x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
¨ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Delaware | 26-0287117 |
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common stock, $0.01 par value | NES | NYSE American |
Large accelerated filer | ¨ | Accelerated filer | ¨ |
Non-accelerated filer | x | Smaller reporting company | x |
Emerging growth company | ¨ |
• | the impact of the coronavirus disease 2019 ("COVID-19") pandemic and oil price declines; |
• | future financial performance and growth targets or expectations; |
• | market and industry trends and developments, and |
• | the potential benefits of any financing transactions and any potential benefits from future merger, acquisition, disposition, and restructuring transactions. |
• | the severity, magnitude and duration of the COVID-19 pandemic and oil price declines; |
• | changes in commodity prices or general market conditions, acquisition and disposition activities; |
• | fluctuations in consumer trends, pricing pressures, transportation costs, changes in raw material or labor prices or rates related to our business and changing regulations or political developments in the markets in which we operate; |
• | risks associated with our indebtedness, including changes to interest rates, decreases in our borrowing availability, our ability to manage our liquidity needs and to comply with covenants under our credit facilities, including as a result of COVID-19 and oil price declines; |
• | the loss of one or more of our larger customers; |
• | delays in customer payment of outstanding receivables and customer bankruptcies; |
• | natural disasters, such as hurricanes, earthquakes and floods, pandemics (including COVID-19) or acts of terrorism, or extreme weather conditions, that may impact our business locations, assets, including wells or pipelines, distribution channels, or which otherwise disrupt our or our customers’ operations or the markets we serve; |
• | disruptions impacting crude oil and natural gas transportation, processing, refining, and export systems, including litigation regarding the Dakota Access Pipeline; |
• | our ability to attract and retain key executives and qualified employees in strategic areas of our business; |
• | our ability to attract and retain a sufficient number of qualified truck drivers; |
• | the unfavorable change to credit and payment terms due to changes in industry condition or our financial condition, which could constrain our liquidity and reduce availability under our revolving credit facility; |
• | higher than forecasted capital expenditures to maintain and repair our fleet of trucks, tanks, equipment and disposal wells; |
• | control of costs and expenses; |
• | changes in customer drilling, completion and production activities, operating methods and capital expenditure plans, including impacts due to low oil and/or natural gas prices, shut-in production, decline in operating drilling rigs, closures or pending closures of third-party pipelines or the economic or regulatory environment; |
• | risks associated with the limited trading volume of our common stock on the NYSE American Stock Exchange, including potential fluctuation in the trading prices of our common stock; |
• | risks and uncertainties associated with the outcome of an appeal of the order confirming our previously completed plan of reorganization; |
• | risks associated with the reliance on third-party analyst and expert market projections and data for the markets in which we operate that is utilized in our strategy; |
• | present and possible future claims, litigation or enforcement actions or investigations; |
• | risks associated with changes in industry practices and operational technologies; |
• | risks associated with the operation, construction, development and closure of saltwater disposal wells, solids and liquids transportation assets, landfills and pipelines, including access to additional locations and rights-of-way, permitting and licensing, environmental remediation obligations, unscheduled delays or inefficiencies and reductions in volume due to micro- and macro-economic factors or the availability of less expensive alternatives; |
• | the effects of competition in the markets in which we operate, including the adverse impact of competitive product announcements or new entrants into our markets and transfers of resources by competitors into our markets; |
• | changes in economic conditions in the markets in which we operate or in the world generally, including as a result of political uncertainty; |
• | reduced demand for our services due to regulatory or other influences related to extraction methods such as hydraulic fracturing, shifts in production among shale areas in which we operate or into shale areas in which we do not currently have operations, and shifts to reuse of water in completion activities; |
• | the unknown future impact of changes in laws and regulation on waste management and disposal activities, including those impacting the delivery, storage, collection, transportation, and disposal of waste products, as well as the use or reuse of recycled or treated products or byproducts; |
• | risks involving developments in environmental or other governmental laws and regulations in the markets in which we operate and our ability to effectively respond to those developments including laws and regulations relating to oil and natural gas extraction businesses, particularly relating to water usage, and the disposal and transportation of liquid and solid wastes; and |
• | other risks identified in this Quarterly Report or referenced from time to time in our filings with the United States Securities and Exchange Commission. |
June 30, | December 31, | ||||||
2020 | 2019 | ||||||
Assets | |||||||
Cash and cash equivalents | $ | 15,793 | $ | 4,788 | |||
Restricted cash | — | 922 | |||||
Accounts receivable, net of allowance for doubtful accounts of $1.0 million and $1.3 million at June 30, 2020 and December 31, 2019, respectively | 16,881 | 26,493 | |||||
Inventories | 2,937 | 3,177 | |||||
Prepaid expenses and other receivables | 2,882 | 3,264 | |||||
Other current assets | — | 231 | |||||
Assets held for sale | 778 | 2,664 | |||||
Total current assets | 39,271 | 41,539 | |||||
Property, plant and equipment, net of accumulated depreciation of $104.1 million and $98.0 million at June 30, 2020 and December 31, 2019, respectively | 163,470 | 190,817 | |||||
Operating lease assets | 2,007 | 2,886 | |||||
Equity investments | 35 | 39 | |||||
Intangibles, net | 407 | 640 | |||||
Other assets | 129 | 178 | |||||
Total assets | $ | 205,319 | $ | 236,099 | |||
Liabilities and Shareholders’ Equity | |||||||
Accounts payable | $ | 3,811 | $ | 5,633 | |||
Accrued and other current liabilities | 8,705 | 10,064 | |||||
Current portion of long-term debt | 8,553 | 6,430 | |||||
Total current liabilities | 21,069 | 22,127 | |||||
Long-term debt | 29,328 | 30,005 | |||||
Noncurrent operating lease liabilities | 1,494 | 1,457 | |||||
Deferred income taxes | 131 | 91 | |||||
Long-term contingent consideration | 500 | 500 | |||||
Other long-term liabilities | 7,617 | 7,487 | |||||
Total liabilities | 60,139 | 61,667 | |||||
Commitments and contingencies | |||||||
Shareholder's equity: | |||||||
Preferred stock $0.01 par value (1,000 shares authorized, no shares issued and outstanding at June 30, 2020 and December 31, 2019) | — | — | |||||
Common stock, $0.01 par value (75,000 shares authorized, 15,821 shares issued and 15,761 outstanding at June 30, 2020, and 15,781 shares issued and 15,735 outstanding at December 31, 2019) | 158 | 158 | |||||
Additional paid-in capital | 338,240 | 337,628 | |||||
Treasury stock (60 shares and 46 shares at June 30, 2020 and December 31, 2019, respectively) | (477 | ) | (436 | ) | |||
Accumulated deficit | (192,741 | ) | (162,918 | ) | |||
Total shareholders' equity | 145,180 | 174,432 | |||||
Total liabilities and equity | $ | 205,319 | $ | 236,099 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Revenue: | |||||||||||||||
Service revenue | $ | 22,956 | $ | 41,238 | $ | 57,427 | $ | 80,239 | |||||||
Rental revenue | 1,510 | 4,002 | 4,981 | 7,628 | |||||||||||
Total revenue | 24,466 | 45,240 | 62,408 | 87,867 | |||||||||||
Costs and expenses: | |||||||||||||||
Direct operating expenses | 18,551 | 34,517 | 50,027 | 67,074 | |||||||||||
General and administrative expenses | 4,445 | 5,280 | 9,369 | 10,755 | |||||||||||
Depreciation and amortization | 7,156 | 9,277 | 15,145 | 18,412 | |||||||||||
Impairment of long-lived assets | — | — | 15,579 | 117 | |||||||||||
Other, net | — | (6 | ) | — | (6 | ) | |||||||||
Total costs and expenses | 30,152 | 49,068 | 90,120 | 96,352 | |||||||||||
Operating loss | (5,686 | ) | (3,828 | ) | (27,712 | ) | (8,485 | ) | |||||||
Interest expense, net | (1,116 | ) | (1,297 | ) | (2,276 | ) | (2,718 | ) | |||||||
Other income, net | 38 | 152 | 180 | 177 | |||||||||||
Reorganization items, net | — | 13 | — | (210 | ) | ||||||||||
Loss before income taxes | (6,764 | ) | (4,960 | ) | (29,808 | ) | (11,236 | ) | |||||||
Income tax expense | (15 | ) | (46 | ) | (15 | ) | (125 | ) | |||||||
Net loss | $ | (6,779 | ) | $ | (5,006 | ) | $ | (29,823 | ) | $ | (11,361 | ) | |||
Loss per common share: | |||||||||||||||
Net loss per basic common share | $ | (0.43 | ) | $ | (0.32 | ) | $ | (1.89 | ) | $ | (0.73 | ) | |||
Net loss per diluted common share | $ | (0.43 | ) | $ | (0.32 | ) | $ | (1.89 | ) | $ | (0.73 | ) | |||
Weighted average shares outstanding: | |||||||||||||||
Basic | 15,761 | 15,704 | 15,757 | 15,627 | |||||||||||
Diluted | 15,761 | 15,704 | 15,757 | 15,627 |
Common Stock | Additional Paid-In Capital | Treasury Stock | Accumulated Deficit | Total | ||||||||||||||||||||||
Shares | Amount | Shares | Amount | |||||||||||||||||||||||
Balance at January 1, 2020 | 15,781 | $ | 158 | $ | 337,628 | (46 | ) | $ | (436 | ) | $ | (162,918 | ) | $ | 174,432 | |||||||||||
Issuance of common stock to employees | 40 | — | — | — | — | — | — | |||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | (14 | ) | (41 | ) | — | (41 | ) | ||||||||||||||||
Stock-based compensation | — | — | 290 | — | — | — | 290 | |||||||||||||||||||
Net loss | — | — | — | — | — | (23,044 | ) | (23,044 | ) | |||||||||||||||||
Balance at March 31, 2020 | 15,821 | 158 | 337,918 | (60 | ) | (477 | ) | (185,962 | ) | 151,637 | ||||||||||||||||
Issuance of common stock to employees | — | — | — | — | — | — | — | |||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | — | — | — | — | |||||||||||||||||||
Stock-based compensation | — | — | 322 | — | — | — | 322 | |||||||||||||||||||
Net loss | — | — | — | — | — | (6,779 | ) | (6,779 | ) | |||||||||||||||||
Balance at June 30, 2020 | 15,821 | $ | 158 | $ | 338,240 | (60 | ) | $ | (477 | ) | $ | (192,741 | ) | $ | 145,180 | |||||||||||
Balance at January 1, 2019 | 12,233 | $ | 122 | $ | 303,463 | — | $ | — | $ | (107,158 | ) | $ | 196,427 | |||||||||||||
Adjustment due to adoption of ASC 842, Leases | — | — | — | — | — | (823 | ) | (823 | ) | |||||||||||||||||
Issuance of common stock for Rights Offering | 3,382 | 34 | 32,141 | — | — | — | 32,175 | |||||||||||||||||||
Issuance of common stock to employees | 97 | 1 | (1 | ) | — | — | — | — | ||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | (34 | ) | (373 | ) | — | (373 | ) | ||||||||||||||||
Stock-based compensation | — | — | 852 | — | — | — | 852 | |||||||||||||||||||
Net loss | — | — | — | — | — | (6,355 | ) | (6,355 | ) | |||||||||||||||||
Balance at March 31, 2019 | 15,712 | 157 | 336,455 | (34 | ) | (373 | ) | (114,336 | ) | 221,903 | ||||||||||||||||
Issuance of common stock to employees | 34 | — | — | — | — | — | — | |||||||||||||||||||
Treasury stock acquired through surrender of shares for tax withholding | — | — | — | (3 | ) | (29 | ) | — | (29 | ) | ||||||||||||||||
Stock-based compensation | — | — | 563 | — | — | — | 563 | |||||||||||||||||||
Net loss | — | — | — | — | — | (5,006 | ) | (5,006 | ) | |||||||||||||||||
Balance at June 30, 2019 | 15,746 | $ | 157 | $ | 337,018 | (37 | ) | $ | (402 | ) | $ | (119,342 | ) | $ | 217,431 |
Six Months Ended | |||||||
June 30, | |||||||
2020 | 2019 | ||||||
Cash flows from operating activities: | |||||||
Net loss | $ | (29,823 | ) | $ | (11,361 | ) | |
Adjustments to reconcile net loss to net cash provided by operating activities: | |||||||
Depreciation and amortization | 15,145 | 18,412 | |||||
Amortization of debt issuance costs, net | 81 | 247 | |||||
Stock-based compensation | 612 | 1,415 | |||||
Impairment of long-lived assets | 15,579 | 117 | |||||
Gain on disposal of property, plant and equipment | (342 | ) | (1,706 | ) | |||
Bad debt recoveries | (160 | ) | (9 | ) | |||
Change in fair value of derivative warrant liability | — | (28 | ) | ||||
Deferred income taxes | 40 | 112 | |||||
Other, net | 375 | 55 | |||||
Changes in operating assets and liabilities: | |||||||
Accounts receivable | 9,772 | 2,724 | |||||
Prepaid expenses and other receivables | 382 | (576 | ) | ||||
Accounts payable and accrued liabilities | (2,271 | ) | (6,059 | ) | |||
Other assets and liabilities, net | 435 | 1,111 | |||||
Net cash provided by operating activities | 9,825 | 4,454 | |||||
Cash flows from investing activities: | |||||||
Proceeds from the sale of property, plant and equipment | 1,548 | 4,525 | |||||
Purchases of property, plant and equipment | (2,328 | ) | (5,019 | ) | |||
Net cash used in investing activities | (780 | ) | (494 | ) | |||
Cash flows from financing activities: | |||||||
