Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2017 | May 12, 2017 | |
Document And Entity Information | ||
Entity Registrant Name | NCS Multistage Holdings, Inc. | |
Entity Central Index Key | 1,692,427 | |
Trading Symbol | NCSM | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2017 | |
Document Fiscal Year Focus | 2,017 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 43,555,978 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Current assets | ||
Cash and cash equivalents | $ 11,980 | $ 18,275 |
Accounts receivable - trade, net | 44,345 | 32,116 |
Inventories | 17,653 | 17,017 |
Prepaid expenses and other current assets | 1,280 | 2,445 |
Other current receivables | 800 | 3,053 |
Deferred income taxes, net | 2,116 | |
Total current assets | 76,058 | 75,022 |
Noncurrent assets | ||
Property and equipment, net | 16,577 | 9,759 |
Goodwill | 138,901 | 122,077 |
Identifiable intangibles, net | 117,617 | 118,697 |
Deposits and other assets | 2,234 | 1,272 |
Total noncurrent assets | 275,329 | 251,805 |
Total assets | 351,387 | 326,827 |
Current liabilities | ||
Accounts payable—trade | 10,387 | 10,258 |
Accrued expenses | 3,366 | 3,290 |
Income taxes payable | 1,581 | |
Other current liabilities | 2,411 | 3,223 |
Current maturities of long-term debt | 4,057 | 772 |
Total current liabilities | 21,802 | 17,543 |
Noncurrent liabilities | ||
Long-term debt, less current maturities | 84,328 | 88,394 |
Other long-term liabilities | 7,776 | 717 |
Deferred income taxes, net | 38,654 | 42,695 |
Total noncurrent liabilities | 130,758 | 131,806 |
Total liabilities | 152,560 | 149,349 |
Commitments and contingencies (Note 8) | ||
Stockholders' Equity | ||
Preferred stock, $.01 par value, 1 share authorized, issued, and outstanding at March 31, 2017 and December 31, 2016, respectively. | ||
Common stock, $.01 par value, 54,000,000 shares authorized, 34,024,326 shares issued and 34,005,978 shares outstanding at March 31, 2017 and December 31, 2016 | 340 | 340 |
Additional paid-in capital | 237,903 | 237,566 |
Accumulated other comprehensive loss | (80,385) | (82,015) |
Retained earnings | 28,312 | 21,762 |
Treasury stock, at cost; 18,348 shares at March 31, 2017 and at December 31, 2016 | (175) | (175) |
Total stockholders’ equity | 185,995 | 177,478 |
Noncontrolling interest | 12,832 | |
Total equity | 198,827 | 177,478 |
Total liabilities and stockholders' equity | $ 351,387 | $ 326,827 |
CONDENSED CONSOLIDATED BALANCE3
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2017 | Dec. 31, 2016 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1 | 1 |
Preferred stock, shares issued (in shares) | 1 | 1 |
Preferred stock, shares outstanding (in shares) | 1 | 1 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 54,000,000 | 54,000,000 |
Common stock, shares issued (in shares) | 34,024,326 | 34,024,326 |
Common stock, shares outstanding (in shares) | 34,005,978 | 34,005,978 |
Treasury stock, shares (in shares) | 18,348 | 18,348 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Revenues | ||
Product sales | $ 45,574 | $ 17,212 |
Services | 13,062 | 5,895 |
Total revenues | 58,636 | 23,107 |
Cost of sales | ||
Cost of product sales, exclusive of depreciation and amortization expense shown below | 24,715 | 9,549 |
Cost of services, exclusive of depreciation and amortization expense shown below | 4,639 | 3,146 |
Total cost of sales, exclusive of depreciation and amortization expense shown below | 29,354 | 12,695 |
Selling, general and administrative expenses | 12,772 | 8,455 |
Depreciation | 564 | 452 |
Amortization | 6,022 | 5,771 |
Income (loss) from operations | 9,924 | (4,266) |
Other income (expense) | ||
Interest expense, net | (1,509) | (1,466) |
Other income, net | 974 | 26 |
Foreign currency exchange loss | (941) | (5,878) |
Total other expense | (1,476) | (7,318) |
Income (loss) before income tax | 8,448 | (11,584) |
Income tax expense (benefit) | 2,100 | (3,458) |
Net income (loss) | 6,348 | (8,126) |
Net loss attributable to noncontrolling interest | 202 | |
Net income (loss) attributable to NCS Multistage Holdings, Inc. | $ 6,550 | $ (8,126) |
Earnings (loss) per common share | ||
Basic earnings (loss) per share attributable to NCS Multistage Holdings, Inc. (in dollars per share) | $ 0.18 | $ (0.24) |
Diluted earnings (loss) per share attributable to NCS Multistage Holdings, Inc. (in dollars per share) | $ 0.18 | $ (0.24) |
Weighted average common shares outstanding: | ||
Basic | 34,006,000 | 34,019,000 |
Diluted | 36,746,000 | 34,019,000 |
CONDENSED CONSOLIDATED STATEME5
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Net income (loss) | $ 6,348 | $ (8,126) |
Foreign currency translation adjustments, net of tax of $0 | 1,653 | 13,581 |
Comprehensive income | 8,001 | 5,455 |
Less: Comprehensive loss attributable to noncontrolling interest | (179) | |
Comprehensive income attributable to NCS Multistage Holdings, Inc. | $ 8,180 | $ 5,455 |
CONDENSED CONSOLIDATED STATEME6
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME [Abstract] | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEME7
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 3 months ended Mar. 31, 2017 - USD ($) $ in Thousands | Preferred Stock [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Retained Earnings [Member] | Treasury Stock [Member] | Noncontrolling Interest [Member] | Total |
Beginning balance at Dec. 31, 2016 | $ 340 | $ 237,566 | $ (82,015) | $ 21,762 | $ (175) | $ 177,478 | ||
Beginning balance, shares at Dec. 31, 2016 | 1 | 34,024,326 | 18,348 | |||||
Acquisition | $ 13,011 | 13,011 | ||||||
Share-based compensation | 337 | 337 | ||||||
Net income (loss) | 6,550 | (202) | 6,348 | |||||
Currency translation adjustments | 1,630 | 23 | 1,653 | |||||
Ending balance at Mar. 31, 2017 | $ 340 | $ 237,903 | $ (80,385) | $ 28,312 | $ (175) | $ 12,832 | $ 198,827 | |
Ending balance, shares at Mar. 31, 2017 | 1 | 34,024,326 | 18,348 |
CONDENSED CONSOLIDATED STATEME8
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Cash flows from operating activities | ||
Net income (loss) | $ 6,348 | $ (8,126) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation and amortization | 6,586 | 6,223 |
Amortization of deferred loan cost | 180 | 183 |
Share-based compensation | 337 | 335 |
Deferred income tax benefit | (2,144) | (2,560) |
Gain on sale of property and equipment | (55) | (174) |
Foreign exchange loss on financing item | 843 | 5,445 |
Changes in operating assets and liabilities: | ||
Accounts receivable—trade | (11,848) | 6,963 |
Inventories | (521) | 1,155 |
Prepaid expenses and other assets | (219) | (421) |
Accounts payable—trade | (29) | (2,520) |
Accrued expenses | 71 | (188) |
Other liabilities | (876) | 257 |
Income taxes receivable/payable | 3,891 | (1,394) |
Net cash provided by operating activities | 2,564 | 5,178 |
Cash flows from investing activities | ||
Purchases of property and equipment | (1,581) | (63) |
Proceeds from sales of property and equipment | 71 | 215 |
Repayment of short-term note receivable | 1,000 | |
Acquisition of business, net of cash acquired | (5,872) | |
Net cash (used in) provided by investing activities | (6,382) | 152 |
Cash flows from financing activities | ||
Equipment note borrowings | 750 | |
Payments on equipment note | (14) | |
Promissory note borrowings | 462 | |
Payments related to public offering | (583) | |
Repayment of term note | (3,000) | |
Proceeds from issuance of common stock | 50 | |
Net cash (used in) provided by financing activities | (2,385) | 50 |
Effect of exchange rate changes on cash and cash equivalents | (92) | 623 |
Net change in cash and cash equivalents | (6,295) | 6,003 |
Cash and cash equivalents beginning of period | 18,275 | 9,545 |
Cash and cash equivalents end of period | 11,980 | $ 15,548 |
Noncash investing and financing activities | ||
