Document and Entity Information
Document and Entity Information - shares | 6 Months Ended | |
Jun. 30, 2020 | Jul. 31, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | RNET | |
Entity Registrant Name | RigNet, Inc. | |
Entity Central Index Key | 0001162112 | |
Current Fiscal Year End Date | --12-31 | |
Entity Current Reporting Status | Yes | |
Entity Shell Company | false | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Interactive Data Current | Yes | |
Security Exchange Name | NASDAQ | |
Title of 12(b) Security | Common Stock, $0.001 par value per share | |
Entity Common Stock, Shares Outstanding | 20,554,132 | |
Entity File Number | 001-35003 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 76-0677208 | |
Entity Address, Address Line One | 15115 Park Row Blvd | |
Entity Address, Address Line Two | Suite 300 | |
Entity Address, City or Town | Houston | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77084-4947 | |
City Area Code | 281 | |
Local Phone Number | 674-0100 | |
Document Quarterly Report | true | |
Document Transition Report | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 15,591 | $ 12,941 |
Restricted cash | 42 | |
Accounts receivable, net | 69,960 | 67,059 |
Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB) | 13,030 | 13,275 |
Prepaid expenses and other current assets | 6,437 | 6,500 |
Total current assets | 105,018 | 99,817 |
Property, plant and equipment, net | 54,163 | 60,118 |
Restricted cash | 1,500 | 1,522 |
Goodwill | 20,134 | 46,792 |
Intangibles, net | 25,626 | 30,145 |
Right-of-use lease asset | 6,175 | 6,829 |
Deferred tax and other assets | 5,417 | 5,757 |
TOTAL ASSETS | 218,033 | 250,980 |
Current liabilities: | ||
Accounts payable | 23,670 | 28,517 |
Accrued expenses | 17,523 | 16,660 |
Current maturities of long-term debt | 8,792 | 10,793 |
Income taxes payable | 2,464 | 2,649 |
GX dispute accrual | 750 | 750 |
Deferred revenue and other current liabilities | 7,440 | 11,173 |
Total current liabilities | 60,639 | 70,542 |
Long-term debt | 106,161 | 96,934 |
Deferred revenue | 764 | 855 |
Deferred tax liability | 1,955 | 2,672 |
Right-of-use lease liability - long-term portion | 5,830 | 6,329 |
Other liabilities | 30,440 | 26,771 |
Total liabilities | 205,789 | 204,103 |
Commitments and contingencies (Note 10) | ||
Stockholders' equity | ||
Preferred stock - $0.001 par value; 10,000,000 shares authorized; no shares issued or outstanding at June 30, 2020 and December 31, 2019 | ||
Common stock - $0.001 par value; 190,000,000 shares authorized; 20,551,153 and 19,979,284 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively | 21 | 20 |
Treasury stock - 445,525 and 203,756 shares at June 30, 2020 and December 31, 2019, respectively, at cost | (3,281) | (2,693) |
Additional paid-in capital | 189,251 | 184,571 |
Accumulated deficit | (146,836) | (115,673) |
Accumulated other comprehensive loss | (27,050) | (19,502) |
Total stockholders' equity | 12,105 | 46,723 |
Non-redeemable, non-controlling interest | 139 | 154 |
Total equity | 12,244 | 46,877 |
TOTAL LIABILITIES AND EQUITY | $ 218,033 | $ 250,980 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 |
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 | 20,551,153 | 19,979,284 |
Common stock, shares outstanding | 20,551,153 | 19,979,284 |
Treasury stock, shares | 445,525 | 203,756 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Comprehensive Loss (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Statement [Abstract] | ||||
Revenue | $ 53,391 | $ 60,332 | $ 112,152 | $ 117,842 |
Expenses: | ||||
Cost of revenue (excluding depreciation and amortization) | 33,687 | 36,519 | 71,637 | 72,975 |
Depreciation and amortization | 6,913 | 7,679 | 13,844 | 16,591 |
Impairment of goodwill | 23,141 | |||
Change in fair value of earn-out/contingent consideration | 3,916 | 1,284 | 3,916 | 1,284 |
Selling and marketing | 2,207 | 2,952 | 5,019 | 6,745 |
General and administrative | 9,453 | 14,458 | 23,282 | 30,928 |
Total expenses | 56,176 | 62,892 | 140,839 | 128,523 |
Operating loss | (2,785) | (2,560) | (28,687) | (10,681) |
Other expense: | ||||
Interest expense | (1,325) | (1,269) | (2,853) | (2,507) |
Other income (expense), net | (13) | (93) | (334) | (21) |
Loss before income taxes | (4,123) | (3,922) | (31,874) | (13,209) |
Income tax benefit (expense) | (129) | (2,204) | 851 | (4,870) |
Net loss | (4,252) | (6,126) | (31,023) | (18,079) |
Less: Net loss attributable to non-redeemable, non-controlling interest | 70 | 30 | 140 | 60 |
Net loss attributable to RigNet, Inc. stockholders | (4,322) | (6,156) | (31,163) | (18,139) |
COMPREHENSIVE LOSS | ||||
Net loss | (4,252) | (6,126) | (31,023) | (18,079) |
Foreign currency translation | (391) | 178 | (7,548) | 336 |
Comprehensive loss | (4,643) | (5,948) | (38,571) | (17,743) |
Less: Comprehensive income attributable to non-controlling interest | 70 | 30 | 140 | 60 |
Comprehensive loss attributable to RigNet, Inc. stockholders | (4,713) | (5,978) | (38,711) | (17,803) |
LOSS PER SHARE - BASIC AND DILUTED | ||||
Net loss attributable to RigNet, Inc. common stockholders | $ (4,322) | $ (6,156) | $ (31,163) | $ (18,139) |
Net loss per share attributable to RigNet, Inc. common stockholders, basic | $ (0.21) | $ (0.32) | $ (1.54) | $ (0.95) |
Net loss per share attributable to RigNet, Inc. common stockholders, diluted | $ (0.21) | $ (0.32) | $ (1.54) | $ (0.95) |
Weighted average shares outstanding, basic | 20,510 | 19,082 | 20,295 | 19,016 |
Weighted average shares outstanding, diluted | 20,510 | 19,082 | 20,295 | 19,016 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Cash flows from operating activities: | ||
Net loss | $ (31,023) | $ (18,079) |
Adjustments to reconcile net loss to net cash provided by operations: | ||
Depreciation and amortization | 13,844 | 16,591 |
Impairment of goodwill | 23,141 | |
Stock-based compensation | 4,686 | 5,628 |
Amortization of deferred financing costs | 189 | 153 |
Deferred taxes | (624) | 4,838 |
Change in fair value of earn-out/contingent consideration | 3,916 | 1,284 |
Accretion of discount of contingent consideration payable for acquisitions | 266 | 183 |
(Gain) loss on sales of property, plant and equipment, net of retirements | 116 | 11 |
Changes in operating assets and liabilities, net of effect of acquisition: | ||
Accounts receivable, net | (4,078) | (488) |
Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB) | (199) | (1,644) |
Prepaid expenses and other assets | 73 | (6) |
Right-of-use lease asset | 654 | |
Accounts payable | (2,027) | 7,564 |
Accrued expenses | 1,195 | (1,574) |
GX Dispute payment | (45,000) | |
Deferred revenue | (7,459) | 1,334 |
Right-of-use lease liability | (779) | |
Other liabilities | 5,138 | (2,052) |
Net cash provided by (used in) operating activities | 7,029 | (31,257) |
Cash flows from investing activities: | ||
Capital expenditures | (8,597) | (11,868) |
Proceeds from sales of property, plant and equipment | 26 | 112 |
Net cash used in investing activities | (8,571) | (11,756) |
Cash flows from financing activities: | ||
Issuance of common stock upon the exercise of stock options and the vesting of restricted stock | 1 | 4 |
Stock withheld to cover employee taxes on stock-based compensation | (594) | (1,406) |
Subsidiary distributions to non-controlling interest | (155) | (135) |
Proceeds from borrowings | 6,750 | 40,000 |
Proceeds from Paycheck Protection Program Loan | 6,298 | |
Repayments of long-term debt | (8,354) | (6,083) |
Payment of financing fees | (485) | (486) |
Net cash provided by financing activities | 3,461 | 31,894 |
Net change in cash and cash equivalents | 1,919 | (11,119) |
Cash and cash equivalents including restricted cash: | ||
Cash and cash equivalents including restricted cash | 14,505 | 23,296 |
Changes in foreign currency translation | 667 | 265 |
Cash and cash equivalents including restricted cash | 17,091 | 12,442 |
Supplemental disclosures: | ||
Income taxes paid | 1,698 | 3,371 |
Interest paid | 2,369 | 2,075 |
Property, plant and equipment acquired under finance leases | 446 | |
Non-cash investing - capital expenditures accrued | 663 | 1,917 |
Non-cash investing and financing - issuance of common stock for the Intelie earn-out | 3,000 | |
Right-of-use operating lease entered into | 121 | |
Cash and cash equivalents | 15,591 | 10,879 |
Restricted cash - current portion | 41 | |
Restricted cash - long-term portion | 1,500 | 1,522 |
Cash and cash equivalents including restricted cash | $ 17,091 | $ 12,442 |
Condensed Consolidated Statem_3
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, 2018 | $ 55,984 | $ 19 | $ (1,270) | $ 172,946 | $ (96,517) | $ (19,254) | $ 55,924 | $ 60 |
Beginning Balance, shares at Dec. 31, 2018 | 19,465,000 | 92,000 | ||||||
Issuance of common stock upon the exercise of stock options | 3 | 3 | 3 | |||||
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 | 1 | $ 1 | 1 | |||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations, shares | 295,000 | |||||||
