Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 30, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38186 | |
Entity Registrant Name | Nesco Holdings, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 84-2531628 | |
Entity Address, Address Line One | 6714 Pointe Inverness Way | |
Entity Address, Address Line Two | Suite 220 | |
Entity Address, City or Town | Fort Wayne | |
Entity Address, State or Province | IN | |
Entity Address, Postal Zip Code | 46804 | |
City Area Code | 800 | |
Local Phone Number | 252-0043 | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 49,033,903 | |
Entity Central Index Key | 0001709682 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common Stock | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common Stock, $0.0001 par value | |
Trading Symbol | NSCO | |
Security Exchange Name | NYSE | |
Redeemable Warrants | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Redeemable warrants, exercisable for Common Stock, $0.0001 par value | |
Trading Symbol | NSCO.WS | |
Security Exchange Name | NYSE |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (unaudited) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current Assets | ||
Cash | $ 1,640 | $ 6,302 |
Accounts receivable, net of allowance of $4,821 and $4,654 respectively | 56,471 | 71,323 |
Inventory | 30,623 | 33,001 |
Prepaid expenses and other | 6,170 | 5,217 |
Total current assets | 94,904 | 115,843 |
Property and equipment, net | 6,373 | 6,561 |
Rental equipment, net | 348,932 | 383,420 |
Goodwill and other intangibles, net | 305,977 | 308,747 |
Deferred income taxes | 12,708 | 0 |
Notes receivable | 562 | 713 |
Total Assets | 769,456 | 815,284 |
Current Liabilities | ||
Accounts payable | 14,826 | 41,172 |
Accrued expenses | 15,806 | 27,590 |
Deferred rent income | 1,000 | 2,270 |
Current maturities of long-term debt | 1,280 | 1,280 |
Current portion of capital lease obligations | 7,975 | 5,451 |
Total current liabilities | 40,887 | 77,763 |
Long-term debt, net | 733,270 | 713,023 |
Capital leases | 11,848 | 22,631 |
Deferred income taxes | 0 | 12,288 |
Interest rate collar | 7,858 | 1,709 |
Total long-term liabilities | 752,976 | 749,651 |
Commitments and contingencies | ||
Stockholders' Deficit | ||
Common stock - $0.0001 par value, 250,000,000 shares authorized, 49,033,903 shares issued and outstanding, at September 30, 2020 and December 31, 2019 | 5 | 5 |
Additional paid-in capital | 434,246 | 432,577 |
Accumulated deficit | (458,658) | (444,712) |
Total stockholders' deficit | (24,407) | (12,130) |
Total Liabilities and Stockholders' Deficit | $ 769,456 | $ 815,284 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (unaudited) (Parentheticals) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Allowance for accounts receivable | $ 4,821 | $ 4,654 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock, authorized (in shares) | 250,000,000 | 250,000,000 |
Common stock, issued (in shares) | 49,033,903 | 49,033,903 |
Common stock, outstanding (in shares) | 49,033,903 | 49,033,903 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue | ||||
Total Revenue | $ 69,260 | $ 62,442 | $ 219,484 | $ 186,789 |
Cost of Revenue | ||||
Cost of rental revenue | 34,162 | 23,484 | 106,833 | 73,159 |
Depreciation of rental equipment | 19,467 | 17,694 | 59,275 | 51,369 |
Total cost of revenue | 53,629 | 41,178 | 166,108 | 124,528 |
Gross Profit | 15,631 | 21,264 | 53,376 | 62,261 |
Operating Expenses | ||||
Selling, general and administrative expenses | 8,633 | 9,824 | 31,269 | 24,708 |
Licensing and titling expenses | 686 | 690 | 2,243 | 1,926 |
Amortization and non-rental depreciation | 792 | 745 | 2,308 | 2,264 |
Transaction expenses | 110 | 3,325 | 1,073 | 7,394 |
Asset impairment | 0 | 657 | 0 | 657 |
Other operating expenses | 451 | 434 | 2,209 | 1,213 |
Total Operating Expenses | 10,672 | 15,675 | 39,102 | 38,162 |
Operating Income | 4,959 | 5,589 | 14,274 | 24,099 |
Other Expense | ||||
Loss on extinguishment of debt | 0 | 4,005 | 0 | 4,005 |
Interest expense, net | 15,853 | 16,533 | 47,816 | 46,376 |
Other (income) expense, net | (559) | 2,567 | 6,245 | 2,545 |
Total other expense | 15,294 | 23,105 | 54,061 | 52,926 |
Loss Before Income Taxes | (10,335) | (17,516) | (39,787) | (28,827) |
Income Tax Expense (Benefit) | (25,508) | 494 | (25,841) | 1,330 |
Net Income (Loss) | $ 15,173 | $ (18,010) | $ (13,946) | $ (30,157) |
Basic Earnings | ||||
Basic Earnings (Loss) Per Share (USD per share) | $ 0.31 | $ (0.45) | $ (0.28) | $ (1.09) |
Weighted-Average-Common Shares Outstanding (in shares) | 49,033,903 | 39,909,481 | 49,033,903 | 27,743,586 |
Diluted Earnings | ||||
Diluted Earnings (Loss) Per Share (USD per share) | $ 0.31 | $ (0.45) | $ (0.28) | $ (1.09) |
Weighted-Average-Common Shares Outstanding (in shares) | 49,307,811 | 39,909,481 | 49,033,903 | 27,743,586 |
Revenue | ||||
Revenue | ||||
Total Revenue | $ 46,125 | $ 50,103 | $ 144,103 | $ 143,871 |
Cost of Revenue | ||||
Cost of rental revenue | 13,096 | 13,545 | 41,193 | 37,445 |
Rental Equipment | ||||
Revenue | ||||
Total Revenue | 5,510 | 3,436 | 19,585 | 15,167 |
Cost of Revenue | ||||
Cost of rental revenue | 5,190 | 2,847 | 16,454 | 12,653 |
New Equipment | ||||
Revenue | ||||
Total Revenue | 6,048 | 1,246 | 19,043 | 8,076 |
Cost of Revenue | ||||
Cost of rental revenue | 5,410 | 1,116 | 16,841 | 6,618 |
Parts sales and services | ||||
Revenue | ||||
Total Revenue | 11,577 | 7,657 | 36,753 | 19,675 |
Cost of Revenue | ||||
Cost of rental revenue | 10,255 | 5,600 | 30,839 | 14,921 |
Major repair disposals | ||||
Cost of Revenue | ||||
Cost of rental revenue | $ 211 | $ 376 | $ 1,506 | $ 1,522 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Comprehensive Income (Loss) (unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ 15,173 | $ (18,010) | $ (13,946) | $ (30,157) |
Other comprehensive loss: | ||||
Interest rate collar (net of taxes of $285 in the nine months ended September 30, 2019) | 0 | 0 | 0 | (388) |
Other comprehensive loss | 0 | 0 | 0 | (388) |
Comprehensive income (loss) | $ 15,173 | $ (18,010) | $ (13,946) | $ (30,545) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Comprehensive Loss (unaudited) Parenthetical | 9 Months Ended |
Sep. 30, 2019USD ($) | |
Statement of Comprehensive Income [Abstract] | |
Interest rate collar, taxes | $ 285,000 |
Reclassifications from AOCI | 800,000 |
Cash flow hedge, tax expense reclassified | $ 300,000 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Cash Flows (unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating Activities | ||
Net loss | $ (13,946) | $ (30,157) |
Adjustments to reconcile net loss to net cash flow from operating activities: | ||
Depreciation | 60,080 | 52,104 |
Amortization - intangibles | 2,233 | 2,172 |
Amortization - financing costs | 2,188 | 2,099 |
Provision for losses on accounts receivable | 1,813 | 3,472 |
Share-based payments | 1,669 | 463 |
Gain on sale of rental equipment and parts | (4,231) | (3,930) |
Gain on insurance proceeds - damaged equipment | (714) | (570) |
Major repair disposal | 1,506 | 1,522 |
Loss on extinguishment of debt | 0 | 4,005 |
Change in fair value of derivative | 6,149 | 2,552 |
Asset impairment | 0 | 657 |
Deferred tax (benefit) expense | (24,417) | 816 |
Accounts receivable | 9,258 | (13,728) |
Inventory | (3,797) | (13,742) |
Prepaid expenses and other | (953) | (2,211) |
Accounts payable | (8,920) | 4,792 |
Accrued expenses and other liabilities | (11,782) | (4,770) |
Unearned income | (1,270) | (4,832) |
Net cash flow from operating activities | 14,866 | 714 |
Investing Activities | ||
Purchase of equipment - rental fleet | (59,197) | (77,752) |
Proceeds from sale of rental equipment and parts | 26,108 | 22,608 |
Insurance proceeds from damaged equipment | 3,747 | 1,721 |
Purchase of other property and equipment | (678) | (7,166) |
Other | 151 | (1,671) |
Net cash flow from investing activities | (29,869) | (62,260) |
Financing Activities | ||
Proceeds from debt | 0 | 475,000 |
Borrowings under revolving credit facilities | 74,042 | 243,000 |
Repayments under revolving credit facilities | (55,019) | (259,000) |
Repayments of notes payable | (964) | (527,348) |
Capital lease payments | (7,718) | (3,830) |
Proceeds from merger and recapitalization | 0 | 147,268 |
Finance fees paid | 0 | (15,483) |
Net cash flow from financing activities | 10,341 | 59,607 |
Net Change in Cash | (4,662) | (1,939) |
Cash at Beginning of Period | 6,302 | 2,140 |
Cash at End of Period | 1,640 | 201 |
Supplemental Cash Flow Information | ||
Cash paid for interest | 56,815 | 47,861 |
Cash paid for income taxes | 156 | 444 |
Non-Cash Investing and Financing Activities | ||
Transfer of inventory to leased equipment | 6,175 | 3,767 |
Rental equipment and property and equipment purchases in accounts payable | 4,217 | 21,227 |
Rental equipment sales in accounts receivable | 902 | 169 |
Settlement of note payable with common stock | 0 | 25,000 |
Insurance recoveries accrued in accounts receivable | $ 0 | $ 189 |
Condensed Consolidated Statem_5
Condensed Consolidated Statement of Stockholders' Deficit (unaudited) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Balance (in shares) at Dec. 31, 2018 | 21,660,638 | ||||
Balance at Dec. 31, 2018 | $ (158,756) | $ 2 | $ 259,298 | $ (417,660) | $ (396) |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (6,724) | (6,724) | |||
Share-based payments | 128 | 128 | |||
Interest rate collar | 88 | 88 | |||
Balance at Mar. 31, 2019 | (165,264) | $ 2 | 259,426 | (424,384) | (308) |
Balance (in shares) at Mar. 31, 2019 | 21,660,638 | ||||
Balance (in shares) at Dec. 31, 2018 | 21,660,638 | ||||
Balance at Dec. 31, 2018 | (158,756) | $ 2 | 259,298 | (417,660) | (396) |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (30,157) | ||||
Balance at Sep. 30, 2019 | (15,785) | $ 5 | 432,027 | (447,817) | 0 |
Balance (in shares) at Sep. 30, 2019 | 49,033,903 | ||||
Balance (in shares) at Dec. 31, 2018 | 21,660,638 | ||||
Balance at Dec. 31, 2018 | (158,756) | $ 2 | 259,298 | (417,660) | (396) |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Reverse capitalization | 172,300 | ||||
Balance at Dec. 31, 2019 | $ (12,130) | $ 5 | 432,577 | (444,712) | 0 |
Balance (in shares) at Dec. 31, 2019 | 49,033,903 | 49,033,903 | |||
Balance (in shares) at Mar. 31, 2019 | 21,660,638 | ||||
Balance at Mar. 31, 2019 | $ (165,264) | $ 2 | 259,426 | (424,384) | (308) |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (5,423) | (5,423) | |||
Share-based payments | 52 | 52 | |||
Interest rate collar | (476) | (476) | |||
Balance at Jun. 30, 2019 | (171,111) | $ 2 | 259,478 | (429,807) | (784) |
Balance (in shares) at Jun. 30, 2019 | 21,660,638 | ||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (18,010) | ||||
Share-based payments | 283 | 283 | |||
Interest rate collar | 784 | 784 | |||
Reverse capitalization (in shares) | 27,373,265 | ||||
Reverse capitalization | 172,269 | $ 3 | 172,266 | ||
Balance at Sep. 30, 2019 | $ (15,785) | $ 5 | 432,027 | (447,817) | 0 |
Balance (in shares) at Sep. 30, 2019 | 49,033,903 | ||||
Balance (in shares) at Dec. 31, 2019 | 49,033,903 | 49,033,903 | |||
Balance at Dec. 31, 2019 | $ (12,130) | $ 5 | 432,577 | (444,712) | 0 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (15,969) | (15,969) | |||
Share-based payments | 559 | 559 | |||
Balance at Mar. 31, 2020 | $ (27,540) | $ 5 | 433,136 | (460,681) | 0 |
Balance (in shares) at Mar. 31, 2020 | 49,033,903 | ||||
Balance (in shares) at Dec. 31, 2019 | 49,033,903 | 49,033,903 | |||
