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 |
(State or other jurisdiction of | (I.R.S. Employer Identification No.) | ||||||||||
incorporation or organization) |
| ||||||||||||||
(Address of Principal Executive Offices) | (Zip Code) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Large accelerated filer | ☐ | ☑ | ||||||||||||
Non-accelerated filer | ☐ | Smaller reporting company | ||||||||||||
Emerging growth company |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
(in thousands, except per share information) | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenue | $ | $ | $ | $ | |||||||||||||||||||
Cost of sales | |||||||||||||||||||||||
Gross profit | |||||||||||||||||||||||
Operating expenses | |||||||||||||||||||||||
Selling, general and administrative expenses | |||||||||||||||||||||||
Loss (gain) on disposal of assets and other | ( | ( | ( | ||||||||||||||||||||
Total operating expenses | |||||||||||||||||||||||
Operating income | |||||||||||||||||||||||
Other expense (income) | |||||||||||||||||||||||
Interest expense | |||||||||||||||||||||||
Foreign exchange and other losses (gains), net | ( | ( | ( | ||||||||||||||||||||
Total other expense (income), net | ( | ( | ( | ||||||||||||||||||||
Income before taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | |||||||||||||||||||||||
Diluted | |||||||||||||||||||||||
Earnings (loss) per share | |||||||||||||||||||||||
Basic | $ | $ | $ | ( | $ | ||||||||||||||||||
Diluted | $ | $ | $ | ( | $ | ||||||||||||||||||
Other comprehensive income (loss), net of tax of $ | |||||||||||||||||||||||
Net income (loss) | $ | $ | $ | ( | $ | ||||||||||||||||||
Change in foreign currency translation | ( | ( | ( | ||||||||||||||||||||
Gain (loss) on pension liability | ( | ( | |||||||||||||||||||||
Comprehensive loss | $ | ( | $ | ( | $ | ( | $ | ( |
(in thousands, except share information) | September 30, 2023 | December 31, 2022 | |||||||||
Assets | |||||||||||
Current assets | |||||||||||
Cash and cash equivalents | $ | $ | |||||||||
Accounts receivable—trade, net of allowances of $ | |||||||||||
Inventories, net | |||||||||||
Prepaid expenses and other current assets | |||||||||||
Accrued revenue | |||||||||||
Costs and estimated profits in excess of billings | |||||||||||
Total current assets | |||||||||||
Property and equipment, net of accumulated depreciation | |||||||||||
Operating lease assets | |||||||||||
Deferred financing costs, net | |||||||||||
Intangible assets, net | |||||||||||
Deferred income taxes, net | |||||||||||
Other long-term assets | |||||||||||
Total assets | $ | $ | |||||||||
Liabilities and equity | |||||||||||
Current liabilities | |||||||||||
Current portion of long-term debt | $ | $ | |||||||||
Accounts payable—trade | |||||||||||
Accrued liabilities | |||||||||||
Deferred revenue | |||||||||||
Billings in excess of costs and profits recognized | |||||||||||
Total current liabilities | |||||||||||
Long-term debt, net of current portion | |||||||||||
Deferred income taxes, net | |||||||||||
Operating lease liabilities | |||||||||||
Other long-term liabilities | |||||||||||
Total liabilities | |||||||||||
Commitments and contingencies | |||||||||||
Equity | |||||||||||
Common stock, $ | |||||||||||
Additional paid-in capital | |||||||||||
Treasury stock at cost, | ( | ( | |||||||||
Retained deficit | ( | ( | |||||||||
Accumulated other comprehensive loss | ( | ( | |||||||||
Total equity | |||||||||||
Total liabilities and equity | $ | $ |
Nine Months Ended September 30, | |||||||||||
(in thousands) | 2023 | 2022 | |||||||||
Cash flows from operating activities | |||||||||||
Net income (loss) | $ | ( | $ | ||||||||
Adjustments to reconcile net income (loss) to net cash used in operating activities: | |||||||||||
Depreciation expense | |||||||||||
Amortization of intangible assets | |||||||||||
Inventory write down | |||||||||||
Stock-based compensation expense | |||||||||||
