Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2021 | Apr. 30, 2021 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Document Period End Date | Mar. 31, 2021 | |
Entity File Number | 001-38382 | |
Entity Registrant Name | FTS INTERNATIONAL, INC. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 30-0780081 | |
Entity Address, Address Line One | 777 Main Street, Suite 2900 | |
Entity Address, City or Town | Fort Worth | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 76102 | |
City Area Code | 817 | |
Local Phone Number | 862-2000 | |
Title of 12(b) Security | Common Stock, par value $0.01 per share | |
Trading Symbol | FTSI | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | true | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001529463 | |
Amendment Flag | false | |
Class A common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 13,677,664 | |
Class B common stock | ||
Document Information [Line Items] | ||
Entity Common Stock, Shares Outstanding | 312,306 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONSOLIDATED STATEMENTS OF OPERATIONS | ||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor |
Revenue | ||
Revenue | $ 95.9 | $ 150.8 |
Revenue from related parties | 0.7 | |
Total revenue | 95.9 | 151.5 |
Operating expenses | ||
Costs of revenue (excluding depreciation of $13.4 and $20.5 respectively, included in depreciation and amortization below) | 78.5 | 114.6 |
Selling, general and administrative | 10.5 | 17.7 |
Depreciation and amortization | 13.9 | 21.4 |
Impairments and other charges | 0.3 | 4.3 |
Gain on disposal of assets, net | (0.1) | |
Total operating expenses | 103.2 | 157.9 |
Operating loss | (7.3) | (6.4) |
Interest expense, net | (0.1) | (7.3) |
Gain on extinguishment of debt, net | 2 | |
Reorganization items | (0.5) | |
Loss before income taxes | (7.9) | (11.7) |
Net loss | $ (7.9) | $ (11.7) |
Basic and diluted loss per share | $ (0.56) | $ (2.18) |
Shares used in computing basic and diluted earnings per share (in thousands) | 13,990 | 5,367 |
CONSOLIDATED STATEMENTS OF OP_2
CONSOLIDATED STATEMENTS OF OPERATIONS (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Depreciation | ||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor |
Depreciation | $ 13.4 | $ 20.5 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Dec. 31, 2020 | |
CONSOLIDATED BALANCE SHEETS | ||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | |
Current assets | ||
Cash and cash equivalents | $ 86.4 | $ 94 |
Accounts receivable, net | 56.5 | 26.9 |
Inventories | 31.8 | 29 |
Prepaid expenses and other current assets | 4.5 | 19.5 |
Total current assets | 179.2 | 169.4 |
Property, plant, and equipment, net | 125.4 | 132.3 |
Operating lease right-of-use assets | 3.8 | 4.5 |
Intangible assets, net | 7.2 | 7.4 |
Other assets | 1.4 | 1.4 |
Total assets | 317 | 315 |
Current liabilities | ||
Accounts payable | 39.1 | 26.9 |
Accrued expenses | 10.9 | 12.5 |
Current portion of operating lease liabilities | 2.6 | 3 |
Other current liabilities | 0.3 | 0.3 |
Total current liabilities | 52.9 | 42.7 |
Operating lease liabilities | 2.3 | 3.3 |
Other liabilities | 2.2 | 2.4 |
Total liabilities | 57.4 | 48.4 |
Commitments and contingencies (Note 9) | ||
Stockholders' equity | ||
Preferred stock, $0.01 par value, 5,000,000 shares authorized | ||
Successor Common stock Class A, $0.01 par value, 49,000,000, authorized | 0.1 | 0.1 |
Additional paid-in capital | 280.8 | 279.9 |
Accumulated deficit | (21.3) | (13.4) |
Total stockholders' equity | 259.6 | 266.6 |
Total liabilities and stockholders' equity | $ 317 | $ 315 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares | Mar. 31, 2021 | Dec. 31, 2020 |
Preferred stock. | ||
Preferred stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, authorized (in shares) | 5,000,000 | 5,000,000 |
Class A common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 49,000,000 | 49,000,000 |
Common stock, issued (in shares) | 13,677,664 | 13,677,664 |
Common stock, outstanding (in shares) | 13,677,664 | 13,677,664 |
Class B common stock | ||
Common stock | ||
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, authorized (in shares) | 1,000,000 | 1,000,000 |
