.franksinternational.com.
The information furnished in this Item 7.01 shall not be deemed to be “filed” for purposes of Section 18 of the Exchange Act, or otherwise subject to the liabilities of that section, and is not incorporated by reference into any filing under the Securities Act or the Exchange Act.
Item 9.01
Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
 
Number
Description of the Exhibit
Press Release dated August 6, 2019.


2



SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 
 
 
FRANK'S INTERNATIONAL N.V.
 
 
 
 
Date: August 6, 2019
 
By:
/s/ Melissa Cougle
 
 
 
Melissa Cougle
 
 
 
Senior Vice President and Chief Financial Officer




3
Exhibit
Exhibit 99.1

https://cdn.kscope.io/d799dec63b7a63c3f42cba1105fc288b-filogo4q34.jpg
 
Frank’s International N.V.
 
10260 Westheimer Rd, Suite 700
 
Houston, Texas 77042

PRESS RELEASE
 
FOR IMMEDIATE RELEASE


FRANK’S INTERNATIONAL N.V. ANNOUNCES SECOND QUARTER 2019 RESULTS
~Strong Fundamentals Drive Solid Top and Bottom Line Improvement~

August 6, 2019 - Houston, Texas - Frank’s International N.V. (NYSE: FI) (the “Company” or “Frank’s”) today reported financial and operational results for the three and six months ended June 30, 2019.

Second Quarter 2019 Financial Highlights

Revenue for the quarter totaled $155.7 million, an improvement from the prior quarter of 8% and from the prior year quarter of 18%.
Net loss of $15.2 million for the quarter, which reflected an improvement of nearly 50% from the first quarter.
Adjusted EBITDA for the quarter was $17.2 million, up 78% in comparison to the first quarter of 2019 results of $9.7 million, and up 57% compared to $11.0 million for the second quarter of 2018.
Incremental margins year-to-date are 34% in comparison to the first half of 2018.
Tubular Running Services demonstrated strong revenue growth of 9% sequentially and 16% over the prior year. Strong fall through resulted in a sequential 6% adjusted EBITDA margin gain, yielding a 24% margin for the quarter.
Tubulars segment sequential revenue growth of 20%.

“Our second quarter results exceeded expectations as we capitalized on increasing activity in the offshore markets, particularly in the U.S. Gulf of Mexico and West Africa. The relentless focus of our team on best serving the needs of our customers through industry leading technological differentiation has allowed us to gain market share and take advantage of increasing market activity, which is driving the improving financial results,” said Michael Kearney, the Company’s Chairman, President and Chief Executive Officer.

“This spring, Frank’s was presented the 2019 Hart’s E&P Meritorious Engineering award in recognition of our patented Collar Load Support System for Stands. This is yet another example of our commitment to provide technology solutions that increase well construction efficiency and improve well integrity for our customers. Most importantly, the Collar Load Support System removes both our employees as well as those of our customers from the red zone on the rig floor, reinforcing our paramount emphasis on safety. I want to congratulate all our employees involved in making this product a success.”

“We continue to maintain our full year 2019 view of significant revenue growth and increased margins across all of our business segments. Our international operations will drive much of the improvement coupled with activity increases in the North America offshore market. Frank’s remains well positioned to continue to show improving results in the recovering offshore market, with innovative and unique product and service offerings which focus on solving our customers’ complex drilling and completion challenges,” concluded Mr. Kearney.
 
Financial measures not presented in accordance with U.S. generally accepted accounting principles (“GAAP”) are defined and reconciled to their most directly comparable GAAP measures below. Please see “Use of Non-GAAP Financial Measures” and the reconciliations to the nearest comparable GAAP measures.



1



Segment Results

Tubular Running Services

Tubular Running Services revenue was $106.6 million for the second quarter of 2019, compared to $98.1 million in the first quarter of 2019, and $91.5 million for the second quarter of 2018. The increase in sequential revenue was primarily driven by increased customer activity in West Africa, the U.S. Gulf of Mexico, the Caribbean and Asia Pacific. In addition, the U.S. onshore TRS business continued its upward revenue trend for the twelfth consecutive quarter despite declining rig counts.

Segment adjusted EBITDA for the second quarter of 2019 was $25.4 million, or 23.8% of revenue, compared to $17.7 million, or 18.1% of revenue, for the first quarter of 2019 and $18.9 million, or 20.6% of revenue, for the second quarter of 2018. The sequential increase in margin growth was primarily a result of regional mix in the offshore markets and lower manufacturing costs.