Deferred income taxes | ( | ( | |||||||||
Noncash losses and other, net | |||||||||||
Changes in operating assets and liabilities | |||||||||||
Accounts receivable—trade | ( | ( | |||||||||
Inventories | ( | ( | |||||||||
Prepaid expenses and other assets | |||||||||||
Cost and estimated profit in excess of billings | ( | ||||||||||
Accounts payable, deferred revenue and other accrued liabilities | ( | ( | |||||||||
Billings in excess of costs and estimated profits earned | ( | ||||||||||
Net cash used in operating activities | ( | ( | |||||||||
Cash flows from investing activities | |||||||||||
Capital expenditures for property and equipment | ( | ( | |||||||||
Proceeds from sale of property and equipment | |||||||||||
Payments related to business acquisitions and dispositions | ( | ||||||||||
Net cash used in investing activities | ( | ( | |||||||||
Cash flows from financing activities | |||||||||||
Borrowings on Credit Facility | |||||||||||
Repayments on Credit Facility | ( | ( | |||||||||
Payment of capital lease obligations | ( | ( | |||||||||
Repurchases of stock | ( | ( | |||||||||
Net cash provided by (used in) financing activities | ( | ||||||||||
Effect of exchange rate changes on cash | ( | ||||||||||
Net decrease in cash, cash equivalents and restricted cash | ( | ( | |||||||||
Cash, cash equivalents and restricted cash at beginning of period | |||||||||||
Cash, cash equivalents and restricted cash at end of period | $ | $ | |||||||||
Noncash activities | |||||||||||
Operating lease right of use assets obtained in exchange for lease obligations | $ | $ | |||||||||
Finance lease right of use assets obtained in exchange for lease obligations | |||||||||||
Conversion of debt to common stock |
Nine Months Ended September 30, 2023 | ||||||||||||||||||||||||||||||||||||||
(in thousands) | Common stock | Additional paid-in capital | Treasury stock | Retained deficit | Accumulated other comprehensive income / (loss) | Total equity | ||||||||||||||||||||||||||||||||
Balance at December 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock issuance, net of forfeitures | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||
Conversion of debt to common stock | — | — | — | |||||||||||||||||||||||||||||||||||
Treasury stock | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ||||||||||||||||||||||||||||||||||
Change in pension liability | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ||||||||||||||||||||||||||||||||||
Change in pension liability | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at June 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock issuance, net of forfeitures | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Change in pension liability | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2023 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Nine Months Ended September 30, 2022 | ||||||||||||||||||||||||||||||||||||||
(in thousands) | Common stock | Additional paid-in capital | Treasury stock | Retained deficit | Accumulated other comprehensive income / (loss) | Total equity | ||||||||||||||||||||||||||||||||
Balance at December 31, 2021 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock issuance, net of forfeitures | ( | — | — | — | ( | |||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Change in pension liability | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net loss | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||
Balance at March 31, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock issuance, net of forfeitures | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Liability awards converted to share settled | — | — | — | — | ||||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Change in pension liability | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at June 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ | |||||||||||||||||||||||||||||