Common stock, issued (in shares) | 312,306 | 312,306 |
Common stock, outstanding (in shares) | 312,306 | 312,306 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor |
Cash flows from operating activities | ||
Net loss | $ (7.9) | $ (11.7) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Depreciation and amortization | 13.9 | 21.4 |
Stock-based compensation | 0.9 | 3.1 |
Amortization of debt discounts and issuance costs | 0.4 | |
Gain on disposal of assets, net | (0.1) | |
Gain on extinguishment of debt, net | (2) | |
Non-cash provision for supply commitment charges | 3.2 | |
Cash paid to settle supply commitment charges | (11.2) | |
Inventory write-down | 0.6 | |
Other non-cash items | 0.1 | 0.9 |
Changes in operating assets and liabilities: | ||
Accounts receivable | (29.7) | (2.4) |
Accounts receivable from related parties | (0.7) | |
Inventories | (2.7) | 1.3 |
Prepaid expenses and other assets | 1.5 | (8.1) |
Accounts payable | 10.7 | 16.2 |
Accrued expenses and other liabilities | (1.8) | 2.3 |
Net cash (used in) provided by operating activities | (15) | 13.2 |
Cash flows from investing activities | ||
Capital expenditures | (5.3) | (16.4) |
Proceeds from disposal of assets | 0.1 | |
Net cash used in investing activities | (5.3) | (16.3) |
Cash flows from financing activities | ||
Repayments of long-term debt | (20.6) | |
Taxes paid related to net share settlement of equity awards | (0.1) | |
Net cash used in financing activities | (20.7) | |
Net decrease in cash, cash equivalents, and restricted cash | (20.3) | (23.8) |
Cash, cash equivalents, and restricted cash at beginning of period | 106.7 | 223 |
Cash and cash equivalents at end of period | 86.4 | 199.2 |
Supplemental cash flow information: | ||
Interest paid | 1.4 | |
Noncash investing and financing activities: | ||
Capital expenditures included in accounts payable | 2 | 2 |
Operating lease liabilities incurred from obtaining right-of-use assets | 0.8 | 0.3 |
Derecognition of lease liabilities and right-of-use assets due to lease termination | $ 1.1 | $ 0.3 |
CONSOLIDATED STATEMENTS OF STOC
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT) - USD ($) shares in Thousands, $ in Millions | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total |
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | |||
Balance at beginning of period at Dec. 31, 2019 | $ 36.4 | $ 4,382 | $ (4,380.7) | $ 37.7 |
Balance at beginning of period (in shares) at Dec. 31, 2019 | 5,355 | |||
Net (loss) income | (11.7) | (11.7) | ||
Activity related to stock plan | 3 | 3 | ||
Activity related to stock plan (in shares) | 20 | |||
Balance at end of period at Mar. 31, 2020 | $ 36.4 | 4,385 | (4,392.4) | 29 |
Balance at end of period (in shares) at Mar. 31, 2020 | 5,375 | |||
Net (loss) income | (50.7) | (50.7) | ||
Activity related to stock plan | 3.6 | 3.6 | ||
Activity related to stock plan (in shares) | 6 | |||
Balance at end of period at Jun. 30, 2020 | $ 36.4 | 4,388.6 | (4,443.1) | (18.1) |
Balance at end of period (in shares) at Jun. 30, 2020 | 5,381 | |||
Net (loss) income | (68.7) | (68.7) | ||
Activity related to stock plan | 2.8 | 2.8 | ||
Balance at end of period at Sep. 30, 2020 | $ 36.4 | 4,391.4 | (4,511.8) | (84) |
Balance at end of period (in shares) at Sep. 30, 2020 | 5,381 | |||
Net (loss) income | 106.7 | 106.7 | ||
Activity related to stock plan | 16.5 | 16.5 | ||
Activity related to stock plan (in shares) | 75 | |||
Balance at end of period before Cancellation of Predecessor Equity at Nov. 19, 2020 | $ 36.4 | 4,407.9 | (4,405.1) | 39.2 |
Balance at end of period before Cancellation of Predecessor Equity(in shares) at Nov. 19, 2020 | 5,456 | |||
Balance at end of period After Cancellation Of Predecessor Equity at Nov. 19, 2020 | ||||
Balance at end of period at Nov. 19, 2020 | $ 0.1 | 279.5 | 279.6 | |
Balance at end of period (in shares) at Nov. 19, 2020 | 13,990 | |||
Cancelation of Predecessor Equity | $ (36.4) | (4,407.9) | 4,405.1 | (39.2) |
Cancelation of Predecessor Equity (in shares) | (5,456) | |||
Balance at end of period After Cancellation Of Predecessor Equity (in shares) | ||||
