Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 06, 2020 | |
Entity Listings [Line Items] | ||
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2020 | |
Entity Registrant Name | TARGET HOSPITALITY CORP. | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 101,170,915 | |
Entity Central Index Key | 0001712189 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 001-38343 | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 98-1378631 | |
Entity Address, Address Line One | 2170 Buckthorne Place, Suite 440 | |
Entity Address, City or Town | The Woodlands | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 77380-1775 | |
City Area Code | 800 | |
Local Phone Number | 832-4242 | |
Common Stock [Member] | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Common stock, par value $0.0001 per share | |
Trading Symbol | TH | |
Security Exchange Name | NASDAQ | |
Warrants to purchase common stock [Member] | ||
Entity Listings [Line Items] | ||
Title of 12(b) Security | Warrants to purchase common stock | |
Trading Symbol | THWWW | |
Security Exchange Name | NASDAQ |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 9,102 | $ 6,787 |
Accounts receivable, less allowance for doubtful accounts of $2,468 and $989, respectively | 33,546 | 48,483 |
Prepaid expenses and other assets | 4,965 | 4,649 |
Related party receivable | 865 | 876 |
Total current assets | 48,478 | 60,795 |
Restricted cash | 0 | 52 |
Specialty rental assets, net | 323,109 | 353,695 |
Other property, plant and equipment, net | 10,247 | 11,541 |
Goodwill | 41,038 | 41,038 |
Other intangible assets, net | 106,789 | 117,866 |
Deferred tax asset | 12,213 | 6,427 |
Deferred financing costs revolver, net | 3,740 | 4,688 |
Other non-current assets | 5,879 | 4,690 |
Total assets | 551,493 | 600,792 |
Current liabilities: | ||
Accounts payable | 8,191 | 7,793 |
Accrued liabilities | 16,933 | 35,330 |
Deferred revenue and customer deposits | 6,895 | 16,809 |
Current portion of capital lease and other financing obligations (Note 10) | 1,094 | 989 |
Total current liabilities | 33,113 | 60,921 |
Long-term debt (Note 10): | ||
Principal amount | 340,000 | 340,000 |
Less: unamortized original issue discount | (2,468) | (2,876) |
Less: unamortized term loan deferred financing costs | (11,900) | (13,866) |
Long-term debt, net | 325,632 | 323,258 |
Revolving credit facility (Note 10) | 70,000 | 80,000 |
Long-term capital lease and other financing obligations | 387 | 996 |
Deferred revenue and customer deposits | 12,214 | 9,390 |
Asset retirement obligations | 2,387 | 2,825 |
Total liabilities | 443,733 | 477,390 |
Commitments and contingencies (Note 14) | ||
Stockholders' equity: | ||
Common Stock, $0.0001 par, 380,000,000 authorized, 105,620,399 issued and 101,205,632 outstanding as of September 30, 2020 and 105,254,929 issued and 100,840,162 outstanding as of December 31, 2019. | 10 | 10 |
Common Stock in treasury at cost, 4,414,767 shares as of September 30, 2020 and December 31, 2019, respectively. | (23,559) | (23,559) |
Additional paid-in-capital | 114,398 | 111,794 |
Accumulated other comprehensive loss | (2,535) | (2,558) |
Accumulated earnings | 19,446 | 37,715 |
Total stockholders' equity | 107,760 | 123,402 |
Total liabilities and stockholders' equity | $ 551,493 | $ 600,792 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Consolidated Balance Sheets | ||
Allowance for doubtful accounts | $ 2,468 | $ 989 |
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 |
Common stock shares authorized | 380,000,000 | 380,000,000 |
Common stock shares issued | 105,620,399 | 105,254,929 |
Common stock, Number of share outstanding | 101,205,632 | 100,840,162 |
Treasury stock, shares | 4,414,767 | 4,414,767 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenue: | ||||
Revenue, Topic 606 | $ 35,436 | $ 67,413 | $ 131,160 | $ 201,880 |
Revenue | 48,263 | 81,643 | 173,539 | 244,983 |
Costs: | ||||
Depreciation of specialty rental assets | 11,995 | 11,222 | 37,158 | 31,083 |
Gross profit | 11,718 | 38,556 | 47,061 | 115,482 |
Selling, general and administrative | 8,508 | 11,141 | 28,599 | 66,817 |
Other depreciation and amortization | 4,341 | 4,021 | 12,555 | 11,600 |
Restructuring costs | 0 | 0 | 0 | 168 |
Currency gains, net | 0 | (77) | 0 | (77) |
Other expense (income), net | (183) | 440 | (752) | 279 |
Operating income (loss) | (948) | 23,031 | 6,659 | 36,695 |
Loss on extinguishment of debt | 0 | 0 | 0 | 907 |
Interest expense, net | 9,913 | 10,172 | 30,113 | 24,056 |
Income (loss) before income tax | (10,861) | 12,859 | (23,454) | 11,732 |
Income tax expense (benefit) | (2,991) | 3,290 | (5,187) | 5,562 |
Net income (loss) | (7,870) | 9,569 | (18,267) | 6,170 |
Other comprehensive income (loss) | ||||
Foreign currency translation | 89 | 80 | 23 | (64) |
Comprehensive income (loss) | $ (7,781) | $ 9,649 | $ (18,244) | $ 6,106 |
Two Class Method: | ||||
Weighted average number shares outstanding - basic and diluted | 96,138,459 | 100,102,641 | 95,997,647 | 93,378,332 |
Net income (loss) per share - basic and diluted | $ (0.08) | $ 0.10 | $ (0.19) | $ 0.07 |
Services | ||||
Revenue: | ||||
Revenue, Topic 606 | $ 24,331 | $ 64,189 | $ 103,526 | $ 185,094 |
Costs: | ||||
Costs | 21,990 | 29,470 | 82,456 | 91,215 |
Specialty rental | ||||
Revenue: | ||||
Revenue, subject to ASC 840 | 12,827 | 14,230 | 42,379 | 43,103 |
Revenue | 42,400 | 43,100 | ||
Costs: | ||||
Costs | 2,560 | 2,395 | 6,864 | 7,203 |
Construction fee | ||||
Revenue: | ||||
Revenue, Topic 606 | $ 11,105 | $ 3,224 | $ 27,634 | $ 16,786 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Thousands | Previously reportedEquity (deficit) | Previously reportedAccumulated Other Comprehensive Loss | Previously reportedAccumulated Earnings | Previously reported | Retroactive application of recapitalizationCommon Stock | Retroactive application of recapitalizationAdditional Paid-in Capital | Retroactive application of recapitalizationEquity (deficit) | Retroactive application of recapitalizationAccumulated Earnings | Common Stock | Treasury Stock | Additional Paid-in Capital | Accumulated Other Comprehensive Loss | Accumulated Earnings | Total |
Beginning Balances at Dec. 31, 2017 | $ 307,366 | $ (2,463) | $ 44,088 | $ 348,991 | ||||||||||
Recapitalization transaction | $ 7 | $ 319,968 | $ (307,366) | $ (12,609) | ||||||||||
Recapitalization transaction (in shares) | 74,786,327 | |||||||||||||
Ending Balances at Dec. 31, 2018 | $ 7 | $ 319,968 | $ (2,463) | $ 31,479 | $ 348,991 | |||||||||
Ending Balances (In shares) at Dec. 31, 2018 | 74,786,327 | |||||||||||||
Net income (loss) | (13,979) | (13,979) | ||||||||||||
Recapitalization transaction | $ 3 | 314,194 | 314,197 | |||||||||||
Recapitalization transaction (in shares) | 30,446,606 | |||||||||||||
Contribution | 39,107 | 39,107 | ||||||||||||
Recapitalization transaction - cash paid to Algeco Seller | (563,134) | (563,134) | ||||||||||||
Ending Balances at Mar. 31, 2019 | $ 10 | 110,135 | (2,463) | 17,500 | 125,182 | |||||||||
Ending Balances (In shares) at Mar. 31, 2019 | 105,232,933 | |||||||||||||
Beginning Balances at Dec. 31, 2018 | $ 7 | 319,968 | (2,463) | 31,479 | 348,991 | |||||||||
Beginning Balances (In Shares) at Dec. 31, 2018 | 74,786,327 | |||||||||||||
Net income (loss) | 6,170 | |||||||||||||
Cumulative translation adjustment | (64) | |||||||||||||
Ending Balances at Sep. 30, 2019 | $ 10 | $ (5,591) | 110,942 | (2,527) | 37,649 | 140,483 | ||||||||
Ending Balances (In shares) at Sep. 30, 2019 | 104,417,230 | 828,600 | ||||||||||||
Beginning Balances at Mar. 31, 2019 | $ 10 | 110,135 | (2,463) | 17,500 | 125,182 | |||||||||
Beginning Balances (In Shares) at Mar. 31, 2019 | 105,232,933 | |||||||||||||
Net income (loss) | 10,580 | 10,580 | ||||||||||||
Stock-based compensation | 210 | 210 | ||||||||||||
Cumulative translation adjustment | (144) | (144) | ||||||||||||
Ending Balances at Jun. 30, 2019 | $ 10 | 110,345 | (2,607) | 28,080 | 135,828 | |||||||||
Ending Balances (In shares) at Jun. 30, 2019 | 105,232,933 | |||||||||||||
Net income (loss) | 9,569 | 9,569 | ||||||||||||
Stock-based compensation | 654 | 654 | ||||||||||||
Stock-based compensation (in shares) | 12,897 | |||||||||||||
Shares used to settle payroll tax withholding | (57) | (57) | ||||||||||||
Repurchase of common stock as part of a share repurchase program | $ (5,591) | (5,591) | ||||||||||||
Repurchase of common stock as part of a share repurchase program (In Shares) | (828,600) | 828,600 | ||||||||||||
Cumulative translation adjustment | 80 | 80 | ||||||||||||
Ending Balances at Sep. 30, 2019 | $ 10 | $ (5,591) | 110,942 | (2,527) | 37,649 | 140,483 | ||||||||
Ending Balances (In shares) at Sep. 30, 2019 | 104,417,230 | 828,600 | ||||||||||||
Beginning Balances at Dec. 31, 2019 | $ 10 | $ (23,559) | 111,794 | (2,558) | 37,715 | 123,402 | ||||||||
Beginning Balances (In Shares) at Dec. 31, 2019 | 100,840,162 | 4,414,767 | ||||||||||||
Net income (loss) | 3,801 | 3,801 | ||||||||||||
Stock-based compensation | 884 | 884 | ||||||||||||
Stock-based compensation (in shares) | 83,831 | |||||||||||||
Shares used to settle payroll tax withholding | (83) | (83) | ||||||||||||
Cumulative translation adjustment | (111) | (111) | ||||||||||||
Ending Balances at Mar. 31, 2020 | $ 10 | $ (23,559) | 112,595 | (2,669) | 41,516 | 127,893 | ||||||||
Ending Balances (In shares) at Mar. 31, 2020 | 100,923,993 | 4,414,767 | ||||||||||||
Beginning Balances at Dec. 31, 2019 | $ 10 | $ (23,559) | 111,794 | (2,558) | 37,715 | 123,402 | ||||||||
Beginning Balances (In Shares) at Dec. 31, 2019 | 100,840,162 | 4,414,767 | ||||||||||||
Net income (loss) | (18,267) | |||||||||||||
Cumulative translation adjustment | 23 | |||||||||||||
Ending Balances at Sep. 30, 2020 | $ 10 | $ (23,559) | 114,398 | (2,535) | 19,446 | 107,760 | ||||||||
Ending Balances (In shares) at Sep. 30, 2020 | 101,205,632 | 4,414,767 | ||||||||||||
Beginning Balances at Mar. 31, 2020 | $ 10 | $ (23,559) | 112,595 | (2,669) | 41,516 | 127,893 | ||||||||
Beginning Balances (In Shares) at Mar. 31, 2020 | 100,923,993 | 4,414,767 | ||||||||||||
Net income (loss) | (14,200) | (14,200) | ||||||||||||
Stock-based compensation | 1,038 | 1,038 | ||||||||||||
Stock-based compensation (in shares) | 184,224 | |||||||||||||
Shares used to settle payroll tax withholding | (74) | (74) | ||||||||||||
Cumulative translation adjustment | 45 | 45 | ||||||||||||
Ending Balances at Jun. 30, 2020 | $ 10 | $ (23,559) | 113,559 | (2,624) | 27,316 | 114,702 | ||||||||
Ending Balances (In shares) at Jun. 30, 2020 | 101,108,217 | 4,414,767 | ||||||||||||
Net income (loss) | (7,870) | (7,870) | ||||||||||||
Stock-based compensation | 886 | 886 | ||||||||||||
Stock-based compensation (in shares) | 97,415 | |||||||||||||
Shares used to settle payroll tax withholding | (47) | (47) | ||||||||||||
Cumulative translation adjustment | 89 | 89 | ||||||||||||
Ending Balances at Sep. 30, 2020 | $ 10 | $ (23,559) | $ 114,398 | $ (2,535) | $ 19,446 | $ 107,760 | ||||||||
Ending Balances (In shares) at Sep. 30, 2020 | 101,205,632 | 4,414,767 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Cash flows from operating activities: | ||
Net income (loss) | $ (18,267) | $ 6,170 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Depreciation | 38,636 | 31,944 |
Amortization of intangible assets | 11,077 | 10,739 |
Accretion of asset retirement obligation | 159 | |
Accretion of asset retirement obligation | (285) | |
Amortization of deferred financing costs | 2,914 | 2,220 |
Amortization of original issue discount | 408 | 287 |
Stock-based compensation expense | 2,822 | 864 |
Officer loan compensation expense | 1,583 | |
Gain on sale of specialty rental assets and other property, plant and equipment | (91) | |
(Gain) loss on involuntary conversion | (619) | 122 |
Loss on extinguishment of debt | 0 | 907 |
Deferred income taxes | (5,776) | 4,410 |
Provision for loss on receivables, net of recoveries | 3,099 | 509 |
Changes in operating assets and liabilities (net of business acquired) | ||
Accounts receivable | 11,906 | 8,039 |
Related party receivable | 12 | (645) |
Prepaid expenses and other assets | (323) | 728 |
Accounts payable and other accrued liabilities | (8,643) | (12,957) |
Deferred revenue and customer deposits | (7,089) | (7,874) |
Other non-current assets and liabilities | (1,189) | (3,128) |
Net cash provided by operating activities | 28,592 | 44,077 |
Cash flows from investing activities: | ||
Purchase of specialty rental assets | (11,601) | (74,002) |
Purchase of property, plant and equipment | (182) | (154) |
Purchase of business, net of cash acquired | (30,000) | |
Receipt of insurance proceeds | 619 | 386 |
Proceeds from sale of specialty rental assets and other property, plant and equipment | 876 | |
Repayments from affiliates | 638 | |
Net cash used in investing activities | (10,288) | (103,132) |
Cash flows from financing activities: | ||
Proceeds from borrowings on Senior Secured Notes, net of discount | 336,699 | |
Principal payments on finance and capital lease obligations | (10,654) | (1,970) |
Proceeds from borrowings on finance and capital lease obligations | 10,151 | |
Principal payments on borrowings from ABL | (52,500) | (32,790) |
Proceeds from borrowings on ABL | 42,500 | 82,240 |
Repayment of affiliate note | (3,762) | |
Contributions from affiliate | 39,107 | |
Recapitalization | 218,752 | |
Recapitalization - cash paid to Algeco Seller | (563,134) | |
Payment of deferred financing costs | (19,799) | |
Restricted shares surrendered to pay tax liabilities | (206) | (57) |
Purchase of treasury stock | (5,318) | (4,959) |
Net cash provided by (used in) financing activities | (16,027) | 50,327 |
Effect of exchange rate changes on cash, cash equivalents and restricted cash | (14) | (17) |
Net increase (decrease) in cash, cash equivalents and restricted cash | 2,263 | (8,745) |
Cash, cash equivalents and restricted cash - beginning of period | 6,839 | 12,451 |
Cash, cash equivalents and restricted cash - end of period | 9,102 | 3,706 |
Non-cash investing and financing activity: | ||
Non-cash change in accrued capital expenditures | (634) | |
Non-cash contribution from affiliate - forgiveness of affiliate note | 104,285 | |
Non-cash distribution to PEAC - liability transfer from PEAC, net | (8,840) | |
Non-cash repurchase of common shares as part of share repurchase program | (632) | |
Reconciliation of cash, cash equivalents, and restricted cash to consolidated balance sheets: | ||
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | $ 9,102 | $ 3,706 |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | 1. Summary of Significant Accounting Policies Organization and Nature of Operations Target Hospitality Corp. (“Target Hospitality” or the “Company”) was formed on March 15, 2019 and is one of the largest vertically integrated specialty rental and hospitality services companies in the United States. The Company provides vertically integrated specialty rental and comprehensive hospitality services including catering and food services, maintenance, housekeeping, grounds-keeping, security, health and recreation services, overall workforce community management, and laundry service. Target Hospitality serves clients in oil, gas, mining, alternative energy, government and immigrations sectors principally located in the West Texas, South Texas, Oklahoma and Bakken regions, as well as various large linear-construction (pipeline and infrastructure) projects in the United States. The Company, whose securities are listed on the Nasdaq Capital Market, serves as the holding company for the businesses of Target Logistics Management, LLC and its subsidiaries (“Target”) and RL Signor Holdings, LLC and its subsidiaries (“Signor”). TDR Capital LLP (“TDR Capital” or “TDR”) owns approximately 63% of Target Hospitality and the remaining ownership is broken out among the founders of the Company’s legal predecessor, Platinum Eagle Acquisition Corp. (“Platinum Eagle” or “PEAC”), investors in Platinum Eagle’s private placement transaction completed substantially and concurrently with the Business Combination (as defined below) (the “PIPE”), and other public shareholders. Platinum Eagle was originally incorporated on July 12, 2017 as a Cayman Islands exempted company, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. References in this Quarterly Report on Form 10-Q to the Company refer to Target Hospitality for all periods at or after March 15, 2019 and Platinum Eagle for all periods prior to March 15, 2019, unless the context requires otherwise. On November 13, 2018, PEAC entered into: (i) the agreement and plan of merger, as amended on January 4, 2019 (the “Signor Merger Agreement”), by and among PEAC, Signor Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of Platinum Eagle and sister company to the Holdco Acquiror (defined below as Topaz Holdings LLC) (“Signor Merger Sub”), Arrow Holdings S.a.r.l., a Luxembourg société à responsabilité limitée besloten vennootschap Target Parent was formed by TDR in September 2017. Prior to the Business Combination, Target Parent was directly owned by Algeco Scotsman Global S.a.r.l. (“ASG”) which is ultimately owned by a group of investment funds managed and controlled by TDR. During 2018, ASG assigned all of its ownership interest in Target Parent to the Algeco Seller, an affiliate of ASG that is also ultimately owned by a group of investment funds managed and controlled by TDR. Target Parent acted as a holding company that included the U.S. corporate employees of ASG and certain of its affiliates and certain related administrative costs and was the owner of Target, its operating company. Target Parent received capital contributions, made distributions, and maintained cash as well as other amounts owed to and from affiliated entities. As discussed above, in connection with the closing of the Business Combination, Target Parent merged with and into Bidco, with Bidco as the surviving entity. Signor Parent owned 100% of Bidco until the closing of the Business Combination in connection with which Signor Parent merged with and into Topaz with Topaz being the surviving entity. Prior to the Business Combination, Signor Parent was owned by the Arrow Seller, which is ultimately owned by a group of investment funds managed and controlled by TDR. Signor Parent was formed in August 2018 and acted as a holding company for Bidco, which was formed in September 2018, also as a holding company. Bidco acquired Signor on September 7, 2018. Neither Signor Parent nor Bidco had operating activity, but each received capital contributions, made distributions, and maintained cash as well as other amounts owed to and from affiliated entities. Signor Parent was dissolved upon consummation of the Business Combination and merger with Topaz described above on March 15, 2019. Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) has been condensed or omitted pursuant to those rules and regulations. The financial statements included in this report should be read in conjunction with the Target Hospitality Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2020 or any future period. The accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, and the adjustments described as part of the Business Combination discussed in Note 3, necessary for a fair statement of financial position as of September 30, 2020, and results of operations for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. The consolidated balance sheet as of December 31, 2019, was derived from the audited consolidated balance sheets of Target Hospitality Corp. but does not contain all of the footnote disclosures from those annual financial statements. Reclassifications Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income (loss) and comprehensive income (loss), stockholders’ equity or cash flows. Use of Estimates The preparation of financial statements in conformity with US GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, actual amounts may differ from those included in the accompanying unaudited consolidated financial statements. Principles of Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All intercompany balances and transactions are eliminated. The Business Combination was accounted for as a reverse recapitalization in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations As a result of Target Parent and Signor Parent being the accounting acquirer in the Business Combination, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if” Target Parent and Signor Parent are the accounting predecessor of the Company. The historical operations of Target Parent and Signor Parent are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Target Parent and Signor Parent prior to the Business Combination; (ii) the consolidated results of the Company, Target Parent and Signor Parent following the Business Combination on March 15, 2019; (iii) the assets and liabilities of Target Parent and Signor Parent at their historical cost; and (iv) the Company’s equity structure for all periods presented. The recapitalization of the number of shares of Common Stock attributable to the purchase of Target Parent and Signor Parent in connection with the Business Combination is reflected retroactively to the earliest period presented and will be utilized for calculating loss per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the transaction as a reverse recapitalization of Target Parent and Signor Parent. Revenue Recognition The Company derives revenue from specialty rental and hospitality services, specifically lodging and related ancillary services. Revenue is recognized in the period in which lodging and services are provided pursuant to the terms of contractual relationships with the customers. Certain arrangements contain a lease of lodging facilities to customers. The leases are accounted for as an operating lease under the authoritative guidance for leases and are recognized as income using the straight-line method over the term of the lease agreement. Because performance obligations related to specialty rental and hospitality services are satisfied over time, the majority of our revenue is recognized on a daily basis, for each night a customer stays, at a contractual day rate. Our customers typically contract for accommodation services under committed contracts with terms that most often range from several months to three years. Our payment terms vary by type and location of our customer and the service offered. The time between invoicing and when payment is due is not significant. When lodging and services are billed and collected in advance, recognition of revenue is deferred until services are rendered. Certain of the Company’s contractual arrangements allow customers the ability to use paid but unused lodging and services for a specified period. The Company recognizes revenue for these paid but unused lodging and services as they are consumed, as it becomes probable the lodging and services will not be used, or upon expiration of the specified term. Cost of services includes labor, food, utilities, supplies, rent and other direct costs associated with operating the lodging units as well as costs associated with construction services. Cost of rental includes leasing costs and other direct costs of maintaining the lodging units. Costs associated with contracts include sales commissions which are expensed as incurred and reflected in selling, general and administrative expenses in the consolidated statements of comprehensive income (loss). The Company recognizes revenue associated with community construction using the percentage of completion method with progress towards completion measured using the cost-to-cost method as the basis to recognize revenue. Management believes this cost-to-cost method is the most appropriate measure of progress to the satisfaction of a performance obligation on the community construction. