UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~June~~September 30, 2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-38183

RANGER ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)


Delaware			81-5449572
(State or other jurisdiction of incorporation or organization)			(I.R.S. Employer Identification No.)

10350 Richmond, Suite 550

Houston, Texas 77042

(Address of principal executive offices) (Zip Code)

(713) 935-8900

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Class A Common Stock, $0.01 par value

RNGR

New York Stock Exchange

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐

Accelerated Filer ☒

Non-accelerated Filer ☐

Smaller reporting company ☒

Emerging growth company ☐

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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of ~~July 31,~~October 25, 2023, the registrant had ~~24,521,679~~24,412,713 shares of Class A Common Stock and zero shares of Class B Common Stock outstanding.

RANGER ENERGY SERVICES, INC.

TABLE OF CONTENTS


						Page
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets						5
Condensed Consolidated Statements of Operations						6
Condensed Consolidated Statements of Stockholders’ Equity						7
Condensed Consolidated Statements of Cash Flows						8
Notes to Condensed Consolidated Financial Statements
Note 1 — Organization and Business Operations						9
Note 2 — Summary of Significant Accounting Policies						9
Note 3 — Assets Held for Sale						10
Note 4 — Property and Equipment, Net						11
Note 5 — Intangible Assets						11
Note 6 — Accrued Expenses						1112
Note 7 — Leases						12
Note 8 — Other Financing Liabilities						13
Note 9 — Debt						13
Note 10 — Equity						15
Note 11 — Risk Concentrations						16
Note 12 — Income Taxes						16
Note 13 — Earnings ~~(loss)~~ per Share						17
Note 14 — Commitments and Contingencies						17
Note 15 — Segment Reporting						17
Note 16 — Subsequent Events						19

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations						1920
Item 3. Quantitative and Qualitative Disclosures About Market Risks						3133
Item 4. Controls and Procedures						3134

PART II – OTHER INFORMATION
Item 1. Legal Proceedings						3436
Item 1A. Risk Factors						3436
Item 2. Unregistered Sales of Securities and Use of Proceeds						3436
Item 6. Exhibits						3537

SIGNATURES						3638

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

The information in this Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Exchange Act of 1934, as amended (the “Exchange Act”). All statements, other than statements of historical fact included in this Quarterly Report, regarding our strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects, plans and objectives of management are forward-looking statements. When used in this Quarterly Report, the words “may,” “should,” “could,” “believe,” “anticipate,” “intend,” “estimate,” “expect,” “outlook,” “project” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain such identifying words. These forward-looking statements are based on our current expectations and assumptions about future events and are based on currently available information as to the outcome and timing of future events.

We caution you that these forward-looking statements are subject to risks and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks include, but are not limited to, the risks described under “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”), those set forth from time-to-time in other filings by the Company with the SEC, and those in this Form 10-Q, including the following factors:

•interest rate risk as a result of our revolving credit facility and financing agreement to fund operations;

•the impact of geopolitical events on our industry and commodity prices, specifically surrounding China as COVID-19 restrictions are lifted and uncertainty regarding Russia’s oil supply while under sanctions;

•credit risk associated with our trade receivables;

•commodity price risk due to fluctuations in the prices of oil and natural gas, and resulting impacts on the activity levels of our E&P customers;

•general economic conditions or a weakening of the broader energy industry, including as a result of inflation or recession;

•volatility of oil and natural gas prices;

•reductions in capital spending by the oil and natural gas industry;

•reduced demand for our services due to fuel conservation measures and resulting reduction in demand for oil and natural gas;

•accidents, blowouts, explosions, craterings, fires, oil spills and releases of drilling, completion or fracturing fluids or hazardous materials or pollutants into the environment;

•seasonal weather conditions, severe weather events and natural disasters that could severely disrupt normal operations and harm our business;

•capital expenditures for new equipment as we grow our operations and capital expenditures resulting from environmental initiatives, new regulatory requirements, and advancements in oilfield services technologies;

•intense competition that may cause us to lose market share and could negatively affect our ability to market our services and expand our operations;

•increasing competition for workers, as well as labor shortages;

•customer concentrations and reliance upon a few large customers that may adversely affect our revenue and operating results;

•unsatisfactory safety performance that may negatively affect our current and future customer relationships, and adversely impact our revenue;

•claims for personal injury and property damage, or for catastrophic events, which could materially and adversely affect our financial condition, results of operations and prospects;

•environmental and occupational health and safety laws and regulations that may expose us to significant costs and liabilities;

•federal and state legislative and regulatory initiatives that could result in increased costs and additional operating restrictions or delays, as well as adversely affect demand for our support services;

•risks arising from climate change, and increased attention to environmental, social, and governance (“ESG”) matters and conservation measures, which may adversely impact our or our customers’ business;

•the impact of geopolitical, economic and market conditions on our industry and commodity prices;

•cybersecurity and data privacy risks;

•risks associated with growth of our business through potential future acquisitions or mergers;

•our ability or intention to pay dividends or to effectuate repurchases of our Class A Common Stock; and

•risks related to our ownership and capital structure.

Our future results will depend upon various other risks and uncertainties, including, but not limited to, those detailed in our current and past filings with the SEC, Those documents are available through our website or through the SEC’s Electronic Data Gathering and Analysis Retrieval (“EDGAR”) system at www.sec.gov. Should one or more of the risks or uncertainties described occur, or should underlying assumptions prove incorrect, our actual results and plans could differ materially from those expressed in any forward-looking statements.

This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue. Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

RANGER ENERGY SERVICES, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)

(in millions, except share amounts)


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	6.4	$	3.7	Cash and cash equivalents	$	8.2	$	3.7
Accounts receivable, net	Accounts receivable, net	74.9		91.2		Accounts receivable, net	89.9		91.2
Contract assets	Contract assets	31.1		26.9		Contract assets	35.6		26.9
Inventory	Inventory	7.5		5.9		Inventory	7.7		5.9
Prepaid expenses	Prepaid expenses	7.2		9.2		Prepaid expenses	8.6		9.2
Assets held for sale	Assets held for sale	1.0		3.2		Assets held for sale	1.0		3.2
Total current assets	Total current assets	128.1		140.1		Total current assets	151.0		140.1

Property and equipment, net	Property and equipment, net	218.8		221.6		Property and equipment, net	225.0		221.6
Intangible assets, net	Intangible assets, net	6.7		7.1		Intangible assets, net	6.5		7.1
Operating leases, right-of-use assets	Operating leases, right-of-use assets	10.0		11.2		Operating leases, right-of-use assets	9.8		11.2
Other assets	Other assets	1.2		1.6		Other assets	1.2		1.6
Total assets	Total assets	$	364.8	$	381.6	Total assets	$	393.5	$	381.6

Liabilities and Stockholders' Equity	Liabilities and Stockholders' Equity					Liabilities and Stockholders' Equity
Accounts payable	Accounts payable	$	22.0	$	24.3	Accounts payable	$	32.6	$	24.3
Accrued expenses	Accrued expenses	31.1		36.1		Accrued expenses	29.6		36.1
Other financing liability, current portion	Other financing liability, current portion	0.6		0.7		Other financing liability, current portion	0.6		0.7
Long-term debt, current portion	Long-term debt, current portion	0.3		6.8		Long-term debt, current portion	10.3		6.8
Other current liabilities	Other current liabilities	6.3		6.6		Other current liabilities	6.5		6.6
Total current liabilities	Total current liabilities	60.3		74.5		Total current liabilities	79.6		74.5

Operating leases, right-of-use obligations	Operating leases, right-of-use obligations	8.4		9.6		Operating leases, right-of-use obligations	8.0		9.6
Other financing liability	Other financing liability	11.3		11.6		Other financing liability	11.1		11.6
Long-term debt, net	Long-term debt, net	—		11.6		Long-term debt, net	—		11.6
Other long-term liabilities	Other long-term liabilities	10.8		8.1		Other long-term liabilities	14.3		8.1
Total liabilities	Total liabilities	90.8		115.4		Total liabilities	113.0		115.4

Commitments and contingencies (Note 14)	Commitments and contingencies (Note 14)					Commitments and contingencies (Note 14)

Stockholders' equity	Stockholders' equity					Stockholders' equity
Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of June 30, 2023 and December 31, 2022		—		—
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 25,689,807 shares issued and 24,589,879 shares outstanding as of June 30, 2023; 25,446,292 shares issued and 24,894,464 shares outstanding as of December 31, 2022		0.3		0.3
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; no shares issued or outstanding as of June 30, 2023 and December 31, 2022		—		—
Less: Class A Common Stock held in treasury at cost; 1,099,928 treasury shares as of June 30, 2023 and 551,828 treasury shares as of December 31, 2022		(9.7)		(3.8)
Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022						Preferred stock, $0.01 per share; 50,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022	—		—
Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 25,744,069 shares issued and 24,411,241 shares outstanding as of September 30, 2023; 25,446,292 shares issued and 24,894,464 shares outstanding as of December 31, 2022						Class A Common Stock, $0.01 par value, 100,000,000 shares authorized; 25,744,069 shares issued and 24,411,241 shares outstanding as of September 30, 2023; 25,446,292 shares issued and 24,894,464 shares outstanding as of December 31, 2022	0.3		0.3
Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022						Class B Common Stock, $0.01 par value, 100,000,000 shares authorized; no shares issued or outstanding as of September 30, 2023 and December 31, 2022	—		—
Less: Class A Common Stock held in treasury at cost; 1,332,828 treasury shares as of September 30, 2023 and 551,828 treasury shares as of December 31, 2022						Less: Class A Common Stock held in treasury at cost; 1,332,828 treasury shares as of September 30, 2023 and 551,828 treasury shares as of December 31, 2022	(12.4)		(3.8)
Retained earnings	Retained earnings	19.5		7.1		Retained earnings	27.6		7.1
Additional paid-in capital	Additional paid-in capital	263.9		262.6		Additional paid-in capital	265.0		262.6
Total stockholders' equity	Total stockholders' equity	274.0		266.2		Total stockholders' equity	280.5		266.2
Total liabilities and stockholders' equity	Total liabilities and stockholders' equity	$	364.8	$	381.6	Total liabilities and stockholders' equity	$	393.5	$	381.6

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

RANGER ENERGY SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)

(in millions, except share and per share amounts)


		Three Months Ended				Six Months Ended					Three Months Ended				Nine Months Ended
		June 30,				June 30,					September 30,				September 30,
		2023		2022		2023		2022			2023		2022		2023		2022
Revenue	Revenue									Revenue
High specification rigs	High specification rigs	$	77.6	$	76.0	$	155.1	$	140.9	High specification rigs	$	79.2	$	79.7	$	234.3	$	220.6
Wireline services	Wireline services	54.5		49.5		104.4		88.1		Wireline services	53.2		60.6		157.6		148.7
Processing solutions and ancillary services	Processing solutions and ancillary services	31.1		28.1		61.2		48.2		Processing solutions and ancillary services	32.0		36.7		93.2		84.9
Total revenue	Total revenue	163.2		153.6		320.7		277.2		Total revenue	164.4		177.0		485.1		454.2

Operating expenses	Operating expenses									Operating expenses
Cost of services (exclusive of depreciation and amortization):	Cost of services (exclusive of depreciation and amortization):									Cost of services (exclusive of depreciation and amortization):
High specification rigs	High specification rigs	62.0		61.8		122.1		112.6		High specification rigs	63.5		62.7		185.6		175.3
Wireline services	Wireline services	48.8		45.2		94.5		85.6		Wireline services	45.8		49.2		140.3		134.8
Processing solutions and ancillary services	Processing solutions and ancillary services	25.5		23.0		50.6		39.8		Processing solutions and ancillary services	25.5		26.2		76.1		66.0
Total cost of services	Total cost of services	136.3		130.0		267.2		238.0		Total cost of services	134.8		138.1		402.0		376.1
General and administrative	General and administrative	7.3		11.2		15.7		21.4		General and administrative	7.0		11.0		22.7		32.4
Depreciation and amortization	Depreciation and amortization	8.7		11.4		18.7		23.0		Depreciation and amortization	10.6		10.8		29.3		33.8
Impairment of fixed assets	Impairment of fixed assets	—		1.1		—		1.1		Impairment of fixed assets	0.4		0.2		0.4		1.3
(Gain) loss on sale of assets		(0.5)		2.1		(1.5)		1.1
Gain on sale of assets										Gain on sale of assets	(0.1)		(1.1)		(1.6)		—
Total operating expenses	Total operating expenses	151.8		155.8		300.1		284.6		Total operating expenses	152.7		159.0		452.8		443.6

Operating income (loss)		11.4		(2.2)		20.6		(7.4)
Operating income										Operating income	11.7		18.0		32.3		10.6

Other (income) expenses	Other (income) expenses									Other (income) expenses
Interest expense, net	Interest expense, net	0.9		1.8		2.1		3.9		Interest expense, net	0.7		1.8		2.8		5.7
Loss on debt retirement	Loss on debt retirement	2.4		—		2.4		—		Loss on debt retirement	—		—		2.4		—
Gain on bargain purchase, net of tax	Gain on bargain purchase, net of tax	—		(2.8)		—		(2.8)		Gain on bargain purchase, net of tax	—		(0.8)		—		(3.6)
Total other (income) expenses	Total other (income) expenses	3.3		(1.0)		4.5		1.1		Total other (income) expenses	0.7		1.0		5.2		2.1

Income (loss) before income tax expense (benefit)		8.1		(1.2)		16.1		(8.5)
Income tax expense (benefit)		2.0		(0.8)		3.8		(2.4)
Net income (loss)		6.1		(0.4)		12.3		(6.1)
Income before income tax expense										Income before income tax expense	11.0		17.0		27.1		8.5
Income tax expense										Income tax expense	1.6		3.4		5.4		1.0
Net income										Net income	9.4		13.6		21.7		7.5

Income (loss) per common share
Income per common share										Income per common share
Basic	Basic	$	0.25	$	(0.02)	$	0.49	$	(0.29)	Basic	$	0.38	$	0.55	$	0.88	$	0.34
Diluted	Diluted	$	0.24	$	(0.02)	$	0.49	$	(0.29)	Diluted	$	0.38	$	0.54	$	0.86	$	0.33
Weighted average common shares outstanding	Weighted average common shares outstanding									Weighted average common shares outstanding
Basic	Basic	24,840,569		23,581,466		24,890,178		21,041,300		Basic	24,500,607		24,845,517		24,758,890		22,323,308
Diluted	Diluted	25,188,123		23,581,466		25,249,026		21,041,300		Diluted	24,887,275		25,184,067		25,149,415		22,637,457

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

RANGER ENERGY SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (UNAUDITED)

(in millions, except share amounts)


		Three Months Ended June 30,						Six Months Ended June 30,							Three Months Ended September 30,						Nine Months Ended September 30,
		2023	2022	2023		2022		2023	2022	2023		2022			2023	2022	2023		2022		2023	2022	2023		2022
		Quantity		Amount				Quantity		Amount					Quantity		Amount				Quantity		Amount
Shares, Series A Preferred Stock	Shares, Series A Preferred Stock													Shares, Series A Preferred Stock
Balance, beginning of period	Balance, beginning of period	—	6,000,001	$	—	$	0.1	—	6,000,001	$	—	$	0.1	Balance, beginning of period	—	—	$	—	$	—	—	6,000,001	$	—	$	0.1
Shares converted to Class A Common Stock	Shares converted to Class A Common Stock	—	(6,000,001)	—		(0.1)		—	(6,000,001)	—		(0.1)		Shares converted to Class A Common Stock	—	—	—		—		—	(6,000,001)	—		(0.1)
Balance, end of period	Balance, end of period	—	—	$	—	$	—	—	—	$	—	$	—	Balance, end of period	—	—	$	—	$	—	—	—	$	—	$	—

Shares, Class A Common Stock	Shares, Class A Common Stock													Shares, Class A Common Stock
Balance, beginning of period	Balance, beginning of period	25,677,673	19,223,189	$	0.3	$	0.2	25,446,292	18,981,172	$	0.3	$	0.2	Balance, beginning of period	25,689,807	25,268,856	$	0.3	$	0.3	25,446,292	18,981,172	$	0.3	$	0.2
Issuance of shares under share-based compensation plans	Issuance of shares under share-based compensation plans	12,134	60,366	—		—		330,616	399,767	—		—		Issuance of shares under share-based compensation plans	59,996	57,263	—		—		390,612	457,030	—		—
Shares withheld for taxes on equity transactions	Shares withheld for taxes on equity transactions	—	(14,700)	—		—		(87,101)	(112,084)	—		—		Shares withheld for taxes on equity transactions	(5,734)	(365)	—		—		(92,835)	(112,449)	—		—
Issuance of shares from Series A Preferred Stock conversion	Issuance of shares from Series A Preferred Stock conversion	—	6,000,001	—		0.1		—	6,000,001	—		0.1		Issuance of shares from Series A Preferred Stock conversion	—	—	—		—		—	6,000,001	—		0.1