Issuance of common stock for the Intelie earn-out | 3,000 | 3,000 | 3,000 | |||||
Issuance of common stock for the Intelie earn-out, shares | 208,000 | |||||||
Stock withheld to cover employee taxes on stock-based compensation | (1,406) | $ (1,406) | (1,406) | |||||
Stock withheld to cover employee taxes on stock-based compensation, shares | 109,000 | |||||||
Stock-based compensation | 5,628 | 5,628 | 5,628 | |||||
Foreign currency translation | 336 | 336 | 336 | |||||
Non-controlling owner distributions | 135 | 135 | ||||||
Net income (loss) | (18,079) | (18,139) | (18,139) | 60 | ||||
Ending Balance at Jun. 30, 2019 | 45,332 | $ 20 | $ (2,676) | 181,577 | (114,656) | (18,918) | 45,347 | (15) |
Ending Balance, shares at Jun. 30, 2019 | 19,969,000 | 201,000 | ||||||
Non-controlling owner distributions | (135) | (135) | ||||||
Beginning Balance at Mar. 31, 2019 | 47,106 | $ 20 | $ (2,677) | 177,404 | (108,500) | (19,096) | 47,151 | (45) |
Beginning Balance, shares at Mar. 31, 2019 | 19,711,000 | 198,000 | ||||||
Issuance of common stock upon the exercise of stock options | 3 | 3 | 3 | |||||
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, shares | 49,000 | |||||||
Issuance of common stock for the Intelie earn-out | 3,000 | 3,000 | 3,000 | |||||
Issuance of common stock for the Intelie earn-out, shares | 208,000 | |||||||
Stock withheld to cover employee taxes on stock-based compensation | 1 | $ 1 | 1 | |||||
Stock withheld to cover employee taxes on stock-based compensation, shares | 3,000 | |||||||
Stock-based compensation | 1,170 | 1,170 | 1,170 | |||||
Foreign currency translation | 178 | 178 | 178 | |||||
Net income (loss) | (6,126) | (6,156) | (6,156) | 30 | ||||
Ending Balance at Jun. 30, 2019 | 45,332 | $ 20 | $ (2,676) | 181,577 | (114,656) | (18,918) | 45,347 | (15) |
Ending Balance, shares at Jun. 30, 2019 | 19,969,000 | 201,000 | ||||||
Beginning Balance at Dec. 31, 2019 | $ 46,877 | $ 20 | $ (2,693) | 184,571 | (115,673) | (19,502) | 46,723 | 154 |
Beginning Balance, shares at Dec. 31, 2019 | 19,979,284 | 19,979,000 | 204,000 | |||||
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 | 572,000 | |||||||
Stock withheld to cover employee taxes on stock-based compensation | (594) | $ (588) | (6) | (594) | ||||
Stock withheld to cover employee taxes on stock-based compensation, shares | 242,000 | |||||||
Stock-based compensation | 4,686 | 4,686 | 4,686 | |||||
Foreign currency translation | (7,548) | (7,548) | (7,548) | |||||
Non-controlling owner distributions | 155 | 155 | ||||||
Net income (loss) | (31,023) | (31,163) | (31,163) | 140 | ||||
Ending Balance at Jun. 30, 2020 | $ 12,244 | $ 21 | $ (3,281) | 189,251 | (146,836) | (27,050) | 12,105 | 139 |
Ending Balance, shares at Jun. 30, 2020 | 20,551,153 | 20,551,000 | 446,000 | |||||
Non-controlling owner distributions | $ (155) | (155) | ||||||
Beginning Balance at Mar. 31, 2020 | 16,070 | $ 20 | $ (3,271) | 188,425 | (142,514) | (26,659) | 16,001 | 69 |
Beginning Balance, shares at Mar. 31, 2020 | 20,454,000 | 432,000 | ||||||
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 | 97,000 | |||||||
Stock withheld to cover employee taxes on stock-based compensation | (16) | $ (10) | (6) | (16) | ||||
Stock withheld to cover employee taxes on stock-based compensation, shares | 14,000 | |||||||
Stock-based compensation | 832 | 832 | 832 | |||||
Foreign currency translation | (391) | (391) | (391) | |||||
Net income (loss) | (4,252) | (4,322) | (4,322) | 70 | ||||
Ending Balance at Jun. 30, 2020 | $ 12,244 | $ 21 | $ (3,281) | $ 189,251 | $ (146,836) | $ (27,050) | $ 12,105 | $ 139 |
Ending Balance, shares at Jun. 30, 2020 | 20,551,153 | 20,551,000 | 446,000 |
Basis of Presentation
Basis of Presentation | 6 Months Ended |
Jun. 30, 2020 | |
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, 2019 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 11, 2020. Significant Accounting Policies In addition to the accounting policies described below, please refer to RigNet’s Annual Report on Form 10-K for the fiscal year 2019 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, usage 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 five 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). With certain customers, our contracts require that the contract backlog on stack rigs be transferred to other units, preserving the total contract value. 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, usage 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 the 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 June 30, 2020, and December 31, 2019, the amount of CIEB related to Systems Integration projects was $13.0 million and $13.3 million, respectively. Under long-term contracts, amounts recorded in CIEB may not be realized or paid within a one-year period. As of June 30, 2020 and December 31, 2019, $1.6 million and $1.0 million, respectively, of amounts billed to customers in excess of revenue recognized to date were classified as a current liability, under deferred revenue and other current liabilities. 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 Condensed Consolidated Balance Sheets as part of CIEB. No material unapproved change orders or claims revenue were included in CIEB as of June 30, 2020, and December 31, 2019 . As new facts become known, an adjustment to the estimated recovery is made and reflected in the current period. Backlog - As of June 30, 2020, we have a backlog for our percentage of completion projects of $15.9 million, which will be recognized over the remaining contract term for each contract. The percentage of completion contract terms are typically one to three years. As of December 31, 2019, we had a backlog for our percentage of completion projects of $26.2 million. Leases Effective with adoption of Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (the new lease standard) on January 1, 2019, we now determine if an arrangement is a lease at inception. Operating leases right-of-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 June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13), which measures credit losses on most financial assets and certain other instruments that are not measured at fair value through net income. The update amends the impairment model to utilize a current expected credit loss (CECL) methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. Companies will apply this standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The new standard is effective for interim and annual reporting periods beginning Company adopted the guidance effective January 1, 2020, and the guidance did not have a 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. 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 adopted the guidance effective January 1, 2020, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued Accounting Standards Update No. 2019-12 (ASU 2019-12), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU removes certain exceptions for investments, intraperiod allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. We will be required to adopt the amended guidance in annual and interim periods beginning after December 15, 2020, with early adoption permitted. The various amendments in Update 2019-12 are applied on a retrospective basis, modified retrospective basis and prospective basis, depending on the amendment. We are in the process of evaluating the impact this amendment will have on our consolidated financial statements. In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting or recognizing the effects of the LIBOR or another reference rate reform on financing rate. The amendments are effective through December 31, 2022. We are currently in the process of evaluating the impact of the transition from LIBOR to alternative reference rates, but we do not expect a material impact on our consolidated financial statements. |
Business and Credit Concentrati
Business and Credit Concentrations | 6 Months Ended |
Jun. 30, 2020 | |
Risks And Uncertainties [Abstract] | |
Business and Credit Concentrations | Note 2 – 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 presently tied to LIBOR resulting in interest rate risk (see Note 5 – 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 and Customer Concentration Risk Credit risk, with respect to accounts receivable, is due to customers being concentrated in the oil and gas, maritime, pipeline, engineering and construction industries on historical experience, current economic conditions, and reasonable. The company determined ASU 2016-13 did not have a material impact on the allowance for doubtful accounts. Although no single customer comprised over 10 % of our revenue for the six months ended June 30 , 20 20 , our top 5 customers generated 28.7% of the Company’s revenue for the six months ended June 30 , 20 20 . 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 2020 or 2019. 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 5 – Long-Term Debt). |
