Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Apr. 30, 2020 | Jun. 02, 2020 | |
Document And Entity Information | ||
Document Type | 10-Q | |
Document Period End Date | Apr. 30, 2020 | |
Entity Registrant Name | KLX Energy Services Holdings, Inc. | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Interactive Data Current | Yes | |
Entity Small Business | false | |
Entity Emerging Growth Company | true | |
Entity Ex Transition Period | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 24,861,932 | |
Current Fiscal Year End Date | --01-31 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001738827 | |
Amendment Flag | false |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 125.6 | $ 123.5 |
Accounts receivable–trade, less allowance for doubtful accounts ($12.3 at April 30, 2020 and $12.9 at January 31, 2020) | 54.9 | 79.2 |
Inventories, net | 12.1 | 12 |
Other current assets | 11.8 | 13.8 |
Total current assets | 204.4 | 228.5 |
Property and equipment, net of accumulated depreciation ($213.2 at April 30, 2020 and $206.0 at January 31, 2020) | 158.1 | 306.8 |
Goodwill | 0 | 28.3 |
Identifiable intangible assets, net | 5.5 | 45.8 |
Other assets | 10.2 | 14 |
Total assets | 378.2 | 623.4 |
Current liabilities: | ||
Accounts payable | 27.3 | 31.4 |
Accrued interest | 14.4 | 7.2 |
Accrued liabilities | 21.7 | 26.2 |
Total current liabilities | 63.4 | 64.8 |
Long-term debt | 243.2 | 243 |
Other non-current liabilities | 3.5 | 3.4 |
Commitments, contingencies and off-balance sheet arrangements (Note 9) | ||
Parent company equity: | ||
Common stock, $0.01 par value per share; 110.0 shares authorized; 25.4 shares issued as of April 30, 2020 and 25.0 shares issued as of January 31, 2020 | 0.2 | 0.2 |
Additional paid-in capital | 415.8 | 416.5 |
Treasury stock: 0.5 shares as of April 30, 2020 and 0.3 shares as of January 31, 2020 | (3.9) | (3.6) |
Accumulated deficit | (344) | (100.9) |
Total stockholders' equity | 68.1 | 312.2 |
Total liabilities and equity | $ 378.2 | $ 623.4 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS - Parenthetical - USD ($) shares in Millions, $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
CONDENSED CONSOLIDATED BALANCE SHEETS | ||
Accounts receivable - trade, allowance for doubtful accounts | $ 12.3 | $ 12.9 |
Property and equipment, accumulated depreciation | $ 213.2 | $ 206 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 110 | 110 |
Common stock, shares issued | 25.4 | 25 |
Treasury stock | 0.5 | 0.3 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF LOSS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
CONDENSED CONSOLIDATED STATEMENTS OF (LOSS) EARNINGS | ||
Service revenues | $ 83 | $ 145.8 |
Cost of sales | 92.2 | 118.9 |
Selling, general and administrative | 17.4 | 23.8 |
Research and development costs | 0.3 | 0.7 |
Goodwill and long-lived asset impairment charge | 208.7 | |
Operating (loss) earnings | (235.6) | 2.4 |
Interest expense, net | 7.4 | 7.1 |
Loss before income taxes | (243) | (4.7) |
Income tax expense | 0.1 | 0.3 |
Net loss | $ (243.1) | $ (5) |
Net loss per share - basic | $ (10.52) | $ (0.24) |
Net loss per share - diluted | $ (10.52) | $ (0.24) |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Millions, $ in Millions | Common Stock | Additional Paid-in Capital | Treasury Stock | Accumulated Earnings (Deficit) | Total |
Balance at Jan. 31, 2019 | $ 0.2 | $ 345 | $ (4.5) | $ 340.7 | |
Balance (shares) at Jan. 31, 2019 | 22.6 | ||||
Restricted stock, net of forfeitures | 4.4 | 4.4 | |||
Issuance of shares as a component of acquisition price | 12.1 | 12.1 | |||
Issuance of shares as a component of acquisition price (in shares) | 0.5 | ||||
Issuance of shares as a component of acquisition price | 36.4 | 36.4 | |||
Escrowed shares related to Tecton acquisition | $ (1.4) | (1.4) | |||
Net loss | (5) | (5) | |||
Balance at Apr. 30, 2019 | $ 0.2 | 397.9 | (1.4) | (9.5) | 387.2 |
Balance (shares) at Apr. 30, 2019 | 23.1 | ||||
Balance at Jan. 31, 2020 | $ 0.2 | 416.5 | (3.6) | (100.9) | 312.2 |
Balance (shares) at Jan. 31, 2020 | 25 | ||||
Restricted stock, net of forfeitures | (0.7) | (0.7) | |||
Purchase of treasury stock | (0.3) | (0.3) | |||
Issuance of shares as a component of acquisition price (in shares) | 0.4 | ||||
Net loss | (243.1) | (243.1) | |||
Balance at Apr. 30, 2020 | $ 0.2 | $ 415.8 | $ (3.9) | $ (344) | $ 68.1 |
Balance (shares) at Apr. 30, 2020 | 25.4 |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
CASH FLOWS FROM OPERATING ACTIVITIES: | ||
Net loss | $ (243.1) | $ (5) |
Adjustments to reconcile net loss to net cash flows provided by operating activities: | ||
Depreciation and amortization | 16.2 | 14.8 |
Goodwill and long-lived asset impairment charge | 208.7 | |
Non-cash compensation | (0.7) | 4.5 |
Amortization of deferred financing fees | 0.3 | 0.3 |
Provision for inventory reserve | 0.7 | 0.1 |
Change in allowance for doubtful accounts | (0.6) | 0.9 |
Loss on disposal of property, equipment and other | 0.6 | 0.8 |
Changes in operating assets and liabilities: | ||
Accounts receivable | 25 | (10.6) |
Inventories | (0.8) | (0.3) |
Other current and non-current assets | 1.2 | (0.8) |
Accounts payable | (3.2) | (3.8) |
Other current and non-current liabilities | 2.7 | 3.3 |
Net cash flows provided by operating activities | 7 | 4.2 |
CASH FLOWS FROM INVESTING ACTIVITIES: | ||
Capital expenditures | (4.8) | (29.6) |
Proceeds from sale of assets | 0.2 | 0.1 |
Acquisitions, net of cash acquired | (27.9) | |
Net cash flows used in investing activities | (4.6) | (57.4) |
CASH FLOWS FROM FINANCING ACTIVITIES: | ||
Purchase of treasury stock | (0.3) | |
Net cash flows used in financing activities | (0.3) | |
Net change in cash and cash equivalents | 2.1 | (53.2) |
Cash and cash equivalents, beginning of period | 123.5 | 163.8 |
Cash and cash equivalents, end of period | 125.6 | 110.6 |
Cash paid during period for: | ||
Interest | 0.1 | 0.1 |
Supplemental schedule of non-cash activities: | ||
Change in deposits on capital expenditures | (4.4) | (1.4) |
Accrued capital expenditures | $ 3.7 | $ 10.1 |
Description of Business and Bas
Description of Business and Basis of Presentation | 3 Months Ended |
Apr. 30, 2020 | |
Description of Business and Basis of Presentation | |
Description of Business and Basis of Presentation | Note 1. Description of Business and Basis of Presentation Description of Business The Company is a provider of completion, intervention and production services and products to the major onshore oil and gas producing regions of the United States. Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments which, in the opinion of the Company’s management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the KLX Energy Services Holdings, Inc. (the “Company”, “KLXE” or “KLX Energy Services”) Annual Report on Form 10-K for the fiscal year ended January 31, 2020. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Recent Accounting Pronouncement
Recent Accounting Pronouncements | 3 Months Ended |
Apr. 30, 2020 | |
Recent Accounting Pronouncements | |