Issuance in connection with acquisitions														Issuance in connection with acquisitions	—	100,000	—		—		—	100,000	—		—
Balance, end of period	Balance, end of period	25,689,807	25,268,856	$	0.3	$	0.3	25,689,807	25,268,856	$	0.3	$	0.3	Balance, end of period	25,744,069	25,425,754	$	0.3	$	0.3	25,744,069	25,425,754	$	0.3	$	0.3

Treasury Stock	Treasury Stock													Treasury Stock
Balance, beginning of period	Balance, beginning of period	(591,228)	(551,828)	$	(4.2)	$	(3.8)	(551,828)	(551,828)	$	(3.8)	$	(3.8)	Balance, beginning of period	(1,099,928)	(551,828)	$	(9.7)	$	(3.8)	(551,828)	(551,828)	$	(3.8)	$	(3.8)
Repurchase of Class A Common Stock	Repurchase of Class A Common Stock	(508,700)	—	(5.5)		—		(548,100)	—	(5.9)		—		Repurchase of Class A Common Stock	(232,900)	—	(2.7)		—		(781,000)	—	(8.6)		—
Balance, end of period	Balance, end of period	(1,099,928)	(551,828)	$	(9.7)	$	(3.8)	(1,099,928)	(551,828)	$	(9.7)	$	(3.8)	Balance, end of period	(1,332,828)	(551,828)	$	(12.4)	$	(3.8)	(1,332,828)	(551,828)	$	(12.4)	$	(3.8)

Retained Earnings (accumulated deficit)	Retained Earnings (accumulated deficit)													Retained Earnings (accumulated deficit)
Balance, beginning of period	Balance, beginning of period			$	13.4	$	(13.7)			$	7.2	$	(8.0)	Balance, beginning of period			$	19.5	$	(14.1)			$	7.2	$	(8.0)
Net income (loss) attributable to controlling interest				6.1		(0.4)				12.3		(6.1)
Net income														Net income			9.4		13.6				21.7		7.5
Dividends declared														Dividends declared			(1.3)		—				(1.3)		—
Balance, end of period	Balance, end of period			$	19.5	$	(14.1)			$	19.5	$	(14.1)	Balance, end of period			$	27.6	$	(0.5)			$	27.6	$	(0.5)

Additional paid-in capital	Additional paid-in capital													Additional paid-in capital
Balance, beginning of period	Balance, beginning of period			$	262.7	$	259.9			$	262.6	$	260.2	Balance, beginning of period			$	263.9	$	260.7			$	262.6	$	260.2
Equity based compensation	Equity based compensation			1.2		0.9				2.3		1.7		Equity based compensation			1.1		0.9				3.4		2.6
Shares withheld for taxes on equity transactions	Shares withheld for taxes on equity transactions			—		(0.1)				(1.0)		(1.2)		Shares withheld for taxes on equity transactions			—		0.1				(1.0)		(1.1)

Balance, end of period	Balance, end of period			$	263.9	$	260.7			$	263.9	$	260.7	Balance, end of period			$	265.0	$	261.7			$	265.0	$	261.7

Total controlling interest shareholders’ equity
Total shareholders’ equity														Total shareholders’ equity
Balance, beginning of period	Balance, beginning of period			$	272.2	$	242.7			$	266.3	$	248.7	Balance, beginning of period			$	274.0	$	243.1			$	266.3	$	248.7
Net income (loss) attributable to controlling interest				6.1		(0.4)				12.3		(6.1)
Net income														Net income			9.4		13.6				21.7		7.5
Dividends declared														Dividends declared			(1.3)		—				(1.3)		—
Equity based compensation	Equity based compensation			1.2		0.9				2.3		1.7		Equity based compensation			1.1		0.9				3.4		2.6
Shares withheld for taxes on equity transactions	Shares withheld for taxes on equity transactions			—		(0.1)				(1.0)		(1.2)		Shares withheld for taxes on equity transactions			—		0.1				(1.0)		(1.1)

Shares converted to Class A Common Stock				—		(1.0)				—		(0.1)
Issuance of shares from Series A Preferred Stock conversion				—		1.0				—		0.1

Repurchase of Class A Common Stock	Repurchase of Class A Common Stock			(5.5)		—				(5.9)		—		Repurchase of Class A Common Stock			(2.7)		—				(8.6)		—
Balance, end of period	Balance, end of period			$	274.0	$	243.1			$	274.0	$	243.1	Balance, end of period			$	280.5	$	257.7			$	280.5	$	257.7

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

RANGER ENERGY SERVICES, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(in millions)


		Six Months Ended June 30,					Nine Months Ended September 30,
		2023		2022			2023		2022
Cash Flows from Operating Activities	Cash Flows from Operating Activities					Cash Flows from Operating Activities
Net income (loss)		$	12.3	$	(6.1)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Net income						Net income	$	21.7	$	7.5
Adjustments to reconcile net income to net cash provided by operating activities:						Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization	Depreciation and amortization	18.7		23.0		Depreciation and amortization	29.3		33.8
Equity based compensation	Equity based compensation	2.4		1.7		Equity based compensation	3.6		2.8
(Gain) loss on disposal of property and equipment		(1.5)		1.1
Gain on disposal of property and equipment						Gain on disposal of property and equipment	(1.6)		—
Impairment of fixed assets	Impairment of fixed assets	—		1.1		Impairment of fixed assets	0.4		1.3
Gain on bargain purchase, net of tax	Gain on bargain purchase, net of tax	—		(2.8)		Gain on bargain purchase, net of tax	—		(3.6)
Deferred income tax expense	Deferred income tax expense	3.8		—		Deferred income tax expense	4.8		—
Loss on debt retirement	Loss on debt retirement	2.4		—		Loss on debt retirement	2.4		—
Other expense, net	Other expense, net	0.9		0.6		Other expense, net	2.3		0.9
Changes in operating assets and liabilities	Changes in operating assets and liabilities					Changes in operating assets and liabilities
Accounts receivable	Accounts receivable	15.8		(3.7)		Accounts receivable	0.1		(14.3)
Contract assets	Contract assets	(4.2)		(14.5)		Contract assets	(8.7)		(25.7)
Inventory	Inventory	(1.8)		(1.7)		Inventory	(2.0)		(2.9)
Prepaid expenses and other current assets	Prepaid expenses and other current assets	2.0		5.0		Prepaid expenses and other current assets	0.6		(4.2)
Other assets	Other assets	0.9		(1.2)		Other assets	1.2		(3.6)
Accounts payable	Accounts payable	(2.3)		6.2		Accounts payable	8.3		16.0
Accrued expenses	Accrued expenses	(7.2)		—		Accrued expenses	(7.7)		3.7
Other current liabilities	Other current liabilities	(0.1)		(0.2)		Other current liabilities	—		0.8
Other long-term liabilities	Other long-term liabilities	(1.2)		(0.7)		Other long-term liabilities	(1.6)		6.0
Net cash provided by operating activities	Net cash provided by operating activities	40.9		7.8		Net cash provided by operating activities	53.1		18.5

Cash Flows from Investing Activities	Cash Flows from Investing Activities					Cash Flows from Investing Activities
Purchase of property and equipment	Purchase of property and equipment	(12.9)		(5.7)		Purchase of property and equipment	(27.9)		(8.7)
Proceeds from disposal of property and equipment	Proceeds from disposal of property and equipment	4.7		13.9		Proceeds from disposal of property and equipment	4.9		20.4

Purchase of businesses, net of cash received						Purchase of businesses, net of cash received	—		0.8
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(8.2)		8.2		Net cash provided by (used in) investing activities	(23.0)		12.5

Cash Flows from Financing Activities	Cash Flows from Financing Activities					Cash Flows from Financing Activities
Borrowings under Credit Facility		298.6		283.3
Principal payments on Credit Facility		(301.1)		(276.4)
Principal payments under Eclipse Term Loan B		—		(9.4)
Borrowings under Revolving Credit Facility						Borrowings under Revolving Credit Facility	315.6		431.0
Principal payments on Revolving Credit Facility						Principal payments on Revolving Credit Facility	(308.1)		(433.2)
Principal payments under Eclipse Term Loan B Facility						Principal payments under Eclipse Term Loan B Facility	—		(12.4)
Principal payments on financing lease obligations	Principal payments on financing lease obligations	(2.7)		(2.3)		Principal payments on financing lease obligations	(4.0)		(3.4)
Principal payments on Secured Promissory Note	Principal payments on Secured Promissory Note	(6.2)		(2.7)		Principal payments on Secured Promissory Note	(6.2)		(3.3)
Principal payments on other financing liabilities	Principal payments on other financing liabilities	(0.5)		(1.8)		Principal payments on other financing liabilities	(0.7)		(2.2)
Principal payments on Eclipse M&E Term Loan		(10.4)		(0.8)
Principal payments on Eclipse M&E Term Loan Facility						Principal payments on Eclipse M&E Term Loan Facility	(10.4)		(1.5)
Dividends paid to Class A Common Stock shareholders						Dividends paid to Class A Common Stock shareholders	(1.2)		—
Shares withheld on equity transactions	Shares withheld on equity transactions	(0.9)		(1.2)		Shares withheld on equity transactions	(1.0)		(1.1)
Payments on Installment Purchases		(0.2)		(0.2)
Payments on Other Installment Purchases						Payments on Other Installment Purchases	(0.3)		(0.3)

Repurchase of Class A Common Stock	Repurchase of Class A Common Stock	(5.9)		—		Repurchase of Class A Common Stock	(8.6)		—

Deferred financing costs on Wells Fargo	Deferred financing costs on Wells Fargo	(0.7)		—		Deferred financing costs on Wells Fargo	(0.7)		—

Net cash used in financing activities	Net cash used in financing activities	(30.0)		(11.5)		Net cash used in financing activities	(25.6)		(26.4)

Increase in cash and cash equivalents	Increase in cash and cash equivalents	2.7		4.5		Increase in cash and cash equivalents	4.5		4.6
Cash and cash equivalents, Beginning of Period	Cash and cash equivalents, Beginning of Period	3.7		0.6		Cash and cash equivalents, Beginning of Period	3.7		0.6
Cash and cash equivalents, End of Period	Cash and cash equivalents, End of Period	$	6.4	$	5.1	Cash and cash equivalents, End of Period	$	8.2	$	5.2

Supplemental Cash Flow Information	Supplemental Cash Flow Information					Supplemental Cash Flow Information
Interest paid	Interest paid	$	0.6	$	0.6	Interest paid	$	1.0	$	0.8
Supplemental Disclosure of Non-cash Investing and Financing Activities	Supplemental Disclosure of Non-cash Investing and Financing Activities					Supplemental Disclosure of Non-cash Investing and Financing Activities

Capital expenditures included in accounts payable and accrued liabilities						Capital expenditures included in accounts payable and accrued liabilities	$	—	$	(0.7)
Additions to fixed assets through installment purchases and financing leases	Additions to fixed assets through installment purchases and financing leases	$	(3.4)	$	(2.0)	Additions to fixed assets through installment purchases and financing leases	$	(5.6)	$	(3.5)
Additions to fixed assets through asset trades	Additions to fixed assets through asset trades	$	(1.1)	$	—	Additions to fixed assets through asset trades	$	(1.1)	$	—

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

RANGER ENERGY SERVICES, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Note 1 — Organization and Business Operations

Business

Ranger Energy Services, Inc. (“Ranger, Inc.,” “Ranger,” “we,” “us” or the “Company”) is a provider of onshore high specification ~~(“high-spec”)~~ well service rigs, wireline services, and additional processing solutions and ancillary services in the United States (“U.S.”). The Company provides an extensive range of well site services to leading U.S. exploration and production (“E&P”) companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.

Our service offerings consist of well completion support, workover, well maintenance, wireline, ~~fluid management,~~ and other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

•High Specification Rigs. Provides ~~high-spec~~high specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

•Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production, and pump down lines of business.

•Processing Solutions and Ancillary Services. Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services include equipment rentals, plug and abandonment, logistics, ~~hauling,~~ snubbing and coil tubing, and processing solutions.

The Company’s operations take place in most of the active oil and natural gas basins in the U.S., including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend, Anadarko Basin, and Canadian and Kingfisher Counties plays.

Organization

Ranger, Inc. was incorporated as a Delaware corporation in February 2017. Ranger, Inc. is a holding company, and its sole assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”). Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”) and Torrent Energy Services, LLC (“Torrent Services”), and the other subsidiaries through which it operates its assets. Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services, its subsidiaries, and Torrent Services’ business and consolidates the financial results of Ranger Services, its subsidiaries, and Torrent Services.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The unaudited Condensed Consolidated Financial Statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form ~~10-Q and Article 10 of Regulation S-X.~~10-Q. Accordingly, certain information and disclosures have been condensed or omitted. The Condensed Consolidated Financial Statements reflect all normal and recurring adjustments that are, in the opinion of management, necessary for the fair presentation of the results of operations for the interim periods. These interim financial statements should be read in conjunction with our audited consolidated financial statements and related notes included in the Annual Report. Interim results for the periods presented may not be indicative of results that will be realized for future periods.

We have made certain reclassifications to our prior period operating expense amounts for year-over-year comparability purposes. Other immaterial reclassifications have been made for comparability purposes. None of these reclassifications have an impact on our consolidated operating results, cash flows or financial position.

Significant Accounting Policies

The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report.

Use of Estimates

The preparation of Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period. Management uses historical and other pertinent information to determine these estimates. Actual results could differ from such estimates.

Areas where critical accounting estimates are made by management include:

•Depreciation and amortization of property and equipment and intangible assets;

•Impairment of property and equipment and intangible assets;

•Revenue recognition;

•Income taxes; and

•Equity-based compensation.

New Accounting Pronouncements

Recently Adopted Accounting Standards

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses, which replaces the incurred loss impairment methodology to reflect expected credit losses. The amendment requires the measurement of all expected credit losses for financial assets held at the reporting date to be performed based on historical experience, current conditions and reasonable and supportable forecasts. ASU 2016-13 is effective for annual and interim periods beginning after December 15, 2022. The Company adopted this standard on January 1, 2023. This adoption did not have a material impact on the Company’s Consolidated Financial Statements.

In March 2020, the FASB issued ASU 2020-04, Reference Rate Reform - Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for accounting contracts, hedging relationships and other transactions affected by reference rate reform if certain criteria are met. The amendments apply only to contracts, hedging relationships and other transactions that reference the London Interbank Offering Rate (“LIBOR”) or another reference rate expected to be discontinued due to the reference rate reform. ASU 2020-04 became effective as of March 12, 2020 and can be applied through December 31, 2022, recently amended by ASU 2022-06 which has delayed the application date through December 31, 2024. On September 23, 2022, the Company entered into the Fourth Amendment to the Loan and Security Agreement (the Eclipse Loan and Security Agreement, as amended through and including the Fourth Amendment, the “Amended Loan Agreement”) with ~~EBC~~Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC where the Secured Overnight Financing Rate (“SOFR”) replaced LIBOR as the reference rate for interest on borrowings, effective October 1, 2022. On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo, NA. with SOFR as the reference rate for interest on borrowings.

New Accounting Standards

With the exception of the standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s Consolidated Financial Statements.

Note 3 — Assets Held for Sale

Assets held for sale ~~includes~~include the net book value of assets the Company plans to sell within the next 12 months and are related to excess assets acquired from the Basic Energy Services, Inc. (“Basic”) acquisition. Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value less estimated costs to sell.

As of ~~June~~September 30, 2023, the Company classified ~~$0.6 million and $0.4~~$1.0 million of land and buildings within our High Specification Rigs and Processing Solutions and Ancillary Services segments ~~respectively,~~ as held for sale as they are being actively marketed. For the nine months ended September 30, 2023, the Company recognized a gain on assets previously classified as held for sale of $1.8 million and recognized a loss on the sale of assets previously held in Property and equipment, net of $0.2 million, which nets to the $1.6 million gain on sale of assets on the Condensed Consolidated Statements of Operations.