Tubulars

Tubulars revenue for the second quarter of 2019 was $22.3 million, compared to $18.7 million for the first quarter of 2019, and $17.0 million for the second quarter of 2018. Improvements from the first quarter of 2019 were generally attributable to increased demand for Tubular products in the U.S. Gulf of Mexico as well as a large customer order in Mexico. Drilling tools revenue also continued to experience growth through further customer adoption of the Company’s VERSAFLO™ technology which provides differentiated casing and drill pipe flowback and circulation control compared to other products in the market.
 
Segment adjusted EBITDA for the second quarter of 2019 was $3.9 million, or 17.6% of revenue, compared to $4.1 million, or 22.0% of revenue, for the first quarter of 2019 and $3.3 million, or 19.5% of revenue for the second quarter of 2018.

Cementing Equipment

Cementing Equipment revenue was $26.7 million in the second quarter of 2019, compared to $27.7 million in the first quarter of 2019 and $23.5 million for the second quarter of 2018. The sequential decline was in line with expectations due to the timing of certain completions work and some international project delays. This was partially offset by increased demand and margin improvement in the U.S. Gulf of Mexico. The U.S. onshore market also maintained activity levels sequentially, despite declining rig counts. The Company continues to expect further international expansion in this segment during the second half of the year.

Segment adjusted EBITDA for the second quarter of 2019 was $3.0 million, or 11.3% of revenue, compared to $3.8 million, or 13.7% of revenue, for the first quarter of 2019 and $4.2 million, or 17.6% of revenue, for the second quarter of 2018. The decline was due to the aforementioned lower international revenue in addition to certain targeted investment in personnel and facilities preparing for future international expansion.

Capital Expenditures, Liquidity and Cash Flow

Cash expenditures related to property, plant and equipment and intangibles were $9.1 million for the second quarter of 2019. The Company expects total capital expenditures of approximately $40 million for 2019, with the majority of spending related to new technologically advanced tools and equipment to meet customer demand.

As of June 30, 2019, the Company’s consolidated cash, cash equivalents and short-term investments was $172.1 million compared to $172.0 million as of the prior quarter end. Total debt outstanding was $2.1 million as of June 30, 2019 compared to $3.9 million as of the prior quarter. Liquidity at June 30, 2019 was $237.3 million, including cash, cash equivalents and short-term investments, as well as $65.2 million available under the Company’s Credit Facility. For the first time since the third quarter of 2017, the Company returned to a positive

2



Free Cash Flow position amounting to $3.3 million due to improved operational results and working capital management.

Conference Call

The Company will host a conference call to discuss second quarter 2019 results on Tuesday, August 6, 2019 at 10:00 a.m. Central Time (11:00 a.m. Eastern Time). Participants may join the conference call by dialing (888) 771-4371 or (847) 585-4405. The conference access code is 48818535. To listen via live webcast, please visit the Investor Relations section of the Company's website, www.franksinternational.com. A presentation will also be posted on the Company’s website prior to the conference call.

An audio replay of the conference call will be available approximately two hours after the conclusion of the call and will remain available for seven days. It can be accessed by dialing (888) 843-7419 or (630) 652-3042. The conference call replay access code is 48818535#. The replay will also be available in the Investor Relations section of the Company’s website approximately two hours after the conclusion of the call and remain available for a period of approximately 90 days.

About Frank’s International

Frank’s International N.V. is a global oil services company that provides a broad and comprehensive range of highly engineered tubular running services, tubular fabrication, and specialty well construction and well intervention solutions with a focus on complex and technically demanding wells. Founded in 1938, Frank’s has approximately 3,100 employees and provides services to leading exploration and production companies in both onshore and offshore environments in approximately 50 countries on six continents. The Company’s common stock is traded on the NYSE under the symbol “FI.” Additional information is available on the Company’s website, www.franksinternational.com.