Recent Accounting Pronouncements | Note 2. Recent Accounting Pronouncements In August 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments related to how certain cash receipts and payments are presented and classified in the statement of cash flows. These cash flow issues include debt prepayment or extinguishment costs, settlement of zero-coupon debt, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies, distributions received from equity method investees, beneficial interests in securitization transactions, and separately identifiable cash flows. This ASU is effective for fiscal years beginning after December 15, 2018, and interim periods within fiscal years beginning after December 15, 2019, with early adoption permitted, and should be applied retrospectively. The adoption of ASU 2016-15 did not have a material impact on the Company’s condensed consolidated financial statements as the Company’s condensed consolidated statements of cash flows are not impacted by the eight issues listed above. In February 2016, the FASB issued ASU 2016-02, Leases, which supersedes ASC Topic 840, Leases, and creates a new topic, ASC Topic 842, Leases. ASU 2016-02 requires lessees to recognize a lease liability and a lease asset for all leases, including operating leases, with a term greater than 12 months on its balance sheet. The update also expands the required quantitative and qualitative disclosures surrounding leases. ASU 2016-02 will be applied using a modified retrospective transition approach for leases existing at, or entered into after, the beginning of the earliest comparative period presented in the financial statements. In November 2019, the FASB deferred the effective date for implementation of ASU 2016-02 by one year and in June 2020 the FASB deferred the effective date by an additional year. The guidance under ASU 2016-02 is effective for fiscal years beginning after December 15, 2021 and interim periods within fiscal years beginning after December 15, 2022. Earlier adoption is permitted. To assess the impact of this guidance, the Company has established a cross functional implementation project team and is currently in the process of accumulating and evaluating all the necessary information required to properly account for its lease portfolio under the new standard. The Company is in the process of developing its new accounting policies and determining the potential aggregate impact this guidance is likely to have on its financial statements as of its adoption date. |
Business Combinations
Business Combinations | 3 Months Ended |
Apr. 30, 2020 | |
Business Combinations | |
BUSINESS COMBINATIONS | Note 3. Business Combinations On March 15, 2019, the Company acquired Tecton Energy Services (“Tecton”), a leading provider of flowback, drill-out and production testing services, operating primarily in the greater Rocky Mountains. On March 19, 2019, the Company acquired Red Bone Services LLC (“Red Bone”), a premier provider of oilfield services primarily in the Mid-Continent, providing fishing, non-frac high pressure pumping, thru-tubing and certain other services. The aggregate acquisition price of the acquisitions was approximately $74.6, comprised of approximately $47.0 in shares of the Company’s common stock issuable over time at a fixed price and approximately $27.6 in cash to the sellers and for the retirement of debt. The Company issued shares in its common stock to effect the Tecton acquisition, a portion of which is not included in the purchase consideration as the shares were escrowed and held as treasury stock to satisfy identified future tax obligations through cancellation of the shares. To effect the Red Bone acquisition, the Company issued shares in a subsidiary company, which were exchangeable for KLXE common stock on specified dates between the acquisition date and September 2020. 416,667 shares of KLXE common stock, representing the balance of the share consideration to effect the Red Bone acquisition, will be issued in September 2020. The shares issued to the sellers of Tecton and Red Bone are subject to restrictions on public re-sale from a minimum of six months to a maximum of 24 months, subject to acceleration upon the occurrence of certain events. Based on the Company’s final purchase price allocation, the excess of the purchase price over the fair value of the identifiable assets acquired approximated $51.2, of which $19.4 was allocated to identifiable intangible assets consisting of customer contracts and relationships and covenants not to compete, and $31.8 was allocated to goodwill. The useful life assigned to the customer contracts and relationships is 20 years, and the covenants not to compete are being amortized over their contractual periods of 18 months and three years for Tecton and Red Bone, respectively. The Tecton and Red Bone acquisitions were accounted for as purchases under FASB ASC 805, Business Combinations (“ASC 805”). The results of operations for the Tecton and Red Bone acquisitions are included in the accompanying condensed consolidated statements of loss from the respective dates of acquisition. The following table summarizes the fair values of assets acquired and liabilities assumed in the Tecton and Red Bone acquisitions in accordance with ASC 805: Tecton Red Bone Accounts receivable-trade $ 2.1 $ 7.2 Inventories - 2.7 Other current and non-current assets 0.2 - Property and equipment 2.8 23.6 Goodwill 15.0 16.8 Identified intangibles 6.2 13.2 Accounts payable (0.7) (3.3) Accrued liabilities (1.4) (0.9) Other current and non-current liabilities (1.6) (7.3) Total consideration paid $ 22.6 $ 52.0 The majority of goodwill and intangible assets for Tecton and Red Bone are not expected to be deductible for tax purposes. As more fully described in Note 5, the Company performed an interim goodwill impairment test and a long-lived asset recovery test during the three months ended April 30, 2020, which resulted in a $208.7 goodwill and long-lived asset impairment charge. The goodwill and long-lived asset impairment charge is included in the condensed consolidated statements of loss for the three months ended April 30, 2020. The Company has substantially integrated Red Bone and, as a result, it is not practicable to report stand-alone revenues and operating earnings of the acquired business since the acquisition date. The amount of Tecton revenues included in the Company’s results was approximately $3.1 for the three months ended April 30, 2019. It is not practicable to report stand-alone operating earnings of Tecton since the acquisition date. On a pro forma basis to give effect to the Tecton and Red Bone acquisitions, as if they occurred on February 1, 2018, revenues, net loss and loss per diluted share for the three months ended April 30, 2019 would have been as follows: UNAUDITED THREE MONTHS ENDED April 30, 2019 Pro forma Revenues $ 153.5 Net loss (4.5) Loss per diluted share (0.20) |
Property and Equipment, Net
Property and Equipment, Net | 3 Months Ended |
Apr. 30, 2020 | |
Property and Equipment, Net | |
PROPERTY AND EQUIPMENT, NET | Note 4. Property and Equipment, Net Property and equipment consist of the following: Useful April 30, January 31, Life (Years) 2020 2020 Land, buildings and improvements 1 - 40 $ 25.9 $ 38.2 Machinery 1 - 20 189.0 257.9 Furniture and equipment 1 - 15 156.4 216.7 371.3 512.8 Less accumulated depreciation 213.2 206.0 $ 158.1 $ 306.8 The long-lived asset impairment charge has been preliminarily allocated to the above asset classes based on each asset class’s percentage of total property and equipment. Depreciation expense was $15.2 and $14.0 for the three months ended April 30, 2020 and 2019, respectively. Refer to Note 5 for a discussion of the interim long-lived asset recovery test performed during the three months ended April 30, 2020. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, Net | 3 Months Ended |
