UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑ Quarterly Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the quarterly period ended ~~September 30, 2020~~March 31, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission file number: 001-36053

FRANK'S INTERNATIONAL N.V.

(Exact name of registrant as specified in its charter)

The

Netherlands

98-1107145

(State or other jurisdiction of
incorporation or organization)

(IRS Employer
Identification number)

Mastenmakersweg 1

1786 PB

Den Helder

The

Netherlands

Not Applicable

(Address of principal executive offices)

(Zip Code)

Registrant’s telephone number, including area code: +31 (0)22 367 0000

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, €0.01 par value	FI	New York Stock Exchange

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

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

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

Large accelerated filer

☑☐

Accelerated filer

☐☑

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes ☐ No ☑

As of ~~October 27, 2020,~~April 29, 2021, there were ~~226,318,715~~227,712,419 shares of common stock, €0.01 par value per share, outstanding.


TABLE OF CONTENTS
		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements
	Condensed Consolidated Balance Sheets (Unaudited) at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020	3
	Condensed Consolidated Statements of Operations (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	4
	Condensed Consolidated Statements of Comprehensive Loss (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	5
	Condensed Consolidated Statements of Stockholders’ Equity (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	6
	Condensed Consolidated Statements of Cash Flows (Unaudited) for the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~	87
	Notes to the Unaudited Condensed Consolidated Financial Statements	98

Item 2.	Management’s Discussion and Analysis of Financial Condition and
	Results of Operations	2926

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4035

Item 4.	Controls and Procedures	4036

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	4137

Item 1A.	Risk Factors	4137

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4641

Item 6.	Exhibits	4741

Signatures		4843

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


FRANK’S INTERNATIONAL N.V.	FRANK’S INTERNATIONAL N.V.					FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED BALANCE SHEETS	CONDENSED CONSOLIDATED BALANCE SHEETS					CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)	(In thousands, except share data)					(In thousands, except share data)

		September 30,		December 31,			March 31,		December 31,
		2020		2019			2021		2020
Assets	Assets	(Unaudited)				Assets	(Unaudited)
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	205,900	$	195,383	Cash and cash equivalents	$	191,339	$	209,575
Restricted cash	Restricted cash	1,524		1,357		Restricted cash	1,656		1,672

Short-term investments						Short-term investments	2,252		2,252
Accounts receivables, net	Accounts receivables, net	99,821		166,694		Accounts receivables, net	116,581		110,607
Inventories, net	Inventories, net	82,817		78,829		Inventories, net	94,738		81,718
Assets held for sale	Assets held for sale	3,479		13,795		Assets held for sale	3,681		2,939
Other current assets	Other current assets	7,584		10,360		Other current assets	8,416		7,744
Total current assets	Total current assets	401,125		466,418		Total current assets	418,663		416,507

Property, plant and equipment, net	Property, plant and equipment, net	286,340		328,432		Property, plant and equipment, net	255,401		272,707
Goodwill	Goodwill	42,785		99,932		Goodwill	42,785		42,785
Intangible assets, net	Intangible assets, net	8,770		16,971		Intangible assets, net	11,062		7,897
Deferred tax assets, net	Deferred tax assets, net	16,874		16,590		Deferred tax assets, net	16,482		18,030
Operating lease right-of-use assets	Operating lease right-of-use assets	28,108		32,585		Operating lease right-of-use assets	27,972		28,116
Other assets	Other assets	29,770		33,237		Other assets	30,907		30,859
Total assets	Total assets	$	813,772	$	994,165	Total assets	$	803,272	$	816,901

Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Current liabilities:	Current liabilities:					Current liabilities:

Accounts payable and accrued liabilities	Accounts payable and accrued liabilities	$	91,514	$	120,321	Accounts payable and accrued liabilities	$	107,085	$	99,986
Current portion of operating lease liabilities	Current portion of operating lease liabilities	7,795		7,925		Current portion of operating lease liabilities	8,066		7,832
Deferred revenue	Deferred revenue	144		657		Deferred revenue	640		586
Other current liabilities						Other current liabilities	960		1,674
Total current liabilities	Total current liabilities	99,453		128,903		Total current liabilities	116,751		110,078

Deferred tax liabilities	Deferred tax liabilities	1,418		2,923		Deferred tax liabilities	0		1,548
Non-current operating lease liabilities	Non-current operating lease liabilities	21,656		24,969		Non-current operating lease liabilities	20,766		21,208
Other non-current liabilities	Other non-current liabilities	22,802		27,076		Other non-current liabilities	25,257		22,818
Total liabilities	Total liabilities	145,329		183,871		Total liabilities	162,774		155,652

Commitments and contingencies (Note 15)
Commitments and contingencies (Note 14)						Commitments and contingencies (Note 14)	0		0

Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Common stock, €0.01 par value, 798,096,000 shares authorized, 228,567,240 and 227,000,507 shares issued and 226,178,727 and 225,510,650 shares outstanding		2,863		2,846
Common stock, €0.01 par value, 798,096,000 shares authorized, 230,761,910 and 228,806,301 shares issued and 227,712,419 and 226,324,559 shares outstanding						Common stock, €0.01 par value, 798,096,000 shares authorized, 230,761,910 and 228,806,301 shares issued and 227,712,419 and 226,324,559 shares outstanding	2,890		2,866
Additional paid-in capital	Additional paid-in capital	1,085,160		1,075,809		Additional paid-in capital	1,091,028		1,087,733
Accumulated deficit	Accumulated deficit	(369,140)		(220,805)		Accumulated deficit	(401,232)		(377,346)
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(30,560)		(30,298)		Accumulated other comprehensive loss	(30,250)		(31,966)
Treasury stock (at cost), 2,388,513 and 1,489,857 shares		(19,880)		(17,258)
Treasury stock (at cost), 3,049,491 and 2,481,742 shares						Treasury stock (at cost), 3,049,491 and 2,481,742 shares	(21,938)		(20,038)
Total stockholders’ equity	Total stockholders’ equity	668,443		810,294		Total stockholders’ equity	640,498		661,249
Total liabilities and equity	Total liabilities and equity	$	813,772	$	994,165	Total liabilities and equity	$	803,272	$	816,901

The accompanying notes are an integral part of these condensed consolidated financial statements.


FRANK’S INTERNATIONAL N.V.	FRANK’S INTERNATIONAL N.V.									FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS	CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS									CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)	(In thousands, except per share data)									(In thousands, except per share data)
(Unaudited)	(Unaudited)									(Unaudited)

		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
Revenue:	Revenue:									Revenue:
Services	Services	$	66,418	$	119,572	$	246,084	$	362,069	Services		$	81,523	$	105,083
Products	Products	17,999		20,845		47,926		78,410		Products		13,288		18,409
Total revenue	Total revenue	84,417		140,417		294,010		440,479		Total revenue		94,811		123,492

Operating expenses:	Operating expenses:									Operating expenses:
Cost of revenue, exclusive of depreciation and amortization	Cost of revenue, exclusive of depreciation and amortization									Cost of revenue, exclusive of depreciation and amortization
Services	Services	56,574		86,745		197,005		255,769		Services		63,935		79,380
Products	Products	13,733		14,247		36,007		57,850		Products		10,914		13,988
General and administrative expenses	General and administrative expenses	18,665		26,921		67,634		96,358		General and administrative expenses		16,447		26,683
Depreciation and amortization	Depreciation and amortization	15,950		21,482		52,920		70,637		Depreciation and amortization		16,107		19,718
Goodwill impairment	Goodwill impairment	0		0		57,146		0		Goodwill impairment		0		57,146
Severance and other charges, net	Severance and other charges, net	3,549		5,222		29,436		6,492		Severance and other charges, net		7,376		20,725
(Gain) loss on disposal of assets	(Gain) loss on disposal of assets	(308)		603		(898)		984		(Gain) loss on disposal of assets		(182)		60
Operating loss	Operating loss	(23,746)		(14,803)		(145,240)		(47,611)		Operating loss		(19,786)		(94,208)

Other income (expense):	Other income (expense):									Other income (expense):
Tax receivable agreement related adjustments		0		0		0		220

Other income, net	Other income, net	109		1,620		2,291		2,818		Other income, net		125		2,026
Interest income (expense), net	Interest income (expense), net	(93)		563		618		1,757		Interest income (expense), net		(287)		533

Foreign currency gain (loss)		2,334		(3,872)		(5,865)		(4,050)
Total other income (expense)		2,350		(1,689)		(2,956)		745
Foreign currency loss										Foreign currency loss		(2,868)		(9,892)
Total other expense										Total other expense		(3,030)		(7,333)

Loss before income taxes	Loss before income taxes	(21,396)		(16,492)		(148,196)		(46,866)		Loss before income taxes		(22,816)		(101,541)
Income tax expense (benefit)	Income tax expense (benefit)	6,395		7,297		(182)		20,370		Income tax expense (benefit)		1,070		(15,563)
Net loss	Net loss	$	(27,791)	$	(23,789)	$	(148,014)	$	(67,236)	Net loss		$	(23,886)	$	(85,978)

Loss per common share:	Loss per common share:									Loss per common share:

Basic and diluted	Basic and diluted	$	(0.12)	$	(0.11)	$	(0.66)	$	(0.30)	Basic and diluted		$	(0.11)	$	(0.38)

Weighted average common shares outstanding:	Weighted average common shares outstanding:									Weighted average common shares outstanding:

Basic and diluted	Basic and diluted	226,143		225,415		225,951		225,043		Basic and diluted		227,019		225,505

The accompanying notes are an integral part of these condensed consolidated financial statements.


FRANK’S INTERNATIONAL N.V.	FRANK’S INTERNATIONAL N.V.									FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS	CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS									CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)	(In thousands)									(In thousands)
(Unaudited)	(Unaudited)									(Unaudited)

		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020

Net loss	Net loss	$	(27,791)	$	(23,789)	$	(148,014)	$	(67,236)	Net loss		$	(23,886)	$	(85,978)
Other comprehensive income (loss):
Other comprehensive income:										Other comprehensive income:
Foreign currency translation adjustments	Foreign currency translation adjustments	(547)		371		(262)		1,079		Foreign currency translation adjustments		1,716		424

Total other comprehensive income (loss)		(547)		371		(262)		1,079
Total other comprehensive income										Total other comprehensive income		1,716		424
Comprehensive loss	Comprehensive loss	$	(28,338)	$	(23,418)	$	(148,276)	$	(66,157)	Comprehensive loss		$	(22,170)	$	(85,554)

The accompanying notes are an integral part of these condensed consolidated financial statements.


FRANK’S INTERNATIONAL N.V.	FRANK’S INTERNATIONAL N.V.														FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY	CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY														CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)	(In thousands)														(In thousands)
(Unaudited)	(Unaudited)														(Unaudited)

		Nine Months Ended September 30, 2019														Three Months Ended March 31, 2020
									Accumulated														Accumulated
					Additional				Other				Total						Additional				Other				Total
		Common Stock			Paid-In		Accumulated		Comprehensive		Treasury		Stockholders’			Common Stock			Paid-In		Accumulated		Comprehensive		Treasury		Stockholders’
		Shares	Value		Capital		Deficit		Income (Loss)		Stock		Equity			Shares	Value		Capital		Deficit		Income (Loss)		Stock		Equity
Balances at December 31, 2018		224,290	$	2,829	$	1,062,794	$	16,860	$	(32,338)	$	(15,373)	$	1,034,772
Balances at December 31, 2019															Balances at December 31, 2019	225,511	$	2,846	$	1,075,809	$	(220,805)	$	(30,298)	$	(17,258)	$	810,294
Cumulative effect of accounting change	Cumulative effect of accounting change	—	—		—		(700)		—		—		(700)		Cumulative effect of accounting change	—	—		—		(321)		—		—		(321)
Net loss	Net loss	—	—		—		(28,287)		—		—		(28,287)		Net loss	—	—		—		(85,978)		—		—		(85,978)
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		250		—		250		Foreign currency translation adjustments	—	—		—		—		424		—		424

Equity-based compensation expense	Equity-based compensation expense	—	—		2,574		—		—		—		2,574		Equity-based compensation expense	—	—		2,146		—		—		—		2,146
Common shares issued upon vesting of share-based awards	Common shares issued upon vesting of share-based awards	720	8		(8)		—		—		—		0		Common shares issued upon vesting of share-based awards	937	10		(10)		—		—		—		0
Common shares issued for employee stock purchase plan	Common shares issued for employee stock purchase plan	154	2		690		—		—		—		692		Common shares issued for employee stock purchase plan	126	1		551		—		—		—		552
Treasury shares withheld	Treasury shares withheld	(220)	—		—		—		—		(1,452)		(1,452)		Treasury shares withheld	(293)	—		—		—		—		(1,056)		(1,056)
Balances at March 31, 2019		224,944	$	2,839	$	1,066,050	$	(12,127)	$	(32,088)	$	(16,825)	$	1,007,849
Net loss		—	—		—		(15,160)		—		—		(15,160)
Foreign currency translation adjustments		—	—		—		—		458		—		458
Reclassification of marketable securities		—	—		—		(1,636)		1,636		—		0
Equity-based compensation expense		—	—		3,017		—		—		—		3,017
Common shares issued upon vesting of share-based awards		186	2		(2)		—		—		—		0
Share repurchase program															Share repurchase program	(373)	—		—		—		—		(1,017)		(1,017)
Balances at March 31, 2020															Balances at March 31, 2020	225,908	$	2,857	$	1,078,496	$	(307,104)	$	(29,874)	$	(19,331)	$	725,044

Treasury shares withheld		(15)	—		—		—		—		(88)		(88)
Balances at June 30, 2019		225,115	$	2,841	$	1,069,065	$	(28,923)	$	(29,994)	$	(16,913)	$	996,076

																Three Months Ended March 31, 2021
																							Accumulated
																			Additional				Other				Total
																Common Stock			Paid-In		Accumulated		Comprehensive		Treasury		Stockholders’
																Shares	Value		Capital		Deficit		Income (Loss)		Stock		Equity
Balances at December 31, 2020															Balances at December 31, 2020	226,325	$	2,866	$	1,087,733	$	(377,346)	$	(31,966)	$	(20,038)	$	661,249

Net loss	Net loss	—	—		—		(23,789)		—		—		(23,789)		Net loss	—	—		—		(23,886)		—		—		(23,886)
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—		—		371		—		371		Foreign currency translation adjustments	—	—		—		—		1,716		—		1,716

Equity-based compensation expense	Equity-based compensation expense	—	—		2,647		—		—		—		2,647		Equity-based compensation expense	—	—		2,872		—		—		—		2,872
Common shares issued upon vesting of share-based awards	Common shares issued upon vesting of share-based awards	217	2		(2)		—		—		—		0		Common shares issued upon vesting of share-based awards	1,717	21		(21)		—		—		—		0
Common shares issued for employee stock purchase plan	Common shares issued for employee stock purchase plan	236	3		1,058		—		—		—		1,061		Common shares issued for employee stock purchase plan	238	3		444		—		—		—		447
Treasury shares withheld	Treasury shares withheld	(65)	—		—		—		—		(332)		(332)		Treasury shares withheld	(568)	—		—		—		—		(1,900)		(1,900)
Balances at September 30, 2019		225,503	$	2,846	$	1,072,768	$	(52,712)	$	(29,623)	$	(17,245)	$	976,034

Balances at March 31, 2021															Balances at March 31, 2021	227,712	$	2,890	$	1,091,028	$	(401,232)	$	(30,250)	$	(21,938)	$	640,498

The accompanying notes are an integral part of these condensed consolidated financial statements.

FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY
(In thousands)
(Unaudited)
Nine Months Ended September 30, 2020
Accumulated
Additional Other Total
Common Stock Paid-In Accumulated Comprehensive Treasury Stockholders’
Shares Value Capital Deficit Income (Loss) Stock Equity
Balances at December 31, 2019 225,511 $ 2,846 $ 1,075,809 $ (220,805) $ (30,298) $ (17,258) $ 810,294
Cumulative effect of accounting change — — — (321) — — (321)
Net loss — — — (85,978) — — (85,978)
Foreign currency translation adjustments — — — — 424 — 424
Equity-based compensation expense — — 2,146 — — — 2,146
Common shares issued upon vesting of share-based awards 937 10 (10) — — — 0
Common shares issued for employee stock purchase plan 126 1 551 — — — 552
Treasury shares withheld (293) — — — — (1,056) (1,056)
Share repurchase program (373) — — — — (1,017) (1,017)
Balances at March 31, 2020 225,908 $ 2,857 $ 1,078,496 $ (307,104) $ (29,874) $ (19,331) $ 725,044
Net loss — — — (34,245) — — (34,245)
Foreign currency translation adjustments — — — — (139) — (139)
Equity-based compensation expense — — 3,515 — — — 3,515
Common shares issued upon vesting of share-based awards 229 3 (3) — — — 0
Treasury shares withheld (13) — — — — (31) (31)
Share repurchase program (197) — — — — (480) (480)
Balances at June 30, 2020 225,927 $ 2,860 $ 1,082,008 $ (341,349) $ (30,013) $ (19,842) $ 693,664
Net loss — — — (27,791) — — (27,791)
Foreign currency translation adjustments — — — — (547) — (547)
Equity-based compensation expense — — 2,773 — — — 2,773
Common shares issued upon vesting of share-based awards 59 1 (1) — — — 0
Common shares issued for employee stock purchase plan 215 2 380 — — — 382
Treasury shares withheld (22) — — — — (38) (38)
Balances at September 30, 2020 226,179 $ 2,863 $ 1,085,160 $ (369,140) $ (30,560) $ (19,880) $ 668,443


FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

	Three Months Ended
	March 31,
	2021		2020
Cash flows from operating activities
Net loss	$	(23,886)	$	(85,978)
Adjustments to reconcile net loss to cash from operating activities

Depreciation and amortization	16,107		19,718
Equity-based compensation expense	2,872		2,146
Goodwill impairment	0		57,146
Loss on asset impairments and retirements	307		20,187
Amortization of deferred financing costs	97		97
Deferred tax provision (benefit)	0		(1,690)
Provision for bad debts	209		1,280
(Gain) loss on disposal of assets	(182)		60
Changes in fair value of investments	(395)		2,411


Other	0		(381)
Changes in operating assets and liabilities
Accounts receivable	(6,806)		(16,129)
Inventories	(12,463)		(1,855)
Other current assets	(675)		(814)
Other assets	267		139
Accounts payable and accrued liabilities	9,192		(14,860)
Deferred revenue	53		67
Other non-current liabilities	(178)		(3,796)
Net cash used in operating activities	(15,481)		(22,252)

Cash flows from investing activities
Purchases of property, plant and equipment	(2,346)		(9,968)
Proceeds from sale of assets	2,073		70


Investment in intellectual property	(1,608)		0
Other	(75)		(141)
Net cash used in investing activities	(1,956)		(10,039)

Cash flows from financing activities
Repayments of borrowings	(712)		0

Treasury shares withheld for taxes	(1,900)		(1,056)
Treasury share repurchase	0		(1,017)
Proceeds from the issuance of ESPP shares	447		552

Net cash used in financing activities	(2,165)		(1,521)
Effect of exchange rate changes on cash	1,350		9,327
Net decrease in cash, cash equivalents and restricted cash	(18,252)		(24,485)
Cash, cash equivalents and restricted cash at beginning of period	211,247		196,740
Cash, cash equivalents and restricted cash at end of period	$	192,995	$	172,255

The accompanying notes are an integral part of these condensed consolidated financial statements.