Payments on First and Second Lien Term Loans | (1,909 | ) | (2,514 | ) | |||
Proceeds from Revolving Facility | 76,202 | 96,677 | |||||
Payments on Revolving Facility | (76,202 | ) | (96,677 | ) | |||
Proceeds from PPP Loan | 4,000 | — | |||||
Payments on Bridge Term Loan | — | (31,382 | ) | ||||
Proceeds from the issuance of stock | — | 31,057 | |||||
Payments on finance leases and other financing activities | (1,053 | ) | (1,226 | ) | |||
Net cash provided by (used in) financing activities | 1,038 | (4,065 | ) | ||||
Change in cash, cash equivalents and restricted cash | 10,083 | (105 | ) | ||||
Cash and cash equivalents, beginning of period | 4,788 | 7,302 | |||||
Restricted cash, beginning of period | 922 | 656 | |||||
Cash, cash equivalents and restricted cash, beginning of period | 5,710 | 7,958 | |||||
Cash and cash equivalents, end of period | 15,793 | 5,978 | |||||
Restricted cash, end of period | — | 1,875 | |||||
Cash, cash equivalents and restricted cash, end of period | $ | 15,793 | $ | 7,853 | |||
Six Months Ended | |||||||
June 30, | |||||||
2020 | 2019 | ||||||
Supplemental disclosure of cash flow information: | |||||||
Cash paid for interest | $ | 1,764 | $ | 2,218 | |||
Cash paid for taxes, net | 181 | 138 | |||||
Property, plant and equipment purchases in accounts payable | 481 | — | |||||
Common stock issued to settle Bridge Term Loan | — | 1,118 |
• | Level 1 — Observable inputs such as quoted prices in active markets that are accessible at the measurement date for identical assets or liabilities; |
• | Level 2 — Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly; and |
• | Level 3 — Unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions. |
Balance at the beginning of the period (January 1, 2020) | $ | 231 | |
Balance at the end of the period (June 30, 2020) | — | ||
Increase/(decrease) | $ | (231 | ) |
Three months ended June 30, 2020 | |||||||||||||||||||
Rocky Mountain | Northeast | Southern | Corporate/Other | Total | |||||||||||||||
Water Transport Services | $ | 8,649 | $ | 5,989 | $ | 2,125 | $ | — | $ | 16,763 | |||||||||
Disposal Services | 1,533 | 1,851 | 1,952 | — | 5,336 | ||||||||||||||
Other Revenue | 565 | 289 | 3 | — | 857 | ||||||||||||||
Total Service Revenue | 10,747 | 8,129 | 4,080 | — | 22,956 | ||||||||||||||
Rental Revenue | 1,475 | 33 | 2 | — | 1,510 | ||||||||||||||
Total Revenue | $ | 12,222 | $ | 8,162 | $ | 4,082 | $ | — | $ | 24,466 |
Three months ended June 30, 2019 | |||||||||||||||||||
Rocky Mountain | Northeast | Southern | Corporate/Other | Total | |||||||||||||||
Water Transport Services | $ | 18,448 | $ | 7,296 | $ | 2,726 | $ | — | $ | 28,470 | |||||||||
Disposal Services | 5,146 | 3,098 | 2,739 | — | 10,983 | ||||||||||||||
Other Revenue | 1,471 | 255 | 59 | — | 1,785 | ||||||||||||||
Total Service Revenue | 25,065 | 10,649 | 5,524 | — | 41,238 | ||||||||||||||
Rental Revenue | 3,928 | 71 | 3 | — | 4,002 | ||||||||||||||
Total Revenue | $ | 28,993 | $ | 10,720 | $ | 5,527 | $ | — | $ | 45,240 |
Six months ended June 30, 2020 | |||||||||||||||||||
Rocky Mountain | Northeast | Southern | Corporate/Other | Total | |||||||||||||||
Water Transport Services | $ | 22,963 | $ | 13,133 | $ | 4,381 | $ | — | $ | 40,477 | |||||||||
Disposal Services | 5,389 | 4,014 | 4,298 | — | 13,701 | ||||||||||||||
Other Revenue | 2,431 | 741 | 77 | — | 3,249 | ||||||||||||||
Total Service Revenue | 30,783 | 17,888 | 8,756 | — | 57,427 | ||||||||||||||
Rental Revenue | 4,907 | 68 | 6 | — | 4,981 | ||||||||||||||
Total Revenue | $ | 35,690 | $ | 17,956 | $ | 8,762 | $ | — | $ | 62,408 |
Six months ended June 30, 2019 | |||||||||||||||||||
Rocky Mountain | Northeast | Southern | Corporate/Other | Total | |||||||||||||||
Water Transport Services | $ | 34,157 | $ | 15,268 | $ | 6,210 | $ | — | $ | 55,635 | |||||||||
Disposal Services | 9,217 | 6,597 | 5,145 | — | 20,959 | ||||||||||||||
Other Revenue | 3,017 | 557 | 71 | — | 3,645 | ||||||||||||||
Total Service Revenue | 46,391 | 22,422 | 11,426 | — | 80,239 | ||||||||||||||
Rental Revenue | 7,479 | 138 | 11 | — | 7,628 | ||||||||||||||
Total Revenue | $ | 53,870 | $ | 22,560 | $ | 11,437 | $ | — | $ | 87,867 |
Three Months Ended | Six Months Ended | |||||||||||||||||
June 30, | June 30, | |||||||||||||||||
Lease Cost | Classification | 2020 | 2019 | 2020 | 2019 | |||||||||||||
Operating lease cost (a) | General and administrative expenses | $ | 696 | $ | 729 | $ | 1,350 | $ | 1,453 | |||||||||
Finance lease cost: | ||||||||||||||||||
Amortization of leased assets | Depreciation and amortization | 546 | 679 | 1,164 | 1,225 | |||||||||||||
Interest on lease liabilities | Interest expense, net | 140 | 177 | 288 | 240 | |||||||||||||
Variable lease cost | General and administrative expenses | 669 | 1,055 | 1,596 | 2,121 | |||||||||||||
Sublease income | Other income, net | (8 | ) | (22 | ) | (32 | ) | (73 | ) | |||||||||
Total net lease cost | $ | 2,043 | $ | 2,618 | $ | 4,366 | $ | 4,966 |
(a) | Includes short-term leases, which represented $0.1 million and $0.2 million of the balance for the three months ended June 30, 2020 and June 30, 2019, respectively, and $0.2 million and $0.4 million of the balance for the six months ended June 30, 2020 and June 30, 2019, respectively. |
Leases | Classification | June 30, 2020 | December 31, 2019 | |||||||
Assets: | ||||||||||
Operating lease assets | Operating lease assets | $ | 2,007 | $ | 2,886 | |||||
Finance lease assets | Property, plant and equipment, net of accumulated depreciation (a) | 7,057 | 8,202 | |||||||
Total leased assets | $ | 9,064 | $ | 11,088 | ||||||
Liabilities: | ||||||||||
Current | ||||||||||
Operating lease liabilities | Accrued and other current liabilities | $ | 518 | $ | 1,442 | |||||
Finance lease liabilities | Current portion of long-term debt | 1,277 | 1,443 | |||||||
Noncurrent | ||||||||||
Operating lease liabilities | Noncurrent operating lease liabilities | 1,494 | 1,457 | |||||||
Finance lease liabilities | Long-term debt | 6,764 | 7,341 | |||||||
Total lease liabilities | $ | 10,053 | $ | 11,683 |
(a) | Finance lease assets are recorded net of accumulated amortization of $2.8 million and $1.7 million as of June 30, 2020 and December 31, 2019, respectively. |
Lease Term and Discount Rate | June 30, 2020 | December 31, 2019 | ||||
Weighted-average remaining lease term (in years): | ||||||
Operating leases | 41.5 | 25.1 | ||||
Finance leases | 3.7 | 4.3 | ||||
Weighted-average discount rate: | ||||||
Operating leases | 9.83 | % | 8.51 | % | ||
Finance leases | 6.75 | % | 6.77 | % |
Six Months Ended | ||||||||
June 30, | ||||||||
Supplemental Disclosure of Cash Flow Information and Other Information | 2020 | 2019 | ||||||
Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
Operating cash flows from operating leases | $ | 1,350 | $ | 1,453 | ||||
Operating cash flows from finance leases | 288 | 240 | ||||||
Financing cash flows from finance leases | 783 | 824 | ||||||
Leased assets obtained in exchange for new operating lease liabilities | $ | — | $ | — | ||||
Leased assets obtained in exchange for new finance lease liabilities | 213 | 6,674 |
June 30, 2020 | |||||||
Operating Leases (a) | Finance Leases (b) | ||||||
Remainder of 2020 | $ | 575 | $ | 884 | |||
2021 | 466 | 1,821 | |||||
2022 | 325 | 1,821 | |||||
2023 | 200 | 3,447 | |||||
2024 | 190 | 383 | |||||
Thereafter | 6,710 | 1,412 | |||||
Total lease payments | 8,466 | 9,768 | |||||
Less amount representing executory costs (c) | — | — | |||||
Net lease payments | 8,466 | 9,768 | |||||
Less amount representing interest | (6,454 | ) | (1,727 | ) | |||
Present value of total lease liabilities | 2,012 | 8,041 | |||||
Less current lease liabilities | (518 | ) | (1,277 | ) | |||
Long-term lease liabilities | $ | 1,494 | $ | 6,764 |
(a) | Operating lease payments do not include any options to extend lease terms that are reasonably certain of being exercised. |
(b) | Finance lease payments include $1.7 million related to options to extend lease terms that are reasonably certain of being exercised. |
(c) | Represents executory costs for all leases. We included executory costs in lease payments under ASC 840, Leases, and have elected to continue to include executory costs for both leases that commenced before and after the effective date of ASC 842. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Numerator: Net loss | $ | (6,779 | ) | $ | (5,006 | ) | $ | (29,823 | ) | $ | (11,361 | ) | |||
Denominator: | |||||||||||||||
Weighted average shares—basic | 15,761 | 15,704 | 15,757 | 15,627 | |||||||||||
Common stock equivalents | — | — | — | — | |||||||||||
Weighted average shares—diluted | 15,761 | 15,704 | 15,757 | 15,627 | |||||||||||
Loss per common share: | |||||||||||||||
Net loss per basic common share | $ | (0.43 | ) | $ | (0.32 | ) | $ | (1.89 | ) | $ | (0.73 | ) | |||
Net loss per diluted common share | $ | (0.43 | ) | $ | (0.32 | ) | $ | (1.89 | ) | $ | (0.73 | ) | |||
Anti-dilutive stock-based awards excluded: | 415 | 559 | 415 | 513 |
June 30, 2020 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Remaining Useful Life (Years) | ||||||||||
Disposal permits | $ | 540 | $ | (311 | ) | $ | 229 | 5.0 | |||||
Trade name | 799 | (621 | ) | 178 | 0.6 | ||||||||
Total intangible assets | $ | 1,339 | $ | (932 | ) | $ | 407 | 3.1 |
December 31, 2019 | |||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net | Remaining Useful Life (Years) | ||||||||||
Disposal permits | $ | 554 | $ | (269 | ) | $ | 285 | 5.0 | |||||
Trade name | 799 | (444 | ) | 355 | 1.0 | ||||||||
Total intangible assets | $ | 1,353 | $ | (713 | ) | $ | 640 | 2.8 |
June 30, 2020 | December 31, 2019 | ||||||
Accrued payroll and employee benefits | $ | 1,264 | $ | 1,837 | |||
Accrued insurance | 2,601 | 2,569 | |||||
Accrued legal | 144 | 295 | |||||
Accrued taxes | 1,067 | 695 | |||||
Accrued interest | 235 | 179 | |||||
Accrued operating costs | 2,452 | 2,653 | |||||
Accrued other | 424 | 394 | |||||
Current operating lease liabilities | 518 | 1,442 | |||||
Total accrued and other current liabilities | $ | 8,705 | $ | 10,064 |
June 30, 2020 | December 31, 2019 | ||||||||||||||
Interest Rate | Maturity Date | Unamortized Debt Issuance Costs (i) | Carrying Value of Debt (j) | Carrying Value of Debt (j) | |||||||||||
Revolving Facility (a) | 6.25% | Feb. 2021 | $ | — | $ | — | $ | — | |||||||
First Lien Term Loan (b) | 8.25% | Feb. 2021 | (13 | ) | 16,362 | 18,008 | |||||||||
Second Lien Term Loan (c) | 11.00% | Oct. 2021 | — | 8,750 | 9,013 | ||||||||||
PPP Loan (d) | 1.00% | May 2022 | — | 4,000 | — | ||||||||||
Vehicle Term Loan (e) | 5.27% | Dec. 2021 | — | 543 | 725 | ||||||||||
Equipment Term Loan (f) | 6.50% | Nov. 2022 | — | 198 | — | ||||||||||
Finance leases (g) | 6.75% | Various | — | 8,041 | 8,784 | ||||||||||
Total debt | $ | (13 | ) | 37,894 | 36,530 | ||||||||||
Debt issuance costs presented with debt | (13 | ) | (95 | ) | |||||||||||
Total debt, net | 37,881 | 36,435 | |||||||||||||
Less: current portion of long-term debt (h) | (8,553 | ) | (6,430 | ) | |||||||||||
Long-term debt | $ | 29,328 | $ | 30,005 |
(a) | The interest rate presented represents the interest rate as of June 30, 2020 on the Revolving Facility. |
(b) | Interest on the First Lien Term Loan accrues at an annual rate equal to the LIBOR Rate plus 7.25%. |
(c) | Interest on the Second Lien Term Loan (as defined below) accrues at an annual rate equal to 11.0%, payable in cash, in arrears, on the first day of each month. |
(d) | Interest on the PPP Loan (as defined below) accrues at an annual rate of 1.00%. |
(e) | Interest on the Vehicle Term Loan (as defined below) accrues at an annual rate of 5.27%. |
(f) | Interest on the Equipment Term Loan (as defined below) accrues at an annual rate of 6.50%. |
(g) | Our finance leases include finance lease arrangements related to fleet purchases and real property with a weighted-average annual interest rate of approximately 6.75%, which mature in varying installments between 2020 and 2029. |
(h) | The principal payments due within one year for the First Lien Term Loan, Second Lien Term Loan, Vehicle Term Loan, Equipment Term Loan and finance leases are included in current portion of long-term debt as of June 30, 2020. |
(i) | The debt issuance costs as of June 30, 2020 and December 31, 2019 resulted from the amendment to the First Lien Term Loan, done in connection with our acquisition of Clearwater Three, LLC, Clearwater Five, LLC, and Clearwater Solutions, LLC. |
(j) | Our Revolving Facility, First Lien Term Loan, Second Lien Term Loan, and finance leases bear interest at rates commensurate with market rates and therefore their respective carrying values approximate fair value. |
Six Months Ended | |||||
June 30, | |||||
2020 | 2019 | ||||
Outstanding at the beginning of the period | 118 | 118 | |||
Issued | — | — | |||
Exercised | — | — | |||
Outstanding at the end of the period | 118 | 118 |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Current income tax expense | $ | (30 | ) | $ | (4 | ) | $ | (30 | ) | $ | (13 | ) | |||
Deferred income tax benefit (expense) | 15 | (42 | ) | 15 | (112 | ) | |||||||||
Total income tax expense | $ | (15 | ) | $ | (46 | ) | $ | (15 | ) | $ | (125 | ) |
Three Months Ended | Six Months Ended | ||||||||||
June 30, | June 30, | ||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||
Restricted stock grants (1) | 75 | 23 | 75 | 142 | |||||||
Total grants in the period | 75 | 23 | 75 | 142 |
(1) | Includes restricted stock awards, performance-based restricted stock units, and time-based restricted stock units granted under the Incentive Plan and the Director Plan. |
