Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | May 11, 2018 | |
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Trading Symbol | NINE | |
Entity Registrant Name | Nine Energy Service, Inc. | |
Entity Central Index Key | 1,532,286 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 25,033,551 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets | ||
Cash and cash equivalents | $ 72,900 | $ 17,513 |
Accounts receivable, net | 116,080 | 99,565 |
Inventories | 21,748 | 22,230 |
Prepaid expenses and other | 6,859 | 7,929 |
Total current assets | 217,587 | 147,237 |
Property and equipment, net | 253,066 | 259,039 |
Goodwill | 93,756 | 93,756 |
Intangible assets, net | 61,645 | 63,545 |
Other long-term assets | 1,181 | 4,806 |
Notes receivable from shareholders | 10,501 | 10,476 |
Total assets | 637,736 | 578,859 |
Current liabilities | ||
Long-term debt, current portion | 2,774 | 241,509 |
Accounts payable | 36,446 | 29,643 |
Accrued expenses | 22,383 | 14,687 |
Income taxes payable | 721 | 581 |
Total current liabilities | 62,324 | 286,420 |
Long-term liabilities | ||
Long-term debt | 110,936 | |
Deferred taxes | 4,970 | 5,017 |
Other long term liabilities | 66 | 64 |
Total liabilities | 178,296 | 291,501 |
Commitments and contingencies (Note 7) | ||
Stockholders’ equity | ||
Common stock (120,000,000 shares authorized at $.01 par value; 23,873,583 and 13,386,986 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively) | 243 | 158 |
Additional paid-in capital | 555,681 | 384,965 |
Accumulated other comprehensive income (loss) | (4,078) | (3,684) |
Retained earnings (accumulated deficit) | (92,406) | (94,081) |
Total stockholders’ equity | 459,440 | 287,358 |
Total liabilities and stockholders’ equity | $ 637,736 | $ 578,859 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - $ / shares | Mar. 31, 2018 | Dec. 31, 2017 |
Statement Of Financial Position [Abstract] | ||
Common stock, shares authorized | 120,000,000 | 120,000,000 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares issued | 24,278,857 | 15,810,540 |
Common stock, shares outstanding | 24,278,857 | 15,810,540 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Revenues | $ 173,807 | $ 105,353 |
Cost and expenses | ||
Cost of revenues (exclusive of depreciation and amortization shown separately below) | 138,227 | 91,388 |
General and administrative expenses | 15,428 | 12,769 |
Depreciation | 13,109 | 13,561 |
Amortization of intangibles | 1,900 | 2,201 |
Loss on equity method investment | 75 | |
Loss on sale of property and equipment | 370 | 224 |
Income (loss) from operations | 4,698 | (14,790) |
Other expense | ||
Interest expense | 2,930 | 3,758 |
Total other expense | 2,930 | 3,758 |
Income (loss) before income taxes | 1,768 | (18,548) |
Income tax expense | 93 | 2,166 |
Net income (loss) | $ 1,675 | $ (20,714) |
Net income (loss) per share | ||
Basic | $ 0.08 | $ (1.50) |
Diluted | $ 0.08 | $ (1.50) |
Weighted average shares outstanding | ||
Basic | 21,902,519 | 13,789,957 |
Diluted | 22,069,353 | 13,789,957 |
Other comprehensive income, net of tax | ||
Foreign currency translation adjustments, net of tax of $0 and $0 | $ (394) | $ (7) |
Total other comprehensive loss, net of tax | (394) | (7) |
Total comprehensive income (loss) | $ 1,281 | $ (20,721) |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS) (Unaudited) (Parenthetical) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (Unaudited) - 3 months ended Mar. 31, 2018 - USD ($) $ in Thousands | Total | Common Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Accumulated Deficit) |
Stockholders’ equity at Dec. 31, 2017 | $ 287,358 | $ 158 | $ 384,965 | $ (3,684) | $ (94,081) |
Stockholders’ equity, Shares at Dec. 31, 2017 | 15,810,540 | ||||
Issuance of common stock | 168,261 | $ 81 | 168,180 | ||
Issuances of common stock, Shares | 8,050,000 | ||||
Other issuances of common stock | 300 | $ 4 | 296 | ||
Other issuances of common stock, Shares | 418,317 | ||||
Stock-based compensation expense | 2,240 | 2,240 | |||
Other comprehensive income | (394) | (394) | |||
Net income | 1,675 | 1,675 | |||
Stockholders’ equity at Mar. 31, 2018 | $ 459,440 | $ 243 | $ 555,681 | $ (4,078) | $ (92,406) |
Stockholders’ equity, Shares at Mar. 31, 2018 | 24,278,857 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities | ||
Net income (loss) | $ 1,675 | $ (20,714) |
Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||
Depreciation | 13,109 | 13,561 |
Amortization of intangibles | 1,900 | 2,201 |
Amortization of deferred financing costs | 853 | 459 |
Provision for doubtful accounts | (270) | 29 |
Deferred tax benefit | (47) | 2,166 |
Stock-based and deferred compensation expense | 2,240 | 1,536 |
Loss on sale of property and equipment | 370 | 224 |
Loss on revaluation of contingent consideration (Note 7) | 1,063 | 87 |
Loss on equity method investment | 75 | |
Changes in operating assets and liabilities, net of effects from acquisitions | ||
Accounts receivable | (16,387) | (20,112) |
Inventories | 406 | (1,503) |
Prepaid expenses and other current assets | 757 | 3,261 |
Accounts payable and accrued expenses | 11,357 | 8,911 |
Income taxes receivable/payable | 140 | (19) |
Other assets and liabilities | 66 | (225) |
Net cash provided by (used in) operating activities | 17,307 | (10,138) |
Cash flows from investing activities | ||
Proceeds from sales of assets | 1,096 | 262 |
Proceeds from property and equipment casualty losses | 19 | |
Proceeds from notes receivable payments | (25) | |
Purchases of property and equipment | (6,468) | (10,005) |
Equity method investment | (1,000) | |
Net cash used in investing activities | (5,372) | (10,749) |
Cash flows from financing activities | ||
Borrowings on revolving credit facilities | 29,000 | |
Payments on revolving credit facilities | (96,182) | (23,500) |
Proceeds from term loan | 125,000 | |
Payments on term loans | (155,701) | |
Payments on notes payable—insurance premium financing | (272) | |
Proceeds from issuance of common stock in IPO, net of offering costs | 171,616 | |
Proceeds from other issuances of common stock | 300 | 41,299 |
Distribution to shareholders | (2,438) | |
Deferred financing costs | (1,385) | (230) |
Net cash provided by financing activities | 43,648 | 43,859 |
Net increase in cash and cash equivalents | 55,583 | 22,972 |
Impact of foreign currency exchange on cash | (196) | (7) |
Cash and cash equivalents | ||
Beginning of year | 17,513 | 4,074 |
End of period | $ 72,900 | $ 27,039 |
Description of business and org
Description of business and organization | 3 Months Ended |
Mar. 31, 2018 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of Business and Organization | 1. Description of business and organization Nine Energy Service, Inc. (the “Company” or “Nine”), a Delaware corporation, is an oilfield services business that provides services integral to the completion of unconventional wells through a full range of tools and methodologies, and provides a range of production enhancement and well workover services. The Company is headquartered in Houston, Texas. On February 28, 2017, pursuant to the terms and conditions of a combination agreement dated February 3, 2017 (“Combination”) the Company merged with Beckman Production Services, Inc. (“Beckman”), and all of the issued and outstanding shares of Beckman common stock were converted into shares of common stock of Nine Energy Service, Inc. Prior to the Combination, SCF-VII, L.P. had controlled a majority of the voting interests of Nine and Beckman since February 28, 2011 and July 31, 2012, respectively. The merger of the entities into the combined Company was accounted for using reorganization accounting (i.e., “as if” pooling of interest) for entities under common control. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | 2. Summary of significant accounting policies Basis of presentation The accompanying condensed consolidated financial statements have not been audited by the Company’s independent registered public These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. 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 condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 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. Principles of consolidation The condensed consolidated financial statements include the accounts of Nine and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in the 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Such estimates include, but are not limited to, fair value assumptions used in purchase accounting and in analyzing goodwill, other intangibles and long-lived assets for possible impairment, useful lives used in depreciation and amortization expense, stock based compensation fair value, estimated realizable value on excess and obsolete inventories, deferred taxes and income tax contingencies and losses on accounts receivable. It is at least reasonably possible that the estimates used will change within the next year Revenue recognition The Company recognizes revenue for equipment, products and services based upon purchase orders, contracts or other persuasive evidence of an arrangement with the customer that include fixed or determinable prices and that do not include right of return or other similar provisions or other post-delivery obligations. Revenue is recognized for products upon delivery, customer acceptance and when collectability is reasonably assured. Revenue is recognized for services when they are rendered and collectability is reasonably assured. Accounts receivable The Company extends credit to customers in the normal course of business. Accounts receivable are carried at their estimated collectible amount. Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. The Company maintains an allowance for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Such allowances are based upon several factors including, but not limited to, credit approval practices, industry and customer historical experience as well as the current and projected financial condition of the specific customer. Accounts receivable outstanding longer than contractual terms are considered past due. The Company writes off accounts receivable to the allowance for doubtful accounts when they become uncollectible. Any payments subsequently received on receivables previously written off are credited to bad debt expense. Bad debt expense reflected a recovery of $0.3 million and expense of $0.0 million for the three months ended March 31, 2018 and 2017, respectively. The allowance for doubtful accounts was $0.3 million and $0.6 million at March 31, 2018 and December 31, 2017, respectively. Revenues for the three months ended March 31, 2018 included sales to one customer that individually represented 10% or more of total revenue. No customer accounted for 10% or more of total revenue for the three months ended March 31, 2017. Inventories Inventories, classified as finished goods, are stated at the lower of cost or net realizable value. Cost is determined on an average cost basis. The Company reviews its inventory balances and writes down its inventory for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The reserves for obsolescence were $2.6 million and $2.9 million at March 31, 2018 and December 31, 2017, respectively. March 31, 2018 December 31, 2017 (in thousands of dollars) Raw Materials $ 610 $ 939 Finished Goods 21,138 21,291 Total $ 21,748 $ 22,230 Equity In January 2018, there was an 8.0256 for 1 stock split immediately preceding the Company’s initial public offering (the “IPO”). All shares and per share data reflect the effect of the stock split. In January 2018, we completed our IPO of 8,050,000 shares of common stock (including 1,050,000 shares pursuant to an over-allotment option) at a price to the public of $23.00 per share. The aggregate gross proceeds of our IPO were $185.2 million. After subtracting underwriting discounts and commissions of $12.5 million and offering expenses of approximately $4.4 million, we received net proceeds of approximately $168.3 million. We used a portion of these net proceeds, together with $125.0 million of term loan borrowings under our credit facility, to fully repay the outstanding indebtedness under our former credit facilities. Further, our credit agreement required that we use a portion of the proceeds from the over-allotment option to make a prepayment of the term loan borrowings of $9.7 million. The remainder of the net proceeds are being used for general corporate purposes. No payments, fees or expenses have been paid, directly or indirectly, to any of our officers, directors or their associates, holders of 10% or more of any class of our equity securities or other affiliates. Share-based compensation The Company has stock-based compensation plans for certain of its employees. The Company measures employee share-based compensation awards at fair value on the date they are granted to employees and recognizes compensation cost in its financial statements over the requisite service period. Compensation expense is recorded for restricted stock over the applicable vesting period based on the fair value of the stock on the date of grant. Options are issued with an exercise price equal to the fair value of the stock on the date of grant. Compensation expense is recorded for the fair value of the stock options, and is recognized over the period of the underlying security’s vesting schedule. Consideration paid on the exercise of stock options is credited to share capital and additional paid-in capital. Fair value of the share-based compensation is measured by use of the Black-Scholes pricing model. The following discusses the assumptions used related to the Black-Scholes pricing model. Expected life The expected term of stock options represents the period the stock options are expected to remain outstanding and is based on the simplified method, which is the weighted average vesting term plus the original contractual term, divided by two. Expected volatility Expected volatility measures the amount that a stock price has fluctuated or is expected to fluctuate during a period. Prior to the IPO, the Company’s stock was not publicly traded and the Company determined volatility based on an analysis of the PHLX Oil Service Index that tracks publicly traded oilfield service stocks. Dividend yield At the time of the issuance of the options, the Company did not plan to pay cash dividends in the foreseeable future. Therefore, a zero expected dividend yield was used in the valuation model. Risk-free interest rate The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. Forfeitures As a result of the adoption of ASU No. 2016-09, the Company elected to account for stock-based compensation forfeitures as they occur. Fair value of common stock Prior to the IPO, the value of the Company’s stock at the time of each option grant used to establish the strike price was estimated by management in accordance with an internal valuation model, and approved by the Company’s Board of Directors. The valuation model was based upon an average of cash flow and book value multiples of comparable companies. The comparable companies selected reflected the market’s view on key sector, geographic, and product type exposure that were similar to those that impacted the Company’s business. The value was further subject to judgmental factors such as prevailing market conditions, changes in the stock prices of other oilfield service companies and the overall outlook for the Company and its products in general. Subsequent to the IPO, the stock value will be the publicly traded share price. Deferred financing costs Deferred financing costs are amortized over the life of the related debt using the effective interest method. The Company expensed approximately $0.9 million and $0.5 million of deferred financing costs during the three months ended March 31, 2018 and 2017, respectively, which amounts are included in interest expense in the Condensed Consolidated Statements of Income and Comprehensive Income (Loss). The expense included the write-off of approximately $0.7 million and $0.1 million of deferred financing costs for the three months ended March 2018 and 2017. The amount written off in the three months ended March 31, 2018 represents the deferred financing costs related to the debt that was outstanding at December 31, 2017 and paid fully in January, 2018; the amount written off in the three months ended March 31, 2017 represents the portion of the deferred financing costs related to the reduction in the amount available in the revolving credit facilities. Deferred financing costs of $1.6 million and $0.7 million at March 31, 2018 and December 31, 2017, respectively, are reported as a reduction of long-term debt (Note 5). Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’) No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payment |
Acquisitions and Combinations
Acquisitions and Combinations | 3 Months Ended |
Mar. 31, 2018 | |
Business Combinations [Abstract] | |
Acquisitions and Combinations | 3. Acquisitions and combinations Beckman combination On February 28, 2017, pursuant to the terms and conditions of a combination agreement dated February 3, 2017, the Company merged with Beckman and substantially all of the issued and outstanding shares of Beckman common stock were converted into shares of common stock of Nine Energy Service, Inc. at a ratio of 0.567154 Nine shares per Beckman share, other than 1.6% of Beckman shares paid in cash. Prior to the Combination, SCF-VII, L.P. had controlled a majority of the voting interests of Nine and Beckman since February 28, 2011 and July 31, 2012, respectively. The merger of the entities into the Company was accounted for using reorganization accounting (i.e., “as if” pooling of interest) for entities under common control (Note 1). In conjunction with the Combination, other events occurred, including: • The conversion of certain Beckman shares owned by non-accredited shareholders of Beckman at the time of the Combination into cash at a price of $17.69 per Beckman share; • Payment of cash for a certain number of Beckman shares that converted into fractional Nine shares at a price of $31.18 per Nine share; • The conversion of Beckman options to purchase Beckman common stock into options to purchase Nine shares; • The conversion of Beckman restricted shares into Nine restricted shares; • The conversion of Beckman warrants to purchase Beckman common stock in warrants to purchase Nine shares; • The issuance of options to purchase Nine common stock; • The issuance, on a pro-rata basis, to the Company’s shareholders, of Nine common stock based on a subscription amount equal to the number of common shares issued at a price of $31.18. The subscription was offered to all shareholders on record at the time of the Combination. Any unsubscribed shares were reallocated among the other shareholders; and • The issuance to the Company’s shareholders of Nine warrants equal to one half of the amount of shares issued related to the subscription described above. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | 4. Goodwill and intangible assets The changes in the net carrying amount of the components of goodwill for the year ended December 31, 2017 and the three months ended March 31, 2018 are as follows: Goodwill Gross value Accumulated impairment loss Net (in thousands of dollars) Balance as of December 31, 2016 $ 173,033 $ (47,747 ) $ 125,286 Impairment — (31,530 ) (31,530 ) Balance as of December 31, 2017 $ 173,033 $ (79,277 ) $ 93,756 Impairment — — — Balance as of March 31, 2018 $ 173,033 $ (79,277 ) $ 93,756 At December 31, 2017, the Company performed its annual impairment test on each of its operating units and concluded that there was impairment at one operating unit in our Completion Solutions segment because its carrying value exceeded its estimated fair value, which resulted from declining profitability and deteriorating market conditions. The Company recognized a goodwill impairment loss of $31.5 million. The December 31, 2017 impairment test for the Production Solutions segment indicated that the estimated fair value calculation provided only 11% of cushion in relation to carrying value. As a result, this segment’s goodwill, which totals $13.0 million, is susceptible to impairment risk from adverse economic conditions in the future. During the three months ended March 31, 2018, there were no indications that impairment of goodwill had occurred. Goodwill by segment was unchanged from December 31, 2017. The changes in the net carrying value of the components of intangible assets for the year ended December 31, 2017 and the three months ended March 31, 2018 are as follows: Intangible assets Gross value Accumulated amortization Net (in thousands of dollars) Balance as of December 31, 2016 $ 105,464 $ (29,320 ) $ 76,144 Amortization expense — (8,799 ) (8,799 ) Impairment (12,000 ) 8,200 (3,800 ) Balance as of December 31, 2017 $ 93,464 $ (29,919 ) $ 63,545 Amortization expense — (1,900 ) (1,900 ) Impairment — — — Balance as of March 31, 2018 $ 93,464 $ (31,819 ) $ 61,645 Amortization expense of $1.9 million and $2.2 million for the three months ended March 31, 2018 and 2017, respectively, is related to cost of revenues, but reported separately. |