FRANK’S INTERNATIONAL N.V.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Nine Months Ended
September 30,
2020 2019
Cash flows from operating activities
Net loss $ (148,014) $ (67,236)
Adjustments to reconcile net loss to cash from operating activities
Depreciation and amortization 52,920 70,637
Equity-based compensation expense 8,434 8,238
Goodwill impairment 57,146 0
Loss on asset impairments and retirements 20,532 4,268
Amortization of deferred financing costs 291 274
Deferred tax provision (benefit) (1,783) 3,887
Provision for (recovery of) bad debts 980 (27)
(Gain) loss on disposal of assets (898) 984
Changes in fair value of investments 218 (1,935)
Unrealized gain on derivative instruments 0 (349)
Other (380) (566)
Changes in operating assets and liabilities
Accounts receivable 63,307 9,872
Inventories (3,625) (14,191)
Other current assets 2,567 2,537
Other assets 667 179
Accounts payable and accrued liabilities (22,486) (7,844)
Deferred revenue (513) 110
Other non-current liabilities (4,048) (353)
Net cash provided by operating activities 25,315 8,485
Cash flows from investing activities
Purchases of property, plant and equipment and intangibles (25,722) (26,979)
Proceeds from sale of assets 7,037 353
Proceeds from sale of investments 2,832 46,739
Purchase of investments 0 (20,304)
Other (356) 0
Net cash used in investing activities (16,209) (191)
Cash flows from financing activities
Repayments of borrowings 0 (5,110)
Treasury shares withheld for taxes (1,125) (1,874)
Treasury share repurchase (1,498) 0
Proceeds from the issuance of ESPP shares 934 1,752
Deferred financing costs 0 (184)
Net cash used in financing activities (1,689) (5,416)
Effect of exchange rate changes on cash 3,267 2,684
Net increase in cash, cash equivalents and restricted cash 10,684 5,562
Cash, cash equivalents and restricted cash at beginning of period 196,740 186,212
Cash, cash equivalents and restricted cash at end of period $ 207,424 $ 191,774

~~The accompanying notes are an integral part of these condensed consolidated financial statements.~~

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1—Basis of Presentation

Nature of Business

Frank’s International N.V. (“FINV”), “Frank's” or the “Company”, as the context requires), a limited liability company organized under the laws of the Netherlands, is a global provider of highly engineered tubular services, tubular fabrication and specialty well construction and well intervention solutions to the oil and gas industry. FINV provides services and products to leading exploration and production companies in both offshore and onshore environments with a focus on complex and technically demanding wells.

The impact of the Coronavirus Disease 2019 (“~~Covid-19”~~COVID-19”) pandemic and related economic, business and market disruptions is evolving rapidly, and its future effects are uncertain. The actual impact of these recent developments on our business will depend on many factors, many of which are beyond management's control and knowledge. It is therefore difficult for management to assess or predict with accuracy the broad future effects of this health crisis on the global economy, the energy industry or the Company. As additional information becomes available, events or circumstances change and strategic operational decisions are made by management, further adjustments may be required which could have a material adverse impact on the Company's consolidated financial position, results of operations and cash flows.

Pending Merger with Expro Group Holdings International Limited

On March 10, 2021, FINV and New Eagle Holdings Limited, an exempted company limited by shares incorporated under the laws of the Cayman Islands and a direct wholly owned subsidiary of FINV (“Merger Sub”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Expro Group Holdings International Limited, an exempted company limited by shares incorporated under the laws of the Cayman Islands (“Expro”), pursuant to which Expro will merge with and into Merger Sub, with Merger Sub surviving the merger as a direct, wholly owned subsidiary of FINV (the “Merger”). If the Merger is completed, each ordinary share of Expro common stock, par value $0.01 per share (“Expro Ordinary Shares”), issued and outstanding immediately prior to the effective time of the Merger (the “Effective Time”), will be converted into the right to receive a number of shares of Frank’s common stock equal to 7.2720 (subject to certain adjustments under the Merger Agreement, the “Exchange Ratio”). Upon consummation of the transactions contemplated by the Merger Agreement and the Plan of Merger (as defined in the Merger Agreement) (collectively, the “Transactions”), FINV expects that its current shareholders will own approximately 35% of the Company after completion of the Merger and related transactions (such entity, the “Combined Company”), and current Expro shareholders will own approximately 65% of the Combined Company. Following the Merger, the name of FINV will be changed to “Expro Group Holdings N.V.” The closing of the Transactions, which is expected to occur during the third quarter of 2021, is subject to the satisfaction or waiver of closing conditions, including, among others, the requisite approval of the shareholders of each of FINV and Expro pursuant to the terms of the Merger Agreement.

The Merger Agreement contains termination rights for each of FINV and Expro, including, among others, a termination right for each party if the consummation of the Merger does not occur on or before 5:00 p.m. Houston, Texas time on October 31, 2021 (the “End Date”), subject to certain exceptions; provided, that if as of the End Date, all of the conditions precedent to closing of the Transactions under the Merger Agreement, other than certain specified conditions, have been satisfied, the End Date will automatically be extended to January 31, 2022. Upon termination of the Merger Agreement under specified circumstances, including, generally, the termination by Expro in the event of FINV's entry into an agreement with respect to an alternative acquisition proposal, or a change of recommendation by the FINV board of supervisory directors and the board of managing directors of FINV (collectively, the “Board”) in each case, prior to the time the FINV shareholder approval is obtained, FINV would be required to pay Expro a termination fee of $37.5 million. Upon termination of the Merger Agreement under specified circumstances, including, generally, the termination by FINV in the event of Expro’s entry into an agreement with respect to an alternative acquisition proposal, or a change of recommendation by Expro’s board of directors (the “Expro Board”), in each case, prior to the time the Expro shareholder approval is obtained, Expro would be required to pay FINV a termination fee of $71.5 million.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

In connection with the Merger Agreement, FINV, Frank’s International C.V. (“FICV”) and Mosing Holdings, LLC (“Mosing Holdings”) entered into an Amended and Restated Tax Receivable Agreement (the “A&R TRA”). Pursuant to the A&R TRA, FINV, FICV and Mosing Holdings have agreed, among other things to settle the early termination payment obligation that would otherwise be owed to Mosing Holdings under the TRA as a result of the Merger by the payment by FINV to Mosing Holdings of (i) $15 million cash at the closing of the Transactions and (ii) certain other contingent payments in the future in the event the Combined Company realizes cash tax savings from tax attributes covered under the TRA during the ten year period following the Closing Date in excess of $18,057,000, as more fully described in the A&R TRA. The terms of the A&R TRA are conditioned upon and subject to the closing of the Transactions and the payment to Mosing Holdings of the $15 million cash payment at the closing of the Transactions. If such conditions do not occur, the A&R TRA will be terminated and will be null and void and the TRA will remain in effect in accordance with its terms.

Basis of Presentation

The condensed consolidated financial statements of FINV for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ include the activities of FINV, ~~Frank’s International C.V. (“FICV”),~~FICV, Blackhawk Group Holdings, LLC (“Blackhawk”) and their wholly owned subsidiaries (either individually or together, as context requires, the “Company,” “we,” “us” or “our”). All intercompany accounts and transactions have been eliminated for purposes of preparing these condensed consolidated financial statements.

Our accompanying condensed consolidated financial statements have not been audited by our independent registered public accounting firm. The consolidated balance sheet at December 31, ~~2019~~2020 is derived from audited financial statements. However, certain information and footnote disclosures required by generally accepted accounting principles in the United States of America (“GAAP”) for complete annual financial statements have been omitted and, therefore, these interim financial statements should be read in conjunction with our audited consolidated financial statements and notes thereto for the year ended December 31, ~~2019,~~2020, which are included in our most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission (“SEC”) on ~~February 25, 2020~~March 1, 2021 (“Annual Report”). In the opinion of management, these condensed consolidated financial statements, which have been prepared pursuant to the rules of the SEC and GAAP for interim financial reporting, reflect all adjustments, which consisted only of normal recurring adjustments that were necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year.

The condensed consolidated financial statements have been prepared on a historical cost basis using the United States dollar as the reporting currency. Our functional currency is primarily the United States dollar.

Reclassifications

Certain prior-period amounts have been reclassified to conform to the current period’s presentation. These reclassifications had no impact on our operating income (loss), net income (loss), working capital, cash flows or total equity previously reported.

Recent Accounting Pronouncements

Changes to GAAP are established by the Financial Accounting Standards Board (“FASB”) generally in the form of accounting standards updates (“ASUs”) to the FASB’s Accounting Standards Codification.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

We consider the applicability and impact of all accounting pronouncements. ASUs not listed below were assessed and were either determined to be not applicable or are expected to have immaterial impact on our consolidated financial position, results of operations and cash flows.

In June 2016, the FASB issued new accounting guidance for credit losses on financial instruments. The guidance includes the replacement of the “incurred loss” approach for recognizing credit losses on financial assets, including trade receivables, with a methodology that reflects expected credit losses, which considers historical and

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

current information as well as reasonable and supportable forecasts. We adopted the guidance on January 1, 2020 and the adoption did not have a material impact on our consolidated financial statements. The new credit loss standard is expected to accelerate recognition of credit losses on our accounts receivable. See Note 3—Accounts Receivable, net for additional information regarding allowance for credit losses on our accounts receivable.

Note 2—Cash, Cash Equivalents and Restricted Cash

Amounts reported in the condensed consolidated balance sheets and condensed consolidated statements of cash flows as cash, cash equivalents and restricted cash at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows (in thousands):


		September 30,		December 31,			March 31,		December 31,
		2020		2019			2021		2020
Cash and cash equivalents	Cash and cash equivalents	$	205,900	$	195,383	Cash and cash equivalents	$	191,339	$	209,575
Restricted cash	Restricted cash	1,524		1,357		Restricted cash	1,656		1,672
Total cash, cash equivalents and restricted cash shown in the statements of cash flows	Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	207,424	$	196,740	Total cash, cash equivalents and restricted cash shown in the statements of cash flows	$	192,995	$	211,247

Restricted cash primarily consists of cash deposits that collateralize our credit card program. Cash paid (received) for income taxes, net, was ~~$(5.5)~~$2.5 million and ~~$7.9~~$1.1 million for the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ respectively.

Note 3—Accounts Receivable, net

Accounts receivable at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 were as follows (in thousands):


		September 30,		December 31,			March 31,		December 31,
		2020		2019			2021		2020
Trade accounts receivable, net of allowance for credit losses of $4,142 and $5,129, respectively		$	61,619	$	101,718
Trade accounts receivable, net of allowance for credit losses of $4,112 and $3,857, respectively						Trade accounts receivable, net of allowance for credit losses of $4,112 and $3,857, respectively	$	67,171	$	65,684
Unbilled receivables	Unbilled receivables	23,050		43,422		Unbilled receivables	29,923		26,215
Taxes receivable	Taxes receivable	11,219		18,516		Taxes receivable	15,392		14,292
Affiliated (1)	Affiliated (1)	549		549		Affiliated (1)	549		549
Other receivables	Other receivables	3,384		2,489		Other receivables	3,546		3,867
Total accounts receivable, net	Total accounts receivable, net	$	99,821	$	166,694	Total accounts receivable, net	$	116,581	$	110,607

(1)Amounts represent expenditures on behalf of non-consolidated affiliates.

~~We estimate current expected credit losses on our accounts receivable~~

Note 4—Inventories, net

Inventories at ~~each reporting date. We estimate current expected credit losses based on our credit loss history, adjusted for current factors including global economic~~March 31, 2021 and ~~business conditions, oil and natural gas industry and market conditions and customer mix. During the three months ended September 30,~~December 31, 2020 ~~$2.4 million was written off against the allowance for credit losses.~~were as follows (in thousands):


	March 31,		December 31,
	2021		2020
Pipe and connectors, net of allowance of $16,561 and $16,819, respectively	$	32,690	$	22,642
Finished goods, net of allowance of $84 and $84, respectively	20,999		22,715
Work in progress	1,954		1,730
Raw materials, components and supplies	39,095		34,631
Total inventories, net	$	94,738	$	81,718

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note ~~4—Inventories, net~~

~~Inventories at September 30, 2020 and December 31, 2019 were as follows (in thousands):~~

September 30, December 31,
2020 2019
Pipe and connectors, net of allowance of $17,622 and $18,287, respectively $ 22,187 $ 21,779
Finished goods, net of allowance of $84 and $485, respectively 23,229 25,628
Work in progress 2,501 3,663
Raw materials, components and supplies 34,900 27,759
Total inventories, net $ 82,817 $ 78,829

~~Note~~ 5—Property, Plant and Equipment

The following is a summary of property, plant and equipment at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):


		Estimated Useful Lives in Years	September 30, 2020		December 31, 2019			Estimated Useful Lives in Years	March 31, 2021		December 31, 2020
Land	Land	—	$	30,362	$	30,724	Land	—	$	31,080	$	30,869
Land improvements	Land improvements	8-15	7,676		7,193		Land improvements	8-15	7,688		7,620
Buildings and improvements	Buildings and improvements	13-39	119,624		116,182		Buildings and improvements	13-39	118,592		121,105
Rental machinery and equipment	Rental machinery and equipment	5-7	892,371		882,979		Rental machinery and equipment	2-7	906,117		897,398
Machinery and equipment - other	Machinery and equipment - other	7	57,430		60,182		Machinery and equipment - other	7	54,869		54,842
Furniture, fixtures and computers	Furniture, fixtures and computers	5	17,208		17,251		Furniture, fixtures and computers	3-5	19,756		16,928
Automobiles and other vehicles	Automobiles and other vehicles	5	26,442		28,734		Automobiles and other vehicles	5	25,894		25,948
Leasehold improvements	Leasehold improvements	7-15, or lease term if shorter	13,445		14,258		Leasehold improvements	7-15, or lease term if shorter	12,754		12,773
Construction in progress - machinery and equipment	Construction in progress - machinery and equipment	—	29,264		46,564		Construction in progress - machinery and equipment	—	12,412		24,381
			1,193,822		1,204,067				1,189,162		1,191,864
Less: Accumulated depreciation	Less: Accumulated depreciation		(907,482)		(875,635)		Less: Accumulated depreciation		(933,761)		(919,157)
Total property, plant and equipment, net	Total property, plant and equipment, net		$	286,340	$	328,432	Total property, plant and equipment, net		$	255,401	$	272,707

During the ~~nine~~three months ended ~~September 30,~~March 31, 2020, we recorded fixed asset impairment charges of ~~$15.6~~$15.5 million primarily associated with construction in progress in our Cementing Equipment segment, which is included in severance and other charges, net on our condensed consolidated statements of operations. During the first quarter of 2020, the results of the Company's test for impairment of goodwill in the Cementing Equipment segment as a result of negative market indicators was a triggering event that indicated that our long-lived tangible assets in this segment were impaired. Impairment testing performed in the first quarter of 2020 resulted in the determination that certain long-lived assets were not recoverable and that the estimated fair value was below the carrying value. Please see Note 15—Severance and Other Charges, net for additional details. NaN impairments associated with held for use assets were recognized during the three ~~and nine~~ months ended ~~September 30, 2019. Please see Note 16—Severance and Other Charges, net for additional details.~~March 31, 2021.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

During the ~~second~~first quarter of ~~2019, we sold~~2021, a building ~~classified as held for sale for~~with a net book value of $1.9 million was sold, resulting in a gain of $0.2 ~~million and recorded an immaterial loss. During the third quarter~~million. In addition, a building with a net book value of ~~2019, an additional building~~$2.6 million met the criteria to be classified as held for sale and a $4.0 million impairment loss was recorded, which is included in severance and other charges, net on our condensed consolidated statements of operations. The building's remaining net book value of $5.3 million was reclassified from property, plant and equipment to assets held for sale on our condensed consolidated balance sheets. During the third quarter of 2020, we determined this building no longer met the held for sale criteria, and reclassified the fair value of $5.3 million from assets held for sale to property, plant and equipment on our condensed consolidated balance sheets. During the second quarter of 2020, we sold a building classified as held for sale for $5.4 million and recorded a gain of $0.6 million.sheet.

The following table presents the depreciation and amortization expense associated with each line item for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2021 and 2020 ~~and 2019~~ (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
Services	Services	$	14,582	$	18,224	$	47,616	$	60,636	Services		$	14,472	$	17,263
Products	Products	144		376		567		1,235		Products		138		239
General and administrative expenses	General and administrative expenses	1,224		2,882		4,737		8,766		General and administrative expenses		1,497		2,216
Total	Total	$	15,950	$	21,482	$	52,920	$	70,637	Total		$	16,107	$	19,718

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 6—Goodwill and Intangible Assets

Goodwill

Goodwill is not subject to amortization and is tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. A qualitative assessment is allowed to determine if goodwill is potentially impaired. We have the option to bypass the qualitative assessment for any reporting unit in any period and proceed directly to performing the quantitative goodwill impairment test. The qualitative assessment determines whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount. If it is more likely than not that the fair value of the reporting unit is less than the carrying amount, then a quantitative impairment test is performed. The quantitative goodwill impairment test is used to identify both the existence of impairment and the amount of impairment loss. The test compares the fair value of a reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit is less than its carrying value, an impairment loss is recorded based on that difference. We complete our assessment of goodwill impairment as of October 31 each year.

As a result of the decline in oil prices due to the ongoing ~~Covid-19~~COVID-19 pandemic and the Organization of Petroleum Exporting Countries (“OPEC”) and Russia price war ~~earlier this year,~~in early 2020, we identified that it was more likely than not that the fair value of goodwill within our Cementing Equipment reporting unit was less than its carrying value. Based on the result of our goodwill impairment test as of March 31, 2020, we recorded a $57.1 million impairment charge to goodwill, which is included in goodwill impairment on the condensed consolidated statements of operations.

We used the income approach to estimate the fair value of the Cementing Equipment reporting unit, but also considered the market approach to validate the results. The income approach estimates the fair value by discounting the reporting unit’s estimated future cash flows using an estimated discount rate, or expected return, that a marketplace participant would have required as of the valuation date. The market approach includes the use of comparative multiples to corroborate the discounted cash flow results and involves significant judgment in the selection of the appropriate peer group companies and valuation multiples. The inputs used in the determination of fair value are generally level 3 inputs.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Some of the more significant assumptions inherent in the income approach include the estimated future net annual cash flows for the reporting unit and the discount rate. We selected the assumptions used in the discounted cash flow projections using historical data supplemented by current and anticipated market conditions and estimated growth rates. Our estimates are based upon assumptions believed to be reasonable. However, given the inherent uncertainty in determining the assumptions underlying a discounted cash flow analysis, actual results may differ from those used in our valuation which could result in additional impairment charges in the future. Assuming all other assumptions and inputs used in the discounted cash flow analysis were held constant, a 50 basis point increase in the discount rate assumption would have increased the goodwill impairment charge by approximately $4.3 million.

NaN goodwill impairment was recorded during the three months ended ~~September 30, 2020 or the three and nine months ended September 30, 2019.~~March 31, 2021. At ~~September 30, 2020,~~March 31, 2021, goodwill is allocated to our reportable segments as follows: Cementing Equipment - approximately $24.1 million; Tubular Running Services - approximately $18.7 million.

Intangible Assets

Identifiable intangible assets are amortized using the straight-line method over the estimated useful lives of the assets. We evaluate impairment of our intangible assets on an asset group basis whenever circumstances indicate that the carrying value may not be recoverable. Intangible assets deemed to be impaired are written down to their fair value using a discounted cash flow model and, if available, comparable market values.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table provides information related to our intangible assets as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 (in thousands):


		September 30, 2020						December 31, 2019							March 31, 2021						December 31, 2020
		Gross Carrying Amount		Accumulated Amortization		Total		Gross Carrying Amount		Accumulated Amortization		Total			Gross Carrying Amount		Accumulated Amortization		Total		Gross Carrying Amount		Accumulated Amortization		Total
Customer Relationships	Customer Relationships	$	28,300	$	(25,938)	$	2,362	$	32,890	$	(23,946)	$	8,944	Customer Relationships	$	28,300	$	(26,917)	$	1,383	$	28,300	$	(26,324)	$	1,976

Intellectual Property	Intellectual Property	13,860		(7,452)		6,408		14,029		(6,002)		8,027		Intellectual Property	18,136		(8,457)		9,679		13,860		(7,939)		5,921

Total intangible assets	Total intangible assets	$	42,160	$	(33,390)	$	8,770	$	46,919	$	(29,948)	$	16,971	Total intangible assets	$	46,436	$	(35,374)	$	11,062	$	42,160	$	(34,263)	$	7,897

Our intangible assets are primarily associated with our Cementing Equipment ~~segment.~~and Tubular Running Services segments. Amortization expense for intangible assets was ~~$0.9~~$1.1 million and ~~$2.8~~$1.7 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $3.5 million and $8.5 million for the nine months ended September 30, 2020 and 2019,~~ respectively. During the first quarter of 2020, the results of the Company's test for impairment of goodwill in the Cementing Equipment segment as a result of the negative market indicators described above was a triggering event that indicated that our intangible assets in this segment were impaired. Impairment testing performed in the first quarter resulted in the determination that certain intangible assets were not recoverable and that the estimated fair value was below the carrying value. As a result, during the ~~nine~~three months ended ~~September 30,~~March 31, 2020, impairment charges of $4.7 million were recorded associated with certain customer relationships and intellectual property intangible assets in our Cementing Equipment segment, which are included in severance and other charges, net on the condensed consolidated statements of operations. NaN intangible asset impairment was recorded during the three months ended ~~September 30, 2020 or the three and nine months ended September 30, 2019.~~March 31, 2021. Please see Note ~~16—~~15—Severance and Other Charges, net for additional details.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Note 7—Other Assets

Other assets at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 consisted of the following (in thousands):


		September 30,		December 31,			March 31,		December 31,
		2020		2019			2021		2020
Cash surrender value of life insurance policies (1)	Cash surrender value of life insurance policies (1)	$	24,813	$	27,313	Cash surrender value of life insurance policies (1)	$	26,586	$	26,167
Deposits	Deposits	2,126		2,119		Deposits	2,023		2,182
Other	Other	2,831		3,805		Other	2,298		2,510
Total other assets	Total other assets	$	29,770	$	33,237	Total other assets	$	30,907	$	30,859

(1)See Note 10—Fair Value Measurements for additional information.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 8—Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities at ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019~~2020 consisted of the following (in thousands):


		September 30,		December 31,			March 31,		December 31,
		2020		2019			2021		2020
Accounts payable	Accounts payable	$	17,656	$	16,793	Accounts payable	$	30,999	$	22,277
Accrued compensation	Accrued compensation	23,495		23,988		Accrued compensation	22,884		23,212
Accrued property and other taxes	Accrued property and other taxes	13,802		20,099		Accrued property and other taxes	13,294		14,420
Accrued severance and other charges	Accrued severance and other charges	2,344		5,837		Accrued severance and other charges	97		2,666
Income taxes	Income taxes	22,196		19,166		Income taxes	14,364		16,029
Affiliated (1)	Affiliated (1)	2,091		1,694		Affiliated (1)	2,238		2,513
Accrued purchase orders and other	Accrued purchase orders and other	9,930		32,744		Accrued purchase orders and other	23,209		18,869
Total accounts payable and accrued liabilities	Total accounts payable and accrued liabilities	$	91,514	$	120,321	Total accounts payable and accrued liabilities	$	107,085	$	99,986

(1)Represents amounts owed to non-consolidated affiliates.

