Document and Entity Information
Document and Entity Information - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Feb. 21, 2020 | Jun. 28, 2019 | |
Document and Entity Information | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2019 | ||
Document Transition Report | false | ||
Entity File Number | 001-38066 | ||
Entity Registrant Name | Select Energy Services, Inc. | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 81-4561945 | ||
Entity Address, Address Line One | 1233 W. Loop South, Suite 1400 | ||
Entity Address, City or Town | Houston | ||
Entity Address, State or Province | TX | ||
Entity Address, Postal Zip Code | 77027 | ||
City Area Code | 713 | ||
Local Phone Number | 235-9500 | ||
Title of 12(b) Security | Class A common stock, par value $0.01 per share | ||
Trading Symbol | WTTR | ||
Security Exchange Name | NYSE | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 684.9 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Fiscal Year Focus | 2019 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001693256 | ||
Amendment Flag | false | ||
Class A Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 87,057,036 | ||
Class B Common Stock | |||
Document and Entity Information | |||
Entity Common Stock, Shares Outstanding | 16,221,101 |
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Current assets | ||
Cash and cash equivalents | $ 79,268 | $ 17,237 |
Accounts receivable trade, net of allowance for doubtful accounts of $5,773 and $5,329, respectively | 267,628 | 341,711 |
Accounts receivable, related parties | 4,677 | 1,119 |
Inventories | 37,542 | 44,992 |
Prepaid expenses and other current assets | 26,486 | 27,093 |
Total current assets | 415,601 | 432,152 |
Property and equipment | 1,015,379 | 1,114,378 |
Accumulated depreciation | (562,986) | (611,530) |
Property and equipment held-for-sale, net | 885 | |
Total property and equipment, net | 453,278 | 502,848 |
Right-of-use assets, net | 70,635 | |
Goodwill | 266,934 | 273,801 |
Other intangible assets, net | 136,952 | 148,377 |
Other assets, net | 4,220 | 3,427 |
Total assets | 1,347,620 | 1,360,605 |
Current liabilities | ||
Accounts payable | 35,686 | 53,847 |
Accrued accounts payable | 47,547 | 62,536 |
Accounts payable and accrued expenses, related parties | 2,789 | 5,056 |
Accrued salaries and benefits | 20,079 | 22,113 |
Accrued insurance | 8,843 | 14,849 |
Sales tax payable | 2,119 | 5,820 |
Accrued expenses and other current liabilities | 15,375 | 14,560 |
Current operating lease liabilities | 19,315 | |
Current portion of finance lease obligations | 128 | 938 |
Total current liabilities | 151,881 | 179,719 |
Long-term operating lease liabilities | 72,143 | |
Long-term operating lease liabilities | 16,752 | |
Other long-term liabilities | 10,784 | 8,361 |
Long-term debt | 45,000 | |
Total liabilities | 234,808 | 249,832 |
Commitments and contingencies (Note 10) | ||
Preferred stock, $0.01 par value; 50,000,000 shares authorized; no shares issued and outstanding as of December 31, 2019 and December 31, 2018 | ||
Additional paid-in capital | 914,699 | 813,599 |
Retained earnings | 21,437 | 18,653 |
Accumulated other comprehensive deficit | (368) | |
Total stockholders' equity | 937,177 | 832,934 |
Noncontrolling interests | 175,635 | 277,839 |
Total equity | 1,112,812 | 1,110,773 |
Total liabilities and equity | 1,347,620 | 1,360,605 |
Class A Common Stock | ||
Current liabilities | ||
Common stock | 879 | 790 |
Total equity | 879 | |
Class A-2 Common Stock | ||
Current liabilities | ||
Common stock | ||
Class B Common Stock | ||
Current liabilities | ||
Common stock | 162 | $ 260 |
Total equity | $ 162 |
CONSOLIDATED BALANCE SHEETS (Pa
CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Allowance for doubtful accounts | $ 5,773 | $ 5,329 |
Preferred Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Preferred Stock, Shares Authorized | 50,000,000 | 50,000,000 |
Preferred Stock, Shares Issued | 0 | 0 |
Preferred Stock, Shares Outstanding | 0 | 0 |
Class A Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 350,000,000 | 350,000,000 |
Common Stock, Shares, Issued | 87,893,525 | 78,956,555 |
Common Stock, Shares, Outstanding | 87,893,525 | 78,956,555 |
Class A-2 Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 40,000,000 | 40,000,000 |
Common Stock, Shares, Issued | 0 | 0 |
Common Stock, Shares, Outstanding | 0 | 0 |
Class B Common Stock | ||
Common Stock, Par or Stated Value Per Share | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 150,000,000 | 150,000,000 |
Common Stock, Shares, Issued | 16,221,101 | 26,026,843 |
Common Stock, Shares, Outstanding | 16,221,101 | 26,026,843 |
CONSOLIDATED STATEMENTS OF OPER
CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Revenue | |||
Total revenue | $ 1,291,589 | $ 1,528,930 | $ 692,491 |
Costs of revenue | |||
Depreciation and amortization | 116,809 | 130,537 | 101,645 |
Total costs of revenue | 1,142,849 | 1,330,448 | 634,711 |
Gross profit | 148,740 | 198,482 | 57,780 |
Operating expenses | |||
Selling, general and administrative | 111,622 | 103,156 | 82,403 |
Depreciation and amortization | 3,860 | 3,176 | 1,804 |
Impairment of goodwill | 4,396 | 17,894 | |
Impairment of property and equipment | 3,715 | 6,657 | |
Impairment of cost-method investment | 2,000 | ||
Lease abandonment costs | 2,073 | 3,925 | 3,572 |
Total operating expenses | 125,666 | 136,808 | 87,779 |
Income (loss) from operations | 23,074 | 61,674 | (29,999) |
Other income (expense) | |||
(Losses) gains on sales of property, equipment and divestitures, net | (11,626) | 3,804 | 2,726 |
Interest expense, net | (2,688) | (5,311) | (6,629) |
Foreign currency gain (loss), net | 273 | (1,292) | 281 |
Other expense, net | (2,948) | (2,872) | (2,357) |
Income (loss) before income tax expense | 6,085 | 56,003 | (35,978) |
Income tax (expense) benefit | (1,949) | (1,704) | 851 |
Net income (loss) | 4,136 | 54,299 | (35,127) |
Less: net (income) loss attributable to noncontrolling interests | (1,352) | (17,787) | 18,311 |
Net income (loss) attributable to Select Energy Services, Inc. | 2,784 | 36,512 | (16,816) |
Water services | |||
Revenue | |||
Total revenue | 772,311 | 896,783 | 418,869 |
Costs of revenue | |||
Costs of revenue | 598,405 | 681,546 | 317,262 |
Water infrastructure | |||
Revenue | |||
Total revenue | 221,593 | 230,115 | 163,328 |
Costs of revenue | |||
Costs of revenue | 166,962 | 160,072 | 120,510 |
Oilfield chemicals | |||
Revenue | |||
Total revenue | 268,614 | 259,791 | 41,586 |
Costs of revenue | |||
Costs of revenue | 230,434 | 233,454 | 37,024 |
Other | |||
Revenue | |||
Total revenue | 29,071 | 142,241 | 68,708 |
Costs of revenue | |||
Costs of revenue | 30,239 | 124,839 | 58,270 |
Class A Common Stock | |||
Other income (expense) | |||
Net income (loss) attributable to Select Energy Services, Inc. | $ 2,784 | $ 35,720 | $ (12,560) |
Net income (loss) per share attributable to common stockholders (Note 16): | |||
Basic | $ 0.03 | $ 0.49 | $ (0.51) |
Diluted | $ 0.03 | $ 0.49 | $ (0.51) |
Class A-1 Common Stock | |||
Other income (expense) | |||
Net income (loss) attributable to Select Energy Services, Inc. | $ (3,691) | ||
Net income (loss) per share attributable to common stockholders (Note 16): | |||
Basic | $ (0.51) | ||
Diluted | $ (0.51) | ||
Class A-2 Common Stock | |||
Other income (expense) | |||
Net income (loss) attributable to Select Energy Services, Inc. | $ 792 | $ (565) | |
Net income (loss) per share attributable to common stockholders (Note 16): | |||
Basic | $ 0.49 | $ (0.51) | |
Diluted | $ 0.49 | $ (0.51) |
CONSOLIDATED STATEMENTS OF COMP
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Net income (loss) | $ 4,136 | $ 54,299 | $ (35,127) |
Other comprehensive income (loss) | |||
Foreign currency translation adjustment, net of tax of $0 | 368 | (670) | 302 |
Net change in unrealized gain (loss) | 368 | (670) | 302 |
Comprehensive income (loss) | 4,504 | 53,629 | (34,825) |
Less: comprehensive (income) loss attributable to noncontrolling interests | (1,472) | (17,568) | 18,154 |
Comprehensive income (loss) attributable to Select Energy Services, Inc. | $ 3,032 | $ 36,061 | $ (16,671) |
CONSOLIDATED STATEMENTS OF CO_2
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Parenthetical) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | |||
Foreign currency translation adjustment, tax amount | $ 0 | $ 0 | $ 0 |
CONSOLIDATED STATEMENTS OF CHAN
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY - USD ($) $ in Thousands | Class A Common StockConversion of Class A-2 to Class A | Class A Common StockConversion of Class B to Class A | Class A Common Stock | Class A-1 Common StockConversion of Class B to Class A | Class A-1 Common Stock | Class A-2 Common StockConversion of Class A-2 to Class A | Class A-2 Common Stock | Class B Common StockConversion of Class B to Class A | Class B Common Stock | Conversion of Class B to Class ATotal Stockholders' Equity | Conversion of Class B to Class AAdditional Paid-In Capital | Conversion of Class B to Class ARetained Earnings (Accumulated Deficit) | Conversion of Class B to Class AAccumulated Other Comprehensive Income (Loss) | Conversion of Class B to Class ANoncontrolling Interests | Conversion of Class B to Class A | Total Stockholders' Equity | Additional Paid-In Capital | Retained Earnings (Accumulated Deficit) | Accumulated Other Comprehensive Income (Loss) | Noncontrolling Interests | Total |
Beginning balance at Dec. 31, 2016 | $ 38 | $ 161 | $ 385 | $ 112,716 | $ 113,175 | $ (1,043) | $ 221,992 | $ 334,708 | |||||||||||||
Beginning balance (in shares) at Dec. 31, 2016 | 3,802,972 | 16,100,000 | 38,462,541 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Conversion of common stock | $ 161 | $ (161) | |||||||||||||||||||
Conversion of common stock (in shares) | 16,100,000 | (16,100,000) | |||||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC units for shares of Class A common stock | $ 25 | $ (25) | 16,298 | 16,298 | (16,298) | ||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC common units for shares of Class A common stock (in shares) | 2,487,029 | (2,487,029) | |||||||||||||||||||
Equity-based compensation | 4,346 | 4,346 | 3,345 | 7,691 | |||||||||||||||||
Issuance of shares for acquisition | $ 6 | 5,001 | 4,995 | 4,879 | 9,880 | ||||||||||||||||
Issuance of shares for acquisition (in shares) | 560,277 | ||||||||||||||||||||
Issuance of shares for merger | $ 262 | $ 67 | $ 44 | 447,615 | 447,242 | 170,276 | 617,891 | ||||||||||||||
Issuance of shares for merger (in shares) | 26,246,115 | 6,731,845 | 4,356,477 | ||||||||||||||||||
Issuance of shares for initial public offering | $ 100 | 87,369 | 87,269 | 41,135 | 128,504 | ||||||||||||||||
Repurchase of common stock | (184) | (184) | (113) | (297) | |||||||||||||||||
Repurchase of common stock ( in shares) | (19,217) | ||||||||||||||||||||
Noncontrolling interest in subsidiary | (368) | (368) | |||||||||||||||||||
Foreign currency translation adjustment | 302 | $ 302 | 185 | 487 | |||||||||||||||||
Net income | (16,816) | (16,816) | (18,311) | (35,127) | |||||||||||||||||
Ending balance at Dec. 31, 2017 | $ 592 | $ 67 | $ 404 | 656,647 | 673,141 | (17,859) | 302 | 406,722 | 1,063,369 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2017 | 59,182,176 | 6,731,845 | 40,331,989 | ||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Conversion of common stock | $ 67 | $ (67) | |||||||||||||||||||
Conversion of common stock (in shares) | 6,731,839 | (6,731,839) | |||||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC units for shares of Class A common stock | $ 144 | $ (144) | $ 146,865 | $ 146,865 | $ (146,865) | ||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC common units for shares of Class A common stock (in shares) | 14,305,146 | (14,305,146) | |||||||||||||||||||
ESPP shares issued | 132 | 132 | (15) | 117 | |||||||||||||||||
ESPP shares issued (in shares) | 9,793 | ||||||||||||||||||||
Equity-based compensation | 7,312 | 7,312 | 3,059 | 10,371 | |||||||||||||||||
Issuance of restricted shares | $ 4 | 2,325 | 2,321 | (2,325) | |||||||||||||||||
Issuance of restricted shares (in shares) | 438,182 | ||||||||||||||||||||
Exercise of restricted stock units | 104 | 104 | (104) | ||||||||||||||||||
Exercise of restricted stock units (in shares) | 27,860 | ||||||||||||||||||||
Stock options exercised | $ 1 | 1,019 | 1,018 | (374) | 645 | ||||||||||||||||
Stock options exercised (in shares) | 79,333 | ||||||||||||||||||||
Repurchase of common stock | $ (17) | (17,138) | (17,121) | 576 | (16,562) | ||||||||||||||||
Repurchase of common stock ( in shares) | (1,766,428) | (6) | |||||||||||||||||||
Restricted shares forfeited | $ (1) | (383) | (382) | 383 | |||||||||||||||||
Restricted shares forfeited (in shares) | (51,346) | ||||||||||||||||||||
Distributions to noncontrolling interests, net | 506 | 506 | |||||||||||||||||||
NCI income tax adjustment | 209 | 209 | (209) | ||||||||||||||||||
Foreign currency translation adjustment | (670) | (670) | (290) | (960) | |||||||||||||||||
Net income | 36,512 | 36,512 | 17,787 | 54,299 | |||||||||||||||||
Ending balance at Dec. 31, 2018 | $ 790 | $ 260 | 832,934 | 813,599 | $ 18,653 | $ (368) | 277,839 | $ 1,110,773 | 1,110,773 | ||||||||||||
Ending balance (in shares) at Dec. 31, 2018 | 78,956,555 | 26,026,843 | |||||||||||||||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC units for shares of Class A common stock | $ 98 | $ (98) | $ 107,062 | $ 107,062 | $ (107,062) | ||||||||||||||||
Exchange of shares of Class B common stock and SES Holdings, LLC common units for shares of Class A common stock (in shares) | 9,805,742 | (9,805,742) | |||||||||||||||||||
ESPP shares issued | 154 | 154 | (42) | 112 | |||||||||||||||||
ESPP shares issued (in shares) | 13,178 | ||||||||||||||||||||
Equity-based compensation | 12,050 | 12,050 | 3,435 | 15,485 | |||||||||||||||||
Issuance of restricted shares | $ 14 | 3,653 | 3,639 | (3,653) | |||||||||||||||||
Issuance of restricted shares (in shares) | 1,417,458 | ||||||||||||||||||||
Exercise of restricted stock units | 4 | 4 | (4) | ||||||||||||||||||
Exercise of restricted stock units (in shares) | 1,250 | ||||||||||||||||||||
Stock options exercised | 84 | 84 | (54) | 30 | |||||||||||||||||
Stock options exercised (in shares) | 5,282 | ||||||||||||||||||||
Repurchase of common stock | $ (23) | (21,962) | (21,939) | 3,362 | (18,600) | ||||||||||||||||
Repurchase of common stock ( in shares) | (2,288,880) | ||||||||||||||||||||
Restricted shares forfeited | (39) | (39) | 39 | ||||||||||||||||||
Restricted shares forfeited (in shares) | (17,060) | ||||||||||||||||||||
Distributions to noncontrolling interests, net | 404 | 404 | |||||||||||||||||||
NCI income tax adjustment | 66 | 66 | (66) | ||||||||||||||||||
Foreign currency translation adjustment | 387 | 19 | $ 368 | 85 | 472 | ||||||||||||||||
Net income | 2,784 | 2,784 | 1,352 | 4,136 | |||||||||||||||||
Ending balance at Dec. 31, 2019 | $ 879 | $ 162 | $ 937,177 | $ 914,699 | $ 21,437 | $ 175,635 | $ 1,112,812 | ||||||||||||||
Ending balance (in shares) at Dec. 31, 2019 | 87,893,525 | 16,221,101 |
CONSOLIDATED STATEMENTS OF CASH
CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Cash flows from operating activities | |||
Net income (loss) | $ 4,136 | $ 54,299 | $ (35,127) |
Adjustments to reconcile net income (loss) to net cash provided by operating activities | |||
Depreciation and amortization | 120,669 | 133,713 | 103,449 |
Net loss (gain) on disposal of property and equipment | 7,950 | (3,803) | (2,726) |
Gain realized on previously held interest in Rockwater | (1,210) | ||
Bad debt expense | 2,553 | 2,210 | 1,542 |
Amortization of debt issuance costs | 688 | 688 | 4,031 |
Inventory write-downs | 250 | 442 | |
Equity-based compensation | 15,485 | 10,371 | 7,691 |
Impairment of goodwill | 4,396 | 17,894 | |
Impairment of property and equipment | 3,715 | 6,657 | |
Impairment of cost-method investment | 2,000 | ||
Loss on divestitures | 3,676 | ||
Other operating items, net | 240 | 1,287 | (353) |
Changes in operating assets and liabilities | |||
Accounts receivable | 57,908 | 36,537 | (100,485) |
Prepaid expenses and other assets | 11,321 | (9,115) | (2,177) |
Accounts payable and accrued liabilities | (29,039) | (20,771) | 22,466 |
Net cash provided by (used in) operating activities | 203,948 | 232,409 | (2,899) |
Cash flows from investing activities | |||
Working capital settlement | 691 | ||
Proceeds received from divestitures | 24,872 | ||
Purchase of property and equipment | (110,143) | (165,360) | (98,722) |
Acquisitions, net of cash received | (10,000) | (16,999) | (65,488) |
Proceeds received from sales of property and equipment | 17,223 | 13,998 | 7,479 |
Net cash used in investing activities | (77,357) | (168,361) | (156,731) |
Cash flows from financing activities | |||
Borrowings from revolving line of credit | 5,000 | 60,000 | 109,000 |
Payments on long-term debt | (50,000) | (90,000) | (111,000) |
Payments of finance lease obligations | (883) | (1,881) | |
Payment of debt issuance costs | (3,442) | ||
Proceeds from initial public offering | 140,070 | ||
Proceeds from share issuance | 142 | 762 | |
Payments incurred for initial public offering | (11,566) | ||
Distributions to noncontrolling interests, net | (349) | (506) | (368) |
Repurchase of common stock | (18,600) | (16,562) | (297) |
Contingent consideration | (1,106) | ||
Net cash (used in) provided by financing activities | (64,690) | (49,293) | 122,397 |
Effect of exchange rate changes on cash | 130 | (292) | (34) |
Net increase (decrease) in cash and cash equivalents | 62,031 | 14,463 | (37,267) |
Cash and cash equivalents, beginning of period | 17,237 | 2,774 | |
Cash and cash equivalents, end of period | 79,268 | 17,237 | 2,774 |
Supplemental cash flow disclosure: | |||
Cash paid for interest | 2,716 | 5,243 | 1,999 |
Cash paid (refunds received) for income taxes, net | 1,793 | (550) | (54) |
Supplemental disclosure of noncash operating activities: | |||
Lease liabilities arising from obtaining right-of-use assets | 119,358 | ||
Supplemental disclosure of noncash investing activities: | |||
Capital expenditures included in accounts payable and accrued liabilities | $ 10,472 | $ 17,910 | $ 11,137 |
BUSINESS AND BASIS OF PRESENTAT
BUSINESS AND BASIS OF PRESENTATION | 12 Months Ended |
Dec. 31, 2019 | |
BUSINESS AND BASIS OF PRESENTATION | |
BUSINESS AND BASIS OF PRESENTATION | NOTE 1—BUSINESS AND BASIS OF PRESENTATION Description of the business : Select Energy Services, Inc. (“we,” “Select Inc.” or “the Company”) was incorporated as a Delaware corporation on November 21, 2016. The Company is a holding company whose sole material asset consists of common units (“SES Holdings LLC Units”) in SES Holdings, LLC (“SES Holdings” or the “ We are a leading provider of comprehensive water-management solutions to the oil and gas industry in the United States (“U.S.”). We also develop, manufacture and deliver a full suite of chemical solutions for use in oil and gas well completion and production operations. Through a combination of organic growth and acquisitions over the last decade, we have developed a leading position in the relatively new water solutions industry. We believe we are the only company in the oilfield services industry that combines comprehensive water-management services with related chemical products. Furthermore, we believe we are one of the few large oilfield services companies whose primary focus is on the management and treatment of water and water resources in the oil and gas development industry. Accordingly, the importance of responsibly managing water resources through our operations to help conserve fresh water and protect the environment is paramount to our continued success. Select 144A Offering and Initial Public Offering : On December 20, 2016, Select Inc. completed a private placement (the “Select 144A Offering”) of Registration rights : In December 2016, in connection with the closing of the Select 144A Offering, Select Inc. entered into a registration rights agreement with FBR Capital Markets & Co. for the benefit of the investors in the Select 144A Offering. Under this registration rights agreement, the Company agreed, at its expense, to file with the SEC, in no event later than April 30, 2017, a shelf registration statement registering for resale the Rockwater Merger: which we issued approximately 25.9 million shares of Class A Common Stock, 6.7 million shares of Select Inc. Class A-2 common stock, par value $0.01 (the “Class A-2 Common Stock”) and 4.4 million shares of Class B Common Stock to the former holders of Rockwater common stock and a unit-for-unit transaction in which SES Holdings issued approximately 37.3 million SES Holdings LLC Units to the former holders of units in Rockwater LLC. See Note 3—Acquisitions for further discussion. Rockwater Registration Rights Agreement: On January 12, 2018, the Company, pursuant to the Rockwater Registration Rights Agreement, filed with the SEC, a shelf registration statement registering for resale of 6,653,777 shares of Class A Common Stock into which certain of the outstanding shares of Class A-2 Common Stock registered under such registration statement were convertible. Pursuant to the Company’s Third Amended and Restated Certificate of Incorporation, upon the effectiveness of this registration statement on March 29, 2018, each outstanding share of Class A-2 Common Stock converted automatically into a share of Class A Common Stock on a one-for-one basis. No shares of Class A-2 Common Stock are currently outstanding. Credit Agreement: . Exchange rights : Under the Eighth Amended and Restated Limited Liability Company Agreement of SES Holdings (the “SES Holdings LLC Agreement”), Legacy Owner Holdco and its permitted transferees have the right (an “Exchange Right”) to cause SES Holdings to acquire all or a portion of its SES Holdings LLC Units for, at SES Holdings’ election, (i) shares of Class A Common Stock at an exchange ratio of one share of Class A Common Stock for each SES Holdings LLC Unit exchanged, subject to conversion rate adjustments for stock splits, stock dividends, reclassification and other similar transactions or (ii) cash in an amount equal to the Cash Election Value (as defined within the SES Holdings LLC Agreement) of such Class A Common Stock. Alternatively, upon the exercise of any Exchange Right, Select Inc. has the right (the “Call Right”) to acquire the tendered SES Holdings LLC Units from the exchanging unitholder for, at its election, (i) the number of shares of Class A Common Stock the exchanging unitholder would have received under the Exchange Right or (ii) cash in an amount equal to the Cash Election Value of such Class A Common Stock. In connection with any exchange of SES Holdings LLC Units pursuant to an Exchange Right or Call Right, the corresponding number of shares of Class B Common Stock will be cancelled. Tax Receivable Agreements : In connection with the Company’s restructuring at the Select 144A Offering, Select Inc. entered into Basis of presentation : The accompanying consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the U.S. (“GAAP”) and pursuant to the rules and regulations of the SEC. The consolidated financial statements include the accounts of the Company and all of its majority-owned or controlled subsidiaries. All intercompany accounts and transactions have been eliminated in consolidation. For investments in subsidiaries that are not wholly owned, but where the Company exercises control, the equity held by the minority owners and their portion of net income or loss are reflected as noncontrolling interests. Investments in entities in which the Company exercises significant influence over operating and financial policies are accounted for using the equity method, and investments in entities for which the Company does not have significant control or influence are accounted for using the cost-method. As of December 31, 2019 and December 31, 2018, the Company had no equity method investees and one cost-method investee. The Company’s investments are reviewed for impairment whenever events or circumstances indicate that the carrying value may not be recoverable. When circumstances indicate that the fair value of its investment is less than its carrying value and the reduction in value is other than temporary, the reduction in value is recognized in earnings. During the first quarter of 2018, the Company determined that its cost-method investee was no longer fully recoverable and was written down to its estimated fair value of $0.5 million. The impairment expense of $2.0 million is included in impairment of cost-method investment within the consolidated statements of operations. Segment reporting : The Water Services segment consists of the Company’s services businesses including water transfer, flowback and well testing, fluids hauling, water containment, water treatment and water network automation, primarily serving exploration and production (“E&P”) companies. Additionally, this segment includes the operations of our accommodations and rentals business, which were previously a part of the former Wellsite Services segment. The Water Infrastructure segment consists of the Company’s infrastructure assets and ongoing infrastructure development projects, including operations associated with our water sourcing and pipelines, produced water gathering systems and salt water disposal wells, primarily serving E&P companies. The Oilfield Chemicals segment develops, manufactures and provides a full suite of chemicals used in hydraulic fracturing, stimulation, cementing, and well completion and production services, including polymer slurries, crosslinkers, friction reducers, biocides, dry and liquid scale inhibitors, corrosion inhibitors, buffers, breakers and other chemical technologies. This segment also provides chemicals needed by our customers to increase oil and gas production and lower production costs over the life of a well. Our Oilfield Chemicals customers are primarily pressure pumpers, along with major integrated and independent oil and gas producers. The results of our divested service lines that were previously a part of the former Wellsite Services segment, including the operations of our Affirm subsidiary, our sand hauling operations and our Canadian operations, are combined in the “Other” category. As of December 31, 2019, these operations have ceased, and we do not expect regular recurring revenue going forward from this former segment. Reclassifications : Substantially complete liquidation: |
SIGNIFICANT ACCOUNTING POLICIES
SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
