Document And Entity Information
Document And Entity Information - shares | 3 Months Ended | |
Mar. 31, 2019 | May 06, 2019 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | NCS Multistage Holdings, Inc. | |
Entity Central Index Key | 0001692427 | |
Trading Symbol | ncsm | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Smaller Reporting Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2019 | |
Document Fiscal Year Focus | 2019 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding (in shares) | 46,669,918 |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 11,984 | $ 25,131 |
Accounts receivable - trade, net | 55,718 | 49,984 |
Inventories | 34,385 | 32,753 |
Prepaid expenses and other current assets | 1,746 | 2,037 |
Other current receivables | 5,195 | 4,685 |
Total current assets | 109,028 | 114,590 |
Noncurrent assets | ||
Property and equipment, net | 33,734 | 32,296 |
Goodwill | 23,136 | 23,112 |
Identifiable intangibles, net | 48,569 | 48,985 |
Deposits and other assets | 8,347 | 1,392 |
Deferred income taxes, net | 9,326 | |
Total noncurrent assets | 113,786 | 115,111 |
Total assets | 222,814 | 229,701 |
Current liabilities | ||
Accounts payable—trade | 9,679 | 7,167 |
Accrued expenses | 2,933 | 4,084 |
Income taxes payable | 487 | 184 |
Current contingent consideration | 9,963 | |
Other current liabilities | 4,498 | 1,991 |
Current maturities of long-term debt | 2,461 | 2,236 |
Total current liabilities | 20,058 | 25,625 |
Noncurrent liabilities | ||
Long-term debt, less current maturities | 23,547 | 23,455 |
Other long-term liabilities | 5,574 | 1,258 |
Deferred income taxes, net | 3,009 | 3,132 |
Total noncurrent liabilities | 32,130 | 27,845 |
Total liabilities | 52,188 | 53,470 |
Commitments and contingencies (Note 9) | ||
Stockholders' Equity | ||
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding at March 31, 2019 and one share issued and outstanding at December 31, 2018 | ||
Common stock, $0.01 par value, 225,000,000 shares authorized, 46,752,755 shares issued and 46,669,918 shares outstanding at March 31, 2019 and 45,100,771 shares issued and 45,072,463 shares outstanding at December 31, 2018 | 468 | 451 |
Additional paid-in capital | 415,051 | 411,423 |
Accumulated other comprehensive loss | (82,493) | (84,030) |
Retained (deficit) earnings | (178,172) | (166,206) |
Treasury stock, at cost; 82,837 shares at March 31, 2019 and 28,308 shares at December 31, 2018 | (646) | (337) |
Total stockholders’ equity | 154,208 | 161,301 |
Non-controlling interest | 16,418 | 14,930 |
Total equity | 170,626 | 176,231 |
Total liabilities and stockholders' equity | $ 222,814 | $ 229,701 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Parentheticals) - $ / shares | Mar. 31, 2019 | Dec. 31, 2018 |
CONDENSED CONSOLIDATED BALANCE SHEETS [Abstract] | ||
Preferred stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 10,000,000 | 10,000,000 |
Preferred stock, shares issued (in shares) | 0 | 1 |
Preferred stock, shares outstanding (in shares) | 0 | 1 |
Common stock par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 225,000,000 | 225,000,000 |
Common stock, shares issued (in shares) | 46,752,755 | 45,100,771 |
Common stock, shares outstanding (in shares) | 46,669,918 | 45,072,463 |
Treasury stock, shares (in shares) | 82,837 | 28,308 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues | ||
Revenues | $ 52,850 | $ 70,686 |
Cost of sales | ||
Cost of product sales, exclusive of depreciation and amortization expense shown below | 16,746 | 24,703 |
Cost of services, exclusive of depreciation and amortization expense shown below | 10,017 | 8,889 |
Total cost of sales, exclusive of depreciation and amortization expense shown below | 26,763 | 33,592 |
Selling, general and administrative expenses | 23,026 | 21,027 |
Depreciation | 1,426 | 1,099 |
Amortization | 1,161 | 3,321 |
Change in fair value of contingent consideration | 37 | (1,353) |
Income from operations | 437 | 13,000 |
Other income (expense) | ||
Interest expense, net | (517) | (457) |
Other income, net | 73 | 84 |
Foreign currency exchange (loss) gain | (297) | 183 |
Total other expense | (741) | (190) |
(Loss) income before income tax | (304) | 12,810 |
Income tax expense | 9,574 | 945 |
Net (loss) income | (9,878) | 11,865 |
Net income attributable to non-controlling interest | 2,088 | 887 |
Net (loss) income attributable to NCS Multistage Holdings, Inc. | $ (11,966) | $ 10,978 |
(Loss) earnings per common share | ||
Basic (loss) earnings per common share attributable to NCS Multistage Holdings, Inc. (in dollars per share) | $ (0.26) | $ 0.24 |
Diluted (loss) earnings per common share attributable to NCS Multistage Holdings, Inc. (in dollars per share) | $ (0.26) | $ 0.23 |
Weighted average common shares outstanding | ||
Basic | 45,974,000 | 44,252,000 |
Diluted | 45,974,000 | 47,114,000 |
Product sales [Member] | ||
Revenues | ||
Revenues | $ 37,232 | $ 50,108 |
Services [Member] | ||
Revenues | ||
Revenues | $ 15,618 | $ 20,578 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME [Abstract] | ||
Net (loss) income | $ (9,878) | $ 11,865 |
Foreign currency translation adjustments, net of tax of $0 | 1,537 | (6,689) |
Comprehensive (loss) income | (8,341) | 5,176 |
Less: Comprehensive income attributable to non-controlling interest | 2,088 | 887 |
Comprehensive (loss) income attributable to NCS Multistage Holdings, Inc. | $ (10,429) | $ 4,289 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (Parentheticals) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME [Abstract] | ||
Foreign currency translation adjustments, tax | $ 0 | $ 0 |
CONDENSED CONSOLIDATED STATEM_4
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - 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] | Non-controlling Interest [Member] | Total |
Beginning balance at Dec. 31, 2017 | $ 439 | $ 399,426 | $ (66,707) | $ 23,864 | $ (175) | $ 12,144 | $ 368,991 | |
Beginning balance, shares at Dec. 31, 2017 | 1 | 43,931,484 | ||||||
Beginning balance, Treasury Stock, shares at Dec. 31, 2017 | (18,348) | |||||||
Adoption of ASC 606 at Dec. 31, 2017 | 247 | 247 | ||||||
Share-based compensation | 2,374 | 2,374 | ||||||
Net (loss) income | 10,978 | 887 | 11,865 | |||||
Exercise of stock options | $ 3 | 350 | 353 | |||||
Exercise of stock options, shares | 275,653 | |||||||
Cemblend exchangeable shares | $ 4 | (4) | ||||||
Cemblend exchangeable shares, shares | 442,312 | |||||||
Currency translation adjustment | (6,689) | (6,689) | ||||||
Ending balance at Mar. 31, 2018 | $ 446 | 402,146 | (73,396) | 35,089 | $ (175) | 13,031 | 377,141 | |
Ending balance, shares at Mar. 31, 2018 | 1 | 44,649,449 | ||||||
Ending balance, Treasury Stock, shares at Mar. 31, 2018 | (18,348) | |||||||
Beginning balance at Dec. 31, 2018 | $ 451 | 411,423 | (84,030) | (166,206) | $ (337) | 14,930 | $ 176,231 | |
Beginning balance, shares at Dec. 31, 2018 | 1 | 45,100,771 | ||||||
Beginning balance, Treasury Stock, shares at Dec. 31, 2018 | (28,308) | (28,308) | ||||||
Share-based compensation | 2,968 | $ 2,968 | ||||||
Net (loss) income | (11,966) | 2,088 | (9,878) | |||||
Shares withheld | $ (309) | (309) | ||||||
Shares withheld, shares | (54,529) | |||||||
Distribution to noncontrolling interest | (600) | (600) | ||||||
Vesting of restricted stock | $ 2 | (2) | ||||||
Vesting of restricted stock, shares | 168,563 | |||||||
Cemblend exchangeable shares | $ 13 | (13) | ||||||
Cemblend exchangeable shares, shares | (1) | 1,326,935 | ||||||
Proceeds from the issuance of ESPP | $ 2 | 675 | 677 | |||||
Proceeds from the issuance of ESPP, shares | 156,486 | |||||||
Currency translation adjustment | 1,537 | 1,537 | ||||||
Ending balance at Mar. 31, 2019 | $ 468 | $ 415,051 | $ (82,493) | $ (178,172) | $ (646) | $ 16,418 | $ 170,626 | |
Ending balance, shares at Mar. 31, 2019 | 46,752,755 | |||||||
Ending balance, Treasury Stock, shares at Mar. 31, 2019 | (82,837) | (82,837) |
CONDENSED CONSOLIDATED STATEM_5
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Cash flows from operating activities | ||
Net (loss) income | $ (9,878) | $ 11,865 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,587 | 4,420 |
Amortization of deferred loan cost | 83 | 84 |
Share-based compensation | 3,058 | 2,374 |
Provision for inventory obsolescence | (98) | 408 |
Deferred income tax expense (benefit) | 9,136 | (1,186) |
Gain on sale of property and equipment | (50) | (17) |
Change in fair value of contingent consideration | 37 | (1,353) |
Provision for doubtful accounts | 573 | |
Payment of contingent consideration | (3,042) | |
Changes in operating assets and liabilities: | ||
Accounts receivable—trade | (6,312) | (13,350) |
Inventories | (1,303) | 1,838 |
Prepaid expenses and other assets | 326 | (477) |
Accounts payable—trade | 3,462 | 2,709 |
Accrued expenses | (1,177) | (2,543) |
Other liabilities | (777) | 508 |
Income taxes receivable/payable | 364 | (13,579) |
Net cash provided by (used in) operating activities | (3,011) | (8,299) |
Cash flows from investing activities | ||
Purchases of property and equipment | (2,505) | (1,121) |
Purchase and development of software and technology | (491) | (55) |
Proceeds from sales of property and equipment | 169 | 110 |
Net cash used in investing activities | (2,827) | (1,066) |
Cash flows from financing activities | ||
Equipment note borrowings | 835 | |
Payments on equipment note and finance leases | (1,319) | (490) |
Promissory note borrowings | 1,951 | |
Payments on promissory note | (1,850) | |
Payment of contingent consideration | (6,958) | |
Proceeds from the exercise of options for common stock | 353 | |
Treasury shares withheld | (309) | |
Proceeds from the issuance of ESPP shares | 677 | |
Distribution to noncontrolling interest | (600) | |
Net cash used in financing activities | (7,674) | (36) |