Note 9—Debt

Credit Facility

Asset Based Revolving Credit Facility

On November 5, 2018, FICV, Frank’s International, LLC and Blackhawk, as borrowers, and FINV, certain of FINV’s subsidiaries, including FICV, Frank’s International, LLC, Blackhawk, Frank’s International GP, LLC, Frank’s International, LP, Frank’s International LP B.V., Frank’s International Partners B.V., Frank’s International Management B.V., Blackhawk Intermediate Holdings, LLC, Blackhawk Specialty Tools, LLC, and Trinity Tool Rentals, L.L.C., as guarantors, entered into a 5-year senior secured revolving credit facility (the “ABL Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent (the “ABL Agent”), and other financial institutions as lenders with total commitments of $100.0 million including up to $15.0 million available for letters of credit. Subject to the terms of the ABL Credit Facility, we have the ability to increase the commitments to $200.0 million. The maximum amount that the Company may borrow under the ABL Credit Facility is subject to a borrowing base, which is based on a percentage of certain eligible accounts receivable and eligible inventory, subject to customary reserves and other adjustments.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Frank’s International, LP, Frank’s International LP B.V., Frank’s International Partners B.V., Frank’s International Management B.V., Blackhawk Intermediate Holdings, LLC, Blackhawk Specialty Tools, LLC, and Trinity Tool Rentals, L.L.C., subject to customary exceptions and exclusions. In addition, the obligations under the ABL Credit Facility are secured by first priority liens on substantially all of the assets and property of the borrowers and guarantors, including pledges of equity interests in certain of FINV’s subsidiaries, subject to certain exceptions. Borrowings under the ABL Credit Facility bear interest at FINV’s option at either (a) the Alternate Base Rate (“ABR”) (as defined therein), calculated as the greatest of (i) the rate of interest publicly quoted by the Wall Street Journal, as the “prime rate,” subject to each increase or decrease in such prime rate effective as of the date such change occurs, (ii) the federal funds effective rate that is subject to a 0.00% interest rate floor plus 0.50%, and (iii) the one-month Adjusted LIBO Rate (as defined therein) plus 1.00%, or (b) the Adjusted LIBO Rate, plus, in each case, an applicable margin. The applicable interest rate margin ranges from 1.00% to 1.50% per annum for ABR loans and 2.00% to 2.50% per annum for Eurodollar loans and, in each case, is based on FINV’s leverage ratio. The unused portion of the ABL Credit Facility is subject to a commitment fee that varies from 0.250% to 0.375% per

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

annum, according to average daily unused commitments under the ABL Credit Facility. Interest on Eurodollar loans is payable at the end of the selected interest period, but no less frequently than quarterly. Interest on ABR loans is payable monthly in arrears.

The ABL Credit Facility contains various covenants and restrictive provisions which limit, subject to certain customary exceptions and thresholds, FINV’s ability to, among other things, (1) enter into asset sales; (2) incur additional indebtedness; (3) make investments, acquisitions, or loans and create or incur liens; (4) pay certain dividends or make other distributions and (5) engage in transactions with affiliates. The ABL Credit Facility also requires FINV to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0 based on the ratio of (a) consolidated EBITDA (as defined therein) minus unfinanced capital expenditures to (b) Fixed Charges (as defined therein), when either (i) an event of default occurs under the ABL Credit Facility or (ii) availability under the ABL Credit Facility falls for at least 2 consecutive calendar days below the greater of (A) $12.5 million and (B) 15% of the lesser of the borrowing base and aggregate commitments (a “FCCR Trigger Event”). Accounts receivable received by FINV’s U.S. subsidiaries that are parties to the ABL Credit Facility will be deposited into deposit accounts subject to deposit control agreements in favor of the ABL Agent. After a FCCR Trigger Event, these deposit accounts would be subject to “springing” cash dominion. After a FCCR Trigger Event, the Company will be subject to compliance with the fixed charge coverage ratio and “springing” cash dominion until no default exists under the ABL Credit Facility and availability under the facility for the preceding 30 consecutive days has been equal to at least the greater of (x) $12.5 million and (y) 15% of the lesser of the borrowing base and the aggregate commitments. If FINV fails to perform its obligations under the agreement that results in an event of default, the commitments under the ABL Credit Facility could be terminated and any outstanding borrowings under the ABL Credit Facility may be declared immediately due and payable. The ABL Credit Facility also contains cross default provisions that apply to FINV’s other indebtedness.

As of ~~September 30, 2020,~~March 31, 2021, FINV had 0 borrowings outstanding under the ABL Credit Facility, letters of credit outstanding of ~~$9.1~~$10.3 million and availability of ~~$30.2~~$23.5 million.

In connection with the closing of the Merger, Frank’s expects that the Combined Company will enter into a new revolving credit facility and terminate or otherwise replace the existing Frank’s and Expro credit facilities.

Note 10—Fair Value Measurements

We follow fair value measurement authoritative accounting guidance for measuring fair values of assets and liabilities in financial statements. We have consistently used the same valuation techniques for all periods presented. Please see Note 109—Fair Value Measurements in our Annual Report for further discussion.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

A summary of financial assets and liabilities that are measured at fair value on a recurring basis, as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019,~~2020, were as follows (in thousands):

Quoted Prices
in Active
Markets Significant
Other
Observable
Inputs Significant
Unobservable
Inputs
(Level 1) (Level 2) (Level 3) Total
September 30, 2020
Assets:
Investments:
Cash surrender value of life insurance policies - deferred compensation plan $ 0 $ 24,813 $ 0 $ 24,813
Marketable securities - other 2 0 0 2
Liabilities:
Deferred compensation plan 0 19,558 0 19,558
December 31, 2019
Assets:
Investments:
Cash surrender value of life insurance policies - deferred compensation plan $ 0 $ 27,313 $ 0 $ 27,313
Marketable securities - other 8 0 0 8
Liabilities:
Derivative financial instruments 0 324 0 324
Deferred compensation plan 0 23,251 0 23,251

Our derivative financial instruments consist of short-duration foreign currency forward contracts. The fair value of our derivative financial instruments is based on quoted market values including foreign exchange forward rates and interest rates. The fair value is computed by discounting the projected future cash flow amounts to present value. Derivative financial instruments are included in accounts payable and accrued liabilities at December 31, 2019.


	Quoted Prices in Active Markets		Significant Other Observable Inputs		Significant Unobservable Inputs
	(Level 1)		(Level 2)		(Level 3)		Total
March 31, 2021
Assets:

Investments:
Cash surrender value of life insurance policies - deferred compensation plan	$	0	$	26,586	$	0	$	26,586
Marketable securities - other	2		0		0		2
Liabilities:

Deferred compensation plan	0		20,125		0		20,125

December 31, 2020
Assets:

Investments:
Cash surrender value of life insurance policies - deferred compensation plan	$	0	$	26,167	$	0	$	26,167
Marketable securities - other	3		0		0		3
Liabilities:

Deferred compensation plan	0		20,271		0		20,271

Our investments associated with our deferred compensation plan consist primarily of the cash surrender value of life insurance policies and are included in other assets on the condensed consolidated balance sheets. Our investments change as a result of contributions, payments, and fluctuations in the market. Our liabilities associated with our deferred compensation plan are included in other non-current liabilities on the condensed consolidated balance sheets. Assets and liabilities, measured using significant observable inputs, are reported at fair value based on third-party broker statements, which are derived from the fair value of the funds’ underlying investments. We also have marketable securities in publicly traded equity securities as an indirect result of strategic investments. They are reported at fair value based on the price of the stock and are included in other assets on the condensed consolidated balance sheets.

Assets and Liabilities Measured at Fair Value on a Non-recurring Basis

We apply the provisions of the fair value measurement standard to our non-recurring, non-financial measurements including business combinations and assets identified as held for sale, as well as impairment related to goodwill and other long-lived assets.

We perform our goodwill impairment assessment for each reporting unit by comparing the estimated fair value of each reporting unit to the reporting unit’s carrying value, including goodwill. We estimate the fair value for each reporting unit using a discounted cash flow analysis based on management’s short-term and long-term forecast of operating performance. This analysis includes significant assumptions regarding discount rates, revenue growth

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

rates, expected profitability margins, forecasted capital expenditures and the timing of expected future cash flows based on market conditions. If the estimated fair value of a reporting unit exceeds its carrying amount, goodwill of the reporting unit is not considered impaired. If the carrying amount of a reporting unit exceeds its estimated fair value, an impairment loss is measured and recorded.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

When conducting an impairment test on long-lived assets, other than goodwill, we first compare estimated future undiscounted cash flows associated with the asset to the asset’s carrying amount. If the undiscounted cash flows are less than the asset’s carrying amount, we then determine the asset’s fair value by using a discounted cash flow analysis. These analyses are based on estimates such as management’s short-term and long-term forecast of operating performance, including revenue growth rates and expected profitability margins, estimates of the remaining useful life and service potential of the asset, and a discount rate based on our weighted average cost of capital.

As a result of factors, including Covid-19, we have sustained a continued decline in the market price of our common stock. This is one of the qualitative factors to be considered when evaluating whether events or changes in circumstances may indicate that it is likely that a potential goodwill impairment exists. We will consider this decline and other factors, both specific to us and to the energy industry as a whole, as a result of Covid-19 as we perform our annual goodwill impairment test as of October 31 this year.

The impairment assessments discussed above incorporate inherent uncertainties, including projected commodity pricing, supply and demand for our services and future market conditions, which are difficult to predict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the estimated assumptions utilized in our forecasts. If crude oil prices decline significantly and remain at low levels for a sustained period of time, we could be required to record an impairment of the carrying value of our long-lived assets in the future which could have a material adverse impact on our operating results. Given the unobservable nature of the inputs, the discounted cash flow models are deemed to use Level 3 inputs.

Other Fair Value Considerations

The carrying values on our condensed consolidated balance sheets of our cash and cash equivalents, restricted cash, short-term investments, trade accounts receivable, other current assets, accounts payable and accrued liabilities and lines of credit approximate fair values due to their short maturities.

Note 11—~~Derivatives~~

From time to time we enter into short-duration foreign currency forward derivative contracts to reduce the risk of foreign currency fluctuations. We use these instruments to mitigate our exposure to non-local currency operating working capital. We record these contracts at fair value on our condensed consolidated balance sheets. Although the derivative contracts will serve as an economic hedge of the cash flow of our currency exchange risk exposure, they are not formally designated as hedge contracts for hedge accounting treatment. Accordingly, any changes in the fair value of the derivative instruments during a period will be included in our condensed consolidated statements of operations.

As of September 30, 2020, we had no foreign currency derivative contracts outstanding. As of December 31, 2019, we had the following foreign currency derivative contracts outstanding in U.S. dollars (in thousands):

December 31, 2019
Derivative Contracts Notional Amount Contractual Exchange Rate Settlement Date
Canadian dollar $ 948 1.3182 3/16/2020
Euro 9,279 1.1180 3/17/2020
Norwegian krone 11,027 9.0688 3/17/2020
Pound sterling 16,057 1.3381 3/17/2020

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~The following table summarizes the location and fair value amounts of all derivative contracts in the condensed consolidated balance sheets as of December 31, 2019 (in thousands):~~

~~Derivatives not Designated as Hedging Instruments~~

~~Consolidated Balance Sheet Location~~

~~December 31, 2019~~

~~Foreign currency contracts~~

~~Accounts payable and accrued liabilities~~

~~(324)~~

~~The following table summarizes the location and amounts of the realized and unrealized gains and losses on derivative contracts in the condensed consolidated statements of operations (in thousands):~~

Three Months Ended Nine Months Ended
September 30, September 30,
Derivatives not Designated as Hedging Instruments Location of Gain Recognized in Income on Derivative Contracts 2020 2019 2020 2019
Unrealized gain on foreign currency contracts Other income, net $ 0 $ 553 $ 0 $ 349
Realized gain on foreign currency contracts Other income, net 0 1,059 1,475 1,471
Total net gain on foreign currency contracts $ 0 $ 1,612 $ 1,475 $ 1,820

Our derivative transactions are governed through International Swaps and Derivatives Association master agreements. These agreements include stipulations regarding the right of offset in the event that we or our counterparty default on our performance obligations. If a default were to occur, both parties have the right to net amounts payable and receivable into a single net settlement between parties. Our accounting policy is to offset derivative assets and liabilities executed with the same counterparty when a master netting arrangement exists.

~~The following table presents the gross and net fair values of our derivatives at December 31, 2019 (in thousands):~~

Derivative Asset Positions Derivative Liability Positions
December 31, 2019 December 31, 2019
Gross position - asset / (liability) $ 127 $ (451)
Netting adjustment (127) 127
Net position - asset / (liability) $ 0 $ (324)

~~Note 12—~~Related Party Transactions

We have engaged in certain transactions with other companies related to us by common ownership. We have entered into various operating leases to lease facilities from these affiliated companies. Rent expense associated with our related party leases was ~~$0.9~~$0.7 million and ~~$0.6~~$0.7 million for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and $2.3 million and $2.0 million for the nine months ended September 30, 2020 and 2019,~~ respectively. As of ~~September 30, 2020, $4.0~~March 31, 2021, $3.1 million of our operating lease right-of-use assets and ~~$5.5~~$4.5 million of our lease liabilities were associated with related party leases.

Tax Receivable Agreement and Amended & Restated Tax Receivable Agreement

Mosing Holdings ~~LLC ("Mosing Holdings") and its permitted transferees~~ converted all of ~~their~~its shares of our Series A convertible preferred stock ~~in FICV (the “Preferred Stock”)~~ into shares of our common stock on August 26, 2016, in connection with ~~their~~its delivery to FINV of all of ~~their~~its interests in FICV (the “Conversion”). As a result of an election under Section 754 of the Internal Revenue Code made by FICV, the Conversion resulted in an adjustment to the tax basis of the tangible and intangible assets of FICV with respect to the portion of FICV transferred to FINV

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

by Mosing ~~Holdings and its permitted transferees.~~Holdings. These adjustments are ~~allocated~~solely allocable to FINV. The adjustments to the tax basis of the tangible and intangible assets of FICV described above would not have been available absent the Conversion. The basis adjustments may reduce the amount of tax that FINV would otherwise be required to pay in the future. These basis adjustments may also decrease gains (or increase losses) on future dispositions of certain capital assets to the extent tax basis is allocated to those capital assets.

The tax receivable agreement (the ~~"TRA"~~“TRA”) that we entered into with FICV and Mosing Holdings in connection with our initial public offering (“IPO”) generally provides for the payment by FINV to Mosing Holdings of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that we actually realize (or are deemed to realize in certain circumstances) in periods after our IPO as a result of (i) tax basis increases resulting from the Conversion and (ii) imputed interest deemed to be paid by FINV as a result of, and additional tax basis arising from, payments under the TRA. We will retain the benefit of the remaining 15% of these cash savings, if any. Payments FINV makes under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return to the date of payment specified by the TRA. The payments under the TRA will not be conditioned upon a holder of rights under the TRA having a continued ownership interest in FINV.

The estimation of the amount and timing of payments under the TRA is by its nature imprecise. For purposes of the TRA, cash savings in tax generally are calculated by comparing FINV’s actual tax liability to the amount FINV would have been required to pay had it not been able to utilize any of the tax benefits subject to the TRA. The

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

amounts payable, as well as the timing of any payments, under the TRA are dependent upon significant future events and assumptions, including the amount and timing of the taxable income FINV generates in the future. As of ~~September 30, 2020,~~March 31, 2021, FINV has had a cumulative loss over the prior 36-month period. Based on this history of losses, as well as uncertainty regarding the timing and amount of future taxable income, we are no longer able to conclude that there will be future cash savings that will lead to additional payouts under the TRA. Additional TRA liability may be recognized in the future based on changes in expectations regarding the timing and likelihood of future cash savings.

The payment obligations under the TRA are FINV’s obligations and are not obligations of FICV. The term of the TRA commenced upon the completion of the IPO and will continue until all tax benefits that are subject to the TRA have been utilized or expired, unless FINV elects to exercise its right to terminate the TRA (or the TRA is terminated due to other circumstances, including our breach of a material obligation thereunder or certain mergers or other changes of control), and FINV makes the termination payment specified by the TRA, or FINV otherwise settles its obligations under the TRA. If FINV elects to terminate the TRA early, which it may do in its sole discretion (or if it terminates early as a result of our breach), it would be required to make a substantial, immediate lump-sum payment equal to the present value of the hypothetical future payments that could be required to be paid under the TRA (based upon certain assumptions and deemed events set forth in the TRA, including the assumption that it has sufficient taxable income to fully utilize such benefits), determined by applying a discount rate equal to the long-term Treasury rate in effect on the applicable date plus 300 basis points. Any early termination payment may be made significantly in advance of the actual realization, if any, of such future benefits. In addition, payments due under the TRA will be similarly accelerated following certain mergers or other changes of control. In these situations, FINV’s obligations under the TRA could have a substantial negative impact on our liquidity and could have the effect of delaying, deferring or preventing certain mergers, asset sales, other forms of business combinations or other changes of control. For example, if the TRA were terminated on ~~September 30, 2020,~~March 31, 2021, the estimated termination payment would be approximately ~~$57.6~~$70.0 million (calculated using a discount rate of ~~4.23%~~4.15%). The foregoing number is merely an estimate and the actual payment could differ materially.

Because FINV is a holding company with no operations of its own, its ability to make payments under the TRA is dependent on the ability of our operating subsidiaries to make distributions to it in an amount sufficient to cover FINV’s obligations under such agreement. The ability of certain of our operating subsidiaries to make such distributions will be subject to, among other things, the applicable provisions of Dutch law that may limit the amount of funds available for distribution and restrictions in our debt instruments. To the extent that FINV is unable to make payments under the TRA for any reason (except in the case of an acceleration of payments thereunder occurring in connection with an early termination of the TRA or certain mergers or change of control) such payments will be deferred and will accrue interest until paid, and FINV will be prohibited from paying dividends on its common stock.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

In connection with the Merger Agreement, FINV, FICV and Mosing Holdings entered into the A&R TRA, pursuant to which FINV, FICV and Mosing Holdings have agreed, among other things, to settle the early termination payment obligation that would otherwise be owed to Mosing Holdings under the TRA as a result of the Merger by the payment by FINV to Mosing Holdings of (i) $15 million cash at the closing of the Transactions and (ii) certain other contingent payments in the future in the event the Combined Company realizes cash tax savings from tax attributes covered under the TRA during the ten year period following the Closing Date (as defined in the Merger Agreement) in excess of $18,057,000, as more fully described in the A&R TRA. The terms of the A&R TRA are conditioned upon and subject to the closing of the Transactions and the payment to Mosing Holdings of the $15 million cash payment at the closing of the Transactions. If such conditions do not occur, the A&R TRA will be terminated and will be null and void, and the TRA will remain in effect in accordance with its terms. Please see Note 1—Basis of Presentation in the Notes to the Unaudited Condensed Consolidated Financial Statements for additional details regarding the Merger, the Merger Agreement and the Transactions.