SIGNIFICANT ACCOUNTING POLICIES | NOTE 2—SIGNIFICANT ACCOUNTING POLICIES Use of estimates : The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, uncollectible accounts receivable, income taxes, self-insurance liabilities, share-based compensation, inventory, incremental borrowing rate on leases and contingent liabilities. The Company bases its estimates on historical and other pertinent information that are believed to be reasonable under the circumstances. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Cash and cash equivalents : The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Accounts receivable and allowance for doubtful accounts : Accounts receivable are stated at the invoiced amount, or the earned but not yet invoiced amount, net of an allowance for doubtful accounts. The Company establishes an allowance for doubtful accounts based on the review of several factors, including historical collection experience, the current aging status of the customer accounts and financial condition of its customers. Accounts receivable are written off when a settlement is reached for an amount less than the outstanding historical balance or when the Company determines that it is probable the balance will not be collected. The change in allowance for doubtful accounts is as follows: For the year ended December 31, 2019 2018 2017 (in thousands) Balance at beginning of year $ 5,329 $ 2,979 $ 2,144 Provisions for bad debts, included in selling, general and administrative 2,553 2,210 1,542 Uncollectible receivable (write-offs) recoveries (2,109) 140 (707) Balance at end of year $ 5,773 $ 5,329 $ 2,979 Concentrations of credit and customer risk : Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The amounts held in financial institutions periodically exceed the federally insured limit. Management believes that the financial institutions are financially sound and the risk of loss is minimal. The Company minimizes its exposure to counterparty credit risk by performing credit evaluations and ongoing monitoring of the financial stability of its customers. There were Inventories : The Company values its inventories at lower of cost or net realizable value. Inventory costs are determined under the weighted-average method. Inventory costs primarily consist of chemicals and materials available for resale and parts and consumables used in operations. Debt issuance costs : Debt issuance costs consist of costs directly associated with obtaining credit with financial institutions. These costs are recorded as a long-term asset associated with the line of credit and amortized on a straight-line basis over the life of the credit agreement, which approximates the effective-interest method. During the year ended December 31, 2017, the Company expensed unamortized debt issuance costs of Property and equipment : Property and equipment are stated at cost less accumulated depreciation. Depreciation (and amortization of capital lease assets) is calculated on a straight line basis over the estimated useful life of each asset as noted below: Asset Classification Useful Life (years) Land Indefinite Buildings and leasehold improvements 30 or lease term Vehicles and equipment 4 - 7 or lease term Machinery and equipment 2 - 15 Computer equipment and software 3 - 4 or lease term Office furniture and equipment 7 Disposal wells 7 - 10 Depreciation expense related to the Company’s property and equipment, including amortization of property under finance leases, was $108.7 million, $120.4 million and $92.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. Change in depreciable lives of property and equipment: The average estimated useful lives of the assets impacted in the vehicles and equipment category increased from 6.0 to 8.1 years, while the average estimated useful lives of assets impacted in machinery and equipment increased from 5.5 years to 6.9 years. The impact of the increase of useful lives was to defer and extend out depreciation expense, including lower expense in 2018. The impact of the increase in salvage values was to permanently lower current and future depreciation expense. The fixed assets obtained in 2017 through mergers and acquisitions, including the Rockwater Merger, had consistent useful life and salvage value estimates with the rest of the Company’s fixed assets. The change in the estimated useful lives of fixed assets and change in salvage value estimates was implemented on a prospective basis starting January 1, 2018. Excluding fixed assets attained through mergers and acquisitions during 2017, the impact of the change in useful estimate of fixed assets purchased on or before December 31, 2017 was to reduce and defer depreciation expense by $12.6 million during the year ended December 31, 2018. Also, the increase in estimated vehicle salvage value produced a permanent depreciation expense reduction of $3.9 million during the year ended December 31, 2018. For the year ended December 31, 2018, the changes in useful life estimate and increased salvage value produced an increase to net income of $10.9 million (including the impact of noncontrolling interests) and increased both basic and diluted earnings per share attributable to our stockholders by $0.15. Business Combinations: Goodwill and other intangible assets : Goodwill represents the excess of the purchase price of acquisitions over the fair value of the net assets acquired. Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible assets are realized. Impairment of goodwill, long-lived assets and intangible assets : Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. Recoverability is measured by a comparison of its carrying amount to the estimated undiscounted cash flows to be generated by those assets. If the undiscounted cash flows are less than the carrying amount, the Company records impairment losses for the excess of its carrying value over the estimated fair value. The development of future cash flows and the estimate of fair value represent its best estimates based on industry trends and reference to market transactions and are subject to variability. The Company considers the factors within the fair value analysis to be Level 3 inputs within the fair value hierarchy. During the year ended December 31, 2018, the Company reviewed certain fluid disposal machinery and equipment used in our fluid hauling and disposal services that are included in our Water Infrastructure segment. Due to the condition of the equipment, the Company determined that long-lived assets with a carrying value of The Company conducts its annual goodwill impairment tests in the fourth quarter of each year, and whenever impairment indicators arise, by examining relevant events and circumstances which could have a negative impact on its goodwill such as macroeconomic conditions, industry and market conditions, cost factors that have a negative effect on earnings and cash flows, overall financial performance, acquisitions and divestitures and other relevant entity-specific events. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is required to perform a quantitative impairment test for goodwill comparing the reporting unit’s carrying value to its fair value. The Company’s reporting units are based on its organizational and reporting structure. In determining fair values for the reporting units, the Company relies primarily on the income and market approaches for valuation. In the income approach, the Company discounts predicted future cash flows using a weighted-average cost of capital calculation based on publicly traded peer companies. In the market approach, valuation multiples are developed from both publicly traded peer companies as well as other company transactions. The cost approach, when used, considers replacement cost as the primary indicator of value. If the fair value of a reporting unit is less than its carrying value, goodwill impairment is calculated by subtracting the fair value of the reporting unit from the carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, allocation of assets (including goodwill) and liabilities to reporting units and determining the fair value. The determination of reporting unit fair value relies upon certain estimates and assumptions that are complex and are affected by numerous factors, including the general economic environment and levels of exploration and production (“E&P”) activity of oil and gas companies, the Company’s financial performance and trends and the Company’s strategies and business plans, among others. Unanticipated changes, including immaterial revisions, to these assumptions, could result in a provision for impairment in a future period. Given the nature of these evaluations and their application to specific assets and time frames, it is not possible to reasonably quantify the impact of changes in these assumptions. During the first quarter of 2019, goodwill related to our Affirm reporting unit was reduced to zero from the crane divestiture and impairment. The $4.4 million impairment was based on the estimated fair value of the proceeds from selling and winding down the remainder of the Affirm reporting unit business being less than the carrying value. Also, in connection with the Company’s segment realignment, the Company reallocated goodwill from reporting units in the 2018 Water Solutions segment to reporting units in the 2019 Water Services and Water Infrastructure segments based on the relative fair value of each as of March 31, 2019. See Note 8—Goodwill and Other Intangible Assets and Note 12—Fair Value Measurement for further discussion. Asset retirement obligations : The asset retirement obligation (“ARO”) liability reflects the present value of estimated costs of plugging, site reclamation and similar activities associated with the Company’s salt water disposal wells. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The Company also estimates the productive life of the disposal wells, a credit-adjusted risk-free discount rate and an inflation factor in order to determine the current present value of this obligation. The Company’s ARO liabilities are included in accrued expenses and other current liabilities and other long-term liabilities as of December 31, 2019 and 2018. The change in asset retirement obligations is as follows: For the year ended December 31, 2019 2018 (in thousands) Balance at beginning of year $ 1,898 $ 1,846 Accretion expense, included in depreciation and amortization expense 115 183 Change in estimate — 377 Disposals (486) — Divestitures — (508) Balance at end of year $ 1,527 $ 1,898 In addition to the obligations described above, the Company may be obligated to remove facilities or perform other remediation upon retirement of certain other assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminable. If applicable, the Company will record an asset retirement obligation for these assets in the periods in which settlement dates are reasonably determinable Self-insurance : The Company self-insures, through deductibles and retentions, up to certain levels for losses related to general liability, workers’ compensation and employer’s liability and vehicle liability. The Company’s exposure (i.e. the retention or deductible) per occurrence is Employee benefit plans : The Company sponsors a defined contribution 401(k) Profit Sharing Plan (the “401(k) Plan”) for the benefit of substantially all employees of the Company. The 401(k) Plan allows eligible employees to make tax-deferred contributions, not to exceed annual limits established by the Internal Revenue Service. The Company did not make any matching contributions for the year ended December 31, 2016. Company reinstated matching contributions of 100% of employee contributions, up to 4% of compensation with immediate vesting for existing employees. Starting July 1, 2017, the vesting schedule for new hires is 25% for the first year, 50% for the second year, 75% for the third year and 100% for the fourth year. The Company’s contributions to the 401(k) Plan were $4.2 million and $3.6 million for the years ended December 31, 2019 and 2018, respectively. Revenue recognition : The Company follows ASU 2014-09, Revenue from Contracts with Customers (Topic 606). . Water Services and Water Infrastructure The Company’s agreements with its customers are often referred to as “price sheets” and sometimes provide pricing for multiple services. However, these agreements generally do not authorize the performance of specific services or provide for guaranteed throughput amounts. As customers are free to choose which services, if any, to use based on the Company’s price sheet, the Company prices its separate services on the basis of their standalone selling prices. Customer agreements generally do not provide for performance-, cancellation-, termination-, or refund-type provisions. Services based on price sheets with customers are generally performed under separately-issued “work orders” or “field tickets” as services are requested. Of the Company’s Water Solutions service lines, only sourcing and transfer of water are consistently provided as part of the same arrangement. In these instances, revenue for both sourcing and transfer are recognized concurrently when delivered. Accommodations and Rentals Oilfield Chemical Product Sales— Oilfield Chemicals products are generally sold under sales agreements based upon purchase orders or contracts with customers that do not include right of return provisions or other significant post-delivery obligations. The Company’s products are produced in a standard manufacturing operation, even if produced to the customer’s specifications. The prices of products are fixed and determinable and are established in price lists or customer purchases orders. The Company recognizes revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured and delivery occurs as directed by the customer. Equity-based compensation : The Company accounts for equity-based awards for restricted stock awards, restricted stock units, and stock settled appreciation awards by measuring the awards at the date of grant and recognizing the grant-date fair value as an expense using either straight-line or accelerated attribution, depending on the specific terms of the award agreements over the requisite service period, which is usually equivalent to the vesting period. The Company expenses awards with graded-vesting service conditions on a straight-line basis and accounts for forfeitures as they occur. The company accounts for performance share units by remeasuring the awards at the end of each reporting period based on the period end closing share price, factoring in the percentage expected to vest, Fair value measurements : The Company measures certain assets and liabilities pursuant to accounting guidance which establishes a three-tier fair value hierarchy and prioritizes the inputs used in measuring fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices or other market data for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs based upon its own judgment and assumptions used to measure assets and liabilities at fair value. See Note 12—Fair Value Measurement for further discussion. Income taxes The Company and its subsidiaries account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. The determination of the provision for income taxes requires significant judgment, use of estimates and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes. The Company recognizes interest and penalties relating to uncertain tax provisions as a component of tax expense. The Company identified no material uncertain tax positions as of December 31, 2019, 2018 and 2017. See Note 14—Income Taxes for further discussion. Recent accounting pronouncements Leases Leases (ASC 842): Targeted Improvements, which provides entities with an option to apply the guidance prospectively, instead of retrospectively, and allows for other classification provisions. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-02 in the first quarter of 2019. The Company elected to recognize its lease assets and liabilities on a prospective basis, beginning on January 1, 2019, using the modified retrospective transition method. Additionally, the Company elected practical expedients to (i) exclude right-of-use assets and lease liabilities for short-term leases, (ii) elected to treat lease and non-lease components as a single lease component, (iii) grandfathered its current accounting for land easements that commenced before January 1, 2019, and (iv) used the package of practical expedients to retain prior lease classification, prior treatment of initial direct costs and prior determination of whether a contract constituted a lease. See Note 5—Leases for additional information. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) |
ACQUISITIONS AND DIVESTITURES
ACQUISITIONS AND DIVESTITURES | 12 Months Ended |
Dec. 31, 2019 | |
ACQUISITIONS AND DIVESTITURES | |
ACQUISITIONS AND DIVESTITURES | NOTE 3—ACQUISITIONS AND DIVESTITURES Business combinations Well Chemical Services Acquisition On September 30, 2019, the Company acquired a well chemical services business (“WCS”), formerly a division of Baker Hughes Company, for $10.0 million, funded with cash on hand (the “WCS Acquisition”). WCS provides advanced water treatment solutions, specialized stimulation flow assurance and integrity additives and post-treatment monitoring service in the U.S. This acquisition expands the Company’s service offerings in oilfield water treatment across the full life-cycle of water, from pre-fracturing treatment through reuse and recycling. The WCS Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. These estimates, judgments and assumptions and valuation of the inventory and property and equipment acquired, customer relationships, and current liabilities have been finalized as of December 31, 2019. The assets acquired and liabilities assumed are included in the Company’s Oilfield Chemicals segment. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 10,000 Total consideration transferred 10,000 Less: identifiable assets acquired and liabilities assumed Inventory 5,221 Property and equipment 4,473 Customer relationships 476 Current liabilities (170) Total identifiable net assets acquired 10,000 Fair value allocated to net assets acquired $ 10,000 Pro Well Acquisition On November 20, 2018, the Company acquired Pro Well Testing and Wireline, Inc. (“Pro Well”) with an initial payment of $12.4 million, funded with cash on hand (the “Pro Well Acquisition”). During March 2019, upon final settlement, the purchase price was revised to $11.8 million. This acquisition expanded the Company’s flowback footprint into New Mexico and added new strategic customers. The Pro Well Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. Management estimated that total consideration paid exceeded the fair value of the net assets acquired by $1.1 million, with the excess recorded as goodwill. The goodwill recognized was primarily attributable to expanding the Company’s flowback footprint into New Mexico and adding new strategic customers. The assets acquired, liabilities assumed and the results of operations of the acquired business are included in the Company’s Water Services segment. The goodwill acquired is deductible for tax purposes. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 11,754 Total consideration transferred 11,754 Less: identifiable assets acquired and liabilities assumed Working capital 1,051 Property and equipment 6,588 Customer relationship intangible assets 3,000 Total identifiable net assets acquired 10,639 Goodwill 1,115 Fair value allocated to net assets acquired $ 11,754 Rockwater Merger On November 1, 2017, the Company completed the Rockwater Merger in which the Company combined with Rockwater. The Rockwater Merger was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. The Company also engaged third-party valuation experts to assist in the purchase price allocation and the recorded valuation of property and equipment. Management estimated that total consideration paid exceeded the fair value of the net assets acquired and liabilities assumed by $264.5 million, with the excess recorded as goodwill. The goodwill recognized was primarily attributable to synergies driven by expanding into new geographies, service offerings and customer relationships, strengthening existing service lines and geographies, acquiring an established, trained workforce and expected cost reductions. Goodwill of $251.8 million and $12.7 million was allocated to reporting units within the Company’s 2018 Water Solutions and Oilfield Chemicals segments, respectively. The acquired goodwill is not deductible for tax purposes. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Class A Common Stock (25,914,260 shares) $ 423,957 Class A-2 Common Stock (6,731,845 shares) 110,133 Class B Common Stock (4,356,477 shares) and SES Holdings common units issued (4,356,477 units) 71,272 Fair value of previously held interest in Rockwater 2,310 Fair value of Rockwater share-based awards attributed to pre-acquisition service 12,529 Total consideration transferred 620,201 Less: identifiable assets acquired and liabilities assumed Working capital 141,720 Property and equipment 172,650 Intangible assets Customer relationships 89,661 Trademarks and patents 31,223 Non-compete agreements 3,811 Other long-term assets 88 Deferred tax liabilities (408) Long-term debt (80,555) Other long-term liabilities (2,517) Total identifiable net assets acquired 355,673 Goodwill 264,528 Fair value allocated to net assets acquired $ 620,201 Resource Water Acquisition On September 15, 2017, the Company completed its acquisition (the “Resource Water Acquisition”) of Resource Water Transfer Services, L.P. and certain other affiliated assets (collectively, “Resource Water”). Resource Water provides water transfer services to E&P operators in West Texas and East Texas. Resource Water’s assets included 24 miles of layflat hose as well as numerous pumps and ancillary equipment required to support water transfer operations. Resource Water has longstanding customer relationships across its operating regions, which are viewed as strategic to the Company’s water services business. The acquired goodwill is deductible for tax purposes. The total consideration for the Resource Water Acquisition was $9.0 million, with $6.6 million paid in cash and $2.4 million paid in shares of Class A Common Stock valued at $15.17 per share. The Company funded the cash portion of the consideration for the Resource Water Acquisition with $6.6 million of cash on hand. The Resource Water Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. Management estimated that total consideration paid exceeded the fair value of the net assets acquired by $1.9 million, with the excess recorded as goodwill. The goodwill recognized was attributable to Resource Water’s assembled workforce as well as synergies related to the Company’s comprehensive water solutions strategy. The assets acquired and liabilities assumed and the results of operations of the acquired business are included in the Company’s Water Services segment. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 6,586 Class A Common Stock (156,909 shares) 2,380 Total consideration transferred 8,966 Less: identifiable assets acquired and liabilities assumed Working capital 1,189 Property and equipment 3,485 Customer relationship intangible assets 1,933 Other intangible assets 465 Total identifiable net assets acquired 7,072 Goodwill 1,894 Fair value allocated to net assets acquired $ 8,966 GRR Acquisition On March 10, 2017, the Company completed its acquisition (the “GRR Acquisition”) of Gregory Rockhouse Ranch, Inc. and certain other affiliated entities and assets (collectively, the “GRR Entities”). The GRR Entities provide water and water-related services to E&P companies in the Permian Basin and own and have rights to a vast array of fresh, brackish and effluent water sources with access to significant volumes of water annually and water transport infrastructure, including over 1,000 miles of temporary and permanent pipeline infrastructure and related storage facilities and pumps, all located in the Northern Delaware Basin portion of the Permian Basin. The total consideration for the GRR Acquisition was $59.6 million, with $53.0 million paid in cash, $1.1 million in assumed tax liabilities and $5.5 million paid to the sellers in shares of Class A Common Stock valued at $20.00 per share. The Company funded the cash portion of the consideration for the GRR Acquisition with $19.0 million of cash on hand and $34.0 million of borrowings under the Company’s Previous Credit Facility. For the year ended December 31, 2017, the Company expensed $1.0 million of transaction-related costs, which are included in selling, general and administrative expenses within the consolidated statements of operations. The GRR Acquisition was accounted for as a business combination under the acquisition method of accounting. When determining the fair values of assets acquired and liabilities assumed, management made significant estimates, judgments and assumptions. Management estimated that consideration paid exceeded the fair value of the net assets acquired by $12.0 million, with the excess recorded as goodwill. The goodwill recognized was primarily attributable to synergies related to the Company’s comprehensive water infrastructure strategy that is expected to arise from the GRR Acquisition and was attributable to the Company’s Water Infrastructure segment. The assets acquired and liabilities assumed and the results of operations of the acquired business are included in the Company’s Water Infrastructure segment. The acquired goodwill is deductible for tax purposes. The following table summarizes the consideration transferred and the estimated fair value of identified assets acquired and liabilities assumed at the date of acquisition: Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 53,032 Class A Common Stock (274,998 shares) 5,500 Assumed liabilities 1,106 Total consideration transferred 59,638 Less: identifiable assets acquired and liabilities assumed Working capital 7,728 Property and equipment 13,225 Customer relationship intangible assets 21,484 Other intangible assets 5,152 Total identifiable net assets acquired 47,589 Goodwill 12,049 Fair value allocated to net assets acquired $ 59,638 The following unaudited consolidated 2017 pro forma information is presented as if the Rockwater Merger, the Resource Water Acquisition and the GRR Acquisition had occurred on January 1, 2017. Pro Forma Year ended December 31, 2017 (unaudited) (in thousands) Revenue $ 1,270,736 Net loss (13,079) Less: net loss attributable to noncontrolling interests (1) 5,299 Net loss attributable to Select Energy Services, Inc. (1) $ (7,780) (1) The allocation of net income (loss) attributable to noncontrolling interests and Select Inc. gives effect to the equity structure as of December 31, 2016 as though the Select 144A Offering, the IPO, the Rockwater Merger, the Resource Water Acquisition and the GRR Acquisition occurred as of January 1, 2017. However, the calculation of pro forma net income (loss) does not give effect to any other pro forma adjustments for the Select 144A Offering or the subsequent IPO. The unaudited pro forma amounts above have been calculated after applying the Company’s accounting policies and the Rockwater Merger, the Resource Water Acquisition, and the GRR Acquisition results to reflect the increase to depreciation and amortization that would have been charged assuming the fair value adjustments to property, plant and equipment and intangible assets had been applied from January 1, 2017 and other related pro forma adjustments. The pro forma amounts do not include any potential synergies, cost savings or other expected benefits of the, Rockwater Merger, the Resource Water Acquisition or the GRR Acquisition, and are presented for illustrative purposes only and are not necessarily indicative of results that would have been achieved if the Rockwater Merger, the Resource Water Acquisition and the GRR Acquisition had occurred as of January 1, 2017 or of future operating performance. Divestitures Affirm and Canadian Operations Divestitures During the year ended December 31, 2019, the Company closed on four sale transactions and wound down the remaining Affirm and Canadian operations. The Company sold property and equipment with a combined net book value of $18.6 million and assigned contracts to the buyers. Additionally, two of the four transactions included the assignment of working capital. The following table summarizes sales details for each of the four transactions: Date of Divestiture Entity Initial Net Proceeds Working Capital True Up Adjusted Net Proceeds Working Capital Status at (Gain)/loss for the year ended December 31, 2019 (in thousands) February 26, 2019 Affirm $ 10,982 $ (208) $ 10,774 Final $ 208 June 28, 2019 Affirm 6,968 — 6,968 Final (1,646) March 19, 2019 Canada 4,975 (302) 4,673 Final 5,013 April 1, 2019 Canada 2,242 — 2,242 Final 101 In connection with the Affirm crane operation divestiture in the first quarter of 2019, no gain or loss was initially recognized and goodwill was reduced by $2.6 million. Additionally, during the first quarter of 2019, the Company recorded an impairment of the remaining Affirm goodwill of $4.4 million (see Note 8). |
REVENUE
REVENUE | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE | |
REVENUE | NOTE 4—REVENUE Effective for the year ended December 31, 2018, the Company adopted ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Leases ASU 2014-09 provides a five-step model for determining revenue recognition for arrangements that are within the scope of the standard: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The Company only applies the five-step model to contracts when it is probable that we will collect the consideration the Company is entitled to in exchange for the goods or services the Company transfers to the customer. The following factors are applicable to all three of the Company’s segments for the years 2019, 2018 and 2017, respectively: ● The vast majority of customer agreements are short-term, lasting less than one year. ● Contracts are seldom combined together as virtually all of our customer agreements constitute separate performance obligations. Each job is typically distinct, thereby not interdependent or interrelated with other customer agreements. ● Most contracts allow either party to terminate at any time without substantive penalties. If the customer terminates the contract, the Company is unconditionally entitled to the payments for the products delivered to date. ● Contract terminations before the end of the agreement are rare. ● Sales returns are rare and no sales return assets have been recognized on the balance sheet. ● There are minimal volume discounts. ● There are no service-type warranties. ● There is no long-term customer financing. ● Taxes collected by the Company to be remitted to a governmental authority are excluded from revenue. In the Water Services and Water Infrastructure segments, performance obligations arise in connection with services provided to customers in accordance with contractual terms, in an amount the Company expects to collect. Services are generally sold based upon customer orders or contracts with customers that include fixed or determinable prices. Revenues are generated by services rendered and measured based on output generated, which is usually simultaneously received and consumed by customers at their job sites. As a multi-job site organization, contract terms, including pricing for the Company’s services, are negotiated on a job site level on a per-job basis. Most jobs are completed in a short period of time, usually between one day and one month. Revenue is recognized as performance obligations are completed on a daily, hourly or per unit basis with unconditional rights to consideration for services rendered reflected as accounts receivable trade, net of allowance for doubtful accounts. In cases where a prepayment is received before the Company satisfies its performance obligations, a contract liability is recorded in accrued expenses and other current liabilities. Final billings generally occur once all of the proper approvals are obtained. No revenue is associated with mobilization or demobilization of personnel and equipment. Rather, mobilization and demobilization are factored into pricing for services. Billings and costs related to mobilization and demobilization is not material for customer agreements that start in one period and end in another. During the year ended December 31, 2019, the Company had one agreement considered long-term under Topic 606. In the Oilfield Chemicals segment, the typical performance obligation is to provide a specific quantity of chemicals to customers in accordance with the customer agreement in an amount the Company expects to collect. Products and services are generally sold based upon customer orders or contracts with customers that include fixed or determinable prices. Revenue is recognized as the customer takes title to chemical products in accordance with the agreement. Products may be provided to customers in packaging or delivered to the customers’ containers through a hose. In some cases, the customer takes title to the chemicals upon consumption from storage containers on their property, where the chemicals are considered inventory until customer usage. In cases where the Company delivers products and recognizes revenue before collecting payment, the Company has an unconditional right to payment reflected in accounts receivable trade, net of allowance for doubtful accounts. Customer returns are rare and immaterial and there were no in-process customer agreements as of December 31, 2019 lasting greater than one year. The Company accounts for accommodations and rentals agreements as an operating lease. The Company recognizes revenue from renting equipment on a straight-line basis. Accommodations and rental contract periods are generally daily, weekly or monthly. The average lease term is less than three months and as of December 31, 2019, no rental agreements lasted more than a year. The following table sets forth certain financial information with respect to the Company’s disaggregation of revenues by geographic location: Year ended December 31, 2019 2018 2017 Geographic Region Permian Basin $ 610,528 $ 606,591 $ 243,482 MidCon 176,216 243,524 96,844 Eagle Ford 156,621 171,942 104,934 Marcellus/Utica 96,454 134,984 32,805 Bakken 92,956 153,212 74,543 Rockies 85,339 111,901 80,180 Haynesville/E. Texas 73,658 59,969 49,600 All other/eliminations (183) 46,807 10,103 Total $ 1,291,589 $ 1,528,930 $ 692,491 In the Water Services segment, the top three revenue producing regions are the Permian Basin, MidCon and Eagle Ford, which collectively comprised 74%, 72% and 71% of segment revenue for 2019, 2018 and 2017, respectively. In the Water Infrastructure segment, the top two revenue producing regions are the Permian Basin and Bakken, which collectively comprised 84%, 85% and 80% of segment revenue for 2019, 2018 and 2017, respectively. In the Oilfield Chemicals segment, the top two revenue producing regions are the Permian Basin and MidCon, which collectively comprised 77%, 77% and 72% of segment revenue for 2019, 2018 and 2017, respectively. |