Effect of exchange rate changes on cash and cash equivalents | 365 | (728) |
Net change in cash and cash equivalents | (13,147) | (10,129) |
Cash and cash equivalents beginning of period | 25,131 | 33,809 |
Cash and cash equivalents end of period | 11,984 | 23,680 |
Supplemental cash flow information | ||
Cash paid for income taxes (net of refunds) | $ 61 | $ 15,452 |
Basis of Presentation
Basis of Presentation | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation [Abstract] | |
Basis of Presentation | Note 1. Basis of Presentation Nature of Business NCS Multistage Holdings, Inc., a Delaware corporation, through its wholly owned subsidiaries and subsidiaries for which we have a controlling voting interest (collectively referred to as the “Company,” “NCS,” “we,” “ our ” and “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 service facilities principally located in Houston, Midland and Corpus Christi, Texas; Tulsa and Oklahoma City, Oklahoma; Billings, Montana; Morgantown, West Virginia; Calgary, Red Deer, Grande Prairie and Estevan, Canada; Neuquen, Argentina and Stavanger, Norway. Basis of Presentation Our accompanying unaudited condensed consolidated financial statements 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 8 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, 2018 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 our Annual Report on Form 10-K filed with the SEC on March 8, 2019. 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. Summary of New Significant Accounting Policy Inventories Inventories consist primarily of raw material, product components, assembled products, certain components used to internally construct our frac isolation assemblies and chemicals, in raw material or finished goods, used in our tracer diagnostics services. Inventories are stated at the lower of cost or estimated net realizable value. Cost is determined at standard costs approximating the first-in first-out basis. We continuously evaluate inventories, based on an analysis of inventory levels, historical sales experience and future sales forecasts, to determine obsolete, slow-moving and excess inventory. Adjustments to reduce such inventory to its estimated recoverable value have been recorded as an adjustment to cost of sales. Recent Accounting Pronouncements Pronouncement Adopted in 2019 In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , which requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with terms longer than 12 months. Under the new standard, lessees need to recognize leases on their balance sheets as lease liabilities with corresponding ROU assets. We adopted the standard effective January 1, 2019, using a modified retrospective transition method and applying certain optional practical expedients. NCS elected an optional transition method that allowed application of the new standard at the adoption date and the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption with no adjustment to previously reported results. We also elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the carry forward of historical lease classification as well as additional practical expedients related to land easements, short-term leases, and non-lease components. We did not elect the practical expedient related to hindsight. The standard had a material impact on our condensed consolidated balance sheet but did not materially impact our condensed consolidated statements of operations or condensed consolidated statements of cash flows. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of $7.5 million on January 1, 2019. See “Note 8. Leases” for more information. Pronouncements Not Yet Effective In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) . The ASU aligns the requirements to capitalize implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements to capitalize implementation costs incurred to develop or obtain internal-use software. For public entities, this guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact of the adoption of this guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) . The ASU modifies, removes and adds certain disclosure requirements on fair value measurements. For public entities, this guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted for all amendments. Further, entities may early adopt eliminated or modified disclosure requirements and delay the adoption of all new disclosure requirements until the effective date. We are currently evaluating the impact of the adoption of this guidance. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2019 | |
Revenues [Abstract] | |
Revenues | Note 2. Revenues Disaggregation of Revenue We sell our products and services primarily in North America and in selected international markets. Revenue by geography is attributed based on the current billing address of the customer. The following table depicts the disaggregation of revenue by geographic region (in thousands): Three Months Ended March 31, 2019 2018 United States Product sales $ 19,564 $ 13,577 Services 5,781 8,423 Total United States 25,345 22,000 Canada Product sales 16,621 35,698 Services 8,375 11,477 Total Canada 24,996 47,175 Other Countries Product sales 1,047 833 Services 1,462 678 Total Other Countries 2,509 1,511 Total Product sales 37,232 50,108 Services 15,618 20,578 Total $ 52,850 $ 70,686 Contract Balances When the timing of the delivery of products and provision of services is different from the timing of the customer payments, we recognize either a contract asset (performance precedes contractual due date in connection with estimates of variable consideration) or a contract liability (customer payment precedes performance) on our condensed consolidated balance sheet. The following table includes the contract assets and liabilities as of March 31, 2019 and January 1, 2019 (in thousands): Contract Assets Contract Liabilities Current Non-Current Current Non-Current Balance at January 1, 2019 $ — $ — $ 515 $ — Additions — — 68 — Revenue recognized — — (515) — Balance at March 31, 2019 $ — $ — $ 68 $ — Our contract liability as of March 31, 2019 and January 1, 2019 is included in current liabilities on our condensed consolidated balance sheet. Our performance obligations for our product and service revenues are usually satisfied before the customer’s payment although prepayments may occasionally be required for international sales . Revenue recognized from the contract liability balance for the three months ended March 31, 2019 was $0.5 million. There was no revenue recognized from the contract liability balance for the three months ended March 31, 2018. Practical Exemption We do not disclose the value of unsatisfied performance obligations when the related contract has a duration of one year or less or we recognize revenue equal to what we have the right to invoice when that amount corresponds directly with the value to the customer of our performance to date. |
Inventories
Inventories | 3 Months Ended |
Mar. 31, 2019 | |
Inventories [Abstract] | |
Inventories | Note 3. Inventories Inventories consist of the following as of March 31, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Raw materials $ 1,885 $ 2,470 Work in process 384 57 Finished goods 32,116 30,226 Total inventories $ 34,385 $ 32,753 |
Property and Equipment
Property and Equipment | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Land $ 2,037 $ 1,995 Building and improvements 11,232 5,185 Machinery and equipment 19,624 18,135 Computers and software 2,277 2,373 Furniture and fixtures 1,045 1,097 Vehicles 7,545 6,980 Service equipment 244 244 44,004 36,009 Less: Accumulated depreciation and amortization (11,210) (10,270) 32,794 25,739 Construction in progress 940 6,557 Property and equipment, net $ 33,734 $ 32,296 |
Goodwill and Identifiable Intan
Goodwill and Identifiable Intangibles | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Identifiable Intangibles [Abstract] | |
Goodwill and Identifiable Intangibles | Note 5. Goodwill and Identifiable Intangibles Changes in the carrying amount of goodwill are as follows (in thousands): At December 31, 2017 $ 184,478 Purchase price allocation adjustment 54 Impairments (154,003) Currency translation adjustment (7,417) At December 31, 2018 $ 23,112 Currency translation adjustment 24 At March 31, 2019 $ 23,136 We perform our annual impairment tests of goodwill as of December 31, or when there is an indication an impairment may have occurred. There was no impairment of goodwill during the three months ended March 31, 2019. On December 31, 2018, we performed our annual impairment test for goodwill on each of our three reporting units. As a result of unfavorable oil and gas industry market conditions in late 2018 that continued to persist into early 2019 and the related impact on expected customer activity levels, particularly in Canada, as well as a decline in the quoted price of our common stock, we concluded that there had been an impairment because the carrying values exceeded the estimated fair values. We recorded impairment charges in the fourth quarter of 2018 in two reporting units, totaling $154.0 million. As a result of the impairment loss, we have no remaining goodwill in the fracturing systems and well construction reporting unit. Subsequent to the impairment charges, our goodwill was $23.1 million at March 31, 2019 and December 31, 2018, respectively. Identifiable intangibles by major asset class consist of the following (in thousands) : March 31, 2019 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 8 - 18 $ 17,482 $ (986) $ 16,496 Trademarks 5 - 10 1,600 (253) 1,347 Customer relationships 10 - 21 28,608 (2,736) 25,872 Internally developed software 5 5,110 (256) 4,854 Total identifiable intangibles $ 52,800 $ (4,231) $ 48,569 December 31, 2018 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 8 - 18 $ 17,289 $ (516) $ 16,773 Trademarks 5 - 10 1,600 (213) 1,387 Customer relationships 10 - 21 28,544 (2,339) 26,205 Internally developed software 5 4,620 — 4,620 Total identifiable intangibles $ 52,053 $ (3,068) $ 48,985 Identifiable intangibles with definite lives are tested for impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. As a result of unfavorable oil and gas industry market conditions in late 2018 that continued to persist into early 2019 and the related impact on expected customer activity levels, particularly in Canada, as well as a decline in the quoted price of our common stock, we determined that the carrying values of certain intangible assets were no longer recoverable, which resulted in an impairment charge of $73.5 million in our asset group that includes fracturing systems and well construction, which we recorded in the fourth quarter of 2018. |