Note ~~13—~~12—Loss Per Common Share

Basic loss per common share is determined by dividing net loss by the weighted average number of common shares outstanding during the period. Diluted loss per share is determined by dividing net loss by the weighted average number of common shares outstanding, assuming all potentially dilutive shares were issued. We apply the

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

treasury stock method to determine the dilutive weighted average common shares represented by unvested restricted stock units and employee stock purchase plan (“ESPP”) shares.

The following table summarizes the basic and diluted loss per share calculations (in thousands, except per share amounts):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
Numerator	Numerator									Numerator
Net loss	Net loss	$	(27,791)	$	(23,789)	$	(148,014)	$	(67,236)	Net loss		$	(23,886)	$	(85,978)
Denominator	Denominator									Denominator

Basic and diluted weighted average common shares (1)	Basic and diluted weighted average common shares (1)	226,143		225,415		225,951		225,043		Basic and diluted weighted average common shares (1)		227,019		225,505
Loss per common share:	Loss per common share:									Loss per common share:

Basic and diluted	Basic and diluted	$	(0.12)	$	(0.11)	$	(0.66)	$	(0.30)	Basic and diluted		$	(0.11)	$	(0.38)

(1) Approximate number of unvested restricted stock units and stock to be issued pursuant to the ESPP that have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive when results from operations are at a net loss position. 1,105 587 1,052 722



(1)	Approximate number of unvested restricted stock units and stock to be issued pursuant to the ESPP that have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive when results from operations are at a net loss position.	2,252	2,015

Note ~~14—~~13—Income Taxes

For interim financial reporting, we estimate the annual tax rate based on projected pre-tax income (loss) for the full year and record a quarterly income tax provision (benefit) in accordance with accounting guidance for income taxes. As the year progresses, we refine the estimate of the year’s pre-tax income (loss) as new information becomes available. The continual estimation process often results in a change to the expected effective tax rate for the year. When this occurs, we adjust the income tax provision (benefit) during the quarter in which the change in estimate occurs so that the year-to-date provision reflects the most current expected annual tax rate.

Our effective tax rate was ~~(29.9)~~(4.7)% and ~~(44.2)%~~15.3% for the three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019, respectively, and 0.1% and (43.5)% for the nine months ended September 30, 2020 and 2019,~~ respectively. The quarterly variance in effective tax rates is primarily due to ~~a change in the geographical mix of income. The variance in effective tax rates compared to the same nine month period last year is due to~~ the beneficial impact in the ~~current~~prior year period ~~of a~~from the five-year net operating loss carryback provision included in the ~~recently-enacted~~ Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which allows corporations with net operating losses (“NOLs”) incurred in 2018, 2019 and 2020 to carry back such NOLs to each of the five years preceding the year of the NOL, beginning with the earliest year in which there is taxable income, and claim an income tax refundas well as a change in the ~~applicable carryback year. As a result~~geographical mix of ~~the NOL carryback provision in the CARES Act, we filed for and received an income tax refund of $17.5 million during the third quarter of 2020.~~income. We are subject to tax in many U.S. and ~~foreign~~non-U.S. jurisdictions. In many ~~foreign~~non-U.S. jurisdictions we are taxed on bases such as deemed profits or withholding taxes based on revenue. Consequently, the level of correlation between our pre-tax income and our income tax provision varies from period to period.

�� We are under audit by certain ~~foreign~~non-U.S. jurisdictions for the years 2008 - 2019. We do not expect the results of these audits to have any material effect on our financial statements.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

As of ~~September 30, 2020,~~March 31, 2021, there were no significant changes to our uncertain tax positions as reported in our audited financial statements for the year ended December 31, ~~2019.~~2020.

Note ~~15—~~14—Commitments and Contingencies

We are the subject of lawsuits and claims arising in the ordinary course of business from time to time. A liability is accrued when a loss is both probable and can be reasonably estimated. We had no material accruals for loss contingencies, individually or in the aggregate, as of ~~September 30, 2020~~March 31, 2021 and December 31, ~~2019.~~2020. We believe the probability is remote that the ultimate outcome of these matters would have a material adverse effect on our financial position, results of operations or cash flows.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

applicable laws. In June 2016, we voluntarily disclosed the existence of our extensive internal review to the SEC, the U.S. Department of Justice (“DOJ”) and other governmental entities. It is our intent to continue to fully cooperate with these agencies and any other applicable authorities in connection with any further investigation that may be conducted in connection with this matter. While our review has not indicated that there has been any material impact on our previously filed financial statements, we have continued to collect information and cooperate with the authorities, but at this time are unable to predict the ultimate resolution of these matters with these agencies.

As disclosed above, our investigation into possible violations of the FCPA remains ongoing, and we will continue to cooperate with the SEC, DOJ and other relevant governmental entities in connection therewith. At this time, we are unable to predict the ultimate resolution of these matters with these agencies, including any financial impact to us. Our ~~board~~Board and management are committed to continuously enhancing our internal controls that support improved compliance and transparency throughout our global operations.

Note ~~16—~~15—Severance and Other Charges, net

We recognize severance and other charges for costs associated with workforce reductions, facility closures, exiting or reducing our footprint in certain countries, asset impairments and the retirement of excess machinery and equipment based on economic utility. As a result of the downturn in the industry and its impact on our business outlook, we continue to take actions to adjust our operations and cost structure to reflect current and expected activity levels. Depending on future market conditions, further actions may be necessary to adjust our operations, which may result in additional charges.

Our severance and other charges, net are summarized below (in thousands):


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2020		2019		2020		2019				2021		2020
Severance and other costs	Severance and other costs	$	3,444	$	1,243	$	8,776	$	2,225	Severance and other costs		$	265	$	538
Mergers and acquisition expense										Mergers and acquisition expense		6,804		0
Fixed asset impairments and retirements	Fixed asset impairments and retirements	105		3,979		15,584		4,045		Fixed asset impairments and retirements		171		15,479
Inventory write-offs	Inventory write-offs	0		0		368		222		Inventory write-offs		136		0
Intangible asset impairments	Intangible asset impairments	0		0		4,708		0		Intangible asset impairments		0		4,708
		$	3,549	$	5,222	$	29,436	$	6,492			$	7,376	$	20,725

Severance and other costs: We incurred costs due to a continued effort to adjust our cost base, including reducing our workforce to meet the depressed demand in the industry. ~~At September 30, 2020, our outstanding liability~~

Mergers and acquisition expense: During the three months ended March 31, 2021, we incurred $6.8 million of costs, primarily related to legal and consulting services, associated with ~~our current program was approximately $2.3 million and included severance payments and other employee-related separation costs.~~the pending merger with Expro.

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

~~Below is a reconciliation of our employee separation liability balance (in thousands):~~

Tubular Running Services Tubulars Cementing Equipment Corporate Total
Balance at December 31, 2019 $ 2,000 $ 19 $ 1,632 $ 2,186 $ 5,837
Additions for costs expensed 5,158 143 926 2,549 8,776
Severance and other payments (7,026) (160) (1,580) (2,779) (11,545)
Other adjustments (78) 0 (12) (634) (724)
Balance at September 30, 2020 $ 54 $ 2 $ 966 $ 1,322 $ 2,344

Fixed asset impairments and retirements: During the ~~nine~~three months ended ~~September 30, 2019,~~March 31, 2020, we recognized ~~$4.0 million of impairment related to assets held for sale. During the nine months ended September 30, 2020, we recorded fixed asset impairment charges of $15.6~~$15.5 million primarily associated with construction in progress in our Cementing Equipment segment. During the three months ended March 31, 2021, we recognized a $0.2 million impairment associated our with construction in progress in our Tubular Running Services segment. Please see Note 5—Property, Plant and Equipment for additional details.

Inventory write-offs: During the ~~nine~~three months ended ~~September 30, 2020,~~March 31, 2021, certain inventories in our ~~Cementing Equipment~~Tubular Running Services segment were determined to have costs that exceeded their net realizable values, resulting in a charge of ~~$0.4~~$0.1 million.

Intangible asset impairments: During the ~~nine~~three months ended ~~September 30,~~March 31, 2020, we identified certain intangible assets where the carrying value exceeded the fair value in the Cementing Equipment segment, resulting in an

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

impairment charge of $4.7 million. NaN impairment was recorded during the three months ended March 31, 2021. Please see Note 6—Goodwill and Intangible Assets for additional details.

Note ~~17—~~16—Segment Information

Reporting Segments

Operating segments are defined as components of an enterprise for which separate financial information is available that is regularly evaluated by the Company’s chief operating decision maker ("CODM") in deciding how to allocate resources and assess performance. We are comprised of 3 reportable segments: Tubular Running Services (“TRS”) segment, Tubulars segment and Cementing Equipment (“CE”) segment.

The TRS segment provides tubular running services globally. Internationally, the TRS segment operates in the majority of the offshore oil and gas markets and also in several onshore regions with operations in approximately 5040 countries on 6 continents. In the U.S., the TRS segment provides services in the active onshore oil and gas drilling regions, including the Permian Basin, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale, and in the U.S. Gulf of Mexico. Our customers are primarily large exploration and production companies, including international oil and gas companies, national oil and gas companies, major independents and other oilfield service companies.

The Tubulars segment designs, manufactures and distributes connectors and casing attachments for large outside diameter (“OD”) heavy wall pipe. Additionally, the Tubulars segment sells large OD pipe originally manufactured by various pipe mills, as plain end or fully fabricated with proprietary welded or thread-direct connector solutions and provides specialized fabrication and welding services in support of offshore deepwater projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long-length tubular assemblies up to 400 feet in length. The Tubulars segment also specializes in the development, manufacture and supply of proprietary drilling tool solutions that focus on improving drilling productivity through eliminating or mitigating traditional drilling operational risks.

The CE segment provides specialty equipment to enhance the safety and efficiency of rig operations. It provides specialized equipment, services and products utilized in the construction of the wellbore in both onshore

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

and offshore environments. The product portfolio includes casing accessories that serve to improve the installation of casing, centralization and wellbore zonal isolation, as well as enhance cementing operations through advance wiper plug and float equipment technology. The CE segment also provides services and products utilized in the construction, completion or abandonment of the wellbore. These solutions are primarily used to isolate portions of the wellbore through the setting of barriers downhole to allow for rig evacuation in case of inclement weather, maintenance work on other rig equipment, squeeze cementing, pressure testing within the wellbore and temporary and permanent abandonments. These offerings improve operational efficiencies and limit non-productive time if unscheduled events are encountered at the wellsite.

Revenue

We disaggregate our revenue from contracts with customers by geography for each of our segments, as we believe this best depicts how the nature, amount, timing and uncertainty of our revenue and cash flows are affected by economic factors. Intersegment revenue is immaterial.

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following tables presents our revenue disaggregated by geography, based on the location where our services were provided and products sold (in thousands):


		Three Months Ended September 30, 2020									Three Months Ended March 31, 2021
		Tubular Running Services		Tubulars		Cementing Equipment		Consolidated			Tubular Running Services		Tubulars		Cementing Equipment		Consolidated
United States	United States	$	15,213	$	12,483	$	7,430	$	35,126	United States	$	18,367	$	7,993	$	9,345	$	35,705
International	International	37,713		4,000		7,578		49,291		International	47,918		3,676		7,512		59,106
Total Revenue	Total Revenue	$	52,926	$	16,483	$	15,008	$	84,417	Total Revenue	$	66,285	$	11,669	$	16,857	$	94,811

		Three Months Ended September 30, 2019									Three Months Ended March 31, 2020
		Tubular Running Services		Tubulars		Cementing Equipment		Consolidated			Tubular Running Services		Tubulars		Cementing Equipment		Consolidated
United States	United States	$	34,903	$	10,148	$	20,044	$	65,095	United States	$	30,169	$	9,797	$	13,531	$	53,497
International	International	67,374		2,371		5,577		75,322		International	59,328		2,745		7,922		69,995
Total Revenue	Total Revenue	$	102,277	$	12,519	$	25,621	$	140,417	Total Revenue	$	89,497	$	12,542	$	21,453	$	123,492

		Nine Months Ended September 30, 2020
		Tubular Running Services		Tubulars		Cementing Equipment		Consolidated
United States		$	64,256	$	27,270	$	28,245	$	119,771
International		140,494		10,496		23,249		174,239
Total Revenue		$	204,750	$	37,766	$	51,494	$	294,010

		Nine Months Ended September 30, 2019
		Tubular Running Services		Tubulars		Cementing Equipment		Consolidated
United States		$	114,466	$	45,163	$	62,963	$	222,592
International		192,505		8,347		17,035		217,887
Total Revenue		$	306,971	$	53,510	$	79,998	$	440,479

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

Revenue by geographic area were as follows (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
United States	United States	$	35,126	$	65,095	$	119,771	$	222,592	United States		$	35,705	$	53,497
Europe/Middle East/Africa	Europe/Middle East/Africa	20,082		41,071		77,402		116,126		Europe/Middle East/Africa		28,254		35,434
Latin America	Latin America	20,001		19,181		61,003		56,520		Latin America		21,934		20,925
Asia Pacific	Asia Pacific	6,928		9,727		25,231		27,753		Asia Pacific		7,653		9,569
Other countries	Other countries	2,280		5,343		10,603		17,488		Other countries		1,265		4,067
Total Revenue	Total Revenue	$	84,417	$	140,417	$	294,010	$	440,479	Total Revenue		$	94,811	$	123,492

Adjusted EBITDA

We define Adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, unrealized and realized gain or loss, net severance and other charges, other non-cash adjustments and other charges. We review Adjusted EBITDA on both a consolidated basis and on a segment basis. We use Adjusted EBITDA to assess our financial performance because it allows us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), income tax, foreign currency exchange rates and other charges and credits. Adjusted EBITDA has limitations as an analytical tool and should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities or any other measure of financial performance presented in accordance with GAAP.

Our CODM uses Adjusted EBITDA as the primary measure of segment reporting performance.

2422

FRANK’S INTERNATIONAL N.V.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

The following table presents a reconciliation of Segment Adjusted EBITDA to net loss (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
Segment Adjusted EBITDA:	Segment Adjusted EBITDA:									Segment Adjusted EBITDA:
Tubular Running Services	Tubular Running Services	$	982	$	23,884	$	18,336	$	67,019	Tubular Running Services		$	8,128	$	13,305
Tubulars	Tubulars	1,806		456		3,883		8,502		Tubulars		639		1,396
Cementing Equipment	Cementing Equipment	3,376		3,031		6,806		9,854		Cementing Equipment		4,795		2,544
Corporate (1)	Corporate (1)	(7,151)		(11,350)		(24,645)		(42,533)		Corporate (1)		(6,909)		(10,186)
		(987)		16,021		4,380		42,842				6,653		7,059
Goodwill impairment	Goodwill impairment	0		0		(57,146)		0		Goodwill impairment		0		(57,146)
Severance and other charges, net	Severance and other charges, net	(3,549)		(5,222)		(29,436)		(6,492)		Severance and other charges, net		(7,376)		(20,725)
Interest income (expense), net	Interest income (expense), net	(93)		563		618		1,757		Interest income (expense), net		(287)		533
Depreciation and amortization	Depreciation and amortization	(15,950)		(21,482)		(52,920)		(70,637)		Depreciation and amortization		(16,107)		(19,718)
Income tax (expense) benefit	Income tax (expense) benefit	(6,395)		(7,297)		182		(20,370)		Income tax (expense) benefit		(1,070)		15,563
Gain (loss) on disposal of assets	Gain (loss) on disposal of assets	308		(603)		898		(984)		Gain (loss) on disposal of assets		182		(60)
Foreign currency gain (loss)		2,334		(3,872)		(5,865)		(4,050)
TRA related adjustments		0		0		0		220
Foreign currency loss										Foreign currency loss		(2,868)		(9,892)

Charges and credits (2)	Charges and credits (2)	(3,459)		(1,897)		(8,725)		(9,522)		Charges and credits (2)		(3,013)		(1,592)
Net loss	Net loss	$	(27,791)	$	(23,789)	$	(148,014)	$	(67,236)	Net loss		$	(23,886)	$	(85,978)

(1) Includes certain expenses not attributable to a particular segment, such as costs related to support functions and corporate executives.

(2) Comprised of Equity-based compensation expense (for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019: $2,773~~2020: $2,872 and ~~$2,647, respectively, and for the nine months ended September 30, 2020 and 2019: $8,434 and $8,238,~~$2,146, respectively), Unrealized and realized gains (losses) (for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019: $(113)~~2020: $(99) and ~~$1,382, respectively, and for the nine months ended September 30, 2020 and 2019: $1,480 and $2,073,~~$1,704, respectively) and Investigation-related matters (for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019: $573~~2020: $42 and ~~$632, respectively, and for the nine months ended September 30, 2020 and 2019: $1,771 and $3,357,~~$1,150, respectively).

~~FRANK’S INTERNATIONAL N.V.~~

~~NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS~~

The following tables set forth certain financial information with respect to our reportable segments (in thousands):


		Tubular Running Services		Tubulars		Cementing Equipment		Corporate		Total			Tubular Running Services		Tubulars		Cementing Equipment		Corporate		Total
Three Months Ended September 30, 2020

Three Months Ended March 31, 2021												Three Months Ended March 31, 2021
Revenue from external customers	Revenue from external customers	$	52,926	$	16,483	$	15,008	$	0	$	84,417	Revenue from external customers	$	66,285	$	11,669	$	16,857	$	0	$	94,811
Operating income (loss)	Operating income (loss)	(13,717)		860		1,160		(12,049)		(23,746)		Operating income (loss)	(5,452)		(875)		1,993		(15,452)		(19,786)
Adjusted EBITDA	Adjusted EBITDA	982		1,806		3,376		(7,151)		*		Adjusted EBITDA	8,128		639		4,795		(6,909)		*

Three Months Ended September 30, 2019
Three Months Ended March 31, 2020												Three Months Ended March 31, 2020
Revenue from external customers	Revenue from external customers	$	102,277	$	12,519	$	25,621	$	0	$	140,417	Revenue from external customers	$	89,497	$	12,542	$	21,453	$	0	$	123,492
Operating income (loss)	Operating income (loss)	8,253		(377)		(1,610)		(21,069)		(14,803)		Operating income (loss)	(1,315)		651		(77,498)		(16,046)		(94,208)
Adjusted EBITDA	Adjusted EBITDA	23,884		456		3,031		(11,350)		*		Adjusted EBITDA	13,305		1,396		2,544		(10,186)		*

Nine Months Ended September 30, 2020
Revenue from external customers		$	204,750	$	37,766	$	51,494	$	0	$	294,010
Operating income (loss)		(28,284)		1,327		(78,824)		(39,459)		(145,240)
Adjusted EBITDA		18,336		3,883		6,806		(24,645)		*

Nine Months Ended September 30, 2019
Revenue from external customers		$	306,971	$	53,510	$	79,998	$	0	$	440,479
Operating income (loss)		17,094		5,906		(4,744)		(65,867)		(47,611)
Adjusted EBITDA		67,019		8,502		9,854		(42,533)		*

* Non-GAAP financial measure not disclosed.

2623

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (this “Form 10-Q”) includes certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Forward-looking statements include those that express a belief, expectation or intention, as well as those that are not statements of historical fact. Forward-looking statements include information regarding our future plans and goals and our current expectations with respect to, among other things:

•our business strategy and prospects for growth;

•The merger with Expro Group Holdings International Limited (“Expro”), (the “Merger”);

•our cash flows and liquidity;

•our financial strategy, budget, projections and operating results;

•the amount, nature and timing of capital expenditures;

•the availability and terms of capital;

•competition and government regulations; and

•general economic conditions.