Contact:

Erin Fazio - Investor Relations
Erin.Fazio@franksintl.com
713-231-2515


3



FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
2019
 
2019
 
2018
 
2019
 
2018
Revenue:
 
 
 
 
 
 
 
 
 
Services
$
127,091

 
$
115,406

 
$
105,746

 
$
242,497

 
$
197,094

Products
28,563

 
29,002

 
26,339

 
57,565

 
50,560

Total revenue
155,654

 
144,408

 
132,085

 
300,062

 
247,654

 
 
 
 
 
 
 
 
 
 
Operating expenses:
 
 
 
 
 
 
 
 
 
Cost of revenue, exclusive of depreciation and amortization
 
 
 
 
 
 
 
 
 
Services (1)
85,785

 
83,239

 
74,088

 
169,024

 
145,050

Products (1)
23,475

 
20,128

 
18,798

 
43,603

 
36,427

General and administrative expenses (1)
34,026

 
35,411

 
32,787

 
69,437

 
64,883

Depreciation and amortization
23,913

 
25,242

 
28,862

 
49,155

 
57,162

Severance and other charges, net
815

 
455

 
1,115

 
1,270

 
2,369

Loss on disposal of assets
154

 
227

 
217

 
381

 
452

Operating loss
(12,514
)
 
(20,294
)
 
(23,782
)
 
(32,808
)
 
(58,689
)
 
 
 
 
 
 
 
 
 
 
Other income (expense):
 
 
 
 
 
 
 
 
 
Tax receivable agreement (“TRA”) related adjustments
220

 

 
(1,171
)
 
220

 
(4,112
)
Other income, net
669

 
529

 
2,033

 
1,198

 
1,593

Interest income, net
426

 
768

 
609

 
1,194

 
1,553

Mergers and acquisition expense

 

 

 

 
(58
)
Foreign currency gain (loss)
(661
)
 
483

 
(4,267
)
 
(178
)
 
(2,563
)
Total other income (expense)
654

 
1,780

 
(2,796
)
 
2,434

 
(3,587
)
 
 
 
 
 
 
 
 
 
 
Loss before income taxes
(11,860
)

(18,514
)

(26,578
)

(30,374
)

(62,276
)
Income tax expense (benefit)
3,300

 
9,773

 
(815
)
 
13,073

 
5,560

Net loss
$
(15,160
)
 
$
(28,287
)
 
$
(25,763
)
 
$
(43,447
)
 
$
(67,836
)
 
 
 
 
 
 
 
 
 
 
Loss per common share:
 
 
 
 
 
 
 
 
 
Basic and diluted
$
(0.07
)
 
$
(0.13
)
 
$
(0.12
)
 
$
(0.19
)
 
$
(0.30
)
 
 
 
 
 
 
 
 
 
 
Weighted average common shares outstanding:
 
 
 
 
 
 
 
 
 
Basic and diluted
225,052

 
224,653

 
223,981

 
224,854

 
223,775

 
 
(1) 
For the three months ended June 30, 2018, $7,565 and $1,508 have been reclassified from general and administrative expenses and cost of revenue, products, respectively, to cost of revenue, services. For the six months ended June 30, 2018, $14,199 and $2,626 have been reclassified from general and administrative expenses and cost of revenue, products, respectively, to cost of revenue, services. The reclassifications reflect a change in presentation of the information used by the Company’s chief operating decision maker.

4



FRANK’S INTERNATIONAL N.V.
SELECTED OPERATING SEGMENT DATA
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
2019
 
2019
 
2018
 
2019
 
2018
Revenue
 
 
 
 
 
 
 
 
 
Tubular Running Services
$
106,615

 
$
98,079

 
$
91,518

 
$
204,694

 
$
170,392

Tubulars
22,334

 
18,657

 
17,040

 
40,991

 
34,726

Cementing Equipment
26,705

 
27,672

 
23,527

 
54,377

 
42,536

Total
$
155,654

 
$
144,408

 
$
132,085

 
$
300,062

 
$
247,654

 
 
 
 
 
 
 
 
 
 
Segment Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
Tubular Running Services
$
25,400

 
$
17,735

 
$
18,860

 
$
43,135

 
$
23,806

Tubulars
3,934

 
4,112

 
3,327

 
8,046

 
6,920

Cementing Equipment
3,029

 
3,794

 
4,151

 
6,823

 
5,102

Corporate
(15,200
)
 
(15,983
)
 
(15,385
)
 
(31,183
)
 
(27,034
)
Total
$
17,163

 
$
9,658

 
$
10,953

 
$
26,821

 
$
8,794



5



FRANKS INTERNATIONAL N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
(Unaudited)
 
 
 
 
 