LEASES
LEASES | 12 Months Ended |
Dec. 31, 2019 | |
LEASES | |
LEASES | NOTE 5—LEASES As of December 31, 2019, the Company was the lessee for approximately 593 operating leases with durations greater than a year, approximately 15 subleases, approximately 25 finance leases, and is the lessor for three owned properties. Most of the operating leases either have renewal options of between one or convert to month-to-month agreements at the end of the specified lease term. In addition to normal lease activity, the Affirm and Canadian divestitures occurring during 2019 included the assignment of leases to the buyers. The assigned leases impacted expenses during 2019, but were not included in the December 31, 2019 consolidated balance sheet. The Company’s operating leases are primarily for (i) housing personnel for operations, (ii) operational yards for storing and staging equipment, (iii) equipment used in operations, (iv) facilities used for back-office functions and (v) equipment used for back office functions. The Company has determined that it is reasonably certain to exercise a future renewal option for one facility lease for the corporate office building in Gainesville, Texas. The majority of the Company’s long-term lease expenses are at fixed prices. The majority of the Company’s lease expenses are in connection with short-term agreements, including expenses incurred hourly, daily, monthly and for other periods of time of one year or less. Due to the volatility of the price of a barrel of oil and the short term nature of the vast majority of customer agreements, the Company must have flexibility to continuously scale operations at multiple locations. Consequently, the Company avoids committing to long-term agreements with numerous equipment rentals, vehicle fleet agreements and man-camp agreements, unless a business case supports a longer term agreement. Consequently, the Company’s future lease commitments at December 31, 2019 do not reflect all of the Company’s short-term lease commitments. Leases with an initial term of 12 months or less are not recorded on the consolidated balance sheets and the Company recognizes lease expense for these leases on a straight-line basis over the lease term. The Company has a significant number of short-term leases including month-to-month agreements that continue in perpetuity until the lessor or the Company terminates the lease agreement. Due to the factors listed above, the Company has determined that only a few short-term leases with renewal options are reasonably certain to last more than a year into the future. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the Company’s leases do not provide a readily determinable implicit rate. Therefore, the Company estimates the incremental borrowing rate based on what it would pay to borrow on a collateralized basis, over a similar term based on information available at lease commencement. The Company’s variable lease costs are comprised of variable royalties, variable common area maintenance, and variable reimbursement of lessor insurance and property taxes. Variable lease costs were $1.6 million during the year ended December 31, 2019, of which, $0.8 million of property tax expense is excluded from the lease expense discussed above. The lease disclosures in this Note 5—Leases exclude revenue governed by the new lease standard associated with the Company’s accommodations and rentals business, as all customer agreements are short-term. See Note 4—Revenue for a comprehensive discussion on revenue recognition. The Company previously had $18.8 million of short-term and long-term lease obligations associated with certain exit and disposal activities in connection with approximately 17 abandoned facility leases as of December 31, 2018. Upon adopting the new lease standard, the former exit-disposal cease use liability was reclassified and factored into the initial right-of-use (“ROU”) asset impairment calculation. The financial impact of leases is listed in the tables below: Balance Sheet Classification As of December 31, 2019 (in thousands) Assets ROU Assets (1) Long-term right-of-use assets $ 70,635 Finance lease assets (2) Property and equipment 213 Liabilities Operating lease liabilities ― ST Current operating lease liabilities $ 19,315 Operating lease liabilities ― LT (3) Long-term operating lease liabilities 72,143 Finance lease liabilities ― ST Current portion of finance lease obligations 128 Finance lease liabilities ― LT Other long term liabilities 87 (1) (2) (3) Year ended Statements of Operations and Cash Flows Classification December 31, 2019 Operating lease cost: Operating lease cost ― fixed Cost of revenue and Selling, general and administrative $ 27,856 Lease abandonment costs Lease abandonment costs 2,073 Short-term agreements: Cost of revenue $ 93,949 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 916 Interest on lease liabilities Interest expense, net 32 Lessor income: Sublease income Cost of sales and lease abandonment costs $ 1,544 Lessor income Cost of sales 478 Statement of cash flows Cash paid for operating leases Operating cash flows $ 30,670 Cash paid for finance leases lease interest Operating cash flows 32 Cash paid for finance leases Financing cash flows 883 Long Term and Discount Rate As of December 31, 2019 Weighted-average remaining lease term (years) Operating leases 7.9 Finance leases 1.6 Weighted-average discount rate Operating leases 5.3 % Finance leases 5.1 % The Company has the following operating and finance lease commitments as of December 31, 2019: Period Operating Leases (1) Finance Leases Total (in thousands) 2020 $ 24,742 $ 135 $ 24,877 2021 16,592 88 16,680 2022 13,231 - 13,231 2023 11,074 - 11,074 2024 10,589 - 10,589 Thereafter 44,094 - 44,094 Total minimum lease payments $ 120,322 $ 223 $ 120,545 Less reconciling items to reconcile undiscounted cash flows to lease liabilities: Leases commencing in the future 5,793 — 5,793 Short-term leases excluded from balance sheet 693 — 693 Imputed interest 22,378 8 22,386 Total reconciling items 28,864 8 28,872 Total liabilities per balance sheet 91,458 215 91,673 (1) The table above excludes sublease and lessor income of $1.6 million during 2020, $0.6 million during 2021 and $0.3 million during 2022. |
INVENTORIES
INVENTORIES | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
INVENTORIES | NOTE 6—INVENTORIES Inventories, which are comprised of chemicals and materials available for resale and parts and consumables used in operations, are valued at the lower of cost and net realizable value, with cost determined under the weighted-average method. The significant components of inventory are as follows: As of December 31, 2019 2018 (in thousands) Raw materials $ 12,365 $ 15,219 Finished goods 24,724 28,540 Materials and supplies 453 1,233 $ 37,542 $ 44,992 During the year ended December 31, 2019, the Company added $5.2 million of finished goods inventory from the purchase of WCS (see Note 3). During the year ended December 31, 2019 and 2018, the Company recorded charges to the reserve for excess and obsolete inventory for $0.3 million and $0.4 million, respectively, which were recognized within costs of revenue on the accompanying consolidated statements of operations. The Company’s inventory reserve was $4.1 million and $4.8 million as of December 31, 2019 and December 31, 2018, respectively. The reserve for excess and obsolete inventories is determined based on the Company’s historical usage of inventory on hand, as well as future expectations, and the amount necessary to reduce the cost of the inventory to its estimated net realizable value. |
PROPERTY AND EQUIPMENT
PROPERTY AND EQUIPMENT | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | |
PROPERTY AND EQUIPMENT | NOTE 7—PROPERTY AND EQUIPMENT Property and equipment consists of the following as of December 31, 2019 and 2018: As of December 31, 2019 2018 (in thousands) Land $ 16,030 $ 17,799 Buildings and leasehold improvements 97,426 106,626 Vehicles and equipment 53,819 83,435 Vehicles and equipment - finance lease 1,291 1,833 Machinery and equipment 729,162 758,528 Machinery and equipment - finance lease 162 532 Computer equipment and software 8,051 15,775 Computer equipment and software - finance lease 356 356 Office furniture and equipment 1,157 4,612 Disposal wells 64,149 64,038 Other 497 497 Construction in progress 43,279 60,347 1,015,379 1,114,378 Less accumulated depreciation (1) (562,986) (611,530) Property and equipment held-for-sale, net 885 — Total property and equipment, net $ 453,278 $ 502,848 (1) Includes $1.6 million and $1.3 million of accumulated depreciation related to finance leases as of December 31, 2019 and December 31, 2018, respectively. Total depreciation and amortization expense related to property and equipment and finance leases presented in the table above, as well as amortization of intangible assets presented in Note 8—Goodwill and Other Intangible Assets as follows: Year ended December 31, 2019 2018 2017 Category Depreciation expense from property and equipment $ 107,738 $ 119,114 $ 92,402 Amortization expense from finance leases 916 1,314 168 Amortization expense from intangible assets 11,900 13,102 10,701 Accretion expense from asset retirement obligations 115 183 178 Total depreciation and amortization $ 120,669 $ 133,713 $ 103,449 Property and Equipment Held-for-Sale and Impairments Long-lived assets are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. During the first quarter of 2019, the Company made the decision to sell and wind down certain operations within its former Wellsite Services segment, including the operations of its Affirm subsidiary, its sand hauling operations and its Canadian operations. All operations have been wound down, with $0.9 million remaining in held-for-sale as of December 31, 2019. The table below shows the former Wellsite Services segment property and equipment sold and divested as follows: Net Book Value of Property and Type of sale event Business Equipment Sold or Divested (in thousands) Business divestitures Affirm subsidiary $ 11,275 Property and equipment sales Affirm subsidiary 1,339 Business divestitures Canadian operations 7,372 Property and equipment sales Canadian operations 393 Property and equipment sales Sand hauling operations 3,030 Total property and equipment sold and divested $ 23,409 During the year ended December 31, 2019, the Company recorded an impairment of $0.9 million of Canadian property and equipment to write down the carrying value based on the expected future sale proceeds. In addition, during the year ended December 31, 2019, the net loss on divestitures and sales of property and equipment held-for-sale was $3.9 million. During the year ended December 31, 2018, the Company reviewed certain fluid disposal machinery and equipment used in our fluid hauling and disposal services that are included in our Water Infrastructure segment. Due to the condition of the equipment, the Company determined that long-lived assets with a carrying value of $2.3 million were no longer recoverable and were written down to their estimated fair value of zero. Additionally, the Company determined that $4.4 million of Canadian fixed assets were impaired due to an expectation of a loss on asset disposals. |
GOODWILL AND OTHER INTANGIBLE A
GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS. | |
GOODWILL AND OTHER INTANGIBLE ASSETS | NOTE 8—GOODWILL AND OTHER INTANGIBLE ASSETS Goodwill is evaluated for impairment on at least an annual basis, or more frequently if indicators of impairment exist. The annual impairment tests are based on Level 3 inputs (see Note 12—Fair Value Measurement). During 2019, the Affirm goodwill was reduced to zero from the crane divestiture and impairment. The $4.4 million of goodwill impairment was based on the expected proceeds from selling and winding down the rest of the Affirm business. Also, in connection with the Company’s segment realignment, the Company reallocated goodwill from The Company performed a goodwill impairment test during the first quarter of 2019 as the result of the change in segments and also performed its annual goodwill impairment test in the fourth quarter of 2019 by assessing the fair value of each reporting unit and comparing it to the reporting units carrying amount which resulted in no impairment. During the fourth quarter of 2018, the Company incurred $12.7 million of goodwill impairment on a reporting unit within the Oilfield Chemicals segment using income and market valuation techniques. This also resulted in $5.2 million of goodwill impairment in connection with the Affirm subsidiary as the estimated fair value was not adequate to fully cover its carrying value using a cost valuation technique. The changes in the carrying amounts of goodwill by reportable segment for the years ended December 31, 2019 and 2018 are as follows: Oilfield Water Wellsite Water Water Chemicals Solutions Services Services Infrastructure Other Total (in thousands) Balance as of December 31, 2017 $ 15,637 $ 245,542 $ 12,242 $ — $ — $ — $ 273,421 Additions — 982 — — — — 982 Impairment (12,652) — (5,242) — — — (17,894) Measurement period adjustments (2,985) 20,277 — — — — 17,292 Balance as of December 31, 2018 — 266,801 7,000 — — — 273,801 Resegmentation — (266,801) (7,000) 186,335 80,466 7,000 — Measurement period adjustment (1) — — — 133 — — 133 Affirm crane business divestiture — — — — — (2,604) (2,604) Affirm impairment — — — — — (4,396) (4,396) Balance as of December 31, 2019 $ — $ — $ — $ 186,468 $ 80,466 $ — $ 266,934 (1) See Note 3―Acquisitions for additional information. The components of other intangible assets as of December 31, 2019 and 2018 are as follows: As of December 31, 2019 As of December 31, 2018 Gross Accumulated Net Gross Accumulated Net Value Amortization Value Value Amortization Value (in thousands) (in thousands) Definite-lived Customer relationships $ 116,554 $ 20,233 $ 96,321 $ 171,245 $ 66,402 $ 104,843 Patents 10,110 2,420 7,690 10,110 1,417 8,693 Other 7,234 4,766 2,468 7,234 2,866 4,368 Total definite-lived 133,898 27,419 106,479 188,589 70,685 117,904 Indefinite-lived Water rights 7,031 — 7,031 7,031 — 7,031 Trademarks 23,442 — 23,442 23,442 — 23,442 Total indefinite-lived 30,473 — 30,473 30,473 — 30,473 Total other intangible assets, net $ 164,371 $ 27,419 $ 136,952 $ 219,062 $ 70,685 $ 148,377 During the year ended December 31, 2019, the Company added $0.5 million of customer relationships. During the year ended December 31, 2018, the Company added $3.0 million in customer relationships and $1.8 million of water rights. The weighted average amortization period for customer relationships, patents and other definite-lived intangible assets as of December 31, 2019 was 10.7 years, 7.7 years and 2.2 years, respectively. The indefinite lived water trademarks five Year Ending December 31, Amount (in thousands) 2020 $ 11,656 2021 10,473 2022 10,259 2023 10,187 2024 10,118 Thereafter 53,786 $ 106,479 |
DEBT
DEBT | 12 Months Ended |
Dec. 31, 2019 | |
DEBT | |
DEBT | NOTE 9—DEBT Credit facility and revolving line of credit The Company’s subsidiary, Select Energy Services, LLC’s (“Select LLC”) previous credit facility (the “Previous Credit Facility”), had a maturity date of February 28, 2020 and a revolving line of credit of $100.0 million. On November 1, 2017, in connection with the closing of the Rockwater Merger (the “Closing”), SES Holdings entered into the Credit Agreement, the obligations of SES Holdings and Select LLC under the Previous Credit Facility were repaid in full and the Previous Credit Facility was terminated. On November 1, 2017, SES Holdings and Select LLC entered into a $300.0 million senior secured revolving credit facility (the “Credit Agreement”), by and among SES Holdings, as parent, Select LLC, as Borrower and certain of SES Holdings’ subsidiaries, as guarantors, each of the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent, issuing lender and swingline lender (the “Administrative Agent”). The Credit Agreement also has a sublimit of $40.0 million for letters of credit and a sublimit of $30.0 million for swingline loans. Subject to obtaining commitments from existing or new lenders, the Company has the option to increase the maximum amount under the Credit Agreement by $150.0 million during the first three years following the closing. The maturity date of the Credit Agreement is the earlier of (a) November 1, 2022, and (b) the earlier termination in whole of the Commitments pursuant to Section 2.1(b) of Article VII of the Credit Agreement. The Credit Agreement permits extensions of credit up to the lesser of $300.0 million and a borrowing base that is determined by calculating the amount equal to the sum of (i) 85% of the Eligible Billed Receivables (as defined in the Credit Agreement), plus (ii) 75% of Eligible Unbilled Receivables (as defined in the Credit Agreement), provided that this amount will not equal more than 35% of the borrowing base, plus (iii) the lesser of (A) the product of 70% multiplied by the value of Eligible Inventory (as defined in the Credit Agreement) at such time and (B) the product of 85% multiplied by the Net Recovery Percentage (as defined in the Credit Agreement) identified in the most recent Acceptable Appraisal of Inventory (as defined in the Credit Agreement), multiplied by the value of Eligible Inventory at such time, provided that this amount will not equal more than 30% of the borrowing base, minus (iv) the aggregate amount of Reserves (as defined in the Credit Agreement), if any, established by the Administrative Agent from time to time, including, if any, the amount of the Dilution Reserve (as defined in the Credit Agreement). The borrowing base is calculated on a monthly basis pursuant to a borrowing base certificate delivered by Select LLC to the Administrative Agent. Borrowings under the Credit Agreement bear interest, at Select LLC’s election, at either the (a) one-, two-, three- or six-month LIBOR (“Eurocurrency Rate”) or (b) the greatest of (i) the federal funds rate plus 0.5%, (ii) the one-month Eurocurrency Rate plus 1% and (iii) the Administrative Agent’s prime rate (the ”Base Rate”), in each case plus an applicable margin. Interest is payable monthly in arrears. The applicable margin for Eurocurrency Rate loans ranges from 1.50% to 2.00% and the applicable margin for Base Rate loans ranges from 0.50% to 1.00%, in each case, depending on Select LLC’s average excess availability under the Credit Agreement. During the continuance of a bankruptcy event of default, automatically and during the continuance of any other default, upon the Administrative Agent’s or the required lenders’ election, all outstanding amounts under the Credit Agreement will bear interest at 2.00% plus the otherwise applicable interest rate. Level Average Excess Availability Base Rate Margin Eurocurrency Rate Margin I < 33% of the commitments 1.00% 2.00% II < 66.67% of the commitments and ≥ 33.33% of the commitments 0.75% 1.75% III ≥ 66.67% of the commitments 0.50% 1.50% Level Average Revolver Usage Unused Line Fee Percentage I ≥ 50% of the commitments 0.250% II < 50% of the commitments 0.375% The obligations under the Credit Agreement are guaranteed by SES Holdings and certain subsidiaries of SES Holdings and Select LLC and secured by a security interest in substantially all of the personal property assets of SES Holdings, Select LLC and their domestic subsidiaries. The Credit Agreement contains certain customary representations and warranties, affirmative and negative covenants and events of default. If an event of default occurs and is continuing, the lenders may declare all amounts outstanding under the Credit Agreement to be immediately due and payable. In addition, the Credit Agreement restricts SES Holdings’ and Select LLC’s ability to make distributions on, or redeem or repurchase, its equity interests, except for certain distributions, including distributions of cash so long as, both at the time of the distribution and after giving effect to the distribution, no default exists under the Credit Agreement and either (a) excess availability at all times during the preceding 30 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 25% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $37.5 million or (b) if SES Holdings’ fixed charge coverage ratio is at least 1.0 to 1.0 on a pro forma basis, and excess availability at all times during the preceding 30 consecutive days, on a pro forma basis and after giving effect to such distribution, is not less than the greater of (1) 20% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (2) $30.0 million. Additionally, the Credit Agreement generally permits Select LLC to make distributions to allow Select Inc. to make payments required under the existing Tax Receivable Agreements. See Note 13-Related Party Transactions for further discussion of the Tax Receivable Agreements. The Credit Agreement also requires SES Holdings to maintain a fixed charge coverage ratio of at least 1.0 to 1.0 at any time availability under the Credit Agreement is less than the greater of (i) 10% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (ii) $15.0 million and continuing through and including the first day after such time that availability under the Credit Agreement has equaled or exceeded the greater of (i) 10% of the lesser of (A) the maximum revolver amount and (B) the then-effective borrowing base and (ii) $15.0 million for 60 consecutive calendar days. Certain lenders party to the Credit Agreement and their respective affiliates have from time to time performed, and may in the future perform, various financial advisory, commercial banking and investment banking services for the Company and its affiliates in the ordinary course of business for which they have received and would receive customary compensation. In addition, in the ordinary course of their various business activities, such parties and their respective affiliates may make or hold a broad array of investments and actively trade debt and equity securities (or related derivative securities) and financial instruments (including bank loans) for their own account and for the accounts of their customers, and such investments and securities activities may involve the Company’s securities and/or instruments. The Company had no borrowings and $45.0 million outstanding under the Credit Agreement as of December 31, 2019 and 2018, respectively. The weighted average interest rate of outstanding borrowings under the Credit Agreement was 4.256% as of December 31, 2018. As of December 31, 2019 and 2018, the borrowing base under the Credit Agreement was Debt issuance costs are amortized to interest expense over the life of the debt to which they pertain. Total unamortized debt issuance costs as of December 31, 2019 and 2018 were $2.0 million and $2.6 million, respectively. As the debt issuance costs relate to a revolving line of credit, they are presented as a deferred charge within other assets on the consolidated balance sheet. Amortization expense related to debt issuance costs were $0.7 million, $0.7 million and $4.0 million for the years ended December 31, 2019, 2018 and 2017, respectively. The Company was in compliance with all debt covenants as of and throughout the year ended December 31, 2019. |
COMMITMENTS AND CONTINGENCIES
COMMITMENTS AND CONTINGENCIES | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
COMMITMENTS AND CONTINGENCIES | NOTE 10—COMMITMENTS AND CONTINGENCIES Litigation The Company is subject to a number of lawsuits and claims arising out of the normal conduct of its business. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. Based on a consideration of all relevant facts and circumstances, including applicable insurance coverage, it is not expected that the ultimate outcome of any currently pending lawsuits or claims against the Company will have a material adverse effect on its consolidated financial position, results of operations or cash flows; however, there can be no assurance as to the ultimate outcome of these matters. As previously disclosed, certain subsidiaries acquired in the Rockwater Merger are under investigation by the U.S. Attorney's Office for the Middle District of Pennsylvania and the U.S. Environmental Protection Agency. It is alleged that certain employees at some of the facilities altered emissions controls systems on 4% of the vehicles in the fleet in violation of the Clean Air Act. The Company is continuing to cooperate with the relevant authorities to resolve the matter including locating any pertinent information to determine if such violations occurred and what, if any, the applicable fine would be related to any such potential violations. At this time no administrative, civil or criminal charges have been brought against the Company. Additionally, while the Company cannot currently reasonably estimate an amount of possible fines or penalties, we do not believe that such amounts will be material to the Company’s financial statements. Self-Insured Reserves We are self-insured up to certain retention limits with respect to workers’ compensation, general liability and vehicle liability matters. We maintain accruals for self-insurance retentions that we estimate using third-party data and claims history. |
EQUITY-BASED COMPENSATION
EQUITY-BASED COMPENSATION | 12 Months Ended |
Dec. 31, 2019 | |
EQUITY-BASED COMPENSATION | |
EQUITY-BASED COMPENSATION | NOTE 11—EQUITY-BASED COMPENSATION The SES Holdings 2011 Equity Incentive Plan, (“2011 Plan”) was approved by the board of managers of SES Holdings in April 2011. In conjunction with the Select 144A Offering, the Company adopted the Select Energy Services, Inc. 2016 Equity Incentive Plan (as amended, the “2016 Plan”) for employees, consultants and directors of the Company and its affiliates. Options that were outstanding under the 2011 Plan immediately prior to the Select 144A Offering were cancelled in exchange for new options granted under the 2016 Plan. On July 18, 2017, the Select Inc. board of directors approved the First Amendment to the 2016 Plan (the “Equity Plan Amendment”), which clarified the treatment of substitute awards under the 2016 Plan (including substitute awards that may be granted in connection with the Rockwater Merger which occurred on November 1, 2017) and allowed for the assumption by the Company of shares eligible under any pre-existing stockholder-approved plan of an entity acquired by the Company or its affiliate (including the Rockwater Energy Solutions Inc. Amended and Restated 2017 Long Term Incentive Plan (the “Rockwater Equity Plan”)), in each case subject to the listing rules of the stock exchange on which the Company’s Class A Common Stock is listed. The effectiveness of the Equity Plan Amendment was subject to approval by the Company's stockholders and the consummation of the transactions contemplated by the Merger Agreement for the Rockwater Merger. The Company’s consenting stockholders, who held a majority of the outstanding common stock of the Company, approved the Equity Plan Amendment on July 18, 2017. The Equity Plan Amendment became effective on November 1, 2017 upon the consummation of the Rockwater Merger. Currently, the maximum number of shares reserved for issuance under the 2016 Plan, taking into account the impact of the Rockwater Merger, is approximately 9.3 million shares. For all share-based compensation award types, the Company accounts for forfeitures as they occur. Stock option awards Stock options were granted with an exercise price equal to or greater than the fair market value of a share of Class A Common Stock as of the date of grant. Prior to the IPO, the Company historically valued Class A Common Stock on a quarterly basis using a market approach that includes a comparison to publicly traded peer companies using earnings multiples based on their market values and a discount for lack of marketability. This fair value measurement relied on Level 3 inputs. The estimated fair value of its stock options is expensed over their vesting period, which is generally three years from the applicable date of grant. However, certain awards granted during the years ended December 31, 2017 and 2016 in exchange for cancelled awards were immediately vested and fully exercisable on the date of grant because they were either granted in exchange for the cancellation of outstanding options granted under the 2011 Plan or the Rockwater Equity Plan, as applicable, that were fully vested and exercisable prior to such cancellation. The Company utilized the Monte Carlo option pricing model to determine fair value of the options granted during 2018, which incorporates assumptions to value equity-based awards. The risk-free interest rate is based on the U.S. Treasury yield curve in effect for the expected term of the option at the time of grant. The expected life of the options was based on the vesting period and term of the options awarded, which is ten years. The table below presents the assumptions used in determining the fair value of stock options granted during the years ended December 31, 2018 and 2017, respectively. No options were granted during the year ended December 31, 2019. The weighted-average grant date fair value of stock options granted was $8.98 and $7.85 for the years ended December 31, 2018 and 2017, respectively. For the year ended December 31, 2018 2017 Underlying equity $ 20.50 $ 20.00 Strike price $ 20.50 - 30.75 $ 20.00 Dividend yield (%) 0.0 % 0.0 % Risk-free rate (%) 2.3 % 2.0 - 2.7 % Volatility (%) 50.0 % 46.6 - 46.8 % Expected term (years) 10.0 4.0 6.0 A summary of the Company’s stock option activity and related information as of and for the year ended December 31, 2019 is as follows: For the year ended December 31, 2019 Weighted-average Weighted-average Weighted-average Grant Date Value Aggregate Intrinsic Stock Options Grant Date Value Exercise Price Term (Years) Value (in thousands) (a) Beginning balance, outstanding 3,865,678 $ 7.95 $ 16.00 4.9 $ 19 Exercised (5,282) 3.12 5.68 Forfeited (30,438) 8.33 17.70 Expired (32,639) 7.45 21.85 Ending balance, outstanding 3,797,319 $ 8.19 $ 15.95 4.2 $ 509 Ending