Unpaid costs related to public offering | $ 708 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2017 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | N ote 1. Basis of Presentation Nature of Business NCS Multistage Holdings, Inc., through its wholly owned subsidiaries and subsidiaries for which we have a controlling voting interest (collectively referred to as the “Company,” “NCS,” “we” or “us”), is primarily engaged in providing engineered products and support services for oil and natural gas well completions and field development strategies. We offer our products and services primarily to exploration and production companies for use in onshore wells. We operate through six service facilities principally located in Houston and Midland, Texas; and Calgary, Red Deer, Grande Prairie and Estevan, Canada. We changed our name from Pioneer Super Holdings, Inc. to NCS Multistage Holdings, Inc. on December 13, 2016. Basis of Presentation The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), issued by the Securities Exchange Commission (“SEC”) and have not been audited by our independent registered public accounting firm. The Condensed Consolidated Balance Sheet at December 31, 2016 is derived from our audited financial statements. However, certain information and footnote disclosures required by GAAP for complete annual financial statements have been omitted or condensed as permitted by the rules and regulations of the SEC, and, therefore, these interim financial statements should be read in conjunction with our audited financial statements included in the prospectus, dated April 27, 2017 (the “Prospectus”), filed by us with the SEC on May 1, 2017 pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”). In the opinion of management, these condensed consolidated financial statements, which have been prepared pursuant to the rules of the SEC and GAAP for interim financial reporting, reflect all adjustments, which consisted only of normal recurring adjustments that were necessary for a fair statement of the interim periods presented. The results of operations for interim periods are not necessarily indicative of those for a full year. All intercompany accounts and transactions have been eliminated for purposes of preparing these condensed consolidated financial statements. On April 13, 2017, in connection with the initial public offering of shares of our common stock (“IPO”), our board of directors and stockholders approved an amendment to the amended and restated certificate of incorporation effecting a 3.00 for 1.00 stock split of our issued and outstanding shares of common stock. In connection with our stock split, the exchange ratio was adjusted to three from one for the exchangeable shares of NCS Multistage, Inc. (“NCS Canada”) held by the preferred stockholder. The stock split was implemented on April 13, 2017 and the par value of the common and preferred stock was not adjusted as a result of the stock split. All common stock share amounts disclosed in this Form 10-Q have been adjusted to reflect this stock split for all periods presented. Recent Accounting Pronouncements Pronouncements Adopted in 2017 In November 2015, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2015-17, Balance Sheet Classification of Deferred Taxes . This standard requires all deferred taxes, along with any related valuation allowance, to be presented as a noncurrent deferred asset or liability. The guidance is effective for fiscal years beginning after December 15, 2016, and includes interim periods within those fiscal years. Early adoption is permitted and the guidance may be applied either prospectively, for all deferred tax assets and liabilities, or retrospectively by reclassifying the comparative balance sheet. We adopted this ASU in the first quarter of 2017 on a prospective basis. Pronouncements Not Yet Effective In January 2017, the FASB issued ASU No. 2017-04, Simplifying the Accounting for Goodwill Impairment (Topic 350). This new standard simplifies the test for goodwill impairment. In the original guidance, an entity is required to perform additional analysis in Step 2, which measures a goodwill impairment loss by comparing the implied fair value of a report unit’s goodwill with the carrying amount of that goodwill. The FASB simplifies the subsequent measurement of goodwill by eliminating Step 2. Instead, under the amendments in this update, an entity should perform its annual or interim goodwill impairment test by comparing the fair value of a reporting unit with its carrying amount with excess carrying value over the fair value recognized as a loss on impairment. In addition, income tax effects from any tax deductible goodwill should be considered in measuring the goodwill impairment loss, if applicable. The amendments in this update are effective for public companies for annual or interim goodwill impairment tests in fiscal years beginning after December 15, 2020, with early adoption permitted. We are currently evaluating the impact of the adoption of this guidance. In February 2016, the FASB issued ASU No. 2016-02, Leases (“ASC 842”), which replaces the existing guidance in ASC 840, Leases . ASC 842 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right-of-use assets. The new lease standard does not substantially change lessor accounting. The new standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. We are currently evaluating the impact of the adoption of this guidance. In May 2014, the FASB issued ASU No. 2014-09 , Revenue from Contracts with Customers (Topic 606) . The new standard is effective for annual reporting periods beginning after December 15, 2017 and early adoption is permitted, however, not before fiscal years beginning after December 15, 2016. Subsequent to ASU 2014-09’s issuance, Topic 606 was amended for FASB updates that changed the effective date as well as addressed certain aspects regarding new revenue standards. The comprehensive new standard will supersede existing revenue recognition guidance and require revenue to be recognized when promised goods or services are transferred to customers in amounts that reflect the consideration to which entities expect to be entitled in exchange for those goods or services. Adoption of the new rules could affect the timing of revenue recognition for certain transactions. The guidance permits two implementation approaches, one requiring retrospective application of the new standard with restatement of prior years and one requiring prospective application of the new standard with disclosure of results under old standards. We are currently evaluating this standard in order to select a transition method and the effective date. We have not determined the effect of this standard on our financial statements and related disclosures. |
Acquisition
Acquisition | 3 Months Ended |
Mar. 31, 2017 | |
Acquisition [Abstract] | |
Acquisition | Note 2. Acquisition On February 1, 2017, we acquired a 50% interest in Repeat Precision, LLC (“Repeat”) for $5 .9 million. Historically, the business has been a supplier to NCS. Our strategic purchase of 50% of this business ensures that we have continued access to these services, but more importantly, allows us greater control of the allocation of their capacity, ensuring that we can scale their operations together with ours. In addition, Repeat will also market certain completion products on a wholesale basis, providing an additional revenue opportunity over time. Concurrent with entering into the transaction, the previous owner of the 50% interest repaid a $1.0 million promissory note to us. We also recorded an earn-out as a contingent adjustment to the asset purchase price in the amount of $7.0 million, which is included in other long-term liabilities on the balance sheet. We estimated the fair value of the earn-out using a Monte Carlo simulation on the acquisition date. The earn-out equity value was based on 2018 EBITDA, multiplied by three, which was then reduced by debt and increased by cash. The earn-out equity value was then discounted at the adjusted cost of equity. The earn-out is subject to remeasurement each reporting period until the full amount of the liability has been satisfied. The payment, if any, is expected to be paid during the first quarter of 2019 and will not exceed $10.0 million. Since NCS has the controlling voting interest in the joint venture, we accounted for the acquisition as a business combination and included Repeat in our consolidated financial statements from the acquisition date. As a result, the other party’s ownership percentage is presented separately as a non-controlling interest. The purchase price is allocated to the fair