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to projected costs and revenue and are recognized in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. Factors that may affect future project costs and margins include weather, production efficiencies, availability and costs of labor, materials and subcomponents. Additionally, the Company collects sales, use, occupancy and similar taxes, which the Company presents on a net basis (excluded from revenues) in the consolidated statements of comprehensive income (loss). Recently Issued Accounting Standards The Company meets the definition of an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). In reliance on exemptions provided under the JOBS Act for EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002) is required to comply with such standards. As such, compliance dates included below pertain to non-issuers, and as permitted, early adoption dates are indicated. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (ASC 840) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses ASU 2016-13 or Topic 326 Codification Improvements to Topic 326, Financial Instruments - Credit Losses In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software the Company capitalized certain implementation costs during 2019. Such systems were placed into service beginning January of 2020 at which time the Company began to amortize these capitalized costs over the period of the service arrangement into selling, general and administrative expenses. Refer to Note 8 for additional details. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Recent Developments – CO VI D-19 and D isruption in Oil and Gas Industry On January 30, 2020, the World Health Organization declared an outbreak of a highly contagious form of an upper respiratory infection caused by , a novel coronavirus strain commonly referred to as “coronavirus”. There have been significant changes to the global economic situation and to public securities markets as a result of COVID-19. It is possible that these changes could cause changes to estimates as a result of the markets in which the Company operates, the price of the Company’s publicly traded equity and debt in comparison to the Company’s carrying value. Such changes to estimates could potentially result in impacts that would be material to the Company’s consolidated financial statements, particularly with respect to the fair value of the Company’s reporting units in relation to potential goodwill impairment, the fair value of long-lived and other intangible assets in relation to potential impairment and the allowance for doubtful accounts. As a result of the impact of COVID-19 and the disruption in the oil and gas industry, in the first quarter of 2020 we also concluded a trigger event had occurred and we tested our long-lived and intangible assets, including goodwill, for impairment. Refer to Note 7 for additional information on our goodwill impairment testing and the related results. Additionally, in connection with COVID-19, on March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). The CARES Act, among other things, includes provisions relating to the 80 percent limitation of net operating loss and modifications to the business interest deduction limitations. We evaluated how the provisions in the CARES Act would impact our consolidated financial statements and concluded that the CARES Act did not have a material impact on our provision for income taxes for the nine months ended September 30, 2020 and 2019 |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2020 | |
Revenue | |
Revenue | 2. Revenue Total revenue under contracts recognized under Topic 606 was $131.2 million and $201.9 million for the nine months ended September 30, 2020 and 2019, respectively, while $42.4 million and $43.1 million was specialty rental income subject to the guidance of ASC 840 for the nine months ended September 30, 2020 and 2019, respectively. Total revenue under contracts recognized under Topic 606 was $35.4 million and $67.4 million for the three months ended September 30, 2020 and 2019, respectively, while $12.8 million and $14.2 million was specialty rental income subject to the guidance of ASC 840 for the three months ended September 30, 2020 and 2019, respectively. The following table disaggregates our revenue by our three reportable segments as well as the All Other category: Permian Basin, Bakken Basin, Government, and All Other for the dates indicated below: For Three Months Ended For Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Permian Basin Services income $ 16,236 $ 51,250 $ 77,863 $ 147,060 Construction fee income - 1,688 - 2,270 Total Permian Basin revenues 16,236 52,938 77,863 149,330 Bakken Basin Services income $ 1,154 $ 6,019 $ 5,705 $ 16,530 Total Bakken Basin revenues 1,154 6,019 5,705 16,530 Government Services income $ 6,169 $ 6,186 $ 18,448 $ 18,952 Total Government revenues 6,169 6,186 18,448 18,952 All Other Services income $ 772 $ 734 $ 1,510 $ 2,552 Construction fee income 11,105 1,536 27,634 14,516 Total All Other revenues 11,877 2,270 29,144 17,068 Total revenues $ 35,436 $ 67,413 $ 131,160 $ 201,880 As a result of the current market environment discussed in Note 1 “Summary of Significant Accounting Policies - Recent Developments – CO VI D-19 and D isruption in Oil and Gas Industry” To date, there has been deterioration in the collectability of our receivables as mentioned above, and we are likely to experience additional challenges in collections due to uncertainties around the continued impact of the COVID-19 global pandemic and decrease in demand for oil and natural gas as discussed in Note 1. As a result of our estimate of the impact, an additional amount of bad debt expense of approximately $1.0 million was recognized during the three months ended September 30, 2020. Contract Assets and Liabilities We do not have any contract assets and we did not recognize any impairments of any contract assets or liabilities. Contract liabilities under Topic 606 primarily consist of deferred revenue that represent room nights that the customer has not used and may use in the future. Activity in the deferred revenue accounts as of the dates indicated below was as follows: For Nine Months Ended September 30, 2020 2019 Balances at Beginning of the Period $ 26,199 $ 37,376 Additions to deferred revenue 7,866 7,054 Revenue recognized (14,956) (14,928) Balances at End of the Period $ 19,109 $ 29,502 As of September 30, 2020, for contracts greater than one year, the following table discloses the estimated revenues related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue, and only represents revenue expected to be recognized from contracts where the price and quantity of the product or service are fixed (in thousands): For the Years Ended December 31, 2020 2021 2022 Thereafter Total Revenue expected to be recognized $ 11,592 $ 35,366 $ 14,952 $ - $ 61,910 The Company applied some of the practical expedients in Topic 606, including the “right to invoice” practical expedient in ASC 606-10-55-18, and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied (or partially unsatisfied) performance obligations. Due to the application of these practical expedients, the table above represents only a portion of the Company’s expected future consolidated revenues and it is not necessarily indicative of the expected trend in total revenues. |
Business Combination
Business Combination | 9 Months Ended |
Sep. 30, 2020 | |
Business Combination | |
Business Combination | 3. Business Combination On March 15, 2019, Platinum Eagle consummated the Business Combination pursuant to the terms of the Merger Agreements and acquired all of the issued and outstanding equity interests in Target Parent and Signor Parent from the Sellers. Pursuant to the Merger Agreements, Topaz purchased from the Sellers all of the issued and outstanding equity interests of Target Parent and Signor Parent for $1.311 billion, of which $563.1 million was paid in cash and the remaining $747.9 million was paid to the Sellers in the form of 25,686,327 shares of Common Stock, to Algeco Seller, and 49,100,000 shares of Common Stock, to Arrow Seller. The following tables reconcile the elements of the Business Combination to the consolidated statement of cash flows for the nine months ended September 30, 2019. Recapitalization Cash - Platinum Eagle's Trust (net of redemptions) $ 146,137 Cash - PIPE 80,000 Gross cash received by Target Hospitality from Business Combination 226,137 Less: fees to underwriters (7,385) Net cash received from Recapitalization 218,752 Plus: non-cash contribution - forgiveness of related party loan 104,285 Less: non-cash net liabilities assumed from PEAC (8,840) Net contributions from Recapitalization Transaction $ 314,197 Contributions Transaction bonus amounts $ 28,519 Payment of historical ABL facility 9,904 Payment of affiliate amounts 684 Total contributions $ 39,107 Cash paid to Algeco Seller $ 563,134 The cash paid to Algeco Seller was funded from the proceeds from debt (described below), net cash received from Recapitalization (described above), offset by deferred financing costs and certain other transaction costs incurred in connection with the Business Combination. The $340 million of gross proceeds from Bidco’s offering of the 2024 Senior Secured Notes less $3.3 million of original issuance discount and $40 million through Bidco’s entry into a new ABL facility are shown separately in the consolidated statement of cash flow for the nine months ended September 30, 2019. Prior to the Business Combination, Platinum Eagle had 32,500,000 shares of Class A common stock, par value $0.0001 per share (the “Class A Shares”) outstanding and 8,125,000 shares of Class B common stock, par value $0.0001 per share (the “Class B Shares”) outstanding, which was comprised of Founder Shares held by the Founders (as defined below) and Former Platinum Eagle Director Shares held by individuals who are not founders but were directors of PEAC. On March 15, 2019, Platinum Eagle was renamed Target Hospitality Corp. and each currently issued and outstanding share of Platinum Eagle Class B Shares automatically converted on a one-for-one basis, into shares of Platinum Eagle Delaware Class A Shares. Immediately thereafter, each currently issued and outstanding share of Platinum Eagle Class A Shares automatically converted on a one-for-one basis, into shares of the common stock of Target Hospitality. In connection with the Business Combination, 18,178,394 Class A Shares were redeemed. The number of shares of Common Stock of Target Hospitality issued immediately following the consummation of the Business Combination is summarized as follows: Shares by Type Number of shares by type Platinum Eagle Class A Shares outstanding prior to the Business Combination 32,500,000 Less: Redemption of Platinum Eagle Class A Shares (18,178,394) Class A Shares of Platinum Eagle 14,321,606 Founder Shares 8,050,000 Former Platinum Eagle Director Shares 75,000 Shares issued to PIPE investors 8,000,000 Shares issued to PEAC and PIPE investors 30,446,606 Shares issued to the Sellers 74,786,327 Total Outstanding Shares of Common Stock issued and outstanding 105,232,933 Less: Founders Shares in escrow (5,015,898) Total Shares of Common Stock outstanding for earnings per share computation (See Note 16) 100,217,035 In connection with the closing of and as a result of the consummation of the Business Combination, certain members of the Company’s management and employees received bonus payments as a result of the Business Combination being consummated in the aggregate amount of $28.5 million. The bonuses have been reflected in the selling, general and administrative expense line in the consolidated statements of comprehensive income (loss). The bonuses were funded by a contribution from Algeco Seller in March of 2019 and is reflected as the transaction bonus amount contribution above. The Company also incurred transaction costs related to the Business Combination of approximately $8 million, which are included in selling, general and administrative expenses on the consolidated statement of comprehensive income (loss) for the nine months ended September 30,2020. Upon the consummation of the Business Combination, outstanding loans to officers were forgiven, which resulted in $1.6 million of additional expenses recognized in selling, general and administrative expenses on the consolidated statement of comprehensive income (loss) nine months ended September 30, 2019 as more fully discussed in Note 15. Earnout Agreement On March 15, 2019 (the “Closing Date”), in connection with the closing of the Business Combination, Harry E. Sloan, Jeff Sagansky and Eli Baker (together, the “Founders”) and the Company entered into an earnout agreement (the “Earnout Agreement”), pursuant to which, on the Closing Date, 5,015,898 Founder Shares were placed in escrow (the “Escrow Shares”), to be released at any time during the period of three years following the Closing Date upon the occurrence of the following triggering events: (i) fifty percent (50%) of the Escrow Shares will be released to the Founder Group (as defined in the Earnout Agreement) if the closing price of the shares of Target Hospitality’s common stock as reported on Nasdaq exceeds $12.50 per share for twenty ( 20 30 20 30 Upon the expiration of the three-year earnout period, any Founders’ Shares remaining in escrow that were not released in accordance with the Earnout Agreement will be transferred to the Company for cancellation. The fair value of the Company’s contingent right to cancel the Founders’ Shares has been recorded as a component of additional paid in capital, with an equal and offsetting capital contribution from the Founders. |
Acquisitions
Acquisitions | 9 Months Ended |
Sep. 30, 2020 | |
Acquisitions | |
Acquisitions | 4. Acquisitions Superior Acquisition On June 19, 2019, Target Logistics Management LLC (“TLM”), entered into a purchase agreement (the “Superior Purchase Agreement”) with Superior Lodging, LLC, Superior Lodging Orla South, LLC, and Superior Lodging Kermit, LLC (collectively, the “Superior Sellers”), and certain other parties, pursuant to which TLM acquired substantially all of the assets in connection with three workforce communities in the Delaware Basin of West Texas, including temporary housing facilities and underlying real estate (the “Communities”). Pursuant to the Superior Purchase Agreement, TLM acquired the Communities for a purchase price of $30.0 million in cash, which represents the acquisition date fair value of consideration transferred. The purchase price was funded by drawing on the New ABL Facility discussed in Note 10. The Superior Purchase Agreement provided for a simultaneous signing and closing on June 19, 2019. This acquisition further expands the Company’s presence in the Permian Basin. Immediately prior to the acquisition of the Communities, TLM provided management and catering services to the Superior Sellers at two of the Communities. At the time of the acquisition, all three Communities were fully operational and provided vertically integrated comprehensive hospitality services consistent with Target’s business. Certain affiliates of the Superior Sellers will continue to lease 140 beds in the Communities for the next year. The following table summarizes the allocation of the total purchase price to the net assets acquired and liabilities assumed at the date of acquisition by TLM at estimated fair value: Property and equipment $ 18,342 Customer relationships 4,800 Goodwill 6,858 Total assets acquired $ 30,000 Intangible assets related to customer relationships represent the aggregate value of those relationships from existing arrangements and future operations on a look-through basis, considering the end customers. The intangible assets received are being amortized on a straight-line basis over an estimated useful life of nine years from the date of the business combination. The following unaudited pro forma information presents consolidated financial information as if Superior had been acquired as of January 1, 2019: Period Revenue Income before taxes 2019 pro forma from January 1, 2019 to September 30, 2019 $ 249,732 $ 14,606 Superior added $7.8 million and $2.6 million to our revenue and income before income taxes, respectively, for the nine months ended September 30, 2020. For the three months ended September 30, 2020, Superior added $1.9 million and $0.5 million to our revenue and income before taxes, respectively. These pro forma amounts have been calculated after applying the Company’s accounting policies and adjusting the results of Superior to reflect the additional depreciation and amortization that would have been charged assuming the fair value adjustments to property and equipment, and intangible assets had been applied from January 1, 2019. This pro forma information is not necessarily indicative of the Company’s results of operations had the acquisition been completed on January 1, 2019, nor is it necessarily indicative of the Company’s future results. This pro forma information does not reflect any cost savings from operating efficiencies or synergies that could result from the acquisition and does not reflect additional revenue opportunities following the acquisition. In connection with this acquisition, the Company incurred approximately $0.4 million of acquisition-related costs and the supplemental pro-forma income before taxes was adjusted to include these acquisition-related costs. The purchase price allocation performed by the Company resulted in the recognition of $6.9 million of goodwill. The goodwill recognized is attributable to expected revenue synergies generated by the territorial expansion of workforce housing, and costs synergies resulting from the consolidation or elimination of certain functions. All of the goodwill is expected to be deductible for income tax purposes. All of the goodwill was allocated to the Permian Basin segment of our reportable segments discussed in Note 20. ProPetro On July 1, 2019, TLM purchased a 168-room community from ProPetro Services, Inc. (“ProPetro”) for an aggregate purchase price of $5.0 million in cash, which represents the acquisition date fair value of consideration transferred. The purchase price was funded by cash on hand as of the acquisition date. The acquisition was accounted for as an asset acquisition. The Company allocated the total purchase price to identifiable tangible assets based on their estimated relative fair values, which resulted in the entire purchase price |
Specialty Rental Assets, Net
Specialty Rental Assets, Net | 9 Months Ended |
Sep. 30, 2020 | |
Specialty Rental Assets, Net | |
Specialty Rental Assets, Net | 5. Specialty Rental Assets, Net Specialty rental assets, net at the dates indicated below consisted of the following: September 30, December 31, 2020 2019 Specialty rental assets $ 547,236 $ 545,399 Construction-in-process 4,183 8,672 Less: accumulated depreciation (228,310) (200,376) Specialty rental assets, net $ 323,109 $ 353,695 Depreciation expense related to Specialty rental assets was $37.2 million and $31.1 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in depreciation of specialty rental assets in the consolidated statements of comprehensive income (loss). For the three months ended September 30, 2020 and 2019, depreciation of Specialty rental assets was $12.0 million and $11.2 million, respectively. During the nine months ended September 30, 2020, the Company disposed of assets with accumulated depreciation of approximately $9.2 million along with the related gross cost of approximately $10 million. These disposals were associated with a sale of assets with a net book value of approximately $0.8 million as well as fully depreciated asset retirement costs. The asset sale resulted in a loss on the sale of assets of approximately $0.1 million and is reported within other expense (income), net in the accompanying unaudited consolidated statements of comprehensive income (loss) for the three and nine months ended September 30, 2020. |