Accrued Expenses
Accrued Expenses | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Expenses [Abstract] | |
Accrued Expenses | Note 6. Accrued Expenses Accrued expenses consist of the following as of March 31, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Accrued payroll and bonus $ 1,711 $ 2,627 Property and franchise taxes accrual 340 424 Accrued other miscellaneous liabilities 882 1,033 Total accrued expenses $ 2,933 $ 4,084 |
Debt
Debt | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Debt | Note 7. Debt Our long-term debt consists of the following as of March 31, 2019 and December 31, 2018 (in thousands): March 31, December 31, 2019 2018 Prior Senior Secured Credit Facility $ 20,000 $ 20,000 Promissory note — — Equipment notes 2,323 2,412 Finance leases 3,685 3,279 Total debt 26,008 25,691 Less: current portion (2,461) (2,236) Long-term debt $ 23,547 $ 23,455 The estimated fair value of total debt for the periods ended March 31, 2019 and December 31, 2018 was $25.6 million and $25.3 million, respectively. The carrying value of the Prior Senior Secured Credit Facility and the lines of credit approximated the fair value of debt as they can be paid at any time. The fair value for the remaining debt was estimated using Level 2 inputs by calculating the sum of the discounted future interest and principal payments through the date of maturity . Below is a description of our credit agreement and other financing arrangements. Prior Senior Secured Credit Facility On May 4, 2017, we entered into an Amended and Restated Credit Agreement (the “Prior 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 “Prior Senior Secured Credit Facility”). The Prior Credit Agreement amended and restated the previous credit agreement in its entirety. The Prior Senior Secured Credit Facility matures on May 4, 2020 . The Prior Senior Secured Credit Facility originally consisted 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 “Prior U.S. Facility”), of which up to $5.0 million could 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 that could be made available to the Canadian Borrower (the “Prior Canadian Facility”). We entered into Amendment No. 1 to the Prior Credit Agreement on August 31, 2017, which increased the loan commitment available to the U.S. Borrower to $50.0 million from $25.0 million under the Prior U.S. Facility. The loan commitment available under the Prior Canadian Facility remained at $25.0 million. On February 16, 2018 and October 9, 2018 , we entered into Amendments No. 2 and No. 3, respectively, to the Prior Credit Agreement, which amended certain negative covenants contained in the Prior Credit Agreement. As of March 31, 2019 and December 31, 2018 , we had $20.0 million in outstanding indebtedness under the Prior U.S. Facility and no outstanding indebtedness under the Prior Canadian Facility. We incurred interest expense related to the Prior Senior Secured Credit Facility, including commitment fees, of $0. 3 million for each of the three months ended March 31, 2019 and 2018, respectively. Borrowings under the Prior U.S. Facility may be made in U.S. dollars, Canadian dollars or Euros and bear interest at a rate equal to the Adjusted Base Rate or Eurocurrency Rate (each as defined in the Prior Credit Agreement), in each case, plus an applicable interest margin as set forth in the Prior Credit Agreement. Borrowings under the Prior Canadian Facility may be made in U.S. dollars or Canadian dollars and bear interest at the Canadian (Cdn) Base Rate, Canadian (U.S.) Base Rate, Eurocurrency Rate or Discount Rate (each as defined in the Prior Credit Agreement), in each case, plus an applicable interest margin as set forth in the Prior Credit Agreement. The Adjusted Base Rate, Canadian (U.S.) Base Rate and Canadian (Cdn) Base Rate applicable margin could be between 2.25% and 3.00% and the Eurocurrency Rate applicable margin could be between 3.25% and 4.00% , in each case, depending on the Company’s leverage ratio. The applicable interest rate at March 31, 2019 was 6.00% . The obligations of the U.S. Borrower under the Prior U.S. Facility are 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 are 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 Prior Canadian Facility are guaranteed by the Parent Guarantors, the U.S. Borrower and each of the future direct and indirect restricted subsidiaries of the Company organized under the laws of the United States and Canada (subject to certain exceptions) and are secured by substantially all of the assets of the Parent Guarantors, the U.S. Borrower, the Canadian Borrower and such subsidiary guarantors, in each case, subject to certain exceptions and permitted liens. The Prior Credit Agreement 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 Prior 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 Prior 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. As of March 31, 2019 , we were in compliance with these financial covenants. The Prior Credit Agreement 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 Prior Credit Agreement 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 Prior U.S. Facility and the Prior Canadian Facility could 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 Prior U.S. Facility and the Prior 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 Prior U.S. Facility and the Prior Canadian Facility, the lenders thereunder will have the right to proceed against the collateral granted to them to secure such facility. Direct costs of $1.0 million were incurred in connection with the Prior Senior Secured Credit Facility. The costs were capitalized as an asset as they represent the benefit of being able to access capital over the contractual term. The costs are being amortized over the term of the Prior Senior Secured Credit Facility using the straight-line method . Amortization expense of the deferred financing charges of $0.1 million was included in interest expense, net for each of the three months ended March 31, 2019 and 2018 , respectively. On May 1, 2019, we entered into a new Second Amended and Restated Credit Agreement (the “New Credit Agreement”) amending and restating the Prior Credit Agreement. See “Note 14. Subsequent Events”. Promissory Note On February 27, 2017, Repeat Precision, LLC (“Repeat Precision”) entered into a promissory note with Security State Bank & Trust, Fredericksburg, for an aggregate borrowing capacity of $3.8 million. It bears interest at a variable interest rate based on prime plus 1.00% . The promissory note is secured against equipment, inventory and receivables. The promissory note was renewed on February 16, 2018 for an aggregate borrowing capacity of $4.3 million and was renewed again on February 15, 2019. The note is s cheduled to mature on February 16, 20 20. No other terms were changed. As of March 31, 2019 and December 31, 2018 , we had no outstanding indebtedness under the promissory note. Equipment Notes In February 2017, Repeat Precision entered into an equipment note in the amount of $0.8 million with Security State Bank & Trust, Fredericksburg. The equipment note bears interest at prime plus 1.00% , matures on February 27, 2021 and is collateralized by certain property. As of March 31, 2019 , the equipment note was paid in full and we had no outstanding indebtedness. As of December 31, 2018 , the outstanding balance on the equipment note was $0. 4 million. In September 2018, Repeat Precision entered into an equipment note for an aggregate borrowing capacity of $3.8 million with Security State Bank & Trust, Fredericksburg. The equipment note bears interest at prime plus 1.00% , matures on June 7, 2023 and is collateralized by certain property. As of March 31, 2019 and December 31, 2018 , the outstanding balance on the equipment note was $2.3 million and $2.0 million, respectively . |
Leases
