Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Oct. 31, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'C&J Energy Services, Inc. | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 55,335,224 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001509273 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Large Accelerated Filer | ' |
Entity Well-known Seasoned Issuer | 'Yes | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Consolidated_Balance_Sheets_Cu
Consolidated Balance Sheets (Current Period Unaudited) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 | |
In Thousands, unless otherwise specified | |||
Current assets: | ' | ' | |
Cash and cash equivalents | $20,295 | $14,414 | |
Accounts receivable, net of allowance of $2,081 at September 30, 2014 and $1,668 at December 31, 2013 | 283,283 | 152,696 | |
Inventory, net | 92,629 | 70,946 | |
Prepaid and other current assets | 19,781 | 17,066 | |
Deferred tax assets | 1,353 | 1,722 | |
Total current assets | 417,341 | 256,844 | |
Property, plant and equipment, net of accumulated depreciation of $216,150 at September 30, 2014 and $148,954 at December 31, 2013 | 730,957 | 535,574 | |
Other assets: | ' | ' | |
Goodwill | 220,266 | 205,798 | |
Intangible assets, net | 132,196 | 123,038 | |
Deposits on equipment under construction | 9,237 | 4,331 | |
Deferred financing costs, net of accumulated amortization of $3,364 at September 30, 2014 and $2,494 at December 31, 2013 | 2,250 | 2,688 | |
Other noncurrent assets | 7,839 | 4,027 | |
Total assets | 1,520,086 | 1,132,300 | |
Current liabilities: | ' | ' | |
Accounts payable | 196,694 | 88,576 | |
Payroll and related costs | 27,902 | 13,711 | |
Accrued expenses | 26,718 | 18,619 | |
Income taxes payable | ' | 266 | |
Current capital lease obligations | 4,040 | 2,861 | |
Other current liabilities | 3,468 | 1,100 | |
Total current liabilities | 258,822 | 125,133 | |
Deferred tax liabilities | 161,051 | 145,215 | |
Long-term debt and capital lease obligations | 341,814 | 164,205 | |
Other long-term liabilities | 2,500 | 1,596 | |
Total liabilities | 764,187 | 436,149 | |
Commitments and contingencies | ' | ' | |
Stockholders' equity | ' | ' | |
Common stock, par value of $0.01, 100,000,000 shares authorized, 55,339,023 issued and outstanding at September 30, 2014 and 54,604,124 issued and outstanding at December 31, 2013 | 553 | 546 | |
Additional paid-in capital | 267,417 | 254,188 | |
Retained earnings | 487,929 | 441,417 | |
Total stockholders' equity | 755,899 | 696,151 | [1] |
Total liabilities and stockholders' equity | $1,520,086 | $1,132,300 | |
[1] | Audited |
Consolidated_Balance_Sheets_Cu1
Consolidated Balance Sheets (Current Period Unaudited) (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, except Share data, unless otherwise specified | ||
Nccounts rP5cP5ivablP5, allowancP5 | $2,081 | $1,668 |
PropP5rty, plant and P5quipmP5nt, accumulatP5d dP5prP5ciation | 216,150 | 148,954 |
DP5fP5rrP5d financing costs, accumulatP5d amortization | $3,364 | $2,494 |
Common stock, par value | $0.01 | $0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares issued | 55,339,023 | 54,604,124 |
Common stock, shares outstanding | 55,339,023 | 54,604,124 |
Consolidated_Statements_of_Ope
Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Revenue | $439,978 | $261,931 | $1,124,436 | $804,938 |
Costs and expenses: | ' | ' | ' | ' |
Direct costs | 315,406 | 182,669 | 813,989 | 549,824 |
Selling, general and administrative expenses | 50,596 | 34,592 | 141,902 | 99,904 |
Research and development | 3,450 | 1,804 | 9,808 | 2,267 |
Depreciation and amortization | 28,499 | 19,213 | 75,743 | 53,695 |
Loss on disposal of assets | 16 | 194 | 15 | 516 |
Operating income | 42,011 | 23,459 | 82,979 | 98,732 |
Other income (expense): | ' | ' | ' | ' |
Interest expense, net | -2,778 | -1,585 | -6,722 | -4,918 |
Other income, net | 206 | 47 | 584 | 167 |
Total other income (expense) | -2,572 | -1,538 | -6,138 | -4,751 |
Income before income taxes | 39,439 | 21,921 | 76,841 | 93,981 |
Income tax expense | 15,623 | 8,796 | 30,329 | 34,865 |
Net income | $23,816 | $13,125 | $46,512 | $59,116 |
Net income per common share: | ' | ' | ' | ' |
Basic (in Dollars per share) | $0.44 | $0.25 | $0.86 | $1.12 |
Diluted (in Dollars per share) | $0.42 | $0.24 | $0.82 | $1.07 |
Weighted average common shares outstanding: | ' | ' | ' | ' |
Basic (in Shares) | 53,950 | 53,355 | 53,799 | 52,898 |
Diluted (in Shares) | 56,804 | 55,486 | 56,634 | 55,199 |
Consolidated_Statements_of_Cha
Consolidated Statements of Changes in Stockholdersb Equity (USD $) | Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Total | |
In Thousands | |||||
Balance at Dec. 31, 2012 | [1] | $531 | $224,348 | $375,012 | $599,891 |
Balance (in Shares) at Dec. 31, 2012 | [1] | 53,132 | ' | ' | ' |
Issuance of restricted stock, net of forfeitures (in Shares) | 669 | ' | ' | ' | |
Issuance of restricted stock, net of forfeitures | 7 | -7 | ' | ' | |
Employee tax withholding on restricted stock vesting | -1 | -1,374 | ' | -1,375 | |
Employee tax withholding on restricted stock vesting (in Shares) | -74 | ' | ' | ' | |
Exercise of stock options | 9 | 5,210 | ' | 5,219 | |
Exercise of stock options (in Shares) | 877 | ' | ' | ' | |
Tax effect of stock-based compensation | ' | 3,430 | ' | 3,430 | |
Stock-based compensation | ' | 22,581 | ' | 22,581 | |
Net income | ' | ' | 66,405 | 66,405 | |
Balance at Dec. 31, 2013 | [1] | 546 | 254,188 | 441,417 | 696,151 |
Balance (in Shares) at Dec. 31, 2013 | [1] | 54,604 | ' | ' | ' |
Issuance of restricted stock, net of forfeitures (in Shares) | 727 | ' | ' | ' | |
Issuance of restricted stock, net of forfeitures | 7 | -7 | ' | ' | |
Employee tax withholding on restricted stock vesting | -2 | -4,329 | ' | -4,331 | |
Employee tax withholding on restricted stock vesting (in Shares) | -150 | ' | ' | ' | |
Exercise of stock options | 2 | 831 | ' | 833 | |
Exercise of stock options (in Shares) | 158 | ' | ' | ' | |
Tax effect of stock-based compensation | ' | 2,108 | ' | 2,108 | |
Stock-based compensation | ' | 14,626 | ' | 14,626 | |
Net income | ' | ' | 46,512 | 46,512 | |
Balance at Sep. 30, 2014 | $553 | $267,417 | $487,929 | $755,899 | |
Balance (in Shares) at Sep. 30, 2014 | 55,339 | ' | ' | ' | |
[1] | Audited |
Consolidated_Statements_of_Cas
Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Cash flows from operating activities: | ' | ' |
Net income | $46,512 | $59,116 |
Adjustments to reconcile net income to net cash provided by operating activities: | ' | ' |
Depreciation and amortization | 75,743 | 53,695 |
Deferred income taxes | 6,690 | 1,019 |
Provision for doubtful accounts, net of write-offs | 450 | 484 |
Equity in earnings from unconsolidated affiliate | -399 | ' |
Loss on disposal of assets | 15 | 516 |
Stock-based compensation expense | 14,626 | 17,282 |
Amortization of deferred financing costs | 870 | 870 |
Inventory write-down | ' | 870 |
Changes in operating assets and liabilities: | ' | ' |
Accounts receivable | -128,142 | 42,418 |
Inventory | -20,082 | 1,326 |
Prepaid and other current assets | -2,406 | -8,152 |
Accounts payable | 94,625 | -4,750 |
Payroll and related costs and accrued expenses | 21,332 | 5,148 |
Income taxes payable | 658 | -1,381 |
Other | 2,186 | 1,551 |
Net cash provided by operating activities | 112,678 | 170,012 |
Cash flows from investing activities: | ' | ' |
Purchases of and deposits on property, plant and equipment | -222,379 | -109,154 |
Proceeds from disposal of property, plant and equipment | 673 | 1,015 |
Investment in unconsolidated affiliate | -3,000 | ' |
Payments made for business acquisitions, net of cash acquired | -33,244 | -7,934 |
Net cash used in investing activities | -257,950 | -116,073 |
Cash flows from financing activities: | ' | ' |
Proceeds from revolving debt | 203,000 | 25,000 |
Payments on revolving debt | -47,000 | -70,000 |
Payments of capital lease obligations | -3,059 | -1,537 |
Financing costs | -433 | ' |
Proceeds from stock options exercised | 833 | 4,842 |
Employee tax withholding on restricted stock vesting | -4,331 | -1,345 |
Excess tax benefit from stock-based award activity | 2,143 | 3,316 |
Net cash provided by (used in) financing activities | 151,153 | -39,724 |
Net increase in cash and cash equivalents | 5,881 | 14,215 |
Cash and cash equivalents, beginning of period | 14,414 | 14,442 |
Cash and cash equivalents, end of period | 20,295 | 28,657 |
Supplemental cash flow disclosure: | ' | ' |
Cash paid for interest | 5,722 | 4,117 |
Cash paid for taxes | 15,975 | 31,912 |
Non-cash consideration for business acquisition | ' | 900 |
Non-cash investing and financing activity | ' | ' |
Capital lease obligations | 25,847 | ' |
Change in accrued capital expenditures | $13,413 | ($1,150) |
Note_1_Organization_Nature_of_
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Basis of Presentation and Significant Accounting Policies [Text Block] | ' | ||||||||||||||||
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies | |||||||||||||||||
C&J Energy Services, Inc., a Delaware corporation, was founded in Texas in 1997. Through its subsidiaries, the Company operates in three reportable segments: Stimulation and Well Intervention Services, Wireline Services and Equipment Manufacturing. The Company provides hydraulic fracturing, coiled tubing and other well stimulation services through its Stimulation and Well Intervention Services segment and cased-hole wireline, pumpdown and other complementary services through its Wireline Services segment to oil and natural gas exploration and production companies throughout the United States. With the development of a specialty chemicals business and strategic acquisitions during 2013, the Company now blends and supplies specialty chemicals for completion and production services, and also manufactures and provides downhole tools and related directional drilling technology and data acquisition and control systems through the Stimulation and Well Intervention Services segment. These products are provided to third-party customers in the energy services industry and are also used in the Company’s operations and equipment. In addition, the Company manufactures, refurbishes and repairs equipment and provides oilfield parts and supplies for third-party customers in the energy services industry through its Equipment Manufacturing segment. The Company also fulfills its internal equipment demands through this segment. See “Note 6 – Segment Information” for further discussion regarding the Company’s reportable segments. As used herein, references to the “Company” or “C&J” are to C&J Energy Services, Inc. together with its consolidated subsidiaries, including C&J International B.V. and C&J International Middle East FZCO. | |||||||||||||||||
Basis of Presentation and Principles of Consolidation. The accompanying consolidated financial statements have not been audited by the Company’s independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2013 is derived from consolidated financial statements audited by the Company’s predecessor auditor. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for fair presentation have been included. | |||||||||||||||||
These consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2013, which are included in the Company’s Annual Report on Form 10-K, as filed with the SEC. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. | |||||||||||||||||
These consolidated financial statements include the accounts of the Company. All significant inter-company transactions and accounts have been eliminated upon consolidation. | |||||||||||||||||
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are used in, but are not limited to, determining the following: allowance for doubtful accounts, recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, inventory reserves, income taxes and stock-based compensation. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. | |||||||||||||||||
New Accounting Pronouncements. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | |||||||||||||||||
Cash and Cash Equivalents. For purposes of the consolidated statement of cash flows, cash is defined as cash on-hand, demand deposits, and short-term investments with initial maturities of three months or less. The Company maintains its cash and cash equivalents in various financial institutions, which at times may exceed federally insured amounts. Management believes that this risk is not significant. | |||||||||||||||||
Accounts Receivable and Allowance for Doubtful Accounts. Accounts receivable are stated at the amount billed to customers and are ordinarily due within 30-45 days of receipt of invoice. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Provisions for doubtful accounts are recorded when it is deemed probable that the customer will not make the required payments at either the contractual due dates or in the future. | |||||||||||||||||
Inventories. Inventories for the Stimulation and Well Intervention Services segment and the Wireline Services segment consist of finished goods and raw materials, including equipment components, chemicals, proppants, supplies and materials for the segments’ operations. Inventories for the Equipment Manufacturing segment consist of raw materials and work-in-process, including equipment components, supplies and materials. See “Note 6 – Segment Information” for further discussion regarding the Company’s reportable segments. | |||||||||||||||||
Inventories are stated at the lower of cost or market (net realizable value) on a first-in, first-out basis and appropriate consideration is given to deterioration, obsolescence and other factors in evaluating net realizable value. Inventories consisted of the following (in thousands): | |||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Raw materials | $ | 43,172 | $ | 31,445 | |||||||||||||
Work-in-process | 8,984 | 3,652 | |||||||||||||||
Finished goods | 41,563 | 36,690 | |||||||||||||||
Total inventory | 93,719 | 71,787 | |||||||||||||||
Inventory reserve | (1,090 | ) | (841 | ) | |||||||||||||
Inventory, net | $ | 92,629 | $ | 70,946 | |||||||||||||
Revenue Recognition. All revenue is recognized when persuasive evidence of an arrangement exists, the service is complete or the equipment has been delivered to the customer, the amount is fixed or determinable and collectability is reasonably assured, as follows: | |||||||||||||||||
Hydraulic Fracturing Revenue. The Company provides hydraulic fracturing services pursuant to contractual arrangements, such as term contracts and pricing agreements, or on a spot market basis. Under either scenario, revenue is recognized and customers are invoiced upon the completion of each job, which can consist of one or more fracturing stages. Once a job has been completed to the customer’s satisfaction, a field ticket is written that includes charges for the service performed and the consumables (such as fluids and proppants) used during the course of service. The field ticket may also include charges for the mobilization and set-up of equipment, any additional equipment used on the job, and other miscellaneous consumables. | |||||||||||||||||
Historically, most of the Company’s hydraulic fracturing services were performed under long-term “take-or-pay” contracts, the last of which expired in February 2014. Under these legacy term contracts, customers were typically obligated to pay on a monthly basis for a specified number of hours of service, whether or not those services were actually used. To the extent customers used more than the specified contracted minimums, the Company would be paid a pre-agreed amount for the provision of such additional services. | |||||||||||||||||
Pursuant to pricing agreements and other contractual arrangements which the Company may enter into from time to time, such as those associated with an award from a bid process, customers typically commit to targeted utilization levels based on a specified number of hours of service at agreed-upon pricing, but without termination penalties or obligations to pay for services not used by the customer. In addition, the agreed-upon pricing is typically subject to periodic review, as specifically defined in the agreement, and may be adjusted upon the agreement of both parties. | |||||||||||||||||
Rates for services performed on a spot market basis are based on an agreed-upon hourly spot market rate for a specified number of hours of service. | |||||||||||||||||
Coiled Tubing and Other Well Stimulation Revenue. The Company provides coiled tubing and other well stimulation services, including nitrogen, pressure pumping and thru-tubing services, primarily on a spot market basis. Jobs for these services are typically short-term in nature, lasting anywhere from a few hours to multiple days. Revenue is recognized upon completion of each day’s work based upon a completed field ticket. The field ticket includes charges for the services performed, and the consumables (such as stimulation fluids, nitrogen and coiled tubing materials) used during the course of service. The field ticket may also include charges for the mobilization and set-up of equipment, the personnel on the job, any additional equipment used on the job, and other miscellaneous consumables.The Company typically charges the customer for these services and resources on an hourly basis at agreed-upon spot market rates. | |||||||||||||||||
Revenue from Materials Consumed While Performing Services. The Company generates revenue from fluids, proppants and other materials that are consumed while performing hydraulic fracturing services. For services performed on a spot market basis, the required consumables are typically provided by the Company and the customer is billed for those consumables at cost plus an agreed-upon markup. For services performed on a contractual basis, when the consumables are provided by the Company, the customer typically is billed for those consumables at a negotiated contractual rate. When consumables are supplied by the customer, the Company typically charges handling fees based on the amount of consumables used. | |||||||||||||||||
In addition, ancillary to coiled tubing and other well stimulation services revenue, the Company generates revenue from stimulation fluids, nitrogen, coiled tubing materials and other consumables used during those processes. | |||||||||||||||||
Wireline Revenue. The Company provides cased-hole wireline, pumpdown and other complementary services, including logging, perforating, pipe recovery and pressure testing services on a spot market basis. Jobs for these services are typically short-term in nature, lasting anywhere from a few hours to multiple days. Revenue is recognized when the services and equipment are provided and the job is completed. The Company typically charges the customer on a per job basis for these services at agreed-upon spot market rates. | |||||||||||||||||
Equipment Manufacturing Revenue. The Company enters into arrangements to construct new equipment, refurbish and repair equipment and provide oilfield parts and supplies to third-party customers in the energy services industry. Revenue is recognized and the customer is invoiced upon the completion and delivery of each order to the customer. | |||||||||||||||||
Stock-Based Compensation. The Company’s stock-based compensation plans provide the ability to grant equity awards to the Company’s employees, consultants and non-employee directors. As of September 30, 2014, only nonqualified stock options and restricted stock had been granted under such plans. The Company values option grants based on the grant date fair value by using the Black-Scholes option-pricing model and values restricted stock grants based on the closing price of C&J’s common stock on the grant date. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Further information regarding the Company’s stock-based compensation arrangements and the related accounting treatment can be found in “Note 4 – Stock-Based Compensation.” | |||||||||||||||||
Fair Value of Financial Instruments. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, long-term debt and capital lease obligations. The recorded values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The carrying value of long-term debt and capital lease obligations approximate their fair value, as the interest rates approximate market rates. | |||||||||||||||||
Equity Method Investments. The Company has an investment in a joint venture which is accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over operating and financial policies of the joint venture. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings and losses of these investments. The Company eliminates all significant intercompany transactions, including the intercompany portion of transactions with equity method investees, from the consolidated financial results. | |||||||||||||||||
Income Taxes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. | |||||||||||||||||
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the likelihood and extent that deferred tax assets will be realized, consideration is given to projected future taxable income and tax planning strategies. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |||||||||||||||||
The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. Previously recognized tax positions are reversed in the first period in which it is no longer more-likely-than-not that the tax position would be sustained upon examination. Income tax related interest and penalties, if applicable, are recorded as a component of the provision for income tax expense. | |||||||||||||||||
The effective tax rate was 39.5% for the nine-month period ending September 30, 2014 as compared to 37.1% for the nine-month period ending September 30, 2013. The increase in the effective tax rate is primarily due to lower pre-tax book income, which caused permanent differences between book and taxable income and state income taxes to have a higher proportionate impact on the calculation of the effective tax rate, partially offset by the recognition of tax benefits for federal and state tax credits. | |||||||||||||||||