Issuance of Successor Common Stock | $ 0.1 | 279.5 | 279.6 | |
Issuance of Successor Common Stock (in shares) | 13,990 | |||
Net (loss) income | (13.4) | (13.4) | ||
Activity related to stock plan | 0.4 | 0.4 | ||
Balance at end of period at Dec. 31, 2020 | $ 0.1 | 279.9 | (13.4) | $ 266.6 |
Balance at end of period (in shares) at Dec. 31, 2020 | 13,990 | |||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | |||
Net (loss) income | (7.9) | $ (7.9) | ||
Activity related to stock plan | 0.9 | 0.9 | ||
Balance at end of period at Mar. 31, 2021 | $ 0.1 | $ 280.8 | $ (21.3) | $ 259.6 |
Balance at end of period (in shares) at Mar. 31, 2021 | 13,990 |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
BASIS OF PRESENTATION | NOTE 1 — BASIS OF PRESENTATION The unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial reporting. Accordingly, certain information and disclosures normally included in our annual consolidated financial statements have been condensed or omitted. These unaudited consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2020. In our opinion, the consolidated financial statements included herein contain all adjustments of a normal, recurring nature considered necessary for a fair presentation of the interim periods. The results of operations of the interim periods are not necessarily indicative of the results of operations to be expected for the full year. There were no items of other comprehensive income in the periods presented. Emergence From Voluntary Reorganization Under Chapter 11 As described in “Note 1 – Description of Business”, “Note 2 – Restructuring”, and “Note 3 – Fresh Start Accounting” of our Consolidated Financial Statements from our annual report on Form 10-K for the year ended December 31, 2020, we filed voluntary petitions for bankruptcy on September 22, 2020, then emerged from bankruptcy on November 19, 2020 and adopted fresh-start accounting upon emergence. References to “Successor” or “Successor Company” relate to the financial position and results of operations of the reorganized Company subsequent to November 19, 2020. References to “Predecessor” or “Predecessor Company” relate to the financial position and results of operations of the Company prior to, and including, November 19, 2020. Certain prior year financial statements are not comparable to our current year financial statements due to the adoption of fresh start accounting. Therefore, “black-line” financial statements are presented to distinguish between the Predecessor and Successor periods. The Company’s financial results for future periods will be different from historical trends and the differences may be material. Intangible Assets The amount of intangible assets recorded in our consolidated balance sheets for March 31, 2021 (Successor) and December 31, 2020 (Successor), was $7.4 million, of which $6.0 million related to our indefinite-lived tradename and $1.4 million related to our developed technology which is amortized on a straight line basis over a period of three years . Accumulated amortization of this intangible at March 31, 2021 (Successor) and December 31, 2020 (Successor) was $0.2 million and $0.1 million, respectively. Amortization expense in the first quarter of 2021 (Successor) and the first quarter of 2020 (Predecessor) was $0.1 million and zero, respectively. Fair Value of Financial Instruments Money market funds, classified as cash and cash equivalents, are the only financial instruments that are measured and recorded at fair value on the Company’s balance sheets. The following table presents money market funds at their level within the fair value hierarchy. (In millions) Principal Amount Total Fair Value Level 1 Level 2 Level 3 March 31, 2021 Money market funds $ 59.6 $ 59.6 $ 59.6 $ — $ — December 31, 2020 Money market funds $ 59.6 $ 59.6 $ 59.6 $ — $ — Reclassifications Inventory write-downs have been reclassified from costs of revenue to impairments and other charges on the statements of operations for the three months ended March 31, 2020, to conform to current year presentation. This reclassification had no effect on operating loss or net loss as previously reported. |
