Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2020 | Feb. 22, 2021 | Jun. 30, 2020 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2020 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-38441 | ||
Entity Registrant Name | ChampionX Corp | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 82-3066826 | ||
Entity Address, Address Line One | 2445 Technology Forest Blvd | ||
Entity Address, Address Line Two | Building 4, 12th Floor | ||
Entity Address, City or Town | The Woodlands, | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77381 | ||
City Area Code | 281 | ||
Local Phone Number | 403-5772 | ||
Title of 12(b) Security | Common stock, $0.01 par value | ||
Trading Symbol | CHX | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | Yes | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 1,948,052,871 | ||
Entity Common Stock, Shares Outstanding | 200,463,940 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement relating to its 2021 annual meeting of stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K where indicated, or such information will be included in an amendment to this Form 10-K in accordance with Instruction G(3) of Form 10-K. | ||
Entity Central Index Key | 0001723089 | ||
Document Fiscal Year Focus | 2020 | ||
Document Fiscal Period Focus | FY | ||
Amendment Flag | false |
CONSOLIDATED STATEMENTS OF INCO
CONSOLIDATED STATEMENTS OF INCOME (LOSS) - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Operating Lease, Lease Income | $ 58,443 | $ 48,600 | $ 44,605 | |
Total revenue | 1,899,996 | 1,131,251 | 1,218,156 | |
Cost of goods and services | 1,490,824 | 754,147 | 801,152 | |
Gross profit | 409,172 | 377,104 | 417,004 | |
Selling, general and administrative expense | 463,767 | 274,268 | 263,957 | |
Goodwill impairment | 616,271 | 0 | 0 | |
Long-lived asset impairment | 40,980 | 1,746 | 990 | |
Interest expense, net | 51,731 | 39,301 | 27,648 | |
Other expense, net | (828) | 2,603 | 3,056 | |
Income (loss) before income taxes | (762,749) | 59,186 | 121,353 | |
Provision for (benefit from) income taxes | (20,396) | 6,226 | 28,162 | |
Net income (loss) | (742,353) | 52,960 | 93,191 | |
Less: Net income attributable to noncontrolling interest | 1,577 | 796 | 454 | |
Net income (loss) attributable to ChampionX | $ (743,930) | $ 52,164 | $ 92,737 | |
Earnings (losses) per share attributable to ChampionX: | ||||
Basic (in dollars per share) | [1] | $ (5.01) | $ 0.67 | $ 1.20 |
Diluted (in dollars per share) | [1] | $ (5.01) | $ 0.67 | $ 1.19 |
Weighted-average shares outstanding: | ||||
Basic (in shares) | [1] | 148,370 | 77,427 | 77,342 |
Diluted (in shares) | [1] | 148,370 | 77,624 | 77,692 |
Product | ||||
Product and service revenue | $ 1,623,464 | $ 986,341 | $ 1,072,917 | |
Service | ||||
Product and service revenue | $ 218,089 | $ 96,310 | $ 100,634 | |
[1] | See Note 15—Earnings Per Share. |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Net income (loss) | $ (742,353) | $ 52,960 | $ 93,191 |
Other comprehensive income (loss), net of tax: | |||
Foreign currency translation adjustments | 20,245 | 936 | (14,210) |
Cash flow hedges | (2,320) | 0 | 0 |
Pension and other post-retirement benefit plans: | |||
Net actuarial gain (loss) arising during period | (5,526) | (2,521) | 856 |
Prior service cost arising during period | 22 | (190) | 0 |
Reclassification adjustment for net actuarial loss included in net income | 356 | 272 | 247 |
Reclassification adjustment for prior service costs included in net income | 0 | 1 | 0 |
Reclassification adjustment for settlement losses included in net income | 505 | 371 | 353 |
Total pension and other post-retirement benefit plans | (4,643) | (2,067) | 1,456 |
Other comprehensive income (loss) | 13,282 | (1,131) | (12,754) |
Comprehensive income (loss) | (729,071) | 51,829 | 80,437 |
Less: Comprehensive income attributable to noncontrolling interest | 1,577 | 796 | 454 |
Comprehensive income (loss) attributable to ChampionX | $ (730,648) | $ 51,033 | $ 79,983 |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Statement of Comprehensive Income [Abstract] | |||
Foreign currency translation adjustments, tax | $ 0 | $ 0 | $ 0 |
Pension and other post-retirement benefit plans, tax | $ 1,878 | $ 347 | $ 352 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Assets | ||
Cash and cash equivalents | $ 201,421 | $ 35,290 |
Receivables, net | 559,545 | 219,874 |
Inventories, net | 430,112 | 211,342 |
Prepaid expenses and other current assets | 74,767 | 26,934 |
Total current assets | 1,265,845 | 493,440 |
Property, plant and equipment, net of accumulated depreciation | 854,536 | 248,181 |
Operating lease right-of-use assets | 122,481 | 24,289 |
Goodwill | 680,594 | 911,113 |
Intangible assets, net | 479,009 | 238,707 |
Other non-current assets | 73,311 | 7,095 |
Total assets | 3,475,776 | 1,922,825 |
Liabilities and Equity | ||
Current portion of long-term debt | 26,850 | 0 |
Accounts payable | 299,666 | 120,291 |
Accrued compensation and employee benefits | 70,303 | 38,470 |
Current portion of operating lease liabilities | 33,234 | 7,620 |
Accrued distributor fees | 37,465 | 0 |
Accrued expenses and other current liabilities | 155,042 | 33,300 |
Total current liabilities | 622,560 | 199,681 |
Long-term debt | 905,764 | 555,291 |
Deferred income taxes | 156,283 | 84,060 |
Operating lease liabilities | 83,553 | 19,419 |
Other long-term liabilities | 95,041 | 28,160 |
Total liabilities | 1,863,201 | 886,611 |
Stockholders’ equity: | ||
Common stock | 2,004 | 775 |
Capital in excess of par value of common stock | 2,293,179 | 969,174 |
Retained earnings (accumulated deficit) | (638,457) | 107,048 |
Accumulated other comprehensive loss | (30,755) | (44,037) |
ChampionX stockholders’ equity | 1,625,971 | 1,032,960 |
Noncontrolling interest | (13,396) | 3,254 |
Total equity | 1,612,575 | 1,036,214 |
Total liabilities and equity | $ 3,475,776 | $ 1,922,825 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Common stock, shares authorized (in shares) | 2,500,000,000 | 2,500,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 200,400,000 | 77,500,000 |
Common stock, shares outstanding (in shares) | 200,400,000 | 77,500,000 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Cash provided by (used for) operating activities: | |||
Net income (loss) | $ (742,353) | $ 52,960 | $ 93,191 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | |||
Depreciation | 142,647 | 68,557 | 72,569 |
Amortization | 71,715 | 51,381 | 51,892 |
Stock-based compensation | 19,536 | 10,250 | 5,375 |
Loss (gain) on disposal of fixed assets | 8,037 | (2,046) | 113 |
Loss on goodwill and long-lived asset impairment | 657,251 | 1,746 | 990 |
Loss (gain) on sale of business | 0 | 2,475 | (1,286) |
Provision for losses on accounts receivable | 3,523 | 4,955 | 2,007 |
Provision for inventory obsolescence and write-downs | 23,841 | (141) | 1,457 |
Amortization of deferred loan costs and accretion of discount | 3,799 | 2,590 | 1,671 |
Deferred income taxes | (41,998) | (13,874) | 1,492 |
Employee benefit plan expense | 3,054 | 1,883 | 3,340 |
Other | 3,306 | 3,733 | 428 |
Changes in operating assets and liabilities (net of effects of acquisitions and foreign exchange): | |||
Receivables | 58,210 | 25,948 | (55,378) |
Inventories | 85,893 | 19,065 | (40,018) |
Prepaid expenses and other current assets | 17,539 | (10,742) | (3,750) |
Accounts payable | (18,389) | (20,526) | 40,393 |
Accrued compensation and employee benefits | 9,669 | (6,358) | 8,454 |
Accrued expenses and other liabilities | 6,674 | 4,406 | 12,095 |
Leased assets | (4,606) | (40,700) | (25,867) |
Other | 2,692 | 337 | (5,268) |
Net cash provided by operating activities | 310,040 | 155,899 | 163,900 |
Cash provided by (used for) investing activities: | |||
Capital expenditures | (45,163) | (39,780) | (57,918) |
Acquisitions, net of cash acquired | 57,588 | (12,500) | 0 |
Proceeds from sale of fixed assets | 9,705 | 4,598 | 1,187 |
Proceeds from (payment on) sale of business | 0 | (2,194) | 2,473 |
Purchase price adjustments on acquisition | 0 | 0 | 53 |
Net cash provided by (used for) investing activities | 22,130 | (49,876) | (54,205) |
Cash provided by (used for) financing activities: | |||
Proceeds from long-term debt | 125,000 | 36,500 | 713,963 |
Payment of debt issue costs | (4,356) | 0 | (16,006) |
Repayment of long-term debt | (286,493) | (141,500) | (45,000) |
Distributions to Dover Corporation, net | 0 | 0 | (736,557) |
Distribution to noncontrolling interest | (2,175) | 0 | (2,720) |
Payment of finance lease obligations | (5,139) | (5,555) | (4,518) |
Payments related to taxes withheld on stock-based compensation | (3,089) | (1,848) | 0 |
Proceeds from exercise of stock options | 886 | 0 | 0 |
Net cash used for financing activities | (175,366) | (112,403) | (90,838) |
Effect of exchange rate changes on cash and cash equivalents | 9,327 | (162) | (737) |
Net increase (decrease) in cash and cash equivalents | 166,131 | (6,542) | 18,120 |
Cash and cash equivalents at beginning of period | 35,290 | 41,832 | 23,712 |
Cash and cash equivalents at end of period | $ 201,421 | $ 35,290 | $ 41,832 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY - USD ($) $ in Thousands | Total | Common Stock, Par Value | Common Stock, Capital in excess of par value | Retained Earnings (Accum. Deficit) | Net Parent Investment | Accum. Other Comp. Loss | Non- controlling Interest | Cumulative Effect Adjustment | Cumulative Effect AdjustmentRetained Earnings (Accum. Deficit) | Cumulative Effect AdjustmentNet Parent Investment | Cumulative Effect AdjustmentAccum. Other Comp. Loss |
Beginning balance at Dec. 31, 2017 | $ 1,635,509 | $ 0 | $ 0 | $ 0 | $ 1,657,176 | $ (26,416) | $ 4,749 | $ 0 | $ 1,315 | $ (1,315) | |
Net income (loss) | 93,191 | 54,884 | 37,853 | 454 | |||||||
Other comprehensive loss | (12,754) | (12,754) | |||||||||
Net transfers to Dover | (742,054) | (739,633) | (2,421) | ||||||||
Reclassification of net parent investment | 0 | 956,711 | (956,711) | ||||||||
Issuance of common stock | 0 | 773 | (773) | ||||||||
Stock-based compensation | 4,836 | 1 | 4,835 | ||||||||
Distributions to noncontrolling interest | (2,720) | (2,720) | |||||||||
Other | (25) | (25) | |||||||||
Ending balance at Dec. 31, 2018 | 975,983 | 774 | 960,773 | 54,884 | 0 | (42,906) | 2,458 | ||||
Net income (loss) | 52,960 | 52,164 | 796 | ||||||||
Other comprehensive loss | (1,131) | (1,131) | |||||||||
Stock-based compensation | 10,250 | 1 | 10,249 | ||||||||
Taxes withheld on issuance of stock-based awards | (1,848) | (1,848) | |||||||||
Ending balance at Dec. 31, 2019 | 1,036,214 | 775 | 969,174 | 107,048 | 0 | (44,037) | 3,254 | $ (1,575) | $ (1,575) | ||
Net income (loss) | (742,353) | (743,930) | 1,577 | ||||||||
Other comprehensive loss | 13,282 | 13,282 | |||||||||
Issuance of common stock | 1,263,931 | 1,223 | 1,262,708 | ||||||||
Issuance of replacement awards related to the Merger | 43,964 | 43,964 | |||||||||
Non-controlling interest acquired in the Merger | (16,052) | (16,052) | |||||||||
Stock-based compensation | 19,540 | 4 | 19,536 | ||||||||
Stock options exercised | 888 | 2 | 886 | ||||||||
Taxes withheld on issuance of stock-based awards | (3,089) | (3,089) | |||||||||
Distributions to noncontrolling interest | (2,175) | (2,175) | |||||||||
Ending balance at Dec. 31, 2020 | $ 1,612,575 | $ 2,004 | $ 2,293,179 | $ (638,457) | $ 0 | $ (30,755) | $ (13,396) |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ChampionX Corporation is a global leader in chemistry solutions and highly engineered equipment and technologies that help companies drill for and produce oil and gas safely and efficiently around the world. Our products provide efficient functioning throughout the lifecycle of a well with a focus on the production phase of wells. Unless the context requires otherwise, references in this report to “we,” “us,” “our,” “the Company,” or “ChampionX” mean ChampionX Corporation, together with our subsidiaries where the context requires. On May 9, 2018, we became an independent, publicly traded company as a result of the spin-off (“Separation”) from Dover Corporation (“Dover”). On June 3, 2020, the Company and Ecolab Inc. (“Ecolab”) completed a Reverse Morris Trust transaction in which Ecolab transferred their upstream energy business to ChampionX Holding Inc. (“legacy ChampionX”) and, thereafter, distributed all of the shares of legacy ChampionX common stock to certain Ecolab stockholders (“the Distribution”). Immediately following the Distribution, a wholly owned subsidiary of the Company merged with and into legacy ChampionX, with legacy ChampionX continuing as the surviving company in the Merger and as a wholly owned subsidiary of the Company (“the Merger”). In association with the completion of the Merger, the Company changed its name from Apergy Corporation (“Apergy” or “legacy Apergy”) to ChampionX Corporation. Basis of Presentation Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany accounts and transactions have been eliminated. Prior to the Separation, our results of operations, financial position, and cash flows were derived from the consolidated financial statements and accounting records of Dover and reflect the combined historical results of operations, financial position, and cash flows of certain Dover entities conducting its upstream oil and gas energy business within Dover’s Energy segment, including an allocated portion of Dover’s corporate costs. As such, our consolidated statement of income, comprehensive income and cash flows for the year ended December 31, 2018 consist of the consolidated results of legacy Apergy on a stand-alone basis from May 9, 2018 to December 31, 2018, and the combined results of operations and cash flows for periods prior to May 9, 2018. For periods prior to the Separation, our combined financial statements include expense allocations for certain corporate functions historically performed by Dover and not allocated to its operating segments, including corporate executive management, human resources, information technology, facilities, tax, shared services, finance, and legal, including the costs of salaries, benefits and other related costs. These expense allocations were based on direct usage or benefit, where identifiable, with the remainder allocated on the basis of revenue, headcount, or other measures. Management believes the assumptions underlying these consolidated financial statements, including the assumptions regarding the allocation of corporate expenses from Dover for periods prior to the Separation, are reasonable. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company for the periods presented prior to the Separation. Actual costs that would have been incurred if we had been a stand-alone public company would depend on a variety of factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Prior to the Separation, transactions with Dover, with the exception of transactions discussed in Note 19—Related Party Transactions, are reflected in the combined statements of cash flows as a financing activity in Distributions to Dover Corporation, net. See Note 19—Related Party Transactions for additional information. As a result of the Merger, the results of operations of legacy ChampionX have been reflected in our accompanying consolidated financial statements from the closing date of the Merger through December 31, 2020. Results for the periods prior to June 3, 2020 reflect the financial and operating results of Apergy and do not include the financial and operating results of legacy ChampionX. See Note 3—Merger Transaction, Acquisitions, And Dispositions for additional information on the Merger. Significant Accounting Policies Use of estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Such estimates include, but are not limited to, net realizable value of inventories, allowance for doubtful accounts, pension and post-retirement plans, future cash flows associated with impairment testing of goodwill, indefinite-lived intangible assets and other long-lived assets, estimates related to income taxes, and estimates related to contingencies. Cash and cash equivalents— Cash equivalents are highly liquid, short-term investments with original maturities of three months or less from their date of purchase. Receivables, net of allowances— Accounts receivable are carried at the invoiced amounts, less an allowance for doubtful accounts, and generally do not bear interest. The Company estimates the allowance for doubtful accounts for expected credit losses by analyzing accounts receivable balances by applying historical write-off and collection trend rates, as well as current economic and market conditions. Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Account balances are written off against the allowance when it is determined the receivable will not be recovered. The following table provides a rollforward of our allowance for credit losses balance: (in thousands) Allowance for Credit Losses December 31, 2019 $ 8,072 Impact of adoption on January 1, 2020 (1) 2,042 Provision for expected credit losses 6,107 Accounts written off (3,230) Recoveries (2,463) Foreign currency translation (336) December 31, 2020 $ 10,192 _______________________ (1) Represents the impact of adoption of ASU 2016-13. See Note 2—New Accounting Standards for additional information. Inventories— Inventories are stated at the lower of cost or net realizable value. The majority of our inventory costs are determined on the first-in, first-out (FIFO) basis. As of December 31, 2020 and 2019, approximately 35% and 23%, respectively, of our total net inventories were accounted for using the last-in, first-out (LIFO) basis, or market. Under the LIFO method, the cost assigned to items sold is based on the cost of the most recent items purchased. As a result, the costs of the first items purchased remain in inventory and are used to value ending inventory. Inventories consisted of the following: (in thousands) December 31, 2020 December 31, 2019 Raw materials $ 137,038 $ 50,099 Work in progress 9,509 13,325 Finished goods 323,144 175,774 469,691 239,198 Inventory reserve (24,769) (12,067) LIFO adjustments (1) (14,810) (15,789) Inventories, net $ 430,112 $ 211,342 _______________________ (1) Represents the amount by which LIFO inventories exceeded their carrying value. Property, plant and equipment— Property, plant and equipment is recorded at cost or fair value in connection with those assets acquired in a business combination. Depreciation is provided on the straight-line basis over the estimated useful lives of our assets as follows: buildings and improvements 5 to 40 years; machinery and equipment 1 to 20 years; and software 3 to 7 years. Expenditures for maintenance and repairs are expensed as incurred. Gains and losses are realized upon the sale or disposition of assets and are recorded in other expense, net on our consolidated statements of income (loss). Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the long-lived asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the impairment loss is measured as the amount by which the carrying value of the long-lived asset exceeds its fair value. Goodwill and other intangible assets— We review goodwill for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such goodwill allocated to reporting units may exceed their fair value. We have established October 1 as the date of our annual test for impairment of goodwill for our legacy Apergy reporting units and May 31 for the acquired Chemical Technologies reporting units. We initially assess goodwill for impairment based on qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of one or more of our reporting units is less than its carrying amount. If the carrying amount exceeds the fair value, an impairment charge will be recognized in an amount equal to the excess; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Our finite-lived acquired intangible assets are amortized on a straight-line basis over their estimated useful lives, which generally range from 3 to 15 years. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the intangible asset may not be recoverable. The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the intangible asset exceeds its fair value. We have one intangible asset with an indefinite life which is tested annually for impairment. See Note 7—Goodwill And Intangible Assets for additional information related to our impairment analysis. Revenue Recognition— Revenue is recognized to depict the transfer of control of the related goods and services to the customer. The majority of our revenue is generated through the manufacture and sale of a broad range of specialized products and components, with revenue recognized upon transfer of control, which typically occurs as title and risk of loss transfers. We account for shipping and handling activities performed after control of a good has been transferred to the customer as a contract fulfillment cost rather than a separate performance obligation. Revenue arrangements with customers in many instances require delivery, installation, testing, or other acceptance provisions to be satisfied before revenue is recognized. Service revenue is recognized as the services are performed. Software product revenue is recorded when the software product is shipped to the customer or over the term of the contract on a subscription based model. Estimates are used to determine the amount of variable consideration in contracts, as well as the determination of the standalone selling price among separate performance obligations. Some contracts with customers include variable consideration primarily related to volume rebates. We estimate variable consideration at the most likely amount to determine the total consideration which we expect to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are largely based on an assessment of our anticipated performance and all information that is reasonably available. We exclude all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (e.g., sales, use, value added, and some excise taxes) from the determination of the transaction price. Lessor accounting —Our lease arrangements generally allow customers to rent equipment on a daily basis with no stated end date. Customers may return the equipment at any point subsequent to the lease commencement date without penalty. We account for these arrangements as a daily renewal option beginning on the lease commencement date, with the lease term determined as the period in which it is reasonably certain the option will be exercised. Based on our assessment of the lease classification criteria, our lease arrangements have been classified as operating leases. Our lease arrangements generally include lease and non-lease components for which revenue is recognized based on each component’s standalone price. Lease revenue is recognized on a straight-line basis over the term of the lease and is included in lease and other revenue in the consolidated statements of income (loss). Non-lease revenue related to our lease arrangements is recognized in accordance with our revenue recognition accounting policy. Assets in our lease program are reported in property, plant, and equipment, net on our consolidated balance sheets and are depreciated over their estimated useful lives. Certain contracts allow for leased equipment damaged in operation to be charged to the customer. Charges for damaged leased equipment is recorded as product revenue and the remaining net book value of the leased asset is expensed as costs of goods and services in the consolidated statements of income (loss). Lessee accounting —Lease liabilities are measured at the lease commencement date and are based on the present value of remaining payments contractually required under the contract. Payments that are variable in nature are excluded from the measurement of our lease liabilities and are recorded as an expense as incurred. Options to renew or extend a lease are included in the measurement of our lease liabilities only when it is reasonably certain that we will exercise these rights. In estimating the present value of our lease liabilities, payments are discounted at our incremental borrowing rate (“IBR”), which we applied utilizing a portfolio approach. We utilized information publicly available from companies within our industry with similar credit profiles to construct a company-specific yield curve in order to estimate the rate of interest we would pay to borrow at various lease terms. At lease commencement, we recognize a lease right-of-use asset equal to our lease liability, adjusted for lease payments paid to the lessor prior to the lease commencement date, and any initial direct costs incurred. Operating lease expense is recorded on a straight-line basis over the lease term. For finance leases, we amortize our right-of-use assets on a straight-line basis over the shorter of the asset’s useful life or the lease term. Additionally, interest expense is recognized each period related to the accretion of our lease liabilities over their respective lease terms. Stock-based compensation— The cost of stock-based awards is measured at the grant date and are based on the fair value of the award. The value of the portion of the award that is expected to ultimately vest is recognized as expense on a straight-line basis, generally over the explicit service period and is included in selling, general and administrative expense in our consolidated statements of income. Forfeitures are accounted for as they occur. Expense for awards granted to retirement-eligible employees is recorded over the period from the date of grant through the date the employee first becomes eligible to retire and is no longer required to provide service. Research and development costs— Research and development costs are expensed as incurred and amounted to $31.2 million, $12.9 million, and $16.0 million for the years ended December 31, 2020, 2019, and 2018, respectively. Income Taxes— Prior to the Separation, our operations were historically included in Dover’s consolidated federal tax return and certain combined state returns. The income tax expense in our combined financial statements for these pre-Separation periods was determined on a stand-alone return basis which requires the recognition of income taxes using the liability method. Under this method, we assume to have historically filed a return separate from Dover, reporting our taxable income or loss and paying applicable tax based on our separate taxable income and associated tax attributes in each tax jurisdiction. Income taxes payable prior to Separation were computed under the stand-alone return basis. Accordingly, changes in income taxes payable for periods prior to the Separation are presented as a component of financing activities in the statement of cash flows. The calculation of income taxes on the separate return basis requires considerable judgment and the use of both estimates and allocations. As a result, our effective tax rate and deferred tax balances will significantly differ from those in the periods prior to the Separation. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Reform Act, enacted in December 2017, require us to include in our U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. We have elected to account for GILTI tax in the period in which it is incurred. Deferred tax assets and liabilities are measured using the tax rates that are expected to apply to taxable income for the years in which those tax assets and liabilities are expected to be realized or settled. We record valuation allowances related to our deferred tax assets when we determine it is more likely than not the benefits will not be realized. Interest and penalties related to unrecognized tax benefits are recorded as a component of our provision for income taxes. We have approximately $15.7 million of foreign withholding taxes on our undistributed foreign earnings from jurisdictions which impose such taxes to the extent these amounts were repatriated to the U.S. by way of intercompany loan. Earnings per share (“EPS”)— Basic EPS is computed using the weighted-average number of common shares outstanding during the year. We use the treasury stock method to compute diluted EPS which gives effect to the potential dilution of earnings that could have occurred if additional shares were issued for awards granted under our incentive compensation and stock plan. The treasury stock method assumes proceeds that would be obtained upon exercise of awards granted under our incentive compensation and stock plan are used to purchase outstanding common stock at the average market price during the period. Investments in Affiliated Companies— Investments in companies in which ChampionX does not have a controlling financial interest, but over which it has significant influence, are accounted for using the equity method. ChampionX’s share of the after-tax earnings of equity method investees is included in Interest and other income. Fair value measurements— We record our financial assets and financial liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities, with the exception of certain assets and liabilities measured using the net asset value practical expedient, which are not required to be leveled. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: • Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. • Level 2: Observable inputs other than quoted prices included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3: Unobservable inputs reflecting management’s own assumptions about the assumptions market participants would use in pricing the asset or liability. Derivative financial instruments— The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. See Note 17—Derivatives And Hedging Transactions for further information. Foreign currency— Financial statements of operations for which the U.S. dollar is not the functional currency, and are located in non-highly inflationary countries, are translated into U.S. dollars prior to consolidation. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date, while income statement accounts are translated at the weighted-average monthly exchange rates. For these operations, translation gains and losses are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity until the foreign entity is sold or liquidated. Assets and liabilities of an entity that are denominated in currencies other than an entity’s functional currency are remeasured into the functional currency using end of period exchange rates or historical rates when applicable to certain balances. Gains and losses related to these re-measurements are recorded in our consolidated statements of income (loss) as a component of other expense, net. Change in accounting estimate— During the second quarter of 2020, we entered into new commercial agreements, which changed the economics of the leased asset program of our Electrical Submersible Pump (“ESP”) subsidiary in our Production & Automation Technologies segment. As such, we re-evaluated the estimated useful life and salvage value of our assets based on the combination of new commercial contracts and historical operating trends related to the aging of our lease fleet, including functioning assets beyond original expected life. Based on our analysis, effective April 1, 2020, we changed our estimate of useful life and salvage values for certain equipment to better reflect the useful life and estimated values of these assets at the end of their useful life. The estimated useful life, previously estimated at 12 months, was increased to 18 months. The estimated salvage value of the equipment, previously estimated at 50% of the original purchase price, was decreased to 0%. The effect of the changes in estimate for the year ended December 31, 2020, was an increase in depreciation expense of $37.6 million, a decrease in net income of $26.4 million, and a decrease in basic and diluted earnings per share of $0.18 per share, respectively. See Note 10—Leases for additional information related to our leased assets. |