Apr. 30, 2020 | |
Goodwill and Intangible Assets, Net | |
GOODWILL AND INTANGIBLE ASSETS, NET | Note 5. Goodwill and Intangible Assets, Net Goodwill and indefinite life intangible assets are tested for impairment annually or on an interim basis if events or circumstances indicate that the fair value of the asset has decreased below its carrying value. The abrupt deterioration in demand during the second half of 2019, which has continued into 2020, was further exacerbated by the unprecedented demand destruction being caused by the COVID-19 pandemic. The combination of the Saudi Arabia/Russia oil market share dispute and the demand destruction caused by the COVID-19 pandemic has driven the price of oil to unprecedented levels resulting in decreases in demand for oilfield services such as those provided by the Company and lower current and expected revenues for the Company. As a result, during the three months ended April 30, 2020, the Company performed an interim goodwill impairment test and a long-lived asset recoverability test. The valuation of the Company and its reportable segments’ goodwill impairment test was estimated using the guideline public company analysis and the discounted cash flow analysis, which were equally weighted in the fair value analysis. Long-lived assets, such as property and equipment and purchased intangibles subject to amortization, are tested for impairment when there is evidence that events or changes in circumstances indicate that the carrying amount of an asset may not be recovered. An impairment loss is recognized when the undiscounted cash flows expected to be generated by an asset (or group of assets) is less than its carrying amount Determining fair value requires the use of estimates and assumptions. Such estimates and assumptions include revenue growth rates, operating profit margins, weighted average cost of capital, terminal growth rates, future market share and future market conditions, among others. The Company's cash flow projections were a significant input into the April 30, 2020 fair value. See Note 8 for additional information regarding the fair value determination. If the business continues to be unable to achieve projected results or long-term projections are adjusted downward, it could negatively impact future valuations of the Rocky Mountains reporting unit and the Company’s long-lived assets and result in a future impairment charge. The following sets forth the intangible assets by major asset class, all of which were acquired through business purchase transactions: April 30, 2020 January 31, 2020 Useful Life Original Accumulated Net Book Original Accumulated Net Book (Years) Cost Amortization Value Cost Amortization Value Customer contracts and relationships 20 $ 8.3 $ 2.9 $ 5.4 $ 43.0 $ 2.4 $ 40.6 Covenants not to compete 1.5 - 3 2.5 2.4 0.1 4.7 1.9 2.8 Developed technologies 15 1.0 1.0 - 3.3 0.9 2.4 $ 11.8 $ 6.3 $ 5.5 $ 51.0 $ 5.2 $ 45.8 Amortization expense associated with identifiable intangible assets was $1.0 and $0.8 for the three months ended April 30, 2020 and 2019, respectively. The changes in the carrying amount of goodwill for the three months ended April 30, 2020 are as follows: Balance, January 31, 2020 $ 28.3 Goodwill impairment (28.3) Balance, April 30, 2020 $ — |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Apr. 30, 2020 | |
Accrued Liabilities | |
ACCRUED LIABILITIES | Note 6. Accrued Liabilities Accrued liabilities consist of the following: April 30, January 31, 2020 2020 Accrued salaries, vacation and related benefits $ 11.2 $ 13.9 Accrued incentive compensation — 2.3 Accrued property taxes 2.7 2.3 Other accrued liabilities 7.8 7.7 $ 21.7 $ 26.2 |
Long-Term Debt
Long-Term Debt | 3 Months Ended |
Apr. 30, 2020 | |
Long-Term Debt | |
LONG-TERM DEBT | Note 7. Long-Term Debt As of April 30, 2020, long-term debt consisted of $250.0 principal amount of 11.5% senior secured notes due 2025 (the “Notes”) offered pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons outside the United States in compliance with Regulation S under the Securities Act. On a net basis, after taking into consideration the debt issue costs for the Notes, total debt as of April 30, 2020 was $243.2. As of April 30, 2020, the Company also had a $100.0 asset-based revolving credit facility pursuant to a senior secured credit agreement dated August 10, 2018 (the “ABL Facility”). The ABL Facility became effective on September 14, 2018, the date of the spin-off, and matures in September 2023. On October 22, 2018, the ABL Facility was amended primarily to permit the Company to issue the Notes and acquire Motley Services, LLC (“Motley”) and the definition of the required ratio (as defined in the ABL Facility) was also amended as a result of the Notes issuance. Borrowings under the ABL Facility bear interest at a rate equal to the London Interbank Offered Rate plus the applicable margin (as defined in the ABL Facility). No amounts were outstanding under the ABL Facility as of April 30, 2020. The ABL Facility is tied to a borrowing base formula and has no maintenance financial covenants. The ABL Facility is secured by, among other things, a first priority lien on the Company’s accounts receivable and inventory and contains customary conditions precedent to borrowing and affirmative and negative covenants, all of which were met as of April 30, 2020. Availability under the ABL Facility was $42.0 and $60.0 as of April 30, 2020 and January 31, 2020, respectively. The decrease in availability during the current period is primarily related to lower levels of accounts receivable at April 30, 2020. Letters of credit issued under the ABL Facility aggregated $2.2 at April 30, 2020. |
Fair Value Information
Fair Value Information | 3 Months Ended |
Apr. 30, 2020 | |
Fair Value Information | |