Note 4 — Property and Equipment, Net

Property and equipment, net include the following (in millions):


		Estimated Useful Life (years)	June 30, 2023		December 31, 2022			Estimated Useful Life (years)	September 30, 2023		December 31, 2022
High specification rigs	High specification rigs	15	$	138.0	$	138.0	High specification rigs	15	$	138.9	$	138.0
Machinery and equipment	Machinery and equipment	3 - 30	180.1		179.3		Machinery and equipment	3 - 30	185.6		179.3
Vehicles	Vehicles	3 - 15	49.0		46.9		Vehicles	3 - 15	50.4		46.9
Other property and equipment	Other property and equipment	5 - 25	19.7		21.3		Other property and equipment	5 - 25	19.7		21.3
Property and equipment	Property and equipment		386.8		385.5		Property and equipment		394.6		385.5
Less: accumulated depreciation	Less: accumulated depreciation		(178.4)		(167.2)		Less: accumulated depreciation		(188.0)		(167.2)
Construction in progress	Construction in progress		10.4		3.3		Construction in progress		18.4		3.3
Property and equipment, net	Property and equipment, net		$	218.8	$	221.6	Property and equipment, net		$	225.0	$	221.6

On August 9, 2023, pursuant to an asset purchase agreement dated August 4, 2023, the Company closed on the acquisition of certain fixed assets from Pegaso Energy Services, LLC (“Pegaso acquisition”) for consideration of $7.3 million paid in cash. The fixed assets acquired from Pegaso were primarily engaged in pump down services for its customers. Under ASC 805 Business Combination, the Company accounted for the Pegaso acquisition as an asset acquisition. The consideration paid is similar to the fair value of the assets acquired and the Company allocated the consideration paid to each of the assets following the cost accumulation model. As of September 30, 2023, two of the acquired pumps are in service. Given the materiality of these assets to the overall acquisition, all acquired assets are classified as construction in progress.

Depreciation expense was ~~$8.5~~$10.4 million and ~~$11.3~~$10.5 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively and ~~$18.3~~$28.7 million and ~~$22.7~~$33.2 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022. For the ~~six~~nine months ended ~~June~~September 30, 2023, the Company reclassified ~~$5.7~~$0.6 million of property and equipment to Assets held for sale.

Impairment expense on fixed assets consists of non-cash impairment charges relating to long-lived assets. Impairments are determined using management’s judgment about our anticipated ability to continue to use fixed assets in-service and under development, current economic and market conditions and their effects based on information available as of the date of these unaudited interim condensed financial statements. During the three and nine months ended September 30, 2023, the Company recognized a fixed assets impairment charge of $0.4 million to reduce the carrying value of the property to estimated net realizable value.

Note 5 — Intangible Assets, Net

Definite lived intangible assets are comprised of the following (in millions):


		Estimated Useful Life (years)	June 30, 2023		December 31, 2022			Estimated Useful Life (years)	September 30, 2023		December 31, 2022
Customer relationships	Customer relationships	10-18	$	11.4	$	11.4	Customer relationships	10-18	$	11.4	$	11.4
Less: accumulated amortization	Less: accumulated amortization		(4.7)		(4.3)		Less: accumulated amortization		(4.9)		(4.3)
Intangible assets, net	Intangible assets, net		$	6.7	$	7.1	Intangible assets, net		$	6.5	$	7.1

Amortization expense was $0.2 million and ~~$0.1~~$0.3 million for the three months ended ~~June~~September 30, 2023 and 2022, respectively and ~~$0.4~~$0.6 million and ~~$0.3~~$0.6 million for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022. Amortization expense for the future periods is expected to be as follows (in millions):


For the twelve months ending June 30,		Amount
For the twelve months ending September 30,				For the twelve months ending September 30,	Amount
2024	2024	$	0.7	2024	$	0.7
2025	2025	0.7		2025	0.7
2026	2026	0.7		2026	0.7
2027	2027	0.7		2027	0.7
2028	2028	0.7		2028	0.6
Thereafter	Thereafter	3.2		Thereafter	3.1
Total	Total	$	6.7	Total	$	6.5

Note 6 — Accrued Expenses

Accrued expenses include the following (in millions):


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Accrued payables	Accrued payables	$	12.9	$	15.9	Accrued payables	$	14.6	$	15.9
Accrued compensation	Accrued compensation	14.4		12.5		Accrued compensation	12.6		12.5
Accrued taxes	Accrued taxes	3.2		2.1		Accrued taxes	1.8		2.1
Accrued insurance	Accrued insurance	0.6		5.6		Accrued insurance	0.6		5.6
Accrued expenses	Accrued expenses	$	31.1	$	36.1	Accrued expenses	$	29.6	$	36.1

Note 7 — Leases

Operating Leases

The Company has operating leases, primarily for real estate and equipment, with terms that vary from one to nine years, included in operating lease costs in the table below. The operating leases are included in Operating leases, right-of-use assets, Other current liabilities and Operating leases, right-of-use obligations in the Condensed Consolidated Balance Sheets.

Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations. Lease costs and other information related to operating leases for the three and ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, are as follows (in millions):


		Three Months Ended June 30,				Six Months Ended June 30,							Three Months Ended September 30,				Nine Months Ended September 30,
		2023		2022		2023			2022				2023		2022		2023			2022
Short-term lease costs	Short-term lease costs	$	4.3	$	3.6	$	9.6		$	6.7		Short-term lease costs	$	3.4	$	3.3	$	13.0		$	10.0
Operating lease costs	Operating lease costs	$	0.8	$	0.5	$	1.6		$	1.1		Operating lease costs	$	0.8	$	1.1	$	2.4		$	2.2
Operating cash outflows from operating leases	Operating cash outflows from operating leases	$	0.8	$	0.7	$	1.6		$	1.2		Operating cash outflows from operating leases	$	0.7	$	0.7	$	2.3		$	1.9

Weighted average remaining lease term	Weighted average remaining lease term					4.0 years			4.8 years			Weighted average remaining lease term					3.7 years			4.7 years
Weighted average discount rate	Weighted average discount rate					8.1		%	9.0		%	Weighted average discount rate					8.2		%	7.9		%

Aggregate future minimum lease payments under operating leases are as follows (in millions):


For the twelve months ending June 30,		Total
For the twelve months ending September 30,				For the twelve months ending September 30,	Total
2024	2024	$	3.2	2024	$	3.3
2025	2025	3.3		2025	3.4
2026	2026	3.0		2026	3.0
2027	2027	2.6		2027	2.3
2028	2028	0.6		2028	0.2

Total future minimum lease payments	Total future minimum lease payments	12.7		Total future minimum lease payments	12.2
Less: amount representing interest	Less: amount representing interest	(1.9)		Less: amount representing interest	(1.7)
Present value of future minimum lease payments	Present value of future minimum lease payments	10.8		Present value of future minimum lease payments	10.5
Less: current portion of operating lease obligations	Less: current portion of operating lease obligations	(2.4)		Less: current portion of operating lease obligations	(2.5)
Long-term portion of operating lease obligations	Long-term portion of operating lease obligations	$	8.4	Long-term portion of operating lease obligations	$	8.0

Finance Leases

The Company leases certain assets, primarily automobiles, under finance leases with terms that are generally three to five years. The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets. The assets are amortized over the shorter of the estimated useful lives or over the lease term. The finance leases are included in Property and equipment, net, Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Lease costs and other information related to finance leases for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022, are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Amortization of finance leases $ 0.9 $ 0.5 $ 1.7 $ 1.0
Interest on lease liabilities $ 0.3 $ 0.3 $ 0.6 $ 0.4
Financing cash outflows from finance leases $ 1.4 $ 1.1 $ 2.7 $ 2.3
Weighted average remaining lease term 2.0 years 1.4 years
Weighted average discount rate 4.7 % 2.3 %


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023			2022
Amortization of finance leases	$	1.0	$	0.5	$	2.7		$	1.5
Interest on lease liabilities	$	0.5	$	0.2	$	1.1		$	0.6
Financing cash outflows from finance leases	$	1.3	$	1.1	$	4.0		$	3.4

Weighted average remaining lease term					2.1 years			1.4 years
Weighted average discount rate					5.2		%	2.6		%

Aggregate future minimum lease payments under finance leases are as follows (in millions):


For the twelve months ending June 30,		Total
For the twelve months ending September 30,				For the twelve months ending September 30,	Total
2024	2024	$	4.5	2024	$	4.7
2025	2025	2.8		2025	3.3
2026	2026	1.4		2026	1.7
2027	2027	0.6		2027	0.8

Total future minimum lease payments	Total future minimum lease payments	9.3		Total future minimum lease payments	10.5
Less: amount representing interest	Less: amount representing interest	(0.9)		Less: amount representing interest	(1.2)
Present value of future minimum lease payments	Present value of future minimum lease payments	8.4		Present value of future minimum lease payments	9.3
Less: current portion of finance lease obligations	Less: current portion of finance lease obligations	(4.0)		Less: current portion of finance lease obligations	(4.0)
Long-term portion of finance lease obligations	Long-term portion of finance lease obligations	$	4.4	Long-term portion of finance lease obligations	$	5.3

Note 8 — Other Financing Liabilities

The Company has sale, lease-back agreements for land and certain other fixed assets with terms that vary from 18 months to 13 years. The sales did not qualify for sale accounting, therefore these leases were classified as finance leases and no gain or loss was recorded. The net book value of the assets remained in Property and equipment, net and are depreciating over their original useful lives.

As of ~~June~~September 30, 2023, aggregate future lease payments of the financing liabilities are as follows (in millions):


For the twelve months ending June 30,		Total
For the twelve months ending September 30,				For the twelve months ending September 30,	Total
2024	2024	$	0.6	2024	$	0.6
2025	2025	0.6		2025	0.7
2026	2026	0.7		2026	0.7
2027	2027	0.8		2027	0.8
2028	2028	0.8		2028	0.8
Thereafter	Thereafter	8.4		Thereafter	8.1
Total future minimum lease payments	Total future minimum lease payments	$	11.9	Total future minimum lease payments	$	11.7

Note 9 — Debt

The aggregate carrying amounts, net of issuance costs, of the Company’s debt consists of the following (in millions):


		June 30, 2023		December 31, 2022			September 30, 2023		December 31, 2022
Wells Fargo Revolving Credit Facility	Wells Fargo Revolving Credit Facility	$	—	$	—	Wells Fargo Revolving Credit Facility	$	10.1	$	—
Eclipse Revolving Credit Facility	Eclipse Revolving Credit Facility	—		1.4		Eclipse Revolving Credit Facility	—		1.4
Eclipse M&E Term Loan, net	Eclipse M&E Term Loan, net	—		10.4		Eclipse M&E Term Loan, net	—		10.4
Secured Promissory Note	Secured Promissory Note	—		6.1		Secured Promissory Note	—		6.1
Installment Purchases	Installment Purchases	0.3		0.5		Installment Purchases	0.2		0.5
Total Debt	Total Debt	0.3		18.4		Total Debt	10.3		18.4
Current portion of long-term debt	Current portion of long-term debt	(0.3)		(6.8)		Current portion of long-term debt	(10.3)		(6.8)
Long term-debt, net	Long term-debt, net	$	—	$	11.6	Long term-debt, net	$	—	$	11.6

Wells Fargo Bank, N.A. Credit Agreement

On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo Bank, N.A., providing the Company with a secured credit facility (“Wells Fargo Revolving Credit Facility”) in an aggregate principal amount of $75 million. Debt under the Credit Agreement is secured by a lien on substantially all of the Company’s assets. The Company was in compliance with the Credit Agreement covenant by maintaining a fixed charge coverage ratio of greater than 1.0 as of September 30, 2023.

In addition, on September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A. which designated an additional Letter of Credit in the amount of $1.6 million to be utilized for insurance deductibles, as needed. This line of credit falls under the Wells Fargo Revolving Credit Facility aggregate principal amount and matures on September 25, 2024. The interest rate for this Letter of Credit was approximately 1.8% for the month ended September 30, 2023.

The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to repay the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note, as defined below. The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause whereby certain restrictions and covenants become applicable beginning when excess availability is 20% or less. The most significant associated restriction is cash dominion, which permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility, to be instituted if excess availability is 12.5% or less.

Under the Wells Fargo Revolving Credit Facility, the total loan capacity was $75.0 million, which was based on a borrowing base certificate in effect as of September 30, 2023. The Company had $10.1 million in borrowings under the Wells Fargo Revolving Credit Facility and $3.2 million of Letters of Credit open under the facility, leaving a residual $61.7 million available for borrowings as of September 30, 2023. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 7.0% for the nine months ended September 30, 2023.

Eclipse Loan and Security Agreement

On September 27, 2021, the Company entered into a Loan and Security Agreement with ~~Eclipse Business Capital LLC (“EBC”)~~EBC and Eclipse Business Capital SPV, LLC, as administrative agent, providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”). On September 23, 2022, the Company entered into the Fourth Amendment to the Loan and Security Agreement pursuant to which, SOFR replaced LIBOR as the reference rate for interest on borrowings, effective October 1, 2022.

~~During~~On May 31, 2023, the ~~three~~Company extinguished the Eclipse Revolving Credit Facility and ~~six~~Eclipse M&E Term Loan Facility, paying the remaining principal amount of $10.4 million associated with the Eclipse M&E Term Loan Facility for the five months ended ~~June 30, 2023,~~May 31, 2023. Of this amount, $8.4 million was outstanding at the time of debt extinguishment, and repaid utilizing funds from the Wells Fargo Revolving Credit Facility. The Company recognized a loss on the retirement of debt of $2.4 million ~~as the Revolving Credit Facility, M&E Loan Facility and Term Loan B Facility were extinguished~~ in connection with the initiation of the Wells Fargo Revolving Credit ~~Facility, which is described further below.~~

~~Revolving Credit Facility~~

Borrowings under the Revolving Credit Facility bore interest at a rate per annum ranging from 4.5% to 5% in excess of SOFR and 3.5% to 4% in excess of the Base Rate, dependent on the fixed cost coverage ratio. The year to date weighted average interest rate on borrowings was approximately 9.4% through the extinguishment date of May 31, 2023.

~~M&E Term Loan Facility~~

Borrowings under the M&E Term Loan Facility bore interest at a rate per annum equal to 8% in excess of the SOFR Rate and 7% in excess of the Base Rate. The weighted average interest rate for the M&E Term Loan Facility was 13.0% through the maturity date of May 31, 2023. On May 31, 2023, the remaining balance of the loan was $8.4 million, which was paid utilizing funds from the Wells Fargo Revolving Credit Facility.

~~Term Loan B Facility~~

~~Borrowings under~~For the nine months ended September 30, 2022, the Company made principal payments totaling $12.4 million towards the Eclipse Term Loan B Facility, bore interest at a rate per annum equal to 12% in excess of the SOFR Rate and 11% in excess of the Base Rate. Term Loan B Facility was scheduled to mature in September 2022 and the remaining balance of $0.3 millionwhich was fully repaid on August 16, ~~2022. The weighted average interest rate for~~2022, and $1.5 million towards the Eclipse M&E Term Loan ~~B was 13.0% through the maturity date of August 16, 2022.~~Facility.

Secured Promissory Note

On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas. In connection with the PerfX acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired (the “Secured Promissory Note”). Borrowings under the Secured Promissory Note bore interest at a rate of 8.5% per annum and was scheduled to mature in January 2024. On

For the five months ended May 31, 2023, the ~~remaining balance~~Company made principal payments to the Secured Promissory Note totaling $6.2 million, of ~~the loan was~~which $5.4 million ~~which~~was related to the debt extinguishment and was repaid utilizing funds from the Wells Fargo Revolving Credit Facility.

~~Wells Fargo Bank, N.A. Credit Agreement~~

The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to repay the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note. The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause with tiered triggers starting when excess availability is 20% or less. Cash dominion, which permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility, will be instituted if excess availability is 12.5% or less.

Under the Wells Fargo Revolving Credit Facility, the total loan capacity was $64.3 million, which was based on a borrowing base certificate in effect as of June 30, 2023. The Company did not have any borrowings under the Wells Fargo Revolving Credit Facility. The Company does have a $1.6 million Letter of Credit open under the facility, leaving a residual $62.7 million available for borrowings as of June 30, 2023. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately 6.9% for the six months ended June 30, 2023.

Other Installment Purchases

The Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral. As of ~~June~~September 30, 2023, the aggregate principal balance outstanding under the Installment Agreements was ~~$0.3~~$0.2 million and is payable ratably over 36 months from the time of each purchase. For the nine months ended September 30, 2023, the Company paid down the Installment Agreements by $0.3 million. The monthly installment payments contain an imputed interest rate that are consistent with the Company’s incremental borrowing rate and is not significant to the Company.

Debt Obligations and Scheduled Maturities

As of ~~June~~September 30, 2023, aggregate future principal payments of total debt are as follows (in millions):


For the twelve months ending June 30,		Total
For the twelve months ending September 30,				For the twelve months ending September 30,	Total
2024	2024	$	0.3	2024	$	10.3

Total	Total	$	0.3	Total	$	10.3

Note 10 — Equity

Equity-Based Compensation

In 2017, the Company adopted the Ranger Energy Services, Inc. 2017 Long Term Incentive Plan (the “2017 Plan”). The Company has granted shares of restricted stock (“restricted shares” or “RSAs”) and performance-based restricted stock units (“performance stock units” or “PSUs”) under the 2017 Plan.

Restricted Stock Awards

The Company has granted RSAs, which generally vest in three equal annual installments beginning on the first anniversary date of the grant. During the ~~six~~nine months ended ~~June~~September 30, 2022, the Company granted approximately ~~388,300~~436,200 RSAs, with an approximated aggregate value of ~~$4.2~~$4.7 million. As of ~~June~~September 30, 2023, there was an aggregate ~~$5.9~~$5.0 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of ~~1.9~~1.8 years.