value of assets acquired and liabilities assumed based on a discounted cash flow model and goodwill is recognized for the excess consideration transferred over the fair value of the net assets. The purchase price allocation is preliminary and adjustments to provisional amounts may occur as we continue to analyze information. We have recognized $16.0 million of goodwill as a result of the transaction and expect the full amount to be deductible for tax purposes. Additional changes to the purchase price allocation may result in a corresponding change to goodwill in the period of the change, however, we do not expect such adjustments to materially change the purchase price allocation. We also incurred acquisition costs of $0.3 million as of March 31, 2017, which were included in general and administrative expense on our statement of operations. The following table summarizes the consideration and the assets acquired at the Repeat closing date (in thousands): Consideration Cash paid by NCS $ 5,872 Other capitalizable costs 124 Earn-out liability recognized 7,015 Total consideration $ 13,011 Preliminary purchase price allocation Other net assets $ 174 Property and equipment 5,750 Intangible assets 4,100 Goodwill 15,998 Total assets acquired $ 26,022 Less: noncontrolling interest (13,011) Net assets acquired $ 13,011 The unaudited pro forma operating results pursuant to ASC 805 related to the Repeat acquisition have been excluded due to immateriality. In connection with the Repeat acquisition, we acquired intangible assets in the amount of $4.1 million related to customer relationships. The intangible assets are amortized over their estimated ten year useful lives. Amortization expense for the intangible assets for the Repeat acquisition was $0.1 million for the three months ended March 31, 2017. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2017 | |
Inventories [Abstract] | |
Inventories | Note 3. Inventories Inventories consist of the following as of March 31, 2017 and December 31, 2016 (in thousands): March 31, December 31, 2017 2016 Raw materials $ 824 $ 695 Work in process 1,244 688 Finished goods 15,585 15,634 $ 17,653 $ 17,017 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment [Abstract] | |
Property and Equipment | Note 4. Property and Equipment Property and equipment by major asset class consist of the following as of March 31, 2017 and December 31, 2016 (in thousands): March 31, December 31, 2017 2016 Land $ 2,041 $ 2,026 Building and improvements 4,593 4,517 Machinery and equipment 8,720 1,983 Computers and software 1,380 1,345 Furniture and fixtures 936 916 Vehicles 2,724 2,475 Service equipment 465 1,964 20,859 15,226 Less: Accumulated depreciation and amortization 4,876 5,763 15,983 9,463 Construction in progress 594 296 Property and equipment, net $ 16,577 $ 9,759 |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangibles | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Identifiable Intangibles [Abstract] | |
Goodwill and Identifiable Intangibles | Note 5. Goodwill and Identifiable Intangibles Changes in the carrying amount of goodwill is as follows (in thousands): At December 31, 2016 $ 122,077 Acquisition 15,998 Currency translation adjustment 826 At March 31, 2017 $ 138,901 Identifiable intangibles by major asset class consist of the following (in thousands) : March 31, 2017 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 14 $ 138,942 $ (42,703) $ 96,239 Trademark 5 943 (811) 132 In-process research and development 5 35,602 (30,640) 4,962 Customer relationships 10 - 15 15,756 (3,412) 12,344 Noncompete agreements 5 28,262 (24,322) 3,940 Total identifiable intangibles $ 219,505 $ (101,888) $ 117,617 December 31, 2016 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 14 $ 138,026 $ (39,956) $ 98,070 Trademark 5 936 (759) 177 In-process research and development 5 35,306 (28,621) 6,685 Customer relationships 15 11,577 (3,128) 8,449 Noncompete agreements 5 28,065 (22,749) 5,316 Total identifiable intangibles $ 213,910 $ (95,213) $ 118,697 |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Note 6. Accrued Expenses Accrued expenses consist of the following as of March 31, 2017 and December 31, 2016 (in thousands): March 31, December 31, 2017 2016 Accrued payroll $ 1,500 $ 850 Property and franchise taxes accrual 181 322 Accrual related to public offering 979 1,153 Accrued acquisition related costs 83 618 Accrued other miscellaneous liabilities 623 347 $ 3,366 $ 3,290 |
Revolving Line of Credit and Lo
Revolving Line of Credit and Long-Term Debt | 3 Months Ended |
Mar. 31, 2017 | |
Revolving Line of Credit and Long-Term Debt [Abstract] | |
Revolving Line of Credit and Long-Term Debt | Note 7. Revolving Line of Credit and Long-Term Debt Our long-term debt is as follows (in thousands): March 31, December 31, 2017 2016 Term loan $ 88,680 $ 90,836 Revolving line of credit — — Promissory note 462 — Equipment note 735 — Total 89,877 90,836 Less debt issuance costs 1,492 1,670 Total debt, net 88,385 89,166 Less: current portion (4,057) (772) Long-term debt $ 84,328 $ 88,394 The estimated fair value of total debt for the periods ended March 31, 2017 and December 31, 2016 was approximately $91.9 million and $92.8 million, respectively. The fair value was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments through the date of maturity. Prior Senior Secured Credit Facilities Effective August 7, 2014, we entered into a credit agreement with a group of financial institutions which was denominated in Canadian dollars (“CAD”) and allowed for a term loan of up to approximately $197.6 million CAD ( $180.0 million USD), and a $38.4 million CAD ( $35.0 million USD) revolving line of credit of which $5.0 million CAD may be made available for letters of credit and $5.0 million CAD may be made available for swingline loans (together, the “Credit Facility”). We entered into Amendment No. 1, effective April 15, 2015, and Amendment No. 2, effective December 22, 2015, which modified the original credit agreement governing the Credit Facility. The modifications changed various defined terms as well as the covenants. Th ese amendment s also revised the revolving credit commitment to $27.8 million CAD ( $20.0 million USD) and evidenced the prepayment of the Term Loan in an amount of $55.8 million CAD . The term loan bears interest at the adjusted base rate or Canadian base rate plus an applicable margin, as defined in the credit agreement governing the Credit Facility, with quarterly interest payments. The applicable interest rate at March 31, 2017 and December 31, 2016 was 5.706% and 5.769% , respectively. The term loan is collateralized by certain assets of the Company and guaranteed by certain wholly owned subsidiaries of the Company. The interest on the term loan is payable in quarterly installments. Beginning in February 2018 , quarterly principal payments will resume with all unpaid principal and interest due at maturity on August 7, 2019 . As of March 31, 2017 and December 31, 2016 , the term loan had an outstanding balance of $88.7 million and $90.8 million, respectively. For the three months ended March 31, 2017 and 2016 , we incurred interest expense of $1.3 million for each period. The revolving line of credit is collateralized by certain assets of the Company and guaranteed by certain wholly owned subsidiaries of the Company. Interest on the revolving line of credit is payable quarterly at the adjusted base rate or Canadian base rate plus an applicable margin, as defined in the agreement governing the Credit Facility. All unpaid principal and interest on the revolving line of credit is due at maturity on August 7, 2019. As of March 31, 2017 , the outstanding balance under the revolving line of credit was zero . The agreement governing the Credit Facility contains financial covenants that requires (i) commencing with the fiscal quarter ending March 31, 2019, compliance with a leverage ratio test set at 3.00 to 1.00 as of the last day of each fiscal quarter, (ii) commencing with the fiscal quarter ending March 31, 2019, compliance with a fixed charge coverage ratio test set at 1.25 to 1.00 as of the last day of each fiscal quarter and (iii) commencing with the fiscal quarter ended December 31, 2015, compliance