Three Months Ended | Six Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2020 | 2019 | 2020 | 2019 | ||||||||||||
Restricted stock (1) | $ | 322 | $ | 563 | $ | 612 | 1,415 | ||||||||
Total expense | $ | 322 | $ | 563 | $ | 612 | $ | 1,415 |
(1) | Includes expense related to restricted stock awards, performance-based restricted stock units, and time-based restricted stock units granted under the Incentive Plan and the Director Plan. |
Rocky Mountain | Northeast | Southern | Corporate/ Other | Total | |||||||||||||||
Three months ended June 30, 2020 | |||||||||||||||||||
Revenue | $ | 12,222 | $ | 8,162 | $ | 4,082 | $ | — | $ | 24,466 | |||||||||
Direct operating expenses | 10,458 | 5,593 | 2,500 | — | 18,551 | ||||||||||||||
General and administrative expenses | 1,524 | 434 | 240 | 2,247 | 4,445 | ||||||||||||||
Depreciation and amortization | 2,874 | 2,532 | 1,746 | 4 | 7,156 | ||||||||||||||
Operating loss | (2,634 | ) | (397 | ) | (404 | ) | (2,251 | ) | (5,686 | ) | |||||||||
Loss before income taxes | (2,786 | ) | (504 | ) | (457 | ) | (3,017 | ) | (6,764 | ) | |||||||||
Six months ended June 30, 2020 | |||||||||||||||||||
Revenue | $ | 35,690 | $ | 17,956 | $ | 8,762 | $ | — | $ | 62,408 | |||||||||
Direct operating expenses | 30,009 | 13,964 | 6,054 | — | 50,027 | ||||||||||||||
General and administrative expenses | 3,013 | 1,068 | 510 | 4,778 | 9,369 | ||||||||||||||
Depreciation and amortization | 6,339 | 5,083 | 3,715 | 8 | 15,145 | ||||||||||||||
Operating loss | (15,854 | ) | (2,159 | ) | (4,913 | ) | (4,786 | ) | (27,712 | ) | |||||||||
Loss before income taxes | (16,041 | ) | (2,379 | ) | (5,020 | ) | (6,368 | ) | (29,808 | ) | |||||||||
As of June 30, 2020 | |||||||||||||||||||
Total assets | $ | 64,093 | $ | 59,668 | $ | 64,535 | $ | 17,023 | $ | 205,319 | |||||||||
Total assets held for sale | — | — | — | 778 | 778 | ||||||||||||||
Three months ended June 30, 2019 | |||||||||||||||||||
Revenue | $ | 28,993 | $ | 10,720 | $ | 5,527 | $ | — | $ | 45,240 | |||||||||
Direct operating expenses | 22,354 | 8,607 | 3,556 | — | 34,517 | ||||||||||||||
General and administrative expenses | 1,206 | 729 | 354 | 2,991 | 5,280 | ||||||||||||||
Depreciation and amortization | 4,307 | 2,821 | 2,136 | 13 | 9,277 | ||||||||||||||
Operating income (loss) | 1,126 | (1,437 | ) | (513 | ) | (3,004 | ) | (3,828 | ) | ||||||||||
Income (loss) before income taxes | 1,041 | (1,560 | ) | (576 | ) | (3,865 | ) | (4,960 | ) | ||||||||||
Six months ended June 30, 2019 | |||||||||||||||||||
Revenue | $ | 53,870 | $ | 22,560 | $ | 11,437 | $ | — | $ | 87,867 | |||||||||
Direct operating expenses | 42,182 | 18,322 | 6,570 | — | 67,074 | ||||||||||||||
General and administrative expenses | 2,252 | 1,575 | 753 | 6,175 | 10,755 | ||||||||||||||
Depreciation and amortization | 8,606 | 5,485 | 4,296 | 25 | 18,412 | ||||||||||||||
Operating income (loss) | 830 | (2,939 | ) | (176 | ) | (6,200 | ) | (8,485 | ) | ||||||||||
Income (loss) before income taxes | 683 | (3,155 | ) | (285 | ) | (8,479 | ) | (11,236 | ) | ||||||||||
As of December 31, 2019 | |||||||||||||||||||
Total assets (a) | $ | 93,504 | $ | 64,023 | $ | 70,841 | $ | 7,731 | $ | 236,099 | |||||||||
Total assets held for sale | 1,751 | 135 | — | 778 | 2,664 |
(a) | Total assets exclude intercompany receivables eliminated in consolidation. |
• | Adjusted salaries for all exempt and non-exempt non-contracted employees between 10% and 20%; |
• | Headcount reduction of approximately 100 employees, including changes made earlier in the first quarter of 2020; |
• | Reduced Chief Executive Officer’s salary by 25%, Chief Operating Officer salary by 20% and two other executives’ salaries between 10% and 20%; |
• | Reduced the compensation program for the non-employee Board of Directors by 25%; |
• | Materially scaled back operations in two completions-related businesses and closed one location; and |
• | Reduced other non-critical operating expenses. |
Three Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2020 | 2019 | 2020 versus 2019 | ||||||||||||
Revenue: | ||||||||||||||
Service revenue | $ | 22,956 | $ | 41,238 | $ | (18,282 | ) | (44.3 | )% | |||||
Rental revenue | 1,510 | 4,002 | (2,492 | ) | (62.3 | )% | ||||||||
Total revenue | 24,466 | 45,240 | (20,774 | ) | (45.9 | )% | ||||||||
Costs and expenses: | ||||||||||||||
Direct operating expenses | 18,551 | 34,517 | (15,966 | ) | (46.3 | )% | ||||||||
General and administrative expenses | 4,445 | 5,280 | (835 | ) | (15.8 | )% | ||||||||
Depreciation and amortization | 7,156 | 9,277 | (2,121 | ) | (22.9 | )% | ||||||||
Impairment of long-lived assets | — | — | — | NM | ||||||||||
Other, net | — | (6 | ) | 6 | (100.0 | )% | ||||||||
Total costs and expenses | 30,152 | 49,068 | (18,916 | ) | (38.6 | )% | ||||||||
Operating loss | (5,686 | ) | (3,828 | ) | 1,858 | (48.5 | )% | |||||||
Interest expense, net | (1,116 | ) | (1,297 | ) | (181 | ) | (14.0 | )% | ||||||
Other income, net | 38 | 152 | (114 | ) | (75.0 | )% | ||||||||
Reorganization items, net | — | 13 | (13 | ) | (100.0 | )% | ||||||||
Loss before income taxes | (6,764 | ) | (4,960 | ) | 1,804 | (36.4 | )% | |||||||
Income tax expense | (15 | ) | (46 | ) | (31 | ) | (67.4 | )% | ||||||
Net loss | $ | (6,779 | ) | $ | (5,006 | ) | $ | 1,773 | (35.4 | )% |
Rocky Mountain | Northeast | Southern | Corp/Other | Total | ||||||||||||||||
Three months ended June 30, 2020 | ||||||||||||||||||||
Revenue | $ | 12,222 | $ | 8,162 | $ | 4,082 | $ | — | $ | 24,466 | ||||||||||
Direct operating expenses | 10,458 | 5,593 | 2,500 | — | 18,551 | |||||||||||||||
Operating loss | (2,634 | ) | (397 | ) | (404 | ) | (2,251 | ) | (5,686 | ) | ||||||||||
Three months ended June 30, 2019 | ||||||||||||||||||||
Revenue | $ | 28,993 | $ | 10,720 | $ | 5,527 | $ | — | $ | 45,240 | ||||||||||
Direct operating expenses | 22,354 | 8,607 | 3,556 | — | 34,517 | |||||||||||||||
Operating income (loss) | 1,126 | (1,437 | ) | (513 | ) | (3,004 | ) | (3,828 | ) | |||||||||||
Change | ||||||||||||||||||||
Revenue | $ | (16,771 | ) | $ | (2,558 | ) | $ | (1,445 | ) | $ | — | $ | (20,774 | ) | ||||||
Direct operating expenses | (11,896 | ) | (3,014 | ) | (1,056 | ) | — | (15,966 | ) | |||||||||||
Operating (loss) income | (3,760 | ) | 1,040 | 109 | 753 | (1,858 | ) |
Six Months Ended | ||||||||||||||
June 30, | Increase (Decrease) | |||||||||||||
2020 | 2019 | 2020 versus 2019 | ||||||||||||
Revenue: | ||||||||||||||
Service revenue | $ | 57,427 | $ | 80,239 | $ | (22,812 | ) | (28.4 | )% | |||||
Rental revenue | 4,981 | 7,628 | (2,647 | ) | (34.7 | )% | ||||||||
Total revenue | 62,408 | 87,867 | (25,459 | ) | (29.0 | )% | ||||||||
Costs and expenses: | ||||||||||||||
Direct operating expenses | 50,027 | 67,074 | (17,047 | ) | (25.4 | )% | ||||||||
General and administrative expenses | 9,369 | 10,755 | (1,386 | ) | (12.9 | )% | ||||||||
Depreciation and amortization | 15,145 | 18,412 | (3,267 | ) | (17.7 | )% | ||||||||
Impairment of long-lived assets | 15,579 | 117 | 15,462 | NM | ||||||||||
Other, net | — | (6 | ) | 6 | (100.0 | )% | ||||||||
Total costs and expenses | 90,120 | 96,352 | (6,232 | ) | (6.5 | )% | ||||||||
Operating loss | (27,712 | ) | (8,485 | ) | 19,227 | NM | ||||||||
Interest expense, net | (2,276 | ) | (2,718 | ) | (442 | ) | (16.3 | )% | ||||||
Other income, net | 180 | 177 | 3 | 1.7 | % | |||||||||
Reorganization items, net | — | (210 | ) | (210 | ) | (100.0 | )% | |||||||
Loss before income taxes | (29,808 | ) | (11,236 | ) | 18,572 | NM | ||||||||
Income tax expense | (15 | ) | (125 | ) | (110 | ) | (88.0 | )% | ||||||
Net loss | $ | (29,823 | ) | $ | (11,361 | ) | $ | 18,462 | NM |
Rocky Mountain | Northeast | Southern | Corp/Other | Total | ||||||||||||||||
Six months ended June 30, 2020 | ||||||||||||||||||||
Revenue | $ | 35,690 | $ | 17,956 | $ | 8,762 | $ | — | $ | 62,408 | ||||||||||
Direct operating expenses | 30,009 | 13,964 | 6,054 | — | 50,027 | |||||||||||||||
Impairment of long-lived assets | 12,183 | — | 3,396 | — | 15,579 | |||||||||||||||
Operating loss | (15,854 | ) | (2,159 | ) | (4,913 | ) | (4,786 | ) | (27,712 | ) | ||||||||||
Six months ended June 30, 2019 | ||||||||||||||||||||
Revenue | $ | 53,870 | $ | 22,560 | $ | 11,437 | $ | — | $ | 87,867 | ||||||||||
Direct operating expenses | 42,182 | 18,322 | 6,570 | — | 67,074 | |||||||||||||||
Impairment of long-lived assets | — | 117 | — | — | 117 | |||||||||||||||
Operating income (loss) | 830 | (2,939 | ) | (176 | ) | (6,200 | ) | (8,485 | ) | |||||||||||
Change | ||||||||||||||||||||
Revenue | $ | (18,180 | ) | $ | (4,604 | ) | $ | (2,675 | ) | $ | — | $ | (25,459 | ) | ||||||
Direct operating expenses | (12,173 | ) | (4,358 | ) | (516 | ) | — | (17,047 | ) | |||||||||||
Impairment of long-lived assets | 12,183 | (117 | ) | 3,396 | — | 15,462 | ||||||||||||||
Operating (loss) income | (16,684 | ) | 780 | (4,737 | ) | 1,414 | (19,227 | ) |
Six Months Ended | ||||||||
June 30, | ||||||||
Net cash provided by (used in): | 2020 | 2019 | ||||||
Operating activities | $ | 9,825 | $ | 4,454 | ||||
Investing activities | (780 | ) | (494 | ) | ||||
Financing activities | 1,038 | (4,065 | ) | |||||
Net change in cash, cash equivalents and restricted cash | $ | 10,083 | $ | (105 | ) |
Exhibit Number | Description |
10.1* † | |
10.2* † | |
10.3 † | |
10.4 | |
31.1* | |
31.2* | |
32.1* | |
101.INS* | XBRL Instance Document. |
101.SCH* | XBRL Taxonomy Extension Schema Document. |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. |
101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. |
* | Filed herewith | |||
† | Compensatory plan, contract or arrangement in which directors or executive officers may participate |
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. | |
(Registrant) | |
Date: | August 11, 2020 |
/s/ Charles K. Thompson | |
Name: | Charles K. Thompson |
Title: | Chief Executive Officer |
(Principal Executive Officer) | |
/s/ Eric Bauer | |
Name: | Eric Bauer |
Title: | Executive Vice President and Interim Chief Financial Officer |
(Principal Financial Officer) | |
1. | Amendment to Section 5.a |
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. | |
By: | /s/ Michael Y. McGovern |
Name: | Michael Y. McGovern |
Title: | Chairman of the Compensation and Nominating Committee of the Board of Directors |
EMPLOYEE: | |
/s/ Charles K. Thompson | |
Charles K. Thompson | |
1. | Amendment to Section 5.a |
NUVERRA ENVIRONMENTAL SOLUTIONS, INC. | |
By: | /s/ Charles K. Thompson |
Name: | Charles K. Thompson |
Title: | Chairman and Chief Executive Officer |
EMPLOYEE: | |
/s/ Robert Fox | |
Robert Fox | |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2020 of Nuverra Environmental Solutions, Inc. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Charles K. Thompson |
Name: | Charles K. Thompson |
Title: | Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q for the period ended June 30, 2020 of Nuverra Environmental Solutions, Inc. |
2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report. |
3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report. |
4. | The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting. |
5. | The registrant's other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
By: | /s/ Eric Bauer |
Name: | Eric Bauer |
Title: | Executive Vice President and Interim Chief Financial Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 as amended; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
By: | /s/ Charles K. Thompson | By: | /s/ Eric Bauer | |
Name: | Charles K. Thompson | Name: | Eric Bauer | |
Title: | Chief Executive Officer (Principal Executive Officer) | Title: | Executive Vice President and Interim Chief Financial Officer (Principal Financial Officer) |
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Cover - shares |
6 Months Ended | |
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Jun. 30, 2020 |
Jul. 31, 2020 |
|
Cover [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Entity Emerging Growth Company | false | |
Entity Small Business | true | |
Entity Shell Company | false | |
Document Period End Date | Jun. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Registrant Name | Nuverra Environmental Solutions, Inc. | |
Entity Central Index Key | 0001403853 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Non-accelerated Filer | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Common Stock, Shares Outstanding (in shares) | 15,772,420 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Jun. 30, 2020 |
Dec. 31, 2019 |
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Statement of Financial Position [Abstract] | ||
Accounts receivable, allowance for doubtful accounts | $ 1.0 | $ 1.3 |
Property, plant and equipment, accumulated depreciation | $ 104.1 | $ 98.0 |
Preferred stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized (in shares) | 1,000,000 | 1,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 75,000,000 | 75,000,000 |
Common stock, shares, issued (in shares) | 15,821,000 | 15,781,000 |
Common stock, shares outstanding (in shares) | 15,761,000 | 15,735,000 |
Treasury stock, shares (in shares) | 60,000 | 46,000 |
Condensed Consolidated Statements of Operations - USD ($) shares in Thousands |
3 Months Ended | 6 Months Ended | ||
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Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
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Revenue: | ||||
Service revenue | $ 22,956,000 | $ 41,238,000 | $ 57,427,000 | $ 80,239,000 |
Rental revenue | 1,510,000 | 4,002,000 | 4,981,000 | 7,628,000 |