FAIR VALUE INFORMATION | Note 8. Fair Value Information All financial instruments are carried at amounts that approximate estimated fair value. The fair value is the price at which an asset could be exchanged in a current transaction between knowledgeable, willing parties. Assets measured at fair value are categorized based upon the lowest level of significant input to the valuations. Level 1 – quoted prices in active markets for identical assets and liabilities. Level 2 – quoted prices for identical assets and liabilities in markets that are not active or observable inputs other than quoted prices in active markets for identical assets and liabilities. Level 3 – unobservable inputs in which there is little or no market data available, which require the reporting entity to develop its own assumptions. The carrying amounts of cash and cash equivalents, accounts receivable-trade and accounts payable represent their respective fair values due to their short-term nature. There was no debt outstanding under the ABL Facility as of April 30, 2020. The fair value of the Company’s Notes, based on market prices for publicly-traded debt (which the Company classifies as Level 2 inputs), was $92.8 and $202.5 as of April 30, 2020 and January 31, 2020, respectively. Goodwill and long-lived assets, including certain property and equipment and purchased intangibles subject to amortization, were impaired and written down to their estimated fair values during the first quarter of Fiscal 2020. The goodwill Level 3 fair value was determined using the average of the guideline public company analysis and the discounted cash flow analysis, both of which were unobservable. The long-lived asset Level 3 fair value was determined using the discounted cash flow analysis using the market and income approaches, both of which were unobservable. The following table summarizes impairments of goodwill and long-lived assets and the related post-impairment fair values of the corresponding assets for the three months ended April 30, 2020: Three Months Ended April 30, 2020 Impairment Fair Value Property and equipment, net $ 141.2 $ 52.8 Goodwill 28.3 — Intangible assets 39.2 — $ 208.7 $ 52.8 Fair value is measured as of the impairment date. See Note 5 for a discussion of the goodwill and long-lived asset impairment charge recorded during the three months ended April 30, 2020. |
Commitments, Contingencies and
Commitments, Contingencies and Off-Balance Sheet Arrangements | 3 Months Ended |
Apr. 30, 2020 | |
Commitments, Contingencies and Off-Balance Sheet Arrangements | |
COMMITMENTS, CONTINGENCIES AND OFF-BALANCE-SHEET ARRANGEMENTS | Note 9. Commitments, Contingencies and Off-Balance-Sheet Arrangements Lease Commitments – The Company finances its use of certain facilities and equipment under committed lease arrangements provided by various institutions. Since the terms of these arrangements meet the accounting definition of operating lease arrangements, the aggregate sum of future minimum lease payments is not reflected on the condensed consolidated balance sheets. At April 30, 2020, future minimum lease payments under these arrangements approximated $75.0, of which $25.0 is related to long-term real estate leases. Litigation – The Company is a defendant in various legal actions arising in the normal course of business, the outcomes of which, in the opinion of management, neither individually nor in the aggregate are likely to result in a material adverse effect on the Company’s condensed consolidated financial statements. During the year ended January 31, 2020 (“Fiscal 2019”), the Company discovered a credit card theft by third parties of approximately $2.6 (which is included in Fiscal 2019 Cost of Sales) and promptly reported the theft to its insurers and law enforcement. The Company has also filed suit against several third parties to recover damages related to the theft. While the Company cannot reasonably determine the outcome of any related litigation at this time, it believes its insurance coverage will be available for recovery of some or all of this loss after the appropriate legal proceedings have concluded. Indemnities, Commitments and Guarantees – During its normal course of business, the Company has made certain indemnities, commitments and guarantees under which it may be required to make payments in relation to certain transactions. These indemnities include indemnities to various lessors in connection with facility leases for certain claims arising from such facility or lease and indemnities to other parties to certain acquisition agreements. The duration of these indemnities, commitments and guarantees varies, and in certain cases, is indefinite. Many of these indemnities, commitments and guarantees provide for limitations on the maximum potential future payments the Company could be obligated to make. However, the Company is unable to estimate the maximum amount of liability related to its indemnities, commitments and guarantees because such liabilities are contingent upon the occurrence of events that are not reasonably determinable. Management believes that any liability for these indemnities, commitments and guarantees would not be material to the accompanying condensed consolidated financial statements. Accordingly, no significant amounts have been accrued for indemnities, commitments and guarantees. |
Accounting for Stock-Based Comp
Accounting for Stock-Based Compensation | 3 Months Ended |
Apr. 30, 2020 | |
Accounting for Stock-Based Compensation | |
Accounting for Stock-Based Compensation | Note 10. Accounting for Stock-Based Compensation The Company has a Long-Term Incentive Plan (“LTIP”) under which its Compensation Committee has the authority to grant stock options, stock appreciation rights, restricted stock, restricted stock units or other forms of equity-based or equity-related awards. Compensation cost is generally recorded on a straight-line basis over the vesting term of the shares based on the grant date value using the closing trading price. Compensation cost recognized during the three months ended April 30, 2020 and 2019 related to grants of restricted stock granted or approved by the Company’s Compensation Committee. Share based compensation was $(0.7) and $4.4 for the three months ended April 30, 2020 and 2019, respectively. The Company has established a qualified Employee Stock Purchase Plan (the “Plan”), the terms of which allow for qualified employees (as defined in the Plan) to participate in the purchase of designated shares of the Company’s common stock at a price equal to 85% of the closing price on the last business day of each semi-annual stock purchase period. The fair value of the employee purchase rights represents the difference between the closing price of the Company’s shares on the date of purchase and the purchase price of the shares. Compensation cost was $0.0 and $0.1 for the three months ended April 30, 2020 and 2019, respectively. |
Income Taxes
Income Taxes | 3 Months Ended |
Apr. 30, 2020 | |
Income Taxes | |
Income Taxes | Note 11. Income Taxes Income tax expense was $0.1 and $0.3 for the three months ended April 30, 2020 and 2019, respectively, and was comprised primarily of state and local taxes. Due to the fact the Company has a valuation allowance against its deferred tax balances, it was unable to recognize a tax benefit at the federal statutory rate of 21% on its year to date losses. In |
Segment Reporting
Segment Reporting | 3 Months Ended |
Apr. 30, 2020 | |
Segment Reporting | |