Long-term Debt
Long-term Debt | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Long-term Debt | 5. Long-term debt Long-term debt consists of the following: March 31, 2018 December 31, 2017 (in thousands of dollars) Term Loan $ 115,274 $ — Nine US revolving credit facility — 75,000 Nine US term loan — 35,175 Nine Canada revolving credit facility — 9,760 Beckman term loan — 110,800 Beckman revolving credit facility — 11,500 Total debt before deferred financing costs $ 115,274 $ 242,235 Deferred financing costs (1,564 ) (726 ) Total $ 113,710 $ 241,509 Less Current portion (2,774 ) (241,509 ) Long-term debt $ 110,936 $ — As explained in Note 2, the Company completed its IPO in January 2018. On September 15, 2017, in anticipation of the IPO, the Company completed negotiations of terms for a new Credit Facility (the “New Facility”) that became effective upon the consummation of the IPO. All balances owed under the Legacy Nine and Legacy Beckman entities’ Credit Facilities (“the Legacy Facilities” – described below) were paid in full immediately following funding of the IPO, and such Legacy Facilities are no longer in effect. The New Facility aggregates the Company’s collateral and security and recognizes the Company as a single combined entity. The New Facility consists of a Term Loan Facility of $125 million, amortizable at a quarterly rate of 2.5%, and a $50 million Revolving Credit Facility. The New Facility matures in July 2020. At March 31, 2018, the revolving credit facility had an undrawn borrowing capacity of $49.4 million, which is net of a $0.6 million outstanding letter of credit. All of the obligations under the New Facility are secured by first priority perfected security interests (subject to permitted liens) in substantially all of the personal property of Nine and its domestic restricted subsidiaries, excluding certain assets. Nine Canada is not a borrower or guarantor under the Credit Agreement. Loans to Nine and its domestic restricted subsidiaries under the New Facility may be base rate loans or LIBOR loans. The applicable margin for base rate and prime rate loans will vary from 1.50% to 2.75%, and the applicable margin for LIBOR loans will vary from 2.50% to 3.75%, in each case depending on Nine’s leverage ratio. Interest rates averaged 5.5% during the three months ended March 31, 2018. Nine is permitted to repay any amounts borrowed prior to the maturity date without any premium or penalty other than customary LIBOR breakage costs. In addition, a commitment fee of 0.50% per annum will be charged on the average daily unused portion of the revolving commitments. Such commitment fee is payable quarterly in arrears. The New Facility’s credit agreement contains various affirmative and negative covenants, including financial reporting requirements and limitations on indebtedness, liens, mergers, consolidations, liquidations and dissolutions, sales of assets, dividends and other restricted payments, investments (including acquisitions) and transactions with affiliates. The credit agreement does not contain any financial covenants, other than a total leverage ratio, an asset coverage ratio and a fixed charge coverage ratio, each of which will be tested on a quarterly basis. The Company was in compliance with all debt covenants under the New Facility as of March 31, 2018. The fair value (level 2) of debt approximates book value, as its interest rates are variable and based on market rates. Legacy credit facilities - Nine In conjunction with the Crest Pumping Technologies (“Crest”) acquisition on June 30, 2014, the Company entered into a $300 million credit facility arrangement with several major financial institutions, secured by substantially all of the Company’s assets. Under the credit facility arrangement, $270 million could be borrowed in the U.S., consisting of an $85 million 5-year Term Loan and a $185 million Revolving Credit Facility, and $30 million could be borrowed in Canada under a Revolving Credit Facility. The maturity date was June 30, 2019. Interest rates were based on prime rate, the federal funds rate or the London Interbank Offered Rate (LIBOR), plus a margin determined by the funded debt to EBITDA ratio. There was also a standby fee of 0.375% to 0.5%. On May 13, 2016, the Company entered into an amendment to the credit facility (“Amended Legacy Nine Credit Facility”) described above. The Amended Legacy Nine Credit Facility reduced the borrowing capacity of the Revolving Credit Facility to $75 million in the US and $13 million in Canada, with a new maturity date of January 1, 2018 and increased interest rates and standby fees. The amendment waived all previous covenants through 2016, established minimum 12-month EBITDA targets for the quarter ended June 30, 2016 through the quarter ended June 30, 2017 and limited the amount of capital expenditures in 2016 and 2017. The amendment established a debt to EBITDA ratio of 4.5 starting subsequent to June 30, 2017, and EBITDA to fixed charge ratios of 1.00 for the quarters ended March 31 and June 30, 2017 and a ratio of 1.25 for the quarter ended September 30, 2017 and thereafter. (Fixed charges include interest, term loan payments, capital expenditures and income tax payments.) The amendment also required that all future income tax refunds resulting from net operating losses be used to prepay term loan advances in reverse order of maturity. On August 2, 2017, the Company amended the Legacy Nine Credit Facility (“Amended Legacy Nine Credit Facility”) and secured approval of the amendment by Legacy Nine’s existing lenders. Under the Amended Legacy Nine Credit Facility, the current maturity date of January 1, 2018 was extended to May 31, 2018 and certain covenants, such as fixed charge coverage ratio, total leverage ratio and minimum EBITDA were modified to coincide with the extended maturity date. The Company was in compliance with all covenants as of December 31, 2017. The Company used a portion of the net proceeds from the IPO and term loan borrowings under the New Facility to fully repay and terminate the Amended Existing Nine Credit Facility in January 2018. Legacy credit facilities - Beckman On May 2, 2014, the Company entered into a senior secured credit agreement with several major financial institutions (“2014 Credit Facility”). The senior secured credit financing consisted of a revolving credit facility in an aggregate amount of $170 million with an accordion feature of up to $50 million in the aggregate. The 2014 Credit Facility was secured by first priority perfected security interest in all equity interests of domestic subsidiaries, 65% of the voting equity of directly owned foreign subsidiaries, and substantially all of the tangible and intangible assets of the Company. Interest only was due monthly and calculated at 2.50% above the London Interbank Offered Rate (LIBOR) or 1.50% above the Alternate Base Rate. The credit agreement was to mature on May 2, 2019. The credit agreement contained certain financial covenants which, among other things, limited Beckman’s spending for capital expenditures and required that certain financial ratios be maintained. During 2014, the credit agreement was amended three times, primarily to increase the aggregate amount of the credit facility. On January 12, 2016, Beckman entered into Amendment No. 4 to the 2014 Credit Facility. The amendment reduced the total aggregate commitments of the lenders from $235 million to $145 million, limited borrowing availability subject to a new borrowing basic mechanic, and amended certain covenant compliance and reporting requirements of the Company. Effective with the amendment date, $12.5 million of the outstanding revolver was converted to a term advance. Repayment of $1.5 million was required in 2016, $3.1 million was required in 2017 and the remainder was due on June 30, 2018. The amended credit agreement contained certain financial covenants which, among other things, limited spending on capital expenditures and required that certain financial ratios be maintained. Beckman was required to provide a monthly borrowing base certificate which calculates the available borrowing base and reports compliance commencing January 2016. The Company was to provide a cash availability report each week commencing in January 2016 whereby cash on hand at the beginning of the week could not exceed $3.0 million. The leverage ratio was waived through the quarter ending March 31, 2017 and could not be more than 3.50 to 1.00 commencing with the quarter ending June 30, 2017. The fixed charge coverage as of the last day of each quarter, commencing with the quarter ending March 31, 2016, was to be less than 1.15 to 1.00 for each fiscal quarter ending on or prior to March 31, 2017 and 1.25 to 1.00 for each fiscal quarter ending after March 31, 2017. Capital expenditures in the fiscal year ended December 31, 2016, were not to exceed $15 million, and in each year ending after December 31, 2016, were not to exceed 75% of EBITDA for the immediately preceding year. Beckman was in compliance with all covenants during 2017 and 2016. On February 10, 2017, Beckman entered into Amendment No. 5 to the 2014 Credit Facility. The amendment reduced the total aggregate commitments of the lenders from $145 million to $127.3 million, limited borrowing availability subject to a new borrowing basic mechanic, and amended certain covenant compliance and reporting requirements. As a requirement of this amendment, immediately prior to the amendment date, Beckman received $15.0 million of equity proceeds from certain of its shareholders. Effective with the amendment date, these proceeds were used to prepay the outstanding revolver $10.0 million and the term advance $5 million, of which $3.9 million was applied as prepayment of the scheduled amortization payments that were due March 31, 2017 through March 31, 2018 and $106.3 million of the outstanding revolver was converted to a second term advance. The amendment provided for a $15 million revolver of which $2.5 million was drawn on the date of the amendment. Required repayments of the original term advance were $1.5 million in 2017, $0.8 million by March 31, 2018 and the remainder on June 30, 2018. The amended credit agreement contained certain financial covenants which, among other things, limited spending on capital expenditures and required that certain financial ratios be maintained. Certain