New Accounting Standards
New Accounting Standards | 12 Months Ended |
Dec. 31, 2020 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Standards | NEW ACCOUNTING STANDARDS Accounting Standards Adopted Effective January 1, 2019, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” using the modified retrospective method of adoption. See Note 10—Leases for additional information related to our lease accounting. Effective January 1, 2020, we adopted ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Merger Transaction, Acquisition
Merger Transaction, Acquisitions, and Dispositions | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Merger Transaction, Acquisitions, and Dispositions | MERGER TRANSACTION, ACQUISITIONS, AND DISPOSITIONS Merger Transaction On June 3, 2020 we completed the acquisition of the legacy ChampionX business through the merger of one of our wholly owned subsidiaries with legacy ChampionX. Immediately prior to the Merger, Ecolab transferred their upstream energy business to legacy ChampionX. Pursuant to the Merger, shares of Ecolab common stock that were tendered through an exchange offer were converted into common shares of legacy ChampionX on a 1-for-24.6667 basis, with each share of legacy ChampionX automatically converting into one share of the Company. To complete the acquisition, we issued 122.2 million shares of common stock, at a share price of $10.34 per share, in exchange for 100% equity ownership of legacy ChampionX. The transaction resulted in legacy ChampionX equityholders owning approximately 62% of the Company on a fully diluted basis, with equityholders of the Company prior to the Merger owning approximately 38% on a fully diluted basis. Acquisition-related costs associated with the Merger were expensed as incurred and total $61.8 million and $9.3 million for the years ended December 31, 2020, and 2019, respectively, and are included in selling, general and administrative expense in our consolidated statements of income (loss). The acquisition-related transaction costs consisted primarily of investment banker fees and legal and accounting costs. The Merger constitutes a business combination, with the Company (formerly known as Apergy) treated as the accounting acquirer and legacy ChampionX treated as the acquired company for accounting purposes. Legacy ChampionX provides on-site, technology-driven chemistry programs and value-enabling solutions and services to the global upstream oil and natural gas industry. Preliminary Purchase Price Allocation The acquisition-date fair value of the consideration transferred consisted of the following: (in thousands) Equity consideration $ 1,263,931 Replacement awards attributable to pre-combination services (1) 43,964 Unfavorable supply agreement (2) 46,000 Favorable supply agreement (2) (59,000) Fair value of consideration transferred $ 1,294,895 _______________________ (1) Represents the fair value of the replacement equity awards to the extent services were provided by employees of legacy ChampionX prior to closing. See Note 13—Equity And Cash Incentive Programs for additional information about the replacement equity awards. (2) As part of the Merger, the Company entered into a Cross Supply and Product Transfer Agreement with Ecolab in which over a period of approximately three years from the merger date, certain products will be manufactured by one party for the other. The cross selling prices at which each party will transfer their products, and include a take-or-pay element, have been set forth within this agreement and are not reflective of market terms. As a result, we recognized an intangible asset recorded at fair value for the favorable terms and a liability recorded at fair value for the unfavorable terms. The intangible asset will be amortized on a straight-line basis over a three-year period into cost of goods and services and the liability will be amortized as a component of product revenue. The purchase price was allocated to the tangible and intangible assets acquired and liabilities assumed based on their preliminary fair value estimates as of the acquisition date. The measurements of assets acquired and liabilities assumed, other than debt which was measured using Level 2 measurements, are based on inputs that are not observable in the market and thus represent Level 3 inputs. The excess of the purchase price over such fair values was recorded as goodwill. The purchase price allocation is based upon a preliminary valuation only and will be finalized upon completion of certain valuation procedures. The primary areas in which the preliminary purchase price allocation is not yet finalized relate to filing of income tax returns that provide taxes payable and receivable from tax authorities as well as under the Tax Matters Agreement with Ecolab, deferred income taxes and residual goodwill. We will complete the purchase price allocation and valuation during the 12-month period following the Merger date. The following table provides the preliminary allocation of the purchase price as of the acquisition date. (in thousands) Cash and cash equivalents $ 57,588 Receivables 394,432 Inventories 340,000 Prepaid expenses and other current assets 63,576 Property, plant, and equipment 687,085 Identifiable intangible assets (1) 290,000 Other non-current assets 156,427 Total identifiable assets acquired 1,989,108 Accounts payable 184,028 Other current liabilities (1) 172,997 Long-term debt (2) 537,000 Deferred tax liabilities 103,956 Other liabilities (1) 98,970 Total liabilities assumed 1,096,951 Net identifiable assets acquired 892,157 Add: Negative fair value of non-controlling interests 16,052 Goodwill 386,686 Total net assets acquired $ 1,294,895 _______________________ (1) The fair value of the consideration transferred related to the favorable and unfavorable terms of the cross supply agreement has been excluded. (2) In connection with the Merger, we assumed a term loan from legacy ChampionX, of which approximately $26.9 million has been classified as short-term representing the mandatory amortization payments due within the next twelve months. See Note 8—Debt for further information. Summary of Significant Fair Value Methods Inventories Acquired inventory is comprised of raw materials and finished goods. The preliminary fair value of finished goods was calculated as the estimated selling price, adjusted for costs of the selling effort and a reasonable profit allowance relating to the selling effort. The preliminary fair value of raw materials and supplies was determined based on replacement cost which approximates historical carrying value. The preliminary fair value step-up of $14.5 million of inventories measured on a FIFO basis was amortized to cost of goods and services in the consolidated financial statements during the year ended December 31, 2020 as the inventory was sold. For inventories measured on a LIFO basis, the acquired inventory becomes the LIFO base layer inventory. Property, Plant, and Equipment The preliminary fair value of identifiable fixed assets was calculated using a combination of valuation approaches, primarily the cost approach which adjusts estimates of replacement cost for the age, condition and utility of the associated assets, as well as the market approach to value asset types where market comparable data is available, and is summarized below: (in thousands) Fair Value Useful Life (years) Land and land improvements $ 125,375 - Buildings and leasehold improvements 208,649 5 to 40 Machinery, equipment, and other 333,478 3 to 20 Capitalized software and computer hardware 19,583 3 to 7 Total property, plant, and equipment acquired $ 687,085 Identifiable Intangible Assets The preliminary fair values of trademarks, trade names, and developed technology were determined using a relief from royalty methodology which estimates cost savings generated by a company related to the ownership of an asset for which otherwise have had to pay royalties or license fees on revenues earned through the use of the asset. Customer relationships were determined using the multi-period excess earnings method which involves isolating the net earnings attributable to the asset being measured based on the present value of the incremental after-tax cash flows attributable solely to the intangible assets over its remaining useful life. Preliminary fair values are summarized below: (in thousands) Fair Value Useful Life (years) Trademarks and trade names $ 25,000 15 Developed technology 120,000 7 Customer relationships 145,000 15 Total identifiable intangible assets acquired 290,000 Favorable supply agreements 59,000 3 Total identifiable intangible assets recognized $ 349,000 The weighted average amortization period for identifiable intangible assets recognized is 10.2 years. Leases Lease-related assets and liabilities acquired were remeasured at the present value of the future minimum lease payments over the remaining lease term utilizing an updated incremental borrowing rate of the Company as if the acquired leases were new leases as of the acquisition date. Right-of-use assets were further adjusted for any off-market terms of the lease. The remaining lease term is based on the remaining term at the acquisition date plus any renewal or extension options that the Company is reasonably certain will be exercised. Additionally, the Company has elected short-term lease treatment for those acquired lease contracts which, at the acquisition date, have a remaining lease term of 12 months or less. For the leases acquired through the Merger, the Company will retain the previous lease classification. This resulted in legacy ChampionX assets and liabilities of $101.0 million and $93.2 million, respectively, as of the acquisition date. Goodwill Goodwill of $386.7 million arising from the acquisition consisted largely of the expected synergies and economies of scale from combining the operations of the Company and legacy ChampionX. Goodwill recognized as a result of the acquisition is not deductible for tax purposes. We have allocated goodwill of $349.8 million and $36.9 million to our Production Chemical Technologies and Reservoir Chemical Technologies operating segments, respectively. See Note 7—Goodwill And Intangible Assets for a rollforward of our goodwill balance by operating segment. Pro forma financial information The results of operations for legacy ChampionX that have been included in our consolidated financial statements from the June 3, 2020 acquisition date through December 31, 2020 include revenue of $1.2 billion and net income of $57.0 million. The following unaudited pro forma results of operations have been prepared as though the Merger was completed on January 1, 2019. Pro forma amounts are based on the preliminary purchase price allocation of the acquisition and are not necessarily indicative of results that may be reported in the future. Non-recurring pro forma adjustments including acquisition-related costs directly attributable to the Merger are included within the reported pro forma revenue and net income (loss). Years Ended December 31, (in thousands, except per share data) 2020 2019 Revenues $ 2,775,027 $ 3,456,354 Net income (loss) attributable to ChampionX (777,553) 229,126 Transactions with Ecolab Certain agreements have been entered into between the Company and Ecolab, including, among others, a Tax Matters Agreement, an Intellectual Property Matters Agreement, a Cross Supply and Product Transfer Agreement, and a Transition Services Agreement, each entered into on the closing date; as well as the Employee Matters Agreement entered into on Other Acquisitions On July 31, 2019, ChampionX entered into an asset purchase agreement to acquire certain assets, which meet the definition of a business, used in the manufacturing of downhole monitoring systems. The acquisition is included among the consolidated subsidiaries reported in our Production & Automation Technologies segment and provides digital technology strategic to our artificial lift product offering. The acquisition-date fair value of the consideration transferred consisted of the following: (in thousands) Cash 12,500 Contingent consideration (1) 1,500 Total consideration transferred 14,000 _______________________ (1) Contingent consideration is payable to the seller based on the acquired business exceeding a revenue target over an eighteen The following table summarizes the final fair values of the assets acquired at the acquisition date: (in thousands) Inventory $ 1,840 Customer relationships 2,650 Technology - Technical know-how 4,000 Goodwill 5,510 Total assets acquired $ 14,000 The amortization period is 15 years for acquired customer relationships and technology. The goodwill recognized as a result of the acquisition is tax deductible and primarily reflects the expected benefits to be derived from operational synergies. Results of operations of the acquired business has been included in our consolidated financial statements from the acquisition dates. Pro forma results of operations have not been presented as the effects of the acquisition are not material to our consolidated financial statements. Dispositions During March 2019, we classified our pressure vessel manufacturing business in our Production & Automated Technologies segment as held for sale. We recognized an impairment loss of $1.7 million, which was recorded in selling, general and administrative expense in the consolidated statements of income (loss), to adjust the carrying amount of the disposal group to fair value. See Note 7—Goodwill And Intangible Assets for additional information. In June 2019, we completed the sale of our pressure vessel manufacturing business and made a cash payment of $2.2 million, resulting in a loss on disposition of $2.5 million, which was recorded in other expense, net in the consolidated statements of income (loss) for the year ended December 31, 2019. |
Segment Information
Segment Information | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | SEGMENT INFORMATION Upon completion of the Merger, the Company re-evaluated its reportable segments. Our determination of reportable segments was made on the basis of our strategic priorities within each segment and corresponds to the manner in which our chief operating decision maker reviews and evaluates operating performance to make decisions about resources to be allocated to the segment. In addition to our strategic priorities, segment reporting is also based on differences in the products and services we provide. As a result, we added two new reportable segments - Production Chemical Technologies and Reservoir Chemical Technologies. The legacy Apergy reportable segments remain unchanged. Our reportable segments are: • Production Chemical Technologies—provides oil and natural gas production and midstream markets with solutions to manage and control corrosion, oil and water separation, flow assurance, sour gas treatment and a host of water-related issues. • Production & Automation Technologies—designs, manufactures, markets and services a full range of artificial lift equipment, end-to-end digital automation solutions, as well as other production equipment. Production & Automation Technologies’ products are sold under a collection of brands including Harbison-Fischer, Norris, Alberta Oil Tool, Oil Lift Technology, PCS Ferguson, Pro-Rod, Upco, Unbridled ESP, Norriseal-Wellmark, Quartzdyne, Spirit, Theta, Timberline and Windrock. • Drilling Technologies—designs, manufactures and markets polycrystalline diamond cutters and bearings for use in oil and gas drill bits under the US Synthetic brand. • Reservoir Chemical Technologies—manufactures specialty products that support well stimulation, construction (including drilling and cementing) and remediation needs in the oil and natural gas industry. Business activities that do not meet the criteria of an operating segment have been combined into Corporate and other. Corporate and other includes (i) corporate and overhead expenses, and (ii) revenue and costs for activities that are not operating segments. Segment revenue and segment operating profit Years Ended December 31, (in thousands) 2020 2019 2018 Segment revenue: Production Chemical Technologies $ 992,805 $ — $ — Production & Automation Technologies 615,918 884,364 932,591 Drilling Technologies 116,186 246,887 285,565 Reservoir Chemical Technologies 61,507 — — Corporate and other (1) 113,580 — — Total revenue $ 1,899,996 $ 1,131,251 $ 1,218,156 Income (loss) before income taxes: Segment operating profit: Production Chemical Technologies $ 94,294 $ — $ — Production & Automation Technologies (697,937) 54,024 74,187 Drilling Technologies 2,574 73,497 98,620 Reservoir Chemical Technologies (6,198) — — Total segment operating profit (loss) (607,267) 127,521 172,807 Corporate and other (1) 103,751 29,034 23,806 Interest expense, net 51,731 39,301 27,648 Income (loss) before income taxes $ (762,749) $ 59,186 $ 121,353 ____________________ (1) Corporate and other includes costs not directly attributable or allocated to our reportable segments such as corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply Agreement with Ecolab are included within Corporate and other. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. Geographic information December 31, (in thousands) 2020 2019 Property, plant, and equipment, net: United States $ 547,662 $ 238,464 Singapore 111,184 — Canada 85,487 5,749 Other Countries 110,203 3,968 Total property, plant, and equipment, net $ 854,536 $ 248,181 See Note 5—Revenue for information related to revenue by geography and end markets. Other business segment information Capital Expenditures (in thousands) 2020 2019 2018 Chemical Technologies (1) $ 10,498 $ — $ — Production & Automation Technologies 32,100 30,291 45,190 Drilling Technologies 1,736 9,061 11,123 Corporate and other 829 428 1,605 Total $ 45,163 $ 39,780 $ 57,918 (1) Our Chemical Technologies business has an integrated supply chain function that serves the Production Chemical Technologies and Reservoir Chemical Technologies reportable segments. As such, capital expenditure information by each reportable segment has not been provided and is not available, since the Company does not produce or utilize such information. Depreciation & Amortization (in thousands) 2020 2019 2018 Production Chemical Technologies $ 58,328 $ — $ — Production & Automation Technologies 130,725 110,131 112,955 Drilling Technologies 7,940 9,263 11,037 Reservoir Chemical Technologies 5,741 — — Corporate and other 11,628 544 469 Total $ 214,362 $ 119,938 $ 124,461 |
Revenue
Revenue | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | REVENUE Our revenue is generated primarily from product sales. Service revenue is generated from providing services to our customers. These services include installation, repair and maintenance, laboratory and logistics services, chemical management services, troubleshooting, reporting, water treatment services, technical advisory assistance and other field services. Lease revenue is derived from rental income of leased production equipment. These lease arrangements generally allow customers to rent equipment on a daily basis with no stated end date. Management accounts for these arrangements as a daily renewal option beginning on the lease commencement date, with the lease term determined as the period in which it is reasonably certain the option will be exercised. As our costs are shared across the various revenue categories, cost of goods sold is not tracked separately and is not discretely identifiable. In certain geographical areas, the Company utilizes joint ventures and independent third-party distributors and sales agents to sell and market products and services. Amounts payable to independent third-party distributors and sales agents may fluctuate based on sales and timing of distributor fee payments. For services rendered by such independent third-party distributors and sales agents, the Company records the consideration received on a net basis within product revenue in our consolidated statements of income (loss). As of December 31, 2020, accrued distributor fees were $37.5 million and nil at December 31, 2019. Revenue disaggregated by geography was as follows: Year Ended December 31, 2020 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 318,460 $ 458,690 $ 82,812 $ 31,907 $ 72,948 $ 964,817 Middle East & Africa 164,480 45,026 1,146 14,292 15,254 240,198 Latin America 202,177 21,679 22 4,283 3,650 231,811 Canada 129,210 32,709 9,029 1,414 640 173,002 Europe 116,192 10,521 11,840 1,990 12,052 152,595 Australia 13,225 41,233 110 274 — 54,842 Asia-Pacific 28,023 5,549 9,141 2,267 9,041 54,021 Other 21,038 511 2,086 5,080 (5) 28,710 Total revenue $ 992,805 $ 615,918 $ 116,186 $ 61,507 $ 113,580 $ 1,899,996 _______________________ (1) Revenues associated with sales under the Cross Supply Agreement with Ecolab are included within Corporate and other. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. Year Ended December 31, 2019 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other Total United States $ — $ 679,280 $ 181,721 $ — $ — $ 861,001 Canada — 52,647 17,667 — — 70,314 Middle East — 59,051 1,013 — — 60,064 Europe — 19,752 32,213 — — 51,965 Latin America — 32,389 19 — — 32,408 Australia — 30,702 139 — — 30,841 Asia-Pacific — 9,727 12,975 — — 22,702 Other — 816 1,140 — — 1,956 Total revenue $ — $ 884,364 $ 246,887 $ — $ — $ 1,131,251 Year Ended December 31, 2018 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other Total United States $ — $ 731,416 $ 227,751 $ — $ — $ 959,167 Canada — 60,256 19,560 — — 79,816 Middle East — 53,315 201 — — 53,516 Europe — 12,686 25,983 — — 38,669 Latin America — 33,967 9 — — 33,976 Australia — 33,138 109 — — 33,247 Asia-Pacific — 7,176 10,430 — — 17,606 Other — 637 1,522 — — 2,159 Total revenue $ — $ 932,591 $ 285,565 $ — $ — $ 1,218,156 Revenue is attributed to regions based on the location of our direct customer, which in some instances is an intermediary and not necessarily the end user. Performance Obligations The majority of our contracts have a single performance obligation which represents, in most cases, the equipment or product sold to the customer. Some contracts include multiple performance obligations, often satisfied at or near the same time, such as a product and the related installation, extended warranty and/or maintenance services. For contracts with multiple performance obligations, we allocate the transaction price to each performance obligation based on the estimated relative standalone selling prices of the promised goods or services underlying each performance obligation. We typically use observable prices to determine the stand-alone selling price of a performance obligation and utilize a cost plus margin approach when observable prices are not available. Within our Production & Automation Technologies and Drilling Technologies reportable segments, substantially all of our performance obligations are recognized at a point in time and are primarily related to our product revenue derived from the sale of drilling and production equipment. Revenue is recognized when control transfers to the customer upon shipment or completion of installation, testing, or certification as required under the contract. Within our Production Chemical Technologies and Reservoir Chemical Technologies segments, revenue recognized from the sale of products is recognized at the point in time when the obligations in the contract with the customer are satisfied, which generally occurs with the delivery of the product. Within our ESP leased asset program, equipment damaged in operation is generally charged to the customer and recognized as product revenue. Service and lease revenue are recognized over time when the services are provided to the customer or when the customer receives the benefit of the leased equipment. Warranties Within our Production & Automation Technologies and Drilling Technologies reportable segments, the majority of our contracts contain customary warranties in connection with the sale of a product to a customer which provide a customer assurance that the related product will function for a period of time as the parties intended. In addition to our customary warranties, we also offer extended warranties to our customers. Warranties that represent a distinct service are recognized as service revenue over the related warranty period. Remaining performance obligations As of December 31, 2020, we did not have any contracts with an original length of greater than a year from which revenue is expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied). Contract Balances The beginning and ending contract asset and contract liability balances from contracts with customers were as follows: December 31, (in thousands) 2020 2019 2018 Contract assets $ — $ 285 $ 4,571 Contract liabilities 16,668 6,148 5,863 Contract assets primarily relate to work completed for performance obligations that are satisfied over time and are recorded in prepaid expenses and other current assets on our consolidated balance sheets. Contract assets are transferred to receivables when the right to consideration becomes unconditional. Contract liabilities relate to billings or consideration received in advance of performance (obligation to transfer goods or services to a customer) under the contract. Contract liabilities are recognized as revenue when the performance obligation has been performed, which primarily occurs during the subsequent quarter. Current contract liabilities are recorded in accrued expenses and other current liabilities on our consolidated balance sheets. |
Property, Plant and Equipment
Property, Plant and Equipment | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following: December 31, (in thousands) 2020 2019 Land and land improvements $ 140,209 $ 14,419 Buildings and improvements 316,529 106,993 Software 37,638 15,323 Machinery, equipment and other 854,650 538,168 1,349,026 674,903 Accumulated depreciation (494,490) (426,722) Property, plant and equipment, net $ 854,536 $ 248,181 Depreciation expense was $142.6 million, $68.6 million, and $72.6 million for the years ended December 31, 2020, 2019, and 2018, respectively. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | GOODWILL AND INTANGIBLE ASSETS During the first quarter of 2020, certain unprecedented events caused the rapid decline of several market indicators in the oil and gas industry. Decisions by the Organization of Petroleum Exporting Countries (“OPEC”) and other oil producing nations resulted in an oversupply of crude oil. Compounding this situation, demand for oil and gas commodities declined significantly as the world was impacted by the COVID-19 pandemic, which resulted in a sharp decline in crude oil prices. Consequently, our market capitalization was negatively impacted as a result of these market conditions and overall impact to our industry. The Company determined that these events and their related impact to future revenues and cash flows constituted a triggering event in the first quarter of 2020, requiring us to perform a recoverability test of our long-lived assets and an interim impairment assessment of goodwill as of March 31, 2020. Long-lived Asset Impairment Long-lived assets, which include property, plant and equipment, right-of-use assets, and identified intangible assets, comprise a significant amount of our total assets. The Company makes judgments and estimates in conjunction with the carrying value of these assets, including amounts to be capitalized, depreciation and amortization methods and estimated useful lives. The negative market indicators described above were triggering events indicating that certain of our long-lived tangible and intangible assets may not be recoverable. We performed recoverability tests on our asset groups as of March 31, 2020, which indicated that long-lived assets associated with two of our asset groups within Production & Automation Technologies were not recoverable as the aggregate amount of estimated undiscounted cash flows of these asset groups was determined to be below their respective carrying values. We estimated the fair value of these intangible and fixed assets using an income approach that required us to make long-term forecasts of our future revenues and costs related to the assets subject to review. These forecasts utilized assumptions about demand for our products and services, future market conditions and technological developments. The forecasts are dependent upon assumptions including those regarding oil prices and the general outlook for the global oil and gas industry, among other factors. We consider the inputs for our long-lived asset and goodwill impairment calculations to be Level 3 inputs in the fair value hierarchy. Significant assumptions used in determining the fair value of our intangible and fixed assets are operating margins, peer group EBITDA multiples and the discount rate. Financial and credit market volatility directly impacts our fair value measurement through our income forecast. Changes to these assumptions, including, but not limited to: variability of spot and futures prices for crude oil; sustained declines in worldwide rig counts below current analysts’ forecasts; significant deterioration of external financing for our customers; higher risk premiums or higher cost of equity; or any other significant adverse economic news could require a provision for impairment. Accordingly, the recoverable value of each of these asset groups was below their respective carrying value and as a result, we recorded a long-lived asset impairment charge of $41.0 million in the first quarter of 2020 based on the estimated fair value of these asset groups, consisting of $40.4 million to customer relationships and $0.6 million to trademarks. We did not identify impairment triggering events at any of our asset groups during the remainder of 2020. Intangible Assets The components of our definite- and indefinite-lived intangible assets were as follows: December 31, 2020 December 31, 2019 (in thousands) Gross Accumulated Net Gross Accumulated Net Definite-lived Customer relationships (1) $ 593,068 $ 321,298 $ 271,770 $ 560,316 $ 353,189 $ 207,127 Trademarks (1) 59,881 27,565 32,316 35,695 24,830 10,865 Patents 38,635 29,289 9,346 38,436 26,838 11,598 Unpatented technologies 133,700 19,958 113,742 13,700 9,811 3,889 Favorable supply agreements (2) 59,000 11,308 47,692 — — — Drawings and manuals 1,783 1,783 — 2,558 1,758 800 Other 5,374 4,831 543 5,332 4,504 828 891,441 416,032 475,409 656,037 420,930 235,107 Indefinite-lived Trademarks 3,600 — 3,600 3,600 — 3,600 Total $ 895,041 $ 416,032 $ 479,009 $ 659,637 $ 420,930 $ 238,707 _______________________ (1) 2020 includes impairment of customer relationships and trademarks intangible assets of $40.4 million and $0.6 million, respectively, all of which relate to asset groups included within our Artificial Lift business. (2) Favorable supply agreements were entered into as part of the Merger transaction. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. We recorded $349.0 million of acquired intangible assets, including $59.0 million for favorable supply agreements, in 2020. We recorded $6.7 million of acquired intangible assets in 2019. See Note 3—Merger Transaction, Acquisitions, And Dispositions, for additional information. Additional changes to the gross carrying amount of intangible assets during the year ended December 31, 2020 were the result of foreign currency translation adjustments. Amortization expense related to our intangible assets was $70.9 million, $51.4 million, and $51.9 million for the years ended December 31, 2020, 2019, and 2018, respectively. Estimated future amortization expense related to intangible assets held as of December 31, 2020, is as follows: (in thousands) Estimated Amortization 2021 $ 87,698 2022 86,181 2023 60,855 2024 47,506 2025 36,396 Goodwill The carrying amount of goodwill, including changes therein, by reportable segment is below: (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Total December 31, 2018 $ — $ 803,849 $ 101,136 $ — $ 904,985 Acquisition (1) — 5,510 — — 5,510 Foreign currency translation — 618 — — 618 December 31, 2019 — 809,977 101,136 — 911,113 Acquisition (1) 349,821 — — 36,865 386,686 Impairment — (616,271) — — (616,271) Foreign currency translation 1,236 (2,169) — (1) (934) December 31, 2020 $ 351,057 $ 191,537 $ 101,136 $ 36,864 $ 680,594 _______________________ (1) See Note 3—Merger Transaction, Acquisitions, And Dispositions for additional information related to the acquisitions completed during July 2019 and June 2020. Goodwill is not subject to amortization but is tested for impairment on an annual basis or more frequently if impairment indicators arise. During the first quarter of 2020, we performed a quantitative analysis for each of our reporting units to determine the existence of goodwill impairment and the amount of the impairment loss. In performing the quantitative assessment, we estimated the fair value of each of our reporting units using a combination of the income and market approaches, which determined that the fair values were less than the respective carrying values for our Artificial Lift and Automation reporting units. Our income-based valuation method determines the present value of estimated future cash flows to estimate the fair value of a reporting unit, which require the use of significant unobservable inputs, representative of a Level 3 fair value measurement. Significant assumptions used in estimating our reporting unit fair values include: (i) annual revenue growth rates; (ii) operating margins; (iii) risk-adjusted discount rate; and (iv) terminal value determined using a long-term growth rate. If the carrying amount of a reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to the reporting unit. Given the unprecedented uncertainty of both short-term and long-term market conditions, we utilized a weighted-average projection for estimated future cash flows that consisted of three estimated future cash flows scenarios with the following weightings: (i) low case scenario with a 40% weighting, (ii) base case scenario with a 40% weighting, and (iii) high case scenario with a 20% weighting. Under the market approach, we estimated a fair value based on comparable companies’ market multiples of revenues and earnings before interest, taxes, depreciation and amortization and factored in a control premium. Finally, we compared our estimates of fair values to our total public market capitalization as of March 31, 2020 and assessed an implied control premium based on the 20-day average trading price of our common stock. The reporting unit carrying values were adjusted based on the long-lived asset impairment assessment noted above. Financial and credit market volatility directly impacted our fair value measurement through the weighted average cost of capital used to determine a discount rate. During times of volatility, significant judgment must be applied to determine whether credit market changes are a short-term or long-term trend. We utilized discount rates of 14.5% and 16.5% for our Artificial Lift and Automation reporting units, respectively. During the first quarter of 2020, we recorded a $616.3 million impairment charge to goodwill, consisting of $539.2 million and $77.1 million in our Artificial Lift reporting unit and our Automation reporting unit, respectively. Both reporting units are within our Production & Automation Technologies reportable segment. The goodwill impairment charge includes $560.1 million of non-taxable goodwill, which was recognized as a discrete item in determining our effective tax rate for the period. As part of our annual goodwill impairment analysis, on October 1, we performed a qualitative goodwill impairment analysis for each of our legacy Apergy reporting units. We concluded that goodwill related to those reporting units was not impaired and further quantitative testing was not required. As a result of the Merger, we added two reporting units (i) Production Chemical Technologies and (ii) Reservoir Chemical Technologies for which the goodwill annual testing date is May 31. In addition, there |
Debt
Debt | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Debt | DEBT Long-term debt consisted of the following: December 31, (in thousands) 2020 2019 2018 Credit Facility $ — $ — 2018 Term Loan Facility 140,000 265,000 2020 Term Loan Facility 523,575 — 6.375% Senior Notes due 2026 277,041 300,000 Total 940,616 565,000 Net unamortized discounts and issuance costs (8,002) (9,709) Total long-term debt 932,614 555,291 Current portion of long-term debt (1) (26,850) — Long-term debt, less current portion $ 905,764 $ 555,291 _______________________ (1) Includes the mandatory amortization payments due within twelve months related to the 2020 Term Loan Facility. 2018 Credit Facility On May 9, 2018, we entered into a credit agreement (“credit agreement”) governing the terms of our senior secured credit facilities, consisting of (i) a 7-year senior secured term loan B facility (“term loan facility”) and (ii) a 5-year senior secured revolving credit facility (“revolving credit facility,” and together with the term loan facility, the “senior secured credit facilities”), with JPMorgan Chase Bank, N.A. as administrative agent. The net proceeds of the senior secured credit facilities were used (i) to pay fees and expenses in connection with the Separation, (ii) partially fund the cash payment to Dover and (iii) provide for working capital and other general corporate purposes. The senior secured credit facilities are jointly and severally guaranteed by ChampionX and certain of ChampionX’s wholly owned U.S. subsidiaries, including, upon the consummation of the Merger, certain legacy ChampionX wholly owned U.S. subsidiaries, (“guarantors”), on a senior secured basis, and are secured by substantially all tangible and intangible assets of ChampionX and the guarantors, except for certain excluded assets. At our election, outstanding borrowings under the senior secured credit facilities will accrue interest at a per annum rate of (i) LIBOR plus a margin or (ii) a base rate plus a margin. Interest on borrowings in which interest is accrued at a base rate plus an applicable margin is payable on the last business day of each quarter. The senior secured credit facilities contain a number of customary covenants that, among other things, limit or restrict the ability of ChampionX and the restricted subsidiaries to, subject to certain qualifications and exceptions, perform certain activities which include, but are not limited to (i) incur additional indebtedness, (ii) make acquisitions and (iii) pay dividends or other payments in respect of our capital stock. Additionally, ChampionX is required to maintain (a) a minimum interest coverage ratio, as defined in the credit agreement, of 2.50 to 1.00 and (b) a maximum total leverage ratio, as defined in the credit agreement, of 4.00 to 1.00 through the fiscal quarter ending March 31, 2021, then 3.75 to 1.00 thereafter. On February 14, 2020, the Company entered into an amendment to the credit agreement (as amended, the “2018 Credit Facility”), which (i) provided for the incurrence of an additional $150.0 million of revolving commitments under the 2018 Credit Facility, upon consummation of the Merger, (ii) permitted the consummation of the Merger and the incurrence of a senior secured term loan facility (“2020 Term Loan Facility”) in an aggregate amount up to $537.0 million by legacy ChampionX, and (iii) continued to provide that all obligations under the 2018 Credit Facility are guaranteed by the guarantors. The weighted average interest rate on borrowings during the period was 4.00%. The revolving credit facility consists of a 5-year senior secured facility with aggregate commitments in an amount equal to $400.0 million, of which up to $100.0 million is available for the issuance of letters of credit. Amounts repaid under the revolving credit facility may be re-borrowed. The revolving credit facility matures in May 2023. 2018 Term Loan Facility The term loan facility had an initial commitment of $415.0 million. The full amount of the term loan facility was funded on May 9, 2018. Amounts borrowed under the term loan facility that are repaid or prepaid may not be re-borrowed. The term loan facility matures in May 2025. Net proceeds of $408.7 million from the term loan facility were utilized to partially fund the cash payment to Dover at the Separation and to pay fees and expenses incurred in connection with the Separation. The term loan is subject to mandatory amortization payments of 1% per annum of the initial commitment of $415.0 million paid quarterly. Additionally, subject to certain exceptions, the term loan facility is subject to mandatory prepayments, including the amount equal to: 100% of the net cash proceeds of all non-ordinary course asset sales subject to (i) reinvestment periods and (ii) step-downs to 75% and 50% based on certain leverage targets; and 50% of excess cash flow, as defined in the credit agreement, with step-downs to 25% and 0% based on certain leverage targets. ChampionX may voluntarily prepay amounts outstanding under the term loan facility in whole or in part at any time without premium or penalty, as defined in the credit agreement. The weighted average interest rate on borrowings during the period was 3.18%. 2020 Term Loan Facility On June 3, 2020, legacy ChampionX entered into a term loan facility for $537.0 million (“2020 Term Loan Facility”). Proceeds from the 2020 Term Loan Facility were utilized to fund a cash payment of $527.4 million from legacy ChampionX to Ecolab upon the completion of the Merger. We assumed the 2020 Term Loan Facility upon completion of the Merger, which is fully and unconditionally guaranteed by the Company and the guarantors, which also guarantee the obligations under the 2018 Credit Facility. The 2020 Term Loan Facility matures at the earlier of (i) June 3, 2027 or (ii) January 30, 2026 in the event the Company’s senior unsecured notes due May 1, 2026 remain outstanding. Amounts outstanding under the 2020 Term Loan Facility bear interest, at the option of the Company, at a rate equal to (a) LIBOR plus 5.0% for eurocurrency rate loans (to the extent LIBOR is less than 1%, the LIBOR rate will be deemed to be 1%) or (b) the highest of (i) the Federal Funds Rate plus 1/2 of 1%, (ii) the “prime rate” quoted by Bank of America, N.A., (iii) LIBOR plus 1.00% and (iv) 1.00%, plus 4.0%. The 2020 Term Loan Facility contains customary representations and warranties, covenants, and events of default for loan facilities of this type. The weighted average interest rate on borrowings during the period was 6.02%. The term loan is subject to mandatory amortization payments of $6.7 million paid quarterly, which began on September 30, 2020. Any voluntary prepayment of the 2020 Term Loan Facility which occurs prior to June 3, 2022, is subject to a make-whole prepayment premium on the aggregate prepaid principal amount of the 2020 Term Loan Facility. Senior Notes On May 3, 2018, and in connection with the Separation, we completed the offering of $300.0 million in aggregate principal amount of 6.375% senior notes due May 2026 (“Senior Notes”). Interest on the Senior Notes is payable semi-annually in arrears on May 1 and November 1 of each year and commenced on November 1, 2018. Net proceeds of $293.8 million from the offering were utilized to partially fund the $700.0 million cash payment to Dover at the Separation and to pay fees and expenses incurred in connection with the Separation. Payment obligations of the Senior Notes are fully and unconditionally guaranteed by the guarantors on a joint and several basis. On June 18, 2020, the wholly owned subsidiaries of legacy ChampionX that guarantee the 2018 Credit Facility and the 2020 Term Loan Facility, delivered a Supplemental Indenture to join as guarantors of the Senior Notes. The terms of the Senior Notes are governed by the indenture dated as of May 3, 2018, between the Company and Wells Fargo Bank, N.A., as trustee, and are guaranteed, on a senior unsecured basis, by the guarantors. At any time prior to May 1, 2021, we may redeem all or part of the Senior Notes at a redemption price equal to 100% of the principal amount of the Senior Notes redeemed plus a premium, as defined in the indenture, plus accrued and unpaid interest. Beginning on or after May 1, 2021, we may redeem the Senior Notes, in whole or in part, at certain tiered redemption prices as defined in the indenture, plus accrued and unpaid interest. The Senior Notes are our senior unsecured obligations. The Senior Notes rank equally in right of payment with our future and existing senior debt but are effectively subordinated to our future and existing debt to the extent of the assets securing such senior debt. The Senior Notes rank senior in right of payment to all of our future subordinated debt. Tender Offer During the fourth quarter of 2020, the Company initiated a tender offer to purchase certain of the Senior Notes (the “Tender Offer”). Approximately $23.0 million in aggregate principal amount of the Senior Notes was repurchased for $23.4 million in cash, including principal, and $0.2 million in accrued interest. In connection with these repurchases, we recognized a net loss of approximately $0.9 million for the year ended December 31, 2020 and is included in other expense, net in our consolidated statement of income (loss). As of December 31, 2020, aggregate contractual future principal payments on long-term debt are as follows: (in thousands) Principal Payments ( 1) 2021 $ 26,850 2022 — 2023 — 2024 — 2025 140,000 Thereafter 773,766 Total $ 940,616 _______________________ (1) Principal payments included relate to our 2020 Term Loan Facility and Senior Notes. See Note 10—Leases for future payments related to finance lease obligations. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | COMMITMENTS AND CONTINGENCIES The Company is subject to various claims and contingencies related to, among other things, workers’ compensation, general liability (including product liability), automobile claims, health care claims, environmental matters, and lawsuits. We record liabilities where a contingent loss is probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. In accordance with applicable GAAP, the Company discloses a contingent liability even if the liability is not probable or the amount is not estimable, or both, if there is a reasonable possibility that a material loss may have been incurred. Lease Commitments See Note 10—Leases for a schedule of future minimum payments on our operating and finance lease arrangements. Guarantees and Indemnifications We have provided indemnities in connection with sales of certain businesses and assets, including representations and warranties, covenants and related indemnities for environmental health and safety, tax, and employment matters. We do not have any material liabilities recorded for these indemnifications and are not aware of any claims or other information that would give rise to material payments under such indemnities. In connection with the Company’s Separation from Dover in 2018, we entered into agreements with Dover that govern the treatment between Dover and us for certain indemnification matters and litigation responsibility. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and to place financial responsibility for the obligations and liabilities of Dover’s business with Dover. The separation and distribution agreement also establishes procedures for handling claims subject to indemnification and related matters. In addition, pursuant to the tax matters agreement, we have agreed to indemnify Dover and its affiliates against any and all tax-related liabilities incurred by them relating to the Separation and/or certain related transactions to the extent caused by an acquisition of ChampionX stock or assets or by any other action or failure to act undertaken by ChampionX or its affiliates. Pursuant to the provisions of the tax matters agreement with Dover, we recorded an indemnification liability of $3.4 million as of December 31, 2019, with respect to certain liabilities related to tax audits for the 2012-2016 tax years. We received notification in February 2020 that the tax audits and related assessments were completed, resulting in a final settlement amount of $3.0 million, which was paid in April 2020. In connection with the Merger, we entered into agreements with Ecolab that govern the treatment between Ecolab and us for certain indemnification matters and litigation responsibility. Generally, the separation and distribution agreement provides for cross-indemnities principally designed to place financial responsibility for the obligations and liabilities of our business with us and to place financial responsibility for the obligations and liabilities of Ecolab’s business with Ecolab. The separation and distribution agreement also establishes procedures for handling claims subject to indemnification and related matters. In addition, pursuant to the Tax Matters Agreement, we have agreed to indemnify Ecolab and its affiliates for (i) all taxes for which ChampionX is responsible as defined within the Tax Matters Agreement, (ii) all taxes resulting from a breach by ChampionX of any of its representations (but only to the extent relating to a breach occurring after the consummation of the Merger) or any of its covenants under the Tax Matters Agreement, (iii) all taxes resulting from an acquisition after the Merger of any of the stock or assets of ChampionX, other than as a result of the Merger or a repayment of the ChampionX Credit Facilities and (iv) reasonable costs and expenses (including reasonable attorneys’ fees and expenses) related to the foregoing. As of December 31, 2020 and December 31, 2019, we had $88.8 million and $15.7 million, respectively, of outstanding letters of credit, surety bonds, and guarantees which expire at various dates through 2025. These financial instruments are primarily maintained as security for insurance, warranty, and other performance obligations. Generally, we would only be liable for the amount of these letters of credit and surety bonds in the event of default in the performance of our obligations, the probability of which we believe is remote. Supply Agreements Cross Supply and Product Transfer Agreement As discussed in Note 3—Merger Transaction, Acquisitions, And Dispositions, certain agreements were entered into between the Company and Ecolab, including, among others, a Cross Supply and Product Transfer Agreement. The Cross Supply and Product Transfer Agreement includes a take-or-pay element which requires the Company to purchase a minimum of 13.7 million kilograms of product over a ten-year period, approximately $23.3 million. The Company has the option to terminate early beginning in the fifth year upon a two-year’s notice, subject to a termination fee which declines over the contract term. Vendor Supply Agreement We also acquired a Vendor Supply Agreement from Ecolab as part of the Merger discussed in Note 3—Merger Transaction, Acquisitions, And Dispositions. Ecolab made payments in the aggregate of $25.0 million and the Company assumed the receivable for the repayment of this loan. The loan is required to be repaid with 4% interest on the unapplied discount, totaling $30.0 million to be paid back in discounts. The fair value of the expected future cash flows as of December 31, 2020 was $14.9 million. Litigation and Environmental Matters We are involved in various pending or potential lawsuits, claims and environmental actions that have arisen in the ordinary course of our business. These proceedings primarily involve claims by private parties alleging injury arising out of use of our products, patent infringement, employment matters, and commercial disputes, as well as possible obligations to investigate and mitigate the effects on the environment of the disposal or release of certain chemical substances at various sites, such as Superfund sites and either operating or owned facilities. We review the probable outcome of such proceedings, the costs and expenses reasonably expected to be incurred and accrued to date, and the availability and extent of insurance coverage. We accrue a liability for legal matters that are probable and can be reasonably estimated. If the reasonable estimate of a probable loss is a range, the Company records the most probable estimate of the loss or the minimum amount when no amount within the range is a better estimate than any other amount. We are unable to predict the ultimate outcome of these actions because of the inherent uncertainty of litigation and unfavorable rulings or developments could occur, and there can be no certainty that the Company may not ultimately incur changes in excess of recorded liabilities. However, we believe the most probable, ultimate resolution of these matters will not have a material adverse effect on our consolidated financial position, results of operations or cash flows. Environmental Matters The Company is currently participating in environmental assessments and remediation at approximately 11 locations, the majority of which are in the U.S., and environmental liabilities have been accrued reflecting our best estimate of future costs. Potential insurance reimbursements are not anticipated in the Company’s accruals for environmental liabilities. As of December 31, 2020 environmental liability accruals related to these locations were $9.2 million. Prior to the Separation, groundwater contamination was discovered at the Norris Sucker Rods plant site located in Tulsa, Oklahoma ("Norris"). Initial remedial efforts were undertaken at the time of discovery of the contamination and Norris has since coordinated monitoring and remediation with the Oklahoma Department of Environmental Quality ("ODEQ"). As part of the ongoing long-term remediation process, Norris contracted an engineering and consulting firm to develop a range of possible additional remedial alternatives in order to accelerate the remediation process and associated cost estimates for the work. In October 2019, we received the firm’s preliminary remedial alternatives for consideration. We have submitted our long-term remediation plan and it was approved by ODEQ. We are now in discussion with ODEQ to finalize a consent order. Because we have not yet finalized the consent order for further remediation at the site and discussions with ODEQ remain ongoing, we cannot fully anticipate the timing, outcome or possible impact of such further remedial activities, financial or otherwise. As a result of the recommendations in the report, we accrued liabilities for these remediation efforts of approximately $2.0 million as of December 31, 2019. Liabilities could increase in the future at such time as we ultimately reach agreement with ODEQ on our remediation plan and such liabilities become probable and can be reasonably estimated, however, there have been no changes to our estimated liability as of December 31, 2020. Matters Related to Deepwater Horizon Incident Response On April 22, 2010, the deepwater drilling platform, the Deepwater Horizon, operated by a subsidiary of BP plc, sank in the Gulf of Mexico after an explosion and fire, resulting in a massive oil spill. Certain entities that are now subsidiaries of ChampionX as a result of the Merger (collectively the “COREXIT Defendants”) supplied COREXIT™ 9500, an oil dispersant product listed on the U.S. EPA National Contingency Plan Product Schedule, which was used in the response to the spill. In connection with the provision of COREXIT™, the COREXIT Defendants were named in several lawsuits. Cases arising out of the Deepwater Horizon accident were administratively transferred and consolidated for pre-trial purposes under In Re: Oil Spill by the Oil Rig “Deepwater Horizon” in the Gulf of Mexico, on April 20, 2010, Case No. 10-md-02179 in the United States District Court in the Eastern District of Louisiana (E.D. La.) (“MDL 2179”). Claims related to the response to the oil spill were consolidated in a master complaint captioned the “B3 Master Complaint.” In 2011, Transocean Deepwater Drilling, Inc. and its affiliates (the “Transocean Entities”) named the COREXIT Defendants and other unaffiliated companies as first party defendants (In re the Complaint and Petition of Triton Asset Leasing GmbH, et al, MDL No. 2179, Civil Action 10-2771). In April and May 2011, the Transocean Entities, Cameron International Corporation, Halliburton Energy Services, Inc., M-I L.L.C., Weatherford U.S., L.P. and Weatherford International, Inc. (collectively, the “Cross Claimants”) filed cross claims in MDL 2179 against the COREXIT Defendants and other unaffiliated cross defendants. In April and June 2011, in support of its defense of the claims against it, the COREXIT Defendants filed counterclaims against the Cross Claimants. On May 18, 2012, the COREXIT Defendants filed a motion for summary judgment as to the claims in the B3 Master Complaint. On November 28, 2012, the Court granted the COREXIT Defendants’ motion and dismissed with prejudice the claims in the B3 Master Complaint asserted against the COREXIT Defendants. There currently remain three cases pending against the COREXIT Defendants relating to the Deepwater Horizon oil spill, all of which are expected to ultimately be dismissed pursuant to the Court’s November 28, 2012 order granting the COREXIT Defendants’ motion for summary judgment. The Company believes the claims asserted against the COREXIT Defendants are without merit and intends to defend these lawsuits vigorously. The Company also believes that it has rights to contribution and/or indemnification (including legal expenses) from third parties. However, we cannot predict the outcome of these lawsuits, the involvement it might have in these matters in the future, or the potential for future litigation. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Leases | LEASES Lessee Accounting We have operating and finance leases for real estate, vehicles and equipment. Certain of our vehicle leases include residual value guarantees, which have been excluded from the measurement of our lease liabilities as we do not believe it is probable the residual value guarantees will be paid at the end of the lease. Our real estate and vehicle leases generally include options to renew or extend the lease term at our discretion. These options are included in the measurement of our lease liabilities only when it is reasonably certain that we will exercise these rights. Balance sheet presentation —Leases are presented in our consolidated balance sheet as follows: December 31, (in thousands) Balance Sheet Classification 2020 2019 Right-of Use Assets: Finance leases Property, plant, and equipment, net $ 7,337 $ 9,406 Operating leases Operating lease right-of-use assets 122,481 24,289 Total lease right-of-use assets 129,818 33,695 Lease Liabilities: Finance leases - current Accrued expenses and other current liabilities $ 4,326 $ 4,845 Finance leases Other long-term liabilities 4,188 4,530 Operating leases - current Current portion of operating lease liabilities 33,234 7,620 Operating leases Operating lease liabilities 83,553 19,419 Total lease liabilities $ 125,301 $ 36,414 Components of total lease cost —Components of total lease cost were as follows: Year Ended December 31, (in thousands) 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 5,266 $ 5,200 Interest on lease liabilities 567 439 Operating lease cost 31,850 11,191 Short-term and variable lease cost 12,917 5,045 Sublease income (3,584) (463) Total lease cost $ 47,016 $ 21,412 Lease term and discount rate —Our weighted-average remaining lease term and weighted-average discount rate for operating and finance leases are as follows: December 31, 2020 2019 Weighted-average remaining lease term (years): Operating lease 6.3 4.6 Finance lease 2.7 2.1 Weighted-average discount rate: Operating lease 6.7 % 6.7 % Finance lease 6.0 % 5.3 % Maturity Analysis —Future minimum payments, as determined in accordance with ASC 842, on our operating and finance leases as of December 31, 2020 are as follows: (in thousands) Operating Finance 2021 $ 40,594 $ 4,727 2022 34,933 2,354 2023 21,994 973 2024 16,510 676 2025 5,745 443 Thereafter 24,877 529 Total future minimum lease payments 144,653 9,702 Interest included within lease payments (27,866) (1,188) Total lease liabilities $ 116,787 $ 8,514 Lessor Accounting Lease revenue is primarily generated from our electric submersible pump (“ESP”) leased asset program within our Production & Automation Technologies segment. An ESP rental unit has components consisting of surface, downhole and cable equipment. Our lease arrangements generally allow customers to rent equipment on a daily basis with no stated end date. Customers may return the equipment at any point subsequent to the lease commencement date without penalty. We account for these arrangements as a daily renewal option beginning on the lease commencement date, with the lease term determined as the period in which it is reasonably certain the option will be exercised. The average length of these arrangements generally range from six months to nine months. Lease revenue for our leased asset programs was $54.0 million and $44.7 million for the years ended December 31, 2020 and 2019, respectively. Leased assets —Components of our leased asset program, all of which are included within Property, plant, and equipment, net on our consolidated balance sheet, are as follows: (in thousands) Useful life December 31, 2020 Cable equipment 18 months $ 48,755 Downhole equipment 18 months 35,174 Surface equipment 5 years 69,172 Other lease equipment 3 - 5 years 21,773 174,874 Accumulated depreciation (110,299) Leased assets, net $ 64,575 Depreciation expense on our leased assets was $67.6 million and $37.1 million for the year ended December 31, 2020 and 2019, respectively. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | RESTRUCTURING Restructuring and other related charges as classified in our consolidated statements of income (loss) were as follows: Years Ended (in thousands) 2020 2019 2018 Segment restructuring charges (1) : Production Chemical Technologies $ 5,241 $ — $ — Production & Automation Technologies 11,814 4,467 5,632 Drilling Technologies 5,521 710 — Reservoir Chemical Technologies 348 — — Corporate and other 367 — — Total $ 23,291 $ 5,177 $ 5,632 Statements of Income (Loss) classification: Cost of goods and services $ 13,955 $ 3,592 $ 4,693 Selling, general and administrative expense 9,336 1,585 939 Total (1) $ 23,291 $ 5,177 $ 5,632 _______________________ (1) Total restructuring expenses include asset write-downs, which are not included in the restructuring accrual below. Restructuring and other related charges during the years ended December 31, 2020, 2019, and 2018, included the following activities, which the Company expects will be completed by early 2021: Production Chemical Technologies. Production Chemical Technologies incurred restructuring charges of $5.2 million during the year ended December 31, 2020, primarily due to costs associated with employee severance and related benefits as a result of workforce reductions to better align the cost base with the significantly lower demand environment. Production & Automation Technologies. Production & Automation Technologies incurred restructuring charges of $11.8 million, $4.5 million, and $5.6 million during the years ended December 31, 2020, 2019, and 2018, respectively, related to various programs, primarily focused on facility closures and consolidations, exit of certain nonstrategic product lines, and workforce reductions. Drilling Technologies. Drilling Technologies incurred restructuring charges of $5.5 million and $0.7 million during the years ended December 31, 2020 and 2019, respectively, primarily due to costs associated with employee severance and related benefits as a result of workforce reductions, as well as equipment disposal costs related to exiting certain non-strategic product lines. Reservoir Chemical Technologies. Reservoir Chemical Technologies incurred restructuring charges of $0.3 million during the year ended December 31, 2020, primarily due to costs associated with employee severance and related benefits as a result of workforce reductions to better align the cost base with the significantly lower demand environment. The following table details our restructuring accrual activities during the year ended December 31, 2020: (in thousands) Restructuring Accrual Balance December 31, 2019 $ 130 Restructuring charges 15,630 Payments (19,004) Liabilities assumed in the Merger 6,208 Other, including foreign currency translation (13) December 31, 2020 $ 2,951 Our liability balance for restructuring and other related charges at December 31, 2020, reflects employee severance and related benefits initiated during the period as well as liabilities assumed in the Merger. Additional programs may be initiated during 2021 with related restructuring charges. |