balance, exercisable 3,463,549 $ 8.12 $ 15.06 3.9 $ 510 Nonvested at end of period 333,770 N/A $ 25.22 (a) as of December 31, 2019 and 2018, respectively. The Company recognized $4.3 million, $5.2 million and $1.9 million of compensation expense related to stock options during the years ended December 31, 2019, 2018 and 2017, respectively. As of December 31, 2019, there was $0.2 million of unrecognized equity-based compensation expense related to non-vested stock options. This cost is expected to be recognized over a weighted-average period of 1.0 year. Restricted Stock Awards and Restricted Stock Units The value of the restricted stock awards and restricted stock units issued was established by the market price of the Class A Common Stock on the date of grant and is recorded as compensation expense ratably over the vesting term, which is generally one A summary of the Company’s restricted stock awards activity and related information for the year ended December 31, 2019 is as follows: For the year ended December 31, 2019 Weighted-average Restricted Stock Awards Grant Date Fair Value Nonvested at December 31, 2018 496,945 $ 19.02 Granted 1,417,458 8.80 Vested (379,150) 16.69 Forfeited (17,060) 15.97 Nonvested at December 31, 2019 1,518,193 $ 10.08 A summary of the Company’s restricted stock unit activity and related information for the year ended December 31, 2019 is as follows: For the year ended December 31, 2019 Weighted-average Restricted Stock Units Grant Date Fair Value Nonvested at December 31, 2018 2,500 $ 19.00 Vested (1,250) 19.00 Nonvested at December 31, 2019 1,250 $ 19.00 Performance Share Units During 2018 and 2019, the Company approved grants of performance share units (“PSUs”) that are subject to both performance-based and service-based vesting provisions. The number of shares of Class A Common Stock issued to a recipient upon vesting of the PSU will be calculated based on performance against certain metrics that relate to the Company’s return on asset performance over the January 1, 2018 through December 31, 2020 and January 1, 2019 through December 31, 2021 performance periods, respectively. The target number of shares of Class A Common Stock subject to each PSU is Return on Assets at Performance Period End Date Percentage of Target PSUs Earned Less than 9.6% 0% 9.6% 50% 12% 100% 14.4% 175% The fair value on the date the PSUs were issued during 2019 and 2018 was $7.0 million and $5.9 million, respectively. Compensation expense related to the PSUs is determined by multiplying the number of shares of Class A Common Stock underlying such awards that, based on the Company’s estimate, are probable to vest, by the measurement-date (i.e., the last day of each reporting period date) fair value and recognized using the accelerated attribution method. The Company recognized compensation expense of $2.1 million and $0.5 million related to the PSUs for the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, the unrecognized compensation cost related to our unvested PSUs is estimated to be $4.2 million and is expected to be recognized over a weighted-average period of 1.4 years as of December 31, 2019. However, this compensation cost will be adjusted as appropriate throughout the applicable performance periods. The following table summarizes the information about the performance share units outstanding at December 31, 2019: Performance Share Units Nonvested as of December 31, 2018 255,364 Target shares granted 778,118 Target shares vested — Target shares forfeited (18,492) Target shares outstanding as of December 31, 2019 1,014,990 Stock-Settled Incentive Awards Effective May 17, 2018, the Company approved grants of stock-settled incentive awards to certain key employees under the 2016 Equity Incentive Plan that are subject to both market-based and service-based vesting provisions. These awards will vest after a two-year service period and, if earned, settled in shares of the Company stock. The ultimate amount earned is based on the achievement of the market metrics, which is based on the stock price of the Company at the vesting date, for which payout could range from 0% to 200%. Any award not earned on the vesting date is forfeited. The target amount that becomes earned during the performance period will be determined in accordance with the following table: Stock Price at Vesting Date (1) Percentage of Target Amount Earned Less than $20.00 0% At least $20.00, but less than $25.00 100% $25.00 or greater 200% (1) The stock price at vesting date equals the greater of (i) the fair market value of a share of the Class A Common Stock on the vesting date, or (ii) the volume weighted average closing price of a share of the Class A Common Stock, as reported on the NYSE, for the 30 trading days preceding the vesting date. The target amount of stock-settled incentive awards granted was $3.9 million. However, the ultimate settlement of the awards will be in shares of Class A Common stock with fair market value equal to the earned amount, which could range from 0% to 200% of the target amount depending on the stock price at vesting date. The Company recognized $0.5 million and $0.4 million of compensation expense related to the stock-settled incentive awards during the years ended December 31, 2019 and 2018, respectively. As of December 31, 2019, the unrecognized compensation cost related to our unvested stock-settled incentive awards was $0.2 million and is expected to be recognized over approximately five months. The following table summarizes the information about the stock-settled incentive awards outstanding at December 31, 2019: Award Value Value at Target Being Recognized Nonvested as of December 31, 2018 $ 3,147 $ 1,202 Forfeited during 2019 (210) (80) Nonvested as of December 31, 2019 $ 2,937 $ 1,122 Employee Stock Purchase Plan (ESPP) The Company has an Employee Stock Purchase Plan (“ESPP”) under which employees that have been continuously employed for at least one year may purchase shares of our common stock at a discount. The plan provides for four The following table summarizes ESPP activity (in thousands, except shares): For the year ended December 31, 2019 Cash received for shares issued $ 112 Shares issued 13,178 Phantom unit awards The Company’s phantom unit awards were cash-settled awards that were contingent upon meeting certain equity returns and a liquidation event. The settlement amount was based on the fair market value of a share of the Company’s Class A common stock on the date of completion of the IPO, which constituted a liquidation event with respect to such phantom unit awards. As a result of the cash-settlement feature of these awards, the Company considered these awards to be liability awards, which were measured at fair value at each reporting date and the pro rata vested portion of the award was recognized as a liability to the extent that the performance condition was deemed probable. On May 5, 2017, the Company settled its outstanding phantom unit awards for an aggregate amount equal to $7.8 million as a result of the completion of its IPO, which constituted a liquidity event with respect to such phantom unit awards. Based on the fair market value of a share of the Company’s Class A common stock on the date of the IPO of $14.00, the cash payment with respect to each phantom unit was approximately $5.53, before employer taxes. The Company recognized compensation expense of $7.8 million for the year ended 2017 related to the settlement of its phantom unit awards. No compensation expense was recognized in 2016 due to the non-occurrence of the performance condition, which was not considered probable. Share-repurchases During the years ended December 31, 2019 and 2018, the Company repurchased 2,180,806 and 1,703,651 shares, respectively, of Class A Common Stock in the open market and repurchased 108,074 and 62,777 shares, respectively, of Class A Common Stock in connection with employee minimum tax withholding requirements for units vested under the 2016 Plan. All repurchased shares were retired. During the year ended December 31, 2019, the repurchases were accounted for as a decrease to paid in-capital of $21.9 million and a decrease to Class A common stock of approximately $23,000. |
FAIR VALUE MEASUREMENT
FAIR VALUE MEASUREMENT | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
FAIR VALUE MEASUREMENT | NOTE 12—FAIR VALUE MEASUREMENT The Company utilizes fair value measurements to measure assets and liabilities in a business combination or assess impairment of property and equipment, intangible assets and goodwill. Fair value is defined as the amount at which an asset (or liability) could be bought (or incurred) or sold (or settled) in an orderly transaction between market participants at the measurement date. Further, ASC 820, Fair Value Measurements, establishes a framework for measuring fair value, establishes a fair value hierarchy based on the quality of inputs used to measure fair value, and includes certain disclosure requirements. Fair value estimates are based on either (i) actual market data or (ii) assumptions that other market participants would use in pricing an asset or liability, including estimates of risk. ASC 820 establishes a three-level valuation hierarchy for disclosure of fair value measurements. The valuation hierarchy categorizes assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. The three levels are defined as follows: Level 1 Level 2 Level 3 A financial instrument’s categorization within the valuation hierarchy is based upon the lowest level of input that is significant to the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value measurement in its entirety requires judgment and considers factors specific to the asset or liability. There were no transfers into, or out Assets and liabilities measured at fair value on a non-recurring basis Nonfinancial assets and liabilities measured at fair value on a non-recurring basis include certain nonfinancial assets and liabilities as may be acquired in a business combination and measurements of goodwill and intangible impairment. As there is no corroborating market activity to support the assumptions used, the Company has designated these measurements as Level 3. Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. The development of future cash flows and the estimate of fair value represent the Company’s best estimates based on industry trends and reference to market transactions and are subject to variability. The Company’s estimates of fair value have been determined at discrete points in time based on relevant information. These estimates involve uncertainty and cannot be determined with precision. There were no significant changes in valuation techniques or related inputs for the years ended December 31, 2019, 2018 and 2017. The following table presents information about the Company’s assets measured at fair value on a non-recurring basis for the years ended December 31, 2019, 2018 and 2017. Fair Value Measurements Using Carrying Level 1 Level 2 Level 3 Value (1) Impairment (in thousands) Year Ended December 31, 2019 Goodwill $ — $ — $ — $ 4,396 $ 4,396 Property and equipment — — 7,325 11,040 3,715 Year Ended December 31, 2018 Goodwill $ — $ — $ 7,000 $ 24,894 $ 17,894 Cost-Method Investment — — 500 2,500 2,000 Fixed Assets — — 10,262 16,919 6,657 Year Ended December 31, 2017 $ — $ — $ — $ — $ — (1) Amount represents carrying value at the date of assessment. Other fair value considerations See Note 2—Significant Accounting Policies for a discussion of impairment reflected above incurred during the year ended December 31, 2019 and December 31, 2018, respectively. Also, see Note 3—Acquisitions and Divestitures for a discussion of the fair value incorporated into the purchase price allocation for the WCS and Pro Well acquisitions occurring during the years ended December 31, 2019 and December 31, 2018, respectively. The carrying values of the Company’s current financial instruments, which include cash and cash equivalents, accounts receivable trade and accounts payable, approximate their fair value at December 31, 2019 and 2018 due to the short- term maturity of these instruments. The Company did not have any bank debt as of December 31, 2019, however, the carrying value of debt as of December 31, 2018 approximated the fair value. The fair value of debt at December 31, 2018, which was a Level 3 measurement, was estimated based on the Company’s incremental borrowing rates for similar types of borrowing arrangements when quoted market prices are not available. The estimated fair values of the Company’s financial instruments are not necessarily indicative of the amounts that would be realized in a current market exchange. |
RELATED PARTY TRANSACTIONS
RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2019 | |
RELATED PARTY TRANSACTIONS | |
RELATED PARTY TRANSACTIONS | NOTE 13—RELATED PARTY TRANSACTIONS The Company considers its related parties to be those stockholders who are beneficial owners of more than 5.0% of its common stock, executive officers, members of its board of directors or immediate family members of any of the foregoing persons and an unconsolidated joint venture. The Company has entered into a number of transactions with related parties. In accordance with the Company’s related persons transactions policy, the audit committee of the Company’s board of directors regularly reviews these transactions. However, the Company’s results of operations may have been different if these transactions were conducted with non-related parties. During the year ended December 31, 2019, sales to related parties were $16.8 million and purchases from related party vendors were $18.8 million. These purchases consisted of $3.0 million relating to purchases of property and equipment, $0.2 million relating to inventory and consumables, $14.3 million relating to the rental of certain equipment or other services used in operations and $1.3 million relating to management, consulting and other services. During the year ended December 31, 2018, sales to related parties were $8.3 million and purchases from related party vendors were $16.7 million. These purchases consisted of $4.7 million relating to purchases of property and equipment, $0.3 million relating to inventory and consumables, $10.3 million relating to the rental of certain equipment or other services used in operations and $1.4 million relating to management, consulting and other services. During the year ended December 31, 2017, sales to related parties were $9.0 million and purchases from related party vendors were $10.4 million. These purchases consisted of $3.8 million relating to purchases of property and equipment, $0.3 million relating to inventory and consumables, $2.7 million relating to the rental of certain equipment or other services used in operations and $3.6 million relating to management, consulting and other services. Tax Receivable Agreements In connection with the Select 144A Offering, the Company entered into the Tax Receivable Agreements with the TRA Holders. The first of the Tax Receivable Agreements, which the Company entered into with Legacy Owner Holdco and Crestview Partners II GP, L.P. (“Crestview GP”), generally provides for the payment by the Company to such TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the Select 144A Offering as a result of, as applicable to each such TRA Holder, (i) certain increases in tax basis that occur as a result of the Company’s acquisition (or deemed acquisition for U.S. federal income tax purposes) of all or a portion of such TRA Holder’s SES Holdings LLC Units in connection with the Select 144A Offering or pursuant to the exercise of the Exchange Right or the Company’s Call Right and (ii) imputed interest deemed to be paid by the Company as a result of, and additional tax basis arising from, any payments the Company makes under such Tax Receivable Agreement. The second of the Tax Receivable Agreements, which the Company entered into with an affiliate of the Contributing Legacy Owners and Crestview GP, generally provides for the payment by the Company to such TRA Holders of 85% of the net cash savings, if any, in U.S. federal, state and local income and franchise tax that the Company actually realizes (computed using simplifying assumptions to address the impact of state and local taxes) or is deemed to realize in certain circumstances in periods after the Select 144A Offering as a result of, as applicable to each such TRA Holder, (i) any net operating losses available to the Company as a result of certain reorganization transactions entered into in connection with the Select 144A Offering and (ii) imputed interest deemed to be paid by the Company as a result of any payments the Company makes under such Tax Receivable Agreement. On July 18, 2017, the Company’s board of directors approved amendments to each of the Tax Receivable Agreements revising the definition of a “change of control” for purposes of the Tax Receivable Agreements and acknowledging that the Rockwater Merger would not result in such a change of control. The Company has not recognized a liability associated with the Tax Receivable Agreements as of December 31, 2019 or 2018. |
INCOME TAXES
INCOME TAXES | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
INCOME TAXES | NOTE 14—INCOME TAXES Select Inc. is subject to U.S. federal and state income taxes as a corporation. SES Holdings and its subsidiaries, with the exception of certain corporate subsidiaries, are treated as flow-through entities for U.S. federal income tax purposes and as such, are generally not subject to U.S. federal income tax at the entity level. Rather, the tax liability with respect to their taxable income is passed through to their members or partners. Select Inc. recognizes a tax liability on its allocable share of SES Holdings’ taxable income. The Company’s effective tax rates for the years ended December 31, 2019, 2018 and 2017 were 32.0%, 3.0% and 2.4% respectively. The effective tax rates for the years ended December 31, 2019, 2018 and 2017 differ from the statutory rate of 21% for 2019 and 2018, and 35% for 2017, due to net income allocated to noncontrolling interests, state income taxes and valuation allowances. In addition, the effective tax rate for the year ended December 31, 2019 differs from the statutory tax rate due to the formation of a new subsidiary during the year. The components of the federal and state income tax expense (benefit) are summarized as follows: For the year ended December 31, 2019 2018 2017 (in thousands) Current tax expense (benefit) Federal income tax expense (benefit) $ 696 $ 1,073 $ (338) State and local income tax expense (benefit) 1,034 1,077 (77) Total current expense (benefit) 1,730 2,150 (415) Deferred tax expense (benefit) Federal income tax expense (benefit) 49 (20) (422) State and local income tax expense (benefit) 170 (426) (14) Total deferred expense (benefit) 219 (446) (436) Total income tax expense (benefit) $ 1,949 $ 1,704 $ (851) Tax expense (benefit) attributable to controlling interests $ 1,488 $ 1,425 $ (405) Tax expense (benefit) attributable to noncontrolling interests 461 279 (446) Total income tax expense (benefit) $ 1,949 $ 1,704 $ (851) A reconciliation of the Company’s provision for income taxes as reported and the amount computed by multiplying income before taxes, less noncontrolling interest, by the U.S. federal statutory rate of 21% for 2019 and 2018, and 35% for 2017: For the year ended December 31, 2019 2018 2017 (in thousands) Provision calculated at federal statutory income tax rate: Income (loss) before taxes $ 6,085 $ 56,003 $ (35,978) Statutory rate 21 % 21 % 35 % Income tax expense (benefit) computed at statutory rate 1,278 11,761 (12,592) Less: noncontrolling interests (284) (3,735) 6,409 Income tax expense (benefit) attributable to controlling interests 994 8,026 (6,183) State and local income taxes, net of federal benefit 884 515 (91) Change in enacted tax rate — — 39,166 Change in subsidiary tax status 587 — — Other 580 — Deferred adjustment due to restructuring 856 — — Change in valuation allowance (1,833) (7,696) (33,297) Income tax expense (benefit) attributable to controlling interests 1,488 1,425 (405) Income tax expense (benefit) attributable to noncontrolling interests 461 279 (446) Total income tax expense (benefit) $ 1,949 $ 1,704 $ (851) Deferred taxes result from the temporary differences between financial reporting carrying amounts and the tax basis of existing assets and liabilities. As of December 31, 2019, and 2018, the Company had net deferred tax liabilities of $0.3 million and $0.1 million, respectively, which are recorded in other long-term liabilities on the consolidated balance sheets. The principal components of the deferred tax assets (liabilities) are summarized as follows: For the year ended December 31, 2019 2018 (in thousands) Deferred tax assets Outside basis difference in SES Holdings $ 27,935 $ 38,739 Net operating losses 46,782 45,927 Credits and other carryforwards 1,451 1,679 Property and equipment — 150 Intangible assets — 1,284 Other 944 468 Total deferred tax assets before valuation allowance 77,112 88,247 Valuation allowance (76,883) (88,247) Total deferred tax assets 229 — Deferred tax liabilities Property and equipment 540 — Other 32 123 Total deferred tax liabilities 572 123 Net deferred tax liabilities $ (343) $ (123) For the year ended December 31, 2019, the Company recorded a decrease in valuation allowance of $11.4 million against certain deferred tax assets. The Company has assessed the future potential to realize these deferred tax assets and has concluded it is more likely than not that these deferred tax assets will not be realized based on current economic conditions and expectations of the future. As a result, the Company has not recorded a liability for the effect of any associated Tax Receivable Agreement liabilities as the liability is based on the actual cash tax savings expected to be realized by the Company, which are not considered probable as of December 31, 2019. See Note 13—Related Party Transactions for further discussion of the Tax Receivable Agreements. The U.S. federal income tax legislation enacted in Public Law No. 115-97, commonly referred to as the Tax Cuts and Jobs Act, reduced the corporate income tax rate effective January 1, 2018 from 35% to 21%. As of December 31, 2018, the Company completed our accounting for the tax effects of the Tax Cuts and Jobs Act (TCJA). During the year ended December 31, 2017, the Company recognized the reasonably estimated (i) effects on our existing deferred tax balances and (ii) one-time transition tax. During the year ended December 31, 2018, the Company finalized the accounting for of the Tax Act and incurred $0.6 million in incremental income tax expense from transitioning to the TCJA. As of December 31, 2019, the Company and certain corporate subsidiaries of SES Holdings had approximately $190.4 million of U.S. federal net operating loss carryforwards (“NOLs”), of which $133.8 million will begin to expire in 2031 and $56.6 million have no expiration, approximately $102.0 million of state NOLs which will begin to expire in 2023, and approximately $5.5 million of foreign NOLs, which will begin to expire in 2037. Accounting for uncertainty in income taxes prescribes a recognition threshold and measurement methodology for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. As of December 31, 2019 and 2018 there was no material liability or expense for the periods then ended recorded for payments of interest and penalties associated with uncertain tax positions or material unrecognized tax positions and the Company’s unrecognized tax benefits were not material. Separate federal and state income tax returns are filed for Select Inc., SES Holdings and certain consolidated affiliates. The tax years 2015 through 2018 remain open to examination by the major taxing jurisdictions to which the Company is subject to income tax. The Louisiana Department of Revenue notified Select Inc. and Select Western, a corporate subsidiary of SES Holdings, that it intended to audit corporate income and franchise tax for the years ended 2016 through 2018. The audit is scheduled to begin in April, 2020. |
NONCONTROLLING INTERESTS
NONCONTROLLING INTERESTS | 12 Months Ended |
Dec. 31, 2019 | |
NONCONTROLLING INTERESTS | |
NONCONTROLLING INTERESTS | NOTE 15—NONCONTROLLING INTERESTS The Company’s noncontrolling interests fall into two categories as follows: ● Noncontrolling interests attributable to joint ventures formed for water-related services. ● Noncontrolling interests attributable to holders of Class B shares. As of December 31 2019 2018 (in thousands) Noncontrolling interests attributable to joint ventures formed for water-related services $ 2,674 $ 3,273 Noncontrolling interests attributable to holders of Class B Common Stock 172,961 274,566 Total noncontrolling interests $ 175,635 $ 277,839 During 2019, the Company dissolved one joint venture formed for water-related services with immaterial noncontrolling interests. For all periods presented, there were no other changes to Select’s ownership interest in joint ventures formed for water-related services. However, during the years ended December 31, 2019, 2018 and 2017, there were changes in Select’s ownership interest in SES Holdings LLC. The effects of the changes in Select’s ownership interest in SES Holdings LLC is as follows: For the year ended December 31, 2019 2018 2017 (in thousands) Net income (loss) attributable to Select Energy Services, Inc. $ 2,784 $ 36,512 $ (16,816) Transfers (to) from noncontrolling interests: Decrease in additional paid-in capital as a result of the contribution of proceeds from the IPO to SES Holdings, LLC in exchange for common units — — (41,135) Decrease in additional paid-in capital as a result of the contribution of net assets acquired to SES Holdings, LLC in exchange for common units — — (4,879) Decrease in additional paid-in capital as a result of the contribution of net assets from the Rockwater Merger to SES Holdings, LLC in exchange for common units — — (170,276) Increase in additional paid-in capital as a result of stock option exercises 54 374 — Increase in additional paid-in capital as a result of restricted stock issuance, net of forfeitures 3,614 1,942 — Increase in additional paid-in capital as a result of issuance of common stock due to vesting of restricted stock units 4 104 — (Decrease) increase in additional paid-in capital as a result of the repurchase of SES Holdings LLC Units (3,362) (576) 113 Increase in additional paid-in capital as a result of exchanges of SES Holdings LLC Units (an equivalent number of shares of Class B Common Stock) for shares of Class A Common Stock 107,062 146,865 — Increase in additional paid-in capital as a result of the Employee Stock Purchase Plan shares issued 42 15 — Change to equity from net income (loss) attributable to Select Energy Services, Inc. and transfers from noncontrolling interests $ 110,198 $ 185,236 $ (232,993) |
EARNINGS (LOSS) PER SHARE
EARNINGS (LOSS) PER SHARE | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS (LOSS) PER SHARE | |
EARNINGS (LOSS) PER SHARE | NOTE 16—EARNINGS (LOSS) PER SHARE Earnings per share are based on the amount of income allocated to the shareholders and the weighted-average number of shares outstanding during the period for each class of common stock. Outstanding options to purchase 2,961,439 and 2,706,159 shares are not included in the calculation of diluted weighted-average shares outstanding for the year ended December 31, 2019 and 2018 respectively, as the effect is antidilutive. The following tables present the Company’s calculation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 (dollars in thousands, except share and per share amounts): Year ended December 31, 2019 Select Energy Services, Inc. Class A Class A-2 Class B Numerator: Net income $ 4,136 Net income attributable to noncontrolling interests (1,352) Net income attributable to Select Energy Services, Inc. — basic 2,784 $ 2,784 $ — $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 7 7 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units 2 2 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 1 1 — — Net income attributable to Select Energy Services, Inc. — diluted $ 2,794 $ 2,794 $ — $ — Denominator: Weighted-average shares of common stock outstanding — basic 80,176,323 — 23,806,646 Dilutive effect of restricted stock 373,366 — — Dilutive effect of performance share units 80,979 — Dilutive effect of stock options 40,215 — — Dilutive effect of ESPP 446 — — Weighted-average shares of common stock outstanding — diluted 80,671,330 — 23,806,646 Earnings per share: Basic $ 0.03 $ — $ — Diluted $ 0.03 $ — $ — Year ended December 31, 2018 Select Energy Services, Inc. Class A Class A-1 Class A-2 Class B Numerator: Net income $ 54,299 Net income attributable to noncontrolling interests (17,787) Net income attributable to Select Energy Services, Inc. — basic 36,512 $ 35,720 $ $ 792 $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 13 13 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 30 30 — — Net loss attributable to Select Energy Services, Inc. — diluted $ 36,555 $ 35,763 $ — $ 792 $ — Denominator: Weighted-average shares of common stock outstanding — basic 72,403,318 1,604,575 31,986,438 Dilutive effect of restricted stock 71,718 — — — Dilutive effect of stock options 166,999 — — — Dilutive effect of ESPP 112 — — — Weighted-average shares of common stock outstanding — diluted 72,642,147 — 1,604,575 31,986,438 Earnings per share: Basic $ 0.49 $ — $ 0.49 $ — Diluted $ 0.49 $ — $ 0.49 $ — Year ended December 31, 2017 Select Energy Services, Inc. Class A Class A-1 Class A-2 Class B Numerator: Net loss $ (35,127) Net loss attributable to noncontrolling interests 18,311 Net loss attributable to Select Energy Services, Inc. — basic (16,816) $ (12,560) $ (3,691) $ (565) $ — Net loss attributable to Select Energy Services, Inc. — diluted $ (16,816) $ (12,560) $ (3,691) $ (565) $ — Denominator: Weighted-average shares of common stock outstanding — basic 24,612,853 7,233,973 1,106,605 38,768,156 Dilutive effect of restricted stock — — — — Dilutive effect of stock options — — — — Dilutive effect of ESPP — — — — Weighted-average shares of common stock outstanding — diluted 24,612,853 7,233,973 1,106,605 38,768,156 Loss per share: Basic $ (0.51) $ (0.51) $ (0.51) $ — Diluted $ (0.51) $ (0.51) $ (0.51) $ — |
SEGMENT INFORMATION
SEGMENT INFORMATION | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