Total revenue | 24,466,000 | 45,240,000 | 62,408,000 | 87,867,000 |
Costs and expenses: | ||||
Direct operating expenses | 18,551,000 | 34,517,000 | 50,027,000 | 67,074,000 |
General and administrative expenses | 4,445,000 | 5,280,000 | 9,369,000 | 10,755,000 |
Depreciation and amortization | 7,156,000 | 9,277,000 | 15,145,000 | 18,412,000 |
Impairment of long-lived assets | 0 | 0 | 15,579,000 | 117,000 |
Other, net | 0 | (6,000) | 0 | (6,000) |
Total costs and expenses | 30,152,000 | 49,068,000 | 90,120,000 | 96,352,000 |
Operating loss | (5,686,000) | (3,828,000) | (27,712,000) | (8,485,000) |
Interest expense, net | (1,116,000) | (1,297,000) | (2,276,000) | (2,718,000) |
Other income, net | 38,000 | 152,000 | 180,000 | 177,000 |
Reorganization items, net | 0 | 13,000 | 0 | (210,000) |
Loss before income taxes | (6,764,000) | (4,960,000) | (29,808,000) | (11,236,000) |
Income tax expense | (15,000) | (46,000) | (15,000) | (125,000) |
Net loss | $ (6,779,000) | $ (5,006,000) | $ (29,823,000) | $ (11,361,000) |
Loss per common share: | ||||
Net loss per basic common share (usd per share) | $ (0.43) | $ (0.32) | $ (1.89) | $ (0.73) |
Net loss per diluted common share (usd per share) | $ (0.43) | $ (0.32) | $ (1.89) | $ (0.73) |
Weighted average shares outstanding: | ||||
Basic (in shares) | 15,761 | 15,704 | 15,757 | 15,627 |
Diluted (in shares) | 15,761 | 15,704 | 15,757 | 15,627 |
Basis of Presentation |
6 Months Ended | ||||||||||||
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Jun. 30, 2020 | |||||||||||||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2019, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020 (the “2019 Annual Report on Form 10-K”). All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. There have been no other material changes or developments in our significant accounting policies or evaluation of accounting estimates and underlying assumptions or methodologies from those disclosed in our 2019 Annual Report on Form 10-K. Restricted Cash Upon emergence from chapter 11 on August 7, 2017 (the “Effective Date”), we entered into a new $45.0 million First Lien Credit Agreement (the “First Lien Credit Agreement”) by and among the lenders party thereto (the “First Lien Credit Agreement Lenders”), ACF FinCo I, LP, as administrative agent (the “Credit Agreement Agent”), and the Company. Pursuant to the First Lien Credit Agreement, the First Lien Credit Agreement Lenders agreed to extend to the Company a $30.0 million senior secured revolving credit facility (the “Revolving Facility”) and a $15.0 million senior secured term loan facility (the “First Lien Term Loan”). As our collections on our accounts receivable serve as collateral on the Revolving Facility, all amounts collected are initially recorded to “Restricted cash” on the condensed consolidated balance sheet as these funds are not available for operations until our First Lien Credit Agreement Lenders release the funds to us approximately one day later. We had a restricted cash balance of $0.9 million as of December 31, 2019. As of June 30, 2020, no borrowings were outstanding under the Revolving Facility. Additionally, on July 13, 2020, the Company entered into an amendment of its First Lien Credit Agreement, which includes among other terms and conditions, a prohibition on drawing on the Revolving Facility until the fixed charge coverage ratio (“FCCR”) is above the established ratio at 1.00 to 1.00. As such, beginning June 30, 2020, the Company will no longer record amounts to restricted cash until such time the Company meets the established FCCR and is able to draw on the Revolving Facility. See Note 18 for further discussion of the amendment. Fair Value Measurements Fair value represents an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
Liquidity and Going Concern The Company continues to incur operating losses, and we anticipate losses to continue into the near future. Additionally, due to the COVID-19 outbreak, there has been a significant decline in oil and natural gas demand, which has negatively impacted our customers’ demand for our services, resulting in uncertainty surrounding the potential impact on our cash flows, results of operations and financial condition. We expect crude oil prices to remain low for the foreseeable future, so we anticipate our customers’ crude or natural gas liquids drilling and completion activity to continue to operate at lower levels. Due to the uncertainty of future oil and natural gas prices and the continued effects of the COVID-19 outbreak, there is substantial doubt as to the Company’s ability to continue as a going concern within one year after the date that these financial statements are issued. In order to mitigate these conditions, the Company has undertaken various initiatives in the first half of 2020 that management believes will positively impact our operations, including personnel and salary reductions, other changes to our operating structure to achieve additional cost reductions, and the sale of certain assets. In addition, on July 13, 2020, the Company entered into amendments of its First Lien Credit Agreement and Second Lien Term Loan Credit Agreement, dated August 7, 2017, by and among the lenders party thereto, Wilmington as administrative agent, and the Company (the “Second Lien Term Loan Credit Agreement”), which extended the maturity dates of its First Lien Term Loan and Revolving Facility from February 7, 2021 to May 15, 2022, and extended the maturity date of its Second Lien Term Loan Credit Agreement from October 7, 2021 to November 15, 2022. We believe that as a result of the cost reduction initiatives undertaken in the first half of 2020 and the extension of the maturity dates of our credit agreements, our cash flow from operations, together with cash on hand and other available liquidity, will provide sufficient liquidity to fund operations for at least the next twelve months. Our consolidated financial statements have been prepared assuming that we will continue as a going concern, which contemplates continuity of operations, realization of assets, and satisfaction of liabilities in the normal course of business. The consolidated financial statements do not include any adjustments related to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern. |
Recently Issued Accounting Pronouncements |
6 Months Ended |
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Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326). Due to the issuance of ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and the fact that we are a smaller reporting company, the new standard is effective for reporting periods beginning after December 15, 2022. The standard replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We plan to adopt the new credit loss standard effective January 1, 2023. We do not expect the new credit loss standard to have a material effect on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The standard removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard will be effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We plan to adopt this new ASU effective January 1, 2021. We do not expect the adoption of the new tax standard to have a material effect on our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform, if certain criteria are met. ASU No. 2020-04 only applies to contracts and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The new standard is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact of the new reference rate reform practical expedient will have on our consolidated financial statements. |
Revenues |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues | Revenues Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues. Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transport services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering. Contract Assets During 2019, we recorded a contract asset as a result of a contract modification for disposal services. The contract asset has been fully collected as of June 30, 2020. The contract asset is included in “Other current assets” on the condensed consolidated balance sheets. The change in contract asset balance for the six months ended June 30, 2020 was as follows:
Disaggregated Revenues The following tables present our revenues disaggregated by revenue source for each reportable segment for the three and six months ended June 30, 2020 and June 30, 2019:
Water Transport Services The majority of our revenues are from the removal and disposal of produced water and flowback originating from oil and natural gas wells or the transportation of fresh water and produced water to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transfer pipelines. Water transport rates for trucking are based upon either a fixed fee per barrel or upon an hourly rate. Revenue is recognized once the water has been transported, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our water disposal pipeline are priced at a fixed fee per disposal barrel transported, with revenues recognized over time from when the water is injected into our pipeline until the transport is complete. Water transport services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month. Disposal Services Revenues for disposal services are generated through fees charged for disposal of fluids near disposal wells and disposal of oilfield wastes in our landfill. Disposal rates are generally based on a fixed fee per barrel of produced water, or on a per ton basis for landfill disposal, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time. Other Revenue Other revenue includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil sales at a point in time once the goods are transferred. Rental Revenue We generate rental revenue from the rental of equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 842, Leases. As the rental service period for our equipment is very short term in nature and does not include any sales-type or direct financing leases, nor any variable rental components, the adoption of ASC 842 in 2019 did not have a material impact upon our consolidated statement of operations. |
Leases |
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Leases | Leases We lease vehicles, transportation equipment, real estate and certain office equipment. We determine if an arrangement is a lease at inception. Operating and finance lease assets represent our right to use an underlying asset for the lease term, and operating and finance lease liabilities represent our obligation to make lease payments arising from the lease. Operating and finance lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Absent a documented borrowing rate from the lessor, we use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. Most of our leases have remaining lease terms of less than one year to 20 years, with one lease having a term of 99 years. Our lease term includes options to extend the lease when it is reasonably certain that we will exercise that option. Leases with an initial term of twelve months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis. Some of our vehicle leases include residual value guarantees. It is probable that we will owe approximately $2.4 million under the residual value guarantees, therefore this amount has been included in the measurement of the lease liability and leased asset. The components of lease expense were as follows:
Supplemental balance sheet, cash flow and other information related to leases was as follows (in thousands, except lease term and discount rate):
Maturities of lease liabilities are as follows:
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Leases | Leases We lease vehicles, transportation equipment, real estate and certain office equipment. We determine if an arrangement is a lease at inception. Operating and finance lease assets represent our right to use an underlying asset for the lease term, and operating and finance lease liabilities represent our obligation to make lease payments arising from the lease. Operating and finance lease assets and liabilities are recognized at the lease commencement date based on the estimated present value of the lease payments over the lease term. Absent a documented borrowing rate from the lessor, we use our estimated incremental borrowing rate, which is derived from information available at the lease commencement date, in determining the present value of lease payments. Most of our leases have remaining lease terms of less than one year to 20 years, with one lease having a term of 99 years. Our lease term includes options to extend the lease when it is reasonably certain that we will exercise that option. Leases with an initial term of twelve months or less are not recorded on the balance sheet and we recognize lease expense for these leases on a straight-line basis. Some of our vehicle leases include residual value guarantees. It is probable that we will owe approximately $2.4 million under the residual value guarantees, therefore this amount has been included in the measurement of the lease liability and leased asset. The components of lease expense were as follows:
Supplemental balance sheet, cash flow and other information related to leases was as follows (in thousands, except lease term and discount rate):
Maturities of lease liabilities are as follows:
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Equity |
6 Months Ended |
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Jun. 30, 2020 | |
Equity [Abstract] | |
