Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2019 | Nov. 08, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Sep. 30, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q3 | |
Entity Registrant Name | Nine Energy Service, Inc. | |
Entity Central Index Key | 0001532286 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Current Reporting Status | Yes | |
Entity Common Stock, Shares Outstanding | 30,569,546 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 93,321 | $ 63,615 |
Accounts receivable, net | 118,428 | 154,783 |
Inventories, net | 66,475 | 91,435 |
Prepaid expenses and other current assets | 14,312 | 15,717 |
Notes receivable from shareholders | 0 | 7,626 |
Total current assets | 292,536 | 333,176 |
Property and equipment, net | 198,879 | 211,644 |
Definite-lived intangible assets, net | 159,526 | 173,451 |
Goodwill | 316,469 | 307,804 |
Indefinite-lived intangible assets | 108,711 | 108,711 |
Other long-term assets | 5,462 | 6,386 |
Total assets | 1,081,583 | 1,141,172 |
Current liabilities | ||
Accounts payable | 32,027 | 46,132 |
Accrued expenses | 40,473 | 61,434 |
Current portion of capital lease obligations | 973 | 665 |
Income taxes payable | 308 | 57 |
Total current liabilities | 73,781 | 108,288 |
Long-term liabilities | ||
Long-term debt | 391,539 | 424,978 |
Deferred income taxes | 3,039 | 5,915 |
Long-term capital lease obligations | 2,458 | 2,330 |
Other long-term liabilities | 3,987 | 4,838 |
Total liabilities | 474,804 | 546,349 |
Commitments and contingencies | ||
Stockholders’ equity | ||
Common stock (120,000,000 shares authorized at $.01 par value; 30,582,584 and 30,163,408 shares issued and outstanding at September 30, 2019 and December 31, 2018, respectively) | 306 | 302 |
Additional paid-in capital | 755,349 | 746,428 |
Accumulated other comprehensive loss | (4,582) | (4,843) |
Accumulated deficit | (144,294) | (147,064) |
Total stockholders’ equity | 606,779 | 594,823 |
Total liabilities and stockholders’ equity | $ 1,081,583 | $ 1,141,172 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Sep. 30, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 120,000,000 | 120,000,000 |
Common stock, par value (in usd per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 30,582,584 | 30,163,408 |
Common stock, shares outstanding (in shares) | 30,582,584 | 30,163,408 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Revenues | $ 202,305 | $ 218,427 | $ 669,527 | $ 597,726 |
Cost and expenses | ||||
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 166,849 | 165,882 | 529,994 | 467,700 |
General and administrative expenses | 19,222 | 21,816 | 60,979 | 51,837 |
(Gain) loss on revaluation of contingent liabilities | (5,771) | 45 | (20,701) | 1,715 |
Loss on sale of subsidiaries | 15,834 | 0 | 15,834 | 0 |
Depreciation | 12,196 | 13,661 | 39,572 | 39,982 |
Amortization of intangibles | 4,609 | 1,857 | 13,925 | 5,653 |
Gain on sale of property and equipment | (466) | (1,190) | (799) | (1,701) |
Income (loss) from operations | (10,168) | 16,356 | 30,723 | 32,540 |
Interest expense | 9,843 | 1,756 | 29,940 | 6,763 |
Interest income | (111) | (188) | (439) | (450) |
Income (loss) before income taxes | (19,900) | 14,788 | 1,222 | 26,227 |
Provision (benefit) for income taxes | 727 | 1,130 | (1,548) | 1,875 |
Net income (loss) | $ (20,627) | $ 13,658 | $ 2,770 | $ 24,352 |
Earnings (loss) per share | ||||
Basic (in usd per share) | $ (0.70) | $ 0.57 | $ 0.09 | $ 1.05 |
Diluted (in usd per share) | $ (0.70) | $ 0.56 | $ 0.09 | $ 1.03 |
Weighted average shares outstanding | ||||
Basic (in shares) | 29,361,633 | 23,971,032 | 29,288,113 | 23,264,014 |
Diluted (in shares) | 29,361,633 | 24,389,295 | 29,397,636 | 23,603,922 |
Other comprehensive income (loss), net of tax | ||||
Foreign currency translation adjustments, net of $0 tax in each period | $ (179) | $ 207 | $ 261 | $ (437) |
Total other comprehensive income (loss), net of tax | (179) | 207 | 261 | (437) |
Total comprehensive income (loss) | $ (20,806) | $ 13,865 | $ 3,031 | $ 23,915 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Statement [Abstract] | ||||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) |
Stockholders’ equity (in shares) at Dec. 31, 2017 | 15,810,540 | ||||
Stockholders’ equity at Dec. 31, 2017 | $ 287,358 | $ 158 | $ 384,965 | $ (3,684) | $ (94,081) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock in IPO, net of offering costs (in shares) | 8,050,000 | ||||
Issuance of common stock in IPO, net of offering costs | 168,261 | $ 81 | 168,180 | ||
Issuance of common stock under stock compensation plan (in shares) | 1,171,008 | ||||
Issuance of common stock under stock compensation plan | 0 | $ 11 | (11) | ||
Stock-based compensation expense | 9,719 | 9,719 | |||
Other issuances of common stock (in shares) | 13,043 | ||||
Other issuances of common stock | 300 | 300 | |||
Exercise of stock options (in shares) | 96,367 | ||||
Exercise of stock options | 1,867 | $ 1 | 1,866 | ||
Vesting of restricted stock (in shares) | (26,361) | ||||
Vesting of restricted stock | (790) | $ 0 | (790) | ||
Other comprehensive income (loss) | (437) | (437) | |||
Net income (loss) | 24,352 | 24,352 | |||
Stockholders’ equity (in shares) at Sep. 30, 2018 | 25,114,597 | ||||
Stockholders’ equity at Sep. 30, 2018 | 490,630 | $ 251 | 564,229 | (4,121) | (69,729) |
Stockholders’ equity (in shares) at Jun. 30, 2018 | 25,030,863 | ||||
Stockholders’ equity at Jun. 30, 2018 | 472,180 | $ 250 | 559,645 | (4,328) | (83,387) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under stock compensation plan (in shares) | 13,728 | ||||
Issuance of common stock under stock compensation plan | 0 | $ 0 | 0 | ||
Stock-based compensation expense | 3,508 | 3,508 | |||
Exercise of stock options (in shares) | 96,367 | ||||
Exercise of stock options | 1,867 | $ 1 | 1,866 | ||
Vesting of restricted stock (in shares) | (26,361) | ||||
Vesting of restricted stock | (790) | (790) | |||
Other comprehensive income (loss) | 207 | 207 | |||
Net income (loss) | 13,658 | 13,658 | |||
Stockholders’ equity (in shares) at Sep. 30, 2018 | 25,114,597 | ||||
Stockholders’ equity at Sep. 30, 2018 | 490,630 | $ 251 | 564,229 | (4,121) | (69,729) |
Stockholders’ equity (in shares) at Dec. 31, 2018 | 30,163,408 | ||||
Stockholders’ equity at Dec. 31, 2018 | 594,823 | $ 302 | 746,428 | (4,843) | (147,064) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under stock compensation plan (in shares) | 489,529 | ||||
Issuance of common stock under stock compensation plan | 0 | $ 5 | (5) | ||
Stock-based compensation expense | 10,553 | 10,553 | |||
Exercise of stock options (in shares) | 674 | ||||
Exercise of stock options | 15 | $ 0 | 15 | ||
Vesting of restricted stock (in shares) | (71,027) | ||||
Vesting of restricted stock | (1,643) | $ (1) | (1,642) | ||
Other comprehensive income (loss) | 261 | 261 | |||
Net income (loss) | 2,770 | 2,770 | |||
Stockholders’ equity (in shares) at Sep. 30, 2019 | 30,582,584 | ||||
Stockholders’ equity at Sep. 30, 2019 | 606,779 | $ 306 | 755,349 | (4,582) | (144,294) |
Stockholders’ equity (in shares) at Jun. 30, 2019 | 30,683,009 | ||||
Stockholders’ equity at Jun. 30, 2019 | 624,309 | $ 307 | 752,072 | (4,403) | (123,667) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||
Issuance of common stock under stock compensation plan (in shares) | (98,954) | ||||
Issuance of common stock under stock compensation plan | 0 | $ (1) | 1 | ||
Stock-based compensation expense | 3,286 | 3,286 | |||
Exercise of stock options (in shares) | 0 | ||||
Exercise of stock options | 0 | $ 0 | 0 | ||
Vesting of restricted stock (in shares) | (1,471) | ||||
Vesting of restricted stock | (10) | $ 0 | (10) | ||
Other comprehensive income (loss) | (179) | (179) | |||
Net income (loss) | (20,627) | (20,627) | |||
Stockholders’ equity (in shares) at Sep. 30, 2019 | 30,582,584 | ||||
Stockholders’ equity at Sep. 30, 2019 | $ 606,779 | $ 306 | $ 755,349 | $ (4,582) | $ (144,294) |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Cash flows from operating activities | ||
Net income | $ 2,770 | $ 24,352 |
Adjustments to reconcile net income to net cash provided by operating activities | ||
Depreciation | 39,572 | 39,982 |
Amortization of intangibles | 13,925 | 5,653 |
Amortization of deferred financing costs | 2,238 | 1,191 |
Provision for (recovery of) doubtful accounts | 236 | (319) |
(Benefit) provision for deferred income taxes | (2,876) | 965 |
Provision for inventory obsolescence | 4,502 | 278 |
Stock-based compensation expense | 10,553 | 9,719 |
Gain on sale of property and equipment | (799) | (1,701) |
(Gain) loss on revaluation of contingent liabilities | (20,701) | 1,715 |
Loss on equity method of investment | 0 | 270 |
Loss on sale of subsidiaries | 15,834 | 0 |
Changes in operating assets and liabilities, net of effects from acquisitions | ||
Accounts receivable, net | 20,453 | (62,702) |
Inventories, net | 17,634 | (7,705) |
Prepaid expenses and other current assets | (405) | 1,760 |
Accounts payable and accrued expenses | (16,953) | 38,117 |
Income taxes receivable/payable | 674 | (666) |
Other assets and liabilities | 151 | (153) |
Net cash provided by operating activities | 86,808 | 50,756 |
Cash flows from investing activities | ||
Acquisitions, net of cash acquired | 1,020 | 0 |
Proceeds from sale of subsidiaries | 17,222 | 0 |
Proceeds from sales of property and equipment | 1,934 | 1,791 |
Proceeds from property and equipment casualty losses | 1,503 | 1,743 |
Proceeds from notes receivable payments | 7,626 | 0 |
Purchases of property and equipment | (48,898) | (29,545) |
Net cash used in investing activities | (19,593) | (26,011) |
Cash flows from financing activities | ||
Proceeds from revolving credit facilities | 10,000 | 0 |
Payments on revolving credit facilities | (45,000) | (96,182) |
Proceeds from term loan | 0 | 125,000 |
Payments on term loans | 0 | (155,701) |
Payments on capital leases | (668) | 0 |
Payments of contingent liability | (250) | 0 |
Proceeds from issuance of common stock in IPO, net of offering costs | 0 | 171,450 |
Proceeds from other issuances of common stock | 0 | 300 |
Proceeds from exercise of stock options | 15 | 1,867 |
Vesting of restricted stock | (1,643) | (790) |
Cost of debt issuance | 0 | (1,385) |
Net cash provided by (used in) financing activities | (37,546) | 44,559 |
Impact of foreign currency exchange on cash | 37 | (283) |
Net increase in cash and cash equivalents | 29,706 | 69,021 |
Cash and cash equivalents | ||
Cash and cash equivalents beginning of year | 63,615 | 17,513 |
Cash and cash equivalents end of period | 93,321 | 86,534 |
Supplemental disclosures of cash flow information: | ||
Cash paid for interest | 19,619 | 4,363 |
Cash paid for income taxes | 649 | 1,582 |
Capital expenditures in accounts payable and accrued expenses | 1,183 | 11,946 |
Property and equipment obtained by capital lease | $ 1,621 | $ 1,679 |
Company and Organization
Company and Organization | 9 Months Ended |
Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Company and Organization | Company and Organization Nine Energy Service, Inc. (the “Company” or “Nine”), a Delaware corporation, is an oilfield services business that provides services integral to the completion of unconventional wells through a full range of tools and methodologies. The Company is headquartered in Houston, Texas. On August 30, 2019 (the “Divestiture Date”), the Company sold its Production Solutions segment to Brigade Energy Services LLC (“Brigade”). For additional information on the Production Solutions divestiture, see Note 4 – Business Acquisitions and Divestitures . |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation Condensed Consolidated Financial Information The accompanying Condensed Consolidated Financial Statements have not been audited by the Company’s independent registered public accounting firm, except that the Condensed Consolidated Balance Sheet at December 31, 2018 and the Condensed Consolidated Statements of Stockholders’ Equity as of December 31, 2018 and 2017 are derived from audited Consolidated Financial Statements . In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for the fair statement of the Company’s financial position have been included. These Condensed Consolidated Financial Statements include all accounts of the Company. These Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2018 , which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts of Nine and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. Use of Estimates The preparation of financial statements in conformity with 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Such estimates include fair value assumptions used in purchase accounting and in analyzing goodwill, definite and indefinite-lived intangible assets, and property and equipment for possible impairment, useful lives used in depreciation and amortization expense, stock-based compensation fair value, estimated realizable value on excess and obsolete inventories, deferred taxes and income tax contingencies, and losses on accounts receivable. It is at least reasonably possible that the estimates used will change within the next year. Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation. “(Gain) loss on revaluation of contingent liabilities” and “Interest income” are presented as separate line items in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . Additionally, “(Gain) loss on equity method investment” is no longer shown as a separate line item but is included within the “General and administrative expenses” line item in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . |
New Accounting Standards
New Accounting Standards | 9 Months Ended |
Sep. 30, 2019 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Standards | New Accounting Standards Accounting Standards Update 2014-09 Background In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the current revenue recognition guidance. The standard is based on the principle that revenue is recognized to depict the transfer of goods and services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and asset recognized from costs incurred to obtain or fulfill a contract. The FASB subsequently issued ASU No. 2016-08, ASU No. 2016-10, and ASU No. 2016-12 which provide additional guidance around Topic 606. These amendments are encompassed in the Company’s reference to ASU No. 2014-09 below. As an emerging growth company, the Company is permitted to, and will, apply ASU No. 2014-09 to annual reporting periods beginning after December 15, 2018 and interim reporting periods within annual reporting periods beginning after December 15, 2019. In the fourth quarter of 2019, the Company, as an emerging growth company, expects to adopt ASU No. 2014-09 for the annual period ending December 31, 2019 (effective January 1, 2019) utilizing the modified retrospective approach. The Company will continue to report revenues under current accounting standards until it formally adopts ASU No. 2014-09. Status of Management’s Implementation Efforts of ASU No. 2014-09 During 2018, in preparation for the adoption of ASU No. 2014-09, the Company reviewed the various types of customer contract arrangements for each of its businesses. These reviews included the following: • accumulating all customer contractual arrangements; • identifying the individual performance obligations pursuant to each arrangement; • quantifying the considerations under each arrangement; • allocating the consideration under each arrangement to the identified performance obligation; and • determining the timing of revenue recognition pursuant to each arrangement. The Company has completed these contract reviews and has determined there will be no material adjustment to retained earnings upon adoption of ASU No. 2014-09, effective January 1, 2019. The Company is currently updating and implementing revised accounting system processes in order to capture information required to be disclosed under ASU No. 2014-09. The Company is also in the process of updating its current accounting policies to align with revenue recognition practices under ASU No. 2014-09. In 2019, as part of its ongoing evaluation of contracts with customers, the Company is holding regular meetings with key stakeholders across the organization to determine any impact ASU No. 2014-09 may have on its current or new business processes. Additionally, the Company continues to evaluate its internal processes to address risks associated with incorporating ASU No. 2014-09. Upon adoption, the Company will also implement new internal controls associated with incorporating ASU No. 2014-09, which is not expected to result in a material change in its existing control environment. Disclosure Requirements for ASU No. 2014-09 The Company’s disclosures related to revenue recognition will be significantly expanded under ASU No. 2014-09, specifically around the quantitative and qualitative information associated with performance obligations, changes in contract assets and liabilities, and the disaggregation of revenue. The Company is currently in the process of evaluating the impact of these disclosure requirements. Other Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard, which requires the use of a modified retrospective transition approach, includes a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued a new, optional transition method that will give companies the option to use the effective date as the date of initial application on transition. Based on initial evaluation, the Company expects to include operating leases with durations greater than twelve months on its Condensed Consolidated Balance Sheets. The Company is currently in the process of accumulating and evaluating all the necessary information required to properly account for its lease portfolio under the new standard. The Company will provide additional information about the expected financial impact as it progresses through the evaluation and implementation of the standard. Although the standard is effective for public business entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, the Company, as an emerging growth company, is permitted, and plans, to adopt the standard for the fiscal years beginning after December 15, 2019 and the interim periods within the fiscal years beginning after December 15, 2020. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice, including: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. As an emerging growth company, the Company is permitted, and plans, to adopt the new standard for the fiscal years beginning after December 15, 2018 and the interim periods within fiscal years beginning after December 15, 2019. The Company will apply the guidance retrospectively and is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this standard provide a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not a business. The Company is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. Although the standard is generally effective for fiscal years beginning after December 15, 2017, the Company, as an emerging growth company, is permitted, and plans, to adopt the standard for the fiscal years beginning after December 15, 2018 and the interim periods within annual periods beginning after December 15, 2019. Entities are required to apply the guidance prospectively when adopted. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The ASU is required to be applied retrospectively, except the new Level 3 disclosure requirements are applied prospectively. The Company is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . ASU No. 2018-15 provides additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The amendments in ASU No. 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post implementation stages are expensed as the activities are performed. ASU 2018-15 is effective for public businesses for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. As an emerging growth company, the Company is permitted, and plans, to adopt the new standard for the annual reporting periods beginning after December 15, 2020 and the interim periods within annual periods beginning after December 15, 2021. The Company is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. |
Business Acquisitions and Dives
Business Acquisitions and Divestitures | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Business Acquisitions | Business Acquisitions and Divestitures Magnum Acquisition On October 25, 2018 (the “Closing Date”), pursuant to the terms of a Securities Purchase Agreement, dated October 15, 2018 (as amended on June 7, 2019, the “Magnum Purchase Agreement”), the Company acquired all of the equity interests of Magnum Oil Tools International, LTD, Magnum Oil Tools GP, LLC, and Magnum Oil Tools Canada Ltd. (such entities collectively, “Magnum”) for approximately $ 334.5 million in upfront cash consideration, subject to customary adjustments, and 5.0 million shares of the Company’s common stock, which were issued to the sellers of Magnum in a private placement. The Magnum Purchase Agreement also includes the potential for additional future payments in cash of (i) up to 60% of net income (before interest, taxes, and certain gains or losses) for the “E-Set” tools business in 2019 through 2026 and (ii) up to $25.0 million based on sales of certain dissolvable plug products in 2019 (the “Magnum Earnout”). The Magnum Acquisition has been accounted for as a business combination using the acquisition method. Under the acquisition method of accounting, the fair value of the consideration transferred is allocated to the tangible and intangible assets acquired and the liabilities assumed based on their estimated fair values as of the acquisition date, with the remaining unallocated amount recorded as goodwill. The following table summarizes the fair value of purchase consideration transferred on the Closing Date: Fair Value (in thousands) Proceeds from newly issued Senior Notes and 2018 ABL Credit Facility (1) $ 296,622 Cash provided from operations 57,740 Total upfront cash consideration $ 354,362 Issuance of the Company’s common shares $ 177,350 Contingent consideration (2) 23,029 Total purchase consideration $ 554,741 (1) Senior Notes and 2018 ABL Credit Facility are defined in Note 8 – Debt Obligations . (2) The estimated fair value of the Magnum Earnout was based on a Monte Carlo simulation model with estimated outcomes ranging from $0 to $25.0 million . The estimated fair value of the Magnum Earnout was based upon available information and certain assumptions, known at the time of the Closing Date, which management believed were reasonable. Any difference in the actual Magnum Earnout from the estimated fair value of the Magnum Earnout is recorded in operating income (loss) in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . The following table summarizes the allocation of the purchase price of the Magnum Acquisition to the assets acquired and liabilities assumed based on the fair value as of the Closing Date, with the excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded as goodwill: Purchase Price Allocation (in thousands) Cash and cash equivalents $ 8,509 Accounts receivable, net 