Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | Apr. 30, 2019 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | RNET | |
Entity Registrant Name | RigNet, Inc. | |
Entity Central Index Key | 0001162112 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Common Stock, Shares Outstanding | 19,711,075 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets: | ||
Cash and cash equivalents | $ 18,660 | $ 21,711 |
Restricted cash | 42 | 41 |
Accounts receivable, net | 74,115 | 67,450 |
Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB) | 5,710 | 7,138 |
Prepaid expenses and other current assets | 7,180 | 6,767 |
Total current assets | 105,707 | 103,107 |
Property, plant and equipment, net | 63,889 | 63,585 |
Restricted cash | 1,499 | 1,544 |
Goodwill | 46,830 | 46,631 |
Intangibles, net | 31,495 | 33,733 |
Right-of-use lease asset | 4,588 | |
Deferred tax and other assets | 7,211 | 10,325 |
TOTAL ASSETS | 261,219 | 258,925 |
Current liabilities: | ||
Accounts payable | 26,922 | 20,568 |
Accrued expenses | 16,015 | 16,374 |
Current maturities of long-term debt | 10,809 | 4,942 |
Income taxes payable | 2,680 | 2,431 |
GX dispute accrual | 50,765 | 50,765 |
Deferred revenue and other current liabilities | 9,724 | 5,863 |
Total current liabilities | 116,915 | 100,943 |
Long-term debt | 64,734 | 72,085 |
Deferred revenue | 272 | 318 |
Deferred tax liability | 619 | 652 |
Right-of-use lease liability - long-term portion | 5,789 | |
Other liabilities | 25,784 | 28,943 |
Total liabilities | 214,113 | 202,941 |
Commitments and contingencies (Note 11) | ||
Stockholders' equity | ||
Preferred stock - $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding at March 31, 2019 or December 31, 2018 | ||
Common stock - $0.001 par value; 190,000,000 shares authorized; 19,711,075 and 19,464,847 shares issued and outstanding at March 31, 2019 and December 31, 2018, respectively | 20 | 19 |
Treasury stock - 198,199 and 91,567 shares at March 31, 2019 and December 31, 2018, respectively, at cost | (2,677) | (1,270) |
Additional paid-in capital | 177,404 | 172,946 |
Accumulated deficit | (108,500) | (96,517) |
Accumulated other comprehensive loss | (19,096) | (19,254) |
Total stockholders' equity | 47,151 | 55,924 |
Non-redeemable, non-controlling interest | (45) | 60 |
Total equity | 47,106 | 55,984 |
TOTAL LIABILITIES AND EQUITY | $ 261,219 | $ 258,925 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
Statement of Financial Position [Abstract] | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 10,000,000 | 10,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 190,000,000 | 190,000,000 |
Common stock, shares issued | 19,711,075 | 19,464,847 |
Common stock, shares outstanding | 19,711,075 | 19,464,847 |
Treasury stock, shares | 198,199 | 91,567 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenue | $ 57,510 | $ 53,833 |
Expenses: | ||
Cost of revenue (excluding depreciation and amortization) | 36,456 | 33,681 |
Depreciation and amortization | 8,912 | 7,987 |
Selling and marketing | 3,793 | 2,949 |
General and administrative | 16,470 | 13,686 |
Total expenses | 65,631 | 58,303 |
Operating income (loss) | (8,121) | (4,470) |
Other income (expense): | ||
Interest expense | (1,238) | (959) |
Other income, net | 72 | 506 |
Loss before income taxes | (9,287) | (4,923) |
Income tax expense | (2,666) | (603) |
Net loss | (11,953) | (5,526) |
Less: Net income attributable to non-redeemable, non-controlling interest | 30 | 30 |
Net loss attributable to RigNet, Inc. stockholders | (11,983) | (5,556) |
COMPREHENSIVE LOSS | ||
Net loss | (11,953) | (5,526) |
Foreign currency translation | 158 | 1,600 |
Comprehensive loss | (11,795) | (3,926) |
Less: Comprehensive income attributable to non-controlling interest | 30 | 30 |
Comprehensive loss attributable to RigNet, Inc. stockholders | (11,825) | (3,956) |
LOSS PER SHARE - BASIC AND DILUTED | ||
Net loss attributable to RigNet, Inc. common stockholders | $ (11,983) | $ (5,556) |
Net loss per share attributable to RigNet, Inc. common stockholders, basic | $ (0.63) | $ (0.31) |
Net loss per share attributable to RigNet, Inc. common stockholders, diluted | $ (0.63) | $ (0.31) |
Weighted average shares outstanding, basic | 18,949 | 18,146 |
Weighted average shares outstanding, diluted | 18,949 | 18,146 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities: | ||
Net loss | $ (11,953) | $ (5,526) |
Adjustments to reconcile net loss to net cash provided by operations: | ||
Depreciation and amortization | 8,912 | 7,987 |
Stock-based compensation | 4,458 | 2,445 |
Amortization of deferred financing costs | 61 | 51 |
Deferred taxes | 2,469 | 449 |
Change in fair value of earn-out/contingent consideration | 22 | |
Accretion of discount of contingent consideration payable for acquisitions | 94 | 162 |
Gain on sales of property, plant and equipment, net of retirements | (7) | (53) |
Changes in operating assets and liabilities, net of effect of acquisition: | ||
Accounts receivable, net | (6,777) | (6,255) |
Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB) | 1,439 | 520 |
Prepaid expenses and other assets | 85 | (1,012) |
Accounts payable | 4,058 | (999) |
Accrued expenses | (38) | (2,613) |
Deferred revenue | 3,074 | 1,905 |
Other liabilities | (1,227) | 425 |
Net cash provided by (used in) operating activities | 4,648 | (2,492) |
Cash flows from investing activities: | ||
Acquisitions (net of cash acquired) | (3,202) | |
Capital expenditures | (4,814) | (5,099) |
Proceeds from sales of property, plant and equipment | 66 | 149 |
Net cash used in investing activities | (4,748) | (8,152) |
Cash flows from financing activities: | ||
Issuance of common stock upon the exercise of stock options and the vesting of restricted stock | 1 | 13 |
Stock withheld to cover employee taxes on stock-based compensation | (1,407) | (980) |
Subsidiary distributions to non-controlling interest | (135) | (66) |
Repayments of long-term debt | (1,295) | (1,286) |
Payment of financing fees | (250) | |
Net cash used in financing activities | (3,086) | (2,319) |
Net change in cash and cash equivalents | (3,186) | (12,963) |
Cash and cash equivalents including restricted cash: | ||
Balance, January 1, | 23,296 | 36,141 |
Changes in foreign currency translation | 91 | 271 |
Balance, March 31, | 20,201 | 23,449 |
Supplemental disclosures: | ||
Income taxes paid | 737 | 629 |
Interest paid | 1,019 | 665 |
Non-cash investing - capital expenditures accrued | $ 4,398 | 3,186 |
Non-cash investing - contingent consideration for acquisitions | 7,600 | |
Non-cash investing and financing - stock for acquisitions | 7,340 | |
Liabilities assumed in acquisitions | $ 4,285 |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Cash Flows [Abstract] | ||||
Cash and cash equivalents | $ 18,660 | $ 21,711 | $ 21,858 | |
Restricted cash - current portion | 42 | 41 | 45 | |
Restricted cash - long-term portion | 1,499 | 1,544 | 1,546 | |
Cash and cash equivalents including restricted cash | $ 20,201 | $ 23,296 | $ 23,449 | $ 36,141 |
Condensed Consolidated Statem_4
Condensed Consolidated Statements of Equity - USD ($) $ in Thousands | Total | Common Stock [Member] | Treasury Stock [Member] | Additional Paid-In Capital [Member] | Retained Earnings (Accumulated Deficit) [Member] | Accumulated Other Comprehensive Income (Loss) [Member] | Total Stockholders' Equity [Member] | Non-Redeemable, Non-Controlling Interest [Member] |
Beginning Balance at Dec. 31, 2017 | $ 107,277 | $ 18 | $ (116) | $ 155,829 | $ (33,726) | $ (14,806) | $ 107,199 | $ 78 |
Beginning Balance, shares at Dec. 31, 2017 | 18,233,000 | 6,000 | ||||||
Issuance of common stock upon the exercise of stock options | 12 | 12 | 12 | |||||
Issuance of common stock upon the exercise of stock options, shares | 1,000 | |||||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations | ||||||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations, shares | 340,000 | |||||||
Issuance of common stock for acquisitions | 7,340 | $ 1 | 7,339 | 7,340 | ||||
Issuance of common stock for acquisitions, shares | 530,000 | |||||||
Stock withheld to cover employee taxes on stock-based compensation | (980) | $ (980) | (980) | |||||
Stock withheld to cover employee taxes on stock-based compensation, shares | 74,000 | |||||||
Stock-based compensation | 2,445 | 2,445 | 2,445 | |||||
Cumulative effect adjustment from implementation of ASU 2016-16 at Dec. 31, 2017 | (338) | (338) | (338) | |||||
Foreign currency translation | 1,600 | 1,600 | 1,600 | |||||
Non-controlling owner distributions | (66) | (66) | ||||||
Net income (loss) | (5,526) | (5,556) | (5,556) | 30 | ||||
Ending Balance at Mar. 31, 2018 | 111,764 | $ 19 | $ (1,096) | 165,625 | (39,620) | (13,206) | 111,722 | 42 |
Ending Balance, shares at Mar. 31, 2018 | 19,104,000 | 80,000 | ||||||
Beginning Balance at Dec. 31, 2018 | $ 55,984 | $ 19 | $ (1,270) | 172,946 | (96,517) | (19,254) | 55,924 | 60 |
Beginning Balance, shares at Dec. 31, 2018 | 19,464,847 | 19,465,000 | 92,000 | |||||
Issuance of common stock upon the exercise of stock options | $ 0 | |||||||
Issuance of common stock upon the exercise of stock options, shares | ||||||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations | 1 | $ 1 | 1 | |||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations, shares | 246,000 | |||||||
Stock withheld to cover employee taxes on stock-based compensation | (1,407) | $ (1,407) | (1,407) | |||||
Stock withheld to cover employee taxes on stock-based compensation, shares | 106,000 | |||||||
Stock-based compensation | 4,458 | 4,458 | 4,458 | |||||
Foreign currency translation | 158 | 158 | 158 | |||||
Non-controlling owner distributions | (135) | (135) | ||||||
Net income (loss) | (11,953) | (11,983) | (11,983) | 30 | ||||
Ending Balance at Mar. 31, 2019 | $ 47,106 | $ 20 | $ (2,677) | $ 177,404 | $ (108,500) | $ (19,096) | $ 47,151 | $ (45) |