Other Property, Plant and Equip
Other Property, Plant and Equipment, Net | 9 Months Ended |
Sep. 30, 2020 | |
Other Property, Plant and Equipment, Net | |
Other Property, Plant and Equipment, Net | 6. Other Property, Plant and Equipment, Net Other property, plant and equipment, net at the dates indicated below, consisted of the following: September 30, December 31, 2020 2019 Land $ 9,155 $ 9,155 Buildings and leasehold improvements 115 115 Machinery and office equipment 887 708 Software and other 3,748 3,748 13,905 13,726 Less: accumulated depreciation (3,658) (2,185) Total other property, plant and equipment, net $ 10,247 $ 11,541 Depreciation expense related to other property, plant and equipment was $1.5 million and $0.7 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in other depreciation and amortization in the consolidated statements of comprehensive income (loss). For the three months ended September 30, 2020 and 2019, depreciation related to other property, plant and equipment was $0.7 million and $0.3 million, respectively. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets, net | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Other Intangible Assets, net | |
Goodwill and Other Intangible Assets, net | 7. Goodwill and Other Intangible Assets, net The financial statements reflect goodwill from previous acquisitions that is all attributable to the Permian Basin business segment and reporting unit. Changes in the carrying amount of goodwill were as follows: Permian Basin Balance at January 1, 2019 $ 34,180 Acquisition of Superior 6,858 Balance at December 31, 2019 41,038 Changes in Goodwill - Balance at September 30, 2020 $ 41,038 As a result of the global COVID-19 pandemic and the recent decrease in demand and oversupply of oil and natural gas during the first quarter of 2020 which impacted the trading price of our common stock, we identified a trigger event requiring us to assess our long-lived and intangibles assets for recoverability and perform a quantitative impairment assessment as of March 31, 2020 of reporting units with goodwill, all of which is within the Permian Basin reporting unit. To determine the fair value of our reporting units and test for impairment, we utilized an income approach (discounted cash flow method), as we believe this is the most direct approach to incorporate the specific economic attributes and risk profiles of our reporting units into our valuation model. We did not utilize a market approach given the current situation with the industry and the lack of contemporaneous transactions. To the extent market indicators of fair value were available, we considered such information as well as market participant assumptions in our discounted cash flow analysis and determination of fair value. The discounted cash flow methodology is based, to a large extent, on assumptions about future events, which includes the use of significant unobservable inputs, representative of a Level 3 fair value measurement. Given the current volatile market environment, we utilized third-party valuation advisors to assist us with these valuations. These analyses required significant judgment, including management’s short-term and long-term forecast of operating performance, revenue growth rates, profitability margins, capital expenditures, timing of future cash flows based on an eventual recovery of the oil and gas industry, the remaining useful life and service potential of the asset (in the case of long-lived assets, including definite-lived intangibles), and discount rates (in the case of our goodwill assessment) based on our weighted average cost of capital. These forecasted cash flows took into consideration historical and recent results, committed contracts and near-term prospects and management's outlook for the future, as well as the increased market risk surrounding the award and execution of future contracts. Based on our quantitative assessments, we determined the carrying value of our long-lived assets was recoverable and goodwill associated with our Permian Basin reporting unit was not impaired. However, the fair value of the reporting unit exceeded its net book value by a margin of less than 20%. Our estimate of fair value was based upon assumptions believed to be reasonable. However, impairment assessments incorporate inherent uncertainties, including projected commodity pricing, supply and demand for our services and future market conditions, which are difficult to predict in volatile economic environments and could result in impairment charges in future periods if actual results materially differ from the estimated assumptions utilized in our forecasts. Further, given the dynamic nature of the COVID-19 pandemic and related market conditions, we cannot reasonably estimate the period of time that these events will persist or the full extent of the impact they will have on our business. We will continue to take actions designed to mitigate the adverse effects of the rapidly changing market environment and expect to continue to adjust our cost structure to market conditions. This may include continued reductions of our workforce to better align our employee count with anticipated lower activity levels and sustained reduction of capital spending at maintenance levels until demand returns to previous levels. During the three months ended September 30, 2020, we considered the continued effects resulting from the COVID-19 pandemic and oil and gas price volatility as part of our review for indicators of potential impairment and reviewed qualitative information currently available in determining if it was more likely than not that the fair values of the Company’s Permian Basin reporting unit was less than the carrying amount as of September 30, 2020. Based on the Company’s current long-term projections and the extent of fair value in excess of carrying value at the Company's March 31, 2020 quantitative impairment test date, management concluded that it is not more likely than not that the fair value of the Company's Permian Basin reporting unit was less than its carrying amount as of September 30, 2020 and therefore an impairment test as of September 30, 2020 was not required. The Company will continue to monitor the situation for any additional changes in economic conditions. Intangible assets other than goodwill at the dates indicated below consisted of the following: September 30, 2020 Weighted Gross average Carrying Accumulated Net Book remaining lives Amount Amortization Value Intangible assets subject to amortization Customer relationships 6.6 $ 128,907 $ (38,518) $ 90,389 Total 128,907 (38,518) 90,389 Indefinite lived assets: Tradenames 16,400 — 16,400 Total intangible assets other than goodwill $ 145,307 $ (38,518) $ 106,789 December 31, 2019 Weighted Gross average Carrying Accumulated Net Book remaining lives Amount Amortization Value Intangible assets subject to amortization Customer relationships 7.4 $ 132,720 $ (31,254) $ 101,466 Total 132,720 (31,254) 101,466 Indefinite lived assets: Tradenames 16,400 — 16,400 Total intangible assets other than goodwill $ 149,120 $ (31,254) $ 117,866 During the three and nine months ended September 30, 2020, the Company wrote-off fully amortized customer related intangibles with a gross carrying amount of approximately $3.8 million and a net book value of $0. The aggregate amortization expense for intangible assets subject to amortization was $11.1 million and $10.7 million for the nine months ended September 30, 2020 and 2019, respectively, and is included in other depreciation and amortization in the consolidated statements of comprehensive income (loss). For the three months ended September 30, 2020 and 2019, amortization expense related to intangible assets was $3.7 million and $3.7 million, respectively. The estimated aggregate amortization expense as of September 30, 2020 for each of the next five years and thereafter is as follows: Rest of 2020 $ 3,579 2021 14,656 2022 13,302 2023 12,881 2024 12,881 Thereafter 33,090 Total $ 90,389 |
Other Non-Current Assets
Other Non-Current Assets | 9 Months Ended |
Sep. 30, 2020 | |
Other Non-Current Assets | |
Other Non-Current Assets | 8. Other Non-Current Assets Other non-current assets include capitalized software implementation costs for the implementation of cloud computing systems. The Company capitalizes expenditures related to the implementation of cloud computing software as incurred during the application development stage. Such capitalized costs are amortized to selling, general, and administrative expenses over the term of the cloud computing hosting arrangement, including reasonably certain renewals, beginning when the module or component of the hosting arrangement is ready for its intended use. As of the dates indicated below, capitalized implementation costs and related accumulated amortization in other non-current assets on the consolidated balance sheets amounted to the following: September 30, December 31, 2020 2019 Cloud computing implementation costs $ 7,061 $ 4,690 Less: accumulated amortization (1,182) - Other non-current assets $ 5,879 $ 4,690 None of these costs were amortized during 2019 as the related systems were not ready for their intended use as of December 31, 2019. Such systems were placed into service beginning January of 2020 at which time the Company began to amortize these capitalized costs on a straight-line basis over the period of the remaining service arrangements of between 2 and 4 years . |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities | |
Accrued Liabilities | 9. Accrued Liabilities Accrued liabilities as of the dates indicated below consists of the following: September 30, December 31, 2020 2019 Employee accrued compensation expense $ 5,039 $ 7,130 Other accrued liabilities 10,257 18,482 Accrued interest on debt 1,637 9,718 Total accrued liabilities $ 16,933 $ 35,330 |
Debt
Debt | 9 Months Ended |
Sep. 30, 2020 | |
Debt | |
Debt | 10. Debt Senior Secured Notes 2024 In connection with the closing of the Business Combination, Bidco issued $340 million in aggregate principal amount of 9.50% senior secured notes due March 15, 2024 (the “2024 Senior Secured Notes” or “Notes”) under an indenture dated March 15, 2019 (the “Indenture”). The Indenture was entered into by and among Bidco, the guarantors named therein (the “Note Guarantors”), and Deutsche Bank Trust Company Americas, as trustee and as collateral agent. Interest is payable semi-annually on September 15 and March 15 beginning September 15, 2019. Refer to table below for a description of the amounts related to the Notes. Principal Unamortized Original Issue Discount Unamortized Deferred Financing Costs 9.50% Senior Secured Notes, due 2024 $ 340,000 $ 2,468 $ 11,900 Before March 15, 2021, Bidco may redeem the Notes at a redemption price equal to 100% of the principal amount, plus a customary make whole premium for the Notes being redeemed, plus accrued and unpaid interest, if any, up to but not including the redemption date. The customary make whole premium, with respect to the Notes on any applicable redemption date, as calculated by Bidco, is the greater of (i) 1.00% of the then outstanding principal amount of the Note; and (ii) the excess of (a) the present value at such redemption date of (i) the redemption price set on or after March 15, 2021 plus (ii) all required interest payments due on the Note through March 15, 2021, excluding accrued but unpaid interest to the redemption date, in each case, computed using a discount rate equal to the Treasury Rate as of such redemption date plus 50 basis points; over (b) the then outstanding principal amount of the Notes. Before March 15, 2021, Bidco may redeem up to 40% of the aggregate principal number of outstanding Notes at a redemption price equal to 109.50% of the principal amount of the Notes redeemed, plus accrued and unpaid interest, if any, to but not including the redemption date, with the net proceeds of any equity offerings. Bidco may redeem up to 10% of the aggregate principal amount of the Notes during each twelve-month period commencing on the issue date and prior to March 15, 2021 at a redemption price equal to 103% of the principal amount of the Notes, plus accrued and unpaid interest, if any, to but not including the redemption date. If Bidco undergoes a change of control or sells certain of its assets, Bidco may be required to offer to repurchase the Notes. On or after March 15, 2021, Bidco at its option, may redeem the Notes, in whole or part, upon not less than fifteen ( 15 ) and not more than sixty (60) days’ prior written notice to holders and not less than twenty (20) days’ prior written notice to the trustee (or such shorter timeline as the trustee may agree), at the redemption price expressed as percentage of principal amount set forth below, plus accrued and unpaid interest thereon but not including the applicable redemption date (subject to the right of Note holders on the relevant record date to receive interest due on an interest payment date falling on or prior to the redemption date), if redeemed during the 12-month period beginning August 15 of each of the years set below . Redemption Year Price 2021 104.750% 2022 102.375% 2023 and thereafter 100.000% The Notes are unconditionally guaranteed by Topaz and each of Bidco’s direct and indirect wholly-owned domestic subsidiaries (collectively, the “Note Guarantors”). Target Hospitality is not an issuer or a guarantor of the Notes. The Note Guarantors are either borrowers or guarantors under the New ABL Facility. To the extent lenders under the New ABL Facility release the guarantee of any Note Guarantor, such Note Guarantor is also released from obligations under the Notes. These guarantees are secured by a second priority security interest in substantially all of the assets of Bidco and the Note Guarantors (subject to customary exclusions). The guarantees of the Notes by TLM Equipment, LLC, a Delaware limited liability company (“TLM Equipment LLC”) which holds certain of Target Hospitality’s assets, are subordinated to its obligations under the New ABL Facility (as defined below). The Notes contain certain negative covenants, including limitations that restrict Bidco’s ability and the ability of certain of its subsidiaries, to directly or indirectly, create additional financial obligations. With certain specified exceptions, these negative covenants prohibit Bidco and certain of its subsidiaries from: creating or incurring additional debt; paying dividends or making any other distributions with respect to its capital stock; making loans or advances to Bidco or any restricted subsidiary of Bidco; selling, leasing or transferring any of its property or assets to Bidco or any restricted subsidiary of Bidco; directly or indirectly creating, incurring or assuming any lien of any kind securing debt on the collateral; or entering into any sale and leaseback transaction. In connection with the issuance of the Notes, there was an original issue discount of $3.3 million and the unamortized balance of $2.5 million is presented on the face of the consolidated balance sheet as of September 30, 2020 as a reduction of the principal. The discount is amortized over the life of the Notes using the effective interest method. Bidco’s ultimate parent, Target Hospitality, has no significant independent assets or operations except as included in the guarantors of the Senior Secured Notes, the guarantees under the Notes are full and unconditional and joint and several, and any subsidiaries of Target Hospitality that are not subsidiary guarantors of the Notes are minor. There are also no significant restrictions on the ability of Target Hospitality or any guarantor to obtain funds from its subsidiaries by dividend or loan. See discussion of certain negative covenants above. Therefore, pursuant to the SEC Rules, no individual guarantor financial statement disclosures are deemed necessary. Capital Lease and Other Financing Obligations The Company’s capital lease and other financing obligations as of September 30, 2020 consisted of approximately $1.1 million of capital leases related primarily to vehicles and approximately $0.3 million of other financing arrangements. The Company’s capital lease and other financing obligations as of December 31, 2019 consisted of approximately $2.0 million of capital leases. In December 2019, the Company entered into a lease for certain equipment with a lease term expiring November 2022 and an effective interest rate of 4.3%. The Company’s lease relates to commercial-use vehicles. New ABL Facility On the Closing Date, in connection with the closing of the Business Combination, Topaz, Bidco, Target, Signor and each of their domestic subsidiaries entered into an ABL credit agreement that provides for a senior secured asset based revolving credit facility in the aggregate principal amount of up to $125 million (the “New ABL Facility”). The historical debt of Bidco, Target and their respective subsidiaries under the ABL facility of Algeco Seller was settled at the time of the consummation of the Business Combination on the Closing Date. Approximately $40 million of proceeds from the New ABL Facility were used to finance a portion of the consideration payable and fees and expenses incurred in connection with the Business Combination. Borrowings under the New ABL Facility, at the relevant borrower’s (the borrowers under the New ABL Facility, the “ABL Borrowers”) option, bear interest at either (1) an adjusted LIBOR or (2) a base rate, in each case plus an applicable margin. The applicable margin is 2.50% with respect to LIBOR borrowings and 1.50% with respect to base rate borrowings. Commencing at the completion of the first full fiscal quarter after the Closing Date, the applicable margin for borrowings under the New ABL Facility is subject to one step-down of 0.25% and one step-up of 0.25%, based on achieving certain excess availability levels with respect to the New ABL Facility. The New ABL Facility provides borrowing availability of an amount equal to the lesser of (i) (a) $125 million and (b) the Borrowing Base (defined below) (the “Line Cap”). The Borrowing Base is, at any time of determination, an amount (net of reserves) equal to the sum of: ● 85% of the net book value of the Borrowers’ eligible accounts receivables, plus ● the lesser of (i) 95% of the net book value of the Borrowers’ eligible rental equipment and (ii) 85% of the net orderly liquidation value of the Borrowers’ eligible rental equipment, minus ● customary reserves As a result of the current market environment mentioned in Note 1 “Summary of Significant Accounting Policies - Recent Developments – CO VI D-19 and D isruption in Oil and Gas Industry” The New ABL Facility includes borrowing capacity available for standby letters of credit of up to $15 million and for ‘‘swingline’’ loan borrowings of up to $15 million. Any issuance of letters of credit or making of a swingline loan will reduce the amount available under the New ABL Facility. In addition, the New ABL Facility will provide the Borrowers with the option to increase commitments under the New ABL Facility in an aggregate amount not to exceed $75 million plus any voluntary prepayments that are accompanied by permanent commitment reductions under the New ABL Facility. The termination date of the New ABL Facility is September 15, 2023. The obligations under the New ABL Facility are unconditionally guaranteed by Topaz and each existing and subsequently acquired or organized direct or indirect wholly-owned U.S. organized restricted subsidiary of Bidco (together with Topaz, the “ABL Guarantors”), other than certain excluded subsidiaries. The New ABL Facility is secured by (i) a first priority pledge of the equity interests of Topaz, Bidco, Target, and Signor (the “Borrowers) and of each direct, wholly-owned US organized restricted subsidiary of any Borrower or any ABL Guarantor, (ii) a first priority pledge of up to 65% of the voting equity interests in each non-US restricted subsidiary of any Borrower or ABL Guarantor and (iii) a first priority security interest in substantially all of the assets of the Borrower and the ABL Guarantors (in each case, subject to customary exceptions). The New ABL Facility requires the Borrowers to maintain a (i) minimum fixed charge coverage ratio of 1.00:1.00 and (ii) maximum total net leverage ratio of 4.00:1.00, at any time when the excess availability under the New ABL Facility is less than the greater of (a) $15.625 million and (b) 12.5% of the Line Cap. The New ABL Facility also contains a number of customary negative covenants. Such covenants, among other things, limit or restrict the ability of each of the Borrowers, their restricted subsidiaries, and where applicable, Topaz, to: ● incur additional indebtedness, issue disqualified stock and make guarantees; ● incur liens on assets; ● engage in mergers or consolidations or fundamental changes; ● sell assets; ● pay dividends and distributions or repurchase capital stock; ● make investments, loans and advances, including acquisitions; ● amend organizational documents and master lease documents; ● enter into certain agreements that