Performance Stock Units

The performance criteria applicable to performance stock units that have been granted by the Company are based on relative total shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of a designated peer group, and absolute total shareholder return. Generally, the performance stock units are subject to an approximated three-year performance period. During the ~~six~~nine months ended ~~June~~September 30, 2023, the Company granted approximately ~~100,400~~110,400 target shares of market-based performance stock units, of which 55,200 were granted at a relative grant date fair value of approximately $15.71 per share and 55,200 were granted at an absolute grant date fair value of approximately ~~and~~ $13.12 per share. Additionally, the Company granted approximately 55,200 target shares of market-based performance stock units with a specified floor price per share, of which 27,600 were granted a relative grant date fair value of approximately $15.22 and 27,600 were granted at an absolute grant date fair value of approximately ~~and~~ $10.85 per share. Shares granted during the ~~six~~nine months ended ~~June~~September 30, 2023 are expected to vest (if at all) following the completion of the applicable performance period on December 31, 2025. As of ~~June~~September 30, 2023, there was an aggregate ~~$2.8~~$2.5 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of ~~1.7~~1.5 years.

Share Repurchases

On March 7, 2023, the Company announced a share repurchase program allowing the Company to purchase Class A Common Stock held by non-affiliates, not to exceed $35.0 million in aggregate value. Share repurchases may take place in any transaction form as allowable by the Securities and Exchange Commission. Approval of the program by the Board of Directors of the Company is specific for the next 36 months.

During the three and ~~six~~nine months ended ~~June~~September 30, 2023, the Company repurchased ~~508,700~~232,900 and ~~548,100~~781,000 shares, respectively, of the Company’s Class A Common Stock for an aggregate ~~$5.5~~$2.7 million and ~~$5.9~~$8.6 million, respectively, on the open market.

Dividends

On August 7, 2023, the Company’s Board of Directors declared a cash dividend of $0.05 per share of Class A Common Stock. On September 8, 2023, the Company paid dividend distributions totaling $1.2 million to stockholders of record as of the close of business on August 18, 2023. The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.

Warrant from PerfX Acquisition

The PerfX acquisition purchase price included a warrant to acquire a 30% ownership in the XConnect Business (“XConnect”), which expires on July 8, 2031. XConnect is the manufacturer of a perforating gun system developed by the PerfX sellers alongside the PerfX wireline service business. The warrant requires the Company to maintain a specific minimum level of purchases of XConnect’s manufactured products. Should the Company fail to maintain the specified minimum level of purchases, a forfeiture event would occur; however, the Company may elect to cure the forfeiture event through a cash payment to XConnect. If the Company elects to not cure the forfeiture event, the ownership percentage would reduce to 15%. Upon the occurrence of a second uncured forfeiture event, the warrant is deemed to be cancelled. The value of the warrant by the Company is negligible as of ~~June~~September 30, 2023. The Company finalized the purchase price allocation in the fourth quarter of 2021.

Note 11 — Risk Concentrations

Customer Concentrations

During the three and ~~six~~nine months ended ~~June~~September 30, 2023, one customer accounted for approximately 11% and 10%, respectively, of the Company’s consolidated revenues. As of ~~June~~September 30, 2023, approximately 6%7% of the net accounts receivable balance was due from this customer.

During the three and nine months ended ~~June~~September 30, 2022, ~~two customers accounted for approximately 11% and 10% each of the Company’s consolidated revenue. During the six months ended June 30, 2022, two customers~~one customer accounted for approximately 11% and 10%, respectively, of the Company’s consolidated revenue. As of ~~June~~September 30, 2022, approximately ~~27%~~15% of the net accounts receivable balance, in aggregate, was due from ~~these two customers.~~this customer.

Note 12 — Income Taxes

Effective Tax Rate

The Company is a corporation and is subject to U.S. federal income tax. The Company uses an estimated annual effective tax rate for purposes of determining the income tax provision during interim reporting periods. In calculating the estimated annual effective tax rate, the Company considers forecasted annual pre-tax income and estimated permanent book versus tax differences. Adjustments to the effective tax rate and other income tax related estimates could occur during the year as information and assumptions change which could include, but are not limited to, changes to forecasted amounts, estimates of permanent book versus tax differences, and changes to tax laws and rates. The effective U.S. federal income tax rate ~~excluding the impact of discrete items,~~ applicable to the Company for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 was ~~23.8%~~20.0% and ~~29.4%~~11.6%, respectively. The Company is subject to the Texas Margin Tax, which requires tax payments at a maximum statutory effective rate of 0.75% on the taxable margin of each taxable entity that does business in Texas.

Tax Attributes

Historically, utilization of a portion of the Company's net operating loss carryforwards has been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986 (“Section 382”), as amended. The Company incurred an ownership change, triggering another Section 382 loss limitation, during the three months ended June 30, 2023. The Company is currently in the process of conducting an analysis to determine the full tax consequence of such limitation and does not expect this will have a material cash impact to taxes for the remainder of 2023.

~~A valuation allowance (“VA”)~~As the Company continues to experience increasing profits and no longer has ~~been recorded to reduce the Company’s net deferred tax assets to an amount~~a trailing 3-year cumulative taxable loss, we currently believe that it is more likely than not to ~~be realized. The VA is based upon the uncertainty of the realization of certain federal and state~~fully utilize all deferred tax assets ~~related to~~including those associated with the net operating loss ~~carryforwards and other tax attributes. The~~carry-forward. Accordingly, the Company ~~currently believes that it is reasonably possible to achieve~~released all valuation allowances previously recorded resulting in a three-year cumulative level of profitability within the next 12 months, and as early as the third quarter of 2023, which would enhance the ability to conclude that is it more likely than not that the deferred tax assets would be realized and support a release of a portion or substantially all of the VA. A release of the VA would result in the recognition of an increase in deferred tax assets and an incomediscrete tax benefit infor the period in which the release occurs, although the exact timing and amount of the release is subject to change based on numerous factors, including projections of future taxable income, which continues to be assessed based on available information each reporting period.ended September 30, 2023.

Other Tax Matters

Total income tax expense for the ~~six~~nine months ended ~~June~~September 30, 2023 and 2022 differed from amounts computed by applying the U.S. federal statutory tax rates to pre-tax income or loss primarily due to the release of the VA on deferred tax assets, the impact of permanently non-deductible expenses, state income taxes and certain discrete tax benefits recognized during the ~~six~~nine months ended ~~June~~September 30, 2023.

The Company is subject to the following material taxing jurisdictions: the United States and Texas. As of ~~June~~September 30, 2023, the Company has no current tax years under audit. The Company remains subject to examination for federal income taxes and state income taxes for tax years 2016 through 2022.

The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination. Therefore, as of ~~June~~September 30, 2023, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

In August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA 2022”) (Public Law Number 117-169) into law. The Company is still evaluating the impact of this legislation as it relates to the Employee Retention Credit.

Note 13 — Earnings ~~(loss)~~ per Share

Earnings or loss per share is based on the amount of net income or loss allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock. The numerator and denominator used to compute earnings or loss per share were as follows (in millions, except share and per share data):

Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
Income (loss) (numerator):
Basic:
Income (loss) attributable to Ranger Energy Services, Inc. $ 6.1 $ (0.4) $ 12.3 $ (6.1)
Net income (loss) attributable to Class A Common Stock $ 6.1 $ (0.4) $ 12.3 $ (6.1)
Diluted:
Income (loss) attributable to Ranger Energy Services, Inc. $ 6.1 $ (0.4) $ 12.3 $ (6.1)
Net income (loss) attributable to Class A Common Stock $ 6.1 $ (0.4) $ 12.3 $ (6.1)
Weighted average shares (denominator):
Weighted average number of shares - basic 24,840,569 23,581,466 24,890,178 21,041,300
Effect of share-based awards 347,554 — 358,848 —
Weighted average number of shares - diluted 25,188,123 23,581,466 25,249,026 21,041,300
Basic income (loss) per share $ 0.25 $ (0.02) $ 0.49 $ (0.29)
Diluted income (loss) per share $ 0.24 $ (0.02) $ 0.49 $ (0.29)


	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Income (numerator):
Basic:
Income attributable to Ranger Energy Services, Inc.	$	9.4	$	13.6	$	21.7	$	7.5
Net income attributable to Class A Common Stock	$	9.4	$	13.6	$	21.7	$	7.5

Diluted:
Income attributable to Ranger Energy Services, Inc.	$	9.4	$	13.6	$	21.7	$	7.5

Net income attributable to Class A Common Stock	$	9.4	$	13.6	$	21.7	$	7.5

Weighted average shares (denominator):
Weighted average number of shares - basic	24,500,607		24,845,517		24,758,890		22,323,308
Effect of share-based awards	386,668		338,550		390,525		314,149

Weighted average number of shares - diluted	24,887,275		25,184,067		25,149,415		22,637,457

Basic income per share	$	0.38	$	0.55	$	0.88	$	0.34
Diluted income per share	$	0.38	$	0.54	$	0.86	$	0.33

During the three and ~~six~~nine months ended ~~June~~September 30, 2022, the Company excluded ~~1.0~~0.1 million of equity-based awards in calculating diluted income per share, as the effect was anti-dilutive.

Note 14 — Commitments and Contingencies

Legal Matters

From time to time, the Company is involved in various legal matters arising in the normal course of business. The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its condensed consolidated financial position or results of operations.

Note 15 — Segment Reporting

The Company’s operations are located in the United States and organized into three reportable segments: High Specification Rigs, Wireline Services and Processing Solutions and Ancillary Services. The reportable segments comprise the structure used by the Chief Operating Decision Maker (“CODM”) to make key operating decisions and assess performance during the years presented in the accompanying Condensed Consolidated Financial Statements. The CODM evaluates the segments’ operating performance based on multiple measures including operating income, rig hours and stage counts. The tables below present the operating income measurement, as the Company believes this is most consistent with the principals used in measuring the Condensed Consolidated Financial Statements.

The following is a description of each operating segment:

High Specification Rigs. Provides ~~high-spec~~high specification well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production and pump down lines of business.

Processing Solutions and Ancillary Services. Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services include equipment rentals, plug and abandonment, logistics, ~~hauling,~~ processing solutions, as well as snubbing and coil tubing.

Other. The Company incurs costs, indicated as Other, that are not allocable to any of the operating segments or lines of business and include corporate general and administrative expenses as well as depreciation of office furniture and fixtures and other corporate assets.

Certain segment information for the ~~six~~three and nine months ended ~~June~~September 30, 2023 and 2022 is as follows (in millions):

High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total
Three Months Ended June 30, 2023
Revenue $ 77.6 $ 54.5 $ 31.1 $ — $ 163.2
Cost of services 62.0 48.8 25.5 — 136.3
Depreciation and amortization 4.1 2.9 1.4 0.3 8.7
Operating income (loss) 11.5 2.8 4.2 (7.1) 11.4
Net income (loss) $ 11.5 $ 2.8 $ 4.2 $ (12.4) $ 6.1
Capital expenditures $ 3.7 $ 3.2 $ 2.8 $ — $ 9.7
Six Months Ended June 30, 2023
Revenue $ 155.1 $ 104.4 $ 61.2 $ — $ 320.7
Cost of services 122.1 94.5 50.6 — 267.2
Depreciation and amortization 9.6 5.3 3.0 0.8 18.7
Operating income (loss) 23.4 4.6 7.6 (15.0) 20.6
Net income (loss) $ 23.4 $ 4.6 $ 7.6 $ (23.3) $ 12.3
Capital expenditures $ 5.8 $ 4.5 $ 7.1 $ — $ 17.4
High Specification Rigs Wireline Services Processing Solutions and Ancillary Services Other Total
Three Months Ended June 30, 2022
Revenue $ 76.0 $ 49.5 $ 28.1 $ — $ 153.6
Cost of services 61.8 45.2 23.0 — 130.0
Depreciation and amortization 8.1 2.8 — 0.5 11.4
Operating income (loss) 6.1 1.5 5.1 (14.9) (2.2)
Gain on bargain purchase $ — $ — $ — $ (2.8) $ (2.8)
Net income (loss) $ 6.1 $ 1.5 $ 5.1 $ (13.1) $ (0.4)
Capital expenditures $ 1.7 $ 0.7 $ 2.9 $ — $ 5.3
Six Months Ended June 30, 2022
Revenue $ 140.9 $ 88.1 $ 48.2 $ — $ 277.2
Cost of services 112.6 85.6 39.8 — 238.0
Depreciation and amortization 14.5 5.5 2.0 1.0 23.0
Operating income (loss) 13.8 (3.0) 6.4 (24.6) (7.4)
Gain on bargain purchase $ — $ — $ — $ (2.8) $ (2.8)
Net income (loss) $ 13.8 $ (3.0) $ 6.4 $ (23.3) $ (6.1)
Capital expenditures $ 2.9 $ 1.6 $ 3.2 $ — $ 7.7


	High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
	Three Months Ended September 30, 2023
Revenue	$	79.2	$	53.2	$	32.0	$	—	$	164.4
Cost of services	63.5		45.8		25.5		—		134.8

Depreciation and amortization	5.1		3.1		2.0		0.4		10.6


Operating income (loss)	10.6		4.3		4.5		(7.7)		11.7



Net income (loss)	$	10.6	$	4.3	$	4.5	$	(10.0)	$	9.4

Capital expenditures	$	5.6	$	9.2	$	2.4	$	—	$	17.2

	Nine Months Ended September 30, 2023
Revenue	$	234.3	$	157.6	$	93.2	$	—	$	485.1
Cost of services	185.6		140.3		76.1		—		402.0

Depreciation and amortization	14.7		8.4		5.0		1.2		29.3


Operating income (loss)	34.0		8.9		12.1		(22.7)		32.3



Net income (loss)	$	34.0	$	8.9	$	12.1	$	(33.3)	$	21.7

Capital expenditures	$	11.4	$	13.7	$	9.5	$	—	$	34.6


	High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
	Three Months Ended September 30, 2022
Revenue	$	79.7	$	60.6	$	36.7	$	—	$	177.0
Cost of services	62.7		49.2		26.2		—		138.1

Depreciation and amortization	6.3		2.8		1.3		0.4		10.8

Operating income (loss)	10.7		8.6		9.2		(10.5)		18.0



Net income (loss)	$	10.7	$	8.6	$	9.2	$	(14.9)	$	13.6

Capital expenditures	$	2.8	$	0.4	$	2.0	$	—	$	5.2

	Nine Months Ended September 30, 2022
Revenue	$	220.6	$	148.7	$	84.9	$	—	$	454.2
Cost of services	175.3		134.8		66.0		—		376.1

Depreciation and amortization	20.8		8.3		3.3		1.4		33.8
Operating income (loss)	24.5		5.6		15.6		(35.1)		10.6



Net income (loss)	$	24.5	$	5.6	$	15.6	$	(38.2)	$	7.5

Capital expenditures	$	5.7	$	2.0	$	5.2	$	—	$	12.9

Note 16 — Subsequent Events

The Company evaluated subsequent events and transactions that occurred after the balance sheet date ~~up to July 31, 2023.~~through the date the financial statements are issued. Based upon this review, the Company did not identify any other subsequent events that would have required adjustment or disclosure in the financial statements.

On ~~August 7,~~October 31, 2023, the Board of Directors declared a quarterly cash dividend of $0.05 per share payable ~~September 8,~~December 1, 2023 to common stockholders of record at the close of business on ~~August 18,~~November 13, 2023.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with the historical financial statements and related notes included in Part I, Item 1. Financial Statements of this Quarterly Report on Form 10-Q (the “Quarterly Report”). This discussion contains “forward-looking statements” reflecting our current expectations, estimates and assumptions concerning events and financial trends that may affect our future operating results or financial position. Actual results and the timing of events may differ materially from those contained in these forward-looking statements due to a number of factors. Factors that could cause or contribute to such differences include, but are not limited to, market prices for oil and natural gas, capital expenditures, economic and competitive conditions, regulatory changes and other uncertainties, as well as those factors discussed below and elsewhere in this report. Please read the Cautionary Statement Regarding Forward-Looking Statements. Also, please read the risk factors and other cautionary statements described under “Risk Factors” in this Quarterly Report and in our Annual Report filed on Form 10-K for the year ended December 31, 2022 (our “Annual Report”). We assume no obligation to update any of these forward-looking statements. Except as otherwise indicated or required by the context, all references in this Quarterly Report to the “Company,” “Ranger,” “we,” “us,” or “our” relate to Ranger Energy Services, Inc. (“Ranger, Inc.”) and its consolidated subsidiaries.

How We Evaluate Our Operations

Our service offerings consist of well completion support, workover, well maintenance, wireline, ~~fluid management,~~ other complementary services, as well as well installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

•High Specification Rigs. Provides ~~high-specification~~high specification well service rigs to facilitate operations throughout the lifecycle of a well.

