Attached files
| file | filename |
|---|---|
| 8-K - FORM 8-K - Nuverra Environmental Solutions, Inc. | d239256d8k.htm |
| EX-10.1 - SHARE PURCHASE AGREEMENT - Nuverra Environmental Solutions, Inc. | d239256dex101.htm |
| EX-10.2 - NOVATION AGREEMENT - Nuverra Environmental Solutions, Inc. | d239256dex102.htm |
| EX-99.2 - PRESS RELEASE - Nuverra Environmental Solutions, Inc. | d239256dex992.htm |
Exhibit 99.1
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On September 30, 2011, Heckmann Corporation (the “Company”), through its wholly-owned subsidiary, China Water and Drinks, Inc. (“CWD”) (by virtue of a novation from its wholly-owned subsidiary China Water and Drinks (BVI) Inc.), entered into a Share Purchase Agreement (the “SPA”) by and among Pacific Water & Drinks (HK) Group Limited (f/k/a Sino Bloom Investments Limited), a Hong Kong company (“Buyer”), CWD, as Seller, and China Water Drinks (H.K.) Holdings Limited, a Hong Kong company (“Target”), pursuant to which Seller agreed to sell 100% of the equity interests in Target to Buyer in exchange for shares in Buyer equal to ten percent (10%) of Buyer’s outstanding equity (the “Sale”). The SPA contains limited representations and warranties related to the business of Target, none of which survived the closing of the Sale.
On 11:59 p.m. on September 30, 2011, and subsequent to the Sale, the Company abandoned all interests in its remaining non-U.S. subsidiaries that were not part of the Sale (the “Abandonment”), thus ceasing its China Water operations. Subsequent to the Sale and the Abandonment, the historical financial results of Target and the remaining abandoned non-U.S. subsidiaries will be reflected in the consolidated financial statements of the Company as discontinued operations for all periods presented through the date of the Sale, beginning with the financial statements to be filed for the quarter ended September 30, 2011.
The following unaudited condensed consolidated financial statements are presented to illustrate the effects of the Sale and the Abandonment. The unaudited pro forma condensed consolidated balance sheet as of June 30, 2011 illustrates the estimated effects of the Sale and the Abandonment as if these activities had occurred on June 30, 2011. The unaudited pro forma condensed consolidated statements of operations for the interim period ended June 30, 2011 and the years ended December 31, 2010, 2009 and 2008 sets forth the estimated effects of the Sale and Abandonment had on the Company’s condensed consolidated statements of operations as if these activities had occurred in their entirety at the beginning of the periods presented.
The unaudited pro forma condensed consolidated financial statements presented herein are for informational purposes only and do not purport to present what the Company’s actual results would have been had the Sale and Abandonment occurred on the date assumed, or to project our results of operations or financial position for any future period. The pro forma financial statements include assumptions that are believed to be reasonable and represent all material information that is necessary to fairly present pro forma financial statements.
The unaudited pro forma condensed consolidated financial statements, including the notes thereto, should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto in the Company’s Annual Report on Form 10-K as of and for the fiscal year ended December 31, 2010, as filed with the United States Securities and Exchange Commission on March 14, 2011.