Stock-based compensation expense | — | — | — | — | ||||||||||||||||||||||||||||||||||
Restricted stock issuance, net of forfeitures | — | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||
Currency translation adjustment | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||
Change in pension liability | — | — | — | — | ||||||||||||||||||||||||||||||||||
Net income | — | — | — | — | ||||||||||||||||||||||||||||||||||
Balance at September 30, 2022 | $ | $ | $ | ( | $ | ( | $ | ( | $ |
September 30, 2023 | December 31, 2022 | Increase / (Decrease) | |||||||||||||||||||||
$ | % | ||||||||||||||||||||||
Accrued revenue | $ | $ | |||||||||||||||||||||
Costs and estimated profits in excess of billings | |||||||||||||||||||||||
Contract assets - current | |||||||||||||||||||||||
Contract assets - noncurrent | |||||||||||||||||||||||
Contract assets | $ | $ | $ | ( | ( | % | |||||||||||||||||
Deferred revenue | $ | $ | |||||||||||||||||||||
Billings in excess of costs and profits recognized | |||||||||||||||||||||||
Contract liabilities | $ | $ | $ | % |
September 30, 2023 | December 31, 2022 | ||||||||||
Raw materials and parts | $ | $ | |||||||||
Work in process | |||||||||||
Finished goods | |||||||||||
Total inventories | |||||||||||
Less: inventory reserve | ( | ( | |||||||||
Inventories, net | $ | $ |
September 30, 2023 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Intangibles | Amortization Period (In Years) | ||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | |||||||||||||||||||
Patents and technology | ( | ||||||||||||||||||||||
Non-compete agreements | ( | ||||||||||||||||||||||
Trade names | ( | ||||||||||||||||||||||
Trademarks | ( | ||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ |
December 31, 2022 | |||||||||||||||||||||||
Gross Carrying Amount | Accumulated Amortization | Net Intangibles | Amortization Period (In Years) | ||||||||||||||||||||
Customer relationships | $ | $ | ( | $ | |||||||||||||||||||
Patents and technology | ( | ||||||||||||||||||||||
Non-compete agreements | ( | ||||||||||||||||||||||
Trade names | ( | ||||||||||||||||||||||
Trademarks | ( | ||||||||||||||||||||||
Total intangible assets | $ | $ | ( | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
2025 Notes | $ | $ | |||||||||
Unamortized debt discount | ( | ( | |||||||||
Debt issuance cost | ( | ( | |||||||||
Credit Facility | |||||||||||
Other debt | |||||||||||
Total debt | |||||||||||
Less: current portion | ( | ( | |||||||||
Long-term debt, net of current portion | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Revenue | |||||||||||||||||||||||
Drilling & Downhole | $ | $ | $ | $ | |||||||||||||||||||
Completions | |||||||||||||||||||||||
Production | |||||||||||||||||||||||
Eliminations | ( | ( | ( | ( | |||||||||||||||||||
Total revenue | $ | $ | $ | $ | |||||||||||||||||||
Segment operating income | |||||||||||||||||||||||
Drilling & Downhole | $ | $ | $ | $ | |||||||||||||||||||
Completions | |||||||||||||||||||||||
Production | ( | ||||||||||||||||||||||
Corporate | ( | ( | ( | ( | |||||||||||||||||||
Segment operating income | |||||||||||||||||||||||
Loss (gain) on disposal of assets and other | ( | ( | ( | ||||||||||||||||||||
Operating income | $ | $ | $ | $ |
September 30, 2023 | December 31, 2022 | ||||||||||
Drilling & Downhole | $ | $ | |||||||||
Completions | |||||||||||
Production | |||||||||||
Corporate | |||||||||||
Total assets | $ | $ |
Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Drilling Technologies | $ | $ | $ | $ | |||||||||||||||||||
Downhole Technologies | |||||||||||||||||||||||
Subsea Technologies | |||||||||||||||||||||||
Stimulation and Intervention | |||||||||||||||||||||||
Coiled Tubing | |||||||||||||||||||||||
Production Equipment | |||||||||||||||||||||||
Valve Solutions | |||||||||||||||||||||||
Eliminations | ( | ( | ( | ( | |||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
United States | $ | $ | $ | $ | |||||||||||||||||||