Earnings Per Share. Basic earnings per share is based on the weighted average number of shares of common stock (“common shares”) outstanding during the applicable period and excludes shares subject to outstanding stock options and shares of restricted stock. Diluted earnings per share is computed based on the weighted average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to outstanding stock options and restricted stock. | |||||||||||||||||
The following is a reconciliation of the components of the basic and diluted earnings per share calculations for the applicable periods: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Numerator: | |||||||||||||||||
Net income attributed to common shareholders | $ | 23,816 | $ | 13,125 | $ | 46,512 | $ | 59,116 | |||||||||
Denominator: | |||||||||||||||||
Weighted average common shares outstanding | 53,950 | 53,355 | 53,799 | 52,898 | |||||||||||||
Effect of potentially dilutive common shares: | |||||||||||||||||
Stock options | 2,442 | 1,981 | 2,358 | 2,090 | |||||||||||||
Restricted stock | 412 | 150 | 477 | 211 | |||||||||||||
Weighted average common shares outstanding and assumed conversions | 56,804 | 55,486 | 56,634 | 55,199 | |||||||||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.44 | $ | 0.25 | $ | 0.86 | $ | 1.12 | |||||||||
Diluted | $ | 0.42 | $ | 0.24 | $ | 0.82 | $ | 1.07 | |||||||||
A summary of securities excluded from the computation of basic and diluted earnings per share is presented below for the applicable periods: | |||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Basic earnings per share: | |||||||||||||||||
Restricted stock | 1,394 | 1,168 | 1,470 | 1,213 | |||||||||||||
Diluted earnings per share: | |||||||||||||||||
Anti-dilutive stock options | - | 1,089 | - | 1,114 | |||||||||||||
Anti-dilutive restricted stock | - | - | - | 219 | |||||||||||||
Potentially dilutive securities excluded as anti-dilutive | - | 1,089 | - | 1,333 | |||||||||||||
Reclassifications and immaterial adjustment. Certain reclassifications have been made to prior period consolidated financial statements to conform to the current period presentations. Additionally, an immaterial adjustment has been made to the Company’s consolidated statement of cash flows for the nine months ended September 30, 2013 to increase previously reported operating cash flows and decrease previously reported investing cash flows by $1.2 million to properly reflect the change in accrued capital expenditures on the consolidated statement of cash flows as a supplemental non-cash investing activity. This adjustment had no impact to the Company’s consolidated balance sheet or consolidated statement of operations for the nine months ended September 30, 2013. |
Note_2_LongTerm_Debt_and_Capit
Note 2 - Long-Term Debt and Capital Lease Obligations | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure Text Block [Abstract] | ' |
Long-term Debt [Text Block] | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations | |
Credit Facility | |
On April 19, 2011, the Company entered into a five-year senior secured revolving credit agreement which, as amended on June 5, 2012, has a borrowing base of $400.0 million (the “Credit Facility”). The aggregate amount by which the Company may periodically increase commitments through incremental facilities is $100.0 million, the sublimit for letters of credit is $200.0 million and the sublimit for Swing Line Loans is $25.0 million. Loans under the Credit Facility are denominated in U.S. dollars and will mature on April 19, 2016. Outstanding loans bear interest at either LIBOR or a base rate, at the Company’s election, plus an applicable margin that ranges from 1.25% to 2.00% for base rate loans and from 2.25% to 3.00% for LIBOR loans, based upon the Company’s Consolidated Leverage Ratio, which is the ratio of funded indebtedness to EBITDA for the Company on a consolidated basis. The Company is also required to pay a quarterly commitment fee of 0.5% on the unused portion of the Credit Facility. | |
As of September 30, 2014, $306.0 million was outstanding under the Credit Facility, along with $2.0 million in letters of credit, leaving $92.0 million available for borrowing. All obligations under the Credit Facility are guaranteed by the Company’s wholly-owned domestic subsidiaries, other than immaterial subsidiaries. The weighted average interest rate as of September 30, 2014 was 3.0%. | |
The Credit Facility contains customary affirmative and restrictive covenants including financial reporting, governance and notification requirements. The covenants require the Company to maintain, measured on a consolidated basis, (1) an Interest Coverage Ratio of not less than 3.00 to 1.00 and (2) a Consolidated Leverage Ratio of not greater than 3.25 to 1.00. Among other restrictions, the Company is unable to issue dividends under the terms of the Credit Facility. The Company was in compliance with all debt covenants under the Credit Facility as of September 30, 2014. | |
Capitalized terms used in this “Note 2 – Long-Term Debt and Capital Lease Obligations” but not defined herein are defined in the Credit Facility. | |
Capital Lease Obligations | |
In 2013, the Company entered into “build-to-suit” lease agreements for the construction of its new research and technology facility and its new corporate headquarters. Each lease is accounted for as a capital lease. The lease for the research and technology facility commenced upon completion of construction in October 2013, creating a capital lease obligation of $13.5 million. The lease for the corporate headquarters facility commenced upon completion of construction in March 2014, creating a capital lease obligation of $25.6 million. As of September 30, 2014, the Company had $35.8 million in long-term capital lease obligations associated with the new research and technology facility and corporate headquarters. | |
The Company leases certain service equipment, with the intent to purchase, under non-cancelable capital leases. The terms of these contracts range from three to four years with varying payment dates throughout each month. |
Note_3_Intangible_Assets
Note 3 - Intangible Assets | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||
Intangible Assets Disclosure [Text Block] | ' | ||||||||||||
Note 3 - Intangible Assets | |||||||||||||
Intangible assets consist of the following (in thousands): | |||||||||||||
Amortization | September 30, | December 31, | |||||||||||
Period | 2014 | 2013 | |||||||||||
Trade name (years) | 15-Oct | $ | 29,315 | $ | 27,665 | ||||||||
Customer relationships (years) | 15-Aug | 116,073 | 100,593 | ||||||||||
Non-compete (years) | 5-Apr | 1,810 | 1,600 | ||||||||||
Developed technology (years) | 10 | 2,110 | 2,110 | ||||||||||
IPR&D | Indefinite | 7,598 | 7,598 | ||||||||||
Trade name - Total Equipment | Indefinite | 6,247 | 6,247 | ||||||||||
163,153 | 145,813 | ||||||||||||
Less: accumulated amortization | (30,957 | ) | (22,775 | ) | |||||||||
Intangible assets, net | $ | 132,196 | $ | 123,038 | |||||||||
Note_4_StockBased_Compensation
Note 4 - Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | ' |
Disclosure of Compensation Related Costs, Share-based Payments [Text Block] | ' |
Note 4 - Stock-Based Compensation | |
The C&J Energy Services, Inc. 2012 Long-Term Incentive Plan (the “2012 LTIP”) provides for the grant of stock-based awards to the Company’s employees, consultants and non-employee directors. The following types of awards are available for issuance under the 2012 LTIP: incentive stock options and nonqualified stock options, stock appreciation rights, restricted stock, restricted stock units, dividend equivalent rights, phantom stock units, performance awards and share awards. To date, only nonqualified stock options and restricted stock have been awarded under the 2012 LTIP. | |
A total of 4.3 million shares of common stock were authorized and approved for issuance under the 2012 LTIP. This number of shares is subject to adjustment in the event of a reclassification, recapitalization, merger, consolidation, reorganization, spin-off, split-up, issuance of warrants, rights or debentures, stock dividend, stock split or reverse stock split, cash dividend, property dividend, combination or exchange of shares, repurchase of shares, change in corporate structure or any similar corporate event or transaction. This number of shares may also increase due to the termination of an award granted under the 2012 LTIP, or under the Company’s Prior Plans (as defined below), by expiration, forfeiture, cancellation or otherwise without the issuance of the shares of common stock. Approximately 2.6 million shares were available for issuance under the 2012 LTIP as of September 30, 2014. | |
Prior to the approval of the 2012 LTIP, all stock-based awards granted to the Company’s employees, consultants and non-employee directors were granted under the C&J Energy Services, Inc. 2010 Stock Option Plan (the “2010 Plan”), and prior to December 23, 2010, all stock-based awards were granted under the C&J Energy Services, Inc. 2006 Stock Option Plan (the “2006 Plan” and, together with the 2010 Plan, the “Prior Plans”). Only nonqualified stock options were awarded under the Prior Plans. Effective as of December 23, 2010 and May 29, 2012, respectively, no additional awards will be granted under the 2006 Plan and the 2010 Plan. | |
Stock Options | |
The fair value of each option award granted under the 2012 LTIP and the Prior Plans is estimated on the date of grant using the Black-Scholes option-pricing model. Option awards are generally granted with an exercise price equal to the market price of the Company’s common stock on the grant date. For options granted prior to the Company’s initial public offering, which closed on August 3, 2011, the calculation of the Company’s stock price involved the use of different valuation techniques, including a combination of an income and/or market approach. Determination of the fair value was a matter of judgment and often involved the use of significant estimates and assumptions. Additionally, due to the Company’s lack of historical volume of option activity, the expected term of options granted is derived using the “plain vanilla” method. In addition, expected volatilities have been based on comparable public company data, with consideration given to the Company’s limited historical data. The Company makes estimates with respect to employee termination and forfeiture rates of the options within the valuation model. The risk-free rate is based on the approximate U.S. Treasury yield rate in effect at the time of grant. No stock options were granted by the Company during the nine months ended September 30, 2014 and September 30, 2013. | |
As of September 30, 2014, the Company had approximately 5.1 million options outstanding to employees and non-employee directors. Option awards granted under the 2012 LTIP and the Prior Plans expire on the tenth anniversary of the grant date and generally vest over three years of continuous service with one-third vesting on each of the first, second and third anniversaries of the grant date. | |
Restricted Stock | |