June 30,
 
December 31,
 
2019
 
2018
Assets
 
 
 
Current assets:
 
 
 
Cash and cash equivalents
$
157,204

 
$
186,212

Restricted cash
1,251

 

Short-term investments
14,921

 
26,603

Accounts receivables, net
204,647

 
189,414

Inventories, net
75,151

 
69,382

Assets held for sale
8,700

 
7,828

Other current assets
9,099

 
12,651

Total current assets
470,973

 
492,090

 
 
 
 
Property, plant and equipment, net
385,637

 
416,490

Goodwill
211,040

 
211,040

Intangible assets, net
25,354

 
31,069

Deferred tax assets, net
14,085

 
14,621

Operating lease right-of-use assets
34,428

 

Other assets
31,187

 
28,619

Total assets
$
1,172,704

 
$
1,193,929

 
 
 
 
Liabilities and Equity
 
 
 
Current liabilities:
 
 
 
Short-term debt
$
2,135

 
$
5,627

Accounts payable and accrued liabilities
107,532

 
123,981

Current portion of operating lease liabilities
8,012

 

Deferred revenue
138

 
116

Total current liabilities
117,817

 
129,724

 
 
 
 
Deferred tax liabilities
3,390

 
221

Non-current operating lease liabilities
26,490

 

Other non-current liabilities
28,931

 
29,212

Total liabilities
176,628

 
159,157

 
 
 
 
Stockholders’ equity:
 
 
 
Common stock
2,841

 
2,829

Additional paid-in capital
1,069,065

 
1,062,794

Retained earnings (deficit)
(28,923
)
 
16,860

Accumulated other comprehensive loss
(29,994
)
 
(32,338
)
Treasury stock
(16,913
)
 
(15,373
)
Total stockholders’ equity
996,076

 
1,034,772

Total liabilities and equity
$
1,172,704

 
$
1,193,929



6



FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
 
 
 
 
 
Six Months Ended
 
June 30,
 
2019
 
2018
Cash flows from operating activities
 
 
 
Net loss
$
(43,447
)
 
$
(67,836
)
Adjustments to reconcile net loss to cash from operating activities
 
 
 
Depreciation and amortization
49,155

 
57,162

Equity-based compensation expense
5,591

 
5,168

Amortization of deferred financing costs
177

 

Deferred tax provision
3,702

 

Provision for bad debts
85

 
41

Loss on disposal of assets
381

 
452

Changes in fair value of investments
(1,879
)
 
(417
)
Unrealized (gain) loss on derivative instruments
204

 
(765
)
Other
(373
)
 

Changes in operating assets and liabilities
 
 
 
Accounts receivable
(14,334
)
 
(21,712
)
Inventories
(2,323
)
 
(1,461
)
Other current assets
2,063

 
2,042

Other assets
111

 
324

Accounts payable and accrued liabilities
(17,118
)
 
(10,192
)
Deferred revenue
22

 
(424
)
Other non-current liabilities
594

 
(244
)
Net cash used in operating activities
(17,389
)
 
(37,862
)

 
 
 
Cash flows from investing activities
 
 
 
Purchases of property, plant and equipment and intangibles
(17,240
)
 
(11,265
)
Proceeds from sale of assets
260

 
1,755

Proceeds from sale of investments
31,739

 
56,946

Purchase of investments
(20,185
)
 
(42,279
)
Net cash (used in) provided by investing activities
(5,426
)
 
5,157

 
 
 
 
Cash flows from financing activities
 
 
 
Repayments of borrowings
(3,492
)
 
(2,921
)
Treasury shares withheld for taxes
(1,542
)
 
(1,217
)
Proceeds from the issuance of ESPP shares
692

 
562

Deferred financing costs
(184
)
 
(48
)
Net cash used in financing activities
(4,526
)
 
(3,624
)
Effect of exchange rate changes on cash
(416
)
 
2,078

Net decrease in cash, cash equivalents and restricted cash
(27,757
)
 
(34,251
)
Cash, cash equivalents and restricted cash at beginning of period
186,212

