Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2023 | Oct. 24, 2023 | |
Cover [Abstract] | ||
Entity Registrant Name | DRIL-QUIP, INC. | |
Entity Central Index Key | 0001042893 | |
Trading Symbol | DRQ | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2023 | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock Shares Outstanding | 34,183,053 | |
Entity Emerging Growth Company | false | |
Entity Small Business | false | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Shell Company | false | |
Entity File Number | 001-13439 | |
Entity Tax Identification Number | 74-2162088 | |
Entity Address, Address Line One | 2050 West Sam Houston Parkway S. | |
Entity Address, Address Line Two | Suite 1100 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Country | US | |
Entity Address, Postal Zip Code | 77042 | |
City Area Code | 713 | |
Local Phone Number | 939-7711 | |
Entity Incorporation, State or Country Code | DE | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Title of each class | Common Stock, $0.01 par value per share | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Current assets: | |||
Cash and cash equivalents | $ 181,072 | $ 264,804 | |
Short-term investments | 8,911 | 32,232 | |
Trade receivables, net | 133,337 | 90,861 | |
Unbilled receivables | 154,305 | 144,428 | |
Inventories, net | 183,250 | 146,004 | |
Prepaid expenses | 19,237 | 19,874 | |
Other current assets | 18,100 | 32,438 | |
Assets held for sale | 10,828 | 19,383 | |
Total current assets | 709,040 | 750,024 | |
Operating lease right of use assets | 16,235 | 4,872 | |
Property, plant and equipment, net | 211,806 | 181,270 | |
Deferred income taxes | 5,839 | 4,488 | |
Goodwill | 16,237 | [1] | 0 |
Intangible assets | 42,504 | 23,348 | |
Other assets | 5,907 | 5,949 | |
Total assets | 1,007,568 | 969,951 | |
Current liabilities: | |||
Accounts payable | 50,455 | 43,019 | |
Accrued income taxes | 6,604 | 4,868 | |
Contract liabilities | 8,098 | 8,020 | |
Accrued compensation | 14,141 | 11,296 | |
Operating lease liabilities | 2,057 | 1,054 | |
Other accrued liabilities | 25,380 | 19,298 | |
Total current liabilities | 106,735 | 87,555 | |
Deferred income taxes | 12,114 | 3,756 | |
Income tax payable | 451 | 823 | |
Operating lease liabilities, long-term | 14,381 | 3,807 | |
Other long-term liabilities | 3,425 | 1,658 | |
Total liabilities | 137,106 | 97,599 | |
Contingencies (Note 14) | |||
Stockholders' equity: | |||
Preferred stock: 10,000,000 shares authorized at $0.01 par value (none issued) | 0 | 0 | |
Common stock: | |||
100,000,000 shares authorized at $0.01 par value, 34,177,472 and 34,157,057 shares issued and outstanding at September 30, 2023 and December 31, 2022 | 343 | 343 | |
Additional paid-in capital | 98,169 | 90,450 | |
Retained earnings | 948,928 | 950,168 | |
Accumulated other comprehensive losses | (176,978) | (168,609) | |
Total stockholders' equity | 870,462 | 872,352 | |
Total liabilities and stockholders' equity | $ 1,007,568 | $ 969,951 | |
[1] As of September 30, 2023, the Goodwill balance is included in long-lived assets in the Well Construction business segment. |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) (Parenthetical) - $ / shares | Sep. 30, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Common stock, shares authorized (in shares) | 100,000,000 | 100,000,000 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares issued (in shares) | 34,177,472 | 34,157,057 |
Common stock, shares outstanding (in shares) | 34,177,472 | 34,157,057 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Revenues: | ||||
Total revenues | $ 117,244 | $ 88,141 | $ 297,716 | $ 265,256 |
Cost of sales: | ||||
Total cost of sales | 85,603 | 65,710 | 216,816 | 199,368 |
Selling, general and administrative | 26,993 | 22,431 | 71,692 | 67,322 |
Engineering and product development | 3,061 | 2,645 | 9,662 | 9,041 |
Restructuring and other charges | 2,267 | 4,101 | 3,375 | 9,898 |
Gain on sale of property, plant and equipment | (1,027) | (17,276) | (8,412) | (17,770) |
Acquisition costs | 5,358 | 0 | 6,492 | 0 |
Foreign currency transaction gain | 1,060 | (1,901) | (2,632) | (5,574) |
Total costs and expenses | 123,315 | 75,710 | 296,993 | 262,285 |
Operating income (loss) | (6,071) | 12,431 | 723 | 2,971 |
Interest income, net | (2,312) | (248) | (7,038) | (871) |
Income (loss) before income taxes | (3,759) | 12,679 | 7,761 | 3,842 |
Income tax provision (benefit) | 3,275 | (610) | 9,001 | 5,061 |
Net income (loss) | $ (7,034) | $ 13,289 | $ (1,240) | $ (1,219) |
Net income (loss) per common share: | ||||
Basic | $ (0.21) | $ 0.39 | $ (0.04) | $ (0.04) |
Diluted | $ (0.21) | $ 0.38 | $ (0.04) | $ (0.04) |
Weighted average common shares outstanding: | ||||
Basic | 34,132 | 33,948 | 34,130 | 33,948 |
Diluted | 34,132 | 34,232 | 34,130 | 33,948 |
Products | ||||
Revenues: | ||||
Revenues from products and services | $ 77,603 | $ 58,508 | $ 192,677 | $ 176,129 |
Cost of sales: | ||||
Total cost of sales | 60,640 | 49,714 | 152,849 | 151,932 |
Services | ||||
Revenues: | ||||
Revenues from products and services | 27,214 | 20,443 | 72,228 | 57,538 |
Cost of sales: | ||||
Total cost of sales | 19,083 | 8,105 | 46,199 | 24,773 |
Leasing | ||||
Revenues: | ||||
Leasing | 12,427 | 9,190 | 32,811 | 31,589 |
Cost of sales: | ||||
Total cost of sales | $ 5,880 | $ 7,891 | $ 17,768 | $ 22,663 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Comprehensive Income [Abstract] | ||||
Net Income (Loss) | $ (7,034) | $ 13,289 | $ (1,240) | $ (1,219) |
Other comprehensive income (loss), net of tax: | ||||
Foreign currency translation adjustments | (4,489) | (10,487) | (8,369) | (19,829) |
Total comprehensive income (loss) | $ (11,523) | $ 2,802 | $ (9,609) | $ (21,048) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 | Sep. 30, 2022 | |
Cash flows from operating activities: | ||
Net Income (Loss) | $ (1,240) | $ (1,219) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Depreciation and amortization | 21,837 | 22,352 |
Stock-based compensation expense | 7,719 | 7,669 |
Restructuring and other charges | (1,148) | 6,119 |
Gain on sale of property, plant and equipment | (8,412) | (17,770) |
Acquisition costs | 4,585 | 0 |
Deferred income taxes | 1,612 | 1,538 |
Changes in operating assets and liabilities: | ||
Trade receivables, net | (22,461) | 16,980 |
Unbilled receivables | (12,440) | (38,097) |
Inventories, net | (18,783) | 2,255 |
Prepaids and other assets | 16,750 | (8,854) |
Accounts payable and accrued expenses | (6,423) | (10,124) |
Other, net | 0 | (16) |
Net cash used in operating activities | (18,404) | (19,167) |
Cash flows from investing activities: | ||
Purchase of property, plant and equipment | (21,041) | (13,712) |
Proceeds from sale of property, plant and equipment | 17,291 | 18,535 |
Acquisition of Great North, net of cash acquired | (82,287) | 0 |
Purchase of short-term investments | (22,978) | (25,287) |
Maturities of short-term investments | 46,299 | 0 |
Net cash used in investing activities | (62,716) | (20,464) |
Cash flows from financing activities: | ||
Repurchase of common shares | 0 | (20,807) |
Other | (41) | (74) |
Net cash used in financing activities | (41) | (20,881) |
Effect of exchange rate changes on cash activities | (2,571) | (4,660) |
Decrease in cash and cash equivalents | (83,732) | (65,172) |
Cash and cash equivalents at beginning of period | 264,804 | 355,451 |
Cash and cash equivalents at end of period | $ 181,072 | $ 290,279 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-In Capital | Retained Earnings | Accumulated Other Comprehensive Losses |
Beginning Balance at Dec. 31, 2021 | $ 897,108 | $ 352 | $ 80,254 | $ 973,087 | $ (156,585) |
Foreign currency translation adjustment | (19,829) | (19,829) | |||
Net income (loss) | (1,219) | (1,219) | |||
Comprehensive income (loss) | (21,048) | ||||
Repurchase of common shares | (20,807) | (9) | (20,798) | ||
Stock-based compensation expense | 7,669 | 7,669 | |||
Other | (6) | (6) | |||
Ending Balance at Sep. 30, 2022 | 862,916 | 343 | 87,917 | 951,070 | (176,414) |
Beginning Balance at Jun. 30, 2022 | 868,689 | 348 | 85,351 | 948,917 | (165,927) |
Foreign currency translation adjustment | (10,487) | (10,487) | |||
Net income (loss) | 13,289 | 13,289 | |||
Comprehensive income (loss) | 2,802 | ||||
Repurchase of common shares | (11,150) | (5) | (11,145) | ||
Stock-based compensation expense | 2,569 | 2,569 | |||
Other | 6 | (3) | 9 | ||
Ending Balance at Sep. 30, 2022 | 862,916 | 343 | 87,917 | 951,070 | (176,414) |
Beginning Balance at Dec. 31, 2022 | 872,352 | 343 | 90,450 | 950,168 | (168,609) |
Foreign currency translation adjustment | (8,369) | (8,369) | |||
Net income (loss) | (1,240) | (1,240) | |||
Comprehensive income (loss) | (9,609) | ||||
Stock-based compensation expense | 7,719 | 7,719 | |||
Ending Balance at Sep. 30, 2023 | 870,462 | 343 | 98,169 | 948,928 | (176,978) |
Beginning Balance at Jun. 30, 2023 | 879,409 | 343 | 95,593 | 955,962 | (172,489) |
Foreign currency translation adjustment | (4,489) | (4,489) | |||
Net income (loss) | (7,034) | (7,034) | |||
Comprehensive income (loss) | (11,523) | ||||
Stock-based compensation expense | 2,576 | 2,576 | |||
Ending Balance at Sep. 30, 2023 | $ 870,462 | $ 343 | $ 98,169 | $ 948,928 | $ (176,978) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) (Parenthetical) - shares | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||||
Treasury stock shares (in shares) | 0 | 457,467 | 0 | 888,197 |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Pay vs Performance Disclosure | ||||
Net Income (Loss) | $ (7,034) | $ 13,289 | $ (1,240) | $ (1,219) |
Insider Trading Arrangements
Insider Trading Arrangements | 9 Months Ended |
Sep. 30, 2023 shares | |
Trading Arrangements, by Individual | |
Material Terms of Trading Arrangement | In the third quarter of 2023, the following trading plans were adopted or terminated: Name and Title Action Date Plan Adopted / Terminated Duration of Plan Rule 10b5-1 Trading Plan Common Shares to be Purchased or Sold Yes No Jeffrey J. Bird , Adopt 8/25/2023 1/1/2024 through 4/5/2024 X Sell up to 15,000 , subject to certain conditions President, Chief Executive Officer and Director Kyle F. McClure , Adopt 8/25/2023 1/1/2024 through 4/5/2024 X Sell up to 8,000 , subject to certain conditions Vice President and Chief Financial Officer James C. Webster , Adopt 8/25/2023 1/1/2024 through 4/5/2024 X Sell up to 8,000 , subject to certain conditions Vice President, General Counsel and Secretary Terence B. Jupp , Adopt 9/11/2023 12/18/2023 through 4/5/2024 X Sell up to 3,218 , subject to certain conditions Director |
Jeffrey J Bird [Member] | |
Trading Arrangements, by Individual | |
Name | Jeffrey J. Bird |
Title | President, Chief Executive Officer and Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 8/25/2023 |
Arrangement Duration | 96 days |
Aggregate Available | 15,000 |
Kyle F McClure [Member] | |
Trading Arrangements, by Individual | |
Name | Kyle F. McClure |
Title | Vice President and Chief Financial Officer |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 8/25/2023 |
Arrangement Duration | 96 days |
Aggregate Available | 8,000 |
James C Webster [Member] | |
Trading Arrangements, by Individual | |
Name | James C. Webster |
Title | Vice President, General Counsel and Secretary |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 8/25/2023 |
Arrangement Duration | 96 days |
Aggregate Available | 8,000 |
Terence B Jupp [Member] | |
Trading Arrangements, by Individual | |
Name | Terence B. Jupp |
Title | Director |
Rule 10b5-1 Arrangement Adopted | true |
Adoption Date | 9/11/2023 |
Arrangement Duration | 110 days |