RESTRICTED CASH
RESTRICTED CASH | 3 Months Ended |
Mar. 31, 2021 | |
RESTRICTED CASH. | |
RESTRICTED CASH | NOTE 2 — RESTRICTED CASH Restricted Cash The following table provides a reconciliation of cash, cash equivalents, and restricted cash reported within the consolidated statement of cash flows. March 31, December 31, (In millions) 2021 2020 Cash and cash equivalents $ 86.4 $ 94.0 Restricted cash included in prepaid expenses and other current assets — 12.7 Total cash, cash equivalents, and restricted cash shown in the $ 86.4 $ 106.7 At December 31, 2020 (Successor), restricted cash included unsettled escrow fees related to our bankruptcy emergence and cash used as collateral for other banking products. |
CURRENT ECONOMIC ENVIRONMENT
CURRENT ECONOMIC ENVIRONMENT | 3 Months Ended |
Mar. 31, 2021 | |
CURRENT ECONOMIC ENVIRONMENT | |
CURRENT ECONOMIC ENVIRONMENT | NOTE 3 — CURRENT ECONOMIC ENVIRONMENT Our business activities are concentrated in the well completion services segment of the oilfield services industry in the United States. The market for these services is cyclical, and we depend on the willingness of our customers to make expenditures to explore for, develop, and produce oil and natural gas in the United States. The willingness of our customers to undertake these activities depends largely upon prevailing industry conditions and is predominantly influenced by current and expected future prices for oil and natural gas. Our customer base is also concentrated. Our business, financial condition and results of operations can be materially adversely affected if one or more of our significant customers ceases to engage us for our services on favorable terms, or at all, or fails to pay, or delays in paying us significant amounts of our outstanding receivables. The prices that we are able to charge for our services is affected by the supply of hydraulic fracturing equipment that is available in the market to meet customer demand. Since the middle of 2018, the supply of hydraulic fracturing equipment has exceeded the demand for equipment, and as a result, the pricing for our services declined during this period. In 2020, the supply of equipment further exceeded demand as the demand for our services dropped significantly. We have seen prices rebound slightly in the first quarter of 2021, but we remain disciplined with respect to our number of active fleets, and we remain focused on optimizing our utilization and cash flow. We plan to focus on expanding our commercial strategy, further advancing our technology initiatives, and maintaining our industry leading safety performance. With this strategy, we strive to provide the best service quality for our customers while maintaining a low-cost structure. We believe that these efforts combined with the recent improvements in pricing will generate free cash flow in 2021 and position us for a longer-term recovery. |
INDEBTEDNESS AND BORROWING FACI
INDEBTEDNESS AND BORROWING FACILITY | 3 Months Ended |
Mar. 31, 2021 | |
INDEBTEDNESS AND BORROWING FACILITY | |
INDEBTEDNESS AND BORROWING FACILITY | NOTE 4 — INDEBTEDNESS AND BORROWING FACILITY Revolving Credit Facility The maximum availability of credit under the Successor Company’s credit facility is limited at any time to the lesser of $40 million or the borrowing base. The borrowing base is based on percentages of eligible accounts receivable and is subject to certain reserves. In an event of default or if the amount available under the credit facility is less than either 12.5% of our maximum availability or $5.0 million, we will be required to maintain a minimum fixed charge coverage ratio of 1.0 to 1.0. If at any time borrowings and letters of credit issued under the credit facility exceed the borrowing base, we will be required to repay an amount equal to such excess. The credit facility contains covenants that could, in certain circumstances, limit our ability to issue additional debt, repurchase or pay dividends on our common stock, sell substantially all of our assets, make certain investments, or enter into certain other transactions. We were in compliance with all of the covenants in the credit facility at March 31, 2021. As of March 31, 2021 (Successor), the borrowing base was $35.6 million and therefore our maximum availability under the credit facility was $35.6 million. There were no borrowings outstanding under the credit facility, and letters of credit totaling $4.0 million were issued, resulting in $31.6 million of availability under the credit facility. |