Segment Reporting | Note 12. Segment Reporting The Company is organized on a geographic basis. The Company’s reportable segments, which are also its operating segments, are comprised of the Southwest (the Permian Basin and the Eagle Ford), the Rocky Mountains (the Bakken, Williston, DJ, Uinta, Powder River, Piceance and Niobrara basins) and the Northeast/Mid-Con (the Marcellus and Utica as well as the Mid-Continent STACK and SCOOP and Haynesville). The segments regularly report their results of operations and make requests for capital expenditures and acquisition funding to the Company’s chief operational decision maker (“CODM”), the President, Chief Executive Officer and Chief Financial Officer. As a result, the CODM has determined the Company has three reportable segments. The following table presents revenues and operating (losses) earnings by reportable segment: Three Months Ended April 30, April 30, 2020 2019 Revenues Southwest $ 24.4 $ 58.0 Rocky Mountains 33.8 48.6 Northeast/Mid-Con 24.8 39.2 Total revenues 83.0 145.8 Operating (loss) earnings (1)(2) Southwest (100.4) (4.0) Rocky Mountains (37.8) 2.9 Northeast/Mid-Con (97.4) 3.5 Total operating (loss) earnings (235.6) 2.4 Interest expense 7.4 7.1 Loss before income taxes $ (243.0) $ (4.7) (1) Operating (loss) earnings include an allocation of employee benefits and general and administrative costs primarily based on each segment’s percentage of total revenues for the three months ended April 30, 2020 and 2019. (2) Operating loss for the three month period ended April 30, 2020 includes a goodwill and long-lived asset impairment charge of $208.7, of which $91.3 was attributable to the Southwest segment, $28.3 was attributable to the Rocky Mountains segment and $89.1 was attributable to the Northeast/Mid-Con segment. The following table presents revenues by service offering by reportable segment: Three Months Ended April 30, 2020 April 30, 2019 Rocky Northeast Rocky Northeast Southwest Mountains /Mid-Con Total Southwest Mountains /Mid-Con Total Completion revenues $ 16.0 $ 19.8 $ 14.1 $ 49.9 $ 40.6 $ 27.5 $ 18.3 $ 86.4 Intervention revenues 5.5 6.5 7.0 19.0 10.2 10.6 8.6 29.4 Production revenues 2.9 7.5 3.7 14.1 7.2 10.5 12.3 30.0 Total revenues $ 24.4 $ 33.8 $ 24.8 $ 83.0 $ 58.0 $ 48.6 $ 39.2 $ 145.8 The following table presents capital expenditures by reportable segment: Three Months Ended April 30, April 30, 2020 2019 Southwest $ 1.5 $ 5.4 Rocky Mountains 2.2 11.5 Northeast/Mid-Con 1.1 12.7 $ 4.8 $ 29.6 Capital expenditures for the administrative office and functions have been allocated to the above segments based on each segment’s percentage of total capital expenditures. The following table presents total assets by reportable segment: April 30, January 31, 2020 (1) 2020 Southwest $ 76.9 $ 203.6 Rocky Mountains 247.6 233.5 Northeast/Mid-Con 53.7 186.3 $ 378.2 $ 623.4 (1) See Note 5 for a discussion of the goodwill and long-lived asset impairment charge recorded during the three months ended April 30, 2020. Assets for the administrative office and functions have been allocated to the above segments based on each segment’s percentage of total assets. The following table presents total goodwill by reportable segment: April 30, January 31, 2020 2020 Southwest $ — $ — Rocky Mountains (1) — 28.3 Northeast/Mid-Con — — $ — $ 28.3 (1) See Note 5 for a discussion of the goodwill impairment charge recorded during the three months ended April 30, 2020. |
Net Loss Per Common Share
Net Loss Per Common Share | 3 Months Ended |
Apr. 30, 2020 | |
Net Loss Per Common Share | |
Net Loss Per Common Share | Note 13. Net Loss Per Common Share Basic net loss per common share is computed using the weighted average common shares outstanding during the period and includes 416,667 shares of KLXE common stock to effect the Red Bone acquisition, which will be issued in September 2020. Such shares are included in the computation of basic weighted average common shares from the date of the acquisition. Diluted net loss per common share is computed by using the weighted average common shares outstanding including the dilutive effect of restricted shares based on an average share price during the period. For the three months ended April 30, 2020 and 2019, 2.3 and 0.4 shares of the Company’s common stock, respectively, were excluded from the determination of diluted net loss per common share because their effect would have been anti-dilutive. The computations of basic and diluted net loss per share for the three months ended April 30, 2020 and 2019 are as follows: Three Months Ended April 30, April 30, 2020 2019 Net loss $ (243.1) $ (5.0) (Shares in millions) Basic weighted average common shares 23.1 21.2 Effect of dilutive securities - dilutive securities - - Diluted weighted average common shares 23.1 21.2 Basic net loss per common share $ (10.52) $ (0.24) Diluted net loss per common share $ (10.52) $ (0.24) |
Subsequent Events
Subsequent Events | 3 Months Ended |
Apr. 30, 2020 | |
Subsequent Events | |
Subsequent Events | Note 14. Subsequent Events On May 3, 2020, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Quintana Energy Services Inc., a Delaware corporation (“QES”), Krypton Intermediate LLC, a Delaware limited liability company and an indirect wholly owned subsidiary of the Company (“Acquiror”), and Krypton Merger Sub Inc., a Delaware corporation and an indirect wholly owned subsidiary of the Company (“Merger Sub”), pursuant to which the companies will combine in an all-stock merger transaction. Merger Sub will merge with and into QES (the “Merger”), with QES continuing as the surviving corporation and becoming an indirect wholly owned subsidiary of the Company, as provided by the terms and subject to the conditions set forth in the Merger Agreement. At the effective time of the Merger (the “Effective Time”), each issued and outstanding share of QES common stock, par value $0.01 per share (the “QES Common Stock”), will automatically be converted into the right to receive 0.4844 shares of KLXE common stock (the “Exchange Ratio”), par value $0.01 per share (the “KLXE Common Stock”). Holders of QES Common Stock will receive cash in lieu of any fractional shares. Upon closing of the Merger, KLXE stockholders will own approximately 59% and QES stockholders will own approximately 41% of the combined company. The respective boards of directors of KLXE and QES have unanimously approved the Merger Agreement, and the board of directors of KLXE has agreed to recommend that KLXE’s stockholders approve the issuance of shares of KLXE Common Stock in the Merger, and the board of directors of QES has agreed to recommend that QES’s stockholders adopt the Merger Agreement. The consummation of the Merger is subject to customary closing conditions, including (i) the adoption of the Merger Agreement by QES’ stockholders and approval of the issuance of KLXE Common Stock in connection with the Merger (the “Share Issuance”) by KLXE’s stockholders, (ii) the absence of certain legal impediments, (iii) the approval for listing of KLXE Common Stock issuable in the Merger on Nasdaq and (iv) the effectiveness of the registration statement on Form S-4, pursuant to which the shares of KLXE Common Stock issuable in the Merger will be registered with the Securities and Exchange Commission (the “SEC”). KLXE and QES have made customary representations, warranties and covenants in the Merger Agreement, including, among others, covenants regarding (i) the conduct of their respective businesses during the period between signing and closing, (ii) obligations to convene and hold meetings of their respective stockholders to obtain the required stockholder approvals and (iii) obligations to cooperate with each other to prepare and file a registration statement on Form S-4 and joint proxy statement with the SEC. The Merger Agreement contains certain termination rights for both KLXE and QES. Upon termination of the Merger Agreement in certain specified circumstances, including in connection with a superior proposal or certain intervening events, KLXE or QES may be required to pay a termination fee of $3.0 to the other party and reimburse the other party for its expenses of up to $1.5. If the Merger Agreement is terminated by KLXE or QES due to the failure of either party’s stockholders to approve the Merger under certain circumstances, then the party who failed to obtain such stockholder approval may be required to reimburse the other party for up to $1.5 of expenses but such party will not be required to pay a termination fee. |