Leases | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Leases | Note 8. Leases We determine if a contract contains a lease at the inception of an arrangement. If so, ROU assets representing the right to use an underlying asset for the lease term and lease liabilities representing an obligation to make lease payments arising from the lease are included on the condensed consolidated balance sheet. We have operating and finance leases for facilities, vehicles, and equipment. Some leases include one or more options to renew, with renewal terms that can extend the lease term from five to ten years with exercise of lease renewal options being at the sole discretion of NCS as lessee. Certain leases also include options to purchase the leased property. Some leases may include an option to terminate the contract with notice. ROU assets and lease liabilities with a term of longer than 12 months are recognized at the lease commencement date based on the present value of lease payments over the lease term. As most of our leases do not provide an implicit rate, our interest rate under the s enior s ecured c redit f acility is used as an incremental borrowing rate applied to the present value calculation at the lease commencement date unless the implicit rate is readily determinable. Lease expense for operating leases is recognized on a straight-line basis over the lease term. At adoption, ROU assets included any lease payments already made and excluded any initial direct costs. Our lease agreements are from a lessee perspective and do not contain (i) any leases with variable lease payments (e.g., payments that depend on a percentage of sales of a lessee or payments that increase based upon an index such as a consumer price index), (ii) residual value guarantees probable of being paid or (iii) material restrictive covenants. Lease agreements with lease and non-lease components are generally accounted for separately when practical. For leases where the lease and non-lease component are comingled and the non-lease component is determined to be insignificant when compared to the lease component, the lease and non-lease components are treated as a single lease component for all asset classes. As of March 31, 2019, we do not have any lessor leases and we do not have any additional operating and finance leases that have not yet commenced. Supplemental balance sheet information related to leases are as follows (in thousands): March 31, Leases Condensed Consolidated Balance Sheet Location 2019 Assets Operating lease right-of-use assets Deposits and other assets $ 6,938 Finance lease right-of-use assets (1) Property and equipment, net 4,234 Total leased right-of-use assets $ 11,172 Liabilities Current Operating lease liabilities Other current liabilities $ 2,711 Finance lease liabilities Current maturities of long-term debt 1,758 Noncurrent Operating lease liabilities Other long-term liabilities 4,263 Finance lease liabilities Long-term debt, less current maturities 1,927 Total lease liabilities $ 10,659 _______________ (1) Finance lease right-of-use assets are recorded net of accumulated amortization of $1.6 million as of March 31, 2019 . The components of lease expense are as follows (in thousands): Three Months Ended March 31, Lease Cost 2019 Operating lease cost $ 680 Finance lease cost Amortization of right-of-use assets 334 Interest on lease liabilities 63 Short-term lease cost 271 Total lease cost $ 1,348 Maturities of lease liabilities are as follows (in thousands): Year Ending December 31, Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 2,396 $ 1,493 2020 2,124 1,393 2021 1,509 891 2022 771 283 2023 265 — Thereafter 586 — Total lease payments $ 7,651 $ 4,060 Less: interest 677 375 Present value of lease liabilities $ 6,974 $ 3,685 Lease term and discount rate consist of the following: March 31, Lease Term and Discount Rate 2019 Weighted-average remaining lease term (years): Operating leases 2.8 Finance leases 1.8 Weighted-average discount rate: Operating leases 5.9 % Finance leases 5.5 % Supplemental cash flow and other information related to leases are as follows (in thousands): Three Month Ended March 31, Other Information 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 829 Operating cash flows from finance leases 63 Financing cash flows from finance leases 394 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 179 Finance leases 837 Future annual commitments at December 31, 2018 under ASC 840 are as follows: Year Ending December 31, Operating Leases Finance Leases 2019 $ 2,867 $ 1,768 2020 1,276 973 2021 757 686 2022 434 198 2023 292 — Thereafter 398 — Total lease payments $ 6,024 $ 3,625 Less: interest — 346 Present value of lease liabilities $ 6,024 $ 3,279 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2019 | |
Commitments and Contingencies [Abstract] | |
Commitments and Contingencies | Note 9. Commitments and Contingencies Litigation In the ordinary course of our business, from time to time, we have various claims, lawsuits and administrative proceedings that are pending or threatened with respect to commercial, intellectual property and employee matters. On July 24, 2018, we filed a patent infringement lawsuit against Kobold Corporation, Kobold Completions Inc. and 2039974 Alberta Ltd. (“Kobold”) in the Federal Court of Canada, alleging that Kobold’s fracturing tools and methods infringe on several of our Canadian patents. We previously filed a breach of contract lawsuit on March 16, 2018, against Kobold Corporation in the Court of Queen’s Bench of Alberta, alleging breach of a prior settlement agreement. Both of these lawsuit s seek unspecified monetary damages and injunctive relief. In early February 2019, we filed a lawsuit against Diamondback Industries, Inc. (“Diamondback”) in the United States District Court for the Western District of Texas, Waco Division, alleging patent infringement, breach of contract and related claims stemming from Diamondback’s breach of an exclusive license, granted by Diamondback to Repeat Precision, to a patent necessary for the manufacture and sale of a disposable setting tool. Around the same time, Diamondback filed a lawsuit against Repeat Precision and various NCS entities in an effort to invalidate the exclusive license agreement and requested monetary damages. We believe the exclusive license is enforceable and there is no basis to support the claims asserted by Diamondback and we intend to vigorously enforce our rights under the license agreement. In accordance with GAAP, we accrue for contingencies where the occurrence of a material loss is probable and can be reasonably estimated, based on our estimate of the expected liability. If we have any outstanding legal accruals, we may increase or decrease these in the future, on a matter-by-matter basis, to account for developments. Our assessment of the likely outcome of litigation matters is based on our judgment of a number of factors, including experience with similar matters, past history, precedents, relevant financial information and other evidence and facts specific to the matter. While the outcome of any legal proceedings cannot be predicted with any certainty, based on a consideration of relevant facts and circumstances, our management currently does not expect that the results of these legal proceedings would have a material adverse effect on our financial position, results of operations or cash flows. |
Share-Based Compensation
Share-Based Compensation | 3 Months Ended |
Mar. 31, 2019 | |
Share-Based Compensation [Abstract] | |
Share-Based Compensation | Note 10. Share- Based Compensation During the first quarter of 2019, we granted 918,155 equity-classified restricted stock units (“RSUs”) with a weighted average grant date fair value of $5.51 . Of the RSUs granted, 799,317 RSUs will vest and settle ratably in three equal annual installments beginning on the anniversary of the date of grant and 118,838 RSUs, which were granted to the nonemployee members of the Board of Directors, will vest on the one year anniversary of the grant date. T he RSUs for the members of the Board of Directors either settle at vesting or, if the director has elected to defer the RSUs, within thirty days following the earlier of the termination of the director’s service for any reason or a change of control. During the first quarter of 2019, we granted 610,570 equivalent stock units, or cash-settled, liability-classified RSUs (“ESUs”), with a weighted average grant date fair value of $5.51 , which will vest and settle ratably in three equal annual installments beginning on the anniversary of the date of grant. The ESUs will be settled in cash and the cash settled for any ESU will not exceed two times the fair market value of our common stock as of the day before the grant date. Compensation cost is remeasured each reporting period at fair value based upon the closing stock price of our common stock until the awards are settled. In addition, during the first quarter of 2019, we granted 377,334 performance stock unit awards (“PSUs”), which have a performance period from January 1, 2019 to December 31, 2021. The grant date fair value of the PSUs of $6.50 was measured using a Monte Carlo simulation. The number of PSUs ultimately issued under the program is dependent upon our total shareholder return relative to our performance peer group (“relative TSR”) over the three -year performance period. Each PSU will settle for between zero and two shares of our common stock in the first quarter of 2021. The threshold performance level (25th percentile relative TSR) starts to earn PSUs, the mid-point performance level (50th percentile relative TSR) earns 65% of the target PSUs and the maximum performance level (90th percentile relative TSR) or greater earns 200% of the target PSUs. The total share-based compensation expense for all awards was $3.1 million and $2.4 million for the three months ended March 31, 2019 and 2018 , respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2019 | |
Income Taxes [Abstract] | |