Ending Balance, shares at Mar. 31, 2019 | 19,711,075 | 19,711,000 | 198,000 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation | Note 1 – Basis of Presentation The interim unaudited condensed consolidated financial statements of RigNet, Inc. (the Company or RigNet) include all adjustments which, in the opinion of management, are necessary for a fair presentation of the Company’s financial position and results of operations. All such adjustments are of a normal recurring nature. These financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and Rule 10-01 of Regulation S-X. The preparation of these financial statements requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying footnotes. Estimates and assumptions about future events and their effects cannot be perceived with certainty. Estimates may change as new events occur, as more experience is acquired, as additional information becomes available and as the Company’s operating environment changes. Actual results could differ from estimates. These interim financial statements should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2018 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 15, 2019. Significant Accounting Policies Please refer to RigNet’s Annual Report on Form 10-K for fiscal year 2018 for information regarding the Company’s accounting policies. Revenue Recognition – Revenue from Contracts with Customers Revenue is recognized to depict the transfer of promised goods or services in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. Revenue Recognition – Managed Communications Services (MCS) and Applications and Internet-of-Things (Apps & IoT) MCS and Apps & IoT customers are primarily served under fixed-price contracts, either on a monthly or day rate basis or for equipment sales and consulting services. Contracts are generally in the form of Master Service Agreements, or MSAs, with specific services being provided under individual service orders. Offshore contracts generally have a term of up to three years with renewal options. Land-based contracts are generally shorter term or terminable on short notice without a penalty. Service orders are executed under the MSA for individual remote sites or groups of sites, and generally permit early termination on short notice without penalty in the event of force majeure, breach of the MSA or cold stacking of a drilling rig (when a rig is taken out of service and is expected to be idle for a protracted period of time). Performance Obligations Satisfied Over Time — The delivery of service represents the single performance obligation under MCS and Apps & IoT contracts. Revenue for contracts is generally recognized over time as service is transferred to the customer and the Company expects to be entitled to the agreed monthly or day rate in exchange for those services. Performance Obligations Satisfied at a Point in Time — The delivery of equipment represents the single performance obligation under equipment sale contracts. Revenue for equipment sales is generally recognized upon delivery of equipment to customers. Revenue Recognition – Systems Integration Revenues related to long-term, fixed-price Systems Integration contracts for customized network solutions are recognized based on the percentage of completion for the contract. At any point, RigNet has numerous contracts in progress, all of which are at various stages of completion. Accounting for revenues and profits on long-term contracts requires estimates of total estimated contract costs and estimates of progress toward completion to determine the extent of revenue and profit recognition. Performance Obligations Satisfied Over Time — The delivery of a Systems Integration solution represents the single performance obligation under Systems Integration contracts. Progress towards completion on fixed-price contracts is measured based on the ratio of costs incurred to total estimated contract costs (the cost-to-cost method). These estimates may be revised as additional information becomes available or as specific project circumstances change. The Company reviews all material contracts on a monthly basis and revises the estimates as appropriate for developments such as providing services, purchasing third-party materials and equipment at costs differing from those previously estimated, and incurring or expecting to incur schedule issues. Changes in estimated final contract revenues and costs can either increase or decrease the final estimated contract profit or loss. Profits are recorded in the period in which a change in estimate is recognized, based on progress achieved through the period of change. Anticipated losses on contracts are recorded in full in the period in which they become evident. Revenue recognized in excess of amounts billed is classified as a current asset under Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB). Systems Integration contracts are billed in accordance with the terms of the contract which are typically either based on milestones or specified time intervals. As of March 31, 2019 and December 31, 2018, the amount of CIEB related to Systems Integration projects was $5.7 million and $7.1 million, respectively. Under long-term contracts, amounts recorded in CIEB may not be realized or paid within a one-year period. As of March 31, 2019 and December 31, 2018, $2.3 million and none, respectively, of amounts billed to customers in excess of revenue recognized to date were classified as a current liability, under deferred revenue. Variable Consideration – Systems Integration - The Company records revenue on contracts relating to certain probable claims and unapproved change orders by including in revenue an amount less than or equal to the amount of costs incurred to date relating to these probable claims and unapproved change orders, thus recognizing no profit until such time as claims are finalized or change orders are approved. The amount of unapproved change orders and claim revenues is included in the Company’s Consolidated Balance Sheets as part of CIEB. No material unapproved change orders or claims revenue were included in CIEB as of March 31, 2019 and December 31, 2018. As new facts become known, an adjustment to the estimated recovery is made and reflected in the current period. Backlog - As of March 31, 2019, we have backlog for our percentage of completion projects of $43.1 million, which will be recognized over the remaining contract term for each contract. Percentage of completion contract terms are typically one to three years. Leases Effective with the adoption of the new lease standard on January 1, 2019, we determine if an arrangement is a lease at inception. Operating leases right to use assets and liabilities are included in right to use lease asset, deferred revenue and other current liabilities and right to use lease liability – long-term portion on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current maturities of long-term debt, and long-term debt on our condensed consolidated balance sheets. Operating lease right to use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Recently Issued Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases. This ASU is effective for annual reporting periods beginning after December 15, 2018. This ASU introduces a new lessee model that generally brings leases on to the balance sheet. The Company adopted this ASU as of the first quarter 2019, and it requires right-of-use liabilities on the consolidated balance sheet of $6.5 million as of March 31, 2019, of which $5.8 million is long-term and $0.7 million is In June 2018, the FASB issued Accounting Standards Update No. 2018-07 (ASU 2018-07), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The ASU is effective for annual and interim reporting periods beginning after December 15, 2018. The adoption of this ASU did not have any material impact on the Company’s condensed consolidated financial statements In August 2018, the FASB issued ASU No. 2018-13 (ASU 2018-13), which eliminates disclosures, modifies existing disclosures and adds new Fair Value disclosure requirements to Topic 820 for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is effective for annual and interim reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this ASU will have on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15 (ASU 2018-15), which provides guidance on implementation costs incurred in a cloud computing arrangement that is a service contract. The ASU is effective for annual and interim reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this ASU will have on the Company’s condensed consolidated financial statements. |
Business Combinations
Business Combinations | 3 Months Ended |
Mar. 31, 2019 | |
Business Combinations [Abstract] | |
Business Combinations | Note 2 – Business Combinations Auto-Comm and SAFCON On April 18, 2018, RigNet completed the separate acquisitions of Automation Communications Engineering Corp. (Auto-Comm) and Safety Controls, Inc. (SAFCON) for an aggregate purchase price of $6.7 million. Of this aggregate purchase price RigNet paid $2.2 million in cash and $4.1 million in stock in April 2018. In September 2018, the Company paid $0.3 million in cash for a working capital adjustment. Auto-Comm provides a broad range of communications services, for both onshore and offshore remote locations, to the oil and gas industry. Auto-Comm brings over 30 years of systems integration experience in engineering and design, installation, testing, and maintenance. SAFCON offers a diverse set of safety, security, and maintenance services to the oil and gas industry. Auto-Comm and SAFCON have developed strong relationships with major energy companies that complement the relationships that RigNet has established over the years. Auto-Comm and SAFCON are based in Louisiana. The assets and liabilities of Auto-Comm and SAFCON have been recorded at their estimated fair values at the date of acquisition. The excess of the purchase price over the estimated fair values of the underlying net tangible and identifiable intangible assets and liabilities has been recorded as goodwill. The goodwill of $1.4 million arising from the acquisitions consists largely of growth prospects, synergies and other benefits that the Company believes will result from combining the operations of the Company, Auto-Comm and SAFCON, as well as other intangible assets that do not qualify for separate recognition, such as assembled workforce in place at the date of acquisition. The goodwill recognized is expected to be nondeductible for income tax purposes. The acquisitions of Auto-Comm and SAFCON, including goodwill, are included in the Company’s condensed consolidated financial statements as of the acquisition date and are primarily reflected in the Systems Integration segment. Weighted Average Estimated Useful Life (Years) Fair Market Values (in thousands) Current assets $ 4,947 Property and equipment 132 Trade name 7 $ 540 Customer relationships 7 980 Total identifiable intangible assets 1,520 Goodwill 1,387 Current liabilities (1,006 ) Deferred tax liability (319 ) Total purchase price $ 6,661 Intelie On March 23, 2018, RigNet completed its acquisition of Intelie TM TM TM The assets and liabilities of Intelie have been recorded at their estimated fair values at the date of acquisition. The excess of the purchase price over the estimated fair values of the underlying net tangible and identifiable intangible assets and liabilities has been recorded as goodwill. The earn-out for Intelie is measured at fair value in each reporting period, based on level 3 inputs, with any change to fair value recorded in the Condensed Consolidated Statements of Comprehensive Loss. As of March 31, 2019, the fair value of the earn-out was $9.6 million. During the three months ended March 31, 2019, RigNet recognized accreted interest expense on the Intelie earn-out of $0.1 million with corresponding increases to other liabilities. Portions of the earn-out are payable in RigNet stock on the first, second and third anniversary of the closing of the acquisition based on certain post-closing performance targets under the acquisition agreement. The goodwill of $10.7 million arising from the acquisition consists largely of growth prospects, synergies and other benefits that the Company believes will result from combining the operations of the Company and Intelie, as well as other intangible assets that do not qualify for separate recognition, such as assembled workforce in place at the date of acquisition. None of the goodwill recognized is expected to be deductible for income tax purposes. The acquisition of Intelie, including goodwill, is included in the Company’s condensed consolidated financial statements as of the acquisition date and is reflected in the Apps & IoT segment. Weighted Average Estimated Useful Life (Years) Fair Market Values (in thousands) Current assets $ 589 Property and equipment 73 Trade name 7 $ 2,300 Technology 7 8,400 Customer relationships 7 320 Total identifiable intangible assets 11,020 Goodwill 10,744 Current liabilities (460 ) Deferred tax liability (3,825 ) Total purchase price $ 18,141 (a) (a) Includes $ 7.6 Actual and Pro Forma Impact of the 2018 Acquisitions The 2018 acquisition of Intelie contributed revenue and net loss of $0.1 million and $0.1 million, respectively, for the three months ended March 31, 2018. The following table represents supplemental pro forma information as if the 2018 acquisitions of Auto-Comm, SAFCON and Intelie had occurred on January 1, 2018. Three Months Ended March 31, 2018 (in thousands, except Revenue $ 57,750 Expenses 62,809 Net loss $ (5,059 ) Net loss attributable to RigNet, Inc. common stockholders $ (5,089 ) Net loss per share attributable to RigNet, Inc. common stockholders: Basic $ (0.28 ) Diluted $ (0.28 ) The Company incurred acquisition-related costs of $0.4 million and $0.8 million in the three months ended March 31, 2019 and 2018, respectively, reported in general and administrative costs. |