SEGMENT INFORMATION | NOTE 17—SEGMENT INFORMATION Select Inc. is an oilfield services company that provides solutions to the onshore oil and natural gas industry in the U.S. The Company’s services are offered through three operating segments. Operating segments are defined as components of an enterprise for which separate financial information is evaluated regularly by the CODM in deciding how to allocate resources and assess performance. The Company’s CODM assesses performance and allocates resources on the basis of the three reportable segments. Corporate and other expenses that do not individually meet the criteria for segment reporting are reported separately as Corporate or Other. Each operating segment reflects a reportable segment led by separate managers that report directly to the Company’s CODM. In connection with the wind down of certain operations within the Company’s former Wellsite Services segment, the Company realigned its reporting segments in 2019. Accordingly, prior period segment information has been retrospectively revised to conform with current period presentation. The Company’s CODM assesses performance and allocates resources on the basis of the following three reportable segments: Water Services Water Infrastructure Oilfield Chemicals Financial information by segment for the years ended December 31, 2019, 2018 and 2017 is as follows: For the year ended December 31, 2019 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water services $ 773,946 $ 51,185 $ 80,664 $ 37,692 Water infrastructure 221,661 15,103 25,665 53,839 Oilfield chemicals 268,963 17,942 8,766 11,110 Other 33,365 (8,066) 1,714 64 Eliminations (6,346) — — — Income from operations 76,164 Corporate — (53,090) 3,860 — Interest expense, net — (2,688) — — Other income, net — (14,301) — — $ 1,291,589 $ 6,085 $ 120,669 $ 102,705 For the year ended December 31, 2018 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water services $ 897,160 $ 89,826 $ 82,875 $ 120,883 Water infrastructure 230,130 31,579 23,042 33,372 Oilfield chemicals 260,281 (7,107) 10,496 10,832 Other 144,499 (14,021) 14,124 7,045 Eliminations (3,140) — — — Income from operations 100,277 Corporate — (38,603) 3,176 — Interest expense, net — (5,311) — — Other income, net — (360) — — $ 1,528,930 $ 56,003 $ 133,713 $ 172,132 For the year ended December 31, 2017 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 420,757 $ 1,823 $ 70,839 $ 82,127 Water Infrastructure 163,386 11,723 22,481 15,264 Oilfield Chemicals 41,586 663 2,040 3,063 Other 69,382 (2,649) 6,286 7,823 Eliminations (2,620) — — — Loss from operations 11,560 Corporate — (41,559) 1,803 — Interest expense, net — (6,629) — — Other income, net — 650 — — $ 692,491 $ (35,978) $ 103,449 $ 108,277 Total assets by segment as of December 31, 2019 and 2018 is as follows: As of December 31, 2019 2018 (in thousands) Water services $ 831,123 $ 865,992 Water infrastructure 314,026 250,207 Oilfield chemicals 192,224 173,762 Other 10,247 70,644 $ 1,347,620 $ 1,360,605 Revenue by groups of similar products and services are as follows: For the year ended December 31, 2019 2018 2017 (in thousands) Water transfer $ 355,535 $ 443,650 $ 193,314 Oilfield chemicals 268,963 260,281 41,586 Flowback and well testing 208,572 223,828 90,107 Accommodations and rentals 150,793 153,013 63,107 Water sourcing 120,517 129,958 97,898 Pipeline logistics and disposal 101,145 100,172 65,488 Fluid hauling 63,156 79,568 75,273 Other 22,908 138,460 65,718 $ 1,291,589 $ 1,528,930 $ 692,491 In connection with the Rockwater Merger in November 2017, the Company expanded into Canada and during 2019, the Company divested and wound down Canadian operations. The Company attributed revenue to the U.S. and Canada based on the location where services were performed or the destination of the products or equipment sold or rented. Long-lived assets consisted of property and equipment and are attributed to the U.S. and Canada based on the physical location of the asset at the end of the period. The Company’s revenue attributed to the U.S. was $1,283.4 million or 99.4%, $1,480.4 million or 96.8% and $680.9 million or 98.3% of total revenue during the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s revenue attributed to Canada was $8.2 million or 0.6%, $48.6 million or 3.2% and $11.6 million or 1.7% of total revenue during the years ended December 31, 2019, 2018 and 2017, respectively. The Company’s net long-lived assets attributed to the U.S. was $452.4 million or 99.8%, $492.4 million or 97.9% and $451.7 million or 95.3% of total net long-lived assets as of December 31, 2019, December 31, 2018 and December 31, 2017, respectively. The Company’s net long-lived assets attributed to Canada was $0.9 million or 0.2%, $10.5 million or 2.1% and $22.4 million or 4.7% of total net long-lived assets as of December 31, 2019, December 31, 2018 and December 31, 2017, respectively. |
QUARTERLY RESULTS OF OPERATIONS
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | NOTE 18—QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) 2019 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 362,646 $ 323,887 $ 328,968 $ 276,088 Gross profit 45,997 39,939 40,994 21,810 Income (loss) from operations 6,633 11,179 12,475 (7,213) Net income (loss) 1,400 8,068 7,172 (12,504) Net income (loss) attributable to Select Energy Services, Inc. 1,135 6,200 5,379 (9,930) Net income (loss) per share attributable to common stockholders: Class A-Basic & Diluted $ 0.01 $ 0.08 $ 0.07 $ (0.12) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ — $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — 2018 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 376,395 $ 393,247 $ 396,970 $ 362,318 Gross profit 47,949 56,728 59,397 34,408 Income (loss) from operations 18,603 24,795 32,258 (13,982) Net income (loss) 16,132 25,023 31,267 (18,123) Net income (loss) attributable to Select Energy Services, Inc. 10,099 16,963 22,951 (13,501) Net income (loss) per share attributable to common stockholders: Class A-Basic & Diluted $ 0.15 $ 0.24 $ 0.29 $ (0.17) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ 0.15 $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — |
SIGNIFICANT ACCOUNTING POLICI_2
SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Use of estimates | Use of estimates : The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, including those related to the recoverability of long-lived assets and intangibles, useful lives used in depreciation and amortization, uncollectible accounts receivable, income taxes, self-insurance liabilities, share-based compensation, inventory, incremental borrowing rate on leases and contingent liabilities. The Company bases its estimates on historical and other pertinent information that are believed to be reasonable under the circumstances. The accounting estimates used in the preparation of the consolidated financial statements may change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. |
Cash and cash equivalents | Cash and cash equivalents : The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. |
Accounts receivable and allowance for doubtful accounts | Accounts receivable and allowance for doubtful accounts : Accounts receivable are stated at the invoiced amount, or the earned but not yet invoiced amount, net of an allowance for doubtful accounts. The Company establishes an allowance for doubtful accounts based on the review of several factors, including historical collection experience, the current aging status of the customer accounts and financial condition of its customers. Accounts receivable are written off when a settlement is reached for an amount less than the outstanding historical balance or when the Company determines that it is probable the balance will not be collected. The change in allowance for doubtful accounts is as follows: For the year ended December 31, 2019 2018 2017 (in thousands) Balance at beginning of year $ 5,329 $ 2,979 $ 2,144 Provisions for bad debts, included in selling, general and administrative 2,553 2,210 1,542 Uncollectible receivable (write-offs) recoveries (2,109) 140 (707) Balance at end of year $ 5,773 $ 5,329 $ 2,979 |
Concentrations of credit and customer risk | Concentrations of credit and customer risk : Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents and trade accounts receivable. The amounts held in financial institutions periodically exceed the federally insured limit. Management believes that the financial institutions are financially sound and the risk of loss is minimal. The Company minimizes its exposure to counterparty credit risk by performing credit evaluations and ongoing monitoring of the financial stability of its customers. There were |
Inventories | Inventories : The Company values its inventories at lower of cost or net realizable value. Inventory costs are determined under the weighted-average method. Inventory costs primarily consist of chemicals and materials available for resale and parts and consumables used in operations. |
Debt issuance costs | Debt issuance costs : Debt issuance costs consist of costs directly associated with obtaining credit with financial institutions. These costs are recorded as a long-term asset associated with the line of credit and amortized on a straight-line basis over the life of the credit agreement, which approximates the effective-interest method. During the year ended December 31, 2017, the Company expensed unamortized debt issuance costs of |
Property and equipment | Property and equipment : Property and equipment are stated at cost less accumulated depreciation. Depreciation (and amortization of capital lease assets) is calculated on a straight line basis over the estimated useful life of each asset as noted below: Asset Classification Useful Life (years) Land Indefinite Buildings and leasehold improvements 30 or lease term Vehicles and equipment 4 - 7 or lease term Machinery and equipment 2 - 15 Computer equipment and software 3 - 4 or lease term Office furniture and equipment 7 Disposal wells 7 - 10 Depreciation expense related to the Company’s property and equipment, including amortization of property under finance leases, was $108.7 million, $120.4 million and $92.6 million for the years ended December 31, 2019, 2018 and 2017, respectively. Change in depreciable lives of property and equipment: The average estimated useful lives of the assets impacted in the vehicles and equipment category increased from 6.0 to 8.1 years, while the average estimated useful lives of assets impacted in machinery and equipment increased from 5.5 years to 6.9 years. The impact of the increase of useful lives was to defer and extend out depreciation expense, including lower expense in 2018. The impact of the increase in salvage values was to permanently lower current and future depreciation expense. The fixed assets obtained in 2017 through mergers and acquisitions, including the Rockwater Merger, had consistent useful life and salvage value estimates with the rest of the Company’s fixed assets. The change in the estimated useful lives of fixed assets and change in salvage value estimates was implemented on a prospective basis starting January 1, 2018. Excluding fixed assets attained through mergers and acquisitions during 2017, the impact of the change in useful estimate of fixed assets purchased on or before December 31, 2017 was to reduce and defer depreciation expense by $12.6 million during the year ended December 31, 2018. Also, the increase in estimated vehicle salvage value produced a permanent depreciation expense reduction of $3.9 million during the year ended December 31, 2018. For the year ended December 31, 2018, the changes in useful life estimate and increased salvage value produced an increase to net income of $10.9 million (including the impact of noncontrolling interests) and increased both basic and diluted earnings per share attributable to our stockholders by $0.15. |
Business combination | Business Combinations: |
Goodwill and other intangible assets | Goodwill and other intangible assets : Goodwill represents the excess of the purchase price of acquisitions over the fair value of the net assets acquired. Goodwill and other intangible assets not subject to amortization are tested for impairment annually or more frequently if events or changes in circumstances indicate that the asset might be impaired. Intangible assets with finite useful lives are amortized either on a straight-line basis over the asset’s estimated useful life or on a basis that reflects the pattern in which the economic benefits of the intangible assets are realized. |
Impairment of goodwill, long lived assets and intangible assets: | Impairment of goodwill, long-lived assets and intangible assets : Long-lived assets, such as property and equipment and finite-lived intangible assets, are evaluated for impairment whenever events or changes in circumstances indicate that its carrying value may not be recoverable. Recoverability is measured by a comparison of its carrying amount to the estimated undiscounted cash flows to be generated by those assets. If the undiscounted cash flows are less than the carrying amount, the Company records impairment losses for the excess of its carrying value over the estimated fair value. The development of future cash flows and the estimate of fair value represent its best estimates based on industry trends and reference to market transactions and are subject to variability. The Company considers the factors within the fair value analysis to be Level 3 inputs within the fair value hierarchy. During the year ended December 31, 2018, the Company reviewed certain fluid disposal machinery and equipment used in our fluid hauling and disposal services that are included in our Water Infrastructure segment. Due to the condition of the equipment, the Company determined that long-lived assets with a carrying value of The Company conducts its annual goodwill impairment tests in the fourth quarter of each year, and whenever impairment indicators arise, by examining relevant events and circumstances which could have a negative impact on its goodwill such as macroeconomic conditions, industry and market conditions, cost factors that have a negative effect on earnings and cash flows, overall financial performance, acquisitions and divestitures and other relevant entity-specific events. If a qualitative assessment indicates that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, the Company is required to perform a quantitative impairment test for goodwill comparing the reporting unit’s carrying value to its fair value. The Company’s reporting units are based on its organizational and reporting structure. In determining fair values for the reporting units, the Company relies primarily on the income and market approaches for valuation. In the income approach, the Company discounts predicted future cash flows using a weighted-average cost of capital calculation based on publicly traded peer companies. In the market approach, valuation multiples are developed from both publicly traded peer companies as well as other company transactions. The cost approach, when used, considers replacement cost as the primary indicator of value. If the fair value of a reporting unit is less than its carrying value, goodwill impairment is calculated by subtracting the fair value of the reporting unit from the carrying value. Application of the goodwill impairment test requires judgment, including the identification of reporting units, allocation of assets (including goodwill) and liabilities to reporting units and determining the fair value. The determination of reporting unit fair value relies upon certain estimates and assumptions that are complex and are affected by numerous factors, including the general economic environment and levels of exploration and production (“E&P”) activity of oil and gas companies, the Company’s financial performance and trends and the Company’s strategies and business plans, among others. Unanticipated changes, including immaterial revisions, to these assumptions, could result in a provision for impairment in a future period. Given the nature of these evaluations and their application to specific assets and time frames, it is not possible to reasonably quantify the impact of changes in these assumptions. During the first quarter of 2019, goodwill related to our Affirm reporting unit was reduced to zero from the crane divestiture and impairment. The $4.4 million impairment was based on the estimated fair value of the proceeds from selling and winding down the remainder of the Affirm reporting unit business being less than the carrying value. Also, in connection with the Company’s segment realignment, the Company reallocated goodwill from reporting units in the 2018 Water Solutions segment to reporting units in the 2019 Water Services and Water Infrastructure segments based on the relative fair value of each as of March 31, 2019. See Note 8—Goodwill and Other Intangible Assets and Note 12—Fair Value Measurement for further discussion. Asset retirement obligations : The asset retirement obligation (“ARO”) liability reflects the present value of estimated costs of plugging, site reclamation and similar activities associated with the Company’s salt water disposal wells. The Company utilizes current retirement costs to estimate the expected cash outflows for retirement obligations. The Company also estimates the productive life of the disposal wells, a credit-adjusted risk-free discount rate and an inflation factor in order to determine the current present value of this obligation. The Company’s ARO liabilities are included in accrued expenses and other current liabilities and other long-term liabilities as of December 31, 2019 and 2018. The change in asset retirement obligations is as follows: For the year ended December 31, 2019 2018 (in thousands) Balance at beginning of year $ 1,898 $ 1,846 Accretion expense, included in depreciation and amortization expense 115 183 Change in estimate — 377 Disposals (486) — Divestitures — (508) Balance at end of year $ 1,527 $ 1,898 In addition to the obligations described above, the Company may be obligated to remove facilities or perform other remediation upon retirement of certain other assets. However, the fair value of the asset retirement obligation cannot currently be reasonably estimated because the settlement dates are indeterminable. If applicable, the Company will record an asset retirement obligation for these assets in the periods in which settlement dates are reasonably determinable |
Asset retirement obligations | During the first quarter of 2019, goodwill related to our Affirm reporting unit was reduced to zero from the crane divestiture and impairment. The $4.4 million impairment was based on the estimated fair value of the proceeds from selling and winding down the remainder of the Affirm reporting unit business being less than the carrying value. Also, in connection with the Company’s segment realignment, the Company reallocated goodwill from reporting units in the 2018 Water Solutions segment to reporting units in the 2019 Water Services and Water Infrastructure segments based on the relative fair value of each as of March 31, 2019. See Note 8—Goodwill and Other Intangible Assets and Note 12—Fair Value Measurement for further discussion. |
Selfinsurance | Self-insurance : The Company self-insures, through deductibles and retentions, up to certain levels for losses related to general liability, workers’ compensation and employer’s liability and vehicle liability. The Company’s exposure (i.e. the retention or deductible) per occurrence is |
Employee benefit plans | Employee benefit plans : The Company sponsors a defined contribution 401(k) Profit Sharing Plan (the “401(k) Plan”) for the benefit of substantially all employees of the Company. The 401(k) Plan allows eligible employees to make tax-deferred contributions, not to exceed annual limits established by the Internal Revenue Service. The Company did not make any matching contributions for the year ended December 31, 2016. Company reinstated matching contributions of 100% of employee contributions, up to 4% of compensation with immediate vesting for existing employees. Starting July 1, 2017, the vesting schedule for new hires is 25% for the first year, 50% for the second year, 75% for the third year and 100% for the fourth year. The Company’s contributions to the 401(k) Plan were $4.2 million and $3.6 million for the years ended December 31, 2019 and 2018, respectively. |
Revenue recognition | Revenue recognition : The Company follows ASU 2014-09, Revenue from Contracts with Customers (Topic 606). . Water Services and Water Infrastructure The Company’s agreements with its customers are often referred to as “price sheets” and sometimes provide pricing for multiple services. However, these agreements generally do not authorize the performance of specific services or provide for guaranteed throughput amounts. As customers are free to choose which services, if any, to use based on the Company’s price sheet, the Company prices its separate services on the basis of their standalone selling prices. Customer agreements generally do not provide for performance-, cancellation-, termination-, or refund-type provisions. Services based on price sheets with customers are generally performed under separately-issued “work orders” or “field tickets” as services are requested. Of the Company’s Water Solutions service lines, only sourcing and transfer of water are consistently provided as part of the same arrangement. In these instances, revenue for both sourcing and transfer are recognized concurrently when delivered. Accommodations and Rentals Oilfield Chemical Product Sales— Oilfield Chemicals products are generally sold under sales agreements based upon purchase orders or contracts with customers that do not include right of return provisions or other significant post-delivery obligations. The Company’s products are produced in a standard manufacturing operation, even if produced to the customer’s specifications. The prices of products are fixed and determinable and are established in price lists or customer purchases orders. The Company recognizes revenue from product sales when title passes to the customer, the customer assumes risks and rewards of ownership, collectability is reasonably assured and delivery occurs as directed by the customer. |
Equity-based compensation | Equity-based compensation : The Company accounts for equity-based awards for restricted stock awards, restricted stock units, and stock settled appreciation awards by measuring the awards at the date of grant and recognizing the grant-date fair value as an expense using either straight-line or accelerated attribution, depending on the specific terms of the award agreements over the requisite service period, which is usually equivalent to the vesting period. The Company expenses awards with graded-vesting service conditions on a straight-line basis and accounts for forfeitures as they occur. The company accounts for performance share units by remeasuring the awards at the end of each reporting period based on the period end closing share price, factoring in the percentage expected to vest, |
Fair value measurements | Fair value measurements : The Company measures certain assets and liabilities pursuant to accounting guidance which establishes a three-tier fair value hierarchy and prioritizes the inputs used in measuring fair value. Level 1 inputs are unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 inputs are quoted prices or other market data for similar assets and liabilities in active markets, or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the asset or liability. Level 3 inputs are unobservable inputs based upon its own judgment and assumptions used to measure assets and liabilities at fair value. See Note 12—Fair Value Measurement for further discussion. |
Income taxes | Income taxes The Company and its subsidiaries account for income taxes under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the estimated future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those temporary differences are expected to be recovered or settled pursuant to the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes. The effect on deferred tax assets and liabilities of a change in tax rate is recognized in earnings in the period that includes the enactment date. Valuation allowances are established when necessary to reduce deferred tax assets to the amounts more likely than not to be realized. The determination of the provision for income taxes requires significant judgment, use of estimates and the interpretation and application of complex tax laws. Significant judgment is required in assessing the timing and amounts of deductible and taxable items and the probability of sustaining uncertain tax positions. The benefits of uncertain tax positions are recorded in the Company’s financial statements only after determining a more likely than not probability that the uncertain tax positions will withstand challenge, if any, from taxing authorities. When facts and circumstances change, the Company reassesses these probabilities and records any changes through the provision for income taxes. The Company recognizes interest and penalties relating to uncertain tax provisions as a component of tax expense. The Company identified no material uncertain tax positions as of December 31, 2019, 2018 and 2017. See Note 14—Income Taxes for further discussion. |
Recent accounting pronouncements: | Recent accounting pronouncements Leases Leases (ASC 842): Targeted Improvements, which provides entities with an option to apply the guidance prospectively, instead of retrospectively, and allows for other classification provisions. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, including interim periods within those fiscal years, with early adoption permitted. The Company adopted ASU 2016-02 in the first quarter of 2019. The Company elected to recognize its lease assets and liabilities on a prospective basis, beginning on January 1, 2019, using the modified retrospective transition method. Additionally, the Company elected practical expedients to (i) exclude right-of-use assets and lease liabilities for short-term leases, (ii) elected to treat lease and non-lease components as a single lease component, (iii) grandfathered its current accounting for land easements that commenced before January 1, 2019, and (iv) used the package of practical expedients to retain prior lease classification, prior treatment of initial direct costs and prior determination of whether a contract constituted a lease. See Note 5—Leases for additional information. In June 2016, the FASB issued ASU 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) |
SIGNIFICANT ACCOUNTING POLICI_3
SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SIGNIFICANT ACCOUNTING POLICIES | |
Schedule of change in allowance for doubtful accounts | The change in allowance for doubtful accounts is as follows: For the year ended December 31, 2019 2018 2017 (in thousands) Balance at beginning of year $ 5,329 $ 2,979 $ 2,144 Provisions for bad debts, included in selling, general and administrative 2,553 2,210 1,542 Uncollectible receivable (write-offs) recoveries (2,109) 140 (707) Balance at end of year $ 5,773 $ 5,329 $ 2,979 |
Schedule of estimated useful life of property and equipment | Asset Classification Useful Life (years) Land Indefinite Buildings and leasehold improvements 30 or lease term Vehicles and equipment 4 - 7 or lease term Machinery and equipment 2 - 15 Computer equipment and software 3 - 4 or lease term Office furniture and equipment 7 Disposal wells 7 - 10 |
Summary of change in asset retirement obligations | For the year ended December 31, 2019 2018 (in thousands) Balance at beginning of year $ 1,898 $ 1,846 Accretion expense, included in depreciation and amortization expense 115 183 Change in estimate — 377 Disposals (486) — Divestitures — (508) Balance at end of year $ 1,527 $ 1,898 |
ACQUISITIONS AND DIVESTITURES (
ACQUISITIONS AND DIVESTITURES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of unaudited consolidated pro forma information | Pro Forma Year ended December 31, 2017 (unaudited) (in thousands) Revenue $ 1,270,736 Net loss (13,079) Less: net loss attributable to noncontrolling interests (1) 5,299 Net loss attributable to Select Energy Services, Inc. (1) $ (7,780) (1) The allocation of net income (loss) attributable to noncontrolling interests and Select Inc. gives effect to the equity structure as of December 31, 2016 as though the Select 144A Offering, the IPO, the Rockwater Merger, the Resource Water Acquisition and the GRR Acquisition occurred as of January 1, 2017. However, the calculation of pro forma net income (loss) does not give effect to any other pro forma adjustments for the Select 144A Offering or the subsequent IPO. |
Schedule of sales details | Date of Divestiture Entity Initial Net Proceeds Working Capital True Up Adjusted Net Proceeds Working Capital Status at (Gain)/loss for the year ended December 31, 2019 (in thousands) February 26, 2019 Affirm $ 10,982 $ (208) $ 10,774 Final $ 208 June 28, 2019 Affirm 6,968 — 6,968 Final (1,646) March 19, 2019 Canada 4,975 (302) 4,673 Final 5,013 April 1, 2019 Canada 2,242 — 2,242 Final 101 |
Well Chemical Services Acquisition | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 10,000 Total consideration transferred 10,000 Less: identifiable assets acquired and liabilities assumed Inventory 5,221 Property and equipment 4,473 Customer relationships 476 Current liabilities (170) Total identifiable net assets acquired 10,000 Fair value allocated to net assets acquired $ 10,000 |
Pro Well Acquisition | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 11,754 Total consideration transferred 11,754 Less: identifiable assets acquired and liabilities assumed Working capital 1,051 Property and equipment 6,588 Customer relationship intangible assets 3,000 Total identifiable net assets acquired 10,639 Goodwill 1,115 Fair value allocated to net assets acquired $ 11,754 |
Rockwater Merger | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Class A Common Stock (25,914,260 shares) $ 423,957 Class A-2 Common Stock (6,731,845 shares) 110,133 Class B Common Stock (4,356,477 shares) and SES Holdings common units issued (4,356,477 units) 71,272 Fair value of previously held interest in Rockwater 2,310 Fair value of Rockwater share-based awards attributed to pre-acquisition service 12,529 Total consideration transferred 620,201 Less: identifiable assets acquired and liabilities assumed Working capital 141,720 Property and equipment 172,650 Intangible assets Customer relationships 89,661 Trademarks and patents 31,223 Non-compete agreements 3,811 Other long-term assets 88 Deferred tax liabilities (408) Long-term debt (80,555) Other long-term liabilities (2,517) Total identifiable net assets acquired 355,673 Goodwill 264,528 Fair value allocated to net assets acquired $ 620,201 |