Balance at Dec. 31, 2019 | $ (12,130) | $ 5 | 432,577 | (444,712) | 0 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (13,946) | ||||
Balance at Sep. 30, 2020 | $ (24,407) | $ 5 | 434,246 | (458,658) | 0 |
Balance (in shares) at Sep. 30, 2020 | 49,033,903 | 49,033,903 | |||
Balance (in shares) at Mar. 31, 2020 | 49,033,903 | ||||
Balance at Mar. 31, 2020 | $ (27,540) | $ 5 | 433,136 | (460,681) | 0 |
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | (13,150) | (13,150) | |||
Share-based payments | 453 | 453 | |||
Balance at Jun. 30, 2020 | (40,237) | $ 5 | 433,589 | (473,831) | 0 |
Balance (in shares) at Jun. 30, 2020 | 49,033,903 | ||||
Increase (Decrease) in Stockholders' Deficit [Roll Forward] | |||||
Net loss | 15,173 | 15,173 | |||
Share-based payments | 657 | 657 | |||
Interest rate collar | 0 | ||||
Balance at Sep. 30, 2020 | $ (24,407) | $ 5 | $ 434,246 | $ (458,658) | $ 0 |
Balance (in shares) at Sep. 30, 2020 | 49,033,903 | 49,033,903 |
Business and Organization
Business and Organization | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Business and Organization | Note 1: Business and Organization Organization Nesco Holdings, Inc. (“Holdings”), a Delaware corporation, serves as the parent for our primary operating company, NESCO, LLC, an Indiana limited liability company, and its wholly owned subsidiaries (collectively, with Holdings, “we,” “our,” “us,” “Nesco,” or the "Company"), and is engaged in the business of providing a range of services and products to customers through rentals of specialty equipment, sales of parts related to the specialty equipment, and repair and maintenance services related to that equipment. The wholly-owned subsidiaries of Holdings include: NESCO, LLC, an Indiana limited liability company, NESCO Holdings I, Inc., a Delaware corporation, NESCO Finance Corporation, a Delaware corporation, NESCO Investments, LLC, a Delaware limited liability company, NESCO International, LLC, a Delaware limited liability company, and NESCO El Alquiler S. de R.L. de C.V., an operating company in Mexico. We are a specialty equipment rental provider to the electric utility transmission and distribution, telecommunications and rail industries in North America. Our core business relates to our fleet of specialty rental equipment that is utilized by service providers in infrastructure improvement work. Specifically, we offer our specialized equipment to a diverse customer base, including utilities and primarily contractors, for the maintenance, repair, upgrade and installation of critical infrastructure assets, including distribution and transmission electric lines, telecommunications networks and rail systems, as well as a small percentage for lighting and signage. We rent and sell a broad range of new and used equipment, including bucket trucks, digger derricks, line equipment, cranes, pressure diggers, and underground equipment, which forms our Equipment Rental and Sales ("ERS") segment. To complement our fleet, we also provide a one-stop shop for existing and prospective Nesco customers in the same end markets of electric lines, telecommunications networks and rail systems; to purchase or rent parts, tools, and accessories needed to outfit their specialty truck fleet. These activities form our Parts, Tools, and Accessories (“PTA”) segment. We are positioned to serve all 50 U.S. states and 13 Canadian provinces and territories via our network of over 70 locations in the United States and Canada. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Polices | Note 2: Summary of Significant Accounting Policies Basis of Presentation The accompanying interim statements of the Company have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other period. These interim statements should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. Use of Estimates We prepare our consolidated financial statements in conformity with GAAP, which requires us to use judgment to make estimates that directly affect the amounts reported in our consolidated financial statements and accompanying notes. Significant estimates are used for items including, but not limited to, the useful lives and residual values of our rental equipment, and business combinations. In addition, estimates are used to test both long-lived assets, goodwill and indefinite-lived assets for impairment, and to determine the fair value of impaired assets, if any impairment exists. These estimates are based on our historical experience and on various other assumptions we believe to be reasonable under the circumstances. We review our estimates on an ongoing basis using information currently available, and we revise our recorded estimates as updated information becomes available, facts and circumstances change, or actual amounts become determinable. Actual results could differ from our estimates. In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. Recently Issued Accounting Pronouncements We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. Accordingly, we have elected to comply with certain reduced public company reporting requirements related to effective dates for the adoption of newly issued standards issued by the Financial Accounting Standards Board (the “FASB”). An emerging growth company is permitted to apply the effective dates applicable to non-public entities, which generally are delayed in comparison to public entities that are non-emerging growth entities. Leases The FASB’s new guidance to account for leases (“Topic 842”) by entities that are lessees, requires (1) recognition of lease assets and lease liabilities on the balance sheet and (2) disclosure of key information about leasing arrangements. Topic 842 provides two classifications for leases: financing or operating. Finance leases - The accounting and recognition for leases qualifying as finance leases is similar to the accounting and recognition required under ASC Topic 840, " Leases (“Topic 840”)," for capital leases. As of September 30, 2020, we have capital lease obligations of approximately $19.8 million. When we make our contractually required payments under the capital leases, we allocate a portion to reduce the capital lease obligation and a portion is recognized as interest expense. The assets leased under the capital leases are included in rental equipment, and depreciation thereon is recognized in cost of rental revenue. Operating leases - Under Topic 842, operating leases result in the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Under Topic 842, operating lease ROU assets and liabilities are recognized at the lease commencement date and measured based on the present value of lease payments over the lease term. The operating lease ROU assets will also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease that we are reasonably certain to exercise. Lease expense under Topic 842 will be recognized on a straight-line basis over the lease term. Upon adoption of Topic 842, we expect to recognize operating lease ROU assets and lease liabilities that reflect the present value of these future payments, which we currently estimate to be in the range of $8.0 million to $10.0 million. The FASB issued new guidance with respect to deferring the effective date of Topic 842 by one year. Accordingly, we will adopt Topic 842 effective January 1, 2022, using the transition method that allows us to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We expect to use the package of practical expedients that allows us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. Under Topic 842, lessor accounting will remain substantially similar to the current accounting; however, certain refinements were made to conform the standard with the recently issued revenue recognition guidance in ASC Topic 606," Revenue from Contracts with Customers (“Topic 606”)," specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. On July 30, 2018, the FASB issued ASU 2018-11, which created a practical expedient that provides lessors an option not to separate lease and non-lease components when certain criteria are met and instead account for those components as a single lease component. We are currently in the process of evaluating whether our lease arrangements will meet the criteria under the practical expedient to account for lease and non-lease components as a single lease component, which would alleviate the requirement upon adoption of Topic 842 that we reallocate or separately present lease and non-lease components. Measurement of Current Expected Credit Losses In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," to update the methodology used to measure current expected credit losses (“CECL”). This ASU applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings (deficit) in the period of adoption. For emerging growth companies electing the modified transition dates of non-public entities, this ASU is effective for fiscal years beginning after December 15, 2022. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350)," intended to simplify the subsequent accounting for goodwill acquired in a business combination. Prior guidance required utilizing a two-step process to review goodwill for impairment. A second step was required if there was an indication that an impairment may exist, and the second step required calculating the potential impairment by comparing the implied fair value of a reporting unit’s goodwill (as if purchase accounting were performed on the testing date) to the carrying amount of the goodwill. The new guidance eliminates the second step from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss should not exceed the total amount of goodwill allocated to the reporting unit). The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021. Early adoption of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently assessing the expected impact on our financial statements. Revenue Recognition Following the adoption of Topic 606, as of January 1, 2018, we recognized revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 840, which addresses lease accounting, for which we will adopt an update to this standard using the modified retrospective approach, as described herein. For the three and nine months ended September 30, 2020 and 2019, we recognized rental revenue in accordance with Topic 840, Leases, which is the lease accounting standard. Under Topic 606, revenue from contracts with customers is measured based on the consideration specified in the contract with the customer, and excludes any sales incentives and amounts collected on behalf of third parties. A “performance obligation” is a promise in a contract to transfer a distinct good or service to a customer, and is the unit of account under Topic 606. We recognize revenue when we satisfy a performance obligation by transferring control over a product or service to a customer. The amount of revenue recognized reflects the consideration we expect to be entitled to in exchange for such products or services. As reflected below, most of our revenue is accounted for under Topic 840. Our contracts with customers generally do not include multiple performance obligations. The inset below presents our revenue types based on the accounting standard used to determine the accounting. Three Months Ended September 30, Three Months Ended September 30, 2020 2019 (in $000s) Topic 840 Topic 606 Total Topic 840 Topic 606 Total Rental: Rental revenue $ 44,468 $ — $ 44,468 $ 47,821 $ — $ 47,821 Shipping and