Business and Credit Concentrati
Business and Credit Concentrations | 3 Months Ended |
Mar. 31, 2019 | |
Risks and Uncertainties [Abstract] | |
Business and Credit Concentrations | Note 3 – Business and Credit Concentrations The Company is exposed to various business and credit risks including interest rate, foreign currency, credit and liquidity risks. Interest Rate Risk The Company has significant interest-bearing liabilities at variable interest rates which generally price monthly. The Company’s variable borrowing rates are tied to LIBOR resulting in interest rate risk (see Note 6 – Long-Term Debt). The Company presently does not use financial instruments to hedge interest rate risk, but evaluates this on a regular basis and may utilize financial instruments in the future if deemed necessary. Foreign Currency Risk The Company has exposure to foreign currency risk, as a portion of the Company’s activities are conducted in currencies other than U.S. dollars. Currently, the Norwegian Kroner, the British Pound Sterling and the Brazilian Real are the currencies that could materially impact the Company’s financial position and results of operations. The Company presently does not hedge these risks, but evaluates financial risk on a regular basis and may utilize financial instruments in the future if deemed necessary. Foreign currency translations are reported as accumulated other comprehensive income (loss) in the Company’s condensed consolidated financial statements. Credit Risk Credit risk, with respect to accounts receivable, is due to the limited number of customers concentrated in the oil and gas, maritime, pipeline, engineering and construction industries. The Company mitigates the risk of financial loss from defaults through defined collection terms in each contract or service agreement and periodic evaluations of the collectability of accounts receivable. The Company provides an allowance for doubtful accounts which is adjusted when the Company becomes aware of a specific customer’s inability to meet its financial obligations or as a result of changes in the overall aging of accounts receivable. For the three months ended March 31, 2019, Royal Dutch Shell represented 10.9% of our consolidated revenue. Additionally, our top 5 customers generated 27.4% of the Company’s revenue for the three months ended March 31, 2019. Liquidity Risk The Company maintains cash and cash equivalent balances with major financial institutions which, at times, exceed federally insured limits. The Company monitors the financial condition of the financial institutions and has not experienced losses associated with these accounts during 2019 or 2018. Liquidity risk is managed by continuously monitoring forecasted and actual cash flows and by matching the maturity profiles of financial assets and liabilities (see Note 6 – Long-Term Debt). |
Goodwill and Intangibles
Goodwill and Intangibles | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Note 4 – Goodwill and Intangibles Goodwill Goodwill resulted from prior acquisitions as the consideration paid for the acquired businesses exceeded the fair value of acquired identifiable net tangible and intangible assets. Goodwill is reviewed for impairment at least annually with additional evaluations being performed when events or circumstances indicate that the carrying value of these assets may not be recoverable. The Company acquired $1.4 million of goodwill in the Systems Integration segment from the Auto-Comm and SAFCON acquisitions completed on April 18, 2018 (see Note 2 – Business Combinations). The Company acquired $10.7 million of goodwill in the Apps & IoT segment from the Intelie acquisition completed on March 23, 2018 (see Note 2 – Business Combinations). The Company performs its annual impairment test as of July 31 st MCS had $22.8 million of goodwill as of March 31, 2019, and fair value exceeded carrying value by 34.7% as of the July 31, 2018 annual impairment test. Apps & IoT had $22.7 million of goodwill as of March 31, 2019, and fair value exceeded carrying value by 48.1% as of the July 31, 2018 annual impairment test. Systems Integration had $1.4 million of goodwill as of March 31, 2019, and fair value exceeded carrying value by 126.5% as of the July 31, 2018 annual impairment test. Any future downturn in our business could adversely impact the key assumptions in our impairment test. While we believe that there appears to be no indication of current or future impairment, historical operating results may not be indicative of future operating results and events and circumstances may occur causing a triggering event in a period as short as three months. No impairment indicators have been identified in any reporting unit as of March 31, 2019 and December 31, 2018. As of March 31, 2019 and December 31, 2018, goodwill was $46.8 million and $46.6 million, respectively. Goodwill increases or decreases in value due to the effect of foreign currency translation, and increases with acquisitions. Intangibles Intangibles consist of customer relationships, covenants-not-to-compete, brand name, licenses, technology and backlog acquired as part of the Company’s acquisitions. Intangibles also include internal-use software. The Company’s intangibles have useful lives ranging from 5.0 to 20.0 years and are amortized on a straight-line basis. Impairment testing is performed when events or circumstances indicate that the carrying value of the assets may not be recoverable. No impairment indicators have been identified in any reporting unit as of March 31, 2019. As of March 31, 2019 and December 31, 2018, intangibles were $31.5 million and $33.7 million, respectively. During the three months ended March 31, 2019 and 2018, the Company recognized amortization expense of $2.5 million and $2.1 million, respectively. The following table sets forth expected amortization expense of intangibles for the remainder of 2019 and the following years (in thousands): 2019 5,154 2020 6,163 2021 5,756 2022 5,476 2023 4,832 Thereafter 4,114 $ 31,495 |
Restricted Cash
Restricted Cash | 3 Months Ended |
Mar. 31, 2019 | |
Cash and Cash Equivalents [Abstract] | |
Restricted Cash | Note 5 – Restricted Cash As of March 31, 2019 and December 31, 2018, the Company had restricted cash of $0.1 million and $1.5 million, in current and long-term assets, respectively. The restricted cash in long-term assets was primarily used to collateralize a performance bond in the MCS segment (see Note 6 – Long-Term Debt). |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 6 – Long-Term Debt As of March 31, 2019 and December 31, 2018, the following credit facilities and long-term debt arrangements with financial institutions were in place: March 31, December 31, 2019 2018 (in thousands) Term Loan, net of unamortized deferred financing costs $ 8,750 $ 10,000 Term-Out Loan 30,000 — Revolving credit facility (RCF) 37,150 67,150 Unamortized deferred financing costs (504 ) (315 ) Finance lease 147 192 75,543 77,027 Less: Current maturities of long-term debt (10,729 ) (4,831 ) Current maturities of finance lease (80 ) (111 ) $ 64,734 $ 72,085 Credit Agreement On February 13, 2019, the Company entered into the first amendment to the third amended and restated credit agreement (Credit Agreement) with four participating financial institutions. The Company refinanced $30.0 million of outstanding draws under the existing $85.0 million revolving credit facility (RCF) with a new $30.0 million term-out facility (Term-Out Loan). The Credit Agreement provides for a $15.0 million term loan (Term Loan), a $30.0 million Term-Out Loan and an $85.0 million RCF. The RCF and Term-Out Loan mature on April 6, 2021. The Term Loan matures on December 31, 2020. The Credit Agreement requires a $45.0 million reserve (Specified Reserve) under the RCF that will be released and made available for borrowing for payment of monetary damages from the GX dispute. The RCF contains a sub-limit of up to $25.0 million for commercial and stand-by letters of credit and performance bonds . The facilities under the credit agreement are secured by substantially all the assets of the Company. Under the Credit Agreement, the Term Loan, Term-Out Loan and the RCF bear interest at a rate of LIBOR plus a margin ranging from 1.75% to 3.00% based on a consolidated leverage ratio defined in the Credit Agreement. Interest is payable monthly and principal installments of $1.25 million under the Term Loan are due quarterly. Principal installments of $1.5 million are due quarterly under the Term-Out Loan beginning June 30, 2019. The weighted average interest rate for the three months ended March 31, 2019 and 2018 were 5.2% and 4.2%, respectively, with an interest rate of 5.2% at March 31, 2019. Term Loan As of March 31, 2019, the Term Loan had an outstanding principal balance of $8.8 million, excluding the impact of unamortized deferred financing costs. Term-Out Loan As of March 31, 2019, the Term-Out Loan had an outstanding principal balance of $30.0 million. RCF As of March 31, 2019, $37.2 million in draws remain outstanding under the RCF. Covenants and Restrictions The Company’s Credit Agreement contains certain covenants and restrictions, including restricting the payment of cash dividends under default, and maintaining certain financial covenants such as a consolidated fixed charge coverage ratio of not less than 1.25 to 1.00. Additionally, the Credit Agreement requires a consolidated leverage ratio, as defined in the Credit Agreement, of less than or equal to 2.75 to 1.00. The consolidated leverage ratio increases to 3.25 to 1.00 for four quarters starting in the quarter that RigNet makes a final irrevocable payment of all monetary damages from the GX dispute. The consolidated leverage ratio then decreases to 3.00 to 1.00 for three quarters, and then decreases to 2.75 to 1.00 for all remaining quarters. If any default occurs related to these covenants that is not cured or waived, the unpaid principal and any accrued interest can be declared immediately due and payable. The facilities under the Credit Agreement are secured by substantially all the assets of the Company. In April 2019, the Company determined that in periods beginning at least as early as March 31, 2014, it had incurred and not appropriately included certain surety bonds or other similar instruments in its consolidated leverage ratio calculation as defined by the Credit Agreement. As a result, on May 6, 2019, the Company entered into a Consent and Waiver (Consent) to the Credit Agreement with the financial institutions party thereto under which the Company is permitted to exclude certain incurred surety bonds and other similar instruments from the calculation of Consolidated Funded Indebtedness (as defined in the credit agreement) for the period ended March 31, 2019. In addition, the Consent waived all specified violations for all prior periods. The Company continues to work with the financial institutions under our Credit Agreement to ensure that the Credit Agreement does not impede the Company’s ordinary-course business operations with respect to surety bonds and other similar instruments. We believe we have accurately calculated and reported our required debt covenant calculations for the March 31, 2019 reporting period and are in compliance with the required covenant ratios. Performance Bonds, Surety Bonds and Other Similar Instruments As of March 31, 2019, there were $ 30.5 $0.1 In June 2016, the Company secured a performance bond facility with a lender in the amount of $1.5 million for its MCS segment. This facility has a maturity date of June 2021. The Company maintains restricted cash on a dollar for dollar basis to secure this facility. Debt Maturities The following table sets forth the aggregate principal maturities of long-term debt, net of deferred financing cost amortization, for the remainder of 2019 and the following years (in thousands): 2019 8,109 2020 10,841 2021 56,593 Total debt, including current maturities $ 75,543 |