Middle East | |||||||||||||||||||||||
Canada | |||||||||||||||||||||||
Europe & Africa | |||||||||||||||||||||||
Latin America | |||||||||||||||||||||||
Asia-Pacific | |||||||||||||||||||||||
Total revenue | $ | $ | $ | $ |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
Net income (loss) - basic | $ | $ | $ | ( | $ | ||||||||||||||||||
Interest on dilutive convertible notes due 2025 | |||||||||||||||||||||||
Net income (loss) - diluted | $ | $ | $ | ( | $ | ||||||||||||||||||
Weighted average shares outstanding - basic | |||||||||||||||||||||||
Dilutive effect of stock options and restricted stock | |||||||||||||||||||||||
Dilutive effect of convertible notes due 2025 | |||||||||||||||||||||||
Weighted average shares outstanding - diluted | |||||||||||||||||||||||
Earnings (loss) per share | |||||||||||||||||||||||
Basic | $ | $ | $ | ( | $ | ||||||||||||||||||
Diluted | $ | $ | $ | ( | $ |
Three Months Ended | |||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||
2023 | 2023 | 2022 | |||||||||||||||
Average global oil, $/bbl | |||||||||||||||||
West Texas Intermediate | $ | 82.25 | $ | 73.54 | $ | 93.06 | |||||||||||
United Kingdom Brent | $ | 86.65 | $ | 77.99 | $ | 100.71 | |||||||||||
Average North American Natural Gas, $/Mcf | |||||||||||||||||
Henry Hub | $ | 2.59 | $ | 2.16 | $ | 8.03 |
Three Months Ended | |||||||||||||||||
September 30, | June 30, | September 30, | |||||||||||||||
2023 | 2023 | 2022 | |||||||||||||||
Active Rigs by Location | |||||||||||||||||
United States | 649 | 719 | 761 | ||||||||||||||
Canada | 188 | 117 | 199 | ||||||||||||||
International | 951 | 960 | 857 | ||||||||||||||
Global Active Rigs | 1,788 | 1,796 | 1,817 | ||||||||||||||
Land vs. Offshore Rigs | |||||||||||||||||
Land | 1,539 | 1,546 | 1,590 | ||||||||||||||
Offshore | 249 | 250 | 227 | ||||||||||||||
Global Active Rigs | 1,788 | 1,796 | 1,817 | ||||||||||||||
U.S. Commodity Target | |||||||||||||||||
Oil/Gas | 521 | 572 | 599 | ||||||||||||||
Gas | 122 | 143 | 158 | ||||||||||||||
Unclassified | 6 | 4 | 4 | ||||||||||||||
Total U.S. Active Rigs | 649 | 719 | 761 | ||||||||||||||
U.S. Well Path | |||||||||||||||||
Horizontal | 578 | 650 | 692 | ||||||||||||||
Vertical | 17 | 19 | 28 | ||||||||||||||
Directional | 54 | 50 | 41 | ||||||||||||||
Total U.S. Active Rigs | 649 | 719 | 761 |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||||||||
September 30, | June 30, | September 30, | September 30, | September 30, | |||||||||||||||||||||||||
(in millions of dollars) | 2023 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||
Drilling & Downhole | $ | 95.0 | $ | 82.1 | $ | 73.3 | $ | 258.1 | $ | 218.6 | |||||||||||||||||||
Completions | 65.1 | 62.7 | 78.7 | 193.8 | 197.1 | ||||||||||||||||||||||||
Production | 38.7 | 41.5 | 45.7 | 112.1 | 149.9 | ||||||||||||||||||||||||
Total Orders | $ | 198.8 | $ | 186.3 | $ | 197.7 | $ | 564.0 | $ | 565.6 |
Three Months Ended September 30, | Change | ||||||||||||||||||||||
(in thousands of dollars, except per share information) | 2023 | 2022 | $ | % | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Drilling & Downhole | $ | 81,181 | $ | 75,723 | $ | 5,458 | 7.2 | % | |||||||||||||||
Completions | 62,473 | 72,246 | (9,773) | (13.5) | % | ||||||||||||||||||
Production | 36,877 | 34,238 | 2,639 | 7.7 | % | ||||||||||||||||||
Eliminations | (1,278) | (372) | (906) | * | |||||||||||||||||||
Total revenue | 179,253 | 181,835 | (2,582) | (1.4) | % | ||||||||||||||||||
Segment operating income | |||||||||||||||||||||||
Drilling & Downhole | 8,437 | 9,481 | (1,044) | (11.0) | % | ||||||||||||||||||
Operating margin % | 10.4 | % | 12.5 | % | |||||||||||||||||||
Completions | 2,147 | 5,915 | (3,768) | (63.7) | % | ||||||||||||||||||
Operating margin % | 3.4 | % | 8.2 | % | |||||||||||||||||||
Production | 1,803 | 665 | 1,138 | 171.1 | % | ||||||||||||||||||
Operating margin % | 4.9 | % | 1.9 | % | |||||||||||||||||||