Employee Benefit Plans
Employee Benefit Plans | 12 Months Ended |
Dec. 31, 2020 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | EMPLOYEE BENEFIT PLANS The Company sponsors several pension and post-employment benefit plans in the U.S. and internationally, of which, approximately half of the plans are frozen to new participants. In conjunction with our acquisition of the legacy ChampionX business in June 2020, we acquired the assets and liabilities of several defined benefit pension plans. The unfunded liability of the acquired plans was $8.3 million as of December 31, 2020 and our net periodic benefit expense was $1.5 million for the year ended December 31, 2020. We recognized net actuarial losses in the amount of $5.5 million and $2.5 million and a gain of $0.9 million during the years ended December 31, 2020, 2019, and 2018, respectively. The actuarial gains and losses are reflected in our consolidated statements of comprehensive income (loss). The unfunded liability of the plans as of December 31, 2020 and 2019 was approximately $24.9 million and $15.1 million, respectively, and is included in other long-term liabilities within our consolidated balance sheets. The net periodic benefit expense was $3.2 million, $2.0 million, and $1.7 million for the years ended December 31, 2020, 2019, and 2018, respectively. |
Equity and Cash Incentive Progr
Equity and Cash Incentive Programs | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Equity and Cash Incentive Programs | EQUITY AND CASH INCENTIVE PROGRAMS Prior to the Separation, Dover granted share-based awards to its officers and other key employees, including certain ChampionX individuals. The principal awards issued under Dover’s stock-based compensation plans included stock options, stock-settled stock appreciation rights, restricted stock units, and performance share awards. All awards granted under the program consisted of Dover common shares and are not necessarily indicative of the results that ChampionX (formerly Apergy) would have experienced as a stand-alone public company for the periods presented prior to the Separation. Effective with the Separation, outstanding Dover share-based awards were converted to ChampionX share-based awards, with the exception of outstanding Dover performance share awards that relate to performance periods ending after the Separation. Such performance share awards were cancelled effective with the Separation. In connection with the Separation, our Board of Directors adopted the 2018 Equity and Cash Incentive Plan (“2018 Plan”). The 2018 Plan was also approved by Dover in its capacity as the sole stockholder of ChampionX at the time of adoption. The 2018 Plan was amended and restated in 2020 to increase the shares of common stock reserved for issuance under the 2018 Plan to 18.2 million (subject to customary adjustments arising from stock splits and other similar changes), along with other amendments. The 2018 Plan authorizes the grant of stock options, stock-settled stock appreciation rights (“SARs”), restricted stock awards, restricted stock units, performance share awards, cash performance awards, directors’ shares and deferred stock units. The ChampionX Compensation Committee determines the exercise price for options and the base price of SARs, which may not be less than the fair value of ChampionX common stock on the date of grant. Generally, stock options or SARs vest after 3 years of service and expire at the end of 10 years. Performance share awards vest if ChampionX achieves certain pre-established performance targets based on specified performance criteria over a performance period of not less than 3 years. In connection with the Merger, the Company entered into the Employee Matters Agreement dated December 18, 2019, which provided the terms in which certain Ecolab share-based awards held by legacy ChampionX employees were replaced with share-based awards of the Company on the merger date. The fair value of the replacement awards has been allocated between each employee’s pre-combination and post-combination services. Amounts allocated to pre-combination services have been included as consideration transferred as part of the Merger. See Note 3—Merger Transaction, Acquisitions, And Dispositions for a summary of consideration transferred. Compensation costs of $15.8 million allocated to post-combination services will be recorded as stock-based compensation expense over each employees’ remaining service period of approximately two years. Stock-based compensation expense is reported within selling, general and administrative expense in the consolidated statements of income (loss). Stock-based compensation expense relating to all stock-based incentive plans was as follows: Years Ended December 31, 2020 2019 2018 Stock-based compensation expense $ 19,536 $ 10,250 $ 5,375 Tax benefit (4,478) (2,153) (1,141) Stock-based compensation expense, net of tax $ 15,058 $ 8,097 $ 4,234 SARs We did not issue SARs during 2020, 2019 or 2018. A summary of activity relating to SARs outstanding for the year ended December 31, 2020, is as follows: SARs Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2020 422,361 $ 29.75 Forfeited / expired (7,030) 34.13 Exercised — — Outstanding at December 31, 2020 415,331 $ 29.67 5.1 $ — Exercisable at December 31, 2020 415,331 $ 29.67 5.1 $ — There is no unrecognized compensation expense related to SARs, as all SARs are exercisable as of December 31, 2020. Other information regarding the exercise of SARs is presented below: (in thousands) 2020 2019 2018 SARs: Fair value of SARs that became exercisable $ 878 $ 662 $ 310 Aggregate intrinsic value of SARs exercised — 629 40 Performance Share Awards - ChampionX Market Vesting Conditions We granted 121,261, 46,459, and 86,817 performance share awards subject to market vesting conditions during 2020, 2019, and 2018, respectively, under the 2018 Plan. These awards vest if ChampionX achieves certain pre-established performance targets based on specified performance criteria over a performance period of not less than 3 years. The performance targets for these awards are classified as a market vesting condition, therefore the compensation cost was calculated using the grant date fair value, as estimated using a Monte Carlo simulation, and is not subject to change based on future events. The fair value used in determining stock-based compensation expense of the performance share awards issued in 2020, 2019, and 2018, is as follows: Performance shares: 2020 2019 2018 Fair value per share at date of grant $ 14.55 $ 57.43 $ 56.32 Performance Vesting Conditions We granted 46,460 performance share awards subject to performance vesting conditions during 2019 under the 2018 Plan. We did not grant any of this type of award in 2020 or 2018. These awards are considered performance condition awards as attainment is based on ChampionX’s performance relative to established internal metrics. The fair value of these awards was determined using ChampionX’s closing stock price on the date of grant. The fair value and average attainment used in determining stock-based compensation expense of the performance shares issued in 2020 and 2019 are as follows: Performance shares: 2020 2019 Fair value per share at date of grant $ — $ 40.22 Average attainment rate reflected in expense — % 100 % A summary of activity for ChampionX’s performance share awards under the 2018 Plan for the year ended December 31, 2020, is as follows: Shares Weighted-Average Unvested at January 1, 2020 174,726 $ 52.44 Granted 121,261 14.55 Forfeited (5,011) 52.60 Vested (12,213) 52.51 Unvested at December 31, 2020 278,763 $ 35.95 Unrecognized compensation expense related to unvested performance share awards as of December 31, 2020, was $3.5 million, which will be recognized over a weighted average period of 1.5 years. Restricted Stock Units Restricted stock units may be granted at no cost to certain officers and key employees. Restricted stock units generally vest over a three A summary of activity for restricted stock units for the year ended December 31, 2020, is as follows: Shares Weighted-Average Unvested at January 1, 2020 440,048 $ 41.07 Granted 655,584 14.13 Replacement awards (1) 2,357,733 10.34 Forfeited (29,272) 31.61 Vested (754,314) 17.64 Unvested at December 31, 2020 2,669,779 $ 14.04 _______________________ (1) In connection with the Merger, the Company entered into the Employee Matters Agreement dated December 18, 2019, which provided the terms in which certain Ecolab share-based awards held by legacy ChampionX employees were replaced with share-based awards of the Company on the merger date. The fair value of the replacement awards has been allocated between each employee’s pre-combination and post-combination services. Amounts allocated to pre-combination services have been included as consideration transferred as part of the Merger. See Note 3—Merger Transaction, Acquisitions, And Dispositions for a summary of consideration transferred. Unrecognized compensation expense relating to unvested restricted stock as of December 31, 2020, was $18.9 million, which will be recognized over a weighted average period of 1.3 years. Non-Qualified Stock Options A summary of activity for non-qualified stock options for the year ended December 31, 2020 is as follows: Non-Qualified Stock Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2020 — $ — Granted — — Replacement awards (1) 7,324,853 6.02 Forfeited / expired (14,381) 7.20 Exercised (135,432) 6.56 Outstanding at December 31, 2020 7,175,040 $ 6.01 5.3 $ 65,431 Exercisable at December 31, 2020 6,534,024 $ 5.85 5.1 $ 60,571 _______________________ (1) In connection with the Merger, the Company entered into the Employee Matters Agreement dated December 18, 2019, which provided the terms in which certain Ecolab share-based awards held by legacy ChampionX employees were replaced with share-based awards of the Company on the merger date. The fair value of the replacement awards has been allocated between each employee’s pre-combination and post-combination services. Amounts allocated to pre-combination services have been included as consideration transferred as part of the Merger. See Note 3—Merger Transaction, Acquisitions, And Dispositions for a summary of consideration transferred. The weighted-average grant-date fair value of stock options granted during 2020 was $6.02 per option. Unrecognized compensation expense relating to unvested stock options as of December 31, 2020, was $1.6 million, which will be recognized over a weighted average period of 0.9 years. During the year ended December 31, 2020, the total intrinsic value of stock options exercised was approximately $1.0 million and cash received from stock options exercised was approximately $0.9 million. The cash tax benefit from stock options exercised during the year ended December 31, 2020 was approximately $0.2 million. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Stockholders' Equity | STOCKHOLDERS' EQUITY Capital stock —The following is a summary of our capital stock activity: (in thousands) Common Stock December 31, 2018 77,353 Shares issued—share-based compensation 107 December 31, 2019 77,460 Issuance of common stock - Merger 122,237 Shares issued—share-based compensation 683 December 31, 2020 200,380 We have 250 million shares of preferred stock authorized, with a par value of $0.01 per share. Accumulated other comprehensive loss —Accumulated other comprehensive loss consisted of the following: (in thousands) Foreign Currency Translation Defined Pension and Other Post-Retirement Benefits Cash Flow Hedges Accumulated Other Comprehensive Loss December 31, 2018 $ (36,146) $ (6,760) $ — $ (42,906) Other comprehensive income (loss) before reclassifications, net of tax 936 (2,711) — (1,775) Reclassification adjustment for net losses included in net income, net of tax — 644 — 644 Other comprehensive income (loss), net of tax 936 (2,067) — (1,131) December 31, 2019 (35,210) (8,827) — (44,037) Other comprehensive income (loss) before reclassifications, net of tax 20,245 (5,504) (2,320) 12,421 Reclassification adjustment for net losses included in net income, net of tax — 861 — 861 Other comprehensive income (loss), net of tax 20,245 (4,643) (2,320) 13,282 December 31, 2020 $ (14,965) $ (13,470) $ (2,320) $ (30,755) Reclassifications from accumulated comprehensive loss —Reclassification adjustments from accumulated other comprehensive loss to net income related to defined pension and other post-retirement benefits consisted of the following: Years Ended December 31, Affected line items on the consolidated statements of income (in thousands) 2020 2019 2018 Amortization of actuarial loss and net transition obligation (1) $ 492 $ 364 $ 330 Other expense, net Amortization of prior service cost (1) — 2 1 Other expense, net Settlement loss (1) 698 508 479 Other expense, net 1,190 874 810 Income before income taxes (329) (230) (210) Provision for (benefit from) income taxes $ 861 $ 644 $ 600 Net income _______________________ (1) These accumulated comprehensive loss components are included in the computation of net periodic benefit cost (See Note 12—Employee Benefit Plans for additional information). |
Earnings Per Share
Earnings Per Share | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | EARNINGS PER SHARE On May 9, 2018, 77.3 million shares of our common stock were distributed to Dover stockholders in conjunction with the Separation. See Note 1—Basis Of Presentation And Summary Of Significant Accounting Policies for additional information. For comparative purposes, and to provide a more meaningful calculation of weighted-average shares outstanding, we have assumed the shares issued in conjunction with the Separation to be outstanding as of the beginning of the year ended December 31, 2018. On June 3, 2020, 122.2 million shares of our common stock were issued in conjunction with the acquisition of the legacy ChampionX business. See Note 3—Merger Transaction, Acquisitions, And Dispositions for additional information. A reconciliation of the number of shares used for the basic and diluted earnings (loss) per share calculation was as follows: Years Ended December 31, (in thousands, except per share data) 2020 2019 2018 Net income (loss) attributable to ChampionX $ (743,930) $ 52,164 $ 92,737 Weighted-average number of shares outstanding 148,370 77,427 77,342 Dilutive effect of stock-based compensation — 197 350 Total shares and dilutive securities 148,370 77,624 77,692 Basic earnings per share attributable to ChampionX $ (5.01) $ 0.67 $ 1.20 Diluted earnings per share attributable to ChampionX $ (5.01) $ 0.67 $ 1.19 For all periods presented, the computation of diluted earnings (losses) per share excludes awards with an anti-dilutive impact. For the year ended December 31, 2020, we excluded all outstanding equity awards from the calculation of weighted-average shares outstanding, because their inclusion would be anti-dilutive as we were in a loss position. For the years ended December 31, 2019, and December 31, 2018, the diluted shares include the dilutive impact of equity awards except for approximately 0.4 million shares and 0.2 million shares that were excluded because their inclusion would be anti-dilutive. |
Fair Value Measurements
Fair Value Measurements | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | FAIR VALUE MEASUREMENTS The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows: December 31, 2020 Carrying Amount Fair Value Measurements (in thousands) Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $ 4,576 $ — $ 4,576 $ — Liabilities Foreign currency forward contracts $ 6,561 $ — $ 6,561 $ — The carrying value of foreign currency forward contracts is at fair value, which is determined based on foreign currency exchange rates as of the balance sheet date and is classified within Level 2. For purposes of fair value disclosure above, derivative values are presented gross. See Note 17—Derivatives And Hedging Transactions for further discussion of gross versus net presentation of the Company’s derivatives. The carrying amounts of cash and cash equivalents, trade receivables, accounts payable, as well as amounts included in other current assets and other current liabilities that meet the definition of financial instruments, approximate fair value due to their short-term nature. The fair value of our Senior Notes is based on Level 1 quoted market prices. The fair value of our term loan facilities are based on Level 2 quoted market prices for the same or similar debt instruments. The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were: December 31, 2020 December 31, 2019 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2018 Term Loan Facility $ 140,000 $ 137,200 $ 265,000 $ 266,161 2020 Term Loan Facility $ 523,575 $ 530,120 $ — $ — 6.375% Senior Notes due 2026 $ 277,041 $ 277,054 $ 300,000 $ 316,710 Impairment of Goodwill and Long-lived Assets During 2020, we recorded a $616.3 million impairment charge to goodwill in our Artificial Lift and Automation reporting units. Additionally, we recorded a long-lived asset impairment charge of $41.0 million in our Production & Automation Technologies asset group. We consider the inputs for our long-lived asset and goodwill impairment calculations to be Level 3 inputs in the fair value hierarchy. See Note 7—Goodwill And Intangible Assets for additional information. Merger Transaction On June 3, 2020 we completed the acquisition of the legacy ChampionX business through the merger of one of our wholly owned subsidiaries with legacy ChampionX. The measurements of assets acquired and liabilities assumed, other than debt which was measured using Level 2 measurements, are based on inputs that are not observable in the market and thus represent Level 3 inputs. See Note 3—Merger Transaction, Acquisitions, And Dispositions for additional information. Credit Risk By their nature, financial instruments involve risk, including credit risk, for non-performance by counterparties. Financial instruments that potentially subject us to credit risk primarily consist of trade receivables. See Note 1—Basis Of Presentation And Summary Of Significant Accounting Policies for additional information on the mitigation of credit risk. |
Derivatives and Hedging Transac
Derivatives and Hedging Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivatives and Hedging Transactions | DERIVATIVES AND HEDGING TRANSACTIONS The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. Derivative contracts are recorded as assets and liabilities on the balance sheet at fair value. We evaluate hedge effectiveness at contract inception and thereafter on a quarterly basis. If a derivative is no longer expected to be effective, hedge accounting is discontinued. Changes in fair value are recognized immediately in earnings unless the derivative qualifies and is designated as a hedge. Changes in fair value attributable to changes in spot exchange rates for derivative contracts that have been designated as cash flow hedges are recognized in accumulated other comprehensive income (loss) (“ AOCI”) and reclassified into earnings in the same period the hedged transaction affects earnings and are presented in the same income statement line as the earnings effect of the hedged item. Cash flows from derivatives are classified in the statement of cash flows in the same category as the cash flows from the items subject to designated hedge or undesignated (economic) hedge relationships. The Company is exposed to credit risk in the event of nonperformance of counterparties for foreign currency forward exchange contracts. We monitor our exposure to credit risk by using major global banks and financial institutions as counterparties and monitoring their financial condition and credit profile. The Company does not anticipate nonperformance by any of these counterparties, and therefore, recording a valuation allowance against the Company’s derivative balance is not considered necessary. Derivative Positions Summary Certain of the Company’s derivative transactions are subject to master netting arrangements that allow the Company to settle with the same counterparties. These arrangements generally do not call for collateral and as of the applicable dates presented in the following table, no cash collateral had been received or pledged related to the underlying derivatives. We have elected to present our derivative balances on a gross basis on the consolidated balance sheet. The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the consolidated balance sheet. We did not have outstanding derivatives at December 31, 2019. December 31, 2020 (in thousands) Derivative Assets Derivative Liabilities Prepaid expenses and other current assets $ 4,576 $ — Accrued expenses and other current liabilities — 6,561 $ 4,576 $ 6,561 The following table summarizes the notional values of the Company’s outstanding derivatives: (in thousands) December 31, 2020 Notional value of foreign currency forward contracts $ 483,377 Cash Flow Hedges The Company utilizes foreign currency forward contracts to hedge the effect of foreign currency exchange rate fluctuations on forecasted foreign currency transactions, primarily related to inventory purchases. These forward contracts are designated as cash flow hedges. The changes in fair value of these contracts attributable to changes in spot exchange rates are recorded in AOCI until the hedged items affect earnings, at which time the gain or loss is reclassified into the same line item in the consolidated statements of income (loss) as the underlying exposure being hedged. The forward points are marked-to-market monthly and recognized in the same line item in the consolidated statements of income (loss) as the underlying exposure being hedged. Derivatives Not Designated as Hedging Instruments The Company also uses foreign currency forward contracts to offset its exposure to the change in value of certain foreign currency denominated assets and liabilities, primarily receivables and payables, which are remeasured at the end of each period. Although the contracts are effective economic hedges, they are not designated as accounting hedges. Therefore, changes in the value of these derivatives are recognized immediately in earnings, thereby offsetting the current earnings effect of the related foreign currency denominated assets and liabilities. Effect of Derivative Instruments on Income The loss of all derivative instruments recognized is summarized below: (in thousands) Year Ended Loss reclassified from AOCI to income on cash flow hedges: Cost of goods and services $ 171 Loss on derivatives not designated as hedging instruments: Other (income) expense, net 692 Total loss of derivative instruments $ 863 |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | INCOME TAXES Components of income (loss) before income taxes —Domestic and foreign components of income before income taxes were as follows: Years Ended December 31, (in thousands) 2020 2019 2018 Domestic $ (811,995) $ 51,073 $ 104,234 Foreign 49,246 8,113 17,119 Income (loss) before income taxes $ (762,749) $ 59,186 $ 121,353 Provision for (benefit from) income taxes —The provision for (benefit from) income taxes consisted of: Years Ended December 31, (in thousands) 2020 2019 2018 Current: U.S. federal $ 1,578 $ 15,327 $ 24,221 State and local 1,579 1,196 1,598 Foreign 20,264 4,264 4,362 Total current 23,421 20,787 30,181 Deferred: U.S. federal (32,454) (12,815) (2,255) State and local (6,738) (1,156) 2,735 Foreign (4,625) (590) (2,499) Total deferred (43,817) (14,561) (2,019) Provision for (benefit from) income taxes $ (20,396) $ 6,226 $ 28,162 Effective income tax rate reconciliation —The effective income tax rate was different from the statutory U.S. federal income tax rate due to the following: Years Ended December 31, 2020 2019 2018 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % Net difference resulting from: State and local taxes, net of federal income tax benefit 0.5 3.2 3.4 Foreign withholding tax (1.2) 1.8 0.3 Foreign derived intangible income — (0.8) (1.9) Foreign operations tax effect (0.4) — 0.3 Research and experimentation tax credits 0.4 (1.2) (0.6) Foreign tax credit — (8.0) (1.5) Nondeductible expenses (0.6) 2.5 0.7 Branch income (0.7) 0.6 — Tax return to accrual adjustments 0.1 (9.4) — State deferred taxes 0.2 (7.9) — Goodwill Impairment (15.5) — — Foreign Inclusions (Including Global intangible low-taxed income) (0.7) — 2.3 Transaction Costs (0.6) — — Change in valuation allowance (0.5) 9.0 — Other 0.7 (0.3) (0.8) Effective income tax rate 2.7 % 10.5 % 23.2 % Deferred tax assets and liabilities —Significant components of deferred tax assets and liabilities were as follows: December 31, (in thousands) 2020 2019 Deferred tax assets attributable to: Accrued compensation $ 13,437 $ 8,725 Accrued expenses 3,950 455 Net operating loss and other carryforwards 25,879 5,937 Inventories — 1,380 Accounts receivable 19,930 1,699 Lease liability 17,180 5,649 Long-term liabilities 1,470 529 Other assets 2,110 1,202 Deferred tax assets 83,956 25,576 Valuation allowance (26,786) (6,027) Deferred tax assets, net of valuation allowance $ 57,170 $ 19,549 Deferred tax liabilities attributable to: Inventories $ (2,124) $ — Intangible assets, including goodwill (80,634) (66,736) Property, plant and equipment (73,507) (31,240) Foreign withholding taxes (15,673) — Lease asset (18,293) (5,633) Investment in Subsidiary (10,189) — Deferred tax liabilities (200,420) (103,609) Net deferred tax liabilities $ (143,250) $ (84,060) Classified as follows in the consolidated balance sheets: Other non-current assets $ 13,033 $ — Deferred income taxes (156,283) (84,060) Net deferred tax liabilities $ (143,250) $ (84,060) Effective Tax Rate. Our effective tax rate was 2.7% for 2020 compared to 10.5% for 2019. The effective tax rate for 2020 was primarily impacted by goodwill impairments which included $560.1 million of non-taxable goodwill. Net operating loss carryforwards. As of December 31, 2020, our deferred tax asset balance included U.S. net operating loss carryforwards of $2.2 million and non-U.S. net operating loss carryforwards of $17.3 million. This entire balance is available to be carried forward; U.S. carryforwards do not expire and non-U.S. carryforwards will expire during the years 2024 through 2038. Foreign tax credit carryforwards. As of December 31, 2020, our deferred tax asset balance included U.S. foreign tax credit carryforwards of $4.2 million. This entire balance is available to be carried forward and will expire during 2029. Valuation allowance. Management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative loss incurred over the three-year period ended December 31, 2020. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of December 31, 2020, we recorded a valuation allowance of $26.8 million to recognize only the portion of the deferred tax asset that is more likely than not to be realized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased if objective negative evidence in the form of cumulative losses are no longer present and additional weight is given to subjective evidence such as our projections of future growth. Unrecognized tax benefits. We file federal, state, and local tax returns in the United States as well as foreign tax returns. We are routinely audited by the tax authorities in these jurisdictions, and a number of audits are currently underway. We believe all income tax uncertainties have been properly accounted. The Company accounts for uncertain tax positions in accordance with guidance in FASB ASC 740, “ Income Taxes (Topic 740)”, which prescribes the minimum recognition threshold a tax position taken or expected to be taken in a tax return is required to meet before being recognized in the financial statements. A reconciliation of the beginning and ending amount of uncertain tax positions is as follows: (in thousands) Uncertain Tax Position Balance at January 1, 2019 $ — Additional based on tax positions related to prior years 868 Balance at December 31, 2020 $ 868 The total amount of unrecognized tax benefits at December 31, 2020 was $0.9 million. The total balance of unrecognized tax benefit would impact the Company’s future effective income tax rate if recognized. The Company recognizes interest and penalties related to uncertain tax positions within the provision for income taxes in its consolidated statements of income (loss) and comprehensive income (loss). As of December 31, 2020, no interest and penalties have been accrued. The Company is subject to U.S. federal income tax as well as income tax in multiple state jurisdictions. The earliest period the Company is subject to examination of federal income tax returns by the Internal Revenue Service is 2017. The state income tax returns and other state tax filings of the Company are subject to examination by the state taxing authorities for various periods, generally up to four years after they are filed. Undistributed Earnings. As of December 31, 2020, the Company has $15.7 million of deferred tax liabilities primarily associated with withholding taxes on undistributed earnings generated by foreign subsidiaries. The Company continues to assert permanent reinvestment of the remaining undistributed earnings for which deferred taxes have not been provided for as of December 31, 2020. If there are policy changes, the Company would record the applicable taxes in the period of change. No deferred taxes have been provided for withholding taxes and other taxes on the remaining earnings as of December 31, 2020 as computation of the potential deferred tax liability associated with these undistributed earnings and any other basis differences is not practicable. CARES Act. On March 27, 2020, as part of the business stimulus package in response to the COVID-19 pandemic, the U.S. federal government enacted the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) to provide relief to businesses impacted by the disruptions of the COVID-19 pandemic. The CARES Act did not have a material impact to our consolidated financial statements. Tax Holidays. The Company has a tax incentive awarded by the Singapore Economic Development Board. This incentive provides 0% tax rate on manufacturing profits generated at the Company’s facility located on Jurong Island which expires in December 2024. The tax incentive provided no benefit in 2020 as the manufacturing income was not profitable. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | RELATED PARTY TRANSACTIONS Dover Corporation Prior to the Separation, Dover provided certain services to us, including corporate executive management, human resources, information technology, facilities, tax, shared services, finance and legal services. Dover continued to provide us certain of these services on a temporary basis following the Separation under a transition services agreement. Under the transition services agreement, ChampionX paid a fee to Dover for services under the transition services agreement, which fee was intended to allow Dover to recover all of its direct and indirect costs generally without profit. The transition services agreement was terminated on January 31, 2019, consistent with the initial term provided within the agreement. Financial information presented prior to the Separation does not include all the expenses that would have been incurred had ChampionX been a stand-alone public company. The corporate expenses allocated by Dover to these financial statements were $7.4 million for the year ended December 31, 2018 and were recorded in selling, general and administrative expense in the consolidated statements of income (loss). For periods prior to the Separation, transactions between ChampionX and Dover, with the exception of transactions discussed below with Dover’s affiliates, are reflected in distributions to Dover Corporation, net in the consolidated statements of cash flows for the year ended December 31, 2018 as a financing activity. Revenue with Dover and its affiliates were not material for the periods presented. We recognized royalty expense of $2.3 million for the year ended December 31, 2018, related to the use of Dover’s intellectual property and patents which are included in other expense, net in the consolidated statements of income (loss). On April 1, 2018, patents and other intangibles owned by Dover related to our operations transferred to ChampionX, and consequently, ChampionX no longer incurred royalty charges related to these assets from Dover. Noncontrolling Interest and Unconsolidated Affiliates For the years ended December 31, 2020, 2019, and 2018, we declared and paid $2.2 million, none, and $2.7 million, respectively, of distributions to the noncontrolling interest holder in Apergy Middle East Services LLC, a subsidiary in the Sultanate of Oman. We have a commission arrangement with our noncontrolling interest for 5% of certain annual product sales. In the ordinary course of business, we enter into certain transactions with our unconsolidated affiliates at market prices. These transactions primarily related to inventory sales and amounted to approximately $4.0 million for the year ended December 31, 2020. |
Cash Flow Information
Cash Flow Information | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash Flow Information | CASH FLOW INFORMATION Cash payments for income taxes and cash payments for interest incurred related to our debt are as follows: Years Ended December 31, (in thousands) 2020 2019 2018 Cash information: Cash paid for income taxes $ 18,179 $ 26,464 $ 27,191 Cash paid for interest $ 39,746 $ 36,085 $ 21,899 Supplemental cash flow information related to our lease liabilities is as follows: (in thousands) Statement of Cash Flows Classification December 31, 2020 December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating leases (1) Operating $ 30,256 $ 12,026 Finance leases - interest Operating $ 550 $ 439 Finance leases - principal Financing $ 5,139 $ 5,555 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets: Operating leases Non-cash $ 37,631 $ 38,225 Finance leases Non-cash $ 4,017 $ 6,412 _______________________ (1) Cash required by operating leases is reported net of operating lease expense in the operating section of our consolidated statements of cash flows in accrued expenses and other liabilities. Leased Asset Program Our ESP leased asset program is reported in our Production & Automation Technologies segment. At the time of purchase, assets are recorded to inventory and are transferred to property, plant, and equipment when a customer contracts for an asset under our leased asset program. During the years ended December 31, 2020, 2019, and 2018, we transferred $15.3 million, $75.7 million, and $97.0 million, respectively, of inventory into property, plant, and equipment as a result of assets entering our lease program. |
Schedule II - Valuation and Qua
Schedule II - Valuation and Qualifying Accounts | 12 Months Ended |
Dec. 31, 2020 | |
SEC Schedule, 12-09, Valuation and Qualifying Accounts [Abstract] | |
Schedule II—Valuation and Qualifying Accounts | Schedule II—Valuation and Qualifying Accounts Allowance for Doubtful Accounts Balance at Beginning of Year Charged to Cost and Expense (1) Accounts Written Off Other Balance at End of Year Year Ended December 31, 2020 $ 8,072 3,644 (3,230) 1,706 $ 10,192 Year Ended December 31, 2019 $ 4,745 4,955 (1,447) (181) $ 8,072 Year Ended December 31, 2018 $ 4,753 2,007 (1,489) (526) $ 4,745 _______________________ (1) Net of recoveries on previously reserved or written-off balances. Deferred Tax Valuation Allowance Balance at Beginning of Year Additions Reductions Other Balance at End of Year Year Ended December 31, 2020 $ 6,027 21,101 (342) — $ 26,786 Year Ended December 31, 2019 $ 722 5,556 (251) — $ 6,027 Year Ended December 31, 2018 $ 1,280 331 (889) — $ 722 |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Basis of Presentation Our consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All intercompany accounts and transactions have been eliminated. Prior to the Separation, our results of operations, financial position, and cash flows were derived from the consolidated financial statements and accounting records of Dover and reflect the combined historical results of operations, financial position, and cash flows of certain Dover entities conducting its upstream oil and gas energy business within Dover’s Energy segment, including an allocated portion of Dover’s corporate costs. As such, our consolidated statement of income, comprehensive income and cash flows for the year ended December 31, 2018 consist of the consolidated results of legacy Apergy on a stand-alone basis from May 9, 2018 to December 31, 2018, and the combined results of operations and cash flows for periods prior to May 9, 2018. For periods prior to the Separation, our combined financial statements include expense allocations for certain corporate functions historically performed by Dover and not allocated to its operating segments, including corporate executive management, human resources, information technology, facilities, tax, shared services, finance, and legal, including the costs of salaries, benefits and other related costs. These expense allocations were based on direct usage or benefit, where identifiable, with the remainder allocated on the basis of revenue, headcount, or other measures. Management believes the assumptions underlying these consolidated financial statements, including the assumptions regarding the allocation of corporate expenses from Dover for periods prior to the Separation, are reasonable. The allocations may not, however, reflect the expense we would have incurred as an independent, publicly traded company for the periods presented prior to the Separation. Actual costs that would have been incurred if we had been a stand-alone public company would depend on a variety of factors, including organizational structure and strategic decisions made in various areas, including information technology and infrastructure. Prior to the Separation, transactions with Dover, with the exception of transactions discussed in Note 19—Related Party Transactions, are reflected in the combined statements of cash flows as a financing activity in Distributions to Dover Corporation, net. See Note 19—Related Party Transactions for additional information. As a result of the Merger, the results of operations of legacy ChampionX have been reflected in our accompanying consolidated financial statements from the closing date of the Merger through December 31, 2020. Results for the periods prior to June 3, 2020 reflect the financial and operating results of Apergy and do not include the financial and operating results of legacy ChampionX. See Note 3—Merger Transaction, Acquisitions, And Dispositions for additional information on the Merger. |
Use of estimates | Use of estimates— The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. Such estimates include, but are not limited to, net realizable value of inventories, allowance for doubtful accounts, pension and post-retirement plans, future cash flows associated with impairment testing of goodwill, indefinite-lived intangible assets and other long-lived assets, estimates related to income taxes, and estimates related to contingencies. |
Cash and cash equivalents | Cash and cash equivalents— Cash equivalents are highly liquid, short-term investments with original maturities of three months or less from their date of purchase. |
Receivables, net of allowances | Receivables, net of allowances—Accounts receivable are carried at the invoiced amounts, less an allowance for doubtful accounts, and generally do not bear interest. The Company estimates the allowance for doubtful accounts for expected credit losses by analyzing accounts receivable balances by applying historical write-off and collection trend rates, as well as current economic and market conditions. Specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Account balances are written off against the allowance when it is determined the receivable will not be recovered. |
Inventories | Inventories— Inventories are stated at the lower of cost or net realizable value. The majority of our inventory costs are determined on the first-in, first-out (FIFO) basis. As of December 31, 2020 and 2019, approximately 35% and 23%, respectively, of our total net inventories were accounted for using the last-in, first-out (LIFO) basis, or market. Under the LIFO method, the cost assigned to items sold is based on the cost of the most recent items purchased. As a result, the costs of the first items purchased remain in inventory and are used to value ending inventory. |
Property, plant and equipment | Property, plant and equipment— Property, plant and equipment is recorded at cost or fair value in connection with those assets acquired in a business combination. Depreciation is provided on the straight-line basis over the estimated useful lives of our assets as follows: buildings and improvements 5 to 40 years; machinery and equipment 1 to 20 years; and software 3 to 7 years. Expenditures for maintenance and repairs are expensed as incurred. Gains and losses are realized upon the sale or disposition of assets and are recorded in other expense, net on our consolidated statements of income (loss). Property, plant and equipment are reviewed for impairment whenever events or changes in circumstances indicate the carrying value of the long-lived asset may not be recoverable. The carrying value of a long-lived asset is not recoverable if it exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the impairment loss is measured as the amount by which the carrying value of the long-lived asset exceeds its fair value. |
Goodwill and other intangible assets | Goodwill and other intangible assets— We review goodwill for impairment annually or more frequently if events or changes in circumstances indicate that the carrying amount of such goodwill allocated to reporting units may exceed their fair value. We have established October 1 as the date of our annual test for impairment of goodwill for our legacy Apergy reporting units and May 31 for the acquired Chemical Technologies reporting units. We initially assess goodwill for impairment based on qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of one or more of our reporting units is less than its carrying amount. If the carrying amount exceeds the fair value, an impairment charge will be recognized in an amount equal to the excess; however, the loss recognized should not exceed the total amount of goodwill allocated to that reporting unit. Our finite-lived acquired intangible assets are amortized on a straight-line basis over their estimated useful lives, which generally range from 3 to 15 years. Intangible assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of the intangible asset may not be recoverable. The carrying amount of an intangible asset is not recoverable if it exceeds the sum of the undiscounted cash flows expected to result from the use and eventual disposition of the asset. If it is determined that an impairment loss has occurred, the loss is measured as the amount by which the carrying amount of the intangible asset exceeds its fair value. We have one intangible asset with an indefinite life which is tested annually for impairment. |
Revenue Recognition | Revenue Recognition— Revenue is recognized to depict the transfer of control of the related goods and services to the customer. The majority of our revenue is generated through the manufacture and sale of a broad range of specialized products and components, with revenue recognized upon transfer of control, which typically occurs as title and risk of loss transfers. We account for shipping and handling activities performed after control of a good has been transferred to the customer as a contract fulfillment cost rather than a separate performance obligation. Revenue arrangements with customers in many instances require delivery, installation, testing, or other acceptance provisions to be satisfied before revenue is recognized. Service revenue is recognized as the services are performed. Software product revenue is recorded when the software product is shipped to the customer or over the term of the contract on a subscription based model. Estimates are used to determine the amount of variable consideration in contracts, as well as the determination of the standalone selling price among separate performance obligations. Some contracts with customers include variable consideration primarily related to volume rebates. We estimate variable consideration at the most likely amount to determine the total consideration which we expect to be entitled. Estimated amounts are included in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is resolved. Our estimates of variable consideration and the determination of whether to include estimated amounts in the transaction price are largely based on an assessment of our anticipated performance and all information that is reasonably available. We exclude all taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction and collected from a customer (e.g., sales, use, value added, and some excise taxes) from the determination of the transaction price. |
Lessor accounting | Lessor accounting —Our lease arrangements generally allow customers to rent equipment on a daily basis with no stated end date. Customers may return the equipment at any point subsequent to the lease commencement date without penalty. We account for these arrangements as a daily renewal option beginning on the lease commencement date, with the lease term determined as the period in which it is reasonably certain the option will be exercised. Based on our assessment of the lease classification criteria, our lease arrangements have been classified as operating leases. Our lease arrangements generally include lease and non-lease components for which revenue is recognized based on each component’s standalone price. Lease revenue is recognized on a straight-line basis over the term of the lease and is included in lease and other revenue in the consolidated statements of income (loss). Non-lease revenue related to our lease arrangements is recognized in accordance with our revenue |
Lessee accounting | Lessee accounting—Lease liabilities are measured at the lease commencement date and are based on the present value of remaining payments contractually required under the contract. Payments that are variable in nature are excluded from the measurement of our lease liabilities and are recorded as an expense as incurred. Options to renew or extend a lease are included in the measurement of our lease liabilities only when it is reasonably certain that we will exercise these rights. In estimating the present value of our lease liabilities, payments are discounted at our incremental borrowing rate (“IBR”), which we applied utilizing a portfolio approach. We utilized information publicly available from companies within our industry with similar credit profiles to construct a company-specific yield curve in order to estimate the rate of interest we would pay to borrow at various lease terms. At lease commencement, we recognize a lease right-of-use asset equal to our lease liability, adjusted for lease payments paid to the lessor prior to the lease commencement date, and any initial direct costs incurred. Operating lease expense is recorded on a straight-line basis over the lease term. For finance leases, we amortize our right-of-use assets on a straight-line basis over the shorter of the asset’s useful life or the lease term. Additionally, interest expense is recognized each period related to the accretion of our lease liabilities over their respective lease terms. |
Stock-based compensation | Stock-based compensation— The cost of stock-based awards is measured at the grant date and are based on the fair value of the award. The value of the portion of the award that is expected to ultimately vest is recognized as expense on a straight-line basis, generally over the explicit service period and is included in selling, general and administrative expense in our consolidated statements of income. Forfeitures are accounted for as they occur. Expense for awards granted to retirement-eligible employees is recorded over the period from the date of grant through the date the employee first becomes eligible to retire and is no longer required to provide service. |
Research and development costs | Research and development costs—Research and development costs are expensed as incurred |
Income Taxes | Income Taxes— Prior to the Separation, our operations were historically included in Dover’s consolidated federal tax return and certain combined state returns. The income tax expense in our combined financial statements for these pre-Separation periods was determined on a stand-alone return basis which requires the recognition of income taxes using the liability method. Under this method, we assume to have historically filed a return separate from Dover, reporting our taxable income or loss and paying applicable tax based on our separate taxable income and associated tax attributes in each tax jurisdiction. Income taxes payable prior to Separation were computed under the stand-alone return basis. Accordingly, changes in income taxes payable for periods prior to the Separation are presented as a component of financing activities in the statement of cash flows. The calculation of income taxes on the separate return basis requires considerable judgment and the use of both estimates and allocations. As a result, our effective tax rate and deferred tax balances will significantly differ from those in the periods prior to the Separation. The Global Intangible Low-Taxed Income (“GILTI”) provisions of the Tax Reform Act, enacted in December 2017, require us to include in our U.S. income tax return foreign subsidiary earnings in excess of an allowable return on the foreign subsidiary’s tangible assets. We have elected to account for GILTI tax in the period in which it is incurred. |
Earnings per share (“EPS”) | Earnings per share (“EPS”)— Basic EPS is computed using the weighted-average number of common shares outstanding during the year. We use the treasury stock method to compute diluted EPS which gives effect to the potential dilution of earnings that could have occurred if additional shares were issued for awards granted under our incentive compensation and stock plan. The treasury stock method assumes proceeds that would be obtained upon exercise of awards granted under our incentive compensation and stock plan are used to purchase outstanding common stock at the average market price during the period. |
Investments in Affiliated Companies | Investments in Affiliated Companies—Investments in companies in which ChampionX does not have a controlling financial interest, but over which it has significant influence, are accounted for using the equity method. ChampionX’s share of the after-tax earnings of equity method investees is included in Interest and other income. |
Fair value measurements | Fair value measurements— We record our financial assets and financial liabilities at fair value. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the reporting date. The fair value framework requires the categorization of assets and liabilities into three levels based upon the assumptions (inputs) used to price the assets or liabilities, with the exception of certain assets and liabilities measured using the net asset value practical expedient, which are not required to be leveled. Level 1 provides the most reliable measure of fair value, whereas Level 3 generally requires significant management judgment. The three levels are defined as follows: • Level 1: Unadjusted quoted prices in active markets for identical assets and liabilities. • Level 2: Observable inputs other than quoted prices included in Level 1. For example, quoted prices for similar assets or liabilities in active markets or quoted prices for identical assets or liabilities in inactive markets. • Level 3: Unobservable inputs reflecting management’s own assumptions about the assumptions market participants would use in pricing the asset or liability. |
Derivative financial instruments | Derivative financial instruments— The Company uses foreign currency forward contracts to manage risks associated with foreign currency exchange rates. The Company does not hold derivative financial instruments of a speculative nature or for trading purposes. See Note 17—Derivatives And Hedging Transactions for further information. |
Foreign currency | Foreign currency—Financial statements of operations for which the U.S. dollar is not the functional currency, and are located in non-highly inflationary countries, are translated into U.S. dollars prior to consolidation. Assets and liabilities are translated at the exchange rate in effect at the balance sheet date, while income statement accounts are translated at the weighted-average monthly exchange rates. For these operations, translation gains and losses are recorded as a component of accumulated other comprehensive income (loss) in stockholders’ equity until the foreign entity is sold or liquidated. Assets and liabilities of an entity that are denominated in currencies other than an entity’s functional currency are remeasured into the functional currency using end of period exchange rates or historical rates when applicable to certain balances. Gains and losses related to these re-measurements are recorded in our consolidated statements of income (loss) as a component of other expense, net. |
Accounting Standards Adopted | Accounting Standards Adopted Effective January 1, 2019, we adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-02, “Leases (Topic 842)” using the modified retrospective method of adoption. See Note 10—Leases for additional information related to our lease accounting. Effective January 1, 2020, we adopted ASU 2016-13, “ Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of Rollforward of Allowance for Credit Losses | The following table provides a rollforward of our allowance for credit losses balance: (in thousands) Allowance for Credit Losses December 31, 2019 $ 8,072 Impact of adoption on January 1, 2020 (1) 2,042 Provision for expected credit losses 6,107 Accounts written off (3,230) Recoveries (2,463) Foreign currency translation (336) December 31, 2020 $ 10,192 _______________________ |
Schedule of Inventory | Inventories consisted of the following: (in thousands) December 31, 2020 December 31, 2019 Raw materials $ 137,038 $ 50,099 Work in progress 9,509 13,325 Finished goods 323,144 175,774 469,691 239,198 Inventory reserve (24,769) (12,067) LIFO adjustments (1) (14,810) (15,789) Inventories, net $ 430,112 $ 211,342 _______________________ (1) Represents the amount by which LIFO inventories exceeded their carrying value. |
Merger Transaction, Acquisiti_2
Merger Transaction, Acquisitions, and Dispositions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Business Combinations [Abstract] | |
Schedule of Acquisition Date Fair Value of Consideration Transferred | The acquisition-date fair value of the consideration transferred consisted of the following: (in thousands) Equity consideration $ 1,263,931 Replacement awards attributable to pre-combination services (1) 43,964 Unfavorable supply agreement (2) 46,000 Favorable supply agreement (2) (59,000) Fair value of consideration transferred $ 1,294,895 _______________________ (1) Represents the fair value of the replacement equity awards to the extent services were provided by employees of legacy ChampionX prior to closing. See Note 13—Equity And Cash Incentive Programs for additional information about the replacement equity awards. (2) As part of the Merger, the Company entered into a Cross Supply and Product Transfer Agreement with Ecolab in which over a period of approximately three years from the merger date, certain products will be manufactured by one party for the other. The cross selling prices at which each party will transfer their products, and include a take-or-pay element, have been set forth within this agreement and are not reflective of market terms. As a result, we recognized an intangible asset recorded at fair value for the favorable terms and a liability recorded at fair value for the unfavorable terms. The intangible asset will be amortized on a straight-line basis over a three-year period into cost of goods and services and the liability will be amortized as a component of product revenue. The acquisition-date fair value of the consideration transferred consisted of the following: (in thousands) Cash 12,500 Contingent consideration (1) 1,500 Total consideration transferred 14,000 _______________________ (1) Contingent consideration is payable to the seller based on the acquired business exceeding a revenue target over an eighteen |
Schedule of Fair Value of Assets Acquired | The following table provides the preliminary allocation of the purchase price as of the acquisition date. (in thousands) Cash and cash equivalents $ 57,588 Receivables 394,432 Inventories 340,000 Prepaid expenses and other current assets 63,576 Property, plant, and equipment 687,085 Identifiable intangible assets (1) 290,000 Other non-current assets 156,427 Total identifiable assets acquired 1,989,108 Accounts payable 184,028 Other current liabilities (1) 172,997 Long-term debt (2) 537,000 Deferred tax liabilities 103,956 Other liabilities (1) 98,970 Total liabilities assumed 1,096,951 Net identifiable assets acquired 892,157 Add: Negative fair value of non-controlling interests 16,052 Goodwill 386,686 Total net assets acquired $ 1,294,895 _______________________ (1) The fair value of the consideration transferred related to the favorable and unfavorable terms of the cross supply agreement has been excluded. (2) In connection with the Merger, we assumed a term loan from legacy ChampionX, of which approximately $26.9 million has been classified as short-term representing the mandatory amortization payments due within the next twelve months. See Note 8—Debt for further information. The preliminary fair value of identifiable fixed assets was calculated using a combination of valuation approaches, primarily the cost approach which adjusts estimates of replacement cost for the age, condition and utility of the associated assets, as well as the market approach to value asset types where market comparable data is available, and is summarized below: (in thousands) Fair Value Useful Life (years) Land and land improvements $ 125,375 - Buildings and leasehold improvements 208,649 5 to 40 Machinery, equipment, and other 333,478 3 to 20 Capitalized software and computer hardware 19,583 3 to 7 Total property, plant, and equipment acquired $ 687,085 The following table summarizes the final fair values of the assets acquired at the acquisition date: (in thousands) Inventory $ 1,840 Customer relationships 2,650 Technology - Technical know-how 4,000 Goodwill 5,510 Total assets acquired $ 14,000 |