Aggregate Available | 3,218 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | 1. Organization and Basis of Presentation Dril-Quip, Inc., a Delaware corporation (the “Company” or “Dril-Quip”), designs, manufactures, sells and services highly engineered drilling and production equipment for both offshore and onshore applications. The Company’s principal products consist of subsea and surface wellheads, subsea and surface production trees, mudline hanger systems, specialty connectors and associated pipe, drilling and production riser systems, liner hangers, wellhead connectors, diverters and safety valves. Dril-Quip’s products are used by major integrated, large independent and foreign national oil and gas companies and drilling contractors throughout the world. Dril-Quip also provides technical advisory assistance on an as-requested basis during installation of its products, as well as rework and reconditioning services for customer-owned Dril-Quip products. In addition, Dril-Quip’s customers may rent or purchase running tools from the Company for use in the installation and retrieval of the Company’s products. During the quarter ended March 31, 2023, the Company reorganized its structure in order to streamline operations and leadership around more focused and integrated product and service lines to align with its business strategy. To reflect the Company’s new organizational structure, the Company changed presentation of its segments in 2023 into the following three reportable business segments: Subsea Products, Subsea Services, and Well Construction. Segment operating results for the prior year comparative period have been restated to reflect this change. Previously, the Company’s operations were organized into three geographic segments. Our Subsea Products business manufactures highly engineered, field-proven products with a wide array of deepwater drilling equipment and technology that meets the requirements for harsh subsea environments. Our Subsea Services business provides high-level aftermarket support and technical services with field technicians that support the full installation and lifecycle management of regulatory and industry standards, as well as offering industry training programs. Our Well Construction business provides products and services utilized in the construction of the wellbore such as completions, casing hardware and liner hanger systems. These products and services are used on both land and offshore markets. Additionally, Corporate includes the expenses and assets of the Company’s corporate office functions, legal and other administrative expenses that are managed at a consolidated level. For information with respect to our segments, see “Business Segments,” Note 12 of Notes to the Condensed Consolidated Financial Statements. The condensed consolidated financial statements included herein are unaudited. The balance sheet at December 31, 2022 has been derived from the audited consolidated financial statements as of that date. In the opinion of management, the unaudited condensed consolidated interim financial statements include all normal recurring adjustments necessary for a fair statement of the financial position as of September 30, 2023 and the results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2023 and 2022 and cash flows for the nine months ended September 30, 2023 and 2022. Certain information and footnote disclosures normally included in annual audited consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been condensed or omitted pursuant to the rules and regulations of the Securities and Exchange Commission. The results of operations and comprehensive income (loss) for the three and nine months ended September 30, 2023 and cash flows for the nine months ended September 30, 2023 are not necessarily indicative of the results to be expected for the full year. The condensed consolidated financial statements included herein should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022. Revision to Previously Reported Financial Information In conjunction with our close process for the second quarter of 2023, we identified accounting errors related to an indemnification receivable and duplicate billing errors impacting prior periods. In the third quarter of 2022, due to the expiration of the statute of limitations of an Uncertain Tax Position (“UTP”), we released the liability for this UTP, but failed to write-off the related indemnification receivable previously obtained from the seller of an acquired business, resulting in an overstatement of operating income during the period. In addition, the Company identified billing errors in 2022 and 2021 that resulted in an overstatement of revenue and trade receivables. We have assessed these errors, individually and in the aggregate, and concluded that they were not material to any prior annual or interim period. However, the aggregate amount of the prior period errors would have been material to our current interim condensed consolidated statements of income and to our anticipated full year results and therefore, we have revised our previously issued financial information. For more details, see “Revision to Previously Reported Financial Information,” Note 5 of Notes to the Condensed Consolidated Financial Statements. |
Significant Accounting Policies
Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Significant Accounting Policies | 2. Significant Accounting Policies Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated. Reclassifications We reclassified approximately $ 5.5 million of accrued bonus related to our short-term incentive plan for the year ended December 31, 2022, from other accrued liabilities to accrued compensation to conform to our current year presentation. These reclassifications did not have an impact on our consolidated statements of income (loss), consolidated balance sheets, consolidated statements of comprehensive income (loss), consolidated statements of stockholders’ equity and consolidated statements of cash flows. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Some of the Company’s more significant estimates are those affected by critical accounting policies for revenue recognition and asset recoverability tests and inventories . Revenue Recognition The Company generates revenues through the sale of products, the sale of services and the leasing of running tools. The Company normally negotiates contracts for products, including those accounted for under the over-time method, rental tools and services separately. Modifications to the scope and price of sales contracts may occur in the form of variations and change orders. For all product sales, it is the customer’s decision as to the timing of the product installation, as well as whether Dril-Quip running tools will be purchased or rented. Furthermore, the customer is under no obligation to utilize the Company’s technical advisory assistance services. The customer may instead choose to use a third party or its own personnel. Leasing Revenues The Company earns leasing revenues from the rental of running tools. Revenues from rental of running tools are recognized on a day rate basis over the lease term, which is generally between one to three months. Cash and Cash Equivalents Short-term investments that have a maturity of three months or less from the date of purchase are classified as cash equivalents. The Company invests excess cash in interest bearing accounts, money market mutual funds and funds which invest in U.S. Treasury obligations and repurchase agreements backed by U.S. Treasury obligations. The Company’s investment objectives continue to be the preservation of capital and the maintenance of liquidity. The Company’s ABL Credit Facility, dated February 23, 2018, as amended, was terminated effective February 22, 2022. We opened a new cash collateral account with JPMorgan Chase Bank, N.A., in which cash was transferred to facilitate our existing letters of credit. As of September 30, 2023 , the cash balance in that account was approximately $ 4.2 million. The Company is required to maintain a balance equal to the outstanding letters of credit plus 5% at all times which is considered as restricted cash and is included in “Cash and cash equivalents” in our condensed consolidated balance sheets as at September 30, 2023 and December 31, 2022 . Withdrawals from this cash collateral account are only allowed at such point a given letter of credit has expired or has been cancelled. Short-term Investments Short-term investments that have a maturity greater than three months and less than a year from the date of purchase are comprised primarily of time deposits, certificates of deposit, commercial paper, bonds and notes, substantially all of which are denominated in U.S. dollars and are stated at cost plus accrued interest, which approximates fair value. The Company expects to hold all of its Short-term investments to maturity. For purposes of the condensed consolidated financial statements, the Company does not consider Short-term investments to be cash equivalents. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, receivables and payables. The carrying values of these financial instruments approximate their respective fair values as they are short-term in nature. Fair Value Measurements The Company applies the applicable accounting guidance for fair value measurements. This guidance provides the definition of fair value, describes the method used to appropriately measure fair value in accordance with generally accepted accounting principles, and outlines fair value disclosure requirements. The fair value hierarchy established under this guidance prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted prices, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant. Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate our property and equipment and definite-lived intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Should the review indicate that the carrying value is not fully recoverable, the amount of the impairment loss is determined by comparing the carrying value to the estimated fair value. We assess recoverability based on undiscounted future net cash flows. Estimating future net cash flows requires us to make judgments regarding long-term forecasts of future revenues and costs related to the assets subject to review. These forecasts are uncertain in that they require assumptions about our revenue growth, operating margins, capital expenditures, future market conditions and technological developments. If changes in these assumptions occur, our expectations regarding future net cash flows may change such that a material impairment could result. Goodwill and Intangible Assets For goodwill and indefinite-lived intangible assets, an assessment for impairment is performed annually or when there is an indication an impairment may have occurred. Goodwill is not amortized but rather tested for impairment annually on October 1 or when events occur or circumstances change that would trigger such a review. The impairment test entails an assessment of qualitative factors to determine whether it is more likely than not that an impairment exists. If it is more likely than not that an impairment exists, then a quantitative impairment test is performed. Impairment exists when the carrying amount of a reporting unit exceeds its fair value. Restructuring and Other Charges Restructuring and other charges consist of costs associated with our 2021 global strategic plan initiated in the fourth quarter of 2021, in an effort to realign our subsea product business with the market conditions. During the three and nine months ended September 30, 2023, the Company incurred $ 2.3 million and $ 3.4 million of additional costs under the 2021 global strategic plan, respectively. The restructuring charges incurred during the current year primarily consist of office moves, site cleanup, preparation costs, severance, consulting and legal fees. During the second quarter of 2023, the Company reassessed the reasonability of a restructuring liability related to its Well Construction business. During our assessment certain market exit costs became known and the liability was adjusted accordingly, resulting in a release of approximately $ 2.3 million, which partially offsets the current year restructuring costs. During the three and nine months ended September 30, 2022, the Company incurred $ 4.1 million and $ 9.9 million of additional costs under the 2021 global strategic plan, respectively. Approximately $ 5.1 million of these charges were primarily related to write-down of our long-lived assets and the remaining $ 4.8 million were related to consulting and legal fees, office moves and site cleanup, and preparation costs. Repurchase of Equity Securities On February 22, 2022, the Board of Directors authorized an incremental $ 100.0 million share repurchase plan. The repurchase plans have no set expiration date and any repurchased shares are expected to be cancelled. The manner, timing and amount of any purchase will be determined by management based on an evaluation of market conditions, stock price, liquidity and other factors. The program does not obligate the Company to acquire any amount of common stock and may be modified or superseded at any time at the Company’s discretion. For the three and nine months ended September 30, 2023 , the Company did no t purchase any shares under the share repurchase plans. For the three months ended September 30, 2022 , the Company purchased 457,467 shares under the share repurchase plans at an average price of approximately $ 24.35 per share totaling approximately $ 11.1 million and has retired such shares. For the nine months ended September 30, 2022 , the Company purchased 888,197 shares under the share repurchase plans at an average price of approximately $ 23.41 per share totaling approximately $ 20.8 million and has retired such shares. Earnings Per Share Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed considering the dilutive effect of stock awards using the treasury stock method. In each relevant period, the net income (loss) used in the basic and dilutive earnings per share calculations is the same. The following table reconciles the weighted average basic number of common shares outstanding and the weighted average diluted number of common shares outstanding for the purpose of calculating basic and diluted earnings per share: Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Weighted average common shares outstanding – basic 34,132 33,948 34,130 33,948 Dilutive effect of common stock awards - 284 - - Weighted average common shares outstanding – diluted 34,132 34,232 34,130 33,948 For the three and nine months ended September 30, 2023 and 2022, the Company has excluded the following common stock awards because their impact on the income (loss) per share is anti-dilutive (in thousands on a weighted average basis): Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Director stock awards 73 1 67 - Performance share units 332 - 332 - Restricted stock awards 543 2 558 1 |