with an interest coverage ratio set at (x) 1.50 to 1.00 as of the last day of each fiscal quarter through and including the fiscal quarter ending December 31, 2017 and (y) 1.75 to 1.00 as of the last day of the fiscal quarter ending March 31, 2018 through and including the fiscal quarter ending December 31, 2018. As of March 31, 2017 , the Company was in compliance with these covenants. Our ability to meet these financial ratios can be affected by events beyond our control and we cannot assure you that we will be able to meet these ratios. A breach of any covenant or restriction contained in the agreement governing our Credit Facility could result in a default under this agreement. If any such default occurs, the lenders under the Credit Facility, may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable. The lenders under the Credit Facility also have the right upon an event of default thereunder to terminate any commitments they have to provide further borrowings. Further, following an event of default under the agreement governing our Credit Facility, the lenders under the Credit Facility will have the right to proceed against the collateral granted to them to secure that debt. If the debt under the Credit Facility was to be accelerated, our assets may not be sufficient to repay in full that debt or any other debt that may become due as a result of that acceleration. Direct costs incurred in connection with the term loan have been capitalized and are being amortized over the term of the debt using the effective interest method. Net fees attributable to the lenders of approximately $1.5 million and $1.7 million are presented as a discount to the carrying value of debt as of March 31, 2017 and December 31, 2016, respectively, in accordance with ASC 470 Debt. Amortization expense of the deferred financing charges of approximately $0.2 million for each period are included in interest expense for the three months ended March 31, 2017 and 2016. In February 2017, to ensure compliance with non-financial covenants per the Credit Facility, we made a $3.0 million term loan prepayment. On May 4, 2017, the term loan was paid in full and terminated using a portion of the proceeds from our IPO and we also entered into a new Amended and Restated Credit Agreement (the “Credit Agreement”). See “Note 14. Subsequent Events”. Promissory Note In connection with the acquisition , Repeat entered into a promissory note with Security State Bank & Trust, Fredericksburg on February 27, 2017, for an aggregate borrowing capacity of approximately $3.8 million. The promissory note is secured against equipment, inventory and receivables. It bears interest at a variable interest rate, which is based on an independent index and matures on February 27, 2018 . Any principal amount not paid by the maturity date bears interest at the lesser of the maximum rate allowed per law or 18% per annum. As of March 31, 2017, the outstanding balance on the promissory note was $0.5 million. For the three months ended March 31, 2017, we incurred interest expense of $1 thousand. Equipment Note In February 2017, Repeat entered into an equipment note in the amount of $0.8 million with Security State Bank & Trust, Fredericksburg also in connection with the acquisition. The equipment note bears interest at prime plus 1% , matures on February 27, 2021 and is collateralized by certain property. Any principal amount not paid by the maturity date bears interest at the lesser of the maximum rate allowed per law or 18% per annum. As of March 31, 2017, the outstanding balance on the equipment note was $0.7 million and for the three months ended March 31, 2017, we incurred interest expense of $3 thousand. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2017 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 8. Commitments and Contingencies Litigation In the ordinary course of business, we are involved in various pending or threatened legal actions, some of which may or may not be covered by insurance. Management has reviewed such pending judicial and legal proceedings, the reasonably anticipated costs and expenses in connection with such proceedings, and the availability and limits of insurance coverage, and has established reserves that are believed to be appropriate in light of those outcomes that are believed to be probable and can be estimated. The reserves accrued at March 31, 2017 and December 31, 2016 are immaterial. In the opinion of management, our ultimate liability, if any, with respect to these actions is not expected to have a material adverse effect on our financial position, results of operations or cash flows. On March 3, 2017, we received $0.9 million resulting from an arbitration case that was decided in our favor in February 2017. This was recorded as other income in our financial statements for the quarter ended March 31, 2017. |
Stockholders_ Equity
Stockholders’ Equity | 3 Months Ended |
Mar. 31, 2017 | |
Equity [Abstract] | |
Stockholders' Equity | Note 9. Stockholders’ Equity As disclosed in “Note 1 . Basis of Presentation”, on April 13, 2017 our board of directors and stockholders approved an amendment to the amended and restated certificate of incorporation effecting a 3.00 for 1.00 stock split of our issued and outstanding shares of common stock. The stock split was implemented on April 13, 2017. The par value of the common and preferred stock was not adjusted as a result of the stock split. All issued and outstanding shares and per share amounts included in the accompanying financial statements have been adjusted to reflect this stock split for all periods presented. We are authorized to issue 54.0 million shares of common stock with $0.01 par value. We are authorized to issue one share of preferred stock with $0.01 par value, defined as the “Special Voting Share” in our amended and restated certificate of incorporation. As of March 31, 2017 and December 31, 2016 , one share of preferred stock was issued and outstanding . On April 27, 2017, our certificate of incorporation was amended and restated and the number of shares of common stock authorized to be issued by the Company was increased from 54.0 million to 225.0 million and the number of our authorized shares of preferred stock was increased from one share to 10.0 million shares. The holders of common stock are entitled to one vote for each share of common stock held. The holder of the Special Voting Share shall be entitled to vote on all matters that a holder of common stock is entitled to vote on and shall be entitled to cast a number of votes equal to the number of exchangeable shares of NCS Multistage, Inc. (“NCS Canada”), a subsidiary of the Company, then outstanding that are not owned by us, multiplied by the exchange ratio (as defined in the articles of incorporation of NCS Canada). In connection with our stock split, the exchange ratio was adjusted to three from one. As of March 31, 2017 and December 31, 2016 , the number of common stock issuable for the exchangeable shares totaled 1,819,247 and are held by the preferred stockholder. On May 3, 2017, the preferred stockholder sold shares of our common stock in our initial public offering, which reduced the number of common stock issuable for the exchangeable shares to 1,769,247 . The holders of common stock are entitled to receive dividends as declared from time-to-time by our Board of Directors and Dividend Committee. The holder of the Special Voting Share is not entitled to receive dividends. No dividends were declared during the three months ended March 31, 2017 or December 31, 2016 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2017 | |
Income Taxes [Abstract] | |