Fair Value Disclosures
Fair Value Disclosures | 3 Months Ended |
Mar. 31, 2019 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Note 7 – Fair Value Disclosures The Company uses the following methods and assumptions to estimate the fair value of financial instruments: • Cash and Cash Equivalents — Reported amounts approximate fair value based on quoted market prices (Level 1). • Restricted Cash — Reported amounts approximate fair value. • Accounts Receivable — Reported amounts, net of the allowance for doubtful accounts, approximate fair value due to the short-term nature of these assets. • Accounts Payable, Including Income Taxes Payable and Accrued Expenses — Reported amounts approximate fair value due to the short-term nature of these liabilities. • Long-Term Debt — The carrying amount of the Company’s floating-rate debt approximates fair value since the interest rates paid are based on short-term maturities and recent quoted rates from financial institutions. The estimated fair value of debt was calculated based upon observable (Level 2) inputs regarding interest rates available to the Company at the end of each respective period. The Company’s non-financial assets, such as goodwill, intangibles and property, plant and equipment, are measured at fair value, based on level 3 inputs, when there is an indicator of impairment and recorded at fair value only when an impairment charge is recognized. The earn-out for Intelie is measured at fair value in each reporting period, based on level 3 inputs, with any change to fair value recorded in the Condensed Consolidated Statements of Comprehensive Loss. As of March 31, 2019, the fair value of the earn-out was $9.6 million, of which $3.0 million is in other current liabilities and $6.6 million is in other long-term liabilities. During the three months ended March 31, 2019, RigNet recognized accreted interest expense on the Intelie earn-out of $0.1 million with corresponding increases to other liabilities. The earn-out is payable in RigNet stock in portions on the first, second and third anniversary of the The contingent consideration for Cyphre, a cybersecurity company acquired in May 2017, is measured at fair value in each reporting period, based on level 3 inputs, with any change to fair value recorded in the Condensed Consolidated Statements of Comprehensive Loss. As of March 31, 2019, the fair value of the contingent consideration was $3.6 million, of which $0.3 million is in other current liabilities and $3.2 million is in other long-term liabilities. During the three months ended March 31, 2019 and 2018, RigNet recognized accreted interest expense on the Cyphre contingent consideration of $0.1 million with corresponding increases to other liabilities. The earn-out for Orgtec S.A.P.I. de C.V., d.b.a. TECNOR (TECNOR), acquired in February 2016, was measured at fair value, based on level 3 inputs, with any change to fair value recorded in the Condensed Consolidated Statements of Comprehensive Loss in each reporting period. The fair value of the earn-out of $8.0 million was paid in July 2018. During the three months ended March 31, 2018, RigNet recognized accreted interest expense on the TECNOR earn-out liability of $0.1 million with corresponding increases to other liabilities. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 8 – Income Taxes The Company’s effective income tax rate was (28.7%) and (12.2%) for the three months ended March 31, 2019 and 2018, respectively. The Company’s effective tax rate is affected by factors including changes in valuation allowances, fluctuations in income across jurisdictions with varying tax rates, and changes in income tax reserves, including related penalties and interest. The Company has computed the provision for taxes for the current and comparative periods using the actual year-to-date effective tax rate. The Company’s financial projections for those periods did not provide the level of detail necessary to calculate a forecasted effective tax rate. The Company received an IRS notice informing us of an audit of the Company’s 2016 income tax return. It is unclear if the audit and the appeals process, if necessary, will be completed within the next twelve months. The Company is in the early stages of the audit and is unable to quantify any potential settlement or outcome of the audit at this time. The Company believes that it is reasonably possible that a decrease of up to $3.2 million in unrecognized tax benefits, including related interest and penalties, may be necessary within the coming year due to lapse in statute of limitations. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Stock-Based Compensation | Note 9 – Stock-Based Compensation During the three months ended March 31, 2019, the Company granted a total of 485,623 stock-based awards to certain officers and employees of the Company under the 2010 Omnibus Incentive Plan (2010 Plan). Of these, the Company granted 185,597 restricted stock units (RSUs) to certain officers and employees that generally vest over a three year period of continued employment, with 33% of the RSUs vesting on each of the first three anniversaries of the grant date, (ii) 7,172 RSUs to certain officers and employees that generally vest over a four year period of continued employment, with 25% of the RSUs vesting on each of the first four anniversaries of the grant date and (iii) 60,361 performance share units (PSUs) to certain officers and employees that generally cliff vest on the third anniversary of the grant date and are subject to continued employment and certain performance based targets. The ultimate number of PSUs issued is based on a multiple determined by certain performance-based targets. The fair value of RSUs and PSUs is determined based on the closing trading price of the Company’s common stock on the grant date of the award. Compensation expense is recognized on a straight-line basis over the requisite service period of the entire award, net of forfeitures. Additionally, the Company granted 232,493 unrestricted stock grants associated with payment of the company’s 2018 short term incentive plan to certain officers and employees that vested immediately. During the three months ended March 31, 2019, the Company also granted 28,923 $15.06 33% of the options vesting on each of the first three anniversaries of the grant date. The fair value of each stock option award is estimated on the grant date using a Black-Scholes option valuation model, which uses certain assumptions as of the date of grant. The assumptions used for the stock option grants made during the three months ended March 31, 2019, were as follows: Three Months Ended March 31, 2019 Expected volatility 49 % Expected term (in years) 7 Risk-free interest rate 2.5 % Dividend yield — Based on these assumptions, the weighted average grant date fair value of stock options granted during the three months ended March 31, 2019 was $8.02 per option. During the three months ended March 31, 2019, 3,904 RSUs and 1,455 stock options were forfeited. Stock-based compensation expense related to the Company’s stock-based compensation plans for the three months ended March 31, 2019 and 2018 was $4.5 million and $2.4 million, respectively. As of March 31, 2019, there was $5.7 million of total unrecognized compensation cost related to unvested options, RSUs and restricted stock expected to vest. This cost is expected to be recognized over a remaining weighted-average period of 2.2 years. |
Earnings (loss) per Share
Earnings (loss) per Share | 3 Months Ended |
Mar. 31, 2019 | |
Earnings Per Share [Abstract] | |
Earnings (loss) per Share | Note 10 – Earnings (loss) per Share Basic earnings (loss) per share (EPS) are computed by dividing net loss attributable to RigNet common stockholders by the number of basic shares outstanding. Basic shares equal the total of the common shares outstanding, weighted for the average days outstanding for the period. Basic shares exclude the dilutive effect of common shares that could potentially be issued due to the exercise of stock options or vesting of restricted stock, RSUs or PSUs. Diluted EPS is computed by dividing loss attributable to RigNet common stockholders by the number of diluted shares outstanding. Diluted shares equal the total of the basic shares outstanding and all potentially issuable shares, other than antidilutive shares, if any, weighted for the average days outstanding for the period. The Company uses the treasury stock method to determine the dilutive effect. In periods when a net loss is reported, all common stock equivalents are excluded from the calculation because they would have an anti-dilutive effect, meaning the loss per share would be reduced. Therefore, in periods when a loss is reported, basic and dilutive loss per share are the same. For the three months ended March 31, 2019, there were approximately 1,478,435 potentially issuable shares excluded from the Company’s calculation of diluted EPS that were excluded because the Company incurred a loss in the period and to include them would have been anti-dilutive. For the three months ended March 31, 2018, there were approximately 671,627 potentially issuable shares excluded from the Company’s calculation of diluted EPS that were excluded because the Company incurred a loss in the period and to include them would have been anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 11 – Commitments and Contingencies Global Xpress (GX) Dispute Inmarsat plc ( Inmarsat), a satellite telecommunications company, filed arbitration with the International Centre for Dispute Resolution tribunal (the panel) in October 2016 concerning a January 2014 take-or-pay agreement to purchase up to $ 65.0 The Company has an accrued liability of $50.8 million, based on the Phase I interim award amount. While management believes it has strong counterclaims, which will be heard in Phase II and could reduce the ultimate liability, the amount of the final award is not estimable at this time. No assurance can be given as to the ultimate outcome of the GX dispute, and