Restricted stock is valued based on the closing price of the Company’s common stock on the New York Stock Exchange (“NYSE”) on the date of grant. During the nine months ended September 30, 2014, approximately 0.8 million shares of restricted stock were granted to employees and non-employee directors under the 2012 LTIP at fair market values ranging from $22.65 to $33.14 per share. During the nine months ended September 30, 2013, 0.7 million shares of restricted stock were granted to employees, consultants and non-employee directors under the 2012 LTIP at fair market values ranging from $19.25 to $23.69 per share. | |
To the extent permitted by law, the recipient of an award of restricted stock will have all of the rights of a stockholder with respect to the underlying shares of common stock, including the right to vote the common shares and to receive all dividends or other distributions made with respect to the common shares. Dividends on restricted stock will be deferred until the lapsing of the restrictions imposed on the shares and will be held by the Company for the account of the recipient (either in cash or to be reinvested in shares of restricted stock) until such time. Payment of the deferred dividends and accrued interest, if any, shall be made upon the lapsing of restrictions on the shares of restricted stock, and any dividends deferred in respect of any shares of restricted stock shall be forfeited upon the forfeiture of such shares of restricted stock. The Company has not issued dividends. | |
As of September 30, 2014, the Company had approximately 1.4 million restricted shares outstanding to employees and non-employee directors. Restricted stock awards granted under the 2012 LTIP generally vest over a three-year period from the grant date. |
Note_5_Commitments_and_Conting
Note 5 - Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2014 | |
Commitments and Contingencies Disclosure [Abstract] | ' |
Commitments and Contingencies Disclosure [Text Block] | ' |
Note 5 - Commitments and Contingencies | |
Environmental | |
The Company is subject to various federal, state and local environmental laws and regulations that establish standards and requirements for protection of the environment. The Company cannot predict the future impact of such standards and requirements which are subject to change and can have retroactive effectiveness. The Company continues to monitor the status of these laws and regulations. | |
Currently, the Company has not been fined, cited or notified of any environmental violations that would have a material adverse effect upon its consolidated financial position, liquidity or capital resources. However, management does recognize that by the very nature of its business, material costs could be incurred in the near term to maintain compliance. The amount of such future expenditures is not determinable due to several factors, including the unknown magnitude of possible regulation or liabilities, the unknown timing and extent of the corrective actions which may be required, the determination of the Company’s liability in proportion to other responsible parties and the extent to which such expenditures are recoverable from insurance or indemnification. | |
Litigation | |
The Company is, and from time to time may be, involved in claims and litigation arising in the ordinary course of business. Because there are inherent uncertainties in the ultimate outcome of such matters, it is presently not possible to determine the ultimate outcome of any pending or potential claims or litigation against the Company; however, management believes that the outcome of those matters that are presently known to the Company will not have a material adverse effect upon the Company’s consolidated financial position, results of operations or liquidity. |
Note_6_Segment_Information
Note 6 - Segment Information | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Segment Reporting Disclosure [Text Block] | ' | ||||||||||||||||||||
Note 6 - Segment Information | |||||||||||||||||||||
In accordance with FASB Accounting Standards Codification 280 Segment Reporting, the Company routinely evaluates whether it has separate operating and reportable segments. The Company has determined that it operates in three reportable segments: Stimulation and Well Intervention Services, Wireline Services and Equipment Manufacturing. This determination is made based on the following factors: (1) the Company’s chief operating decision maker is currently managing each segment as a separate business and evaluating the performance of each segment and making resource allocation decisions distinctly and expects to do so for the foreseeable future, and (2) discrete financial information for each segment is available. The following is a brief description of the Company’s three segments: | |||||||||||||||||||||
Stimulation and Well Intervention Services. This segment has two related service lines providing hydraulic fracturing services and coiled tubing and other well stimulation services. The Company’s other well stimulation services primarily include nitrogen, pressure pumping and thru-tubing services. Additionally, with the development of a specialty chemicals business and strategic acquisitions during 2013, the Company now blends and supplies specialty chemicals for completion and production services, and also manufactures and provides downhole tools and related directional drilling technology and data acquisition and control systems, all of which are currently considered part of the Company’s other well stimulation services provided through its Well Intervention Services. | |||||||||||||||||||||
Wireline Services. This segment provides cased-hole wireline, pumpdown and other complementary services, including logging, perforating, pipe recovery and pressure testing services. The Company generates revenue for wireline services on a per job basis at agreed-upon spot market rates. Wireline jobs are short-term in nature, typically lasting only a few hours to a few days. The results of Tiger Cased Hole Services, Inc. (“Tiger”) since May 30, 2014, which is the date of the Company’s acquisition of Tiger, have been included in the Company’s consolidated financial statements and reflected in this segment. See “Note 7 – Mergers and Acquisitions” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” (MD&A) in Item 2 of this Form 10-Q for further discussion regarding the Tiger Acquisition. | |||||||||||||||||||||
Equipment Manufacturing. This segment manufactures, refurbishes and repairs equipment and provides oilfield parts and supplies for third-party customers in the energy services industry, as well as to fulfill the internal equipment demands of the Company’s Stimulation and Well Intervention Services and Wireline Services segments. | |||||||||||||||||||||
The following tables set forth certain financial information with respect to the Company’s reportable segments. Included in “Corporate and Other” are intersegment eliminations and costs associated with activities of a general corporate nature. | |||||||||||||||||||||
Stimulation & Well Intervention Services | Wireline Services | Equipment Manufacturing | Corporate and Other | Total | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Three months ended September 30, 2014 | |||||||||||||||||||||
Revenue from external customers | $ | 324,768 | $ | 113,222 | $ | 1,718 | $ | 270 | $ | 439,978 | |||||||||||
Inter-segment revenues | 129 | - | 49,084 | (49,213 | ) | - | |||||||||||||||
Adjusted EBITDA | 50,934 | 39,706 | 13,105 | (28,586 | ) | 75,159 | |||||||||||||||
Depreciation and amortization | 16,923 | 10,589 | 482 | 505 | 28,499 | ||||||||||||||||
Operating income (loss) | 34,060 | 29,026 | 12,621 | (33,696 | ) | 42,011 | |||||||||||||||
Capital expenditures | 80,853 | 18,341 | 1,453 | (8,565 | ) | 92,082 | |||||||||||||||
Nine months ended September 30, 2014 | |||||||||||||||||||||
Revenue from external customers | $ | 826,942 | $ | 289,987 | $ | 7,237 | $ | 270 | $ | 1,124,436 | |||||||||||
Inter-segment revenues | 330 | - | 97,162 | (97,492 | ) | - | |||||||||||||||
Adjusted EBITDA | 123,031 | 95,723 | 23,855 | (71,447 | ) | 171,162 | |||||||||||||||
Depreciation and amortization | 46,121 | 27,595 | 1,374 | 653 | 75,743 | ||||||||||||||||
Operating income (loss) | 77,137 | 67,951 | 22,474 | (84,583 | ) | 82,979 | |||||||||||||||
Capital expenditures | 177,409 | 62,795 | 3,193 | (7,606 | ) | 235,792 | |||||||||||||||
As of September 30, 2014 | |||||||||||||||||||||
Total assets | $ | 897,993 | $ | 509,368 | $ | 123,472 | $ | (10,747 | ) | $ | 1,520,086 | ||||||||||
Goodwill | 69,423 | 146,125 | 4,718 | - | 220,266 | ||||||||||||||||
Three months ended September 30, 2013 | |||||||||||||||||||||
Revenue from external customers | $ | 183,882 | $ | 74,909 | $ | 3,140 | $ | - | $ | 261,931 | |||||||||||
Inter-segment revenues | 117 | - | 12,983 | (13,100 | ) | - | |||||||||||||||
Adjusted EBITDA | 34,476 | 22,787 | 2,298 | (16,648 | ) | 42,913 | |||||||||||||||
Depreciation and amortization | 12,249 | 6,741 | 414 | (191 | ) | 19,213 | |||||||||||||||
Operating income (loss) | 22,233 | 15,793 | 1,882 | (16,449 | ) | 23,459 | |||||||||||||||
Capital expenditures | 22,513 | 9,753 | 187 | (3,910 | ) | 28,543 | |||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||
Revenue from external customers | $ | 594,306 | $ | 204,699 | $ | 5,933 | $ | - | $ | 804,938 | |||||||||||
Inter-segment revenues | 232 | 3 | 43,326 | (43,561 | ) | - | |||||||||||||||
Adjusted EBITDA | 137,124 | 60,148 | 5,370 | (48,486 | ) | 154,156 | |||||||||||||||
Depreciation and amortization | 34,080 | 18,982 | 1,222 | (589 | ) | 53,695 | |||||||||||||||
Operating income (loss) | 102,134 | 40,513 | 4,142 | (48,057 | ) | 98,732 | |||||||||||||||
Capital expenditures | 69,214 | 30,221 | 728 | 7,841 | 108,004 | ||||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||
Total assets | $ | 580,453 | $ | 393,910 | $ | 78,921 | $ | (1,437 | ) | $ | 1,051,847 | ||||||||||
Goodwill | 64,703 | 131,455 | 4,718 | - | 200,876 | ||||||||||||||||
Management evaluates segment performance and allocates resources based on total earnings before net interest expense, income taxes, depreciation and amortization, net gain or loss on disposal of assets, transaction costs, and certain non-routine items (“Adjusted EBITDA”), because Adjusted EBITDA is considered an important measure of each segment’s performance. In addition, management believes that the disclosure of Adjusted EBITDA as a measure of each segment’s operating performance allows investors to make a direct comparison to competitors, without regard to differences in capital and financing structure. Investors should be aware, however, that there are limitations inherent in using Adjusted EBITDA as a measure of overall profitability because it excludes significant expense items. An improving trend in Adjusted EBITDA may not be indicative of an improvement in the Company’s profitability. To compensate for the limitations in utilizing Adjusted EBITDA as an operating measure, management also uses U.S. GAAP measures of performance, including operating income and net income, to evaluate performance, but only with respect to the Company as a whole and not on a segment basis. | |||||||||||||||||||||