handling — 1,657 1,657 — 2,282 2,282 Total rental revenue 44,468 1,657 46,125 47,821 2,282 50,103 Sales and services: Sales of rental equipment — 5,510 5,510 — 3,436 3,436 Sales of new equipment — 6,048 6,048 — 1,246 1,246 Parts and services — 11,577 11,577 — 7,657 7,657 Total sales and services — 23,135 23,135 — 12,339 12,339 Total revenue $ 44,468 $ 24,792 $ 69,260 $ 47,821 $ 14,621 $ 62,442 Nine Months Ended September 30, Nine Months Ended September 30, 2020 2019 (in $000s) Topic 840 Topic 606 Total Topic 840 Topic 606 Total Rental: Rental revenue $ 138,429 $ — $ 138,429 $ 137,194 $ — $ 137,194 Shipping and handling — 5,674 5,674 — 6,677 6,677 Total rental revenue 138,429 5,674 144,103 137,194 6,677 143,871 Sales and services: Sales of rental equipment — 19,585 19,585 — 15,167 15,167 Sales of new equipment — 19,043 19,043 — 8,076 8,076 Parts and services — 36,753 36,753 — 19,675 19,675 Total sales and services — 75,381 75,381 — 42,918 42,918 Total revenue $ 138,429 $ 81,055 $ 219,484 $ 137,194 $ 49,595 $ 186,789 Rental revenue is primarily comprised of revenues from rental agreements and freight charges billed to customers as well as charges to customers for damaged equipment. Inventory Parts, tools and accessories inventory is primarily comprised of items purchased for resale or rent to customers. During the second quarter ended June 30, 2020, in connection with a new inventory management system, we elected to change our method for these inventories, which were previously valued using the first-in, first-out (“FIFO”) method, to the moving average cost method. We believe the change is preferable because it better reflects movement of the inventory and the corresponding value which provides a better reflection of periodic income from operations. This change was not applied retrospectively to prior periods, as the effect of the change was not material to our consolidated financial statements, including interim periods. Also included within parts, tools and accessories inventory are materials and components that we carry to service our rental fleet and new equipment held for sale. These materials and components are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. Equipment inventory consists of equipment bought specifically for resale to customers. These new purchases are recorded directly to inventory when received. Equipment inventory is stated at the lower of cost or net realizable value, with cost determined on a specific identification basis. Inventory consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Parts, tools and accessories inventory $ 26,781 $ 30,174 Equipment inventory 3,842 2,827 Inventory $ 30,623 $ 33,001 Rental and Property and Equipment Rental equipment consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Rental equipment $ 661,153 $ 658,564 Less: accumulated depreciation (312,221) (275,144) Rental equipment, net $ 348,932 $ 383,420 Property and equipment consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Property and equipment $ 11,575 $ 10,082 Less: accumulated depreciation (7,921) (7,168) Construction in progress 2,719 3,647 Property and equipment, net $ 6,373 $ 6,561 On September 27, 2019, we commenced closure of the Company's operations in Mexico due to continued delays in contracts from the Mexican government. In the three and nine month periods ended September 30, 2019, an impairment loss of $0.7 million was recorded to reduce the carrying amount of rental equipment to its fair value, which was determined based on a recent analysis of market activity (i.e., Level 3 fair value as defined in Note 9 herein) for the equipment at these operations. This charge is included in Impairment loss on the Unaudited Condensed Consolidated Statements of Operations. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Segments | Note 3: Segments We have two reportable business segments, Equipment Rental and Sales (“ERS”) and Parts, Tools, and Accessories (“PTA”). ERS provides rental solutions to utilities and contractors serving multiple infrastructure end-markets, including electric transmission and distribution, telecom, rail, lighting and signage. We rent and sell specialized equipment to utilities and utility contractors that build and maintain critical transmission and distribution infrastructure. Utilizing our national platform and rental fleet, we expanded our focus on equipment rental to the telecom, rail, lighting and signage end-markets. The majority of our existing equipment can be used across multiple end-markets and many of our customers operate in these multiple end-markets. We rent and sell a broad range of new and used equipment including bucket trucks, digger derricks, line equipment, cranes, pressure diggers, rail mounted equipment and underground equipment. Our PTA segment offers customers sale and rental solutions for parts, tools, and accessories to complement our specialty equipment line doing business servicing these same end-markets. Our reportable segments align with the information our chief operating decision maker (“CODM”) receives on a regular basis to evaluate the performance of the business and to allocate resources. The accounting principles applied at the operating segment level in determining gross profit are generally the same as those applied at the consolidated financial statement level. There are no inter-segment revenues, and cost allocations to operating segment cost of revenue are minimal; that is, revenue, cost of equipment and parts sold or rented, depreciation of rental equipment and gross profit are directly attributed to each of the operating segments. The following tables present our financial information by segment: Three Months Ended September 30, Three Months Ended September 30, 2020 2019 (in $000s) ERS PTA Total ERS PTA Total Rental revenue (1) $ 42,615 $ 3,510 $ 46,125 $ 46,922 $ 3,181 $ 50,103 Sales of rental equipment 5,510 — 5,510 3,436 — 3,436 Sales of new equipment 6,048 — 6,048 1,246 — 1,246 Parts sales and services — 11,577 11,577 — 7,657 7,657 Total revenues 54,173 15,087 69,260 51,604 10,838 62,442 Cost of revenue 23,342 10,820 34,162 17,091 6,393 23,484 Depreciation of rental equipment 18,530 937 19,467 16,636 1,058 17,694 Gross Profit $ 12,301 $ 3,330 $ 15,631 $ 17,877 $ 3,387 $ 21,264 Nine Months Ended September 30, Nine Months Ended September 30, 2020 2019 (in $000s) ERS PTA Total ERS PTA Total Rental revenue (1) $ 132,693 $ 11,410 $ 144,103 $ 134,684 $ 9,187 $ 143,871 Sales of rental equipment 19,585 — 19,585 15,167 — 15,167 Sales of new equipment 19,043 — 19,043 8,076 — 8,076 Parts sales and services — 36,753 36,753 — 19,675 19,675 Total revenues 171,321 48,163 219,484 157,927 28,862 186,789 Cost of revenue 72,211 34,622 106,833 55,306 17,853 73,159 Depreciation of rental equipment 56,065 3,210 59,275 48,186 3,183 51,369 Gross Profit $ 43,045 $ 10,331 $ 53,376 $ 54,435 $ 7,826 $ 62,261 (1) Amounts for equipment rental revenue of $0.7 million and $1.9 million for the three and nine months ended September 30, 2019, respectively, previously reported in the PTA segment as rental revenue have been reclassified to the ERS segment to align the reportable segment information to the information our CODM began receiving on a regular basis in 2019. Total assets by segment are not disclosed herein because asset by operating segment data is not reviewed by the CODM to assess performance and allocate resources. Gross profit is the primary operating result whereby our segments are evaluated for performance and resource allocation. The following table presents a reconciliation of consolidated gross profit to consolidated loss before income taxes: Three Months Ended September 30, Nine Months Ended September 30, (in $000s) 2020 2019 2020 2019 Gross profit $ 15,631 $ 21,264 $ 53,376 $ 62,261 Selling, general and administrative expenses 8,633 9,824 31,269 24,708 Licensing and titling expenses 686 690 2,243 1,926 Amortization and non-rental depreciation 792 745 2,308 2,264 Transaction expenses 110 3,325 1,073 7,394 Asset impairment — 657 — 657 Other operating expenses 451 434 2,209 1,213 Other (income) expense (559) 2,567 6,245 2,545 Loss on extinguishment of debt — 4,005 — 4,005 Interest expense, net 15,853 16,533 47,816 46,376 Loss before income taxes $ (10,335) $ (17,516) $ (39,787) $ (28,827) We are positioned to serve all 50 U.S. states and 13 Canadian provinces and territories using our network of locations in North America. The following tables present revenue by country and total assets by country: Three Months Ended September 30, Nine Months Ended September 30, (in $000s) 2020 2019 2020 2019 Revenue: United States $ 67,506 $ 60,115 $ 213,576 $ 181,248 Canada 1,754 1,918 4,121 4,599 Mexico (1) — 409 1,787 942 $ 69,260 $ 62,442 $ 219,484 $ 186,789 (1) On September 27, 2019, the Company began commencing activities for the closure of its Mexican operations, which is part of the ERS segment. For the three and nine months ended September, 30, 2020 and 2019, operations in Mexico generated a loss before income taxes of $0.8 million and $2.0 million, and $1.9 million and $3.8 million, respectively. (in $000s) September 30, 2020 December 31, 2019 Assets: United States $ 763,013 $ 802,516 Canada 5,983 8,152 Mexico 460 4,616 $ 769,456 $ 815,284 |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Business Combination | Note 4: Business Combination On September 20, 2019, we entered into a stock purchase agreement with Truck Utilities, Inc. (“Truck Utilities”). Truck Utilities is a specialty rentals, parts, tools and accessories sales, service, equipment sales and truck upfitting company serving the electric transmission, distribution, telecom, and other regional end-markets. On November 4, 2019, we closed on the acquisition for a purchase price of approximately $44.7 million (net of cash acquired of $3.1 million), prior to certain capital expenditure adjustments of approximately $3.8 million. Truck Utilities’ rentals, equipment sales and truck upfitting operations were added to our ERS segment, while its parts, tools and accessories sales and service were added to our PTA segment. The transaction was financed by drawing on the 2019 Credit Facility. As of the date of this report, we were in the preliminary phases of preparing the valuation of the assets acquired and liabilities assumed. Accordingly, the purchase price allocation for this acquisition presented below is preliminary. Completion of the purchase price allocation, which will be completed during the fourth quarter of 2020, will encompass the finalization of valuations for acquisition-date working capital, intangible assets, property and equipment, as well as completion of acquisition-related income tax assessments. We have estimated the fair values of the assets acquired and liabilities assumed using the information that was available. Upon completion of the valuation process, amounts recognized could change resulting in additional expenses recognized for depreciation and amortization of long-lived assets in future periods. We accounted for the acquisitions using the acquisition method of accounting. The purchase price has been allocated to the fair value of the tangible and identifiable intangible assets acquired as determined by management with the assistance of independent third parties. The results of operations of Truck Utilities has been included with the Company’s results since the date of the acquisition. Transaction costs associated with the acquisitions were expensed as incurred. The fair value (which remains provisional) of the assets acquired and liabilities assumed as of the acquisition date is presented below. (in $000s) Current assets, net of current liabilities $ 898 Property and equipment 78 Rental equipment 38,780 Customer relationships 2,820 Total identifiable assets acquired 42,576 Goodwill 8,944 Total consideration $ 51,520 The preliminary values of intangible assets and goodwill related to the acquisition of Truck Utilities consists largely of the synergies and economies of scale provided by the acquired rental equipment portion of the business, as well as additional service center locations in the central Midwestern region of the United States. During the three and nine months ended September 30, 2020 we recorded adjustments to the preliminary fair values, including the related income tax effect, assigned to certain rental equipment, which reduced goodwill. These adjustments were not significant. Goodwill has been preliminarily allocated to the ERS and PTA reporting units in the amount of $5.4 million and $3.5 million, respectively. The operating results of the acquisition have been reflected in the Company’s consolidated financial statements since the acquisition date. Truck Utilities reported revenue of $9.0 million and pretax income of $0.7 million in the three months ended September 30, 2020 ($31.6 million and $1.6 million, respectively, in the nine months ended September 30, 2020). The following pro forma information is presented for comparison purposes as if the Truck Utilities acquisition was completed as of January 1, 2019: (in $000s) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Total revenue $ 74,677 $ 220,993 Net loss (18,719) (29,631) Basic and diluted net loss per share (0.47) (1.07) |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Debt | Note 5: Debt Debt obligations and associated interest rates consisted of the following as of September 30, 2020 and December 31, 2019: September 30, December 31, September 30, December 31, (in $000s) 2020 2019 2020 2019 2019 Credit Facility $ 269,022 $ 250,000 4.1 % 4.2 % Senior Secured Notes due 2024 475,000 475,000 10.0 % 10.0 % Notes Payable 2,561 3,525 Total debt outstanding 746,583 728,525 Deferred finance fees (12,033) (14,222) Net debt 734,550 714,303 Less current maturities (1,280) (1,280) Long-term debt $ 733,270 $ 713,023 On March 10, 2020, we entered into an agreement (the “Incremental Agreement”) amending the 2019 Credit Facility. The Incremental Agreement amends the syndicate of banks for a new participant that increased the maximum amount of the facility by $35.0 million to a total of $385.0 million. As of September 30, 2020, there was $67.4 million (excluding cash) of availability under the 2019 Credit Facility. On July 31, 2019, in connection with a series of transactions with Capitol Investment Corp. IV, debt obligations under a revolving credit facility, a revolving credit commitments and senior notes, were extinguished. In connection with the extinguishment, unamortized deferred financing fees were written-off. The loss on extinguishment of debt aggregated $4.0 million. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Note 6: Goodwill and Intangible Assets Goodwill and intangible assets consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Goodwill $ 237,658 $ 238,195 Nesco trade name 28,000 28,000 Other intangible assets: Trade names 1,030 1,030 Non-compete agreements 380 380 Customer relationships 52,880 52,880 82,290 82,290 Less: accumulated amortization (13,971) (11,738) Intangible assets, net 68,319 70,552 Goodwill and intangible assets $ 305,977 $ 308,747 Goodwill related to our ERS segment and PTA segment was $228.9 million and $8.8 million, respectively, as of September 30, 2020 and December 31, 2019. We perform our annual goodwill impairment testing in the fourth quarter of each year. In addition to the annual impairment test, we regularly assess whether a triggering event has occurred which would require interim impairment testing. During the first quarter ended March 31, 2020, we qualitatively assessed whether it was more likely than not that the goodwill and indefinite-lived intangible assets were impaired. Based that interim impairment assessment, we determined that our goodwill and indefinite-lived intangible assets were not impaired. During the three months ended September 30, 2020, we did not identify any triggering events that necessitated an impairment test. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Note 7: Earnings per Share As described more fully in our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2019, on July 31, 2019, we completed a series of transactions with Capitol Investment Corp. IV that were accounted for as a reverse recapitalization. In connection therewith, the merger and share exchange resulted in $172.3 million, net of transaction costs, of contributed capital. Earnings per share has been recast for all historical periods to reflect the Company's capital structure for all comparative periods. Diluted net income (loss) per share includes the effects of potentially dilutive shares of common stock. Potentially dilutive effects include the exercise of warrants, contingently issuable shares, and share-based compensation, all of which have been excluded from the calculation of diluted net income (loss) per share because earnings are at a net loss and therefore, the potentially dilutive effect would be anti-dilutive. The share amounts of our potentially dilutive shares excluded aggregated 27.8 million and 27.3 million for the three and nine months ended September 30, 2020, respectively. The following tables set forth the computation of basic and dilutive earnings (loss) per share: Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (in $000s, except share and per share data) Net Income (Loss) Weighted Average Shares Per Share Amount Net Income (Loss) Weighted Average Shares Per Share Amount Basic earnings (loss) per share $ 15,173 49,033,903 $ 0.31 $ (18,010) 39,909,481 $ (0.45) Dilutive common share equivalents — 273,908 — — Diluted earnings (loss) per share $ 15,173 49,307,811 $ 0.31 $ (18,010) 39,909,481 $ (0.45) Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (in $000s, except share and per share data) Net Income (Loss) Weighted Average Shares Per Share Amount Net Income (Loss) Weighted Average Shares Per Share Amount Basic earnings (loss) per share $ (13,946) 49,033,903 $ (0.28) $ (30,157) 27,743,586 $ (1.09) Dilutive common share equivalents — — — — Diluted earnings (loss) per share $ (13,946) 49,033,903 $ (0.28) $ (30,157) 27,743,586 $ (1.09) |
Share-Based Compensation
Share-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-Based Compensation | Note 8: Share-Based Compensation During the second quarter ended June 30, 2019, the Company's stockholders approved the 2019 Omnibus Incentive Plan, which authorizes up to 3,150,000 shares of common stock of Nesco Holdings, Inc. for issuance in accordance with the plan’s terms, subject to certain adjustments. On June 11, 2020, the Company's stockholders approved the Amended and Restated 2019 Omnibus Incentive Plan, which increased the total authorized shares of common stock of Nesco Holdings, Inc. to 6,150,000 (the "Plan"). The purpose of the Plan is to provide the Company's and its subsidiaries’ officers, directors, employees and consultants who, by their position, ability and diligence, are able to make important contributions to the Company’s growth and profitability, with an incentive to assist the Company in achieving its long-term corporate objectives, to attract and retain executive officers and other employees of outstanding competence and to provide such persons with an opportunity to acquire an equity interest in the Company. To accomplish these objectives, the Plan provides for awards of equity-based incentives through granting of restricted stock units, stock options, stock appreciation rights and other stock or cash based awards. At September 30, 2020, there were 2,587,992 shares in the share reserve still available for issuance. The Company records share-based compensation awards using a fair value method and recognizes compensation expense for an amount equal to the fair value of the share-based payment issued in its financial statements. The Company’s share-based compensation plans include programs for stock options, restricted stock units ("RSUs"), performance share units ("PSUs"), and deferred compensation. Compensation Expense Share-based compensation expense was $0.7 million and $1.7 million for the three and nine months ended September 30, 2020, respectively, and is included in selling, general, and administrative expenses within the unaudited condensed consolidated statements of operations. In the nine months ended September 30, 2020, the Company's board of directors approved and awarded various share grants under the Plan, totaling approximately 1.2 million options and 0.8 million RSUs. As of September 30, 2020, there was approximately $8.0 million of total unrecognized compensation cost related to stock-based compensation arrangements under the Plan. That cost is expected to be recognized over a weighted average period of 3.4 years. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Note 9: Fair Value Measurements FASB accounting standards provide a comprehensive framework for measuring fair value and sets forth a definition of fair value and establishes a hierarchy prioritizing the inputs to valuation techniques, giving the highest priority to quoted prices in active markets for identical assets and liabilities and the lowest priority to unobservable value inputs. Levels within the hierarchy are defined as follows: • Level 1 - Unadjusted quoted prices for identical assets and liabilities in active markets; • Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for the asset or liability, either directly or indirectly; and • Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The following table sets forth the carrying values (exclusive of deferred financing fees) and fair values of our financial liabilities: Carrying Value Fair Value (in $000s) Level 1 Level 2 Level 3 September 30, 2020 2019 Credit Facility $ 269,022 $ — $ 269,022 $ — Senior Secured Notes due 2024 475,000 — 497,563 — Notes Payable 2,561 — 2,561 — Derivative 7,858 — 7,858 — December 31, 2019 2019 Credit Facility $ 250,000 $ — $ 250,000 $ — Senior Secured Notes due 2024 475,000 — 494,000 — Notes Payable 3,525 — 3,650 — Derivative 1,709 — 1,709 — |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Financial Instruments | Note 10: Financial Instruments In the normal course of business, the Company uses various financial instruments, including derivative instruments, to manage the risks associated with interest rate exposure. These financial instruments are not used for trading or speculative purposes. The fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets were as follows: Liability Derivatives (in $000s) September 30, 2020 December 31, 2019 Derivative instruments: Interest rate collar $ 7,858 $ 1,709 Total derivative instruments $ 7,858 $ 1,709 Derivatives Not Designated as Hedges On July 17, 2019, we entered into an interest rate collar agreement to mitigate the risk of changes in the interest rate paid during the contract period for $170.0 million of the Company's variable rate loans under the 2019 Credit Facility. Under the terms of the interest rate collar, we are required to pay the counterparty to the agreement an amount