REVENUE
REVENUE | 3 Months Ended |
Mar. 31, 2021 | |
REVENUE | |
REVENUE | NOTE 5 — REVENUE The Company contracts with its customers to perform hydraulic fracturing services on one or more oil or natural gas wells. Under these arrangements, we satisfy our performance obligations as services are rendered, which is generally upon the completion of a fracturing stage or the passage of time. Pricing for our services is frequently negotiated with our customers and is based on prevailing market rates during each reporting period. The amounts we invoice our customers for services performed during a period are directly related to the value received by the customers for the period. There is no inherent uncertainty to the amount of consideration we will receive for services performed during a period and no judgment is required to allocate a portion of the transaction price to a future period. Accordingly, we are not required to identify any unsatisfied performance obligations nor attribute any revenue to them. We have no material contract assets or liabilities with our customers. We do not present disaggregated revenue because we do not believe this information is necessary to understand the nature, amount, timing and uncertainty of our revenues and cash flows. |
IMPAIRMENTS AND OTHER CHARGES
IMPAIRMENTS AND OTHER CHARGES | 3 Months Ended |
Mar. 31, 2021 | |
IMPAIRMENTS AND OTHER CHARGES | |
IMPAIRMENTS AND OTHER CHARGES | NOTE 6 — IMPAIRMENTS AND OTHER CHARGES The following table summarizes our impairments and other charges: Successor Predecessor Three Months Ended Three Months Ended March 31, March 31, (In millions) 2021 2020 Transaction and strategic initiative costs $ 0.6 $ — Gain on contract termination (0.3) — Supply commitment charges — 3.2 Inventory write-down — 0.6 Employee severance costs — 0.5 Total impairments and other charges $ 0.3 $ 4.3 Transaction and Strategic Initiative Costs In the first quarter of 2021 (Successor), we incurred $0.6 million of costs related to strategic initiatives. Gain on Contract Termination In the first quarter of 2021 (Successor), we terminated a portion our operating lease for certain buildings. We recorded a net gain of $0.3 million as a result of this contract termination. Supply Commitment Charges The Predecessor Company incurred supply commitment charges when our purchases of sand from certain suppliers were less than the minimum purchase commitments in our supply contracts. According to the accounting guidance for firm purchase commitments, future losses that are considered likely are also required to be recorded in the current period. In the first quarter of 2020 (Predecessor), we recorded aggregate charges under these supply contracts of $3.2 million. The charges related to actual purchase shortfalls incurred, as well as forecasted losses expected to be incurred and settled in future periods. The purchase shortfalls were largely due to our customers choosing to procure their own sand, often from sand mines closer to their operating areas. The Company terminated all sand supply contracts upon emergence from bankruptcy. Any amounts due as outlined in the Plan were paid upon emergence and the Company does not expect any future commitment related to these Predecessor contracts. Inventory Write-down In the first quarter of 2020 (Predecessor), we recorded $0.6 million of inventory write-downs to reduce excess, obsolete and slow-moving inventory to its estimated net realizable value. Employee Severance Costs In the first quarter of 2020 (Predecessor), we incurred employee severance costs of $0.5 million in connection with our cost reduction measures to mitigate losses from the decline in customer activity levels due to the low commodity price environment. |