would restrict the ability to pay dividends; ● repay certain junior indebtedness; and ● change the conduct of its business. The aforementioned restrictions are subject to certain exceptions including (i) the ability to incur additional indebtedness, liens, investments, dividends and distributions, and prepayments of junior indebtedness subject, in each case, to compliance with certain financial metrics and certain other conditions and (ii) a number of other traditional exceptions that grant the ABL Borrowers continued flexibility to operate and develop their businesses. The New ABL Facility also contains certain customary representations and warranties, affirmative covenants and events of default. The carrying value of debt outstanding as of the dates indicated below consist of the following: September 30, December 31, 2020 2019 Capital lease and other financing obligations $ 1,481 $ 1,985 ABL facilities 70,000 80,000 9.50% Senior Secured Notes due 2024, face amount 340,000 340,000 Less: unamortized original issue discount (2,468) (2,876) Less: unamortized term loan deferred financing costs (11,900) (13,866) Total debt, net 397,113 405,243 Less: current maturities (1,094) (996) Total long-term debt $ 396,019 $ 404,247 Interest expense, net The components of interest expense, net (which includes interest expense incurred) recognized in the unaudited consolidated statements of comprehensive income (loss) for the periods indicated below consist of the following: For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Interest expense incurred on Notes Due to Affiliates $ - $ - $ - $ 1,955 Interest incurred on capital lease and other financing obligations 30 - 98 - Interest expense incurred on ABL facilities and Notes 8,722 9,063 26,693 19,594 Amortization of deferred financing costs on ABL facilities and Notes 1,016 969 2,914 2,220 Amortization of original issue discount on Notes 145 140 408 287 Interest expense, net $ 9,913 $ 10,172 $ 30,113 $ 24,056 The interest expense incurred on Notes Due to Affiliates shown in the above table was associated with an affiliate note between Signor and a TDR affiliate that was settled in the form of a capital contribution upon consummation of the Business Combination as discussed in Note 3. Deferred Financing Costs and Original Issue Discount The Company incurred and deferred approximately $15.9 million of deferred financing costs and approximately $3.3 million of original issue discount in connection with the issuance of the Notes in 2019 in connection with the Business Combination, which are included in the carrying value of the Notes as of September 30, 2020. The Company presents unamortized deferred financing costs and unamortized original issue discount as a direct deduction from the principal amount of the Notes on the unaudited consolidated balance sheet as of September 30, 2020. Accumulated amortization expense related to the deferred financing costs was approximately $4.0 million and $2.0 million as of September 30, 2020 and December 31, 2019, respectively. Accumulated amortization of the original issue discount was approximately $0.8 million and $0.4 million as of September 30, 2020 and December 31, 2019, respectively. The Company also incurred deferred financing costs associated with the New ABL Facility as a result of the Business Combination in the amount of approximately $3.9 million, which are capitalized and presented on the unaudited consolidated balance sheet within deferred financing costs revolver, net. These costs are amortized over the contractual term of the line-of-credit through the initial maturity date using the straight-line method. The New ABL Facility was considered a modification of the Algeco ABL facility for accounting purposes. Certain of the lenders under the Algeco ABL facility are also lenders under the New ABL Facility. As the borrowing capacity of each of the continuing lenders in the New ABL Facility is greater than the borrowing capacity of the Algeco ABL facility, the unamortized deferred financing costs at the time of the modification of approximately $1.8 million associated with the continuing lenders of the Algeco ABL facility was deferred and is being amortized over the remaining term of the New ABL Facility. Any unamortized deferred financing costs from the Algeco ABL facility that pertained to non-continuing lenders were expensed through loss on extinguishment of debt on the consolidated statement of comprehensive income (loss) as of the modification date. The Company recognized a charge of $0.9 million in loss on extinguishment of debt related to the write-off of deferred financing costs pertaining to non-continuing lenders for the nine months ended September 30, 2019. Accumulated amortization related to revolver deferred financing costs for both the Algeco ABL facility and New ABL Facility was approximately $1.9 million and $1.1 million as of September 30, 2020 and December 31, 2019, respectively. Refer to the components of interest expense in the table above for the amounts of the amortization expense related to the deferred financing costs and original issue discount recognized for each of these debt instruments for the three and nine months ended September 30, 2020 and 2019, respectively. Future maturities The aggregate annual principal maturities of debt and capital lease obligations for each of the next five years and thereafter, based on contractual terms are listed in the table below. The schedule of future maturities as of September 30, 2020, consists of the following: Rest of 2020 $ 1,094 2021 70 2022 317 2023 70,000 2024 340,000 Total $ 411,481 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2020 | |
Income Taxes | |
Income Taxes | 11. Income Taxes Income tax benefit was $5.2 The Company accounts for income taxes in interim periods under ASC 740-270, Income Taxes – Interim Reporting As discussed in Note 1, we determined the CARES ACT did not have a material impact on our provision for income taxes for the three months ended September 30, 2020. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value of Financial Instruments | |
Fair Value of Financial Instruments | 12. Fair Value of Financial Instruments The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Company has assessed that the fair value of cash and cash equivalents, trade receivables, related party receivables, trade payables, other current liabilities, and other debt approximates their carrying amounts largely due to the short-term maturities or recent commencement of these instruments. The fair value of the ABL Revolver is primarily based upon observable market data, such as market interest rates, for similar debt. The fair value of the Notes is based upon observable market data. The carrying amounts and fair values of financial assets and liabilities, which are either Level 1 or Level 2, are as follows: September 30, 2020 December 31, 2019 Financial Assets (Liabilities) Not Measured at Fair Value Carrying Fair Value Carrying Fair Value ABL facilities (See Note 10) - Level 2 $ (70,000) $ (70,000) $ (80,000) $ (80,000) Senior Secured Notes (See Note 10) - Level 1 $ (325,632) $ (276,573) $ (323,258) $ (325,693) There were no transfers of financial instruments between the three levels of the fair value hierarchy during the nine months ended September 30, 2020 and 2019 and the year ended December 31, 2019. |
Business Restructuring
Business Restructuring | 9 Months Ended |
Sep. 30, 2020 | |
Business Restructuring | |
Business Restructuring | 13. Business Restructuring The Company incurred costs associated with restructuring plans that originated in 2017 designed to streamline operations and reduce costs of $0 and $0.2 million during the nine months ended September 30, 2020 and 2019, respectively. For the three months ended September 30, 2020 and 2019, $0 was incurred. The following is a summary of the activity in our restructuring accruals: September 30, 2020 2019 Balance at January 1 $ — $ 1,462 Charges during the period — 168 Cash payments during the period — (1,630) Balance at September 30, $ — $ — The restructuring costs relate to the closure of the Baltimore, MD corporate office for Target Parent which resulted in downsizing of corporate employees consisting of employee termination costs. As part of the corporate restructuring plans, certain employees were required to render future service in order to receive their termination benefits. The termination costs associated with these employees was recognized over the period from the date of communication to the employee to the actual date of termination. No further amounts are expected to be incurred in connection with this restructuring as of September 30, 2020. These restructuring costs pertain to corporate locations and do not impact the segments discussed in Note 20. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies. | |
Commitments and Contingencies | 14. Commitments and Contingencies The Company is involved in various lawsuits or claims in the ordinary course of business. Management is of the opinion that there is no pending claim or lawsuit which, if adversely determined, would have a material impact on the financial condition of the Company. |
Related Parties
Related Parties | 9 Months Ended |
Sep. 30, 2020 | |
Related Parties | |
Related Parties | 15. Related Parties Loans to officers were provided as retention payments and were earned and forgiven over a four-year period and charged to compensation expense on a straight-line basis as amounts were forgiven. No amounts were due as of September 30, 2020 and September 30, 2019 as the remaining amounts due were forgiven on March 15, 2019 as part of the consummation of the Business Combination. Compensation expense recognized for the nine months ended September 30, 2020 and September 30, 2019, totaled $0 and $1.6 million, respectively, and are included in selling, general and administrative expense in the consolidated statement of comprehensive income (loss). During the nine months ended September 30, 2020 and 2019 the Company incurred $0.8 million and $0.6 million, respectively, in commissions owed to related parties, included in selling, general and administrative expense in the accompanying consolidated statements of comprehensive income (loss). For the three months ended September 30, 2020 and 2019 $0.2 million and $0.2 million in commissions were incurred, respectively. At September 30, 2020 and December 31, 2019 the Company accrued $0.3 million and $0.2 million, respectively, for these commissions. Prior to the closing of the Business Combination, Mr. Diarmuid Cummins (the “Advisor”) provided certain consulting and advisory services (the “Services”) to Target Parent and certain of its affiliated entities (collectively, “Algeco”), including Target. The Advisor was compensated for these Services by Algeco. Following the closing of the Business Combination, the Advisor continued to provide these Services to Algeco and to the Company and is serving as an observer on the board of directors of the Company. The Advisor is currently compensated for these services by Chard Camp Catering Services Ltd. (“Chard”), a wholly-owned subsidiary of the Company. In June 2019, Chard and Algeco Global Sarl (“Algeco Global”) entered into a reimbursement agreement, as amended in July 2019, (the “Agreement”), pursuant to which Algeco Global agreed to reimburse Chard for 100% of the total compensation paid by it to the Advisor, from and after January 1, 2019, with such amounts to be paid monthly. The initial term of the Agreement ran through December 31, 2019 and automatically extended for an additional 12 month term. The Company and Algeco Global are each majority owned by TDR Capital. This reimbursement for the three and nine months ended September 30, 2020 amounts to approximately $0.3 million and $0.9 million, respectively, and is included in the other expense (income), net line within the consolidated statement of comprehensive income (loss) while approximately $0.9 million is recorded as a related party receivable on the consolidated balance sheet as of September 30, 2020. This reimbursement for the three and nine months ended September 30, 2019 amounts to approximately $0.9 million and $0.3 million, respectively, and is included in the other expense (income), net line within the consolidated statement of comprehensive income (loss) while approximately $0.9 million is recorded as a related party receivable on the consolidated balance sheet as of December 31, 2019. |
Earnings per Share
Earnings per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings per Share | |
Earnings per Share | 16. Earnings (Loss) per Share Basic earnings (loss) per share (“EPS” or “LPS”) is calculated by dividing net income or loss attributable to Target Hospitality by the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed similarly to basic net earnings per share, except that it includes the potential dilution that could occur if dilutive securities were exercised. During periods when net losses are incurred, potential dilutive securities would be anti-dilutive and are excluded from the calculation of diluted loss per share for that period. A net loss was recorded for the three and nine months ended September 30, 2020, while net income was recorded for the three and nine months ended September 30, 2019. The following table presents basic and diluted EPS for the periods indicated below ($ in thousands, except per share amounts): For Three Months Ended For Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Numerator Net income (loss) attributable to Common Stockholders $ (7,870) $ 9,569 $ (18,267) $ 6,170 Denominator Weighted average shares outstanding - basic and diluted 96,138,459 100,102,641 95,997,647 93,378,332 Net income (loss) per share - basic and diluted $ (0.08) $ 0.10 $ (0.19) $ 0.07 As discussed in Note 3, 5,015,898 shares of the 8,050,000 shares of common stock held by the Founders, were placed into escrow concurrent with the Business Combination. Upon being placed into escrow, the voting and economic rights of the shares were suspended for the period they are in escrow. Given that the Founders are not entitled to vote or participate in the economic rewards available to the other shareholders with respect to these shares, these shares are not included in the EPS or LPS calculations. Warrants representing 16,166,650 shares of the Company’s common stock for the three and nine months ended September 30, 2020 and 2019, respectively, were excluded from the computation of EPS and LPS because they are considered anti-dilutive as the exercise price exceeds the average market price of the common stock during the applicable periods. As discussed in Note 18, RSUs and stock options were outstanding for the three and nine months ended September 30, 2020 and 2019. These RSUs and stock options were excluded from the computation of EPS because their effect would have been anti-dilutive. As discussed in Note 17, the Company repurchased shares of its outstanding common stock. These shares of treasury stock have been excluded from the computation of EPS. |
Stockholders Equity
Stockholders Equity | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders Equity | |
Stockholders' Equity | 17. Stockholders’ Equity Common Stock As of September 30, 2020, and December 31, 2019, Target Hospitality had 105,620,399 and 105,254,929 shares of Common Stock, par value $0.0001 per share issued while 101,205,632 and 100,840,162 were outstanding, respectively. Each share of Common Stock has one vote, except the voting rights related to the 5,015,898 of Founder Shares placed in escrow have been suspended subject to release pursuant to the terms of the Earnout Agreement, as discussed in Note 3. Preferred Shares Target Hospitality is authorized to issue 1,000,000 preferred shares at $0.0001 par value. As of September 30, 2020, no preferred shares were issued and outstanding. Warrants On January 17, 2018, PEAC sold 32,500,000 units at a price of $10.00 per unit (the “Units”) in its initial public offering (the “Public Offering”), including the issuance of 2,500,000 Units as a result of the underwriters’ partial exercise of their overallotment option. Each Unit consisted of one Class A ordinary share of PEAC, par value $0.0001 per share (the “Public Shares”), and one-third Each Public Warrant entitles the holder to purchase one share of the Company’s Common Stock at a price of $11.50 per share. No fractional shares will be issued upon exercise of the Public Warrants. If upon exercise of the Public Warrants, a holder would be entitled to receive a fractional interest in a share, the Company will upon exercise, round down to the nearest whole number, the number of shares to be issued to the Public Warrant holder. Each Public Warrant became exercisable 30 days after the completion of the Business Combination. On January 17, 2018, Platinum Eagle Acquisition LLC, a Delaware limited liability company (the “Sponsor”), Harry E. Sloan, Joshua Kazam, Fredric D. Rosen, the Sara L. Rosen Trust and the Samuel N. Rosen 2015 Trust, purchased from PEAC an aggregate of 5,333,334 warrants at a price of $1.50 per warrant (for an aggregate purchase price of $8.0 million) in a private placement (the “Private Placement Warrants”) that occurred simultaneously with the completion of the Public Offering. Each Private Placement Warrant entitles the holder to purchase one share of common stock at $11.50 per share. The purchase price of the Private Placement Warrants was added to the proceeds from the Public Offering and was held in the Trust Account until the closing of the Business Combination. The Private Placement Warrants (including the shares of Common Stock issuable upon exercise of the Private Placement Warrants) were not transferable, assignable or salable until 30 days after the closing date of the Business Combination, and they are non-redeemable so long as they are held by the initial purchasers of the Private Placement Warrants or their permitted transferees. If the Private Placement Warrants are held by someone other than the initial purchasers of the Private Placement Warrants or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by such holders on the same basis as the Public Warrants (as defined above). Otherwise, the Private Placement Warrants have terms and provisions that are identical to those of the Public Warrants and have no net cash settlement provisions. As of September 30, 2020, and December 31, 2019, the Company had 16,166,650 warrants issued and outstanding with the same terms as described above. Common Stock in Treasury On August 15, 2019, the Company's Board of Directors approved the 2019 Share Repurchase Program (“2019 Plan”), authorizing the repurchase of up to $75.0 million of common stock from August 30, 2019 to August 15, 2020. During for the nine months ended September 30, 2020, the Company did not repurchase any common stock. As of September 30, 2020, 4,414,767 shares of common stock for an aggregated price of approximately $23.6 million were held as treasury stock (at cost). As of August 15, 2020, the 2019 Plan had a remaining capacity of approximately $51.4 million. |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation | |
Stock-Based Compensation | 18. Stock-Based Compensation On March 15, 2019, in connection with the Business Combination, the Company’s Board of Directors approved the adoption of the Target Hospitality Corp. 2019 Incentive Award Plan (the “Plan”), under which 4,000,000 of the Company’s shares of Common Stock were reserved for issuance pursuant to future grants of share awards. The expiration date of the Plan, on and after which date no awards may be granted, is March 15, 2029. On March 4, 2020, the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company adopted a new form of Executive Nonqualified Stock Option Award Agreement (the “Stock Option Agreement”) and a new form of Executive Restricted Stock Unit Agreement (the “RSU Agreement” and together with the Stock Option Agreement, the “Award Agreements”) with respect to the granting of nonqualified stock options and restricted stock units, respectively, granted under the Plan. The new Award Agreements will be used for all awards to executive officers made on or after March 4, 2020. The Award Agreements have material terms that are substantially similar to those in the forms of award agreements last approved by the Compensation Committee and disclosed by the Company, except for the following: under the new Award Agreements, if the participant’s employment or service terminates due to Retirement (as defined in the Plan), and the participant has been continuously employed by the Company for at least twelve months following the grant date, then any portion of the participant’s awarded securities scheduled to become vested within twelve months after the participant’s termination date shall be vested on his or her termination date. Restricted Stock Units On May 21, 2019, the Compensation Committee granted time-based RSUs to certain of the Company’s executive officers, other employees, and directors. Each RSU represents a contingent right to receive, upon vesting, one share of the Company’s Common Stock or its cash equivalent, as determined by the Company. The number of RSUs granted to certain named executive officers and certain other employees totaled 212,621. These RSU awards granted vest in four equal installments on each of the first four anniversaries of the grant date, on May 21, 2020, 2021, 2022, and 2023. On September 3, 2019, our recently appointed Chief Financial Officer received a grant of 81,434 RSUs, which vested on March 15, 2020 and 48,860 RSUs, which vest on each of the first four anniversaries of the grant date, respectively. Also on May 21, 2019, the number of RSUs granted to non-executive directors of the board totaled to 81,967. On May 20, 2020, the Compensation Committee also awarded a total of 477,529 restricted stock units to our non-executive directors of the board. The RSU awards granted in 2019 and 2020 to non-executive directors of the board vest one year from the anniversary of the date of grant or the date of the first annual meeting of the stockholders following the grant date, whichever is sooner. Additionally, on May 21, 2019, the Compensation Committee approved the election by Mr. Archer, the CEO, pursuant to his employment agreement dated January 29, 2019, to receive his annual base salary for the period July 1, 2019 to December 31, 2019 in the form of 30,000 RSUs. These RSUs vested in six equal installments on the first of each month, beginning on July 1, 2019 through December 1, 2019. On January 2, 2020, the Compensation Committee approved the election by Mr. Archer, the CEO, pursuant to his employment agreement dated January 29, 2019, to receive his annual base salary for the period January 1, 2020 to December 31, 2020 in the form of 124,741 RSUs. These RSUs vest in twelve equal installments on the first of each month, except for one twelfth vested on January 9, 2020. On August 5, 2020 (the “Effective Date”), the Company and Mr. Archer, entered into the Executive Restricted Stock Units Termination Agreement (the “Agreement”) following the Company’s Compensation Committee of the Board of Directors’ approval of the election by Mr. Archer, pursuant to his employment agreement, to receive his base salary in cash, rather than in the form of RSUs as previously elected. Pursuant to the Agreement (i) Mr. Archer forfeited a portion of his currently unvested RSUs as of the Effective Date and (ii) the Company recommenced payment of 80% of Mr. Archer’s base salary for the period between the Effective Date and December 31, 2020. Further, on March 4, 2020, the Compensation Committee granted time-based RSUs to certain of the Company’s executive officers and other employees. Each RSU represents a contingent right to receive, upon vesting, one share of the Company’s Common Stock or its cash equivalent, as determined by the Company. The number of RSUs granted to certain named executive officers and certain other employees totaled 503,757. These RSU awards granted vest in four equal installments on each of the first four anniversaries of the grant date, on March 4, 2021, 2022, 2023, and 2024. As a result of recent volatility in the global financial and commodity markets created by the COVID-19 pandemic, the Company implemented measures to reduce the Company’s ongoing cash expenses. Consistent with that goal, the Compensation Committee approved the Salary Reduction Equity Award Program (the “Salary Program”), effective April 1, 2020. Pursuant to the Salary Program, the Company reduced the base salary amounts paid to certain executive officers and other employees by up to 20% for the period between April 1, 2020 and December 31, 2020. On April 1, 2020 and as contemplated by the Salary Program, the Company awarded a total of 201,988 RSUs pursuant to the Plan to participants in the Salary Program. The number of RSUs granted was equal to (x) the reduced compensation amount that would have been paid during the remaining nine Concurrent with the approval of the Salary Program, the Compensation Committee approved the Director Retainer Reduction Equity Award Program (the “Director Retainer Program”), effective April 1, 2020. Pursuant to the Director Retainer Program, the Company reduced the cash retainer paid to non-employee directors by 20%. During the nine months ended September 30, 2020 and as contemplated by the Director Retainer Program, the Company awarded a total of 66,070 RSUs pursuant to the Plan to the participants in the Director Retainer Program. The number of RSUs granted was equal to (x) the reduced retainer amount that would have been paid during the remaining three 10-day On October 1, 2020, both the Salary Program and the Director Retainer Program were terminated. Pursuant to the termination of the Salary Program, the Company recommenced payment of 100% of the base salary of the participating executive officers and other employees, on October 1, 2020, and each participating executive officer and employee agreed to forfeit RSUs awarded to him or her pursuant to the Salary Program scheduled to vest on or after October 1, 2020. Pursuant to the termination of the Director Retainer Program, the Company recommenced payment of 100% of the director fees of each non-employee director, on October 1, 2020, and each non-employee director agreed to forfeit RSUs awarded to him or her pursuant to the Director Retainer Program scheduled to vest on or after October 1, 2020. During for the nine months ended September 30, 2020, certain of the Company's employees surrendered RSUs owned by them to satisfy their statutory minimum federal and state tax obligations associated with the vesting of RSUs issued under the Plan. The table below represents the changes in RSUs: Number of Weighted Balance at December 31, 2019 401,797 $ 9.31 Granted 1,374,085 3.07 Vested and released (491,430) 5.46 Forfeited (53,561) 5.89 Balance at September 30, 2020 1,230,891 $ 4.15 Stock-based compensation expense for these RSUs recognized in selling, general and administrative expense in the consolidated statement of comprehensive income (loss) for the nine months ended September 30, 2020 and 2019, was approximately $2.3 million and $0.7 million, respectively, with an associated tax benefit of $0.6 million and less than $0.2 million, respectively. For the three months ended September 30, 2020 and 2019, stock-based compensation expense for RSUs was approximately $0.7 million and $0.6 million, respectively. At September 30, 2020, unrecognized compensation expense related to RSUs totaled approximately $4.3 million and is expected to be recognized over a remaining term of approximately 3.18 years. Stock Option Awards On May 21, 2019, the Compensation Committee granted 482,792 time-based stock option awards to certain employees. On September 3, 2019 the Compensation Committee made an additional grant of 171,429 time-based stock options to our newly appointed Chief Financial Officer. Additionally, on March 4, 2020 the Compensation Committee granted 1,140,873 time-based stock option awards to certain employees. Each option represents the right upon vesting, to buy one share of the Company’s common stock, par value $0.0001 per share, for $4.51 to $10.83 per share. The stock options vest in four equal installments on each of the first four anniversaries of the grant date and expire ten years from the grant date. The following table presents the changes in stock options outstanding and related information for our employees: Options Weighted Average Weighted Average Intrinsic Value Outstanding Options at December 31, 2019 579,370 $ 9.44 9.48 $ - Granted 1,140,875 4.51 - - Expired (5,614) 10.83 - - Forfeited (67,754) 7.13 - - Outstanding Options at September 30, 2020 1,646,877 $ 6.12 9.44 $ - 136,421 stock options were exercisable at September 30, 2020. Stock-based compensation expense for these stock option awards recognized in selling, general and administrative expense in the unaudited consolidated statement of comprehensive income (loss) for the nine months ended September 30, 2020 and 2019, was approximately $0.5 million and $0.1 million, respectively, with an associated tax benefit of $0.1 million and less than $0.1 million, respectively. For the three months ended September 30, 2020 and 2019, stock-based compensation expense was approximately $0.2 million and $0.1 million, respectively, with an associated tax benefit of less than $0.1 million and less than $0.1 million, respectively. At September 30, 2020, unrecognized compensation expense related to stock options totaled $2.1 million and is expected to be recognized over a remaining term of approximately 3.04 years. The fair value of each option award at the grant date was estimated using the Black-Scholes option-pricing model with the following assumptions: Assumptions Weighted average expected stock volatility % 25.80 Expected dividend yield % 0.00 Expected term (years) 6.25 Risk-free interest rate (range) % 0.82 - 2.26 Exercise price (range) $ 4.51 - 10.83 Weighted-average grant date fair value $ 1.87 The volatility assumption used in the Black-Scholes option-pricing model is based on peer group volatility as the Company does not have a sufficient trading history as a stand-alone public company to calculate volatility. Additionally, due to an insufficient history with respect to stock option activity and post vesting cancellations, the expected term assumption is based on the simplified method permitted under SEC rules, whereby, the simple average of the vesting period for each tranche of award and its contractual term is aggregated to arrive at a weighted average expected term for the award. The risk-free interest rate used in the Black-Scholes model is based on the implied US Treasury bill yield curve at the date of grant with a remaining term equal to the Company’s expected term assumption. The Company has never declared or paid a dividend on its shares of common stock. Stock-based payments are subject to service based vesting requirements and expense is recognized on a straight-line basis over the vesting period. Forfeitures are accounted for as they occur. 67,754 stock options were forfeited during for the nine months ended September 30, 2020. |
Retirement Plans
Retirement Plans | 9 Months Ended |
Sep. 30, 2020 | |
Retirement Plans | |
Retirement Plans | 19. Retirement plans We offer a defined contribution 401(k) retirement plan to substantially all of our U.S. employees. Participants may contribute from 1% to 90% of eligible compensation, inclusive of pretax and/or Roth deferrals (subject to Internal Revenue Service limitations), and we make matching contributions under this plan on the first 6% of the participant’s compensation (100% match of the first 3% employee contribution and 50% match on the next 3% contribution). Our matching contributions vest at a rate of 20% per year for each of the employee’s first five years of service and then are fully vested thereafter. For the nine months ended September 30, 2020 and 2019, we recognized expense of $0.6 million and $0.7 million, respectively, related to these matching contributions. For the three months ended September 30, 2020 and 2019, we recognized expense of $0.2 million and $0.2 million, respectively. |
Business Segments
Business Segments | 9 Months Ended |
Sep. 30, 2020 | |
Business Segments | |
Business Segments | 20. Business Segments The Company is organized primarily on the basis of geographic region, customer industry group and operates primarily in three reportable segments. Our remaining operating segments have been consolidated and included in an “All Other” category. The following is a brief description of our reportable segments and a description of business activities conducted by All Other. Permian Basin — Bakken Basin Government All Other — The table below presents information about reported segments for the three and nine months ended September 30 (except for asset information for 2019 that is presented as of December 31): 2020 Permian Basin Bakken Basin Government All Other Total For the Nine Months Ended September 30, 2020 Revenue $ 89,163 $ 5,705 $ 49,527 $ 29,144 (a) $ 173,539 Adjusted gross profit $ 42,257 $ 323 $ 37,701 $ 3,938 $ 84,219 Total Assets $ 285,668 $ 55,210 $ 28,636 $ 4,880 $ 374,394 For the Three Months Ended September 30, 2020 Revenue $ 18,968 $ 1,154 $ 16,264 $ 11,877 (a) $ 48,263 Adjusted gross profit $ 8,606 $ 87 $ 13,213 $ 1,807 $ 23,713 2019 Permian Basin Bakken Basin Government All Other Total For the Nine Months Ended September 30, 2019 Revenue $ 161,270 $ 16,530 $ 50,115 $ 17,068 (a) $ 244,983 Adjusted gross profit $ 98,529 $ 7,228 $ 36,985 $ 3,823 $ 146,565 Total Assets (as of December 31, 2019) $ 305,701 $ 59,134 $ 35,484 $ 5,955 $ 406,274 For the Three Months Ended September 30, 2019 Revenue $ 56,524 $ 6,019 $ 16,830 $ 2,270 (a) $ 81,643 Adjusted gross profit $ 33,285 $ 2,895 $ 12,817 $ 781 $ 49,778 (a) Revenues are attributable to three operating segments of the Company and are reported in the “All Other” category previously described. A reconciliation of total segment adjusted gross profit to total consolidated income (loss) before income taxes for the dates indicated below, is as follows: For the Three Months Ended For the Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Total reportable segment adjusted gross profit $ 21,906 $ 48,997 $ 80,281 $ 142,742 Other adjusted gross profit 1,807 781 3,938 3,823 Depreciation and amortization (16,336) (15,243) (49,713) (42,683) Selling, general, and administrative expenses (8,508) (11,141) (28,599) (66,817) Restructuring costs — — — (168) Other (expense) income, net 183 (440) 752 (279) Currency gains, net — 77 — 77 Loss on extinguishment of debt — — — (907) Interest expense, net (9,913) (10,172) (30,113) (24,056) Consolidated income (loss) before income taxes $ (10,861) $ 12,859 $ (23,454) $ 11,732 A reconciliation of total segment assets to total consolidated assets as of the dates indicated below, is as follows: September 30, 2020 December 31, 2019 Total reportable segment assets $ 369,514 $ 400,319 Other assets 4,880 5,955 Restricted cash — 52 Other unallocated amounts 177,099 194,466 Total Assets $ 551,493 $ 600,792 Other unallocated assets consist of the following as reported in the consolidated balance sheets of the Company as of the dates indicated below: September 30, 2020 December 31, 2019 Total current assets $ 48,478 $ 60,795 Other intangible assets, net 106,789 117,866 Deferred tax asset 12,213 6,427 Deferred financing costs revolver, net 3,740 4,688 Other non-current assets 5,879 4,690 Total other unallocated amounts of assets $ 177,099 $ 194,466 |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events | |
Subsequent Events | 21. Subsequent Events On November 5, 2020, the Company announced the Board of Directors of the Company ("the Board") received an unsolicited non-binding proposal from Arrow Holdings S.à r.l. ("Arrow"), an affiliate of TDR, to acquire all of the outstanding shares of common stock of the Company that are not owned by any of Arrow, any investment fund managed by TDR or their respective affiliates, for cash consideration of $1.50 per share (the "Proposal"). The Board intends to establish a special committee of independent directors with its own independent advisors to review the Proposal (the "Special Committee"). There can be no assurance that any agreement with respect to the proposed transaction will be executed or that this or any other transaction will be approved or consummated. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Summary of Significant Accounting Policies | |
Organization and Nature of Operations | Organization and Nature of Operations Target Hospitality Corp. (“Target Hospitality” or the “Company”) was formed on March 15, 2019 and is one of the largest vertically integrated specialty rental and hospitality services companies in the United States. The Company provides vertically integrated specialty rental and comprehensive hospitality services including catering and food services, maintenance, housekeeping, grounds-keeping, security, health and recreation services, overall workforce community management, and laundry service. Target Hospitality serves clients in oil, gas, mining, alternative energy, government and immigrations sectors principally located in the West Texas, South Texas, Oklahoma and Bakken regions, as well as various large linear-construction (pipeline and infrastructure) projects in the United States. The Company, whose securities are listed on the Nasdaq Capital Market, serves as the holding company for the businesses of Target Logistics Management, LLC and its subsidiaries (“Target”) and RL Signor Holdings, LLC and its subsidiaries (“Signor”). TDR Capital LLP (“TDR Capital” or “TDR”) owns approximately 63% of Target Hospitality and the remaining ownership is broken out among the founders of the Company’s legal predecessor, Platinum Eagle Acquisition Corp. (“Platinum Eagle” or “PEAC”), investors in Platinum Eagle’s private placement transaction completed substantially and concurrently with the Business Combination (as defined below) (the “PIPE”), and other public shareholders. Platinum Eagle was originally incorporated on July 12, 2017 as a Cayman Islands exempted company, for the purpose of effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. References in this Quarterly Report on Form 10-Q to the Company refer to Target Hospitality for all periods at or after March 15, 2019 and Platinum Eagle for all periods prior to March 15, 2019, unless the context requires otherwise. On November 13, 2018, PEAC entered into: (i) the agreement and plan of merger, as amended on January 4, 2019 (the “Signor Merger Agreement”), by and among PEAC, Signor Merger Sub LLC, a Delaware limited liability company and wholly-owned subsidiary of Platinum Eagle and sister company to the Holdco Acquiror (defined below as Topaz Holdings LLC) (“Signor Merger Sub”), Arrow Holdings S.a.r.l., a Luxembourg société à responsabilité limitée besloten vennootschap Target Parent was formed by TDR in September 2017. Prior to the Business Combination, Target Parent was directly owned by Algeco Scotsman Global S.a.r.l. (“ASG”) which is ultimately owned by a group of investment funds managed and controlled by TDR. During 2018, ASG assigned all of its ownership interest in Target Parent to the Algeco Seller, an affiliate of ASG that is also ultimately owned by a group of investment funds managed and controlled by TDR. Target Parent acted as a holding company that included the U.S. corporate employees of ASG and certain of its affiliates and certain related administrative costs and was the owner of Target, its operating company. Target Parent received capital contributions, made distributions, and maintained cash as well as other amounts owed to and from affiliated entities. As discussed above, in connection with the closing of the Business Combination, Target Parent merged with and into Bidco, with Bidco as the surviving entity. Signor Parent owned 100% of Bidco until the closing of the Business Combination in connection with which Signor Parent merged with and into Topaz with Topaz being the surviving entity. Prior to the Business Combination, Signor Parent was owned by the Arrow Seller, which is ultimately owned by a group of investment funds managed and controlled by TDR. Signor Parent was formed in August 2018 and acted as a holding company for Bidco, which was formed in September 2018, also as a holding company. Bidco acquired Signor on September 7, 2018. Neither Signor Parent nor Bidco had operating activity, but each received capital contributions, made distributions, and maintained cash as well as other amounts owed to and from affiliated entities. Signor Parent was dissolved upon consummation of the Business Combination and merger with Topaz described above on March 15, 2019. |
Basis of Presentation | Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) pertaining to interim financial information. Certain information in footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“US GAAP”) has been condensed or omitted pursuant to those rules and regulations. The financial statements included in this report should be read in conjunction with the Target Hospitality Annual Report on Form 10-K for the year ended December 31, 2019. The results of operations for the nine months ended September 30, 2020 are not necessarily indicative of the operating results that may be expected for the full fiscal year ending December 31, 2020 or any future period. The accompanying unaudited consolidated financial statements contain all adjustments, consisting of only normal recurring adjustments, and the adjustments described as part of the Business Combination discussed in Note 3, necessary for a fair statement of financial position as of September 30, 2020, and results of operations for the three and nine months ended September 30, 2020 and 2019, and cash flows for the nine months ended September 30, 2020 and 2019. The consolidated balance sheet as of December 31, 2019, was derived from the audited consolidated balance sheets of Target Hospitality Corp. but does not contain all of the footnote disclosures from those annual financial statements. |