Our forward-looking statements are generally accompanied by words such as “anticipate,” “believe,” “estimate,” “expect,” “goal,” “plan,” “potential,” “predict,” “project,” or other terms that convey the uncertainty of future events or outcomes, although not all forward-looking statements contain such identifying words. The forward-looking statements in this Form 10-Q speak only as of the date of this report; we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. Forward-looking statements are not assurances of future performance and involve risks and uncertainties. We have based these forward-looking statements on our current expectations and assumptions about future events. While our management considers these expectations and assumptions to be reasonable, they are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. These risks, contingencies and uncertainties include, but are not limited to, the following:

•continuing uncertainty relating to global crude oil demand and crude oil prices that correspondingly may lead to further significant reductions in domestic oil and gas activity, which in turn could result in further significant declines in demand for our products and services;

•uncertainty regarding the extent and duration of the remaining restrictions in the United States and globally on various commercial and economic activities due to the ~~Covid-19~~COVID-19 virus, including uncertainty regarding the re-imposition of restrictions due to resurgences in infection rates; such restrictions are designed to protect public health but also have the effect of significantly reducing demand for oil and gas, which may correspondingly decrease demand for our products and services;

•uncertainty regarding the timing, pace and extent of an economic recovery in the United States and elsewhere, which in turn will likely affect demand for crude oil and therefore the demand for the products and services we provide and the commercial opportunities available to us;

•the impact of current and future laws, rulings, governmental regulations, accounting standards and statements, and related interpretations;

•unique risks associated with our offshore operations;

•political, economic and regulatory uncertainties in our international operations;

•our ability to develop new technologies and products;

•our ability to protect our intellectual property rights;

•our ability to employ and retain skilled and qualified workers;

•the level of competition in our industry;

•operational safety laws and regulations;

•international trade laws and sanctions;

•weather conditions and natural disasters;

•global or national health concerns, including health epidemics, including ~~Covid-19; and~~COVID-19;

•policy or regulatory changes domestically in the United ~~States.~~

States;

2724

•risks and conditions that apply to Expro, which may be different from risks that apply to us;

•unforeseen consequences of the Merger;

•failure to complete the Merger or changes in the expected timing of the completion of the Merger;

•completion of the Merger following unforeseen changes in circumstance;

•uncertainty with respect to integration and realization of expected cost synergies following completion of the Merger; and

•litigation risk associated with the Merger.

These and other important factors that could affect our operating results and performance are described in (1) “Risk Factors” in Part II, Item 1A of this Form 10-Q, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in Part I, Item 2 of this Form 10-Q, and elsewhere within this Form 10-Q, (2) our Annual Report on Form 10-K for the year ended December 31, ~~2019, filed with the SEC on February 25, 2020 (our “Annual Report”), (3) our Quarterly Reports on Form 10-Q for the three months ended March 31, 2020 and June 30,~~ 2020, filed with the SEC on ~~May 11, 2020 and August 4, 2020, respectively, (4)~~March 1, 2021 (our “Annual Report”), (3) our other reports and filings we make with the SEC from time to time and ~~(5)~~(4) other announcements we make from time to time. Should one or more of the risks or uncertainties described in the documents above or in this Form 10-Q occur, or should underlying assumptions prove incorrect, our actual results, performance, achievements or plans could differ materially from those expressed or implied in any forward-looking statements. All such forward-looking statements in this Form 10-Q are expressly qualified in their entirety by the cautionary statements in this section.

2825

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Form 10-Q and the audited consolidated financial statements and notes thereto and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in our Annual Report.

This section contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in any forward-looking statement because of various factors, including those described in the sections titled “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” of this Form 10-Q.

Overview of Business

We are a global provider of highly engineered tubular services, tubular fabrication and specialty well construction and well intervention solutions to the oil and gas industry and have been in business for over 80 years. We provide our services and products to leading exploration and production companies in both offshore and onshore environments, with a focus on complex and technically demanding wells.

We conduct our business through three operating segments:

•Tubular Running Services. The Tubular Running Services (“TRS”) segment provides tubular running services globally. Internationally, the TRS segment operates in the majority of the offshore oil and gas markets and also in several onshore regions with operations in approximately 5040 countries on six continents. In the U.S., the TRS segment provides services in the active onshore oil and gas drilling regions, including the Permian Basin, Eagle Ford Shale, Haynesville Shale, Marcellus Shale and Utica Shale, as well as in the U.S. Gulf of Mexico. Our customers in these markets are primarily large exploration and production companies, including international oil and gas companies, national oil and gas companies, major independents and other oilfield service companies.

•Tubulars. The Tubulars segment designs, manufactures and distributes connectors and casing attachments for large outside diameter (“OD”) heavy wall pipe. Additionally, the Tubulars segment sells large OD pipe originally manufactured by various pipe mills, as plain end or fully fabricated with proprietary welded or thread-direct connector solutions and provides specialized fabrication and welding services in support of offshore deepwater projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long-length tubular assemblies up to 400 feet in length. The Tubulars segment also specializes in the development, manufacture and supply of proprietary drilling tool solutions that focus on improving drilling productivity through eliminating or mitigating traditional drilling operational risks.

•Cementing Equipment. The Cementing Equipment (“CE”) segment provides specialty equipment to enhance the safety and efficiency of rig operations. It provides specialized equipment, services and products utilized in the construction of the wellbore in both onshore and offshore environments. The product portfolio includes casing accessories that serve to improve the installation of casing, centralization and wellbore zonal isolation, as well as enhance cementing operations through advance wiper plug and float equipment technology. The CE segment also provides services and products utilized in the construction, completion or abandonment of the wellbore. These solutions are primarily used to isolate portions of the wellbore through the setting of barriers downhole to allow for rig evacuation in case of inclement weather, maintenance work on other rig equipment, squeeze cementing, pressure testing within the wellbore, hydraulic fracturing and temporary and permanent abandonments. These offerings improve operational efficiencies and limit non-productive time if unscheduled events are encountered at the wellsite.

2926

~~Outlook~~Merger Agreement with Expro

AsOn March 10, 2021, FINV and Merger Sub, a direct wholly owned subsidiary of ~~September 30, 2020,~~FINV, entered into the ~~full impact~~Merger Agreement with Expro, pursuant to which Expro will merge with and into Merger Sub, with Merger Sub surviving the merger as a direct, wholly owned subsidiary of FINV. If the Merger is completed, each of the ~~Coronavirus Disease 2019 (“Covid-19”) outbreak~~Expro Ordinary Shares, issued and outstanding immediately prior to the Effective Time, will be converted into the right to receive a number of shares of Frank’s common stock equal to the Exchange Ratio. Upon consummation of the transactions contemplated by the Merger Agreement and the ~~reduction~~Plan of Merger (as defined in ~~oil sector activity continues~~the Merger Agreement), FINV expects that its current shareholders will own approximately 35% of the Combined Company after the completion of the Merger and related transactions, and current Expro shareholders will own approximately 65% of the Combined Company. Following the Merger, the name of FINV will be changed to ~~evolve. Since~~“Expro Group Holdings N.V.” The closing of the ~~Organization~~Transactions, which is expected to occur during the third quarter of Petroleum Exporting Countries (“OPEC”) and Russia production cut agreements have remained in place since May 2020 and Covid-19 responses have normalized, demand has now begun to draw down stockpiles of supply which we anticipate will continue into 2021. While world events continue to add uncertainty and volatility2021, is subject to the ~~price~~satisfaction or waiver of ~~oil, we are seeing a more stable economy emerge in this new normal~~closing conditions, including, among others, the requisite approval of the shareholders of each of FINV and ~~expect our customer's spending~~Expro pursuant to remain relatively flat to slightly improving going forward. While it is uncertain how long depressed energy demand will last, we anticipate international and U.S. offshore demand for our products and services to moderately increase from current levels as those customer projects come back online in 2021.the terms of the Merger Agreement.

~~Although Covid-19 has contributed~~In connection with the Merger Agreement, FINV, FICV and Mosing Holdings have entered into an Amended and Restated Tax Receivable Agreement (the “A&R TRA”), that amends and restates the TRA. See Note 1—Basis of Presentation in the Notes to ~~a decline in demand~~the Unaudited Condensed Consolidated Financial Statements for ~~our offerings,~~additional information regarding the ~~direct impact of~~Merger Agreement and the outbreak on our ability to conduct operations has been minor. We have implemented a work-from-home directive for office personnel across the globe, split-shift rotation protocols for our manufacturing and operations facilities, social distancing guidelines in manufacturing and operations facilities, and quarantine protocols for employees at risk of exposure to Covid-19. These measures are periodically reviewed and updated based on changing conditions and local government requirements. In addition, we have experienced local disruptions of activity in response to outbreaks of Covid-19 at certain offshore drilling locations, and disruptions due to travel restrictions and local governmental orders. However, in most locations, our products and services have been deemed essential economic activity and have continued during local restrictions on business activity.A&R TRA.

As our customer base looks for differentiated technology and efficiency-based solutions, we are continuing to focus our efforts on integrating our product lines across all markets, with a focus on improving market share, asset utilization, and profitability.Outlook

As we ~~move through this challenging market,~~look toward recovery from the COVID-19 pandemic and balancing of OPEC-driven oversupply, we ~~are now realizing~~believe there may be a slow but steady drawdown of supply stockpiles over the ~~results of our profitability improvement project~~next 18 months, driven by increasing ~~efficiencies~~demand as lockdown measures loosen with vaccine rollouts.

In the short term, uncertainty around further lockdowns may temper continued activity improvement. However, current indicators are supportive of improved market conditions for the remainder of 2021 as compared to the same period in 2020. We expect that crude oil demand and ~~reducing costs. We~~associated customer activity will continue to monitor the market to ensure we are right-sized to execute customer projects and maximize profitability. Ongoing efforts are underway to reduce our spending base and to optimize working capital, with active workstreamsramp up in the ~~areas~~mid to long term toward pre-pandemic levels. However, we remain vigilant to the uncertainty that OPEC-controlled supply and U.S. activity levels can have on the market.

While the Gulf of ~~collections, capital expenditures, inventory management~~Mexico is expected to remain relatively flat through 2022, operators will continue to look to Frank’s digital and ~~disbursements.~~automated technologies to drive operational efficiencies with reduced personnel. Our recent successes in bolstering our market share in the Gulf of Mexico with digital and automated technology that removes personnel from the rig site sets a blueprint for duplicating this success in international offshore markets.

We ~~also~~anticipate our U.S. land business will continue to ~~monitor potential goodwill impairments as a result~~improve through at least 2022, supported by recent commercialization of ~~Covid-19. For further information,~~performance drilling technologies and digital solutions that increase operation efficiency. In international markets, we expect offshore markets to see ~~Note 6—Goodwill and Intangible Assets~~continued moderate growth in ~~our Notes to Unaudited Condensed Consolidated Financial Statements.~~

While management anticipates that the industry and economic impact of Covid-19 and OPEC’s actions will have a negative effect on our results of operations in 2020 and perhaps beyond, the degree to which these factors will impact our business remains uncertain. Please read Item 1A, Risk Factors, in this Quarterly Report.line with market trends.

How We Evaluate Our Operations

We use a number of financial and operational measures to routinely analyze and evaluate the performance of our business, including revenue, Adjusted EBITDA, Adjusted EBITDA margin and safety performance.

Revenue

We analyze our revenue growth by comparing actual monthly revenue to our internal projections for each month to assess our performance. We also assess incremental changes in our monthly revenue across our operating segments to identify potential areas for improvement.

3027

Adjusted EBITDA and Adjusted EBITDA Margin

We define Adjusted EBITDA as net income (loss) before interest income, net, depreciation and amortization, income tax benefit or expense, asset impairments, gain or loss on disposal of assets, foreign currency gain or loss, equity-based compensation, unrealized and realized gains or losses, the effects of the tax receivable agreement (“TRA”), other non-cash adjustments and other charges or credits. Adjusted EBITDA margin reflects our Adjusted EBITDA as a percentage of our revenue. We review Adjusted EBITDA and Adjusted EBITDA margin on both a consolidated basis and on a segment basis. We use Adjusted EBITDA and Adjusted EBITDA margin to assess our financial performance because it allows us to compare our operating performance on a consistent basis across periods by removing the effects of our capital structure (such as varying levels of interest expense), asset base (such as depreciation and amortization), income tax, foreign currency exchange rates and other charges and credits. Adjusted EBITDA and Adjusted EBITDA margin have limitations as analytical tools and should not be considered as an alternative to net income (loss), operating income (loss), cash flow from operating activities or any other measure of financial performance presented in accordance with generally accepted accounting principles in the U.S. (“GAAP”).

The following table presents a reconciliation of net loss to Adjusted EBITDA and Adjusted EBITDA margin for each of the periods presented (in thousands):


		Three Months Ended						Nine Months Ended							Three Months Ended
		September 30,						September 30,							March 31,
		2020			2019			2020			2019					2021			2020

Net loss	Net loss	$	(27,791)		$	(23,789)		$	(148,014)		$	(67,236)		Net loss		$	(23,886)		$	(85,978)
Goodwill impairment	Goodwill impairment	—			—			57,146			—			Goodwill impairment		—			57,146
Severance and other charges, net	Severance and other charges, net	3,549			5,222			29,436			6,492			Severance and other charges, net		7,376			20,725
Interest (income) expense, net	Interest (income) expense, net	93			(563)			(618)			(1,757)			Interest (income) expense, net		287			(533)
Depreciation and amortization	Depreciation and amortization	15,950			21,482			52,920			70,637			Depreciation and amortization		16,107			19,718
Income tax expense (benefit)	Income tax expense (benefit)	6,395			7,297			(182)			20,370			Income tax expense (benefit)		1,070			(15,563)
(Gain) loss on disposal of assets	(Gain) loss on disposal of assets	(308)			603			(898)			984			(Gain) loss on disposal of assets		(182)			60
Foreign currency (gain) loss		(2,334)			3,872			5,865			4,050
TRA related adjustments		—			—			—			(220)
Foreign currency loss														Foreign currency loss		2,868			9,892

Charges and credits (1)	Charges and credits (1)	3,459			1,897			8,725			9,522			Charges and credits (1)		3,013			1,592
Adjusted EBITDA	Adjusted EBITDA	$	(987)		$	16,021		$	4,380		$	42,842		Adjusted EBITDA		$	6,653		$	7,059
Adjusted EBITDA margin	Adjusted EBITDA margin	(1.2)		%	11.4		%	1.5		%	9.7		%	Adjusted EBITDA margin		7.0		%	5.7		%

(1) Comprised of Equity-based compensation expense (for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019: $2,773~~2020: $2,872 and ~~$2,647, respectively, and for the nine months ended September 30, 2020 and 2019: $8,434 and $8,238,~~$2,146, respectively), Unrealized and realized (gains) losses (for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019: $113~~2020: $99 and ~~$(1,382), respectively, and for the nine months ended September 30, 2020 and 2019: $(1,480) and $(2,073)~~$(1,704), respectively), and Investigation-related matters (for the three months ended ~~September 30, 2020~~March 31, 2021 and ~~2019: $573~~2020: $42 and ~~$632, respectively, and for the nine months ended September 30, 2020 and 2019: $1,771 and $3,357,~~$1,150, respectively).

For a reconciliation of our Adjusted EBITDA on a segment basis to the most comparable measure calculated in accordance with GAAP, see “Operating Segment Results.”

Safety and Quality Performance

Safety is one of our primary core values. Maintaining a strong safety record is a critical component of our operational success. Many of our customers have safety standards we must satisfy before we can perform services. As a result, we continually monitor our safety performance through the evaluation of safety observations, job and customer surveys, and safety data. The primary measure for our safety performance is the tracking of the Total Recordable Incident Rate which is reviewed on both a monthly and rolling twelve-month basis.

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Consolidated Results of Operations

The following table presents our consolidated results for the periods presented (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019					2021		2020
		(Unaudited)										(Unaudited)
Revenue:	Revenue:									Revenue:
Services	Services	$	66,418	$	119,572	$	246,084	$	362,069	Services			$	81,523	$	105,083
Products	Products	17,999		20,845		47,926		78,410		Products			13,288		18,409
Total revenue	Total revenue	84,417		140,417		294,010		440,479		Total revenue			94,811		123,492

Operating expenses:	Operating expenses:									Operating expenses:
Cost of revenue, exclusive of depreciation and amortization	Cost of revenue, exclusive of depreciation and amortization									Cost of revenue, exclusive of depreciation and amortization
Services	Services	56,574		86,745		197,005		255,769		Services			63,935		79,380
Products	Products	13,733		14,247		36,007		57,850		Products			10,914		13,988
General and administrative expenses	General and administrative expenses	18,665		26,921		67,634		96,358		General and administrative expenses			16,447		26,683
Depreciation and amortization	Depreciation and amortization	15,950		21,482		52,920		70,637		Depreciation and amortization			16,107		19,718
Goodwill impairment	Goodwill impairment	—		—		57,146		—		Goodwill impairment			—		57,146
Severance and other charges, net	Severance and other charges, net	3,549		5,222		29,436		6,492		Severance and other charges, net			7,376		20,725
(Gain) loss on disposal of assets	(Gain) loss on disposal of assets	(308)		603		(898)		984		(Gain) loss on disposal of assets			(182)		60
Operating loss	Operating loss	(23,746)		(14,803)		(145,240)		(47,611)		Operating loss			(19,786)		(94,208)

Other income (expense):	Other income (expense):									Other income (expense):
TRA related adjustments		—		—		—		220

Other income, net	Other income, net	109		1,620		2,291		2,818		Other income, net			125		2,026
Interest income (expense), net	Interest income (expense), net	(93)		563		618		1,757		Interest income (expense), net			(287)		533

Foreign currency gain (loss)		2,334		(3,872)		(5,865)		(4,050)
Total other income (expense)		2,350		(1,689)		(2,956)		745
Foreign currency loss										Foreign currency loss			(2,868)		(9,892)
Total other expense										Total other expense			(3,030)		(7,333)

Loss before income taxes	Loss before income taxes	(21,396)		(16,492)		(148,196)		(46,866)		Loss before income taxes			(22,816)		(101,541)
Income tax expense (benefit)	Income tax expense (benefit)	6,395		7,297		(182)		20,370		Income tax expense (benefit)			1,070		(15,563)
Net loss	Net loss	$	(27,791)	$	(23,789)	$	(148,014)	$	(67,236)	Net loss			$	(23,886)	$	(85,978)

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2019~~March 31, 2020

Revenue. Revenue from external customers, excluding intersegment sales, for the three months ended ~~September 30, 2020~~March 31, 2021 decreased by ~~$56.0~~$28.7 million, or ~~39.9%~~23.2%, to ~~$84.4~~$94.8 million from ~~$140.4~~$123.5 million for the three months ended ~~September 30, 2019.~~March 31, 2020. Revenue decreased across all segments due to the ~~Covid-19~~COVID-19 pandemic and the sharp decline in oil prices. Revenue for our segments is discussed separately below under the heading “Operating Segment Results.”

Cost of revenue, exclusive of depreciation and amortization. Cost of revenue for the three months ended ~~September 30, 2020~~March 31, 2021 decreased by ~~$30.6~~$18.6 million, or ~~30.3%~~19.9%, to ~~$70.3~~$74.8 million from ~~$100.9~~$93.4 million for the three months ended ~~September 30, 2019.~~March 31, 2020. The decrease was driven by lower activity levels and mix of work in the TRS, Tubulars and CE segments.

General and administrative expenses. General and administrative expenses for the three months ended ~~September 30, 2020~~March 31, 2021 decreased by ~~$8.2~~$10.3 million, or ~~30.5%~~38.6%, to ~~$18.7~~$16.4 million from ~~$26.9~~$26.7 million for the three months ended March 31, 2020 due to the restructuring and cost cutting measures we implemented during 2020.

3229

~~ended September 30, 2019, primarily~~ ~~due to previously implemented restructuring and cost cutting measures. The prior year period benefited from sales and use tax refunds received which did not repeat in the current period.~~

Depreciation and amortization.Depreciation and amortization for the three months ended ~~September 30, 2020~~March 31, 2021 decreased by ~~$5.5~~$3.6 million, or ~~25.6%~~18.3%, to ~~$16.0~~$16.1 million from ~~$21.5~~$19.7 million for the three months ended ~~September 30, 2019,~~March 31, 2020, as a result of a lower depreciable base and less intangible asset amortization.