As required under Item 10(e) of Regulation S-K of the Securities Exchange Act of 1934, as amended, included below is a reconciliation of Adjusted EBITDA, a non-GAAP financial measure, to net income, which is the nearest comparable U.S. GAAP financial measure (in thousands). | |||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Adjusted EBITDA | $ | 75,159 | $ | 42,913 | $ | 171,162 | $ | 154,156 | |||||||||||||
Interest expense, net | (2,778 | ) | (1,585 | ) | (6,722 | ) | (4,918 | ) | |||||||||||||
Income tax expense | (15,623 | ) | (8,796 | ) | (30,329 | ) | (34,865 | ) | |||||||||||||
Depreciation and amortization | (28,499 | ) | (19,213 | ) | (75,743 | ) | (53,695 | ) | |||||||||||||
Inventory write-down | - | - | - | (870 | ) | ||||||||||||||||
(Gain) loss on disposal of assets | (16 | ) | (194 | ) | (15 | ) | (516 | ) | |||||||||||||
Transaction costs | (4,427 | ) | - | (11,841 | ) | (176 | ) | ||||||||||||||
Net income | $ | 23,816 | $ | 13,125 | $ | 46,512 | $ | 59,116 | |||||||||||||
Note_7_Mergers_and_Acquisition
Note 7 - Mergers and Acquisitions | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Business Combination Disclosure [Text Block] | ' | ||||
Note 7 - Mergers and Acquisitions | |||||
Agreement to Combine with the Completion and Production Services Business of Nabors Industries, Ltd. | |||||
On June 25, 2014, the Company entered into a definitive merger agreement (the “Merger Agreement”) with Nabors Industries Ltd., a Bermuda exempted company (“Nabors”), and Nabors Red Lion Limited, a Bermuda exempted company and a wholly owned subsidiary of Nabors (“Red Lion”), pursuant to which, subject to the terms and conditions thereof, a wholly owned subsidiary of Red Lion (“Merger Sub”) will merge with and into C&J with C&J surviving as a wholly owned subsidiary of Red Lion (the “Merger”). Prior to the Merger, Nabors will undergo a restructuring pursuant to a Separation Agreement dated as of June 25, 2014 by and between Nabors and Red Lion (the “Separation Agreement”) to separate Nabors’ completion and production services business in the U.S. and Canada (“NCPS”) from the other businesses of Nabors, as a result of which Red Lion will own solely NCPS (the “Separation”). In the Merger, each share of the Company’s common stock (other than any treasury shares) will be converted into the right to receive one Red Lion common share. It is currently expected that, immediately following the closing of the Merger (the “Closing”), former C&J stockholders will own approximately 47% of the issued and outstanding Red Lion common shares (49.75% on a fully diluted basis) and Nabors will own approximately 53% of the issued and outstanding Red Lion common shares (50.25% on a fully diluted basis). When the Merger is completed, Red Lion (which will then own both NCPS and C&J) will be renamed C&J Energy Services, Ltd. and is expected to be listed on the NYSE under the ticker symbol CJES. Both the Separation and Merger are expected to qualify as tax-free transactions. | |||||
At Closing, Nabors will receive total consideration valued at approximately $2.86 billion at the time of signing the Merger Agreement, comprised of approximately $938 million in cash and approximately 62.5 million Red Lion common shares, which were valued based on the $30.76 45-day volume weighted average price for C&J’s common stock at the time of signing the Merger Agreement. Neither the number of common shares nor the cash consideration is subject to adjustment. The value of such consideration to paid to Nabors at closing was $2.14 billion as of October 31, 2014, with the approximately 62.5 million Red Lion common shares valued based on the closing price on the NYSE for C&J’s common stock on such date. | |||||
Closing is subject to customary closing conditions, including, among others, (1) the consummation of the Separation in accordance with the Separation Agreement, (2) the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (“HSR”), (3) approval by C&J’s stockholders, (4) the registration statement on Form S-4 (the “S-4”) used to register the Red Lion common shares to be issued in the Merger being declared effective by the SEC, (5) the approval for listing on the NYSE of the Red Lion common shares to be issued in the Merger, (6) subject to specified materiality standards, the accuracy of the representations and warranties of, and the performance of all covenants by, the parties, (7) the absence of a material adverse effect with respect to each of C&J and Red Lion; (8) the availability of the proceeds of the debt financing to effect the Note Repayment, (9) the receipt of consents, approvals and other deliverables with respect to certain agreements of C&J; (10) the receipt by Nabors of an opinion from its counsel to the effect that certain aspects of the Separation should qualify as tax-free pursuant to Section 355 of the Internal Revenue Code of 1986, as amended (the “Code”) and (11) the receipt by C&J of an opinion from its counsel to the effect that the Merger should be treated as a reorganization within the meaning of Section 368(a) of the Code and Red Lion should be treated as a corporation within the meaning of Section 367(a) of the Code. | |||||
On July 28, 2014 the Company was granted early termination of the HSR waiting period by the U.S. Federal Trade Commission. On September 29, 2014, Red Lion filed the S-4, with the SEC which includes a preliminary prospectus of Red Lion and a preliminary proxy statement of C&J. | |||||
C&J currently expects the Closing to occur in the fourth quarter of 2014, subject to timely completion of the SEC’s review of the S-4 and other customary closing items. There can be no assurance as to whether or when the Closing will occur. | |||||
Acquisition of Tiger Cased Hole Services, Inc. | |||||
On May 30, 2014, the Company acquired all of the outstanding equity interests of Tiger for approximately $33.2 million, including working capital adjustments. | |||||
Tiger provides cased-hole wireline, logging, perforating, pipe recovery and tubing-conveyed perforating services. The acquisition of Tiger increased the Company’s existing wireline capabilities and provides a presence on the U.S. West Coast. The results of Tiger’s operations since the date of the acquisition have been included in the Company’s consolidated financial statements and are reflected in the Wireline Services Segment in “Note 6 – Segment Information”. | |||||
The purchase price was allocated to the net assets acquired based upon their estimated fair values, as follows (in thousands): | |||||
Current assets | $ | 3,851 | |||
Property and equipment | 8,176 | ||||
Goodwill | 14,671 | ||||
Other intangible assets | 17,340 | ||||
Total assets acquired | $ | 44,038 | |||
Current liabilities | $ | 1,223 | |||
Deferred income taxes | 8,556 | ||||
Other liabilities | 1,015 | ||||
Total liabilites assumed | $ | 10,794 | |||
Net assets acquired | $ | 33,244 | |||
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Basis of Accounting, Policy [Policy Text Block] | ' |
Basis of Presentation and Principles of Consolidation. The accompanying consolidated financial statements have not been audited by the Company’s independent registered public accounting firm, except that the consolidated balance sheet at December 31, 2013 is derived from consolidated financial statements audited by the Company’s predecessor auditor. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for fair presentation have been included. | |
These consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America (“U.S. GAAP”) for complete financial statements. Therefore, these consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the year ended December 31, 2013, which are included in the Company’s Annual Report on Form 10-K, as filed with the SEC. The operating results for interim periods are not necessarily indicative of results that may be expected for any other interim period or for the full year. | |
These consolidated financial statements include the accounts of the Company. All significant inter-company transactions and accounts have been eliminated upon consolidation. | |
Use of Estimates, Policy [Policy Text Block] | ' |
Use of Estimates. The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are used in, but are not limited to, determining the following: allowance for doubtful accounts, recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, inventory reserves, income taxes and stock-based compensation. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. | |
New Accounting Pronouncements, Policy [Policy Text Block] | ' |
New Accounting Pronouncements. On May 28, 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers, which requires an entity to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. The ASU will replace most existing revenue recognition guidance in U.S. GAAP when it becomes effective. The new standard is effective for the Company on January 1, 2017. Early application is not permitted. The standard permits the use of either the retrospective or cumulative effect transition method. The Company is evaluating the effect that ASU 2014-09 will have on its consolidated financial statements and related disclosures. The Company has not yet selected a transition method nor has it determined the effect of the standard on its ongoing financial reporting. | |
Cash and Cash Equivalents, Policy [Policy Text Block] | ' |
Cash and Cash Equivalents. For purposes of the consolidated statement of cash flows, cash is defined as cash on-hand, demand deposits, and short-term investments with initial maturities of three months or less. The Company maintains its cash and cash equivalents in various financial institutions, which at times may exceed federally insured amounts. Management believes that this risk is not significant. | |
Receivables, Policy [Policy Text Block] | ' |
Accounts Receivable and Allowance for Doubtful Accounts. Accounts receivable are stated at the amount billed to customers and are ordinarily due within 30-45 days of receipt of invoice. The Company provides an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information and existing economic conditions. Provisions for doubtful accounts are recorded when it is deemed probable that the customer will not make the required payments at either the contractual due dates or in the future. | |
Inventory, Policy [Policy Text Block] | ' |
Inventories. Inventories for the Stimulation and Well Intervention Services segment and the Wireline Services segment consist of finished goods and raw materials, including equipment components, chemicals, proppants, supplies and materials for the segments’ operations. Inventories for the Equipment Manufacturing segment consist of raw materials and work-in-process, including equipment components, supplies and materials. See “Note 6 – Segment Information” for further discussion regarding the Company’s reportable segments. | |