Income Taxes | Note 11. Income Taxes 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, tax credits and foreign deemed dividends. We recorded a tax expense of $9.6 million and $0.9 million for the three months ended March 31, 2019 and 2018 , respectively. Included in tax expense for the three months ended March 31, 2019 was a valuation allowance in the amount of $9.8 million against our U.S. deferred tax asset based on management’s position that the Company has not met the more likely than not condition of realizing the deferred tax asset based on the existence of sufficient projected U.S. taxable income of the appropriate character to recognize the tax benefit . Without the valuation allowance, the net income tax benefit is approximately $0.2 million. For the three months ended March 31, 2018, our effective tax rate was 7.4% . The income tax expense and effective tax rate for the three months ended March 31, 2018 was significantly impacted by the U.S. Tax Cuts and Jobs Act of 2017 (the “2017 Tax Act ”) including administrative guidance issued by the Internal Revenue Service on April 2, 2018. This guidance along with other updates resulted in a change to the calculation of the mandatory one-time tax on accumulated earnings of foreign subsidiaries in 2017 and a tax benefit of $2.1 million for the three months ended March 31, 2018 was recorded in tax expense with a corresponding reduction in the effective tax rate of 16.4 % . Additionally, the effective tax rate for the three months ended March 31, 2019 and 2018 included a tax expense (benefit) of $0.3 million and $(0.3) million, respectively, for the tax effect of stock awards. The 2017 Tax Act was signed into law on December 22, 2017. The 2017 Tax Act significantly revised the U.S. corporate income tax by, among other things, lowering the statutory corporate tax rate from 35% to 21% , eliminating certain deductions, imposing a mandatory one-time tax on accumulated earnings of foreign subsidiaries as of 2017, introducing new tax regimes, and changing how foreign earnings are subject to U.S. tax. Our preliminary estimate of the 2017 Tax Act and the remeasurement of our deferred tax assets and liabilities is subject to the finalization of management’s analysis related to certain matters, such as developing interpretations of the provisions of the 2017 Tax Act, changes to certain estimates and the filing of our tax returns. U.S. Treasury regulations, administrative interpretations or court decisions interpreting the 2017 Tax Act may require further adjustments and changes in our estimates. Those adjustments may impact our provision for income taxes in the period in which the adjustments are made. For our calendar year beginning in 2018 we are subject to several provisions of the 2017 Tax Act including computations under Global Intangible Low Taxed Income (“GILTI”) and Foreign Derived Intangible Income (“FDII”). We were able to make a reasonable estimate of the impact of each provision of the 2017 Tax Act on our effective tax rate for the three months ended March 31, 2019 and 2018. 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, net in the condensed consolidated statements of operations and recognized $26 thousand for the three months ended March 31, 2019 . There was no interest and penalties for the three months ended March 31, 2018. |
(Loss) Earnings Per Common Shar
(Loss) Earnings Per Common Share | 3 Months Ended |
Mar. 31, 2019 | |
(Loss) Earnings Per Common Share [Abstract] | |
(Loss) Earnings Per Common Share | Note 12. (Loss) Earnings Per Common Share The following table presents the reconciliation of the numerator and denominator for calculating (loss) earnings per common share from net (loss) income ( in thousands, except per share data) : Three Months Ended March 31, 2019 2018 Numerator—Basic Net (loss) income $ (9,878) $ 11,865 Less: income attributable to participating shares — 399 Less: income attributable to non-controlling interest 2,088 887 Net (loss) income attributable to NCS Multistage Holdings, Inc.––Basic $ (11,966) $ 10,579 Numerator—Diluted Net (loss) income $ (9,878) $ 11,865 Less: income attributable to non-controlling interest 2,088 887 Net (loss) income attributable to NCS Multistage Holdings, Inc.––Diluted $ (11,966) $ 10,978 Denominator Basic weighted average number of shares 45,974 44,252 Exchangeable shares for common stock — 1,543 Dilutive effect of stock options, RSUs, PSUs and ESPP — 1,319 Diluted weighted average number of shares 45,974 47,114 (Loss) earnings per common share Basic $ (0.26) $ 0.24 Diluted $ (0.26) $ 0.23 Potentially dilutive securities excluded as anti-dilutive 4,391 - |
Segment and Geographic Informat
Segment and Geographic Information | 3 Months Ended |
Mar. 31, 2019 | |
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, 2019 | |
Subsequent Events [Abstract] | |
Subsequent Events | Note 14. Subsequent Events On May 1, 2019, we entered into a Second Amended and Restated Credit Agreement with Pioneer Investment, Inc., as U.S. borrower, NCS Multistage Inc., as Canadian borrower, Pioneer Intermediate, Inc. and the lenders party thereto, Wells Fargo Bank, National Association as administrative agent in respect of the New U.S. Facility (as defined below) and Wells Fargo Bank, National Association, Canadian Branch, as administrative agent in respect of the New Canadian Facility (as defined below) (the senior secured revolving credit facilities provided thereunder, the “New Senior Secured Credit Facility”). The New Credit Agreement amended and restated the Prior Credit Agreement in its entirety. The New Senior Secured Credit Facility consists of a (i) senior secured revolving credit facility in an aggregate principal amount of $50.0 million made available to the U.S. Borrower (the “New 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 “New Canadian Facility”). The New Senior Secured Credit Facility will mature on May 1, 2023. Borrowings under the New U.S. Facility may be made in U.S. dollars for Adjusted Base Rate Advances, and in U.S. dollars, Canadian dollars or Euros for Eurocurrency Rate Advances (each as defined in the New Credit Agreement). Such advances bear interest at the Adjusted Base Rate or at the Eurocurrency Rate plus an applicable interest margin as set forth in the New Credit Agreement. Borrowings under the New Canadian Facility may be made in U.S. dollars or Canadian dollars and bear interest at the Canadian (Cdn) Base Rate, Canadian (U.S.) Base Rate, Eurocurrency Rate or Discount Rate (each as defined in the New Credit Agreement), in each case, plus an applicable interest margin as set forth in the New Credit Agreement. The obligations of the U.S. Borrower under the New U.S. Facility are 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 are 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 New Canadian Facility are 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 are 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 Credit Agreement contains financial covenants that require (i) commencing with the fiscal quarter ending June 30, 2019, compliance with a maximum leverage ratio test set at 2.50 to 1.00 as of the last day of each fiscal quarter, (ii) commencing with the fiscal quarter ending June 30, 2019, compliance with an interest coverage ratio test set at not more than 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 New 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 of at least 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 New 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 of at least 1.00 to 1.00. The New Credit Agreement 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 Credit Agreement 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 New U.S. Facility and the New 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 New U.S. Facility and the New 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 New U.S. Facility and the New Canadian Facility, the lenders thereunder will have the right to proceed against the collateral granted to them to secure such facility. |
Basis of Presentation (Policy)
Basis of Presentation (Policy) | 3 Months Ended |
Mar. 31, 2019 | |
Basis of Presentation [Abstract] | |
Nature of Business | Nature of Business NCS Multistage Holdings, Inc., a Delaware corporation, through its wholly owned subsidiaries and subsidiaries for which we have a controlling voting interest (collectively referred to as the “Company,” “NCS,” “we,” “ our ” and “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 service facilities principally located in Houston, Midland and Corpus Christi, Texas; Tulsa and Oklahoma City, Oklahoma; Billings, Montana; Morgantown, West Virginia; Calgary, Red Deer, Grande Prairie and Estevan, Canada; Neuquen, Argentina and Stavanger, Norway. |
Basis of Presentation | Basis of Presentation Our accompanying unaudited condensed consolidated financial statements 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 8 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, 2018 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 our Annual Report on Form 10-K filed with the SEC on March 8, 2019. 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. |