the ultimate outcome may differ from the accrued amount. Based on the information available at this time, the potential final loss could be based on the Phase I ruling less any offsets from RigNet’s counterclaims in Phase II of the arbitration offset by any potential counterclaims by Inmarsat, including interest and fees. As such, the range of the ultimate liability The Company incurred GX dispute Phase II costs of $2.1 $0.6 Other Litigation The Company, in the ordinary course of business, is a claimant or a defendant in various legal proceedings, including proceedings as to which the Company has insurance coverage and those that may involve the filing of liens against the Company or its assets. Sales Tax Audit The Company is undergoing a routine sales tax audit from a state where the Company has operations. The audit can cover up to a four-year period. The Company is in the early stages of the audit, and does not have any estimates of further exposure, if any, for the tax years under review. Operating Leases The Company adopted the new lease standard as of the first quarter 2019 and has used the optional transition method permitted under ASU 2018-11. Accordingly, prior year amounts have not been adjusted and continue to be reflected in accordance with Company’s historical accounting. The Company’s leasing activities primarily consist of leases of real-estate including office space under lease agreements expiring on various dates through 2025. For the three months ended March 31, 2019 and 2018, the Company recognized expense under operating leases, which approximates cash paid and includes short-term leases, of $0.7 million. As of March 31, 2019, future undiscounted minimum lease obligation maturities for the remainder of 2019 and future years were as follows (in thousands): 2019 $ 1,569 2020 1,374 2021 933 2022 853 2023 839 Thereafter 1,382 Total lease payments $ 6,950 Less present value discount (420 ) Amounts recognized in Balance Sheet $ 6,530 Amounts recognized in Balance Sheet Deferred revenue and other current liabilities 741 Right-of-use lease liability - long-term portion 5,789 Total right to use lease liability $ 6,530 Operating lease right-of-use assets for leases were $ 4.6 The right-of-use assets and liabilities for leases were discounted at a weighted-average discount rate of 5.3 4.8 As of December 31, 2018, future undiscounted minimum lease obligation maturities for 2019 and future years were as follows (in thousands): 2019 1,822 2020 1,115 2021 780 2022 692 2023 659 Thereafter 1,044 $ 6,112 Commercial Commitments The Company enters into contracts for satellite bandwidth and other network services with certain providers. As of March 31, 2019, the Company had the following commercial commitments related to satellite and network services for the remainder of 2018 and the future years thereafter (in thousands): 2019 12,151 2020 6,392 2021 673 2022 17 $ 19,233 The Company is no longer reporting $65.0 million in the above table for capacity from Inmarsat’s GX network. Please see paragraph “Global Xpress (GX) Dispute” above for details of the ongoing arbitration with Inmarsat. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Segment Information | Note 12 – Segment Information Segment information is prepared consistent with the components of the enterprise for which separate financial information is available and regularly evaluated by the chief operating decision-maker for the purpose of allocating resources and assessing performance. Managed Services was renamed Managed Communications Services (MCS). RigNet considers its business to consist of the following segments: • Managed Communications Services (MCS). The MCS segment provides remote communications, telephony and technology services for offshore and onshore drilling rigs and production facilities, support vessels, and other remote sites. • Applications and Internet-of-Things & IoT). over-the-top machine-to-machine • Systems Integration. The Systems Integration segment provides design and implementation services for customer telecommunications systems. Solutions are delivered based on the customer’s specifications, adhering to international industry standards and best practices. Project services may include consulting, design, engineering, project management, procurement, testing, installation, commissioning and maintenance. Corporate and eliminations primarily represents unallocated executive and support activities, interest expense, income taxes and eliminations. The Company’s business segment information as of and for the three months ended March 31, 2019 and 2018, is presented below. Three Months Ended March 31, 2019 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 42,333 $ 8,015 $ 7,162 $ — $ 57,510 Cost of revenue (excluding depreciation and amortization) 26,985 4,497 4,974 — 36,456 Depreciation and amortization 6,264 1,231 662 755 8,912 Selling, general and administrative 3,797 565 1,124 14,777 20,263 Operating income (loss) $ 5,287 $ 1,722 $ 402 $ (15,532 ) $ (8,121 ) Total assets 170,553 46,086 26,546 18,034 261,219 Capital expenditures 6,636 433 — 20 7,089 Three Months Ended March 31, 2018 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 42,050 $ 5,336 $ 6,447 $ — $ 53,833 Cost of revenue (excluding depreciation and amortization) 25,745 3,085 4,851 — 33,681 Depreciation and amortization 5,726 847 652 762 7,987 Selling, general and administrative 4,215 354 323 11,743 16,635 Operating income (loss) $ 6,364 $ 1,050 $ 621 $ (12,505 ) $ (4,470 ) Total assets 148,535 49,758 16,535 30,431 245,259 Capital expenditures 5,834 134 — 645 6,613 The following table presents revenue earned from the Company’s domestic and international operations for the three months ended March 31, 2019 and 2018. Revenue is based on the location where services are provided or goods are sold. Due to the mobile nature of RigNet’s customer base and the services provided, the Company works closely with its customers to ensure rig or vessel moves are closely monitored to ensure location of service information is properly reflected. Three Months Ended March 31, 2019 2018 (in thousands) Domestic $ 24,627 $ 17,628 International 32,883 36,205 Total $ 57,510 $ 53,833 The following table presents goodwill, right-of-use lease assets and long-lived assets, net of accumulated depreciation, for the Company’s domestic and international operations as of March 31, 2019 and December 31, 2018. March 31, December 31, 2019 2018 (in thousands) Domestic $ 79,323 $ 73,615 International 67,479 70,334 Total $ 146,802 $ 143,949 |
Related Party
Related Party | 3 Months Ended |
Mar. 31, 2019 | |
Related Party Transactions [Abstract] | |
Related Party | Note 13 – Related Party The Company has a reseller arrangement with Darktrace, which is an artificial intelligence company in cybersecurity that is partially owned by Kohlberg Kravis Roberts & Co. L.P. (KKR). KKR is a significant stockholder of the Company. Under the arrangement, the Company will sell Darktrace’s cybersecurity audit services with the Company’s cybersecurity offerings. In the three months ended March 31, 2019, the Company purchased $0.1 million from Darktrace in the ordinary course of business. Vissim AS is now a vendor following a competitive request for quote from RigNet in the ordinary course of business. AS is 24% owned by AVANT Venture Capital AS. AVANT Venture Capital is owned by and has as its chairman of its board one of our board members. Although no amounts were spent with Vissim AS in the three months ended March 31, 2019, in the future the Company anticipates spending money with this vendor. |
Restructuring Costs - Cost Redu
Restructuring Costs - Cost Reduction Plans | 3 Months Ended |
Mar. 31, 2019 | |
Restructuring and Related Activities [Abstract] | |
Restructuring Costs - Cost Reduction Plans | Note 14 – Restructuring Costs – Cost Reduction Plans During the three months ended March 31, 2019, the Company incurred a net pre-tax restructuring expense of $0.6 million reported as general and administrative expense in the Corporate segment associated with the reduction of 25 employees. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 3 Months Ended |
Mar. 31, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Revenue Recognition | Revenue Recognition – Managed Communications Services (MCS) and Applications and Internet-of-Things (Apps & IoT) MCS and Apps & IoT customers are primarily served under fixed-price contracts, either on a monthly or day rate basis or for equipment sales and consulting services. Contracts are generally in the form of Master Service Agreements, or MSAs, with specific services being provided under individual service orders. Offshore contracts generally have a term of up to three years with renewal options. Land-based contracts are generally shorter term or terminable on short notice without a penalty. Service orders are executed under the MSA for individual remote sites or groups of sites, and generally permit early termination on short notice without penalty in the event of force majeure, breach of the MSA or cold stacking of a drilling rig (when a rig is taken out of service and is expected to be idle for a protracted period of time). Performance Obligations Satisfied Over Time — The delivery of service represents the single performance obligation under MCS and Apps & IoT contracts. Revenue for contracts is generally recognized over time as service is transferred to the customer and the Company expects to be entitled to the agreed monthly or day rate in exchange for those services. Performance Obligations Satisfied at a Point in Time — The delivery of equipment represents the single performance obligation under equipment sale contracts. Revenue for equipment sales is generally recognized upon delivery of equipment to customers. Revenue Recognition – Systems Integration Revenues related to long-term, fixed-price Systems Integration contracts for customized network solutions are recognized based on the percentage of completion for the contract. At any point, RigNet has numerous contracts in progress, all of which are at various stages of completion. Accounting for revenues and profits on long-term contracts requires estimates of total estimated contract costs and estimates of progress toward completion to determine the extent of revenue and profit recognition. Performance Obligations Satisfied Over Time — The delivery of a Systems Integration solution represents the single performance obligation under Systems Integration contracts. Progress towards completion on fixed-price contracts is measured based on the ratio of costs incurred to total estimated contract costs (the cost-to-cost method). These estimates may be revised as additional information becomes available or as specific project circumstances change. The Company reviews all material contracts on a monthly basis and revises the estimates as appropriate for developments such as providing services, purchasing third-party materials and equipment at costs differing from those previously estimated, and incurring or expecting to incur schedule issues. Changes in estimated final contract revenues and costs can either increase or decrease the final estimated contract profit or loss. Profits are recorded in the period in which a change in estimate is recognized, based on progress achieved through the period of change. Anticipated losses on contracts are recorded in full in the period in which they become evident. Revenue recognized in excess of amounts