Income Taxes | Note 10. Income Taxes We calculate our interim income tax provision in accordance with ASC 740. At the end of each interim period, we make an estimate of the annual expected effective tax rate and apply that rate to our ordinary year to date earnings or loss. In addition, the effect of changes in exacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. The computation of the annual expected effective tax rate at each interim period requires certain estimates and assumptions including , but not limited to, the expected operating income (or loss) for the year, projections of the proportion of income (or loss) earned and taxed in foreign jurisdictions, permanent and temporary differences and the likelihood of recovering deferred tax assets generated in the current year. The accounting estimates used to compute the provision for income taxes may change as new events occur, more experience is acquired or additional information is obtained. The computation of the annual effective rate would include applicable modifications, which were projected for the year, such as certain book expenses not deductible for tax, the domestic manufacturing deduction, tax credits and foreign deemed dividends. We recorded a tax expense (benefit) of $2.1 million and $(3.5) million for the three months ended March 31, 2017 and 2016 , respectively. For the three months ended March 31, 2017 and 2016 , our effective tax rates were approximately 24.9% and (29.9)% , respectively. The difference in these effective tax rates were primarily due to the effect of not providing U.S. income taxes on the undistributed earnings of foreign subsidiaries as of March 31, 2017 because we intend to permanently reinvest such earnings outside the U.S. We are changing our assertion that undistributed foreign earnings are indefinitely or permanently reinvested during the three months ended March 31, 2017 as a result of cash proceeds received from the IPO during May 2017, a portion of which was used to pay off existing debt. The excess proceeds from the IPO leaves cash available in the U.S. without requiring cash from foreign operations. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The impact of an uncertain income tax position on the income tax returns must be recognized at the largest amount that is more-likely-than-not to be required to be recognized upon audit by the relevant taxing authority. This standard also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting for interim periods, disclosure and transition issues with respect to tax positions. We include interest and penalties as a component of other income (expense) in the consolidated statement of operations. For the three months ended March 31, 2017 and 2016 , we recognized approximately $1.6 thousand and $4.0 thousand, respectively, in interest and penalties. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Earnings per Share | Note 11. Earnings Per Share The following table presents the reconciliation of the numerator and denominator for calculating earnings per share from net income (loss) (in thousands, except per share data) : Three Months Ended March 31, 2017 2016 Numerator—Basic Net income (loss) $ 6,348 $ (8,126) Less: income attributable to participating shares (333) — Add: loss attributable to noncontrolling interest 202 — Net income (loss) attributable to NCS Multistage Holdings, Inc.—Basic $ 6,217 $ (8,126) Numerator—Diluted Net income (loss) $ 6,348 $ (8,126) Add: loss attributable to noncontrolling interest 202 — Net income (loss) attributable to NCS Multistage Holdings, Inc.—Diluted $ 6,550 $ (8,126) Denominator Basic weighted average number of shares 34,006 34,019 Exchangeable shares for common stock 1,819 — Dilutive effect of stock options after application of treasury stock method 921 — Diluted weighted average number of shares 36,746 34,019 Earnings (loss) per common share Basic $ 0.18 $ (0.24) Diluted $ 0.18 $ (0.24) |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2017 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Note 12. Related Party Transactions As of December 31, 2016 , we held a long-term note receivable in the amount of approximately $0.8 million due from a related party. During the first quarter of 2017, the long-term note receivable was paid in full. We also purchased services and grease in the amount of approximately $21.0 thousand and $31.6 thousand from a related party for the three months ended March 31, 2017 and 2016 . |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2017 | |
Segment and Geographic Information [Abstract] | |
Segment and Geographic Information | Note 13. Segment and Geographic Information We have determined that we operate in one reportable segment that has been identified based on how our chief operating decision maker manages our business. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2017 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14. Subsequent Events On May 3, 2017, we completed the initial public offering of 9.5 million shares of our common stock, $0.01 par value, at a price to the public of $17.00 per share pursuant to a Registration Statement on Form S-1, as amended (File No. 333-216580) (the “Registration Statement”). The underwriters exercised their option to purchase an additional 1.425 million shares of our common stock from certain selling stockholders and the closing of the over-allotment option occurred on May 3, 2017 concurrently with the closing of the IPO. We received approximately $148.9 million in net proceeds after deducting underwriting discounts and commissions and estimated offering expenses. We used a portion of the net proceeds from the IPO to repay our indebtedness under our Credit Facility (see “Note 7. Revolving Line of Credit and Long-Term Debt”) and will use the remainder for general corporate purposes, which may include the payment of costs and expenses associated with the implementation of our business strategy, although we have no current specific plans for the use of the remaining net proceeds at this time. In addition, in connection with the IPO, our certificate of incorporation was amended and restated to increase our authorized capital stock to consist of 225.0 million shares of common stock, par value $0.01 per share and 10.0 million shares of preferred stock, par value $0.01 per share. On May 4, 2017, we entered into an Amended and Restated Credit Agreement with Pioneer Investment, Inc., as borrower (the “U.S. Borrower ”), NCS Multistage Inc., as borrower (the “Canadian Borrower”), Pioneer Intermediate, Inc., (together with the Company, the “Parent Guarantors”) and the lenders party thereto, Wells Fargo Bank, National Association as administrative agent in respect of the U.S. Facility (as defined below) and Wells Fargo Bank, National Association, Canadian Branch, as administrative agent in respect of the Canadian Facility (as defined below) (the senior secured revolving credit facilities provided thereunder, the “New Senior Secured Credit Facility”). The New Senior Secured Credit Facility consists of a (i) senior secured revolving credit facility in an aggregate principal amount of $25.0 million made available to the U.S. Borrower (the “U.S. Facility”), of which up to $5.0 million may be made available for letters of credit and up to $5.0 million may be made available for swingline loans and (ii) senior secured revolving credit facility in an aggregate principal amount of $25.0 million made available to the Canadian Borrower (the “Canadian Facility”). Borrowings under the U.S. Facility may be made in U.S. dollars, Canadian dollars or Euros and will bear interest at a rate equal to the Adjusted Base Rate or Eurocurrency Rate, in each case, plus an applicable interest margin as set forth in the New Senior Secured Credit Facility. Borrowings under the Canadian Facility may be made in U.S. dollars or Canadian dollars and will bear interest at the Canadian (Cdn) Base Rate, Canadian (U.S.) Base Rate, Eurocurrency Rate or Discount Rate, in each case, plus an applicable interest margin as set forth in the New Senior Secured Credit Facility. The obligations of the U.S. Borrower under the U.S. Facility will be guaranteed by the Parent Guarantors and each of the other existing and future direct and indirect restricted subsidiaries of the Company organized under the laws of the United States (subject to certain exceptions) and will be secured by substantially all of the assets of the Parent Guarantors, the U.S. Borrower and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens. The obligations of the Canadian Borrower under the Canadian Facility will be guaranteed by the Parent Guarantors, the U.S. Borrower and each of the other future direct and indirect restricted subsidiaries of the Company organized under the laws of the United States and Canada (subject