INCOME TAXES
INCOME TAXES | 3 Months Ended |
Mar. 31, 2021 | |
INCOME TAXES | |
INCOME TAXES | NOTE 7 — INCOME TAXES We provide a valuation allowance against all deferred tax assets in excess of our deferred tax liabilities. As a result, we only record income tax expense for states that limit the deduction of net operating loss carryforwards and for foreign income taxes. Upon our emergence from bankruptcy on November 19, 2020 an ownership change under Internal Revenue Code Section 382 occurred. This change substantially reduced our pre-Chapter 11 net operating loss carryforwards and certain other tax deductions. At each reporting date, we consider all available positive and negative evidence to evaluate whether our deferred tax assets are more likely than not to be realized. A significant piece of negative evidence that we consider is whether we have incurred cumulative losses (generally defined as losses before income taxes) in recent years. Such negative evidence weighs heavily against other more subjective positive evidence such as our projections for future taxable income. Notwithstanding a three-year cumulative income, we concluded that a full valuation allowance was still required at March 31, 2021, because of the significant fluctuations of our business in recent years, and our losses before income taxes for the year ended December 31, 2020, and the for three months ended March 31, 2021. |
EARNINGS PER SHARE
EARNINGS PER SHARE | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
EARNINGS PER SHARE | NOTE 8 — EARNINGS PER SHARE The numerators and denominators of the basic and diluted earnings per share (“EPS”) computations for our common stock are calculated as follows: Successor Predecessor Three Months Ended Three Months Ended March 31, March 31, (Dollars in millions, except per share amounts) 2021 2020 Numerator: Net loss used for basic and diluted EPS computations $ (7.9) $ (11.7) Denominator: Weighted average shares used for 13,990 5,367 Effect of dilutive securities: Dilutive potential of equity awards — — Number of shares used for 13,990 5,367 Basic and diluted EPS $ (0.56) $ (2.18) We had 203,000 and 125,000 restricted stock units outstanding at March 31, 2021 (Successor) and 2020 (Predecessor), respectively, that were not included in the calculation of diluted EPS for the periods presented because the effect would be antidilutive. These securities would be included in the calculation of diluted EPS in future periods if the Company generates positive net income for purposes of the calculation. The Company also has performance based restricted stock units, stock options, and warrants outstanding that could become potentially dilutive in future periods depending on the company’s market capitalization. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 3 Months Ended |
Mar. 31, 2021 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 9 — COMMITMENTS AND CONTINGENCIES Legal Contingencies In the ordinary course of business, we are subject to various legal proceedings and claims, some of which may not be covered by insurance. Some of these legal proceedings and claims are in early stages, and many of them seek an indeterminate amount of damages. We estimate and provide for potential losses that may arise out of legal proceedings and claims to the extent that such losses are probable and can be reasonably estimated. Significant judgment is required in making these estimates and our final liabilities may ultimately be materially different from these estimates. When preparing our estimates, we consider, among other factors, the progress of each legal proceeding and claim, our experience and the experience of others in similar legal proceedings and claims, and the opinions and views of legal counsel. Legal costs related to litigation contingencies are expensed as incurred. With respect to the litigation matter below, if there is an adverse outcome individually or collectively, there could be a material adverse effect on the Company’s consolidated financial position or results of operations. Litigation matters are subject to inherent uncertainties and management’s view of these matters may change in the future. Therefore, there can be no assurance as to the ultimate outcome of litigation matters. Regardless of the outcome, any such litigation and claims can have an adverse impact on the Company because of defense and settlement costs, diversion of management resources and other factors. Patterson v. FTS International Manufacturing, LLC and FTS International Services, LLC We believe that costs associated with other legal matters will not have a material adverse effect on our consolidated financial statements or financial condition. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
Intangible Assets | Intangible Assets The amount of intangible assets recorded in our consolidated balance sheets for March 31, 2021 (Successor) and December 31, 2020 (Successor), was $7.4 million, of which $6.0 million related to our indefinite-lived tradename and $1.4 million related to our developed technology which is amortized on a straight line basis over a period of three years . Accumulated amortization of this intangible at March 31, 2021 (Successor) and December 31, 2020 (Successor) was $0.2 million and $0.1 million, respectively. Amortization expense in the first quarter of 2021 (Successor) and the first quarter of 2020 (Predecessor) was $0.1 million and zero, respectively. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments Money market funds, classified as cash and cash equivalents, are the only financial instruments that are measured and recorded at fair value on the Company’s balance sheets. The following table presents money market funds at their level within the fair value hierarchy. (In millions) Principal Amount Total Fair Value Level 1 Level 2 Level 3 March 31, 2021 Money market funds $ 59.6 $ 59.6 $ 59.6 $ — $ — December 31, 2020 Money market funds $ 59.6 $ 59.6 $ 59.6 $ — $ — |
Reclassifications | Reclassifications Inventory write-downs have been reclassified from costs of revenue to impairments and other charges on the statements of operations for the three months ended March 31, 2020, to conform to current year presentation. This reclassification had no effect on operating loss or net loss as previously reported. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
BASIS OF PRESENTATION | |
Schedule of recurring fair value measurements | (In millions) Principal Amount Total Fair Value Level 1 Level 2 Level 3 March 31, 2021 Money market funds $ 59.6 $ 59.6 $ 59.6 $ — $ — December 31, 2020 Money market funds $ 59.6 $ 59.6 $ 59.6 $ — $ — |
RESTRICTED CASH (Tables)
RESTRICTED CASH (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
RESTRICTED CASH. | |
Schedule of cash and cash equivalents and restricted cash | March 31, December 31, (In millions) 2021 2020 Cash and cash equivalents $ 86.4 $ 94.0 Restricted cash included in prepaid expenses and other current assets — 12.7 Total cash, cash equivalents, and restricted cash shown in the $ 86.4 $ 106.7 |
IMPAIRMENTS AND OTHER CHARGES (
IMPAIRMENTS AND OTHER CHARGES (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
Table Text Blocks | |
Schedule of impairments and other charges | Successor Predecessor Three Months Ended Three Months Ended March 31, March 31, (In millions) 2021 2020 Transaction and strategic initiative costs $ 0.6 $ — Gain on contract termination (0.3) — Supply commitment charges — 3.2 Inventory write-down — 0.6 Employee severance costs — 0.5 Total impairments and other charges $ 0.3 $ 4.3 |
EARNINGS PER SHARE (Tables)
EARNINGS PER SHARE (Tables) | 3 Months Ended |
Mar. 31, 2021 | |
EARNINGS PER SHARE | |
Schedule of computations for basic and diluted earnings (loss) per share | Successor Predecessor Three Months Ended Three Months Ended March 31, March 31, (Dollars in millions, except per share amounts) 2021 2020 Numerator: Net loss used for basic and diluted EPS computations $ (7.9) $ (11.7) Denominator: Weighted average shares used for 13,990 5,367 Effect of dilutive securities: Dilutive potential of equity awards — — Number of shares used for 13,990 5,367 Basic and diluted EPS $ (0.56) $ (2.18) |
BASIS OF PRESENTATION (Details)