Description of Business and B_2
Description of Business and Basis of Presentation (Policies) | 3 Months Ended |
Apr. 30, 2020 | |
Description of Business and Basis of Presentation | |
Basis of Presentation | Basis of Presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. All adjustments which, in the opinion of the Company’s management, are considered necessary for a fair presentation of the results of operations for the periods shown are of a normal recurring nature and have been reflected in the condensed consolidated financial statements. The results of operations for the periods presented are not necessarily indicative of the results expected for the full fiscal year or for any future period. The information included in these condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the KLX Energy Services Holdings, Inc. (the “Company”, “KLXE” or “KLX Energy Services”) Annual Report on Form 10-K for the fiscal year ended January 31, 2020. The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts and related disclosures. Actual results could differ from those estimates. |
Business Combinations (Tables)
Business Combinations (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Business Combinations | |
Schedule of Fair Values of Assets Acquired and Liabilities Assumed | Tecton Red Bone Accounts receivable-trade $ 2.1 $ 7.2 Inventories - 2.7 Other current and non-current assets 0.2 - Property and equipment 2.8 23.6 Goodwill 15.0 16.8 Identified intangibles 6.2 13.2 Accounts payable (0.7) (3.3) Accrued liabilities (1.4) (0.9) Other current and non-current liabilities (1.6) (7.3) Total consideration paid $ 22.6 $ 52.0 |
Schedule of proforma information of revenues and net earnings (loss) | UNAUDITED THREE MONTHS ENDED April 30, 2019 Pro forma Revenues $ 153.5 Net loss (4.5) Loss per diluted share (0.20) |
Property and Equipment, Net (Ta
Property and Equipment, Net (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Property and Equipment, Net | |
Property and Equipment | Useful April 30, January 31, Life (Years) 2020 2020 Land, buildings and improvements 1 - 40 $ 25.9 $ 38.2 Machinery 1 - 20 189.0 257.9 Furniture and equipment 1 - 15 156.4 216.7 371.3 512.8 Less accumulated depreciation 213.2 206.0 $ 158.1 $ 306.8 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, Net (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Goodwill and Intangible Assets, Net | |
Intangible Assets by Major Asset Class | April 30, 2020 January 31, 2020 Useful Life Original Accumulated Net Book Original Accumulated Net Book (Years) Cost Amortization Value Cost Amortization Value Customer contracts and relationships 20 $ 8.3 $ 2.9 $ 5.4 $ 43.0 $ 2.4 $ 40.6 Covenants not to compete 1.5 - 3 2.5 2.4 0.1 4.7 1.9 2.8 Developed technologies 15 1.0 1.0 - 3.3 0.9 2.4 $ 11.8 $ 6.3 $ 5.5 $ 51.0 $ 5.2 $ 45.8 |
Schedule of activity for carrying amount of goodwill | Balance, January 31, 2020 $ 28.3 Goodwill impairment (28.3) Balance, April 30, 2020 $ — |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Accrued Liabilities | |
Accrued Liabilities | April 30, January 31, 2020 2020 Accrued salaries, vacation and related benefits $ 11.2 $ 13.9 Accrued incentive compensation — 2.3 Accrued property taxes 2.7 2.3 Other accrued liabilities 7.8 7.7 $ 21.7 $ 26.2 |
Fair Value Information (Tables)
Fair Value Information (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Fair Value Information | |
Summary of Impairments of Goodwill and Long-lived Assets | Three Months Ended April 30, 2020 Impairment Fair Value Property and equipment, net $ 141.2 $ 52.8 Goodwill 28.3 — Intangible assets 39.2 — $ 208.7 $ 52.8 |
Segment Reporting (Tables)
Segment Reporting (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Segment Reporting | |
Revenues and Other Financial Information by Business Segment | Three Months Ended April 30, April 30, 2020 2019 Revenues Southwest $ 24.4 $ 58.0 Rocky Mountains 33.8 48.6 Northeast/Mid-Con 24.8 39.2 Total revenues 83.0 145.8 Operating (loss) earnings (1)(2) Southwest (100.4) (4.0) Rocky Mountains (37.8) 2.9 Northeast/Mid-Con (97.4) 3.5 Total operating (loss) earnings (235.6) 2.4 Interest expense 7.4 7.1 Loss before income taxes $ (243.0) $ (4.7) (1) Operating (loss) earnings include an allocation of employee benefits and general and administrative costs primarily based on each segment’s percentage of total revenues for the three months ended April 30, 2020 and 2019. (2) Operating loss for the three month period ended April 30, 2020 includes a goodwill and long-lived asset impairment charge of $208.7, of which $91.3 was attributable to the Southwest segment, $28.3 was attributable to the Rocky Mountains segment and $89.1 was attributable to the Northeast/Mid-Con segment. |
Schedule of revenues by service offering by reportable segment | Three Months Ended April 30, 2020 April 30, 2019 Rocky Northeast Rocky Northeast Southwest Mountains /Mid-Con Total Southwest Mountains /Mid-Con Total Completion revenues $ 16.0 $ 19.8 $ 14.1 $ 49.9 $ 40.6 $ 27.5 $ 18.3 $ 86.4 Intervention revenues 5.5 6.5 7.0 19.0 10.2 10.6 8.6 29.4 Production revenues 2.9 7.5 3.7 14.1 7.2 10.5 12.3 30.0 Total revenues $ 24.4 $ 33.8 $ 24.8 $ 83.0 $ 58.0 $ 48.6 $ 39.2 $ 145.8 |
Capital Expenditures by Reportable Segment | Three Months Ended April 30, April 30, 2020 2019 Southwest $ 1.5 $ 5.4 Rocky Mountains 2.2 11.5 Northeast/Mid-Con 1.1 12.7 $ 4.8 $ 29.6 |
Total Assets by Reportable Segment | April 30, January 31, 2020 (1) 2020 Southwest $ 76.9 $ 203.6 Rocky Mountains 247.6 233.5 Northeast/Mid-Con 53.7 186.3 $ 378.2 $ 623.4 |
Goodwill by Reportable Segment | April 30, January 31, 2020 2020 Southwest $ — $ — Rocky Mountains (1) — 28.3 Northeast/Mid-Con — — $ — $ 28.3 See Note 5 for a discussion of the goodwill impairment charge recorded during the three months ended April 30, 2020. |
Net Loss Per Common Share (Tabl
Net Loss Per Common Share (Tables) | 3 Months Ended |
Apr. 30, 2020 | |
Net Loss Per Common Share | |
Computation of Basic and Diluted Net Loss Per Share | Three Months Ended April 30, April 30, 2020 2019 Net loss $ (243.1) $ (5.0) (Shares in millions) Basic weighted average common shares 23.1 21.2 Effect of dilutive securities - dilutive securities - - Diluted weighted average common shares 23.1 21.2 Basic net loss per common share $ (10.52) $ (0.24) Diluted net loss per common share $ (10.52) $ (0.24) |
Business Combinations (Details)
Business Combinations (Details) - USD ($) $ in Millions | Mar. 19, 2019 | Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 |
Business Combinations | ||||
Purchase price, net of cash acquired | $ 27.9 | |||
Goodwill | $ 0 | $ 28.3 | ||
Goodwill | $ 0 | $ 28.3 | ||
Tecton and Red Bone | ||||
Business Combinations | ||||
Total consideration | $ 74.6 | |||
Cash paid for acquisition | $ 27.6 | |||
Shares issued | 416,667 | |||
Common stock value issued as consideration | $ 47 | |||