HECKMANN CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In thousands, except share data)
| June 30, 2011 | ||||||||||||||
| As Reported |
Pro Forma Adjustments |
Notes | Pro Forma | |||||||||||
| ASSETS | (unaudited) | (unaudited) | (unaudited) | |||||||||||
| Current Assets |
||||||||||||||
| Cash and cash equivalents |
$ | 36,887 | $ | (4,387 | ) | (a) | $ | 32,500 | ||||||
| Certificates of deposit |
11,830 | 11,830 | ||||||||||||
| Marketable securities |
6,113 | 6,113 | ||||||||||||
| Accounts receivable, net |
42,389 | (6,280 | ) | (a) | 36,109 | |||||||||
| Inventories, net |
3,088 | (2,417 | ) | (a) | 671 | |||||||||
| Prepaid expenses and other receivables |
4,890 | (2,130 | ) | (a) | 2,760 | |||||||||
| Income tax receivable |
2,018 | 2,018 | ||||||||||||
| Other current assets |
1,908 | (165 | ) | (a) | 1,743 | |||||||||
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|
|||||||||
| Total current assets |
109,123 | (15,379 | ) | 93,744 | ||||||||||
| Property, plant and equipment, net |
210,102 | (19,940 | ) | (a) | 190,162 | |||||||||
| Marketable securities |
8,873 | 8,873 | ||||||||||||
| Equity investments |
7,182 | 7,182 | ||||||||||||
| Intangible assets, net |
32,210 | (3,672 | ) | (a) | 28,538 | |||||||||
| Goodwill |
100,665 | (6,342 | ) | (a) | 94,323 | |||||||||
| Other |
1,173 | (107 | ) | (a) | 1,066 | |||||||||
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| TOTAL ASSETS |
$ | 469,328 | $ | (45,440 | ) | $ | 423,888 | |||||||
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| LIABILITIES AND EQUITY |
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| Current Liabilities |
||||||||||||||
| Accounts payable |
$ | 31,331 | $ | (14,895 | ) | (a) | $ | 16,436 | ||||||
| Deferred revenue |
158 | (158 | ) | (a) | — | |||||||||
| Accrued expenses |
26,117 | (6,644 | ) | (a) | 19,473 | |||||||||
| Current portion of long term debt |
33,827 | 33,827 | ||||||||||||
| Due to related parties |
423 | (423 | ) | (a) | — | |||||||||
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|||||||||
| Total current liabilities |
91,856 | (22,120 | ) | 69,736 | ||||||||||
| Long-term debt, less current portion |
36,494 | 36,494 | ||||||||||||
| Deferred income taxes |
12,771 | 12,771 | ||||||||||||
| Other long-term liabilities |
11,438 | (1,673 | ) | (a) | 9,765 | |||||||||
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| TOTAL LIABILITIES |
152,559 | (23,793 | ) | 128,766 | ||||||||||
| Equity: |
||||||||||||||
| Preferred stock, $0.001 par value, 1,000,000 shares authorized; no shares issued outstanding |
— | — | ||||||||||||
| Common stock, $0.001 par value: 500,000,000 authorized at June 30, 2011, 131,036,430 shares issued and 116,727,227 shares outstanding at June 30, 2011 |
128 | 128 | ||||||||||||
| Additional paid-in capital |
764,993 | 764,993 | ||||||||||||
| Purchased warrants |
(6,844 | ) | (6,844 | ) | ||||||||||
| Treasury stock |
(19,500 | ) | (19,500 | ) | ||||||||||
| Accumulated deficit |
(423,311 | ) | (20,400 | ) | (b) | (443,711 | ) | |||||||
| Accumulated other comprehensive income |
(108 | ) | 164 | (a) | 56 | |||||||||
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| Total equity of Heckmann Corporation |
315,358 | (20,236 | ) | 295,122 | ||||||||||
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| Noncontrolling interest |
1,411 | (1,411 | ) | — | ||||||||||
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| TOTAL EQUITY |
316,769 | (21,647 | ) | 295,122 | ||||||||||
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| TOTAL LIABILITIES AND EQUITY |
$ | 469,328 | $ | (45,440 | ) | $ | 423,888 | |||||||
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HECKMANN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
| Six Months Ended June 30, 2011 | ||||||||||||||
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma | |||||||||||
| (unaudited | ) | (unaudited | ) | (unaudited | ) | |||||||||
| Revenue |
$ | 70,693 | $ | (13,295 | ) | (a) | $ | 57,398 | ||||||
| Cost of goods sold |
54,365 | (11,489 | ) | (a) | 42,876 | |||||||||
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| Gross profit |
16,328 | (1,806 | ) | 14,522 | ||||||||||
| Operating expenses: |
||||||||||||||
| Selling and marketing |
1,272 | (1,272 | ) | (a) | — | |||||||||
| General and administrative |
15,281 | (2,275 | ) | (a) | 13,006 | |||||||||
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| Total operating expenses |
16,553 | (3,547 | ) | 13,006 | ||||||||||