Resource Water Acquisition | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 6,586 Class A Common Stock (156,909 shares) 2,380 Total consideration transferred 8,966 Less: identifiable assets acquired and liabilities assumed Working capital 1,189 Property and equipment 3,485 Customer relationship intangible assets 1,933 Other intangible assets 465 Total identifiable net assets acquired 7,072 Goodwill 1,894 Fair value allocated to net assets acquired $ 8,966 |
GRR Acquisition | |
Schedule Of consideration transferred and the estimated fair value of identified assets acquired and liabilities | Purchase price allocation Amount Consideration transferred (in thousands) Cash paid $ 53,032 Class A Common Stock (274,998 shares) 5,500 Assumed liabilities 1,106 Total consideration transferred 59,638 Less: identifiable assets acquired and liabilities assumed Working capital 7,728 Property and equipment 13,225 Customer relationship intangible assets 21,484 Other intangible assets 5,152 Total identifiable net assets acquired 47,589 Goodwill 12,049 Fair value allocated to net assets acquired $ 59,638 |
REVENUE (Tables)
REVENUE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
REVENUE | |
Schedule of disaggregation of revenue by geographic location | Year ended December 31, 2019 2018 2017 Geographic Region Permian Basin $ 610,528 $ 606,591 $ 243,482 MidCon 176,216 243,524 96,844 Eagle Ford 156,621 171,942 104,934 Marcellus/Utica 96,454 134,984 32,805 Bakken 92,956 153,212 74,543 Rockies 85,339 111,901 80,180 Haynesville/E. Texas 73,658 59,969 49,600 All other/eliminations (183) 46,807 10,103 Total $ 1,291,589 $ 1,528,930 $ 692,491 |
LEASES (Tables)
LEASES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
LEASES | |
Schedule of financial impact of leases | Balance Sheet Classification As of December 31, 2019 (in thousands) Assets ROU Assets (1) Long-term right-of-use assets $ 70,635 Finance lease assets (2) Property and equipment 213 Liabilities Operating lease liabilities ― ST Current operating lease liabilities $ 19,315 Operating lease liabilities ― LT (3) Long-term operating lease liabilities 72,143 Finance lease liabilities ― ST Current portion of finance lease obligations 128 Finance lease liabilities ― LT Other long term liabilities 87 (1) (2) (3) Year ended Statements of Operations and Cash Flows Classification December 31, 2019 Operating lease cost: Operating lease cost ― fixed Cost of revenue and Selling, general and administrative $ 27,856 Lease abandonment costs Lease abandonment costs 2,073 Short-term agreements: Cost of revenue $ 93,949 Finance lease cost: Amortization of leased assets Depreciation and amortization $ 916 Interest on lease liabilities Interest expense, net 32 Lessor income: Sublease income Cost of sales and lease abandonment costs $ 1,544 Lessor income Cost of sales 478 Statement of cash flows Cash paid for operating leases Operating cash flows $ 30,670 Cash paid for finance leases lease interest Operating cash flows 32 Cash paid for finance leases Financing cash flows 883 Long Term and Discount Rate As of December 31, 2019 Weighted-average remaining lease term (years) Operating leases 7.9 Finance leases 1.6 Weighted-average discount rate Operating leases 5.3 % Finance leases 5.1 % |
Schedule of operating and finance lease commitments | Period Operating Leases (1) Finance Leases Total (in thousands) 2020 $ 24,742 $ 135 $ 24,877 2021 16,592 88 16,680 2022 13,231 - 13,231 2023 11,074 - 11,074 2024 10,589 - 10,589 Thereafter 44,094 - 44,094 Total minimum lease payments $ 120,322 $ 223 $ 120,545 Less reconciling items to reconcile undiscounted cash flows to lease liabilities: Leases commencing in the future 5,793 — 5,793 Short-term leases excluded from balance sheet 693 — 693 Imputed interest 22,378 8 22,386 Total reconciling items 28,864 8 28,872 Total liabilities per balance sheet 91,458 215 91,673 (1) The table above excludes sublease and lessor income of $1.6 million during 2020, $0.6 million during 2021 and $0.3 million during 2022. |
INVENTORIES (Tables)
INVENTORIES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INVENTORIES | |
Schedule of inventory | As of December 31, 2019 2018 (in thousands) Raw materials $ 12,365 $ 15,219 Finished goods 24,724 28,540 Materials and supplies 453 1,233 $ 37,542 $ 44,992 |
PROPERTY AND EQUIPMENT (Tables)
PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
PROPERTY AND EQUIPMENT | |
Schedule of property and equipment | As of December 31, 2019 2018 (in thousands) Land $ 16,030 $ 17,799 Buildings and leasehold improvements 97,426 106,626 Vehicles and equipment 53,819 83,435 Vehicles and equipment - finance lease 1,291 1,833 Machinery and equipment 729,162 758,528 Machinery and equipment - finance lease 162 532 Computer equipment and software 8,051 15,775 Computer equipment and software - finance lease 356 356 Office furniture and equipment 1,157 4,612 Disposal wells 64,149 64,038 Other 497 497 Construction in progress 43,279 60,347 1,015,379 1,114,378 Less accumulated depreciation (1) (562,986) (611,530) Property and equipment held-for-sale, net 885 — Total property and equipment, net $ 453,278 $ 502,848 (1) Includes $1.6 million and $1.3 million of accumulated depreciation related to finance leases as of December 31, 2019 and December 31, 2018, respectively. |
Schedule of amortization of intangible assets | Year ended December 31, 2019 2018 2017 Category Depreciation expense from property and equipment $ 107,738 $ 119,114 $ 92,402 Amortization expense from finance leases 916 1,314 168 Amortization expense from intangible assets 11,900 13,102 10,701 Accretion expense from asset retirement obligations 115 183 178 Total depreciation and amortization $ 120,669 $ 133,713 $ 103,449 |
Schedule of property and equipment sold and divested | Net Book Value of Property and Type of sale event Business Equipment Sold or Divested (in thousands) Business divestitures Affirm subsidiary $ 11,275 Property and equipment sales Affirm subsidiary 1,339 Business divestitures Canadian operations 7,372 Property and equipment sales Canadian operations 393 Property and equipment sales Sand hauling operations 3,030 Total property and equipment sold and divested $ 23,409 |
GOODWILL AND OTHER INTANGIBLE_2
GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
GOODWILL AND OTHER INTANGIBLE ASSETS. | |
Schedule of changes in the carrying amounts of goodwill by reportable segment | Oilfield Water Wellsite Water Water Chemicals Solutions Services Services Infrastructure Other Total (in thousands) Balance as of December 31, 2017 $ 15,637 $ 245,542 $ 12,242 $ — $ — $ — $ 273,421 Additions — 982 — — — — 982 Impairment (12,652) — (5,242) — — — (17,894) Measurement period adjustments (2,985) 20,277 — — — — 17,292 Balance as of December 31, 2018 — 266,801 7,000 — — — 273,801 Resegmentation — (266,801) (7,000) 186,335 80,466 7,000 — Measurement period adjustment (1) — — — 133 — — 133 Affirm crane business divestiture — — — — — (2,604) (2,604) Affirm impairment — — — — — (4,396) (4,396) Balance as of December 31, 2019 $ — $ — $ — $ 186,468 $ 80,466 $ — $ 266,934 (1) See Note 3―Acquisitions for additional information. |
Summary of components of other intangible assets | As of December 31, 2019 As of December 31, 2018 Gross Accumulated Net Gross Accumulated Net Value Amortization Value Value Amortization Value (in thousands) (in thousands) Definite-lived Customer relationships $ 116,554 $ 20,233 $ 96,321 $ 171,245 $ 66,402 $ 104,843 Patents 10,110 2,420 7,690 10,110 1,417 8,693 Other 7,234 4,766 2,468 7,234 2,866 4,368 Total definite-lived 133,898 27,419 106,479 188,589 70,685 117,904 Indefinite-lived Water rights 7,031 — 7,031 7,031 — 7,031 Trademarks 23,442 — 23,442 23,442 — 23,442 Total indefinite-lived 30,473 — 30,473 30,473 — 30,473 Total other intangible assets, net $ 164,371 $ 27,419 $ 136,952 $ 219,062 $ 70,685 $ 148,377 |
Summary of future estimated amortization expense for other intangible assets | Year Ending December 31, Amount (in thousands) 2020 $ 11,656 2021 10,473 2022 10,259 2023 10,187 2024 10,118 Thereafter 53,786 $ 106,479 |
DEBT (Tables)
DEBT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
DEBT | |
Summary of Company's leverage ratio | Level Average Excess Availability Base Rate Margin Eurocurrency Rate Margin I < 33% of the commitments 1.00% 2.00% II < 66.67% of the commitments and ≥ 33.33% of the commitments 0.75% 1.75% III ≥ 66.67% of the commitments 0.50% 1.50% |
Schedule of fee Percentage on unused credit facility | Level Average Revolver Usage Unused Line Fee Percentage I ≥ 50% of the commitments 0.250% II < 50% of the commitments 0.375% |
EQUITY-BASED COMPENSATION (Tabl
EQUITY-BASED COMPENSATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
Schedule of assumptions used in determining the fair value of certain equity options | For the year ended December 31, 2018 2017 Underlying equity $ 20.50 $ 20.00 Strike price $ 20.50 - 30.75 $ 20.00 Dividend yield (%) 0.0 % 0.0 % Risk-free rate (%) 2.3 % 2.0 - 2.7 % Volatility (%) 50.0 % 46.6 - 46.8 % Expected term (years) 10.0 4.0 6.0 |
Schedule of equity option activity and related information | For the year ended December 31, 2019 Weighted-average Weighted-average Weighted-average Grant Date Value Aggregate Intrinsic Stock Options Grant Date Value Exercise Price Term (Years) Value (in thousands) (a) Beginning balance, outstanding 3,865,678 $ 7.95 $ 16.00 4.9 $ 19 Exercised (5,282) 3.12 5.68 Forfeited (30,438) 8.33 17.70 Expired (32,639) 7.45 21.85 Ending balance, outstanding 3,797,319 $ 8.19 $ 15.95 4.2 $ 509 Ending balance, exercisable 3,463,549 $ 8.12 $ 15.06 3.9 $ 510 Nonvested at end of period 333,770 N/A $ 25.22 (a) as of December 31, 2019 and 2018, respectively. |
Schedule of percentage of stock settled incentives earned | Stock Price at Vesting Date (1) Percentage of Target Amount Earned Less than $20.00 0% At least $20.00, but less than $25.00 100% $25.00 or greater 200% (1) The stock price at vesting date equals the greater of (i) the fair market value of a share of the Class A Common Stock on the vesting date, or (ii) the volume weighted average closing price of a share of the Class A Common Stock, as reported on the NYSE, for the 30 trading days preceding the vesting date. |
Schedule of stock-settled incentive awards outstanding | Award Value Value at Target Being Recognized Nonvested as of December 31, 2018 $ 3,147 $ 1,202 Forfeited during 2019 (210) (80) Nonvested as of December 31, 2019 $ 2,937 $ 1,122 |
summary of ESPP activity | The following table summarizes ESPP activity (in thousands, except shares): For the year ended December 31, 2019 Cash received for shares issued $ 112 Shares issued 13,178 |
Restricted Stock | |
Schedule of restricted stock activity | For the year ended December 31, 2019 Weighted-average Restricted Stock Awards Grant Date Fair Value Nonvested at December 31, 2018 496,945 $ 19.02 Granted 1,417,458 8.80 Vested (379,150) 16.69 Forfeited (17,060) 15.97 Nonvested at December 31, 2019 1,518,193 $ 10.08 |
Restricted Stock Units | |
Schedule of restricted stock activity | For the year ended December 31, 2019 Weighted-average Restricted Stock Units Grant Date Fair Value Nonvested at December 31, 2018 2,500 $ 19.00 Vested (1,250) 19.00 Nonvested at December 31, 2019 1,250 $ 19.00 |
Performance share units | |
Schedule of percentage of target PSUs earned | Return on Assets at Performance Period End Date Percentage of Target PSUs Earned Less than 9.6% 0% 9.6% 50% 12% 100% 14.4% 175% |
Summary of activity related to the units outstanding | Performance Share Units Nonvested as of December 31, 2018 255,364 Target shares granted 778,118 Target shares vested — Target shares forfeited (18,492) Target shares outstanding as of December 31, 2019 1,014,990 |
FAIR VALUE MEASUREMENT (Tables)
FAIR VALUE MEASUREMENT (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
FAIR VALUE MEASUREMENT | |
Summary of assets and liabilities measured at fair value on a recurring basis | Fair Value Measurements Using Carrying Level 1 Level 2 Level 3 Value (1) Impairment (in thousands) Year Ended December 31, 2019 Goodwill $ — $ — $ — $ 4,396 $ 4,396 Property and equipment — — 7,325 11,040 3,715 Year Ended December 31, 2018 Goodwill $ — $ — $ 7,000 $ 24,894 $ 17,894 Cost-Method Investment — — 500 2,500 2,000 Fixed Assets — — 10,262 16,919 6,657 Year Ended December 31, 2017 $ — $ — $ — $ — $ — (1) Amount represents carrying value at the date of assessment. |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
INCOME TAXES | |
Summary of components of the federal and state income tax expense (benefit) | For the year ended December 31, 2019 2018 2017 (in thousands) Current tax expense (benefit) Federal income tax expense (benefit) $ 696 $ 1,073 $ (338) State and local income tax expense (benefit) 1,034 1,077 (77) Total current expense (benefit) 1,730 2,150 (415) Deferred tax expense (benefit) Federal income tax expense (benefit) 49 (20) (422) State and local income tax expense (benefit) 170 (426) (14) Total deferred expense (benefit) 219 (446) (436) Total income tax expense (benefit) $ 1,949 $ 1,704 $ (851) Tax expense (benefit) attributable to controlling interests $ 1,488 $ 1,425 $ (405) Tax expense (benefit) attributable to noncontrolling interests 461 279 (446) Total income tax expense (benefit) $ 1,949 $ 1,704 $ (851) |
Summary of reconciliation of the provision for income taxes | For the year ended December 31, 2019 2018 2017 (in thousands) Provision calculated at federal statutory income tax rate: Income (loss) before taxes $ 6,085 $ 56,003 $ (35,978) Statutory rate 21 % 21 % 35 % Income tax expense (benefit) computed at statutory rate 1,278 11,761 (12,592) Less: noncontrolling interests (284) (3,735) 6,409 Income tax expense (benefit) attributable to controlling interests 994 8,026 (6,183) State and local income taxes, net of federal benefit 884 515 (91) Change in enacted tax rate — — 39,166 Change in subsidiary tax status 587 — — Other 580 — Deferred adjustment due to restructuring 856 — — Change in valuation allowance (1,833) (7,696) (33,297) Income tax expense (benefit) attributable to controlling interests 1,488 1,425 (405) Income tax expense (benefit) attributable to noncontrolling interests 461 279 (446) Total income tax expense (benefit) $ 1,949 $ 1,704 $ (851) |
Summary of principal components of the deferred tax assets (liabilities) | For the year ended December 31, 2019 2018 (in thousands) Deferred tax assets Outside basis difference in SES Holdings $ 27,935 $ 38,739 Net operating losses 46,782 45,927 Credits and other carryforwards 1,451 1,679 Property and equipment — 150 Intangible assets — 1,284 Other 944 468 Total deferred tax assets before valuation allowance 77,112 88,247 Valuation allowance (76,883) (88,247) Total deferred tax assets 229 — Deferred tax liabilities Property and equipment 540 — Other 32 123 Total deferred tax liabilities 572 123 Net deferred tax liabilities $ (343) $ (123) |
NONCONTROLLING INTERESTS (Table
NONCONTROLLING INTERESTS (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
NONCONTROLLING INTERESTS | |
Schedule of Non Controlling Interests Categories | As of December 31 2019 2018 (in thousands) Noncontrolling interests attributable to joint ventures formed for water-related services $ 2,674 $ 3,273 Noncontrolling interests attributable to holders of Class B Common Stock 172,961 274,566 Total noncontrolling interests $ 175,635 $ 277,839 |
Summary of the effects of changes in noncontrolling interests | For the year ended December 31, 2019 2018 2017 (in thousands) Net income (loss) attributable to Select Energy Services, Inc. $ 2,784 $ 36,512 $ (16,816) Transfers (to) from noncontrolling interests: Decrease in additional paid-in capital as a result of the contribution of proceeds from the IPO to SES Holdings, LLC in exchange for common units — — (41,135) Decrease in additional paid-in capital as a result of the contribution of net assets acquired to SES Holdings, LLC in exchange for common units — — (4,879) Decrease in additional paid-in capital as a result of the contribution of net assets from the Rockwater Merger to SES Holdings, LLC in exchange for common units — — (170,276) Increase in additional paid-in capital as a result of stock option exercises 54 374 — Increase in additional paid-in capital as a result of restricted stock issuance, net of forfeitures 3,614 1,942 — Increase in additional paid-in capital as a result of issuance of common stock due to vesting of restricted stock units 4 104 — (Decrease) increase in additional paid-in capital as a result of the repurchase of SES Holdings LLC Units (3,362) (576) 113 Increase in additional paid-in capital as a result of exchanges of SES Holdings LLC Units (an equivalent number of shares of Class B Common Stock) for shares of Class A Common Stock 107,062 146,865 — Increase in additional paid-in capital as a result of the Employee Stock Purchase Plan shares issued 42 15 — Change to equity from net income (loss) attributable to Select Energy Services, Inc. and transfers from noncontrolling interests $ 110,198 $ 185,236 $ (232,993) |
EARNINGS (LOSS) PER SHARE (Tabl
EARNINGS (LOSS) PER SHARE (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
EARNINGS (LOSS) PER SHARE | |
Summary of calculation of basic and diluted earnings per share | The following tables present the Company’s calculation of basic and diluted earnings per share for the years ended December 31, 2019, 2018 and 2017 (dollars in thousands, except share and per share amounts): Year ended December 31, 2019 Select Energy Services, Inc. Class A Class A-2 Class B Numerator: Net income $ 4,136 Net income attributable to noncontrolling interests (1,352) Net income attributable to Select Energy Services, Inc. — basic 2,784 $ 2,784 $ — $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 7 7 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units 2 2 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 1 1 — — Net income attributable to Select Energy Services, Inc. — diluted $ 2,794 $ 2,794 $ — $ — Denominator: Weighted-average shares of common stock outstanding — basic 80,176,323 — 23,806,646 Dilutive effect of restricted stock 373,366 — — Dilutive effect of performance share units 80,979 — Dilutive effect of stock options 40,215 — — Dilutive effect of ESPP 446 — — Weighted-average shares of common stock outstanding — diluted 80,671,330 — 23,806,646 Earnings per share: Basic $ 0.03 $ — $ — Diluted $ 0.03 $ — $ — Year ended December 31, 2018 Select Energy Services, Inc. Class A Class A-1 Class A-2 Class B Numerator: Net income $ 54,299 Net income attributable to noncontrolling interests (17,787) Net income attributable to Select Energy Services, Inc. — basic 36,512 $ 35,720 $ $ 792 $ — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock 13 13 — — Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options 30 30 — — Net loss attributable to Select Energy Services, Inc. — diluted $ 36,555 $ 35,763 $ — $ 792 $ — Denominator: Weighted-average shares of common stock outstanding — basic 72,403,318 1,604,575 31,986,438 Dilutive effect of restricted stock 71,718 — — — Dilutive effect of stock options 166,999 — — — Dilutive effect of ESPP 112 — — — Weighted-average shares of common stock outstanding — diluted 72,642,147 — 1,604,575 31,986,438 Earnings per share: Basic $ 0.49 $ — $ 0.49 $ — Diluted $ 0.49 $ — $ 0.49 $ — Year ended December 31, 2017 Select Energy Services, Inc. Class A Class A-1 Class A-2 Class B Numerator: Net loss $ (35,127) Net loss attributable to noncontrolling interests 18,311 Net loss attributable to Select Energy Services, Inc. — basic (16,816) $ (12,560) $ (3,691) $ (565) $ — Net loss attributable to Select Energy Services, Inc. — diluted $ (16,816) $ (12,560) $ (3,691) $ (565) $ — Denominator: Weighted-average shares of common stock outstanding — basic 24,612,853 7,233,973 1,106,605 38,768,156 Dilutive effect of restricted stock — — — — Dilutive effect of stock options — — — — Dilutive effect of ESPP — — — — Weighted-average shares of common stock outstanding — diluted 24,612,853 7,233,973 1,106,605 38,768,156 Loss per share: Basic $ (0.51) $ (0.51) $ (0.51) $ — Diluted $ (0.51) $ (0.51) $ (0.51) $ — |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
SEGMENT INFORMATION | |
Summary of financial information by segment | For the year ended December 31, 2019 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water services $ 773,946 $ 51,185 $ 80,664 $ 37,692 Water infrastructure 221,661 15,103 25,665 53,839 Oilfield chemicals 268,963 17,942 8,766 11,110 Other 33,365 (8,066) 1,714 64 Eliminations (6,346) — — — Income from operations 76,164 Corporate — (53,090) 3,860 — Interest expense, net — (2,688) — — Other income, net — (14,301) — — $ 1,291,589 $ 6,085 $ 120,669 $ 102,705 For the year ended December 31, 2018 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water services $ 897,160 $ 89,826 $ 82,875 $ 120,883 Water infrastructure 230,130 31,579 23,042 33,372 Oilfield chemicals 260,281 (7,107) 10,496 10,832 Other 144,499 (14,021) 14,124 7,045 Eliminations (3,140) — — — Income from operations 100,277 Corporate — (38,603) 3,176 — Interest expense, net — (5,311) — — Other income, net — (360) — — $ 1,528,930 $ 56,003 $ 133,713 $ 172,132 For the year ended December 31, 2017 Income (loss) Depreciation and Capital Revenue before taxes Amortization Expenditures (in thousands) Water Services $ 420,757 $ 1,823 $ 70,839 $ 82,127 Water Infrastructure 163,386 11,723 22,481 15,264 Oilfield Chemicals 41,586 663 2,040 3,063 Other 69,382 (2,649) 6,286 7,823 Eliminations (2,620) — — — Loss from operations 11,560 Corporate — (41,559) 1,803 — Interest expense, net — (6,629) — — Other income, net — 650 — — $ 692,491 $ (35,978) $ 103,449 $ 108,277 Total assets by segment as of December 31, 2019 and 2018 is as follows: As of December 31, 2019 2018 (in thousands) Water services $ 831,123 $ 865,992 Water infrastructure 314,026 250,207 Oilfield chemicals 192,224 173,762 Other 10,247 70,644 $ 1,347,620 $ 1,360,605 Revenue by groups of similar products and services are as follows: |
Revenue from External Customers by Products and Services | For the year ended December 31, 2019 2018 2017 (in thousands) Water transfer $ 355,535 $ 443,650 $ 193,314 Oilfield chemicals 268,963 260,281 41,586 Flowback and well testing 208,572 223,828 90,107 Accommodations and rentals 150,793 153,013 63,107 Water sourcing 120,517 129,958 97,898 Pipeline logistics and disposal 101,145 100,172 65,488 Fluid hauling 63,156 79,568 75,273 Other 22,908 138,460 65,718 $ 1,291,589 $ 1,528,930 $ 692,491 |
QUARTERLY RESULTS OF OPERATIO_2
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Tables) | 12 Months Ended |
Dec. 31, 2019 | |
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) | |
Schedule of quarterly results of operations | 2019 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 362,646 $ 323,887 $ 328,968 $ 276,088 Gross profit 45,997 39,939 40,994 21,810 Income (loss) from operations 6,633 11,179 12,475 (7,213) Net income (loss) 1,400 8,068 7,172 (12,504) Net income (loss) attributable to Select Energy Services, Inc. 1,135 6,200 5,379 (9,930) Net income (loss) per share attributable to common stockholders: Class A-Basic & Diluted $ 0.01 $ 0.08 $ 0.07 $ (0.12) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ — $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — 2018 First Second Third Fourth Quarter Quarter Quarter Quarter (in thousands) Revenue $ 376,395 $ 393,247 $ 396,970 $ 362,318 Gross profit 47,949 56,728 59,397 34,408 Income (loss) from operations 18,603 24,795 32,258 (13,982) Net income (loss) 16,132 25,023 31,267 (18,123) Net income (loss) attributable to Select Energy Services, Inc. 10,099 16,963 22,951 (13,501) Net income (loss) per share attributable to common stockholders: Class A-Basic & Diluted $ 0.15 $ 0.24 $ 0.29 $ (0.17) Class A-1-Basic & Diluted $ — $ — $ — $ — Class A-2-Basic & Diluted $ 0.15 $ — $ — $ — Class B-Basic & Diluted $ — $ — $ — $ — |
BUSINESS AND BASIS OF PRESENT_2
BUSINESS AND BASIS OF PRESENTATION (Details) $ / shares in Units, $ in Thousands | Jan. 12, 2018shares | Nov. 01, 2017USD ($)shares | Sep. 15, 2017USD ($)shares | Apr. 26, 2017shares | Mar. 10, 2017USD ($)shares | Dec. 20, 2016USD ($)$ / sharesshares | Dec. 31, 2019USD ($)segmentitemagreement$ / sharesshares | Dec. 31, 2018USD ($)segmentitem$ / sharesshares | Dec. 31, 2017segment$ / sharesshares | Mar. 31, 2018USD ($) | Mar. 28, 2018shares | Dec. 31, 2016shares |
Share Price | $ / shares | $ 20.50 | $ 20 | ||||||||||
Convertible Common Stock, Shares Issued upon Conversion | 1 | |||||||||||
Common units issued | 16,100,000 | |||||||||||
Financial Designation, Predecessor and Successor [Fixed List] | Predecessor | |||||||||||
Number of tax receivable agreements | agreement | 2 | |||||||||||
Impairment of cost-method investment | $ | $ 2,000 | |||||||||||
Number of equity method investee | item | 0 | 0 | ||||||||||
Number of cost-method investee | item | 1 | 1 | ||||||||||
Number of operating segments | segment | 3 | 3 | 3 | |||||||||
Number of reportable segments | segment | 3 | 3 | 3 | |||||||||
Fair value of cost method investee | $ | $ 500 | |||||||||||
Cumulative translation adjustment | $ | $ 400 | |||||||||||
Revolving line of credit | ||||||||||||
Maximum borrowing capacity | $ | $ 300,000 | $ 300,000 | ||||||||||
Class A-1 Common Stock | ||||||||||||
Par value | $ / shares | $ 0.01 | |||||||||||
Common stock issued | 16,100,000 | |||||||||||
Class A-1 Common Stock | Private Placement | ||||||||||||
Shares issued | 16,100,000 | |||||||||||
Conversion rate per share | 1 | |||||||||||
Class A Common Stock | ||||||||||||
Shares issued | 10,005,000 | |||||||||||
Par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Common stock issued | 87,893,525 | 78,956,555 | ||||||||||
Common Stock, Shares, Outstanding | 87,893,525 | 78,956,555 | ||||||||||
Class A Common Stock | IPO | ||||||||||||
Shares issued | 8,700,000 | |||||||||||
Class B Common Stock | ||||||||||||
Par value | $ / shares | $ 0.01 | $ 0.01 | $ 0.01 | |||||||||
Common stock issued | 38,462,541 | 16,221,101 | 26,026,843 | |||||||||
Common Stock, Shares, Outstanding | 16,221,101 | 26,026,843 | ||||||||||
Class A-2 Common Stock | ||||||||||||
Par value | $ / shares | $ 0.01 | $ 0.01 | ||||||||||
Common stock issued | 0 | 0 | ||||||||||
Common Stock, Shares, Outstanding | 0 | 0 | ||||||||||
GRR Acquisition | ||||||||||||
Total consideration transferred | $ | $ 59,638 | |||||||||||
Number of shares resold | 274,998 | |||||||||||
Resource Water Acquisition | ||||||||||||
Total consideration transferred | $ | $ 8,966 | |||||||||||
Resource Water Acquisition | Class A Common Stock | ||||||||||||
Number of shares resold | 156,909 | |||||||||||
Rockwater Merger | ||||||||||||
Total consideration transferred | $ | $ 620,201 | |||||||||||
Rockwater Merger | Class A Common Stock | ||||||||||||
Shares issued | 25,900,000 | |||||||||||
Number of shares resold | 25,914,260 | |||||||||||
Rockwater Merger | Class B Common Stock | ||||||||||||
Shares issued | 4,400,000 | |||||||||||
Number of shares resold | 4,356,477 | |||||||||||
Rockwater Merger | Class A-2 Common Stock | ||||||||||||
Shares issued | 6,700,000 | |||||||||||
Conversion rate per share | 1 | |||||||||||
Common Stock, Shares, Outstanding | 0 | |||||||||||
Number of shares resold | 6,653,777 | 6,731,845 | ||||||||||
Rockwater Merger | SES Holdings | ||||||||||||
Common units issued | 37,300,000 | |||||||||||
Rockwater Merger | SES Holdings | Class B Common Stock | ||||||||||||
Number of shares resold | 4,356,477 |
SIGNIFICANT ACCOUNTING POLICI_4
SIGNIFICANT ACCOUNTING POLICIES - Allowance activity (Details) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019USD ($)customer | Dec. 31, 2018USD ($)customer | Dec. 31, 2017USD ($)customer | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Balance at beginning of year | $ 5,329 | $ 2,979 | $ 2,144 |
Provisions for bad debts, included in selling, general and administrative | 2,553 | 2,210 | 1,542 |
Uncollectible receivable (write-offs) recoveries | (2,109) | 140 | (707) |
Balance at end of year | $ 5,773 | $ 5,329 | $ 2,979 |
Concentrations of credit and customer risk | |||
Number of customers accounting for more than 10% of consolidated revenues | customer | 0 | 0 | 0 |
Debt issuance costs | |||
Unamortized Debt issuance Costs | $ 2,900 | ||
Agreement Debt Issuance Cost | 3,442 | ||
Amortization of debt issuance costs | $ 688 | $ 688 | $ 4,031 |
SIGNIFICANT ACCOUNTING POLICI_5
SIGNIFICANT ACCOUNTING POLICIES - Property and Equipment (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |||||||||||
Balance at beginning of Current Period | $ 1,898 | $ 1,846 | $ 1,898 | $ 1,846 | |||||||
Accretion expense from asset retirement obligations | 115 | 183 | $ 178 | ||||||||
Change in estimate | 377 | ||||||||||
Disposals | (486) | ||||||||||
Divestitures | (508) | ||||||||||
Balance at end of Current Period | $ 1,527 | $ 1,898 | 1,527 | 1,898 | 1,846 | ||||||
PROPERTY AND EQUIPMENT | |||||||||||
Depreciation | 107,738 | 119,114 | 92,402 | ||||||||
Net Income (Loss) Attributable to Parent | (9,930) | $ 5,379 | $ 6,200 | 1,135 | (13,501) | $ 22,951 | $ 16,963 | $ 10,099 | 2,784 | 36,512 | (16,816) |
Goodwill and Intangible Asset Impairment | |||||||||||
Depreciation and amortization | 3,860 | 3,176 | 1,804 | ||||||||
Goodwill, Impairment Loss | $ 0 | 4,396 | 17,894 | ||||||||
Goodwill | 266,934 | 273,801 | 266,934 | 273,801 | 273,421 | ||||||
Impairment of property and equipment | 3,715 | 6,657 | |||||||||
Fluid Disposal Equipment | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Impaired asset carrying value | 2,300 | 2,300 | 2,300 | 2,300 | |||||||
Estimated fair value | $ 0 | 0 | 0 | 0 | |||||||
Canadian Assets | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Impairment of property and equipment | 900 | 4,400 | |||||||||
Layflat Hose | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Impairment of property and equipment | 1,000 | ||||||||||
Pipeline Assets | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Impairment of property and equipment | 1,100 | ||||||||||
Owned Facility | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Impairment of property and equipment | $ 600 | ||||||||||
Water Solutions | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Goodwill | 266,801 | 266,801 | 245,542 | ||||||||
Wellsite Services | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Goodwill, Impairment Loss | 5,242 | ||||||||||
Goodwill | $ 7,000 | 7,000 | 12,242 | ||||||||
Buildings and leasehold improvements | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 30 years | ||||||||||