Goodwill and Intangibles
Goodwill and Intangibles | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangibles | Note 3 – 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 oil and gas industry experienced an unprecedented disruption during the first half of 2020 as a result of a combination of factors, including the coronavirus (“COVID-19”) pandemic and disagreements between the Organization of Petroleum Exporting Countries (OPEC) in March 2020 regarding reduction on production of oil. These market conditions significantly impacted the Company’s internal forecast. As a result, the Company performed an interim goodwill impairment test. The Company used the income approach to estimate the fair value of its reporting units, but also considered the market approach to validate the results. The income approach estimates the fair value by discounting each reporting unit’s estimated future cash flows using the Company’s discount rate. Some of the significant assumptions inherent in the income approach include the estimated future net annual cash flows for each reporting unit and the discount rate. The Company selected the assumptions used in the discounted cash flow projections using historical information with supplemental data by current and anticipated market conditions and estimated growth rates. The Company's estimates are based upon assumptions believed to be reasonable. The Company determined that the carrying amount in two of our reporting units was in excess of their fair value which resulted in a goodwill impairment charge of $23.1 million during the six months ended June 30, 2020. The charge fully impairs goodwill previously reported in MCS of $21.8 million and Systems Integration of $1.4 million during the six months ended June 30, 2020. The impairment test for Apps & IoT resulted in no impairment related to the goodwill balance of $20.1 million during the six months ended June 30, 2020. The Company's estimates are based upon assumptions believed to be reasonable. However, given the inherent uncertainty in determining the assumptions underlying a discounted cash flow analysis, particularly in the current volatile market, actual results may differ from those used in the Company's valuations. Any future downturn in our business could adversely impact the key assumptions in our impairment test. As of June 30, 2020, and December 31, 2019, goodwill was $20.1 million and $46.8 million, respectively. Goodwill increases or decreases in value due to the effect of foreign currency translation, increases with acquisitions, and decreases in the event an impairment is recognized. Intangibles Intangibles consist of customer relationships, brand covenants-not-to-compete and licenses The Company’s intangibles have useful lives ranging from 5.0 to 20.0 years Based on the indicators discussed above, the Company reviewed certain finite intangible and other long-lived assets for impairment during the six months ended June 30, 2020. The Company performed a recoverability analysis and determined that the recoverable value was in excess of its carrying value, therefore no impairment was recognized during the six months ended June 30, 2020. As of June 30, 2020, and December 31, 2019, intangibles were $25.6 million and $30.1 million, respectively. During the three months ended June 30, 2020 and 2019, the Company recognized amortization expense of $1.9 million and $2.4 million, respectively. During the six months ended June 30, 2020 and 2019, the Company recognized amortization expense of $3.9 million and $4.9 million, respectively The following table sets forth expected amortization expense of intangibles for the remainder of 2020 and the following years (in thousands): 2020 3,233 2021 6,243 2022 5,834 2023 5,221 2024 3,659 Thereafter 1,436 $ 25,626 |
Restricted Cash
Restricted Cash | 6 Months Ended |
Jun. 30, 2020 | |
Cash And Cash Equivalents [Abstract] | |
Restricted Cash | As of June 30, 2020, the Company had no in the MCS segment . |
Long-Term Debt
Long-Term Debt | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Note 5 – Long-Term Debt As of June 30, 2020, and December 31, 2019, the following credit facilities and long-term debt arrangements with financial institutions were in place: June 30, December 31, 2020 2019 (in thousands) Term Loan $ 14,000 $ 5,000 Term-Out Loan - 25,500 Revolving credit facility (RCF) 92,400 77,150 Vendor Finance Arrangement 2,557 - Paycheck Protection Program Loan 6,298 - Unamortized deferred financing costs (762 ) (466 ) Finance lease 460 543 114,953 107,727 Less: Current maturities of long-term debt (7,633 ) (10,627 ) Current maturities of Vendor Finance Arrangement (992 ) - Current maturities of finance lease (167 ) (166 ) $ 106,161 $ 96,934 Credit Agreement The Company and certain of its subsidiaries are party to the Third Amendment to the Third Amended and Restated Credit Agreement, dated as of February 21, 2020, with four participating financial institutions (as amended from time to time, the Credit Agreement), which provides for a $16.0 million term loan (Term Loan), a $100.0 million revolving credit facility (RCF) and a $30.0 million accordion feature. The Term Loan matures on March 31, 2022 with principal installments of $2.0 million due quarterly beginning June 30, 2020. The RCF and accordion, if exercised, mature on August 31, 2022. The Credit Agreement bears Overnight Financing Rate s (SOFR) or another alternate benchmark rate . The Credit Agreement also addresses the situation in which no LIBOR successor rate has been determined. Interest on the Credit Agreement is payable monthly. The weighted average interest rate for the three months ended June 30 , 2020 and 2019 were 3.8% and %, respectively . The weighted average interest rate for the six months ended June 30 , 2020 and 2019 were 4.1% and 5.3 %, respectively, with an interest rate of 3.4% at June 30 , 2020. Term Loan As of June 30, 2020, the outstanding principal amount of the Term Loan was $14.0 million, excluding the impact of unamortized deferred financing costs. RCF As of June 30, 2020, outstanding draws on the RCF were $92.4 million. 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 Leverage Ratio, of less than or equal to 3.25 through the third quarter of 2020. The Consolidated Leverage Ratio requirement then steps down to 3.00 through the second quarter of 2021 and then steps down to 2.75 for all remaining quarters. The Consolidated Fixed Charge Coverage ratio requirement is greater than or equal to 1.25 through the maturity of the Credit Agreement. 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. We believe we have accurately calculated and reported our required debt covenant calculations for the June 30, 2020 reporting period and are in compliance with the required covenant ratios. As of June 30, 2020, the Consolidated Leverage Ratio was 3.03 and Consolidated Fixed Charge Coverage Ratio was 2.32. Vendor Finance Agreement As of June 30, 2020, the Company had a vendor financing agreement in place, with an outstanding balance of $2.6 million. The outstanding balance bears interest at a rate of 6% and has quarterly payments of $0.3 million of principal and interest through January 2023 Paycheck Protection Program Loan In May 2020, the Company entered into a loan agreement (PPP Loan) with Bank of America, N.A., as the lender, pursuant to the Paycheck Protection Program (PPP) of the U.S. Small Business Administration (SBA) established under the Coronavirus Aid, Relief, and Economic Security Act. Under the PPP Loan, the Company borrowed $6.3 million which the Company expects to be eligible for forgiveness pursuant to the applicable regulations of the PPP. Currently, the regulations provide for loan forgiveness to the extent that (i) the proceeds are used in the Cover Period, as defined in the application for loan forgiveness, after the funding of the loan, (ii) at least 60% of the forgiven amount is used for eligible payroll costs and (iii) the remaining proceeds are used for interest on mortgages, rents, or utilities, and interest on other debt obligations incurred before February 15, 2020. The amount eligible for forgiveness may be reduced if, among other things, the Company reduces its full-time headcount or if the Company reduces salaries and wages beyond certain limits. While the Company expects all $6.3 million will be used in accordance with the regulations for forgiveness, not all costs are within the control of the Company and these regulations are subject to change as a result of administrative or judicial proceedings or legislative initiatives including additional regulations that are anticipated to be released by the SBA. While the Company cannot determine the ultimate outcome, based on the Company’s assessments on the current rules in place, the Company believes it should qualify for full forgiveness. Any amounts not forgiven must be repaid in two years and accrue interest at a rate of 1.0% per year. No interest or principal payments are due for six months, at which time interest and principal payments will be made on any unforgiven balance under terms established by Bank of America, N.A. at that time. The SBA has publicly stated that it intends to review all loans in excess of $2.0 million when loan forgiveness is requested. The SBA has not provided any further details of this review and the Company cannot assure the results of any such review. Performance Bonds , Surety Bonds and Other Similar Instruments As of June 30, 2020, there were $8.5 million of performance bonds, surety bonds and similar instruments outstanding of which $2.1 million is issued by the parties under the Credit Agreement. 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 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 2020 and the following years (in thousands): 2020 4,354 2021 8,731 2022 101,561 2023 307 Total debt, including current maturities $ 114,953 |