Equity | Equity Rights Offering On January 2, 2019, we received the aggregate cash proceeds of $31.4 million from an offering to our shareholders to purchase shares of our common stock on a pro rata basis with an aggregate offering price of $32.5 million (the “Rights Offering”). We sold an aggregate of 3,381,894 shares of common stock at a purchase price of $9.61 per share in the Rights Offering. Additionally, one of the backstop parties elected to satisfy the backstop commitment by converting $1.1 million of the $32.5 million bridge loan (“Bridge Term Loan”) to common stock. The aggregate cash proceeds from the Rights Offering were used to repay the remaining $31.4 million balance of the Bridge Term Loan, satisfying the obligations under the Bridge Term Loan Credit Agreement, entered October 5, 2018 (the “Bridge Term Loan Credit Agreement”), with the lenders party thereto and Wilmington Savings Fund Society, FSB, as administrative agent (“Wilmington”). Immediately after the issuance of the 3,381,894 shares for the Rights Offering, which commenced on January 2, 2019, the Company had 15,614,981 common shares outstanding. Other Equity Issuances During the six months ended June 30, 2020, we issued common stock for our stock-based compensation program, which is discussed further in Note 13. |
Earnings Per Common Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Common Share | Earnings Per Common Share Net loss per basic and diluted common share have been computed using the weighted average number of shares of common stock outstanding during the period. For the three and six months ended June 30, 2020 and June 30, 2019, no shares of common stock underlying restricted stock or warrants were included in the computation of diluted earnings per common share because the inclusion of such shares would be anti-dilutive based on the net losses reported for those periods. The following table presents the calculation of basic and diluted net loss per common share, as well as the anti-dilutive stock-based awards that were excluded from the calculation of diluted net loss per share for the periods presented:
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Intangible Assets |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets Intangible assets consist of the following:
The gross carrying value of the disposal permits decreased by $27.0 thousand during the year ended December 31, 2019 due to the sale of disposal permits in the Northeast and Southern divisions. The disposal permits are related to the Rocky Mountain, Northeast and Southern divisions. The remaining weighted average useful lives shown are calculated based on the net book value and remaining amortization period of each respective intangible asset. Amortization expense was $0.1 million and $0.1 million for the three months ended June 30, 2020 and June 30, 2019, respectively, and $0.2 million and $0.2 million for the six months ended June 30, 2020 and June 30, 2019, respectively. |
Assets Held for Sale and Impairment |
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Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Assets Held for Sale and Impairment | Assets Held for Sale and Impairment Impairment Charges Impairment charges of $15.6 million and $0.1 million were recorded during the six months ended June 30, 2020 and June 30, 2019, respectively. No impairment charges were recorded during the three months ended June 30, 2020 and June 30, 2019. Assets Held for Sale During the six months ended June 30, 2020, certain property classified as “Assets held for sale” on the condensed consolidated balance sheet located in the Rocky Mountain division was re-evaluated for impairment based on an accepted offer from a buyer that indicated fair value of the real property was lower than its net book value, and impairment charges of $0.6 million were recorded during the six months ended June 30, 2020, which is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations. During 2019, management approved plans to sell real properties located in both the Northeast and Rocky Mountain divisions. As a result, management began to actively market the properties, which were expected to sell within one year. In accordance with applicable accounting guidance, the real property was recorded at the lower of net book value or fair value less costs to sell and reclassified to “Assets held for sale” on the condensed consolidated balance sheet during the six months ended June 30, 2019. As the fair value of the real property reclassified as held for sale in the Northeast division was lower than its net book value, impairment charges of $0.1 million were recorded during the six months ended June 30, 2019, which is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations. Impairment of Long-Lived Assets Long-lived assets, such as property, plant and equipment and purchased intangibles subject to amortization, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of such assets may not be recoverable. Due to the impacts of the outbreak of COVID-19 and the oil supply conflict between two major oil producing countries, there was a significant decline in oil prices during the first half of 2020, which resulted in a decrease in activities by our customers. As a result of these events, we determined that there were indicators that the carrying value of our assets may not be recoverable. Our impairment review during the six months ended June 30, 2020 concluded that the carrying values of the assets associated with the landfill in the Rocky Mountain division and trucking equipment in the Southern division were not recoverable as the carrying value exceeded our estimate of future undiscounted cash flows for these asset groups. As a result, we recorded an impairment charge of $15.0 million during the six months ended June 30, 2020 as the carrying value exceeded fair value, which is included in “Impairment of long-lived assets” on our condensed consolidated statements of operations. The fair value of the assets associated with the landfill and trucking equipment asset groups was determined using discounted estimated future cash flows (Level 3 in the fair value hierarchy). |
Accrued and Other Current Liabilities |
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Accrued and Other Current Liabilities | Accrued and Other Current Liabilities Accrued and other current liabilities consisted of the following at June 30, 2020 and December 31, 2019:
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Debt |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Debt consisted of the following at June 30, 2020 and December 31, 2019:
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See below for a discussion of material changes and developments in our debt and its principal terms from those described in Note 12 to the consolidated financial statements in our 2019 Annual Report on Form 10-K. Indebtedness As of June 30, 2020, we had $37.9 million of indebtedness outstanding, consisting of $16.4 million under the First Lien Term Loan, $8.8 million under the second lien term loan facility (the “Second Lien Term Loan”) pursuant to the Second Lien Term Loan Credit Agreement, $4.0 million under the PPP Loan, $0.5 million under the Direct Loan Security Agreement ( the “Vehicle Term Loan”) with PACCAR Financial Corp as the secured party, $0.2 million under the Equipment Term Loan and $8.0 million of finance leases for vehicle financings and real property leases. Our Revolving Facility, First Lien Term Loan and Second Lien Term Loan contain certain affirmative and negative covenants, including a FCCR covenant, as well as other terms and conditions that are customary for revolving credit facilities and term loans of this type. On July 13, 2020, the Company entered into amendments of its First Lien Credit Agreement and Second Lien Term Loan Credit Agreement, which included among other terms and conditions, deferral of the measurement of the FCCR covenant until the second quarter of 2021. See Note 18 for further discussion of the amendments. As of June 30, 2020, we were in compliance with all covenants. Equipment Term Loan On November 20, 2019, we entered into a Retail Installment Contract (the “Equipment Term Loan”) with a secured party to finance $0.2 million of equipment. The Equipment Term Loan matures on November 2022, and shall be repaid in monthly installments of approximately $7 thousand beginning December 2019 and then each month thereafter, with interest accruing at an annual rate of 6.50%. Paycheck Protection Program Loan On May 8, 2020, pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) enacted on March 27, 2020, an indirect wholly-owned subsidiary of the Company (the “PPP Borrower”) received proceeds of a loan (the “PPP Loan”) from First International Bank & Trust (the “PPP Lender”) in the principal amount of $4.0 million. The PPP Loan is evidenced by a promissory note (the “Promissory Note”), dated May 8, 2020. The Promissory Note is unsecured, matures on May 8, 2022, bears interest at a rate of 1.00% per annum, and is subject to the terms and conditions applicable to loans administered by the U.S. Small Business Administration (the “SBA”) under the CARES Act. Under the terms of the PPP, up to the entire principal amount of the PPP Loan, and accrued interest, may be forgiven if the proceeds are used for certain qualifying expenses over the covered period as described in the CARES Act and applicable implementing guidance issued by the SBA, subject to potential reduction based on the level of full-time employees maintained by the organization during the covered period as compared to a baseline period. In June 2020, the Paycheck Protection Program Flexibility Act of 2020 (“Flexibility Act”) was signed into law, which amended the CARES Act. The Flexibility Act changed key provisions of the PPP, including, but not limited to, (i) provisions relating to the maturity of PPP loans, (ii) the deferral period covering PPP loan payments and (iii) the process for measurement of loan forgiveness. More specifically, the Flexibility Act provides a minimum maturity of five years for all PPP loans made on or after the date of the enactment of the Flexibility Act (“June 5, 2020”) and permits lenders and borrowers to extend the maturity date of earlier PPP loans by mutual agreement. As of the date of this filing, the Company has not approached the PPP Lender to request an extension of the maturity date from two years to five years. The Flexibility Act also provides that if a borrower does not apply for forgiveness of a loan within 10 months after the last day of the measurement period (“covered period”), the PPP loan is no longer deferred and the borrower must begin paying principal and interest. In addition, the Flexibility Act extended the length of the covered period from eight weeks to 24 weeks from receipt of proceeds, while allowing borrowers that received PPP loans before June 5, 2020 to determine, at their sole discretion, a covered period of either eight weeks or 24 weeks. The PPP Borrower used the PPP Loan proceeds for designated qualifying expenses over the covered period and plans to apply for forgiveness of the PPP Loan in accordance with the terms of the PPP, but no assurance can be given that the PPP Borrower will obtain forgiveness of the PPP Loan in whole or in part. As such, the Company has classified the PPP loan as debt and it is included in long-term debt on the condensed consolidated balance sheet. With respect to any portion of the PPP Loan that is not forgiven, the PPP Loan will be subject to customary provisions for a loan of this type, including customary events of default relating to, among other things, payment defaults, breaches of the provisions of the Promissory Note and cross-defaults on any other loan with the PPP Lender or other creditors. Upon a default under the Promissory Note, including the non-payment of principal or interest when due, the obligations of the PPP Borrower thereunder may be accelerated. In the event the PPP Loan is not forgiven, the principal amount of $4.0 million shall be repaid at maturity. The Company has obtained the consent of the lenders under each of the Credit Agreement and the Second Lien Term Loan Credit Agreement for the PPP Borrower to enter into and obtain the funds provided by the PPP Loan. Maturity Date Extension On July 13, 2020, the Company entered into an amendment of its First Lien Credit Agreement, which extended the maturity date of the First Lien Credit Agreement from February 7, 2021 to May 15, 2022. Prior to executing the Third Amendment to Credit Agreement (the “Third Amendment to First Lien Credit Agreement”), the First Lien Credit Agreement, which includes the Revolving Facility and the First Lien Term Loan, was set to mature on February 7, 2021, at which time the Company would have been required to repay the outstanding principal amount of the Revolving Facility and approximately $15.0 million of the First Lien Term Loan, together with interest accrued and unpaid thereon. On July 13, 2020, the Company also entered into an amendment of its Second Lien Term Loan Credit Agreement, which extended the maturity date from October 7, 2021 to November 15, 2022. Due to the Third Amendment to First Lien Credit Agreement, the First Lien Term Loan principal payments that were due at maturity are no longer due within twelve months. Therefore, as of June 30, 2020, the First Lien Term Loan principal payments due at maturity are included in long-term debt on the condensed consolidated balance sheet. See Note 18 for further discussion of the amendments. |