Business Acquisitions
Business Acquisitions | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Business Acquisitions | 3. Business Acquisitions On July 31, 2023, the Company acquired 100 % of the issued and outstanding shares of 1185641 B.C. LTD (d/b/a Great North Wellhead and Frac, “Great North” ) for a purchase price of $ 105 million CAD, approximately $ 79.8 million, which is subject to customary adjustments for cash and working capital. The acquisition of Great North allows Dril-Quip to service its clients with Great North’s products. The acquired b usiness contributed revenues of $ 15.5 million and earnings of $ 1.6 million to Dril-Quip for the period from August 1, 2023 to September 30, 2023. The following unaudited pro forma summary presents consolidated information of Dril-Quip as if the business combination had occurred on January 1, 2022. Pro forma three months ended Pro forma nine months ended 2023 2022 2023 2022 (In thousands) (unaudited) Revenues $ 125,367 $ 112,471 $ 352,343 $ 329,692 Net income $ ( 1,611 ) $ 15,810 $ 10,387 $ ( 1,450 ) These pro forma amounts have been calculated after applying Dril-Quip’s accounting policies and adjusting the results of Great North to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant, and equipment, and intangible assets had been applied from January 1, 2022, with the consequential tax effects. Dril-Quip incurred $ 5.4 million and $ 6.5 million of acquisition-related costs for the three and nine months ended September 30, 2023, respectively. These expenses are included in “Acquisition costs” in the condensed consolidated statements of income (loss) for the respective periods and are reflected in the pro forma earnings for the nine months ended September 30, 2022, in the table above. The following table summarizes the consideration transferred to acquire Great North: Fair value of consideration transferred: (In thousands) Cash $ 84,097 Contingent consideration 3,571 Total $ 87,668 The acquisition of Great North includes a contingent consideration arrangement that requires additional consideration to be paid by Dril-Quip to the sellers of Great North based on the future revenues of Great North for FY 2024 and 2025. The range of the undiscounted amounts Dril-Quip could pay under the contingent consideration agreement is between zero and $ 30 million CAD, approximately $ 22.8 million. The fair value of the contingent consideration recognized on the acquisition date was $ 3.6 million. The current and noncurrent portion of contingent consideration is included in other accrued liabilities and other long-term liabilities, respectively. The fair value of the contingent consideration recognized on the acquisition date of $ 3.6 million was estimated by applying a Monte-Carlo valuation model based on Level 3 inputs. The Company will be required to remeasure this liability to fair value quarterly with any changes in the fair value recorded in income until the final payment is made. The following table sets forth the preliminary purchase price allocation, which was based on fair value of assets acquired and liabilities assumed at the acquisition date, July 31, 2023: Preliminary amounts of identified assets acquired and liabilities assumed: (In thousands) Cash $ 1,810 Accounts receivable 16,499 Prepaid expenses and other current assets 609 Inventory 16,068 Property, plant and equipment 29,338 Right of use assets 11,115 Intangible assets (1) 22,263 Total assets acquired $ 97,702 Accounts payable 7,034 Accrued expenses 3,522 Deferred revenue 47 Lease liability, long-term 11,115 Deferred taxes 5,075 Total liabilities assumed $ 26,793 Net identifiable assets acquired $ 70,909 Goodwill 16,759 Net assets acquired $ 87,668 (1) Includes $ 4.0 million of trademarks with a weighted average useful life of 10 years, $ 3.6 million of patents with a weighted average useful life of 15 years, and $ 14.7 million of customer relationships with a weighted average useful life of 10 years. See “Goodwill and Intangible Assets,” Note 11 of Notes to the Condensed Consolidated Financial Statements for further information regarding intangible assets. Acquired assets and liabilities were recorded at estimated fair value as of the acquisition date. The excess of the purchase price over the estimated fair value of tangible and intangible identifiable net assets resulted in the recognition of goodwill of $ 16.8 million, all of which is included in long-lived assets in the Well Construction business segment and is attributable to expected synergies from combining operations as well as intangible assets which do not qualify for separate recognition. This goodwill is not tax deductible. The goodwill was determined on the basis of the fair values of the tangible and intangible assets and liabilities as of the acquisition date. It may be adjusted if the provisional fair values change as a result of circumstances existing at the acquisition date. Such fair value adjustments may arise in respect to intangible assets, inventories and property, plant and equipment, upon completion of the necessary valuations and physical verifications of such assets. The amount of deferred taxes may also be adjusted during the measurement period. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | 4. Fair Value Measurements As of Septemb er 30, 2023, the Company’s Level 3 instruments consist of contingent purchase consideration liabilities related to the acquisition of Great North (Note 3). The fair value of such earn-out liabilities is generally determined using a Monte Carlo Simulation that includes significant inputs that are not observable. Significant inputs include management's estimate of revenue and other market inputs, including expected revenue volatility ( 7.5 %) and a revenue discount rate ( 8.7 %). The fair value of certain earn-out liabilities is derived using the estimated probability of success of achieving the earn-out periods discounted to present value. The fair value of contingent consideration liabilities is remeasured at each reporting period at the estimated fair value based on the inputs on the date of remeasurement, with the change in fair value recognized in the Selling, general and administrative expense of the Condensed Consolidated Statements of Income. The Company’s contingent consideration measured at fair value for the periods presented are as follows ( in thousands ): September 30, 2023 December 31, 2022 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Liability: Contingent consideration (1) $ 3,460 - - $ 3,460 - - - - Total liabilities $ 3,460 - - $ 3,460 - - - - (1) As of September 30, 2023 , contingent consideration includes certain amounts in accrued general liabilities and other long-term liabilities on the Company’s Consolidated Balance Sheets. The following table provides a reconciliation of changes in the fair value of the Company’s earn-out liabilities associated with the Company’s acquisition measured at fair value for the three and nine months ended September 30, 2023 and 2022 ( in thousands ): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Beginning period balance $ - - $ - - Additions to contingent consideration 3,571 - 3,571 - Payments of contingent consideration - - - - Fair value adjustment of earn-out liabilities - - - - Currency translation adjustment ( 111 ) - ( 111 ) - Ending period balance $ 3,460 - $ 3,460 - |
Revision to Previously Reported
Revision to Previously Reported Financial Information | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Revision to Previously Reported Financial Information | 5. Revision to Previously Reported Financial Information In conjunction with our close process for the second quarter of 2023, we identified accounting errors related to an indemnification receivable and duplicate billing errors impacting prior periods. In the third quarter of 2022, due to the expiration of the statute of limitations of an Uncertain Tax Position (“UTP”), we released the liability for this UTP, but failed to write-off the related indemnification receivable previously obtained from the seller of an acquired business, resulting in an overstatement of operating income during the period. In addition, the Company identified billing errors in 2022 and 2021 that resulted in an overstatement of revenue and trade receivables. The following table presents the impact of correcting the errors on the affected line items of our condensed consolidated balance sheet as of December 31, 2022: December 31, 2022 As Reported Adjustments As Revised (In thousands) Trade receivables, net $ 91,504 $ ( 643 ) $ 90,861 Other current assets 34,359 ( 1,921 ) 32,438 Total current assets 752,588 ( 2,564 ) 750,024 Total assets 972,515 ( 2,564 ) 969,951 Total stockholders’ equity 874,916 ( 2,564 ) 872,352 The following table presents the impact of correcting the errors on the affected line items of our condensed consolidated statement of income (loss) for the three months ended September 30, 2022: Three months ended September 30, 2022 As Reported Adjustments As Revised (In thousands, except per share data) Restructuring and other charges $ 2,180 $ 1,921 $ 4,101 Operating income (loss) 14,352 ( 1,921 ) 12,431 Income (loss) before income taxes 14,600 ( 1,921 ) 12,679 Net income (loss) 15,210 ( 1,921 ) 13,289 Net income (loss) per common share: Basic 0.45 ( 0.06 ) 0.39 Diluted 0.44 ( 0.06 ) 0.38 The following table presents the impact of correcting the errors on the affected line items of our condensed consolidated statement of income (loss) for the nine months ended September 30, 2022: Nine months ended September 30, 2022 As Reported Adjustments As Revised (In thousands, except per share data) Restructuring and other charges $ 7,977 $ 1,921 $ 9,898 Operating income (loss) 4,892 ( 1,921 ) 2,971 Income (loss) before income taxes 5,763 ( 1,921 ) 3,842 Net income (loss) 702 ( 1,921 ) ( 1,219 ) Net income (loss) per common share: Basic 0.02 ( 0.06 ) ( 0.04 ) Diluted 0.02 ( 0.06 ) ( 0.04 ) The condensed consolidated statement of stockholders’ equity for the period from January 1, 2022 to September 30, 2022 and the period from July 1, 2022 to September 30, 2022 has also been revised to reflect the impacts to net earnings. The impact of the error arising in 2021, as reflected above, has been reflected as a reduction to opening retained earnings in the amount of $ 0.5 million in the condensed consolidated statement of stockholders’ equity. The Company also assessed the impact of all these errors on the st atement of cash flows and noted that there was no impact to the net cash provided by (used in) operating activities as the changes in assets and net income offset completely. |
Revenue Recognition
Revenue Recognition | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | 6. Revenue Recognition Revenues from contracts with customers (excludes leasing) consisted of the following: Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Revenues: Products: Subsea products $ 55,427 $ 48,480 $ 146,123 $ 144,229 Well construction 22,176 10,028 46,554 31,900 Total products $ 77,603 $ 58,508 $ 192,677 $ 176,129 Services: Subsea services $ 17,412 $ 15,806 $ 50,230 $ 43,748 Well construction services 9,802 4,637 21,998 13,790 Total services $ 27,214 $ 20,443 $ 72,228 $ 57,538 Contract Balances Balances related to contracts with customers consisted of the following: Contract Assets (amounts shown in thousands) Contract assets at December 31, 2022 $ 138,592 Additions 147,250 Transfers to Trade receivables, net ( 137,423 ) Contract assets at September 30, 2023 $ 148,419 Contract Liabilities (amounts shown in thousands) Contract liabilities at December 31, 2022 $ 6,824 Additions 12,614 Revenue recognized ( 11,961 ) Contract liabilities at September 30, 2023 $ 7,477 Contract assets include unbilled accounts receivable associated with contracts accounted for under the over-time accounting method which were approximately $ 92.3 million and $ 92.6 million at September 30, 2023 and December 31, 2022, respectively. Unbilled contract assets are transferred to trade receivables, net, when the rights become unconditional. Contract liabilities primarily relate to advance payments from customers. Obligations for returns and refunds were considered immaterial as of September 30, 2023. Remaining Performance Obligations The aggregate amount of the transaction price allocated to remaining performance obligations from our over-time product lines was $ 41.8 million as of September 30, 2023. The Company expects to recognize revenue on approximately 98.6 % of the remaining performance obligations over the next 12 months and the remaining 1.4 % thereafter . The Company applies the practical expedient available under the revenue standard and does not disclose in formation about remaining performance obligations that have original expected durations of one year or less. |