to certain exceptions) and will be secured by substantially all of the assets of the Parent Guarantors, the U.S. Borrower, the Canadian Borrower and such other subsidiary guarantors, in each case, subject to certain exceptions and permitted liens. The New Senior Secured Credit Facility contains financial covenants that require (i) commencing with the fiscal quarter ending June 30, 2017, compliance with a leverage ratio test set at (A) 3.00 to 1.00 as of the last day of each fiscal quarter ending prior to March 31, 2018 and (B) 2.50 to 1:00 as of the last day of each fiscal quarter ending on or after March 31, 2018, (ii) commencing with the fiscal quarter ending June 30, 2017, compliance with an interest coverage ratio test set at 2.75 to 1.00 as of the last day of each fiscal quarter, (iii) if the leverage ratio as of the end of any fiscal quarter is greater than 2.00 to 1.00 and the amount outstanding under the Canadian Facility at any time during such fiscal quarter was greater than $0, compliance as of the end of such fiscal quarter with a Canadian asset coverage ratio test set at 1.00 to 1.00 and (iv) if the leverage ratio as of the end of any fiscal quarter is greater than 2.00 to 1.00 and the amount outstanding under the U.S. Facility at any time during such fiscal quarter was greater than $0, compliance as of the end of such fiscal quarter with a U.S. asset coverage ratio test set at 1.00 to 1.00. The New Senior Secured Credit Facility also contains customary affirmative and negative covenants, including, among other things, restrictions on the creation of liens, the incurrence of indebtedness, investments, dividends and other restricted payments, dispositions and transactions with affiliates. The New Senior Secured Credit Facility also includes customary events of default for facilities of this type (with customary grace periods, as applicable). If an event of default occurs, the lenders under each of the U.S. Facility and the Canadian Facility may elect (after the expiration of any applicable notice or grace periods) to declare all outstanding borrowings under such facility, together with accrued and unpaid interest and other amounts payable thereunder, to be immediately due and payable, The lenders under each of the U.S. Facility and the Canadian Facility also have the right upon an event of default thereunder to terminate any commitments they have to provide further borrowings under such facility. Further, following an event of default under each of the U.S. Facility and the Canadian Facility, the lenders thereunder will have the right to proceed against the collateral granted to them to secure such facility. The New Senior Secured Credit Facility amended and restated that certain Credit Agreement, dated as of August 7, 2014, among the U.S. Borrower, Pioneer Intermediate, Wells Fargo Bank, National Association and the lenders party thereto. The New Senior Secured Credit Facility will mature on May 4, 2020 . |
Acquisition (Tables)
Acquisition (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Acquisition [Abstract] | |
Summary of Consideration and Assets Acquired | Consideration Cash paid by NCS $ 5,872 Other capitalizable costs 124 Earn-out liability recognized 7,015 Total consideration $ 13,011 Preliminary purchase price allocation Other net assets $ 174 Property and equipment 5,750 Intangible assets 4,100 Goodwill 15,998 Total assets acquired $ 26,022 Less: noncontrolling interest (13,011) Net assets acquired $ 13,011 |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Inventories [Abstract] | |
Schedule of Inventories | March 31, December 31, 2017 2016 Raw materials $ 824 $ 695 Work in process 1,244 688 Finished goods 15,585 15,634 $ 17,653 $ 17,017 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Property and Equipment [Abstract] | |
Schedule of Property and Equipment by Major Asset Class | March 31, December 31, 2017 2016 Land $ 2,041 $ 2,026 Building and improvements 4,593 4,517 Machinery and equipment 8,720 1,983 Computers and software 1,380 1,345 Furniture and fixtures 936 916 Vehicles 2,724 2,475 Service equipment 465 1,964 20,859 15,226 Less: Accumulated depreciation and amortization 4,876 5,763 15,983 9,463 Construction in progress 594 296 Property and equipment, net $ 16,577 $ 9,759 |
Goodwill and Identifiable Int26
Goodwill and Identifiable Intangible (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Goodwill and Identifiable Intangibles [Abstract] | |
Changes in Carrying Amount of Goodwill | At December 31, 2016 $ 122,077 Acquisition 15,998 Currency translation adjustment 826 At March 31, 2017 $ 138,901 |
Schedule of Identifiable Intangibles by Major Asset Class | March 31, 2017 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 14 $ 138,942 $ (42,703) $ 96,239 Trademark 5 943 (811) 132 In-process research and development 5 35,602 (30,640) 4,962 Customer relationships 10 - 15 15,756 (3,412) 12,344 Noncompete agreements 5 28,262 (24,322) 3,940 Total identifiable intangibles $ 219,505 $ (101,888) $ 117,617 December 31, 2016 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 14 $ 138,026 $ (39,956) $ 98,070 Trademark 5 936 (759) 177 In-process research and development 5 35,306 (28,621) 6,685 Customer relationships 15 11,577 (3,128) 8,449 Noncompete agreements 5 28,065 (22,749) 5,316 Total identifiable intangibles $ 213,910 $ (95,213) $ 118,697 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Liabilities | March 31, December 31, 2017 2016 Accrued payroll $ 1,500 $ 850 Property and franchise taxes accrual 181 322 Accrual related to public offering 979 1,153 Accrued acquisition related costs 83 618 Accrued other miscellaneous liabilities 623 347 $ 3,366 $ 3,290 |
Revolving Line of Credit and 28
Revolving Line of Credit and Long-Term Debt (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Revolving Line of Credit and Long-Term Debt [Abstract] | |
Schedule of Long-term Debt | March 31, December 31, 2017 2016 Term loan $ 88,680 $ 90,836 Revolving line of credit — — Promissory note 462 — Equipment note 735 — Total 89,877 90,836 Less debt issuance costs 1,492 1,670 Total debt, net 88,385 89,166 Less: current portion (4,057) (772) Long-term debt $ 84,328 $ 88,394 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2017 | |
Earnings Per Share [Abstract] | |
Reconciliation of Numerator and Denominator for Calculating Earnings Per Share from Net Income (Loss) | Three Months Ended March 31, 2017 2016 Numerator—Basic Net income (loss) $ 6,348 $ (8,126) Less: income attributable to participating shares (333) — Add: loss attributable to noncontrolling interest 202 — Net income (loss) attributable to NCS Multistage Holdings, Inc.—Basic $ 6,217 $ (8,126) Numerator—Diluted Net income (loss) $ 6,348 $ (8,126) Add: loss attributable to noncontrolling interest 202 — Net income (loss) attributable to NCS Multistage Holdings, Inc.—Diluted $ 6,550 $ (8,126) Denominator Basic weighted average number of shares 34,006 34,019 Exchangeable shares for common stock 1,819 — Dilutive effect of stock options after application of treasury stock method 921 — Diluted weighted average number of shares 36,746 34,019 Earnings (loss) per common share Basic $ 0.18 $ (0.24) Diluted $ 0.18 $ (0.24) |
Basis of Presentation (Details)
Basis of Presentation (Details) | Apr. 13, 2017 | Mar. 31, 2017item |
Number of service facilities | 6 | |
IPO [Member] | Subsequent Event [Member] | ||
Stock split ratio of all issued and outstanding shares of common stock | 3 |
Acquisition (Narrative) (Detail
Acquisition (Narrative) (Details) - USD ($) $ in Thousands | Feb. 01, 2017 | Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 |
Business Acquisition [Line Items] | ||||
Proceeds from promissory note | $ 1,000 | |||
Goodwill | 138,901 | $ 122,077 | ||
Amortization of intangible assets | 6,022 | $ 5,771 | ||
Repeat Precision LLC [Member] | ||||
Business Acquisition [Line Items] | ||||
Ownership interest acquired, percent | 50.00% | |||
Cash payment for acquisition | $ 5,872 | |||
Proceeds from promissory note | 1,000 | |||
Earn-out as a contingent adjustment to asset purchase price | 7,000 | |||
Maximum earn-out contingent consideration | 10,000 | |||
Goodwill | 15,998 | |||
Acquisition costs | 300 | |||
Repeat Precision LLC [Member] | Customer Relationships [Member] | ||||