Reclassifications | Reclassifications Certain prior year amounts in these financial statements have been reclassified to conform to the current year presentation with no impact to net income (loss) and comprehensive income (loss), stockholders’ equity or cash flows. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with US GAAP requires the use of estimates and assumptions by management in determining the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. If the underlying estimates and assumptions upon which the financial statements are based change in future periods, actual amounts may differ from those included in the accompanying unaudited consolidated financial statements. |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements comprise the financial statements of the Company and its subsidiaries that it controls due to ownership of a majority voting interest. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Company obtains control, and continue to be consolidated until the date when such control ceases. The financial statements of the subsidiaries are prepared for the same reporting period as the Company. All intercompany balances and transactions are eliminated. The Business Combination was accounted for as a reverse recapitalization in accordance with Accounting Standards Codification (“ASC”) 805, Business Combinations As a result of Target Parent and Signor Parent being the accounting acquirer in the Business Combination, the financial reports filed with the SEC by the Company subsequent to the Business Combination are prepared “as if” Target Parent and Signor Parent are the accounting predecessor of the Company. The historical operations of Target Parent and Signor Parent are deemed to be those of the Company. Thus, the financial statements included in this report reflect (i) the historical operating results of Target Parent and Signor Parent prior to the Business Combination; (ii) the consolidated results of the Company, Target Parent and Signor Parent following the Business Combination on March 15, 2019; (iii) the assets and liabilities of Target Parent and Signor Parent at their historical cost; and (iv) the Company’s equity structure for all periods presented. The recapitalization of the number of shares of Common Stock attributable to the purchase of Target Parent and Signor Parent in connection with the Business Combination is reflected retroactively to the earliest period presented and will be utilized for calculating loss per share in all prior periods presented. No step-up basis of intangible assets or goodwill was recorded in the Business Combination transaction consistent with the treatment of the transaction as a reverse recapitalization of Target Parent and Signor Parent. |
Revenue Recognition | Revenue Recognition The Company derives revenue from specialty rental and hospitality services, specifically lodging and related ancillary services. Revenue is recognized in the period in which lodging and services are provided pursuant to the terms of contractual relationships with the customers. Certain arrangements contain a lease of lodging facilities to customers. The leases are accounted for as an operating lease under the authoritative guidance for leases and are recognized as income using the straight-line method over the term of the lease agreement. Because performance obligations related to specialty rental and hospitality services are satisfied over time, the majority of our revenue is recognized on a daily basis, for each night a customer stays, at a contractual day rate. Our customers typically contract for accommodation services under committed contracts with terms that most often range from several months to three years. Our payment terms vary by type and location of our customer and the service offered. The time between invoicing and when payment is due is not significant. When lodging and services are billed and collected in advance, recognition of revenue is deferred until services are rendered. Certain of the Company’s contractual arrangements allow customers the ability to use paid but unused lodging and services for a specified period. The Company recognizes revenue for these paid but unused lodging and services as they are consumed, as it becomes probable the lodging and services will not be used, or upon expiration of the specified term. Cost of services includes labor, food, utilities, supplies, rent and other direct costs associated with operating the lodging units as well as costs associated with construction services. Cost of rental includes leasing costs and other direct costs of maintaining the lodging units. Costs associated with contracts include sales commissions which are expensed as incurred and reflected in selling, general and administrative expenses in the consolidated statements of comprehensive income (loss). The Company recognizes revenue associated with community construction using the percentage of completion method with progress towards completion measured using the cost-to-cost method as the basis to recognize revenue. Management believes this cost-to-cost method is the most appropriate measure of progress to the satisfaction of a performance obligation on the community construction. Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. Changes in job performance, job conditions, estimated profitability and final contract settlements may result in revisions to projected costs and revenue and are recognized in the period in which the revisions to estimates are identified and the amounts can be reasonably estimated. Factors that may affect future project costs and margins include weather, production efficiencies, availability and costs of labor, materials and subcomponents. Additionally, the Company collects sales, use, occupancy and similar taxes, which the Company presents on a net basis (excluded from revenues) in the consolidated statements of comprehensive income (loss). |
Recently Issued Accounting Standards | Recently Issued Accounting Standards The Company meets the definition of an emerging growth company (“EGC”) as defined under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). In reliance on exemptions provided under the JOBS Act for EGCs, the Company has elected to defer compliance with new or revised financial accounting standards until a company that is not an issuer (as defined under section 2(a) of the Sarbanes-Oxley Act of 2002) is required to comply with such standards. As such, compliance dates included below pertain to non-issuers, and as permitted, early adoption dates are indicated. In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842) Leases (ASC 840) In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses ASU 2016-13 or Topic 326 Codification Improvements to Topic 326, Financial Instruments - Credit Losses In August 2018, the FASB issued ASU No. 2018-15, Intangibles—Goodwill and Other—Internal-Use Software the Company capitalized certain implementation costs during 2019. Such systems were placed into service beginning January of 2020 at which time the Company began to amortize these capitalized costs over the period of the service arrangement into selling, general and administrative expenses. Refer to Note 8 for additional details. In December 2019, the FASB issued ASU 2019-12, Simplifying the Accounting for Income Taxes Recent Developments – CO VI D-19 and D isruption in Oil and Gas Industry On January 30, 2020, the World Health Organization declared an outbreak of a highly contagious form of an upper respiratory infection caused by , a novel coronavirus strain commonly referred to as “coronavirus”. There have been significant changes to the global economic situation and to public securities markets as a result of COVID-19. It is possible that these changes could cause changes to estimates as a result of the markets in which the Company operates, the price of the Company’s publicly traded equity and debt in comparison to the Company’s carrying value. Such changes to estimates could potentially result in impacts that would be material to the Company’s consolidated financial statements, particularly with respect to the fair value of the Company’s reporting units in relation to potential goodwill impairment, the fair value of long-lived and other intangible assets in relation to potential impairment and the allowance for doubtful accounts. As a result of the impact of COVID-19 and the disruption in the oil and gas industry, in the first quarter of 2020 we also concluded a trigger event had occurred and we tested our long-lived and intangible assets, including goodwill, for impairment. Refer to Note 7 for additional information on our goodwill impairment testing and the related results. Additionally, in connection with COVID-19, on March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief and Economic Security Act ("CARES Act"). The CARES Act, among other things, includes provisions relating to the 80 percent limitation of net operating loss and modifications to the business interest deduction limitations. We evaluated how the provisions in the CARES Act would impact our consolidated financial statements and concluded that the CARES Act did not have a material impact on our provision for income taxes for the nine months ended September 30, 2020 and 2019 |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue | |
Summary of disaggregation of revenue by reportable segments as well as the all other category | For Three Months Ended For Nine Months Ended September 30, September 30, 2020 2019 2020 2019 Permian Basin Services income $ 16,236 $ 51,250 $ 77,863 $ 147,060 Construction fee income - 1,688 - 2,270 Total Permian Basin revenues 16,236 52,938 77,863 149,330 Bakken Basin Services income $ 1,154 $ 6,019 $ 5,705 $ 16,530 Total Bakken Basin revenues 1,154 6,019 5,705 16,530 Government Services income $ 6,169 $ 6,186 $ 18,448 $ 18,952 Total Government revenues 6,169 6,186 18,448 18,952 All Other Services income $ 772 $ 734 $ 1,510 $ 2,552 Construction fee income 11,105 1,536 27,634 14,516 Total All Other revenues 11,877 2,270 29,144 17,068 Total revenues $ 35,436 $ 67,413 $ 131,160 $ 201,880 |
Summary of contract liabilities | For Nine Months Ended September 30, 2020 2019 Balances at Beginning of the Period $ 26,199 $ 37,376 Additions to deferred revenue 7,866 7,054 Revenue recognized (14,956) (14,928) Balances at End of the Period $ 19,109 $ 29,502 |
Summary of revenue expected to be recognized from contracts where the price and quantity of the product or service are fixed | As of September 30, 2020, for contracts greater than one year, the following table discloses the estimated revenues related to performance obligations that are unsatisfied (or partially unsatisfied) and when we expect to recognize the revenue, and only represents revenue expected to be recognized from contracts where the price and quantity of the product or service are fixed (in thousands): For the Years Ended December 31, 2020 2021 2022 Thereafter Total Revenue expected to be recognized $ 11,592 $ 35,366 $ 14,952 $ - $ 61,910 |
Business Combination (Tables)
Business Combination (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combination | |
Schedule of reconciliation of cash flows and net proceeds to the Sellers | Recapitalization Cash - Platinum Eagle's Trust (net of redemptions) $ 146,137 Cash - PIPE 80,000 Gross cash received by Target Hospitality from Business Combination 226,137 Less: fees to underwriters (7,385) Net cash received from Recapitalization 218,752 Plus: non-cash contribution - forgiveness of related party loan 104,285 Less: non-cash net liabilities assumed from PEAC (8,840) Net contributions from Recapitalization Transaction $ 314,197 Contributions Transaction bonus amounts $ 28,519 Payment of historical ABL facility 9,904 Payment of affiliate amounts 684 Total contributions $ 39,107 Cash paid to Algeco Seller $ 563,134 |
Schedule of common stock issued immediately consummation of business combination | Shares by Type Number of shares by type Platinum Eagle Class A Shares outstanding prior to the Business Combination 32,500,000 Less: Redemption of Platinum Eagle Class A Shares (18,178,394) Class A Shares of Platinum Eagle 14,321,606 Founder Shares 8,050,000 Former Platinum Eagle Director Shares 75,000 Shares issued to PIPE investors 8,000,000 Shares issued to PEAC and PIPE investors 30,446,606 Shares issued to the Sellers 74,786,327 Total Outstanding Shares of Common Stock issued and outstanding 105,232,933 Less: Founders Shares in escrow (5,015,898) Total Shares of Common Stock outstanding for earnings per share computation (See Note 16) 100,217,035 |
Acquisitions (Tables)
Acquisitions (Tables) - Superior | 9 Months Ended |
Sep. 30, 2020 | |
Schedule of preliminary allocation of total purchase price | Property and equipment $ 18,342 Customer relationships 4,800 Goodwill 6,858 Total assets acquired $ 30,000 |
Schedule of unaudited pro forma information | Period Revenue Income before taxes 2019 pro forma from January 1, 2019 to September 30, 2019 $ 249,732 $ 14,606 |
Specialty Rental Assets, Net (T
Specialty Rental Assets, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Specialty Rental Assets, Net | |
Schedule of Specialty rental assets | September 30, December 31, 2020 2019 Specialty rental assets $ 547,236 $ 545,399 Construction-in-process 4,183 8,672 Less: accumulated depreciation (228,310) (200,376) Specialty rental assets, net $ 323,109 $ 353,695 |
Other Property, Plant and Equ_2
Other Property, Plant and Equipment, Net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Property, Plant and Equipment, Net | |
Schedule of other property, plant and equipment, net | September 30, December 31, 2020 2019 Land $ 9,155 $ 9,155 Buildings and leasehold improvements 115 115 Machinery and office equipment 887 708 Software and other 3,748 3,748 13,905 13,726 Less: accumulated depreciation (3,658) (2,185) Total other property, plant and equipment, net $ 10,247 $ 11,541 |
Goodwill and Other Intangible_2
Goodwill and Other Intangible Assets, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Other Intangible Assets, net | |
Schedule of changes in carrying amount of goodwill | Permian Basin Balance at January 1, 2019 $ 34,180 Acquisition of Superior 6,858 Balance at December 31, 2019 41,038 Changes in Goodwill - Balance at September 30, 2020 $ 41,038 |
Schedule of intangible assets other than goodwill | September 30, 2020 Weighted Gross average Carrying Accumulated Net Book remaining lives Amount Amortization Value Intangible assets subject to amortization Customer relationships 6.6 $ 128,907 $ (38,518) $ 90,389 Total 128,907 (38,518) 90,389 Indefinite lived assets: Tradenames 16,400 — 16,400 Total intangible assets other than goodwill $ 145,307 $ (38,518) $ 106,789 December 31, 2019 Weighted Gross average Carrying Accumulated Net Book remaining lives Amount Amortization Value Intangible assets subject to amortization Customer relationships 7.4 $ 132,720 $ (31,254) $ 101,466 Total 132,720 (31,254) 101,466 Indefinite lived assets: Tradenames 16,400 — 16,400 Total intangible assets other than goodwill $ 149,120 $ (31,254) $ 117,866 |
Schedule of estimated aggregate amortization expense | Rest of 2020 $ 3,579 2021 14,656 2022 13,302 2023 12,881 2024 12,881 Thereafter 33,090 Total $ 90,389 |
Other Non-Current Assets (Table
Other Non-Current Assets (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Other Non-Current Assets | |
Other non-current assets | September 30, December 31, 2020 2019 Cloud computing implementation costs $ 7,061 $ 4,690 Less: accumulated amortization (1,182) - Other non-current assets $ 5,879 $ 4,690 |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accrued Liabilities | |
Schedule of accrued liabilities | September 30, December 31, 2020 2019 Employee accrued compensation expense $ 5,039 $ 7,130 Other accrued liabilities 10,257 18,482 Accrued interest on debt 1,637 9,718 Total accrued liabilities $ 16,933 $ 35,330 |
Debt (Tables)
Debt (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Debt | |
Summary of carrying value of debt outstanding | September 30, December 31, 2020 2019 Capital lease and other financing obligations $ 1,481 $ 1,985 ABL facilities 70,000 80,000 9.50% Senior Secured Notes due 2024, face amount 340,000 340,000 Less: unamortized original issue discount (2,468) (2,876) Less: unamortized term loan deferred financing costs (11,900) (13,866) Total debt, net 397,113 405,243 Less: current maturities (1,094) (996) Total long-term debt $ 396,019 $ 404,247 |
Components of interest expense | For the three months ended For the nine months ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Interest expense incurred on Notes Due to Affiliates $ - $ - $ - $ 1,955 Interest incurred on capital lease and other financing obligations 30 - 98 - Interest expense incurred on ABL facilities and Notes 8,722 9,063 26,693 19,594 Amortization of deferred financing costs on ABL facilities and Notes 1,016 969 2,914 2,220 Amortization of original issue discount on Notes 145 140 408 287 Interest expense, net $ 9,913 $ 10,172 $ 30,113 $ 24,056 |
Schedule of future maturities | Rest of 2020 $ 1,094 2021 70 2022 317 2023 70,000 2024 340,000 Total $ 411,481 |
Senior Secured Notes 2024 | |
Debt | |
Summary of carrying value of debt outstanding | Principal Unamortized Original Issue Discount Unamortized Deferred Financing Costs 9.50% Senior Secured Notes, due 2024 $ 340,000 $ 2,468 $ 11,900 |
Schedule of debt redemption | Redemption Year Price 2021 104.750% 2022 102.375% 2023 and thereafter 100.000% |
Fair Value of Financial Instr_2
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value of Financial Instruments | |
Summary of carrying amounts and fair values of financial assets and liabilities | September 30, 2020 December 31, 2019 Financial Assets (Liabilities) Not Measured at Fair Value Carrying Fair Value Carrying Fair Value ABL facilities (See Note 10) - Level 2 $ (70,000) $ (70,000) $ (80,000) $ (80,000) Senior Secured Notes (See Note 10) - Level 1 $ (325,632) $ (276,573) $ (323,258) $ (325,693) |
Business Restructuring (Tables)
Business Restructuring (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Restructuring | |
Summary of the activity in our restructuring accruals | September 30, 2020 2019 Balance at January 1 $ — $ 1,462 Charges during the period — 168 Cash payments during the period — (1,630) Balance at September 30, $ — $ — |
Earnings per Share (Tables)
Earnings per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings per Share | |
Schedule of reconciliation of net loss and weighted-average shares of common stock outstanding | For Three Months Ended For Nine Months Ended September 30, September 30, September 30, September 30, 2020 2019 2020 2019 Numerator Net income (loss) attributable to Common Stockholders $ (7,870) $ 9,569 $ (18,267) $ 6,170 Denominator Weighted average shares outstanding - basic and diluted 96,138,459 100,102,641 95,997,647 93,378,332 Net income (loss) per share - basic and diluted $ (0.08) $ 0.10 $ (0.19) $ 0.07 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stock-Based Compensation | |
Schedule of changes in restricted stock units | Number of Weighted Balance at December 31, 2019 401,797 $ 9.31 Granted 1,374,085 3.07 Vested and released (491,430) 5.46 Forfeited (53,561) 5.89 Balance at September 30, 2020 1,230,891 $ 4.15 |
Schedule of changes in stock options | Options Weighted Average Weighted Average Intrinsic Value Outstanding Options at December 31, 2019 579,370 $ 9.44 9.48 $ - Granted 1,140,875 4.51 - - Expired (5,614) 10.83 - - Forfeited (67,754) 7.13 - - Outstanding Options at September 30, 2020 1,646,877 $ 6.12 9.44 $ - |
Schedule of assumptions using Black-scholes option-pricing model | Assumptions Weighted average expected stock volatility % 25.80 Expected dividend yield % 0.00 Expected term (years) 6.25 Risk-free interest rate (range) % 0.82 - 2.26 Exercise price (range) $ 4.51 - 10.83 Weighted-average grant date fair value $ 1.87 |
Business Segments (Tables)
Business Segments (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Segments | |
Schedule of Segment Reporting Information | The table below presents information about reported segments for the three and nine months ended September 30 (except for asset information for 2019 that is presented as of December 31): 2020 Permian Basin Bakken Basin Government All Other Total For the Nine Months Ended September 30, 2020 Revenue $ 89,163 $ 5,705 $ 49,527 $ 29,144 (a) $ 173,539 Adjusted gross profit $ 42,257 $ 323 $ 37,701 $ 3,938 $ 84,219 Total Assets $ 285,668 $ 55,210 $ 28,636 $ 4,880 $ 374,394 For the Three Months Ended September 30, 2020 Revenue $ 18,968 $ 1,154 $ 16,264 $ 11,877 (a) $ 48,263 Adjusted gross profit $ 8,606 $ 87 $ 13,213 $ 1,807 $ 23,713 2019 Permian Basin Bakken Basin Government All Other Total For the Nine Months Ended September 30, 2019 Revenue $ 161,270 $ 16,530 $ 50,115 $ 17,068 (a) $ 244,983 Adjusted gross profit $ 98,529 $ 7,228 $ 36,985 $ 3,823 $ 146,565 Total Assets (as of December 31, 2019) $ 305,701 $ 59,134 $ 35,484 $ 5,955 $ 406,274 For the Three Months Ended September 30, 2019 Revenue $ 56,524 $ 6,019 $ 16,830 $ 2,270 (a) $ 81,643 Adjusted gross profit $ 33,285 $ 2,895 $ 12,817 $ 781 $ 49,778 (a) Revenues are attributable to three operating segments of the Company and are reported in the “All Other” category previously described. |
Schedule of reconciliation of total segment adjusted gross profit | For the Three Months Ended For the Nine Months Ended September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019 Total reportable segment adjusted gross profit $ 21,906 $ 48,997 $ 80,281 $ 142,742 Other adjusted gross profit 1,807 781 3,938 3,823 Depreciation and amortization (16,336) (15,243) (49,713) (42,683) Selling, general, and administrative expenses (8,508) (11,141) (28,599) (66,817) Restructuring costs — — — (168) Other (expense) income, net 183 (440) 752 (279) Currency gains, net — 77 — 77 Loss on extinguishment of debt — — — (907) Interest expense, net (9,913) (10,172) (30,113) (24,056) Consolidated income (loss) before income taxes $ (10,861) $ 12,859 $ (23,454) $ 11,732 |
Schedule of reconciliation of total segment assets to total combined assets | September 30, 2020 December 31, 2019 Total reportable segment assets $ 369,514 $ 400,319 Other assets 4,880 5,955 Restricted cash — 52 Other unallocated amounts 177,099 194,466 Total Assets $ 551,493 $ 600,792 |
Schedule of unallocated assets consist of the following as reported in the combined balance sheets | September 30, 2020 December 31, 2019 Total current assets $ 48,478 $ 60,795 Other intangible assets, net 106,789 117,866 Deferred tax asset 12,213 6,427 Deferred financing costs revolver, net 3,740 4,688 Other non-current assets 5,879 4,690 Total other unallocated amounts of assets $ 177,099 $ 194,466 |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Apr. 01, 2020 | Dec. 31, 2019 | |