of the requirements were: • Beckman was required to provide a monthly borrowing base certificate which calculated the available borrowing base and reports compliance commencing February 2017; • Beckman was required to provide a cash availability report each month commencing in February 2017 whereby cash on hand on the last business day of the month could not exceed $6.0 million; • The leverage ratio was waived through the quarter ending September 30, 2017 and could not be more than 3.50 to 1.00 commencing with the quarter ending December 31, 2017; • The interest coverage ratio remained waived; • The fixed charge coverage as of the last day of each quarter, commencing with the quarter ending March 31, 2016, to be a) less than 1.15 to 1.00 for each fiscal quarter ending on or prior to June 30, 2017 and b) 1.25 to 1.00 for each fiscal quarter ending after June 30, 2017; and • Capital expenditures in the fiscal year ended December 31, 2017 could not exceed $20.0 million, and in each year ending after December 31, 2017 could not exceed 75% of EBITDA for the immediately preceding year. As of December 31, 2017, $6.0 million was outstanding under the original term advance, $104.8 million was outstanding under the second term advance, $11.5 million was outstanding under the revolver and $0.7 million was outstanding under a letter of credit. As of December 31, 2017, the Company had $2.9 million available under the revolver. Beckman and its restricted subsidiaries were in compliance with such covenants and ratios as of December 31, 2017. The Company used a portion of the net proceeds from the IPO and term loan borrowings under the New Facility to fully repay and terminate the 2014 Credit Facility in January 2018. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | 6. Related Party Transactions During 2014, in conjunction with an exercise of warrants to provide a capital infusion, the Company issued promissory notes totaling $2.5 million to both a former executive officer of the Company and a current manager of the Company. The principal is due on June 30, 2019 (the “Maturity Date”). Interest of 4% per annum is due and payable on the Maturity Date. At each of March 31, 2018 and December 31, 2017, the outstanding balance of the notes, including principal and unpaid interest, totaled $2.9 million. Unpaid interest at each of March 31, 2018 and December 31, 2017 totaled $0.4 million. As part of the acquisition of Crest in 2014, the Company issued promissory notes totaling $9.4 million to former owners of Crest, including Mr. Crombie, who is an executive officer of the Company. The principal is due on June 30, 2019. The interest rate is based on the prime rate, the federal funds rate or LIBOR, plus a margin to be determined in connection with the Company’s credit agreement, and is due quarterly. Mr. Crombie paid $1.8 million during 2016 to pay his promissory note in full. At each of March 31, 2018 and December 31, 2017, the outstanding principal balance of the remaining promissory notes held by other former owners of Crest totaled $7.6 million. Unpaid interest, included in “Prepaid expenses and other” in the Condensed Consolidated Balance Sheets, totaled $0.1 million and $8,000 at March 31, 2018 and December 31, 2017, respectively. The Company leases office space, yard facilities and equipment, and purchases building maintenance services from entities owned by Mr. Crombie. Total lease expense and building maintenance expense was $0.2 million for each of the three months ended March 31, 2018 and 2017. There were payables to these entities of $13,000 at each of March 31, 2018 and December 31, 2017. The Company provides services to Citation Oil & Gas Corp., an entity owned by Curtis F. Harrell, a director of the Company. The Company billed $0.2 million and $0.1 million for services provided to this entity during the three months ended March 31, 2018 and 2017, respectively. There was an outstanding receivable due from such entity of $0.1 million and $0.2 million as of March 31, 2018 and December 31, 2017, respectively. The Company provides services in the ordinary course of business to EOG Resources, Inc. Gary L. Thomas, a director of the Company, acts as the President of EOG Resources, Inc. The Company generated revenue from EOG Resources, Inc. of $7.8 million and $7.5 million for the three months ended March 31, 2018 and 2017, respectively. |
Commitment and Contingencies
Commitment and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitment and contingencies | 7. Commitments and contingencies Litigation From time to time, we have various claims, lawsuits and administrative proceedings that are pending or threatened with respect to personal injury, workers’ compensation, contractual matters and other matters. Although no assurance can be given with respect to the outcome of these and the effect such outcomes may have, we believe any ultimate liability resulting from the outcome of such claims, lawsuits or administrative proceedings, to the extent not otherwise provided for or covered by insurance, will not have a material adverse effect on our business, operating results or financial condition. We have been named in the following proceeding: Christina Sparks, et al v. Pioneer Natural Resources, et al., Filed in the District Court, 142nd Judicial District, Midland County, Texas. On August 31, 2017, an accident occurred while a five-employee crew of Big Lake Services, LLC, a subsidiary of Nine (“Big Lake Services”), was performing workover services at an oil and gas wellsite near Midland, Texas, operated by Pioneer Natural Resources, resulting in the death of a Big Lake Services employee, Juan De La Rosa. On December 7, 2017, a lawsuit was filed on behalf of Mr. De La Rosa’s minor children in the Midland County District Court against Pioneer Natural Resources, Big Lake Services, and Phillip Hamilton related to this accident. The petition alleges, among other things, that the defendants acted negligently, resulting in the death of Mr. De La Rosa. On March 14, 2018, a plea in intervention was filed on behalf of Mr. De La Rosa’s parents, alleging similar claims. The plaintiffs and intervenors are seeking money damages, including punitive damages. We maintain insurance coverage against liability for, among other things, personal injury (including death), which coverage is subject to certain exclusions and deductibles. We tendered this matter to our insurance company for defense and indemnification of Big Lake Services and the other defendants. While we maintain such insurance policies with insurers in amounts and with coverage and deductibles that we, with the advice of our insurance advisors and brokers, believe are reasonable and prudent, we cannot assure you that this insurance will be adequate to protect us from all material expenses related to current or potential future claims for personal and property damage or that these levels of insurance will be available in the future at economical prices. Self-insurance The Company uses a combination of third party insurance and self-insurance for health insurance clams. The self-insured liability represents an estimate of the undiscounted ultimate cost of uninsured claims incurred as of the balance sheet date. The estimate is based on an analysis of trailing months of incurred medical claims to project the amount of incurred but not reported claims liability. The estimated liability for self-insured medical claims was $1.2 million and $1.3 million at March 31, 2018 and December 31, 2017, respectively, and is included under the caption “Accrued liabilities” on the Condensed Consolidated Balance Sheets. Although the Company does not expect the amounts ultimately paid to differ significantly from the estimates, the self-insurance liability could be affected if future claims experience differs significantly from historical trends and actuarial assumptions. Scorpion contingent liability In connection with the acquisition of Scorpion in 2015, the Company recorded a liability for contingent consideration to be paid in shares of Company common stock and in cash, contingent upon quantities of Scorpion Composite Plugs TM The contingent consideration related to the Scorpion acquisition is reported at fair value, based on discounted cash flows. Significant inputs used in the fair value measurement include estimated gross margin related to forecasted sales of the plugs, term of the agreement, and a risk adjusted discount factor. The revaluation gains and losses are included in “General and administrative expenses” in the Condensed Consolidated Statements of Income and Comprehensive Income (Loss). The following is a reconciliation of the beginning and ending amounts of contingent consideration obligation (level 3) related to the Scorpion acquisition for the three months ended March 31, 2018 and 2017: March 31, 2018 December 31, 2017 (in thousands of dollars) Balance at beginning of year $ 1,730 $ 3,187 Common stock issuance — (547 ) Payment — (1,325 ) Revaluation 1,063 415 Balance at end of the period $ 2,793 $ 1,730 Contingent liabilities related to the Scorpion acquisition include $2.8 million and $1.7 million reported in “Accrued expenses” at March 31, 2018 and December 2017, respectively. The liabilities related to Scorpion are expected to be paid by December 31, 2018. |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | 8. Stockholders’ equity Common stock issued In January 2018, the Company completed its IPO of 8,050,000 shares of common stock (including 1,050,000 shares pursuant to an over-allotment option) at a price to the public of $23.00 per share pursuant to our registration statement on Form S‑1 (File 333‑217601), as amended and declared effective by the SEC on January 18, 2018 (the “Registration Statement”). The aggregate gross proceeds of the Company’s IPO were $185.2 million. After subtracting underwriting discounts and commissions of $12.5 million and offering expenses of approximately $4.4 million, the Company received net proceeds of approximately $168.3 million. The Company used a portion of these net proceeds, together with $125.0 million of term loan borrowings under the New Facility, to fully repay the outstanding indebtedness under its former credit facilities. Further, the Company’s credit agreement required that it use a portion of the proceeds from the over-allotment option to make a prepayment of the term loan borrowings of $9.7 million. The remainder of the net proceeds are being used for general corporate purposes. No payments, fees or expenses have been paid, directly or indirectly, to any of the Company’s officers, directors or its associates, holders of 10% or more of any class of its equity securities or other affiliates. |