•Wireline Services. Provides services necessary to bring and maintain a well on production and consists of our completion, production and pump down service lines.

•Processing Solutions and Ancillary Services. Provides complimentary services often utilized in conjunction with our High Specification Rigs and Wireline Services segments. These services primarily include equipment rentals, coil tubing, plug and abandonment, snubbing, and processing solutions.

•Other. Other represents costs not allocable to the reporting segments and includes corporate general and administrative expense and depreciation of corporate furniture and fixtures, amortization, impairments, debt retirements and other items similar in nature.

For additional financial information about our segments, please see “Item 1. Financial Information — Note 15 — Segment Reporting.”

Business Outlook

~~We continue to expect~~The outlook for our business ~~opportunities~~remains stable. Despite drilling and ~~financial results~~completion activity declines in the first three quarters of 2023, we have continued to show mild increases ~~to the extent~~in operating activity through redeployment of idled assets. Going forward, we anticipate the global economy ~~continues to slowly stabilize~~ and, ~~improve.~~commodity prices as a consequence, will show further stabilization and eventual improvement. OPEC+ production cuts have continued and are expected to ~~tighten~~keep commodity prices at a stable level through the ~~market, driving supply deficits in the second half~~remainder of ~~2023, which generally supports higher oil prices.~~2023. Furthermore, both EIA and OPEC+ isare projecting for oil demand to rise ~~by approximately 2.5 million barrels per day~~ in 2024 ~~an approximated 2.2% increase over 2.4 million barrels per day in 2023~~ driving continued investment and growth in the sector. Consolidation occurring at the Exploration and Production operator level within the energy industry is expected to impact U.S. onshore activity levels. The full extent of this impact is not yet known, but the Company expects that it may be varied and include favorable preference from larger organizations where the well-established processes and systems of Ranger are more valued over the longer term, while also potentially involving a temporary reduction in activity levels in the near term.

The Company also believes the current geopolitical ~~instability~~events will continue to have an impact on our ~~industry, specifically surrounding China as pandemic restrictions are lifted~~industry. Considering the rapidly evolving events and ~~uncertainty regarding Russia’s~~the interplay of supply and demand within oil ~~supply while under sanctions.~~

~~Given the evolving geographical events, there are many~~and gas commodities sector, numerous unknown factors ~~that~~ could materially impact our operations. These events have already, and are likely to continue, ~~to impact~~influencing commodity prices, causing volatility ~~which~~that could have a material effect on our earnings, cash flows, and financial condition. In the short-term, commodity price volatility is expected to continue and the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months.

Financial Metrics

How We Generate Revenue

Rig hours and stage counts, as it relates to our High Specification Rigs and Wireline Services segments, respectively, are important indicators of our activity levels and profitability. Rig hours represent the aggregate number of hours that our well service rigs actively worked, whereas stage counts represent the number of completed stages during the periods presented for

the completion service line within our Wireline Services segment. Generally, during the period our services are being provided, our customers are billed on an hourly basis for our ~~high-spec~~high specification rig services. As it relates to our wireline services, services are billed upon the completion of the well, on a monthly basis, or on a per job basis. The rates for which the customer is billed is generally predetermined based upon a contractual agreement.

Costs of Conducting Our Business

The principal costs associated with conducting our business are personnel, repairs and maintenance, general and administrative, and depreciation expense.

Cost of Services. The primary costs associated with our cost of services are related to personnel expenses, repairs and maintenance of our fixed assets and, additionally, as it relates to our Wireline Services segment, perforating and gun costs. A significant portion of these expenses are variable, and therefore typically managed based on industry conditions and demand for our services. Further, there is generally a correlation between our revenue generated and personnel and repairs and maintenance costs, which are dependent upon the operational activity.

Personnel costs associated with our operational employees represent the most significant cost of our business. A substantial portion of our labor costs is attributable to our field crews and is partly variable based on the requirements of specific customers. A key component of personnel costs relates to the ongoing training of our employees, which improves safety rates and reduces attrition.

General & Administrative. General and administrative expenses are corporate in nature and are included within Other. These costs include the majority of ~~centrally located~~centrally-located company management and administrative personnel and are not attributable to any of our lines of businesses nor reporting segments.

Operating Income or Loss

We analyze our operating income or loss by segment, which we have defined as revenue less cost of services and depreciation expense. We believe this is a key financial metric as it provides insight on profitability and operational performance based on the historical cost basis of our assets.

Adjusted EBITDA

We view Adjusted EBITDA, which is a non‑GAAP financial measure, as an important indicator of performance. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, ~~(benefit),~~ depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, gain or loss on disposal of assets, significant and unusual legal fees and settlements, and other non‑cash and certain other items that we do not view as indicative of our ongoing performance. See “—Results of Operations” and “—Note Regarding Non‑GAAP Financial Measure” for more information and reconciliations of net income (loss) to Adjusted EBITDA, the most directly comparable financial measure calculated and presented in accordance with GAAP.

2021

Results of Operations

Three Months Ended ~~June~~September 30, 2023 compared to Three Months Ended ~~June~~September 30, 2022

The following is an analysis of our operating results. See “—How We Evaluate Our Operations” for definitions of rig hours, stage counts and other analogous information, as well as key operating metrics.


		Three Months Ended									Three Months Ended
		June 30,				Variance					September 30,				Variance
		2023		2022		$		%			2023		2022		$		%
Revenue	Revenue									Revenue
High specification rigs	High specification rigs	$	77.6	$	76.0	$	1.6	2	%	High specification rigs	$	79.2	$	79.7	$	(0.5)	(1)	%
Wireline services	Wireline services	54.5		49.5		5.0		10	%	Wireline services	53.2		60.6		(7.4)		(12)	%
Processing solutions and ancillary services	Processing solutions and ancillary services	31.1		28.1		3.0		11	%	Processing solutions and ancillary services	32.0		36.7		(4.7)		(13)	%
Total revenue	Total revenue	163.2		153.6		9.6		6	%	Total revenue	164.4		177.0		(12.6)		(7)	%

Operating expenses	Operating expenses									Operating expenses
Cost of services (exclusive of depreciation and amortization):	Cost of services (exclusive of depreciation and amortization):									Cost of services (exclusive of depreciation and amortization):
High specification rigs	High specification rigs	62.0		61.8		0.2		—	%	High specification rigs	63.5		62.7		0.8		1	%
Wireline services	Wireline services	48.8		45.2		3.6		8	%	Wireline services	45.8		49.2		(3.4)		(7)	%
Processing solutions and ancillary services	Processing solutions and ancillary services	25.5		23.0		2.5		11	%	Processing solutions and ancillary services	25.5		26.2		(0.7)		(3)	%
Total cost of services	Total cost of services	136.3		130.0		6.3		5	%	Total cost of services	134.8		138.1		(3.3)		(2)	%
General and administrative	General and administrative	7.3		11.2		(3.9)		(35)	%	General and administrative	7.0		11.0		(4.0)		(36)	%
Depreciation and amortization	Depreciation and amortization	8.7		11.4		(2.7)		(24)	%	Depreciation and amortization	10.6		10.8		(0.2)		(2)	%
Impairment of fixed assets	Impairment of fixed assets	—		1.1		(1.1)		(100)	%	Impairment of fixed assets	0.4		0.2		0.2		100	%
(Gain) loss on sale of assets		(0.5)		2.1		(2.6)		(124)	%
Gain on sale of assets										Gain on sale of assets	(0.1)		(1.1)		1.0		(91)	%
Total operating expenses	Total operating expenses	151.8		155.8		(4.0)		(3)	%	Total operating expenses	152.7		159.0		(6.3)		(4)	%

Operating income (loss)		11.4		(2.2)		13.6		618	%
Operating income										Operating income	11.7		18.0		(6.3)		(35)	%

Other (income) expenses	Other (income) expenses									Other (income) expenses
Interest expense, net	Interest expense, net	0.9		1.8		(0.9)		(50)	%	Interest expense, net	0.7		1.8		(1.1)		(61)	%
Loss on debt retirement		2.4		—		2.4		100	%

Gain on bargain purchase, net of tax	Gain on bargain purchase, net of tax	—		(2.8)		2.8		(100)	%	Gain on bargain purchase, net of tax	—		(0.8)		0.8		(100)	%
Total other (income) expenses	Total other (income) expenses	3.3		(1.0)		4.3		(430)	%	Total other (income) expenses	0.7		1.0		(0.3)		(30)	%

Income (loss) before income tax expense (benefit)		8.1		(1.2)		9.3		775	%
Income tax expense (benefit)		2.0		(0.8)		2.8		350	%
Net income (loss)		$	6.1	$	(0.4)	$	6.5	1625	%
Income before income tax expense										Income before income tax expense	11.0		17.0		(6.0)		(35)	%
Income tax expense										Income tax expense	1.6		3.4		(1.8)		(53)	%
Net income										Net income	$	9.4	$	13.6	$	(4.2)	(31)	%

Revenue. Revenue for the three months ended ~~June~~September 30, 2023 ~~increased $9.6~~decreased $12.6 million, or 6%7%, to ~~$163.2~~$164.4 million from ~~$153.6~~$177.0 million for the three months ended ~~June~~September 30, 2022. The change in revenue by segment was as follows:

High Specification Rigs. High Specification Rig revenue for the three months ended ~~June~~September 30, 2023 ~~increased $1.6~~decreased $0.5 million, or 2%1%, to ~~$77.6~~$79.2 million from ~~$76.0~~$79.7 million for the three months ended ~~June~~September 30, 2022. The revenue ~~increase~~decrease is attributable to ~~improved efficiencies, as the average revenue per~~decreased total rig ~~hour increased 9%~~hours to ~~$687~~112,400 for the three months ended ~~June~~September 30, 2023 from ~~$632 for the three months ended June 30, 2022. Total rig hours decreased to 113,200 for the three months ended June 30, 2023 from 119,900~~123,000 for three months ended ~~June~~September 30, 2022 due to reduced rig activity in the South region offset ~~with~~by rig ~~developments~~activity increases in other ~~regions.~~regions and improved pricing, as the average revenue per rig hour increased 8% to $700 for the three months ended September 30, 2023 from $648 for the three months ended September 30, 2022.

Wireline Services. Wireline Services revenue for the three months ended ~~June~~September 30, 2023 ~~increased $5.0~~decreased $7.4 million, or ~~10%~~12%, to ~~$54.5~~$53.2 million from ~~$49.5~~$60.6 million for the three months ended ~~June~~September 30, 2022. The ~~increased wireline services~~decreased revenue was primarily attributable to ~~an increase~~a decrease in completion services revenue of ~~$2.3~~$6.5 million ~~due to improved pricing and the addition of standby charges to contracts, offset by an 8%~~where there was a 26% decrease in completed stage counts to ~~7,400~~6,800 for the three months ended ~~June~~September 30, 2023 from ~~8,000~~9,200 for the three months ended ~~June~~September 30, 2022. ~~Additional increased wireline services revenue was attributable to production services and pump down services of $1.5 million and $1.2 million, respectively.~~

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services revenue for the three months ended ~~June~~September 30, 2023 ~~increased $3.0~~decreased $4.7 million, or ~~11%~~13%, to ~~$31.1~~$32.0 million from ~~$28.1~~$36.7 million for the three months ended ~~June~~September 30, 2022. The decrease in revenue is primarily attributable to decreased activity in our rentals service, coil tubing service lines, and snubbing services, which amounted to decreased revenue of $2.3 million, $1.8 million, and $1.4 million, respectively. These activity declines were partially offset by increased revenues within plugging and abandonment services of $0.7 million.

2122

2022. The increase in processing solutions and ancillary services is primarily attributable to increased activity in our plugging and abandonment services and coil tubing service lines, which amounted to $2.9 million and $0.7 million, respectively.

Cost of services (exclusive of depreciation and amortization). Cost of services for the three months ended ~~June~~September 30, 2023 ~~increased $6.3~~decreased $3.3 million, or 5%2%, to ~~$136.3~~$134.8 million from ~~$130.0~~$138.1 million for the three months ended ~~June~~September 30, 2022. As a percentage of revenue, cost of services was ~~84%~~82% and ~~85%~~78% for the three months ended ~~June~~September 30, 2023 and 2022, respectively. The change in cost of services by segment was as follows:

High Specification Rigs. High Specification Rig cost of services for the three months ended ~~June~~September 30, 2023 increased ~~$0.2~~$0.8 million, to ~~$62.0~~$63.5 million from ~~$61.8~~$62.7 million for the three months ended ~~June~~September 30, 2022. Costs of services increased year over year primarily due to labor and other cost increases year over year due to inflationary pressures.

Wireline Services. Wireline Services cost of services for the three months ended ~~June~~September 30, 2023 ~~increased $3.6~~decreased $3.4 million, or 8%7%, to ~~$48.8~~$45.8 million from ~~$45.2~~$49.2 million for the three months ended ~~June~~September 30, 2022. Wireline Services cost of services as a percentage of revenue ~~decreased~~increased from ~~91%~~81% for the three months ended ~~June~~September 30, 2022 to ~~90%~~86% for the three months ended ~~June~~September 30, 2023 due to the ~~increase~~decreased activity levels. Increasing costs as a percent of revenue is due to a reduction in revenue attributed to increased utilization of assets. The overall increase in cost of services was primarily attributable to increased revenues and employee costs of $1.8 million and specifically employee medical costs of $0.9 million as well as increased maintenance costs of approximately $0.7 million.operating leverage.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services cost of services for the three months ended ~~June~~September 30, 2023 ~~increased $2.5~~decreased $0.7 million, or ~~11%~~3%, to $25.5 million from ~~$23.0~~$26.2 million for the three months ended ~~June~~September 30, 2022. The ~~increase~~decrease was primarily attributable to ~~increased~~decreased employee, fuel, and maintenance costs with the ~~upturn~~downturn in operational activity in our rental, coil tubing, and ~~plugging and abandonment~~snubbing services.

General & Administrative. General and administrative expenses for the three months ended ~~June~~September 30, 2023 decreased ~~$3.9~~$4.0 million, or ~~35%~~36%, to ~~$7.3~~$7.0 million from ~~$11.2~~$11.0 million for the three months ended ~~June~~September 30, 2022. The decrease in general and administrative expenses is primarily due to decreased in accounting, legal, and professional expenses related to the Basic acquisition for the three months ended September 30, 2022, coupled with decreased employee costs during the three months ended ~~June~~September 30, 2023.

Depreciation and Amortization. Depreciation and amortization for the three months ended ~~June~~September 30, 2023 decreased ~~$2.7~~$0.2 million, or ~~24%~~2%, to ~~$8.7~~$10.6 million from ~~$11.4~~$10.8 million for the three months ended ~~June~~September 30, 2022. The decrease was attributable to assets disposed of during three months ended September 30, 2023.

Impairment of Fixed Assets. Impairment of fixed assets for the three months ended September 30, 2023 increased $0.2 million, or 100%, to $0.4 million from $0.2 million for the three months ended September 30, 2022. The increase was attributable impairment recognized on a property during the three months ended September 30, 2023, which was greater than the impairment recognized on certain assets during the three months ended September 30, 2022.

Interest Expense, net. Interest expense, net for the three months ended ~~June~~September 30, 2023 decreased ~~$0.9~~$1.1 million, or ~~50%~~61%, to ~~$0.9~~$0.7 million from $1.8 million for the three months ended ~~June~~September 30, 2022. The decrease to net interest expense was attributable to the reduced ~~borrowings on our Revolving Credit Facility, M&E Term Loan Facility, Term Loan B Facility, and Secured Promissory Note.~~borrowings.

Income Tax ~~Expense (Benefit).~~Expense. Income tax expense for the three months ended ~~June~~September 30, 2023 ~~increased $2.8~~decreased $1.8 million, or ~~350%~~53%, to ~~a tax expense of $2.0~~$1.6 million from ~~a tax benefit of $0.8~~$3.4 million for the three months ended ~~June~~September 30, 2022. The ~~increase~~decrease in tax expense was attributable to the increase in net operating loss utilization in the current quarter, coupled with a decrease in net income.

Net Income. Net income ~~over~~for the three ~~consecutive quarters.~~months ended September 30, 2023 decreased $4.2 million, or 31%, to $9.4 million from $13.6 million for the three months ended September 30, 2022. The decrease in net income was primarily driven by reduced activity in wireline and processing and ancillary services segments.