~~Severance and other charges, net~~Goodwill impairment. ~~. Severance and other charges, net for~~There was no goodwill impairment charge during the three months ended September 30, 2020 decreased by $1.7 million, or 32.7%, to $3.5 million from $5.2 million for the three months ended September 30, 2019. Severance and other charges, net for the three months ended September 30, 2020 was unfavorably impacted by higher employee separation costs as compared to the prior period. Severance and other charges, net for the three months ended September 30, 2019 was unfavorably impacted by a $4.0 million impairment charge associated with assets identified as held for sale during the quarter. ~~See Note 16—Severance and Other Charges, net in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.~~

~~Foreign currency gain (loss)~~March 31, 2021. Foreign currency gain (loss) for the three months ended September 30, 2020 changed by $6.2 million, or 159.0%, to a gain of $2.3 million from a loss of $(3.9) million for the three months ended September 30, 2019. The change in foreign currency results year-over-year was primarily driven by the weakening of the U.S. dollar in the current period as compared to the prior year period, primarily against the Norwegian Krone and British Pound.

~~Income tax expense.~~ Income tax expense for the three months ended September 30, 2020 decreased by $0.9 million to $6.4 million from $7.3 million for the three months ended September 30, 2019, primarily as a result of a change in the jurisdictional sources of income, namely an increase in revenue in certain regions that apply withholding or revenue based taxes. We are subject to many U.S. and foreign tax jurisdictions and many tax agreements and treaties among the various taxing authorities. Our operations in these jurisdictions are taxed on various bases such as income before taxes, deemed profits (which is generally determined using a percentage of revenue rather than profits) and withholding taxes based on revenue; consequently, the relationship between our pre-tax income from operations and our income tax provision varies from period to period based on the overall effective tax rate for all jurisdictions in which we operate.

~~Nine Months Ended~~ ~~September 30, 2020~~ ~~Compared to Nine Months Ended~~ ~~September 30, 2019~~

~~Revenue.~~ Revenue from external customers, excluding intersegment sales, for the nine months ended September 30, 2020 decreased by $146.5 million, or 33.3%, to $294.0 million from $440.5 million for the nine months ended September 30, 2019. Revenue decreased across all segments due to the Covid-19 pandemic and the sharp decline in oil prices. Revenue for our segments is discussed separately below under the heading “~~Operating Segment Results.~~”

~~Cost of revenue, exclusive of depreciation and amortization.~~ Cost of revenue for the nine months ended September 30, 2020 decreased by $80.6 million, or 25.7%, to $233.0 million from $313.6 million for the nine months ended September 30, 2019. The decrease was driven by lower activity levels and mix of work in the TRS, Tubulars and CE segments.

~~General and administrative expenses.~~ General and administrative expenses for the nine months ended September 30, 2020 decreased by $28.8 million, or 29.9%, to $67.6 million from $96.4 million for the nine months ended September 30, 2019 ~~due to the restructuring and cost cutting measures we implemented during 2019 and 2020.~~

~~Depreciation and amortization.~~ Depreciation and amortization for the nine months ended September 30, 2020 decreased by $17.7 million, or 25.1%, to $52.9 million from $70.6 million for the nine months ended September 30, 2019, as a result of ~~a lower depreciable base and less intangible asset amortization.~~

~~Goodwill impairment.~~ We recognized a goodwill impairment of $57.1 million during the ~~nine~~three months ended ~~September 30, 2020. There was no goodwill impairment charge during the nine months ended September 30, 2019.~~March 31, 2020. See Note 6—Goodwill and Intangible Assets in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Severance and other charges, net. Severance and other charges, net for the ~~nine~~three months ended ~~September 30, 2020 increased~~March 31, 2021 decreased by ~~$22.9~~$13.3 million to ~~$29.4~~$7.4 million from ~~$6.5~~$20.7 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. Severance and other charges, net for the ~~nine~~three months ended ~~September 30,~~March 31, 2020 was unfavorably impacted by fixed asset impairment charges of ~~$15.6~~$15.5 million and intangible asset impairments of $4.7 million, ~~and severance and other costs of $8.8 million,~~ primarily driven by ~~Covid-19-related~~COVID-19-related activity disruptions and customer spending cuts in response to falling oil prices. Severance and other charges, net for the three months ended March 31, 2021 includes $6.8 million of mergers and acquisition costs associated with the pending merger with Expro.See Note ~~16—~~15—Severance and Other Charges, net in the Notes to Unaudited Condensed Consolidated Financial Statements for additional information.

Foreign currency ~~gain (loss)~~loss. Foreign currency loss for the ~~nine~~three months ended ~~September 30, 2020 increased~~March 31, 2021 decreased by ~~$1.8~~$7.0 million, to ~~$5.9~~$2.9 million compared to ~~$4.1~~$9.9 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The change in foreign currency results year-over-year was primarily driven by ~~increased~~reduced strengthening of the U.S. dollar in the current period as compared to the prior year period.

Income tax expense (benefit). Income tax expense for the ~~nine~~three months ended ~~September 30, 2020 decreased~~March 31, 2021 changed by ~~$20.6~~$16.7 million to an expense of $1.1 million from a benefit of ~~$(0.2) million from an expense of $20.4~~$15.6 million for the ~~nine~~three months ended ~~September 30, 2019.~~March 31, 2020. The variance in effective tax rates compared to the same period last year is due to the beneficial impact in the ~~current~~prior year period from the 5-year net operating loss carryback provision included in the ~~recently-enacted~~ Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). as well as a change in the geographical mix of income.

Operating Segment Results

The following table presents revenue and Adjusted EBITDA by segment (in thousands):


		Three Months Ended				Nine Months Ended					Three Months Ended
		September 30,				September 30,					March 31,
		2020		2019		2020		2019				2021		2020
Revenue:	Revenue:									Revenue:
Tubular Running Services	Tubular Running Services	$	52,926	$	102,277	$	204,750	$	306,971	Tubular Running Services		$	66,285	$	89,497
Tubulars	Tubulars	16,483		12,519		37,766		53,510		Tubulars		11,669		12,542
Cementing Equipment	Cementing Equipment	15,008		25,621		51,494		79,998		Cementing Equipment		16,857		21,453
Total	Total	$	84,417	$	140,417	$	294,010	$	440,479	Total		$	94,811	$	123,492

Segment Adjusted EBITDA (1):	Segment Adjusted EBITDA (1):									Segment Adjusted EBITDA (1):
Tubular Running Services	Tubular Running Services	$	982	$	23,884	$	18,336	$	67,019	Tubular Running Services		$	8,128	$	13,305
Tubulars	Tubulars	1,806		456		3,883		8,502		Tubulars		639		1,396
Cementing Equipment	Cementing Equipment	3,376		3,031		6,806		9,854		Cementing Equipment		4,795		2,544
Corporate (2)	Corporate (2)	(7,151)		(11,350)		(24,645)		(42,533)		Corporate (2)		(6,909)		(10,186)
		$	(987)	$	16,021	$	4,380	$	42,842			$	6,653	$	7,059

(1)Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. (For a reconciliation of our Adjusted EBITDA, see “Adjusted EBITDA and Adjusted EBITDA Margin”).

(2)Includes certain expenses not attributable to a particular segment, such as costs related to support functions and corporate executives.

Three Months Ended ~~September 30, 2020~~March 31, 2021 Compared to Three Months Ended ~~September 30, 2019~~March 31, 2020

Tubular Running Services

Revenue for the TRS segment was ~~$52.9~~$66.3 million for the three months ended ~~September 30, 2020~~March 31, 2021, a decrease of ~~$49.4~~$23.2 million, or ~~48.3%~~25.9%, compared to ~~$102.3~~$89.5 million for the same period in ~~2019.~~2020. The decrease was driven by ~~Covid-19-related activity disruptions and~~ customer spending cuts ~~in response to falling oil prices, primarily in Africa, the U.S., Europe and Asia Pacific markets.~~

Adjusted EBITDA for the TRS segment was $1.0 million for the three months ended September 30, 2020, a decrease of $22.9 million, or 95.8%, compared to $23.9 million for the same period in 2019. Segment results were negatively impacted by the activity declines in Africa, the U.S., Europe and Asia Pacific markets.

~~Tubulars~~

Revenue for the Tubulars segment was $16.5 million for the three months ended September 30, 2020, an increase of $4.0 million, or 32.0%, compared to $12.5 million for the same period in 2019, primarily as a result of an increase in tubular product sales during the current period.

Adjusted EBITDA for the Tubulars segment was $1.8 million for the three months ended September 30, 2020, an increase of $1.3 million, or 260.0%, compared to $0.5 million for the same period in 2019. An increase in tubular product sales impacted the current period.

~~Cementing Equipment~~

Revenue for the CE segment was $15.0 million for the three months ended September 30, 2020, a decrease of $10.6 million, or 41.4%, compared to $25.6 million for the same period in 2019, driven by lower drilling activity and lower product sales in the U.S. as a result of depressed oil prices.

Adjusted EBITDA for the CE segment was $3.4 million for the three months ended September 30, 2020, an increase of $0.4 million, or 13.3%, compared to $3.0 million for the same period in 2019, primarily due to lower costs as a result of restructuring and cost cutting measures

~~Corporate~~

Adjusted EBITDA for Corporate was a loss of $7.2 million for the three months ended September 30, 2020, an improvement of $4.2 million, or 36.8%, compared to a loss of $11.4 million for the same period in 2019, primarily due to lower costs as a result of restructuring and cost cutting measures.

~~Nine Months Ended September 30, 2020 Compared to Nine Months Ended September 30, 2019~~

~~Tubular Running Services~~

~~Revenue for the TRS segment was $204.8 million for the~~ ~~nine months ended September 30, 2020~~, a decrease of $102.2 million, or 33.3%, compared to $307.0 million for the same period in 2019. The decrease was driven by Covid-19-related activity disruptions and customer spending cuts in response to falling oil prices in most offshore markets and the U.S. land market.

Adjusted EBITDA for the TRS segment was ~~$18.3~~$8.1 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, a decrease of ~~$48.7~~$5.2 million, or ~~72.7%~~39.1%, compared to ~~$67.0~~$13.3 million for the same period in ~~2019.~~2020. Segment results were negatively impacted by activity declines across most offshore markets and the U.S. land market.

Tubulars

Revenue for the Tubulars segment was ~~$37.8~~$11.7 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, a decrease of ~~$15.7~~$0.8 million, or ~~29.3%~~6.4%, compared to ~~$53.5~~$12.5 million for the same period in ~~2019,~~2020, primarily as a result of lower drilling tools activity and lower tubular sales during the current ~~period, due in part to Covid-19-related activity disruptions and customer spending cuts in response to falling oil prices.~~period.

Adjusted EBITDA for the Tubulars segment was ~~$3.9~~$0.6 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, a decrease of ~~$4.6~~$0.8 million, or ~~54.1%~~57.1%, compared to ~~$8.5~~$1.4 million for the same period in ~~2019. Lower~~2020. A decrease in high margin drilling tools activity and lower tubular sales impacted the current period.

Cementing Equipment

Revenue for the CE segment was ~~$51.5~~$16.9 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, a decrease of ~~$28.5~~$4.6 million, or ~~35.6%~~21.4%, compared to ~~$80.0~~$21.5 million for the same period in ~~2019,~~2020, driven by lower drilling activity and product sales in the U.S. ~~as a result of falling oil prices.~~

Adjusted EBITDA for the CE segment was ~~$6.8~~$4.8 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, ~~a decrease~~an increase of ~~$3.1~~$2.3 million, or ~~31.3%~~92.0%, compared to ~~$9.9~~$2.5 million for the same period in ~~2019,~~2020, primarily due to cost cutting measures that more than offset lower ~~revenue, particularly in the U.S. offshore market.~~revenue.

Corporate

Adjusted EBITDA for Corporate was a loss of ~~$24.6~~$6.9 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021, an improvement of ~~$17.9~~$3.3 million, or ~~42.1%~~32.4%, compared to a loss of ~~$42.5~~$10.2 million for the same period in ~~2019,~~2020, primarily due to lower costs as a result of restructuring and cost cutting measures.

Liquidity and Capital Resources

Liquidity

At ~~September 30, 2020,~~March 31, 2021, we had cash and cash equivalents and and short-term investments of ~~$205.9~~$193.6 million and no debt. Our primary sources of liquidity to date have been cash flows from operations. Our primary uses of capital have been for organic growth capital expenditures. We continually monitor potential capital sources, including equity and debt financing, in order to meet our investment and target liquidity requirements. The ~~Covid-19~~COVID-19 pandemic has significantly reduced economic activity levels across the globe, which has resulted in lower demand for oil and natural gas, as well as for our services and products. The reduced demand for our services and products has had, and may continue to have, a material adverse impact on our business, results of operations and financial condition. In consideration of these risks, we are undertaking additional measures to protect liquidity. These

measures include increased focus on collection of receivables, enhanced customer credit review, special measures to reduce risks of high-cost inventory items, and enhanced cash reporting requirements.

Our Board ~~of Directors~~ has authorized a program to repurchase our common stock from time to time. Approximately $38,502,322 remained authorized for repurchases as of ~~September 30, 2020;~~March 31, 2021; subject to the limitation set in our shareholder authorization for repurchases of our common stock, which is currently 10% of the common stock outstanding as of April 30, 2020. From the inception of this program in February 2020 ~~through September 30, 2020,~~to date, we repurchased 570,044 shares of our common stock for a total cost of approximately $1.5 million. This program was suspended during the second quarter of 2020 due to the impacts of ~~Covid-19~~COVID-19 and commodity price declines and will be revisited when market conditions stabilize sufficiently to provide greater clarity to anticipated business results. We expect that following the Merger, the board of directors of the Combined Company will reevaluate this program.

Our total capital expenditures are estimated to be approximately ~~$30.0~~$25.0 million in ~~2020,~~2021, of which we expect approximately 90% will be used for the purchase and manufacture of equipment and 10% for other property, plant and ~~equipment, inclusive of capitalized enterprise resource planning software implementation costs. The increased~~

~~estimate is attributable to prior year approved expenditures in progress during 2020 and delivered more quickly than anticipated.~~equipment. The actual amount of capital expenditures for the manufacture of equipment may fluctuate based on market conditions and timing of deliveries. During the ~~nine~~three months ended ~~September 30,~~March 31, 2021 and 2020, ~~and 2019,~~ cash expenditures related to property, plant and equipment ~~and intangibles~~ were ~~$25.7~~$2.3 million and ~~$27.0~~$10.0 million, respectively, all of which were funded from internally generated funds. We believe our cash on hand should be sufficient to fund our capital expenditure and liquidity requirements for the remainder of ~~2020.~~2021. We expect that following the Merger, the board of directors of the Combined Company will reevaluate our capital expenditures plan.

Credit Facility

Asset Based Revolving Credit Facility

On November 5, 2018, FICV, Frank’s International, LLC and Blackhawk, as borrowers, and FINV, certain of FINV’s subsidiaries, including FICV, Frank’s International, LLC, Blackhawk, Frank’s International GP, LLC, Frank’s International, LP, Frank’s International LP B.V., Frank’s International Partners B.V., Frank’s International Management B.V., Blackhawk Intermediate Holdings, LLC, Blackhawk Specialty Tools, LLC, and Trinity Tool Rentals, L.L.C., as guarantors, entered into a five-year senior secured revolving credit facility (the “ABL Credit Facility”) with JPMorgan Chase Bank, N.A., as administrative agent (the “ABL Agent”), and other financial institutions as lenders with total commitments of $100.0 million including up to $15.0 million available for letters of credit. Subject to the terms of the ABL Credit Facility, we have the ability to increase the commitments to $200.0 million. The maximum amount that the Company may borrow under the ABL Credit Facility is subject to a borrowing base, which is based on a percentage of certain eligible accounts receivable and eligible inventory, subject to customary reserves and other adjustments.

All obligations under the ABL Credit Facility are fully and unconditionally guaranteed jointly and severally by FINV’s subsidiaries, including FICV, Frank’s International, LLC, Blackhawk, Frank’s International GP, LLC, Frank’s International, LP, Frank’s International LP B.V., Frank’s International Partners B.V., Frank’s International Management B.V., Blackhawk Intermediate Holdings, LLC, Blackhawk Specialty Tools, LLC, and Trinity Tool Rentals, L.L.C., subject to customary exceptions and exclusions. In addition, the obligations under the ABL Credit Facility are secured by first priority liens on substantially all of the assets and property of the borrowers and guarantors, including pledges of equity interests in certain of FINV’s subsidiaries, subject to certain exceptions. Borrowings under the ABL Credit Facility bear interest at FINV’s option at either (a) the Alternate Base Rate (“ABR”) (as defined therein), calculated as the greatest of (i) the rate of interest publicly quoted by the Wall Street Journal, as the “prime rate,” subject to each increase or decrease in such prime rate effective as of the date such change occurs, (ii) the federal funds effective rate that is subject to a 0.00% interest rate floor plus 0.50%, and (iii) the one-month Adjusted LIBO Rate (as defined therein) plus 1.00%, or (b) the Adjusted LIBO Rate, plus, in each case, an applicable margin. The applicable interest rate margin ranges from 1.00% to 1.50% per annum for ABR loans and 2.00% to 2.50% per annum for Eurodollar loans and, in each case, is based on FINV’s leverage ratio. The unused portion of the ABL Credit Facility is subject to a commitment fee that varies from 0.250% to 0.375% per

to deposit control agreements in favor of the ABL Agent. After a FCCR Trigger Event, these deposit accounts would be subject to “springing” cash dominion. After a FCCR Trigger Event, the Company will be subject to compliance with the fixed charge coverage ratio and “springing” cash dominion until no default exists under the ABL Credit Facility and availability under the facility for the preceding thirty consecutive days has been equal to at least the greater of (x) $12.5 million and (y) 15% of the lesser of the borrowing base and the aggregate commitments. If FINV fails to perform its obligations under the agreement that results in an event of default, the commitments under the ABL Credit Facility could be terminated and any outstanding borrowings under the ABL Credit Facility may be declared immediately due and payable. The ABL Credit Facility also contains cross default provisions that apply to FINV’s other indebtedness.

As of ~~September 30, 2020,~~March 31, 2021, FINV had no borrowings outstanding under the ABL Credit Facility, letters of credit outstanding of ~~$9.1~~$10.3 million and availability of ~~$30.2~~$23.5 million. At this time, due to our expected ability to fund our capital expenditure and liquidity requirements from cash on hand, we do not anticipate a need to borrow under the ABL Credit Facility during the remainder of ~~2020.~~2021. Further, we do not believe that an FCCR Trigger Event will occur in the remainder of ~~2020.~~2021.

Tax Receivable Agreement and Amended & Restated Tax Receivable Agreement

We entered into the TRA with FICV and Mosing Holdings in connection with our IPO. The TRA generally provides for the payment by FINV to Mosing Holdings of 85% of the net cash savings, if any, in U.S. federal, state and local income tax and franchise tax that FINV actually realizes (or is deemed to realize in certain circumstances) in periods after our IPO as a result of (i) tax basis increases resulting from the Conversion and (ii) imputed interest deemed to be paid by FINV as a result of, and additional tax basis arising from, payments under the TRA. We will retain the benefit of the remaining 15% of these cash savings, if any. Payments FINV makes under the TRA will be increased by any interest accrued from the due date (without extensions) of the corresponding tax return to the date of payment specified by the TRA. The payments under the TRA will not be conditioned upon a holder of rights under the TRA having a continued ownership interest in FINV. As of ~~October 27, 2020,~~April 29, 2021, based on the best information available to us, the Mosing family collectively owns approximately ~~48%~~47% of our common shares.

If FINV elects to terminate the TRA early, which it may do in its sole discretion (or if it terminates early as a result of our breach), it would be required to make a substantial, immediate lump-sum payment equal to the present value of the hypothetical future payments that could be required to be paid under the TRA (based upon certain assumptions and deemed events set forth in the TRA, including the assumption that it has sufficient taxable income to fully utilize such benefits), determined by applying a discount rate equal to the long-term Treasury rate in effect on the applicable date plus 300 basis points. Any early termination payment may be made significantly in advance of the actual realization, if any, of such future benefits. In addition, payments due under the TRA will be similarly accelerated following certain mergers or other changes of control.

In certain circumstances, FINV may be required to make payments under the TRA that it has entered into with Mosing Holdings. In most circumstances, these payments will be associated with the actual cash savings that FINV recognizes from tax benefits resulting from the Conversion, which would reduce the actual tax benefit to FINV. If FINV was to elect to exercise its sole right to terminate the TRA early or enter into certain change of control transactions, FINV may incur payment obligations prior to the time it actually incurs any tax benefit. In those circumstances, FINV would need to pay the amounts out of cash on hand, finance the payments or refrain from incurring the obligation (including by not entering into a change of control transaction). Though we do not have any present intention of incurring an advance payment under the TRA (other than as described below with respect to the

A&R TRA), based on our current liquidity and our expected

ability to access debt and equity financing, we believe FINV would be able to make such a payment if necessary. Any such payment could reduce our cash on hand and our borrowing availability, however, which would also reduce the amount of cash available to operate our business, to fund capital expenditures and to be paid as dividends to our stockholders, among other things.