billed is classified as a current asset under Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB). Systems Integration contracts are billed in accordance with the terms of the contract which are typically either based on milestones or specified time intervals. As of March 31, 2019 and December 31, 2018, the amount of CIEB related to Systems Integration projects was $5.7 million and $7.1 million, respectively. Under long-term contracts, amounts recorded in CIEB may not be realized or paid within a one-year period. As of March 31, 2019 and December 31, 2018, $2.3 million and none, respectively, of amounts billed to customers in excess of revenue recognized to date were classified as a current liability, under deferred revenue. Variable Consideration – Systems Integration - The Company records revenue on contracts relating to certain probable claims and unapproved change orders by including in revenue an amount less than or equal to the amount of costs incurred to date relating to these probable claims and unapproved change orders, thus recognizing no profit until such time as claims are finalized or change orders are approved. The amount of unapproved change orders and claim revenues is included in the Company’s Consolidated Balance Sheets as part of CIEB. No material unapproved change orders or claims revenue were included in CIEB as of March 31, 2019 and December 31, 2018. As new facts become known, an adjustment to the estimated recovery is made and reflected in the current period. Backlog - As of March 31, 2019, we have backlog for our percentage of completion projects of $43.1 million, which will be recognized over the remaining contract term for each contract. Percentage of completion contract terms are typically one to three years. |
Leases | Leases Effective with the adoption of the new lease standard on January 1, 2019, we determine if an arrangement is a lease at inception. Operating leases right to use assets and liabilities are included in right to use lease asset, deferred revenue and other current liabilities and right to use lease liability – long-term portion on our condensed consolidated balance sheets. Finance leases are included in property, plant and equipment, current maturities of long-term debt, and long-term debt on our condensed consolidated balance sheets. Operating lease right to use assets and liabilities are recognized based on the present value of the future minimum lease payments over the lease term. As most of our leases do not provide an implicit rate, we use our incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. Our lease terms may include options to extend or terminate the lease when it is reasonably certain that we will exercise that option. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In March 2016, the FASB issued Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases. This ASU is effective for annual reporting periods beginning after December 15, 2018. This ASU introduces a new lessee model that generally brings leases on to the balance sheet. The Company adopted this ASU as of the first quarter 2019, and it requires right-of-use liabilities on the consolidated balance sheet of $6.5 million as of March 31, 2019, of which $5.8 million is long-term and $0.7 million is In June 2018, the FASB issued Accounting Standards Update No. 2018-07 (ASU 2018-07), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. The ASU is effective for annual and interim reporting periods beginning after December 15, 2018. The adoption of this ASU did not have any material impact on the Company’s condensed consolidated financial statements In August 2018, the FASB issued ASU No. 2018-13 (ASU 2018-13), which eliminates disclosures, modifies existing disclosures and adds new Fair Value disclosure requirements to Topic 820 for the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. The ASU is effective for annual and interim reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this ASU will have on the Company’s condensed consolidated financial statements. In August 2018, the FASB issued ASU No. 2018-15 (ASU 2018-15), which provides guidance on implementation costs incurred in a cloud computing arrangement that is a service contract. The ASU is effective for annual and interim reporting periods beginning after December 15, 2019. The Company is currently in the process of evaluating the impact the adoption of this ASU will have on the Company’s condensed consolidated financial statements. |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Intelie Solucoes Em Informatica S A [Member] | |
Summary of Allocation of Purchase Price | The acquisition of Intelie, including goodwill, is included in the Company’s condensed consolidated financial statements as of the acquisition date and is reflected in the Apps & IoT segment. Weighted Average Estimated Useful Life (Years) Fair Market Values (in thousands) Current assets $ 589 Property and equipment 73 Trade name 7 $ 2,300 Technology 7 8,400 Customer relationships 7 320 Total identifiable intangible assets 11,020 Goodwill 10,744 Current liabilities (460 ) Deferred tax liability (3,825 ) Total purchase price $ 18,141 (a) (a) Includes $ 7.6 |
Auto-Comm and SAFCON [Member] | |
Summary of Allocation of Purchase Price | The acquisitions of Auto-Comm and SAFCON, including goodwill, are included in the Company’s condensed consolidated financial statements as of the acquisition date and are primarily reflected in the Systems Integration segment. Weighted Average Estimated Useful Life (Years) Fair Market Values (in thousands) Current assets $ 4,947 Property and equipment 132 Trade name 7 $ 540 Customer relationships 7 980 Total identifiable intangible assets 1,520 Goodwill 1,387 Current liabilities (1,006 ) Deferred tax liability (319 ) Total purchase price $ 6,661 |
Supplemental Pro Forma Information | The following table represents supplemental pro forma information as if the 2018 acquisitions of Auto-Comm, SAFCON and Intelie had occurred on January 1, 2018. Three Months Ended March 31, 2018 (in thousands, except Revenue $ 57,750 Expenses 62,809 Net loss $ (5,059 ) Net loss attributable to RigNet, Inc. common stockholders $ (5,089 ) Net loss per share attributable to RigNet, Inc. common stockholders: Basic $ (0.28 ) Diluted $ (0.28 ) |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Amortization Expense for Intangibles | The following table sets forth expected amortization expense of intangibles for the remainder of 2019 and the following years (in thousands): 2019 5,154 2020 6,163 2021 5,756 2022 5,476 2023 4,832 Thereafter 4,114 $ 31,495 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-Term Debt Arrangements | As of March 31, 2019 and December 31, 2018, the following credit facilities and long-term debt arrangements with financial institutions were in place: March 31, December 31, 2019 2018 (in thousands) Term Loan, net of unamortized deferred financing costs $ 8,750 $ 10,000 Term-Out Loan 30,000 — Revolving credit facility (RCF) 37,150 67,150 Unamortized deferred financing costs (504 ) (315 ) Finance lease 147 192 75,543 77,027 Less: Current maturities of long-term debt (10,729 ) (4,831 ) Current maturities of finance lease (80 ) (111 ) $ 64,734 $ 72,085 |
Aggregate Principal Maturities of Long-Term Debt | The following table sets forth the aggregate principal maturities of long-term debt, net of deferred financing cost amortization, for the remainder of 2019 and the following years (in thousands): 2019 8,109 2020 10,841 2021 56,593 Total debt, including current maturities $ 75,543 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Assumptions Used for Stock Option Grants | The assumptions used for the stock option grants made during the three months ended March 31, 2019, were as follows: Three Months Ended March 31, 2019 Expected volatility 49 % Expected term (in years) 7 Risk-free interest rate 2.5 % Dividend yield — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | |
Future Minimum Lease Obligations | As of March 31, 2019, future undiscounted minimum lease obligation maturities for the remainder of 2019 and future years were as follows (in thousands): 2019 $ 1,569 2020 1,374 2021 933 2022 853 2023 839 Thereafter 1,382 Total lease payments $ 6,950 Less present value discount (420 ) Amounts recognized in Balance Sheet $ 6,530 Amounts recognized in Balance Sheet Deferred revenue and other current liabilities 741 Right-of-use lease liability - long-term portion 5,789 Total right to use lease liability $ 6,530 As of December 31, 2018, future undiscounted minimum lease obligation maturities for 2019 and future years were as follows (in thousands): 2019 1,822 2020 1,115 2021 780 2022 692 2023 659 Thereafter 1,044 $ 6,112 |
Commercial Commitments Related to Satellite and Network Services | As of March 31, 2019, the Company had the following commercial commitments related to satellite and network services for the remainder of 2018 and the future years thereafter (in thousands): 2019 12,151 2020 6,392 2021 673 2022 17 $ 19,233 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Segment Reporting [Abstract] | |
Company's Business Segment Information | The Company’s business segment information as of and for the three months ended March 31, 2019 and 2018, is presented below. Three Months Ended March 31, 2019 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 42,333 $ 8,015 $ 7,162 $ — $ 57,510 Cost of revenue (excluding depreciation and amortization) 26,985 4,497 4,974 — 36,456 Depreciation and amortization 6,264 1,231 662 755 8,912 Selling, general and administrative 3,797 565 1,124 14,777 20,263 Operating income (loss) $ 5,287 $ 1,722 $ 402 $ (15,532 ) $ (8,121 ) Total assets 170,553 46,086 26,546 18,034 261,219 Capital expenditures 6,636 433 — 20 7,089 Three Months Ended March 31, 2018 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 42,050 $ 5,336 $ 6,447 $ — $ 53,833 Cost of revenue (excluding depreciation and amortization) 25,745 3,085 4,851 — 33,681 Depreciation and amortization 5,726 847 652 762 7,987 Selling, general and administrative 4,215 354 323 11,743 16,635 Operating income (loss) $ 6,364 $ 1,050 $ 621 $ (12,505 ) $ (4,470 ) Total assets 148,535 49,758 16,535 30,431 245,259 Capital expenditures 5,834 134 — 645 6,613 |
Revenue Earned from Domestic and International Operations | The following table presents revenue earned from the Company’s domestic and international operations for the three months ended March 31, 2019 and 2018. Revenue is based on the location where services are provided or goods are sold. Due to the mobile nature of RigNet’s customer base and the services provided, the Company works closely with its customers to ensure rig or vessel moves are closely monitored to ensure location of service information is properly reflected. Three Months Ended March 31, 2019 2018 (in thousands) Domestic $ 24,627 $ 17,628 International 32,883 36,205 Total $ 57,510 $ 53,833 |
Long - Lived Assets, Net of Accumulated Depreciation for Both Domestic and International Operations | The following table presents goodwill, right-of-use lease assets and long-lived assets, net of accumulated depreciation, for the Company’s domestic and international operations as of March 31, 2019 and December 31, 2018. March 31, December 31, 2019 2018 (in thousands) Domestic $ 79,323 $ 73,615 International 67,479 70,334 Total $ 146,802 $ 143,949 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Dec. 31, 2018 | |
Summary Of Significant Accounting Policies [Line Items] | ||