30,898 Income taxes receivable 695 Inventories, net 52,249 Prepaid expenses and other current assets 1,147 Property and equipment, net 3,729 Goodwill 234,504 Definite-lived intangible assets, net 148,000 Indefinite-lived intangible assets 96,000 Other long-term assets 1,055 Accounts payable (3,626 ) Accrued expenses (18,404 ) Other long-term liabilities (15 ) Total net assets acquired $ 554,741 All goodwill acquired is attributable to expected synergies gained through the Magnum Acquisition as well as the assembled workforce. In addition, all goodwill acquired is included in the Completion Solutions segment and is deductible for tax purposes. For additional information on goodwill, see Note 6 – Goodwill and Intangible Assets . The Company finalized its purchase price allocation in connection with the Magnum Acquisition during the three months ended September 30, 2019. As a result, the Company recorded measurement period adjustments to the fair value of assets acquired and liabilities assumed at the Closing Date due to the refinement of its valuation models, assumptions, and inputs. The updated assumptions and inputs incorporated additional information obtained about facts and circumstances that existed at the Closing Date. These final purchase price allocation adjustments recorded during the three months ended September 30, 2019 related to the finalization of contractual obligations and the finalization of working capital adjustments, which decreased working capital by $1.0 million , and increased accrued expenses by $7.7 million . Total adjustments recorded during the three months ended September 30, 2019 increased goodwill by $8.7 million . Magnum’s results of operations are included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) , as part of its Completion Solutions segment, for the three and nine months ended September 30, 2019 . It is impractical to quantify the contribution of Magnum since the Closing Date, as the business was fully integrated into the Company’s existing operations in 2018. Frac Tech Acquisition On October 1, 2018, pursuant to the terms and conditions of a Securities Purchase Agreement (the “Frac Tech Purchase Agreement”), the Company acquired Frac Technology AS, a Norwegian private limited company (“Frac Tech”) focused on the development of downhole technology, including a casing flotation tool and a number of patented downhole completion tools. This acquisition was not material to the Company’s Condensed Consolidated Financial Statements. Production Solutions Divestiture On August 30, 2019, the Company entered into a Membership Interest Purchase Agreement (“ Production Solutions Purchase Agreement”) with Brigade. Pursuant to the Production Solutions Purchase Agreement, on such date, through the sale of all of the limited liability interests of its wholly owned subsidiary, Beckman Holding Production Services, LLC, the Company sold its Production Solutions segment to Brigade for approximately $17.4 million in cash. The closing consideration is subject to working capital and other customary post-closing adjustments. The Production Solutions Purchase Agreement contained customary representations and warranties, covenants, and indemnification provisions. The Company recorded a loss of $15.8 million in connection with this divestiture during the third quarter of 2019. This divestiture does not qualify as discontinued operations at September 30, 2019 in accordance with ASU 2014-08, Presentation of Financial Statements (Topic 205) and Property, Plant, and Equipment (Topic 360): Reporting Discontinued Operations and Disclosures of Disposals of Components of an Entity as it does not represent a strategic shift that has a major effect on the Company’s operations and financial results. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Inventories | Inventories Inventories, consisting primarily of finished goods and raw materials, are stated at the lower of cost or net realizable value. Cost is determined on an average cost basis. The Company reviews its inventory balances and writes down its inventory for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The reserve for obsolescence was $5.6 million and $1.9 million at September 30, 2019 and December 31, 2018 , respectively. Inventories, net as of September 30, 2019 and December 31, 2018 were comprised of the following: September 30, 2019 December 31, (in thousands) Raw materials $ 37,398 $ 38,890 Work in progress 597 130 Finished goods 34,072 54,301 Inventories 72,067 93,321 Reserve for obsolescence (5,592 ) (1,886 ) Inventories, net $ 66,475 $ 91,435 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets Goodwill The changes in the net carrying amount of the components of goodwill for the nine months ended September 30, 2019 were as follows: Goodwill Gross Value Accumulated Net (in thousands) Balance as of December 31, 2018 $ 400,067 $ (92,263 ) $ 307,804 Purchase price adjustments (1) 8,665 — 8,665 Balance as of September 30, 2019 $ 408,732 $ (92,263 ) $ 316,469 (1) The Company recorded adjustments to the fair value of goodwill in relation to the Magnum Acquisition. For additional information on the Magnum Acquisition and related purchase price adjustments, see Note 4 – Business Acquisitions and Divestitures . Intangible Assets The changes in the net carrying value of the components of intangible assets for the nine months ended September 30, 2019 were as follows: Intangible Assets Customer Relationships Non- Compete Agreements Technology Definite-Lived Intangible Asset Total Trade Names Other Intangible Assets Indefinite-Lived Intangible Asset Total (in thousands, except weighted average amortization period information) Balance as of December 31, 2018 $ 47,964 $ 2,850 $ 122,637 $ 173,451 $ 107,700 $ 1,011 $ 108,711 Additions — — — — — — — Amortization expense (6,255 ) (1,133 ) (6,537 ) (13,925 ) — — — Balance as of September 30, 2019 $ 41,709 $ 1,717 $ 116,100 $ 159,526 $ 107,700 $ 1,011 $ 108,711 Weighted average amortization period 6.8 3.9 13.8 Indefinite Indefinite Amortization of intangibles expense was $4.6 million and $13.9 million for the three and nine months ended September 30, 2019 , respectively. Amortization of intangibles expense was $1.9 million and $5.7 million for the three and nine months ended September 30, 2018 , respectively. Future estimated amortization of intangibles is as follows: (in thousands) Year Ending December 31, 2019 $ 4,443 2020 17,227 2021 16,876 2022 14,223 2023 12,275 Thereafter 94,482 Total $ 159,526 |
Accrued Expenses
Accrued Expenses | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Accrued Expenses | Accrued Expenses Accrued expenses as of September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Accrued compensation and benefits $ 15,140 $ 11,930 Accrued bonus 2,067 13,250 Sales tax payable 724 1,185 Contingent liabilities 778 20,922 Interest payable 14,841 7,031 Other accrued expenses 6,923 7,116 Accrued expenses $ 40,473 $ 61,434 |
Debt Obligations
Debt Obligations | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Debt Obligations | Debt Obligations The Company’s debt obligations as of September 30, 2019 and December 31, 2018 were as follows: September 30, December 31, (in thousands) Senior Notes $ 400,000 $ 400,000 2018 ABL Credit Facility — 35,000 Total debt before deferred financing costs $ 400,000 $ 435,000 Deferred financing costs (8,461 ) (10,022 ) Total debt $ 391,539 $ 424,978 Less: Current portion of long-term debt — — Long-term debt $ 391,539 $ 424,978 Senior Notes On October 25, 2018, the Company issued $400.0 million principal amount of 8.750% Senior Notes due 2023 (the “Senior Notes”). The Senior Notes were issued under an indenture, dated as of October 25, 2018 (the “Indenture”), by and among the Company, certain subsidiaries of the Company and Wells Fargo, National Association, as Trustee. The Senior Notes bear interest at an annual rate of 8.750% payable on May 1 and November 1 of each year with the first interest payment being due on May 1, 2019. The Senior Notes are senior unsecured obligations of the Company and are fully and unconditionally guaranteed on a senior unsecured basis by each of the Company’s current domestic subsidiaries and by certain future subsidiaries. The Indenture contains covenants that limit the Company’s ability and the ability of its restricted subsidiaries to engage in certain activities. The Company was in compliance with the provisions of the Indenture at September 30, 2019 . Upon an event of default, the trustee or the holders of at least 25% in aggregate principal amount of then outstanding Senior Notes may declare the Senior Notes immediately due and payable, except that a default resulting from certain events of bankruptcy or insolvency with respect to the Company, any restricted subsidiary of the Company that is a significant subsidiary or any group of restricted subsidiaries that, taken together, would constitute a significant subsidiary, will automatically cause all outstanding Senior Notes to become due and payable. Unamortized deferred financing costs associated with the Senior Notes were $8.5 million and $10.0 million at September 30, 2019 and December 31, 2018 , respectively. These costs are direct deductions from the carrying amount of the Senior Notes and are being amortized through interest expense through the maturity date of the Senior Notes using the effective interest method. 2018 ABL Credit Facility On October 25, 2018, the Company entered into a credit agreement dated as of October 25, 2018 (the “2018 ABL Credit Agreement”), by and among the Company, Nine Energy Canada, Inc., JP Morgan Chase Bank, N.A. (“JP Morgan”) as administrative agent and as an issuing lender, and certain other financial institutions party thereto as lenders and issuing lenders. The 2018 ABL Credit Agreement permits aggregate borrowings of up to $200.0 million , subject to a borrowing base, including a Canadian tranche with a sub-limit of up to $25.0 million and a sub-limit of $50.0 million for letters of credit (the “2018 ABL Credit Facility”). The 2018 ABL Credit Facility will mature on October 25, 2023 or, if earlier, on the date that is 180 days before the scheduled maturity date of the Senior Notes if they have not been redeemed or repurchased by such date. Loans to the Company and its domestic related subsidiaries (the “U.S. Credit Parties”) under the 2018 ABL Credit Facility may be base rate loans or LIBOR loans; and loans to Nine Energy Canada Inc., a corporation organized under the laws of Alberta, Canada, and its restricted subsidiaries (the “Canadian Credit Parties”) under the Canadian tranche may be CDOR loans or Canadian prime rate loans. The applicable margin for base rate loans and Canadian prime rate loans vary from 0.75% to 1.25% , and the applicable margin for LIBOR loans or CDOR loans vary from 1.75% to 2.25% , in each case depending on the Company’s leverage ratio. In addition, a commitment fee of 0.50% per annum will be charged on the average daily unused portion of the revolving commitments. The weighted average interest rate was 2.63% during the nine months ended September 30, 2019. The 2018 ABL Credit Agreement contains various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions), and transactions with affiliates. In addition, the 2018 ABL Credit Agreement contains a minimum fixed charge ratio covenant that is tested quarterly when the availability under the 2018 ABL Credit Facility drops below a certain threshold or a default has occurred until the availability exceeds such threshold for 30 consecutive days and such default is no longer outstanding. The