BASIS OF PRESENTATION (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Other comprehensive income. | ||
Other comprehensive income | $ 0 | $ 0 |
BASIS OF PRESENTATION - Intangi
BASIS OF PRESENTATION - Intangible Assets (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | Dec. 31, 2020 | |
BASIS OF PRESENTATION | |||
Intangible assets | $ 7.4 | $ 7.4 | |
Trade name intangible assets | 6 | 6 | |
Developed technolgy intangible assets | $ 1.4 | $ 1.4 | |
Amortization period | 3 years | 3 years | |
Accumulated amortization | $ 0.2 | $ 0.1 | |
Amortization expense | $ 0.1 | $ 0.1 |
BASIS OF PRESENTATION - Fair Va
BASIS OF PRESENTATION - Fair Value of Financial Instruments (Details) - Recurring - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 59.6 | $ 59.6 |
Fair value. | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | 59.6 | 59.6 |
Carrying value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Money market funds | $ 59.6 | $ 59.6 |
RESTRICTED CASH (Details)
RESTRICTED CASH (Details) - USD ($) $ in Millions | Mar. 31, 2021 | Dec. 31, 2020 | Mar. 31, 2020 | Dec. 31, 2019 |
Cash, restricted cash and cash equivalents | ||||
Cash and cash equivalents | $ 86.4 | $ 94 | ||
Restricted cash included in prepaid expenses and other current assets | 12.7 | |||
Total cash, cash equivalents, and restricted cash shown in the consolidated statements of cash flows | $ 86.4 | $ 106.7 | $ 199.2 | $ 223 |
INDEBTEDNESS AND BORROWING FA_2
INDEBTEDNESS AND BORROWING FACILITY - Revolving Credit Facility (Details) $ in Millions | 3 Months Ended |
Mar. 31, 2021USD ($) | |
Revolving credit facility | |
Revolving Credit Facility | |
Minimum credit facility percentage | 12.50% |
Minimum maintained credit facility | $ 5 |
Fixed coverage ratio | 1.00% |
Borrowing base on line of credit | $ 35.6 |
Maximum borrowing capacity | 35.6 |
Revolving credit | 0 |
Maximum borrowing credit facility | 31.6 |
Revolving credit facility | Maximum | |
Revolving Credit Facility | |
Credit facility sub limit amount | 40 |
Letter of Credit | |
Revolving Credit Facility | |
Revolving credit | $ 4 |
IMPAIRMENTS AND OTHER CHARGES -
IMPAIRMENTS AND OTHER CHARGES - Summary of Impairments and Other Charges (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Impairments and other charges | ||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor |
Transaction and strategic initiative costs | $ 0.6 | |
Gain on contract termination | (0.3) | |
Supply commitment charges | $ 3.2 | |
Inventory write-down | 0.6 | |
Employee severance costs | 0.5 | |
Total impairments and other charges | $ 0.3 | $ 4.3 |
EARNINGS PER SHARE - (Details)
EARNINGS PER SHARE - (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 2 Months Ended | 3 Months Ended | |||
Dec. 31, 2020 | Nov. 19, 2020 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | |
Earnings per share basic and diluted | ||||||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor | ||||
Numerator: | ||||||
Net loss used for basic and diluted EPS computations | $ (13.4) | $ 106.7 | $ (7.9) | $ (68.7) | $ (50.7) | $ (11.7) |
Denominator: | ||||||
Weighted average shares used for basic EPS computation (in thousands) | 13,990 | 5,367 | ||||
Number of shares used for diluted EPS computation (in thousands) | 13,990 | 5,367 | ||||
Basic and diluted EPS | $ (0.56) | $ (2.18) | ||||
Employee restricted stock units | ||||||
Denominator: | ||||||
Dilutive potential of equity awards |
EARNINGS PER SHARE - Antidiluti
EARNINGS PER SHARE - Antidilutive Securities (Details) - shares | 3 Months Ended | |
Mar. 31, 2021 | Mar. 31, 2020 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Financial Designation, Predecessor and Successor [Fixed List] | Successor | Predecessor |
Employee restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||
Number of common stock equivalents that were not included in calculation of diluted net earnings per share | 203,000 | 125,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) - Patterson Case - USD ($) $ in Millions | Nov. 12, 2018 | Jul. 19, 2018 | Jun. 24, 2015 |
Litigation | |||
Damages sought | $ 1 | ||
Damages awarded value | $ 33 | $ 100 |