Fair Value Disclosures
Fair Value Disclosures | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Disclosures | Note 6 – 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 the fair value recorded in the Condensed Consolidated Statements of Comprehensive Loss. The earn-out is payable in RigNet stock in portions and is based on certain post-closing performance targets under the acquisition agreement. In May 2019, the Company issued 208,356 shares of its common stock, with an aggregate value of $3.0 million, as payment for the portion of the earn-out earned as of the first anniversary of the closing of the acquisition. The earn-out was originally payable on the first, second and third anniversary of the March 23, 2018 closing of the acquisition. However, on June 11, 2020, the Company, Intelie and the former shareholders of Intelie entered into the Third Amendment to the Purchase Agreement dated as of January 15, 2018. The Amendment clarified the calculation of certain contingent consideration, extended the earn-out achievement period by six months, and delayed the time of payment of a portion of that contingent consideration until September 23, 2021, but did not change the amount or form of consideration that could be paid pursuant to the Purchase Agreement. The value of the maximum remaining earn-out consideration is $13.9 million. As of June 30, 2020, the fair value of the earn-out was $13.7 million, all in other long-term liabilities. During the three and six months ended June 30, 2020, RigNet recognized an increase in the fair value of the earn-out of $3.9 million . Additionally, during the three and six months ended June 30 , 2020, RigNet recognized accreted interest expense on the Intelie earn-out of $0.1 million with corresponding increases to other liabilities. As of December 31, 2019, the fair value of the earn-out was $9.7 million with $4.4 million in deferred revenue and other current liabilities and $5.3 million in other long-term liabilities. During the three and six months ended June 30, 2019, RigNet recognized an increase in the fair value of the earn-out of $ 1.3 million 0.1 million 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 the fair value recorded in the Condensed Consolidated Statements of Comprehensive Loss. As of June 30, 2020, the fair value of the contingent consideration was $3.0 million of which $0.3 million is in other current liabilities and $2.7 million is in other long-term liabilities. As of December 31, 2019, the fair value of the contingent consideration was $3.1 million, of which $0.3 million is in other current liabilities and $2.7 million is in other long-term liabilities. During the three and six months ended June 30, 2020, RigNet recognized accreted interest expense on the Cyphre contingent consideration of $0.1 million, and $0.2 million, respectively, with corresponding increases to other liabilities. During the three and six months ended June 30, 2020, RigNet paid cash of none and $0.2 million, respectively, in required royalty payments, with corresponding decreases to other liabilities. During the three and six months ended June 30, 2019, RigNet paid cash of $0.1 million and $0.1 million, respectively, in required royalty payments, with corresponding decreases to other liabilities. |
Income Taxes
Income Taxes | 6 Months Ended |
Jun. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 7 – Income Taxes The Company’s effective income tax rate was (3.1%) and 2.7% for the three and six months ended June 30, 2020. The Company’s effective income tax rate was (56.2%) and (36.9%) for the three and six months ended June 30, 2019. 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 notices informing us of audits of the Company’s 2016-2018 income tax returns in Malaysia, the 2010-2014 income tax returns in Qatar and the 2018 income tax return in Saudi Arabia. It is unclear if the audits and the appeals processes, if necessary, will be completed within the next twelve months. The Company is in the early stages of the audits and is unable to quantify any potential settlement or outcome of the audits at this time. The authorities closed the audit of the Company’s 2016-2017 income tax returns in Singapore with no additional assessments. The Company believes that it is reasonably possible that a decrease of up to $4.4 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 | 6 Months Ended |
Jun. 30, 2020 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | Note 8 – Stock-Based Compensation During the six months ended June 30, 2020, the Company granted a total of 836,439 shares of common stock and restricted stock units (RSUs) to certain directors, officers and employees of the Company under the 2019 Omnibus Incentive Plan (2019 Plan). Of these, the Company granted (i) 602,457 shares of common stock were associated with the payment of the Company’s 2019 short term incentive plan to certain officers and employees and were fully vested on issuance and (ii) 233,982 RSUs to outside directors that vest in 2021. The fair value of restricted stock units and shares of common stock 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. During the six months ended June 30, 2020, 59,056 RSUs and 23,619 stock options were forfeited. Stock-based compensation expense related to the Company’s stock-based compensation plans for the three and six months ended June 30, 2020, was $0.8 million and $4.7 million respectively, and reported as a general and administrative expense in the Corporate segment . Stock -based compensation expense related to the Company’s stock-based compensation plans for the three and six months ended June 30 , 201 9 , was $1.2 million and $5.6 million , respectively . As of June 30 , 20 20 , there was $ 7.3 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 1.9 years . |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Note 9 – Earnings (loss) per Share Basic earnings (loss) per share (EPS) are computed by dividing net loss attributable to RigNet common stockholders by the weighted average number of basic shares outstanding during the period. Basic shares equal the total of the common shares outstanding, but excludes 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 weighted average number of diluted shares outstanding during the period. Diluted shares equal the total of the basic shares outstanding and all potentially issuable shares, other than anti-dilutive shares, if any. 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 if included, 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. The effect of stock-based awards was not included in the Company’s calculation of diluted EPS for . The effect of stock-based awards was not included in the Company’s calculation of diluted EPS for the three and six months ended June 30, 2019, due to the net loss for the periods |
Commitments and Contingencies