Stock-Based Compensation and St
Stock-Based Compensation and Stock Awards | 9 Months Ended |
Sep. 30, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation and Stock Awards | 7. Stock-Based Compensation and Stock Awards During the three and nine months ended September 30, 2023, the Company recognized approximately $ 2.6 million and $ 7.7 million of stock-based compensation expense. Stock-based compensation is included in “Selling, general and administrative” in our accompanying condensed consolidated statements of income (loss) and “Additional paid-in capital” in our accompanying condensed consolidated balance sheets. During the three and nine months ended September 30, 2022, the Company recognized approximately $ 2.6 million and $ 7.7 million of stock-based compensation expense. |
Inventories, net
Inventories, net | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Inventories, net | 8. Inventories, net Inventories consist of the following: September 30, December 31, 2023 2022 (In thousands) Raw materials and supplies, net $ 34,057 $ 21,956 Work in progress, net 34,056 38,263 Finished goods, net 115,137 85,785 Total inventory, net $ 183,250 $ 146,004 As of September 30, 2023, inventory values of raw materials, work in progress and finished goods have been reduced by approximately $ 7.6 million, $ 2.8 million and $ 62.1 million, respectively, by a reserve for slow moving and excess inventory, and as of December 31, 2022 inventory values of raw materials, work in progress and finished goods have been reduced by approximately $ 8.1 million, $ 3.4 million and $ 64.4 million, respectively by a reserve for slow moving and excess inventory. |
Assets Held For Sale
Assets Held For Sale | 9 Months Ended |
Sep. 30, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Assets Held for Sale | 9. Assets Held for Sale In the second quarter of 2022, the Company actively marketed for sale its corporate administrative building, forge facility and aftermarket facility in connection with the consolidation of its operations into a smaller footprint at its campus in Houston, Texas. In September 2022, we sold our forge facility for a net amount of approximately $ 18.9 million and a gain on sale of approximately $ 18.0 million of which $ 0.8 million was realized in the three months ended March 31, 2023. In March 2023, we sold our aftermarket facility for a net amount of approximately $ 14.5 million and a gain on sale of approximately $ 5.9 million. The Company expects to sell the corporate administrative building within a year. In accordance with the applicable accounting guidance, FASB ASC 360-10-45-9, the Company reclassified the buildings’ net carrying amount from Property, plant and equipment, net, to Assets held for sale on the condensed consolidated balance sheets. As of September 30, 2023, the Assets held for sale balance was $ 10.8 million comprising of the corporate administrative building held in Corporate. |
Restructuring and Other Charges
Restructuring and Other Charges | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring and Other Charges | 10. Restructuring and Other Charges During the three and nine months ended September 30, 2023 , the Company incurred costs of approximately $ 2.3 million and $ 3.4 million, under the 2021 global strategic plan. The restructuring charges incurred during the current year primarily consist of office moves, site cleanup, preparation costs, severance, consulting and legal fees. During the second quarter of 2023, the Company reassessed the reasonability of a restructuring liability related to its Well Construction business. During our assessment certain market exit costs became known and the liability was adjusted accordingly, resulting in a release of approximately $ 2.3 million, which partially offsets the current year restructuring costs. During the three and nine months ended September 30, 2022, the Company incurred additional costs of approximately $ 4.1 million and $ 9.9 million under the 2021 global strategic plan. Approximately $ 5.1 million of these charges were primarily related to write-down of our long-lived assets and the remaining $ 4.8 million were related to consulting and legal fees, office moves and site cleanup, and preparation costs. The following table summarizes the components of charges included in “Restructuring and other charges” in our condensed consolidated statements of income (loss) for the three and nine months ended September 30, 2023 and 2022 (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Severance $ 504 $ - $ 504 $ 32 Long-lived asset write-down - - - 5,055 Other 1,763 4,101 2,871 4,811 $ 2,267 $ 4,101 $ 3,375 $ 9,898 The following table summarizes the changes to our accrued liability balance related to restructuring and other charges as of September 30, 2023 (in thousands): Total Beginning balance at January 1, 2023 $ 3,802 Additions for costs expensed - Reductions for payments ( 645 ) Other ( 2,255 ) Ending balance at September 30, 2023 $ 902 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 11. Goodwill and Intangible Assets Goodwill The following table summarizes the change in goodwill, which was acquired in the acquisition of Great North in 2023 (in millions): Total Net balance as of December 31, 2022 $ - Addition due to business combination 16.8 Impairments - Foreign currency translation ( 0.6 ) Net balance as of September 30, 2023 (1) $ 16.2 (1) As of September 30, 2023, the Goodwill balance is included in long-lived assets in the Well Construction business segment. Intangible Assets Intangible assets, the majority of which were acquired in the acquisition of TIW Corporation in 2016, OilPatch Technologies in 2017, and Great North in July 2023, consist of the following: September 30, 2023 Estimated Gross Accumulated Foreign Net Book (In thousands) Trademarks 10 - 15 years $ 11,967 $ ( 2,578 ) $ 2 $ 9,391 Patents 15 - 30 years 9,573 ( 4,033 ) ( 1 ) 5,539 Customer relationships 5 - 15 years 39,833 ( 12,272 ) 13 27,574 Organizational costs 3 years 163 ( 163 ) - - $ 61,536 $ ( 19,046 ) $ 14 $ 42,504 December 31, 2022 Estimated Gross Accumulated Foreign Net Book (In thousands) Trademarks 10 - 15 years $ 8,233 $ ( 2,118 ) $ ( 79 ) $ 6,036 Patents 15 - 30 years 6,055 ( 3,699 ) - 2,356 Customer relationships 5 - 15 years 26,028 ( 10,878 ) ( 234 ) 14,916 Organizational costs 3 years 183 ( 131 ) ( 12 ) 40 $ 40,499 $ ( 16,826 ) $ ( 325 ) $ 23,348 |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Business Segments | 12. Business Segments Operating segments are defined in FASB ASC Topic 280, Segment Reporting , as components of an enterprise about which separate financial information is available and evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. During the quarter ended March 31, 2023, the Company reorganized its structure in order to streamline operations and leadership around more focused and integrated product and service lines to align with its business strategy. To reflect the Company’s new organizational structure, the Company changed presentation of its segments in 2023 into the following three reportable business segments: Subsea Products, Subsea Services, and Well Construction. Segment operating results for the prior year comparative period have been restated to reflect this change. Previously, the Company’s operations were organized into three geographic segments. The Company evaluates segment performance based on operating income. The accounting policies of the segments are the same as described in the summary of significant accounting policies. Subsea Products. The Company’s Subsea Products segment designs, manufactures and sells a variety of products including subsea wellheads, connectors and surface equipment, and subsea production systems. Subsea Services. The Company’s Subsea Services segment delivers a variety of technical services including subsea rental services, subsea rework services and subsea services shared support. Well Construction. The Company’s Well Construction business provides products and services utilized in the construction of the wellbore such as completions, casing hardware and liner hanger systems. The Well Construction business also includes all of Great North’s operations as of the acquisition date. Corporate. Corporate includes the expenses and assets of the Company’s corporate office functions, legal and other administrative expenses that are managed at a consolidated level. During the three months ended September 30, 2023 , the Company incurred $ 2.3 million of restructuring and other charges under the 2021 global strategic plan out of which approximately $ 2.2 million is in Corporate and $ 0.1 million in Subsea Services. The charges in Corporate primarily consisted of severance, office moves, site cleanup, preparation costs, consulting and legal fees. During the three months ended September 30, 2022 , the Company incurred $ 4.1 million of additional costs under the 2021 global strategic plan. These charges were primarily related to office moves, site cleanup, preparation costs, consulting and legal fees. During the nine months ended September 30, 2023 , the Company incurred $ 3.4 million of additional restructuring and other charges under the 2021 global strategic plan out of which approximately $ 4.9 million is in Corporate, ($ 1.9 ) million in Well Construction and $ 0.4 million in Subsea Services. The restructuring charges incurred during the current year primarily consist of office moves, site cleanup, preparation costs, severance, consulting and legal fees. During the second quarter of 2023, the Company reassessed the reasonability of a restructuring liability related to its Well Construction business. During our assessment certain market exit costs became known and the liability was adjusted accordingly, resulting in a release of approximately $ 2.3 million, which partially offsets the current year restructuring costs. During the nine months ended September 30, 2022, the Company incu rred $ 9.9 million of additional costs under the 2021 global strategic plan. These charges were primarily related to a $ 2.6 million write down of our Houston corporate administrative building in Corporate and other long-lived asset write downs of $ 2.5 million in Subsea Products. In addition, there were other charges of $ 4.8 million primarily related to consulting and legal fees, office moves, cleanup and p reparation costs, and brokerage fees in Corporate. The following tables presents selected financial data by business segment: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 (In thousands) Revenue Subsea products $ 55,427 $ 48,496 $ 146,123 $ 144,245 Subsea services 24,176 22,276 71,658 69,292 Well construction 37,641 17,369 79,935 51,719 Total revenue $ 117,244 $ 88,141 $ 297,716 $ 265,256 Depreciation and amortization Subsea products $ 1,670 $ 1,623 $ 5,014 $ 5,196 Subsea services 2,595 2,826 8,122 8,954 Well construction 2,977 1,558 6,536 4,837 Corporate 657 1,116 2,165 3,365 Total depreciation and amortization $ 7,899 $ 7,123 $ 21,837 $ 22,352 Operating income (loss) Subsea products $ 954 $ 18,007 $ 555 $ 11,109 Subsea services 885 676 11,498 5,859 Well construction 6,353 2,066 13,407 9,613 Corporate ( 14,263 ) ( 8,318 ) ( 24,737 ) ( 23,610 ) Total operating income (loss) $ ( 6,071 ) $ 12,431 $ 723 $ 2,971 The Company does not allocate assets to its reportable segments as they are not included in the review performed by the Chief Operating Decision Maker (CODM) for purposes of assessing segment performance and allocating resources. The balance sheet is reviewed on a consolidated basis and is not used in the context of segment reporting. |
Income Tax
Income Tax | 9 Months Ended |