Taxes
Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Taxes | 9. Taxes The Company’s effective income tax rate fluctuates based on, among other factors, changes in statutory tax rates, changes in pretax income and nondeductible items, and changes in valuation allowances. The Company’s effective tax rate for the three months ended March 31, 2018 was 5%, compared with (12)% for the three months ended March 31, 2017. The change in effective income tax rate for the three months ended March 31, 2018 was primarily attributable to changes in pre-tax book income and valuation allowance positions as well as tax liability in states where income is expected to exceed available net operating losses. The Company recognized the income tax effects of Tax Reform in its audited financial statements included in the Company’s 2017 Annual Report on Form 10-K in accordance with Staff Accounting Bulletin No. 118, which provides SEC staff guidance for the application of ASC Topic 740, Income Taxes, in the reporting period during which Tax Reform was signed into law. The guidance also provides for a measurement period of up to one year from the enactment date of Tax Reform for the Company to complete its accounting for the U.S. tax law changes. As such, the Company’s 2017 financial results reflected the provisional estimate of the income tax effects of the Tax Reform. No subsequent adjustments have been made to the amounts recorded as of December 31, 2017, which continue to represent a provisional estimate of the impact of Tax Reform. The estimate of the impact of Tax Reform was based on certain assumptions and the Company’s current interpretation of Tax Reform. This estimate may change as the Company receives additional clarification and implementation guidance and as additional interpretations of Tax Reform become available. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | 10. Earnings per share The diluted earnings per share calculation in the following table excludes all stock options and unvested restricted stock for the three months ended March 31, 2017 because there was a net loss and their inclusion would be anti-dilutive. Three Months Ended March 31, 2018 2017 (in thousands of dollars except for share and per share data) Net income (loss) attributable to common stockholders $ 1,675 $ (20,714 ) Average shares outstanding - basic 21,902,519 13,789,957 Average shares outstanding - diluted 22,069,353 13,789,957 Net income (loss) per share - basic $ 0.08 $ (1.50 ) Net income (loss) per share - diluted $ 0.08 $ (1.50 ) |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Information | 11. Segment information The Company has two reportable segments, Completion Solutions and Production Solutions. The Completion Solutions segment consists primarily of cementing, completion tools, wireline and coiled tubing services, while the Production Solutions consists of rig-based well maintenance and workover services. The Company’s reportable segments are strategic units that offer distinct products and services. They are managed separately since each business segment requires different marketing strategies. Operating segments have not been aggregated as part of a reportable segment. The Company evaluates the performance of its reportable segments based on adjusted gross profit. This segmentation is representative of the manner in which our Chief Operating Decision Maker and our Board of Directors view the business. We consider the Chief Operating Decision Maker to be the Chief Executive Officer. Summary financial data by segment follows. The amounts labeled “Corporate” relate to assets not allocated to the reportable segments. Three Months Ended March 31, 2018 2017 (in thousands of dollars) Revenues Completion Solutions $ 154,644 $ 87,279 Production Solutions 19,163 18,074 $ 173,807 $ 105,353 Adjusted gross profit (1) Completion Solutions $ 33,218 $ 11,047 Production Solutions 2,362 2,918 $ 35,580 $ 13,965 General and administrative expenses 15,428 12,769 Depreciation 13,109 13,561 Amortization of intangibles 1,900 2,201 Loss on equity method investment 75 — Loss on sale of assets 370 224 Income (loss) from operations $ 4,698 $ (14,790 ) Capital expenditures Completion Solutions $ 5,283 $ 8,291 Production Solutions 692 1,714 Corporate 493 — $ 6,468 $ 10,005 March 31, 2018 December 31, 2017 Assets Completion Solutions $ 442,433 $ 428,702 Production Solutions 117,240 119,607 Corporate 78,063 30,550 $ 637,736 $ 578,859 (1) Excludes depreciation and amortization, shown separately below. Revenues by country were as follows: Three Months Ended March 31, 2018 2017 (in thousands of dollars) Revenues United States $ 166,705 95.9 % $ 101,158 96.0 % Canada 7,102 4.1 % 4,195 4.0 % $ 173,807 100.0 % $ 105,353 100.0 % Long-lived assets by country were as follows: March 31, 2018 December 31, 2017 (in thousands of dollars) Long-lived assets: United States $ 415,138 $ 426,858 Canada 5,011 4,764 $ 420,149 $ 431,622 |
Supplemental Disclosure of Cash
Supplemental Disclosure of Cash Flow Information | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Disclosure of Cash Flow Information | 12. Supplemental disclosures of cash flow information Three Months Ended March 31, 2018 2017 (in thousands of dollars) Supplemental disclosures Cash paid for interest $ 2,105 $ 3,456 Cash refunds for income taxes, net — — Noncash investing and financing activities Increase in accounts payable and accrued liabilities for additions to property and equipment $ 2,264 $ 577 Issuance of common stock warrants — 1,838 Issuance of common stock in acquisitions — 547 Unpaid costs related to public offering 175 890 |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | 13. Subsequent Events The Company has evaluated events occurring after the balance sheet date through the date these financial statements were available to be issued, for potential recognition or disclosure. Based on that evaluation, the Company determined that there were no material subsequent events for recognition or disclosure other than those disclosed herein. |
Summary of Significant Accoun21
Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of presentation The accompanying condensed consolidated financial statements have not been audited by the Company’s independent registered public These condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the U.S. 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 condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto for the fiscal year ended December 31, 2017, which are included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2017 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. |
Principles of Consolidation | Principles of consolidation The condensed consolidated financial statements include the accounts of Nine and its wholly owned subsidiaries. All inter-company balances and transactions have been eliminated in the consolidation. |
Use of Estimates | 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 consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future. Such estimates include, but are not limited to, fair value assumptions used in purchase accounting and in analyzing goodwill, other intangibles and long-lived assets for possible impairment, useful lives used in depreciation and amortization expense, stock based compensation fair value, estimated realizable value on excess and obsolete inventories, deferred taxes and income tax contingencies and losses on accounts receivable. It is at least reasonably possible that the estimates used will change within the next year |
Revenue Recognition | Revenue recognition The Company recognizes revenue for equipment, products and services based upon purchase orders, contracts or other persuasive evidence of an arrangement with the customer that include fixed or determinable prices and that do not include right of return or other similar provisions or other post-delivery obligations. Revenue is recognized for products upon delivery, customer acceptance and when collectability is reasonably assured. Revenue is recognized for services when they are rendered and collectability is reasonably assured. |
Accounts Receivable | Accounts receivable The Company extends credit to customers in the normal course of business. Accounts receivable are carried at their estimated collectible amount. Trade credit is generally extended on a short-term basis; thus receivables do not bear interest, although a finance charge may be applied to amounts past due. The Company maintains an allowance for doubtful accounts for estimated losses that may result from the inability of its customers to make required payments. Such allowances are based upon several factors including, but not limited to, credit approval practices, industry and customer historical experience as well as the current and projected financial condition of the specific customer. Accounts receivable outstanding longer than contractual terms are considered past due. The Company writes off accounts receivable to the allowance for doubtful accounts when they become uncollectible. Any payments subsequently received on receivables previously written off are credited to bad debt expense. Bad debt expense reflected a recovery of $0.3 million and expense of $0.0 million for the three months ended March 31, 2018 and 2017, respectively. The allowance for doubtful accounts was $0.3 million and $0.6 million at March 31, 2018 and December 31, 2017, respectively. Revenues for the three months ended March 31, 2018 included sales to one customer that individually represented 10% or more of total revenue. No customer accounted for 10% or more of total revenue for the three months ended March 31, 2017. |
Inventories | Inventories Inventories, classified as finished goods, are stated at the lower of cost or net realizable value. Cost is determined on an average cost basis. The Company reviews its inventory balances and writes down its inventory for estimated obsolescence or excess inventory equal to the difference between the cost of inventory and the estimated market value based upon assumptions about future demand and market conditions. The reserves for obsolescence were $2.6 million and $2.9 million at March 31, 2018 and December 31, 2017, respectively. March 31, 2018 December 31, 2017 (in thousands of dollars) Raw Materials $ 610 $ 939 Finished Goods 21,138 21,291 Total $ 21,748 $ 22,230 |