2223

~~Six~~Nine Months Ended ~~June~~September 30, 2023 compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2022


		Six Months Ended									Nine Months Ended
		June 30,				Variance					September 30,				Variance
		2023		2022		$		%			2023		2022		$		%
Revenue	Revenue									Revenue
High specification rigs	High specification rigs	$	155.1	$	140.9	$	14.2	10	%	High specification rigs	$	234.3	$	220.6	$	13.7	6	%
Wireline services	Wireline services	104.4		88.1		16.3		19	%	Wireline services	157.6		148.7		8.9		6	%
Processing solutions and ancillary services	Processing solutions and ancillary services	61.2		48.2		13.0		27	%	Processing solutions and ancillary services	93.2		84.9		8.3		10	%
Total revenue	Total revenue	320.7		277.2		43.5		16	%	Total revenue	485.1		454.2		30.9		7	%

Operating expenses	Operating expenses									Operating expenses
Cost of services (exclusive of depreciation and amortization):	Cost of services (exclusive of depreciation and amortization):									Cost of services (exclusive of depreciation and amortization):
High specification rigs	High specification rigs	122.1		112.6		9.5		8	%	High specification rigs	185.6		175.3		10.3		6	%
Wireline services	Wireline services	94.5		85.6		8.9		10	%	Wireline services	140.3		134.8		5.5		4	%
Processing solutions and ancillary services	Processing solutions and ancillary services	50.6		39.8		10.8		27	%	Processing solutions and ancillary services	76.1		66.0		10.1		15	%
Total cost of services	Total cost of services	267.2		238.0		29.2		12	%	Total cost of services	402.0		376.1		25.9		7	%
General and administrative	General and administrative	15.7		21.4		(5.7)		(27)	%	General and administrative	22.7		32.4		(9.7)		(30)	%
Depreciation and amortization	Depreciation and amortization	18.7		23.0		(4.3)		(19)	%	Depreciation and amortization	29.3		33.8		(4.5)		(13)	%
Impairment of fixed assets	Impairment of fixed assets	—		1.1		(1.1)		100	%	Impairment of fixed assets	0.4		1.3		(0.9)		(69)	%
(Gain) loss on sale of assets		(1.5)		1.1		(2.6)		(236)	%
Gain on sale of assets										Gain on sale of assets	(1.6)		—		(1.6)		100	%
Total operating expenses	Total operating expenses	300.1		284.6		15.5		5	%	Total operating expenses	452.8		443.6		9.2		2	%

Operating income (loss)		20.6		(7.4)		28.0		378	%
Operating income										Operating income	32.3		10.6		21.7		(205)	%

Other (income) expenses	Other (income) expenses									Other (income) expenses
Interest expense, net	Interest expense, net	2.1		3.9		(1.8)		(46)	%	Interest expense, net	2.8		5.7		(2.9)		(51)	%
Loss on debt retirement	Loss on debt retirement	2.4		—		2.4		100	%	Loss on debt retirement	2.4		—		2.4		(100)	%
Gain on bargain purchase, net of tax	Gain on bargain purchase, net of tax	—		(2.8)		2.8		(100)	%	Gain on bargain purchase, net of tax	—		(3.6)		3.6		(100)	%
Total other (income) expenses	Total other (income) expenses	4.5		1.1		3.4		309	%	Total other (income) expenses	5.2		2.1		3.1		148	%

Income (loss) before income tax expense (benefit)		16.1		(8.5)		24.6		289	%
Income tax expense (benefit)		3.8		(2.4)		6.2		258	%
Net income (loss)		$	12.3	$	(6.1)	$	18.4	302	%
Income before income tax expense										Income before income tax expense	27.1		8.5		18.6		219	%
Income tax expense										Income tax expense	5.4		1.0		4.4		440	%
Net income										Net income	$	21.7	$	7.5	$	14.2	189	%

Revenue. Revenue for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$43.5~~$30.9 million, or ~~16%~~7%, to ~~$320.7~~$485.1 million from ~~$277.2~~$454.2 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The change in revenue by segment was as follows:

High Specification Rigs. High Specification Rig revenue for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$14.2~~$13.7 million, or ~~10%~~6%, to ~~$155.1~~$234.3 million from ~~$140.9~~$220.6 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increase in rig services revenue included an increase in the average revenue per rig hour by ~~14%~~12% to ~~$688~~$693 from ~~$606~~$621 for the ~~six~~nine months ended ~~June~~September 30, 2022, offset by a 3%5% decrease in total rig hours to ~~225,700~~338,100 for the ~~six~~nine months ended ~~June~~September 30, 2023 from ~~232,400~~355,400 for the ~~six~~nine months ended ~~June~~September 30, 2022. Revenue improvement was driven by pricing improvements year over year offset by a decrease in activity levels during 2023 due to the redeployment of rigs between customers and regions.

Wireline Services. Wireline Services revenue for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$16.3~~$8.9 million, or ~~19%~~6%, to ~~$104.4~~$157.6 million from ~~$88.1~~$148.7 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increased wireline services revenue was primarily attributable to pricing improvements in the completion service lines totaling $5.2 million that more than offset a 10% decrease in completed stage counts to 13,800 for the six months ended June 30, 2023 from 15,400 for the six months ended June 30, 2022. Additional increasedincrease wireline services revenue was attributable to production and pump down services ~~totaling $6.9~~accounting for $5.8 million and $4.5 million, respectively, and related to both increased pricing and utilization of assets. This is offset by decreased wireline services revenue within the completion service line totaling $1.4 million coupled with a 16% decrease in completed stage counts to 20,600 for the nine months ended September 30, 2023 from 24,600 for the nine months ended September 30, 2022.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services revenue for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$13.0~~$8.3 million, or ~~27%~~10%, to ~~$61.2~~$93.2 million from ~~$48.2~~$84.9 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increase in processing solutions and ancillary services revenue is attributable to ~~a $6.0 million increase in our coil tubing~~increases of

2324

~~service line, a $4.9~~$5.6 million in our plugging and abandonment service lines, ~~and a $1.1~~$4.2 million ~~increase~~ in our ~~equipment rentals~~coil tubing service line, and $1.0 million in our logistics services.

Cost of services (exclusive of depreciation and amortization). Cost of services for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$29.2~~$25.9 million, or ~~12%~~7%, to ~~$267.2~~$402.0 million from ~~$238.0~~$376.1 million for the ~~six~~nine months ended ~~June~~September 30, 2022. As a percentage of revenue, cost of services was 83% ~~and 86%~~ for both the ~~six~~nine months ended ~~June~~September 30, 2023 and ~~2022, respectively.~~2022. The change in cost of services by segment was as follows:

High Specification Rigs. High Specification Rig cost of services for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$9.5~~$10.3 million, or 8%6%, to ~~$122.1~~$185.6 million from ~~$112.6~~$175.3 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increase was primarily attributable to an increase in variable expenses, ~~associated with the increased activity,~~ most significant of which is employee-related labor costs and repair and maintenance accounting for of ~~$9.1~~$7.1 million and ~~$1.3~~$1.1 million, respectively.

Wireline Services. Wireline Services cost of services for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$8.9~~$5.5 million, or ~~10%~~4%, to ~~$94.5~~$140.3 million from ~~$85.6~~$134.8 million for the ~~six~~nine months ended ~~June~~September 30, 2022. Increase in costs from the production and pump down service lines accounted for approximately ~~$5.6~~$6.2 million and ~~$2.4~~$3.4 million, respectively, of the segment cost of services increase. These increases are offset by a decrease in costs from the completion services lines by approximately $4.1 million.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services cost of services for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$10.8~~$10.1 million, or ~~27%~~15%, to ~~$50.6~~$76.1 million from ~~$39.8~~$66.0 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The increase was primarily attributable to increased employee labor costs and other costs associated with higher operational activity, which amounted to ~~$4.3~~$4.0 million and ~~$4.6~~$4.9 million, respectively.

General & Administrative. General and administrative expenses for the ~~six~~nine months ended ~~June~~September 30, 2023 decreased ~~$5.7~~$9.7 million, or ~~27%~~30%, to ~~$15.7~~$22.7 million from ~~$21.4~~$32.4 million. The decrease in general and administrative expenses is primarily due to higher compensation costs in the prior year, coupled with accounting, legal, and professional fees and transactional costs incurred during the ~~six~~nine months ended ~~June~~September 30, 2022 both largely related to the Basic acquisition.

Depreciation and Amortization. Depreciation and amortization for the ~~six~~nine months ended ~~June~~September 30, 2023 decreased ~~$4.3~~$4.5 million, or ~~19%~~13%, to ~~$18.7~~$29.3 million from ~~$23.0~~$33.8 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The decrease was attributable to assets disposed of during 2022.

Impairment of Fixed Assets. Impairment of fixed assets for the nine months ended September 30, 2023 decreased $0.9 million, or 69%, to $0.4 million from $1.3 million for the nine months ended September 30, 2022. The decrease was attributable impairment recognized on a property during the nine months ended September 30, 2023, which was less than the impairment recognized on certain assets during the nine months ended September 30, 2022.

Interest Expense, net. Interest expense, net for the ~~six~~nine months ended ~~June~~September 30, 2023 decreased ~~$1.8~~$2.9 million, or ~~46%~~51%, to ~~$2.1~~$2.8 million from ~~$3.9~~$5.7 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The decrease to net interest expense was attributable to the decreased levels of borrowings year over year.

Income Tax Expense. Income tax expense for the nine months ended September 30, 2023 increased $4.4 million, or 440%, to $5.4 million from $1.0 million for the nine months ended September 30, 2022. The increase in tax expense was attributable to the increase in income from the prior year.

Net Income. Net income for the nine months ended September 30, 2023 increased $14.2 million, or 189%, to $21.7 million from $7.5 million for the nine months ended September 30, 2022. The increase in net income was primarily driven by an increase in operating activity and pricing improvements across high specification rigs and wireline services segments.

Note Regarding Non-GAAP Financial Measure

Adjusted EBITDA is not a financial measure determined in accordance with U.S. GAAP. We define Adjusted EBITDA as net income or loss before net interest expense, income tax expense, ~~(benefit),~~ depreciation and amortization, equity-based compensation, gain or loss on disposal of assets, legal fees and settlements, and other non-cash or certain other items that we do not view as indicative of our ongoing performance.

We believe Adjusted EBITDA is a useful performance measure because it allows for an effective evaluation of our operating performance when compared to our peers, without regard to our financing methods or capital structure. We exclude the items listed above from net income (loss) in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net income (loss) determined in accordance with U.S. GAAP. Certain items excluded from Adjusted EBITDA are significant components in understanding and assessing a company’s financial performance, such as a company’s cost of capital and tax structure, as well as the historic costs of depreciable assets, none of which are reflected in Adjusted EBITDA. Our presentation of Adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of net income (loss) to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with U.S. GAAP.

2426

Three Months Ended ~~June~~September 30, 2023 compared to Three Months Ended ~~June~~September 30, 2022

The following is an analysis of our Adjusted EBITDA. See “Item 1. Financial Information—Note 15—Segment Reporting” and “—Results of Operations” for further details (in millions).


		High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total			High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
		Three Months Ended June 30, 2023											Three Months Ended September 30, 2023
Net income (loss)	Net income (loss)	$	11.5	$	2.8	$	4.2	$	(12.4)	$	6.1	Net income (loss)	$	10.6	$	4.3	$	4.5	$	(10.0)	$	9.4
Interest expense, net	Interest expense, net	—		—		—		0.9		0.9		Interest expense, net	—		—		—		0.7		0.7
Income tax expense	Income tax expense	—		—		—		2.0		2.0		Income tax expense	—		—		—		1.6		1.6
Depreciation and amortization	Depreciation and amortization	4.1		2.9		1.4		0.3		8.7		Depreciation and amortization	5.1		3.1		2.0		0.4		10.6
EBITDA	EBITDA	15.6		5.7		5.6		(9.2)		17.7		EBITDA	15.7		7.4		6.5		(7.3)		22.3
Impairment of fixed assets												Impairment of fixed assets	—		—		—		0.4		0.4
Equity based compensation												Equity based compensation	—		—		—		1.3		1.3

Equity based compensation		—		—		—		1.2		1.2
Loss on retirement of debt		—		—		—		2.4		2.4
Gain on disposal of property and equipment	Gain on disposal of property and equipment	—		—		—		(0.5)		(0.5)		Gain on disposal of property and equipment	—		—		—		(0.1)		(0.1)

Severance and reorganization costs		—		—		—		0.2		0.2

Acquisition related costs	Acquisition related costs	—		—		—		0.9		0.9		Acquisition related costs	—		—		—		0.1		0.1

Adjusted EBITDA	Adjusted EBITDA	$	15.6	$	5.7	$	5.6	$	(5.0)	$	21.9	Adjusted EBITDA	$	15.7	$	7.4	$	6.5	$	(5.6)	$	24.0


		High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total			High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
		Three Months Ended June 30, 2022											Three Months Ended September 30, 2022
Net income (loss)	Net income (loss)	$	6.1	$	1.5	$	5.1	$	(13.1)	$	(0.4)	Net income (loss)	$	10.7	$	8.6	$	9.2	$	(14.9)	$	13.6
Interest expense, net	Interest expense, net	—		—		—		1.8		1.8		Interest expense, net	—		—		—		1.8		1.8
Income tax benefit		—		—		—		(0.8)		(0.8)
Income tax expense												Income tax expense	—		—		—		3.4		3.4
Depreciation and amortization	Depreciation and amortization	8.1		2.8		—		0.5		11.4		Depreciation and amortization	6.3		2.8		1.3		0.4		10.8
EBITDA	EBITDA	14.2		4.3		5.1		(11.6)		12.0		EBITDA	17.0		11.4		10.5		(9.3)		29.6
Impairment of fixed assets	Impairment of fixed assets	—		—		—		1.1		1.1		Impairment of fixed assets	—		—		—		0.2		0.2
Equity based compensation	Equity based compensation	—		—		—		0.9		0.9		Equity based compensation	—		—		—		1.1		1.1

Gain on disposal of property and equipment	Gain on disposal of property and equipment	—		—		—		2.1		2.1		Gain on disposal of property and equipment	—		—		—		(1.1)		(1.1)
Bargain purchase gain, net of tax	Bargain purchase gain, net of tax	—		—		—		(2.8)		(2.8)		Bargain purchase gain, net of tax	—		—		—		(0.8)		(0.8)
Severance and reorganization costs	Severance and reorganization costs	—		—		—		0.5		0.5		Severance and reorganization costs	—		—		—		1.1		1.1
Acquisition related costs		—		—		—		3.3		3.3

Legal fees and settlements	Legal fees and settlements	—		—		—		0.9		0.9		Legal fees and settlements	—		—		—		0.2		0.2
Adjusted EBITDA	Adjusted EBITDA	$	14.2	$	4.3	$	5.1	$	(5.6)	$	18.0	Adjusted EBITDA	$	17.0	$	11.4	$	10.5	$	(8.6)	$	30.3

2527


		High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total			High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
		Variance ($)											Variance ($)
Net income (loss)	Net income (loss)	$	5.4	$	1.3	$	(0.9)	$	0.7	$	6.5	Net income (loss)	$	(0.1)	$	(4.3)	$	(4.7)	$	4.9	$	(4.2)
Interest expense, net	Interest expense, net	—		—		—		(0.9)		(0.9)		Interest expense, net	—		—		—		(1.1)		(1.1)
Income tax expense (benefit)		—		—		—		2.8		2.8
Income tax expense												Income tax expense	—		—		—		(1.8)		(1.8)
Depreciation and amortization	Depreciation and amortization	(4.0)		0.1		1.4		(0.2)		(2.7)		Depreciation and amortization	(1.2)		0.3		0.7		—		(0.2)
EBITDA	EBITDA	1.4		1.4		0.5		2.4		5.7		EBITDA	(1.3)		(4.0)		(4.0)		2.0		(7.3)
Impairment of fixed assets	Impairment of fixed assets	—		—		—		(1.1)		(1.1)		Impairment of fixed assets	—		—		—		0.2		0.2
Equity based compensation	Equity based compensation	—		—		—		0.3		0.3		Equity based compensation	—		—		—		0.2		0.2
Loss on retirement of debt		—		—		—		2.4		2.4

Gain on disposal of property and equipment	Gain on disposal of property and equipment	—		—		—		(2.6)		(2.6)		Gain on disposal of property and equipment	—		—		—		1.0		1.0
Bargain purchase gain, net of tax	Bargain purchase gain, net of tax	—		—		—		2.8		2.8		Bargain purchase gain, net of tax	—		—		—		0.8		0.8
Severance and reorganization costs	Severance and reorganization costs	—		—		—		(0.3)		(0.3)		Severance and reorganization costs	—		—		—		(1.1)		(1.1)
Acquisition related costs	Acquisition related costs	—		—		—		(2.4)		(2.4)		Acquisition related costs	—		—		—		0.1		0.1
Legal fees and settlements	Legal fees and settlements	—		—		—		(0.9)		(0.9)		Legal fees and settlements	—		—		—		(0.2)		(0.2)
Adjusted EBITDA	Adjusted EBITDA	$	1.4	$	1.4	$	0.5	$	0.6	$	3.9	Adjusted EBITDA	$	(1.3)	$	(4.0)	$	(4.0)	$	3.0	$	(6.3)

Adjusted EBITDA for the three months ended ~~June~~September 30, 2023 ~~increased $3.9~~decreased $6.3 million to ~~$21.9~~$24.0 million from ~~$18.0~~$30.3 million for the three months ended ~~June~~September 30, 2022. The change by segment was as follows:

High Specification Rigs. High Specification Rigs Adjusted EBITDA for the three months ended ~~June~~September 30, 2023 ~~increased $1.4~~decreased $1.3 million to ~~$15.6~~$15.7 million from ~~$14.2~~$17.0 million for the three months ended ~~June~~September 30, 2022, due to ~~increased~~decreased revenue of ~~$1.6~~$0.5 million ~~partially offset by a corresponding~~as well as an increase in cost of services of ~~$0.2 million.~~$0.8 million driven by inflationary pressures year over year and gaps in rig scheduling during the three months ended September 30, 2023.