Business Acquisition [Line Items] | ||||
Finite-lived intangible assets acquired | $ 4,100 | |||
Amortization of intangible assets | $ 100 |
Acquisition (Summary of Conside
Acquisition (Summary of Consideration and Assets Acquired) (Details) - USD ($) $ in Thousands | Feb. 01, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Preliminary purchase price allocation | |||
Goodwill | $ 138,901 | $ 122,077 | |
Repeat Precision LLC [Member] | |||
Consideration | |||
Cash paid by NCS | $ 5,872 | ||
Other capitalizable costs | 124 | ||
Earn-out liability recognized | 7,015 | ||
Total consideration | 13,011 | ||
Preliminary purchase price allocation | |||
Other net assets | 174 | ||
Property and equipment | 5,750 | ||
Intangible assets | 4,100 | ||
Goodwill | 15,998 | ||
Total assets acquired | 26,022 | ||
Less: noncontrolling interest | (13,011) | ||
Net assets acquired | $ 13,011 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Inventories [Abstract] | ||
Raw materials | $ 824 | $ 695 |
Work in process | 1,244 | 688 |
Finished goods | 15,585 | 15,634 |
Total inventories | $ 17,653 | $ 17,017 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment by Major Asset Class) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 20,859 | $ 15,226 |
Less: Accumulated depreciation and amortization | 4,876 | 5,763 |
Property and equipment, net, excluding construction in progress | 15,983 | 9,463 |
Construction in progress | 594 | 296 |
Property and equipment, net | 16,577 | 9,759 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,041 | 2,026 |
Building and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 4,593 | 4,517 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 8,720 | 1,983 |
Computers and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,380 | 1,345 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 936 | 916 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,724 | 2,475 |
Service equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 465 | $ 1,964 |
Goodwill and Identifiable Int35
Goodwill and Identifiable Intangibles (Changes in Carrying Amount of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2017USD ($) | |
Goodwill and Identifiable Intangibles [Abstract] | |
Goodwill, beginning balance | $ 122,077 |
Acquisition | 15,998 |
Currency translation adjustment | 826 |
Goodwill, ending balance | $ 138,901 |
Goodwill and Identifiable Int36
Goodwill and Identifiable Intangibles (Schedule of Identifiable Intangibles by Major Asset Class) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2017 | Dec. 31, 2016 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Carrying Amount | $ 219,505 | $ 213,910 |
Finite-lived intangible assets, Accumulated Amortization | (101,888) | (95,213) |
Finite-lived intangible assets, Net Balance | $ 117,617 | $ 118,697 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 14 years | 14 years |
Finite-lived intangible assets, Gross Carrying Amount | $ 138,942 | $ 138,026 |
Finite-lived intangible assets, Accumulated Amortization | (42,703) | (39,956) |
Finite-lived intangible assets, Net Balance | $ 96,239 | $ 98,070 |
Trademark [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | 5 years |
Finite-lived intangible assets, Gross Carrying Amount | $ 943 | $ 936 |
Finite-lived intangible assets, Accumulated Amortization | (811) | (759) |
Finite-lived intangible assets, Net Balance | $ 132 | $ 177 |
In-Process Research and Development [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | 5 years |
Finite-lived intangible assets, Gross Carrying Amount | $ 35,602 | $ 35,306 |
Finite-lived intangible assets, Accumulated Amortization | (30,640) | (28,621) |
Finite-lived intangible assets, Net Balance | 4,962 | $ 6,685 |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 15 years | |
Finite-lived intangible assets, Gross Carrying Amount | 15,756 | $ 11,577 |
Finite-lived intangible assets, Accumulated Amortization | (3,412) | (3,128) |
Finite-lived intangible assets, Net Balance | $ 12,344 | $ 8,449 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 15 years | |
Noncompete Agreements [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | 5 years |
Finite-lived intangible assets, Gross Carrying Amount | $ 28,262 | $ 28,065 |
Finite-lived intangible assets, Accumulated Amortization | (24,322) | (22,749) |
Finite-lived intangible assets, Net Balance | $ 3,940 | $ 5,316 |
Accrued Expenses (Schedule of A
Accrued Expenses (Schedule of Accrued Expenses) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Accrued Expenses [Abstract] | ||
Accrued payroll | $ 1,500 | $ 850 |
Property and franchise taxes accrual | 181 | 322 |
Accrual related to public offering | 979 | 1,153 |
Accrued acquisition related costs | 83 | 618 |
Accrued other miscellaneous liabilities | 623 | 347 |
Accrued Expenses | $ 3,366 | $ 3,290 |
Revolving Line of Credit and 38
Revolving Line of Credit and Long-Term Debt (Narrative) (Details) CAD in Millions | Feb. 27, 2017USD ($) | Apr. 15, 2015CAD | Feb. 28, 2017USD ($) | Mar. 31, 2017USD ($) | Mar. 31, 2016USD ($) | Dec. 31, 2016USD ($) | Apr. 15, 2015USD ($) | Aug. 07, 2014CAD | Aug. 07, 2014USD ($) |
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $ 89,877,000 | $ 90,836,000 | |||||||
Incurred interest expense | 1,300,000 | $ 1,300,000 | |||||||
Line of credit outstanding | 0 | ||||||||
Debt issuance cost | 1,492,000 | 1,670,000 | |||||||
Amortization expesne of deferred financing charges | $ 180,000 | $ 183,000 | |||||||
Letter of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | CAD | CAD 5 | ||||||||
Swingline Loans [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | CAD | 5 | ||||||||
Commencing on Quarter Ending March 31, 2019 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Leverage ratio | 3.00% | ||||||||
Fixed charge coverage ratio | 1.25% | ||||||||
Commencing on Quarter Ending December 31, 2015 through December 31, 2017 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest coverage ratio | 1.50% | ||||||||
Quarter Ending March 31, 2018 through December 31, 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Future interest coverage ratio | 1.75% | ||||||||
Fair Value, Inputs, Level 2 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, fair value | $ 91,900,000 | $ 92,800,000 | |||||||
Term Loan [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, maximum borrowing capacity | 197.6 | $ 180,000,000 | |||||||
Interest rate, effective percentage | 5.706% | 5.769% | |||||||
Debt redemption start date | Feb. 1, 2018 | ||||||||
Debt redemption end date | Aug. 7, 2019 | ||||||||
Long-term debt, gross | $ 88,680,000 | $ 90,836,000 | |||||||
Prepayment of debt | $ 3,000,000 | ||||||||
Term Loan [Member] | Amendment [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Prepayment of debt | CAD | CAD 55.8 | ||||||||
Revolving Line of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | CAD 38.4 | $ 35,000,000 | |||||||
Revolving Line of Credit [Member] | Amendment [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | CAD 27.8 | $ 20,000,000 | |||||||
Promissory Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $ 462,000 | ||||||||
Promissory Note [Member] | Repeat Precision LLC [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, maximum borrowing capacity | $ 3,800,000 | ||||||||
Debt maturity date | Feb. 27, 2018 | ||||||||
Long-term debt, gross | $ 500,000 | ||||||||
Incurred interest expense | 1,000 | ||||||||
Promissory Note [Member] | Repeat Precision LLC [Member] | Maximum [Member] | If Not Paid by Maturity Date [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 18.00% | ||||||||
Equipment Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 1.00% | ||||||||
Long-term debt, gross | $ 735,000 | ||||||||
Equipment Note [Member] | Repeat Precision LLC [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt maturity date | Feb. 27, 2021 | ||||||||
Long-term debt, gross | $ 700,000 | ||||||||
Incurred interest expense | $ 3,000 | ||||||||
Debt instrument, face amount | $ 800,000 | ||||||||
Equipment Note [Member] | Repeat Precision LLC [Member] | Maximum [Member] | If Not Paid by Maturity Date [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 18.00% |
Revolving Line of Credit and 39