Schedule of Identifiable Intangible Assets Acquired | Preliminary fair values are summarized below: (in thousands) Fair Value Useful Life (years) Trademarks and trade names $ 25,000 15 Developed technology 120,000 7 Customer relationships 145,000 15 Total identifiable intangible assets acquired 290,000 Favorable supply agreements 59,000 3 Total identifiable intangible assets recognized $ 349,000 |
Schedule of Non-recurring Pro Forma Adjustments | Non-recurring pro forma adjustments including acquisition-related costs directly attributable to the Merger are included within the reported pro forma revenue and net income (loss). Years Ended December 31, (in thousands, except per share data) 2020 2019 Revenues $ 2,775,027 $ 3,456,354 Net income (loss) attributable to ChampionX (777,553) 229,126 |
Segment Information (Tables)
Segment Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Revenue and Operating Profit | Segment revenue and segment operating profit Years Ended December 31, (in thousands) 2020 2019 2018 Segment revenue: Production Chemical Technologies $ 992,805 $ — $ — Production & Automation Technologies 615,918 884,364 932,591 Drilling Technologies 116,186 246,887 285,565 Reservoir Chemical Technologies 61,507 — — Corporate and other (1) 113,580 — — Total revenue $ 1,899,996 $ 1,131,251 $ 1,218,156 Income (loss) before income taxes: Segment operating profit: Production Chemical Technologies $ 94,294 $ — $ — Production & Automation Technologies (697,937) 54,024 74,187 Drilling Technologies 2,574 73,497 98,620 Reservoir Chemical Technologies (6,198) — — Total segment operating profit (loss) (607,267) 127,521 172,807 Corporate and other (1) 103,751 29,034 23,806 Interest expense, net 51,731 39,301 27,648 Income (loss) before income taxes $ (762,749) $ 59,186 $ 121,353 ____________________ (1) Corporate and other includes costs not directly attributable or allocated to our reportable segments such as corporate executive management and other administrative functions, and the results attributable to our noncontrolling interest. Additionally, the sales and expenses related to the Cross Supply Agreement with Ecolab are included within Corporate and other. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. |
Schedule of Property, Plant and Equipment, Net by Geographical Area | December 31, (in thousands) 2020 2019 Property, plant, and equipment, net: United States $ 547,662 $ 238,464 Singapore 111,184 — Canada 85,487 5,749 Other Countries 110,203 3,968 Total property, plant, and equipment, net $ 854,536 $ 248,181 |
Schedule of Other Segment Information | Capital Expenditures (in thousands) 2020 2019 2018 Chemical Technologies (1) $ 10,498 $ — $ — Production & Automation Technologies 32,100 30,291 45,190 Drilling Technologies 1,736 9,061 11,123 Corporate and other 829 428 1,605 Total $ 45,163 $ 39,780 $ 57,918 (1) Our Chemical Technologies business has an integrated supply chain function that serves the Production Chemical Technologies and Reservoir Chemical Technologies reportable segments. As such, capital expenditure information by each reportable segment has not been provided and is not available, since the Company does not produce or utilize such information. Depreciation & Amortization (in thousands) 2020 2019 2018 Production Chemical Technologies $ 58,328 $ — $ — Production & Automation Technologies 130,725 110,131 112,955 Drilling Technologies 7,940 9,263 11,037 Reservoir Chemical Technologies 5,741 — — Corporate and other 11,628 544 469 Total $ 214,362 $ 119,938 $ 124,461 |
Revenue (Tables)
Revenue (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | Revenue disaggregated by geography was as follows: Year Ended December 31, 2020 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other (1) Total United States $ 318,460 $ 458,690 $ 82,812 $ 31,907 $ 72,948 $ 964,817 Middle East & Africa 164,480 45,026 1,146 14,292 15,254 240,198 Latin America 202,177 21,679 22 4,283 3,650 231,811 Canada 129,210 32,709 9,029 1,414 640 173,002 Europe 116,192 10,521 11,840 1,990 12,052 152,595 Australia 13,225 41,233 110 274 — 54,842 Asia-Pacific 28,023 5,549 9,141 2,267 9,041 54,021 Other 21,038 511 2,086 5,080 (5) 28,710 Total revenue $ 992,805 $ 615,918 $ 116,186 $ 61,507 $ 113,580 $ 1,899,996 _______________________ (1) Revenues associated with sales under the Cross Supply Agreement with Ecolab are included within Corporate and other. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. Year Ended December 31, 2019 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other Total United States $ — $ 679,280 $ 181,721 $ — $ — $ 861,001 Canada — 52,647 17,667 — — 70,314 Middle East — 59,051 1,013 — — 60,064 Europe — 19,752 32,213 — — 51,965 Latin America — 32,389 19 — — 32,408 Australia — 30,702 139 — — 30,841 Asia-Pacific — 9,727 12,975 — — 22,702 Other — 816 1,140 — — 1,956 Total revenue $ — $ 884,364 $ 246,887 $ — $ — $ 1,131,251 Year Ended December 31, 2018 (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Corporate and other Total United States $ — $ 731,416 $ 227,751 $ — $ — $ 959,167 Canada — 60,256 19,560 — — 79,816 Middle East — 53,315 201 — — 53,516 Europe — 12,686 25,983 — — 38,669 Latin America — 33,967 9 — — 33,976 Australia — 33,138 109 — — 33,247 Asia-Pacific — 7,176 10,430 — — 17,606 Other — 637 1,522 — — 2,159 Total revenue $ — $ 932,591 $ 285,565 $ — $ — $ 1,218,156 Revenue is attributed to regions based on the location of our direct customer, which in some instances is an intermediary and not necessarily the end user. |
Schedule of Contract Balances | The beginning and ending contract asset and contract liability balances from contracts with customers were as follows: December 31, (in thousands) 2020 2019 2018 Contract assets $ — $ 285 $ 4,571 Contract liabilities 16,668 6,148 5,863 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Property, plant and equipment consisted of the following: December 31, (in thousands) 2020 2019 Land and land improvements $ 140,209 $ 14,419 Buildings and improvements 316,529 106,993 Software 37,638 15,323 Machinery, equipment and other 854,650 538,168 1,349,026 674,903 Accumulated depreciation (494,490) (426,722) Property, plant and equipment, net $ 854,536 $ 248,181 (in thousands) Useful life December 31, 2020 Cable equipment 18 months $ 48,755 Downhole equipment 18 months 35,174 Surface equipment 5 years 69,172 Other lease equipment 3 - 5 years 21,773 174,874 Accumulated depreciation (110,299) Leased assets, net $ 64,575 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | The components of our definite- and indefinite-lived intangible assets were as follows: December 31, 2020 December 31, 2019 (in thousands) Gross Accumulated Net Gross Accumulated Net Definite-lived Customer relationships (1) $ 593,068 $ 321,298 $ 271,770 $ 560,316 $ 353,189 $ 207,127 Trademarks (1) 59,881 27,565 32,316 35,695 24,830 10,865 Patents 38,635 29,289 9,346 38,436 26,838 11,598 Unpatented technologies 133,700 19,958 113,742 13,700 9,811 3,889 Favorable supply agreements (2) 59,000 11,308 47,692 — — — Drawings and manuals 1,783 1,783 — 2,558 1,758 800 Other 5,374 4,831 543 5,332 4,504 828 891,441 416,032 475,409 656,037 420,930 235,107 Indefinite-lived Trademarks 3,600 — 3,600 3,600 — 3,600 Total $ 895,041 $ 416,032 $ 479,009 $ 659,637 $ 420,930 $ 238,707 _______________________ (1) 2020 includes impairment of customer relationships and trademarks intangible assets of $40.4 million and $0.6 million, respectively, all of which relate to asset groups included within our Artificial Lift business. (2) Favorable supply agreements were entered into as part of the Merger transaction. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. |
Schedule of Indefinite-Lived Intangible Assets | The components of our definite- and indefinite-lived intangible assets were as follows: December 31, 2020 December 31, 2019 (in thousands) Gross Accumulated Net Gross Accumulated Net Definite-lived Customer relationships (1) $ 593,068 $ 321,298 $ 271,770 $ 560,316 $ 353,189 $ 207,127 Trademarks (1) 59,881 27,565 32,316 35,695 24,830 10,865 Patents 38,635 29,289 9,346 38,436 26,838 11,598 Unpatented technologies 133,700 19,958 113,742 13,700 9,811 3,889 Favorable supply agreements (2) 59,000 11,308 47,692 — — — Drawings and manuals 1,783 1,783 — 2,558 1,758 800 Other 5,374 4,831 543 5,332 4,504 828 891,441 416,032 475,409 656,037 420,930 235,107 Indefinite-lived Trademarks 3,600 — 3,600 3,600 — 3,600 Total $ 895,041 $ 416,032 $ 479,009 $ 659,637 $ 420,930 $ 238,707 _______________________ (1) 2020 includes impairment of customer relationships and trademarks intangible assets of $40.4 million and $0.6 million, respectively, all of which relate to asset groups included within our Artificial Lift business. (2) Favorable supply agreements were entered into as part of the Merger transaction. See Note 3—Merger Transaction, Acquisitions, And Dispositions for further information. |
Schedule of Finite-Lived Intangible Assets, Future Amortization Expense | Estimated future amortization expense related to intangible assets held as of December 31, 2020, is as follows: (in thousands) Estimated Amortization 2021 $ 87,698 2022 86,181 2023 60,855 2024 47,506 2025 36,396 |
Schedule of Goodwill | The carrying amount of goodwill, including changes therein, by reportable segment is below: (in thousands) Production Chemical Technologies Production & Automation Technologies Drilling Technologies Reservoir Chemical Technologies Total December 31, 2018 $ — $ 803,849 $ 101,136 $ — $ 904,985 Acquisition (1) — 5,510 — — 5,510 Foreign currency translation — 618 — — 618 December 31, 2019 — 809,977 101,136 — 911,113 Acquisition (1) 349,821 — — 36,865 386,686 Impairment — (616,271) — — (616,271) Foreign currency translation 1,236 (2,169) — (1) (934) December 31, 2020 $ 351,057 $ 191,537 $ 101,136 $ 36,864 $ 680,594 _______________________ (1) See Note 3—Merger Transaction, Acquisitions, And Dispositions for additional information related to the acquisitions completed during July 2019 and June 2020. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Debt | Long-term debt consisted of the following: December 31, (in thousands) 2020 2019 2018 Credit Facility $ — $ — 2018 Term Loan Facility 140,000 265,000 2020 Term Loan Facility 523,575 — 6.375% Senior Notes due 2026 277,041 300,000 Total 940,616 565,000 Net unamortized discounts and issuance costs (8,002) (9,709) Total long-term debt 932,614 555,291 Current portion of long-term debt (1) (26,850) — Long-term debt, less current portion $ 905,764 $ 555,291 _______________________ (1) Includes the mandatory amortization payments due within twelve months related to the 2020 Term Loan Facility. |
Contractual Obligation, Maturity Schedule | As of December 31, 2020, aggregate contractual future principal payments on long-term debt are as follows: (in thousands) Principal Payments ( 1) 2021 $ 26,850 2022 — 2023 — 2024 — 2025 140,000 Thereafter 773,766 Total $ 940,616 _______________________ (1) Principal payments included relate to our 2020 Term Loan Facility and Senior Notes. See Note 10—Leases for future payments related to finance lease obligations. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Schedule of Leases, Balance Sheet Information | Leases are presented in our consolidated balance sheet as follows: December 31, (in thousands) Balance Sheet Classification 2020 2019 Right-of Use Assets: Finance leases Property, plant, and equipment, net $ 7,337 $ 9,406 Operating leases Operating lease right-of-use assets 122,481 24,289 Total lease right-of-use assets 129,818 33,695 Lease Liabilities: Finance leases - current Accrued expenses and other current liabilities $ 4,326 $ 4,845 Finance leases Other long-term liabilities 4,188 4,530 Operating leases - current Current portion of operating lease liabilities 33,234 7,620 Operating leases Operating lease liabilities 83,553 19,419 Total lease liabilities $ 125,301 $ 36,414 |
Schedule of Lease Costs and Other Information | Components of total lease cost were as follows: Year Ended December 31, (in thousands) 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 5,266 $ 5,200 Interest on lease liabilities 567 439 Operating lease cost 31,850 11,191 Short-term and variable lease cost 12,917 5,045 Sublease income (3,584) (463) Total lease cost $ 47,016 $ 21,412 December 31, 2020 2019 Weighted-average remaining lease term (years): Operating lease 6.3 4.6 Finance lease 2.7 2.1 Weighted-average discount rate: Operating lease 6.7 % 6.7 % Finance lease 6.0 % 5.3 % Supplemental cash flow information related to our lease liabilities is as follows: (in thousands) Statement of Cash Flows Classification December 31, 2020 December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating leases (1) Operating $ 30,256 $ 12,026 Finance leases - interest Operating $ 550 $ 439 Finance leases - principal Financing $ 5,139 $ 5,555 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets: Operating leases Non-cash $ 37,631 $ 38,225 Finance leases Non-cash $ 4,017 $ 6,412 _______________________ (1) Cash required by operating leases is reported net of operating lease expense in the operating section of our consolidated statements of cash flows in accrued expenses and other liabilities. |
Schedule of Future Minimum Operating Lease Payments | Future minimum payments, as determined in accordance with ASC 842, on our operating and finance leases as of December 31, 2020 are as follows: (in thousands) Operating Finance 2021 $ 40,594 $ 4,727 2022 34,933 2,354 2023 21,994 973 2024 16,510 676 2025 5,745 443 Thereafter 24,877 529 Total future minimum lease payments 144,653 9,702 Interest included within lease payments (27,866) (1,188) Total lease liabilities $ 116,787 $ 8,514 |
Schedule of Future Minimum Financing Lease Payments | Future minimum payments, as determined in accordance with ASC 842, on our operating and finance leases as of December 31, 2020 are as follows: (in thousands) Operating Finance 2021 $ 40,594 $ 4,727 2022 34,933 2,354 2023 21,994 973 2024 16,510 676 2025 5,745 443 Thereafter 24,877 529 Total future minimum lease payments 144,653 9,702 Interest included within lease payments (27,866) (1,188) Total lease liabilities $ 116,787 $ 8,514 |
Schedule of Leased Assets | Property, plant and equipment consisted of the following: December 31, (in thousands) 2020 2019 Land and land improvements $ 140,209 $ 14,419 Buildings and improvements 316,529 106,993 Software 37,638 15,323 Machinery, equipment and other 854,650 538,168 1,349,026 674,903 Accumulated depreciation (494,490) (426,722) Property, plant and equipment, net $ 854,536 $ 248,181 (in thousands) Useful life December 31, 2020 Cable equipment 18 months $ 48,755 Downhole equipment 18 months 35,174 Surface equipment 5 years 69,172 Other lease equipment 3 - 5 years 21,773 174,874 Accumulated depreciation (110,299) Leased assets, net $ 64,575 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Related Charges | Restructuring and other related charges as classified in our consolidated statements of income (loss) were as follows: Years Ended (in thousands) 2020 2019 2018 Segment restructuring charges (1) : Production Chemical Technologies $ 5,241 $ — $ — Production & Automation Technologies 11,814 4,467 5,632 Drilling Technologies 5,521 710 — Reservoir Chemical Technologies 348 — — Corporate and other 367 — — Total $ 23,291 $ 5,177 $ 5,632 Statements of Income (Loss) classification: Cost of goods and services $ 13,955 $ 3,592 $ 4,693 Selling, general and administrative expense 9,336 1,585 939 Total (1) $ 23,291 $ 5,177 $ 5,632 _______________________ (1) Total restructuring expenses include asset write-downs, which are not included in the restructuring accrual below. The following table details our restructuring accrual activities during the year ended December 31, 2020: (in thousands) Restructuring Accrual Balance December 31, 2019 $ 130 Restructuring charges 15,630 Payments (19,004) Liabilities assumed in the Merger 6,208 Other, including foreign currency translation (13) December 31, 2020 $ 2,951 |
Equity and Cash Incentive Pro_2
Equity and Cash Incentive Programs (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Schedule of Stock-Based Compensation Expense | Stock-based compensation expense relating to all stock-based incentive plans was as follows: Years Ended December 31, 2020 2019 2018 Stock-based compensation expense $ 19,536 $ 10,250 $ 5,375 Tax benefit (4,478) (2,153) (1,141) Stock-based compensation expense, net of tax $ 15,058 $ 8,097 $ 4,234 |
Schedule of Activity Related to SARs Outstanding | A summary of activity relating to SARs outstanding for the year ended December 31, 2020, is as follows: SARs Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2020 422,361 $ 29.75 Forfeited / expired (7,030) 34.13 Exercised — — Outstanding at December 31, 2020 415,331 $ 29.67 5.1 $ — Exercisable at December 31, 2020 415,331 $ 29.67 5.1 $ — |
Schedule of Other Information Related to the Exercise of SARs | Other information regarding the exercise of SARs is presented below: (in thousands) 2020 2019 2018 SARs: Fair value of SARs that became exercisable $ 878 $ 662 $ 310 Aggregate intrinsic value of SARs exercised — 629 40 |
Schedule of Fair Value Used in Determining Stock-Based Compensation Expense | The fair value used in determining stock-based compensation expense of the performance share awards issued in 2020, 2019, and 2018, is as follows: Performance shares: 2020 2019 2018 Fair value per share at date of grant $ 14.55 $ 57.43 $ 56.32 The fair value and average attainment used in determining stock-based compensation expense of the performance shares issued in 2020 and 2019 are as follows: Performance shares: 2020 2019 Fair value per share at date of grant $ — $ 40.22 Average attainment rate reflected in expense — % 100 % |
Schedule of Performance Shares | A summary of activity for ChampionX’s performance share awards under the 2018 Plan for the year ended December 31, 2020, is as follows: Shares Weighted-Average Unvested at January 1, 2020 174,726 $ 52.44 Granted 121,261 14.55 Forfeited (5,011) 52.60 Vested (12,213) 52.51 Unvested at December 31, 2020 278,763 $ 35.95 |
Schedule of Restricted Stock Unit Activity | A summary of activity for restricted stock units for the year ended December 31, 2020, is as follows: Shares Weighted-Average Unvested at January 1, 2020 440,048 $ 41.07 Granted 655,584 14.13 Replacement awards (1) 2,357,733 10.34 Forfeited (29,272) 31.61 Vested (754,314) 17.64 Unvested at December 31, 2020 2,669,779 $ 14.04 _______________________ |
Schedule of Non-Qualified Stock Options | A summary of activity for non-qualified stock options for the year ended December 31, 2020 is as follows: Non-Qualified Stock Options Shares Weighted-Average Exercise Price Weighted-Average Remaining Contractual Term Aggregate Intrinsic Value Outstanding at January 1, 2020 — $ — Granted — — Replacement awards (1) 7,324,853 6.02 Forfeited / expired (14,381) 7.20 Exercised (135,432) 6.56 Outstanding at December 31, 2020 7,175,040 $ 6.01 5.3 $ 65,431 Exercisable at December 31, 2020 6,534,024 $ 5.85 5.1 $ 60,571 _______________________ |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Equity [Abstract] | |
Summary of Capital Stock Activity | The following is a summary of our capital stock activity: (in thousands) Common Stock December 31, 2018 77,353 Shares issued—share-based compensation 107 December 31, 2019 77,460 Issuance of common stock - Merger 122,237 Shares issued—share-based compensation 683 December 31, 2020 200,380 |
Schedule of Accumulated Other Comprehensive Loss | Accumulated other comprehensive loss consisted of the following: (in thousands) Foreign Currency Translation Defined Pension and Other Post-Retirement Benefits Cash Flow Hedges Accumulated Other Comprehensive Loss December 31, 2018 $ (36,146) $ (6,760) $ — $ (42,906) Other comprehensive income (loss) before reclassifications, net of tax 936 (2,711) — (1,775) Reclassification adjustment for net losses included in net income, net of tax — 644 — 644 Other comprehensive income (loss), net of tax 936 (2,067) — (1,131) December 31, 2019 (35,210) (8,827) — (44,037) Other comprehensive income (loss) before reclassifications, net of tax 20,245 (5,504) (2,320) 12,421 Reclassification adjustment for net losses included in net income, net of tax — 861 — 861 Other comprehensive income (loss), net of tax 20,245 (4,643) (2,320) 13,282 December 31, 2020 $ (14,965) $ (13,470) $ (2,320) $ (30,755) |
Reclassifications from Accumulated Comprehensive Loss | Reclassification adjustments from accumulated other comprehensive loss to net income related to defined pension and other post-retirement benefits consisted of the following: Years Ended December 31, Affected line items on the consolidated statements of income (in thousands) 2020 2019 2018 Amortization of actuarial loss and net transition obligation (1) $ 492 $ 364 $ 330 Other expense, net Amortization of prior service cost (1) — 2 1 Other expense, net Settlement loss (1) 698 508 479 Other expense, net 1,190 874 810 Income before income taxes (329) (230) (210) Provision for (benefit from) income taxes $ 861 $ 644 $ 600 Net income _______________________ (1) These accumulated comprehensive loss components are included in the computation of net periodic benefit cost (See Note 12—Employee Benefit Plans for additional information). |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share, Basic and Diluted | A reconciliation of the number of shares used for the basic and diluted earnings (loss) per share calculation was as follows: Years Ended December 31, (in thousands, except per share data) 2020 2019 2018 Net income (loss) attributable to ChampionX $ (743,930) $ 52,164 $ 92,737 Weighted-average number of shares outstanding 148,370 77,427 77,342 Dilutive effect of stock-based compensation — 197 350 Total shares and dilutive securities 148,370 77,624 77,692 Basic earnings per share attributable to ChampionX $ (5.01) $ 0.67 $ 1.20 Diluted earnings per share attributable to ChampionX $ (5.01) $ 0.67 $ 1.19 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Assets and Liabilities Measured on Recurring Basis | The carrying amount and the estimated fair value for assets and liabilities measured on a recurring basis are as follows: December 31, 2020 Carrying Amount Fair Value Measurements (in thousands) Level 1 Level 2 Level 3 Assets Foreign currency forward contracts $ 4,576 $ — $ 4,576 $ — Liabilities Foreign currency forward contracts $ 6,561 $ — $ 6,561 $ — |
Schedule of Fair Value of Long-Term Debt | The carrying amount and the estimated fair value of long-term debt, including current maturities, held by the Company were: December 31, 2020 December 31, 2019 (in thousands) Carrying Amount Fair Value Carrying Amount Fair Value 2018 Term Loan Facility $ 140,000 $ 137,200 $ 265,000 $ 266,161 2020 Term Loan Facility $ 523,575 $ 530,120 $ — $ — 6.375% Senior Notes due 2026 $ 277,041 $ 277,054 $ 300,000 $ 316,710 |
Derivatives and Hedging Trans_2
Derivatives and Hedging Transactions (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Notional Values of Outstanding Derivatives | The following table summarizes the gross fair value of the Company’s outstanding derivatives and the lines in which they are presented on the consolidated balance sheet. We did not have outstanding derivatives at December 31, 2019. December 31, 2020 (in thousands) Derivative Assets Derivative Liabilities Prepaid expenses and other current assets $ 4,576 $ — Accrued expenses and other current liabilities — 6,561 $ 4,576 $ 6,561 The following table summarizes the notional values of the Company’s outstanding derivatives: (in thousands) December 31, 2020 Notional value of foreign currency forward contracts $ 483,377 |
Schedule of Gain (Loss) on Derivative Instruments | The loss of all derivative instruments recognized is summarized below: (in thousands) Year Ended Loss reclassified from AOCI to income on cash flow hedges: Cost of goods and services $ 171 Loss on derivatives not designated as hedging instruments: Other (income) expense, net 692 Total loss of derivative instruments $ 863 |
Income Taxes - (Tables)
Income Taxes - (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Domestic and foreign components of income (loss) before income taxes | Domestic and foreign components of income before income taxes were as follows: Years Ended December 31, (in thousands) 2020 2019 2018 Domestic $ (811,995) $ 51,073 $ 104,234 Foreign 49,246 8,113 17,119 Income (loss) before income taxes $ (762,749) $ 59,186 $ 121,353 |
Provision for (benefit from) income tax | The provision for (benefit from) income taxes consisted of: Years Ended December 31, (in thousands) 2020 2019 2018 Current: U.S. federal $ 1,578 $ 15,327 $ 24,221 State and local 1,579 1,196 1,598 Foreign 20,264 4,264 4,362 Total current 23,421 20,787 30,181 Deferred: U.S. federal (32,454) (12,815) (2,255) State and local (6,738) (1,156) 2,735 Foreign (4,625) (590) (2,499) Total deferred (43,817) (14,561) (2,019) Provision for (benefit from) income taxes $ (20,396) $ 6,226 $ 28,162 |
Effective income tax rate reconciliation | The effective income tax rate was different from the statutory U.S. federal income tax rate due to the following: Years Ended December 31, 2020 2019 2018 Statutory U.S. federal income tax rate 21.0 % 21.0 % 21.0 % Net difference resulting from: State and local taxes, net of federal income tax benefit 0.5 3.2 3.4 Foreign withholding tax (1.2) 1.8 0.3 Foreign derived intangible income — (0.8) (1.9) Foreign operations tax effect (0.4) — 0.3 Research and experimentation tax credits 0.4 (1.2) (0.6) Foreign tax credit — (8.0) (1.5) Nondeductible expenses (0.6) 2.5 0.7 Branch income (0.7) 0.6 — Tax return to accrual adjustments 0.1 (9.4) — State deferred taxes 0.2 (7.9) — Goodwill Impairment (15.5) — — Foreign Inclusions (Including Global intangible low-taxed income) (0.7) — 2.3 Transaction Costs (0.6) — — Change in valuation allowance (0.5) 9.0 — Other 0.7 (0.3) (0.8) Effective income tax rate 2.7 % 10.5 % 23.2 % |
Significant components of deferred tax assets and liabilities | Significant components of deferred tax assets and liabilities were as follows: December 31, (in thousands) 2020 2019 Deferred tax assets attributable to: Accrued compensation $ 13,437 $ 8,725 Accrued expenses 3,950 455 Net operating loss and other carryforwards 25,879 5,937 Inventories — 1,380 Accounts receivable 19,930 1,699 Lease liability 17,180 5,649 Long-term liabilities 1,470 529 Other assets 2,110 1,202 Deferred tax assets 83,956 25,576 Valuation allowance (26,786) (6,027) Deferred tax assets, net of valuation allowance $ 57,170 $ 19,549 Deferred tax liabilities attributable to: Inventories $ (2,124) $ — Intangible assets, including goodwill (80,634) (66,736) Property, plant and equipment (73,507) (31,240) Foreign withholding taxes (15,673) — Lease asset (18,293) (5,633) Investment in Subsidiary (10,189) — Deferred tax liabilities (200,420) (103,609) Net deferred tax liabilities $ (143,250) $ (84,060) Classified as follows in the consolidated balance sheets: Other non-current assets $ 13,033 $ — Deferred income taxes (156,283) (84,060) Net deferred tax liabilities $ (143,250) $ (84,060) |
Schedule of uncertain tax positions | A reconciliation of the beginning and ending amount of uncertain tax positions is as follows: (in thousands) Uncertain Tax Position Balance at January 1, 2019 $ — Additional based on tax positions related to prior years 868 Balance at December 31, 2020 $ 868 |
Cash Flow Information (Tables)
Cash Flow Information (Tables) | 12 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Cash and Non-cash Supplemental Information | Cash payments for income taxes and cash payments for interest incurred related to our debt are as follows: Years Ended December 31, (in thousands) 2020 2019 2018 Cash information: Cash paid for income taxes $ 18,179 $ 26,464 $ 27,191 Cash paid for interest $ 39,746 $ 36,085 $ 21,899 |
Schedule of Supplemental Cash Flow Information Related to Leases | Components of total lease cost were as follows: Year Ended December 31, (in thousands) 2020 2019 Finance lease cost: Amortization of right-of-use assets $ 5,266 $ 5,200 Interest on lease liabilities 567 439 Operating lease cost 31,850 11,191 Short-term and variable lease cost 12,917 5,045 Sublease income (3,584) (463) Total lease cost $ 47,016 $ 21,412 December 31, 2020 2019 Weighted-average remaining lease term (years): Operating lease 6.3 4.6 Finance lease 2.7 2.1 Weighted-average discount rate: Operating lease 6.7 % 6.7 % Finance lease 6.0 % 5.3 % Supplemental cash flow information related to our lease liabilities is as follows: (in thousands) Statement of Cash Flows Classification December 31, 2020 December 31, 2019 Cash paid for amounts included in measurement of lease liabilities: Operating leases (1) Operating $ 30,256 $ 12,026 Finance leases - interest Operating $ 550 $ 439 Finance leases - principal Financing $ 5,139 $ 5,555 Supplemental non-cash information on lease liabilities arising from obtaining right-of-use assets: Operating leases Non-cash $ 37,631 $ 38,225 Finance leases Non-cash $ 4,017 $ 6,412 _______________________ (1) Cash required by operating leases is reported net of operating lease expense in the operating section of our consolidated statements of cash flows in accrued expenses and other liabilities. |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Allowance for Credit Losses Rollforward (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Allowance for credit losses, beginning balance | $ 8,072 |
Provision for expected credit losses | 6,107 |
Accounts written off | (3,230) |
Recoveries | (2,463) |
Foreign currency translation | (336) |
Allowance for credit losses, ending balance | 10,192 |
Cumulative Effect Adjustment | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | |
Allowance for credit losses, beginning balance | $ 2,042 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Schedule of Inventories (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Raw materials | $ 137,038 | $ 50,099 |
Work in progress | 9,509 | 13,325 |
Finished goods | 323,144 | 175,774 |
Inventory, gross | 469,691 | 239,198 |
Inventory reserve | (24,769) | (12,067) |
LIFO Adjustments | (14,810) | (15,789) |
Inventories, net | $ 430,112 | $ 211,342 |
Percentage of LIFO inventory | 35.00% | 23.00% |
Basis of Presentation and Sum_6
Basis of Presentation and Summary of Significant Accounting Policies - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Apr. 01, 2020 | Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Line Items] | ||||||
Research and development expense | $ 31,200 | $ 12,900 | $ 16,000 | |||
Increase in depreciation expense | 142,647 | 68,557 | 72,569 | |||
Decrease in net income | $ 743,930 | $ (52,164) | $ (92,737) | |||
Decrease in earnings per share, basic (in dollars per share) | [1] | $ 5.01 | $ (0.67) | $ (1.20) | ||
Decrease in earnings per share, diluted (in dollars per share) | [1] | $ 5.01 | $ (0.67) | $ (1.19) | ||