Inventories are stated at the lower of cost or market (net realizable value) on a first-in, first-out basis and appropriate consideration is given to deterioration, obsolescence and other factors in evaluating net realizable value. | |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition. All revenue is recognized when persuasive evidence of an arrangement exists, the service is complete or the equipment has been delivered to the customer, the amount is fixed or determinable and collectability is reasonably assured, as follows: | |
Hydraulic Fracturing Revenue. The Company provides hydraulic fracturing services pursuant to contractual arrangements, such as term contracts and pricing agreements, or on a spot market basis. Under either scenario, revenue is recognized and customers are invoiced upon the completion of each job, which can consist of one or more fracturing stages. Once a job has been completed to the customer’s satisfaction, a field ticket is written that includes charges for the service performed and the consumables (such as fluids and proppants) used during the course of service. The field ticket may also include charges for the mobilization and set-up of equipment, any additional equipment used on the job, and other miscellaneous consumables. | |
Historically, most of the Company’s hydraulic fracturing services were performed under long-term “take-or-pay” contracts, the last of which expired in February 2014. Under these legacy term contracts, customers were typically obligated to pay on a monthly basis for a specified number of hours of service, whether or not those services were actually used. To the extent customers used more than the specified contracted minimums, the Company would be paid a pre-agreed amount for the provision of such additional services. | |
Pursuant to pricing agreements and other contractual arrangements which the Company may enter into from time to time, such as those associated with an award from a bid process, customers typically commit to targeted utilization levels based on a specified number of hours of service at agreed-upon pricing, but without termination penalties or obligations to pay for services not used by the customer. In addition, the agreed-upon pricing is typically subject to periodic review, as specifically defined in the agreement, and may be adjusted upon the agreement of both parties. | |
Rates for services performed on a spot market basis are based on an agreed-upon hourly spot market rate for a specified number of hours of service. | |
Coiled Tubing and Other Well Stimulation Revenue. The Company provides coiled tubing and other well stimulation services, including nitrogen, pressure pumping and thru-tubing services, primarily on a spot market basis. Jobs for these services are typically short-term in nature, lasting anywhere from a few hours to multiple days. Revenue is recognized upon completion of each day’s work based upon a completed field ticket. The field ticket includes charges for the services performed, and the consumables (such as stimulation fluids, nitrogen and coiled tubing materials) used during the course of service. The field ticket may also include charges for the mobilization and set-up of equipment, the personnel on the job, any additional equipment used on the job, and other miscellaneous consumables.The Company typically charges the customer for these services and resources on an hourly basis at agreed-upon spot market rates. | |
Revenue from Materials Consumed While Performing Services. The Company generates revenue from fluids, proppants and other materials that are consumed while performing hydraulic fracturing services. For services performed on a spot market basis, the required consumables are typically provided by the Company and the customer is billed for those consumables at cost plus an agreed-upon markup. For services performed on a contractual basis, when the consumables are provided by the Company, the customer typically is billed for those consumables at a negotiated contractual rate. When consumables are supplied by the customer, the Company typically charges handling fees based on the amount of consumables used. | |
In addition, ancillary to coiled tubing and other well stimulation services revenue, the Company generates revenue from stimulation fluids, nitrogen, coiled tubing materials and other consumables used during those processes. | |
Wireline Revenue. The Company provides cased-hole wireline, pumpdown and other complementary services, including logging, perforating, pipe recovery and pressure testing services on a spot market basis. Jobs for these services are typically short-term in nature, lasting anywhere from a few hours to multiple days. Revenue is recognized when the services and equipment are provided and the job is completed. The Company typically charges the customer on a per job basis for these services at agreed-upon spot market rates. | |
Equipment Manufacturing Revenue. The Company enters into arrangements to construct new equipment, refurbish and repair equipment and provide oilfield parts and supplies to third-party customers in the energy services industry. Revenue is recognized and the customer is invoiced upon the completion and delivery of each order to the customer. | |
Share-based Compensation, Option and Incentive Plans Policy [Policy Text Block] | ' |
Stock-Based Compensation. The Company’s stock-based compensation plans provide the ability to grant equity awards to the Company’s employees, consultants and non-employee directors. As of September 30, 2014, only nonqualified stock options and restricted stock had been granted under such plans. The Company values option grants based on the grant date fair value by using the Black-Scholes option-pricing model and values restricted stock grants based on the closing price of C&J’s common stock on the grant date. The Company recognizes stock-based compensation expense on a straight-line basis over the requisite service period. Further information regarding the Company’s stock-based compensation arrangements and the related accounting treatment can be found in “Note 4 – Stock-Based Compensation. | |
Fair Value of Financial Instruments, Policy [Policy Text Block] | ' |
Fair Value of Financial Instruments. The Company’s financial instruments consist of cash and cash equivalents, accounts receivable, accounts payable, long-term debt and capital lease obligations. The recorded values of cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values based on their short-term nature. The carrying value of long-term debt and capital lease obligations approximate their fair value, as the interest rates approximate market rates. | |
Equity Method Investments, Policy [Policy Text Block] | ' |
Equity Method Investments. The Company has an investment in a joint venture which is accounted for under the equity method of accounting as the Company has the ability to exercise significant influence over operating and financial policies of the joint venture. Judgment regarding the level of influence over each equity method investment includes considering key factors such as ownership interest, representation on the board of directors, participation in policy-making decisions and material intercompany transactions. Under the equity method, original investments are recorded at cost and adjusted by the Company’s share of undistributed earnings and losses of these investments. The Company eliminates all significant intercompany transactions, including the intercompany portion of transactions with equity method investees, from the consolidated financial results. | |
Income Tax, Policy [Policy Text Block] | ' |
Income Taxes. The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date. | |
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the likelihood and extent that deferred tax assets will be realized, consideration is given to projected future taxable income and tax planning strategies. A valuation allowance is recorded when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. | |
The Company recognizes the financial statement effects of a tax position when it is more-likely-than-not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. Previously recognized tax positions are reversed in the first period in which it is no longer more-likely-than-not that the tax position would be sustained upon examination. Income tax related interest and penalties, if applicable, are recorded as a component of the provision for income tax expense. | |
The effective tax rate was 39.5% for the nine-month period ending September 30, 2014 as compared to 37.1% for the nine-month period ending September 30, 2013. The increase in the effective tax rate is primarily due to lower pre-tax book income, which caused permanent differences between book and taxable income and state income taxes to have a higher proportionate impact on the calculation of the effective tax rate, partially offset by the recognition of tax benefits for federal and state tax credits. | |
Earnings Per Share, Policy [Policy Text Block] | ' |
Earnings Per Share. Basic earnings per share is based on the weighted average number of shares of common stock (“common shares”) outstanding during the applicable period and excludes shares subject to outstanding stock options and shares of restricted stock. Diluted earnings per share is computed based on the weighted average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to outstanding stock options and restricted stock. | |
Reclassification, Policy [Policy Text Block] | ' |
Reclassifications and immaterial adjustment. Certain reclassifications have been made to prior period consolidated financial statements to conform to the current period presentations. Additionally, an immaterial adjustment has been made to the Company’s consolidated statement of cash flows for the nine months ended September 30, 2013 to increase previously reported operating cash flows and decrease previously reported investing cash flows by $1.2 million to properly reflect the change in accrued capital expenditures on the consolidated statement of cash flows as a supplemental non-cash investing activity. This adjustment had no impact to the Company’s consolidated balance sheet or consolidated statement of operations for the nine months ended September 30, 2013. |
Note_1_Organization_Nature_of_1
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies (Tables) | 9 Months Ended | ||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||||||
Schedule of Inventory, Current [Table Text Block] | ' | ||||||||||||||||
September 30, | December 31, | ||||||||||||||||
2014 | 2013 | ||||||||||||||||
Raw materials | $ | 43,172 | $ | 31,445 | |||||||||||||
Work-in-process | 8,984 | 3,652 | |||||||||||||||
Finished goods | 41,563 | 36,690 | |||||||||||||||
Total inventory | 93,719 | 71,787 | |||||||||||||||
Inventory reserve | (1,090 | ) | (841 | ) | |||||||||||||
Inventory, net | $ | 92,629 | $ | 70,946 | |||||||||||||
Schedule of Earnings Per Share, Basic and Diluted [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands, except per share amounts) | |||||||||||||||||
Numerator: | |||||||||||||||||