Revolving Line of Credit and Long-Term Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2017 | Dec. 31, 2016 |
Debt Instrument [Line Items] | ||
Total long-term debt | $ 89,877 | $ 90,836 |
Less debt issuance costs | 1,492 | 1,670 |
Total debt, net | 88,385 | 89,166 |
Less: current portion | (4,057) | (772) |
Long-term debt | 84,328 | 88,394 |
Term Loan [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 88,680 | $ 90,836 |
Promissory Note [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | 462 | |
Equipment Note [Member] | ||
Debt Instrument [Line Items] | ||
Total long-term debt | $ 735 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Mar. 03, 2017USD ($) |
Commitments and Contingencies [Abstract] | |
Proceeds from an arbitration case | $ 0.9 |
Stockholders_ Equity (Details)
Stockholders’ Equity (Details) | Apr. 13, 2017 | Mar. 31, 2017$ / sharesshares | Dec. 31, 2016$ / sharesshares | May 03, 2017$ / sharesshares | Apr. 27, 2017shares |
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 54,000,000 | 54,000,000 | |||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Preferred stock, shares authorized (in shares) | 1 | 1 | |||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | |||
Preferred stock, shares issued (in shares) | 1 | 1 | |||
Preferred stock, shares outstanding (in shares) | 1 | 1 | |||
Voting rights entitled for each common stockholders | The holders of common stock are entitled to one vote for each share of common stock held. | ||||
Common stock issuable for the exchangeable shares | 1,819,247 | 1,819,247 | |||
Dividends declared | $ / shares | $ 0 | $ 0 | |||
Subsequent Event [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Common stock, shares authorized (in shares) | 225,000,000 | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | ||||
Common stock issuable for the exchangeable shares | 1,769,247 | ||||
Subsequent Event [Member] | IPO [Member] | |||||
Equity, Class of Treasury Stock [Line Items] | |||||
Stock split ratio of all issued and outstanding shares of common stock | 3 | ||||
Common stock, shares authorized (in shares) | 225,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | ||||
Preferred stock, shares authorized (in shares) | 10,000,000 | ||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Income Taxes [Abstract] | ||
Income tax expense (benefit) | $ 2,100,000 | $ (3,458,000) |
Effective tax rate | 24.90% | (29.90%) |
Unrecognized tax benefits, income tax penalties and interest expense | $ 1,600 | $ 4,000 |
Earnings Per Share (Reconciliat
Earnings Per Share (Reconciliation of Numerator and Denominator for Calculating Earnings Per Share from Net Income (Loss)) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2017 | Mar. 31, 2016 | |
Numerator—Basic | ||
Net income (loss) | $ 6,348 | $ (8,126) |
Less: income attributable to participating shares | (333) | |
Add: loss attributable to noncontrolling interest | 202 | |
Net income (loss) attributable to NCS Multistage Holdings, Inc.—Basic | 6,217 | (8,126) |
Numerator—Diluted | ||
Net income (loss) | 6,348 | (8,126) |
Add: loss attributable to noncontrolling interest | 202 | |
Net income (loss) attributable to NCS Multistage Holdings, Inc.—Diluted | $ 6,550 | $ (8,126) |
Denominator | ||
Basic weighted average number of shares (in shares) | 34,006,000 | 34,019,000 |
Exchangeable shares for common stock (in shares) | 1,819,000 | |
Dilutive effect of stock options after application of treasury stock method (in shares) | 921,000 | |
Diluted weighted average number of shares (in shares) | 36,746,000 | 34,019,000 |
Earnings (loss) per common share | ||
Basic (in dollars per share) | $ 0.18 | $ (0.24) |
Diluted (in dollars per share) | $ 0.18 | $ (0.24) |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2017 | Mar. 31, 2016 | Dec. 31, 2016 | |
Related Party Transactions [Abstract] | |||
Long-term note receivable due from related party | $ 800,000 | ||
Purchase of services and grease from related party | $ 21,000 | $ 31,600 |
Segment and Geographic Inform45
Segment and Geographic Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2017segment | |
Segment and Geographic Information [Abstract] | |
Number of reportable segments | 1 |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, CAD in Millions, $ in Millions | May 04, 2017USD ($) | May 03, 2017USD ($)$ / sharesshares | Mar. 31, 2017$ / sharesshares | Apr. 27, 2017shares | Dec. 31, 2016$ / sharesshares | Aug. 07, 2014CAD |
Subsequent Events [Line Items] | ||||||
Common stock, shares authorized (in shares) | 54,000,000 | 54,000,000 | ||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Preferred stock, shares authorized (in shares) | 1 | 1 | ||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||
Letter of Credit [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Line of credit aggregate principal amount | CAD | CAD 5 | |||||
Swingline Loans [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Line of credit aggregate principal amount | CAD | CAD 5 | |||||
Amended And Restated Credit Agreement [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Credit facility maturity date | May 4, 2020 | |||||
Subsequent Event [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Common stock, shares authorized (in shares) | 225,000,000 | |||||
Preferred stock, shares authorized (in shares) | 10,000,000 | |||||
Subsequent Event [Member] | IPO [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Common stock shares issued | 9,500,000 | |||||
Common stock, shares authorized (in shares) | 225,000,000 | |||||
Common stock par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Preferred stock, shares authorized (in shares) | 10,000,000 | |||||
Preferred stock par value (in dollars per share) | $ / shares | $ 0.01 | |||||
Shares sales price (in dollars per share) | $ / shares | $ 17 | |||||
Net proceeds after deducting underwriting discounts and commissions | $ | $ 148.9 | |||||
Subsequent Event [Member] | IPO [Member] | Maximum [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Underwriters option to purchase additional shares from selling stockholders | 1,425,000 | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Commencing on Quarter Ending June 30, 2017 through Quarter Ending Prior to March 31, 2018 [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Leverage ratio | 3.00% | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Commencing on Quarter Ending June 30, 2017 through Quarter Ending on or After March 31, 2018 [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Leverage ratio | 2.50% | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Commencing on Quarter Ending June 30, 2017 through Last Day of Each Fiscal Quarter [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Interest coverage ratio | 2.75% | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Revolving Credit U.S. Facility [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Line of credit aggregate principal amount | $ | $ 25 | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Revolving Credit U.S. Facility [Member] | If Leverage Ratio as of End of Any Fiscal Quarter is Greater than 2.00 to 1.00 and Amount Outstanding Under U.S. Facility at Any Time During such Fiscal Quarter was Greater than $0 [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Asset coverage ratio | 1.00% | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Revolving Credit Canadian Facility [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Line of credit aggregate principal amount | $ | $ 25 | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Revolving Credit Canadian Facility [Member] | If Leverage Ratio as of End of Any Fiscal Quarter is Greater than 2.00 to 1.00 and the Amount Outstanding Under the Canadian Facility at Any Time During such Fiscal Quarter was Greater than $0 [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Asset coverage ratio | 1.00% | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Letter of Credit [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Line of credit aggregate principal amount | $ | $ 5 | |||||
Subsequent Event [Member] | Amended And Restated Credit Agreement [Member] | Swingline Loans [Member] | ||||||
Subsequent Events [Line Items] | ||||||
Line of credit aggregate principal amount | $ | $ 5 |