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Tax | 13. Income Tax The effective tax rate for the three and nine months ended September 30, 2023 was ( 87.1 )% and 116.0 % compared to ( 4.8 %) and 131.7 % for the same period in 2022. The change in the effective tax rate between the periods resulted primarily due to the change in projected earnings mix by geography and tax jurisdiction as compared to the prior period, changes in valuation allowances in the United States, foreign withholding tax, changes in nondeductible compensation, and the mix of earnings in jurisdictions with differing tax rates. The Company had approximately $ 16.8 million in outstanding NOL carryback claims as of December 31, 2022 including the estimated carryback claim relating to the 2020 tax year, which was reflected in “Other current assets” on the consolidated balance sheets. During the three and nine months ended September 30, 2023, the Company received refunds of $ 16.8 million and $ 17.2 million, respectively. The third quarter 2023 refund is comprised of the refund amount of $ 15.5 million and related interest of $ 1.3 million. As t he Company no longer asserts the indefinite reinvestment assertion, we maintain a deferred foreign tax liability, which had a balance of $ 1.8 million as of September 30, 2023 and is primarily related to estimated foreign withholding tax associated with repatriating all non-U.S. earnings back to the United States. The Company operates in multiple jurisdictions with complex tax and regulatory environments and our tax returns are periodically audited or subjected to review by tax authorities. We monitor tax law changes and the potential impact to our results of operations. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | 14. Contingencies FMC Technologies Lawsuit On October 5, 2020, FMC Technologies, Inc. (“FMC”) sued the Company alleging misappropriation of trade secrets and sought money damages and injunctive relief in the 127th District Court of Harris County in an action styled FMC Technologies, Inc. v. Richard Murphy and Dril-Quip, Inc., Cause No. 2020-63081. FMC alleged that its former employee communicated FMC trade secrets to the Company and the Company used those trade secrets in its VXTe subsea tree systems. On April 29, 2021, the jury returned a verdict in favor of the Company. FMC filed a notice of appeal on August 20, 2021. On August 10, 2023, the First District of Texas Court of Appeals rendered a judgment that affirmed the judgment of the 127th District Court of Harris County in favor of the Company. The current deadline for FMC to file a petition for review with the Texas Supreme Court is November 24, 2023. General The Company operates its business and markets its products and services in most of the significant oil and gas producing areas in the world and is, therefore, subject to the risks customarily attendant to international operations and is dependent on the condition of the oil and gas industry. Additionally, certain of the Company’s products are used in potentially hazardous drilling, completion, and production applications that can cause personal injury, property damage and environmental claims. Although exposure to such risks has not resulted in any significant problems for the Company in the past, ongoing exposure to these risks and future developments could adversely impact the Company in the future. The Company is also involved in a number of legal actions arising in the ordinary course of business. Although no assurance can be given with respect to the ultimate outcome of such legal action, in the opinion of management, the ultimate liability with respect thereto will not have a material adverse effect on the Company’s results of operations, financial position or cash flows. |
Significant Accounting Polici_2
Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Principles of Consolidation | Principles of Consolidation The condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts and transactions have been eliminated. |
Reclassifications | Reclassifications We reclassified approximately $ 5.5 million of accrued bonus related to our short-term incentive plan for the year ended December 31, 2022, from other accrued liabilities to accrued compensation to conform to our current year presentation. These reclassifications did not have an impact on our consolidated statements of income (loss), consolidated balance sheets, consolidated statements of comprehensive income (loss), consolidated statements of stockholders’ equity and consolidated statements of cash flows. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect reported amounts of assets and liabilities as of the date of the financial statements and reported amounts of revenues and expenses during the reporting period. Actual results could differ materially from those estimates. Some of the Company’s more significant estimates are those affected by critical accounting policies for revenue recognition and asset recoverability tests and inventories |
Revenue Recognition | Revenue Recognition The Company generates revenues through the sale of products, the sale of services and the leasing of running tools. The Company normally negotiates contracts for products, including those accounted for under the over-time method, rental tools and services separately. Modifications to the scope and price of sales contracts may occur in the form of variations and change orders. For all product sales, it is the customer’s decision as to the timing of the product installation, as well as whether Dril-Quip running tools will be purchased or rented. Furthermore, the customer is under no obligation to utilize the Company’s technical advisory assistance services. The customer may instead choose to use a third party or its own personnel. Leasing Revenues The Company earns leasing revenues from the rental of running tools. Revenues from rental of running tools are recognized on a day rate basis over the lease term, which is generally between one to three months. |
Cash and Cash Equivalents | Cash and Cash Equivalents Short-term investments that have a maturity of three months or less from the date of purchase are classified as cash equivalents. The Company invests excess cash in interest bearing accounts, money market mutual funds and funds which invest in U.S. Treasury obligations and repurchase agreements backed by U.S. Treasury obligations. The Company’s investment objectives continue to be the preservation of capital and the maintenance of liquidity. The Company’s ABL Credit Facility, dated February 23, 2018, as amended, was terminated effective February 22, 2022. We opened a new cash collateral account with JPMorgan Chase Bank, N.A., in which cash was transferred to facilitate our existing letters of credit. As of September 30, 2023 , the cash balance in that account was approximately $ 4.2 million. The Company is required to maintain a balance equal to the outstanding letters of credit plus 5% at all times which is considered as restricted cash and is included in “Cash and cash equivalents” in our condensed consolidated balance sheets as at September 30, 2023 and December 31, 2022 . Withdrawals from this cash collateral account are only allowed at such point a given letter of credit has expired or has been cancelled. |
Short-term Investments | Short-term Investments Short-term investments that have a maturity greater than three months and less than a year from the date of purchase are comprised primarily of time deposits, certificates of deposit, commercial paper, bonds and notes, substantially all of which are denominated in U.S. dollars and are stated at cost plus accrued interest, which approximates fair value. The Company expects to hold all of its Short-term investments to maturity. For purposes of the condensed consolidated financial statements, the Company does not consider Short-term investments to be cash equivalents. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash and cash equivalents, receivables and payables. The carrying values of these financial instruments approximate their respective fair values as they are short-term in nature. |
Fair Value Measurements | Fair Value Measurements The Company applies the applicable accounting guidance for fair value measurements. This guidance provides the definition of fair value, describes the method used to appropriately measure fair value in accordance with generally accepted accounting principles, and outlines fair value disclosure requirements. The fair value hierarchy established under this guidance prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The three levels of the fair value hierarchy are as follows: • Level 1 - Quoted prices are available in active markets for identical assets or liabilities as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis. • Level 2 - Pricing inputs are other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date. Level 2 includes those financial instruments that are valued using models or other valuation methodologies. These models are primarily industry-standard models that consider various assumptions, including quoted prices, time value, volatility factors, and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these assumptions are observable in the marketplace throughout the full term of the instrument, can be derived from observable data or are supported by observable levels at which transactions are executed in the marketplace. • Level 3 - Pricing inputs include significant inputs that are generally less observable from objective sources. These inputs may be used with internally developed methodologies that result in management’s best estimate of fair value from the perspective of a market participant. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets Long-lived assets, including property, plant and equipment and definite-lived intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We evaluate our property and equipment and definite-lived intangible assets for impairment whenever changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Should the review indicate that the carrying value is not fully recoverable, the amount of the impairment loss is determined by comparing the carrying value to the estimated fair value. We assess recoverability based on undiscounted future net cash flows. Estimating future net cash flows requires us to make judgments regarding long-term forecasts of future revenues and costs related to the assets subject to review. These forecasts are uncertain in that they require assumptions about our revenue growth, operating margins, capital expenditures, future market conditions and technological developments. If changes in these assumptions occur, our expectations regarding future net cash flows may change such that a material impairment could result. |
Goodwill and Intangible Assets | Goodwill and Intangible Assets For goodwill and indefinite-lived intangible assets, an assessment for impairment is performed annually or when there is an indication an impairment may have occurred. Goodwill is not amortized but rather tested for impairment annually on October 1 or when events occur or circumstances change that would trigger such a review. The impairment test entails an assessment of qualitative factors to determine whether it is more likely than not that an impairment exists. If it is more likely than not that an impairment exists, then a quantitative impairment test is performed. Impairment exists when the carrying amount of a reporting unit exceeds its fair value. |
Restructuring and Other Charges | Restructuring and Other Charges Restructuring and other charges consist of costs associated with our 2021 global strategic plan initiated in the fourth quarter of 2021, in an effort to realign our subsea product business with the market conditions. During the three and nine months ended September 30, 2023, the Company incurred $ 2.3 million and $ 3.4 million of additional costs under the 2021 global strategic plan, respectively. The restructuring charges incurred during the current year primarily consist of office moves, site cleanup, preparation costs, severance, consulting and legal fees. During the second quarter of 2023, the Company reassessed the reasonability of a restructuring liability related to its Well Construction business. During our assessment certain market exit costs became known and the liability was adjusted accordingly, resulting in a release of approximately $ 2.3 million, which partially offsets the current year restructuring costs. During the three and nine months ended September 30, 2022, the Company incurred $ 4.1 million and $ 9.9 million of additional costs under the 2021 global strategic plan, respectively. Approximately $ 5.1 million of these charges were primarily related to write-down of our long-lived assets and the remaining $ 4.8 million were related to consulting and legal fees, office moves and site cleanup, and preparation costs. |