equal to the difference between a monthly LIBOR-based interest rate and a defined interest rate floor; conversely, we are entitled to receive from the counterparty an amount equal to the excess of a LIBOR-based interest rate and a defined interest rate cap. The required payments due to or due from the counterparty are calculated by applying the interest rate differential to the notional amount ($170.0 million) and are determined monthly through July 31, 2024. The interest rate collar expires in July 2024 and has not been designated as a cash flow hedge. Consequently, the change in fair value of the interest rate collar ($0.2 million and $6.1 million in the three and nine months ended September 30, 2020, respectively) is recognized in our Unaudited Condensed Consolidated Statements of Operations within Other (income) expense, net. Derivatives Instruments Designated as Hedges When a derivative contract is entered into, the Company may designate the derivative instrument as a cash flow hedge of a forecasted transaction, a cash flow hedge of a recognized asset or liability or as an undesignated derivative. When a derivative is designated, the Company formally documents its hedge relationships, including identification of the derivative instruments and the hedged items, as well as its risk management objectives and strategies for undertaking the hedge transaction. This process includes linking derivative instruments that are designated as hedges to specific assets, liabilities or forecasted transactions. The fair market value of derivative instruments is determined through market-based valuations and may not be representative of the actual gains or losses that will be recorded when these instruments mature due to future fluctuations in the markets in which they are traded. The Company assesses at inception and at least quarterly thereafter, whether the derivatives used in cash flow hedging transactions are effective in offsetting the changes in the cash flows of the hedged item. To the extent the derivative is deemed to be an effective hedge, the fair market value changes of the instrument are recorded to accumulated other comprehensive loss and subsequently reclassified into net loss when the hedged transaction affects earnings. Changes in the fair market value of derivatives not deemed to be an effective hedge are recorded in net loss in the period of change. If the hedging relationship ceases to be effective subsequent to inception, or it becomes probable that a forecasted transaction is no longer expected to occur, the hedging relationship will be undesignated and any future gains and losses on the derivative instrument will be recorded in net loss. We entered into an interest rate collar on December 4, 2018, to hedge the interest rate risk associated with our previous revolving credit facility, which was repaid on the date of the merger with Capitol Investment Corp. IV. The interest rate collar was designated as a cash flow hedge and had a term extending to September 30, 2020. On July 17, 2019, we terminated the interest rate collar, which resulted in the hedge becoming undesignated. Accordingly, $0.8 million (net of income taxes of $0.3 million) was reclassified from accumulated other comprehensive loss to Other income (expense) net, in our Condensed Consolidated Statements of Operations during the year ended December 31, 2019. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11: Commitments and Contingencies We record a liability when we believe that it is both probable that a liability has been incurred and the amount can be reasonably estimated. Significant judgment is required to determine both probability and the estimated amount. We review these provisions at least quarterly and adjust these provisions to reflect the impact of negotiations, settlements, rulings, advice of legal counsel, and updated information. Legal Matters We are subject to various claims and legal actions that arise primarily in the ordinary course of business. These matters include, but are not limited to, general liability claims (including personal injury, product liability, property, and auto claims), indemnification and guarantee obligations, employee injuries and employment-related claims, and contract and real estate matters. We maintain insurance coverage for our operations and employees. Our major policies include coverage for property, general liability, auto, directors and officers, health, and workers’ compensation insurances. The ultimate legal and financial liability with respect to such matters generally cannot be estimated with certainty and requires the use of estimates in recording liabilities for potential litigation settlements against us. Estimates for losses from litigation are made after consultation with outside legal counsel. In our opinion, after consultation with legal counsel, the disposition or ultimate resolution of such claims and actions will not have a material adverse effect on our consolidated financial position, results of operations, or cash flows. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 12: Income Taxes The Tax Cuts and Jobs Act of 2017 included new rules created to limit the deductibility of interest expense in certain circumstances. Historically, we had maintained a valuation allowance against our deferred tax assets related to federal and state net operating loss carryforwards as well as disallowed interest expense deduction carryforwards under those rules. During the three and nine months ended September 30, 2020, we recorded a reduction of our deferred tax valuation allowance, which resulted in an increase in income tax benefit of approximately $5.0 million. The reduction represents a correction of valuation allowances recorded in prior annual periods. These valuation allowances were recognized based on our prior interpretation of the manner in which the interest limitation rules impact the realizability of certain deferred tax assets. In our revised assessment, we estimate we are more likely than not to realize certain of our federal and state deferred tax assets within the period that the carryforwards expire. In addition, in March 2020, the United States Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) reduced the amount of disallowed interest expense which resulted in a greater amount of interest deduction. Consistent with our historical practice, we had recognized a deferred tax valuation allowance against the incremental net operating loss carryforwards generated as a result of the CARES Act during the first half of 2020. As a result of our revised assessment described in the previous paragraph, during the three and nine months ended September 30, 2020, we recorded an income tax benefit of approximately $8.7 million to correct the deferred tax valuation allowance recorded in prior 2020 interim periods. We determined that the effects of the misstatements, both on an individual and cumulative basis, were not material to our consolidated financial statements for any interim or annual period. Further, on July 27, 2020, the United States Department of Treasury and Internal Revenue Service issued final regulations that provided guidance on the determination of disallowed interest expense. This guidance also resulted in net operating loss carryforwards that are estimated to be realized. As a result, during the three and nine months ended September 30, 2020, we recorded an income tax benefit of approximately $11.8 million. |
COVID-19
COVID-19 | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
COVID-19 | Note 13: COVID-19 During the on-going COVID-19 pandemic, we have undertaken efforts intended to maintain the health and safety of our employees and their families and to ensure the Company's continued financial and operational viability, especially in relation to our position as a supplier to critical industries. Employees whose tasks can be completed offsite have been instructed to work from home. Our service locations remain operational, and we are maintaining social distancing and enhanced cleaning protocols and usage of personal protective equipment, where appropriate. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of PresentationThe accompanying interim statements of the Company have been prepared in accordance with GAAP for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments, consisting only of normal recurring adjustments and disclosures necessary for a fair statement of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year or for any other period. These interim statements should be read in conjunction with the Company's audited consolidated financial statements included in the Company's Annual Report on Form 10-K for the year ended December 31, 2019. |
Use of Estimates | Use of EstimatesWe prepare our consolidated financial statements in conformity with GAAP, which requires us to use judgment to make estimates that directly affect the amounts reported in our consolidated financial statements and accompanying notes. Significant estimates are used for items including, but not limited to, the useful lives and residual values of our rental equipment, and business combinations. In addition, estimates are used to test both long-lived assets, goodwill and indefinite-lived assets for impairment, and to determine the fair value of impaired assets, if any impairment exists. These estimates are based on our historical experience and on various other assumptions we believe to be reasonable under the circumstances. We review our estimates on an ongoing basis using information currently available, and we revise our recorded estimates as updated information becomes available, facts and circumstances change, or actual amounts become determinable. Actual results could differ from our estimates. In the opinion of management, these financial statements reflect all normal recurring adjustments necessary for a fair presentation of the interim period results. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements We are an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012. Accordingly, we have elected to comply with certain reduced public company reporting requirements related to effective dates for the adoption of newly issued standards issued by the Financial Accounting Standards Board (the “FASB”). An emerging growth company is permitted to apply the effective dates applicable to non-public entities, which generally are delayed in comparison to public entities that are non-emerging growth entities. Leases The FASB’s new guidance to account for leases (“Topic 842”) by entities that are lessees, requires (1) recognition of lease assets and lease liabilities on the balance sheet and (2) disclosure of key information about leasing arrangements. Topic 842 provides two classifications for leases: financing or operating. Finance leases - The accounting and recognition for leases qualifying as finance leases is similar to the accounting and recognition required under ASC Topic 840, " Leases (“Topic 840”)," for capital leases. As of September 30, 2020, we have capital lease obligations of approximately $19.8 million. When we make our contractually required payments under the capital leases, we allocate a portion to reduce the capital lease obligation and a portion is recognized as interest expense. The assets leased under the capital leases are included in rental equipment, and depreciation thereon is recognized in cost of rental revenue. Operating leases - Under Topic 842, operating leases result in the recognition of right-of-use (“ROU”) assets and lease liabilities on the balance sheet. ROU assets represent our right to use the leased asset for the lease term and lease liabilities represent our obligation to make lease payments. Under Topic 842, operating lease ROU assets and liabilities are recognized at the lease commencement date and measured based on the present value of lease payments over the lease term. The operating lease ROU assets will also include any lease payments made and exclude lease incentives. Our lease terms may include options to extend or terminate the lease that we are reasonably certain to exercise. Lease expense under Topic 842 will be recognized on a straight-line basis over the lease term. Upon adoption of Topic 842, we expect to recognize operating lease ROU assets and lease liabilities that reflect the present value of these future payments, which we currently estimate to be in the range of $8.0 million to $10.0 million. The FASB issued new guidance with respect to deferring the effective date of Topic 842 by one year. Accordingly, we will adopt Topic 842 effective January 1, 2022, using the transition method that allows us to recognize a cumulative-effect adjustment to the opening balance of accumulated deficit in the period of adoption. A modified retrospective approach is required for adoption for all leases that exist at or commence after the date of initial application with an option to use certain practical expedients. We expect to use the package of practical expedients that allows us to not reassess: (1) whether any expired or existing contracts are or contain leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. Under Topic 842, lessor accounting will remain substantially similar to the current accounting; however, certain refinements were made to conform the standard with the recently issued revenue recognition guidance in ASC Topic 606," Revenue from Contracts with Customers (“Topic 606”)," specifically related to the allocation and recognition of contract consideration earned from lease and non-lease revenue components. On July 30, 2018, the FASB issued ASU 2018-11, which created a practical expedient that provides lessors an option not to separate lease and non-lease components when certain criteria are met and instead account for those components as a single lease component. We are currently in the process of evaluating whether our lease arrangements will meet the criteria under the practical expedient to account for lease and non-lease components as a single lease component, which would alleviate the requirement upon adoption of Topic 842 that we reallocate or separately present lease and non-lease components. Measurement of Current Expected Credit Losses In June 2016, the FASB issued ASU 2016-13, " Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ," to update the methodology used to measure current expected credit losses (“CECL”). This ASU applies to financial assets measured at amortized cost, including loans, held-to-maturity debt securities, net investments in leases, and trade accounts receivable as well as certain off-balance sheet credit exposures, such as loan commitments. This ASU replaces the current incurred loss impairment methodology with a methodology to reflect CECL and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The guidance must be adopted using a modified retrospective transition method through a cumulative-effect adjustment to retained earnings (deficit) in the period of adoption. For emerging growth companies electing the modified transition dates of non-public entities, this ASU is effective for fiscal years beginning after December 15, 2022. We are currently evaluating the impact of this standard on our consolidated financial statements and related disclosures. Simplifying the Test for Goodwill Impairment In January 2017, the FASB issued ASU 2017-04, “Intangibles-Goodwill and Other: Simplifying the Test for Goodwill Impairment (Topic 350)," intended to simplify the subsequent accounting for goodwill acquired in a business combination. Prior guidance required utilizing a two-step process to review goodwill for impairment. A second step was required if there was an indication that an impairment may exist, and the second step required calculating the potential impairment by comparing the implied fair value of a reporting unit’s goodwill (as if purchase accounting were performed on the testing date) to the carrying amount of the goodwill. The new guidance eliminates the second step from the goodwill impairment test. Under the new guidance, an entity should perform its annual, or interim, goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount, and then recognize an impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value (although the loss should not exceed the total amount of goodwill allocated to the reporting unit). The guidance requires prospective adoption and will be effective for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2021. Early adoption of this guidance is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. We are currently assessing the expected impact on our financial statements. Revenue Recognition Following the adoption of Topic 606, as of January 1, 2018, we recognized revenue in accordance with two different accounting standards: 1) Topic 606 and 2) Topic 840, which addresses lease accounting, for which we will adopt an update to this standard using the modified retrospective approach, as described herein. For the three and nine months ended September 30, 2020 and 2019, we recognized rental revenue in accordance with Topic 840, Leases, which is the lease accounting standard. |
Inventory | Inventory Parts, tools and accessories inventory is primarily comprised of items purchased for resale or rent to customers. During the second quarter ended June 30, 2020, in connection with a new inventory management system, we elected to change our method for these inventories, which were previously valued using the first-in, first-out (“FIFO”) method, to the moving average cost method. We believe the change is preferable because it better reflects movement of the inventory and the corresponding value which provides a better reflection of periodic income from operations. This change was not applied retrospectively to prior periods, as the effect of the change was not material to our consolidated financial statements, including interim periods. Also included within parts, tools and accessories inventory are materials and components that we carry to service our rental fleet and new equipment held for sale. These materials and components are stated at the lower of cost or net realizable value, with cost determined on a first-in, first-out basis. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Revenue Types Based On Accounting Standard | The inset below presents our revenue types based on the accounting standard used to determine the accounting. Three Months Ended September 30, Three Months Ended September 30, 2020 2019 (in $000s) Topic 840 Topic 606 Total Topic 840 Topic 606 Total Rental: Rental revenue $ 44,468 $ — $ 44,468 $ 47,821 $ — $ 47,821 Shipping and handling — 1,657 1,657 — 2,282 2,282 Total rental revenue 44,468 1,657 46,125 47,821 2,282 50,103 Sales and services: Sales of rental equipment — 5,510 5,510 — 3,436 3,436 Sales of new equipment — 6,048 6,048 — 1,246 1,246 Parts and services — 11,577 11,577 — 7,657 7,657 Total sales and services — 23,135 23,135 — 12,339 12,339 Total revenue $ 44,468 $ 24,792 $ 69,260 $ 47,821 $ 14,621 $ 62,442 Nine Months Ended September 30, Nine Months Ended September 30, 2020 2019 (in $000s) Topic 840 Topic 606 Total Topic 840 Topic 606 Total Rental: Rental revenue $ 138,429 $ — $ 138,429 $ 137,194 $ — $ 137,194 Shipping and handling — 5,674 5,674 — 6,677 6,677 Total rental revenue 138,429 5,674 144,103 137,194 6,677 143,871 Sales and services: Sales of rental equipment — 19,585 19,585 — 15,167 15,167 Sales of new equipment — 19,043 19,043 — 8,076 8,076 Parts and services — 36,753 36,753 — 19,675 19,675 Total sales and services — 75,381 75,381 — 42,918 42,918 Total revenue $ 138,429 $ 81,055 $ 219,484 $ 137,194 $ 49,595 $ 186,789 |
Schedule of Inventory | Inventory consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Parts, tools and accessories inventory $ 26,781 $ 30,174 Equipment inventory 3,842 2,827 Inventory $ 30,623 $ 33,001 |
Schedule of Rental Equipment | Rental equipment consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Rental equipment $ 661,153 $ 658,564 Less: accumulated depreciation (312,221) (275,144) Rental equipment, net $ 348,932 $ 383,420 Property and equipment consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Property and equipment $ 11,575 $ 10,082 Less: accumulated depreciation (7,921) (7,168) Construction in progress 2,719 3,647 Property and equipment, net $ 6,373 $ 6,561 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Summary of Financial Information by Segment | The following tables present our financial information by segment: Three Months Ended September 30, Three Months Ended September 30, 2020 2019 (in $000s) ERS PTA Total ERS PTA Total Rental revenue (1) $ 42,615 $ 3,510 $ 46,125 $ 46,922 $ 3,181 $ 50,103 Sales of rental equipment 5,510 — 5,510 3,436 — 3,436 Sales of new equipment 6,048 — 6,048 1,246 — 1,246 Parts sales and services — 11,577 11,577 — 7,657 7,657 Total revenues 54,173 15,087 69,260 51,604 10,838 62,442 Cost of revenue 23,342 10,820 34,162 17,091 6,393 23,484 Depreciation of rental equipment 18,530 937 19,467 16,636 1,058 17,694 Gross Profit $ 12,301 $ 3,330 $ 15,631 $ 17,877 $ 3,387 $ 21,264 Nine Months Ended September 30, Nine Months Ended September 30, 2020 2019 (in $000s) ERS PTA Total ERS PTA Total Rental revenue (1) $ 132,693 $ 11,410 $ 144,103 $ 134,684 $ 9,187 $ 143,871 Sales of rental equipment 19,585 — 19,585 15,167 — 15,167 Sales of new equipment 19,043 — 19,043 8,076 — 8,076 Parts sales and services — 36,753 36,753 — 19,675 19,675 Total revenues 171,321 48,163 219,484 157,927 28,862 186,789 Cost of revenue 72,211 34,622 106,833 55,306 17,853 73,159 Depreciation of rental equipment 56,065 3,210 59,275 48,186 3,183 51,369 Gross Profit $ 43,045 $ 10,331 $ 53,376 $ 54,435 $ 7,826 $ 62,261 (1) Amounts for equipment rental revenue of $0.7 million and $1.9 million for the three and nine months ended September 30, 2019, respectively, previously reported in the PTA segment as rental revenue have been reclassified to the ERS segment to align the reportable segment information to the information our CODM began receiving on a regular basis in 2019. |
Reconciliation of Segment Gross Profit to Consolidated Loss Before Income Taxes | The following table presents a reconciliation of consolidated gross profit to consolidated loss before income taxes: Three Months Ended September 30, Nine Months Ended September 30, (in $000s) 2020 2019 2020 2019 Gross profit $ 15,631 $ 21,264 $ 53,376 $ 62,261 Selling, general and administrative expenses 8,633 9,824 31,269 24,708 Licensing and titling expenses 686 690 2,243 1,926 Amortization and non-rental depreciation 792 745 2,308 2,264 Transaction expenses 110 3,325 1,073 7,394 Asset impairment — 657 — 657 Other operating expenses 451 434 2,209 1,213 Other (income) expense (559) 2,567 6,245 2,545 Loss on extinguishment of debt — 4,005 — 4,005 Interest expense, net 15,853 16,533 47,816 46,376 Loss before income taxes $ (10,335) $ (17,516) $ (39,787) $ (28,827) |