Commitments and Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 10 – 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 million, under certain conditions, of GX capacity from Inmarsat over several years. In June 2019, the Company announced that it reached a settlement with Inmarsat that concludes the GX Dispute. Pursuant to the settlement the Company paid $45.0 million in June 2019, $5.0 million in July 2019 and will pay $0.8 million in the third quarter of 2020. The Company had an accrued liability of $0.8 million as of June 30, 2020. The Company incurred GX Dispute Phase II costs of $2.2 million and $4.4 million for the three and six months ended June 30, 2019. 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. It is expected that the audit and the appeals process, if necessary, will be completed within the year. The Company does not believe that the outcome of the audit will result in a material impact to the consolidated financial statements. Operating Leases million and $1.2 million , respectively . For the three and six months ended June 30 , 2019, the Company recognized expense under operating leases, which approximates cash paid and includes short-term leases, of $ 0.7 million and $ 1.4 million, respectively . As of June 30, 2020, future undiscounted minimum lease obligation maturities for the remainder of 2020 and future years were as follows (in thousands): 2020 $ 1,015 2021 1,487 2022 1,211 2023 1,195 2024 1,200 Thereafter 3,020 Total lease payments $ 9,128 Less present value discount (1,493 ) Amounts recognized in Balance Sheet $ 7,635 Amounts recognized in Balance Sheet Deferred revenue and other current liabilities 1,805 Right-of-use lease liability - long-term portion 5,830 Total right-to-use lease liability $ 7,635 Operating lease right-of-use assets for leases were $6.2 million as of June 30, 2020. The right-of-use assets and liabilities for leases were discounted at a weighted-average discount rate of Commercial Commitments The Company enters into contracts for satellite bandwidth and other network services with certain providers. As of June 30, 2020, the Company had the following commercial commitments related to satellite and network services for the remainder of 2020 and the future years thereafter (in thousands): 2020 11,375 2021 12,654 2022 5,800 2023 204 $ 30,033 |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Note 11 – 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. 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 (Apps & IoT). The Apps & IoT segment provides applications over-the-top of the network layer including Software as a Service (SaaS) offerings such as a real-time machine learning and AI data platform (Intelie Pipes and Intelie LIVE), Cyphre Encryption, Enhanced Cybersecurity Services (ECS), edge computing solution services that assist customers with collecting and standardizing the complex data produced by edge devices (LIVE-IT), applications for safety and workforce productivity such as weather monitoring primarily in the North Sea (MetOcean) , and certain other value-added services such as Adaptive Video Intelligence (AVI) . This segment also includes the private machine-to-machine I o T data networks including Supervisory Control and Data Acquisition (SCADA) provided primarily for pipelines . • 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. Additionally, Systems Integration provides complete monitoring and maintenance for fire and gas detection systems and PLC/automation control systems. Corporate and Eliminations primarily represents unallocated executive and support activities, including back-office software development, interest expense, income taxes and eliminations , the GX Dispute and change in fair value of earn-out/contingent consideration The Company’s reportable segment information as of and for the three and six months ended June 30, 2020 and 2019, is presented below. Three Months Ended June 30, 2020 Managed Communication Services Applications and Internet-of-Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 34,136 $ 8,805 $ 10,450 $ - $ 53,391 Cost of revenue (excluding depreciation and amortization) 22,985 3,221 7,481 - 33,687 Depreciation and amortization 4,843 1,154 157 759 6,913 Change in fair value of earn-out/contingent consideration - - - 3,916 3,916 Selling, general and administrative 2,436 1,563 302 7,359 11,660 Operating income (loss) $ 3,872 $ 2,867 $ 2,510 $ (12,034 ) $ (2,785 ) Capital expenditures 1,900 911 - 244 3,055 Three Months Ended June 30, 2019 Managed Communication Services Applications and Internet-of-Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 41,205 $ 8,005 $ 11,122 $ - $ 60,332 Cost of revenue (excluding depreciation and amortization) 25,019 4,387 7,113 - 36,519 Depreciation and amortization 5,059 1,226 639 755 7,679 Change in fair value of earn-out/contingent consideration - - - 1,284 1,284 Selling, general and administrative 3,346 835 570 12,659 17,410 Operating income (loss) $ 7,781 $ 1,557 $ 2,800 $ (14,698 ) $ (2,560 ) Capital expenditures $ 3,689 $ 403 $ - $ 481 $ 4,573 Six Months Ended June 30, 2020 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 74,032 $ 17,548 $ 20,572 $ - $ 112,152 Cost of revenue (excluding depreciation and amortization) 48,487 7,782 15,368 - 71,637 Depreciation and amortization 9,502 2,336 321 1,685 13,844 Impairment of goodwill 21,755 - 1,386 - 23,141 Change in fair value of earn- out/contingent consideration - - - 3,916 3,916 Selling, general and administrative 5,243 3,183 706 19,169 28,301 Operating income (loss) $ (10,955 ) $ 4,247 $ 2,791 $ (24,770 ) $ (28,687 ) Total assets $ 127,535 $ 35,690 $ 32,340 $ 22,468 $ 218,033 Capital expenditures 4,739 1,425 - 588 6,752 Six Months Ended June 30, 2019 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 83,538 $ 16,020 $ 18,284 $ - $ 117,842 Cost of revenue (excluding depreciation and amortization) 52,004 8,884 12,087 - 72,975 Depreciation and amortization 11,323 2,457 1,301 1,510 16,591 Change in fair value of earn-out/contingent consideration - - - 1,284 1,284 Selling, general and administrative 7,143 1,400 1,694 27,436 37,673 Operating income (loss) $ 13,068 $ 3,279 $ 3,202 $ (30,230 ) $ (10,681 ) Total assets $ 159,874 $ 45,281 $ 24,747 $ 14,471 $ 244,373 Capital expenditures $ 10,325 $ 836 $ - $ 501 $ 11,662 The following table presents revenue earned from the Company’s domestic and international operations for the three and six months ended June 30, 2020 and 2019. 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 monitored to ensure the location of service information is properly reflected. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (in thousands) Domestic $ 22,582 $ 28,881 $ 45,857 $ 53,508 International 30,809 31,451 66,295 64,334 Total $ 53,391 $ 60,332 $ 112,152 $ 117,842 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 June 30, 2020 and December 31, 2019. June 30, December 31, 2020 2019 (in thousands) Domestic $ 66,586 $ 76,253 International 39,512 67,631 Total $ 106,098 $ 143,884 |
Related Party Transactions
Related Party Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12 – Related Party Transactions The Company has a reseller arrangement with Darktrace, which is an artificial intelligence company in cybersecurity that is partially owned by KKR & CO. Inc. (KKR). KKR is a significant stockholder of the Company. Under the arrangement, the Company sells Darktrace’s cybersecurity audit services with the Company’s cybersecurity offerings. In the three and six months ended June 30, 2020, the Company purchased none and $0.1 million, respectively, from Darktrace in the ordinary course of business. In the three and six months ended June 30, 2019, the Company purchased $0.1 million and $0.1 million, respectively, from Darktrace in the ordinary course of business. Vissim AS is now a vendor following a competitive request for a quote from RigNet in the ordinary course of business. A customer specified Vissim AS by name as a provider for an SI project. Vissim AS is 24% owned by AVANT Venture Capital AS, which is owned by and has as the chairman of its board one of our board members. In the three and six months ended June 30, 2020, the Company purchased $0.1 million and $0.1 million, respectively, from Vissim AS in the ordinary course of business. In the three and six months ended June 30, 2019, the Company purchased $0.6 million and $0.6 million, respectively, from Vissim AS in the ordinary course of business. |
Restructuring Costs - Cost Redu
Restructuring Costs - Cost Reduction Plans | 6 Months Ended |
Jun. 30, 2020 | |
Restructuring And Related Activities [Abstract] | |
Restructuring Costs - Cost Reduction Plans | Note 13 – Restructuring Costs – Cost Reduction Plans During the six months ended June 30, 2019, the Company incurred a net pre-tax restructuring expense of $0.6 million reported as a general and administrative expense in the Corporate segment associated with the reduction of 25 employees. |
Basis of Presentation (Policies