Inventories | Inventories Inventories consist primarily of raw material, product components, assembled products, certain components used to internally construct our frac isolation assemblies and chemicals, in raw material or finished goods, used in our tracer diagnostics services. Inventories are stated at the lower of cost or estimated net realizable value. Cost is determined at standard costs approximating the first-in first-out basis. We continuously evaluate inventories, based on an analysis of inventory levels, historical sales experience and future sales forecasts, to determine obsolete, slow-moving and excess inventory. Adjustments to reduce such inventory to its estimated recoverable value have been recorded as an adjustment to cost of sales. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Pronouncement Adopted in 2019 In February 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-02, Leases (Topic 842) , which requires lessees to recognize a right-of-use (“ROU”) asset and a lease liability for all leases with terms longer than 12 months. Under the new standard, lessees need to recognize leases on their balance sheets as lease liabilities with corresponding ROU assets. We adopted the standard effective January 1, 2019, using a modified retrospective transition method and applying certain optional practical expedients. NCS elected an optional transition method that allowed application of the new standard at the adoption date and the recognition of a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption with no adjustment to previously reported results. We also elected the package of practical expedients permitted under the transition guidance within the new standard, which among other things, allowed the carry forward of historical lease classification as well as additional practical expedients related to land easements, short-term leases, and non-lease components. We did not elect the practical expedient related to hindsight. The standard had a material impact on our condensed consolidated balance sheet but did not materially impact our condensed consolidated statements of operations or condensed consolidated statements of cash flows. Adoption of the new standard resulted in the recording of ROU assets and lease liabilities of $7.5 million on January 1, 2019. See “Note 8. Leases” for more information. Pronouncements Not Yet Effective In August 2018, the FASB issued ASU No. 2018-15, Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40) . The ASU aligns the requirements to capitalize implementation costs incurred in a cloud computing arrangement that is a service contract with the requirements to capitalize implementation costs incurred to develop or obtain internal-use software. For public entities, this guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted, including adoption in any interim period. We are currently evaluating the impact of the adoption of this guidance. In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820) . The ASU modifies, removes and adds certain disclosure requirements on fair value measurements. For public entities, this guidance is effective for fiscal years beginning after December 15, 2019 and interim periods within those fiscal years. Early adoption is permitted for all amendments. Further, entities may early adopt eliminated or modified disclosure requirements and delay the adoption of all new disclosure requirements until the effective date. We are currently evaluating the impact of the adoption of this guidance. |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Revenues [Abstract] | |
Disaggregation of Revenue by Geographic Region | Three Months Ended March 31, 2019 2018 United States Product sales $ 19,564 $ 13,577 Services 5,781 8,423 Total United States 25,345 22,000 Canada Product sales 16,621 35,698 Services 8,375 11,477 Total Canada 24,996 47,175 Other Countries Product sales 1,047 833 Services 1,462 678 Total Other Countries 2,509 1,511 Total Product sales 37,232 50,108 Services 15,618 20,578 Total $ 52,850 $ 70,686 |
Schedule of Contract Assets and Liabilities | Contract Assets Contract Liabilities Current Non-Current Current Non-Current Balance at January 1, 2019 $ — $ — $ 515 $ — Additions — — 68 — Revenue recognized — — (515) — Balance at March 31, 2019 $ — $ — $ 68 $ — |
Inventories (Tables)
Inventories (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Inventories [Abstract] | |
Schedule of Inventories | March 31, December 31, 2019 2018 Raw materials $ 1,885 $ 2,470 Work in process 384 57 Finished goods 32,116 30,226 Total inventories $ 34,385 $ 32,753 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Property and Equipment [Abstract] | |
Schedule of Property and Equipment by Major Asset Class | March 31, December 31, 2019 2018 Land $ 2,037 $ 1,995 Building and improvements 11,232 5,185 Machinery and equipment 19,624 18,135 Computers and software 2,277 2,373 Furniture and fixtures 1,045 1,097 Vehicles 7,545 6,980 Service equipment 244 244 44,004 36,009 Less: Accumulated depreciation and amortization (11,210) (10,270) 32,794 25,739 Construction in progress 940 6,557 Property and equipment, net $ 33,734 $ 32,296 |
Goodwill and Identifiable Int_2
Goodwill and Identifiable Intangibles (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Goodwill and Identifiable Intangibles [Abstract] | |
Changes in Carrying Amount of Goodwill | At December 31, 2017 $ 184,478 Purchase price allocation adjustment 54 Impairments (154,003) Currency translation adjustment (7,417) At December 31, 2018 $ 23,112 Currency translation adjustment 24 At March 31, 2019 $ 23,136 |
Schedule of Identifiable Intangibles | March 31, 2019 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 8 - 18 $ 17,482 $ (986) $ 16,496 Trademarks 5 - 10 1,600 (253) 1,347 Customer relationships 10 - 21 28,608 (2,736) 25,872 Internally developed software 5 5,110 (256) 4,854 Total identifiable intangibles $ 52,800 $ (4,231) $ 48,569 December 31, 2018 Estimated Gross Useful Carrying Accumulated Net Lives (Years) Amount Amortization Balance Technology 8 - 18 $ 17,289 $ (516) $ 16,773 Trademarks 5 - 10 1,600 (213) 1,387 Customer relationships 10 - 21 28,544 (2,339) 26,205 Internally developed software 5 4,620 — 4,620 Total identifiable intangibles $ 52,053 $ (3,068) $ 48,985 |
Accrued Expenses (Tables)
Accrued Expenses (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Accrued Expenses [Abstract] | |
Schedule of Accrued Expenses | March 31, December 31, 2019 2018 Accrued payroll and bonus $ 1,711 $ 2,627 Property and franchise taxes accrual 340 424 Accrued other miscellaneous liabilities 882 1,033 Total accrued expenses $ 2,933 $ 4,084 |
Debt (Tables)
Debt (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Debt [Abstract] | |
Schedule of Long-term Debt | March 31, December 31, 2019 2018 Prior Senior Secured Credit Facility $ 20,000 $ 20,000 Promissory note — — Equipment notes 2,323 2,412 Finance leases 3,685 3,279 Total debt 26,008 25,691 Less: current portion (2,461) (2,236) Long-term debt $ 23,547 $ 23,455 |
Leases (Tables)
Leases (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
Supplemental Balance Sheet Information Related to Leases | March 31, Leases Condensed Consolidated Balance Sheet Location 2019 Assets Operating lease right-of-use assets Deposits and other assets $ 6,938 Finance lease right-of-use assets (1) Property and equipment, net 4,234 Total leased right-of-use assets $ 11,172 Liabilities Current Operating lease liabilities Other current liabilities $ 2,711 Finance lease liabilities Current maturities of long-term debt 1,758 Noncurrent Operating lease liabilities Other long-term liabilities 4,263 Finance lease liabilities Long-term debt, less current maturities 1,927 Total lease liabilities $ 10,659 _______________ (1) Finance lease right-of-use assets are recorded net of accumulated amortization of $1.6 million as of March 31, 2019 . |
Components of Lease Expense | Three Months Ended March 31, Lease Cost 2019 Operating lease cost $ 680 Finance lease cost Amortization of right-of-use assets 334 Interest on lease liabilities 63 Short-term lease cost 271 Total lease cost $ 1,348 |
Lease Term and Discount Rate | March 31, Lease Term and Discount Rate 2019 Weighted-average remaining lease term (years): Operating leases 2.8 Finance leases 1.8 Weighted-average discount rate: Operating leases 5.9 % Finance leases 5.5 % |
Supplemental Cash Flow and Other Information Related to Leases | Three Month Ended March 31, Other Information 2019 Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases $ 829 Operating cash flows from finance leases 63 Financing cash flows from finance leases 394 Right-of-use assets obtained in exchange for new lease liabilities: Operating leases $ 179 Finance leases 837 |
Future Annual Commitments Under ASC 840 | Year Ending December 31, Operating Leases Finance Leases 2019 $ 2,867 $ 1,768 2020 1,276 973 2021 757 686 2022 434 198 2023 292 — Thereafter 398 — Total lease payments $ 6,024 $ 3,625 Less: interest — 346 Present value of lease liabilities $ 6,024 $ 3,279 |
Accounting Standards Update 2016-02 [Member] | |
Maturities of Lease Liabilities | Year Ending December 31, Operating Leases Finance Leases 2019 (excluding the three months ended March 31, 2019) $ 2,396 $ 1,493 2020 2,124 1,393 2021 1,509 891 2022 771 283 2023 265 — Thereafter 586 — Total lease payments $ 7,651 $ 4,060 Less: interest 677 375 Present value of lease liabilities $ 6,974 $ 3,685 |
(Loss) Earnings Per Common Sh_2
(Loss) Earnings Per Common Share (Tables) | 3 Months Ended |
Mar. 31, 2019 | |
(Loss) Earnings Per Common Share [Abstract] | |
Reconciliation of Numerator and Denominator for Calculating Earnings Per Share from Net Income | Three Months Ended March 31, 2019 2018 Numerator—Basic Net (loss) income $ (9,878) $ 11,865 Less: income attributable to participating shares — 399 Less: income attributable to non-controlling interest 2,088 887 Net (loss) income attributable to NCS Multistage Holdings, Inc.––Basic $ (11,966) $ 10,579 Numerator—Diluted Net (loss) income $ (9,878) $ 11,865 Less: income attributable to non-controlling interest 2,088 887 Net (loss) income attributable to NCS Multistage Holdings, Inc.––Diluted $ (11,966) $ 10,978 Denominator Basic weighted average number of shares 45,974 44,252 Exchangeable shares for common stock — 1,543 Dilutive effect of stock options, RSUs, PSUs and ESPP — 1,319 Diluted weighted average number of shares 45,974 47,114 (Loss) earnings per common share Basic $ (0.26) $ 0.24 Diluted $ (0.26) $ 0.23 Potentially dilutive securities excluded as anti-dilutive 4,391 - |
Basis of Presentation (Narrativ
Basis of Presentation (Narrative) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
ROU assets | $ 6,938 | ||
Lease liabilities | $ 6,974 | $ 6,024 | |
Accounting Standards Update 2016-02 [Member] | |||
ROU assets | $ 7,500 | ||
Lease liabilities | $ 7,500 |
Revenues (Narrative) (Details)
Revenues (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Revenues [Abstract] | ||
Revenue recognized from the contract liability balance | $ 515,000 | $ 0 |
Revenues (Disaggregation of Rev
Revenues (Disaggregation of Revenue by Geographic Region) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 52,850 | $ 70,686 |