Vehicles and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 4 years | ||||||||||
Vehicles and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 7 years | ||||||||||
Machinery and equipment | |||||||||||
Goodwill and Intangible Asset Impairment | |||||||||||
Depreciation and amortization | $ 108,700 | 120,400 | $ 92,600 | ||||||||
Machinery and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 2 years | ||||||||||
Machinery and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 15 years | ||||||||||
Computer equipment and software | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 3 years | ||||||||||
Computer equipment and software | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 4 years | ||||||||||
Office furniture and equipment | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 7 years | ||||||||||
Disposal wells | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 7 years | ||||||||||
Disposal wells | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 10 years | ||||||||||
Change in useful life estimate and increased salvage value | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Depreciation | 12,600 | ||||||||||
Net Income (Loss) Attributable to Parent | $ 10,900 | ||||||||||
Earnings Per Share, Basic and Diluted | $ 0.15 | ||||||||||
Change in useful life estimate and increased salvage value | Vehicles and equipment | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Depreciation | $ 3,900 | ||||||||||
Change in useful life estimate and increased salvage value | Vehicles and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 6 years | ||||||||||
Change in useful life estimate and increased salvage value | Vehicles and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 8 years 1 month 6 days | ||||||||||
Change in useful life estimate and increased salvage value | Machinery and equipment | Minimum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 5 years 6 months | ||||||||||
Change in useful life estimate and increased salvage value | Machinery and equipment | Maximum | |||||||||||
PROPERTY AND EQUIPMENT | |||||||||||
Estimated useful lives of the assets | 6 years 10 months 24 days |
SIGNIFICANT ACCOUNTING POLICI_6
SIGNIFICANT ACCOUNTING POLICIES - Self Insurance (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Class of Stock [Line Items] | ||
Self insurance reserve towards deductible for general liability | $ 1,000 | |
Self insurance reserve towards deductible for workers compensation and employers liability | 1,000 | |
Self insurance reserve towards deductible for vehicle liability | 1,000 | |
Excess loss policy limit | 100,000 | |
Self insured group medical claim plan deductible | 300 | |
Workers' Compensation Liability, Current | 13,400 | |
Accrued insurance | $ 8,843 | $ 14,849 |
Employee benefit plans | ||
Matching contribution as a percentage of employee contributions | 100.00% | |
Matching contribution as a percentage of employee compensation | 4.00% | |
Company 401k contribution | $ 4,200 | $ 3,600 |
First year | ||
Employee benefit plans | ||
Annual vesting matching contribution as a percentage of employee compensation | 25.00% | |
Second year | ||
Employee benefit plans | ||
Annual vesting matching contribution as a percentage of employee compensation | 50.00% | |
Third year | ||
Employee benefit plans | ||
Annual vesting matching contribution as a percentage of employee compensation | 75.00% | |
Fourth year | ||
Employee benefit plans | ||
Annual vesting matching contribution as a percentage of employee compensation | 100.00% | |
Minimum | ||
Class of Stock [Line Items] | ||
Estimated exposure amount of workers compensation claims | $ 13,900 | |
Maximum | ||
Class of Stock [Line Items] | ||
Estimated exposure amount of workers compensation claims | $ 15,900 |
ACQUISITIONS AND DIVESTITURES -
ACQUISITIONS AND DIVESTITURES - Pro Well Acquisition (Details) - USD ($) $ in Thousands | Sep. 30, 2019 | Nov. 20, 2018 | Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Less: identified assets acquired and liabilities assumed | ||||||
Goodwill | $ 266,934 | $ 273,801 | $ 273,421 | |||
Well Chemical Services Acquisition | ||||||
Consideration transferred | ||||||
Cash paid | $ 10,000 | |||||
Total consideration transferred | 10,000 | |||||
Less: identified assets acquired and liabilities assumed | ||||||
Inventory | 5,221 | |||||
Property and equipment | 4,473 | |||||
Current liabilities | (170) | |||||
Total identifiable net assets acquired | 10,000 | |||||
Fair value allocated to net assets acquired | 10,000 | |||||
Well Chemical Services Acquisition | Customer relationships | ||||||
Less: identified assets acquired and liabilities assumed | ||||||
Intangible assets | $ 476 | |||||
Pro Well Acquisition | ||||||
Consideration transferred | ||||||
Cash paid | $ 11,754 | |||||
Total consideration transferred | 11,754 | $ 11,800 | ||||
Less: identified assets acquired and liabilities assumed | ||||||
Working capital | 1,051 | |||||
Property and equipment | 6,588 | |||||
Total identifiable net assets acquired | 10,639 | |||||
Goodwill | 1,115 | |||||
Fair value allocated to net assets acquired | 11,754 | |||||
Initial payment | 12,400 | |||||
Pro Well Acquisition | Customer relationships | ||||||
Less: identified assets acquired and liabilities assumed | ||||||
Intangible assets | $ 3,000 |
ACQUISITIONS - Rockwater Merger
ACQUISITIONS - Rockwater Merger (Details) - USD ($) $ in Thousands | Nov. 01, 2018 | Jan. 12, 2018 | Nov. 01, 2017 | Dec. 31, 2017 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 31, 2019 |
Less: identified assets acquired and liabilities assumed | |||||||
Goodwill | $ 273,421 | $ 273,801 | $ 273,421 | $ 266,934 | |||
SES Holdings | |||||||
Business Acquisition [Line Items] | |||||||
Gain on remeasurement of investment | 1,200 | ||||||
Water Solutions | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Goodwill | 245,542 | 266,801 | 245,542 | ||||
Oilfield chemicals | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Goodwill | $ 15,637 | 15,637 | |||||
Rockwater Merger | |||||||
Business Acquisition [Line Items] | |||||||
Transaction-related costs | $ 6,300 | $ 8,900 | |||||
Consideration transferred | |||||||
Fair value of previously held interest in Rockwater | $ 2,300 | $ 2,310 | |||||
Fair value of Rockwater share-based awards attributed to pre-acquisition service | 12,529 | ||||||
Total consideration transferred | 620,201 | ||||||
Less: identified assets acquired and liabilities assumed | |||||||
Working capital | 141,720 | ||||||
Property and equipment | 172,650 | ||||||
Other long-term assets | 88 | ||||||
Deferred tax liabilities | (408) | ||||||
Long-term debt | (80,555) | ||||||
Other long-term liabilities | (2,517) | ||||||
Total identifiable net assets acquired | 355,673 | ||||||
Goodwill | 264,528 | ||||||
Fair value allocated to net assets acquired | 620,201 | ||||||
Rockwater Merger | Customer relationships | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Intangible assets | 89,661 | ||||||
Rockwater Merger | Trademarks and patents | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Intangible assets | 31,223 | ||||||
Rockwater Merger | Noncompete agreements | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Intangible assets | 3,811 | ||||||
Rockwater Merger | Water Solutions | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Goodwill | 251,800 | ||||||
Rockwater Merger | Oilfield chemicals | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Goodwill | 12,700 | ||||||
Class A Common Stock | Rockwater Merger | |||||||
Consideration transferred | |||||||
Common stock issued | $ 423,957 | ||||||
Less: identified assets acquired and liabilities assumed | |||||||
Shares issued in Merger Agreement | 25,914,260 | ||||||
Class A-2 Common Stock | Rockwater Merger | |||||||
Consideration transferred | |||||||
Common stock issued | $ 110,133 | ||||||
Less: identified assets acquired and liabilities assumed | |||||||
Shares issued in Merger Agreement | 6,653,777 | 6,731,845 | |||||
Class B Common Stock | Rockwater Merger | |||||||
Consideration transferred | |||||||
Common stock issued | $ 71,272 | ||||||
Less: identified assets acquired and liabilities assumed | |||||||
Shares issued in Merger Agreement | 4,356,477 | ||||||
Class B Common Stock | Rockwater Merger | SES Holdings | |||||||
Less: identified assets acquired and liabilities assumed | |||||||
Shares issued in Merger Agreement | 4,356,477 |
ACQUISITIONS - Resource Water A
ACQUISITIONS - Resource Water Acquisition - Purchase price allocation (Details) - USD ($) $ / shares in Units, $ in Thousands | Sep. 15, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Less: identified assets acquired and liabilities assumed | ||||
Goodwill | $ 266,934 | $ 273,801 | $ 273,421 | |
Resource Water Acquisition | ||||
Consideration transferred | ||||
Miles Of Layflat Hose | 24 | |||
Class A Common stock issued, Share Price | $ 15.17 | |||
Cash paid | $ 6,586 | |||
Common stock issued | 2,380 | |||
Total consideration transferred | 8,966 | |||
Less: identified assets acquired and liabilities assumed | ||||
Working capital | 1,189 | |||
Fixed assets | 3,485 | |||
Total identifiable net assets acquired | 7,072 | |||
Goodwill | 1,894 | |||
Fair value allocated to net assets acquired | 8,966 | |||
Cash on hand | $ 6,600 | |||
Resource Water Acquisition | Class A Common Stock | ||||
Less: identified assets acquired and liabilities assumed | ||||
Shares issued in Merger Agreement | 156,909 | |||
Resource Water Acquisition | Customer relationships | ||||
Less: identified assets acquired and liabilities assumed | ||||
Intangible assets | $ 1,933 | |||
Resource Water Acquisition | Other intangibles | ||||
Less: identified assets acquired and liabilities assumed | ||||
Intangible assets | $ 465 |
ACQUISITIONS - GRR Acquisition
ACQUISITIONS - GRR Acquisition (Details) - USD ($) $ / shares in Units, $ in Thousands | Mar. 10, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
ACQUISITION | ||||
Goodwill | $ 266,934 | $ 273,801 | $ 273,421 | |
GRR Acquisition | ||||
ACQUISITION | ||||
Miles of layflat hose | 1,000 | |||
Cash paid | $ 53,032 | |||
Assumed liabilities | 1,106 | |||
Class A Common Stock (274,998 shares) | 5,500 | |||
Total consideration paid | 59,638 | |||
Goodwill | $ 12,049 | |||
Class A Common stock issued, Share Price | $ 20 | |||
Cash on hand | $ 19,000 | |||
Proceeds from credit facility | 34,000 | |||
Transaction cost | $ 1,000 |
ACQUISITIONS - GRR Acquisitio_2
ACQUISITIONS - GRR Acquisition - Purchase price allocation (Details) - USD ($) $ in Thousands | Mar. 10, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Less: identified assets acquired and liabilities assumed | ||||
Goodwill | $ 266,934 | $ 273,801 | $ 273,421 | |
GRR Acquisition | ||||
Consideration transferred | ||||
Cash paid | $ 53,032 | |||
Class A Common Stock (274,998 shares) | 5,500 | |||
Assumed liabilities | 1,106 | |||
Total consideration transferred | 59,638 | |||
Less: identified assets acquired and liabilities assumed | ||||
Working capital | 7,728 | |||
Fixed assets | 13,225 | |||
Total identifiable net assets acquired | 47,589 | |||
Goodwill | 12,049 | |||
Fair value allocated to net assets acquired | $ 59,638 | |||
Shares issued in Merger Agreement | 274,998 | |||
GRR Acquisition | Customer relationships | ||||
Less: identified assets acquired and liabilities assumed | ||||
Intangible assets | $ 21,484 | |||
GRR Acquisition | Other intangibles | ||||
Less: identified assets acquired and liabilities assumed | ||||
Intangible assets | $ 5,152 |
ACQUISITIONS - Proforma (Detail
ACQUISITIONS - Proforma (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2017USD ($) | |
Pro forma information | |
Revenue | $ 1,270,736 |
Net loss | (13,079) |
Less: net loss attributable to noncontrolling interests | 5,299 |
Net loss attributable to Select Energy Services, Inc | $ (7,780) |
ACQUISITIONS AND DIVESTITURES_2
ACQUISITIONS AND DIVESTITURES - Affirm and Canadian Operations Divestitures (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | 9 Months Ended | 10 Months Ended | 12 Months Ended | ||||||
Mar. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2019USD ($)item | Dec. 31, 2018USD ($) | Jun. 28, 2019USD ($) | Apr. 01, 2019USD ($) | Mar. 19, 2019USD ($) | Feb. 26, 2019USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Number of sales transactions | 4 | ||||||||||
Reduction in goodwill | $ 2,604 | ||||||||||
Impairment of Goodwill | $ 0 | $ 4,396 | $ 17,894 | ||||||||
Affirm Crane Operations [Member] | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Initial Net Proceeds | $ 6,968 | $ 10,982 | |||||||||
Working Capital True Up | (208) | ||||||||||
Adjusted Net Proceeds | $ 6,968 | $ 10,774 | |||||||||
Gain or loss | $ (1,646) | $ 208 | |||||||||
Canadian Business | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Initial Net Proceeds | $ 2,242 | $ 4,975 | |||||||||
Working Capital True Up | (302) | ||||||||||
Adjusted Net Proceeds | $ 2,242 | $ 4,673 | |||||||||
Gain or loss | $ 5,013 | $ 101 | |||||||||
Sale | Affirm Crane Operations [Member] | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Gain or loss | 0 | ||||||||||
Number of transactions assigned for working capital | item | 2 | ||||||||||
Reduction in goodwill | 2,600 | ||||||||||
Impairment of Goodwill | $ 4,400 | ||||||||||
Sale | Affirm and Canadian Operations Divestitures [Member] | |||||||||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||||||||
Number of sales transactions | 4 | ||||||||||
Net book value | $ 18,600 | $ 18,600 | $ 18,600 | $ 18,600 | $ 18,600 |
REVENUE (Details)
REVENUE (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)region | Dec. 31, 2018USD ($)region | Dec. 31, 2017USD ($)region | |
REVENUE | |||||||||||
Revenue | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 362,318 | $ 396,970 | $ 393,247 | $ 376,395 | $ 1,291,589 | $ 1,528,930 | $ 692,491 |
Permian Basin | |||||||||||
REVENUE | |||||||||||
Revenue | 610,528 | 606,591 | 243,482 | ||||||||
MidCon | |||||||||||
REVENUE | |||||||||||
Revenue | 176,216 | 243,524 | 96,844 | ||||||||
Eagle Ford | |||||||||||
REVENUE | |||||||||||
Revenue | 156,621 | 171,942 | 104,934 | ||||||||
Bakken | |||||||||||
REVENUE | |||||||||||
Revenue | 92,956 | 153,212 | 74,543 | ||||||||
Marcellus/Utica | |||||||||||
REVENUE | |||||||||||
Revenue | 96,454 | 134,984 | 32,805 | ||||||||
Rockies | |||||||||||
REVENUE | |||||||||||
Revenue | 85,339 | 111,901 | 80,180 | ||||||||
Haynesville/E. Texas | |||||||||||
REVENUE | |||||||||||
Revenue | 73,658 | 59,969 | 49,600 | ||||||||
All other | |||||||||||
REVENUE | |||||||||||
Revenue | $ (183) | $ 46,807 | $ 10,103 | ||||||||
Permian Basin, MidCon and Eagle Ford | Water services | |||||||||||
REVENUE | |||||||||||
Number of revenue producing regions | region | 3 | 3 | 3 | ||||||||
Percentage of revenue | 74.00% | 72.00% | 71.00% | ||||||||
Permian Basin and Bakken | Water infrastructure | |||||||||||
REVENUE | |||||||||||
Number of revenue producing regions | region | 2 | 2 | 2 | ||||||||
Percentage of revenue | 84.00% | 85.00% | 80.00% | ||||||||
Permian Basin and MidCon | Oilfield chemicals | |||||||||||
REVENUE | |||||||||||
Number of revenue producing regions | region | 2 | 2 | 2 | ||||||||
Percentage of revenue | 77.00% | 77.00% | 72.00% |
LEASES - Description (Details)
LEASES - Description (Details) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019USD ($)lease | Dec. 31, 2018USD ($)facility | |
LEASES | ||
Number of operating leases | lease | 593 | |
Number of subleases | lease | 15 | |
Number of finance leases | lease | 25 | |
Number of lessor owned properties | lease | 3 | |
Lessee Operating Lease Existence Of Option To Extend | true | |
Renewal option for lease facility (Number) | lease | 1 | |
Exit-disposal cease use liability | $ 16,752 | |
Operating lease liabilities | $ 72,143 | |
Long-term operating lease liabilities | 16,800 | |
Variable Lease, Cost | 1,600 | |
Property tax expense | $ 800 | |
Minimum | ||
LEASES | ||
Lessee operating lease renewal term | 1 year | |
Maximum | ||
LEASES | ||
Lessee operating lease renewal term | 5 years | |
Exit and disposal activities | ||
LEASES | ||
Exit-disposal cease use liability | $ 18,800 | |
Number of abandoned facility leases | facility | 17 |
LEASES - Financial Impact of Le
LEASES - Financial Impact of Leases (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Statement of Financial Position | |||
Operating lease assets | $ 70,635 | ||
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:LongTermRightOfUseAssetsMember | ||
Finance lease assets | $ 213 | ||
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | Property Plant And Equipment [Member] | ||
Operating lease liabilities | $ 19,315 | ||
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | wttr:CurrentOperatingLeaseLiabilitiesMember | ||
Operating lease liabilities | $ 72,143 | ||
Operating Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | wttr:LongTermOperatingLeaseLiabilitiesMember | ||
Finance lease liabilities | $ 128 | $ 938 | |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | Finance Lease, Liability | ||
Finance lease liabilities | $ 87 | ||
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | wttr:OtherLongTermLliabilitiesMember | ||
Operating lease cost: | |||
Impairment of lease | $ 16,800 | ||
Finance lease, accumulated amortization | 1,600 | ||
Operating lease cost - fixed | 27,856 | ||
Lease abandonment costs | 2,073 | ||
Short-term agreements: | 93,949 | ||
Finance lease cost: | |||
Amortization of leased assets | 916 | 1,314 | $ 168 |
Interest on lease liabilities | 32 | ||
Sublease income | 1,544 | ||
Lessor income | 478 | ||
Statement of cash flows | |||
Cash paid for operating leases | 30,670 | ||
Cash paid for finance leases lease interest | 32 | ||
Cash paid for finance leases | $ 883 | $ 1,881 |
LEASES - Lease Term and Discoun
LEASES - Lease Term and Discount Rate (Details) | Dec. 31, 2019 |
LEASES | |
Operating leases, weighted average remaining lease term | 7 years 10 months 24 days |
Finance leases, weighted average remaining lease term | 1 year 7 months 6 days |
Operating Leases, Weighted-average discount rate | 5.30% |
Finance leases, Weighted average discount rate | 5.10% |
LEASES - Lease Commitments (Det
LEASES - Lease Commitments (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Operating Leases | |
2020 | $ 24,742 |
2021 | 16,592 |
2022 | 13,231 |
2023 | 11,074 |
2024 | 10,589 |
Thereafter | 44,094 |
Total minimum lease payments | 120,322 |
Operating lease, Less reconciling items to reconcile undiscounted cash flows to lease liabilities: | |
Leases commencing in the future | 5,793 |
Short-term leases excluded from balance sheet | 693 |
Imputed interest | 22,378 |
Total reconciling items | 28,864 |
Total liabilities per balance sheet | $ 91,458 |
Operating Lease, Liability, Statement of Financial Position [Extensible List] | Operating Lease, Liability, Current |
Finance Leases | |
2020 | $ 135 |
2021 | 88 |
Total minimum lease payments | 223 |
Finance Lease, Less reconciling items to reconcile undiscounted cash flows to lease liabilities: | |
Imputed interest | 8 |
Total reconciling items | 8 |
Total liabilities per balance sheet | 215 |
Total | |
2020 | 24,877 |
2021 | 16,680 |
2022 | 13,231 |
2023 | 11,074 |
2024 | 10,589 |
Thereafter | 44,094 |
Total minimum lease payments | 120,545 |
Leases Total , Less reconciling items to reconcile undiscounted cash flows to lease liabilities: | |
Leases commencing in the future | 5,793 |
Short-term leases excluded from balance sheet | 693 |
Imputed interest | 22,386 |
Total reconciling items | 28,872 |
Total liabilities per balance sheet | 91,673 |
2020 | 1,600 |
2021 | 600 |
2022 | $ 300 |
INVENTORIES (Details)
INVENTORIES (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Significant components of inventory | ||
Raw materials | $ 12,365 | $ 15,219 |
Finished goods | 24,724 | 28,540 |
Materials and supplies | 453 | 1,233 |
Inventory net | 37,542 | 44,992 |
Inventory write-downs | 250 | 442 |
Inventory Valuation Reserves | 4,100 | $ 4,800 |
Well Chemical Services Acquisition | ||
Significant components of inventory | ||
Finished goods | $ 5,200 |
PROPERTY AND EQUIPMENT (Details
PROPERTY AND EQUIPMENT (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Property and equipment | |||
Property and equipment | $ 1,015,379 | $ 1,114,378 | |
Accumulated depreciation | (562,986) | (611,530) | |
Property and equipment held-for-sale, net | 885 | ||
Total property and equipment, net | 453,278 | 502,848 | |
Accumulated depreciation related to finance leases | 1,600 | 1,300 | |
depreciation and amortization expense | |||
Depreciation expense from property and equipment | 107,738 | 119,114 | $ 92,402 |
Amortization expense from finance lease | 916 | 1,314 | 168 |
Amortization expense from intangible assets | 11,900 | 13,102 | 10,701 |
Accretion expense from asset retirement obligations | 115 | 183 | 178 |
Total depreciation and amortization | 120,669 | 133,713 | 103,449 |
Property and Equipment Held-for-Sale and Impairments | |||
Impairment of property and equipment | 3,715 | 6,657 | |
Net loss on divestitures and sales of property and equipment held-for-sale | (7,950) | 3,803 | $ 2,726 |
Canadian Business | |||
Property and Equipment Held-for-Sale and Impairments | |||
Impairment of property and equipment | 900 | ||
Net loss on divestitures and sales of property and equipment held-for-sale | 3,900 | ||
Canadian Assets | |||
Property and Equipment Held-for-Sale and Impairments | |||
Impairment of property and equipment | 900 | 4,400 | |
Fluid Disposal Equipment | |||
Property and Equipment Held-for-Sale and Impairments | |||
Impaired Assets to be Disposed of by Method Other than Sale, Carrying Value of Asset | 2,300 | 2,300 | |
Property and equipment | 0 | 0 | |
Land | |||
Property and equipment | |||
Property and equipment | 16,030 | 17,799 | |
Buildings and leasehold improvements | |||
Property and equipment | |||
Property and equipment | 97,426 | 106,626 | |
Vehicles and equipment | |||
Property and equipment | |||
Property and equipment | 53,819 | 83,435 | |
Vehicles and equipment - finance lease | |||
Property and equipment | |||
Property and equipment | 1,291 | 1,833 | |
Machinery and equipment | |||
Property and equipment | |||
Property and equipment | 729,162 | 758,528 | |
Machinery and equipment - finance lease | |||
Property and equipment | |||
Property and equipment | 162 | 532 | |
Computer equipment and software | |||
Property and equipment | |||
Property and equipment | 8,051 | 15,775 | |
Computer equipment and software - finance lease | |||
Property and equipment | |||
Property and equipment | 356 | 356 | |
Office furniture and equipment | |||
Property and equipment | |||
Property and equipment | 1,157 | 4,612 | |
Disposal wells | |||
Property and equipment | |||
Property and equipment | 64,149 | 64,038 | |
Other | |||
Property and equipment | |||
Property and equipment | 497 | 497 | |
Construction in progress | |||
Property and equipment | |||
Property and equipment | $ 43,279 | $ 60,347 |
PROPERTY AND EQUIPMENT- Sold An
PROPERTY AND EQUIPMENT- Sold And Divested (Details) $ in Thousands | Dec. 31, 2019USD ($) |
Property, Plant and Equipment [Line Items] | |
Property and equipment held-for-sale | $ 885 |
Total property and equipment sold and divested | 23,409 |
Affirm Crane Operations [Member] | |
Property, Plant and Equipment [Line Items] | |
Business divestitures | 11,275 |
Property and equipment sales | 1,339 |
Canadian Business | |
Property, Plant and Equipment [Line Items] | |
Business divestitures | 7,372 |
Property and equipment sales | 393 |
Sand Hauling Operations | |
Property, Plant and Equipment [Line Items] | |
Property and equipment sales | $ 3,030 |
GOODWILL AND OTHER INTANGIBLE_3
GOODWILL AND OTHER INTANGIBLE ASSETS - Goodwill (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($)segment | |
Goodwill | ||||
Number of Reporting Units | segment | 1 | |||
Balance at the beginning of the period | $ 273,801 | $ 273,801 | $ 273,421 | |
Additions | 982 | |||
Measurement period adjustment | 133 | 17,292 | ||
Affirm crane business divestiture | 2,604 | |||
Impairment | 0 | (4,396) | (17,894) | |
Balance at the end of the period | $ 273,801 | 266,934 | 273,801 | |
Oilfield chemicals | ||||
Goodwill | ||||
Balance at the beginning of the period | 15,637 | |||
Measurement period adjustment | (2,985) | |||
Impairment | (12,700) | (12,652) | ||
Water Solutions | ||||
Goodwill | ||||
Balance at the beginning of the period | 266,801 | 266,801 | 245,542 | |
Additions | 982 | |||
Resegmentation | (266,801) | |||
Measurement period adjustment | 20,277 | |||
Balance at the end of the period | 266,801 | 266,801 | ||
Wellsite Services | ||||
Goodwill | ||||
Balance at the beginning of the period | $ 7,000 | 7,000 | 12,242 | |
Resegmentation | (7,000) | |||
Impairment | (5,242) | |||
Balance at the end of the period | $ 7,000 | $ 7,000 | ||
Water services | ||||
Goodwill | ||||
Resegmentation | 186,335 | |||
Measurement period adjustment | 133 | |||
Balance at the end of the period | 186,468 | |||
Water infrastructure | ||||
Goodwill | ||||
Resegmentation | 80,466 | |||
Balance at the end of the period | 80,466 | |||
Other | ||||
Goodwill | ||||
Resegmentation | 7,000 | |||
Affirm crane business divestiture | 2,604 | |||
Impairment | $ (4,396) |
GOODWILL AND OTHER INTANGIBLE_4
GOODWILL AND OTHER INTANGIBLE ASSETS - Other Intangible Assets (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Other intangible assets | |||
Gross Value | $ 133,898 | $ 188,589 | |
Accumulated Amortization | 27,419 | 70,685 | |
Net Value | 106,479 | 117,904 | |
Intangible assets | 30,473 | 30,473 | |
Intangible Assets, Gross (Excluding Goodwill) | 164,371 | 219,062 | |
Intangible Assets, Net (Excluding Goodwill) | 136,952 | 148,377 | |
Amortization of Intangible Assets | 11,900 | 13,102 | $ 10,701 |
Water rights | |||
Other intangible assets | |||
Intangible assets | $ 7,031 | 7,031 | |
Indefinite-lived intangible assets added | 1,800 | ||
Water rights | Minimum | |||
Other intangible assets | |||
Renewal term | 5 years | ||
Water rights | Maximum | |||
Other intangible assets | |||
Renewal term | 10 years | ||
Trademarks | |||
Other intangible assets | |||
Intangible assets | $ 23,442 | 23,442 | |
Trademarks | Minimum | |||
Other intangible assets | |||
Renewal term | 5 years | ||
Trademarks | Maximum | |||
Other intangible assets | |||
Renewal term | 10 years | ||
Customer relationships | |||
Other intangible assets | |||
Gross Value | $ 116,554 | 171,245 | |
Accumulated Amortization | 20,233 | 66,402 | |
Net Value | 96,321 | 104,843 | |
Definite-lived intangible asset acquired | $ 500 | 3,000 | |
Weighted average amortization period | 10 years 8 months 12 days | ||
Patents | |||
Other intangible assets | |||
Gross Value | $ 10,110 | 10,110 | |
Accumulated Amortization | 2,420 | 1,417 | |
Net Value | $ 7,690 | 8,693 | |
Weighted average amortization period | 7 years 8 months 12 days | ||
Other intangibles | |||
Other intangible assets | |||
Gross Value | $ 7,234 | 7,234 | |
Accumulated Amortization | 4,766 | 2,866 | |
Net Value | $ 2,468 | $ 4,368 | |
Weighted average amortization period | 2 years 2 months 12 days |
GOODWILL AND OTHER INTANGIBLE_5
GOODWILL AND OTHER INTANGIBLE ASSETS - Annual Amortization of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Annual amortization of intangible assets | ||
2020 | $ 11,656 | |
2021 | 10,473 | |
2022 | 10,259 | |
2023 | 10,187 | |
2024 | 10,118 | |
Thereafter | 53,786 | |
Net Value | $ 106,479 | $ 117,904 |
DEBT (Details)
DEBT (Details) - USD ($) $ in Thousands | Nov. 01, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | Dec. 20, 2016 |
DEBT | |||||
Unamortized Debt issuance Costs | $ 2,900 | ||||
Amortization of debt issuance costs | $ 688 | $ 688 | $ 4,031 | ||
Average excess availability, less than 33% of the commitments | Base Rate Advances | |||||
DEBT | |||||
Variable interest rate (as a percent) | 1.00% | ||||
Average excess availability, less than 33% of the commitments | LIBOR | |||||
DEBT | |||||
Variable interest rate (as a percent) | 2.00% | ||||
Average excess availability, less than 66.67% of the commitments and more than or equal to 33.33% of the commitments | Base Rate Advances | |||||
DEBT | |||||
Variable interest rate (as a percent) | 0.75% | ||||
Average excess availability, less than 66.67% of the commitments and more than or equal to 33.33% of the commitments | LIBOR | |||||
DEBT | |||||
Variable interest rate (as a percent) | 1.75% | ||||
Average excess availability, more than or equal to 66.67% of the commitments | Base Rate Advances | |||||
DEBT | |||||
Variable interest rate (as a percent) | 0.50% | ||||
Average excess availability, more than or equal to 66.67% of the commitments | LIBOR | |||||
DEBT | |||||
Variable interest rate (as a percent) | 1.50% | ||||
Average excess availability more than or equal to fifty percent | |||||
DEBT | |||||
Unused line fee (as a percent) | 0.25% | ||||
Average excess availability less than fifty percent | |||||
DEBT | |||||
Unused line fee (as a percent) | 0.375% | ||||
Eligible unbilled receivables | |||||
DEBT | |||||
Borrowing base (as a percent) | 75.00% | ||||
Letter of credit | |||||
DEBT | |||||
Amount outstanding | $ 0 | 45,000 | |||
Revolving line of credit | |||||
DEBT | |||||
Maximum borrowing capacity | $ 300,000 | $ 300,000 | |||
Revolving line of credit | Letter of credit | |||||
DEBT | |||||
Unused portion of available borrowing | 214,600 | $ 270,500 | |||
Senior secured credit facility | |||||
DEBT | |||||
Additional borrowing capacity | $ 150,000 | ||||
Time frame for increasing borrowing capacity | 3 years | ||||
Percentage of borrowing base allowed | 35.00% | ||||
Margin (as a percent) | 2.00% | ||||
Weighted average interest rate (as a percent) | 4.256% | ||||
Reduction in borrowing capacity | 19,900 | $ 20,800 | |||
Unused portion of available borrowing | 194,700 | ||||
Unamortized Debt issuance Costs | $ 2,000 | $ 2,600 | |||
Senior secured credit facility | Minimum | |||||
DEBT | |||||
Percentage of borrowing base allowed | 30.00% | ||||
Variable interest rate (as a percent) | 1.50% | ||||
Senior secured credit facility | Maximum | |||||
DEBT | |||||
Variable interest rate (as a percent) | 2.00% | ||||
Senior secured credit facility | Base Rate Advances | Minimum | |||||
DEBT | |||||
Margin (as a percent) | 0.50% | ||||
Senior secured credit facility | Base Rate Advances | Maximum | |||||
DEBT | |||||
Margin (as a percent) | 1.00% | ||||
Senior secured credit facility | LIBOR | |||||
DEBT | |||||
Margin (as a percent) | 1.00% | ||||
Senior secured credit facility | LIBOR | Minimum | |||||
DEBT | |||||
Margin (as a percent) | 1.50% | ||||
Senior secured credit facility | LIBOR | Maximum | |||||
DEBT | |||||
