Shareholders' Equity

3 Months Ended

Mar. 31, 2023

Equity [Abstract]

Shareholders' Equity

Note 12 – Shareholders’ Equity

Capital Stock

As of March 31, 2023, the Company had two classes of common stock: Class A Common Stock and Class B Common Stock. The holders of record of Class A Common Stock and Class B Common Stock vote together as a single class on all matters on which holders of Class A Common Stock and Class B Common Stock are entitled to vote; except that certain directors are elected by holders of a majority of the shares of Class B Common Stock voting as a separate class.

The holders of Class A Common Stock have no preemptive rights to purchase shares of Class A Common Stock. Shares of Class A Common Stock are not subject to any redemption or sinking fund provisions and are not convertible into any of the Company’s other securities. In the event of the Company’s voluntary or involuntary liquidation, dissolution or winding up, holders of Class A Common Stock will share equally in the assets remaining after it pays its creditors and preferred shareholders. Holders of Class A Common Stock are entitled to receive dividends when and if declared by the Board of Directors.

Shares of Class B Common Stock are non-economic interests in the Company, and no dividends can be declared or paid on the Class B Common Stock. The holders of Class B Common Stock have no preemptive rights to purchase shares of Class B Common Stock. Shares of Class B common stock are not subject to any redemption or sinking fund provisions. In the event of the Company’s voluntary or involuntary liquidation, dissolution or winding up, after payment or provision for payment of its debts and other liabilities, the holders of Class B Common Stock will be entitled to receive, out of its assets or proceeds thereof available for distribution to our shareholders, before any distribution of such assets or proceeds is made to or set aside for the holders of Class A Common Stock and any other of the Company’s stock ranking junior to the Class B Common Stock as to such distribution, payment in full in an amount equal to $0.01 per share of Class B Common Stock. With the exception of the aforementioned distribution, the holders of shares of Class B Common Stock will not be entitled to receive any of the Company’s assets in the event of its voluntary or involuntary liquidation, dissolution or winding up.

The Company’s Class B Common Stock is not convertible into any of the Company’s other securities. However, if a holder exchanges one common unit of the Partnership for one share of the Company’s Class A Common Stock, it must also surrender to the Company a share of its Class B Common Stock for each common unit exchanged.

As of March 31, 2023, the Company had (i) 110,000,000 authorized shares of Class A Common Stock and 18,982,425 shares of Class A Common Stock issued and outstanding, (ii) 30,000,000 authorized shares of Class B Common Stock and 22,548,998 shares of Class B Common Stock issued and outstanding, and (iii) 5,000,000 authorized shares of preferred stock, par value $0.01 per share, and no shares of preferred stock issued or outstanding.

Dividends

On March 3, 2023, the Company’s Board of Directors declared a cash dividend of $0.075 per share of Class A Common Stock. The dividend was paid on March 30, 2023 to holders of record of Class A Common Stock as of the close of business on March 17, 2023. In connection with any dividend, Ranger’s operating subsidiary will also make a corresponding distribution to its common unitholders. During the first quarter of 2023, the dividend to the holders of our Class A Common Stock and distribution to common unitholders totaled $3.1 million in the aggregate. The Company’s Credit Facility and the Indenture have restrictive covenants that limit its ability to pay dividends. See Note 15 for details on dividends declared subsequent to March 31, 2023.

Share Repurchase Program

On April 13, 2022, our Board of Directors approved a share repurchase program that authorized the Company to repurchase up to $100 million of its outstanding Class A Common Stock. The share repurchase authorization was effective immediately and was valid through March 31, 2023. On July 7, 2022, the Board of Directors authorized an increase in the share repurchase program from $100 million to $140 million and extended the term of the program through June 30, 2023. We do not intend to repurchase additional shares pending closing of the Baytex Merger.

During the three months ended March 31, 2023, we repurchased 121,857 shares of our Class A Common Stock at a total cost of $4.8 million and an average purchase price of $39.52. The share repurchases were recorded to Class A common stock and Paid-in capital on our condensed consolidated balance sheets. As of March 31, 2023, the remaining authorized repurchase amount under the share repurchase program was $60.0 million.

On August 16, 2022, the Inflation Reduction Act was signed into law and imposes a 1% excise tax on the repurchase of stock by publicly traded U.S. corporations. The excise tax is effective for stock repurchases after December 31, 2022. Based on the total share repurchases during the three months ended March 31, 2023, we recognized less than $0.1 million of additional cost within Paid-in capital associated with the excise tax for these share repurchases.

Change in Ownership of Consolidated Subsidiaries

The following table summarizes changes in the ownership interest in consolidated subsidiaries during the periods presented:

	Three Months Ended March 31,
	2023		2022
Net income (loss) attributable to Class A common shareholders	$	51,999	$	(9,985)
Transfers from the noncontrolling interest, net 1	978		N/A
Change from Net income (loss) attributable to Class A common shareholders and net transfers from Noncontrolling interest	$	52,977	$	(9,985)

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1     The three months ended March 31, 2023 includes a net transfer of $1.0 million from Noncontrolling interest for share repurchases and common stock issuances related to employees’ share-based compensation with a corresponding adjustment to Paid-in capital. This equity adjustment had no impact on earnings other than a resulting increase to the noncontrolling interest proportionate share of net income and a corresponding decrease to the proportionate share of net income attributable to Class A common shareholders.

As discussed above and in Note 13, in the three months ended March 31, 2023, we repurchased shares of our Class A Common Stock and issued shares of our Class A Common Stock related to the vesting of employees’ share-based compensation resulting in a change in the proportionate share of Common Units held by the Company relative to Juniper. As such, we recognized an adjustment to the carrying amount of noncontrolling interest and a corresponding adjustment to Class A common shareholders’ equity of $1.0 million for the three months ended March 31, 2023 to reflect the revised ownership percentage of total equity. See Note 2 for further discussion.