Summary of Revenue by Country | The following tables present revenue by country and total assets by country: Three Months Ended September 30, Nine Months Ended September 30, (in $000s) 2020 2019 2020 2019 Revenue: United States $ 67,506 $ 60,115 $ 213,576 $ 181,248 Canada 1,754 1,918 4,121 4,599 Mexico (1) — 409 1,787 942 $ 69,260 $ 62,442 $ 219,484 $ 186,789 (1) On September 27, 2019, the Company began commencing activities for the closure of its Mexican operations, which is part of the ERS segment. For the three and nine months ended September, 30, 2020 and 2019, operations in Mexico generated a loss before income taxes of $0.8 million and $2.0 million, and $1.9 million and $3.8 million, respectively. |
Summary of Total Assets by Country | (in $000s) September 30, 2020 December 31, 2019 Assets: United States $ 763,013 $ 802,516 Canada 5,983 8,152 Mexico 460 4,616 $ 769,456 $ 815,284 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of Assets Acquired and Liabilities Assumed | The fair value (which remains provisional) of the assets acquired and liabilities assumed as of the acquisition date is presented below. (in $000s) Current assets, net of current liabilities $ 898 Property and equipment 78 Rental equipment 38,780 Customer relationships 2,820 Total identifiable assets acquired 42,576 Goodwill 8,944 Total consideration $ 51,520 |
Business Acquisition, Pro Forma Information | The following pro forma information is presented for comparison purposes as if the Truck Utilities acquisition was completed as of January 1, 2019: (in $000s) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 Total revenue $ 74,677 $ 220,993 Net loss (18,719) (29,631) Basic and diluted net loss per share (0.47) (1.07) |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt Obligations | Debt obligations and associated interest rates consisted of the following as of September 30, 2020 and December 31, 2019: September 30, December 31, September 30, December 31, (in $000s) 2020 2019 2020 2019 2019 Credit Facility $ 269,022 $ 250,000 4.1 % 4.2 % Senior Secured Notes due 2024 475,000 475,000 10.0 % 10.0 % Notes Payable 2,561 3,525 Total debt outstanding 746,583 728,525 Deferred finance fees (12,033) (14,222) Net debt 734,550 714,303 Less current maturities (1,280) (1,280) Long-term debt $ 733,270 $ 713,023 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets and Goodwill | Goodwill and intangible assets consisted of the following: (in $000s) September 30, 2020 December 31, 2019 Goodwill $ 237,658 $ 238,195 Nesco trade name 28,000 28,000 Other intangible assets: Trade names 1,030 1,030 Non-compete agreements 380 380 Customer relationships 52,880 52,880 82,290 82,290 Less: accumulated amortization (13,971) (11,738) Intangible assets, net 68,319 70,552 Goodwill and intangible assets $ 305,977 $ 308,747 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Computation of Basic and Dilutive Loss Per Share | The following tables set forth the computation of basic and dilutive earnings (loss) per share: Three Months Ended September 30, 2020 Three Months Ended September 30, 2019 (in $000s, except share and per share data) Net Income (Loss) Weighted Average Shares Per Share Amount Net Income (Loss) Weighted Average Shares Per Share Amount Basic earnings (loss) per share $ 15,173 49,033,903 $ 0.31 $ (18,010) 39,909,481 $ (0.45) Dilutive common share equivalents — 273,908 — — Diluted earnings (loss) per share $ 15,173 49,307,811 $ 0.31 $ (18,010) 39,909,481 $ (0.45) Nine Months Ended September 30, 2020 Nine Months Ended September 30, 2019 (in $000s, except share and per share data) Net Income (Loss) Weighted Average Shares Per Share Amount Net Income (Loss) Weighted Average Shares Per Share Amount Basic earnings (loss) per share $ (13,946) 49,033,903 $ (0.28) $ (30,157) 27,743,586 $ (1.09) Dilutive common share equivalents — — — — Diluted earnings (loss) per share $ (13,946) 49,033,903 $ (0.28) $ (30,157) 27,743,586 $ (1.09) |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Carrying Values and Fair Values of Financial Liabilities | The following table sets forth the carrying values (exclusive of deferred financing fees) and fair values of our financial liabilities: Carrying Value Fair Value (in $000s) Level 1 Level 2 Level 3 September 30, 2020 2019 Credit Facility $ 269,022 $ — $ 269,022 $ — Senior Secured Notes due 2024 475,000 — 497,563 — Notes Payable 2,561 — 2,561 — Derivative 7,858 — 7,858 — December 31, 2019 2019 Credit Facility $ 250,000 $ — $ 250,000 $ — Senior Secured Notes due 2024 475,000 — 494,000 — Notes Payable 3,525 — 3,650 — Derivative 1,709 — 1,709 — |
Financial Instruments (Tables)
Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivative Instruments Within Condensed and Consolidated Balance Sheets | The fair values of derivative instruments included within the Unaudited Condensed Consolidated Balance Sheets were as follows: Liability Derivatives (in $000s) September 30, 2020 December 31, 2019 Derivative instruments: Interest rate collar $ 7,858 $ 1,709 Total derivative instruments $ 7,858 $ 1,709 |
Business and Organization (Deta
Business and Organization (Details) | 9 Months Ended |
Sep. 30, 2020statelocation | |
Business Combination Segment Allocation [Line Items] | |
Number of location in which the entity operates | location | 70 |
United States | |
Business Combination Segment Allocation [Line Items] | |
Number of states positioned to serve | 50 |
Canada | |
Business Combination Segment Allocation [Line Items] | |
Number of states positioned to serve | 13 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jan. 01, 2021 | |
Revenue from External Customer [Line Items] | |||||
Capital leases | $ 19,800 | $ 19,800 | |||
Asset impairment | $ 0 | $ 657 | $ 0 | $ 657 | |
Assets Leased to Others | |||||
Revenue from External Customer [Line Items] | |||||
Asset impairment | $ 700 | $ 700 | |||
Forecast | Minimum | |||||
Revenue from External Customer [Line Items] | |||||
ROU assets | $ 8,000 | ||||
Operating lease liability | 8,000 | ||||
Forecast | Maximum | |||||
Revenue from External Customer [Line Items] | |||||
ROU assets | 10,000 | ||||
Operating lease liability | $ 10,000 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Schedule of Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue from External Customer [Line Items] | ||||
Topic 840 | $ 44,468 | $ 47,821 | $ 138,429 | $ 137,194 |
Topic 606 | 24,792 | 14,621 | 81,055 | 49,595 |
Total | 69,260 | 62,442 | 219,484 | 186,789 |
Revenue | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 44,468 | 47,821 | 138,429 | 137,194 |
Topic 606 | 1,657 | 2,282 | 5,674 | 6,677 |
Total | 46,125 | 50,103 | 144,103 | 143,871 |
Rental Revenue, Excluding Shipping And Handling | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 44,468 | 47,821 | 138,429 | 137,194 |
Topic 606 | 0 | 0 | 0 | 0 |
Total | 44,468 | 47,821 | 138,429 | 137,194 |
Rental Revenue, Shipping And Handling | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 0 | 0 | 0 | 0 |
Topic 606 | 1,657 | 2,282 | 5,674 | 6,677 |
Total | 1,657 | 2,282 | 5,674 | 6,677 |
Sales and services | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 0 | 0 | 0 | 0 |
Topic 606 | 23,135 | 12,339 | 75,381 | 42,918 |
Total | 23,135 | 12,339 | 75,381 | 42,918 |
Sales of rental equipment | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 0 | 0 | 0 | 0 |
Topic 606 | 5,510 | 3,436 | 19,585 | 15,167 |
Total | 5,510 | 3,436 | 19,585 | 15,167 |
Sales of new equipment | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 0 | 0 | 0 | 0 |
Topic 606 | 6,048 | 1,246 | 19,043 | 8,076 |
Total | 6,048 | 1,246 | 19,043 | 8,076 |
Parts sales and services | ||||
Revenue from External Customer [Line Items] | ||||
Topic 840 | 0 | 0 | 0 | 0 |
Topic 606 | 11,577 | 7,657 | 36,753 | 19,675 |
Total | $ 11,577 | $ 7,657 | $ 36,753 | $ 19,675 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Inventory [Line Items] | ||
Inventory | $ 30,623 | $ 33,001 |
Parts, tools and accessories inventory | ||
Inventory [Line Items] | ||
Inventory | 26,781 | 30,174 |
Equipment inventory | ||
Inventory [Line Items] | ||
Inventory | $ 3,842 | $ 2,827 |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Rental Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accounting Policies [Abstract] | ||
Rental equipment | $ 661,153 | $ 658,564 |
Less: accumulated depreciation | (312,221) | (275,144) |
Rental equipment, net | $ 348,932 | $ 383,420 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Schedule of Property and Equipment (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (7,921) | $ (7,168) |
Property and equipment, net | 6,373 | 6,561 |
Property and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 11,575 | 10,082 |
Construction in Progress | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 2,719 | $ 3,647 |
Segments - Additional Informati
Segments - Additional Information (Details) | 9 Months Ended |
Sep. 30, 2020statesegment | |
Segment Reporting Information [Line Items] | |
Number of reportable segments | segment | 2 |
United States | |
Segment Reporting Information [Line Items] | |
Number of states positioned to serve | 50 |
Canada | |
Segment Reporting Information [Line Items] | |
Number of states positioned to serve | 13 |
Segments - Financial Informatio
Segments - Financial Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Segment Reporting Information [Line Items] | ||||
Rental revenue | $ 69,260 | $ 62,442 | $ 219,484 | $ 186,789 |
Cost of revenue | 34,162 | 23,484 | 106,833 | 73,159 |
Depreciation of rental equipment | 19,467 | 17,694 | 59,275 | 51,369 |
Gross Profit | 15,631 | 21,264 | 53,376 | 62,261 |
Revenues | 44,468 | 47,821 | 138,429 | 137,194 |
ERS | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 54,173 | 51,604 | 171,321 | 157,927 |
Cost of revenue | 23,342 | 17,091 | 72,211 | 55,306 |
Depreciation of rental equipment | 18,530 | 16,636 | 56,065 | 48,186 |
Gross Profit | 12,301 | 17,877 | 43,045 | 54,435 |
PTA | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 15,087 | 10,838 | 48,163 | 28,862 |
Cost of revenue | 10,820 | 6,393 | 34,622 | 17,853 |
Depreciation of rental equipment | 937 | 1,058 | 3,210 | 3,183 |
Gross Profit | 3,330 | 3,387 | 10,331 | 7,826 |
Revenue | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 46,125 | 50,103 | 144,103 | 143,871 |
Cost of revenue | 13,096 | 13,545 | 41,193 | 37,445 |
Revenues | 44,468 | 47,821 | 138,429 | 137,194 |
Revenue | ERS | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 42,615 | 46,922 | 132,693 | 134,684 |
Revenue | ERS | Reclassification Adjustment | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 700 | 1,900 | ||
Revenue | PTA | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 3,510 | 3,181 | 11,410 | 9,187 |
Sales of rental equipment | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 5,510 | 3,436 | 19,585 | 15,167 |
Cost of revenue | 5,190 | 2,847 | 16,454 | 12,653 |
Revenues | 0 | 0 | 0 | 0 |
Sales of rental equipment | ERS | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 5,510 | 3,436 | 19,585 | 15,167 |
Sales of rental equipment | PTA | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Sales of new equipment | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 6,048 | 1,246 | 19,043 | 8,076 |
Cost of revenue | 5,410 | 1,116 | 16,841 | 6,618 |
Revenues | 0 | 0 | 0 | 0 |
Sales of new equipment | ERS | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 6,048 | 1,246 | 19,043 | 8,076 |