Company was in compliance with all covenants under the 2018 ABL Credit Agreement at September 30, 2019 . All of the obligations under the 2018 ABL Credit Facility are secured by first priority perfected security interests (subject to permitted liens) in substantially all of the personal property of U.S. Credit Parties, excluding certain assets. The obligations under the Canadian tranche are further secured by first priority perfected security interests (subject to permitted liens) in substantially all of the personal property of Canadian Credit Parties, excluding certain assets. The 2018 ABL Credit Facility is guaranteed by the U.S. Credit Parties, and the Canadian tranche is further guaranteed by the Canadian Credit Parties and the U.S. Credit Parties. Concurrent with the effectiveness of the 2018 ABL Credit Facility, the Company borrowed approximately $35.0 million to fund a portion of the upfront cash purchase of the Magnum Acquisition. The Company is permitted to repay any amounts borrowed prior to the maturity date without any premium or penalty, subject to minimum amounts of prepayments and customary LIBOR breakage costs. During the first nine months of 2019, the Company repaid its outstanding revolver borrowings in full. At September 30, 2019 , the Company’s availability under the 2018 ABL Credit Facility was approximately $118.0 million , net of an outstanding letter of credit of $0.2 million . Prior Credit Agreements On September 14, 2017, the Company entered into a credit agreement (as amended on November 20, 2017, the “2018 IPO Credit Agreement”) with JP Morgan as administrative agent and certain other financial institutions that became effective upon the consummation of the initial public offering (“IPO”) in January 2018 (the “Effective Date”). Pursuant to the terms of the 2018 IPO Credit Agreement, the Company and its domestic restricted subsidiaries were entitled to borrow $125.0 million of term loans (the “2018 IPO Term Loan Credit Facility”), which the Company drew in full on the Effective Date. In January 2018, the Company also made a mandatory prepayment of $9.7 million against the 2018 IPO Term Loan Credit Facility, which approximated 50.0% of the estimated net proceeds from the IPO in excess of $150.0 million , as prescribed under the 2018 IPO Credit Agreement. In addition, under the 2018 IPO Credit Agreement, the Company and its domestic restricted subsidiaries were entitled to borrow up to $50.0 million (including letters of credit) as revolving credit loans under the revolving commitments. Loans to the Company and its domestic restricted subsidiaries under the 2018 IPO Credit Agreement were either base rate loans or LIBOR loans. The applicable margin for base rate loans varied from 1.50% to 2.75% , and the applicable margin for LIBOR loans varied from 2.50% to 3.75% , in each case depending on the Company’s leverage ratio. In addition, a commitment fee of 0.50% per annum was charged on the average daily unused portion of the revolving commitments. On October 25, 2018, the Company fully repaid and terminated the 2018 IPO Credit Agreement. In 2014, the Company entered into the Amended and Restated Credit Agreement (as amended, the “Legacy Nine Credit Agreement”) with HSBC Bank USA, N.A., as U.S. administrative agent, HSBC Bank Canada, as Canadian agent, and certain other financial institutions. All loans and other obligations under the Legacy Nine Credit Agreement were scheduled to mature on May 31, 2018. In 2014, Beckman Production Services, Inc. entered into a credit agreement (as amended, the “Legacy Beckman Credit Agreement” and together with the Legacy Nine Credit Agreement, the “Legacy Credit Agreements”) with Wells Fargo Bank, National Association, as administrative agent, and certain other financial institutions. All loans and other obligations under the Legacy Beckman Credit Agreement were scheduled to mature on June 30, 2018. Concurrent with the effectiveness of the 2018 IPO Credit Agreement in January 2018, the Company repaid all indebtedness under the Legacy Credit Agreements, which approximated $242.2 million . Debt Extinguishment Costs During the first quarter of 2018, the Company recorded debt extinguishment costs of approximately $0.7 million in unamortized deferred financing costs associated with the termination of the Legacy Credit Agreements. These unamortized deferred financing costs were being amortized through the maturity dates of each agreement using the effective interest method. These debt extinguishment costs are included in “Interest expense” in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) for the nine months ended September 30, 2018 . Fair Value of Debt Instruments The estimated fair value of the Company’s debt obligations as of September 30, 2019 and December 31, 2018 was as follows: September 30, 2019 December 31, 2018 (in thousands) Senior Notes $ 324,000 $ 376,000 2018 ABL Credit Facility $ — $ 35,000 The fair value of the Senior Notes is classified as Level 2 in the fair value hierarchy and is established based on observable inputs in less active markets. The 2018 ABL Credit Facility is also classified within Level 2 of the fair value hierarchy. The fair value of the 2018 ABL Credit Facility approximates its carrying value. |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2019 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As part of the acquisition of Crest Pumping Technologies, LLC (“Crest”) in 2014, the Company issued promissory notes totaling $9.4 million to former owners of Crest, including David Crombie, who is an executive officer of the Company. The principal was due on June 30, 2019 . The interest rate was based on the prime rate, the federal funds rate, or LIBOR, plus a margin to be determined in connection with the Company’s credit agreement and was due quarterly. Mr. Crombie paid $1.8 million during 2016 to pay his promissory note in full. At December 31, 2018 , the outstanding principal balance of the notes of the remaining individuals totaled $7.6 million , and unpaid interest, included in “Prepaid expenses and other current assets” in the Company’s Condensed Consolidated Balance Sheets , totaled $10,000 . During the nine months ended September 30, 2019, the Company received the full principal balance of the notes outstanding as well as any unpaid interest. The Company leases office space, yard facilities, and equipment and purchases building maintenance services from entities owned by Mr. Crombie. Total lease expense and building maintenance expense associated with these entities was $0.2 million and $0.6 million for the three and nine months ended September 30, 2019 and $0.2 million and $0.6 million for the three and nine months ended September 30, 2018 , respectively. The Company also purchased $0.7 million and $1.3 million of equipment during the three and nine months ended September 30, 2019 , respectively, from an entity in which Mr. Crombie is a limited partner. The Company purchased $0.6 million of equipment from this entity during the three and nine months ended September 30, 2018 . There were outstanding payables due to this entity relating to equipment purchases of $0.1 million at September 30, 2019 . In addition, the Company leases office space in Corpus Christi and Midland, Texas from an entity affiliated with Lynn Frazier, a beneficial owner of more than 5% of the Company’s stock. Total rental expense associated with this office space was $0.4 million and $1.1 million for the three and nine months ended September 30, 2019 , respectively. There were no outstanding payables due to the entity at September 30, 2019 and December 31, 2018. At December 31, 2018 , the Company had an open receivable due from the sellers of Magnum primarily related to sales commissions paid to an intercompany entity that was not included in the Magnum Acquisition. The Company received payment in full in the first quarter of 2019. The Company provides services to Citation Oil & Gas Corp., an entity owned by Curtis F. Harrell, a director of the Company. The Company billed $0.2 million and $0.4 million for services provided to this entity during the three and nine months ended September 30, 2019 , respectively, and billed $0.0 million and $0.5 million for the three and nine months ended September 30, 2018 , respectively. There was an outstanding receivable due from this entity of $0.2 million and $0.1 million at September 30, 2019 and December 31, 2018 , respectively. The Company provides services in the ordinary course of business to EOG Resources, Inc. (“EOG”). Gary L. Thomas, a director of the Company, acted as the President of EOG until his retirement from EOG at December 31, 2018. The Company generated revenue from EOG of $12.1 million and $31.8 million for the three and nine months ended September 30, 2018 , respectively. There was an outstanding receivable due from this entity of $7.0 million at December 31, 2018. On June 5, 2019, Ann G. Fox, President and Chief Executive Officer and a director of the Company, was elected as a director of Devon Energy Corporation (“Devon”). The Company generated revenue from Devon of $5.4 million and $15.8 million for the three and nine months ended September 30, 2019 , respectively. There was an outstanding receivable due from Devon of $2.0 million at September 30, 2019 . |
Commitment and Contingencies
Commitment and Contingencies | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitment and Contingencies | Commitments and Contingencies Litigation From time to time, the Company has various claims, lawsuits, and administrative proceedings that are pending or threatened with respect to personal injury, workers’ compensation, contractual matters, and other matters. Although no assurance can be given with respect to the outcome of these claims, lawsuits, or proceedings or the effect such outcomes may have, the Company believes any ultimate liability resulting from the outcome of such claims, lawsuits, or administrative proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on its business, operating results, or financial condition. On August 31, 2017, an accident occurred while a five-employee crew of Big Lake Services, LLC, a subsidiary of Nine (“Big Lake Services”), was performing workover services at an oil and gas wellsite near Midland, Texas, operated by Pioneer Natural Resources USA, Inc. (“Pioneer Natural Resources”), resulting in the death of a Big Lake Services employee, Juan De La Rosa. On December 7, 2017 , a lawsuit was filed on behalf of Mr. De La Rosa’s minor children in the Midland County District Court against Pioneer Natural Resources, Big Lake Services, and Phillip Hamilton related to this accident. The petition alleged, among other things, that the defendants acted negligently, resulting in the death of Mr. De La Rosa. On March 14, 2018, a plea in intervention was filed on behalf of Mr. De La Rosa’s parents, alleging similar claims. The plaintiffs and intervenors sought money damages, including punitive damages. On December 17, 2018, a mediation was held, and the parties reached an agreement in principle to settle this matter. In May 2019, the parties entered into settlement agreements, which have been approved by the court, and the court has dismissed the case. The Company has tendered this matter to its insurance company for defense and indemnification of Big Lake Services and the other defendants, and this settlement has been fully funded by its insurance company. Self-insurance The Company uses a combination of third-party insurance and self-insurance for health insurance clams. The self-insured liability