Derivative Warrants |
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Derivative Warrants | Derivative Warrants On the Effective Date, pursuant to the prepackaged plan of reorganization (the “Plan”), we issued to the holders of our pre-Effective Date 9.875% Senior Notes due 2018 (the “2018 Notes”) and holders of certain claims relating to the rejection of executory contracts and unexpired leases warrants to purchase an aggregate of 118,137 shares of common stock, par value $0.01, at an exercise price of $39.82 per share and with a term expiring seven years from the Effective Date. The following table shows the warrant activity for the six months ended June 30, 2020 and June 30, 2019:
The fair value of our derivative warrant liability was $354 at December 31, 2019. There was no change in the fair value at June 30, 2020. Fair Value of Warrants We account for warrants in accordance with the accounting guidance for derivatives, which sets forth a two-step model to be applied in determining whether a financial instrument is indexed to an entity’s own stock which would qualify such financial instruments for a scope exception. This scope exception specifies that a contract that would otherwise meet the definition of a derivative financial instrument would not be considered as such if the contract is both (i) indexed to the entity’s own stock and (ii) classified in the shareholders’ equity section of the entity’s balance sheet. We determined that the warrants are ineligible for equity classification as the warrants are not indexed to our common stock. Therefore, the warrants are recorded as derivative liabilities at fair value and included in “Accrued and other current liabilities” in the condensed consolidated balance sheets. The warrants are classified as a current liability as they could be exercised by the holders at any time. The fair value of the derivative warrant liability was estimated using a Monte Carlo simulation model (Level 3 in the fair value hierarchy) on the date of issue and is periodically re-measured until expiration or exercise of the underlying warrants with the resulting fair value adjustment recorded in “Other income, net” in the condensed consolidated statements of operations. |
Income Taxes |
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Income Taxes | Income Taxes
The effective tax rate for the three and six months ended June 30, 2020 was (0.2)% and (0.1)%, respectively, which differs from the federal statutory rate of 21.0%. The difference is primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses. The effective income tax rate for the three and six months ended June 30, 2019 was (0.9)%, and (1.1)%, respectively, which differed from the federal statutory rate of 21.0% primarily due to the increase in the valuation allowance on deferred tax assets resulting from current year losses. We have significant deferred tax assets, consisting primarily of net operating losses, some of which have a limited life, generally expiring between the years 2032 and 2037, and capital losses, which begin to expire in 2020. We regularly assess the evidence available to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred in recent years. Such objective evidence limits the ability to consider other subjective evidence such as our projections for future taxable income. In light of our continued ordinary losses, at June 30, 2020 we determined that our deferred tax liabilities were not sufficient to fully realize our deferred tax assets. Accordingly, a valuation allowance continues to be required against the portion of our deferred tax assets that is not offset by deferred tax liabilities. We expect our effective income tax rate to be near (0.1)% for the remainder of 2020. |
Stock-Based Compensation |
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Stock-Based Compensation | Stock-Based Compensation The Nuverra Environmental Solutions, Inc. 2017 Long Term Incentive Plan (the “Incentive Plan”) is intended to provide for the grant of equity-based awards to designated members of the Company’s management and employees. The maximum number of shares of the Company’s common stock that is available for the issuance of awards under the Incentive Plan is 1,772,058. As of June 30, 2020, approximately 771,000 shares were available for issuance under the Incentive Plan. The 2018 Restricted Stock Plan for Directors (the “Director Plan”) provides for the grant of restricted stock to the non-employee directors of the Company. The Director Plan limits the shares that may be issued thereunder to 100,000 shares of common stock. As of June 30, 2020, no shares were remaining available for issuance under the Director Plan. The total grants awarded under both the Incentive Plan and the Director Plan during the three and six months ended June 30, 2020 and June 30, 2019 are presented in the table below:
The total stock-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2020 and June 30, 2019 was as follows:
At June 30, 2020, the total unrecognized share-based compensation expense, net of estimated forfeitures, was $0.7 million and is expected to be recognized over a weighted average period of 0.5 years. |
Commitments and Contingencies |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Environmental Liabilities We are subject to the environmental protection and health and safety laws and related rules and regulations of the United States and of the individual states, municipalities and other local jurisdictions where we operate. Our operations are subject to rules and regulations promulgated by the Texas Railroad Commission, the Texas Commission on Environmental Quality, the Louisiana Department of Natural Resources, the Louisiana Department of Environmental Quality, the Ohio Department of Natural Resources, the Pennsylvania Department of Environmental Protection, the North Dakota Department of Health, the North Dakota Industrial Commission, Oil and Gas Division, the North Dakota State Water Commission, the Montana Department of Environmental Quality and the Montana Board of Oil and Gas, among others. These laws, rules and regulations address environmental, health and safety and related concerns, including water quality and employee safety. We have installed safety, monitoring and environmental protection equipment such as pressure sensors, containment walls, SCADA systems and relief valves, and have established reporting and responsibility protocols for environmental protection and reporting to such relevant local environmental protection departments as required by law. We believe we are in material compliance with all applicable environmental protection laws and regulations in the United States and the states in which we operate. We believe that there are no unrecorded liabilities as of the periods reported herein in connection with our compliance with applicable environmental laws and regulations. The condensed consolidated balance sheets at June 30, 2020 and December 31, 2019 did not include any accruals for environmental matters. Contingent Consideration for Ideal Settlement On June 28, 2017, the Company and certain of its material subsidiaries (collectively with the Company, the “Nuverra Parties”) filed a motion with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”) seeking authorization to resolve unsecured claims related to the $8.5 million contingent consideration from the Ideal Oilfield Disposal LLC acquisition (the “Ideal Settlement”). On July 11, 2017, the Bankruptcy Court entered an order authorizing the Ideal Settlement. Pursuant to the approved settlement terms, the $8.5 million contingent claim was replaced with an obligation on the part of the applicable Nuverra Party to transfer $0.5 million to the counterparties to the Ideal Settlement upon emergence from chapter 11, and $0.5 million when the Ideal Settlement counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit. The $0.5 million due upon emergence from chapter 11 was paid during the five months ended December 31, 2017. The remaining $0.5 million, due when the counterparties deliver the required permits and certificates necessary for the issuance of the second special waste disposal permit, has been classified as noncurrent and is reported in “Long-term contingent consideration” on the condensed consolidated balance sheets, as these permits and certificates are not expected to be received within one year. State Sales and Use Tax Liabilities During the year ended December 31, 2017, the Pennsylvania Department of Revenue (or “DOR”) completed an audit of our sales and use tax compliance for the period January 1, 2012 through May 31, 2017. As a result of the audit, we were assessed by the DOR for additional state and local sales and use tax plus penalties and interest. During the years ended December 31, 2017 and 2018, we disputed various claims in the assessment made by the DOR through the appropriate boards of appeal and were able to obtain relief for many of the contested claims. However, in January of 2019, the final appeals board upheld an assessment of sales tax and interest that relates to one material position. We have appealed this decision to the Commonwealth of Pennsylvania as we continue to believe that the transactions involved are exempt from sales tax in Pennsylvania, and therefore we have not recorded an accrual as of June 30, 2020. If we lose this appeal, which could take several years to settle, we estimate that we would be required to pay between $1.0 million and $1.5 million to the DOR. |
Legal Matters |
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Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Legal Matters | Legal Matters Litigation There are various lawsuits, claims, investigations and proceedings that have been brought or asserted against us, which arise in the ordinary course of business, including actions with respect to securities and shareholder class actions, personal injury, vehicular and industrial accidents, commercial contracts, legal and regulatory compliance, securities disclosure, labor and employment, and employee benefits and environmental matters, the more significant of which are summarized below. We record a provision for these matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Any provisions are reviewed at least quarterly and are adjusted to reflect the impact and status of settlements, rulings, advice of counsel and other information and events pertinent to a particular matter. We believe that we have valid defenses with respect to legal matters pending against us. Based on our experience, we also believe that the damage amounts claimed in pending lawsuits are not necessarily a meaningful indicator of our potential liability. Litigation is inherently unpredictable, and it is possible that our results of operations or cash flow could be materially affected in any particular period by the resolution of one or more of the legal matters pending against us. We do not expect that the outcome of other current claims and legal actions not discussed below will have a material adverse effect on our consolidated financial position, results of operations or cash flows. Confirmation Order Appeal On July 25, 2017, the Bankruptcy Court entered an order (the “Confirmation Order”) confirming the Plan. On July 26, 2017, David Hargreaves, an individual holder of 2018 Notes, appealed the Confirmation Order to the District Court of the District of Delaware (the “District Court”) and filed a motion for a stay pending appeal from the District Court. Although the motion for a stay pending appeal was denied, the appeal remained pending and the District Court heard oral arguments in May 2018, and in August 2018 the District Court issued an order dismissing the appeal. Hargreaves subsequently appealed the District Court’s decision to the United States Court of Appeals for the Third Circuit. The parties filed appellate briefs in December 2018 and January 2019, and as a result the appeal remains pending with the United States Court of Appeals for the Third Circuit. The ultimate outcome of this appeal and its effects on the Confirmation Order are impossible to predict with certainty. No assurance can be given that the final disposition of this appeal will not affect the validity, enforceability or finality of the Confirmation Order. |
Related Party and Affiliated Company Transactions |
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Related Party Transactions [Abstract] | |
Related Party and Affiliated Company Transactions | Related Party and Affiliated Company Transactions There have been no significant changes to the other related party transactions as described in Note 22 to the consolidated financial statements in our 2019 Annual Report on Form 10-K. |
Segments |
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Segments | Segments We evaluate business segment performance based on income (loss) before income taxes exclusive of corporate general and administrative costs and interest expense, which are not allocated to the segments. Our business is comprised of three operating divisions, which we consider to be operating and reportable segments of our operations: (1) the Northeast division comprising the Marcellus and Utica Shale areas, (2) the Southern division comprising the Haynesville Shale area and (3) the Rocky Mountain division comprising the Bakken Shale area. Corporate/Other includes certain corporate costs and certain other corporate assets. Financial information for our reportable segments related to operations is presented below.