Corporate | (6,861) | (8,411) | 1,550 | 18.4 | % | ||||||||||||||||||
Total segment operating income | 5,526 | 7,650 | (2,124) | (27.8) | % | ||||||||||||||||||
Operating margin % | 3.1 | % | 4.2 | % | |||||||||||||||||||
Gain on disposal of assets and other | (145) | (52) | (93) | * | |||||||||||||||||||
Operating income | 5,671 | 7,702 | (2,031) | (26.4) | % | ||||||||||||||||||
Interest expense | 4,504 | 8,143 | (3,639) | (44.7) | % | ||||||||||||||||||
Foreign exchange gains and other, net | (8,279) | (18,288) | 10,009 | * | |||||||||||||||||||
Total other income | (3,775) | (10,145) | 6,370 | 62.8 | % | ||||||||||||||||||
Income before income taxes | 9,446 | 17,847 | (8,401) | (47.1) | % | ||||||||||||||||||
Income tax expense | 1,477 | 1,370 | 107 | 7.8 | % | ||||||||||||||||||
Net income | $ | 7,969 | $ | 16,477 | $ | (8,508) | (51.6) | % | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | 10,235 | 5,778 | |||||||||||||||||||||
Diluted | 10,393 | 10,552 | |||||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | 0.78 | $ | 2.85 | |||||||||||||||||||
Diluted | $ | 0.77 | $ | 1.82 | |||||||||||||||||||
* not meaningful |
Nine Months Ended September 30, | Change | ||||||||||||||||||||||
(in thousands of dollars, except per share information) | 2023 | 2022 | $ | % | |||||||||||||||||||
Revenue | |||||||||||||||||||||||
Drilling & Downhole | $ | 238,652 | $ | 223,476 | $ | 15,176 | 6.8 | % | |||||||||||||||
Completions | 208,239 | 190,867 | 17,372 | 9.1 | % | ||||||||||||||||||
Production | 108,918 | 95,622 | 13,296 | 13.9 | % | ||||||||||||||||||
Eliminations | (2,150) | (710) | (1,440) | * | |||||||||||||||||||
Total revenue | 553,659 | 509,255 | 44,404 | 8.7 | % | ||||||||||||||||||
Segment operating income | |||||||||||||||||||||||
Drilling & Downhole | 25,165 | 23,995 | 1,170 | 4.9 | % | ||||||||||||||||||
Operating margin % | 10.5 | % | 10.7 | % | |||||||||||||||||||
Completions | 9,893 | 8,787 | 1,106 | 12.6 | % | ||||||||||||||||||
Operating margin % | 4.8 | % | 4.6 | % | |||||||||||||||||||
Production | 4,546 | (1,241) | 5,787 | 466.3 | % | ||||||||||||||||||
Operating margin % | 4.2 | % | (1.3) | % | |||||||||||||||||||
Corporate | (20,538) | (24,501) | 3,963 | 16.2 | % | ||||||||||||||||||
Total segment operating income | 19,066 | 7,040 | 12,026 | 170.8 | % | ||||||||||||||||||
Operating margin % | 3.4 | % | 1.4 | % | |||||||||||||||||||
Loss (gain) on disposal of assets and other | 137 | (938) | 1,075 | * | |||||||||||||||||||
Operating income | 18,929 | 7,978 | 10,951 | 137.3 | % | ||||||||||||||||||
Interest expense | 13,742 | 23,609 | (9,867) | (41.8) | % | ||||||||||||||||||
Foreign exchange losses (gains) and other, net | 1,129 | (37,112) | 38,241 | * | |||||||||||||||||||
Total other (income) expense, net | 14,871 | (13,503) | 28,374 | 210.1 | % | ||||||||||||||||||
Income before income taxes | 4,058 | 21,481 | (17,423) | (81.1) | % | ||||||||||||||||||
Income tax expense | 6,154 | 4,939 | 1,215 | 24.6 | % | ||||||||||||||||||
Net income (loss) | $ | (2,096) | $ | 16,542 | $ | (18,638) | (112.7) | % | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||||||
Basic | 10,208 | 5,736 | |||||||||||||||||||||
Diluted | 10,208 | 10,489 | |||||||||||||||||||||
Earnings per share | |||||||||||||||||||||||
Basic | $ | (0.21) | $ | 2.88 | |||||||||||||||||||
Diluted | $ | (0.21) | $ | 2.37 | |||||||||||||||||||
* not meaningful |
Nine Months Ended September 30, | |||||||||||
2023 | 2022 | ||||||||||
Net cash used in operating activities | $ | (3.1) | $ | (32.1) | |||||||
Net cash used in investing activities | (4.2) | (2.6) | |||||||||
Net cash provided by (used in) financing activities | (6.9) | 9.2 | |||||||||
Effect of exchange rate changes on cash | 0.3 | (1.6) | |||||||||
Net decrease in cash, cash equivalents and restricted cash | $ | (13.9) | $ | (27.1) |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||||||