Wireline Services. Wireline Services Adjusted EBITDA for the three months ended ~~June~~September 30, 2023 ~~increased $1.4~~decreased $4.0 million to ~~$5.7~~$7.4 million from ~~a loss of $4.3~~$11.4 million for the three months ended ~~June~~September 30, 2022, due to ~~increased~~decreased revenue of ~~$5.0~~$7.4 million, partially offset by a corresponding ~~increase~~decrease in cost of services of ~~$3.6~~$3.4 million.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services Adjusted EBITDA for the three months ended ~~June~~September 30, 2023 ~~increased $0.5~~decreased $4.0 million to ~~$5.6~~$6.5 million from ~~$5.1~~$10.5 million for the three months ended ~~June~~September 30, 2022, due to ~~increased~~decreased revenue of ~~$3.0~~$4.7 million, partially offset by a corresponding ~~increase~~decrease in cost of services of ~~$2.5~~$0.7 million.

Other. Other Adjusted EBITDA for the three months ended ~~June~~September 30, 2023 improved ~~$0.6~~$3.0 million to a loss of ~~$5.0~~$5.6 million from a loss of ~~$5.6~~$8.6 million for the three months ended ~~June~~September 30, ~~2022.~~2022 due to lower general and administrative costs year over year. The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services.

2628

~~Six~~Nine Months Ended ~~June~~September 30, 2023 compared to ~~Six~~Nine Months Ended ~~June~~September 30, 2022

The following is an analysis of our Adjusted EBITDA. See “Item 1. Financial Information—Note 15—Segment Reporting” and “—Results of Operations” for further details (in millions).


			High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total				High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
		TA	Six Months Ended June 30, 2023											TA	Nine Months Ended September 30, 2023
Net income (loss)	Net income (loss)		$	23.4	$	4.6	$	7.6	$	(23.3)	$	12.3	Net income (loss)		$	34.0	$	8.9	$	12.1	$	(33.3)	$	21.7
Interest expense, net	Interest expense, net		—		—		—		2.1		2.1		Interest expense, net		—		—		—		2.8		2.8
Income tax expense	Income tax expense		—		—		—		3.8		3.8		Income tax expense		—		—		—		5.4		5.4
Depreciation and amortization	Depreciation and amortization		9.6		5.3		3.0		0.8		18.7		Depreciation and amortization		14.7		8.4		5.0		1.2		29.3
EBITDA	EBITDA		33.0		9.9		10.6		(16.6)		36.9		EBITDA		48.7		17.3		17.1		(23.9)		59.2

Impairment of fixed assets													Impairment of fixed assets		—		—		—		0.4		0.4
Equity based compensation	Equity based compensation		—		—		—		2.3		2.3		Equity based compensation		—		—		—		3.6		3.6
Loss on retirement of debt	Loss on retirement of debt		—		—		—		2.4		2.4		Loss on retirement of debt		—		—		—		2.4		2.4
Gain on disposal of property and equipment	Gain on disposal of property and equipment		—		—		—		(1.5)		(1.5)		Gain on disposal of property and equipment		—		—		—		(1.6)		(1.6)

Severance and reorganization costs	Severance and reorganization costs		—		—		—		0.4		0.4		Severance and reorganization costs		—		—		—		0.4		0.4
Acquisition related costs	Acquisition related costs		—		—		—		1.5		1.5		Acquisition related costs		—		—		—		1.6		1.6

Adjusted EBITDA	Adjusted EBITDA		$	33.0	$	9.9	$	10.6	$	(11.5)	$	42.0	Adjusted EBITDA		$	48.7	$	17.3	$	17.1	$	(17.1)	$	66.0


		High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total			High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other			Total
		Six Months Ended June 30, 2022											Nine Months Ended September 30, 2022
Net income (loss)	Net income (loss)	$	13.8	$	(3.0)	$	6.4	$	(23.3)	$	(6.1)	Net income (loss)	$	24.5	$	5.6	$	15.6	$	(38.2)		$	7.5
Interest expense, net	Interest expense, net	—		—		—		3.9		3.9		Interest expense, net	—		—		—		5.7			5.7
Income tax benefit		—		—		—		(2.4)		(2.4)
Income tax expense												Income tax expense	—		—		—		1.0			1.0
Depreciation and amortization	Depreciation and amortization	14.5		5.5		2.0		1.0		23.0		Depreciation and amortization	20.8		8.3		3.3		1.4			33.8
EBITDA	EBITDA	28.3		2.5		8.4		(20.8)		18.4		EBITDA	45.3		13.9		18.9		(30.1)			48.0
Impairment of fixed assets	Impairment of fixed assets	—		—		—		1.1		1.1		Impairment of fixed assets	—		—		—		1.3			1.3
Equity based compensation	Equity based compensation	—		—		—		1.7		1.7		Equity based compensation	—		—		—		2.8			2.8

Gain on disposal of property and equipment		—		—		—		1.1		1.1

Bargain purchase gain, net of tax	Bargain purchase gain, net of tax	—		—		—		(2.8)		(2.8)		Bargain purchase gain, net of tax	—		—		—		(3.6)		(3.6)	(3.6)
Severance and reorganization costs	Severance and reorganization costs	—		—		—		0.5		0.5		Severance and reorganization costs	—		—		—		1.6			1.6
Acquisition related costs	Acquisition related costs	—		—		—		6.5		6.5		Acquisition related costs	—		—		—		6.5			6.5
Legal fees and settlements	Legal fees and settlements	—		—		—		1.1		1.1		Legal fees and settlements	—		—		—		1.3			1.3
Adjusted EBITDA	Adjusted EBITDA	$	28.3	$	2.5	$	8.4	$	(11.6)	$	27.6	Adjusted EBITDA	$	45.3	$	13.9	$	18.9	$	(20.2)		$	57.9

2729


		High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total			High Specification Rigs		Wireline Services		Processing Solutions and Ancillary Services		Other		Total
		Variance ($)											Variance ($)
Net income (loss)	Net income (loss)	$	9.6	$	7.6	$	1.2	$	—	$	18.4	Net income (loss)	$	9.5	$	3.3	$	(3.5)	$	4.9	$	14.2
Interest expense, net	Interest expense, net	—		—		—		(1.8)		(1.8)		Interest expense, net	—		—		—		(2.9)		(2.9)
Income tax expense (benefit)		—		—		—		6.2		6.2
Income tax expense												Income tax expense	—		—		—		4.4		4.4
Depreciation and amortization	Depreciation and amortization	(4.9)		(0.2)		1.0		(0.2)		(4.3)		Depreciation and amortization	(6.1)		0.1		1.7		(0.2)		(4.5)
EBITDA	EBITDA	4.7		7.4		2.2		4.2		18.5		EBITDA	3.4		3.4		(1.8)		6.2		11.2
Impairment of fixed assets	Impairment of fixed assets	—		—		—		(1.1)		(1.1)		Impairment of fixed assets	—		—		—		(0.9)		(0.9)
Equity based compensation	Equity based compensation	—		—		—		0.6		0.6		Equity based compensation	—		—		—		0.8		0.8
Loss on retirement of debt	Loss on retirement of debt	—		—		—		2.4		2.4		Loss on retirement of debt	—		—		—		2.4		2.4
Gain on disposal of property and equipment	Gain on disposal of property and equipment	—		—		—		(2.6)		(2.6)		Gain on disposal of property and equipment	—		—		—		(1.6)		(1.6)
Bargain purchase gain, net of tax	Bargain purchase gain, net of tax	—		—		—		2.8		2.8		Bargain purchase gain, net of tax	—		—		—		3.6		3.6
Severance and reorganization costs	Severance and reorganization costs	—		—		—		(0.1)		(0.1)		Severance and reorganization costs	—		—		—		(1.2)		(1.2)
Acquisition related costs	Acquisition related costs	—		—		—		(5.0)		(5.0)		Acquisition related costs	—		—		—		(4.9)		(4.9)
Legal fees and settlements	Legal fees and settlements	—		—		—		(1.1)		(1.1)		Legal fees and settlements	—		—		—		(1.3)		(1.3)
Adjusted EBITDA	Adjusted EBITDA	$	4.7	$	7.4	$	2.2	$	0.1	$	14.4	Adjusted EBITDA	$	3.4	$	3.4	$	(1.8)	$	3.1	$	8.1

Adjusted EBITDA for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$14.4~~$8.1 million to ~~$42.0~~$66.0 million from ~~$27.6~~$57.9 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The change by segment was as follows:

High Specification Rigs. High Specification Rigs Adjusted EBITDA for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$4.7~~$3.4 million to ~~$33.0~~$48.7 million from ~~$28.3~~$45.3 million for the ~~six~~nine months ended ~~June~~September 30, 2022, primarily due to increased revenue of ~~$14.2~~$13.7 million, partially offset by a corresponding increase in cost of services of ~~$9.5~~$10.3 million.

Wireline Services. Wireline Services Adjusted EBITDA for the ~~six~~nine months ended ~~June~~September 30, 2023 increased ~~$7.4~~$3.4 million to ~~$9.9~~$17.3 million from ~~$2.5~~$13.9 million for the ~~six~~nine months ended ~~June~~September 30, 2022, primarily due to increased revenue of ~~$16.3~~$8.9 million, partially offset by an increase in cost of services of ~~$8.9~~$5.5 million.

Processing Solutions and Ancillary Services. Processing Solutions and Ancillary Services Adjusted EBITDA for the ~~six~~nine months ended ~~June~~September 30, 2023 ~~increased $2.2~~decreased $1.8 million to ~~$10.6~~$17.1 million from ~~$8.4~~$18.9 million for the ~~six~~nine months ended ~~June~~September 30, 2022, primarily due to ~~increased revenue of $13.0 million, partially offset by~~ an increase in cost of services of ~~$10.8~~$10.1 million, partially offset by increased revenue of $8.3 million.

Other. Other Adjusted EBITDA for the ~~six~~nine months ended ~~June~~September 30, 2023 ~~decreased $0.1~~increased $3.1 million to a loss of ~~$11.5~~$17.1 million from a loss of ~~$11.6~~$20.2 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The balances included in Other reflect other general and administrative costs, which are not directly attributable to High Specification Rigs, Wireline Services or Processing Solutions and Ancillary Services.

Liquidity and Capital Resources

Overview

We require capital to fund ongoing operations, including maintenance expenditures on our existing fleet and equipment, organic growth initiatives, investments and acquisitions. Our primary sources of liquidity have historically been cash generated from operations and borrowings under our credit facilities. As of ~~June~~September 30, 2023, we had total liquidity of ~~$69.1~~$69.9 million, consisting of ~~$6.4~~$8.2 million of cash on hand and availability under our Wells Fargo Revolving Credit Facility of ~~$62.7~~$61.7 million.

~~As of June 30, 2023, our borrowing base under~~ Under the Wells Fargo Revolving Credit Facility, the total loan capacity was ~~$64.3~~$75.0 million, ~~compared~~net of $10.1 million in borrowings and $3.2 million of Letters of Credit open under the facility. This compares to the Company’s available borrowings under the EBC Revolving Credit Facility of ~~$57.1~~$57.0 million and $61.0 million as of ~~June~~September 30, 2022 and December 31, 2022, respectively. We strive to maintain financial flexibility and proactively monitor potential capital sources to meet our investment and target liquidity requirements that permit us to manage the cyclicality associated with our business. We currently expect to have sufficient funds to meet the Company’s short and long term liquidity requirements and comply with our covenants of our debt agreements. For further details, see “— ~~Our~~ Debt Agreements.”

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Cash Flows

The following table presents our cash flows for the periods indicated:


		Six Months Ended June 30,				Change					Nine Months Ended September 30,				Change
		2023		2022		$		%			2023		2022		$		%
		(in millions)									(in millions)
Net cash provided by operating activities	Net cash provided by operating activities	$	40.9	$	7.8	$	33.1	424	%	Net cash provided by operating activities	$	53.1	$	18.5	$	34.6	187	%
Net cash provided by (used in) investing activities	Net cash provided by (used in) investing activities	(8.2)		8.2		(16.4)		(200)	%	Net cash provided by (used in) investing activities	(23.0)		12.5		(35.5)		(284)	%
Net cash used in financing activities	Net cash used in financing activities	(30.0)		(11.5)		(18.5)		(161)	%	Net cash used in financing activities	(25.6)		(26.4)		0.8		3	%
Net change in cash	Net change in cash	$	2.7	$	4.5	$	(1.8)	(40)	%	Net change in cash	$	4.5	$	4.6	$	(0.1)	(2)	%

Operating Activities

Net cash from operating activities increased ~~$33.1~~$34.6 million to cash provided of ~~$40.9~~$53.1 million for ~~six~~nine months ended ~~June~~September 30, 2023 compared to ~~$7.8~~cash provided of $18.5 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The change in cash flows from operating activities is primarily attributable to an increase in operating income for the ~~six~~nine months ended ~~June~~September 30, 2023 compared to the ~~six~~nine months ended ~~June~~September 30, 2022 and the building of working capital in the prior year period due to the absorption of the business associated with the Basic acquisition. The use of working capital cash decreased ~~$42.3~~$17.2 million to ~~working capital provided of $21.4~~$9.4 million for the ~~six~~nine months ended ~~June~~September 30, 2023, compared to ~~working capital used of $20.9~~$26.6 million for the ~~six~~nine months ended ~~June~~September 30, 2022 due to the aforementioned Basic ~~acquisition.~~acquisition working capital.

Investing Activities

Net cash from investing activities decreased ~~$16.4~~$35.5 million to cash used of ~~$8.2~~$23.0 million for ~~six~~nine months ended ~~June~~September 30, 2023 compared to cash provided of ~~$8.2~~$12.5 million for the ~~six~~nine months ended ~~June~~September 30, 2022. The change in cash flows from investing activities is largely attributable to the significant asset disposals ~~related to assets acquired from~~occurring after the Basic ~~that took place~~asset acquisition during the ~~six~~nine months ended ~~June~~September 30, ~~2022.~~2022, coupled with acquisition of certain fixed assets from Pegaso for consideration of $7.3 million during the three months ended September 30, 2023.

Financing Activities

Net cash from financing activities ~~decreased $18.5~~increased $0.8 million from cash used of ~~$11.5~~$26.4 million for the ~~six~~nine months ended ~~June~~September 30, 2022 to cash used of ~~$30.0~~$25.6 million for the ~~six~~nine months ended ~~June~~September 30, 2023. The ~~change~~Company centralized debt and repaid the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note with borrowings from the new Wells Fargo Revolving Credit Facility (see Item 1. Financial Information— Note 9 — Debt). The repayment along with a decrease in cash flows from financing activities is primarily attributable to the increased ability to pay down debt in 2023 with proceeds from operating activities.

Supplemental Disclosures

During the ~~six~~nine months ended ~~June~~September 30, 2023, the Company added fixed assets of ~~$3.4~~$5.6 million and $1.1 million primarily related to finance leased assets and asset trades, respectively, across all operating segments.

Working Capital

Our working capital, which we define as total current assets less total current liabilities, was ~~$67.8~~$71.4 million as of ~~June~~September 30, 2023, compared to $65.6 million as of December 31, 2022. The increase in working capital can be attributed to a higher cash balance and contract assets, as well as a decrease in accrued ~~expenses and debt.~~expenses.

Debt Agreements

~~Eclipse Loan and Security Agreement~~

On September 27, 2021, the Company entered into a Loan and Security Agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent, providing the Company with a senior secured credit facility in an aggregate principal amount of $77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $15.0 million (the “Term Loan B Facility”).

During the three and six months ended June 30, 2023, the Company recognized a loss on the retirement of debt of $2.4 million, as the Revolving Credit Facility, M&E Loan Facility and Term Loan B Facility were extinguished in connection with the initiation of the Wells Fargo Revolving Credit Facility, which is described further below.

~~Revolving Credit Facility~~

~~M&E Term Loan Facility~~

Borrowings under the M&E Term Loan Facility bore interest at a rate per annum equal to 8% in excess of the SOFR Rate and 7% in excess of the Base Rate. The year to date weighted average interest rate for the M&E Term Loan Facility was 13.0% through the extinguishment date of May 31, 2023. On May 31, 2023, the remaining balance of the loan was $8.4 million, which was paid utilizing funds from the Wells Fargo Revolving Credit Facility.