Goodwill | 31.8 | |||
Excess of purchase price over the fair market value of identifiable assets. | 51.2 | |||
Identifiable intangible assets | 19.4 | |||
Goodwill | $ 31.8 | |||
Acquisitions revenues | 3.1 | |||
Tecton and Red Bone | Minimum | ||||
Business Combinations | ||||
Restriction period on re-sale of shares | 6 months | |||
Tecton and Red Bone | Maximum | ||||
Business Combinations | ||||
Restriction period on re-sale of shares | 24 months | |||
Tecton | ||||
Business Combinations | ||||
Identified intangibles | 6.2 | |||
Goodwill | 15 | |||
Goodwill | 15 | |||
Red Bone | ||||
Business Combinations | ||||
Identified intangibles | 13.2 | |||
Goodwill | 16.8 | |||
Goodwill | $ 16.8 | |||
Customer contracts and relationships | ||||
Business Combinations | ||||
Useful Life (years) | 20 years | |||
Customer contracts and relationships | Tecton and Red Bone | ||||
Business Combinations | ||||
Useful Life (years) | 20 years | |||
Covenants not to compete | Minimum | ||||
Business Combinations | ||||
Useful Life (years) | 1 year 6 months | |||
Covenants not to compete | Maximum | ||||
Business Combinations | ||||
Useful Life (years) | 3 years | |||
Covenants not to compete | Tecton and Red Bone | Minimum | ||||
Business Combinations | ||||
Useful Life (years) | 18 months | |||
Covenants not to compete | Tecton and Red Bone | Maximum | ||||
Business Combinations | ||||
Useful Life (years) | 3 years |
Business Combinations (Assets A
Business Combinations (Assets Acquired and Liabilities Assumed) (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | |||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | Mar. 19, 2019 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Goodwill | $ 0 | $ 28.3 | ||
Asset impairment charge | 208.7 | |||
Goodwill impairment charge | 28.3 | |||
Intangible assets impairment | $ 39.2 | |||
Pro forma | ||||
Revenues | $ 153.5 | |||
Net (loss) earnings | $ (4.5) | |||
(Loss) earnings per diluted share | $ (0.20) | |||
Tecton and Red Bone | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Goodwill | $ 31.8 | |||
Pro forma | ||||
Revenues included in the Company's results | $ 3.1 | |||
Tecton | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 2.1 | |||
Other current and non-current assets | 0.2 | |||
Property and equipment | 2.8 | |||
Goodwill | 15 | |||
Identified intangibles | 6.2 | |||
Accounts payable | (0.7) | |||
Accrued liabilities | (1.4) | |||
Other current and non-current liabilities | (1.6) | |||
Total consideration paid | 22.6 | |||
Red Bone | ||||
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Accounts receivable-trade | 7.2 | |||
Inventories | 2.7 | |||
Property and equipment | 23.6 | |||
Goodwill | 16.8 | |||
Identified intangibles | 13.2 | |||
Accounts payable | (3.3) | |||
Accrued liabilities | (0.9) | |||
Other current and non-current liabilities | (7.3) | |||
Total consideration paid | $ 52 |
Property and Equipment, Net (Pr
Property and Equipment, Net (Property and Equipment) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 371.3 | $ 512.8 | |
Less accumulated depreciation | 213.2 | 206 | |
Property, Plant and Equipment, Net, Total | 158.1 | 306.8 | |
Depreciation expense | 15.2 | $ 14 | |
Land, buildings and improvements | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 25.9 | 38.2 | |
Land, buildings and improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | P1Y | ||
Land, buildings and improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | P40Y | ||
Machinery | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 189 | 257.9 | |
Machinery | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | P1Y | ||
Machinery | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | P20Y | ||
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment, gross | $ 156.4 | $ 216.7 | |
Furniture and equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | P1Y | ||
Furniture and equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Useful Life | P15Y |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Major Asset Classes) (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Apr. 30, 2020 | Apr. 30, 2019 | Jan. 31, 2020 | |
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Original Cost | $ 11.8 | $ 51 | |
Accumulated Amortization | 6.3 | 5.2 | |
Impairment charge | 39.2 | ||
Net Book Value | 5.5 | 45.8 | |
Amortization expense of intangible assets | 1 | $ 0.8 | |
Property and equipment | 158.1 | 306.8 | |
Long-lived asset impairment charge | 180.4 | ||
Asset impairment charge | 208.7 | ||
Long-lived asset impairment charge, property and equipment | 141.2 | ||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 28.3 | ||
Goodwill impairment | (28.3) | ||
Goodwill, Ending Balance | $ 0 | ||
Customer contracts and relationships | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Useful Life (years) | 20 years | ||
Original Cost | $ 8.3 | 43 | |
Accumulated Amortization | 2.9 | 2.4 | |
Net Book Value | 5.4 | 40.6 | |
Covenants not to compete | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Original Cost | 2.5 | 4.7 | |
Accumulated Amortization | 2.4 | 1.9 | |
Net Book Value | $ 0.1 | 2.8 | |
Covenants not to compete | Minimum | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Useful Life (years) | 1 year 6 months | ||
Covenants not to compete | Maximum | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Useful Life (years) | 3 years | ||
Developed Technologies | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Useful Life (years) | 15 years | ||
Original Cost | $ 1 | 3.3 | |
Accumulated Amortization | 1 | 0.9 | |
Net Book Value | $ 2.4 | ||
Southwest | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Asset impairment charge | 91.3 | ||
Impairment charge | $ 91.3 | ||
Rocky Mountains | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Percentage of undiscounted cash flows exceeding carrying value of assets | 20.50% | ||
Asset impairment charge | $ 28.3 | ||
Goodwill [Roll Forward] | |||
Goodwill, Beginning Balance | 28.3 | ||
Goodwill impairment | (28.3) | ||
Goodwill, Ending Balance | 0 | ||
Northeast/Mid-Con | |||
Goodwill and Intangible Assets Disclosure [Line Items] | |||
Asset impairment charge | 89.1 | ||
Impairment charge | $ 89.1 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
Accrued Liabilities | ||
Accrued salaries, vacation and related benefits | $ 11.2 | $ 13.9 |
Accrued interest | 14.4 | 7.2 |
Accrued incentive compensation | 2.3 | |
Accrued property taxes | 2.7 | 2.3 |
Other accrued liabilities | 7.8 | 7.7 |
Total accrued liabilities | $ 21.7 | $ 26.2 |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 243.2 | $ 243 |
Asset based revolving line of credit | ||
Debt Instrument [Line Items] | ||
Amount outstanding | 0 | |
Revolving credit facility | 100 | |
Current borrowing capacity | 42 | $ 60 |
Outstanding letter of credit amount | 2.2 | |
Senior Secured Notes 11.5 Percent Due 2025 | ||
Debt Instrument [Line Items] | ||
Principle amount | $ 250 | |
Debt instrument, stated interest rate (as a percent) | 11.50% | |
Long term debt outstanding | $ 243.2 |
Fair Value Information (Details
Fair Value Information (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Jan. 31, 2020 | |
Asset Impairment Charges [Abstract] | ||
Property and equipment impairment, net | $ 141.2 | |