represents an estimate of the undiscounted ultimate cost of uninsured claims incurred as of the balance sheet date. The estimate is based on an analysis of trailing months of incurred medical claims to project the amount of incurred but not reported claims liability. The estimated liability for self-insured medical claims was $1.6 million at September 30, 2019 and December 31, 2018 and is included under the caption “Accrued expenses” on the Condensed Consolidated Balance Sheets . Although the Company does not expect the amounts ultimately paid to differ significantly from the estimates, the self-insurance liability could be affected if future claims experience differs significantly from historical trends and actuarial assumptions. Contingent Liabilities The Company has recorded the following contingent liabilities at September 30, 2019 : Magnum Earnout The Magnum Purchase Agreement includes the potential for additional future payments in cash of (i) up to 60% of net income (before interest, taxes, and certain gains or losses) for the “E-Set” tools business in 2019 through 2026 and (ii) up to $25.0 million based on sales of certain dissolvable plug products in 2019. For additional information on the Magnum Acquisition, see Note 4 – Business Acquisitions and Divestitures . Frac Tech Earnout On October 1, 2018, pursuant to the terms and conditions of the Frac Tech Purchase Agreement, the Company acquired Frac Tech. The Frac Tech Purchase Agreement includes, among other things, the potential for additional future payments, based on certain Frac Tech sales volume metrics through December 31, 2023. The following is a reconciliation of the beginning and ending amounts of the contingent liabilities (Level 3) for the nine months ended September 30, 2019 : Magnum Frac Tech Total (in thousands) Balance at December 31, 2018 $ 24,521 $ 1,008 $ 25,529 Payments — (250 ) (250 ) Revaluation adjustments (21,436 ) 735 (20,701 ) Balance at September 30, 2019 $ 3,085 $ 1,493 $ 4,578 The contingent consideration related to the contingent liabilities is reported at fair value, based on a Monte Carlo simulation model. Significant inputs used in the fair value measurement include estimated gross margin related to forecasted sales of the plugs, term of the agreement, and a risk adjusted discount factor. Contingent liabilities include $0.8 million and $20.9 million reported in “Accrued expenses” at September 30, 2019 and December 31, 2018 , respectively, and $3.8 million and $4.6 million reported in “Other long-term liabilities” at September 30, 2019 and December 31, 2018 , respectively, in the Company’s Condensed Consolidated Balance Sheets . The impact of the revaluation adjustments is included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . |
Taxes
Taxes | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Taxes | Taxes Income tax expense (benefit) included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands, except percentages) Income tax expense (benefit) $ 727 $ 1,130 $ (1,548 ) $ 1,875 Effective tax rate (3.7 )% 7.6 % (126.7 )% 7.1 % Generally, the Company’s effective tax rate is lower than the statutory federal rate of 21% in most periods due to its valuation allowance position, offset by state and foreign income taxes. The effective tax rate for the nine months ended September 30, 2019 also includes the discrete tax impact from the Production Solutions divestiture. All other changes in the effective tax rate are attributable to the current year impact of the Company’s valuation allowance positions, levels of pre-tax income, and state and non-U.S. income taxes. |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic earnings (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding for the period. Diluted earnings (loss) per share is based on the weighted average number of shares outstanding during each period and the assumed exercise of potentially dilutive stock options, restricted stock, and restricted stock units. Basic and diluted earnings (loss) per common share was computed as follows: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Net Loss Average Shares Outstanding Loss Per Share Net Income Average Shares Outstanding Earnings Per Share (in thousands, except share and per share amounts) Basic $ (20,627 ) 29,361,633 $ (0.70 ) $ 13,658 23,971,032 $ 0.57 Assumed exercise of stock options — — — — 41,341 — Unvested restricted stock and stock units — — — — 376,922 — Diluted $ (20,627 ) 29,361,633 $ (0.70 ) $ 13,658 24,389,295 $ 0.56 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Net Income Average Shares Outstanding Earnings Per Share Net Income Average Shares Outstanding Earnings Per Share (in thousands, except share and per share amounts) Basic $ 2,770 29,288,113 $ 0.09 $ 24,352 23,264,014 $ 1.05 Assumed exercise of stock options — — — — 31,879 — Unvested restricted stock and stock units — 109,523 — — 308,029 — Diluted $ 2,770 29,397,636 $ 0.09 $ 24,352 23,603,922 $ 1.03 For the three months ended September 30, 2019, the computation of diluted earnings (loss) per share excluded stock options, unvested restricted stock, and unvested restricted stock units because their inclusion would be anti-dilutive given the Company was in a net loss position. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information On August 30, 2019, the Company sold its Production Solutions segment to Brigade. For additional information on the Production Solutions divestiture, see Note 4 – Business Acquisitions and Divestitures . Prior to the Divestiture Date, the Company reported its results in two segments, the Completions Solutions segment and the Production Solutions segment. As a result of the Company’s sale of its Production Solutions segment, the Company considers the Completion Solutions segment to be its operating and reporting segment. This segmentation is representative of the manner in which the Chief Operating Decision Maker (“CODM”) and its Board of Directors view the business in allocating resources and measuring financial performance. The Company considers the CODM to be its Chief Executive Officer. Financial data through the Divestiture Date is reported below for the Production Solutions segment. The amounts labeled “Corporate” relate to assets not allocated to either the Completion Solutions segment or the Production Solutions segment. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Revenues Completion Solutions $ 186,252 $ 196,608 $ 611,255 $ 536,363 Production Solutions 16,053 21,819 58,272 61,363 $ 202,305 $ 218,427 $ 669,527 $ 597,726 Cost of revenues (exclusive of depreciation and amortization shown separately below) Completion Solutions $ 152,679 $ 147,178 $ 480,140 $ 414,606 Production Solutions 14,170 18,704 49,854 53,094 $ 166,849 $ 165,882 $ 529,994 $ 467,700 Adjusted gross profit Completion Solutions $ 33,573 $ 49,430 $ 131,115 $ 121,757 Production Solutions 1,883 3,115 8,418 8,269 $ 35,456 $ 52,545 $ 139,533 $ 130,026 General and administrative expenses 19,222 21,816 60,979 51,837 (Gain) loss on revaluation of contingent liabilities (5,771 ) 45 (20,701 ) 1,715 Loss on sale of subsidiaries 15,834 — 15,834 — Depreciation 12,196 13,661 39,572 39,982 Amortization of intangibles 4,609 1,857 13,925 5,653 Gain on sale of property and equipment (466 ) (1,190 ) (799 ) (1,701 ) Income (loss) from operations $ (10,168 ) $ 16,356 $ 30,723 $ 32,540 Non-operating expenses 9,732 1,568 29,501 6,313 Income (loss) before income taxes (19,900 ) 14,788 1,222 26,227 Provision (benefit) for income taxes 727 1,130 (1,548 ) 1,875 Net income (loss) $ (20,627 ) $ 13,658 $ 2,770 $ 24,352 Capital expenditures by segment for the three and nine months ended September 30, 2019 and 2018 , were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Completion Solutions $ 9,146 $ 10,723 $ 44,343 $ 26,636 Production Solutions 804 665 2,790 2,312 Corporate — 92 93 597 $ 9,950 $ 11,480 $ 47,226 $ 29,545 Total assets by segment as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 (in thousands) Completion Solutions $ 977,633 $ 1,045,643 Production Solutions — 35,086 Corporate 103,950 60,443 $ 1,081,583 $ 1,141,172 |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 9 Months Ended |
Sep. 30, 2019 | |
Accounting Policies [Abstract] | |
Condensed Consolidated Financial Information | Condensed Consolidated Financial Information The accompanying Condensed Consolidated Financial Statements have not been audited by the Company’s independent registered public accounting firm, except that the Condensed Consolidated Balance Sheet at December 31, 2018 and the Condensed Consolidated Statements of Stockholders’ Equity as of December 31, 2018 and 2017 are derived from audited Consolidated Financial Statements . In the opinion of management, all adjustments consisting of normal recurring adjustments necessary for the fair statement of the Company’s financial position have been included. These Condensed Consolidated Financial Statements include all accounts of the Company. These Condensed Consolidated Financial Statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“GAAP”) for complete financial statements. Therefore, these Condensed Consolidated Financial Statements should be read in conjunction with the Company’s audited Consolidated Financial Statements and notes thereto for the year ended December 31, 2018 , which are included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2018 filed with the SEC. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. |
Principles of Consolidation | Principles of Consolidation The Condensed Consolidated Financial Statements include the accounts of Nine and its wholly owned subsidiaries. All inter-company accounts and transactions have been eliminated in consolidation. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with 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 revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Such estimates include fair value assumptions used in purchase accounting and in analyzing goodwill, definite and indefinite-lived intangible assets, and property and equipment for possible impairment, useful lives used in depreciation and amortization expense, stock-based compensation fair value, estimated realizable value on excess and obsolete inventories, deferred taxes and income tax contingencies, and losses on accounts receivable. It is at least reasonably possible that the estimates used will change within the next year. |
Reclassifications | Reclassifications Certain reclassifications have been made to prior period amounts to conform to the current period financial statement presentation. “(Gain) loss on revaluation of contingent liabilities” and “Interest income” are presented as separate line items in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . Additionally, “(Gain) loss on equity method investment” is no longer shown as a separate line item but is included within the “General and administrative expenses” line item in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . |
New Accounting Standards | New Accounting Standards Accounting Standards Update 2014-09 Background In May 2014, the Financial Accounting Standards Board (the “FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) , which supersedes the current revenue recognition guidance. The standard is based on the principle that revenue is recognized to depict the transfer of goods and services to customers in the amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The standard also requires additional disclosure about the nature, amount, timing, and uncertainty of revenue and cash flows arising from customer contracts, including significant judgments and changes in judgments and asset recognized from costs incurred to obtain or fulfill a contract. The FASB subsequently issued ASU No. 2016-08, ASU No. 2016-10, and ASU No. 2016-12 which provide additional guidance around Topic 606. These amendments are encompassed in the Company’s reference to ASU No. 2014-09 below. As an emerging growth company, the Company is permitted to, and will, apply ASU No. 2014-09 to annual reporting periods beginning after December 15, 2018 and interim reporting periods within annual reporting periods beginning after December 15, 2019. In the fourth quarter of 2019, the Company, as an emerging growth company, expects to adopt ASU No. 2014-09 for the annual period ending December 31, 2019 (effective January 1, 2019) utilizing the modified retrospective approach. The Company will continue to report revenues under current accounting standards until it formally adopts ASU No. 2014-09. Status of Management’s Implementation Efforts of ASU No. 2014-09 During 2018, in preparation for the adoption of ASU No. 2014-09, the Company reviewed the various types of customer contract arrangements for each of its businesses. These reviews included the following: • accumulating all customer contractual arrangements; • identifying the individual performance obligations pursuant to each arrangement; • quantifying the considerations under each arrangement; • allocating the consideration under each arrangement to the identified performance obligation; and • determining the timing of revenue recognition pursuant to each arrangement. The Company has completed these contract reviews and has determined there will be no material adjustment to retained earnings upon adoption of ASU No. 2014-09, effective January 1, 2019. The Company is currently updating and implementing revised accounting system processes in order to capture information required to be disclosed under ASU No. 2014-09. The Company is also in the process of updating its current accounting policies to align with revenue recognition practices under ASU No. 2014-09. In 2019, as part of its ongoing evaluation of contracts with customers, the Company is holding regular meetings with key stakeholders across the organization to determine any impact ASU No. 2014-09 may have on its current or new business processes. Additionally, the Company continues to evaluate its internal processes to address risks associated with incorporating ASU No. 2014-09. Upon adoption, the Company will also implement new internal controls associated with incorporating ASU No. 2014-09, which is not expected to result in a material change in its existing control environment. Disclosure Requirements for ASU No. 2014-09 The Company’s disclosures related to revenue recognition will be significantly expanded under ASU No. 2014-09, specifically around the quantitative and qualitative information associated with performance obligations, changes in contract assets and liabilities, and the disaggregation of revenue. The Company is currently in the process of evaluating the impact of these disclosure requirements. Other Accounting Standards In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The standard, which requires the use of a modified retrospective transition approach, includes a number of optional practical expedients that entities may elect to apply. In July 2018, the FASB issued a new, optional transition method that will give companies the option to use the effective date as the date of initial application on transition. Based on initial evaluation, the Company expects to include operating leases with durations greater than twelve months on its Condensed Consolidated Balance Sheets. The Company is currently in the process of accumulating and evaluating all the necessary information required to properly account for its lease portfolio under the new standard. The Company will provide additional information about the expected financial impact as it progresses through the evaluation and implementation of the standard. Although the standard is effective for public business entities for fiscal years beginning after December 15, 2018 and interim periods within those fiscal years, the Company, as an emerging growth company, is permitted, and plans, to adopt the standard for the fiscal years beginning after December 15, 2019 and the interim periods within the fiscal years beginning after December 15, 2020. In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments . This new guidance addresses eight specific cash flow issues with the objective of reducing the existing diversity in practice, including: debt prepayment or debt extinguishment costs, settlement of zero-coupon debt instruments or other debt instruments, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows and application of the predominance principle. ASU 2016-15 is effective for public business entities for fiscal years beginning after December 15, 2017 and interim periods within those fiscal years. As an emerging growth company, the Company is permitted, and plans, to adopt the new standard for the fiscal years beginning after December 15, 2018 and the interim periods within fiscal years beginning after December 15, 2019. The Company will apply the guidance retrospectively and is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business , in an effort to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The amendments in this standard provide a screen to determine when an integrated set of assets and activities is not a business. The screen requires that when substantially all of the fair value of the gross assets acquired (or disposed of) is concentrated in a single identifiable asset or a group of similar identifiable assets, the integrated set of assets and activities is not a business. The Company is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. Although the standard is generally effective for fiscal years beginning after December 15, 2017, the Company, as an emerging growth company, is permitted, and plans, to adopt the standard for the fiscal years beginning after December 15, 2018 and the interim periods within annual periods beginning after December 15, 2019. Entities are required to apply the guidance prospectively when adopted. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement , which eliminates, adds, and modifies certain disclosure requirements for fair value measurements as part of its disclosure framework project. The ASU is effective for all entities for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2019. The ASU is required to be applied retrospectively, except the new Level 3 disclosure requirements are applied prospectively. The Company is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. In August 2018, the FASB issued ASU No. 2018-15, Intangibles – Goodwill and Other – Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract . ASU No. 2018-15 provides additional guidance on the accounting for costs of implementation activities performed in a cloud computing arrangement that is a service contract. The amendments in ASU No. 2018-15 align the requirements for capitalizing implementation costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing implementation costs incurred to develop or obtain internal-use software (and hosting arrangements that include an internal-use software license). Costs for implementation activities in the application development stage are capitalized depending on the nature of the costs, while costs incurred during the preliminary project and post implementation stages are expensed as the activities are performed. ASU 2018-15 is effective for public businesses for fiscal years beginning after December 15, 2019, and interim periods within those fiscal years. As an emerging growth company, the Company is permitted, and plans, to adopt the new standard for the annual reporting periods beginning after December 15, 2020 and the interim periods within annual periods beginning after December 15, 2021. The Company is currently evaluating the impact of the standard on its Condensed Consolidated Financial Statements. |
Business Acquisitions and Div_2
Business Acquisitions and Divestitures (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Business Combinations [Abstract] | |
Schedule of Business Acquisition | The following table summarizes the fair value of purchase consideration transferred on the Closing Date: Fair Value (in thousands) Proceeds from newly issued Senior Notes and 2018 ABL Credit Facility (1) $ 296,622 Cash provided from operations 57,740 Total upfront cash consideration $ 354,362 Issuance of the Company’s common shares $ 177,350 Contingent consideration (2) 23,029 Total purchase consideration $ 554,741 (1) Senior Notes and 2018 ABL Credit Facility are defined in Note 8 – Debt Obligations . (2) The estimated fair value of the Magnum Earnout was based on a Monte Carlo simulation model with estimated outcomes ranging from $0 to $25.0 million . The estimated fair value of the Magnum Earnout was based upon available information and certain assumptions, known at the time of the Closing Date, which management believed were reasonable. Any difference in the actual Magnum Earnout from the estimated fair value of the Magnum Earnout is recorded in operating income (loss) in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) . |
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed | The following table summarizes the allocation of the purchase price of the Magnum Acquisition to the assets acquired and liabilities assumed based on the fair value as of the Closing Date, with the excess of the purchase price over the estimated fair value of the identifiable net assets acquired recorded as goodwill: Purchase Price Allocation (in thousands) Cash and cash equivalents $ 8,509 Accounts receivable, net 30,898 Income taxes receivable 695 Inventories, net 52,249 Prepaid expenses and other current assets 1,147 Property and equipment, net 3,729 Goodwill 234,504 Definite-lived intangible assets, net 148,000 Indefinite-lived intangible assets 96,000 Other long-term assets 1,055 Accounts payable (3,626 ) Accrued expenses (18,404 ) Other long-term liabilities (15 ) Total net assets acquired $ 554,741 |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories, Net | Inventories, net as of September 30, 2019 and December 31, 2018 were comprised of the following: September 30, 2019 December 31, (in thousands) Raw materials $ 37,398 $ 38,890 Work in progress 597 130 Finished goods 34,072 54,301 Inventories 72,067 93,321 Reserve for obsolescence (5,592 ) (1,886 ) Inventories, net $ 66,475 $ 91,435 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Amount of Components of Goodwill | The changes in the net carrying amount of the components of goodwill for the nine months ended September 30, 2019 were as follows: Goodwill Gross Value Accumulated Net (in thousands) Balance as of December 31, 2018 $ 400,067 $ (92,263 ) $ 307,804 Purchase price adjustments (1) 8,665 — 8,665 Balance as of September 30, 2019 $ 408,732 $ (92,263 ) $ 316,469 (1) The Company recorded adjustments to the fair value of goodwill in relation to the Magnum Acquisition. For additional information on the Magnum Acquisition and related purchase price adjustments, see Note 4 – Business Acquisitions and Divestitures . |