Repurchase of Equity Securities | Repurchase of Equity Securities On February 22, 2022, the Board of Directors authorized an incremental $ 100.0 million share repurchase plan. The repurchase plans have no set expiration date and any repurchased shares are expected to be cancelled. The manner, timing and amount of any purchase will be determined by management based on an evaluation of market conditions, stock price, liquidity and other factors. The program does not obligate the Company to acquire any amount of common stock and may be modified or superseded at any time at the Company’s discretion. For the three and nine months ended September 30, 2023 , the Company did no t purchase any shares under the share repurchase plans. For the three months ended September 30, 2022 , the Company purchased 457,467 shares under the share repurchase plans at an average price of approximately $ 24.35 per share totaling approximately $ 11.1 million and has retired such shares. For the nine months ended September 30, 2022 , the Company purchased 888,197 shares under the share repurchase plans at an average price of approximately $ 23.41 per share totaling approximately $ 20.8 million and has retired such shares. |
Earnings Per Share | Earnings Per Share Basic earnings per common share is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. Diluted earnings per common share is computed considering the dilutive effect of stock awards using the treasury stock method. In each relevant period, the net income (loss) used in the basic and dilutive earnings per share calculations is the same. The following table reconciles the weighted average basic number of common shares outstanding and the weighted average diluted number of common shares outstanding for the purpose of calculating basic and diluted earnings per share: Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Weighted average common shares outstanding – basic 34,132 33,948 34,130 33,948 Dilutive effect of common stock awards - 284 - - Weighted average common shares outstanding – diluted 34,132 34,232 34,130 33,948 For the three and nine months ended September 30, 2023 and 2022, the Company has excluded the following common stock awards because their impact on the income (loss) per share is anti-dilutive (in thousands on a weighted average basis): Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Director stock awards 73 1 67 - Performance share units 332 - 332 - Restricted stock awards 543 2 558 1 |
Significant Accounting Polici_3
Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Earnings Per Share | The following table reconciles the weighted average basic number of common shares outstanding and the weighted average diluted number of common shares outstanding for the purpose of calculating basic and diluted earnings per share: Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Weighted average common shares outstanding – basic 34,132 33,948 34,130 33,948 Dilutive effect of common stock awards - 284 - - Weighted average common shares outstanding – diluted 34,132 34,232 34,130 33,948 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | For the three and nine months ended September 30, 2023 and 2022, the Company has excluded the following common stock awards because their impact on the income (loss) per share is anti-dilutive (in thousands on a weighted average basis): Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Director stock awards 73 1 67 - Performance share units 332 - 332 - Restricted stock awards 543 2 558 1 |
Business Acquisitions (Tables)
Business Acquisitions (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Business Combinations [Abstract] | |
Schedule of Pro forma Consolidated Results of Operations | The following unaudited pro forma summary presents consolidated information of Dril-Quip as if the business combination had occurred on January 1, 2022. Pro forma three months ended Pro forma nine months ended 2023 2022 2023 2022 (In thousands) (unaudited) Revenues $ 125,367 $ 112,471 $ 352,343 $ 329,692 Net income $ ( 1,611 ) $ 15,810 $ 10,387 $ ( 1,450 ) |
Summary of Consideration Transferred to Acquire Great North | The following table summarizes the consideration transferred to acquire Great North: Fair value of consideration transferred: (In thousands) Cash $ 84,097 Contingent consideration 3,571 Total $ 87,668 The acquisition of Great North includes a contingent consideration arrangement that requires additional consideration to be paid by Dril-Quip to the sellers of Great North based on the future revenues of Great North for FY 2024 and 2025. The range of the undiscounted amounts Dril-Quip could pay under the contingent consideration agreement is between zero and $ 30 million CAD, approximately $ 22.8 million. The fair value of the contingent consideration recognized on the acquisition date was $ 3.6 million. The current and noncurrent portion of contingent consideration is included in other accrued liabilities and other long-term liabilities, respectively. The fair value of the contingent consideration recognized on the acquisition date of $ 3.6 million was estimated by applying a Monte-Carlo valuation model based on Level 3 inputs. The Company will be required to remeasure this liability to fair value quarterly with any changes in the fair value recorded in income until the final payment is made. |
Allocation of Purchase Price to Fair Value of Assets Acquired and Liabilities Assumed | The following table sets forth the preliminary purchase price allocation, which was based on fair value of assets acquired and liabilities assumed at the acquisition date, July 31, 2023: Preliminary amounts of identified assets acquired and liabilities assumed: (In thousands) Cash $ 1,810 Accounts receivable 16,499 Prepaid expenses and other current assets 609 Inventory 16,068 Property, plant and equipment 29,338 Right of use assets 11,115 Intangible assets (1) 22,263 Total assets acquired $ 97,702 Accounts payable 7,034 Accrued expenses 3,522 Deferred revenue 47 Lease liability, long-term 11,115 Deferred taxes 5,075 Total liabilities assumed $ 26,793 Net identifiable assets acquired $ 70,909 Goodwill 16,759 Net assets acquired $ 87,668 (1) Includes $ 4.0 million of trademarks with a weighted average useful life of 10 years, $ 3.6 million of patents with a weighted average useful life of 15 years, and $ 14.7 million of customer relationships with a weighted average useful life of 10 years. See “Goodwill and Intangible Assets,” Note 11 of Notes to the Condensed Consolidated Financial Statements for further information regarding intangible assets. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Schedule of company's contingent consideration measured at fair value | The Company’s contingent consideration measured at fair value for the periods presented are as follows ( in thousands ): September 30, 2023 December 31, 2022 Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Liability: Contingent consideration (1) $ 3,460 - - $ 3,460 - - - - Total liabilities $ 3,460 - - $ 3,460 - - - - (1) As of September 30, 2023 , contingent consideration includes certain amounts in accrued general liabilities and other long-term liabilities on the Company’s Consolidated Balance Sheets. |
Summary of reconciliation of changes in the fair value of the Company's earn-out liabilities | The following table provides a reconciliation of changes in the fair value of the Company’s earn-out liabilities associated with the Company’s acquisition measured at fair value for the three and nine months ended September 30, 2023 and 2022 ( in thousands ): Three Months Ended Nine Months Ended 2023 2022 2023 2022 Beginning period balance $ - - $ - - Additions to contingent consideration 3,571 - 3,571 - Payments of contingent consideration - - - - Fair value adjustment of earn-out liabilities - - - - Currency translation adjustment ( 111 ) - ( 111 ) - Ending period balance $ 3,460 - $ 3,460 - |
Revision to Previously Report_2
Revision to Previously Reported Financial Information (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Accounting Changes and Error Corrections [Abstract] | |
Schedule of Error Corrections and Prior Period Adjustments | The following table presents the impact of correcting the errors on the affected line items of our condensed consolidated balance sheet as of December 31, 2022: December 31, 2022 As Reported Adjustments As Revised (In thousands) Trade receivables, net $ 91,504 $ ( 643 ) $ 90,861 Other current assets 34,359 ( 1,921 ) 32,438 Total current assets 752,588 ( 2,564 ) 750,024 Total assets 972,515 ( 2,564 ) 969,951 Total stockholders’ equity 874,916 ( 2,564 ) 872,352 The following table presents the impact of correcting the errors on the affected line items of our condensed consolidated statement of income (loss) for the three months ended September 30, 2022: Three months ended September 30, 2022 As Reported Adjustments As Revised (In thousands, except per share data) Restructuring and other charges $ 2,180 $ 1,921 $ 4,101 Operating income (loss) 14,352 ( 1,921 ) 12,431 Income (loss) before income taxes 14,600 ( 1,921 ) 12,679 Net income (loss) 15,210 ( 1,921 ) 13,289 Net income (loss) per common share: Basic 0.45 ( 0.06 ) 0.39 Diluted 0.44 ( 0.06 ) 0.38 The following table presents the impact of correcting the errors on the affected line items of our condensed consolidated statement of income (loss) for the nine months ended September 30, 2022: Nine months ended September 30, 2022 As Reported Adjustments As Revised (In thousands, except per share data) Restructuring and other charges $ 7,977 $ 1,921 $ 9,898 Operating income (loss) 4,892 ( 1,921 ) 2,971 Income (loss) before income taxes 5,763 ( 1,921 ) 3,842 Net income (loss) 702 ( 1,921 ) ( 1,219 ) Net income (loss) per common share: Basic 0.02 ( 0.06 ) ( 0.04 ) Diluted 0.02 ( 0.06 ) ( 0.04 ) |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Revenue from Contract with Customer Excludes Leasing | Revenues from contracts with customers (excludes leasing) consisted of the following: Three months ended Nine months ended September 30, September 30, 2023 2022 2023 2022 (In thousands) Revenues: Products: Subsea products $ 55,427 $ 48,480 $ 146,123 $ 144,229 Well construction 22,176 10,028 46,554 31,900 Total products $ 77,603 $ 58,508 $ 192,677 $ 176,129 Services: Subsea services $ 17,412 $ 15,806 $ 50,230 $ 43,748 Well construction services 9,802 4,637 21,998 13,790 Total services $ 27,214 $ 20,443 $ 72,228 $ 57,538 |
Schedule of Contract Asset and Liability | Balances related to contracts with customers consisted of the following: Contract Assets (amounts shown in thousands) Contract assets at December 31, 2022 $ 138,592 Additions 147,250 Transfers to Trade receivables, net ( 137,423 ) Contract assets at September 30, 2023 $ 148,419 Contract Liabilities (amounts shown in thousands) Contract liabilities at December 31, 2022 $ 6,824 Additions 12,614 Revenue recognized ( 11,961 ) Contract liabilities at September 30, 2023 $ 7,477 |
Inventories, net (Tables)
Inventories, net (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventories | Inventories consist of the following: September 30, December 31, 2023 2022 (In thousands) Raw materials and supplies, net $ 34,057 $ 21,956 Work in progress, net 34,056 38,263 Finished goods, net 115,137 85,785 Total inventory, net $ 183,250 $ 146,004 |
Restructuring and Other Charg_2
Restructuring and Other Charges (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Impairment, Restructuring and Other Charges | The following table summarizes the components of charges included in “Restructuring and other charges” in our condensed consolidated statements of income (loss) for the three and nine months ended September 30, 2023 and 2022 (in thousands): Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 Severance $ 504 $ - $ 504 $ 32 Long-lived asset write-down - - - 5,055 Other 1,763 4,101 2,871 4,811 $ 2,267 $ 4,101 $ 3,375 $ 9,898 |
Schedule of Accrued Liabilities Related to Restructuring and Others Charges | The following table summarizes the changes to our accrued liability balance related to restructuring and other charges as of September 30, 2023 (in thousands): Total Beginning balance at January 1, 2023 $ 3,802 Additions for costs expensed - Reductions for payments ( 645 ) Other ( 2,255 ) Ending balance at September 30, 2023 $ 902 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Summary of Change in Goodwill | The following table summarizes the change in goodwill, which was acquired in the acquisition of Great North in 2023 (in millions): Total Net balance as of December 31, 2022 $ - Addition due to business combination 16.8 Impairments - Foreign currency translation ( 0.6 ) Net balance as of September 30, 2023 (1) $ 16.2 (1) As of September 30, 2023, the Goodwill balance is included in long-lived assets in the Well Construction business segment. |