Revenue recognized from customers | $ 2,300 | $ 0 |
Finance Lease, Liability | 6,500 | |
Finance Lease, Liability, Noncurrent | 5,789 | |
Finance Lease, Liability, Current | 700 | |
Systems Integration Projects [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Costs and estimated earnings | 5,700 | $ 7,100 |
Backlog from revenue contract | $ 43,100 | |
Systems Integration Projects [Member] | Minimum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining contract term | 1 year | |
Systems Integration Projects [Member] | Maximum [Member] | ||
Summary Of Significant Accounting Policies [Line Items] | ||
Remaining contract term | 3 years |
Business Combinations - Additio
Business Combinations - Additional Information (Detail) $ in Thousands, R$ in Millions | Apr. 18, 2018USD ($) | Mar. 23, 2018USD ($) | Mar. 23, 2018BRL (R$) | Sep. 30, 2018USD ($) | Mar. 31, 2019USD ($) | Mar. 31, 2018USD ($) |
Auto-Comm and SAFCON [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate purchase price | $ 6,661 | |||||
Amount paid for acquisition | 2,200 | |||||
Stock issued for acquisition | $ 4,100 | |||||
Amount paid for working capital adjustment | $ 300 | |||||
Goodwill acquired during period | $ 1,400 | |||||
Intelie Solucoes Em Informatica S A [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Aggregate purchase price | $ 18,141 | |||||
Amount paid for acquisition | 3,200 | R$ 10.6 | ||||
Stock issued for acquisition | 7,300 | |||||
Goodwill acquired during period | 10,700 | |||||
Contingent consideration earn-out, estimated payment | 7,600 | 9,600 | ||||
Estimate maximum earn-out payable in stock | $ 17,000 | |||||
Intelie Solucoes Em Informatica S A [Member] | Interest Expense [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Accreted interest expense on earn-out liability | 100 | |||||
Hydrasat, Auto-Comm, SAFCON and Intelie Solucoes Em Informatica S A [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Revenue | 100 | |||||
Net income (loss) | 100 | |||||
Hydrasat, Auto-Comm, SAFCON and Intelie Solucoes Em Informatica S A [Member] | General and Administrative Expenses [Member] | ||||||
Business Acquisition [Line Items] | ||||||
Acquisition related costs | $ 400 | $ 800 |
Business Combinations - Summary
Business Combinations - Summary of Allocation of Purchase Price (Detail) - USD ($) $ in Thousands | Apr. 18, 2018 | Mar. 23, 2018 | Mar. 31, 2019 | Dec. 31, 2018 |
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Goodwill | $ 46,830 | $ 46,631 | ||
Intelie Solucoes Em Informatica S A [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Current assets | $ 589 | |||
Property and equipment | 73 | |||
Identifiable intangible assets | 11,020 | |||
Goodwill | 10,744 | |||
Current liabilities | (460) | |||
Deferred tax liability | (3,825) | |||
Total purchase price | $ 18,141 | |||
Intelie Solucoes Em Informatica S A [Member] | Brand Name [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 7 years | |||
Identifiable intangible assets | $ 2,300 | |||
Intelie Solucoes Em Informatica S A [Member] | Technology [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 7 years | |||
Identifiable intangible assets | $ 8,400 | |||
Intelie Solucoes Em Informatica S A [Member] | Customer Relationships [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 7 years | |||
Identifiable intangible assets | $ 320 | |||
Auto-Comm and SAFCON [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Current assets | $ 4,947 | |||
Property and equipment | 132 | |||
Identifiable intangible assets | 1,520 | |||
Goodwill | 1,387 | |||
Current liabilities | (1,006) | |||
Deferred tax liability | (319) | |||
Total purchase price | $ 6,661 | |||
Auto-Comm and SAFCON [Member] | Brand Name [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 7 years | |||
Identifiable intangible assets | $ 540 | |||
Auto-Comm and SAFCON [Member] | Customer Relationships [Member] | ||||
Acquired Finite Lived Intangible Assets [Line Items] | ||||
Weighted Average Estimated Useful Life | 7 years | |||
Identifiable intangible assets | $ 980 |
Business Combinations - Supplem
Business Combinations - Supplemental Pro Forma Information (Detail) - Hydrasat, Auto-Comm, SAFCON and Intelie Solucoes Em Informatica S A [Member] $ / shares in Units, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / shares | |
Business Acquisition [Line Items] | |
Revenue | $ 57,750 |
Expenses | 62,809 |
Net loss | (5,059) |
Net loss attributable to RigNet, Inc. common stockholders | $ (5,089) |
Net loss per share attributable to RigNet, Inc. common stockholders: | |
Basic | $ / shares | $ (0.28) |
Diluted | $ / shares | $ (0.28) |
Business and Credit Concentra_2
Business and Credit Concentrations - Additional Information (Detail) - Sales Revenue, Net [Member] | 3 Months Ended |
Mar. 31, 2019 | |
Percentage of revenue generated from top five customers | 27.40% |
Royal Dutch [Member] | |
Maximum Percentage Of Revenue Generated From Single Customer | 10.90% |
Goodwill and Intangibles - Addi
Goodwill and Intangibles - Additional Information (Detail) - USD ($) | Apr. 18, 2018 | Mar. 23, 2018 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jul. 31, 2018 |
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill | $ 46,830,000 | $ 46,631,000 | ||||
Goodwill impairment | 0 | 0 | ||||
Impairment of intangibles | 0 | |||||
Intangibles, net | 31,495,000 | $ 33,733,000 | ||||
Amortization expense | 2,500,000 | $ 2,100,000 | ||||
Applications and Internet-of-Things [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill | 22,700,000 | |||||
Applications and Internet-of-Things [Member] | Goodwill [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Percentage of fair value of goodwill in excess of carrying amount | 48.10% | |||||
Managed Services [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill | 22,800,000 | |||||
Managed Services [Member] | Goodwill [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Percentage of fair value of goodwill in excess of carrying amount | 34.70% | |||||
Systems Integration [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill | $ 1,400,000 | |||||
Systems Integration [Member] | Goodwill [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Percentage of fair value of goodwill in excess of carrying amount | 126.50% | |||||
Minimum [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Intangible assets useful life | 5 years | |||||
Maximum [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Intangible assets useful life | 20 years | |||||
Intelie Solucoes Em Informatica S A [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill acquired during period | $ 10,700,000 | |||||
Goodwill | 10,744,000 | |||||
Intelie Solucoes Em Informatica S A [Member] | Applications and Internet-of-Things [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill acquired during period | $ 10,700,000 | |||||
Auto-Comm and SAFCON [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill acquired during period | $ 1,400,000 | |||||
Goodwill | $ 1,387,000 | |||||
Auto-Comm and SAFCON [Member] | Systems Integration [Member] | ||||||
Goodwill And Intangible Assets Impairment [Line Items] | ||||||
Goodwill acquired during period | $ 1,400,000 |
Goodwill and Intangibles - Amor
Goodwill and Intangibles - Amortization Expense for Intangibles (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Goodwill and Intangible Assets Disclosure [Abstract] | ||
2019 | $ 5,154 | |
2020 | 6,163 | |
2021 | 5,756 | |
2022 | 5,476 | |
2023 | 4,832 | |
Thereafter | 4,114 | |
Total amortization expense of intangibles | $ 31,495 | $ 33,733 |
Restricted Cash - Additional In
Restricted Cash - Additional Information (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 | Mar. 31, 2018 |
Cash and Cash Equivalents [Abstract] | |||
Restricted cash, current | $ 42 | $ 41 | $ 45 |
Restricted cash, non-current | $ 1,499 | $ 1,544 | $ 1,546 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facilities and Long-Term Debt Arrangements (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Long-Term Debt | ||
Term Loan, net of unamortized deferred financing costs | $ 8,750 | $ 10,000 |
Term Out Loan | 30,000 | |
Revolving credit facility (RCF) | 37,150 | 67,150 |
Unamortized deferred financing costs | (504) | (315) |
Finance lease | 147 | 192 |
Total debt, including current maturities | 75,543 | 77,027 |
Less: Current maturities of long-term debt | (10,729) | (4,831) |
Current maturities of finance lease | (80) | (111) |
Long-term debt, non-current portion | $ 64,734 | $ 72,085 |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) $ in Thousands | 1 Months Ended | 3 Months Ended | ||||
Feb. 13, 2019USD ($)Institution | Mar. 31, 2019USD ($) | Mar. 31, 2018 | Dec. 31, 2018USD ($) | Sep. 30, 2018 | Jun. 30, 2016USD ($) | |
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | $ 37,150 | $ 67,150 | ||||
Quarterly principal installments of Term Loan | $ 1,250 | |||||
Performance bonds outstanding amount | 30,500 | |||||
Surety Bonds and Similar Instruments Outstanding | 1,700 | |||||
Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | 8,800 | |||||
Term Out Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | $ 30,000 | |||||
Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |||||
Weighted average interest rate | 5.20% | 4.20% | ||||
Interest rate | 5.20% | |||||
Funded debt to Adjusted EBITDA ratio | 1.25% | |||||
Fixed charge coverage ratio | 1.00% | |||||
Updated Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Number of participating financial institutions | Institution | 4 | |||||
Revolving credit facility | $ 85,000 | |||||
Funded debt to Adjusted EBITDA ratio | 2.75% | |||||
Fixed charge coverage ratio | 1.00% | |||||
Updated Credit Agreement [Member] | Term Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | 15,000 | |||||
Quarterly principal installments of Term Loan | 1,500 | |||||
Updated Credit Agreement [Member] | Term Out Loan [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | 30,000 | |||||
Updated Credit Agreement [Member] | Term Out Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | $ 30,000 | |||||
Maturity of Term Loan / Maturity date | Apr. 6, 2021 | |||||
Revolving Credit Facility [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | $ 37,200 | |||||
Revolving Credit Facility [Member] | Updated Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount | $ 30,000 | |||||
Performance Bond and Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Performance bond facility | $ 1,500 | |||||
Maximum [Member] | Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Supplementary Leverage Ratio | 2.75% | |||||
Maximum [Member] | Updated Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Supplementary Leverage Ratio | 3.00% | |||||
Maximum [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Supplementary Leverage Ratio | 3.00% | |||||
Maximum [Member] | Performance Bond and Letter of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Sublimit for issuance of standby letters of credit and performance bonds | $ 25,000 | |||||
Minimum [Member] | Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Supplementary Leverage Ratio | 1.00% | |||||
Minimum [Member] | Updated Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Supplementary Leverage Ratio | 1.00% | |||||
Minimum [Member] | Revolving Credit Facility [Member] | Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Supplementary Leverage Ratio | 1.75% | |||||