Basis of Presentation (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Revenue Recognition | 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, usage 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 five 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). With certain customers, our contracts require that the contract backlog on stack rigs be transferred to other units, preserving the total contract value. 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, usage 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 the 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 June 30, 2020, and December 31, 2019, the amount of CIEB related to Systems Integration projects was $13.0 million and $13.3 million, respectively. Under long-term contracts, amounts recorded in CIEB may not be realized or paid within a one-year period. As of June 30, 2020 and December 31, 2019, $1.6 million and $1.0 million, respectively, of amounts billed to customers in excess of revenue recognized to date were classified as a current liability, under deferred revenue and other current liabilities. 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 Condensed Consolidated Balance Sheets as part of CIEB. No material unapproved change orders or claims revenue were included in CIEB as of June 30, 2020, and December 31, 2019 . As new facts become known, an adjustment to the estimated recovery is made and reflected in the current period. Backlog - As of June 30, 2020, we have a backlog for our percentage of completion projects of $15.9 million, which will be recognized over the remaining contract term for each contract. The percentage of completion contract terms are typically one to three years. As of December 31, 2019, we had a backlog for our percentage of completion projects of $26.2 million. |
Leases | Leases Effective with adoption of Accounting Standards Update No. 2016-02 (ASU 2016-02), Leases (the new lease standard) on January 1, 2019, we now determine if an arrangement is a lease at inception. Operating leases right-of-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 June 2016, the FASB issued Accounting Standards Update No. 2016-13 (ASU 2016-13), which measures credit losses on most financial assets and certain other instruments that are not measured at fair value through net income. The update amends the impairment model to utilize a current expected credit loss (CECL) methodology in place of the incurred loss methodology for financial instruments, including trade receivables. The amendment requires entities to consider a broader range of information to estimate expected credit losses, which may result in earlier recognition of losses. Companies will apply this standard’s provisions as a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. The new standard is effective for interim and annual reporting periods beginning Company adopted the guidance effective January 1, 2020, and the guidance did not have a 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. 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 adopted the guidance effective January 1, 2020, and the guidance did not have a material impact on the Company’s condensed consolidated financial statements. In December 2019, the FASB issued Accounting Standards Update No. 2019-12 (ASU 2019-12), Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes. This ASU removes certain exceptions for investments, intraperiod allocations and interim tax calculations and adds guidance to reduce complexity in accounting for income taxes. We will be required to adopt the amended guidance in annual and interim periods beginning after December 15, 2020, with early adoption permitted. The various amendments in Update 2019-12 are applied on a retrospective basis, modified retrospective basis and prospective basis, depending on the amendment. We are in the process of evaluating the impact this amendment will have on our consolidated financial statements. In March 2020, the FASB issued Accounting Standards Update No. 2020-04 (ASU 2020-04), Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting. This ASU provides optional guidance for a limited period of time to ease the potential burden in accounting or recognizing the effects of the LIBOR or another reference rate reform on financing rate. The amendments are effective through December 31, 2022. We are currently in the process of evaluating the impact of the transition from LIBOR to alternative reference rates, but we do not expect a material impact on our consolidated financial statements. |
Goodwill and Intangibles (Table
Goodwill and Intangibles (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Amortization Expense for Intangibles | The following table sets forth expected amortization expense of intangibles for the remainder of 2020 and the following years (in thousands): 2020 3,233 2021 6,243 2022 5,834 2023 5,221 2024 3,659 Thereafter 1,436 $ 25,626 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Debt Disclosure [Abstract] | |
Credit Facilities and Long-Term Debt Arrangements | As of June 30, 2020, and December 31, 2019, the following credit facilities and long-term debt arrangements with financial institutions were in place: June 30, December 31, 2020 2019 (in thousands) Term Loan $ 14,000 $ 5,000 Term-Out Loan - 25,500 Revolving credit facility (RCF) 92,400 77,150 Vendor Finance Arrangement 2,557 - Paycheck Protection Program Loan 6,298 - Unamortized deferred financing costs (762 ) (466 ) Finance lease 460 543 114,953 107,727 Less: Current maturities of long-term debt (7,633 ) (10,627 ) Current maturities of Vendor Finance Arrangement (992 ) - Current maturities of finance lease (167 ) (166 ) $ 106,161 $ 96,934 |
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 2020 and the following years (in thousands): 2020 4,354 2021 8,731 2022 101,561 2023 307 Total debt, including current maturities $ 114,953 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Commitments And Contingencies Disclosure [Abstract] | |
Future Minimum Lease Obligations | As of June 30, 2020, future undiscounted minimum lease obligation maturities for the remainder of 2020 and future years were as follows (in thousands): 2020 $ 1,015 2021 1,487 2022 1,211 2023 1,195 2024 1,200 Thereafter 3,020 Total lease payments $ 9,128 Less present value discount (1,493 ) Amounts recognized in Balance Sheet $ 7,635 Amounts recognized in Balance Sheet Deferred revenue and other current liabilities 1,805 Right-of-use lease liability - long-term portion 5,830 Total right-to-use lease liability $ 7,635 |
Commercial Commitments Related to Satellite and Network Services | As of June 30, 2020, the Company had the following commercial commitments related to satellite and network services for the remainder of 2020 and the future years thereafter (in thousands): 2020 11,375 2021 12,654 2022 5,800 2023 204 $ 30,033 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Company's Business Segment Information | The Company’s reportable segment information as of and for the three and six months ended June 30, 2020 and 2019, is presented below. Three Months Ended June 30, 2020 Managed Communication Services Applications and Internet-of-Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 34,136 $ 8,805 $ 10,450 $ - $ 53,391 Cost of revenue (excluding depreciation and amortization) 22,985 3,221 7,481 - 33,687 Depreciation and amortization 4,843 1,154 157 759 6,913 Change in fair value of earn-out/contingent consideration - - - 3,916 3,916 Selling, general and administrative 2,436 1,563 302 7,359 11,660 Operating income (loss) $ 3,872 $ 2,867 $ 2,510 $ (12,034 ) $ (2,785 ) Capital expenditures 1,900 911 - 244 3,055 Three Months Ended June 30, 2019 Managed Communication Services Applications and Internet-of-Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 41,205 $ 8,005 $ 11,122 $ - $ 60,332 Cost of revenue (excluding depreciation and amortization) 25,019 4,387 7,113 - 36,519 Depreciation and amortization 5,059 1,226 639 755 7,679 Change in fair value of earn-out/contingent consideration - - - 1,284 1,284 Selling, general and administrative 3,346 835 570 12,659 17,410 Operating income (loss) $ 7,781 $ 1,557 $ 2,800 $ (14,698 ) $ (2,560 ) Capital expenditures $ 3,689 $ 403 $ - $ 481 $ 4,573 Six Months Ended June 30, 2020 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 74,032 $ 17,548 $ 20,572 $ - $ 112,152 Cost of revenue (excluding depreciation and amortization) 48,487 7,782 15,368 - 71,637 Depreciation and amortization 9,502 2,336 321 1,685 13,844 Impairment of goodwill 21,755 - 1,386 - 23,141 Change in fair value of earn- out/contingent consideration - - - 3,916 3,916 Selling, general and administrative 5,243 3,183 706 19,169 28,301 Operating income (loss) $ (10,955 ) $ 4,247 $ 2,791 $ (24,770 ) $ (28,687 ) Total assets $ 127,535 $ 35,690 $ 32,340 $ 22,468 $ 218,033 Capital expenditures 4,739 1,425 - 588 6,752 Six Months Ended June 30, 2019 Managed Communications Services Applications and Internet-of- Things Systems Integration Corporate and Eliminations Consolidated Total (in thousands) Revenue $ 83,538 $ 16,020 $ 18,284 $ - $ 117,842 Cost of revenue (excluding depreciation and amortization) 52,004 8,884 12,087 - 72,975 Depreciation and amortization 11,323 2,457 1,301 1,510 16,591 Change in fair value of earn-out/contingent consideration - - - 1,284 1,284 Selling, general and administrative 7,143 1,400 1,694 27,436 37,673 Operating income (loss) $ 13,068 $ 3,279 $ 3,202 $ (30,230 ) $ (10,681 ) Total assets $ 159,874 $ 45,281 $ 24,747 $ 14,471 $ 244,373 Capital expenditures $ 10,325 $ 836 $ - $ 501 $ 11,662 |