Product sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 37,232 | 50,108 |
Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 15,618 | 20,578 |
United States [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 25,345 | 22,000 |
United States [Member] | Product sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 19,564 | 13,577 |
United States [Member] | Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 5,781 | 8,423 |
Canada [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 24,996 | 47,175 |
Canada [Member] | Product sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 16,621 | 35,698 |
Canada [Member] | Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 8,375 | 11,477 |
Other Countries [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 2,509 | 1,511 |
Other Countries [Member] | Product sales [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | 1,047 | 833 |
Other Countries [Member] | Services [Member] | ||
Disaggregation of Revenue [Line Items] | ||
Revenues | $ 1,462 | $ 678 |
Revenues (Schedule of Contract
Revenues (Schedule of Contract Assets and Liabilities) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Change in Contract with Customer, Asset and Liability [Abstract] | ||
Contract Liabilities Current Beginning Balance | $ 515,000 | |
Additions | 68,000 | |
Revenue recognized | (515,000) | $ 0 |
Contract Liabilities Current Ending Balance | $ 68,000 |
Inventories (Schedule of Invent
Inventories (Schedule of Inventories) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Inventories [Abstract] | ||
Raw materials | $ 1,885 | $ 2,470 |
Work in process | 384 | 57 |
Finished goods | 32,116 | 30,226 |
Total inventories | $ 34,385 | $ 32,753 |
Property and Equipment (Schedul
Property and Equipment (Schedule of Property and Equipment by Major Asset Class) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 44,004 | $ 36,009 |
Less: Accumulated depreciation and amortization | (11,210) | (10,270) |
Property and equipment, net, excluding construction in progress | 32,794 | 25,739 |
Construction in progress | 940 | 6,557 |
Property and equipment, net | 33,734 | 32,296 |
Land [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,037 | 1,995 |
Building and improvements [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 11,232 | 5,185 |
Machinery and equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 19,624 | 18,135 |
Computers and software [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 2,277 | 2,373 |
Furniture and fixtures [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 1,045 | 1,097 |
Vehicles [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | 7,545 | 6,980 |
Service equipment [Member] | ||
Property, Plant and Equipment [Line Items] | ||
Property and equipment | $ 244 | $ 244 |
Goodwill and Identifiable Int_3
Goodwill and Identifiable Intangibles (Narrative) (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2018USD ($)segment | Dec. 31, 2018USD ($)segment | Mar. 31, 2019USD ($) | Dec. 31, 2017USD ($) | |
Goodwill and Identifiable Intangibles [Abstract] | ||||
Number of reporting units | segment | 2 | 3 | ||
Goodwill impairment charge | $ 154,003 | |||
Goodwill | $ 23,112 | $ 23,112 | $ 23,136 | $ 184,478 |
Impairment loss of identifiable intangible assets | $ 73,500 |
Goodwill and Identifiable Int_4
Goodwill and Identifiable Intangibles (Changes in Carrying Amount of Goodwill) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Goodwill and Identifiable Intangibles [Abstract] | ||
Goodwill, beginning balance | $ 23,112 | $ 184,478 |
Purchase price allocation adjustment | 54 | |
Impairments | (154,003) | |
Currency translation adjustment | 24 | (7,417) |
Goodwill, ending balance | $ 23,136 | $ 23,112 |
Goodwill and Identifiable Int_5
Goodwill and Identifiable Intangibles (Schedule of Identifiable Intangibles) (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended |
Mar. 31, 2019 | Dec. 31, 2018 | |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Carrying Amount | $ 52,800 | $ 52,053 |
Finite-lived intangible assets, Accumulated Amortization | (4,231) | (3,068) |
Finite-lived intangible assets, Net Balance | 48,569 | 48,985 |
Technology [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Carrying Amount | 17,482 | 17,289 |
Finite-lived intangible assets, Accumulated Amortization | (986) | (516) |
Finite-lived intangible assets, Net Balance | $ 16,496 | $ 16,773 |
Technology [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 8 years | 8 years |
Technology [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 18 years | 18 years |
Trademarks [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Carrying Amount | $ 1,600 | $ 1,600 |
Finite-lived intangible assets, Accumulated Amortization | (253) | (213) |
Finite-lived intangible assets, Net Balance | $ 1,347 | $ 1,387 |
Trademarks [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | 5 years |
Trademarks [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | 10 years |
Customer Relationships [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, Gross Carrying Amount | $ 28,608 | $ 28,544 |
Finite-lived intangible assets, Accumulated Amortization | (2,736) | (2,339) |
Finite-lived intangible assets, Net Balance | $ 25,872 | $ 26,205 |
Customer Relationships [Member] | Minimum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | 10 years |
Customer Relationships [Member] | Maximum [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 21 years | 21 years |
Internally Developed Software [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | 5 years |
Finite-lived intangible assets, Gross Carrying Amount | $ 5,110 | $ 4,620 |
Finite-lived intangible assets, Accumulated Amortization | (256) | |
Finite-lived intangible assets, Net Balance | $ 4,854 | $ 4,620 |
Accrued Expenses (Schedule of A
Accrued Expenses (Schedule of Accrued Expenses) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Accrued Expenses [Abstract] | ||
Accrued payroll and bonus | $ 1,711 | $ 2,627 |
Property and franchise taxes accrual | 340 | 424 |
Accrued other miscellaneous liabilities | 882 | 1,033 |
Total accrued expenses | $ 2,933 | $ 4,084 |
Debt (Narrative) (Details)
Debt (Narrative) (Details) - USD ($) | May 04, 2017 | Feb. 27, 2017 | Sep. 30, 2018 | Feb. 28, 2017 | Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2018 | Feb. 16, 2018 | Aug. 31, 2017 |
Debt Instrument [Line Items] | |||||||||
Amortization expense of deferred financing charges | $ 83,000 | $ 84,000 | |||||||
Fair Value, Inputs, Level 2 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, fair value | 25,600,000 | $ 25,300,000 | |||||||
Promissory Note [Member] | Repeat Precision [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, maximum borrowing capacity | $ 3,800,000 | $ 4,300,000 | |||||||
Long-term debt, gross | 0 | 0 | |||||||
Promissory Note [Member] | Repeat Precision [Member] | Prime Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 1.00% | ||||||||
Equipment Notes [Member] | Repeat Precision [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, face amount | $ 800,000 | ||||||||
Equipment Notes [Member] | Repeat Precision [Member] | Prime Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 1.00% | ||||||||
Equipment Notes [Member] | Repeat Precision [Member] | February 2017 Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Long-term debt, gross | $ 0 | 400,000 | |||||||
Debt maturity date | Feb. 27, 2021 | ||||||||
Equipment Notes [Member] | Repeat Precision [Member] | September 2018 Note [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument, maximum borrowing capacity | $ 3,800,000 | ||||||||
Long-term debt, gross | $ 2,300,000 | 2,000,000 | |||||||
Debt maturity date | Jun. 7, 2023 | ||||||||
Equipment Notes [Member] | Repeat Precision [Member] | September 2018 Note [Member] | Prime Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 1.00% | ||||||||
Amended And Restated Credit Agreement [Member] | Commencing on Quarter Ending June 30, 2017 through Quarter Ending Prior to March 31, 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Leverage ratio | 3.00% | ||||||||
Amended And Restated Credit Agreement [Member] | Commencing on Quarter Ending June 30, 2017 through Quarter Ending on or After March 31, 2018 [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Leverage ratio | 2.50% | ||||||||
Amended And Restated Credit Agreement [Member] | Commencing on Quarter Ending June 30, 2017 through Last Day of Each Fiscal Quarter [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Interest coverage ratio | 2.75% | ||||||||
Amended And Restated Credit Agreement [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] | Revolving Credit Canadian Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Asset coverage ratio | 1.00% | ||||||||
Amended And Restated Credit Agreement [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] | Revolving Credit U.S. Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Asset coverage ratio | 1.00% | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument stated interest rate | 6.00% | ||||||||
Interest expense on debt | $ 300,000 | 300,000 | |||||||
Debt issuance cost | $ 1,000,000 | ||||||||
Amortization expense of deferred financing charges | $ 100,000 | $ 100,000 | |||||||
Credit facility maturity date | May 4, 2020 | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Revolving Credit U.S. Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 25,000,000 | $ 50,000,000 | |||||||
Line of credit outstanding | $ 20,000,000 | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Revolving Credit Canadian Facility [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 25,000,000 | ||||||||