~~Term Loan B Facility~~

Borrowings under Term Loan B Facility bore interest at a rate per annum equal to 12% in excess of the SOFR Rate and 11% in excess of the Base Rate. Term Loan B Facility was scheduled to mature in September 2022 and the remaining balance of $0.3 million was fully repaid on August 16, 2022. The weighted average interest rate for Term Loan B was 13.0% through the payoff date of August 16, 2022.

~~Secured Promissory Note~~

On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas. In connection with the PerfX acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. Borrowings under the Secured Promissory Note bear interest at a rate of 8.5% per annum and was scheduled to mature in January 2024. On May 31, 2023, the remaining bore of the loan was $5.4 million, which was repaid utilizing funds from the Wells Fargo Revolving Credit Facility.

Wells Fargo Bank, N.A. Credit Agreement

In addition, on September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A. which designated an additional Letter of Credit in the amount of $1.6 million as part of incremental collateral requirements for the Company’s 2023 insurance renewal. This line of credit falls under the Wells Fargo Revolving Credit Facility aggregate principal amount and matures on September 25, 2024. The interest rate for this Letter of Credit was approximately 1.8% for the month ended September 30, 2023.

The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to repay the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note. The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments, such as dividends and share repurchases. The Wells Fargo Revolving Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves. The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028. The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions under certain circumstances that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility. The borrowings of the Wells Fargo Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet.

Under the Wells Fargo Revolving Credit Facility, the total loan capacity was ~~$64.3~~$75.0 million, which was based on a borrowing base certificate in effect as of ~~June~~September 30, 2023. The Company ~~did not have any~~had $10.1 million in borrowings under the Wells Fargo Revolving Credit ~~Facility. The Company does have a $1.6~~Facility and $3.2 million ~~Letter~~in Letters of Credit open under the facility, leaving a residual ~~$62.7~~$61.7 million available for borrowings as of ~~June~~September 30, 2023. Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75% to 2.25% in excess of SOFR and 0.75% to 1.25% in excess of the Base Rate, dependent on the average excess availability. The weighted average interest rate for the loan was approximately ~~6.9%~~7.0% for the ~~six~~nine months ended ~~June~~September 30, 2023.

Eclipse Loan and Security Agreement

On May 31, 2023, the Company extinguished the Eclipse Revolving Credit Facility and Eclipse M&E Term Loan Facility, paying the remaining principal amount of $10.4 million associated with the Eclipse M&E Term Loan Facility for the five months ended May 31, 2023. Of this amount, $8.4 million was outstanding at the time of debt extinguishment, and repaid utilizing funds from the Wells Fargo Revolving Credit Facility. The Company recognized a loss on the retirement of debt of $2.4 million in connection with the initiation of the Wells Fargo Revolving Credit Facility.

For the nine months ended September 30, 2022, the Company made principal payments totaling $12.4 million towards the Eclipse Term Loan B Facility, which was fully repaid on August 16, 2022, and $1.5 million towards the Eclipse M&E Term Loan Facility.

Secured Promissory Note

On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas. In connection with the PerfX acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired. Borrowings under the Secured Promissory Note bear interest at a rate of 8.5% per annum and was scheduled to mature in January 2024.

For the five months ended May 31, 2023, the Company made principal payments to the Secured Promissory Note totaling $6.2 million, of which $5.4 million was related to the debt extinguishment and was repaid utilizing funds from the Wells Fargo Revolving Credit Facility.

Other Installment Purchases

During the year ended December 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral. As of ~~June~~September 30, 2023, the aggregate principal balance outstanding under the Installment Agreements was ~~$0.3~~$0.2 million and is payable ratably over 36 months from the time of each purchase. For the nine months ended September 30, 2023, the Company paid down the Installment Agreements by $0.3 million. The monthly installment payments contain an imputed interest rate that are consistent with the Company’s incremental borrowing rate and is not significant to the Company.

Capital Returns Program

On March 7, 2023, the Company announced a share repurchase program authorizing the Company to purchase up to $35.0 million of Class A Common Stock that can be utilized for up to 36 months. Additionally, the Board of Directors

announced an intention to initiate a quarterly dividend of $0.05 per share once the Company achieved a stated objective of being net debt zero. The Board of Directors ~~has~~ approved the initiation of the ~~aforementioned~~quarterly dividend, ~~intended~~which first became payable on September 8, 2023 to be

~~commenced during the third quarter~~all stockholders of record as of August 18, 2023. The Company believes that a share repurchase and dividend framework provides the best overall value creation potential for investors and intends to return at least 25% of annual cash flows to investors going forward.

Critical Accounting Policies and Estimates

Our significant accounting policies are discussed in our Annual Report and have not materially changed since December 31, 2022.

Off-Balance Sheet Arrangements

We currently have no material off-balance sheet arrangements.

Item 3. Quantitative and Qualitative Disclosures about Market Risks

Recent Events

We continue to expect business opportunities and financial results to show mild increases asassuming the global economy ~~continues to slowly stabilize and improve.~~remains stable. OPEC+ production cuts have continued and are expected to ~~tighten the market, driving supply deficits in the second half of 2023 which supports higher oil prices. OPEC+ countries agreed to extend oil production cuts announced in April~~keep commodity prices at a stable level through the ~~end~~remainder of ~~2024, reducing the amount of crude by more than 1 million barrels per day. OPEC~~2023. OPEC+ also expects oil demand to rise by approximately 2.5 million barrels per day in 2024, an approximated 2.2% increase over 2.4 million barrels per day in 2023. ~~Additionally, we~~

We believe ~~the~~that geopolitical events will continue to have an impact on the macroeconomic backdrop of our industry, ~~specifically surrounding China as COVID-19 restrictions are lifted~~most notably, China’s growth expectations and uncertainty regarding Russia’s oil supply while under sanctions.

~~In February~~ The 2022 ~~Russia invaded~~invasion of Ukraine by neighboring ~~Ukraine. The conflict~~Russia has caused turmoil in global markets, ~~resulting in higher~~generally driving oil prices ~~and injected even more~~higher while also injecting further uncertainty into a worldwide economy recovering from the effects of COVID-19. Additionally, recent events in the Middle East have contributed to further uncertainty and created additional risk to global stability that could ultimately affect our business.

Given the ~~evolving~~continuing conflict ~~and series of events,~~globally, there are many unknown factors and events that could materially impact our operations. These events have and continue to impact commodity prices, which could have a material effect on our earnings, cash flows, and financial condition. In the short-term, commodity price fluctuations are highly uncertain. Actual price outcomes will be dependent on the degree to which existing sanctions imposed on Russia, any potential future sanctions, and independent corporate actions affect Russia’s oil production or the sale of Russia’s oil in the global market. In addition, the degree to which other oil producers respond to current oil prices, as well as the effects macroeconomic developments might have on global oil demand, will be important for oil price formation in the coming months.

Interest Rate Risk

We are exposed to interest rate risk as a result of borrowings associated with our Wells Fargo Revolving Credit Facility and Financing Agreement to fund operations. The Company ~~did not have any borrowings~~had $10.1 million outstanding under the Wells Fargo Revolving Credit Facility, ~~and therefore~~with a weighted average interest rate of 7.0%. A hypothetical 1.0% increase or decrease in the weighted average interest rate would increase or decrease interest expense by less than $0.1 million per year. We do not currently hedge out interest rate exposure. We do not engage in derivative transactions for speculative or trading purposes. For a complete discussion of our interest rate risk, see our Annual Report.

Credit Risk

The majority of our trade receivables have payment terms of 30 days or less. As of ~~June~~September 30, 2023, the top three trade receivable balances represented approximately ~~13%~~12%, ~~10%~~11%, and 7%, respectively, of consolidated net accounts receivable. Within our High Specification Rig segment, the top three trade receivable balances represented ~~21%~~20%, 13% and 12%, respectively, of total High Specification Rig net accounts receivable. Within our Wireline Services segment, the top three trade receivable balances represented 16%, 14%, and 9%12%, respectively, of total Wireline Services net accounts receivable. Within our Processing Solutions and Ancillary Services segment, the top three trade receivable balances represented ~~11%~~14%, 11%, and 7%10%, respectively, of total Processing Solutions and Ancillary Services net accounts receivable. We mitigate the associated credit risk by performing credit evaluations and monitoring the payment patterns of our customers.

Commodity Price Risk

The market for our services is indirectly exposed to fluctuations in the prices of oil and natural gas to the extent such fluctuations impact the activity levels of our E&P customers. See “— Recent Events” above for further details. Any prolonged substantial reduction in oil and natural gas prices would likely affect oil and natural gas production levels and therefore affect demand for our services. We do not currently intend to hedge our indirect exposure to commodity price risk.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Exchange Act, we have evaluated, under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report.

Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were ineffective as of ~~June~~September 30, 2023 due to the material weaknesses previously disclosed in our 2022 Annual Report.

Material Weaknesses in Internal Control Over Financial Reporting

In connection with the evaluation of the Company’s internal control over financial reporting as described above, management has identified the following deficiencies in our control environment in the current period that constituted material weaknesses in the Company’s internal control over financial reporting as of December 31, 2022:

•Ineffective controls over segregation of duties related to the review of manual journal entries and account reconciliations. Specifically, certain personnel had the ability to both (a) create and post journal entries within our general ledger system, and (b) review account reconciliations.

•Ineffective information technology general controls related to administrative user access to the Company’s information systems that are relevant to the preparation of financial statements to ensure appropriate segregation of duties and to adequately restrict access to financial applications and data.

In addition, the following material weakness previously reporting in our 2021 Annual Report continued to exist as of December 31, 2022.

•Ineffective controls over the accounting for complex transactions.

Notwithstanding we did not identify any material misstatements to the consolidated financial statements and there were no changes to previously released financial results as a result of these material weaknesses, the control deficiencies created a reasonable possibility that a material misstatement to the consolidated financial statements would not be prevented or detected on a timely basis.

Remediation Efforts to Address the Material Weaknesses Existing in the Current Period

•During the fourth quarter of 2022, management implemented a remediation plan to update its design and implementation of controls to remediate the deficiency related to manual journal entries and enhance the Company's internal control environment. The Company has designed and implemented controls to prevent or detect a material misstatement resulting from certain personnel with the ability to create and post journal entries within the Company’s general ledger system. Management has designed and implemented controls over the review of all manual journal entries initiated and approved to ensure appropriate segregation of duties.

•Management has implemented measures to design information technology general controls related to administrative user access by restricting privileged access, implemented controls over user access and enforced proper segregation of duties within IT environments based on roles and responsibilities.

•Management is enhancing processes and designing and implementing additional internal controls to properly account for complex transactions. Additionally, the Company has hired additional accounting personnel and implementing training of new and existing personnel on proper execution of designed control procedures.

During 2022 and 2023, significant remediation steps were taken to address the communicated material weaknesses in our Internal Control environment. These remediation actions have largely been completed and the Company expects to test the effectiveness of these remediation plans at the time of the full year financial reporting for the year ended December 31, 2023.

The material weaknesses will not be considered remediated until the controls have operated effectively, as evidenced through testing, for a sufficient number of instances.

Any failure to implement and maintain the improvements in the controls over our financial reporting, or difficulties encountered in the implementation of these improvements in our controls, could cause us to fail to meet our reporting obligations. Any failure to improve our internal controls to address these identified weaknesses could cause misstatements (whether or not material) in our consolidated financial statements and/or also cause investors to lose confidence in our reported financial information, which could have a negative impact on the trading price of our stock.

Changes in Internal Control over Financial Reporting

~~Management continues to remediate previously disclosed material weaknesses.~~ There were no other changes in our internal control over financial reporting during the quarter ended ~~June~~September 30, 2023 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Our operations are subject to a variety of risks and disputes normally incident to our business. As a result, we may, at any given time, be a defendant in various legal proceedings and litigation arising in the ordinary course of business. However, we are not currently subject to any material litigation and in the opinion of management, the outcome of any existing matters will not have a material adverse effect on the Company’s consolidated financial position or consolidated results of operations. We maintain insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisers and brokers, believe are reasonable and prudent. We cannot, however, assure you that this insurance will be adequate to protect us from all material expenses related to potential future claims for personal injury and property damage or that these levels of insurance will be available in the future at economical prices.

Item 1A. Risk Factors

Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our Class A Common Stock are described under “Risk Factors,” included in our Annual Report. This information should be considered carefully, together with other information in the Quarterly Report and the other reports and materials we file with the SEC.

Item 2. Unregistered Sales of Securities, Use of Proceeds, and Issuer Purchases of Equity Securities

Issuer Purchases of Equity Securities

On March 7, 2023, the Company announced that its Board of Directors authorized a share repurchase program, allowing the Company to purchase currently outstanding Class A Common Stock held by non-affiliates, not to exceed $35.0 million in aggregate value. Share repurchases may take place from time to time on the open market or through privately negotiated transactions. The duration of the share repurchase program is 36 months and may be accelerated, suspended or discontinued at any time without notice.

The following table provides information with respect to Class A Common Stock purchases made by the Company during the three months ended ~~June~~September 30, 2023.

Period
Total Number of Shares Repurchased (1)
Average Price Paid Per Share
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)
Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (3)
April 1, 2023 - June 30, 2023 207,800 $ 11.21 207,800 —
May 1, 2023 - May 31, 2023 114,000 11.26 114,000 —
June 1, 2023 - June 30, 2023 186,900 10.25 186,900 399,361
Total 508,700 $ 10.87 508,700 399,361


Period	Total Number of Shares Repurchased (1)	Average Price Paid Per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (3)
July 1, 2023 - July 31, 2023	68,200	$	9.80	68,200	2,743,081
August 1, 2023 - August 31, 2023	89,500	12.35		89,500	2,293,301
September 1, 2023 - September 30, 2023	80,934	12.30		75,200	1,860,857
Total	238,634	$	11.60	232,900	1,860,857

_________________________

(1) Total number of shares repurchased during the ~~second~~third quarter of 2023 consists of ~~508,700~~5,734 shares of Class A Common Stock, at an average price paid per share of $12.27, withheld by the Company in satisfaction of withholding taxes due upon the vesting of restricted shares granted to our employees under the Ranger Energy Services, Inc. 2017 Long-Term Incentive Plan and 232,900 shares of Class A Common Stock, at an average price paid per share of $12.30, repurchased pursuant to the repurchase program that was announced on March 7, 2023.

(2) As of ~~June~~September 30, 2023, an aggregate of ~~548,100~~781,000 shares of Class A Common Stock were purchased for a total of ~~$5.9~~$8.6 million since the inception of the repurchase plan announced on March 7, 2023.

(3) As of ~~June~~September 30, 2023, the maximum number of shares that may yet be purchased under the plan is ~~399,361~~1,860,857 shares of Class A Common Stock. This is based on the closing price of ~~$10.24~~$14.18 of Ranger Energy Services, Inc.’s Class A Common Stock on the New York Stock Exchange as of ~~June~~September 30, 2023.

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Item 6. Exhibits

The following exhibits are filed as part of this Quarterly Report.


INDEX TO EXHIBITS
Exhibit Number						Description
~~10.1~~10.1*						~~Credit~~Form of Restricted Stock Agreement ~~dated May 31, 2023, by and among RNGR~~for Directors under the Ranger Energy Services, ~~LLC and certain of its subsidiaries and Wells Fargo Bank, National Association~~Inc. 2017 Long-Term Incentive Plan dated 2023.
31.1*						Certification of Chief Executive Officer Pursuant to Rule 13a‑14(a)/15d‑14(a) of the Securities Exchange Act of 1934
31.2*						Certification of Chief Financial Officer Pursuant to Rule 13a‑14(a)/15d‑14(a) of the Securities Exchange Act of 1934
32.1**						Certifications of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**						Certifications of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.CAL*						iXBRL Calculation Linkbase Document
101.DEF*						iXBRL Definition Linkbase Document
101.INS*						iXBRL Instance Document
101.LAB*						iXBRL Labels Linkbase Document
101.PRE*						iXBRL Presentation Linkbase Document
101.SCH*						iXBRL Schema Document
104*						Cover page interactive data file (formatted in iXBRL and contained in Exhibit 101)

* Filed as an exhibit to this Quarterly Report on Form 10-Q.

** Furnished as an exhibit to this Quarterly Report on Form 10-Q.

† Schedules and similar attachments have been omitted pursuant to Item 601(b)(2) of Regulation S-K. The registrant will furnish a supplemental copy of any omitted schedule or similar attachment to the SEC upon request.

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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, thereunto duly authorized.


Ranger Energy Services, Inc.


/s/ Melissa Cougle						~~August 8,~~October 31, 2023
Melissa Cougle						Date
Chief Financial Officer
(Principal Financial Officer)

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