Equity | Equity In January 2018, there was an 8.0256 for 1 stock split immediately preceding the Company’s initial public offering (the “IPO”). All shares and per share data reflect the effect of the stock split. In January 2018, we completed our IPO of 8,050,000 shares of common stock (including 1,050,000 shares pursuant to an over-allotment option) at a price to the public of $23.00 per share. The aggregate gross proceeds of our IPO were $185.2 million. After subtracting underwriting discounts and commissions of $12.5 million and offering expenses of approximately $4.4 million, we received net proceeds of approximately $168.3 million. We used a portion of these net proceeds, together with $125.0 million of term loan borrowings under our credit facility, to fully repay the outstanding indebtedness under our former credit facilities. Further, our credit agreement required that we use a portion of the proceeds from the over-allotment option to make a prepayment of the term loan borrowings of $9.7 million. The remainder of the net proceeds are being used for general corporate purposes. No payments, fees or expenses have been paid, directly or indirectly, to any of our officers, directors or their associates, holders of 10% or more of any class of our equity securities or other affiliates. |
Stock-Based Compensation | Share-based compensation The Company has stock-based compensation plans for certain of its employees. The Company measures employee share-based compensation awards at fair value on the date they are granted to employees and recognizes compensation cost in its financial statements over the requisite service period. Compensation expense is recorded for restricted stock over the applicable vesting period based on the fair value of the stock on the date of grant. Options are issued with an exercise price equal to the fair value of the stock on the date of grant. Compensation expense is recorded for the fair value of the stock options, and is recognized over the period of the underlying security’s vesting schedule. Consideration paid on the exercise of stock options is credited to share capital and additional paid-in capital. Fair value of the share-based compensation is measured by use of the Black-Scholes pricing model. The following discusses the assumptions used related to the Black-Scholes pricing model. Expected life The expected term of stock options represents the period the stock options are expected to remain outstanding and is based on the simplified method, which is the weighted average vesting term plus the original contractual term, divided by two. Expected volatility Expected volatility measures the amount that a stock price has fluctuated or is expected to fluctuate during a period. Prior to the IPO, the Company’s stock was not publicly traded and the Company determined volatility based on an analysis of the PHLX Oil Service Index that tracks publicly traded oilfield service stocks. Dividend yield At the time of the issuance of the options, the Company did not plan to pay cash dividends in the foreseeable future. Therefore, a zero expected dividend yield was used in the valuation model. Risk-free interest rate The risk-free interest rate is based on U.S. Treasury zero-coupon issues with remaining terms similar to the expected term on the options. Forfeitures As a result of the adoption of ASU No. 2016-09, the Company elected to account for stock-based compensation forfeitures as they occur. Fair value of common stock Prior to the IPO, the value of the Company’s stock at the time of each option grant used to establish the strike price was estimated by management in accordance with an internal valuation model, and approved by the Company’s Board of Directors. The valuation model was based upon an average of cash flow and book value multiples of comparable companies. The comparable companies selected reflected the market’s view on key sector, geographic, and product type exposure that were similar to those that impacted the Company’s business. The value was further subject to judgmental factors such as prevailing market conditions, changes in the stock prices of other oilfield service companies and the overall outlook for the Company and its products in general. Subsequent to the IPO, the stock value will be the publicly traded share price. |
Deferred Financing Costs | Deferred financing costs Deferred financing costs are amortized over the life of the related debt using the effective interest method. The Company expensed approximately $0.9 million and $0.5 million of deferred financing costs during the three months ended March 31, 2018 and 2017, respectively, which amounts are included in interest expense in the Condensed Consolidated Statements of Income and Comprehensive Income (Loss). The expense included the write-off of approximately $0.7 million and $0.1 million of deferred financing costs for the three months ended March 2018 and 2017. The amount written off in the three months ended March 31, 2018 represents the deferred financing costs related to the debt that was outstanding at December 31, 2017 and paid fully in January, 2018; the amount written off in the three months ended March 31, 2017 represents the portion of the deferred financing costs related to the reduction in the amount available in the revolving credit facilities. Deferred financing costs of $1.6 million and $0.7 million at March 31, 2018 and December 31, 2017, respectively, are reported as a reduction of long-term debt (Note 5). |
Recently Issued Accounting Pronouncements | Recently issued accounting pronouncements In May 2014, the Financial Accounting Standards Board (‘‘FASB’’) issued Accounting Standards Update (‘‘ASU’’) No. 2014-09, Revenue from Contracts with Customers In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) In January 2017, the FASB issued ASU No. 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business In January 2017, the FASB issued ASU 2017-04, Intangibles—Goodwill and Other In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows (Topic 230)—Classification of Certain Cash Receipts and Cash Payment |
Summary of Significant Accoun22
Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Accounting Policies [Abstract] | |
Schedule of Inventory | March 31, 2018 December 31, 2017 (in thousands of dollars) Raw Materials $ 610 $ 939 Finished Goods 21,138 21,291 Total $ 21,748 $ 22,230 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Net Carrying Amount of Components of Goodwill | The changes in the net carrying amount of the components of goodwill for the year ended December 31, 2017 and the three months ended March 31, 2018 are as follows: Goodwill Gross value Accumulated impairment loss Net (in thousands of dollars) Balance as of December 31, 2016 $ 173,033 $ (47,747 ) $ 125,286 Impairment — (31,530 ) (31,530 ) Balance as of December 31, 2017 $ 173,033 $ (79,277 ) $ 93,756 Impairment — — — Balance as of March 31, 2018 $ 173,033 $ (79,277 ) $ 93,756 |
Schedule of Changes in Net Carrying Amount of Components of Intangible Assets | The changes in the net carrying value of the components of intangible assets for the year ended December 31, 2017 and the three months ended March 31, 2018 are as follows: Intangible assets Gross value Accumulated amortization Net (in thousands of dollars) Balance as of December 31, 2016 $ 105,464 $ (29,320 ) $ 76,144 Amortization expense — (8,799 ) (8,799 ) Impairment (12,000 ) 8,200 (3,800 ) Balance as of December 31, 2017 $ 93,464 $ (29,919 ) $ 63,545 Amortization expense — (1,900 ) (1,900 ) Impairment — — — Balance as of March 31, 2018 $ 93,464 $ (31,819 ) $ 61,645 |
Long-term Debt (Tables)
Long-term Debt (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Summary of Long-term Debt | Long-term debt consists of the following: March 31, 2018 December 31, 2017 (in thousands of dollars) Term Loan $ 115,274 $ — Nine US revolving credit facility — 75,000 Nine US term loan — 35,175 Nine Canada revolving credit facility — 9,760 Beckman term loan — 110,800 Beckman revolving credit facility — 11,500 Total debt before deferred financing costs $ 115,274 $ 242,235 Deferred financing costs (1,564 ) (726 ) Total $ 113,710 $ 241,509 Less Current portion (2,774 ) (241,509 ) Long-term debt $ 110,936 $ — |
Commitment and Contingencies (T
Commitment and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments And Contingencies Disclosure [Abstract] | |
Schedule of the Beginning and Ending Amount of Contingent Consideration Obligation (Level 3) Related to Acquisition | The following is a reconciliation of the beginning and ending amounts of contingent consideration obligation (level 3) related to the Scorpion acquisition for the three months ended March 31, 2018 and 2017 March 31, 2018 December 31, 2017 (in thousands of dollars) Balance at beginning of year $ 1,730 $ 3,187 Common stock issuance — (547 ) Payment — (1,325 ) Revaluation 1,063 415 Balance at end of the period $ 2,793 $ 1,730 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Earnings Per Share [Abstract] | |
Summary of Diluted Earnings Per Share Calculation Excludes Stock Options and Unvested Restricted Stock | The diluted earnings per share calculation in the following table excludes all stock options and unvested restricted stock for the three months ended March 31, 2017 because there was a net loss and their inclusion would be anti-dilutive. Three Months Ended March 31, 2018 2017 (in thousands of dollars except for share and per share data) Net income (loss) attributable to common stockholders $ 1,675 $ (20,714 ) Average shares outstanding - basic 21,902,519 13,789,957 Average shares outstanding - diluted 22,069,353 13,789,957 Net income (loss) per share - basic $ 0.08 $ (1.50 ) Net income (loss) per share - diluted $ 0.08 $ (1.50 ) |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of Financial Data by Segment | Summary financial data by segment follows. The amounts labeled “Corporate” relate to assets not allocated to the reportable segments. Three Months Ended March 31, 2018 2017 (in thousands of dollars) Revenues Completion Solutions $ 154,644 $ 87,279 Production Solutions 19,163 18,074 $ 173,807 $ 105,353 Adjusted gross profit (1) Completion Solutions $ 33,218 $ 11,047 Production Solutions 2,362 2,918 $ 35,580 $ 13,965 General and administrative expenses 15,428 12,769 Depreciation 13,109 13,561 Amortization of intangibles 1,900 2,201 Loss on equity method investment 75 — Loss on sale of assets 370 224 Income (loss) from operations $ 4,698 $ (14,790 ) Capital expenditures Completion Solutions $ 5,283 $ 8,291 Production Solutions 692 1,714 Corporate 493 — $ 6,468 $ 10,005 March 31, 2018 December 31, 2017 Assets Completion Solutions $ 442,433 $ 428,702 Production Solutions 117,240 119,607 Corporate 78,063 30,550 $ 637,736 $ 578,859 (1) Excludes depreciation and amortization, shown separately below. |