 
213,015

Cash, cash equivalents and restricted cash at end of period
$
158,455

 
$
178,764




7



Forward Looking Statements

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that the Company expects, believes or anticipates will or may occur in the future are forward-looking statements. Without limiting the generality of the foregoing, forward-looking statements contained in this press release specifically include statements, estimates and projections regarding the Company’s future business strategy and prospects for growth, cash flows and liquidity, financial strategy, budget, projections and operating results, the amount, nature and timing of capital expenditures, the availability and terms of capital, the level of activity in the oil and gas industry, volatility of oil and gas prices, unique risks associated with offshore operations, political, economic and regulatory uncertainties in international operations, the ability to develop new technologies and products, the ability to protect intellectual property rights, the ability to employ and retain skilled and qualified workers, the level of competition in the Company’s industry and other guidance. These statements are based on certain assumptions made by the Company based on management’s experience, expectations and perception of historical trends, current conditions, anticipated future developments and other factors believed to be appropriate. Forward-looking statements are not guarantees of performance.

Although the Company believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, such statements are subject to a number of assumptions, risks and uncertainties, many of which are beyond the control of the Company, which may cause actual results to differ materially from those implied or expressed by the forward-looking statements. These include the factors discussed or referenced in the “Risk Factors” section of the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 that has been filed with the SEC and in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2019 that will be filed with the SEC. Any forward-looking statement speaks only as of the date on which such statement is made, and the Company undertakes no obligation to correct or update any forward-looking statement, whether as a result of new information, future events or otherwise, except as required by applicable law, and we caution you not to rely on them unduly.

Use of Non-GAAP Financial Measures

This press release and the accompanying schedules include the non-GAAP financial measures of free cash flow, adjusted EBITDA and adjusted EBITDA margin, which may be used periodically by management when discussing the Company’s financial results with investors and analysts. The accompanying schedules of this press release provide a reconciliation of these non-GAAP financial measures to their most directly comparable financial measure calculated and presented in accordance with GAAP. Free cash flow, adjusted EBITDA and adjusted EBITDA margin are presented because management believes these metrics provide additional information relative to the performance of the Company’s business. These metrics are commonly employed by financial analysts and investors to evaluate the operating and financial performance of the Company from period to period and to compare it with the performance of other publicly traded companies within the industry. You should not consider free cash flow, adjusted EBITDA and adjusted EBITDA margin in isolation or as a substitute for analysis of the Company’s results as reported under GAAP. Because free cash flow, adjusted EBITDA and adjusted EBITDA margin may be defined differently by other companies in the Company’s industry, the Company’s presentation of these non-GAAP financial measures may not be comparable to similarly titled measures of other companies, thereby diminishing their utility.


8



The Company defines free cash flow as net cash (used in) provided by operating activities less purchases of property, plant and equipment and intangibles. The Company defines adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, the effects of the tax receivable agreement, unrealized and realized gains or losses and other non-cash adjustments and other charges or credits. The Company uses adjusted EBITDA to assess its financial performance because it allows the Company to compare its operating performance on a consistent basis across periods by removing the effects of its capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), income tax, foreign currency exchange rates and other charges and credits. The Company defines adjusted EBITDA margin as adjusted EBITDA divided by total revenue.

Please see the accompanying financial tables for a reconciliation of these non-GAAP measures to their most directly comparable GAAP measures.



9



FRANK’S INTERNATIONAL N.V.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
ADJUSTED EBITDA AND ADJUSTED EBITDA MARGIN RECONCILIATION
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Revenue
$
155,654

 
$
144,408

 
$
132,085

 
$
300,062

 
$
247,654

 
 
 
 
 
 
 
 
 
 
Net loss
$
(15,160
)
 
$
(28,287
)
 
$
(25,763
)
 
$
(43,447
)
 
$
(67,836
)
Interest income, net
(426
)
 
(768
)
 
(609
)
 
(1,194
)
 
(1,553
)
Depreciation and amortization
23,913

 
25,242

 
28,862

 
49,155

 
57,162

Income tax expense (benefit)
3,300

 
9,773

 
(815
)
 
13,073

 
5,560

Loss on disposal of assets
154

 
227

 
217

 
381

 
452

Foreign currency (gain) loss
661

 
(483
)
 
4,267

 
178

 
2,563

TRA related adjustments
(220
)
 

 
1,171

 
(220
)
 