Accrued foreign withholding taxes on undistributed foreign earnings | $ 15,673 | $ 0 | ||||
Minimum | Buildings and leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 5 years | |||||
Minimum | Machinery, equipment, and other | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 1 year | |||||
Minimum | Software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 3 years | |||||
Minimum | Other intangible assets | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of acquired intangibles (in years) | 3 years | |||||
Maximum | Buildings and leasehold improvements | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 40 years | |||||
Maximum | Machinery, equipment, and other | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 20 years | |||||
Maximum | Software | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 7 years | |||||
Maximum | Other intangible assets | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of acquired intangibles (in years) | 15 years | |||||
Salvage Value | ||||||
Property, Plant and Equipment [Line Items] | ||||||
Useful life of property, plant and equipment (in years) | 18 months | 12 months | ||||
Equipment salvage value estimate, as a percentage of total value | 0.00% | 50.00% | ||||
Increase in depreciation expense | $ 37,600 | |||||
Decrease in net income | $ 26,400 | |||||
Decrease in earnings per share, basic (in dollars per share) | $ 0.18 | |||||
Decrease in earnings per share, diluted (in dollars per share) | $ (0.18) | |||||
[1] | See Note 15—Earnings Per Share. |
New Accounting Standards - Narr
New Accounting Standards - Narrative (Details) - USD ($) $ in Thousands | Jan. 01, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings (accumulated deficit) | $ (638,457) | $ 107,048 | ||
Income Tax Expense (Benefit) | $ (20,396) | $ 6,226 | $ 28,162 | |
Cumulative Effect Adjustment | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Retained earnings (accumulated deficit) | $ 1,600 | |||
Income Tax Expense (Benefit) | $ 400 |
Merger Transaction, Acquisiti_3
Merger Transaction, Acquisitions, and Dispositions - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 03, 2020 | Jul. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | |||||||
Operating lease right-of-use assets | $ 122,481 | $ 122,481 | $ 24,289 | ||||
Total lease liabilities | 116,787 | 116,787 | |||||
Goodwill, acquired during period | 386,686 | 5,510 | |||||
Impairment loss | 1,700 | ||||||
Payment on sale of business | $ 2,200 | 0 | 2,194 | $ (2,473) | |||
Loss (gain) on sale of business | 0 | 2,475 | $ (1,286) | ||||
Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period for identifiable intangible assets | 15 years | ||||||
Legacy ChampionX | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares issued (in shares) | 122,200,000 | ||||||
Share price (in dollars per share) | $ 10.34 | ||||||
Percentage of equity interest acquired | 100.00% | ||||||
Acquisition related costs | 61,800 | 9,300 | |||||
Fair-value step up on inventory acquired measured under FIFO | $ 14,500 | ||||||
Weighted average amortization period for identifiable intangible assets | 10 years 2 months 12 days | ||||||
Operating lease right-of-use assets | $ 101,000 | ||||||
Total lease liabilities | 93,200 | ||||||
Goodwill, acquired during period | $ 386,700 | ||||||
Revenues of acquiree since date of acquisition | 1,200,000 | ||||||
Net income of acquiree since date of acquisition | $ 57,000 | ||||||
Legacy ChampionX | Customer relationships | |||||||
Business Acquisition [Line Items] | |||||||
Weighted average amortization period for identifiable intangible assets | 15 years | ||||||
Legacy ChampionX | Ecolab | |||||||
Business Acquisition [Line Items] | |||||||
Number of shares converted (in shares) | 0.040540 | ||||||
Legacy ChampionX | ChampionX Equityholders | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of equity interest acquired | 62.00% | ||||||
Legacy ChampionX | Equityholders, Prior To Merger | |||||||
Business Acquisition [Line Items] | |||||||
Percentage of equity interest acquired | 38.00% | ||||||
Production Chemical Technologies | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, acquired during period | 349,821 | 0 | |||||
Production Chemical Technologies | Legacy ChampionX | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, acquired during period | $ 349,800 | ||||||
Reservoir Chemical Technologies | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, acquired during period | 36,865 | $ 0 | |||||
Reservoir Chemical Technologies | Legacy ChampionX | |||||||
Business Acquisition [Line Items] | |||||||
Goodwill, acquired during period | $ 36,900 | ||||||
Ecolab | |||||||
Business Acquisition [Line Items] | |||||||
Revenue recognized under supply and product transfer agreement | $ 113,600 |
Merger Transaction, Acquisiti_4
Merger Transaction, Acquisitions, and Dispositions - Schedule of Preliminary Purchase Price Allocation (Details) - Legacy ChampionX $ in Thousands | Jun. 03, 2020USD ($) |
Business Acquisition [Line Items] | |
Equity consideration | $ 1,263,931 |
Replacement awards attributable to pre-combination services | 43,964 |
Unfavorable supply agreement | 46,000 |
Favorable supply agreement | (59,000) |
Fair value of consideration transferred | $ 1,294,895 |
Favorable supply agreements | |
Business Acquisition [Line Items] | |
Useful life of intangible assets recognized | 3 years |
Merger Transaction, Acquisiti_5
Merger Transaction, Acquisitions, and Dispositions - Schedule of Preliminary Allocation of Purchase Price (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Jun. 03, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Business Acquisition [Line Items] | ||||
Goodwill | $ 680,594 | $ 911,113 | $ 904,985 | |
Legacy ChampionX | ||||
Business Acquisition [Line Items] | ||||
Cash and cash equivalents | $ 57,588 | |||
Receivables | 394,432 | |||
Inventory | 340,000 | |||
Prepaid expenses and other current assets | 63,576 | |||
Property, plant, and equipment | 687,085 | |||
Identifiable intangible assets | 290,000 | |||
Other non-current assets | 156,427 | |||
Total identifiable assets acquired | 1,989,108 | |||
Accounts payable | 184,028 | |||
Other current liabilities | 172,997 | |||
Long-term debt | 537,000 | |||
Deferred tax liabilities | 103,956 | |||
Other liabilities | 98,970 | |||
Total liabilities assumed | 1,096,951 | |||
Net identifiable assets acquired | 892,157 | |||
Add: Negative fair value of non-controlling interests | 16,052 | |||
Goodwill | 386,686 | |||
Total net assets acquired | 1,294,895 | |||
Short-term debt | $ 26,900 |
Merger Transaction, Acquisiti_6
Merger Transaction, Acquisitions, and Dispositions - Schedule of Property, Plant and Equipment Acquired (Details) - USD ($) $ in Thousands | Jun. 03, 2020 | Dec. 31, 2020 |
Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Land and land improvements | $ 125,375 | |
Buildings and leasehold improvements | 208,649 | |
Machinery, equipment, and other | 333,478 | |
Capitalized software and computer hardware | 19,583 | |
Total property, plant, and equipment acquired | $ 687,085 | |
Buildings and leasehold improvements | Minimum | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 5 years | |
Buildings and leasehold improvements | Minimum | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 5 years | |
Buildings and leasehold improvements | Maximum | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 40 years | |
Buildings and leasehold improvements | Maximum | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 40 years | |
Machinery, equipment, and other | Minimum | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 1 year | |
Machinery, equipment, and other | Minimum | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 3 years | |
Machinery, equipment, and other | Maximum | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 20 years | |
Machinery, equipment, and other | Maximum | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 20 years | |
Capitalized software and computer hardware | Minimum | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 3 years | |
Capitalized software and computer hardware | Maximum | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Useful life of property, plant and equipment (in years) | 7 years |
Merger Transaction, Acquisiti_7
Merger Transaction, Acquisitions, and Dispositions - Schedule of Identifiable Intangible Assets Acquired (Details) - USD ($) $ in Thousands | Jun. 03, 2020 | Jul. 31, 2019 |
Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets acquired | $ 290,000 | |
Identifiable intangible assets recognized | $ 349,000 | |
Useful life of intangible assets acquired | 10 years 2 months 12 days | |
Trademarks and trade names | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets acquired | $ 25,000 | |
Useful life of intangible assets acquired | 15 years | |
Developed technology | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets acquired | $ 120,000 | |
Useful life of intangible assets acquired | 7 years | |
Customer relationships | ||
Business Acquisition [Line Items] | ||
Useful life of intangible assets acquired | 15 years | |
Customer relationships | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets acquired | $ 145,000 | |
Useful life of intangible assets acquired | 15 years | |
Favorable supply agreements | Legacy ChampionX | ||
Business Acquisition [Line Items] | ||
Identifiable intangible assets recognized | $ 59,000 | |
Useful life of intangible assets recognized | 3 years |
Merger Transaction, Acquisiti_8
Merger Transaction, Acquisitions, and Dispositions - Schedule of Pro Forma Information (Details) - Legacy ChampionX - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | ||
Revenues | $ 2,775,027 | $ 3,456,354 |
Net income (loss) attributable to ChampionX | $ (777,553) | $ 229,126 |
Merger Transaction, Acquisiti_9
Merger Transaction, Acquisitions, and Dispositions - Schedule of Other Acquisitions (Details) - USD ($) $ in Thousands | Jun. 03, 2020 | Jul. 31, 2019 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Contingent consideration revenue target period | 18 months | ||||
Goodwill | $ 680,594 | $ 911,113 | $ 904,985 | ||
Legacy ChampionX | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Fair value of consideration transferred | $ 1,294,895 | ||||
Inventory | 340,000 | ||||
Identifiable intangible assets | 290,000 | ||||
Goodwill | 386,686 | ||||
Total assets acquired | 892,157 | ||||
Other Acquisitions | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Cash | $ 12,500 | ||||
Contingent consideration | 1,500 | ||||
Fair value of consideration transferred | 14,000 | ||||
Inventory | 1,840 | ||||
Goodwill | 5,510 | ||||
Total assets acquired | 14,000 | ||||
Customer Relationships [Member] | Legacy ChampionX | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | $ 145,000 | ||||
Customer Relationships [Member] | Other Acquisitions | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | 2,650 | ||||
Unpatented Technology [Member] | Other Acquisitions | |||||
Acquired Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets | $ 4,000 |
Segment Information - Segment R
Segment Information - Segment Revenue and Segment Operating Profit (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 1,899,996 | $ 1,131,251 | $ 1,218,156 |
Interest expense, net | 51,731 | 39,301 | 27,648 |
Income (loss) before income taxes | (762,749) | 59,186 | 121,353 |
Reporting segments | |||
Segment Reporting Information [Line Items] | |||
Income (loss) before income taxes | (607,267) | 127,521 | 172,807 |
Reporting segments | Production Chemical Technologies | |||
Segment Reporting Information [Line Items] | |||
Revenue | 992,805 | 0 | 0 |
Income (loss) before income taxes | 94,294 | 0 | 0 |
Reporting segments | Production & Automation Technologies | |||
Segment Reporting Information [Line Items] | |||
Revenue | 615,918 | 884,364 | 932,591 |
Income (loss) before income taxes | (697,937) | 54,024 | 74,187 |
Reporting segments | Drilling Technologies | |||
Segment Reporting Information [Line Items] | |||
Revenue | 116,186 | 246,887 | 285,565 |
Income (loss) before income taxes | 2,574 | 73,497 | 98,620 |
Reporting segments | Reservoir Chemical Technologies | |||
Segment Reporting Information [Line Items] | |||
Revenue | 61,507 | 0 | 0 |
Income (loss) before income taxes | (6,198) | 0 | 0 |
Corporate and other | |||
Segment Reporting Information [Line Items] | |||
Revenue | 113,580 | 0 | 0 |
Income (loss) before income taxes | $ 103,751 | $ 29,034 | $ 23,806 |
Segment Information - Segment A
Segment Information - Segment Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Assets | $ 3,475,776 | $ 1,922,825 |
Segment Information - Geographi
Segment Information - Geographic Segment Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue, Major Customer [Line Items] | ||
Total property, plant, and equipment, net | $ 854,536 | $ 248,181 |
UNITED STATES | ||
Revenue, Major Customer [Line Items] | ||
Total property, plant, and equipment, net | 547,662 | 238,464 |
Singapore | ||
Revenue, Major Customer [Line Items] | ||
Total property, plant, and equipment, net | 111,184 | 0 |
Canada | ||
Revenue, Major Customer [Line Items] | ||
Total property, plant, and equipment, net | 85,487 | 5,749 |
Other Countries | ||
Revenue, Major Customer [Line Items] | ||
Total property, plant, and equipment, net | $ 110,203 | $ 3,968 |
Segment Information - Other Bus
Segment Information - Other Business Segment Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Capital expenditures | $ 45,163 | $ 39,780 | $ 57,918 |
Depreciation and amortization | 214,362 | 119,938 | 124,461 |
Reporting segments | Production Chemical Technologies | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 10,498 | 0 | 0 |
Depreciation and amortization | 58,328 | 0 | 0 |
Reporting segments | Production & Automation Technologies | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 32,100 | 30,291 | 45,190 |
Depreciation and amortization | 130,725 | 110,131 | 112,955 |
Reporting segments | Drilling Technologies | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 1,736 | 9,061 | 11,123 |
Depreciation and amortization | 7,940 | 9,263 | 11,037 |
Reporting segments | Reservoir Chemical Technologies | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 5,741 | 0 | 0 |
Corporate and other | Corporate and Other | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 829 | 428 | 1,605 |
Depreciation and amortization | $ 11,628 | $ 544 | $ 469 |
Revenue - Narrative (Details)
Revenue - Narrative (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Revenue from Contract with Customer [Abstract] | ||
Accrued distributor fees | $ 37,465 | $ 0 |
Revenue - Disaggregation of Rev
Revenue - Disaggregation of Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 1,899,996 | $ 1,131,251 | $ 1,218,156 |
UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 964,817 | 861,001 | 959,167 |
Middle East & Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 240,198 | ||
Middle East [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 60,064 | 53,516 | |
Latin America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 231,811 | 32,408 | 33,247 |
Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 173,002 | 70,314 | 79,816 |
Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 152,595 | 51,965 | 38,669 |
AUSTRALIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 54,842 | 30,841 | 33,976 |
Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 54,021 | 22,702 | 17,606 |
Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 28,710 | 1,956 | 2,159 |
Corporate and other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 113,580 | 0 | 0 |
Corporate and other | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 72,948 | 0 | 0 |
Corporate and other | Middle East & Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 15,254 | ||
Corporate and other | Middle East [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | |
Corporate and other | Latin America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 3,650 | 0 | 0 |
Corporate and other | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 640 | 0 | 0 |
Corporate and other | Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 12,052 | 0 | 0 |
Corporate and other | AUSTRALIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | 0 |
Corporate and other | Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 9,041 | 0 | 0 |
Corporate and other | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | (5) | 0 | 0 |
Production Chemical Technologies | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 318,460 | 0 | 0 |
Production Chemical Technologies | Middle East & Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 164,480 | ||
Production Chemical Technologies | Middle East [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | |
Production Chemical Technologies | Latin America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 202,177 | 0 | 0 |
Production Chemical Technologies | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 129,210 | 0 | 0 |
Production Chemical Technologies | Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 116,192 | 0 | 0 |
Production Chemical Technologies | AUSTRALIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 13,225 | 0 | 0 |
Production Chemical Technologies | Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 28,023 | 0 | 0 |
Production Chemical Technologies | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 21,038 | 0 | 0 |
Production Chemical Technologies | Reporting segments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 992,805 | 0 | 0 |
Production & Automation Technologies | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 458,690 | 679,280 | 731,416 |
Production & Automation Technologies | Middle East & Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 45,026 | ||
Production & Automation Technologies | Middle East [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 59,051 | 53,315 | |
Production & Automation Technologies | Latin America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 21,679 | 32,389 | 33,138 |
Production & Automation Technologies | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 32,709 | 52,647 | 60,256 |
Production & Automation Technologies | Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 10,521 | 19,752 | 12,686 |
Production & Automation Technologies | AUSTRALIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 41,233 | 30,702 | 33,967 |
Production & Automation Technologies | Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 5,549 | 9,727 | 7,176 |
Production & Automation Technologies | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 511 | 816 | 637 |
Production & Automation Technologies | Reporting segments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 615,918 | 884,364 | 932,591 |
Drilling Technologies | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 82,812 | 181,721 | 227,751 |
Drilling Technologies | Middle East & Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,146 | ||
Drilling Technologies | Middle East [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,013 | 201 | |
Drilling Technologies | Latin America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 22 | 19 | 109 |
Drilling Technologies | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 9,029 | 17,667 | 19,560 |
Drilling Technologies | Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 11,840 | 32,213 | 25,983 |
Drilling Technologies | AUSTRALIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 110 | 139 | 9 |
Drilling Technologies | Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 9,141 | 12,975 | 10,430 |
Drilling Technologies | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2,086 | 1,140 | 1,522 |
Drilling Technologies | Reporting segments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 116,186 | 246,887 | 285,565 |
Reservoir Chemical Technologies | UNITED STATES | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 31,907 | 0 | 0 |
Reservoir Chemical Technologies | Middle East & Africa | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 14,292 | ||
Reservoir Chemical Technologies | Middle East [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 0 | 0 | |
Reservoir Chemical Technologies | Latin America [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 4,283 | 0 | 0 |
Reservoir Chemical Technologies | Canada | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,414 | 0 | 0 |
Reservoir Chemical Technologies | Europe [Member] | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 1,990 | 0 | 0 |
Reservoir Chemical Technologies | AUSTRALIA | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 274 | 0 | 0 |
Reservoir Chemical Technologies | Asia-Pacific | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 2,267 | 0 | 0 |
Reservoir Chemical Technologies | Other | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 5,080 | 0 | 0 |
Reservoir Chemical Technologies | Reporting segments | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 61,507 | $ 0 | $ 0 |
Revenue - Contract Balances (De
Revenue - Contract Balances (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Revenue from Contract with Customer [Abstract] | |||
Contract assets | $ 0 | $ 285 | $ 4,571 |
Contract liabilities - current | $ 16,668 | $ 6,148 | $ 5,863 |
Property, Plant and Equipment -
Property, Plant and Equipment - PPE (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 1,349,026 | $ 674,903 |
Accumulated depreciation | (494,490) | (426,722) |
Property, plant and equipment, net | 854,536 | 248,181 |
Land and land improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 140,209 | 14,419 |
Buildings and improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 316,529 | 106,993 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | 37,638 | 15,323 |
Machinery, equipment, and other | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant and equipment, gross | $ 854,650 | $ 538,168 |
Property, Plant and Equipment_2
Property, Plant and Equipment - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Property, Plant and Equipment [Abstract] | |||
Depreciation | $ 142,647 | $ 68,557 | $ 72,569 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Mar. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Jun. 03, 2020USD ($) | |
Finite-Lived Intangible Assets [Line Items] | |||||
Amortization of intangible assets | $ 70,900 | $ 51,400 | $ 51,900 | ||
Goodwill impairment | $ 616,300 | 616,271 | 0 | 0 | |
Long-lived asset impairment | 41,000 | 40,980 | 1,746 | $ 990 | |
Impairment of non-taxable goodwill, amount impacting the effective tax rate | 560,100 | ||||
Legacy ChampionX | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets recognized | $ 349,000 | ||||
Other Acquisitions | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets recognized | $ 6,700 | ||||
Favorable supply agreements | Legacy ChampionX | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Identifiable intangible assets recognized | $ 59,000 | ||||
Production & Automation Technologies | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | $ 616,271 | ||||
Production & Automation Technologies | Artificial Lift [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 539,200 | ||||
Production & Automation Technologies | Automation technologies | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment | 77,100 | ||||
Artificial Lift [Member] | Customer relationships | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | 40,400 | ||||
Artificial Lift [Member] | Trademarks [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Impairment of intangible assets (excluding goodwill) | $ 600 | ||||
Discount Rate | Artificial Lift [Member] | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment measurement input | 0.145 | ||||
Discount Rate | Automation technologies | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Goodwill impairment measurement input | 0.165 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets - Intangible Assets and Amortization Expense (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 891,441 | $ 656,037 |
Finite-Lived Intangible Assets, Accumulated Amortization | 416,032 | 420,930 |
Finite-Lived Intangible Assets, Net, Total | 475,409 | 235,107 |
Intangible assets, gross | 895,041 | 659,637 |
Intangible assets, net | 479,009 | 238,707 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Indefinite-lived intangible assets | 3,600 | 3,600 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 593,068 | 560,316 |
Finite-Lived Intangible Assets, Accumulated Amortization | 321,298 | 353,189 |
Finite-Lived Intangible Assets, Net, Total | 271,770 | 207,127 |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 59,881 | 35,695 |
Finite-Lived Intangible Assets, Accumulated Amortization | 27,565 | 24,830 |
Finite-Lived Intangible Assets, Net, Total | 32,316 | 10,865 |
Patents [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 38,635 | 38,436 |
Finite-Lived Intangible Assets, Accumulated Amortization | 29,289 | 26,838 |
Finite-Lived Intangible Assets, Net, Total | 9,346 | 11,598 |
Unpatented Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 133,700 | 13,700 |
Finite-Lived Intangible Assets, Accumulated Amortization | 19,958 | 9,811 |
Finite-Lived Intangible Assets, Net, Total | 113,742 | 3,889 |
Favorable supply agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 59,000 | 0 |
Finite-Lived Intangible Assets, Accumulated Amortization | 11,308 | 0 |
Finite-Lived Intangible Assets, Net, Total | 47,692 | 0 |
Drawings and Manuals [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 1,783 | 2,558 |
Finite-Lived Intangible Assets, Accumulated Amortization | 1,783 | 1,758 |
Finite-Lived Intangible Assets, Net, Total | 0 | 800 |
Other Intangible Assets [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 5,374 | 5,332 |
Finite-Lived Intangible Assets, Accumulated Amortization | 4,831 | 4,504 |
Finite-Lived Intangible Assets, Net, Total | $ 543 | $ 828 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets - Amortization Expense (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Goodwill and Intangible Assets Disclosure [Abstract] | |
2021 | $ 87,698 |
2022 | 86,181 |
2023 | 60,855 |
2024 | 47,506 |
2025 | $ 36,396 |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets - Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | $ 911,113 | $ 911,113 | $ 904,985 | |
Acquisition | 386,686 | 5,510 | ||
Foreign currency translation | (934) | 618 | ||
Impairment | (616,300) | (616,271) | 0 | $ 0 |
Goodwill, end of period | 680,594 | 911,113 | 904,985 | |
Production Chemical Technologies | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | 0 | 0 | 0 | |
Acquisition | 349,821 | 0 | ||
Foreign currency translation | 1,236 | 0 | ||
Impairment | 0 | |||
Goodwill, end of period | 351,057 | 0 | 0 | |
Production & Automation Technologies | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | 809,977 | 809,977 | 803,849 | |
Acquisition | 0 | 5,510 | ||
Foreign currency translation | (2,169) | 618 | ||
Impairment | (616,271) | |||
Goodwill, end of period | 191,537 | 809,977 | 803,849 | |
Drilling Technologies | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | 101,136 | 101,136 | 101,136 | |
Acquisition | 0 | 0 | ||
Foreign currency translation | 0 | 0 | ||
Impairment | 0 | |||
Goodwill, end of period | 101,136 | 101,136 | 101,136 | |
Reservoir Chemical Technologies | ||||
Goodwill [Roll Forward] | ||||
Goodwill, beginning of period | $ 0 | 0 | 0 | |
Acquisition | 36,865 | 0 | ||
Foreign currency translation | (1) | 0 | ||
Impairment | 0 | |||
Goodwill, end of period | $ 36,864 | $ 0 | $ 0 |
Debt - Schedule of Debt (Detail
Debt - Schedule of Debt (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Debt Instrument [Line Items] | ||
Total | $ 940,616 | $ 565,000 |
Net unamortized discounts and issuance costs | (8,002) | (9,709) |
Total long-term debt | 932,614 | 555,291 |
Current portion of long-term debt | (26,850) | 0 |
Long-term debt | 905,764 | 555,291 |
Credit Facility | ||
Debt Instrument [Line Items] | ||
Total | 0 | 0 |
Term Loan Facility | 2018 Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Total | 140,000 | 265,000 |
Term Loan Facility | 2020 Term Loan Facility | ||
Debt Instrument [Line Items] | ||
Total | $ 523,575 | 0 |
Senior Notes | 6.375% Senior Notes due 2026 | ||
Debt Instrument [Line Items] | ||
Debt interest rate | 6.375% | |
Total | $ 277,041 | $ 300,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) | Jun. 03, 2020USD ($) | Feb. 14, 2020USD ($) | May 09, 2018USD ($) | May 03, 2018USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Debt Instrument [Line Items] | |||||||||
Proceeds from long-term debt | $ 125,000,000 | $ 36,500,000 | $ 713,963,000 | ||||||
2018 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 150,000,000 | ||||||||
Weighted average interest rate | 4.00% | 4.00% | 4.00% | ||||||
2018 Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Weighted average interest rate | 3.18% | 3.18% | 3.18% | ||||||
2020 Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Payments to fund merger | $ 527,400,000 | ||||||||
Weighted average interest rate | 6.02% | 6.02% | 6.02% | ||||||
Amortization payments | 6,700,000 | ||||||||
6.375% Senior Notes due 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Cash payment to Dover | $ 700,000,000 | ||||||||
Mandatory prepayments, percent of net cash proceeds | 100.00% | ||||||||
Aggregate principal amount repurchased | $ 23,000,000 | $ 23,000,000 | $ 23,000,000 | ||||||
Debt repurchased, cash portion | 23,400,000 | ||||||||
Debt repurchased, accrued interest | 200,000 | ||||||||
Loss on repurchase of debt | $ 900,000 | ||||||||
Senior Notes | 6.375% Senior Notes due 2026 | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt issued | 300,000,000 | ||||||||
Debt interest rate | 6.375% | 6.375% | 6.375% | ||||||
Proceeds from long-term debt | $ 293,800,000 | ||||||||
Term Loan Facility | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 7 years | ||||||||
Term Loan Facility | 2018 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt issued | $ 537,000,000 | ||||||||
Term Loan Facility | 2018 Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt issued | $ 415,000,000 | ||||||||
Proceeds from issuance of debt | $ 408,700,000 | ||||||||
Mandatory amortization payment, percent per annum | 1.00% | ||||||||
Mandatory prepayments, percent of net cash proceeds | 100.00% | ||||||||
Mandatory prepayments, percent of net cash proceeds, step down one | 75.00% | ||||||||
Mandatory prepayments, percent of net cash proceeds, step down two | 50.00% | ||||||||
Mandatory prepayment in excess of cash flow | 50.00% | ||||||||
Mandatory prepayment in excess of cash flow, step down one | 25.00% | ||||||||
Mandatory prepayment in excess of cash flow, step down two | 0.00% | ||||||||
Term Loan Facility | 2020 Term Loan Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Principal amount of debt issued | $ 537,000,000 | ||||||||
Term Loan Facility | 2020 Term Loan Facility | Eurocurrency Marginal Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 5.00% | ||||||||