Sales of new equipment | PTA | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Parts sales and services | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 11,577 | 7,657 | 36,753 | 19,675 |
Cost of revenue | 10,255 | 5,600 | 30,839 | 14,921 |
Revenues | 0 | 0 | 0 | 0 |
Parts sales and services | ERS | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | 0 | 0 | 0 | 0 |
Parts sales and services | PTA | ||||
Segment Reporting Information [Line Items] | ||||
Rental revenue | $ 11,577 | $ 7,657 | $ 36,753 | $ 19,675 |
Segments - Reconciliation of Se
Segments - Reconciliation of Segment Gross Profit (Details) - USD ($) $ in Thousands | Jul. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Segment Reporting [Abstract] | |||||
Gross profit | $ 15,631 | $ 21,264 | $ 53,376 | $ 62,261 | |
Selling, general and administrative expenses | 8,633 | 9,824 | 31,269 | 24,708 | |
Licensing and titling expenses | 686 | 690 | 2,243 | 1,926 | |
Amortization and non-rental depreciation | 792 | 745 | 2,308 | 2,264 | |
Transaction expenses | 110 | 3,325 | 1,073 | 7,394 | |
Asset impairment | 0 | 657 | 0 | 657 | |
Other operating expenses | 451 | 434 | 2,209 | 1,213 | |
Other (income) expense | (559) | 2,567 | 6,245 | 2,545 | |
Loss on extinguishment of debt | $ 4,000 | 0 | 4,005 | 0 | 4,005 |
Interest expense, net | 15,853 | 16,533 | 47,816 | 46,376 | |
Loss Before Income Taxes | $ (10,335) | $ (17,516) | $ (39,787) | $ (28,827) |
Segments - Revenue and Assets b
Segments - Revenue and Assets by Country (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Rental revenue | $ 69,260 | $ 62,442 | $ 219,484 | $ 186,789 | |
Loss before income taxes | 10,335 | 17,516 | 39,787 | 28,827 | |
Assets | 769,456 | 769,456 | $ 815,284 | ||
United States | |||||
Segment Reporting Information [Line Items] | |||||
Rental revenue | 67,506 | 60,115 | 213,576 | 181,248 | |
Assets | 763,013 | 763,013 | 802,516 | ||
Canada | |||||
Segment Reporting Information [Line Items] | |||||
Rental revenue | 1,754 | 1,918 | 4,121 | 4,599 | |
Assets | 5,983 | 5,983 | 8,152 | ||
Mexico | |||||
Segment Reporting Information [Line Items] | |||||
Rental revenue | 0 | 409 | 1,787 | 942 | |
Loss before income taxes | 800 | $ 2,000 | 1,900 | $ 3,800 | |
Assets | $ 460 | $ 460 | $ 4,616 |
Business Combination - Narrativ
Business Combination - Narrative (Details) - USD ($) $ in Thousands | Nov. 04, 2019 | Sep. 30, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 237,658 | $ 237,658 | $ 238,195 | |
Truck Utilities, Inc | ||||
Business Acquisition [Line Items] | ||||
Purchase consideration | $ 44,700 | |||
Cash acquired | 3,100 | |||
Capital expenditure adjustment | 3,800 | |||
Goodwill | 8,944 | |||
Revenues | 9,000 | 31,600 | ||
Pretax income | $ 700 | $ 1,600 | ||
Equipment Rental And Sales | Truck Utilities, Inc | ||||
Business Acquisition [Line Items] | ||||
Goodwill | 5,400 | |||
Parts, tools and accessories inventory | Truck Utilities, Inc | ||||
Business Acquisition [Line Items] | ||||
Goodwill | $ 3,500 |
Business Combination - Fair Val
Business Combination - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Nov. 04, 2019 |
Business Acquisition [Line Items] | |||
Goodwill | $ 237,658 | $ 238,195 | |
Truck Utilities, Inc | |||
Business Acquisition [Line Items] | |||
Current assets, net of current liabilities | $ 898 | ||
Property and equipment | 78 | ||
Rental equipment | 38,780 | ||
Total identifiable assets acquired | 42,576 | ||
Goodwill | 8,944 | ||
Total consideration | 51,520 | ||
Customer relationships | Truck Utilities, Inc | |||
Business Acquisition [Line Items] | |||
Customer relationships | $ 2,820 |
Business Combination - Pro Form
Business Combination - Pro Forma Information (Details) - Truck Utilities, Inc - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended |
Sep. 30, 2019 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | ||
Total revenue | $ 74,677 | $ 220,993 |
Net loss | $ (18,719) | $ (29,631) |
Basic and diluted net loss per share (USD per share) | $ (470) | $ (1,070) |
Debt Schedule of Debt Obligatio
Debt Schedule of Debt Obligations (Details) - USD ($) | Jul. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Mar. 10, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | |||||||
Total debt outstanding | $ 746,583,000 | $ 746,583,000 | $ 728,525,000 | ||||
Deferred finance fees | (12,033,000) | (12,033,000) | (14,222,000) | ||||
Net debt | 734,550,000 | 734,550,000 | 714,303,000 | ||||
Less current maturities | (1,280,000) | (1,280,000) | (1,280,000) | ||||
Long-term debt | 733,270,000 | 733,270,000 | 713,023,000 | ||||
Loss on extinguishment of debt | $ 4,000,000 | 0 | $ 4,005,000 | 0 | $ 4,005,000 | ||
Notes Payable | |||||||
Debt Instrument [Line Items] | |||||||
Total debt outstanding | 2,561,000 | 2,561,000 | 3,525,000 | ||||
2019 Credit Facility | Revolving Credit Facility | Line of Credit | |||||||
Debt Instrument [Line Items] | |||||||
Total debt outstanding | $ 269,022,000 | $ 269,022,000 | $ 250,000,000 | ||||
Debt interest rate | 4.10% | 4.10% | 4.20% | ||||
Increase in maximum borrowing capacity | $ 35,000,000 | ||||||
Maximum borrowing capacity | $ 385,000,000 | ||||||
Remaining borrowing capacity | $ 67,400,000 | $ 67,400,000 | |||||
Senior Secured Notes due 2024 | Senior Notes | |||||||
Debt Instrument [Line Items] | |||||||
Total debt outstanding | $ 475,000,000 | $ 475,000,000 | $ 475,000,000 | ||||
Debt interest rate | 10.00% | 10.00% | 10.00% |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Goodwill and Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | $ 237,658 | $ 238,195 |
Nesco trade name | 28,000 | 28,000 |
Intangible assets, gross | 82,290 | 82,290 |
Less: accumulated amortization | (13,971) | (11,738) |
Intangible assets, net | 68,319 | 70,552 |
Goodwill and intangible assets | 305,977 | 308,747 |
ERS | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 228,900 | 228,900 |
PTA | ||
Finite-Lived Intangible Assets [Line Items] | ||
Goodwill | 8,800 | 8,800 |
Trade names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 1,030 | 1,030 |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | 380 | 380 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Other intangible assets | $ 52,880 | $ 52,880 |
Earnings Per Share - Computatio
Earnings Per Share - Computation of Basic and Dilutive Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Reverse capitalization | $ 172,269 | ||||
Potentially dilutive shares excluded in aggregate (in shares) | 27,800,000 | 27,300,000 | |||
Net Income (Loss) | |||||
Basic earnings (loss) per share | $ 15,173 | (18,010) | $ (13,946) | $ (30,157) | |
Dilutive common share equivalents | 0 | 0 | 0 | 0 | |
Diluted earnings (loss) per share | $ 15,173 | $ (18,010) | $ (13,946) | $ (30,157) | |
Weighted Average Shares | |||||
Weighted-average-common shares outstanding, basic (in shares) | 49,033,903 | 39,909,481 | 49,033,903 | 27,743,586 | |
Dilutive common share equivalents (in shares) | 273,908 | 0 | 0 | 0 | |
Weighted-average-common shares outstanding, basic (in shares) | 49,307,811 | 39,909,481 | 49,033,903 | 27,743,586 | |
Per Share Amount | |||||
Basic earnings per share (USD per share) | $ 0.31 | $ (0.45) | $ (0.28) | $ (1.09) | |
Diluted earnings per share (USD per share) | $ 0.31 | $ (0.45) | $ (0.28) | $ (1.09) | |
Additional Paid-in Capital | |||||
Earnings Per Share, Basic, by Common Class, Including Two Class Method [Line Items] | |||||
Reverse capitalization | $ 172,266 | $ 172,300 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 11, 2020 | Jun. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock authorized for issuance (in shares) | 6,150,000 | 3,150,000 | |||
Shares of common stock reserved for issuance (in shares) | 2,587,992 | 2,587,992 | |||
Share-based payments | $ 700 | $ 1,669 | $ 463 | ||
Unrecognized compensation cost | $ 8,000 | $ 8,000 | |||
Weighted average period for recognition | 3 years 4 months 24 days | ||||
Stock Option | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock authorized for issuance (in shares) | 1,200,000 | 1,200,000 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Shares of common stock authorized for issuance (in shares) | 800,000 | 800,000 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative | $ 7,858 | $ 1,709 |
Carrying Value | Notes Payable | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 2,561 | 3,525 |
Carrying Value | Senior Secured Notes due 2024 | Senior Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 475,000 | 475,000 |
Carrying Value | Revolving Credit Facility | 2019 Credit Facility | Line of Credit | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 269,022 | 250,000 |
Fair Value | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative | 0 | 0 |
Fair Value | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative | 7,858 | 1,709 |
Fair Value | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Derivative | 0 | 0 |
Fair Value | Notes Payable | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value | Notes Payable | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 2,561 | 3,650 |
Fair Value | Notes Payable | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value | Senior Secured Notes due 2024 | Senior Notes | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value | Senior Secured Notes due 2024 | Senior Notes | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 497,563 | 494,000 |
Fair Value | Senior Secured Notes due 2024 | Senior Notes | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value | Revolving Credit Facility | 2019 Credit Facility | Line of Credit | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 0 | 0 |
Fair Value | Revolving Credit Facility | 2019 Credit Facility | Line of Credit | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | 269,022 | 250,000 |
Fair Value | Revolving Credit Facility | 2019 Credit Facility | Line of Credit | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt | $ 0 | $ 0 |
Financial Instruments - Fair Va
Financial Instruments - Fair Value of Derivative Instruments (Details) - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Derivative [Line Items] | ||
Total derivative instruments | $ 7,858 | $ 1,709 |
Other liabilities | Interest Rate Collar | ||
Derivative [Line Items] | ||
Total derivative instruments | $ 7,858 | $ 1,709 |
Financial Instruments - Narrati
Financial Instruments - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Jul. 17, 2019 | |
Derivative [Line Items] | ||||||
Derivative instruments not designated as hedges, gain (loss) | $ 200,000 | $ 6,100,000 | ||||
Reclassifications from AOCI | $ 0 | $ 800,000 | $ 0 | $ 800,000 | ||
Cash flow hedge, tax expense reclassified | $ 300,000 | $ 300,000 | ||||
Not Designated as Hedging Instrument | Interest Rate Collar | ||||||
Derivative [Line Items] | ||||||
Interest rate collar amount | $ 170,000,000 | |||||
Designated as Hedging Instrument | Interest Rate Collar | Cash Flow Hedging | ||||||
Derivative [Line Items] | ||||||
Reclassifications from AOCI | $ 800,000 | |||||
Cash flow hedge, tax expense reclassified | $ 300,000 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | ||
Tax cuts and jobs act, measurement period adjustment, income tax benefit | $ 5 | $ 5 |
Income tax benefit adjustment, CARES Act | 8.7 | 8.7 |
Income tax benefit, net operating loss carry forward, CARES Act | $ 11.8 | $ 11.8 |
Uncategorized Items - nsco-2020
Label | Element | Value |
Retained Earnings [Member] | ||
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ (7,022,000) |
Net Income (Loss) Attributable to Parent | us-gaap_NetIncomeLoss | $ (10,988,000) |