Revenue Earned from Domestic and International Operations | The following table presents revenue earned from the Company’s domestic and international operations for the three and six months ended June 30, 2020 and 2019. 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 monitored to ensure the location of service information is properly reflected. Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 (in thousands) Domestic $ 22,582 $ 28,881 $ 45,857 $ 53,508 International 30,809 31,451 66,295 64,334 Total $ 53,391 $ 60,332 $ 112,152 $ 117,842 |
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 June 30, 2020 and December 31, 2019. June 30, December 31, 2020 2019 (in thousands) Domestic $ 66,586 $ 76,253 International 39,512 67,631 Total $ 106,098 $ 143,884 |
Basis of Presentation - Additio
Basis of Presentation - Additional Information (Detail) - USD ($) $ in Millions | 6 Months Ended | |
Jun. 30, 2020 | Dec. 31, 2019 | |
Revenue recognized from customers | $ 1.6 | $ 1 |
Systems Integration Projects [Member] | ||
Costs and estimated earnings | 13 | 13.3 |
Backlog from revenue contract | $ 15.9 | $ 26.2 |
Systems Integration Projects [Member] | Maximum [Member] | ||
Remaining contract term | 1 year | |
Systems Integration Projects [Member] | Minimum [Member] | ||
Remaining contract term | 3 years |
Business and Credit Concentra_2
Business and Credit Concentrations - Additional Information (Detail) - Sales Revenue, Net [Member] | 6 Months Ended |
Jun. 30, 2020Customer | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Percentage of revenue generated from top five customers | 28.70% |
Number of significant customers | 0 |
Royal Dutch [Member] | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Maximum percentage of revenue generated from single customer | 10.00% |
Goodwill and Intangibles - Addi
Goodwill and Intangibles - Additional Information (Detail) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)ReportingUnit | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Goodwill And Intangible Assets Impairment [Line Items] | |||||
Reporting units | ReportingUnit | 2 | ||||
Impairment of goodwill | $ 23,141 | ||||
Goodwill | $ 20,134 | 20,134 | $ 46,792 | ||
Impairment of intangibles | 0 | ||||
Intangibles, net | 25,626 | 25,626 | $ 30,145 | ||
Amortization expense | 1,900 | $ 2,400 | $ 3,900 | $ 4,900 | |
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 | ||||
Managed Communication Services [Member] | |||||
Goodwill And Intangible Assets Impairment [Line Items] | |||||
Goodwill | 21,800 | $ 21,800 | |||
Applications and Internet-of-Things [Member] | |||||
Goodwill And Intangible Assets Impairment [Line Items] | |||||
Goodwill | 20,100 | 20,100 | |||
Systems Integration [Member] | |||||
Goodwill And Intangible Assets Impairment [Line Items] | |||||
Goodwill | $ 1,400 | $ 1,400 |
Goodwill and Intangibles - Amor
Goodwill and Intangibles - Amortization Expense for Intangible Assets (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
2020 | $ 3,233 | |
2021 | 6,243 | |
2022 | 5,834 | |
2023 | 5,221 | |
2024 | 3,659 | |
Thereafter | 1,436 | |
Total amortization expense of intangibles | $ 25,626 | $ 30,145 |
Restricted Cash - Additional In
Restricted Cash - Additional Information (Detail) - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 |
Restricted cash, current | $ 42,000 | $ 41,000 | |
Restricted cash, non-current | $ 1,500,000 | 1,522,000 | $ 1,522,000 |
Current assets [Member] | |||
Restricted cash, current | 0 | 100,000 | |
Long-term assets [Member] | |||
Restricted cash, non-current | $ 1,500,000 | $ 1,500,000 |
Long-Term Debt - Credit Facilit
Long-Term Debt - Credit Facilities and Long-Term Debt Arrangements (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Debt Disclosure [Abstract] | ||
Term Loan | $ 14,000 | $ 5,000 |
Term-Out Loan | 25,500 | |
Revolving credit facility (RCF) | 92,400 | 77,150 |
Vendor Finance Arrangement | 2,557 | |
Paycheck Protection Program Loan | 6,298 | |
Unamortized deferred financing costs | (762) | (466) |
Finance lease | 460 | 543 |
Total debt, including current maturities | 114,953 | 107,727 |
Less: Current maturities of long-term debt | (7,633) | (10,627) |
Current maturities of Vendor Finance Arrangement | (992) | |
Current maturities of finance lease | (167) | (166) |
Long-term debt, non current portion | $ (106,161) | $ (96,934) |
Long-Term Debt - Additional Inf
Long-Term Debt - Additional Information (Detail) $ in Thousands | Feb. 21, 2020USD ($)Institution | May 31, 2020USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019 | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2016USD ($) |
Debt Instrument [Line Items] | ||||||||
Number of participating financial institutions | Institution | 4 | |||||||
Line of credit outstanding amount | $ 92,400 | $ 92,400 | $ 77,150 | |||||
Maturity of Term Loan / Maturity date | Jan. 31, 2023 | |||||||
Debt Instrument, Description of Variable Rate Basis | LIBOR | |||||||
Supplementary leverage ratio | 0.0303 | 0.0303 | ||||||
Weighted average interest rate | 6.00% | |||||||
Fixed Charge Coverage Ratio | 2.32% | 2.32% | ||||||
Vendor finance agreement , outstanding amount | $ 2,600 | $ 2,600 | ||||||
Quartely payments | 300 | |||||||
Proceeds from borrowings | 6,750 | $ 40,000 | ||||||
Performance bonds outstanding amount | 8,500 | 8,500 | ||||||
Surety Bonds And Similar Instruments Outstanding | 2,100 | $ 2,100 | ||||||
Performance bond facility | $ 1,500 | |||||||
Maturity date of performance bond facility | Jun. 30, 2021 | |||||||
Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit outstanding amount | $ 92,400 | $ 92,400 | ||||||
Revolving credit facility | $ 100,000 | |||||||
Amendment Credit Agreement [Member] | Term Out Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Maturity of Term Loan / Maturity date | Aug. 31, 2022 | |||||||
Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Fixed Charge Coverage Ratio | 1.25% | 1.25% | ||||||
Credit Agreement [Member] | Revolving Credit Facility [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Weighted average interest rate | 3.80% | 5.30% | 4.10% | 5.30% | ||||
Interest rate | 3.40% | 3.40% | ||||||
Credit Agreement [Member] | Revolving Credit Facility [Member] | Minimum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Supplementary leverage ratio | 0.0175 | |||||||
Credit Agreement [Member] | Revolving Credit Facility [Member] | Maximum [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Supplementary leverage ratio | 0.0325 | |||||||
Third Quarter 2020 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Funded debt to Adjusted EBITDA ratio | 3.25% | 3.25% | ||||||
Second Quarter 2021 [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Funded debt to Adjusted EBITDA ratio | 3.00% | 3.00% | ||||||
Remaining Quarter [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Funded debt to Adjusted EBITDA ratio | 2.75% | 2.75% | ||||||
Paycheck Protection Program Loan | Bank of America, N.A [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Proceeds from borrowings | $ 6,300 | |||||||
Borrowing capacity description | (i) the proceeds are used in the Cover Period, as defined in the application for loan forgiveness, after the funding of the loan, (ii) at least 60% of the forgiven amount is used for eligible payroll costs and (iii) the remaining proceeds are used for interest on mortgages, rents, or utilities, and interest on other debt obligations incurred before February 15, 2020. | |||||||
Debt repayment term | 2 years | |||||||
Accrued interest | 1.00% | |||||||
Forgiveness of loan | $ 2,000 | |||||||
Paycheck Protection Program Loan | Minimum [Member] | Bank of America, N.A [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Loan forgiveness, percentage | 60.00% | |||||||
Term Loan [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit outstanding amount | $ 14,000 | $ 14,000 | ||||||
Maturity of Term Loan / Maturity date | Mar. 31, 2022 | |||||||
Debt Instrument, Periodic Payment, Principal | $ 2,000 | |||||||
Term Loan [Member] | Amendment Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit outstanding amount | $ 16,000 | |||||||
Accordion Feature [Member] | Amendment Credit Agreement [Member] | ||||||||
Debt Instrument [Line Items] | ||||||||
Line of credit outstanding amount | $ 30,000 |
Long-Term Debt - Aggregate Prin
Long-Term Debt - Aggregate Principal Maturities of Long-Term Debt (Detail) $ in Thousands | Jun. 30, 2020USD ($) |
Debt Disclosure [Abstract] | |
2020 | $ 4,354 |
2021 | 8,731 |
2022 | 101,561 |
2023 | 307 |
Total debt, including current maturities | $ 114,953 |
Fair Value Disclosure - Additio
Fair Value Disclosure - Additional Information (Detail) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | 6 Months Ended | |||
May 31, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||||||
Change in fair value of earn-out/contingent consideration | $ 3,916 | $ 1,284 | $ 3,916 | $ 1,284 | ||
Royalty payments | 100 | 100 | ||||
Intelie Solucoes Em Informatica S A [Member] | ||||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||||||
