HOUSTON--(BUSINESS WIRE)--Nine Energy Service, Inc. (NYSE: NINE) reported second quarter 2020 revenues of $52.7 million, net loss of $(24.2) million and adjusted EBITDA of $(11.0) million. For the second quarter 2020, adjusted net lossB was $(33.7) million, or $(1.13) adjusted basic earnings per shareC.

“In response to the extreme reduction in demand related to the COVID-19 pandemic, North American operators significantly cut capex, either reducing or completely suspending activity during the quarter,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service. “These reductions were most evident in the Permian Basin where total completions have declined by approximately 77% in June from the 2020 high in February. Activity reductions affected revenue and profitability across service lines, but with what we know today, we believe that we are at or near the trough from an activity perspective.”

“The preservation of cash and debt service remains our top priority. Because of our high variable cost and the asset-light make-up of Nine, we were able to quickly implement cost-cutting measures and will continue to adapt as the market dictates. Our focus on working capital management has resulted in a strong cash balance of $88.7 million as of June 30, 2020, as well as an undrawn revolver.”

“Our team continues to gain ground with the commercialization of our dissolvable plugs, receiving incremental trials with new customers and expanding market share with current customers despite the extremely difficult environment. The tool continues to perform very well, allowing us to maintain some momentum into this downturn. While the near-term outlook is very challenging, we believe that our technological innovations position us to thrive when activity recovers.”

Operating Results

During the second quarter of 2020, the Company reported revenues of $52.7 million with adjusted gross lossD of $(4.0) million. During the second quarter, the Company generated ROICE of (27)%.

During the second quarter of 2020, the Company reported selling, general and administrative (“SG&A”) expense of $11.3 million, compared to $16.4 million for the first quarter of 2020. Depreciation and amortization expense ("D&A") in the second quarter of 2020 was $12.6 million, compared to $12.7 million for the first quarter of 2020.

The Company recognized an income tax benefit of approximately $0.2 million in the second quarter of 2020 and an overall income tax benefit year-to-date of approximately $2.3 million, resulting in an effective tax rate of 0.7% against year-to-date results. The Company’s year-to-date income tax benefit is primarily a result of the discrete tax benefit recorded in the first quarter of 2020 related to the Coronavirus Aid, Relief, and Economic Security Act as well as the release of a portion of our valuation allowance due to goodwill impairment which was also recorded in the first quarter of 2020.

Liquidity and Capital Expenditures

During the second quarter of 2020, the Company reported net cash provided by operating activities of $1.6 million, compared to $0.7 million for the first quarter of 2020.Capital expenditures totaled $3.6 million during the second quarter of 2020.

As of June 30, 2020, Nine’s cash and cash equivalents were $88.7 million, and the Company had $44.8 million of availability under the revolving credit facility, which remains undrawn, resulting in a total liquidity position of $133.5 million as of June 30, 2020. Availability under the revolving credit facility decreased due to a reduction in accounts receivable and inventory balances.

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About Nine Energy Service

Nine Energy Service is an oilfield services company that offers completion solutions within North America and abroad. The Company brings years of experience with a deep commitment to serving clients with smarter, customized solutions and world-class resources that drive efficiencies. Serving the global oil and gas industry, Nine continues to differentiate itself through superior service quality, wellsite execution and cutting-edge technology. Nine is headquartered in Houston, Texas with operating facilities in the Permian, Eagle Ford, SCOOP/STACK, Niobrara, Barnett, Bakken, Marcellus, Utica and Canada.

For more information on the Company, please visit Nine’s website at nineenergyservice.com.