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Subsequent Events |
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Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Amendment to First Lien Credit Agreement On July 13, 2020, the Company entered into the Third Amendment to First Lien Credit Agreement with the First Lien Credit Agreement Lenders and Credit Agreement Agent, which further amends the First Lien Credit Agreement. The Third Amendment to First Lien Credit Agreement amends the First Lien Credit Agreement to extend the maturity date from February 7, 2021 to May 15, 2022. In connection with the Third Amendment to First Lien Credit Amendment, the Company repaid $2.5 million of the outstanding principal amount of the term loans under the First Lien Credit Agreement on July 13, 2020. In addition, among other terms and conditions, the Third Amendment to First Lien Credit Agreement amends the First Lien Credit Agreement to: (i) defer measurement of the FCCR covenant until the second quarter of 2021 at 0.70 to 1.00 for such quarter and at 1.00 to 1.00 thereafter, (ii) add a monthly minimum liquidity covenant that requires the Company to maintain minimum liquidity amounts as follows: $8.0 million through July 31, 2020, $5.5 million through August 31, 2020, $5.0 million through November 30, 2020 and $4.0 million on and after December 1, 2020, (iii) set the maximum capital expenditures covenant for 2020 and 2021 at $6.0 million and $7.5 million, respectively, (iv) prohibit draws on the Revolving Facility until the FCCR is 1.00 to 1.00, and (v) require the Company to engage a financial advisor on or prior to December 31, 2020. In connection with the Third Amendment to First Lien Credit Agreement, the Company agreed to pay the First Lien Credit Agreement Lenders an amendment fee of $375 thousand on close of the Third Amendment to First Lien Credit Agreement, $50 thousand per quarter for the next five quarters thereafter and $125 thousand on the maturity date of the First Lien Credit Agreement. The amendment fee is subject to reduction by $200 thousand if the First Lien Credit Agreement is repaid in full within 75 days following July 6, 2020. Amendment to Second Lien Credit Agreement On July 13, 2020, the Company entered into a Second Amendment to Credit Agreement (the “Second Amendment to Second Lien Credit Agreement”) with the lenders party thereto and Wilmington, as administrative agent, which further amends the Second Lien Term Loan Credit Agreement. The Second Amendment to Second Lien Credit Agreement amends the Second Lien Term Loan Credit Agreement to extend the maturity date from October 7, 2021 to November 15, 2022. In addition, among other terms and conditions, the Second Amendment to Second Lien Credit Agreement amends the Second Lien Credit Agreement to: (i) defer measurement of the FCCR covenant until the second quarter of 2021 and set the minimum FCCR at 0.60 to 1.00 for such quarter and at 0.85 to 1.00 thereafter, (ii) add a monthly minimum liquidity covenant that requires the Company to maintain minimum liquidity amounts as follows: $6.8 million through July 31, 2020, approximately $4.7 million through August 31, 2020, $4.25 million through November 30, 2020 and $3.4 million on and after December 1, 2020, (iii) set the maximum capital expenditures covenant for 2020 and 2021 at approximately $7.1 million and approximately $8.8 million, respectively, and (iv) require the Company to engage a financial advisor on or prior to December 31, 2020. |
Basis of Presentation (Policies) |
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||||||||||||
Basis of Presentation | Basis of Presentation The accompanying condensed consolidated financial statements of Nuverra Environmental Solutions, Inc. and its subsidiaries (collectively, “Nuverra,” the “Company,” “we,” “us,” or “our”) are unaudited, pursuant to the rules and regulations of the United States Securities and Exchange Commission (“SEC”). Our condensed consolidated balance sheet as of December 31, 2019, included herein, has been derived from audited financial statements, but does not include all disclosures required by accounting principles generally accepted in the United States of America (or “GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. In our opinion, the condensed consolidated financial statements include the normal, recurring adjustments necessary for the fair statement of the results for the interim periods. These financial statements should be read in conjunction with the audited consolidated financial statements, including the notes thereto, contained in our Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on March 10, 2020 (the “2019 Annual Report on Form 10-K”). All dollar and share amounts in the footnote tabular presentations are in thousands, except per share amounts and unless otherwise noted. |
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Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires us to make estimates and assumptions for the reporting periods covered by the financial statements. These estimates and assumptions affect the reported amounts of assets, liabilities, revenues and expenses. Actual results could differ from these estimates. |
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Fair Value Measurements | Fair Value Measurements Fair value represents an exit price, representing the amount that would be received from the sale of an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions that market participants would use in pricing an asset or liability. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value as follows:
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Recently Issued Accounting Pronouncements | Recently Issued Accounting Pronouncements In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments - Credit Losses (Topic 326). Due to the issuance of ASU No. 2019-10, Financial Instruments - Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842), and the fact that we are a smaller reporting company, the new standard is effective for reporting periods beginning after December 15, 2022. The standard replaces the incurred loss impairment methodology under current GAAP with a methodology that reflects expected credit losses and requires the use of a forward-looking expected credit loss model for accounts receivables, loans, and other financial instruments. The standard requires a modified retrospective approach through a cumulative-effect adjustment to retained earnings as of the beginning of the first reporting period in which the guidance is effective. We plan to adopt the new credit loss standard effective January 1, 2023. We do not expect the new credit loss standard to have a material effect on our consolidated financial statements. In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. The standard removes certain exceptions to the general principles in Topic 740 and also clarifies and amends existing guidance to improve consistent application. The new standard will be effective for interim and annual periods beginning after December 15, 2020, with early adoption permitted. We plan to adopt this new ASU effective January 1, 2021. We do not expect the adoption of the new tax standard to have a material effect on our consolidated financial statements. In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting, which provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships and other transactions affected by reference rate reform, if certain criteria are met. ASU No. 2020-04 only applies to contracts and other transactions that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. The new standard is effective for all entities as of March 12, 2020 through December 31, 2022. We are currently evaluating the impact of the new reference rate reform practical expedient will have on our consolidated financial statements. |
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Revenue Recognition | Revenues are generated upon the performance of contracted services under formal and informal contracts with customers. Revenues are recognized when the contracted services for our customers are completed in an amount that reflects the consideration we expect to be entitled to in exchange for those services. Sales and usage-based taxes are excluded from revenues. Payment is due when the contracted services are completed in accordance with the payment terms established with each customer prior to providing any services. As such, there is no significant financing component for any of our revenues. Some of our contracts with customers involve multiple performance obligations as we are providing more than one service under the same contract, such as water transport services and disposal services. However, our core service offerings are capable of being distinct and also are distinct within the context of contracts with our customers. As such, these services represent separate performance obligations when included in a single contract. We have standalone pricing for all of our services which is negotiated with each of our customers in advance of providing the service. The contract consideration is allocated to the individual performance obligations based upon the standalone selling price of each service, and no discount is offered for a bundled services offering. Water Transport Services The majority of our revenues are from the removal and disposal of produced water and flowback originating from oil and natural gas wells or the transportation of fresh water and produced water to customer sites for use in drilling and hydraulic fracturing activities by trucks or through temporary or permanent water transfer pipelines. Water transport rates for trucking are based upon either a fixed fee per barrel or upon an hourly rate. Revenue is recognized once the water has been transported, or over time, based upon the number of barrels transported or disposed of, or at the agreed upon hourly rate, depending upon the customer contract. Contracts for the use of our water disposal pipeline are priced at a fixed fee per disposal barrel transported, with revenues recognized over time from when the water is injected into our pipeline until the transport is complete. Water transport services are all generally completed within 24 hours with no remaining performance obligation outstanding at the end of each month. Disposal Services Revenues for disposal services are generated through fees charged for disposal of fluids near disposal wells and disposal of oilfield wastes in our landfill. Disposal rates are generally based on a fixed fee per barrel of produced water, or on a per ton basis for landfill disposal, with revenues recognized once the disposal has occurred. The performance obligation for disposal services is considered complete once the disposal occurs. Therefore, disposal services revenues are recognized at a point in time. Other Revenue Other revenue includes revenues from the sale of “junk” or “slop” oil obtained through the skimming of disposal water. Under the new revenue standard, revenue is recognized for “junk” or “slop” oil sales at a point in time once the goods are transferred. Rental Revenue We generate rental revenue from the rental of equipment used in wellsite services. Rental rates are based upon negotiated rates with our customers and revenue is recognized over the rental service period. Revenues from rental equipment are not within the scope of the new revenue standard, but rather are recognized under ASC 842, Leases. As the rental service period for our equipment is very short term in nature and does not include any sales-type or direct financing leases, nor any variable rental components, the adoption of ASC 842 in 2019 did not have a material impact upon our consolidated statement of operations. |
Revenues (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Contract Assets | The change in contract asset balance for the six months ended June 30, 2020 was as follows:
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Schedule of Revenues Disaggregated by Revenue Source | The following tables present our revenues disaggregated by revenue source for each reportable segment for the three and six months ended June 30, 2020 and June 30, 2019:
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Leases (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Leases [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Lease Expense | The components of lease expense were as follows:
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Schedule of Assets and Liabilities, Lease Term and Discount Rate and Supplemental Disclosure | Supplemental balance sheet, cash flow and other information related to leases was as follows (in thousands, except lease term and discount rate):
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Schedule of Maturities of Operating Lease Liabilities | Maturities of lease liabilities are as follows:
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Schedule of Maturities of Finance Lease Liabilities | Maturities of lease liabilities are as follows:
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Earnings Per Common Share (Tables) |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The following table presents the calculation of basic and diluted net loss per common share, as well as the anti-dilutive stock-based awards that were excluded from the calculation of diluted net loss per share for the periods presented:
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Intangible Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible assets consist of the following:
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Accrued and Other Current Liabilities (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accrued Liabilities | Accrued and other current liabilities consisted of the following at June 30, 2020 and December 31, 2019:
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Debt (Tables) |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Debt consisted of the following at June 30, 2020 and December 31, 2019:
_____________________
|
Derivative Warrants (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Equity [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Stockholders' Equity Note, Warrants or Rights | The following table shows the warrant activity for the six months ended June 30, 2020 and June 30, 2019:
|
Income Taxes (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Components of Income Tax |
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Share-based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Share-based Compensation Arrangements by Share-based Payment Award | The total grants awarded under both the Incentive Plan and the Director Plan during the three and six months ended June 30, 2020 and June 30, 2019 are presented in the table below:
The total stock-based compensation expense, net of estimated forfeitures, included in “General and administrative expenses” in the accompanying condensed consolidated statements of operations for the three and six months ended June 30, 2020 and June 30, 2019 was as follows:
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Segments (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2020 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Financial Information for Reportable Segments | Financial information for our reportable segments related to operations is presented below.