Net income attributed to common shareholders | $ | 23,816 | $ | 13,125 | $ | 46,512 | $ | 59,116 | |||||||||
Denominator: | |||||||||||||||||
Weighted average common shares outstanding | 53,950 | 53,355 | 53,799 | 52,898 | |||||||||||||
Effect of potentially dilutive common shares: | |||||||||||||||||
Stock options | 2,442 | 1,981 | 2,358 | 2,090 | |||||||||||||
Restricted stock | 412 | 150 | 477 | 211 | |||||||||||||
Weighted average common shares outstanding and assumed conversions | 56,804 | 55,486 | 56,634 | 55,199 | |||||||||||||
Earnings per common share: | |||||||||||||||||
Basic | $ | 0.44 | $ | 0.25 | $ | 0.86 | $ | 1.12 | |||||||||
Diluted | $ | 0.42 | $ | 0.24 | $ | 0.82 | $ | 1.07 | |||||||||
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share [Table Text Block] | ' | ||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||
September 30, | September 30, | ||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||
(In thousands) | |||||||||||||||||
Basic earnings per share: | |||||||||||||||||
Restricted stock | 1,394 | 1,168 | 1,470 | 1,213 | |||||||||||||
Diluted earnings per share: | |||||||||||||||||
Anti-dilutive stock options | - | 1,089 | - | 1,114 | |||||||||||||
Anti-dilutive restricted stock | - | - | - | 219 | |||||||||||||
Potentially dilutive securities excluded as anti-dilutive | - | 1,089 | - | 1,333 |
Note_3_Intangible_Assets_Table
Note 3 - Intangible Assets (Tables) | 9 Months Ended | ||||||||||||
Sep. 30, 2014 | |||||||||||||
Disclosure Text Block [Abstract] | ' | ||||||||||||
Schedule of Intangible Assets and Goodwill [Table Text Block] | ' | ||||||||||||
Amortization | September 30, | December 31, | |||||||||||
Period | 2014 | 2013 | |||||||||||
Trade name (years) | 15-Oct | $ | 29,315 | $ | 27,665 | ||||||||
Customer relationships (years) | 15-Aug | 116,073 | 100,593 | ||||||||||
Non-compete (years) | 5-Apr | 1,810 | 1,600 | ||||||||||
Developed technology (years) | 10 | 2,110 | 2,110 | ||||||||||
IPR&D | Indefinite | 7,598 | 7,598 | ||||||||||
Trade name - Total Equipment | Indefinite | 6,247 | 6,247 | ||||||||||
163,153 | 145,813 | ||||||||||||
Less: accumulated amortization | (30,957 | ) | (22,775 | ) | |||||||||
Intangible assets, net | $ | 132,196 | $ | 123,038 |
Note_6_Segment_Information_Tab
Note 6 - Segment Information (Tables) | 9 Months Ended | ||||||||||||||||||||
Sep. 30, 2014 | |||||||||||||||||||||
Segment Reporting [Abstract] | ' | ||||||||||||||||||||
Schedule of Segment Reporting Information, by Segment [Table Text Block] | ' | ||||||||||||||||||||
Stimulation & Well Intervention Services | Wireline Services | Equipment Manufacturing | Corporate and Other | Total | |||||||||||||||||
(in thousands) | |||||||||||||||||||||
Three months ended September 30, 2014 | |||||||||||||||||||||
Revenue from external customers | $ | 324,768 | $ | 113,222 | $ | 1,718 | $ | 270 | $ | 439,978 | |||||||||||
Inter-segment revenues | 129 | - | 49,084 | (49,213 | ) | - | |||||||||||||||
Adjusted EBITDA | 50,934 | 39,706 | 13,105 | (28,586 | ) | 75,159 | |||||||||||||||
Depreciation and amortization | 16,923 | 10,589 | 482 | 505 | 28,499 | ||||||||||||||||
Operating income (loss) | 34,060 | 29,026 | 12,621 | (33,696 | ) | 42,011 | |||||||||||||||
Capital expenditures | 80,853 | 18,341 | 1,453 | (8,565 | ) | 92,082 | |||||||||||||||
Nine months ended September 30, 2014 | |||||||||||||||||||||
Revenue from external customers | $ | 826,942 | $ | 289,987 | $ | 7,237 | $ | 270 | $ | 1,124,436 | |||||||||||
Inter-segment revenues | 330 | - | 97,162 | (97,492 | ) | - | |||||||||||||||
Adjusted EBITDA | 123,031 | 95,723 | 23,855 | (71,447 | ) | 171,162 | |||||||||||||||
Depreciation and amortization | 46,121 | 27,595 | 1,374 | 653 | 75,743 | ||||||||||||||||
Operating income (loss) | 77,137 | 67,951 | 22,474 | (84,583 | ) | 82,979 | |||||||||||||||
Capital expenditures | 177,409 | 62,795 | 3,193 | (7,606 | ) | 235,792 | |||||||||||||||
As of September 30, 2014 | |||||||||||||||||||||
Total assets | $ | 897,993 | $ | 509,368 | $ | 123,472 | $ | (10,747 | ) | $ | 1,520,086 | ||||||||||
Goodwill | 69,423 | 146,125 | 4,718 | - | 220,266 | ||||||||||||||||
Three months ended September 30, 2013 | |||||||||||||||||||||
Revenue from external customers | $ | 183,882 | $ | 74,909 | $ | 3,140 | $ | - | $ | 261,931 | |||||||||||
Inter-segment revenues | 117 | - | 12,983 | (13,100 | ) | - | |||||||||||||||
Adjusted EBITDA | 34,476 | 22,787 | 2,298 | (16,648 | ) | 42,913 | |||||||||||||||
Depreciation and amortization | 12,249 | 6,741 | 414 | (191 | ) | 19,213 | |||||||||||||||
Operating income (loss) | 22,233 | 15,793 | 1,882 | (16,449 | ) | 23,459 | |||||||||||||||
Capital expenditures | 22,513 | 9,753 | 187 | (3,910 | ) | 28,543 | |||||||||||||||
Nine months ended September 30, 2013 | |||||||||||||||||||||
Revenue from external customers | $ | 594,306 | $ | 204,699 | $ | 5,933 | $ | - | $ | 804,938 | |||||||||||
Inter-segment revenues | 232 | 3 | 43,326 | (43,561 | ) | - | |||||||||||||||
Adjusted EBITDA | 137,124 | 60,148 | 5,370 | (48,486 | ) | 154,156 | |||||||||||||||
Depreciation and amortization | 34,080 | 18,982 | 1,222 | (589 | ) | 53,695 | |||||||||||||||
Operating income (loss) | 102,134 | 40,513 | 4,142 | (48,057 | ) | 98,732 | |||||||||||||||
Capital expenditures | 69,214 | 30,221 | 728 | 7,841 | 108,004 | ||||||||||||||||
As of September 30, 2013 | |||||||||||||||||||||
Total assets | $ | 580,453 | $ | 393,910 | $ | 78,921 | $ | (1,437 | ) | $ | 1,051,847 | ||||||||||
Goodwill | 64,703 | 131,455 | 4,718 | - | 200,876 | ||||||||||||||||
Reconciliation of Earnings Before Interest Taxes Depreciation and Amortization [Table Text Block] | ' | ||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||||||||
Adjusted EBITDA | $ | 75,159 | $ | 42,913 | $ | 171,162 | $ | 154,156 | |||||||||||||
Interest expense, net | (2,778 | ) | (1,585 | ) | (6,722 | ) | (4,918 | ) | |||||||||||||
Income tax expense | (15,623 | ) | (8,796 | ) | (30,329 | ) | (34,865 | ) | |||||||||||||
Depreciation and amortization | (28,499 | ) | (19,213 | ) | (75,743 | ) | (53,695 | ) | |||||||||||||
Inventory write-down | - | - | - | (870 | ) | ||||||||||||||||
(Gain) loss on disposal of assets | (16 | ) | (194 | ) | (15 | ) | (516 | ) | |||||||||||||
Transaction costs | (4,427 | ) | - | (11,841 | ) | (176 | ) | ||||||||||||||
Net income | $ | 23,816 | $ | 13,125 | $ | 46,512 | $ | 59,116 |
Note_7_Mergers_and_Acquisition1
Note 7 - Mergers and Acquisitions (Tables) | 9 Months Ended | ||||
Sep. 30, 2014 | |||||
Business Combinations [Abstract] | ' | ||||
Schedule of Recognized Identified Assets Acquired and Liabilities Assumed [Table Text Block] | ' | ||||
Current assets | $ | 3,851 | |||
Property and equipment | 8,176 | ||||
Goodwill | 14,671 | ||||
Other intangible assets | 17,340 | ||||
Total assets acquired | $ | 44,038 | |||
Current liabilities | $ | 1,223 | |||
Deferred income taxes | 8,556 | ||||
Other liabilities | 1,015 | ||||
Total liabilites assumed | $ | 10,794 | |||
Net assets acquired | $ | 33,244 |
Note_1_Organization_Nature_of_2
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies (Details) (USD $) | 9 Months Ended | |
In Millions, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 |
Disclosure Text Block [Abstract] | ' | ' |
Number of Reportable Segments | 3 | ' |
Effective Income Tax Rate Reconciliation, Percent | 39.50% | 37.10% |
Prior Period Reclassification Adjustment (in Dollars) | ' | $1.20 |
Note_1_Organization_Nature_of_3
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies (Details) - Inventories (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Inventories [Abstract] | ' | ' |
Raw materials | $43,172 | $31,445 |
Work-in-process | 8,984 | 3,652 |
Finished goods | 41,563 | 36,690 |
Total inventory | 93,719 | 71,787 |
Inventory reserve | -1,090 | -841 |
Inventory, net | $92,629 | $70,946 |
Note_1_Organization_Nature_of_4
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies (Details) - Earnings (Loss) Per Share (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, except Per Share data, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Numerator: | ' | ' | ' | ' | ' |
Net income attributed to common shareholders (in Dollars) | $23,816 | $13,125 | $46,512 | $59,116 | $66,405 |
Denominator: | ' | ' | ' | ' | ' |
Weighted average common shares outstanding | 53,950 | 53,355 | 53,799 | 52,898 | ' |
Effect of potentially dilutive common shares: | ' | ' | ' | ' | ' |
Weighted average common shares outstanding and assumed conversions | 56,804 | 55,486 | 56,634 | 55,199 | ' |
Earnings per common share: | ' | ' | ' | ' | ' |
Basic (in Dollars per share) | $0.44 | $0.25 | $0.86 | $1.12 | ' |
Diluted (in Dollars per share) | $0.42 | $0.24 | $0.82 | $1.07 | ' |
Employee Stock Option [Member] | ' | ' | ' | ' | ' |
Effect of potentially dilutive common shares: | ' | ' | ' | ' | ' |
Potentially dilutive common shares | 2,442 | 1,981 | 2,358 | 2,090 | ' |
Restricted Stock [Member] | ' | ' | ' | ' | ' |
Effect of potentially dilutive common shares: | ' | ' | ' | ' | ' |
Potentially dilutive common shares | 412 | 150 | 477 | 211 | ' |
Note_1_Organization_Nature_of_5
Note 1 - Organization, Nature of Business and Summary of Significant Accounting Policies (Details) - Summary of Securities Excluded from the Computation of Basic and Diluted Earnings Per Share (USD $) | 3 Months Ended | 9 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 |
Basic earnings per share: | ' | ' | ' | ' |
Restricted stock (in Dollars) | $1,394 | $1,168 | $1,470 | $1,213 |
Diluted earnings per share: | ' | ' | ' | ' |
Potentially dilutive securities excluded as anti-dilutive | ' | 1,089 | ' | 1,333 |
Stock Options1 [Member] | ' | ' | ' | ' |
Diluted earnings per share: | ' | ' | ' | ' |
Potentially dilutive securities excluded as anti-dilutive | ' | 1,089 | ' | 1,114 |
Restricted Stock [Member] | ' | ' | ' | ' |
Diluted earnings per share: | ' | ' | ' | ' |
Potentially dilutive securities excluded as anti-dilutive | ' | ' | ' | 219 |
Note_2_LongTerm_Debt_and_Capit1
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) (USD $) | 0 Months Ended | 1 Months Ended | 9 Months Ended |
In Millions, unless otherwise specified | Jun. 05, 2012 | Apr. 19, 2011 | Sep. 30, 2014 |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Line Of Credit Facility, Term | ' | '5 years | ' |
Line of Credit Facility, Maximum Borrowing Capacity | $400 | ' | ' |
Aggregate Amount of Periodic Increase in Commitments Through Incremental Facilities | 100 | ' | ' |
Sublimit for Letters of Credit | 200 | ' | ' |
Sublimit for Swing Line Loans | 25 | ' | ' |
Line of Credit Facility, Unused Capacity, Commitment Fee Percentage | ' | ' | 0.50% |
Long-term Line of Credit | ' | ' | 306 |
Letters of Credit Outstanding, Amount | ' | ' | 2 |
Line of Credit Facility, Remaining Borrowing Capacity | ' | ' | 92 |
Interest Coverage Ratio Required Under Debt Covenants | ' | ' | 3 |
Consolidated Leverage Ratio Required under Debt Covenants | ' | ' | 3.25 |
Lease for Research and Technology Facility [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Capital Lease Obligations | ' | ' | 13.5 |