Contingent consideration earn-out, estimated payment | 13,700 | 13,700 | $ 9,700 | |||
Maximum remaining earn-out consideration | 13,900 | |||||
Business combination, contingent consideration, liability, current | 13,700 | 13,700 | 4,400 | |||
Business combination, contingent consideration, liability, noncurrent | 5,300 | 5,300 | 5,300 | |||
Change in fair value of earn-out/contingent consideration | 3,900 | 1,300 | 3,900 | 1,300 | ||
Number of Stock Issued For Acquisition | 208,356 | |||||
Stock issued for acquisition | $ 3,000 | |||||
Intelie Solucoes Em Informatica S A [Member] | Interest Expense [Member] | ||||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||||||
Change in fair value of earn-out/contingent consideration | 100 | $ 100 | 100 | $ 100 | ||
Cyphre Security Solutions [Member] | ||||||
Fair Value Inputs Assets Liabilities Quantitative Information [Line Items] | ||||||
Contingent consideration earn-out, estimated payment | 3,000 | 3,000 | 3,100 | |||
Business combination, contingent consideration, liability, current | 300 | 300 | 300 | |||
Business combination, contingent consideration, liability, noncurrent | 2,700 | 2,700 | $ 2,700 | |||
Royalty payments | 0 | 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 | $ 200 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Income Tax Disclosure [Abstract] | ||||
Effective income tax rate | 3.10% | 56.20% | 2.70% | 36.90% |
Reductions related to lapses in statue of limitations | $ 4.4 |
Stock-Based Compensation - Addi
Stock-Based Compensation - Additional Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Stock options, forfeited | 23,619 | |||
Stock-based compensation | $ 800 | $ 1,200 | $ 4,686 | $ 5,628 |
Total unrecognized compensation cost | $ 7,300 | $ 7,300 | ||
Restricted Stock Units RSUs [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
RSUs, forfeited | 59,056 | |||
2019 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 | 836,439 | |||
2019 Omnibus Incentive Plan [Member] | Share-based Payment Arrangement, Tranche Three [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations, shares | 602,457 | |||
2019 Omnibus Incentive Plan [Member] | Vesting Twenty Twenty One [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Issuance of common stock upon the vesting of Restricted Stock Units, net of share cancellations, shares | 233,982 | |||
2006 Long Term Incentive Plan [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Weighted-average period | 1 year 10 months 24 days |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 6 Months Ended | ||||
Jul. 31, 2019 | Jun. 30, 2019 | Sep. 30, 2020 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Commitments And Contingencies [Line Items] | |||||||
Recognized expense under operating leases | $ 0.7 | $ 0.7 | $ 1.2 | $ 1.4 | |||
Operating lease right-of-use assets | $ 6.2 | $ 6.2 | |||||
Operating lease,weighted-average discount rate | 5.10% | 5.10% | |||||
Weighted-average remaining lease term | 6 years 10 months 24 days | 6 years 10 months 24 days | |||||
GX Dispute [Member] | |||||||
Commitments And Contingencies [Line Items] | |||||||
Long term purchase commitment amount, maximum | $ 65 | ||||||
Damages Paid | $ 45 | ||||||
Legal expenses | $ 5 | $ 2.2 | $ 4.4 | ||||
Accrued liability | $ 0.8 | $ 0.8 | |||||
GX Dispute [Member] | Forecast | |||||||
Commitments And Contingencies [Line Items] | |||||||
Damages Paid | $ 0.8 |
Commitments and Contingencies_2
Commitments and Contingencies - Future Minimum Lease Obligations (Detail) $ in Thousands | Jun. 30, 2020USD ($) |
Operating Leases Future Minimum Payments Due [Abstract] | |
2020 | $ 1,015 |
2021 | 1,487 |
2022 | 1,211 |
2023 | 1,195 |
2024 | 1,200 |
Thereafter | 3,020 |
Total lease payments | 9,128 |
Less present value discount | (1,493) |
Amounts recognized in Balance Sheet | 7,635 |
Deferred revenue and other current liabilities | 1,805 |
Right-of-use lease liability - long-term portion | 5,830 |
Total right-to-use lease liability | $ 7,635 |
Commitments and Contingencies_3
Commitments and Contingencies - Commercial Commitments Related to Satellite and Network Services (Detail) $ in Thousands | Jun. 30, 2020USD ($) |
Commitments And Contingencies Disclosure [Abstract] | |
2020 | $ 11,375 |
2021 | 12,654 |
2022 | 5,800 |
2023 | 204 |
Other Commitment total | $ 30,033 |
Segment Information - Company's
Segment Information - Company's Business Segment Information (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Revenue | $ 53,391 | $ 60,332 | $ 112,152 | $ 117,842 | |
Cost of revenue (excluding depreciation and amortization) | 33,687 | 36,519 | 71,637 | 72,975 | |
Depreciation and amortization | 6,913 | 7,679 | 13,844 | 16,591 | |
Change in fair value of earn-out/contingent consideration | 3,916 | 1,284 | 3,916 | 1,284 | |
Selling, general and administrative | 11,660 | 17,410 | 28,301 | 37,673 | |
Operating loss | (2,785) | (2,560) | (28,687) | (10,681) | |
Total assets | 218,033 | 244,373 | 218,033 | 244,373 | $ 250,980 |
Capital expenditures | 3,055 | 4,573 | 6,752 | 11,662 | |
Impairment of goodwill | 23,141 | ||||
Reportable Segments [Member] | Managed Communication Services [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 34,136 | 41,205 | 74,032 | 83,538 | |
Cost of revenue (excluding depreciation and amortization) | 22,985 | 25,019 | 48,487 | 52,004 | |
Depreciation and amortization | 4,843 | 5,059 | 9,502 | 11,323 | |
Selling, general and administrative | 2,436 | 3,346 | 5,243 | 7,143 | |
Operating loss | 3,872 | 7,781 | (10,955) | 13,068 | |
Total assets | 127,535 | 159,874 | 127,535 | 159,874 | |
Capital expenditures | 1,900 | 3,689 | 4,739 | 10,325 | |
Impairment of goodwill | 21,755 | ||||
Reportable Segments [Member] | Applications and Internet-of-Things [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 8,805 | 8,005 | 17,548 | 16,020 | |
Cost of revenue (excluding depreciation and amortization) | 3,221 | 4,387 | 7,782 | 8,884 | |
Depreciation and amortization | 1,154 | 1,226 | 2,336 | 2,457 | |
Selling, general and administrative | 1,563 | 835 | 3,183 | 1,400 | |
Operating loss | 2,867 | 1,557 | 4,247 | 3,279 | |
Total assets | 35,690 | 45,281 | 35,690 | 45,281 | |
Capital expenditures | 911 | 403 | 1,425 | 836 | |
Reportable Segments [Member] | Systems Integration [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Revenue | 10,450 | 11,122 | 20,572 | 18,284 | |
Cost of revenue (excluding depreciation and amortization) | 7,481 | 7,113 | 15,368 | 12,087 | |
Depreciation and amortization | 157 | 639 | 321 | 1,301 | |
Selling, general and administrative | 302 | 570 | 706 | 1,694 | |
Operating loss | 2,510 | 2,800 | 2,791 | 3,202 | |
Total assets | 32,340 | 24,747 | 32,340 | 24,747 | |
Impairment of goodwill | 1,386 | ||||
Corporate and Eliminations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Depreciation and amortization | 759 | 755 | 1,685 | 1,510 | |
Change in fair value of earn-out/contingent consideration | 3,916 | 1,284 | 3,916 | 1,284 | |
Selling, general and administrative | 7,359 | 12,659 | 19,169 | 27,436 | |
Operating loss | (12,034) | (14,698) | (24,770) | (30,230) | |
Total assets | 22,468 | 14,471 | 22,468 | 14,471 | |
Capital expenditures | $ 244 | $ 481 | $ 588 | $ 501 |
Segment Information - Revenue E
Segment Information - Revenue Earned from Domestic and International Operations (Detail) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 53,391 | $ 60,332 | $ 112,152 | $ 117,842 |
Domestic [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | 22,582 | 28,881 | 45,857 | 53,508 |
International [Member] | ||||
Revenues From External Customers And Long Lived Assets [Line Items] | ||||
Revenue | $ 30,809 | $ 31,451 | $ 66,295 | $ 64,334 |
Segment Information - Long - Li
Segment Information - Long - Lived Assets, Net of Accumulated Depreciation for Both Domestic and International Operations (Detail) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long lived assets | $ 106,098 | $ 143,884 |
Domestic [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long lived assets | 66,586 | 76,253 |
International [Member] | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long lived assets | $ 39,512 | $ 67,631 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 0 | $ 100,000 | $ 100,000 | $ 100,000 |
Avant Venture Capital AS [Member] | ||||
Related Party Transaction [Line Items] | ||||
Purchases from related party | $ 100,000 | $ 600,000 | $ 100,000 | $ 600,000 |
Equity method investment, Ownership percentage | 24.00% | 24.00% |
Restructuring Costs - Cost Re_2
Restructuring Costs - Cost Reduction Plans - Additional Information (Detail) $ in Millions | 6 Months Ended |
Jun. 30, 2019USD ($)Employee | |
Employee Severance [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Number of employees lay off | Employee | 25 |
General and Administrative Expenses [Member] | |
Restructuring Cost and Reserve [Line Items] | |
Restructuring charges, pre-tax | $ | $ 0.6 |