Common Stock, Par or Stated Value Per Share | $ 0.0001 | $ 0.0001 | $ 0.0001 |
Algeco and Arrow | |||
Purchase price | $ 1,311 | ||
Common Stock, Par or Stated Value Per Share | $ 0.0001 | ||
TDR Capital | Target Hospitality | |||
Ownership interest in an affiliate | 63.00% | ||
Signor | Bidco | |||
Ownership percentage | 100.00% |
Revenue (Details)
Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue, Topic 606 | $ 35,436 | $ 67,413 | $ 131,160 | $ 201,880 |
Revenue. | 48,263 | 81,643 | 173,539 | 244,983 |
Specialty rental | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue Not from Contract with Customer | $ 12,827 | $ 14,230 | 42,379 | 43,103 |
Revenue. | $ 42,400 | $ 43,100 |
Revenue - Disaggregation Revenu
Revenue - Disaggregation Revenue (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Disaggregation of Revenue [Line Items] | ||||
Number of Reportable Segments | segment | 3 | 3 | ||
Total Revenue | $ 35,436 | $ 67,413 | $ 131,160 | $ 201,880 |
Additional bad debt due to impact of Covid-19. | 1,000 | |||
Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 16,236 | 52,938 | 77,863 | 149,330 |
Bakken Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,154 | 6,019 | 5,705 | 16,530 |
Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 6,169 | 6,186 | 18,448 | 18,952 |
All Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 11,877 | 2,270 | 29,144 | 17,068 |
Services | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 24,331 | 64,189 | 103,526 | 185,094 |
Services | Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 16,236 | 51,250 | 77,863 | 147,060 |
Services | Bakken Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,154 | 6,019 | 5,705 | 16,530 |
Services | Government | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 6,169 | 6,186 | 18,448 | 18,952 |
Services | All Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 772 | 734 | 1,510 | 2,552 |
Construction fee | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 11,105 | 3,224 | 27,634 | 16,786 |
Construction fee | Permian Basin | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | 1,688 | 2,270 | ||
Construction fee | All Other | ||||
Disaggregation of Revenue [Line Items] | ||||
Total Revenue | $ 11,105 | $ 1,536 | $ 27,634 | $ 14,516 |
Revenue - Contract Liabilities
Revenue - Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Change in Contract with Customer, Liability [Abstract] | ||
Balances at Beginning of Year | $ 26,199 | $ 37,376 |
Additions to deferred revenue | 7,866 | 7,054 |
Revenue recognized | (14,956) | (14,928) |
Balances at End of Year | $ 19,109 | $ 29,502 |
Revenue - Revenue Expected to b
Revenue - Revenue Expected to be Recognized (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized | $ 61,910 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue expected to be recognized | $ 11,592 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue expected to be recognized | $ 35,366 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Period | 1 year |
Revenue expected to be recognized | $ 14,952 |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Thousands | Mar. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
Business acquisition | |||
Cash - Platinum Eagle's Trust (net of redemptions) | $ 146,137 | ||
Net cash received from Recapitalization | $ 218,752 | ||
Plus: non-cash contribution - forgiveness of related party loan | 104,285 | ||
Less: non-cash net liabilities assumed from PEAC | (8,840) | ||
Payment of Historical ABL facility | 52,500 | 32,790 | |
Total cash received from affiliates | $ 39,107 | ||
Arrow holdings S.a.r.l. | |||
Business acquisition | |||
Transaction bonus amounts | 28,519 | ||
Payment of Historical ABL facility | 9,904 | ||
Payment of affiliate amounts | 684 | ||
Total cash received from affiliates | 39,107 | ||
Cash paid to Algeco Seller | 563,134 | ||
Target Parent and Arrow Parent | |||
Business acquisition | |||
Aggregate purchase price | $ 1,311,000 | ||
Acquisition price paid in form of cash | 563,100 | ||
Paid to the seller | $ 747,900 | ||
Cash - PIPE | 80,000 | ||
Gross cash received by Target Hospitality from Business Combination | 226,137 | ||
Less: fees to underwriters | (7,385) | ||
Net cash received from Recapitalization | 218,752 | ||
Plus: non-cash contribution - forgiveness of related party loan | 104,285 | ||
Less: non-cash net liabilities assumed from PEAC | 8,840 | ||
Net contributions from Recapitalization Transaction | $ 314,197 | ||
Arrow Seller | |||
Business acquisition | |||
Shares issued | 49,100,000 | ||
Algeco Seller | |||
Business acquisition | |||
Shares issued | 25,686,327 |
Business Combinations - Bidco's
Business Combinations - Bidco's offering of Senior Secured Notes (Details) - USD ($) $ in Thousands | Mar. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Business acquisition | ||||
Principal amount | $ 340,000 | $ 340,000 | ||
Proceeds from borrowings on ABL | 42,500 | $ 82,240 | ||
New ABL Facility | ||||
Business acquisition | ||||
Proceeds from borrowings on ABL | $ 40,000 | 40,000 | ||
Senior Secured Notes 2024 | ||||
Business acquisition | ||||
Principal amount | 340,000 | $ 340,000 | ||
Payment of original issuance cost | $ 3,300 |
Business Combinations - Platinu
Business Combinations - Platinum Eagle (Details) - $ / shares | Mar. 15, 2019 | Mar. 14, 2019 | Sep. 30, 2020 | Apr. 01, 2020 | Dec. 31, 2019 | Mar. 14, 2018 | Jan. 17, 2018 |
Business Acquisition [Line Items] | |||||||
Common stock, Number of share outstanding | 101,205,632 | 100,840,162 | |||||
Common stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||
Common Stock [Member] | |||||||
Business Acquisition [Line Items] | |||||||
Common stock, Number of share outstanding | 14,321,606 | 32,500,000 | 32,500,000 | ||||
Common stock, par value | $ 0.0001 | $ 0.0001 | |||||
Common stock redeemed (in shares) | 18,178,394 | ||||||
Common Stock [Member] | Target Parent and Arrow Parent | |||||||
Business Acquisition [Line Items] | |||||||
Common stock redeemed (in shares) | 18,178,394 | ||||||
Common Class B | |||||||
Business Acquisition [Line Items] | |||||||
Common stock, Number of share outstanding | 8,125,000 | ||||||
Common stock, par value | $ 0.0001 |
Business Combinations - Shares
Business Combinations - Shares by Type (Details) - shares | Mar. 15, 2019 | Mar. 14, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | Mar. 14, 2018 |
Business acquisition | |||||
Total Outstanding Shares of Common Stock Outstanding | 101,205,632 | 100,840,162 | |||
Total Outstanding Shares of Common Stock issued | 105,232,933 | 105,620,399 | 105,254,929 | ||
Less: Founders shares in escrow | (5,015,898) | (5,015,898) | |||
Total Shares of Common Stock outstanding for earnings per share computation (see Note 20) | 100,217,035 | ||||
PIPE investors | |||||
Business acquisition | |||||
Total Outstanding Shares of Common Stock issued | 8,000,000 | ||||
Platinum Eagle And PIPE Investor | |||||
Business acquisition | |||||
Total Outstanding Shares of Common Stock issued | 30,446,606 | ||||
Algeco Sellers | |||||
Business acquisition | |||||
Shares issued to the Sellers | 74,786,327 | ||||
Founder Shares | |||||
Business acquisition | |||||
Total Outstanding Shares of Common Stock issued | 8,050,000 | ||||
Former Director Shares | |||||
Business acquisition | |||||
Total Outstanding Shares of Common Stock issued | 75,000 | ||||
Common Stock [Member] | |||||
Business acquisition | |||||
Total Outstanding Shares of Common Stock Outstanding | 14,321,606 | 32,500,000 | 32,500,000 | ||
Less: Redemption of Platinum Eagle Class A Shares | (18,178,394) | ||||
Common Stock [Member] | Target Parent and Arrow Parent | |||||
Business acquisition | |||||
Less: Redemption of Platinum Eagle Class A Shares | (18,178,394) |
Business Combinations - Other i
Business Combinations - Other information (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Business Acquisition [Line Items] | ||
Transaction fees | $ 0.4 | |
Selling, general, and administrative expenses | ||
Business Acquisition [Line Items] | ||
Payment of Transaction Bonus | $ 28.5 | |
Transaction fees | 8 | |
Loans to officers forgiven amount | $ 1.6 |
Business Combination - Earnout
Business Combination - Earnout Agreement (Details) - $ / shares | Mar. 15, 2019 | Sep. 30, 2020 |
Common shares placed into escrow | 5,015,898 | 5,015,898 |
Scenario if share price exceeds $12.50 | ||
Period after business combination to release shares from escrow account | 3 years | |
Share price | $ 12.50 | |
Number of trading days to monitor share price to release shares from escrow account | 20 days | |
Number of consecutive trading days to monitor share price to release shares from escrow account | 30 days | |
Percentage of founder shares to be released from escrow account | 50.00% | |
Scenario if share price exceeds $15.00 | ||
Period after business combination to release shares from escrow account | 3 years | |
Share price | $ 15 | |
Number of trading days to monitor share price to release shares from escrow account | 20 days | |
Number of consecutive trading days to monitor share price to release shares from escrow account | 30 days | |
Percentage of founder shares to be released from escrow account | 50.00% |
Acquisitions (Details)
Acquisitions (Details) $ in Thousands | Jun. 19, 2019USD ($)item | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Dec. 31, 2018USD ($) |
Business acquisition | ||||
Goodwill | $ 41,038 | $ 41,038 | ||
Permian Basin | ||||
Business acquisition | ||||
Goodwill | $ 41,038 | $ 41,038 | $ 34,180 | |
Superior | ||||
Business acquisition | ||||
Number of workforce communities | item | 3 | |||
Purchase price | $ 30,000 | |||
Number of location being serviced prior to acquisition | item | 2 | |||
Number of beds leased after acquisition | item | 140 | |||
Goodwill | $ 6,858 |
Acquisitions - Preliminary allo
Acquisitions - Preliminary allocation of total purchase price (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | Jun. 19, 2019 |
Allocation of total purchase price to net assets acquired and liabilities assumed | |||
Goodwill | $ 41,038 | $ 41,038 | |
Superior | |||
Allocation of total purchase price to net assets acquired and liabilities assumed | |||
Property and equipment | $ 18,342 | ||
Goodwill | 6,858 | ||
Customer relationships | 4,800 | ||
Total assets acquired | $ 30,000 |
Acquisitions - Other informatio
Acquisitions - Other information (Details) - USD ($) $ in Thousands | Jun. 19, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Business acquisition | |||
Goodwill | $ 41,038 | $ 41,038 | |
Superior | |||
Business acquisition | |||
Estimated useful lives | 9 years | ||
Goodwill | $ 6,858 |
Acquisitions - Pro forma inform
Acquisitions - Pro forma information and acquisition cost (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Jun. 19, 2019 | |
Pro forma information | |||||
Revenue | $ 48,263 | $ 81,643 | $ 173,539 | $ 244,983 | |
Income (loss) before income taxes | (10,861) | $ 12,859 | (23,454) | 11,732 | |
Acquisition related cost | 400 | ||||
Superior | |||||
Pro forma information | |||||
Revenue, if acquired beginning of the year | 249,732 | ||||
Income before taxes, if acquired beginning of the year | $ 14,606 | ||||
Revenue | 1,900 | 7,800 | |||
Income (loss) before income taxes | $ 500 | $ 2,600 | |||
Goodwill expected to be deductible for tax purposes | $ 6,900 |
Acquisitions - Pro Petro (Detai
Acquisitions - Pro Petro (Details) - Pro Petro $ in Millions | Jul. 01, 2019USD ($)room |
Business acquisition | |
Property, plant, and equipment | $ 5 |
Number of Rooms | room | 168 |
Purchase price | $ 5 |
Specialty Rental Assets, Net (D
Specialty Rental Assets, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||||
Less: accumulated depreciation | $ (228,310) | $ (228,310) | $ (200,376) | ||
Specialty rental assets, net | 323,109 | 323,109 | 353,695 | ||
Depreciation | 11,995 | $ 11,222 | 37,158 | $ 31,083 | |
Accumulated depreciation | 9,200 | 9,200 | |||
Gross cost | 10,000 | 10,000 | |||
Net book value | 800 | 800 | |||
Gain (Loss) on Disposition of Property Plant Equipment | 100 | 100 | |||
Specialty rental assets | |||||
Property, Plant and Equipment [Line Items] | |||||
Specialty rental assets, gross | 547,236 | 547,236 | 545,399 | ||
Depreciation | 12,000 | $ 11,200 | 37,200 | $ 31,100 | |
Construction-in-process | |||||
Property, Plant and Equipment [Line Items] | |||||
Specialty rental assets, gross | $ 4,183 | $ 4,183 | $ 8,672 |
Other Property, Plant and Equ_3
Other Property, Plant and Equipment, Net (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Other property, plant and equipment | |||||
Other property, plant and equipment, gross | $ 13,905 | $ 13,905 | $ 13,726 | ||
Less: accumulated depreciation | (3,658) | (3,658) | (2,185) | ||
Property, Plant and Equipment, Other, Net, Total | 10,247 | 10,247 | 11,541 | ||
Depreciation on Other PPE | 4,341 | $ 4,021 | 12,555 | $ 11,600 | |
Land | |||||
Other property, plant and equipment | |||||
Other property, plant and equipment, gross | 9,155 | 9,155 | 9,155 | ||
Buildings and leasehold improvements | |||||
Other property, plant and equipment | |||||
Other property, plant and equipment, gross | 115 | 115 | 115 | ||
Machinery and office equipment | |||||
Other property, plant and equipment | |||||
Other property, plant and equipment, gross | 887 | 887 | 708 | ||
Software and other | |||||
Other property, plant and equipment | |||||
Other property, plant and equipment, gross | 3,748 | 3,748 | $ 3,748 | ||
Property, Plant and Equipment Other Types | |||||
Other property, plant and equipment | |||||
Depreciation on Other PPE | $ 700 | $ 300 | $ 1,500 | $ 700 |
Goodwill and Other Intangible_3
Goodwill and Other Intangible Assets, net - Goodwill (Details) $ in Thousands | 12 Months Ended |
Dec. 31, 2019USD ($) | |
Goodwill | |
Goodwill, Ending Balance | $ 41,038 |
Permian Basin | |
Goodwill | |
Goodwill, Beginning Balance | 34,180 |
Goodwill acquired | 6,858 |
Goodwill, Ending Balance | $ 41,038 |
Goodwill and Other Intangible_4
Goodwill and Other Intangible Assets, net - Intangible Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Intangible assets subject to amortization | |||||
Gross Carrying Amount | $ 128,907 | $ 128,907 | $ 132,720 | ||
Accumulated Amortization | (38,518) | (38,518) | (31,254) | ||
Net Book Value | 90,389 | 90,389 | 101,466 | ||
Total intangible assets other than goodwill | |||||
Gross Carrying Amount | 145,307 | 145,307 | 149,120 | ||
Net Book Value | 106,789 | 106,789 | 117,866 | ||
Aggregate amortization expense of intangible assets | 3,700 | $ 3,700 | 11,077 | $ 10,739 | |
Tradenames | |||||
Indefinite lived assets: | |||||
Net Book Value | 16,400 | ||||
Total intangible assets other than goodwill | |||||
Gross Carrying Amount | 16,400 | 16,400 | $ 16,400 | ||
Net Book Value | 16,400 | $ 16,400 | |||
Customer relationships | |||||
Intangible assets subject to amortization | |||||
Weighted average remaining lives | 6 years 7 months 6 days | 7 years 4 months 24 days | |||
Gross Carrying Amount | 128,907 | $ 128,907 | $ 132,720 | ||
Accumulated Amortization | (38,518) | (38,518) | (31,254) | ||
Net Book Value | 90,389 | 90,389 | $ 101,466 | ||
Customer-Related Intangible Assets | |||||
Intangible assets subject to amortization | |||||
Gross Carrying Amount | 3,800 | 3,800 | |||
Net Book Value | $ 0 | $ 0 |
Goodwill and Other Intangible_5
Goodwill and Other Intangible Assets, net - Future Amortization Expense (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Estimated aggregate amortization expense: | ||
Rest of 2020 | $ 3,579 | |
2021 | 14,656 | |
2022 | 13,302 | |
2023 | 12,881 | |
2024 | 12,881 | |
Thereafter | 33,090 | |
Total | $ 90,389 | $ 101,466 |
Other Non-Current Assets (Narra
Other Non-Current Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Other Depreciation and Amortization | $ 4,341 | $ 4,021 | $ 12,555 | $ 11,600 |
Amortization of Intangible Assets | 3,700 | 3,700 | 11,077 | 10,739 |
Computer Software, Intangible Asset [Member] | ||||
Amortization of Intangible Assets | $ 500 | $ 0 | $ 1,200 | $ 0 |
Computer Software, Intangible Asset [Member] | Maximum | ||||
Finite-Lived Intangible Asset, Useful Life | 4 years | |||
Computer Software, Intangible Asset [Member] | Minimum | ||||
Finite-Lived Intangible Asset, Useful Life | 2 years |
Other Non-Current Assets (Other
Other Non-Current Assets (Other non-current assets) (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Other Non-Current Assets | ||
Cloud computing implementation costs | $ 7,061 | $ 4,690 |
Less: accumulated amortization | (1,182) | |
Other non-current assets | $ 5,879 | $ 4,690 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Accrued Liabilities | ||
Employee accrued compensation expense | $ 5,039 | $ 7,130 |
Other accrued liabilities | 10,257 | 18,482 |
Accrued interest on debt | 1,637 | 9,718 |
Total accrued liabilities | $ 16,933 | $ 35,330 |
Debt (Details)
Debt (Details) - USD ($) $ in Thousands | Mar. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Debt | ||||||
Unamortized Original Issue Discount | $ 2,468 | $ 2,468 | $ 2,876 | |||
Unamortized Deferred Financing Costs | 11,900 | 11,900 | $ 13,866 | |||
Amortization | 145 | $ 140 | $ 408 | $ 287 | ||
Minimum | ||||||
Debt | ||||||
Period for prior written notice to trustee for redemption | 20 days | |||||
Senior Secured Notes 2024 | ||||||
Debt | ||||||
Aggregate principal amount | $ 340,000 | 340,000 | $ 340,000 | |||
Interest rate (as a percent) | 9.50% | 9.50% | 9.50% | |||
Unamortized Original Issue Discount | $ 3,300 | 2,468 | $ 2,468 | |||
Unamortized Deferred Financing Costs | $ 15,900 | $ 11,900 | $ 11,900 | |||
Senior Secured Notes 2024 | Minimum | ||||||
Debt | ||||||
Period for prior written notice to holders for redemption | 15 days | |||||
Senior Secured Notes 2024 | Maximum | ||||||
Debt | ||||||
Period for prior written notice to holders for redemption | 60 days | |||||
Prior to March 15, 2021 with redemption price equal to 100% | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Maximum percentage of principal amount of notes redeemed | 1.00% | |||||
Redemption price | 100.00% | |||||
Treasury rate - basis points | 50.00% | |||||
Prior to March 15, 2021 with redemption price equal to 109.5% | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Maximum percentage of principal amount of notes redeemed | 40.00% | |||||
Redemption price | 109.50% | |||||
Twelve-month period commencing on the issue date and prior to March 15, 2021 | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Maximum percentage of principal amount of notes redeemed | 10.00% | |||||
Redemption price | 103.00% | |||||
2021 | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Redemption price | 104.75% | |||||
2022 | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Redemption price | 102.375% | |||||
2023 and thereafter | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Redemption price | 100.00% |
Debt - Capital Lease and Other
Debt - Capital Lease and Other Financing Obligations (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Lessee, Lease, Description [Line Items] | ||
Other financing obligations | $ 0.3 | |
Commercial-use vehicles | ||
Lessee, Lease, Description [Line Items] | ||
Capital leases | $ 1.1 | $ 2 |
Interest rate (as a percent) | 4.30% |
Debt - ABL Facility (Details)
Debt - ABL Facility (Details) - USD ($) $ in Thousands | Mar. 15, 2019 | Sep. 30, 2020 | Sep. 30, 2019 |
ABL Facility | |||
Proceeds from line of credit | $ 42,500 | $ 82,240 | |
New ABL Facility | |||
ABL Facility | |||
Borrowing capacity | $ 125,000 | ||
Proceeds from line of credit | $ 40,000 | $ 40,000 | |
Borrowing base, line cap (as a percent) | 12.50% | ||
Applicable margin - one step-down (as a percent) | 0.25% | ||
Applicable margin - one step-up (as a percent) | 0.25% | ||
Percentage of net book value of borrowers' eligible accounts receivables | 85.00% | ||
Percentage of net book value of borrowers' eligible rental equipment | 95.00% | ||
Percentage of net orderly liquidation value of borrowers' eligible rental equipment | 85.00% | ||
Options to increase commitments | $ 75,000 | ||
Percentage of voting equity interests in non-US restricted subsidiary pledge | 65.00% | ||
Minimum fixed charge coverage ratio | 100.00% | ||
Maximum total net leverage ratio | 400.00% | ||
Borrowing base | $ 15,625 | ||
Line cap (as a percent) | 12.50% | ||
New ABL Facility | Libor | |||
ABL Facility | |||
Variable rate (as a percent) | 2.50% | ||
New ABL Facility | Base rate | |||
ABL Facility | |||
Variable rate (as a percent) | 1.50% | ||
Standby letters of credit | |||
ABL Facility | |||
Borrowing capacity | $ 15,000 | ||
Swingline | |||
ABL Facility | |||
Borrowing capacity | $ 15,000 |
Debt - Carrying Value of Debt O
Debt - Carrying Value of Debt Outstanding (Details) - USD ($) $ in Thousands | Mar. 15, 2019 | Sep. 30, 2020 | Dec. 31, 2019 |
Carrying value of debt outstanding | |||
Long-term debt, net | $ 411,481 | ||
Principal amount | 340,000 | $ 340,000 | |
Less: unamortized original issue discount | (2,468) | (2,876) | |
Less: unamortized term loan deferred financing costs | (11,900) | (13,866) | |
Total debt, net | 397,113 | 405,243 | |
Less: current maturities | (1,094) | (996) | |
Total long-term debt | 396,019 | 404,247 | |
New ABL Facility | |||
Carrying value of debt outstanding | |||
Long-term debt, net | 70,000 | 80,000 | |
Capital lease and other financing obligations | |||
Carrying value of debt outstanding | |||
Capital lease and other financing obligations | 1,481 | 1,985 | |
Senior Secured Notes 2024 | |||
Carrying value of debt outstanding | |||
Principal amount | 340,000 | $ 340,000 | |
Less: unamortized original issue discount | $ (3,300) | (2,468) | |