Schedule of Intangible Assets | Intangible assets, the majority of which were acquired in the acquisition of TIW Corporation in 2016, OilPatch Technologies in 2017, and Great North in July 2023, consist of the following: September 30, 2023 Estimated Gross Accumulated Foreign Net Book (In thousands) Trademarks 10 - 15 years $ 11,967 $ ( 2,578 ) $ 2 $ 9,391 Patents 15 - 30 years 9,573 ( 4,033 ) ( 1 ) 5,539 Customer relationships 5 - 15 years 39,833 ( 12,272 ) 13 27,574 Organizational costs 3 years 163 ( 163 ) - - $ 61,536 $ ( 19,046 ) $ 14 $ 42,504 December 31, 2022 Estimated Gross Accumulated Foreign Net Book (In thousands) Trademarks 10 - 15 years $ 8,233 $ ( 2,118 ) $ ( 79 ) $ 6,036 Patents 15 - 30 years 6,055 ( 3,699 ) - 2,356 Customer relationships 5 - 15 years 26,028 ( 10,878 ) ( 234 ) 14,916 Organizational costs 3 years 183 ( 131 ) ( 12 ) 40 $ 40,499 $ ( 16,826 ) $ ( 325 ) $ 23,348 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting | The following tables presents selected financial data by business segment: Three months ended September 30, Nine months ended September 30, 2023 2022 2023 2022 (In thousands) Revenue Subsea products $ 55,427 $ 48,496 $ 146,123 $ 144,245 Subsea services 24,176 22,276 71,658 69,292 Well construction 37,641 17,369 79,935 51,719 Total revenue $ 117,244 $ 88,141 $ 297,716 $ 265,256 Depreciation and amortization Subsea products $ 1,670 $ 1,623 $ 5,014 $ 5,196 Subsea services 2,595 2,826 8,122 8,954 Well construction 2,977 1,558 6,536 4,837 Corporate 657 1,116 2,165 3,365 Total depreciation and amortization $ 7,899 $ 7,123 $ 21,837 $ 22,352 Operating income (loss) Subsea products $ 954 $ 18,007 $ 555 $ 11,109 Subsea services 885 676 11,498 5,859 Well construction 6,353 2,066 13,407 9,613 Corporate ( 14,263 ) ( 8,318 ) ( 24,737 ) ( 23,610 ) Total operating income (loss) $ ( 6,071 ) $ 12,431 $ 723 $ 2,971 |
Organization and Basis of Pre_2
Organization and Basis of Presentation (Details) - Segment | 3 Months Ended | 9 Months Ended |
Mar. 31, 2023 | Sep. 30, 2023 | |
Segment Reporting Information [Line Items] | ||
Number of geographic segments | 3 | 3 |
Number of reportable business segments | 3 |
Significant Accounting Polici_4
Significant Accounting Policies - Additional Information (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | Feb. 22, 2022 | |
Accounting Policies [Line Items] | ||||||
Accrued bonuses | $ 5,500 | |||||
Additions for costs expensed | $ 0 | |||||
Restructuring liability | $ 902 | 902 | $ 3,802 | |||
Outstanding cash balance | $ 4,200 | $ 4,200 | ||||
Amount to maintain by company, description | the outstanding letters of credit plus 5% at all times | |||||
Shares authorized to be repurchased (up to) | $ 100,000 | |||||
Treasury stock shares (in shares) | 0 | 457,467 | 0 | 888,197 | ||
Average price of shares (in dollars per share) | $ 24.35 | $ 23.41 | ||||
Treasury stock, value of acquired shares | $ 11,100 | $ 20,800 | ||||
2021 Global Strategic Plan | ||||||
Accounting Policies [Line Items] | ||||||
Additions for costs expensed | $ 2,300 | 4,100 | $ 3,400 | 9,900 | ||
Restructuring liability | $ 2,300 | 2,300 | ||||
Inventory write down | $ 5,100 | 5,100 | ||||
Restructuring costs | $ 4,800 | |||||
2021 Global Strategic Plan | Well construction | ||||||
Accounting Policies [Line Items] | ||||||
Additions for costs expensed | $ (1,900) |
Significant Accounting Polici_5
Significant Accounting Policies - Schedule of Earnings Per Share (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Accounting Policies [Abstract] | ||||
Weighted average common shares outstanding basic (in shares) | 34,132 | 33,948 | 34,130 | 33,948 |
Dilutive effect of common stock awards (in shares) | 0 | 284 | 0 | 0 |
Weighted average common shares outstanding diluted (in shares) | 34,132 | 34,232 | 34,130 | 33,948 |
Significant Accounting Polici_6
Significant Accounting Policies - Schedule of Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Director stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive performance share units (in shares) | 73 | 1 | 67 | 0 |
Performance share units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive performance share units (in shares) | 332 | 0 | 332 | 0 |
Restricted stock awards | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Anti-dilutive performance share units (in shares) | 543 | 2 | 558 | 1 |
Business Acquisitions - Additio
Business Acquisitions - Additional Information (Details) $ in Thousands, $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | 9 Months Ended | ||||||||||
Jul. 31, 2023 USD ($) | Jul. 31, 2023 CAD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 CAD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2023 CAD ($) | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |||||
Business Acquisition [Line Items] | ||||||||||||||
Purchase price | $ 82,287 | $ 0 | ||||||||||||
Acquisitions, net of cash acquired | 82,287 | 0 | ||||||||||||
Contingent consideration | [1] | $ 3,460 | $ 3,460 | 3,460 | $ 0 | |||||||||
Goodwill | 16,237 | [2] | 16,237 | [2] | 16,237 | [2] | 0 | |||||||
Acquisition related costs | $ 5.4 | $ 6.5 | ||||||||||||
Revenues of acquired business since acquisition date | 15,500 | |||||||||||||
Pre-tax operating loss | (6,071) | $ 12,431 | 723 | $ 2,971 | ||||||||||
Net income of acquired business since acquisition date | 1,600 | |||||||||||||
Level 3 | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | [1] | $ 3,460 | $ 3,460 | $ 3,460 | $ 0 | |||||||||
Great North Wellhead and Frac | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Purchase price | $ 87,668 | |||||||||||||
Purchase price | 84,097 | |||||||||||||
Purchase price | $ 79,800 | $ 105 | ||||||||||||
Business acquisition, percentage of voting interests acquired | 100% | |||||||||||||
Acquisitions, net of cash acquired | $ 79,800 | 105 | ||||||||||||
Contingent consideration | 3,600 | |||||||||||||
Fair value of the contingent consideration | 22,800 | |||||||||||||
Goodwill | 16,759 | |||||||||||||
Great North Wellhead and Frac | Level 3 | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Contingent consideration | $ 3,600 | |||||||||||||
Great North Wellhead and Frac | Maximum | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value of the contingent consideration | 30 | |||||||||||||
Great North Wellhead and Frac | Minimum | ||||||||||||||
Business Acquisition [Line Items] | ||||||||||||||
Fair value of the contingent consideration | $ 0 | |||||||||||||
[1] As of September 30, 2023 , contingent consideration includes certain amounts in accrued general liabilities and other long-term liabilities on the Company’s Consolidated Balance Sheets. As of September 30, 2023, the Goodwill balance is included in long-lived assets in the Well Construction business segment. |
Business Acquisitions - Pro For
Business Acquisitions - Pro Forma Consolidated Results of Operations (Details) - Great North Wellhead and Frac - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Business Acquisition [Line Items] | ||||
Revenues | $ 125,367 | $ 112,471 | $ 352,343 | $ 329,692 |
Net income | $ (1,611) | $ 15,810 | $ 10,387 | $ (1,450) |
Business Acquisitions - Summary
Business Acquisitions - Summary of Consideration Transferred to Acquire Great North (Details) $ in Thousands, $ in Millions | 1 Months Ended | 9 Months Ended | ||
Jul. 31, 2023 USD ($) | Jul. 31, 2023 CAD ($) | Sep. 30, 2023 USD ($) | Sep. 30, 2022 USD ($) | |
Business Acquisition [Line Items] | ||||
Purchase price | $ 82,287 | $ 0 | ||
Great North Wellhead and Frac | ||||
Business Acquisition [Line Items] | ||||
Purchase price | $ 79,800 | $ 105 | ||
Cash | 84,097 | |||
Contingent consideration | 3,571 | |||
Total | $ 87,668 |
Business Acquisitions - Purchas
Business Acquisitions - Purchase Price Allocation (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | [1] | Jul. 31, 2023 | Dec. 31, 2022 | |
Business Acquisition [Line Items] | |||||
Goodwill | $ 16,237 | $ 0 | |||
Great North Wellhead and Frac | |||||
Business Acquisition [Line Items] | |||||
Cash | $ 1,810 | ||||
Accounts receivable | 16,499 | ||||
Prepaid expenses and other current assets | 609 | ||||
Inventory | 16,068 | ||||
Property, plant and equipment | 29,338 | ||||
Right of use assets | 11,115 | ||||
Intangible assets (1) | [2] | 22,263 | |||
Total assets acquired | 97,702 | ||||
Accounts payable | 7,034 | ||||
Accrued expenses | 3,522 | ||||
Deferred revenue | 47 | ||||
Lease liability, current | 11,115 | ||||
Deferred taxes | 5,075 | ||||
Total liabilities assumed | 26,793 | ||||
Net identifiable assets acquired | 70,909 | ||||
Goodwill | 16,759 | ||||
Net assets acquired | $ 87,668 | ||||
[1] As of September 30, 2023, the Goodwill balance is included in long-lived assets in the Well Construction business segment. Includes $ 4.0 million of trademarks with a weighted average useful life of 10 years, $ 3.6 million of patents with a weighted average useful life of 15 years, and $ 14.7 million of customer relationships with a weighted average useful life of 10 years. See “Goodwill and Intangible Assets,” Note 11 of Notes to the Condensed Consolidated Financial Statements for further information regarding intangible assets. |
Business Acquisitions - Purch_2
Business Acquisitions - Purchase Price Allocation (Parenthetical) (Details) - Great North Wellhead and Frac $ in Millions | 1 Months Ended |
Jul. 31, 2023 USD ($) | |
Trademarks | |
Business Acquisition [Line Items] | |
Acquired amount | $ 4 |
Weighted-average useful lives in years | 10 years |
Patents | |
Business Acquisition [Line Items] | |
Acquired amount | $ 3.6 |
Weighted-average useful lives in years | 15 years |
Customer relationships | |
Business Acquisition [Line Items] | |
Acquired amount | $ 14.7 |
Weighted-average useful lives in years | 10 years |
Fair Value Measurements - Addit
Fair Value Measurements - Additional Information (Details) - Level 3 | 9 Months Ended |
Sep. 30, 2023 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |
Expected revenue volatility | 7.50% |
Revenue discount rate | 8.70% |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Company's Contingent Consideration Measured at Fair Value (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | |
Liability: | |||
Contingent consideration | [1] | $ 3,460 | $ 0 |
Total liabilities | 3,460 | 0 | |
Level 1 | |||
Liability: | |||
Contingent consideration | [1] | 0 | 0 |
Total liabilities | 0 | ||
Level 2 | |||
Liability: | |||
Contingent consideration | [1] | 0 | 0 |
Total liabilities | 0 | 0 | |
Level 3 | |||
Liability: | |||
Contingent consideration | [1] | 3,460 | 0 |
Total liabilities | $ 3,460 | $ 0 | |
[1] As of September 30, 2023 , contingent consideration includes certain amounts in accrued general liabilities and other long-term liabilities on the Company’s Consolidated Balance Sheets. |
Fair Value Measurements - Summa
Fair Value Measurements - Summary of Reconciliation of Changes in the Fair Value of the Company's Earn-out Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | ||||
Beginning period balance | $ 0 | $ 0 | $ 0 | $ 0 |
Additions to contingent consideration | 3,571 | 0 | 3,571 | 0 |
Payments of contingent consideration | 0 | 0 | 0 | 0 |
Fair value adjustment of earn-out liabilities | 0 | 0 | 0 | 0 |
Currency translation adjustment | (111) | 0 | (111) | 0 |
Ending period balance | $ 3,460 | $ 0 | $ 3,460 | $ 0 |
Revision to Previously Report_3
Revision to Previously Reported Financial Information - Balance Sheet (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Jun. 30, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Jun. 30, 2022 | Dec. 31, 2021 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Trade receivables, net | $ 133,337 | $ 90,861 | ||||
Other current assets | 18,100 | 32,438 | ||||
Total current assets | 709,040 | 750,024 | ||||
Total assets | 1,007,568 | 969,951 | ||||
Total stockholders equity | $ 870,462 | $ 879,409 | 872,352 | $ 862,916 | $ 868,689 | $ 897,108 |
As Reported | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Trade receivables, net | 91,504 | |||||
Other current assets | 34,359 | |||||
Total current assets | 752,588 | |||||
Total assets | 972,515 | |||||
Total stockholders equity | 874,916 | |||||
Adjustments | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Trade receivables, net | (643) | |||||
Other current assets | (1,921) | |||||
Total current assets | (2,564) | |||||
Total assets | (2,564) | |||||
Total stockholders equity | $ (2,564) |
Revision to Previously Report_4
Revision to Previously Reported Financial Information - Statement of Income (Loss) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Total revenues | $ 117,244 | $ 88,141 | $ 297,716 | $ 265,256 |
Restructuring and other charges | 2,267 | 4,101 | 3,375 | 9,898 |
Operating income (loss) | (6,071) | 12,431 | 723 | 2,971 |
Income (loss) before income taxes | (3,759) | 12,679 | 7,761 | 3,842 |
Net Income (Loss) | $ (7,034) | $ 13,289 | $ (1,240) | $ (1,219) |
Net income (loss) per common share: | ||||
Basic | $ (0.21) | $ 0.39 | $ (0.04) | $ (0.04) |
Diluted | $ (0.21) | $ 0.38 | $ (0.04) | $ (0.04) |
As Reported | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Restructuring and other charges | $ 2,180 | $ 7,977 | ||