Lease for New Corporate Headquarters [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Capital Lease Obligations | ' | ' | 25.6 |
Lease New Research and Technology Facility and Corporate Headquarters [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Capital Lease Obligations | ' | ' | $35.80 |
Base Rate Loans [Member] | Minimum [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | 1.25% |
Base Rate Loans [Member] | Maximum [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | 2.00% |
LIBOR Loans [Member] | Minimum [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | 2.25% |
LIBOR Loans [Member] | Maximum [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Debt Instrument, Basis Spread on Variable Rate | ' | ' | 3.00% |
Minimum [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Capital Leases Contracts Term | ' | ' | '3 years |
Maximum [Member] | ' | ' | ' |
Note 2 - Long-Term Debt and Capital Lease Obligations (Details) [Line Items] | ' | ' | ' |
Line of Credit Facility, Interest Rate at Period End | ' | ' | 3.00% |
Capital Leases Contracts Term | ' | ' | '4 years |
Note_3_Intangible_Assets_Detai
Note 3 - Intangible Assets (Details) - Intangible Assets (USD $) | 9 Months Ended | |
In Thousands, unless otherwise specified | Sep. 30, 2014 | Dec. 31, 2013 |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
$163,153 | $145,813 | |
Less: accumulated amortization | -30,957 | -22,775 |
Intangible assets, net | 132,196 | 123,038 |
IPR&D Total [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | 'Indefinite | ' |
Intangible Assets | 7,598 | 7,598 |
Trade Name - Total Equipment [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | 'Indefinite | ' |
Intangible Assets | 6,247 | 6,247 |
Trade Names [Member] | Minimum [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '10 years | ' |
Trade Names [Member] | Maximum [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '15 years | ' |
Trade Names [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets | 29,315 | 27,665 |
Customer Relationships [Member] | Minimum [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '8 years | ' |
Customer Relationships [Member] | Maximum [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '15 years | ' |
Customer Relationships [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets | 116,073 | 100,593 |
Noncompete Agreements [Member] | Minimum [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '4 years | ' |
Noncompete Agreements [Member] | Maximum [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '5 years | ' |
Noncompete Agreements [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Intangible Assets | 1,810 | 1,600 |
Developed Technology Rights [Member] | ' | ' |
Note 3 - Intangible Assets (Details) - Intangible Assets [Line Items] | ' | ' |
Amortization Period | '10 years | ' |
Intangible Assets | $2,110 | $2,110 |
Note_4_StockBased_Compensation1
Note 4 - Stock-Based Compensation (Details) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Gross | 0 | 0 |
Stock Options1 [Member] | Employee and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '3 years | ' |
Restricted Stock [Member] | Minimum [Member] | Employee and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | 22.65 | ' |
Restricted Stock [Member] | Minimum [Member] | Employees,Consultants and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | ' | 19.25 |
Restricted Stock [Member] | Maximum [Member] | Employee and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | 33.14 | ' |
Restricted Stock [Member] | Maximum [Member] | Employees,Consultants and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period, Weighted Average Grant Date Fair Value (in Dollars per share) | ' | 23.69 |
Restricted Stock [Member] | Employee and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Award Vesting Period | '3 years | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | 800,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding, Number | 1,400,000 | ' |
Restricted Stock [Member] | Employees,Consultants and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Grants in Period | ' | 700,000 |
Employee and Non Employee Directors [Member] | LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Number | 5,100,000 | ' |
LTIP 2012 [Member] | ' | ' |
Note 4 - Stock-Based Compensation (Details) [Line Items] | ' | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Authorized | 4,300,000 | ' |
Share-based Compensation Arrangement by Share-based Payment Award, Number of Shares Available for Grant | 2,600,000 | ' |
Note_6_Segment_Information_Det
Note 6 - Segment Information (Details) | 9 Months Ended |
Sep. 30, 2014 | |
Segment Reporting [Abstract] | ' |
Number of Reportable Segments | 3 |
Business Segment, Number Of Related Service Lines | 2 |
Note_6_Segment_Information_Det1
Note 6 - Segment Information (Details) - Segment Data (USD $) | 3 Months Ended | 9 Months Ended | |||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | $439,978 | $261,931 | $1,124,436 | $804,938 | ' |
Adjusted EBITDA | 75,159 | 42,913 | 171,162 | 154,156 | ' |
Depreciation and amortization | 28,499 | 19,213 | 75,743 | 53,695 | ' |
Operating income (loss) | 42,011 | 23,459 | 82,979 | 98,732 | ' |
Capital expenditures | ' | ' | 222,379 | 109,154 | ' |
Total assets | 1,520,086 | ' | 1,520,086 | ' | 1,132,300 |
Goodwill | 220,266 | ' | 220,266 | ' | 205,798 |
Operating Segments [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 439,978 | 261,931 | 1,124,436 | 804,938 | ' |
Adjusted EBITDA | 75,159 | 42,913 | 171,162 | 154,156 | ' |
Depreciation and amortization | 28,499 | 19,213 | 75,743 | 53,695 | ' |
Operating income (loss) | 42,011 | 23,459 | 82,979 | 98,732 | ' |
Capital expenditures | 92,082 | 28,543 | 235,792 | 108,004 | ' |
Total assets | 1,520,086 | 1,051,847 | 1,520,086 | 1,051,847 | ' |
Goodwill | 220,266 | 200,876 | 220,266 | 200,876 | ' |
Intersegment Eliminations [Member] | Stimulation and Well Intervention Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 129 | 117 | 330 | 232 | ' |
Intersegment Eliminations [Member] | Wireline Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | ' | ' | ' | 3 | ' |
Intersegment Eliminations [Member] | Equipment Manufacturing [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 49,084 | 12,983 | 97,162 | 43,326 | ' |
Intersegment Eliminations [Member] | Corporate and Other [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | -49,213 | -13,100 | -97,492 | -43,561 | ' |
Stimulation and Well Intervention Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 324,768 | 183,882 | 826,942 | 594,306 | ' |
Adjusted EBITDA | 50,934 | 34,476 | 123,031 | 137,124 | ' |
Depreciation and amortization | 16,923 | 12,249 | 46,121 | 34,080 | ' |
Operating income (loss) | 34,060 | 22,233 | 77,137 | 102,134 | ' |
Capital expenditures | 80,853 | 22,513 | 177,409 | 69,214 | ' |
Total assets | 897,993 | 580,453 | 897,993 | 580,453 | ' |
Goodwill | 69,423 | 64,703 | 69,423 | 64,703 | ' |
Wireline Services [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 113,222 | 74,909 | 289,987 | 204,699 | ' |
Adjusted EBITDA | 39,706 | 22,787 | 95,723 | 60,148 | ' |
Depreciation and amortization | 10,589 | 6,741 | 27,595 | 18,982 | ' |
Operating income (loss) | 29,026 | 15,793 | 67,951 | 40,513 | ' |
Capital expenditures | 18,341 | 9,753 | 62,795 | 30,221 | ' |
Total assets | 509,368 | 393,910 | 509,368 | 393,910 | ' |
Goodwill | 146,125 | 131,455 | 146,125 | 131,455 | ' |
Equipment Manufacturing [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 1,718 | 3,140 | 7,237 | 5,933 | ' |
Adjusted EBITDA | 13,105 | 2,298 | 23,855 | 5,370 | ' |
Depreciation and amortization | 482 | 414 | 1,374 | 1,222 | ' |
Operating income (loss) | 12,621 | 1,882 | 22,474 | 4,142 | ' |
Capital expenditures | 1,453 | 187 | 3,193 | 728 | ' |
Total assets | 123,472 | 78,921 | 123,472 | 78,921 | ' |
Goodwill | 4,718 | 4,718 | 4,718 | 4,718 | ' |
Corporate and Other [Member] | ' | ' | ' | ' | ' |
Segment Reporting Information [Line Items] | ' | ' | ' | ' | ' |
Revenues | 270 | ' | 270 | ' | ' |
Adjusted EBITDA | -28,586 | -16,648 | -71,447 | -48,486 | ' |
Depreciation and amortization | 505 | -191 | 653 | -589 | ' |
Operating income (loss) | -33,696 | -16,449 | -84,583 | -48,057 | ' |
Capital expenditures | -8,565 | -3,910 | -7,606 | 7,841 | ' |
Total assets | ($10,747) | ($1,437) | ($10,747) | ($1,437) | ' |
Note_6_Segment_Information_Det2
Note 6 - Segment Information (Details) - EBITDA Reconciliation (USD $) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
In Thousands, unless otherwise specified | Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | Dec. 31, 2013 |
EBITDA Reconciliation [Abstract] | ' | ' | ' | ' | ' |
Adjusted EBITDA | $75,159 | $42,913 | $171,162 | $154,156 | ' |
Interest expense, net | -2,778 | -1,585 | -6,722 | -4,918 | ' |
Income tax expense | -15,623 | -8,796 | -30,329 | -34,865 | ' |
Depreciation and amortization | -28,499 | -19,213 | -75,743 | -53,695 | ' |
Inventory write-down | ' | ' | ' | -870 | ' |
(Gain) loss on disposal of assets | -16 | -194 | -15 | -516 | ' |
Transaction costs | -4,427 | ' | -11,841 | -176 | ' |
Net income | $23,816 | $13,125 | $46,512 | $59,116 | $66,405 |
Note_7_Mergers_and_Acquisition2
Note 7 - Mergers and Acquisitions (Details) (USD $) | Jun. 25, 2014 | Oct. 31, 2014 | Oct. 31, 2014 | Jun. 25, 2014 | Jun. 25, 2014 | 30-May-14 |
Share data in Millions, except Per Share data, unless otherwise specified | Subsequent Event [Member] | Subsequent Event [Member] | Nabors Industries, Ltd. [Member] | Nabors Red Lion Limited [Member] | Tiger [Member] | |
Nabors Industries, Ltd. [Member] | Nabors Red Lion Limited [Member] | |||||
Note 7 - Mergers and Acquisitions (Details) [Line Items] | ' | ' | ' | ' | ' | ' |
Business Combination Proposed Ownership Percentage by C&J Shareholders | 47.00% | ' | ' | ' | ' | ' |
Business Combination Proposed Ownership Percentage by C&J Shareholders on a Fully Diluted Basis | 49.75% | ' | ' | ' | ' | ' |
Business Combination Proposed Ownership Percentage by Nabors | 53.00% | ' | ' | ' | ' | ' |
Business Combination Proposed Ownership Percentage by Nabors on a Fully Dilutive Basis | 50.25% | ' | ' | ' | ' | ' |
Business Combination Proposed Consideration | ' | $2,140,000,000 | ' | $2,860,000,000 | ' | ' |
Business Combination Proposed Cash Payment | ' | ' | ' | 938,000,000 | ' | ' |
Business Combination Proposed Equity Interest Issuable | ' | ' | 62.5 | ' | 62.5 | ' |
Weighted Average Price of Common Stock | ' | ' | ' | ' | $30.76 | ' |
Payments to Acquire Businesses, Gross | ' | ' | ' | ' | ' | $33,200,000 |
Note_7_Mergers_and_Acquisition3
Note 7 - Mergers and Acquisitions (Details) - Purchase Price Allocation (Tiger [Member], USD $) | 30-May-14 |
In Thousands, unless otherwise specified | |
Tiger [Member] | ' |
Note 7 - Mergers and Acquisitions (Details) - Purchase Price Allocation [Line Items] | ' |
Current assets | $3,851 |
Property and equipment | 8,176 |
Goodwill | 14,671 |
Other intangible assets | 17,340 |
Total assets acquired | 44,038 |
Current liabilities | 1,223 |
Deferred income taxes | 8,556 |
Other liabilities | 1,015 |
Total liabilites assumed | 10,794 |
Net assets acquired | $33,244 |