In connection with the Merger Agreement, FINV, FICV and Mosing Holdings have entered into the A&R TRA. Pursuant to the A&R TRA, FINV, FICV and Mosing Holdings have agreed, among other things to settle the early termination payment obligation that would otherwise be owed to Mosing Holdings under the TRA as a result of the Merger by the payment by FINV to Mosing Holdings of (i) $15 million cash at the closing of the Transactions and (ii) certain other contingent payments in the future in the event the Combined Company realizes cash tax savings from tax attributes covered under the TRA during the ten year period following the Closing Date in excess of $18,057,000, as more fully described in the A&R TRA. The terms of the A&R TRA are conditioned upon and subject to the closing of the Transactions and the payment to Mosing Holdings of the $15 million cash payment at the closing of the Transactions. If such conditions do not occur, the A&R TRA will be terminated and will be null and void, and the TRA will remain in effect in accordance with its terms. Please see Note ~~12—~~11—Related Party Transactions in the Notes to Unaudited Condensed Consolidated Financial Statements.

Cash Flows from Operating, Investing and Financing Activities

Cash flows from our operations, investing and financing activities are summarized below (in thousands):


		Nine Months Ended					Three Months Ended
		September 30,					March 31,
		2020		2019			2021		2020
Operating activities	Operating activities	$	25,315	$	8,485	Operating activities	$	(15,481)	$	(22,252)
Investing activities	Investing activities	(16,209)		(191)		Investing activities	(1,956)		(10,039)
Financing activities	Financing activities	(1,689)		(5,416)		Financing activities	(2,165)		(1,521)
		7,417		2,878			(19,602)		(33,812)
Effect of exchange rate changes on cash	Effect of exchange rate changes on cash	3,267		2,684		Effect of exchange rate changes on cash	1,350		9,327
Net increase in cash, cash equivalents and restricted cash		$	10,684	$	5,562
Net decrease in cash, cash equivalents and restricted cash						Net decrease in cash, cash equivalents and restricted cash	$	(18,252)	$	(24,485)

Statements of cash flows for entities with international operations that use the local currency as the functional currency exclude the effects of the changes in foreign currency exchange rates that occur during any given year, as these are noncash changes. As a result, changes reflected in certain accounts on the condensed consolidated

statements of cash flows may not reflect the changes in corresponding accounts on the condensed consolidated balance sheets.

Operating Activities

Cash flow ~~provided by~~used in operating activities was ~~$25.3~~$15.5 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$8.5~~$22.3 million for the same period in ~~2019.~~2020. The change in cash flow from operating activities of ~~$16.8~~$6.8 million was primarily a result of favorable changes in accounts receivable of ~~$53.4~~$9.3 million ~~partially offset by an increased net loss, unfavorable changes in~~and accounts payable and accrued liabilities of ~~$14.6~~$24.1 million, ~~and other noncurrent liabilities~~partially offset by unfavorable changes in inventories of ~~$3.7~~$10.6 million. ~~During the third quarter of 2020, we received an income tax refund of $17.5 million as a result of the net operating loss carryback provision in the CARES Act.~~ ~~Please see Note 14—Income Taxes in the Notes to Unaudited Condensed Consolidated Financial Statements.~~

Investing Activities

Cash flow used in investing activities was ~~$16.2~~$2.0 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$0.2~~$10.0 million in the same period in ~~2019,~~2020, a year-over-year decrease of ~~$16.0 million. Investing activities for the nine months ended September 30, 2019 included net proceeds from sales of investments of $23.6~~$8.0 million, ~~that did not reoccur in the nine months ended September 30, 2020. This was offset by~~primarily due to a ~~$6.7 million increase in proceeds from the sale of assets and a $1.3~~$7.6 million decrease in the purchases of property, plant, ~~equipment and intangibles.~~equipment.

Financing Activities

Cash flow used in financing activities was ~~$1.7~~$2.2 million for the ~~nine~~three months ended ~~September 30, 2020~~March 31, 2021 compared to ~~$5.4~~$1.5 million in the same period in ~~2019.~~2020. The ~~decrease~~increase in cash flow used in financing activities of ~~$3.7~~$0.7 million was due to ~~decreased~~increased treasury shares withheld for employee taxes of $0.8 million and increased repayment of borrowings of ~~$5.1~~$0.7 million, partially offset by repurchases under our publicly announced share repurchase program of ~~$1.5~~$1.0 million during the ~~nine~~three months ended ~~September 30, 2020.~~March 31, 2020 that did not reoccur during 2021.

Off-Balance Sheet Arrangements

We do not have any material off-balance sheet arrangements with the exception of purchase obligations.

Critical Accounting Policies

There were no changes to our significant accounting policies from those disclosed in our Annual Report.

Impact of Recent Accounting Pronouncements

Refer to Note 1—Basis of Presentation in the Notes to Unaudited Condensed Consolidated Financial Statements for a discussion of accounting standards we recently adopted or will be required to adopt.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk,” in our Annual Report. Our exposure to market risk has not changed materially since December 31, ~~2019.~~2020.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Form 10-Q. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure, and such information is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective as of ~~September 30, 2020~~March 31, 2021 at the reasonable assurance level.

(b) Change in Internal Control Over Financial Reporting.

~~There have been~~Except as described below, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, has determined that there were no changes in ~~our~~the Company’s internal control over financial reporting ~~that occurred during the quarter ended September 30, 2020,~~ that have materially affected, or are reasonably likely to materially affect, these internal controls over financial reporting during the period covered by this quarterly report.

During the first quarter of 2021, the Company implemented a new enterprise resource planning (“ERP”) system. In connection with this ERP system, we have updated our internal controls over financial reporting to accommodate modifications to our business processes and accounting procedures. As with all new information systems, this ERP system and the related internal controls over financial reporting will require testing for effectiveness. We do not believe that the transition to this ERP system will have an adverse effect on our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

We are conducting an internal investigation of the operations of certain of our foreign subsidiaries in West Africa including possible violations of the U.S. Foreign Corrupt Practices Act (“FCPA”), our policies and other applicable laws. In June 2016, we voluntarily disclosed the existence of our extensive internal review to the U.S. Securities and Exchange Commission (“SEC”), the U.S. Department of Justice (“DOJ”) and other governmental entities. It is our intent to continue to fully cooperate with these agencies and any other applicable authorities in connection with any further investigation that may be conducted in connection with this matter. While our review has not indicated that there has been any material impact on our previously filed financial statements, we have continued to collect information and cooperate with the authorities, but at this time are unable to predict the ultimate resolution of these matters with these agencies.

Item 1A. Risk Factors

In addition to the other information set forth in this report, you should carefully consider the risks discussed below and under the heading “Risk Factors” in our Annual Report, which risks could materially affect our business, financial condition or future results. These risks are not the only risks we face. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially adversely affect our business, financial condition or results of operations.

~~Our business depends on~~Risk Factors Relating to the ~~level of activity in the oil and gas industry, which is significantly affected by oil and gas prices and other factors.~~Merger

~~Our business depends~~The Exchange Ratio will not be adjusted in the event of any change in the stock price of Frank’s.

At the Effective Time, each Expro Ordinary Share outstanding immediately prior to the Effective Time, other than shares owned by Expro, Frank’s, Merger Sub or any subsidiary of Frank’s (but including, for the avoidance of doubt, any such shares held by any wholly-owned subsidiary of Expro), will be converted into the right to receive a number of shares of our common stock equal to the Exchange Ratio. The Exchange Ratio will not be adjusted for changes in the market price of our common stock between the date of signing the Merger Agreement and completion of the Merger. Changes in the price of our common stock prior to the Merger will affect the value of our common stock that Expro shareholders will receive on the ~~level~~date of ~~activity~~the Merger. Stock price changes may result from a variety of factors (many of which are out of our control), including the following:

•changes in ~~oil~~the respective businesses, operations and ~~gas exploration, development~~prospects of Frank’s and ~~production~~Expro;

•changes in market ~~sectors worldwide. Oil~~assessments of the business, operations and ~~gas prices~~prospects of Frank’s and Expro;

•investor behavior and strategies, including market ~~expectations~~assessments of potential changes in these prices significantly affect this level of activity. However, higher commodity prices do not necessarily translate into increased drilling or well construction and completion activity, since customers’ expectations of future commodity prices typically drive demand for our services and products. The availability of quality drilling prospects, exploration success, relative production costs, the ~~stage of reservoir development and political and regulatory environments also affect~~likelihood that the ~~demand for our services and products. Worldwide military, political~~Merger will be completed;

•interest rates, general market and economic ~~events have in~~conditions and other factors generally affecting the ~~past contributed to oil and gas~~ price volatility and continue to do so at present. Average daily prices for New York Mercantile Exchange West Texas Intermediate ranged from a high of approximately $63/Bbl in January 2020 to a low of negative $37/Bbl in April 2020. This significant decline in crude oil prices has largely been attributable to the global outbreak of Covid-19, which has reduced demand for oil and natural gas because of significantly reduced global and national economic activity. Additionally, in March 2020, Saudi Arabia and Russia failed to agree on a plan to cut production of oil and gas within OPEC and Russia. Subsequently, Saudi Arabia announced plans to increase production to record levels and reduce the prices at which they sell oil. We cannot predict whether or when oil production and economic activities will return to normalized levels. Saudi Arabia and Russia subsequently announced production cuts, but even with such cuts oil prices could remain at current levels, or decline further, for an extended period of time. If current levels are sustained or decline further, certain of our ~~customers may be unable to pay their vendors~~common stock; and ~~service providers, including us, as a result of the decline in commodity prices. Reduced~~

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~~activity~~•legislation, governmental regulation and legal developments in ~~our areas of operation as a result of decreased capital spending could have a negative long-term impact on our business, even~~the businesses in ~~an environment of stronger oil~~which Frank’s and ~~natural gas prices.~~Expro operate.

The ~~demand for~~price of our ~~services and products may also be generally affected by numerous factors, including:~~

•~~the level of worldwide oil and gas exploration and production;~~

•~~the cost of exploring for, producing and delivering oil and gas;~~

•~~demand for energy, which is affected by worldwide economic activity and population growth;~~

•~~the level of excess production capacity;~~

•~~the discovery rate of new oil and gas reserves;~~

•~~the ability of OPEC to set and maintain production levels for oil;~~

•~~the level of production by non-OPEC countries;~~

•~~global or national health concerns, including health epidemics such as the outbreak of Covid-19 at the beginning of 2020;~~

•~~the location of oil and gas drilling and production activity, including the relative amounts of activity onshore and offshore;~~

•~~the technical specifications of wells including depth of wells and complexity of well design;~~

•~~U.S. and global political and economic uncertainty or inactivity, socio-political unrest and instability or hostilities;~~

•~~demand for, availability of and technological viability of, alternative sources of energy; and~~

•~~technological advances affecting energy exploration, production, transportation and consumption.~~

~~Demand for our offshore services and products substantially depends~~common stock on the ~~level~~Closing Date may vary from its price on the date the Merger Agreement was executed, on the date of ~~activity in offshore oil~~the proxy statement/prospectus and ~~gas exploration, development and production. The level~~on the date of offshore activity is historically cyclical and characterized by large fluctuations in response to relatively minor changes in a variety of factors, including oil and gas prices, which could have a material adverse effect on our business, financial condition and results of operations.

~~A significant amount~~the 2021 annual general meeting of our ~~U.S. onshore business is focused on unconventional shale resource plays. The demand for those services~~shareholders (the “Annual Meeting”). As a result, the value represented by the Exchange Ratio will also vary, and products is substantially affected by oil and gas prices and market expectations of potential changes in these prices. If commodity prices remain depressed, demand for our services and products in the U.S. onshore market could be reduced, which could have a material adverse effect on our business, financial condition and results of operations. Any actualyou will not know or anticipated reduction in oil or gas prices may reduce the level of exploration, drilling and production activities. Prolonged low oil prices have resulted in softer demand for our products and services and if prices remain at current levels, demand could be further reduced. Additionally, we have reduced pricing in some of our customer contracts in light of the volatility of the oil and gas market.

Furthermore, the oil and gas industry has historically experienced periodic downturns, which have been characterized by reduced demand for oilfield products and services and downward pressure on the prices we charge. A significant downturn in the oil and gas industry has adversely affected the demand for oilfield services and our business, financial condition and results of operations since late 2014. In the first and second quarters of 2020, demand further decreased due to the Covid-19 outbreak and increased oil production out of Saudi Arabia and Russia. With the continued downturn, demand for our products and services has not returned to the levels experienced prior to late 2014. We cannot be assured that there will be a significant recovery in the demand for our products and services to equal or approach levels experienced prior to the downturn.

The recent downturns in 2014 and 2020 in the oil and gas industry have negatively affected, and will likely continue to affect, our ability to accurately predict customer demand, causing us to potentially hold excess or obsolete inventory and experience a reduction in gross margins and financial results.

~~We may not~~ be able to ~~accurately predict what or how many products our customers will need in~~calculate at the future. Orders are placed with our suppliers based on forecasts of customer demand and, in some instances, we may establish buffer inventories to accommodate anticipated demand. Our forecasts of customer demand are based on multiple assumptions, each of which may introduce errors into the estimates. In addition, many of our suppliers require a longer lead time ~~to provide products than our customers demand for delivery of our finished products. If~~

we overestimate customer demand, we may allocate resources to the purchase of material or manufactured products that we may not be able to sell when we expect to, if at all. As a result, we would hold excess or obsolete inventory, which would reduce gross margin and adversely affect financial results. We overestimated customer demand for our pipe and connectors inventory, and this resulted in a material impairment charge in 2017. Conversely, if we underestimate customer demand or if insufficient manufacturing capacity is available, we would miss revenue opportunities and potentially lose market share and damage our customer relationships. In addition, any future significant cancellations or deferrals of product orders or the return of previously sold products could materially and adversely affect profit margins, increase product obsolescence and restrict our ability to fund our operations. Recently, the uncertainty surrounding the duration and spread of the ~~Covid-19 pandemic along with~~Annual Meeting the market volatility due to variable oil production from Russia and Saudi Arabia have further decreased our ability to accurately estimate demand for our services and products. In particular, sporadic suspensions of activity in certain locations due to local outbreaks of Covid-19 are difficult or impossible to anticipate, and can cause interruption of revenue and delays in availability of equipment and personnel for subsequent work, interfering with our ability to plan allocation of resources over time.

~~We may be exposed to unforeseen risks in our services and product manufacturing, which could adversely affect our results of operations.~~

We operate a number of manufacturing facilities to support our operations. In addition, we also manufacture certain products, including large OD pipe connectors and cementing products that we sell directly to external customers. The equipment and management systems necessary for such operations may break down, perform poorly or fail, resulting in fluctuations in manufacturing efficiencies. In addition, in the event of an outbreak of Covid-19 among workers at a manufacturing facility, all or somevalue of the workers at the facility might become temporarily unavailable due to required public health measures. Any such disruptions caused by equipment or personnel availability could negatively impact our ability to manufacture and timely deliver products to our customers or our field operations, which could materially and negatively impact the results of our operations. In addition, in such circumstances our customers might cancel purchase orders for failure to timely deliver the products, potentially leading to us holding excess or obsolete inventory, which would reduce gross margin and adversely affect financial results.

Additionally, some of our U.S. onshore business may be conducted under fixed price or “turnkey” contracts. Under fixed price contracts, we agree to perform a defined scope of work for a fixed price. Prices for these contracts are based largelymerger consideration Expro shareholders will receive upon ~~estimates and assumptions relating to project scope and specifications, personnel and material needs.~~

Fluctuations in our manufacturing process and inaccurate estimates and assumptions used in our projects may occur due to factors out of our control, resulting in cost overruns, which we may be required to absorb and could have a material adverse effect on our business, financial condition and results of operations. Such fluctuations or incorrect estimates may affect our ability to deliver services and products to our customers on a timely basis and we may suffer financial penalties and a diminution of our commercial reputation and future product orders, which could adversely affect our business, financial condition and results of operations.

~~We may be unable to employ a sufficient number of skilled and qualified workers to sustain or expand our current operations.~~

Our operations require personnel with specialized skills and experience. Our ability to be productive and profitable will depend upon our ability to employ and retain skilled workers. In addition, our ability to expand our operations depends in part on our ability to increase the size of our skilled labor force. The demand for skilled workers is high, the supply can be limited in certain jurisdictions, and the cost to attract and retain qualified personnel has increased over the past few years. In addition, we are currently a party to collective bargaining or similar agreements in certain international areas in which we operate, which could result in increases in the wage rates that we must pay to retain our employees. Furthermore, a significant increase in the wages paid by competing employers could result in a reduction of our skilled labor force, increases in the wage rates that we must pay, or both. Finally, the Covid-19 pandemic provides an illustrative example of how a pandemic or other health crisis can

impact our operations and business by affecting the health of skilled workers and rendering them unable to work or travel. These events may cause our capacity to be diminished, our ability to respond quickly to customer demands or strong market conditions may be inhibited and our growth potential could be impaired, any of which could have a material adverse effect on our business, financial condition and results of operations.

Our operations and our customers’ operations are subject to a variety of governmental laws and regulations that may increase our costs, limit the demand for our services and products or restrict our operations.

~~Our business and our customers’ businesses may be significantly affected by:~~

•~~federal, state and local restrictions on business activity and travel including stay at home orders and quarantines such as those enacted in response to Covid-19;~~

•~~federal, state and local and non-U.S. laws and other regulations relating to oilfield operations, worker safety and protection~~completion of the ~~environment and natural resources;~~

•~~changes in these laws and regulations; and~~

•~~the level of enforcement of these laws and regulations.~~

In addition, we depend on the demand for our services and products from the oil and gas industry. This demand is affected by changing taxes, price controls and other laws and regulations relating to the oil and gas industry in general. For example, the adoption of laws and regulations curtailing exploration and development drilling for oil and gas for economic or other policy reasons could adversely affect our operations by limiting demand for our products. In addition, some non-U.S. countries may adopt regulations or practices that give advantage to indigenous oil companies in bidding for oil leases, or require indigenous companies to perform oilfield services currently supplied by international service companies. To the extent that such companies are not our customers, or we are unable to develop relationships with them, our business may suffer. We cannot determine the extent to which our future operations and earnings may be affected by new legislation, new regulations or changes in existing regulations.

Because of our non-U.S. operations and sales, we are also subject to changes in non-U.S. laws and regulations that may encourage or require hiring of local contractors or require non-U.S. contractors to employ citizens of, or purchase supplies from, a particular jurisdiction. If we fail to comply with any applicable law or regulation, our business, financial condition and results of operations may be adversely affected.

~~Our business is dependent on capital spending by our customers, and reductions in capital spending in response to declining commodity prices will have a material adverse effect on our business.~~

Any change in capital expenditures by our customers or reductions in their capital spending could directly impact our business by reducing demand for our products and services and could have a material adverse effect on our business. Our customers are subject to risks which, in turn, could impact our business, including recent volatile oil and gas prices caused by Covid-19 and the potential for increased oil production from Russia and Saudi Arabia, difficulty accessing capital on economically advantageous terms and adverse developments in their own business or operations. With respect to national oil company customers, we are also subject to risk of policy, regime and budgetary changes.

~~We face risks related to natural disasters, which could result in severe property damage or materially and adversely disrupt our operations and affect travel required for our worldwide operations.~~

Some of our operations involve risks of, among other things, property damage, which could curtail our operations. For example, disruptions in operations or damage to a manufacturing plant could reduce our ability to produce products and satisfy customer demand. In particular, we have offices and manufacturing facilities in Houston, Texas and Houma and Lafayette, Louisiana as well as in various places throughout the Gulf Coast region of the United States. These offices and facilities are particularly susceptible to severe tropical storms, hurricanes and flooding, which may disrupt our operations. If one or more manufacturing facilities we own are damaged by severe weather or any other disaster, accident, catastrophe or event, our operations could be significantly interrupted.

Similar interruptions could result from damage to production or other facilities that provide supplies or other raw materials to our plants or other stoppages arising from factors beyond our control. These interruptions might involve significant damage to, among other things, property, and repairs might take from a week or less for a minor incident to many months or more for a major interruption.