Line of credit outstanding | $ 0 | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Letter of Credit [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | 5,000,000 | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Swingline Loans [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Maximum borrowing capacity | $ 5,000,000 | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Minimum [Member] | US And Canadian Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 2.25% | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Minimum [Member] | Eurocurrency Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 3.25% | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Maximum [Member] | US And Canadian Base Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 3.00% | ||||||||
Amended And Restated Credit Agreement [Member] | Prior Senior Secured Credit Facility [Member] | Maximum [Member] | Eurocurrency Rate [Member] | |||||||||
Debt Instrument [Line Items] | |||||||||
Debt instrument variable interest rate | 4.00% |
Debt (Schedule of Long-term Deb
Debt (Schedule of Long-term Debt) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Dec. 31, 2018 |
Debt Instrument [Line Items] | ||
Less: current portion | $ (2,461) | $ (2,236) |
Long-term debt | 23,547 | 23,455 |
Debt and Capital Lease Obligations | 26,008 | 25,691 |
Prior Senior Secured Credit Facility [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 20,000 | 20,000 |
Equipment Notes [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | 2,323 | 2,412 |
Finance Lease [Member] | ||
Debt Instrument [Line Items] | ||
Total debt | $ 3,685 | $ 3,279 |
Leases (Supplemental Balance Sh
Leases (Supplemental Balance Sheet Information Related to Leases) (Details) $ in Thousands | Mar. 31, 2019USD ($) | |
Operating lease right-of-use assets | $ 6,938 | |
Finance lease right-of-use assets | 4,234 | [1] |
Total leased right-of-use assets | 11,172 | |
Liabilities Current | ||
Operating lease liabilities | 2,711 | |
Finance lease liabilities | 1,758 | |
Liabilities Noncurrent | ||
Operating lease liabilities | 4,263 | |
Finance lease liabilities | 1,927 | |
Total lease liabilities | 10,659 | |
Finance Lease Right-of-Use Assets [Member] | ||
Liabilities Noncurrent | ||
Accumulated amortization | $ 1,600 | |
[1] | Finance lease right-of-use assets are recorded net of accumulated amortization of $1.6 million as of March 31, 2019. |
Leases (Components of Lease Exp
Leases (Components of Lease Expense) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Operating lease cost | $ 680 |
Finance lease cost | |
Amortization of right-of-use assets | 334 |
Interest on lease liabilities | 63 |
Short-term lease cost | 271 |
Total lease cost | $ 1,348 |
Leases (Maturities of Lease Lia
Leases (Maturities of Lease Liabilities) (Details) - USD ($) $ in Thousands | Mar. 31, 2019 | Jan. 01, 2019 | Dec. 31, 2018 |
Operating Leases | |||
2019 (excluding the three months ended March 31, 2019) | $ 2,396 | ||
2019 | $ 2,867 | ||
2020 | 2,124 | 1,276 | |
2021 | 1,509 | 757 | |
2022 | 771 | 434 | |
2023 | 265 | 292 | |
Thereafter | 586 | 398 | |
Total lease payments | 7,651 | 6,024 | |
Less: interest | 677 | ||
Present value of lease liabilities | 6,974 | 6,024 | |
Finance Leases | |||
2019 (excluding the three months ended March 31, 2019) | 1,493 | ||
2019 | 1,768 | ||
2020 | 1,393 | 973 | |
2021 | 891 | 686 | |
2022 | 283 | 198 | |
Total lease payments | 4,060 | 3,625 | |
Less: interest | 375 | 346 | |
Present value of lease liabilities | $ 3,685 | $ 3,279 | |
Accounting Standards Update 2016-02 [Member] | |||
Operating Leases | |||
Present value of lease liabilities | $ 7,500 |
Leases (Lease Term and Discount
Leases (Lease Term and Discount Rate) (Details) | 3 Months Ended |
Mar. 31, 2019 | |
Leases [Abstract] | |
Weighted-average remaining lease term (years): Operating leases | 2 years 9 months 18 days |
Weighted-average remaining lease term (years): Finance leases | 1 year 9 months 18 days |
Weighted-average discount rate: Operating leases | 5.90% |
Weighted-average discount rate: Finance leases | 5.50% |
Leases (Supplemental Cash Flow
Leases (Supplemental Cash Flow and Other Information Related to Leases) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2019USD ($) | |
Leases [Abstract] | |
Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from operating leases | $ 829 |
Cash paid for amounts included in measurement of lease liabilities: Operating cash flows from finance leases | 63 |
Cash paid for amounts included in measurement of lease liabilities: Financing cash flows from finance leases | 394 |
Right-of-use assets obtained in exchange for new lease liabilities: Operating leases | 179 |
Right-of-use assets obtained in exchange for new lease liabilities: Finance leases | $ 837 |
Share-Based Compensation (Narra
Share-Based Compensation (Narrative) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Allocated share-based compensation expense | $ 3.1 | $ 2.4 |
Restricted Stock Units (RSUs) [Member] | ||
Share-based compensation shares granted | 918,155 | |
Weighted average grant date fair value | $ 5.51 | |
Share-based compensation vesting period | 3 years | |
Restricted Stock Units (RSUs) [Member] | Non-Employee Board Of Directors [Member] | ||
Share-based compensation vesting period | 1 year | |
Restricted Stock Units (RSUs) [Member] | Vest on One Year Anniversary [Member] | ||
Share-based compensation shares granted | 799,317 | |
Restricted Stock Units (RSUs) [Member] | Vest on One Year Anniversary [Member] | Non-Employee Board Of Directors [Member] | ||
Share-based compensation shares granted | 118,838 | |
Equivalent Stock Units (ESUs) [Member] | ||
Share-based compensation shares granted | 610,570 | |
Weighted average grant date fair value | $ 5.51 | |
Share-based compensation vesting period | 3 years | |
Performance Stock Unit Awards (PSUs) [Member] | ||
Share-based compensation shares granted | 377,334 | |
Weighted average grant date fair value | $ 6.50 | |
Share-based compensation award vesting period | 3 years | |
Performance Stock Unit Awards (PSUs) [Member] | Minimum [Member] | ||
Number of common stock shares issued for each PSU | 0 | |
Performance Stock Unit Awards (PSUs) [Member] | Maximum [Member] | ||
Number of common stock shares issued for each PSU | 2 | |
Performance Stock Unit Awards (PSUs) [Member] | 50th percentile relative TSR [Member] | ||
Percentage of vesting of share-based compensation awards | 65.00% | |
Performance Stock Unit Awards (PSUs) [Member] | 90th percentile relative TSR [Member] | ||
Percentage of vesting of share-based compensation awards | 200.00% |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | Dec. 31, 2017 | |
Income Tax Contingency [Line Items] | |||
Income tax expense | $ 9,574,000 | $ 945,000 | |
Effective tax rate | 7.40% | ||
Tax benefit from exercise of stock option awards | $ (300,000) | $ 300,000 | |
Change in effective tax rate | 16.40% | ||
Provisional tax expense (benefit) for impact of the Tax Act of 2017 | $ 2,100,000 | ||
Statutory corporate tax rate | 21.00% | 35.00% | |
Income tax interest and penalties | $ 26,000 | $ 0 | |
Deferred tax assets, valuation allowance | 9,800,000 | ||
Without Valuation Allowance [Member] | |||
Income Tax Contingency [Line Items] | |||
Income tax expense | $ 200,000 |
(Loss) Earnings Per Common Sh_3
(Loss) Earnings Per Common Share (Reconciliation of Numerator and Denominator for Calculating Earnings Per Share from Net Income) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2019 | Mar. 31, 2018 | |
Numerator—Basic | ||
Net (loss) income | $ (9,878) | $ 11,865 |
Less: income attributable to participating shares | 399 | |
Less: income attributable to non-controlling interest | 2,088 | 887 |
Net (loss) income attributable to NCS Multistage Holdings, Inc.—Basic | (11,966) | 10,579 |
Numerator—Diluted | ||
Net (loss) income | (9,878) | 11,865 |
Less: income attributable to non-controlling interest | 2,088 | 887 |
Net (loss) income attributable to NCS Multistage Holdings, Inc.—Diluted | $ (11,966) | $ 10,978 |
Denominator | ||
Basic weighted average number of shares (in shares) | 45,974,000 | 44,252,000 |
Exchangeable shares for common stock (in shares) | 1,543,000 | |
Dilutive effect of stock options, RSUs, PSUs and ESPP | 1,319,000 | |
Diluted weighted average number of shares (in shares) | 45,974,000 | 47,114,000 |
(Loss) earnings per common share | ||
Basic (in dollars per share) | $ (0.26) | $ 0.24 |
Diluted (in dollars per share) | $ (0.26) | $ 0.23 |
Potentially dilutive securities excluded as anti-dilutive | 4,391,000 |
Segment and Geographic Inform_2
Segment and Geographic Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2019segment | |
Segment and Geographic Information [Abstract] | |
Number of reportable segments | 1 |
Subsequent Events (Details)
Subsequent Events (Details) - Second Amended and Restated Credit Agreement [Member] - New Senior Secured Credit Facility [Member] - Wells Fargo Bank [Member] - Subsequent Event [Member] $ in Millions | May 01, 2019USD ($) |
Commencing on Quarter Ending June 30, 2017 through Quarter Ending Prior to March 31, 2018 [Member] | |
Subsequent Events [Line Items] | |
Leverage ratio | 2.50% |
Commencing on Quarter Ending June 30, 2017 through Last Day of Each Fiscal Quarter [Member] | |
Subsequent Events [Line Items] | |
Interest coverage ratio | 2.75% |
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% |
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% |
Revolving Credit U.S. Facility [Member] | |
Subsequent Events [Line Items] | |
Line of credit available aggregate principal amount | $ 50 |
Revolving Credit Canadian Facility [Member] | |
Subsequent Events [Line Items] | |
Line of credit available aggregate principal amount | 25 |
Letter of Credit [Member] | |
Subsequent Events [Line Items] | |
Line of credit available aggregate principal amount | 5 |
Swingline Loans [Member] | |
Subsequent Events [Line Items] | |
Line of credit available aggregate principal amount | $ 5 |