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| Income (loss) from operations |
(225 | ) | 1,741 | 1,516 | ||||||||||
| Interest income (expense), net |
(1,147 | ) | (1,147 | ) | ||||||||||
| Loss from equity method investment |
(462 | ) | (462 | ) | ||||||||||
| Other, net |
2,547 | (2,150 | ) | (a) | 397 | |||||||||
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| Income (loss) before income taxes |
713 | (409 | ) | 304 | ||||||||||
| Income tax benefit (expense) |
(210 | ) | 120 | (c) | (90 | ) | ||||||||
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| Net income (loss) |
$ | 503 | $ | (289 | ) | $ | 214 | |||||||
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| Weighted average shares outstanding: |
||||||||||||||
| Basic |
112,393,028 | 112,393,028 | 112,393,028 | |||||||||||
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| Diluted |
116,391,549 | 116,391,549 | 116,391,549 | |||||||||||
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| Income (loss) per share: |
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| Basic |
* | * | * | |||||||||||
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| Diluted |
* | * | * | |||||||||||
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| * amount is less than $0.01 per share |
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HECKMANN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
| Twelve Months Ended December 31, 2010 | ||||||||||||||
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma | |||||||||||
| (unaudited) | (unaudited) | |||||||||||||
| Revenue |
$ | 45,691 | $ | (30,483 | ) | (a) | $ | 15,208 | ||||||
| Cost of goods sold |
34,951 | (23,614 | ) | (a) | 11,337 | |||||||||
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| Gross profit |
10,740 | (6,869 | ) | 3,871 | ||||||||||
| Operating expenses: |
||||||||||||||
| Selling and marketing |
2,861 | (2,861 | ) | (a) | — | |||||||||
| General and administrative |
17,961 | (6,407 | ) | (a) | 11,554 | |||||||||
| Pipeline start-up and commissioning |
11,830 | 11,830 | ||||||||||||
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| Total operating expenses |
32,652 | (9,268 | ) | 23,384 | ||||||||||
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| Loss from operations |
(21,912 | ) | 2,399 | (19,513 | ) | |||||||||
| Interest income, net |
2,005 | 82 | (a) | 2,087 | ||||||||||
| Income (loss) from equity method investment |
(4,016 | ) | 3,327 | (a) | (689 | ) | ||||||||
| Other, net |
6,171 | (1,760 | ) | (a) | 4,411 | |||||||||
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| Loss before income taxes |
(17,752 | ) | 4,048 | (13,704 | ) | |||||||||
| Income tax benefit (expense) |
3,059 | (695 | ) | (c) | 2,364 | |||||||||
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| Net loss |
(14,693 | ) | 3,353 | (11,340 | ) | |||||||||
| Net income attributable to non-controlling interests |
— | — | — | |||||||||||
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| Net loss attributable to Heckmann Corporation |
$ | (14,693 | ) | $ | 3,353 | $ | (11,340 | ) | ||||||
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| Weighted average shares outstanding: |
||||||||||||||
| Basic and diluted |
108,819,384 | 108,819,384 | 108,819,384 | |||||||||||
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| Income (loss) per share: |
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| Basic and diluted |
$ | (0.14 | ) | $ | 0.04 | $ | (0.10 | ) | ||||||
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HECKMANN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
| Twelve Months Ended December 31, 2009 | ||||||||||||||||
| As Reported |
Pro Forma Adjustments |
Notes | Pro Forma | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenue |
$ | 35,975 | $ | (32,155 | ) | (a) | $ | 3,820 | ||||||||
| Cost of goods sold |
26,734 | (24,634 | ) | (a) | 2,100 | |||||||||||
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| Gross profit |
9,241 | (7,521 | ) | 1,720 | ||||||||||||
| Operating expenses: |
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| Selling and marketing |
3,141 | (3,141 | ) | (a | ) | — | ||||||||||
| General and administrative |
41,287 | (32,093 | ) | (a | ) | 9,194 | ||||||||||
| Goodwill impairment |
357,545 | (357,545 | ) | (a | ) | — | ||||||||||
| Fixed asset impairment |
6,781 | (6,781 | ) | (a | ) | — | ||||||||||
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| Total operating expenses |
408,754 | (399,560 | ) | 9,194 | ||||||||||||