In addition, a portion of our business involves the movement of people and certain parts and supplies to or from foreign locations. Any restrictions on travel or shipments to and from foreign locations, due to the occurrence of natural disasters such as earthquakes, floods or hurricanes, in these locations, could significantly disrupt our operations and decrease our ability to provide services to our customers. If a natural disaster were to impact a location where we have a high concentration of business and resources, our local facilities and workforce could be affected by such an occurrence or outbreak which could also significantly disrupt our operations and decrease our ability to provide services and products to our customers.

Events outside of our control, including a pandemic, epidemic or outbreak of an infectious disease, such as the global outbreak of Covid-19, have materially adversely affected, and may further materially adversely affect, our business.

We face risks related to pandemics, epidemics, outbreaks or other public health events that are outside of our control, and could significantly disrupt our operations and adversely affect our financial condition. For example, the global outbreak of Covid-19 has reduced demand for oil and natural gas because of significantly reduced global and national economic activity. In addition, the impact of Covid-19 or other public health events may adversely affect our operations or the health of our workforce and the workforces of our customers and service providers by rendering employees or contractors unable to work or unable to access our and their facilities for an indefinite period of time. On March 13, 2020, the United States declared the Covid-19 pandemic a national emergency, and several states, including Texas and Louisiana, and municipalities declared public health emergencies. Along with these declarations, there have been extraordinary and wide-ranging actions taken by international, federal, state and local public health and governmental authorities to contain and combat the outbreak and spread of Covid-19 in regions across the United States and the world, including mandates for many individuals to substantially restrict daily activities and for many businesses to curtail or cease normal operations. Our business involves movement of people and certain parts and supplies to or from foreign locations, and the travel restrictions many governments have imposed due to Covid-19 have significantly disrupted such movement and decreased our ability to provide products and services to our customers. To the extent Covid-19 continues or worsens, including potential seasonal increases, governments may impose additional similar restrictions.Merger.

In addition, the ~~technology required for~~Merger might not be completed until a significant period of time has passed after the ~~corresponding transition~~Annual Meeting. Because the Exchange Ratio will not be adjusted to ~~remote work increases~~reflect any changes in the market value of our ~~vulnerability~~common stock, the market value of the our common stock issued in connection with the Merger may be higher or lower than the value of those shares on earlier dates. Stock price changes may result from, among other things, changes in the business, operations or prospects of Frank’s and Expro prior to ~~cybersecurity threats, including threats to gain unauthorized access to sensitive information~~ or ~~to render data~~following the Merger, litigation or ~~systems unusable, the impact of which may have material adverse effects on our~~regulatory considerations, general business, ~~and operations. See “Item 1A. Risk Factors—Risks Related to Our Business-Our business could be negatively affected by cybersecurity threats~~market, industry or economic conditions and other ~~disruptions”~~factors both within and beyond the control of Frank’s. Neither Frank’s nor Expro is permitted to terminate the Merger Agreement solely because of changes in the market price or value of either company’s equity securities.

Current Frank’s shareholders will have a reduced ownership and voting interest in the Combined Company after the Merger, and such reduced ownership could have negative Dutch tax consequences.

Frank’s will issue approximately 426,146,247 shares of our ~~Annual Report~~common stock to Expro shareholders in the Merger. As a result of these issuances, Expro shareholders are expected to hold up to approximately 65% of the Combined Company’s outstanding common stock immediately following completion of the Merger.

Frank’s shareholders currently have the right to vote for its directors and on ~~Form 10-K for~~other matters affecting Frank’s. Each Frank’s shareholder will remain a shareholder of Frank’s with a percentage ownership of the ~~year ended December 31, 2019.~~Combined Company that will be smaller than the shareholder’s percentage of Frank’s prior to the Merger. As a result of these reduced ownership percentages, Frank’s shareholders will have less voting power in the Combined Company than they now have with respect to Frank’s.

As a result of the Merger, the interest held by current Frank’s shareholders in the Combined Company could fall below certain thresholds relevant for Dutch tax purposes, such as the threshold relevant in respect of the Dutch substantial interest rules, which could give rise to Dutch taxes on income and capital gains. In addition, the Merger will impact the average paid-in capital of Frank’s common stock held by current Frank’s shareholders as recognized for purposes of Dutch dividend withholding tax, which may have tax consequences in relation to future liquidation proceeds of redemption of Frank’s common stock or proceeds of repurchases of Frank’s common stock derived by current Frank’s shareholders. For further information, see the “Material Dutch Tax Consequences” section of the Registration Statement on Form S-4 filed with the SEC on April 26, 2021. Each Frank’s shareholder should seek tax advice from his own tax advisors about the potential tax consequences to it of holding and disposing of shares of our common stock (some of which could be material) following the merger.

The Merger is subject to conditions, including certain conditions that may not be satisfied, or completed on a timely basis, if at all.

The Merger is subject to a number of conditions beyond the control of Frank’s and Expro that may prevent, delay or otherwise materially adversely affect its completion. We cannot predict whether and when these conditions will be satisfied. Any delay in completing the Merger could cause the Combined Company not to realize some or all of the benefits that we expect to achieve if the Merger is successfully completed within its expected time frame.

Failure to complete the Merger could negatively impact the future business and financial results of Frank’s.

Neither Frank’s nor Expro can make any assurances that it will be able to satisfy all of the conditions to the Merger or succeed in any litigation brought in connection with the Merger. If the Merger is not completed, the financial results of Frank’s may be adversely affected and Frank’s will be subject to several risks, including but not limited to:

•Frank’s being required to pay Expro a termination fee of $37.5 million or Expro being required to pay Frank’s a termination fee of $71.5 million, in each case under certain circumstances provided in the Merger Agreement;

•payment of costs relating to the Merger, such as legal, accounting, financial advisor and printing fees, regardless of whether the Merger is completed;

•the focus of our management team on the Merger instead of the pursuit of other opportunities that could have been beneficial to Frank’s; and

•the potential occurrence of litigation related to any failure to complete the Merger.

In addition, if the Merger is not completed, Frank’s may experience negative reactions from ~~Covid-19~~the financial markets and from its customers and employees. If the Merger is ~~difficult~~not completed, Frank’s cannot assure its shareholders that these risks will not materialize and will not materially and adversely affect the business, financial results of Frank’s or the stock price of our common stock.

The Merger Agreement contains provisions that limit each party’s ability to ~~predict,~~pursue alternatives to the Merger, could discourage a potential competing acquiror of either Frank’s or Expro from making a favorable alternative transaction proposal and, in specified circumstances, could require either party to pay a termination fee to the other party.

The Merger Agreement contains “non-solicitation” provisions that, subject to limited exceptions, restrict Frank’s or Expro’s ability to, among other things, directly or indirectly initiate, solicit, knowingly encourage or knowingly facilitate or take any action designed to lead to the inquiry, making, or submission of a proposal competing with the transactions contemplated by the Merger Agreement. In addition, while each of the Frank’s Board and the Expro Board has the ability, in certain circumstances, to change its recommendation of the transaction to its shareholders, neither party can terminate the Merger Agreement to accept an alternative proposal, and the other party generally has an opportunity to modify the terms of the Merger and Merger Agreement in response to any alternative proposals that may be made before such board of directors may withdraw or modify its recommendation. Moreover, in certain circumstances, Frank’s or Expro may be required to pay up to $5.5 million of the other party’s expenses, respectively, or a termination fee of $37.5 million or $71.5 million, respectively.

These provisions could discourage a potential third party that might have an interest in acquiring all or a significant portion of Frank’s or Expro from considering or proposing that acquisition, even if it were prepared to pay consideration with a higher per share cash or market value than the market value proposed to be received or realized in the Merger. In addition, these provisions might result in a potential third party acquirer proposing to pay a lower price to the shareholders than it might otherwise have proposed to pay because of the added expense of the termination fee that may become payable in certain circumstances.

If the Merger Agreement is terminated and either Frank’s or Expro determines to seek another business combination, it may not be able to negotiate a transaction with another party on terms comparable to, or better than, the terms of the Merger.

Members of Frank’s management and the Frank’s Board have interests in the Transactions that are different from, or in addition to, those of other Frank’s shareholders.

In considering whether to approve the Transactions, holders of our common stock should recognize that members of Frank’s management and the Frank’s Board have interests in the Transactions that differ from, or are in addition to, their interests as shareholders of Frank’s.

Frank’s and Expro may be unable to obtain the regulatory clearances and approvals required to complete the Merger or, in order to do so, Frank’s and Expro may be required to comply with material restrictions or conditions.

Consummation of the Merger is subject to obtaining approval under certain antitrust and foreign investment laws. Regulatory entities may impose certain requirements or obligations as conditions for their approval or in connection with their review. The Merger Agreement may require Frank’s or Expro to accept conditions from these regulators that could adversely impact the Combined Company without either of them having the right to refuse to close the Merger on the basis of those regulatory conditions. Neither Frank’s nor Expro can provide any assurance that they will obtain the necessary clearances or approvals, or that any required conditions will not have a material adverse effect on the Combined Company following the Merger or result in the abandonment of the Merger.

Additionally, even after completion of the Merger, governmental authorities could seek to challenge the Merger. Frank’s or Expro may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.

The pendency of the Merger could adversely affect the business and operations of Frank’s.

In connection with the pending Merger, some customers or vendors of Frank’s may delay or defer decisions, which could negatively affect the revenues, earnings, cash flows and expenses of Frank’s, regardless of whether the Merger is completed. Similarly, current and prospective employees of Frank’s may experience uncertainty about their future roles with the Combined Company following the Merger, which may materially adversely affect the ability of Frank’s to attract, retain and motivate key personnel during the pendency of the Merger and which may materially adversely divert attention from the daily activities of Frank’s existing employees.

In addition, due to operating covenants in the Merger Agreement, Frank’s may be unable, during the pendency of the Merger, to pursue strategic transactions, undertake significant capital projects, undertake certain significant financing transactions and otherwise pursue other actions that are not in the ordinary course of business, even if such actions would prove beneficial to Frank’s. Further, the process of seeking to accomplish the Merger could also divert the focus of management of Frank’s from pursuing other opportunities that could be beneficial to it, without realizing any of the benefits which might have resulted had the Merger been completed.

The COVID-19 outbreak may adversely affect Frank’s and Expro’s ability to timely consummate the Merger.

COVID-19 and the various precautionary measures attempting to limit its spread taken by many governmental authorities worldwide has had a severe effect on global markets and the global economy. The extent to which ~~it may negatively affect our operating results or~~ the ~~duration of any potential~~COVID-19 pandemic impacts Frank’s and Expro’s respective business ~~disruption is uncertain. Any potential impact~~operations will depend on future developments, which are highly uncertain and cannot be predicted, including but not limited to new information ~~that~~which may emerge ~~regarding~~concerning the severity ~~and duration~~ of ~~Covid-19, seasonal variation of Covid-19,~~COVID-19 and the nature and extent of governmental actions taken ~~by authorities~~ to contain it or treat its impact, ~~all~~the availability of ~~which are beyond our control. These potential impacts, while uncertain, could adversely affect our~~effective treatments and vaccines, the ultimate duration of the pandemic, and how quickly and to what extent normal economic and operating ~~results.~~

~~Customer credit risks could result~~conditions can resume. COVID-19 and official actions in ~~losses.~~response to it have made it more challenging for Frank’s, Expro and relevant third parties to adequately staff their respective businesses and operations, and may cause delay in the companies’ ability to obtain the relevant approvals for the consummation of the Merger.

The ~~concentration of our customers in the energy industry may impact our overall exposure to credit risk as customers~~Merger may be ~~similarly affected by prolonged~~completed even though material adverse changes ~~in economic and industry conditions. Those countries that rely heavily upon income from hydrocarbon exports would be hit particularly hard by a drop in oil prices~~subsequent to the announcement of the Merger, such as industry-wide changes or other events, may occur.

In general, either party can refuse to complete the ~~drop that has occurred this year. The impact~~Merger if there is a material adverse change affecting the other party. However, some types of changes do not permit either party to refuse to complete the Merger, even if such changes would have a material adverse effect on either of the ~~most recent downturn on our customers and their ability~~parties. For example, a worsening of Frank’s or Expro’s financial condition or results of operations due to ~~continue operations and pay for our services is uncertain. Further, laws~~a decrease in ~~some jurisdictions in which we operate could make collection difficult~~commodity prices or ~~time consuming. We perform ongoing credit evaluations of our customers and do~~general economic conditions would not give the other party the right to refuse to complete the Merger. If adverse changes occur that

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~~not generally require collateral in support of our trade receivables. While we maintain reserves for potential credit losses, we cannot assure such reserves will be sufficient~~affect either party but the parties are still required to ~~meet write-offs of uncollectible receivables or that our losses from such receivables will be consistent with our expectations.~~complete the Merger, Frank’s share price, business and financial results after the Merger may suffer.

~~Furthermore, some~~The opinion obtained by Frank’s Board from Moelis does not and will not reflect changes in circumstances after the date of ~~our customers may be highly leveraged~~such opinion.

On March 10, 2021, Moelis & Company LLC (“Moelis”), Frank’s financial advisor in connection with the Merger, delivered an opinion to Frank’s Board as to the fairness, as of the date of the opinion and subject to ~~their own operating~~the assumptions made, procedures followed, matters considered and ~~regulatory risks,~~other limitations set forth in the opinion, of the Exchange Ratio in the Merger to Frank’s. Changes in the operations and prospects of Frank’s or Expro, general market and economic conditions and other factors that may be beyond the control of Frank’s or Expro, and on which ~~increases~~ the ~~risk that they~~opinion of Moelis was based, may ~~default on their obligations to us. To~~alter the ~~extent one~~value of Frank’s or ~~more~~Expro or the price of our ~~key customers~~common stock by the time the Merger is incompleted. Frank’s has not obtained, and does not expect to request, an updated opinion from Moelis. Moelis’s opinion does not speak to the time when the Merger will be completed or to any date other than the date of such opinion. As a result, the opinion does not and will not address the fairness, from a financial ~~distress or commences bankruptcy proceedings, contracts with these customers may be subject to renegotiation or rejection under applicable provisions~~point of view, of the ~~United States Bankruptcy Code and similar international laws. Any material nonpayment~~Exchange Ratio at the time the Merger is completed or nonperformance by our key customers could adversely affect our business, financial condition and results of operations. The current downturn in our industry as a result of the Covid-19 pandemic along with the market volatility due to variable oil production from Russia and Saudi Arabia has exacerbated these credit risks.

In addition, customers experiencing financial difficulty may delay payment for our products and services. Such delays, even if accounts are ultimately paid in full, could reduce our cash resources available and materially and adversely impact our credit available from suppliers and financial institutions.

~~Our executive officers and certain key personnel are critical to our business, and these officers and key personnel may not remain with us in the future.~~

~~Our future success depends in substantial part on our ability to hire and retain our executive officers and~~at any time other key personnel who possess extensive expertise, talent and leadership and are critical to our success. The diminution or loss of the services of these individuals, or other integral key personnel affiliated with entities that we acquire in the future, could have a material adverse effect on our business. The public health concerns posed by Covid-19 could pose a risk to our employees and may render our employees unable to work or travel. The full extent to which Covid-19 may impact our employees, and subsequently our business, cannot be predicted at this time. We continue to monitor the situation, have actively implemented policies and practices to address the situation, and may adjust our current policies and practices as more information and guidance become available. Furthermore, we may not be able to enforce all of the provisions in agreements we have entered into with certain of our executive officers, and such agreements may not otherwise be effective in retaining such individuals. In addition, we may not be able to retain key employees of entities that we acquire in the future. This may impact our ability to successfully integrate or operate the assets we acquire.than March 10, 2021.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Following is a summary of our repurchases of our common stock during the three months ended ~~September 30, 2020.~~March 31, 2021.


Period	Total Number of Shares Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Number (or Approximate Dollar Value) of Shares that may yet be Purchased Under the Program (2)
~~July~~January 1 - ~~July~~January 31	—	$	—	—	$	38,502,322
~~August~~February 1 - ~~August 31~~February 28	—	$	—	—	$	38,502,322
~~September~~March 1 - ~~September 30~~March 31	—	$	—	—	$	38,502,322
Total	—	$	—	—

(1)This table excludes shares withheld from employees to satisfy tax withholding requirements on equity-based transactions. The Company administers cashless settlements and does not repurchase stock in connection with cashless settlements.

(2)Our Board ~~of Directors~~ has authorized a program to repurchase our common stock from time to time. Approximately $38,502,322 remained authorized for repurchases as of ~~September 30, 2020;~~March 31, 2021; subject to the limitation set in our shareholder authorization for repurchases of our common stock, which is currently 10% of the common stock outstanding as of April 30, 2020. From the inception of this program in February 2020 ~~through September 30, 2020,~~to date, we repurchased 570,044 shares of our common stock for a total cost of approximately $1.5 million. This program was suspended during the second quarter of 2020.

Item 6. Exhibits

The exhibits required to be filed by Item 6 are set forth in the Exhibit Index included below.

EXHIBIT INDEX


Exhibit Number			Description
2 .1			Agreement and Plan of Merger, dated as of March 10, 2021, by and among Frank’s International N.V., New Eagle Holdings Limited and Expro Group Holdings International Limited (incorporated by reference to Exhibit 2.1 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021).
3.1			Deed of Amendment to Articles of Association of Frank’s International N.V., dated May 19, 2017 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36053), filed on May 25, 2017).
4 .1			Registration Rights Agreement, dated as of March 10, 2021, by and among Frank’s International N.V. and the shareholders party thereto (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021).
4.2			Amendment to Registration Rights Agreement, dated as of March 10, 2021, by and among Frank’s International N.V. and the shareholders party thereto (incorporated by reference to Exhibit 4.2 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021).
10.1			Form of Voting and Support Agreement (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021).
10.2			Form of Director Nomination Agreement (incorporated by reference to Exhibit 10.2 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021).
10.3			Amended and Restated Tax Receivable Agreement, dated as of March 10, 2021, by and among Frank’s International N.V., Frank’s International C.V. and Mosing Holdings, LLC (incorporated by reference to Exhibit 10.3 to the Current Report on Form 8-K (File No. 001-36053), filed on March 10, 2021).
†10.4			Amended and Restated Employment Offer Letter for Michael C. Kearney, effective as of March 10, 2021.
†10.5			First Amendment to the Frank’s International N.V. Amended and Restated U.S. Executive Change-in-Control Severance Plan.
†10.6			Amendment to Frank’s International N.V. Employee Restricted Stock Unit (RSU) Agreement (2013 Long-Term Incentive Plan).
*31.1			Certification of Chief Executive Officer pursuant to Rule 13a-14 (a) under the Securities Exchange Act of 1934.
*31.2			Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
**32.1			Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
**32.2			Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
*101.1			The following materials from Frank’s International N.V.’s Quarterly Report on Form 10-Q for the period ended ~~September 30, 2020~~March 31, 2021 formatted in iXBRL (Inline eXtensible Business Reporting Language): (i) Condensed Consolidated Balance Sheets; (ii) Condensed Consolidated Statements of Operations; (iii) Condensed Consolidated Statements of Comprehensive Loss; (iv) Condensed Consolidated Statements of Stockholders’ Equity; (v) Condensed Consolidated Statements of Cash Flows; and (vi) Notes to Unaudited Condensed Consolidated Financial Statements.
*104			Cover Page Interactive Data File (embedded within the Inline XBRL document).

† Represents management contract or compensatory plan or arrangement.

* Filed herewith.

** Furnished herewith.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			FRANK’S INTERNATIONAL N.V.

Date:	~~November 3, 2020~~May 4, 2021	By:	/s/ Melissa Cougle
			Melissa Cougle
			Senior Vice President and Chief Financial Officer
			(Principal Financial Officer)

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	December 31, 2019
Derivative Contracts	Notional Amount		Contractual Exchange Rate	Settlement Date
Canadian dollar	$	948	1.3182	3/16/2020
Euro	9,279		1.1180	3/17/2020
Norwegian krone	11,027		9.0688	3/17/2020
Pound sterling	16,057		1.3381	3/17/2020


	Derivative Asset Positions		Derivative Liability Positions
	December 31, 2019		December 31, 2019
Gross position - asset / (liability)	$	127	$	(451)
Netting adjustment	(127)		127
Net position - asset / (liability)	$	0	$	(324)



(1)	Approximate number of unvested restricted stock units and stock to be issued pursuant to the ESPP that have been excluded from the computation of diluted loss per share as the effect would be anti-dilutive when results from operations are at a net loss position.	1,105	587	1,052	722