Schedule of Changes in Net Carrying Amount of Components of Intangible Assets | The changes in the net carrying value of the components of intangible assets for the nine months ended September 30, 2019 were as follows: Intangible Assets Customer Relationships Non- Compete Agreements Technology Definite-Lived Intangible Asset Total Trade Names Other Intangible Assets Indefinite-Lived Intangible Asset Total (in thousands, except weighted average amortization period information) Balance as of December 31, 2018 $ 47,964 $ 2,850 $ 122,637 $ 173,451 $ 107,700 $ 1,011 $ 108,711 Additions — — — — — — — Amortization expense (6,255 ) (1,133 ) (6,537 ) (13,925 ) — — — Balance as of September 30, 2019 $ 41,709 $ 1,717 $ 116,100 $ 159,526 $ 107,700 $ 1,011 $ 108,711 Weighted average amortization period 6.8 3.9 13.8 Indefinite Indefinite |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Future estimated amortization of intangibles is as follows: (in thousands) Year Ending December 31, 2019 $ 4,443 2020 17,227 2021 16,876 2022 14,223 2023 12,275 Thereafter 94,482 Total $ 159,526 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued Expenses | Accrued expenses as of September 30, 2019 and December 31, 2018 consisted of the following: September 30, 2019 December 31, 2018 (in thousands) Accrued compensation and benefits $ 15,140 $ 11,930 Accrued bonus 2,067 13,250 Sales tax payable 724 1,185 Contingent liabilities 778 20,922 Interest payable 14,841 7,031 Other accrued expenses 6,923 7,116 Accrued expenses $ 40,473 $ 61,434 |
Debt Obligations (Tables)
Debt Obligations (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Debt Disclosure [Abstract] | |
Summary of Debt Obligations | The Company’s debt obligations as of September 30, 2019 and December 31, 2018 were as follows: September 30, December 31, (in thousands) Senior Notes $ 400,000 $ 400,000 2018 ABL Credit Facility — 35,000 Total debt before deferred financing costs $ 400,000 $ 435,000 Deferred financing costs (8,461 ) (10,022 ) Total debt $ 391,539 $ 424,978 Less: Current portion of long-term debt — — Long-term debt $ 391,539 $ 424,978 |
Summary of Fair Value of Debt Obligations | The estimated fair value of the Company’s debt obligations as of September 30, 2019 and December 31, 2018 was as follows: September 30, 2019 December 31, 2018 (in thousands) Senior Notes $ 324,000 $ 376,000 2018 ABL Credit Facility $ — $ 35,000 |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Schedule of Contingent Liabilities | The following is a reconciliation of the beginning and ending amounts of the contingent liabilities (Level 3) for the nine months ended September 30, 2019 : Magnum Frac Tech Total (in thousands) Balance at December 31, 2018 $ 24,521 $ 1,008 $ 25,529 Payments — (250 ) (250 ) Revaluation adjustments (21,436 ) 735 (20,701 ) Balance at September 30, 2019 $ 3,085 $ 1,493 $ 4,578 |
Taxes (Tables)
Taxes (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Income Tax Disclosure [Abstract] | |
Schedule of Components of Income Tax Expense (Benefit) | Income tax expense (benefit) included in the Company’s Condensed Consolidated Statements of Income and Comprehensive Income (Loss) were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands, except percentages) Income tax expense (benefit) $ 727 $ 1,130 $ (1,548 ) $ 1,875 Effective tax rate (3.7 )% 7.6 % (126.7 )% 7.1 % |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Table) | 9 Months Ended |
Sep. 30, 2019 | |
Earnings Per Share [Abstract] | |
Summary of Basic and Diluted Income (Loss) per Common Share | Basic and diluted earnings (loss) per common share was computed as follows: Three Months Ended September 30, 2019 Three Months Ended September 30, 2018 Net Loss Average Shares Outstanding Loss Per Share Net Income Average Shares Outstanding Earnings Per Share (in thousands, except share and per share amounts) Basic $ (20,627 ) 29,361,633 $ (0.70 ) $ 13,658 23,971,032 $ 0.57 Assumed exercise of stock options — — — — 41,341 — Unvested restricted stock and stock units — — — — 376,922 — Diluted $ (20,627 ) 29,361,633 $ (0.70 ) $ 13,658 24,389,295 $ 0.56 Nine Months Ended September 30, 2019 Nine Months Ended September 30, 2018 Net Income Average Shares Outstanding Earnings Per Share Net Income Average Shares Outstanding Earnings Per Share (in thousands, except share and per share amounts) Basic $ 2,770 29,288,113 $ 0.09 $ 24,352 23,264,014 $ 1.05 Assumed exercise of stock options — — — — 31,879 — Unvested restricted stock and stock units — 109,523 — — 308,029 — Diluted $ 2,770 29,397,636 $ 0.09 $ 24,352 23,603,922 $ 1.03 For the three months ended September 30, 2019, the computation of diluted earnings (loss) per share excluded stock options, unvested restricted stock, and unvested restricted stock units because their inclusion would be anti-dilutive given the Company was in a net loss position. |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2019 | |
Segment Reporting [Abstract] | |
Summary of Financial Data by Segment | nancial data through the Divestiture Date is reported below for the Production Solutions segment. The amounts labeled “Corporate” relate to assets not allocated to either the Completion Solutions segment or the Production Solutions segment. Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Revenues Completion Solutions $ 186,252 $ 196,608 $ 611,255 $ 536,363 Production Solutions 16,053 21,819 58,272 61,363 $ 202,305 $ 218,427 $ 669,527 $ 597,726 Cost of revenues (exclusive of depreciation and amortization shown separately below) Completion Solutions $ 152,679 $ 147,178 $ 480,140 $ 414,606 Production Solutions 14,170 18,704 49,854 53,094 $ 166,849 $ 165,882 $ 529,994 $ 467,700 Adjusted gross profit Completion Solutions $ 33,573 $ 49,430 $ 131,115 $ 121,757 Production Solutions 1,883 3,115 8,418 8,269 $ 35,456 $ 52,545 $ 139,533 $ 130,026 General and administrative expenses 19,222 21,816 60,979 51,837 (Gain) loss on revaluation of contingent liabilities (5,771 ) 45 (20,701 ) 1,715 Loss on sale of subsidiaries 15,834 — 15,834 — Depreciation 12,196 13,661 39,572 39,982 Amortization of intangibles 4,609 1,857 13,925 5,653 Gain on sale of property and equipment (466 ) (1,190 ) (799 ) (1,701 ) Income (loss) from operations $ (10,168 ) $ 16,356 $ 30,723 $ 32,540 Non-operating expenses 9,732 1,568 29,501 6,313 Income (loss) before income taxes (19,900 ) 14,788 1,222 26,227 Provision (benefit) for income taxes 727 1,130 (1,548 ) 1,875 Net income (loss) $ (20,627 ) $ 13,658 $ 2,770 $ 24,352 Capital expenditures by segment for the three and nine months ended September 30, 2019 and 2018 , were as follows: Three Months Ended September 30, Nine Months Ended September 30, 2019 2018 2019 2018 (in thousands) Completion Solutions $ 9,146 $ 10,723 $ 44,343 $ 26,636 Production Solutions 804 665 2,790 2,312 Corporate — 92 93 597 $ 9,950 $ 11,480 $ 47,226 $ 29,545 Total assets by segment as of September 30, 2019 and December 31, 2018 were as follows: September 30, 2019 December 31, 2018 (in thousands) Completion Solutions $ 977,633 $ 1,045,643 Production Solutions — 35,086 Corporate 103,950 60,443 $ 1,081,583 $ 1,141,172 |
Business Acquisitions and Div_3
Business Acquisitions and Divestitures - Additional Information (Details) - USD ($) shares in Millions | Oct. 25, 2018 | Aug. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2019 | Sep. 30, 2018 |
Business Acquisition [Line Items] | |||||
Goodwill | $ (8,665,000) | ||||
Proceeds from sale of subsidiaries | $ 17,400,000 | $ 17,222,000 | $ 0 | ||
Loss on disposal | $ 15,800,000 | ||||
Magnum | |||||
Business Acquisition [Line Items] | |||||
Upfront cash consideration | $ 334,500,000 | 1,000,000 | |||
Equity interest issued (in shares) | 5 | ||||
Percentage of net income on potential future cash payments | 60.00% | ||||
Value of potential future cash payments | $ 25,000,000 | ||||
Accrued expenses | 7,700,000 | ||||
Goodwill | $ (8,700,000) | ||||
Minimum | Magnum | |||||
Business Acquisition [Line Items] | |||||
Estimated fair value of earnout | 0 | ||||
Maximum | Magnum | |||||
Business Acquisition [Line Items] | |||||
Estimated fair value of earnout | $ 25,000,000 |
Business Acquisitions and Div_4
Business Acquisitions and Divestitures - Total Purchase Consideration (Details) - Magnum $ in Thousands | Oct. 25, 2018USD ($) |
Business Acquisition [Line Items] | |
Proceeds from newly issued Senior Notes and 2018 ABL Credit Facility | $ 296,622 |
Cash provided from operations | 57,740 |
Total upfront cash consideration | 354,362 |
Issuance of the Company’s common shares | 177,350 |
Contingent consideration | 23,029 |
Total purchase consideration | $ 554,741 |
Business Acquisitions and Div_5
Business Acquisitions and Divestitures - Net Assets Acquired (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 | Oct. 25, 2018 |
Business Acquisition [Line Items] | |||
Goodwill | $ 316,469 | $ 307,804 | |
Magnum | |||
Business Acquisition [Line Items] | |||
Cash and cash equivalents | $ 8,509 | ||
Accounts receivable, net | 30,898 | ||
Income taxes receivable | 695 | ||
Inventories, net | 52,249 | ||
Prepaid expenses and other current assets | 1,147 | ||
Property and equipment, net | 3,729 | ||
Goodwill | 234,504 | ||
Definite-lived intangible assets, net | 148,000 | ||
Indefinite-lived intangible assets | 96,000 | ||
Other long-term assets | 1,055 | ||
Accounts payable | (3,626) | ||
Accrued expenses | (18,404) | ||
Other long-term liabilities | (15) | ||
Total net assets acquired | $ 554,741 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 37,398 | $ 38,890 |
Work in progress | 597 | 130 |
Finished goods | 34,072 | 54,301 |
Inventories | 72,067 | 93,321 |
Reserve for obsolescence | (5,592) | (1,886) |
Inventories, net | $ 66,475 | $ 91,435 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Components of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Goodwill [Roll Forward] | |
Gross Value, beginning balance | $ 400,067 |
Accumulated Impairment Loss, Impairment, beginning balance | (92,263) |
Net, beginning balance | 307,804 |
Goodwill, purchase accounting adjustments | 8,665 |
Gross Value, ending balance | 408,732 |
Accumulated Impairment Loss, Impairment, ending balance | (92,263) |
Net, ending balance | $ 316,469 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, Beginning balance | $ 173,451 | |||
Indefinite-lived intangible assets, Beginning balance | 108,711 | |||
Finite-lived intangible assets, Additions | 0 | |||
Indefinite-lived intangible assets, Additions | 0 | |||
Amortization of intangibles | $ (4,609) | $ (1,857) | (13,925) | $ (5,653) |
Finite-lived intangible assets, Ending balance | 159,526 | 159,526 | ||
Indefinite-lived intangible assets, Ending balance | 108,711 | 108,711 | ||
Trade Names | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets, Beginning balance | 107,700 | |||
Indefinite-lived intangible assets, Additions | 0 | |||
Indefinite-lived intangible assets, Ending balance | 107,700 | 107,700 | ||
Other Intangible Assets | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets, Beginning balance | 1,011 | |||
Indefinite-lived intangible assets, Additions | 0 | |||
Indefinite-lived intangible assets, Ending balance | 1,011 | 1,011 | ||
Customer Relationships | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, Beginning balance | 47,964 | |||
Finite-lived intangible assets, Additions | 0 | |||
Amortization of intangibles | (6,255) | |||
Finite-lived intangible assets, Ending balance | 41,709 | $ 41,709 | ||
Finite-lived intangible assets, weighted average amortization period | 6 years 9 months 20 days | |||
Non- Compete Agreements | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, Beginning balance | $ 2,850 | |||
Finite-lived intangible assets, Additions | 0 | |||
Amortization of intangibles | (1,133) | |||
Finite-lived intangible assets, Ending balance | 1,717 | $ 1,717 | ||