Less: unamortized term loan deferred financing costs | $ (15,900) | $ (11,900) | |
Interest rate (as a percent) | 9.50% | 9.50% | 9.50% |
Senior Secured Notes 2024 | New ABL Facility | |||
Carrying value of debt outstanding | |||
Less: unamortized term loan deferred financing costs | $ (3,900) |
Debt - Components of interest e
Debt - Components of interest expense (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Debt Instrument [Line Items] | ||||
Interest expense incurred on Notes Due to Affiliates | $ 1,955 | |||
Interest incurred on capital lease and other financing obligations | $ 30 | $ 98 | ||
Interest expense incurred on ABL facilities and Notes | 8,722 | $ 9,063 | 26,693 | 19,594 |
Amortization of deferred financing costs | 2,914 | 2,220 | ||
Amortization of original issue discount | 145 | 140 | 408 | 287 |
Interest expense, net | 9,913 | 10,172 | 30,113 | 24,056 |
Senior Secured Notes 2024 | ||||
Debt Instrument [Line Items] | ||||
Amortization of deferred financing costs | $ 1,016 | $ 969 | $ 2,914 | $ 2,220 |
Debt - Interest Expense and Def
Debt - Interest Expense and Deferred Financing Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 15, 2019 | |
Debt | ||||||
Interest incurred and expensed on debt | $ 8,722 | $ 9,063 | $ 26,693 | $ 19,594 | ||
Debt issuance costs | 11,900 | 11,900 | $ 13,866 | |||
Amortization of deferred financing costs | 2,914 | 2,220 | ||||
Loss on extinguishment of debt | 0 | $ 0 | 0 | (907) | ||
Algeco ABL facility | ||||||
Debt | ||||||
Loss on extinguishment of debt | $ 900 | |||||
Senior Secured Notes 2024 | ||||||
Debt | ||||||
Debt issuance costs | 11,900 | 11,900 | $ 15,900 | |||
Unamortized debt discount | 3,300 | 3,300 | ||||
Accumulated amortization of deferred financing costs | 4,000 | 4,000 | 2,000 | |||
Accumulated amortization of debt issuance costs | 800 | 800 | 400 | |||
New ABL Facility | Algeco ABL facility | ||||||
Debt | ||||||
Debt issuance costs | 1,800 | 1,800 | ||||
Accumulated amortization related to revolver deferred financing costs | 1,900 | 1,900 | $ 1,100 | |||
New ABL Facility | Senior Secured Notes 2024 | ||||||
Debt | ||||||
Debt issuance costs | $ 3,900 | $ 3,900 |
Debt - Future Maturities (Detai
Debt - Future Maturities (Details) $ in Thousands | Sep. 30, 2020USD ($) |
Future maturities of long term debt | |
Rest of 2020 | $ 1,094 |
2021 | 70 |
2022 | 317 |
2023 | 70,000 |
2024 | 340,000 |
Long-term debt, net | $ 411,481 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Taxes | ||||
Income tax expense (benefit) | $ (2,991) | $ 3,290 | $ (5,187) | $ 5,562 |
Effective tax rate | 27.54% | 25.59% | 22.12% | 47.41% |
Fair Value of Financial Instr_3
Fair Value of Financial Instruments (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Carrying amounts and fair values of financial assets and liabilities | |||
Transfers of financials assets form level 1 to level 2 | $ 0 | $ 0 | $ 0 |
Transfers of financials assets form level 2 to level 1 | 0 | 0 | 0 |
Transfers of financials assets in and out of level 3 | 0 | 0 | 0 |
Transfers of financials liabilities form level 1 to level 2 | 0 | 0 | 0 |
Transfers of financials liabilities form level 2 to level 1 | 0 | 0 | 0 |
Transfers of financials liabilities in and out of level 3 | 0 | $ 0 | 0 |
Carrying amount | New ABL Facility | Level 2 | |||
Carrying amounts and fair values of financial assets and liabilities | |||
Debt Instrument, Fair Value Disclosure, | (70,000) | (80,000) | |
Fair value | New ABL Facility | Level 2 | |||
Carrying amounts and fair values of financial assets and liabilities | |||
Debt Instrument, Fair Value Disclosure, | (70,000) | (80,000) | |
Senior Secured Notes 2024 | Carrying amount | Level 1 | |||
Carrying amounts and fair values of financial assets and liabilities | |||
Debt Instrument, Fair Value Disclosure, | (325,632) | (323,258) | |
Senior Secured Notes 2024 | Fair value | Level 1 | |||
Carrying amounts and fair values of financial assets and liabilities | |||
Debt Instrument, Fair Value Disclosure, | $ (276,573) | $ (325,693) |
Business Restructuring (Details
Business Restructuring (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Restructuring Reserve [Roll Forward] | ||||
Balance at the beginning | $ 1,462 | |||
Charges during the period | $ 0 | $ 0 | $ 0 | 168 |
Cash payments during the year | $ (1,630) | |||
Expected to be incurred | $ 0 | $ 0 |
Related Parties (Details)
Related Parties (Details) - USD ($) $ in Thousands | Jan. 01, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 |
Related parties | ||||||
Secured Debt | $ 325,632 | $ 325,632 | $ 323,258 | |||
Debt issuance costs | 11,900 | 11,900 | 13,866 | |||
Accrued | 300 | $ 300 | 200 | |||
Forgiveness period | 4 years | |||||
Compensation expense recognized | $ 900 | $ 900 | ||||
Reimbursement of employee compensation | $ 900 | $ 300 | ||||
Selling, general, and administrative expenses | ||||||
Related parties | ||||||
Loans to officers forgiven amount | 1,600 | |||||
Commission | 200 | 200 | 800 | 600 | ||
Executive Officer | ||||||
Related parties | ||||||
Due from related parties | 0 | $ 0 | 0 | 0 | ||
Executive Officer | Selling, general, and administrative expenses | ||||||
Related parties | ||||||
Compensation expense recognized | $ 0 | $ 1,600 | ||||
Algeco Global | ||||||
Related parties | ||||||
Compensation percentage | 100.00% | |||||
Extended term of agreement | 12 months | |||||
Reimbursement of employee compensation | $ 300 | $ 900 |
Earnings per Share (Details)
Earnings per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Numerator | ||||||||
Net income (loss) | $ (7,870) | $ (14,200) | $ 3,801 | $ 9,569 | $ 10,580 | $ (13,979) | $ (18,267) | $ 6,170 |
Weighted average number shares outstanding - basic and diluted | 96,138,459 | 100,102,641 | 95,997,647 | 93,378,332 | ||||
Net income (loss) per share - basic and diluted | $ (0.08) | $ 0.10 | $ (0.19) | $ 0.07 | ||||
Founder Shares | ||||||||
Numerator | ||||||||
Shares issued to the Sellers | 8,050,000 | |||||||
Founder Shares | ||||||||
Numerator | ||||||||
Excluded from computation of loss per share | 5,015,898 | |||||||
Warrant | ||||||||
Numerator | ||||||||
Excluded from computation of loss per share | 16,166,650 | 16,166,650 | 16,166,650 | 16,166,650 |
Stockholders' Equity (Details)
Stockholders' Equity (Details) - USD ($) $ / shares in Units, $ in Thousands | Jan. 17, 2018 | Sep. 30, 2019 | Sep. 30, 2020 | Apr. 01, 2020 | Dec. 31, 2019 | Aug. 15, 2019 | Mar. 15, 2019 | Mar. 14, 2019 | Mar. 14, 2018 |
Common Stock | |||||||||
Common stock shares issued | 105,620,399 | 105,254,929 | 105,232,933 | ||||||
Common stock, Number of share outstanding | 101,205,632 | 100,840,162 | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Common shares placed into escrow | 5,015,898 | 5,015,898 | |||||||
Preferred Shares | |||||||||
Preferred stock, shares authorized | 1,000,000 | ||||||||
Preferred stock, par value | $ 0.0001 | ||||||||
Preferred stock, shares issued | 0 | ||||||||
Preferred stock, shares outstanding | 0 | ||||||||
Warrants | |||||||||
Warrants to issue shares of common stock | 16,166,650 | 16,166,650 | |||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
Number of fractional shares issued upon exercise of warrants | 0 | ||||||||
Treasury Stock, Shares [Abstract] | |||||||||
Repurchase of common stock as part of a share repurchase program | $ 5,591 | ||||||||
Share Repurchase Program 2019 Plan | |||||||||
Treasury Stock, Shares [Abstract] | |||||||||
Stock repurchase authorized amount | $ 75,000 | ||||||||
Repurchase of common stock as part of a share repurchase program (In Shares) | 4,414,767 | ||||||||
Repurchase of common stock as part of a share repurchase program | $ 23,600 | ||||||||
Remaining authorized repurchase amount | $ 51,400 | ||||||||
Private placement | |||||||||
Warrants | |||||||||
Warrants to issue shares of common stock | 5,333,334 | ||||||||
Aggregate purchase price per warrant | $ 1.50 | ||||||||
Aggregate purchase price | $ 8,000 | ||||||||
Number of stock issued for each warrant | 1 | ||||||||
Share price | $ 11.50 | ||||||||
Warrant exercisable term | 30 days | ||||||||
Public Offering | |||||||||
Warrants | |||||||||
Number of stock issued for each warrant | 1 | ||||||||
Share price | $ 11.50 | ||||||||
Warrant exercisable term | 30 years | ||||||||
Number of units sold | 32,500,000 | ||||||||
Price per unit | $ 10 | ||||||||
Number of warrants per unit | 0.33 | ||||||||
Over allotment | |||||||||
Warrants | |||||||||
Number of units sold | 2,500,000 | ||||||||
Common Stock [Member] | |||||||||
Common Stock | |||||||||
Common stock, Number of share outstanding | 14,321,606 | 32,500,000 | 32,500,000 | ||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Warrants | |||||||||
Common stock, par value (in dollars per share) | $ 0.0001 | $ 0.0001 | |||||||
Common Stock [Member] | Public Offering | |||||||||
Warrants | |||||||||
Number of shares per unit | 1 |
Stock-Based Compensation (Detai
Stock-Based Compensation (Details) | May 20, 2020shares | Apr. 20, 2020shares | Apr. 01, 2020USD ($)$ / sharesshares | Mar. 04, 2020installmentitemshares | Jan. 02, 2020installmentshares | Sep. 03, 2019installmentshares | May 21, 2019installmentitemshares | Sep. 30, 2020$ / sharesshares | Dec. 31, 2019installment$ / sharesshares | Mar. 15, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Shares reserved for issuance | 4,000,000 | |||||||||
Reduction in salary | 20.00% | |||||||||
Salary Reduction Program, Period. | 10 days | 10 days | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||
Number of days | 9 months | 9 months | ||||||||
Reduction in cash | $ | $ 20 | |||||||||
Executive Officers and Other Employees | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 66,070 | |||||||||
Time-based restricted stock unit | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Right to buy number of shares upon vesting | 1 | 1 | ||||||||
Granted (in shares) | 201,988 | |||||||||
Options | ||||||||||
Outstanding Options at beginning of period (in shares) | 401,797 | |||||||||
Granted (in shares) | 1,374,085 | |||||||||
Vested and released (in shares) | (491,430) | |||||||||
Forfeited (in shares) | (53,561) | |||||||||
Outstanding Options at end of period (in shares) | 1,230,891 | 401,797 | ||||||||
Weighted Average Grant Date Fair Value per Share | ||||||||||
Outstanding Options at beginning of period (in shares) | $ / shares | $ 9.31 | |||||||||
Granted (in dollars per share) | $ / shares | 3.07 | |||||||||
Vested and released (in dollars per share) | $ / shares | 5.46 | |||||||||
Forfeited (in dollars per share) | $ / shares | 5.89 | |||||||||
Outstanding Options at end of period (in dollars per share) | $ / shares | $ 4.15 | $ 9.31 | ||||||||
Time-based restricted stock unit | Chief Financial Officer | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of anniversaries the awards vest | installment | 4 | |||||||||
Time-based restricted stock unit | Chief Financial Officer | Grant One | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 81,434 | |||||||||
Time-based restricted stock unit | Chief Financial Officer | Grant Two | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 48,860 | |||||||||
Time-based restricted stock unit | CEO | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equal installments | installment | 12 | 6 | ||||||||
Options | ||||||||||
Granted (in shares) | 124,741 | 30,000 | ||||||||
Time-based stock option awards | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Right to buy number of shares upon vesting | 1 | |||||||||
Number of anniversaries the awards vest | item | 4 | |||||||||
Granted (in shares) | 1,140,875 | |||||||||
options forfeited | 67,754 | |||||||||
Time-based stock option awards | Non-executive Directors | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 477,529 | |||||||||
Director | Time-based restricted stock unit | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equal installments | installment | 4 | |||||||||
Number of anniversaries the awards vest | item | 4 | |||||||||
Vesting period (in years) | 1 year | |||||||||
Granted (in shares) | 503,757 | 81,967 | ||||||||
Employees | Time-based restricted stock unit | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equal installments | installment | 4 | |||||||||
Number of anniversaries the awards vest | item | 4 | |||||||||
Granted (in shares) | 212,621 | |||||||||
Employees | Time-based stock option awards | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of equal installments | installment | 4 | |||||||||
Granted (in shares) | 1,140,873 | 482,792 | ||||||||
Employees | Time-based stock option awards | Chief Financial Officer | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Granted (in shares) | 171,429 |
Stock-Based Compensation - Opti
Stock-Based Compensation - Options to Purchase Common Shares (Details) | Oct. 01, 2020 | Aug. 05, 2020 | Mar. 04, 2020shares | Sep. 03, 2019shares | May 21, 2019installmentitem$ / sharesshares | Sep. 30, 2020shares |
Time-based stock option awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 1,140,875 | |||||
Right to buy number of shares upon vesting | 1 | |||||
Per value | $ / shares | $ 0.0001 | |||||
Number of anniversaries the awards vest | item | 4 | |||||
Expiration Period (in years) | 10 years | |||||
Time-based stock option awards | Minimum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share price | $ / shares | $ 4.51 | |||||
Time-based stock option awards | Maximum | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share price | $ / shares | $ 10.83 | |||||
Director | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Director Fee Payment Rate | 100.00% | |||||
Employees | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Base Salary payment rate | 100.00% | |||||
Employees | Time-based stock option awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 1,140,873 | 482,792 | ||||
Number of equal installments | installment | 4 | |||||
CEO | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Base Salary payment rate | 80.00% | |||||
Chief Financial Officer | Employees | Time-based stock option awards | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Granted (in shares) | 171,429 |
Stock-Based Compensation - Chan
Stock-Based Compensation - Changes in stock options (Details) - USD ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Intrinsic Value | ||
Exercisable Options at end of period | $ 136,421 | |
Time-based stock option awards | ||
Number of shares | ||
Outstanding Options at beginning of period (in shares) | 579,370 | |
Granted (in shares) | 1,140,875 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Vested And Expired, Number of Shares | 5,614 | |
Expired (in shares) | (5,614) | |
Forfeited (in shares) | (67,754) | |
Outstanding Options at end of period (in shares) | 1,646,877 | 579,370 |
Weighted Average Exercise Price per Share | ||
Outstanding Options at beginning of period (in dollars per share) | $ 9.44 | |
Granted (in dollars per share) | 4.51 | |
Expired (in dollars per share) | 10.83 | |
Forfeited (in dollars per share) | 7.13 | |
Outstanding Options at end of period (in dollars per share) | $ 6.12 | $ 9.44 |
Weighted Average Contractual Life (Years) | ||
Outstanding Options (in years) | 9 years 5 months 8 days | 9 years 5 months 23 days |
Outstanding Options at end of period (in years) | 9 years 5 months 8 days | 9 years 5 months 23 days |
Stock-Based Compensation - Assu
Stock-Based Compensation - Assumptions (Details) - Time-based stock option awards | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Assumptions: | |
Weighted average expected stock volatility | 25.80% |
Expected dividend yield | 0.00% |
Expected term (years) | 6 years 3 months |
Risk-free interest rate - maximum | 2.26% |
Weighted-average grant date fair value | $ 1.87 |
Forfeited (in shares) | shares | 67,754 |
Minimum | |
Assumptions: | |
Risk-free interest rate - minimum | 0.82% |
Exercise price (range) | $ 4.51 |
Maximum | |
Assumptions: | |
Exercise price (range) | $ 10.83 |
Stock-Based Compensation - Stoc
Stock-Based Compensation - Stock-based Compensation Expense (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based Compensation Expense | $ 0.2 | $ 0.1 | ||
Time-based restricted stock unit | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based Compensation Expense | 0.7 | 0.6 | $ 2.3 | $ 0.7 |
Associated tax benefit from stock-based compensation expense | 0.6 | 0.2 | ||
Unrecognized compensation expense | 4.3 | $ 4.3 | ||
Period for unrecognized compensation expense expected to be recognized | 3 years 2 months 4 days | |||
Time-based stock option awards | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Stock-based Compensation Expense | $ 0.5 | 0.1 | ||
Associated tax benefit from stock-based compensation expense | 0.1 | $ 0.1 | 0.1 | $ 0.1 |
Unrecognized compensation expense | $ 2.1 | $ 2.1 | ||
Period for unrecognized compensation expense expected to be recognized | 3 years 14 days |
Retirement Plans (Details)
Retirement Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Retirement Plans | ||||
Minimum percentage of annual eligible compensation by the participants | 1.00% | |||
Maximum percentage of annual eligible compensation by the participants | 90.00% | |||
Percentage of contribution matched | 6.00% | |||
Percentage of contribution, matched 100% by employer | 3.00% | |||
Employer match of employee contributions of first 3% of contributions | 100.00% | |||
Percentage of contribution, matched 50% by employer | 3.00% | |||
Employer match of employee contributions of next 3% of contributions | 50.00% | |||
Vesting percentage | 20.00% | |||
Vesting period | 5 years | |||
Contribution expenses | $ 0.2 | $ 0.2 | $ 0.6 | $ 0.7 |
Business Segments (Details)
Business Segments (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($)segment | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($)segment | Dec. 31, 2019USD ($) | |
Business segments | |||||
Number of reportable segments | segment | 3 | 3 | |||
Number of Operating Segments | segment | 3 | 3 | 3 | 3 | |
Revenue | $ 48,263 | $ 81,643 | $ 173,539 | $ 244,983 | |
Adjusted gross profit | 21,906 | 48,997 | 80,281 | 142,742 | |
Total Assets | 551,493 | 551,493 | $ 600,792 | ||
Operating Segments | |||||
Business segments | |||||
Revenue | 48,263 | 81,643 | 173,539 | 244,983 | |
Adjusted gross profit | 23,713 | 49,778 | 84,219 | 146,565 | |
Total Assets | 374,394 | 374,394 | 406,274 | ||
Permian Basin | Operating Segments | |||||
Business segments | |||||
Revenue | 18,968 | 56,524 | 89,163 | 161,270 | |
Adjusted gross profit | 8,606 | 33,285 | 42,257 | 98,529 | |
Total Assets | 285,668 | 285,668 | 305,701 | ||
Bakken Basin | Operating Segments | |||||
Business segments | |||||
Revenue | 1,154 | 6,019 | 5,705 | 16,530 | |
Adjusted gross profit | 87 | 2,895 | 323 | 7,228 | |
Total Assets | 55,210 | 55,210 | 59,134 | ||
Government | Operating Segments | |||||
Business segments | |||||
Revenue | 16,264 | 16,830 | 49,527 | 50,115 | |
Adjusted gross profit | 13,213 | 12,817 | 37,701 | 36,985 | |
Total Assets | 28,636 | 28,636 | 35,484 | ||
All Other | |||||
Business segments | |||||
Total Assets | 4,880 | 4,880 | 5,955 | ||
All Other | Operating Segments | |||||
Business segments | |||||
Revenue | 11,877 | 2,270 | 29,144 | 17,068 | |
Adjusted gross profit | 1,807 | $ 781 | 3,938 | $ 3,823 | |
Total Assets | $ 4,880 | $ 4,880 | $ 5,955 |
Business Segments - Reconciliat
Business Segments - Reconciliation of total segment adjusted gross profit to total combined income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Business Segments | ||||
Total reportable segment adjusted gross profit | $ 21,906 | $ 48,997 | $ 80,281 | $ 142,742 |
Other adjusted gross profit | 1,807 | 781 | 3,938 | 3,823 |
Depreciation and amortization | (16,336) | (15,243) | (49,713) | (42,683) |
Selling, general and administrative expenses | (8,508) | (11,141) | (28,599) | (66,817) |
Restructuring costs | 0 | 0 | 0 | (168) |
Other (income) expense, net | 183 | (440) | 752 | (279) |
Currency (gain) losses, net | 0 | 77 | 0 | 77 |
Loss on extinguishment of debt | 0 | 0 | 0 | (907) |
Interest expense, net | (9,913) | (10,172) | (30,113) | (24,056) |
Income (loss) before income tax | $ (10,861) | $ 12,859 | $ (23,454) | $ 11,732 |
Business Segments - Reconcili_2
Business Segments - Reconciliation of total segment assets to total combined assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 551,493 | $ 600,792 |
Restricted cash | 0 | 52 |
Total reportable segment assets | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 369,514 | 400,319 |
All Other | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 4,880 | 5,955 |
Other unallocated amounts | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 177,099 | $ 194,466 |
Business Segments - Unallocated
Business Segments - Unallocated assets (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Total current assets | $ 48,478 | $ 60,795 |
Other intangible assets, net | 106,789 | 117,866 |
Deferred tax asset | 12,213 | 6,427 |
Deferred financing costs revolver, net | 3,740 | 4,688 |
Other non-current assets | 5,879 | 4,690 |
Total assets | 551,493 | 600,792 |
Other unallocated amounts | ||
Total current assets | 48,478 | 60,795 |
Other intangible assets, net | 106,789 | 117,866 |
Deferred tax asset | 12,213 | 6,427 |
Deferred financing costs revolver, net | 3,740 | 4,688 |
Other non-current assets | 5,879 | 4,690 |
Total assets | $ 177,099 | $ 194,466 |
Subsequent Events (Details)
Subsequent Events (Details) | Nov. 05, 2020$ / shares |
Subsequent Events [Member] | Arrow Holdings [Member] | |
Subsequent Events | |
Proposed Cash Consideration, Price Per Share | $ 1.50 |
Uncategorized Items - th-202009
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 167,000 |