4,112

Charges and credits (1)
4,941

 
3,954

 
3,623

 
8,895

 
8,334

Adjusted EBITDA
$
17,163

 
$
9,658

 
$
10,953

 
$
26,821

 
$
8,794

Adjusted EBITDA margin
11.0
%
 
6.7
%
 
8.3
%
 
8.9
%
 
3.6
%
 
 
(1) 
Comprised of Equity-based compensation expense (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $3,017, $2,574 and $2,888, respectively, and for the six months ended June 30, 2019 and 2018: $5,591 and $5,168, respectively), Mergers and acquisition expense (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: none, none and none, respectively, and for the six months ended June 30, 2019 and 2018: none and $58, respectively), Severance and other charges, net (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $815, $455 and $1,115, respectively, and for the six months ended June 30, 2019 and 2018: $1,270 and $2,369, respectively), Unrealized and realized gains (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $383, $308 and $1,561, respectively, and for the six months ended June 30, 2019 and 2018: $691 and $1,161, respectively) and Investigation-related matters (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $1,492, $1,233 and $1,181, respectively, and for the six months ended June 30, 2019 and 2018: $2,725 and $1,900, respectively).


10



FRANK’S INTERNATIONAL N.V.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
SEGMENT ADJUSTED EBITDA RECONCILIATION
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
2019
 
2019
 
2018
 
2019
 
2018
Segment Adjusted EBITDA:
 
 
 
 
 
 
 
 
 
Tubular Running Services
$
25,400

 
$
17,735

 
$
18,860

 
$
43,135

 
$
23,806

Tubulars
3,934

 
4,112

 
3,327

 
8,046

 
6,920

Cementing Equipment
3,029

 
3,794

 
4,151

 
6,823

 
5,102

Corporate
(15,200
)
 
(15,983
)
 
(15,385
)
 
(31,183
)
 
(27,034
)
 
17,163

 
9,658

 
10,953

 
26,821

 
8,794

Interest income, net
426

 
768

 
609

 
1,194

 
1,553

Depreciation and amortization
(23,913
)
 
(25,242
)
 
(28,862
)
 
(49,155
)
 
(57,162
)
Income tax (expense) benefit
(3,300
)
 
(9,773
)
 
815

 
(13,073
)
 
(5,560
)
Loss on disposal of assets
(154
)
 
(227
)
 
(217
)
 
(381
)
 
(452
)
Foreign currency gain (loss)
(661
)
 
483

 
(4,267
)
 
(178
)
 
(2,563
)
TRA related adjustments
220

 

 
(1,171
)
 
220

 
(4,112
)
Charges and credits (1)
(4,941
)
 
(3,954
)
 
(3,623
)
 
(8,895
)
 
(8,334
)
Net loss
$
(15,160
)
 
$
(28,287
)
 
$
(25,763
)
 
$
(43,447
)
 
$
(67,836
)
 
 
(1) 
Comprised of Equity-based compensation expense (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $3,017, $2,574 and $2,888, respectively, and for the six months ended June 30, 2019 and 2018: $5,591 and $5,168, respectively), Mergers and acquisition expense (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: none, none and none, respectively, and for the six months ended June 30, 2019 and 2018: none and $58, respectively), Severance and other charges, net (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $815, $455 and $1,115, respectively, and for the six months ended June 30, 2019 and 2018: $1,270 and $2,369, respectively), Unrealized and realized gains (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $383, $308 and $1,561, respectively, and for the six months ended June 30, 2019 and 2018: $691 and $1,161, respectively) and Investigation-related matters (for the three months ended June 30, 2019, March 31, 2019 and June 30, 2018: $1,492, $1,233 and $1,181, respectively, and for the six months ended June 30, 2019 and 2018: $2,725 and $1,900, respectively).



11



FRANK’S INTERNATIONAL N.V.
NON-GAAP FINANCIAL MEASURES AND RECONCILIATION
(In thousands)
(Unaudited)
 
 
 
 
 
 
 
 
 
 
FREE CASH FLOW RECONCILIATION
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended
 
Six Months Ended
 
June 30,
 
March 31,
 
June 30,
 
June 30,
 
2019
 
2019
 
2018
 
2019
 
2018
 
 
 
 
 
 
 
 
 
 
Net cash (used in) provided by operating activities
$
12,381

 
$
(29,770
)
 
$
(16,953
)
 
$
(17,389
)
 
$
(37,862
)
Less: purchases of property, plant and equipment and intangibles
9,095

 
8,145

 
4,942

 
17,240

 
11,265

Free cash flow
$
3,286

 
$
(37,915
)
 
$
(21,895
)
 
$
(34,629
)
 
$
(49,127
)


12