|
Basis of Presentation - Narrative (Details) |
Feb. 27, 2021
USD ($)
|
Jul. 13, 2020 |
Jun. 30, 2020
USD ($)
|
Dec. 31, 2019
USD ($)
|
Jun. 30, 2019
USD ($)
|
Dec. 31, 2018
USD ($)
|
Aug. 07, 2017
USD ($)
|
---|---|---|---|---|---|---|---|
Line of Credit Facility [Line Items] | |||||||
Restricted cash | $ 0 | $ 922,000 | $ 1,875,000 | $ 656,000 | |||
First Lien Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility | $ 45,000,000.0 | ||||||
First Lien Term Loan | Scenario, Forecast | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility | $ 15,000,000.0 | ||||||
Revolving Facility | |||||||
Line of Credit Facility [Line Items] | |||||||
Line of credit facility | 30,000,000.0 | ||||||
Borrowings outstanding | $ 0 | ||||||
Subsequent Event | First Lien Term Loan | |||||||
Line of Credit Facility [Line Items] | |||||||
Fixed charge coverage ratio | 1.00 |
Revenues - Schedule of Contract Assets (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Revenue from Contract with Customer [Abstract] | ||
Balance at the beginning of the period (January 1, 2020) | $ 0 | $ 231 |
Balance at the end of the period (June 30, 2020) | 0 | $ 231 |
Increase/(decrease) | $ (231) |
Leases - Narrative (Details) $ in Millions |
Jun. 30, 2020
USD ($)
|
---|---|
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 99 years |
Residual value guarantee | $ 2.4 |
Minimum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 1 year |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Remaining lease terms | 20 years |
Leases - Components of Lease Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Leases [Abstract] | ||||
Operating lease cost | $ 696 | $ 729 | $ 1,350 | $ 1,453 |
Finance lease cost: | ||||
Amortization of leased assets | 546 | 679 | 1,164 | 1,225 |
Interest on lease liabilities | 140 | 177 | 288 | 240 |
Variable lease cost | 669 | 1,055 | 1,596 | 2,121 |
Sublease income | (8) | (22) | (32) | (73) |
Total net lease cost | 2,043 | 2,618 | 4,366 | 4,966 |
Short-term lease cost | $ 100 | $ 200 | $ 200 | $ 400 |
Leases - Schedule of Supplemental Balance Sheet, Cash Flow and Other Information (Details) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Assets: | ||
Operating lease assets | $ 2,007 | $ 2,886 |
Finance lease assets | 7,057 | 8,202 |
Total leased assets | 9,064 | 11,088 |
Current | ||
Operating lease liabilities | 518 | 1,442 |
Finance lease liabilities | 1,277 | 1,443 |
Noncurrent | ||
Operating lease liabilities | 1,494 | 1,457 |
Finance lease liabilities | 6,764 | 7,341 |
Total lease liabilities | 10,053 | 11,683 |
Accumulated amortization, finance lease assets | $ 2,800 | $ 1,700 |
Finance Lease, Right-of-Use Asset, Statement of Financial Position [Extensible List] | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization | us-gaap:PropertyPlantAndEquipmentAndFinanceLeaseRightOfUseAssetAfterAccumulatedDepreciationAndAmortization |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:AccruedLiabilitiesCurrent | us-gaap:AccruedLiabilitiesCurrent |
Finance Lease, Liability, Current, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent | us-gaap:LongTermDebtAndCapitalLeaseObligationsCurrent |
Finance Lease, Liability, Noncurrent, Statement of Financial Position [Extensible List] | us-gaap:LongTermDebtAndCapitalLeaseObligations | us-gaap:LongTermDebtAndCapitalLeaseObligations |
Leases - Schedule of Weighted Average Remaining Lease Term and Discount Rate (Details) |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Weighted-average remaining lease term (in years): | ||
Operating leases | 41 years 6 months | 25 years 1 month |
Finance leases | 3 years 8 months | 4 years 3 months |
Weighted-average discount rate: | ||
Operating leases | 9.83% | 8.51% |
Finance leases | 6.75% | 6.77% |
Leases - Supplemental Disclosure of Cash Flow Information and Other Information (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows from operating leases | $ 1,350 | $ 1,453 |
Operating cash flows from finance leases | 288 | 240 |
Financing cash flows from finance leases | 783 | 824 |
Leased assets obtained in exchange for new operating lease liabilities | 0 | 0 |
Leased assets obtained in exchange for new finance lease liabilities | $ 213 | $ 6,674 |
Leases - Schedule of Maturities of Lease Liabilities (Details) - USD ($) $ in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Dec. 31, 2019 |
|
Operating Leases | ||
Remainder of 2020 | $ 575 | |
2021 | 466 | |
2022 | 325 | |
2023 | 200 | |
2024 | 190 | |
Thereafter | 6,710 | |
Total lease payments | 8,466 | |
Less amount representing executory costs | 0 | |
Net lease payments | 8,466 | |
Less amount representing interest | (6,454) | |
Present value of total lease liabilities | 2,012 | |
Less current lease liabilities | (518) | $ (1,442) |
Long-term lease liabilities | 1,494 | 1,457 |
Finance Leases | ||
Remainder of 2020 | 884 | |
2021 | 1,821 | |
2022 | 1,821 | |
2023 | 3,447 | |
2024 | 383 | |
Thereafter | 1,412 | |
Total lease payments | 9,768 | |
Less amount representing executory costs | 0 | |
Net lease payments | 9,768 | |
Less amount representing interest | (1,727) | |
Present value of total lease liabilities | 8,041 | |
Less current lease liabilities | (1,277) | (1,443) |
Long-term lease liabilities | 6,764 | $ 7,341 |
Finance lease payments | $ 1,700 |
Equity (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jan. 02, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
Dec. 31, 2018 |
|
Class of Stock [Line Items] | ||||||
Proceeds from the issuance of stock | $ 0 | $ 31,057 | ||||
Payments on bridge term loan | $ 0 | $ 31,382 | ||||
Shares outstanding of successor company (in shares) | 15,614,981 | 15,761,000 | 15,735,000 | |||
Bridge Term Loan | ||||||
Class of Stock [Line Items] | ||||||
Conversion of loan to common stock | $ 1,100 | |||||
Carrying value of debt | $ 543 | $ 725 | $ 32,500 | |||
Payments on bridge term loan | 31,400 | |||||
Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Issuance of common stock for rights offering (in shares) | 3,382,000 | |||||
Rights Offering | Common Stock | ||||||
Class of Stock [Line Items] | ||||||
Proceeds from the issuance of stock | 31,400 | |||||
Aggregate offering price | $ 32,500 | |||||
Aggregate shares sold (in shares) | 3,381,894 | |||||
Purchase price (usd per share) | $ 9.61 | |||||
Issuance of common stock for rights offering (in shares) | 3,381,894 |
Earnings Per Common Share - Narrative (Details) - shares |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||
Anti-dilutive shares of common stock (in shares) | 0 | 0 | 0 | 0 |
Earnings Per Common Share - Schedule of Earnings Per Common Share (Detail) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 6 Months Ended | ||||
---|---|---|---|---|---|---|
Jun. 30, 2020 |
Mar. 31, 2020 |
Jun. 30, 2019 |
Mar. 31, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Earnings Per Share [Abstract] | ||||||
Numerator: Net loss | $ (6,779) | $ (23,044) | $ (5,006) | $ (6,355) | $ (29,823) | $ (11,361) |
Denominator: | ||||||
Weighted average shares—basic (in shares) | 15,761,000 | 15,704,000 | 15,757,000 | 15,627,000 | ||
Common stock equivalents (in shares) | 0 | 0 | 0 | 0 | ||
Weighted average shares—diluted (in shares) | 15,761,000 | 15,704,000 | 15,757,000 | 15,627,000 | ||
Loss per common share: | ||||||
Net loss per basic common share (usd per share) | $ (0.43) | $ (0.32) | $ (1.89) | $ (0.73) | ||
Net loss per diluted common share (usd per share) | $ (0.43) | $ (0.32) | $ (1.89) | $ (0.73) | ||
Antidilutive stock-based awards excluded (in shares) | 415,000 | 559,000 | 415,000 | 513,000 |
Intangible Assets (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2019 |
|
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | $ 1,339 | $ 1,339 | $ 1,353 | ||
Accumulated Amortization | (932) | (932) | (713) | ||
Net | 407 | $ 407 | $ 640 | ||
Remaining Useful Life (Years) | 3 years 1 month | 2 years 9 months 24 days | |||
Write-off of disposal permits | $ 27 | ||||
Amortization of intangible assets | 100 | $ 100 | $ 200 | $ 200 | |
Disposal permits | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 540 | 540 | 554 | ||
Accumulated Amortization | (311) | (311) | (269) | ||
Net | 229 | $ 229 | $ 285 | ||
Remaining Useful Life (Years) | 4 years 11 months 15 days | 5 years | |||
Trade name | |||||
Finite-Lived Intangible Assets [Line Items] | |||||
Gross Carrying Amount | 799 | $ 799 | $ 799 | ||
Accumulated Amortization | (621) | (621) | (444) | ||
Net | $ 178 | $ 178 | $ 355 | ||
Remaining Useful Life (Years) | 7 months | 1 year |
Assets Held for Sale and Impairment (Details) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | ||||
Impairment of long-lived assets | $ 0 | $ 0 | $ 15,579,000 | $ 117,000 |
Impairment of assets to be disposed of | 600,000 | $ 100,000 | ||
Impairment of long-lived assets | $ 15,000,000 |
Accrued and Other Current Liabilities (Detail) - USD ($) $ in Thousands |
Jun. 30, 2020 |
Dec. 31, 2019 |
---|---|---|
Payables and Accruals [Abstract] | ||
Accrued payroll and employee benefits | $ 1,264 | $ 1,837 |
Accrued insurance | 2,601 | 2,569 |
Accrued legal | 144 | 295 |
Accrued taxes | 1,067 | 695 |
Accrued interest | 235 | 179 |
Accrued operating costs | 2,452 | 2,653 |
Accrued other | 424 | 394 |
Current operating lease liabilities | 518 | 1,442 |
Total accrued and other current liabilities | $ 8,705 | $ 10,064 |
Derivative Warrants - Narrative (Details) |
6 Months Ended | |
---|---|---|
Jun. 30, 2020
warrant
$ / shares
|
Dec. 31, 2019
USD ($)
$ / shares
|
|
Equity [Abstract] | ||
Plan of reorganization, number of warrants Issued | warrant | 118,137 | |
Par value of successor common stock (USD per share) | $ 0.01 | $ 0.01 |
Exercise price of warrants (in USD per warrant) | $ 39.82 | |
Expiration term | 7 years | |
Derivative warrant liability | $ | $ 354 |
Derivative Warrants - Warrants Outstanding Reconciliation (Details) - Warrant - shares shares in Thousands |
6 Months Ended | |
---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Increase (Decrease) in Temporary Equity [Roll Forward] | ||
Outstanding at the beginning of the period (in shares) | 118 | 118 |
Issued (in shares) | 0 | 0 |
Exercised (in shares) | 0 | 0 |
Outstanding at the end of the period (in shares) | 118 | 118 |
Income Taxes - Components of Income Tax (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Income Tax Disclosure [Abstract] | ||||
Current income tax expense | $ (30) | $ (4) | $ (30) | $ (13) |
Deferred income tax benefit (expense) | 15 | (42) | 15 | (112) |
Total income tax expense | $ (15) | $ (46) | $ (15) | $ (125) |
Income Taxes - Narrative (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | 12 Months Ended | ||
---|---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
Dec. 31, 2020 |
|
Income Tax Contingency [Line Items] | |||||
Income tax expense (benefit) | $ 15 | $ 46 | $ 15 | $ 125 | |
Effective income tax benefit rate | (0.20%) | (0.90%) | (0.10%) | (1.10%) | |
Scenario, Forecast | |||||
Income Tax Contingency [Line Items] | |||||
Effective income tax benefit rate | (0.10%) |
Stock-Based Compensation - Narrative (Details) - USD ($) $ in Millions |
6 Months Ended | ||
---|---|---|---|
Jun. 30, 2020 |
Dec. 31, 2018 |
Dec. 31, 2017 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares of common stock available for issuance of awards (in shares) | 0 | 100,000 | |
Share-based costs, not yet recognized | $ 0.7 | ||
Share-based costs, not yet recognized, period for recognition | 6 months | ||
2017 Long Term Incentive Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Maximum number of shares of common stock available for issuance of awards (in shares) | 771,000 | 1,772,058 |
Stock-Based Compensation - Stock-Based Compensation Arrangements (Details) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2020 |
Jun. 30, 2019 |
Jun. 30, 2020 |
Jun. 30, 2019 |
|
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Total grants in the period (in shares) | 75 | 23 | 75 | 142 |
Share-based compensation expense | $ 322 | $ 563 | $ 612 | $ 1,415 |
Restricted stock grants | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Restricted stock grants (in shares) | 75 | 23 | 75 | 142 |
Share-based compensation expense | $ 322 | $ 563 | $ 612 | $ 1,415 |
Commitments and Contingencies (Details) - USD ($) $ in Thousands |
5 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jul. 11, 2017 |
Dec. 31, 2017 |
Jun. 30, 2020 |
Dec. 31, 2019 |
Jun. 28, 2017 |
|
Loss Contingencies [Line Items] | |||||
Long-term contingent consideration | $ 500 | $ 500 | |||
Minimum | |||||
Loss Contingencies [Line Items] | |||||
Estimated tax required to be paid if appeal is lost | 1,000 | ||||
Maximum | |||||
Loss Contingencies [Line Items] | |||||
Estimated tax required to be paid if appeal is lost | 1,500 | ||||
Chapter 11 Bankruptcy | |||||
Loss Contingencies [Line Items] | |||||
Long-term contingent consideration | $ 8,500 | ||||
Amount to be transferred upon emergence from chapter 11 | $ 500 | $ 500 | |||
Amount to be transferred when required permits are delivered | $ 500 | $ 500 |
Segments - Narrative (Detail) |
Jun. 30, 2020
operating_division
|
---|---|
Segment Reporting [Abstract] | |
Number of operating divisions | 3 |
Label | Element | Value |
---|---|---|
Accounting Standards Update [Extensible List] | us-gaap_AccountingStandardsUpdateExtensibleList | us-gaap:AccountingStandardsUpdate201602Member |
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