Finite-lived intangible assets, weighted average amortization period | 3 years 8 months 86 days | |||
Technology | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Finite-lived intangible assets, Beginning balance | $ 122,637 | |||
Finite-lived intangible assets, Additions | 0 | |||
Amortization of intangibles | (6,537) | |||
Finite-lived intangible assets, Ending balance | $ 116,100 | $ 116,100 | ||
Finite-lived intangible assets, weighted average amortization period | 13 years 9 months 19 days |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Amortization of intangibles | $ 4,609 | $ 1,857 | $ 13,925 | $ 5,653 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Future estimated amortization of intangibles (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 4,443 | |
2020 | 17,227 | |
2021 | 16,876 | |
2022 | 14,223 | |
2023 | 12,275 | |
Thereafter | 94,482 | |
Total | $ 159,526 | $ 173,451 |
Accrued Expenses (Details)
Accrued Expenses (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Payables and Accruals [Abstract] | ||
Accrued compensation and benefits | $ 15,140 | $ 11,930 |
Accrued bonus | 2,067 | 13,250 |
Sales tax payable | 724 | 1,185 |
Contingent liabilities | 778 | 20,922 |
Interest payable | 14,841 | 7,031 |
Other accrued expenses | 6,923 | 7,116 |
Accrued expenses | $ 40,473 | $ 61,434 |
Debt Obligations - Summary of D
Debt Obligations - Summary of Debt Obligations (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Line of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | $ 400,000 | $ 435,000 |
Deferred financing costs | (8,461) | (10,022) |
Total debt | 391,539 | 424,978 |
Less: Current portion of long-term debt | 0 | 0 |
Long-term debt | 391,539 | 424,978 |
Senior Notes | ||
Line of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | 400,000 | 400,000 |
2018 ABL Credit Facility | Line of Credit | ||
Line of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | $ 0 | $ 35,000 |
Debt Obligations - Additional I
Debt Obligations - Additional Information (Details) - USD ($) | Oct. 25, 2018 | Sep. 14, 2017 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2018 | Jan. 31, 2018 |
Debt Instrument [Line Items] | ||||||
Deferred financing costs | $ 8,461,000 | $ 10,022,000 | ||||
Proceeds from secured lines of credit | $ 35,000,000 | 10,000,000 | $ 0 | |||
Proceeds from issuance of common stock, net | 0 | 171,450,000 | ||||
Debt extinguishment cost | $ 700,000 | |||||
Senior Notes | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 400,000,000 | |||||
Debt instrument, interest rate | 8.75% | |||||
Default trigger percentage | 25.00% | |||||
2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 200,000,000 | |||||
Commitment fee percentage | 0.50% | |||||
Interest rate | 2.63% | |||||
Current borrowing capacity | $ 118,000,000 | |||||
2018 IPO Term Loan Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Proceeds from issuance of common stock, net | $ 150,000,000 | |||||
Legacy Term Loans And Revolving Credit Facilities | ||||||
Debt Instrument [Line Items] | ||||||
Repayments of debt | 242,200,000 | |||||
Canadian Tranche | 2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | 25,000,000 | |||||
Letter of Credit | 2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Maximum borrowing capacity | $ 50,000,000 | |||||
2018 IPO Term Loan Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Debt instrument, face amount | $ 125,000,000 | |||||
Maximum borrowing capacity | $ 50,000,000 | |||||
Outstanding letter of credit | $ 200,000 | |||||
Mandatory prepayment | $ 9,700,000 | |||||
Percentage of net proceeds from IPO | 50.00% | |||||
Commitment fee percentage | 0.50% | |||||
Minimum | LIBOR | Canadian Tranche | 2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 0.75% | |||||
Minimum | LIBOR | Letter of Credit | 2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 1.75% | |||||
Minimum | LIBOR | 2018 IPO Term Loan Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 2.50% | |||||
Minimum | Base Rate | 2018 IPO Term Loan Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 1.50% | |||||
Maximum | LIBOR | Canadian Tranche | 2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 1.25% | |||||
Maximum | LIBOR | Letter of Credit | 2018 ABL Credit Facility | Line of Credit | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 2.25% | |||||
Maximum | LIBOR | 2018 IPO Term Loan Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 3.75% | |||||
Maximum | Base Rate | 2018 IPO Term Loan Credit Facility | ||||||
Debt Instrument [Line Items] | ||||||
Applicable margin for base rate loans | 2.75% |
Debt Obligations - Fair Value o
Debt Obligations - Fair Value of Debt Instruments (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Dec. 31, 2018 |
Senior Notes | ||
Debt Instrument [Line Items] | ||
Debt instrument, fair value disclosure | $ 324,000 | $ 376,000 |
Line of Credit | 2018 ABL Credit Facility | ||
Debt Instrument [Line Items] | ||
Debt instrument, fair value disclosure | $ 0 | $ 35,000 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | Dec. 31, 2016 | Dec. 31, 2018 | |
Lynn Frazier | |||||||
Related Party Transaction [Line Items] | |||||||
Payables due to entities | $ 0 | $ 0 | $ 0 | ||||
Beneficial owners of entity stock, percentage owned | 5.00% | ||||||
Rent expense | 400,000 | $ 1,100,000 | |||||
Curtis F. Harrell | |||||||
Related Party Transaction [Line Items] | |||||||
Payments to acquire equipment | $ 600,000 | $ 600,000 | |||||
Cost of services | 200,000 | 0 | 400,000 | 500,000 | |||
Due from related parties | 200,000 | 200,000 | 100,000 | ||||
EOG Resources, Inc. | |||||||
Related Party Transaction [Line Items] | |||||||
Due from related parties | 7,000,000 | ||||||
Revenue from related parties | 12,100,000 | 31,800,000 | |||||
Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Due from related parties | 2,000,000 | 2,000,000 | |||||
Revenue from related parties | 5,400,000 | 15,800,000 | |||||
Prepaid Expenses and Other | |||||||
Related Party Transaction [Line Items] | |||||||
Unpaid interest of notes payable | 10,000 | ||||||
Mr. Crombie | |||||||
Related Party Transaction [Line Items] | |||||||
Outstanding notes | $ 7,600,000 | ||||||
Lease and building maintenance expense | 200,000 | $ 200,000 | 600,000 | $ 600,000 | |||
Payments to acquire equipment | 700,000 | 1,300,000 | |||||
Promissory Notes | Former owners of Crest and Mr.Crombie | |||||||
Related Party Transaction [Line Items] | |||||||
Notes issued | $ 9,400,000 | ||||||
Promissory Notes | Mr. Crombie | |||||||
Related Party Transaction [Line Items] | |||||||
Notes paid | $ 1,800,000 | ||||||
Equipment | Mr. Crombie | |||||||
Related Party Transaction [Line Items] | |||||||
Payables due to entities | $ 100,000 | $ 100,000 |
Commitment and Contingencies -
Commitment and Contingencies - Contingent Consideration (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2019 | Sep. 30, 2018 | |
Loss Contingencies [Line Items] | ||
Beginning balance | $ 25,529 | |
Payments | (250) | $ 0 |
Revaluation adjustments | (20,701) | |
Ending balance | 4,578 | |
Magnum | ||
Loss Contingencies [Line Items] | ||
Beginning balance | 24,521 | |
Payments | 0 | |
Revaluation adjustments | (21,436) | |
Ending balance | 3,085 | |
Frac Tech | ||
Loss Contingencies [Line Items] | ||
Beginning balance | 1,008 | |
Payments | (250) | |
Revaluation adjustments | 735 | |
Ending balance | $ 1,493 |
Commitment and Contingencies _2
Commitment and Contingencies - Additional Information (Details) - USD ($) | Sep. 30, 2019 | Dec. 31, 2018 | Oct. 25, 2018 |
Loss Contingencies [Line Items] | |||
Contingent liabilities | $ 4,578,000 | $ 25,529,000 | |
Accrued Expenses | |||
Loss Contingencies [Line Items] | |||
Contingent liabilities | 800,000 | 20,900,000 | |
Other Noncurrent Liabilities | |||
Loss Contingencies [Line Items] | |||
Contingent liabilities | 3,800,000 | 4,600,000 | |
Scorpion | Accrued Expenses | |||
Loss Contingencies [Line Items] | |||
Estimated liability for self-insured medical claims | 1,600,000 | ||
Magnum | |||
Loss Contingencies [Line Items] | |||
Percentage of net income on potential future cash payments | 60.00% | ||
Value of potential future cash payments | $ 25,000,000 | ||
Contingent liabilities | $ 3,085,000 | $ 24,521,000 |
Taxes (Details)
Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Income tax expense (benefit) | $ 727 | $ 1,130 | $ (1,548) | $ 1,875 |
Effective tax rate | (3.70%) | 7.60% | (126.70%) | 7.10% |
Earnings (Loss) Per Share (Deta
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2019 | Sep. 30, 2018 | Sep. 30, 2019 | Sep. 30, 2018 | |
Earnings Per Share [Abstract] | ||||
Net Loss | $ (20,627) | $ 13,658 | $ 2,770 | $ 24,352 |
Average Shares Outstanding, Basic (in shares) | 29,361,633 | 23,971,032 | 29,288,113 | 23,264,014 |
Earnings Per Share, Basic (in usd per share) | $ (0.70) | $ 0.57 | $ 0.09 | $ 1.05 |
Assumed exercise of stock options (in shares) | 0 | 41,341 | 0 | 31,879 |
Unvested restricted stock (in shares) | 0 | 376,922 | 109,523 | 308,029 |
Average Shares Outstanding, Diluted (in shares) | 29,361,633 | 24,389,295 | 29,397,636 | 23,603,922 |
Earnings Per Share, Diluted (in usd per share) | $ (0.70) | $ 0.56 | $ 0.09 | $ 1.03 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | 8 Months Ended | 9 Months Ended | |||
Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Aug. 31, 2019segment | Sep. 30, 2019USD ($) | Sep. 30, 2018USD ($) | Dec. 31, 2018USD ($) | |
Segment Reporting Information [Line Items] | ||||||
Number of segments | segment | 2 | |||||
Revenues | $ 202,305 | $ 218,427 | $ 669,527 | $ 597,726 | ||
Cost of revenue | 166,849 | 165,882 | 529,994 | 467,700 | ||
Adjusted gross profit | 35,456 | 52,545 | 139,533 | 130,026 | ||
General and administrative expenses | 19,222 | 21,816 | 60,979 | 51,837 | ||
(Gain) loss on revaluation of contingent liabilities | (5,771) | 45 | (20,701) | 1,715 | ||
Loss on sale of subsidiaries | 15,834 | 0 | 15,834 | 0 | ||
Depreciation | 12,196 | 13,661 | 39,572 | 39,982 | ||
Amortization of intangibles | 4,609 | 1,857 | 13,925 | 5,653 | ||
Gain on sale of property and equipment | (466) | (1,190) | (799) | (1,701) | ||
Income (loss) from operations | (10,168) | 16,356 | 30,723 | 32,540 | ||
Interest Income (Expense), Nonoperating, Net | 9,732 | 1,568 | 29,501 | 6,313 | ||
Non-operating expenses | 9,843 | 1,756 | 29,940 | 6,763 | ||
Income (loss) before income taxes | (19,900) | 14,788 | 1,222 | 26,227 | ||
Provision (benefit) for income taxes | 727 | 1,130 | (1,548) | 1,875 | ||
Net income (loss) | (20,627) | 13,658 | 2,770 | 24,352 | ||
Capital expenditures | 9,950 | 11,480 | 47,226 | 29,545 | ||
Total Assets | 1,081,583 | 1,081,583 | $ 1,141,172 | |||
Corporate | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 0 | 92 | 93 | 597 | ||
Total Assets | 103,950 | 103,950 | 60,443 | |||
Completion Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 186,252 | 196,608 | 611,255 | 536,363 | ||
Cost of revenue | 152,679 | 147,178 | 480,140 | 414,606 | ||
Adjusted gross profit | 33,573 | 49,430 | 131,115 | 121,757 | ||
Completion Solutions | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 9,146 | 10,723 | 44,343 | 26,636 | ||
Total Assets | 977,633 | 977,633 | 1,045,643 | |||
Production Solutions | ||||||
Segment Reporting Information [Line Items] | ||||||
Revenues | 16,053 | 21,819 | 58,272 | 61,363 | ||
Cost of revenue | 14,170 | 18,704 | 49,854 | 53,094 | ||
Adjusted gross profit | 1,883 | 3,115 | 8,418 | 8,269 | ||
Production Solutions | Operating Segments | ||||||
Segment Reporting Information [Line Items] | ||||||
Capital expenditures | 804 | $ 665 | 2,790 | $ 2,312 | ||
Total Assets | $ 0 | $ 0 | $ 35,086 |