Margin (as a percent) | 2.00% | ||||
Senior secured credit facility | Federal Funds Rate | |||||
DEBT | |||||
Margin (as a percent) | 0.50% | ||||
Senior secured credit facility | Eligible billed receivables | |||||
DEBT | |||||
Borrowing base (as a percent) | 85.00% | ||||
Senior secured credit facility | Eligible inventory | |||||
DEBT | |||||
Borrowing base (as a percent) | 70.00% | ||||
Senior secured credit facility | Net recovery percentage | |||||
DEBT | |||||
Borrowing base (as a percent) | 85.00% | ||||
Senior secured credit facility | Criteria for distributions, scenario one | |||||
DEBT | |||||
Lookback period | 30 days | ||||
Percentage outstanding | 25.00% | ||||
Base amount | $ 37,500 | ||||
Senior secured credit facility | Criteria for distributions, scenario two | |||||
DEBT | |||||
Lookback period | 30 days | ||||
Percentage outstanding | 20.00% | ||||
Base amount | $ 30,000 | ||||
Fixed charge coverage ratio | 1.00% | ||||
Senior secured credit facility | Coverage Ratio Criteria | |||||
DEBT | |||||
Lookback period | 60 days | ||||
Percentage outstanding | 10.00% | ||||
Base amount | $ 15,000 | ||||
Fixed charge coverage ratio | 1.00% | ||||
Senior secured credit facility | Letter of credit | |||||
DEBT | |||||
Maximum borrowing capacity | $ 40,000 | ||||
Senior secured credit facility | Swingline loan | |||||
DEBT | |||||
Maximum borrowing capacity | $ 30,000 | ||||
Previous Credit Facility | |||||
DEBT | |||||
Maximum borrowing capacity | $ 100,000 |
COMMITMENTS AND CONTINGENCIES (
COMMITMENTS AND CONTINGENCIES (Details) | 12 Months Ended |
Dec. 31, 2019 | |
COMMITMENTS AND CONTINGENCIES | |
Percentage of vehicles in which certain employees at some of the facilities altered emissions controls systems | 4.00% |
EQUITY-BASED COMPENSATION (Deta
EQUITY-BASED COMPENSATION (Details) - shares shares in Millions | 12 Months Ended | |
Dec. 31, 2019 | Nov. 01, 2017 | |
EQUITY-BASED COMPENSATION | ||
offering period | 3 years | |
2016 plan | Maximum | ||
EQUITY-BASED COMPENSATION | ||
Equity options term | 10 years | |
Rockwater Equity Plan | ||
EQUITY-BASED COMPENSATION | ||
Maximum number of shares | 9.3 |
EQUITY-BASED COMPENSATION - Ass
EQUITY-BASED COMPENSATION - Assumptions (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EQUITY-BASED COMPENSATION | |||
Granted (in shares) | 0 | ||
Weighted-average grant date fair value of equity options granted | $ 8.98 | $ 7.85 | |
Assumptions for equity options granted: | |||
Underlying equity | $ 20.50 | 20 | |
Strike price | $ 20 | ||
Dividend yield (%) | 0.00% | 0.00% | |
Risk free rate(%) | 2.30% | ||
Volatility (%) | 50.00% | ||
Expected term (years) | 10 years | ||
Equity options | Minimum | |||
Assumptions for equity options granted: | |||
Strike price | $ 20.50 | ||
Expected term (years) | 4 years | ||
Risk free rate(%), minimum | 2.00% | ||
Volatility (%), minimum | 46.60% | ||
Equity options | Maximum | |||
Assumptions for equity options granted: | |||
Strike price | $ 30.75 | ||
Expected term (years) | 6 years | ||
Risk free rate(%), maximum | 2.70% | ||
Volatility (%), maximum | 46.80% |
EQUITY-BASED COMPENSATION - Equ
EQUITY-BASED COMPENSATION - Equity Options Changed During Period (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Equity Options | ||
Granted (in shares) | 0 | |
Equity options | ||
Equity Options | ||
Beginning balance (in shares) | 3,865,678 | |
Exercised (in shares) | (5,282) | |
Forfeited (in shares) | (30,438) | |
Expired (in shares) | (32,639) | |
Ending balance (in shares) | 3,797,319 | 3,865,678 |
Ending balance, exercisable (in shares) | 3,463,549 | |
Nonvested at end of period (in shares) | 333,770 | |
Weighted-average Grant Date Value | ||
Beginning balance (in dollars per share) | $ 7.95 | |
Exercised (in dollars per share) | 3.12 | |
Forfeited (in dollars per share) | 8.33 | |
Expired (in dollars per share) | 7.45 | |
Ending balance (in dollars per share) | 8.19 | $ 7.95 |
Ending balance, exercisable | 8.12 | |
Weighted-average Exercise Price | ||
Beginning balance (in dollars per share) | 16 | |
Exercised (in dollars per share) | 5.68 | |
Forfeited (in dollars per share) | 17.70 | |
Expired (in dollars per share) | 21.85 | |
Ending balance (in dollars per share) | 15.95 | $ 16 |
Ending balance, exercisable | 15.06 | |
Nonvested at end of period (in dollar per share) | $ 25.22 | |
Weighted-average Remaining Contractual Term (Years) | ||
Outstanding | 4 years 2 months 12 days | 4 years 10 months 24 days |
Ending balance, exercisable | 3 years 10 months 24 days | |
Aggregate Intrinsic Value | ||
Beginning balance, outstanding | $ 19 | |
Ending balance, outstanding | 509 | $ 19 |
Ending balance, exercisable | $ 510 |
EQUITY-BASED COMPENSATION - E_2
EQUITY-BASED COMPENSATION - Equity Options (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 20.50 | $ 20 | |
Equity options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 4.3 | $ 5.2 | $ 1.9 |
Unrecognized compensation expense | $ 0.2 | ||
Weighted-average period for recognition (in years) | 1 year | ||
Class A Common Stock | Equity options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Share Price | $ 9.28 | $ 6.32 |
EQUITY-BASED COMPENSATION - Res
EQUITY-BASED COMPENSATION - Restricted stock (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
EQUITY-BASED COMPENSATION | |||
offering period | 3 years | ||
Payments for repurchase of common stock | $ 18,600 | $ 16,562 | $ 297 |
Restricted Stock | |||
EQUITY-BASED COMPENSATION | |||
Compensation expense | 8,500 | 4,300 | |
Unrecognized compensation expense | 9,200 | ||
Payments for repurchase of common stock | $ 1,000 | $ 900 | |
Weighted-average remaining life | 1 year 4 months 24 days | ||
Restricted Stock | Minimum | |||
EQUITY-BASED COMPENSATION | |||
offering period | 1 year | ||
Restricted Stock | Maximum | |||
EQUITY-BASED COMPENSATION | |||
offering period | 3 years | ||
Restricted Stock Awards | |||
Restricted stock | |||
Beginning balance (in shares) | 496,945 | ||
Granted (in shares) | 1,417,458 | ||
Vested (in shares) | (379,150) | ||
Forfeited (in shares) | (17,060) | ||
Ending balance (in shares) | 1,518,193 | 496,945 | |
Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 19.02 | ||
Granted (in dollars per share) | 8.80 | ||
Vested (in dollars per share) | 16.69 | ||
Forfeited | 15.97 | ||
Ending balance (in dollars per share) | $ 10.08 | $ 19.02 | |
Restricted Stock Units | |||
Restricted stock | |||
Beginning balance (in shares) | 2,500 | ||
Vested (in shares) | (1,250) | ||
Ending balance (in shares) | 1,250 | 2,500 | |
Grant Date Fair Value | |||
Beginning balance (in dollars per share) | $ 19 | ||
Vested (in dollars per share) | 19 | ||
Ending balance (in dollars per share) | $ 19 | $ 19 |
EQUITY-BASED COMPENSATION - Per
EQUITY-BASED COMPENSATION - Performance share units (Details) - Performance share units | 12 Months Ended | |
Dec. 31, 2019USD ($)$ / shares | Dec. 31, 2018USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of times shares issued for each performance share settlement | $ / shares | 1 | |
Grant date fair value of PSUs | $ 7,000,000 | $ 5,900,000 |
Compensation expense | 2,100,000 | $ 500,000 |
Unrecognized compensation expense | $ 4,200,000 | |
Weighted-average remaining life | 1 year 4 months 24 days | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of times shares issued for each performance share settlement | 0 | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of times shares issued for each performance share settlement | 1.75 | |
Return on assets Less than 9.6% | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of Target PSUs Earned | 0.00% | |
Return on assets 9.6% | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of Target PSUs Earned | 50.00% | |
Return on assets 12% | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of Target PSUs Earned | 100.00% | |
Return on assets 14.4% | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Percentage of Target PSUs Earned | 175.00% |
EQUITY-BASED COMPENSATION - P_2
EQUITY-BASED COMPENSATION - Performance share units outstanding (Details) - Performance share units - 2019 | 12 Months Ended |
Dec. 31, 2019shares | |
Performance share units | |
Beginning balance (in shares) | 255,364 |
Target shares granted | 778,118 |
Target shares forfeited | (18,492) |
Ending balance (in shares) | 1,014,990 |
EQUITY-BASED COMPENSATION - Sto
EQUITY-BASED COMPENSATION - Stock-Settled Incentive Awards (Details) - USD ($) $ in Millions | May 17, 2018 | Dec. 31, 2018 | Dec. 31, 2019 |
EQUITY-BASED COMPENSATION | |||
offering period | 3 years | ||
Stock-Settled Incentive Awards | |||
EQUITY-BASED COMPENSATION | |||
offering period | 2 years | ||
Vesting date | 30 days | ||
Target amount of stock settled incentive awards granted | $ 3.9 | ||
Compensation expense | $ 0.4 | $ 0.5 | |
Unrecognized compensation expense | $ 0.2 | ||
Weighted-average period for recognition (in years) | 5 months | ||
Stock-Settled Incentive Awards | Minimum | |||
EQUITY-BASED COMPENSATION | |||
Pay out percentage | 0.00% | ||
Stock-Settled Incentive Awards | Maximum | |||
EQUITY-BASED COMPENSATION | |||
Pay out percentage | 200.00% | ||
Stock-Settled Incentive Awards | Less than $20.00 | |||
EQUITY-BASED COMPENSATION | |||
Percentage of Target Amount Earned | 0.00% | ||
Stock-Settled Incentive Awards | At least $20.00, but less than $25.00 | |||
EQUITY-BASED COMPENSATION | |||
Percentage of Target Amount Earned | 100.00% | ||
Stock-Settled Incentive Awards | $25.00 or greater | |||
EQUITY-BASED COMPENSATION | |||
Percentage of Target Amount Earned | 200.00% |
EQUITY-BASED COMPENSATION - S_2
EQUITY-BASED COMPENSATION - Stock-settled incentive awards outstanding (Details) - Stock-Settled Incentive Awards $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Value at Target | |
Non-vested at beginning of period | $ 3,147 |
Forfeited during 2019 | (210) |
Non-vested at end of period | 2,937 |
Award Value Being Recognized | |
Non-vested at beginning of period | 1,202 |
Forfeited during 2019 | (80) |
Non-vested at end of period | $ 1,122 |
EQUITY-BASED COMPENSATION - Emp
EQUITY-BASED COMPENSATION - Employee Stock Purchase Plan (ESPP) (Details) shares in Thousands, $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($)shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
offering period | 3 years |
ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
offering period | 4 years |
Issue price (percentage) | 95.00% |
Maximum annual employees contribution | $ 15,000 |
Cash received for shares issued | $ 112 |
Shares issued | shares | 13,178 |
Minimum | ESPP | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Employee service period | 1 year |
EQUITY-BASED COMPENSATION - Pha
EQUITY-BASED COMPENSATION - Phantom unit awards (Details) - USD ($) $ / shares in Units, $ in Thousands | May 05, 2017 | Dec. 31, 2017 | Dec. 31, 2016 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Underlying equity | $ 20 | $ 20.50 | ||
Phantom unit awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Settlement of phantom units | $ 7,800 | |||
Underlying equity | $ 14 | |||
Cash payment (in dollars per share) | $ 5.53 | |||
Compensation expense | $ 7,800 | $ 0 |
EQUITY-BASED COMPENSATION - Sha
EQUITY-BASED COMPENSATION - Share-repurchases (Details) - 2016 plan - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2019 | Dec. 31, 2018 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of shares repurchased in open market | 2,180,806 | 1,703,651 |
Number of shares repurchased with employee minimum tax withholding requirements | 108,074 | 62,777 |
Decrease in paid in-capital | $ 21.9 | |
Class A Common Stock | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Decrease in Class A common stock | 23,000 |
FAIR VALUE MEASUREMENT (Details
FAIR VALUE MEASUREMENT (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Transfers into Level3 | $ 0 | $ 0 | $ 0 | |
Transfers out of Level3 | 0 | 0 | $ 0 | |
Impairment of Goodwill | $ 0 | 4,396 | 17,894 | |
Impairment of property and equipment | 3,715 | 6,657 | ||
Nonrecurring | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 4,396 | 17,894 | ||
Cost-Method Investment | 2,000 | |||
Property and equipment | 3,715 | 6,657 | ||
Nonrecurring | Carrying value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 4,396 | 24,894 | ||
Cost-Method Investment | 2,500 | |||
Property and equipment | 11,040 | 16,919 | ||
Level 3 | Nonrecurring | Fair value | ||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||||
Goodwill | 7,000 | |||
Cost-Method Investment | 500 | |||
Property and equipment | $ 7,325 | $ 10,262 |
RELATED PARTY TRANSACTIONS (Det
RELATED PARTY TRANSACTIONS (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
RELATED PARTY TRANSACTIONS | |||
Sales to related parties | $ 16.8 | $ 8.3 | $ 9 |
Purchases from related party vendors | $ 18.8 | 16.7 | 10.4 |
Minimum | |||
RELATED PARTY TRANSACTIONS | |||
Beneficial ownership (as a percent) | 5.00% | ||
Tax Receivable Agreement | Legacy Owner Holdco and Crestview GP | |||
RELATED PARTY TRANSACTIONS | |||
Percentage of net tax savings for payment to TRA Holders | 85.00% | ||
Tax Receivable Agreement | Contributing Legacy Owners | |||
RELATED PARTY TRANSACTIONS | |||
Percentage of net tax savings for payment to TRA Holders | 85.00% | ||
Property and equipment | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | $ 3 | 4.7 | 3.8 |
Inventory and consumables | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | 0.2 | 0.3 | 0.3 |
Rent of certain equipment or other services | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | 14.3 | 10.3 | 2.7 |
Management, consulting and other services | |||
RELATED PARTY TRANSACTIONS | |||
Purchases from related party vendors | $ 1.3 | $ 1.4 | $ 3.6 |
INCOME TAXES (Details)
INCOME TAXES (Details) - USD ($) $ in Thousands | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
INCOME TAXES | |||||
Effective Income tax (as percent) | 32.00% | 3.00% | 2.40% | ||
Statutory tax rate (as a percent) | 21.00% | 35.00% | 21.00% | 21.00% | 35.00% |
Tax expense (benefit) | $ 1,949 | $ 1,704 | $ (851) | ||
Current tax expense (benefit) | |||||
Federal income tax expense (benefit) | 696 | 1,073 | (338) | ||
State and local income tax expense (benefit) | 1,034 | 1,077 | (77) | ||
Total current expense (benefit) | 1,730 | 2,150 | (415) | ||
Deferred tax expense (benefit) | |||||
Federal income tax expense (benefit) | 49 | (20) | (422) | ||
State and local income tax expense (benefit) | 170 | (426) | (14) | ||
Total deferred expense (benefit) | 219 | (446) | (436) | ||
Total income tax expense (benefit) | 1,949 | 1,704 | (851) | ||
Tax expense (benefit) attributable to controlling interests | 1,488 | 1,425 | (405) | ||
Tax expense (benefit) attributable to noncontrolling interests | 461 | 279 | (446) | ||
Provision calculated at federal statutory income tax rate: | |||||
Income (loss) before taxes | $ 6,085 | $ 56,003 | $ (35,978) | ||
Statutory rate | 21.00% | 35.00% | 21.00% | 21.00% | 35.00% |
Income tax expense (benefit) computed at statutory rate | $ 1,278 | $ 11,761 | $ (12,592) | ||
Less: noncontrolling interests | (284) | (3,735) | 6,409 | ||
Income tax expense (benefit) attributable to controlling interests | 994 | 8,026 | (6,183) | ||
State and local income taxes, net of federal benefit | 884 | 515 | (91) | ||
Change in enacted tax rate | 39,166 | ||||
Change in subsidiary tax status | 587 | ||||
Other | 580 | ||||
Deferred adjsutment due to restructuring | 856 | ||||
Change in valuation allowance | (1,833) | (7,696) | (33,297) | ||
Income tax expense (benefit) attributable to controlling interests | 1,488 | 1,425 | (405) | ||
Tax expense (benefit) attributable to noncontrolling interests | 461 | 279 | (446) | ||
Total income tax expense (benefit) | $ 1,949 | $ 1,704 | $ (851) |
INCOME TAXES - Deferred tax ass
INCOME TAXES - Deferred tax assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Deferred tax assets | ||
Outside basis difference in SES Holdings | $ 27,935 | $ 38,739 |
Federal net operating loss carryforward | 46,782 | 45,927 |
Federal net operating loss carryforward expires begining in 2031 | 133,800 | |
Federal net operating loss carry forward with no expiration | 56,600 | |
State NOLs | 102,000 | |
Foreign NOLs | 5,500 | |
Credits and other carryforwards | 1,451 | 1,679 |
Property and equipment | 150 | |
Intangible assets | 1,284 | |
Other | 944 | 468 |
Total deferred tax assets before valuation allowance | 77,112 | 88,247 |
Valuation allowance | (76,883) | (88,247) |
Total deferred tax assets | 229 | |
Deferred tax liabilities | ||
Property and equipment | 540 | |
Other | 32 | 123 |
Total deferred tax liabilities | 572 | 123 |
Net deferred tax (liabilities) | $ (343) | $ (123) |
INCOME TAXES - Valuation allowa
INCOME TAXES - Valuation allowance (Details) - USD ($) $ in Millions | Jan. 01, 2018 | Dec. 31, 2017 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 |
Change in valuation allowance | |||||
Change during the year | $ 11.4 | ||||
Net operating loss carryforward | $ 190.4 | ||||
Statutory rate | 21.00% | 35.00% | 21.00% | 21.00% | 35.00% |
Liability or expense | $ 0 | $ 0 |
NONCONTROLLING INTERESTS (Detai
NONCONTROLLING INTERESTS (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
NONCONTROLLING INTERESTS | ||
Noncontrolling interests attributable to joint ventures formed for water-related services | $ 2,674 | $ 3,273 |
Noncontrolling interests attributable to holders of Class B Common Stock | 172,961 | 274,566 |
Total noncontrolling interests | $ 175,635 | $ 277,839 |
NONCONTROLLING INTERESTS - Effe
NONCONTROLLING INTERESTS - Effect of Changes (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Effects of changes in noncontrolling interests on equity | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | $ (13,501) | $ 22,951 | $ 16,963 | $ 10,099 | $ 2,784 | $ 36,512 | $ (16,816) |
Transfers (to) from noncontrolling interests: | |||||||||||
Decrease in additional paid-in capital as a result of the contribution of proceeds from the IPO to SES Holdings, LLC in exchange for common units | (41,135) | ||||||||||
Decrease in additional paid-in capital as a result of the contribution of net assets acquired to SES Holdings, LLC in exchange for common units | (4,879) | ||||||||||
Decrease in additional paid-in capital as a result of the contribution of net assets from the Rockwater Merger to SES Holdings, LLC in exchange for common units | 170,276 | ||||||||||
Increase in additional paid-in capital as a result of stock option exercises | 54 | 374 | |||||||||
Increase in additional paid-in capital as a result of restricted stock issuance, net of forfeitures | 3,614 | 1,942 | |||||||||
Increase in additional paid-in capital as a result of issuance of common stock due to vesting of restricted stock units | 4 | 104 | |||||||||
(Decrease) increase in additional paid-in capital as a result of the repurchase of SES Holdings LLC Units | (3,362) | (576) | 113 | ||||||||
Increase in additional paid-in capital as a result of exchanges of SES Holdings LLC Units (an equivalent number of shares of Class B Common Stock) for shares of Class A Common Stock | 107,062 | 146,865 | |||||||||
Increase in additional paid-in capital as a result of the Employee Stock Purchase Plan shares issued | 42 | 15 | |||||||||
Change to equity from net income attributable to Select Energy Services, Inc. and transfers from noncontrolling interests | $ 110,198 | $ 185,236 | $ (232,993) |
EARNINGS (LOSS) PER SHARE (Deta
EARNINGS (LOSS) PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Calculation of basic and diluted earnings per share: | |||||||||||
Antidilutive shares | 2,961,439 | 2,706,159 | |||||||||
Net income | $ (12,504) | $ 7,172 | $ 8,068 | $ 1,400 | $ (18,123) | $ 31,267 | $ 25,023 | $ 16,132 | $ 4,136 | $ 54,299 | $ (35,127) |
Net income attributable to noncontrolling interests | (1,352) | (17,787) | 18,311 | ||||||||
Net income (loss) attributable to Select Energy Services, Inc. | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | $ (13,501) | $ 22,951 | $ 16,963 | $ 10,099 | 2,784 | 36,512 | (16,816) |
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock | 7 | 13 | |||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units | 2 | ||||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options | 1 | 30 | |||||||||
Net income attributable to Select Energy Services, Inc. - diluted | 2,794 | 36,555 | (16,816) | ||||||||
Class A Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | 2,784 | 35,720 | (12,560) | ||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of restricted stock | 7 | 13 | |||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of performance share units | 2 | ||||||||||
Add: Reallocation of net income attributable to noncontrolling interests for the dilutive effect of stock options | 1 | 30 | |||||||||
Net income attributable to Select Energy Services, Inc. - diluted | $ 2,794 | $ 35,763 | $ (12,560) | ||||||||
Weighted-average shares of common stock outstanding - basic | 80,176,323 | 72,403,318 | 24,612,853 | ||||||||
Dilutive effect of restricted stock | 373,366 | 71,718 | |||||||||
Dilutive effect of stock options | 40,215 | 166,999 | |||||||||
Dilutive effect of ESPP | 446 | 112 | |||||||||
Weighted-average shares of common stock outstanding - diluted | 80,671,330 | 72,642,147 | 24,612,853 | ||||||||
Earnings (loss) per share, Basic (in dollars per share) | $ 0.03 | $ 0.49 | $ (0.51) | ||||||||
Earnings (loss) per share, Diluted (in dollars per share) | $ 0.03 | $ 0.49 | $ (0.51) | ||||||||
Basic & Diluted | $ (0.12) | $ 0.07 | $ 0.08 | $ 0.01 | $ (0.17) | $ 0.29 | $ 0.24 | $ 0.15 | |||
Class A Common Stock | Performance share units | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Dilutive effect of stock options | 80,979 | ||||||||||
Class A-1 Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | $ (3,691) | ||||||||||
Net income attributable to Select Energy Services, Inc. - diluted | $ (3,691) | ||||||||||
Weighted-average shares of common stock outstanding - basic | 7,233,973 | ||||||||||
Weighted-average shares of common stock outstanding - diluted | 7,233,973 | ||||||||||
Earnings (loss) per share, Basic (in dollars per share) | $ (0.51) | ||||||||||
Earnings (loss) per share, Diluted (in dollars per share) | $ (0.51) | ||||||||||
Class A-2 Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | $ 792 | $ (565) | |||||||||
Net income attributable to Select Energy Services, Inc. - diluted | $ 792 | $ (565) | |||||||||
Weighted-average shares of common stock outstanding - basic | 1,604,575 | 1,106,605 | |||||||||
Weighted-average shares of common stock outstanding - diluted | 1,604,575 | 1,106,605 | |||||||||
Earnings (loss) per share, Basic (in dollars per share) | $ 0.49 | $ (0.51) | |||||||||
Earnings (loss) per share, Diluted (in dollars per share) | $ 0.49 | $ (0.51) | |||||||||
Basic & Diluted | $ 0.15 | ||||||||||
Class B Common Stock | |||||||||||
Calculation of basic and diluted earnings per share: | |||||||||||
Weighted-average shares of common stock outstanding - basic | 23,806,646 | 31,986,438 | 38,768,156 | ||||||||
Weighted-average shares of common stock outstanding - diluted | 23,806,646 | 31,986,438 | 38,768,156 |
SEGMENT INFORMATION (Details)
SEGMENT INFORMATION (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2019USD ($) | Dec. 31, 2018USD ($) | Sep. 30, 2018USD ($) | Jun. 30, 2018USD ($) | Mar. 31, 2018USD ($) | Dec. 31, 2019USD ($)segment | Dec. 31, 2018USD ($)segment | Dec. 31, 2017USD ($)segment | |
SEGMENT INFORMATION | |||||||||||
Number of operating segments | segment | 3 | 3 | 3 | ||||||||
Number of reportable segments | segment | 3 | 3 | 3 | ||||||||
Segment information | |||||||||||
Revenue | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 362,318 | $ 396,970 | $ 393,247 | $ 376,395 | $ 1,291,589 | $ 1,528,930 | $ 692,491 |
Income (loss) before taxes | 6,085 | 56,003 | (35,978) | ||||||||
Depreciation and Amortization | 120,669 | 133,713 | 103,449 | ||||||||
Capital Expenditures | 102,705 | 172,132 | 108,277 | ||||||||
Income (loss) from operations | $ (7,213) | $ 12,475 | $ 11,179 | $ 6,633 | $ (13,982) | $ 32,258 | $ 24,795 | $ 18,603 | 23,074 | 61,674 | (29,999) |
Other income, net | (2,948) | (2,872) | (2,357) | ||||||||
Other | |||||||||||
Segment information | |||||||||||
Revenue | 33,365 | 144,499 | 69,382 | ||||||||
Income (loss) before taxes | (8,066) | (14,021) | (2,649) | ||||||||
Depreciation and Amortization | 1,714 | 14,124 | 6,286 | ||||||||
Capital Expenditures | 64 | 7,045 | 7,823 | ||||||||
Operating segment | Water services | |||||||||||
Segment information | |||||||||||
Revenue | 773,946 | 897,160 | 420,757 | ||||||||
Income (loss) before taxes | 51,185 | 89,826 | 1,823 | ||||||||
Depreciation and Amortization | 80,664 | 82,875 | 70,839 | ||||||||
Capital Expenditures | 37,692 | 120,883 | 82,127 | ||||||||
Operating segment | Water infrastructure | |||||||||||
Segment information | |||||||||||
Revenue | 221,661 | 230,130 | 163,386 | ||||||||
Income (loss) before taxes | 15,103 | 31,579 | 11,723 | ||||||||
Depreciation and Amortization | 25,665 | 23,042 | 22,481 | ||||||||
Capital Expenditures | 53,839 | 33,372 | 15,264 | ||||||||
Operating segment | Oilfield chemicals | |||||||||||
Segment information | |||||||||||
Revenue | 268,963 | 260,281 | 41,586 | ||||||||
Income (loss) before taxes | 17,942 | (7,107) | 663 | ||||||||
Depreciation and Amortization | 8,766 | 10,496 | 2,040 | ||||||||
Capital Expenditures | 11,110 | 10,832 | 3,063 | ||||||||
Elimination | |||||||||||
Segment information | |||||||||||
Revenue | (6,346) | (3,140) | (2,620) | ||||||||
Corporate | |||||||||||
Segment information | |||||||||||
Income (loss) before taxes | (53,090) | (38,603) | (41,559) | ||||||||
Depreciation and Amortization | 3,860 | 3,176 | 1,803 | ||||||||
Material reconciling items | |||||||||||
Segment information | |||||||||||
Income (loss) from operations | 76,164 | 100,277 | 11,560 | ||||||||
Interest expense, net | (2,688) | (5,311) | (6,629) | ||||||||
Other income, net | $ (14,301) | $ (360) | $ 650 |
SEGMENT INFORMATION - Total Ass
SEGMENT INFORMATION - Total Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2019 | Dec. 31, 2018 |
Segment Reporting Information [Line Items] | ||
Assets | $ 1,347,620 | $ 1,360,605 |
Operating segment | Water services | ||
Segment Reporting Information [Line Items] | ||
Assets | 831,123 | 865,992 |
Operating segment | Water infrastructure | ||
Segment Reporting Information [Line Items] | ||
Assets | 314,026 | 250,207 |
Operating segment | Oilfield chemicals | ||
Segment Reporting Information [Line Items] | ||
Assets | 192,224 | 173,762 |
Operating segment | Other | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 10,247 | $ 70,644 |
SEGMENT INFORMATION - Revenue b
SEGMENT INFORMATION - Revenue by product (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 362,318 | $ 396,970 | $ 393,247 | $ 376,395 | $ 1,291,589 | $ 1,528,930 | $ 692,491 |
Water transfer | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 355,535 | 443,650 | 193,314 | ||||||||
Oilfield chemicals | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 268,963 | 260,281 | 41,586 | ||||||||
Flowback and well testing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 208,572 | 223,828 | 90,107 | ||||||||
Accommodations and rentals | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 150,793 | 153,013 | 63,107 | ||||||||
Water Sourcing | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 120,517 | 129,958 | 97,898 | ||||||||
Pipeline logistics and disposal | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 101,145 | 100,172 | 65,488 | ||||||||
Fluid hauling | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | 63,156 | 79,568 | 75,273 | ||||||||
Other | |||||||||||
Segment Reporting Information [Line Items] | |||||||||||
Revenue | $ 22,908 | $ 138,460 | $ 65,718 |
SEGMENT INFORMATION - Other dis
SEGMENT INFORMATION - Other disclosures (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 362,318 | $ 396,970 | $ 393,247 | $ 376,395 | $ 1,291,589 | $ 1,528,930 | $ 692,491 |
Geographic concentration risk | UNITED STATES | Revenue | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 1,283,400 | $ 1,480,400 | $ 680,900 | ||||||||
Concentration risk (as a percent) | 99.40% | 96.80% | 98.30% | ||||||||
Geographic concentration risk | UNITED STATES | Long Lived Asset | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Long-lived assets | 452,400 | 492,400 | $ 452,400 | $ 492,400 | $ 451,700 | ||||||
Concentration risk (as a percent) | 99.80% | 97.90% | 95.30% | ||||||||
Geographic concentration risk | CANADA | Revenue | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Revenue | $ 8,200 | $ 48,600 | $ 11,600 | ||||||||
Concentration risk (as a percent) | 0.60% | 3.20% | 1.70% | ||||||||
Geographic concentration risk | CANADA | Long Lived Asset | |||||||||||
Concentration Risk [Line Items] | |||||||||||
Long-lived assets | $ 900 | $ 10,500 | $ 900 | $ 10,500 | $ 22,400 | ||||||
Concentration risk (as a percent) | 0.20% | 2.10% | 4.70% |
QUARTERLY RESULTS OF OPERATIO_3
QUARTERLY RESULTS OF OPERATIONS (UNAUDITED) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||
Dec. 31, 2019 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Dec. 31, 2018 | Sep. 30, 2018 | Jun. 30, 2018 | Mar. 31, 2018 | Dec. 31, 2019 | Dec. 31, 2018 | Dec. 31, 2017 | |
Quarterly Financial Data [Abstract] | |||||||||||
Revenue | $ 276,088 | $ 328,968 | $ 323,887 | $ 362,646 | $ 362,318 | $ 396,970 | $ 393,247 | $ 376,395 | $ 1,291,589 | $ 1,528,930 | $ 692,491 |
Gross profit | 21,810 | 40,994 | 39,939 | 45,997 | 34,408 | 59,397 | 56,728 | 47,949 | 148,740 | 198,482 | 57,780 |
Income (loss) from operations | (7,213) | 12,475 | 11,179 | 6,633 | (13,982) | 32,258 | 24,795 | 18,603 | 23,074 | 61,674 | (29,999) |
Net income (loss) | (12,504) | 7,172 | 8,068 | 1,400 | (18,123) | 31,267 | 25,023 | 16,132 | 4,136 | 54,299 | (35,127) |
Net income (loss) attributable to Select Energy Services, Inc. | $ (9,930) | $ 5,379 | $ 6,200 | $ 1,135 | $ (13,501) | $ 22,951 | $ 16,963 | $ 10,099 | 2,784 | 36,512 | (16,816) |
Class A Common Stock | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | $ 2,784 | 35,720 | (12,560) | ||||||||
Net income (loss) per share attributable to common stockholders (Note 16): | |||||||||||
Basic & Diluted | $ (0.12) | $ 0.07 | $ 0.08 | $ 0.01 | $ (0.17) | $ 0.29 | $ 0.24 | $ 0.15 | |||
Class A-1 Common Stock | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | (3,691) | ||||||||||
Class A-2 Common Stock | |||||||||||
Quarterly Financial Data [Abstract] | |||||||||||
Net income (loss) attributable to Select Energy Services, Inc. | $ 792 | $ (565) | |||||||||
Net income (loss) per share attributable to common stockholders (Note 16): | |||||||||||
Basic & Diluted | $ 0.15 |