Term Loan Facility | 2020 Term Loan Facility | LIBOR | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Term Loan Facility | 2020 Term Loan Facility | LIBOR | Minimum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 1.00% | ||||||||
Term Loan Facility | 2020 Term Loan Facility | LIBOR | Maximum | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 4.00% | ||||||||
Term Loan Facility | 2020 Term Loan Facility | Federal Funds Rate | |||||||||
Debt Instrument [Line Items] | |||||||||
Basis spread on variable rate | 0.50% | ||||||||
Revolving Credit Facility | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Revolving Credit Facility | 2018 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, term | 5 years | ||||||||
Maximum borrowing capacity | $ 400,000,000 | ||||||||
Letters of credit | 2018 Credit Facility | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 100,000,000 | ||||||||
JP Morgan Chase Bank, N.A. | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Minimum interest coverage ratio | 2.50 | ||||||||
Fiscal Quarter Ending March 31, 2021 | JP Morgan Chase Bank, N.A. | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum total leverage ratio | 4 | ||||||||
After Fiscal Quarter Ending March 31, 2021 | JP Morgan Chase Bank, N.A. | Credit Agreement | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum total leverage ratio | 3.75 |
Debt - Aggregate Contractual Fu
Debt - Aggregate Contractual Future Principal Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Debt Disclosure [Abstract] | |
2021 | $ 26,850 |
2022 | 0 |
2023 | 0 |
2024 | 0 |
2025 | 140,000 |
Thereafter | 773,766 |
Total | $ 940,616 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) kg in Millions, $ in Millions | 1 Months Ended | 12 Months Ended | |
Apr. 30, 2020USD ($) | Dec. 31, 2020USD ($)locationkg | Dec. 31, 2019USD ($) | |
Loss Contingencies [Line Items] | |||
Outstanding letters of credit | $ 88.8 | $ 15.7 | |
Minimum number of kilograms required to be purchased (in kilograms) | kg | 13.7 | ||
Purchase commitment term | 10 years | ||
Minimum purchase commitment | $ 23.3 | ||
Notice period | 2 years | ||
Number of locations | location | 11 | ||
Accrued liabilities for remediation | $ 9.2 | ||
Ecolab | |||
Loss Contingencies [Line Items] | |||
Payments made under supply agreements | $ 25 | ||
Interest rate under supply agreement | 4.00% | ||
Discounts to be paid under supply agreement | $ 30 | ||
Fair value of expected future cash flows | $ 14.9 | ||
Oklahoma Department of Environmental Quality | |||
Loss Contingencies [Line Items] | |||
Accrued liabilities for remediation | 2 | ||
Indemnification Agreement | |||
Loss Contingencies [Line Items] | |||
Indemnification accrual | $ 3.4 | ||
Indemnification expense | $ 3 |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Lease revenue | $ 54 | $ 44.7 |
Equipment Leased Assets | ||
Property, Plant and Equipment [Line Items] | ||
Depreciation expense | $ 67.6 | $ 37.1 |
Minimum | ||
Property, Plant and Equipment [Line Items] | ||
Lessor, term of leases | 6 months | |
Maximum | ||
Property, Plant and Equipment [Line Items] | ||
Lessor, term of leases | 9 months |
Leases - Schedule of Balance Sh
Leases - Schedule of Balance Sheet Information (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Leases [Abstract] | ||
Finance lease, right-of-use asset | $ 7,337 | $ 9,406 |
Operating lease right-of-use assets | 122,481 | 24,289 |
Total right-of-use assets | 129,818 | 33,695 |
Finance lease, liability, current | 4,326 | 4,845 |
Finance Lease, Liability, Noncurrent | 4,188 | 4,530 |
Current portion of operating lease liabilities | 33,234 | 7,620 |
Operating lease liabilities | 83,553 | 19,419 |
Total lease liability | $ 125,301 | $ 36,414 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesCurrent | us-gaap:OtherLiabilitiesCurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:OtherLiabilitiesNoncurrent | us-gaap:OtherLiabilitiesNoncurrent |
Leases - Lease Cost (Details)
Leases - Lease Cost (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Leases [Abstract] | ||
Finance lease cost, amortization of right-of-use assets | $ 5,266 | $ 5,200 |
Finance lease cost, interest on lease liabilities | 567 | 439 |
Operating lease cost | 31,850 | 11,191 |
Short-term and variable lease cost | 12,917 | 5,045 |
Sublease income | (3,584) | (463) |
Total lease cost | $ 47,016 | $ 21,412 |
Operating lease, weighted-average remaining lease term | 6 years 3 months 18 days | 4 years 7 months 6 days |
Finance lease, weighted-average remaining lease term | 2 years 8 months 12 days | 2 years 1 month 6 days |
Operating lease, weighted-average discount rate | 6.70% | 6.70% |
Finance lease, weighted-average discount rate | 6.00% | 5.30% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Payments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Operating | |
2021 | $ 40,594 |
2022 | 34,933 |
2023 | 21,994 |
2024 | 16,510 |
2025 | 5,745 |
Thereafter | 24,877 |
Total future minimum lease payments | 144,653 |
Interest included within lease payments | (27,866) |
Total lease liabilities | 116,787 |
Finance | |
2021 | 4,727 |
2022 | 2,354 |
2023 | 973 |
2024 | 676 |
2025 | 443 |
Thereafter | 529 |
Total future minimum lease payments | 9,702 |
Interest included within lease payments | (1,188) |
Total lease liabilities | $ 8,514 |
Leases - Lease Assets (Details)
Leases - Lease Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | $ 1,349,026 | $ 674,903 |
Accumulated depreciation | (494,490) | (426,722) |
Property, plant and equipment, net | 854,536 | $ 248,181 |
Equipment Leased Assets | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | 174,874 | |
Accumulated depreciation | (110,299) | |
Property, plant and equipment, net | $ 64,575 | |
Cable Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property, plant and equipment (in years) | 18 months | |
Property, plant, and equipment | $ 48,755 | |
Downhole Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property, plant and equipment (in years) | 18 months | |
Property, plant, and equipment | $ 35,174 | |
Surface Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property, plant and equipment (in years) | 5 years | |
Property, plant, and equipment | $ 69,172 | |
Other Lease Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, plant, and equipment | $ 21,773 | |
Minimum | Other Lease Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property, plant and equipment (in years) | 3 years | |
Maximum | Other Lease Equipment | ||
Property, Plant and Equipment [Line Items] | ||
Useful life of property, plant and equipment (in years) | 5 years |
Restructuring - Schedule of Res
Restructuring - Schedule of Restructuring and Other Related Charges (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 23,291 | $ 5,177 | $ 5,632 |
Cost of Sales [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 13,955 | 3,592 | 4,693 |
Selling, General and Administrative Expenses [Member] | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 9,336 | 1,585 | 939 |
Production Chemical Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 5,241 | 0 | 0 |
Production & Automation Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 11,814 | 4,467 | 5,632 |
Drilling Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 5,521 | 710 | 0 |
Reservoir Chemical Technologies | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | 348 | 0 | 0 |
Corporate and other | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring charges | $ 367 | $ 0 | $ 0 |
Restructuring - Restructuring R
Restructuring - Restructuring Reserve Rollforward (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Restructuring and Related Activities [Abstract] | |
Beginning balance | $ 130 |
Restructuring charges | 15,630 |
Payments | (19,004) |
Liabilities assumed in the Merger | 6,208 |
Other, including foreign currency translation | (13) |
Ending balance | $ 2,951 |
Employee Benefit Plans - Narrat
Employee Benefit Plans - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Retirement Benefits [Abstract] | |||
Net actuarial gain (loss) arising during period | $ (5,526) | $ (2,521) | $ 856 |
Liability, defined benefit plan | 24,900 | 15,100 | |
Defined benefit plan, net periodic benefit expense | $ 3,200 | $ 2,000 | $ 1,700 |
Equity and Cash Incentive Pro_3
Equity and Cash Incentive Programs - Narrative (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of shares reserved and authorized for issuance (in shares) | 18,200,000 | ||
Compensation costs | $ 15,058 | $ 8,097 | $ 4,234 |
Options, replacement awards (in dollars per share) | $ 6.02 | ||
Unrecognized compensation costs related to options | $ 1,600 | ||
Weighted average period of recognition, options (in years) | 10 months 24 days | ||
Total intrinsic value of stock options exercised | $ 1,000 | ||
Stock options exercised | 888 | ||
Tax benefit from stock options exercised | 200 | ||
Legacy ChampionX | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation costs | $ 15,800 | ||
Performance shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 121,261 | 46,459 | 86,817 |
Unrecognized compensation expense not yet exercisable | $ 3,500 | ||
Weighted average period (in years) | 1 year 6 months | ||
Stock Appreciation Rights (SARs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Expiration period | 10 years | ||
Unrecognized compensation expense not yet exercisable | $ 0 | ||
Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 655,584 | ||
Unrecognized compensation expense not yet exercisable | $ 18,900 | ||
Weighted average period (in years) | 1 year 3 months 18 days | ||
Minimum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Maximum | Restricted Stock Units (RSUs) | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 4 years | ||
Market Vesting Conditions | Performance shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vesting period | 3 years | ||
Performance Vesting Conditions | Performance shares | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Granted (in shares) | 0 | 46,460 | 0 |
Equity and Cash Incentive Pro_4
Equity and Cash Incentive Programs - Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Payment Arrangement [Abstract] | |||
Stock-based compensation expense | $ 19,536 | $ 10,250 | $ 5,375 |
Tax benefit | (4,478) | (2,153) | (1,141) |
Stock-based compensation expense, net of tax | $ 15,058 | $ 8,097 | $ 4,234 |
Equity and Cash Incentive Pro_5
Equity and Cash Incentive Programs - Summary of Activity Relating to SARs Outstanding (Details) - Stock Appreciation Rights (SARs) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of shares outstanding, beginning of the period (in shares) | shares | 422,361 |
Forfeited / expired (in shares) | shares | (7,030) |
Exercised (in shares) | shares | 0 |
Number of shares outstanding, end of the period (in shares) | shares | 415,331 |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Additional Disclosures [Abstract] | |
Weighted average exercise price outstanding, beginning of the period (in dollars per share) | $ / shares | $ 29.75 |
Forfeited / expired (in dollars per share) | $ / shares | 34.13 |
Exercised (in dollars per share) | $ / shares | 0 |
Weighted average exercise price outstanding, end of the period (in dollars per share) | $ / shares | $ 29.67 |
Weighted average remaining contractual term, outstanding (years) | 5 years 1 month 6 days |
Aggregate intrinsic value | $ | $ 0 |
Number of shares, exercisable (in shares) | shares | 415,331 |
Weighted average exercise price exercisable (in dollars per share) | $ / shares | $ 29.67 |
Weighted average remaining contractual term, exercisable (in years) | 5 years 1 month 6 days |
Aggregate intrinsic value, exercisable | $ | $ 0 |
Equity and Cash Incentive Pro_6
Equity and Cash Incentive Programs - Other Information Regarding the Exercise of SARs (Details) - Stock Appreciation Rights (SARs) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value of SARs that became exercisable | $ 878 | $ 662 | $ 310 |
Aggregate intrinsic value of SARs exercised | $ 0 | $ 629 | $ 40 |
Equity and Cash Incentive Pro_7
Equity and Cash Incentive Programs - Fair Value and Average Attainment Used in Determining Compensation Cost of the Performance Shares (Details) - Performance shares - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 |
Market Vesting Conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value at date of grant (in dollars per share) | $ 14.55 | $ 57.43 | $ 56.32 |
Performance Vesting Conditions | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Fair value at date of grant (in dollars per share) | $ 0 | $ 40.22 | |
Share Based Compensation Arrangement by Share Based Payment Award Attainment of Target Granted Percentage | 0.00% | 100.00% |
Equity and Cash Incentive Pro_8
Equity and Cash Incentive Programs - Summary of Activity for Performance Share Awards (Details) - Performance shares - $ / shares | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Shares | |||
Number of shares outstanding, beginning of the period (in shares) | 174,726 | ||
Granted (in shares) | 121,261 | 46,459 | 86,817 |
Forfeited (in shares) | (5,011) | ||
Vested (in shares) | (12,213) | ||
Number of shares outstanding, end of the period (in shares) | 278,763 | 174,726 | |
Weighted-Average Grant-Date Fair Value | |||
Weighted average grant-date fair value, outstanding beginning of the period (in dollars per share) | $ 52.44 | ||
Granted (in dollars per share) | 14.55 | ||
Forfeited (in dollars per share) | 52.60 | ||
Vested (in dollars per share) | 52.51 | ||
Weighted average grant-date fair value, outstanding end of the period (in dollars per share) | $ 35.95 | $ 52.44 |
Equity and Cash Incentive Pro_9
Equity and Cash Incentive Programs - Summary of Activity for Restricted Stock Units (Details) - Restricted Stock Units (RSUs) | 12 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Shares | |
Number of shares outstanding, beginning of the period (in shares) | shares | 440,048 |
Granted (in shares) | shares | 655,584 |
Replacement awards (in shares) | shares | 2,357,733 |
Forfeited (in shares) | shares | (29,272) |
Vested (in shares) | shares | (754,314) |
Number of shares outstanding, end of the period (in shares) | shares | 2,669,779 |
Weighted-Average Grant-Date Fair Value | |
Weighted average grant-date fair value, outstanding beginning of the period (in dollars per share) | $ / shares | $ 41.07 |
Granted (in dollars per share) | $ / shares | 14.13 |
Replacement awards (in dollars per share) | $ / shares | 10.34 |
Forfeited (in dollars per share) | $ / shares | 31.61 |
Vested (in dollars per share) | $ / shares | 17.64 |
Weighted average grant-date fair value, outstanding end of the period (in dollars per share) | $ / shares | $ 14.04 |
Equity and Cash Incentive Pr_10
Equity and Cash Incentive Programs - Non-Qualified Stock Options (Details) $ / shares in Units, $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($)$ / sharesshares | |
Number of shares | |
Options outstanding, balance at the beginning of the period (in shares) | shares | 0 |
Options granted (in shares) | shares | 0 |
Options, replacement awards (in shares) | shares | 7,324,853 |
Options forfeited/expired (in shares) | shares | (14,381) |
Options exercised (in shares) | shares | (135,432) |
Options outstanding, balance at the end of the period (in shares) | shares | 7,175,040 |
Weighted Average Exercise Price | |
Options outstanding, balance at the beginning of the period (in dollars per share) | $ / shares | $ 0 |
Options granted (in dollars per share) | $ / shares | 0 |
Options, replacement awards (in dollars per share) | $ / shares | 6.02 |
Options forfeited/expired (in dollars per share) | $ / shares | 7.20 |
Options exercised (in dollars per share) | $ / shares | 6.56 |
Options outstanding, balance at the end of the period (in dollars per share) | $ / shares | $ 6.01 |
Weighted-average remaining contractual term, outstanding at end of period | 5 years 3 months 18 days |
Aggregate intrinsic value, at end of period | $ | $ 65,431 |
Options exercisable (in shares) | shares | 6,534,024 |
Options exercisable, weighted-average exercise price (in dollars per share) | $ / shares | $ 5.85 |
Options exercisable, weighted average remaining contractual term (in years) | 5 years 1 month 6 days |
Aggregate intrinsic value, options | $ | $ 60,571 |
Stockholders' Equity - Capital
Stockholders' Equity - Capital Stock Activity (Details) - shares shares in Thousands | May 09, 2018 | Dec. 31, 2020 | Dec. 31, 2019 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance (in shares) | 77,500 | ||
Issuance of common stock (in shares) | 77,300 | ||
Ending balance (in shares) | 200,400 | 77,500 | |
Common Stock | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||
Beginning balance (in shares) | 77,460 | 77,353 | |
Issuance of common stock (in shares) | 122,237 | ||
Shares issued—share-based compensation (in shares) | 683 | 107 | |
Ending balance (in shares) | 200,380 | 77,460 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) - $ / shares | Dec. 31, 2020 | Dec. 31, 2019 |
Equity [Abstract] | ||
Preferred stock authorized (in shares) | 250,000,000 | 250,000,000 |
Preferred stock, par value (dollars per share) | $ 0.01 | $ 0.01 |
Stockholders' Equity - Accumula
Stockholders' Equity - Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | $ 1,036,214 | $ 975,983 | $ 1,635,509 |
Other comprehensive income (loss) | 13,282 | (1,131) | (12,754) |
Ending balance | 1,612,575 | 1,036,214 | 975,983 |
Foreign Currency Translation | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (35,210) | (36,146) | |
Other comprehensive income (loss) before reclassifications, net of tax | 20,245 | 936 | |
Reclassification adjustment for net losses included in net income, net of tax | 0 | 0 | |
Other comprehensive income (loss) | 20,245 | 936 | |
Ending balance | (14,965) | (35,210) | (36,146) |
Defined Pension and Other Post-Retirement Benefits | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (8,827) | (6,760) | |
Other comprehensive income (loss) before reclassifications, net of tax | (5,504) | (2,711) | |
Reclassification adjustment for net losses included in net income, net of tax | 861 | 644 | |
Other comprehensive income (loss) | (4,643) | (2,067) | |
Ending balance | (13,470) | (8,827) | (6,760) |
Cash Flow Hedges | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | 0 | 0 | |
Other comprehensive income (loss) before reclassifications, net of tax | (2,320) | 0 | |
Reclassification adjustment for net losses included in net income, net of tax | 0 | 0 | |
Other comprehensive income (loss) | (2,320) | 0 | |
Ending balance | (2,320) | 0 | 0 |
Accum. Other Comp. Loss | |||
AOCI Attributable to Parent, Net of Tax [Roll Forward] | |||
Beginning balance | (44,037) | (42,906) | (26,416) |
Other comprehensive income (loss) before reclassifications, net of tax | 12,421 | (1,775) | |
Reclassification adjustment for net losses included in net income, net of tax | 861 | 644 | |
Other comprehensive income (loss) | 13,282 | (1,131) | (12,754) |
Ending balance | $ (30,755) | $ (44,037) | $ (42,906) |
Stockholders' Equity - Reclassi
Stockholders' Equity - Reclassifications from Accumulated Comprehensive Loss (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other expense, net | $ (828) | $ 2,603 | $ 3,056 |
Income before income taxes | 762,749 | (59,186) | (121,353) |
Provision for (benefit from) income taxes | (20,396) | 6,226 | 28,162 |
Net income (loss) | 742,353 | (52,960) | (93,191) |
Amortization of actuarial loss and net transition obligation | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other expense, net | 492 | 364 | 330 |
Amortization of prior service cost | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other expense, net | 0 | 2 | 1 |
Settlement loss | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Other expense, net | 698 | 508 | 479 |
Accumulated defined benefit plans adjustment including portion attributable to noncontrolling interest | Reclassification out of Accumulated Other Comprehensive Income | |||
Reclassification Adjustment out of Accumulated Other Comprehensive Income [Line Items] | |||
Income before income taxes | 1,190 | 874 | 810 |
Provision for (benefit from) income taxes | (329) | (230) | (210) |
Net income (loss) | $ 861 | $ 644 | $ 600 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | Jun. 03, 2020 | May 09, 2018 | Dec. 31, 2019 | Dec. 31, 2018 |
Earnings Per Share [Abstract] | ||||
Issuance of common stock - Merger (in shares) | 77.3 | |||
Potentially diluted securities excluded as anti-dilutive (in shares) | 0.4 | 0.2 | ||
Legacy ChampionX | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Number of shares issued (in shares) | 122.2 |
Earnings Per Share - Reconcilia
Earnings Per Share - Reconciliation of the Shares Used in EPS Calculation (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | ||
Earnings Per Share [Abstract] | ||||
Net income (loss) attributable to ChampionX | $ (743,930) | $ 52,164 | $ 92,737 | |
Weighted-average number of shares outstanding (in shares) | [1] | 148,370 | 77,427 | 77,342 |
Dilutive effect of stock-based compensation (in shares) | 0 | 197 | 350 | |
Total shares and dilutive securities (in shares) | [1] | 148,370 | 77,624 | 77,692 |
Basic earnings (loss) per share attributable to ChampionX (in dollars per share) | [1] | $ (5.01) | $ 0.67 | $ 1.20 |
Diluted earnings (loss) per share attributable to ChampionX (in dollars per share) | [1] | $ (5.01) | $ 0.67 | $ 1.19 |
[1] | See Note 15—Earnings Per Share. |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | $ 4,576 | |||
Derivative liabilities | 6,561 | |||
Goodwill impairment | $ 616,300 | 616,271 | $ 0 | $ 0 |
Long-lived asset impairment | $ 41,000 | $ 40,980 | 1,746 | $ 990 |
Term Loan Facility | 2018 Term Loan Facility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying amount | 265,000 | |||
Term Loan Facility | 2020 Term Loan Facility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying amount | 0 | |||
Senior Notes | 6.375% Senior Notes due 2026 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Carrying amount | 300,000 | |||
Debt interest rate | 6.375% | |||
Foreign currency forward contracts | Fair Value, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | $ 4,576 | |||
Derivative liabilities | 6,561 | |||
Level 1 | Senior Notes | 6.375% Senior Notes due 2026 | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value | 277,054 | 316,710 | ||
Level 1 | Foreign currency forward contracts | Fair Value, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | |||
Derivative liabilities | 0 | |||
Level 2 | Term Loan Facility | 2018 Term Loan Facility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value | 137,200 | 266,161 | ||
Level 2 | Term Loan Facility | 2020 Term Loan Facility | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Fair value | 530,120 | $ 0 | ||
Level 2 | Foreign currency forward contracts | Fair Value, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 4,576 | |||
Derivative liabilities | 6,561 | |||
Level 3 | Foreign currency forward contracts | Fair Value, Recurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Derivative assets | 0 | |||
Derivative liabilities | $ 0 |
Derivatives and Hedging Trans_3
Derivatives and Hedging Transactions - Schedule of Fair Value of Derivative Instruments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Derivative Asset [Abstract] | |
Derivative assets | $ 4,576 |
Derivative Liability [Abstract] | |
Derivative liabilities | 6,561 |
Prepaid expenses and other current assets | |
Derivative Asset [Abstract] | |
Derivative assets | 4,576 |
Accrued expenses and other current liabilities | |
Derivative Liability [Abstract] | |
Derivative liabilities | $ 6,561 |
Derivatives and Hedging Trans_4
Derivatives and Hedging Transactions - Schedule of Derivative Instruments (Details) $ in Thousands | Dec. 31, 2020USD ($) |
Foreign currency forward contracts | |
Derivative [Line Items] | |
Notional value of foreign currency forward contracts | $ 483,377 |
Derivatives and Hedging Trans_5
Derivatives and Hedging Transactions - Schedule of Gain (Loss) on Derivative Instruments (Details) $ in Thousands | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Total loss of derivative instruments | $ 863 |
Cost of Sales [Member] | Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Total loss of derivative instruments | 171 |
Other (income) expense, net | Not Designated as Hedging Instrument | |
Derivative Instruments and Hedging Activities Disclosures [Line Items] | |
Total loss of derivative instruments | $ 692 |
Income Taxes - Components of In
Income Taxes - Components of Income (Loss) Before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (811,995) | $ 51,073 | $ 104,234 |
Foreign | 49,246 | 8,113 | 17,119 |
Income (loss) before income taxes | $ (762,749) | $ 59,186 | $ 121,353 |
Income Taxes - Provision for (B
Income Taxes - Provision for (Benefit From) Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Current: | |||
U.S. federal | $ 1,578 | $ 15,327 | $ 24,221 |
State and local | 1,579 | 1,196 | 1,598 |
Foreign | 20,264 | 4,264 | 4,362 |
Total current | 23,421 | 20,787 | 30,181 |
Deferred: | |||
U.S. federal | (32,454) | (12,815) | (2,255) |
State and local | (6,738) | (1,156) | 2,735 |
Foreign | (4,625) | (590) | (2,499) |
Total deferred | (43,817) | (14,561) | (2,019) |
Provision for (benefit from) income taxes | $ (20,396) | $ 6,226 | $ 28,162 |
Income Taxes - Effective Income
Income Taxes - Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | |||
Statutory U.S. federal income tax rate | 21.00% | 21.00% | 21.00% |
State and local taxes, net of federal income tax benefit | 0.50% | 3.20% | 3.40% |
Foreign withholding tax | (1.20%) | 1.80% | 0.30% |
Foreign derived intangible income | 0.00% | (0.80%) | (1.90%) |
Foreign operations tax effect | (0.40%) | 0.00% | 0.30% |
Research and experimentation tax credits | 0.40% | (1.20%) | (0.60%) |
Foreign tax credit | 0.00% | (8.00%) | (1.50%) |
Nondeductible expenses | (0.60%) | 2.50% | 0.70% |
Branch income | (0.70%) | 0.60% | 0.00% |
Tax return to accrual adjustments | 0.10% | (9.40%) | 0.00% |
State deferred taxes | 0.20% | (7.90%) | 0.00% |
Goodwill Impairment | (15.50%) | 0.00% | |
Foreign Inclusions (Including Global intangible low-taxed income) | (0.70%) | 0.00% | 2.30% |
Transaction Costs | (0.60%) | 0.00% | 0.00% |
Change in valuation allowance | (0.50%) | 9.00% | 0.00% |
Other | 0.70% | (0.30%) | (0.80%) |
Effective income tax rate | 2.70% | 10.50% | 23.20% |
Income Taxes - Components of De
Income Taxes - Components of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Dec. 31, 2019 |
Deferred tax assets attributable to: | ||
Accrued compensation | $ 13,437 | $ 8,725 |
Accrued expenses | 3,950 | 455 |
Net operating loss and other carryforwards | 25,879 | 5,937 |
Inventories | 0 | 1,380 |
Accounts receivable | 19,930 | 1,699 |
Lease liability | 17,180 | 5,649 |
Long-term liabilities | 1,470 | 529 |
Other assets | 2,110 | 1,202 |
Deferred tax assets | 83,956 | 25,576 |
Valuation allowance | (26,786) | (6,027) |
Deferred tax assets, net of valuation allowance | 57,170 | 19,549 |
Deferred tax liabilities attributable to: | ||
Inventories | (2,124) | 0 |
Intangible assets, including goodwill | (80,634) | (66,736) |
Property, plant and equipment | (73,507) | (31,240) |
Foreign withholding taxes | (15,673) | 0 |
Lease asset | (18,293) | (5,633) |
Investment in Subsidiary | (10,189) | 0 |
Deferred tax liabilities | (200,420) | (103,609) |
Net deferred tax liabilities | (143,250) | (84,060) |
Other non-current assets | 13,033 | 0 |
Deferred income taxes | $ (156,283) | $ (84,060) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 2.70% | 10.50% | 23.20% | |
Impairment of non-taxable goodwill, amount impacting the effective tax rate | $ 560,100 | |||
Net operating loss carryforwards, domestic | $ 2,200 | |||
Net operating loss carryforwards, foreign | 17,300 | |||
Foreign tax credit carryforwards | 4,200 | |||
Valuation allowance | 26,786 | $ 6,027 | ||
Unrecognized tax benefits | 868 | 0 | ||
Interest and penalties accrued | 0 | |||
Accrued foreign withholding taxes on undistributed foreign earnings | $ 15,673 | $ 0 |
Income Taxes - Unrecognized Tax
Income Taxes - Unrecognized Tax Benefits (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2020USD ($) | |
Reconciliation of Unrecognized Tax Benefits, Excluding Amounts Pertaining to Examined Tax Returns [Roll Forward] | |
Unrecognized tax benefits, beginning of the period | $ 0 |
Additional based on tax positions related to prior years | 868 |
Unrecognized tax benefits, end of the period | $ 868 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Related Party Transaction [Line Items] | |||
Related party transaction, selling, general and administrative expenses from transactions with related party | $ 7,400 | ||
Payments of ordinary dividends, noncontrolling interest | $ 2,175 | $ 0 | 2,720 |
Proceeds from sale of inventory to related parties | $ 4,000 | ||
Non- controlling Interest | |||
Related Party Transaction [Line Items] | |||
Related party transaction, commission rate | 5.00% | ||
Royalty Agreements | |||
Related Party Transaction [Line Items] | |||
Related party transaction, expenses from transactions with related party | $ 2,300 |
Cash Flow Information - Cash Fl
Cash Flow Information - Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2020 | Dec. 31, 2020 | Dec. 31, 2019 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash paid for income taxes | $ 27,191 | $ 18,179 | $ 26,464 |
Cash paid for interest | $ 21,899 | $ 39,746 | $ 36,085 |
Cash Flow Information - Supplem
Cash Flow Information - Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |||
Cash required by operating leases | $ 30,256 | $ 12,026 | |
Finance leases - interest | 550 | 439 | |
Finance leases - principal | 5,139 | 5,555 | $ 4,518 |
Operating lease additions | 37,631 | 38,225 | |
Finance lease additions | $ 4,017 | $ 6,412 |
Cash Flow Information - Narrati
Cash Flow Information - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Inventory transferred into property, plant, and equipment | $ 15,300 | $ 75,700 | $ 97,000 |
Gain on disposition of business | 0 | (2,475) | 1,286 |
Equipment Leased Assets | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Expenditures for assets expected to be placed in lease asset program | $ 20,800 | $ 16,000 | $ 26,700 |
Schedule II - Valuation and Q_2
Schedule II - Valuation and Qualifying Accounts - Allowance for Doubtful Accounts (Details) - Allowance for Doubtful Accounts - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 8,072 | $ 4,745 | $ 4,753 |
Charged to Cost and Expense | 3,644 | 4,955 | 2,007 |
Accounts Written Off | (3,230) | (1,447) | (1,489) |
Other | 1,706 | (181) | (526) |
Balance at end of year | $ 10,192 | $ 8,072 | $ 4,745 |
Schedule II - Valuation and Q_3
Schedule II - Valuation and Qualifying Accounts - Deferred Tax Valuation Allowance (Details) - Deferred Tax Valuation Allowance - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Dec. 31, 2018 | |
SEC Schedule, 12-09, Movement in Valuation Allowances and Reserves [Roll Forward] | |||
Balance at beginning of year | $ 6,027 | $ 722 | $ 1,280 |
Additions | 21,101 | 5,556 | 331 |
Reductions | (342) | (251) | (889) |
Other | 0 | 0 | 0 |
Balance at end of year | $ 26,786 | $ 6,027 | $ 722 |