Operating income (loss) | 14,352 | 4,892 | ||
Income (loss) before income taxes | 14,600 | 5,763 | ||
Net Income (Loss) | $ 15,210 | $ 702 | ||
Net income (loss) per common share: | ||||
Basic | $ 0.45 | $ 0.02 | ||
Diluted | $ 0.44 | $ 0.02 | ||
Adjustments | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Restructuring and other charges | $ 1,921 | $ 1,921 | ||
Operating income (loss) | (1,921) | (1,921) | ||
Income (loss) before income taxes | (1,921) | (1,921) | ||
Net Income (Loss) | $ (1,921) | $ (1,921) | ||
Net income (loss) per common share: | ||||
Basic | $ (0.06) | $ (0.06) | ||
Diluted | $ (0.06) | $ (0.06) |
Revision to Previously Report_5
Revision to Previously Reported Financial Information - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reduction to opening retained earnings | $ (948,928) | $ (950,168) | |
Adjustments | |||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | |||
Reduction to opening retained earnings | $ 500 |
Revenue Recognition - Revenues
Revenue Recognition - Revenues From Contracts With Customers (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Subsea Products | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 55,427 | $ 48,480 | $ 146,123 | $ 144,229 |
Well construction | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 22,176 | 10,028 | 46,554 | 31,900 |
Products | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 77,603 | 58,508 | 192,677 | 176,129 |
Products | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 77,603 | 58,508 | 192,677 | 176,129 |
Subsea Services | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 17,412 | 15,806 | 50,230 | 43,748 |
Well construction services. | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | 9,802 | 4,637 | 21,998 | 13,790 |
Services | Operating Segments | ||||
Disaggregation Of Revenue [Line Items] | ||||
Revenues | $ 27,214 | $ 20,443 | $ 72,228 | $ 57,538 |
Revenue Recognition - Contract
Revenue Recognition - Contract Asset and Liability (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Contract Assets | |
Contract assets at December 31, 2022 | $ 138,592 |
Additions | 147,250 |
Transfers to Trade receivables, net | (137,423) |
Contract assets at September 30, 2023 | 148,419 |
Contract Liabilities | |
Contract liabilities at December 31, 2022 | 8,020 |
Contract liabilities at September 30, 2023 | 8,098 |
Other Current Liabilities | |
Contract Liabilities | |
Contract liabilities at December 31, 2022 | 6,824 |
Additions | 12,614 |
Revenue recognized | (11,961) |
Contract liabilities at September 30, 2023 | $ 7,477 |
Revenue Recognition - Additiona
Revenue Recognition - Additional Information (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Unbilled receivables | $ 154,305 | $ 144,428 |
Performance obligation | 41,800 | |
Receivables (Included in Trade Receivables) | ||
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | ||
Unbilled receivables | $ 92,300 | $ 92,600 |
Revenue Recognition - Additio_2
Revenue Recognition - Additional Information (Details1) | Sep. 30, 2023 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2023-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligation percentage | 98.60% |
Expected timing of satisfaction period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date: 2024-10-01 | |
Revenue Remaining Performance Obligation Expected Timing Of Satisfaction [Line Items] | |
Remaining performance obligation percentage | 1.40% |
Expected timing of satisfaction period | 0 years |
Stock-Based Compensation and _2
Stock-Based Compensation and Stock Awards - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Selling, General and Administrative Expenses | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Allocated share-based compensation expense | $ 2.6 | $ 2.6 | $ 7.7 | $ 7.7 |
Inventories, net - Schedule of
Inventories, net - Schedule of Inventories (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials and supplies, net | $ 34,057 | $ 21,956 |
Work in progress, net | 34,056 | 38,263 |
Finished goods, net | 115,137 | 85,785 |
Total inventory, net | $ 183,250 | $ 146,004 |
Inventories, net - Additional i
Inventories, net - Additional information (Details) - USD ($) $ in Millions | Sep. 30, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Reduction in raw materials by reserve | $ (7.6) | $ (8.1) |
Reduction in work in progress by reserve | (2.8) | (3.4) |
Reduction in finished goods by reserve | $ (62.1) | $ (64.4) |
Assets Held For Sale (Details)
Assets Held For Sale (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||||
Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Mar. 31, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Assets held for sale | $ 10,828 | $ 10,828 | $ 19,383 | |||||
Gain on sale of facility | 1,027 | $ 17,276 | 8,412 | $ 17,770 | ||||
DQ Corporate | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Assets held for sale | $ 10,800 | $ 10,800 | ||||||
Forge Facility | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Net proceeds from sale of productive assets | $ 18,900 | |||||||
Gain on sale of facility | $ 18,000 | |||||||
Realized gain on assets held for sale | $ 800 | |||||||
Aftermarket facility | ||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||||||
Net proceeds from sale of productive assets | $ 14,500 | |||||||
Gain on sale of facility | $ 5,900 |
Restructuring and Other Charg_3
Restructuring and Other Charges - Additional information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | |||||
Additions for costs expensed | $ 0 | ||||
Restructuring liability | $ 902 | 902 | $ 3,802 | ||
2021 Global Strategic Plan | |||||
Restructuring Cost and Reserve [Line Items] | |||||
Additions for costs expensed | 2,300 | $ 4,100 | 3,400 | $ 9,900 | |
Inventory Write-down | $ 5,100 | 5,100 | |||
Restructuring costs | $ 4,800 | ||||
Restructuring liability | $ 2,300 | $ 2,300 |
Restructuring and Other Charg_4
Restructuring and Other Charges - Schedule of Impairment, Restructuring and Other Charges (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Restructuring and Related Activities [Abstract] | ||||
Severance | $ 504 | $ 0 | $ 504 | $ 32 |
Long-lived asset write-down | 0 | 0 | 0 | 5,055 |
Other | 1,763 | 4,101 | 2,871 | 4,811 |
Total impairment, restructuring and other charges | $ 2,267 | $ 4,101 | $ 3,375 | $ 9,898 |
Restructuring and Other Charg_5
Restructuring and Other Charges - Schedule of Accrued Liabilities Related to Restructuring and Others Charges (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2023 USD ($) | |
Restructuring and Related Activities [Abstract] | |
Beginning balance | $ 3,802 |
Additions for costs expensed | $ 0 |
Restructuring, Incurred Cost, Statement of Income or Comprehensive Income [Extensible Enumeration] | Restructuring And Other Charges |
Reductions for payments | $ (645) |
Other | (2,255) |
Ending balance | $ 902 |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets - Summary of Changes in Goodwill (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2023 USD ($) | ||
Goodwill and Intangible Assets Disclosure [Abstract] | ||
Goodwill, Beginning Balance | $ 0 | |
Addition due to business combination | 16,800 | |
Goodwill, Impairment Loss | 0 | |
Goodwill, Foreign Currency Translation Gain (Loss) | (600) | |
Goodwill, Ending Balance | $ 16,237 | [1] |
[1] As of September 30, 2023, the Goodwill balance is included in long-lived assets in the Well Construction business segment. |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Sep. 30, 2023 | Dec. 31, 2022 |
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived, Gross Book Value | $ 61,536 | $ 40,499 |
Accumulated Amortization | (19,046) | (16,826) |
Finite-Lived, Foreign Currency Translation | 14 | (325) |
Finite-Lived, Net Book Value | 42,504 | 23,348 |
Trademarks | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived, Gross Book Value | 11,967 | 8,233 |
Accumulated Amortization | (2,578) | (2,118) |
Finite-Lived, Foreign Currency Translation | 2 | (79) |
Finite-Lived, Net Book Value | $ 9,391 | $ 6,036 |
Trademarks | Minimum | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 10 years | 10 years |
Trademarks | Maximum | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 15 years | 15 years |
Patents | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived, Gross Book Value | $ 9,573 | $ 6,055 |
Accumulated Amortization | (4,033) | (3,699) |
Finite-Lived, Foreign Currency Translation | (1) | 0 |
Finite-Lived, Net Book Value | $ 5,539 | $ 2,356 |
Patents | Minimum | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 15 years | 15 years |
Patents | Maximum | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 30 years | 30 years |
Customer relationships | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Finite-Lived, Gross Book Value | $ 39,833 | $ 26,028 |
Accumulated Amortization | (12,272) | (10,878) |
Finite-Lived, Foreign Currency Translation | 13 | (234) |
Finite-Lived, Net Book Value | $ 27,574 | $ 14,916 |
Customer relationships | Minimum | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 5 years | 5 years |
Customer relationships | Maximum | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 15 years | 15 years |
Organizational costs | ||
Schedule of Finite and Indefinite-Lived Intangible Assets [Line Items] | ||
Estimated Useful Lives | 3 years | 3 years |
Finite-Lived, Gross Book Value | $ 163 | $ 183 |
Accumulated Amortization | (163) | (131) |
Finite-Lived, Foreign Currency Translation | 0 | (12) |
Finite-Lived, Net Book Value | $ 0 | $ 40 |
Business Segments - Additional
Business Segments - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2023 USD ($) | Mar. 31, 2023 Segment | Sep. 30, 2022 USD ($) | Sep. 30, 2023 USD ($) Segment | Sep. 30, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Concentration Risk [Line Items] | ||||||
Number of geographic segments | Segment | 3 | 3 | ||||
Restructuring and Related Cost, Incurred Cost | $ 0 | |||||
Restructuring liability | $ 902 | 902 | $ 3,802 | |||
2021 Global Strategic Plan | ||||||
Concentration Risk [Line Items] | ||||||
Restructuring and Related Cost, Incurred Cost | 2,300 | $ 4,100 | 3,400 | $ 9,900 | ||
Inventory write down | $ 5,100 | 5,100 | ||||
Restructuring costs | 4,800 | |||||
Restructuring liability | 2,300 | 2,300 | ||||
2021 Global Strategic Plan | Subsea Services | ||||||
Concentration Risk [Line Items] | ||||||
Restructuring and Related Cost, Incurred Cost | 100 | 400 | ||||
2021 Global Strategic Plan | Subsea Products | ||||||
Concentration Risk [Line Items] | ||||||
Inventory write down | 2,500 | |||||
2021 Global Strategic Plan | Corporate | ||||||
Concentration Risk [Line Items] | ||||||
Restructuring and Related Cost, Incurred Cost | $ 2,200 | 4,900 | ||||
Long-lived asset write-downs | 2,600 | |||||
Restructuring costs | $ 4,800 | |||||
2021 Global Strategic Plan | Well construction | ||||||
Concentration Risk [Line Items] | ||||||
Restructuring and Related Cost, Incurred Cost | $ (1,900) |
Business Segments - Schedule of
Business Segments - Schedule of Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | |
Segment Reporting Information [Line Items] | ||||
Revenues | $ 117,244 | $ 88,141 | $ 297,716 | $ 265,256 |
Depreciation and amortization | 7,899 | 7,123 | 21,837 | 22,352 |
Operating income (loss) | (6,071) | 12,431 | 723 | 2,971 |
Subsea Products | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 55,427 | 48,496 | 146,123 | 144,245 |
Depreciation and amortization | 1,670 | 1,623 | 5,014 | 5,196 |
Operating income (loss) | 954 | 18,007 | 555 | 11,109 |
Subsea Services | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 24,176 | 22,276 | 71,658 | 69,292 |
Depreciation and amortization | 2,595 | 2,826 | 8,122 | 8,954 |
Operating income (loss) | 885 | 676 | 11,498 | 5,859 |
Well construction | ||||
Segment Reporting Information [Line Items] | ||||
Revenues | 37,641 | 17,369 | 79,935 | 51,719 |
Depreciation and amortization | 2,977 | 1,558 | 6,536 | 4,837 |
Operating income (loss) | 6,353 | 2,066 | 13,407 | 9,613 |
Corporate | ||||
Segment Reporting Information [Line Items] | ||||
Depreciation and amortization | 657 | 1,116 | 2,165 | 3,365 |
Operating income (loss) | $ (14,263) | $ (8,318) | $ (24,737) | $ (23,610) |
Income Tax - Additional Informa
Income Tax - Additional Information (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2023 | Sep. 30, 2022 | Sep. 30, 2023 | Sep. 30, 2022 | Dec. 31, 2022 | |
Operating Loss Carryforwards [Line Items] | |||||
Effective tax rate, percent | (87.10%) | (4.80%) | 116% | 131.70% | |
Proceeds from Income tax refunds | $ 15.5 | ||||
Deferred foreign tax liability | 1.8 | $ 1.8 | |||
Income tax examination, interest accrued | 1.3 | 1.3 | |||
Proceeds from Income tax refunds | $ 16.8 | $ 17.2 | |||
Other Current Assets | |||||
Operating Loss Carryforwards [Line Items] | |||||
Net operating loss carryback claims | $ 16.8 |