Summary of Revenues by Country | Revenues by country were as follows: Three Months Ended March 31, 2018 2017 (in thousands of dollars) Revenues United States $ 166,705 95.9 % $ 101,158 96.0 % Canada 7,102 4.1 % 4,195 4.0 % $ 173,807 100.0 % $ 105,353 100.0 % |
Summary of Long-lived Assets by Country | Long-lived assets by country were as follows: March 31, 2018 December 31, 2017 (in thousands of dollars) Long-lived assets: United States $ 415,138 $ 426,858 Canada 5,011 4,764 $ 420,149 $ 431,622 |
Supplemental Disclosure of Ca28
Supplemental Disclosure of Cash Flow Information (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Supplemental Disclosures of Cash Flow Information | Three Months Ended March 31, 2018 2017 (in thousands of dollars) Supplemental disclosures Cash paid for interest $ 2,105 $ 3,456 Cash refunds for income taxes, net — — Noncash investing and financing activities Increase in accounts payable and accrued liabilities for additions to property and equipment $ 2,264 $ 577 Issuance of common stock warrants — 1,838 Issuance of common stock in acquisitions — 547 Unpaid costs related to public offering 175 890 |
Summary of Significant Accoun29
Summary of Significant Accounting Policies - Additional Information (Details) | 1 Months Ended | 3 Months Ended | ||
Jan. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2018USD ($) | Mar. 31, 2017USD ($) | Dec. 31, 2017USD ($) | |
Significant Accounting Policies [Line Items] | ||||
Bad debt recovery (expense) | $ 300,000 | $ 0 | ||
Allowance for doubtful accounts | 300,000 | $ 600,000 | ||
Reserves for obsolescence | 2,600,000 | 2,900,000 | ||
Proceeds from issuance of common stock, net | 171,616,000 | |||
Payment of term loan borrowings under credit facility | $ 125,000,000 | |||
Deferred financing costs interest expense related to debt | 900,000 | 500,000 | ||
Write-off of deferred financing costs | 700,000 | $ 100,000 | ||
Deferred financing costs | $ 1,564,000 | $ 726,000 | ||
Line of Credit | ||||
Significant Accounting Policies [Line Items] | ||||
Prepayment of term loan borrowings | $ 9,700,000 | |||
IPO | ||||
Significant Accounting Policies [Line Items] | ||||
Stock split ratio | 8.0256 | |||
Initial public offering period | January 2,018 | |||
Issuances of common stock, Shares | shares | 8,050,000 | |||
Public offer price per share | $ / shares | $ 23 | |||
Gross proceeds from issuance of common stock upon initial public offering | $ 185,200,000 | |||
Underwriting discounts and commissions | 12,500,000 | |||
Initial public offering expenses | 4,400,000 | |||
Proceeds from issuance of common stock, net | $ 168,300,000 | |||
Over-Allotment Option | ||||
Significant Accounting Policies [Line Items] | ||||
Issuances of common stock, Shares | shares | 1,050,000 | |||
Customer Concentration Risk | Sales Revenue, Net | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 100.00% | 100.00% | ||
Customer Concentration Risk | Sales Revenue, Net | Maximum | ||||
Significant Accounting Policies [Line Items] | ||||
Concentration risk, percentage | 10.00% | 10.00% |
Summary of Significant Accoun30
Summary of Significant Accounting Policies - Schedule of Inventory (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Accounting Policies [Abstract] | ||
Raw Materials | $ 610 | $ 939 |
Finished Goods | 21,138 | 21,291 |
Total | $ 21,748 | $ 22,230 |
Acquisitions and Combinations -
Acquisitions and Combinations - Additional Information (Details) | Feb. 28, 2018$ / shares | Feb. 03, 2017 |
Business Acquisition [Line Items] | ||
Business acquisition, date of acquisition agreement | Feb. 3, 2017 | |
Conversion ratio | 0.567154 | |
Business acquisition percentage of shares paid in cash | 1.60% | |
Backman | ||
Business Acquisition [Line Items] | ||
Business acquisition, conversion of share price into cash | $ 17.69 | |
Common shares issued amount per share | $ 31.18 |
Goodwill and Intangible Asset32
Goodwill and Intangible Assets - Schedule of Changes in Net Carrying Amount of Components of Goodwill (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Gross value | $ 173,033 | $ 173,033 | $ 173,033 |
Goodwill, Accumulated impairment loss, Beginning balance | (79,277) | (47,747) | |
Goodwill, Net, Impairment | 0 | (31,530) | |
Goodwill, Accumulated impairment loss, Ending balance | (79,277) | (79,277) | |
Goodwill, Net, Beginning balance | 93,756 | 125,286 | |
Goodwill, Net, Ending balance | $ 93,756 | $ 93,756 |
Goodwill and Intangible Asset33
Goodwill and Intangible Assets - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | |
Finite Lived Intangible Assets [Line Items] | ||||
Goodwill impairment loss | $ 0 | $ 31,530 | ||
Goodwill | 93,756 | 93,756 | $ 125,286 | |
Amortization expense | $ 1,900 | $ 2,201 | $ 8,799 | |
Product Solutions Segment | ||||
Finite Lived Intangible Assets [Line Items] | ||||
Percentage of estimated fair value calculation to carrying value | 11.00% | |||
Goodwill | $ 13,000 |
Goodwill and Intangible Asset34
Goodwill and Intangible Assets - Schedule of Changes in Net Carrying Amount of Components of Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |||
Intangible assets, Gross value, Beginning balance | $ 93,464 | $ 105,464 | $ 105,464 |
Intangible assets, Gross value, Impairment | (12,000) | ||
Intangible assets, Gross value, Ending balance | 93,464 | 93,464 | |
Intangible assets, Accumulated amortization, Beginning balance | (29,919) | (29,320) | (29,320) |
Intangible assets, Accumulated amortization, Amortization expense | (1,900) | (2,201) | (8,799) |
Intangible assets, Accumulated amortization, Impairment | 8,200 | ||
Intangible assets, Accumulated amortization, Ending balance | (31,819) | (29,919) | |
Intangible assets, Net, Beginning balance | 63,545 | $ 76,144 | 76,144 |
Intangible assets, Net, Impairment | (3,800) | ||
Intangible assets, Net, Ending balance | $ 61,645 | $ 63,545 |
Long-term Debt - Summary of Lon
Long-term Debt - Summary of Long-term Debt (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | $ 115,274 | $ 242,235 |
Deferred financing costs | (1,564) | (726) |
Total | 113,710 | 241,509 |
Less Current portion | (2,774) | (241,509) |
Long-term debt | 110,936 | |
Term Loan | ||
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | $ 115,274 | |
Nine US Revolving Credit Facility | ||
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | 75,000 | |
Nine US Term Loan | ||
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | 35,175 | |
Nine Canada Revolving Credit Facility | ||
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | 9,760 | |
Beckman Revolving Credit Facility | ||
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | 11,500 | |
Beckman Term Loan | ||
Line Of Credit Facility [Line Items] | ||
Total debt before deferred financing costs | $ 110,800 |
Long-term Debt - Additional Inf
Long-term Debt - Additional Information (Details) - USD ($) | Feb. 10, 2017 | Jan. 12, 2016 | May 02, 2014 | Jan. 31, 2016 | Jun. 30, 2014 | Mar. 31, 2018 | Dec. 31, 2017 | Jun. 30, 2017 | Mar. 31, 2017 | Dec. 31, 2017 | Jun. 30, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Jan. 31, 2018 | Feb. 28, 2017 | May 13, 2016 |
Debt Instrument [Line Items] | ||||||||||||||||
Capital expenditures | $ 6,468,000 | $ 10,005,000 | ||||||||||||||
Debt outstanding under facilities | $ 125,000,000 | |||||||||||||||
New Facility | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument amortization rate | 2.50% | |||||||||||||||
Debt instrument maturity date | 2020-07 | |||||||||||||||
Debt instrument average interest rates | 5.50% | |||||||||||||||
New Facility | Minimum | Base Rate and Prime Rate | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument basis spread on variable rate | 1.50% | |||||||||||||||
New Facility | Minimum | London Interbank Offered Rate (LIBOR) | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument basis spread on variable rate | 2.50% | |||||||||||||||
New Facility | Maximum | Base Rate and Prime Rate | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument basis spread on variable rate | 2.75% | |||||||||||||||
New Facility | Maximum | London Interbank Offered Rate (LIBOR) | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument basis spread on variable rate | 3.75% | |||||||||||||||
New Facility | Term Loan | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 125,000,000 | |||||||||||||||
New Facility | Revolving Credit Facility | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity | 50,000,000 | |||||||||||||||
Undrawn borrowing capacity | 49,400,000 | |||||||||||||||
Letters of credit outstanding, amount | $ 600,000 | |||||||||||||||
Credit facility, commitment fee on unused portion | 0.50% | |||||||||||||||
Legacy Credit Facilities - Nine | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 300,000,000 | |||||||||||||||
Debt instrument maturity date | Jun. 30, 2019 | |||||||||||||||
Debt to EBITDA ratio | 450.00% | |||||||||||||||
EBITDA to fixed charge ratios | 125.00% | 100.00% | 100.00% | |||||||||||||
Legacy Credit Facilities - Nine | U.S. | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 270,000,000 | |||||||||||||||
Legacy Credit Facilities - Nine | Minimum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, commitment fee on unused portion | 0.375% | |||||||||||||||
Legacy Credit Facilities - Nine | Maximum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Credit facility, commitment fee on unused portion | 0.50% | |||||||||||||||
Legacy Credit Facilities - Nine | Term Loan | U.S. | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 85,000,000 | |||||||||||||||
Debt instrument term | 5 years | |||||||||||||||
Legacy Credit Facilities - Nine | Revolving Credit Facility | U.S. | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 185,000,000 | $ 75,000,000 | ||||||||||||||
Legacy Credit Facilities - Nine | Revolving Credit Facility | Canada | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Maximum borrowing capacity | $ 30,000,000 | $ 13,000,000 | ||||||||||||||
Legacy Credit Facilities - Beckman | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Undrawn borrowing capacity | $ 2,900,000 | $ 2,900,000 | $ 2,900,000 | |||||||||||||
Letters of credit outstanding, amount | $ 700,000 | $ 700,000 | 700,000 | |||||||||||||
Voting equity of directly owned foreign subsidiaries, percentage | 65.00% | |||||||||||||||