Goodwill impairment charge | 28.3 | |
Intangible assets impairment | 39.2 | |
Goodwill and long-lived asset impairment charge | 208.7 | |
Assets, Fair Value Disclosure [Abstract] | ||
Property and equipment fair value, net | 52.8 | |
Total fair value | 52.8 | |
Asset based revolving line of credit | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Amount outstanding | 0 | |
Fair Value, Inputs, Level 2 | Senior Secured Notes 11.5 Percent Due 2025 | ||
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items] | ||
Senior secured notes, fair value | $ 92.8 | $ 202.5 |
Commitments, Contingencies an_2
Commitments, Contingencies and Off-Balance Sheet Arrangements (Details) - USD ($) $ in Millions | 12 Months Ended | |
Jan. 31, 2020 | Apr. 30, 2020 | |
Future minimum lease payments | $ 75 | |
Third Party Credit Card Theft | ||
Credit card theft, loss | $ 2.6 | |
Real Estate | ||
Future minimum lease payments | $ 25 |
Accounting for Stock-Based Co_2
Accounting for Stock-Based Compensation (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation expense, net | $ (0.7) | |
Share based compensation | $ 4.4 | |
Unrecognized compensation cost | 21.1 | |
Employee Stock Purchase Plan | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share based compensation | $ 0 | $ 0.1 |
Qualified employees purchase of stock at a price equal to percentage of closing price | 85.00% |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Income Taxes | ||
Income Tax Expense Benefit | $ 0.1 | $ 0.3 |
Effective U.S. federal income tax rate | 21.00% |
Segment Reporting (Revenues and
Segment Reporting (Revenues and Operating Earnings (Losses) by Reportable Segment) (Details) $ in Millions | 3 Months Ended | |
Apr. 30, 2020USD ($)segment | Apr. 30, 2019USD ($) | |
Reportable Segments [Abstract] | ||
Number of reportable segments | segment | 3 | |
Revenues | $ 83 | $ 145.8 |
Operating (loss) earnings | (235.6) | 2.4 |
Interest expense | 7.4 | 7.1 |
Loss before income taxes | (243) | (4.7) |
Asset impairment charge | 208.7 | |
Southwest | ||
Reportable Segments [Abstract] | ||
Revenues | 24.4 | 58 |
Operating (loss) earnings | (100.4) | (4) |
Asset impairment charge | 91.3 | |
Rocky Mountains | ||
Reportable Segments [Abstract] | ||
Revenues | 33.8 | 48.6 |
Operating (loss) earnings | (37.8) | 2.9 |
Asset impairment charge | 28.3 | |
Northeast/Mid-Con | ||
Reportable Segments [Abstract] | ||
Revenues | 24.8 | 39.2 |
Operating (loss) earnings | (97.4) | $ 3.5 |
Asset impairment charge | $ 89.1 |
Segment Reporting (Revenues by
Segment Reporting (Revenues by Service Offering by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Segment Reporting Information [Line Items] | ||
Revenues | $ 83 | $ 145.8 |
Southwest | ||
Segment Reporting Information [Line Items] | ||
Revenues | 24.4 | 58 |
Rocky Mountains | ||
Segment Reporting Information [Line Items] | ||
Revenues | 33.8 | 48.6 |
Northeast/Mid-Con | ||
Segment Reporting Information [Line Items] | ||
Revenues | 24.8 | 39.2 |
Completion revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 49.9 | 86.4 |
Completion revenues | Southwest | ||
Segment Reporting Information [Line Items] | ||
Revenues | 16 | 40.6 |
Completion revenues | Rocky Mountains | ||
Segment Reporting Information [Line Items] | ||
Revenues | 19.8 | 27.5 |
Completion revenues | Northeast/Mid-Con | ||
Segment Reporting Information [Line Items] | ||
Revenues | 14.1 | 18.3 |
Intervention revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 19 | 29.4 |
Intervention revenues | Southwest | ||
Segment Reporting Information [Line Items] | ||
Revenues | 5.5 | 10.2 |
Intervention revenues | Rocky Mountains | ||
Segment Reporting Information [Line Items] | ||
Revenues | 6.5 | 10.6 |
Intervention revenues | Northeast/Mid-Con | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7 | 8.6 |
Production revenues | ||
Segment Reporting Information [Line Items] | ||
Revenues | 14.1 | 30 |
Production revenues | Southwest | ||
Segment Reporting Information [Line Items] | ||
Revenues | 2.9 | 7.2 |
Production revenues | Rocky Mountains | ||
Segment Reporting Information [Line Items] | ||
Revenues | 7.5 | 10.5 |
Production revenues | Northeast/Mid-Con | ||
Segment Reporting Information [Line Items] | ||
Revenues | $ 3.7 | $ 12.3 |
Segment Reporting (Capital Expe
Segment Reporting (Capital Expenditures by Reportable Segment) (Details) - USD ($) $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | $ 4.8 | $ 29.6 |
Southwest | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | 1.5 | 5.4 |
Rocky Mountains | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | 2.2 | 11.5 |
Northeast/Mid-Con | ||
Property, Plant and Equipment [Line Items] | ||
Capital expenditures | $ 1.1 | $ 12.7 |
Segment Reporting (Total Assets
Segment Reporting (Total Assets by Reportable Segment) (Details) - USD ($) $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 378.2 | $ 623.4 |
Southwest | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 76.9 | 203.6 |
Rocky Mountains | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | 247.6 | 233.5 |
Northeast/Mid-Con | ||
Segment Reporting, Asset Reconciling Item [Line Items] | ||
Total assets | $ 53.7 | $ 186.3 |
Segment Reporting (Goodwill by
Segment Reporting (Goodwill by Reportable Segment) (Details) - USD ($) $ in Millions | Apr. 30, 2020 | Jan. 31, 2020 |
Goodwill [Line Items] | ||
Goodwill | $ 0 | $ 28.3 |
Rocky Mountains | ||
Goodwill [Line Items] | ||
Goodwill | $ 0 | $ 28.3 |
Net Earnings Per Common Share (
Net Earnings Per Common Share (Details) - shares | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Shares included in weighted average common shares outstanding, acquisitions | 416,667 | |
Restricted Stock | ||
Anti-dilutive securities excluded from determination of diluted earnings per common share | 2,300,000 | 400,000 |
Net Earnings Per Common Share_2
Net Earnings Per Common Share (Computations of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Apr. 30, 2020 | Apr. 30, 2019 | |
Net Loss Per Common Share | ||
Net loss | $ (243.1) | $ (5) |
Basic weighted average common shares | 23.1 | 21.2 |
Diluted weighted average common shares | 23.1 | 21.2 |
Basic net loss per common share (in dollars per share) | $ (10.52) | $ (0.24) |
Diluted net loss per common share (in dollars per share) | $ (10.52) | $ (0.24) |
Subsequent Events (Details)
Subsequent Events (Details) $ / shares in Units, $ in Millions | May 03, 2020USD ($)$ / shares | Apr. 30, 2020$ / shares | Jan. 31, 2020$ / shares |
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | $ 0.01 | |
Subsequent Event | Agreement and Plan of Merger | |||
Subsequent Event [Line Items] | |||
Termination fees | $ | $ 3 | ||
Subsequent Event | Agreement and Plan of Merger | Maximum | |||
Subsequent Event [Line Items] | |||
Reimbursement expense | $ | $ 1.5 | ||
Subsequent Event | KLX ENERGY SERVICES HOLDINGS, INC. [Member] | Agreement and Plan of Merger | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Exchange ratio | 0.4844 | ||
Ownership percentage acquired (in percentage) | 59.00% | ||
Subsequent Event | Quintana Energy Services Inc. | Agreement and Plan of Merger | |||
Subsequent Event [Line Items] | |||
Common stock, par value | $ 0.01 | ||
Ownership percentage acquired (in percentage) | 41.00% |