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| Loss from operations |
(399,513 | ) | 392,039 | (7,474 | ) | |||||||||||
| Interest income, net |
3,928 | 3,928 | ||||||||||||||
| Income (loss) from equity method investment |
47 | (47 | ) | (a) | — | |||||||||||
| Other, net |
(2 | ) | 151 | (a) | 149 | |||||||||||
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| Loss before income taxes |
(395,540 | ) | 392,143 | (3,397 | ) | |||||||||||
| Income tax benefit (expense) |
2 | — | 2 | |||||||||||||
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| Net loss |
(395,538 | ) | 392,143 | (3,395 | ) | |||||||||||
| Net income attributable to non-controlling interests |
143 | (143 | ) | (a) | — | |||||||||||
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| Net loss attributable to Heckmann Corporation |
$ | (395,395 | ) | $ | 392,000 | $ | (3,395 | ) | ||||||||
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| Weighted average shares outstanding: |
||||||||||||||||
| Basic and diluted |
109,575,057 | 109,575,057 | 109,575,057 | |||||||||||||
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| Income (loss) per share: |
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| Basic and diluted |
$ | (3.61 | ) | $ | 3.58 | $ | (0.03 | ) | ||||||||
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HECKMANN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Operations
(In thousands, except share and per share data)
| Twelve Months Ended December 31, 2008 | ||||||||||||||||
| As Reported | Pro Forma Adjustments |
Notes | Pro Forma | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||||
| Revenue |
$ | 10,507 | $ | (10,507 | ) | (a) | $ | — | ||||||||
| Cost of goods sold |
7,247 | (7,247 | ) | (a) | — | |||||||||||
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| Gross profit |
3,260 | (3,260 | ) | — | ||||||||||||
| Operating expenses: |
||||||||||||||||
| Selling and marketing |
322 | (322 | ) | (a | ) | — | ||||||||||
| General and administrative |
3,585 | (1,611 | ) | (a | ) | 1,974 | ||||||||||
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| Total operating expenses |
3,907 | (1,933 | ) | 1,974 | ||||||||||||
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| Loss from operations |
(647 | ) | (1,327 | ) | (1,974 | ) | ||||||||||
| Interest income, net |
10,940 | 10,940 | ||||||||||||||
| Acquisition costs |
(21,153 | ) | 21,153 | (a) | — | |||||||||||
| Income (loss) from equity method investment |
4 | (4 | ) | (a) | — | |||||||||||
| Other, net |
(174 | ) | (164 | ) | (a) | (338 | ) | |||||||||
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| Income (loss) before income taxes |
(11,030 | ) | 19,658 | 8,628 | ||||||||||||
| Income tax benefit (expense) |
(3,710 | ) | 808 | (c) | (2,902 | ) | ||||||||||
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| Net income (loss) |
(14,740 | ) | 20,466 | 5,726 | ||||||||||||
| Net income attributable to non-controlling interests |
(177 | ) | 177 | (a) | — | |||||||||||
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| Net income (loss) attributable to Heckmann Corporation |
(14,917 | ) | 20,643 | 5,726 | ||||||||||||
| Deferred interest income, net of taxes, attributable to common stock subject to possible redemption |
265 | — | 265 | |||||||||||||
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| Net income (loss) attributable to common stockholders |
$ | (14,652 | ) | $ | 20,643 | $ | 5,991 | |||||||||
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| Weighted average shares outstanding: |
||||||||||||||||
| Basic and diluted |
74,853,651 | 74,853,651 | 74,853,651 | |||||||||||||
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| Income (loss) per share: |
||||||||||||||||
| Basic and diluted |
$ | (0.20 | ) | $ | 0.28 | $ | 0.08 | |||||||||
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NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTES TO UNAUDITED PRO FORMA ADJUSTMENTS
| (a) | The pro forma adjustments remove all previously reported balances related to CWD. |
| (b) | The $20.4 million balance represents a loss on the Sale and Abandonment. |
| (c) | The pro forma income tax benefit or expense has been adjusted by applying the previously reported effective tax rate to the pro forma income or loss before income taxes with the resulting difference reported as a pro forma adjustment to the income tax benefit or expense. |
The pro forma adjustments are directly attributable to the transaction and are expected to have a continuing effect on the organization.