Maximum cash on hand at beginning of the week | $ 3,000,000 | |||||||||||||||
Fixed charge coverage ratio | 125.00% | 125.00% | ||||||||||||||
Equity proceeds from certain shareholders | $ 15,000,000 | |||||||||||||||
Prepayment of scheduled amortization payments | $ 3,900,000 | |||||||||||||||
Legacy Credit Facilities - Beckman | London Interbank Offered Rate (LIBOR) | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument basis spread on variable rate | 2.50% | |||||||||||||||
Legacy Credit Facilities - Beckman | Alternate Base Rate | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument basis spread on variable rate | 1.50% | |||||||||||||||
Legacy Credit Facilities - Beckman | Maximum | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Leverage ratio | 350.00% | 350.00% | ||||||||||||||
Fixed charge coverage ratio | 115.00% | 115.00% | ||||||||||||||
Capital expenditures | 20,000,000 | $ 15,000,000 | ||||||||||||||
Capital expenditures to EBITDA ratio | 75.00% | 75.00% | ||||||||||||||
Cash on hand on last business day of the month | $ 6,000,000 | |||||||||||||||
Legacy Credit Facilities - Beckman | Term Loan | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding debt converted to term advance | $ 12,500,000 | |||||||||||||||
Repayment of facility | 3,100,000 | $ 1,500,000 | ||||||||||||||
Prepayment of term loan borrowings | $ 5,000,000 | |||||||||||||||
Debt outstanding under facilities | $ 6,000,000 | $ 6,000,000 | 6,000,000 | |||||||||||||
Legacy Credit Facilities - Beckman | Revolving Credit Facility | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Debt instrument, face amount | $ 145,000,000 | $ 170,000,000 | ||||||||||||||
Maximum borrowing capacity | 15,000,000 | |||||||||||||||
Maximum borrowing capacity with accordion feature | 50,000,000 | |||||||||||||||
Aggregate reduced debt commitments from lenders | $ 235,000,000 | |||||||||||||||
Line of credit facility, current borrowing capacity | 127,300,000 | |||||||||||||||
Prepayment of term loan borrowings | 10,000,000 | |||||||||||||||
Debt outstanding under facilities | 2,500,000 | 11,500,000 | 11,500,000 | 11,500,000 | ||||||||||||
Legacy Credit Facilities - Beckman | Second Term Loan Advance | ||||||||||||||||
Debt Instrument [Line Items] | ||||||||||||||||
Outstanding debt converted to term advance | $ 106,300,000 | |||||||||||||||
Repayment of facility | $ 800,000 | 1,500,000 | ||||||||||||||
Debt outstanding under facilities | $ 104,800,000 | $ 104,800,000 | $ 104,800,000 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2014 | Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2014 | Dec. 31, 2017 | |
Related Party Transaction [Line Items] | ||||||
Unpaid interest of notes payable | $ 400,000 | $ 400,000 | ||||
Curtis F. Harrell | ||||||
Related Party Transaction [Line Items] | ||||||
Cost of services | 200,000 | $ 100,000 | ||||
Receivable due from entity | 100,000 | 200,000 | ||||
EOG Resources, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Revenue from related parties | 7,800,000 | 7,500,000 | ||||
Prepaid Expenses and Other | ||||||
Related Party Transaction [Line Items] | ||||||
Unpaid interest of notes payable | 100,000 | 8,000 | ||||
Former Executive Officer and Manger | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding notes | 2,900,000 | 2,900,000 | ||||
Mr. Crombie | ||||||
Related Party Transaction [Line Items] | ||||||
Outstanding notes | 7,600,000 | 7,600,000 | ||||
Lease and building maintenance expense | 200,000 | $ 200,000 | ||||
Payables due to entities | $ 13,000 | $ 13,000 | ||||
Promissory Notes | ||||||
Related Party Transaction [Line Items] | ||||||
Maturity date | Jun. 30, 2019 | Jun. 30, 2019 | ||||
Interest rate | 4.00% | |||||
Promissory Notes | Former Executive Officer and Manger | ||||||
Related Party Transaction [Line Items] | ||||||
Notes issued | $ 2,500,000 | |||||
Promissory Notes | Former owners of Crest and Mr.Crombie | ||||||
Related Party Transaction [Line Items] | ||||||
Notes issued | $ 9,400,000 | |||||
Promissory Notes | Mr. Crombie | ||||||
Related Party Transaction [Line Items] | ||||||
Notes paid | $ 1,800,000 |
Commitment and Contingencies -
Commitment and Contingencies - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Dec. 31, 2017 | Sep. 30, 2017 | |
Loss Contingencies [Line Items] | |||
Lawsuit filing date | December 7, 2017 | ||
Contingent liabilities | $ 2,793 | $ 1,730 | $ 3,187 |
Scorpion Acquisition | Accrued Expenses | |||
Loss Contingencies [Line Items] | |||
Estimated liability for self-insured medical claims | 1,200 | 1,300 | |
Contingent liabilities | $ 2,800 | $ 1,700 |
Commitment and Contingencies 39
Commitment and Contingencies - Reconciliation of the Beginning and Ending Amount of Contingent Consideration Obligation (Level 3) Related to Acquisition (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Commitments And Contingencies Disclosure [Abstract] | ||
Balance at beginning of year | $ 1,730 | $ 3,187 |
Common stock issuance | (547) | |
Payment | (1,325) | |
Revaluation | 1,063 | 415 |
Balance at end of the period | $ 2,793 | $ 1,730 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Details) - USD ($) | 1 Months Ended | 3 Months Ended |
Jan. 31, 2018 | Mar. 31, 2018 | |
Class Of Stock [Line Items] | ||
Proceeds from issuance of common stock, net | $ 171,616,000 | |
Payment of term loan borrowings under credit facility | $ 125,000,000 | |
Officers, Directors or Their Associates | ||
Class Of Stock [Line Items] | ||
Payments, fees or expenses been paid | $ 0 | |
Percentage of holders of any class of equity or other affiliates | 10.00% | |
IPO | ||
Class Of Stock [Line Items] | ||
Issuances of common stock, Shares | 8,050,000 | |
Public offer price per share | $ 23 | |
Gross proceeds from issuance of common stock upon initial public offering | $ 185,200,000 | |
Underwriting discounts and commissions | 12,500,000 | |
Initial public offering expenses | 4,400,000 | |
Proceeds from issuance of common stock, net | $ 168,300,000 | |
Over-Allotment Option | ||
Class Of Stock [Line Items] | ||
Issuances of common stock, Shares | 1,050,000 | |
Over-Allotment Option | Line of Credit | ||
Class Of Stock [Line Items] | ||
Prepayment of term loan borrowings | $ 9,700,000 | |
Common Stock | ||
Class Of Stock [Line Items] | ||
Issuances of common stock, Shares | 8,050,000 | |
Common Stock | IPO | ||
Class Of Stock [Line Items] | ||
Issuances of common stock, Shares | 8,050,000 | |
Public offer price per share | $ 23 | |
Common Stock | Over-Allotment Option | ||
Class Of Stock [Line Items] | ||
Issuances of common stock, Shares | 1,050,000 |
Taxes - Additional Information
Taxes - Additional Information (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Income Tax Disclosure [Abstract] | |||
Effective tax rate | 5.00% | (12.00%) | |
Tax cuts and jobs act of 2017, change in tax rate income tax expense benefit | $ 0 |
Earnings Per Share - Summary of
Earnings Per Share - Summary of Diluted Earnings Per Share Calculation Excludes Stock Options and Unvested Restricted Stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Earnings Per Share [Abstract] | ||
Net income (loss) attributable to common stockholders | $ 1,675 | $ (20,714) |
Average shares outstanding - basic | 21,902,519 | 13,789,957 |
Average shares outstanding - diluted | 22,069,353 | 13,789,957 |
Net income (loss) per share - basic | $ 0.08 | $ (1.50) |
Net income (loss) per share - diluted | $ 0.08 | $ (1.50) |
Segment Information - Additiona
Segment Information - Additional Information (Details) | 3 Months Ended |
Mar. 31, 2018Segment | |
Segment Reporting [Abstract] | |
Number of reportable segments | 2 |
Segment Information - Summary o
Segment Information - Summary of Financial Data by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||
Revenues | $ 173,807 | $ 105,353 | |
Adjusted gross profit | 35,580 | 13,965 | |
General and administrative expenses | 15,428 | 12,769 | |
Depreciation | 13,109 | 13,561 | |
Amortization of intangibles | 1,900 | 2,201 | $ 8,799 |
Loss on equity method investment | 75 | ||
Loss on sale of property and equipment | 370 | 224 | |
Income (loss) from operations | 4,698 | (14,790) | |
Capital expenditures | 6,468 | 10,005 | |
Assets | 637,736 | 578,859 | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 493 | ||
Assets | 78,063 | 30,550 | |
Completion Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues | 154,644 | 87,279 | |
Adjusted gross profit | 33,218 | 11,047 | |
Completion Solutions | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 5,283 | 8,291 | |
Assets | 442,433 | 428,702 | |
Production Solutions | |||
Segment Reporting Information [Line Items] | |||
Revenues | 19,163 | 18,074 | |
Adjusted gross profit | 2,362 | 2,918 | |
Production Solutions | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Capital expenditures | 692 | $ 1,714 | |
Assets | $ 117,240 | $ 119,607 |
Segment Information - Summary45
Segment Information - Summary of Revenues by Country (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 173,807 | $ 105,353 |
Sales Revenue, Net | Customer Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
United States | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 166,705 | $ 101,158 |
United States | Sales Revenue, Net | Customer Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 95.90% | 96.00% |
Canada | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 7,102 | $ 4,195 |
Canada | Sales Revenue, Net | Customer Concentration Risk | ||
Segment Reporting Information [Line Items] | ||
Concentration risk, percentage | 4.10% | 4.00% |
Segment Information - Summary46
Segment Information - Summary of Long-lived Assets by Country (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets: | $ 420,149 | $ 431,622 |
U.S. | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets: | 415,138 | 426,858 |
Canada | ||
Revenues From External Customers And Long Lived Assets [Line Items] | ||
Long-lived assets: | $ 5,011 | $ 4,764 |
Supplemental Disclosure of Ca47
Supplemental Disclosure of Cash Flow Information - Schedule of Supplemental Disclosures of Cash Flow Information (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Supplemental disclosures | ||
Cash paid for interest | $ 2,105 | $ 3,456 |
Noncash investing and financing activities | ||
Increase in accounts payable and accrued liabilities for additions to property and equipment | 2,264 | 577 |
Issuance of common stock warrants | 1,838 | |
Issuance of common stock in acquisitions | 547 | |
Unpaid costs related to public offering | $ 175 | $ 890 |