Standby Letters of Credit [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Performance bonds outstanding amount | $ 100 | |||||
GX Dispute [Member] | Updated Credit Agreement [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Line of credit outstanding amount for specified reserve | $ 45,000 | |||||
GX Dispute [Member] | Maximum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Funded debt to Adjusted EBITDA ratio | 3.25% | |||||
GX Dispute [Member] | Minimum [Member] | ||||||
Debt Instrument [Line Items] | ||||||
Funded debt to Adjusted EBITDA ratio | 1.00% |
Long-Term Debt - Aggregate Prin
Long-Term Debt - Aggregate Principal Maturities of Long-Term Debt (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Debt Disclosure [Abstract] | |
2019 | $ 8,109 |
2020 | 10,841 |
2021 | 56,593 |
Total debt, including current maturities | $ 75,543 |
Fair Value Disclosure - Additio
Fair Value Disclosure - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Jul. 31, 2018 | Mar. 23, 2018 | |
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Other non-current liabilities | $ 25,784 | $ 28,943 | |||
Intelie Solucoes Em Informatica S A [Member] | |||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Contingent consideration earn-out paid | 9,600 | $ 7,600 | |||
Other current liabilities | 3,000 | ||||
Other non-current liabilities | 6,600 | ||||
Intelie Solucoes Em Informatica S A [Member] | Interest Expense [Member] | |||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Accreted interest expense on earn-out liability | 100 | ||||
Cyphre Security Solutions [Member] | |||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Contingent consideration earn-out paid | 3,600 | ||||
Other current liabilities | 300 | ||||
Other non-current liabilities | 3,200 | ||||
Cyphre Security Solutions [Member] | Interest Expense [Member] | |||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Accreted interest expense on earn-out liability | $ 100 | $ 100 | |||
Tecnor [Member] | |||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Contingent consideration earn-out paid | $ 8,000 | ||||
Tecnor [Member] | Interest Expense [Member] | |||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | |||||
Accreted interest expense on earn-out liability | $ 100 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | ||
Effective income tax rate | (28.70%) | (12.20%) |
Reductions related to lapses in statue of limitations | $ 3.2 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Weighted average grant date fair value of stock options granted | $ 8.02 | |
Stock options forfeited | 1,455 | |
Stock-based compensation | $ 4,458 | $ 2,445 |
Total unrecognized compensation cost | $ 5,700 | |
Weighted-average period | 2 years 2 months 12 days | |
Restricted Stock Units (RSUs) [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Shares forfeited | 3,904 | |
Stock Options [Member] | Certain Officers and Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Stock options granted | 28,923 | |
Exercise price | $ 15.06 | |
Contractual term | 7 years | |
Period of employment | 3 years | |
Stock Options [Member] | Certain Officers and Employees [Member] | First Anniversary [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage for restricted shares issued to officers and employees | 25.00% | |
Stock Options [Member] | Certain Officers and Employees [Member] | Second Anniversary [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage for restricted shares issued to officers and employees | 25.00% | |
Stock Options [Member] | Certain Officers and Employees [Member] | Third Anniversary [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage for restricted shares issued to officers and employees | 25.00% | |
Stock Options [Member] | Certain Officers and Employees [Member] | Fourth Anniversary [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage for restricted shares issued to officers and employees | 25.00% | |
Stock Options [Member] | Certain Officers and Employees [Member] | Vest Over a three Year Period of Continued Employment | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Vesting percentage for restricted shares issued to officers and employees | 33.00% | |
2010 Omnibus Incentive Plan [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted common stock granted, net of share repurchase from employees and share cancellations, shares | 485,623 | |
2010 Omnibus Incentive Plan [Member] | Officers and Employees [Member] | Vest Over a Four Year Period of Continued Employment [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Issuance of restricted common stock, net of share repurchase from employees and share cancellations, shares | 7,172 | |
Vesting period for restricted stock | 4 years | |
Vesting percentage for restricted shares issued to officers and employees | 25.00% | |
2010 Omnibus Incentive Plan [Member] | Officers and Employees [Member] | Vest Over a three Year Period of Continued Employment | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Issuance of restricted common stock, net of share repurchase from employees and share cancellations, shares | 185,597 | |
Vesting period for restricted stock | 3 years | |
Vesting percentage for restricted shares issued to officers and employees | 33.00% | |
2010 Omnibus Incentive Plan [Member] | Performance Share Units (PSUs) [Member] | Officers and Employees [Member] | Vest Over a three Year Period of Continued Employment | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Restricted stock units granted | 60,361 | |
2018 Short term Incentive Plan [Member] | Officers and Employees [Member] | Vest Immediately [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Issuance of unrestricted common stock | 232,493 |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions Used for Stock Option Grants (Detail) | 3 Months Ended |
Mar. 31, 2019 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |
Expected volatility | 49.00% |
Expected term (in years) | 7 years |
Risk-free interest rate | 2.50% |
Dividend yield | 0.00% |
Earnings (loss) per Share - Add
Earnings (loss) per Share - Additional Information (Detail) - shares | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Earnings Per Share [Abstract] | ||
Potentially issuable shares excluded from calculation of diluted EPS | 1,478,435 | 671,627 |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Commitments And Contingencies [Line Items] | |||
Recognized expense under operating leases | $ 700 | $ 700 | |
Dispute settlement expense | 50,765 | $ 50,765 | |
Operating lease right-of-use assets | $ 4,600 | ||
Operating lease,weighted-average discount rate | 5.30% | ||
Weighted-average remaining lease term | 4 years 9 months 18 days | ||
GX Dispute [Member] | |||
Commitments And Contingencies [Line Items] | |||
Legal expenses | $ 2,100 | $ 600 | |
Long term purchase commitment amount, maximum | 65,000 | ||
Accrued liability | $ 50,800 | ||
Dispute settlement expense | $ 50,800 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Obligations (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Operating Leases, Future Minimum Payments Due, Fiscal Year Maturity [Abstract] | ||
2019 | $ 1,569 | $ 1,822 |
2020 | 1,374 | 1,115 |
2021 | 933 | 780 |
2022 | 853 | 692 |
2023 | 839 | 659 |
Thereafter | 1,382 | 1,044 |
Total lease payments | 6,950 | $ 6,112 |
Less present value discount | (420) | |
Amounts recognized in Balance Sheet | 6,530 | |
Deferred revenue and other current liabilities | 741 | |
Right-of-use lease liability - long-term portion | 5,789 | |
Total right to use lease liability | $ 6,530 |
Commitments and Contingencies_3
Commitments and Contingencies - Commercial Commitments Related to Satellite and Network Services (Detail) $ in Thousands | Mar. 31, 2019USD ($) |
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 12,151 |
2020 | 6,392 |
2021 | 673 |
2022 | 17 |
Other Commitment, Total | $ 19,233 |
Segment Information - Company's
Segment Information - Company's Business Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 57,510 | $ 53,833 | |
Cost of revenue (excluding depreciation and amortization) | 36,456 | 33,681 | |
Depreciation and amortization | 8,912 | 7,987 | |
Selling, general and administrative | 20,263 | 16,635 | |
Operating income (loss) | (8,121) | (4,470) | |
Total assets | 261,219 | 245,259 | $ 258,925 |
Capital expenditures | 7,089 | 6,613 | |
Reportable Segments [Member] | Managed Communications Services [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 42,333 | 42,050 | |
Cost of revenue (excluding depreciation and amortization) | 26,985 | 25,745 | |
Depreciation and amortization | 6,264 | 5,726 | |
Selling, general and administrative | 3,797 | 4,215 | |
Operating income (loss) | 5,287 | 6,364 | |
Total assets | 170,553 | 148,535 | |
Capital expenditures | 6,636 | 5,834 | |
Reportable Segments [Member] | Applications and Internet-of-Things [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 8,015 | 5,336 | |
Cost of revenue (excluding depreciation and amortization) | 4,497 | 3,085 | |
Depreciation and amortization | 1,231 | 847 | |
Selling, general and administrative | 565 | 354 | |
Operating income (loss) | 1,722 | 1,050 | |
Total assets | 46,086 | 49,758 | |
Capital expenditures | 433 | 134 | |
Reportable Segments [Member] | Systems Integration [Member] | |||
Segment Reporting Information [Line Items] | |||
Revenue | 7,162 | 6,447 | |
Cost of revenue (excluding depreciation and amortization) | 4,974 | 4,851 | |
Depreciation and amortization | 662 | 652 | |
Selling, general and administrative | 1,124 | 323 | |
Operating income (loss) | 402 | 621 | |
Total assets | 26,546 | 16,535 | |
Capital expenditures | 0 | ||
Corporate and Eliminations [Member] | |||
Segment Reporting Information [Line Items] | |||
Depreciation and amortization | 755 | 762 | |
Selling, general and administrative | 14,777 | 11,743 | |
Operating income (loss) | (15,532) | (12,505) | |
Total assets | 18,034 | 30,431 | |
Capital expenditures | $ 20 | $ 645 |
Segment Information - Revenue E
Segment Information - Revenue Earned from Domestic and International Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Revenue | $ 57,510 | $ 53,833 |
Domestic [Member] | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Revenue | 24,627 | 17,628 |
International [Member] | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Revenue | $ 32,883 | $ 36,205 |
Segment Information - Long - Li
Segment Information - Long - Lived Assets, Net of Accumulated Depreciation for Both Domestic and International Operations (Detail) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long lived assets | $ 146,802 | $ 143,949 |
Domestic [Member] | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long lived assets | 79,323 | 73,615 |
International [Member] | ||
Revenues From External Customers And Long-Lived Assets [Line Items] | ||
Long lived assets | $ 67,479 | $ 70,334 |
Related Party - Additional Info
Related Party - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Related Party Transaction [Line Items] | |
Purchases from related party | $ 0.1 |
Avant Venture Capital AS | |
Related Party Transaction [Line Items] | |
Equity method investment, Ownership percentage | 24.00% |
Restructuring Costs - Cost Re_2
Restructuring Costs - Cost Reduction Plans - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2019USD ($)Employees | |
General and Administrative Expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges, pre-tax | $ | $ 0.6 |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Number of employees lay off | Employees | 25 |