Summarized Statements of Operations | 2023 | 2022 | 2023 | 2022 | |||||||||||||||||||
Revenue | $ | 133,202 | $ | 145,028 | $ | 424,210 | $ | 398,412 | |||||||||||||||
Cost of sales | 100,361 | 108,175 | 324,421 | 299,714 | |||||||||||||||||||
Operating income | 6,034 | 19,013 | 14,910 | 39,096 | |||||||||||||||||||
Net income (loss) | 7,969 | 16,477 | (2,096) | 16,542 |
September 30, 2023 | December 31, 2022 | ||||||||||
Summarized Balance Sheet | |||||||||||
Current assets | $ | 393,783 | $ | 378,812 | |||||||
Non-current assets | 258,480 | 279,389 | |||||||||
Current liabilities | $ | 157,492 | $ | 175,155 | |||||||
Payables to non-guarantor subsidiaries | 174,264 | 132,839 | |||||||||
Non-current liabilities | 179,358 | 293,150 |
Exhibit | ||||||||
Number | DESCRIPTION | |||||||
10.1** | — | |||||||
22.1* | — | |||||||
31.1** | — | |||||||
31.2** | — | |||||||
32.1** | — | |||||||
32.2** | — | |||||||
101.INS** | — | Inline XBRL Instance Document | ||||||
101.SCH** | — | Inline XBRL Taxonomy Extension Schema Document. | ||||||
101.CAL** | — | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | ||||||
101.LAB** | — | Inline XBRL Taxonomy Extension Label Linkbase Document. | ||||||
101.PRE** | — | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | ||||||
101.DEF** | — | Inline XBRL Taxonomy Extension Definition Linkbase Document. | ||||||
104** | — | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
FORUM ENERGY TECHNOLOGIES, INC. | ||||||||||||||
Date: | November 3, 2023 | By: | /s/ D. Lyle Williams, Jr. | |||||||||||
D. Lyle Williams, Jr. | ||||||||||||||
Executive Vice President and Chief Financial Officer | ||||||||||||||
(As Duly Authorized Officer and Principal Financial Officer) | ||||||||||||||
By: | /s/ Katherine C. Keller | |||||||||||||
Katherine C. Keller | ||||||||||||||
Vice President and Principal Accounting Officer | ||||||||||||||
(As Duly Authorized Officer and Principal Accounting Officer) |
Date: | November 3, 2023 | By: | /s/ Neal Lux | |||||||||||
Neal Lux | ||||||||||||||
President and Chief Executive Officer |
Date: | November 3, 2023 | By: | /s/ D. Lyle Williams, Jr. | |||||||||||
D. Lyle Williams, Jr. | ||||||||||||||
Executive Vice President and Chief Financial Officer |
Date: | November 3, 2023 | By: | /s/ Neal Lux | |||||||||||
Neal Lux | ||||||||||||||
President and Chief Executive Officer |
Date: | November 3, 2023 | By: | /s/ D. Lyle Williams, Jr. | |||||||||||
D. Lyle Williams, Jr. | ||||||||||||||
Executive Vice President and Chief Financial Officer |
Condensed Consolidated Statements of Comprehensive Loss - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Revenue | $ 179,253 | $ 181,835 | $ 553,659 | $ 509,255 |
Cost of sales | 128,231 | 130,472 | 399,229 | 370,700 |
Gross profit | 51,022 | 51,363 | 154,430 | 138,555 |
Operating expenses | ||||
Selling, general and administrative expenses | 45,496 | 43,713 | 135,364 | 131,515 |
Loss (gain) on disposal of assets and other | (145) | (52) | 137 | (938) |
Total operating expenses | 45,351 | 43,661 | 135,501 | 130,577 |
Operating income | 5,671 | 7,702 | 18,929 | 7,978 |
Other expense (income) | ||||
Interest expense | 4,504 | 8,143 | 13,742 | 23,609 |
Foreign exchange and other losses (gains), net | (8,279) | (18,288) | 1,129 | (37,112) |
Total other expense (income), net | (3,775) | (10,145) | 14,871 | (13,503) |
Income before taxes | 9,446 | 17,847 | 4,058 | 21,481 |
Income tax expense | 1,477 | 1,370 | 6,154 | 4,939 |
Net income (loss) | $ 7,969 | $ 16,477 | $ (2,096) | $ 16,542 |
Weighted average shares outstanding | ||||
Basic (in shares) | 10,235 | 5,778 | 10,208 | 5,736 |
Diluted (in shares) | 10,393 | 10,552 | 10,208 | 10,489 |
Earnings (loss) per share | ||||
Basic (in USD per share) | $ 0.78 | $ 2.85 | $ (0.21) | $ 2.88 |
Diluted (in USD per share) | $ 0.77 | $ 1.82 | $ (0.21) | $ 2.37 |
Other comprehensive income (loss), net of tax of $0: | ||||
Net income (loss) | $ 7,969 | $ 16,477 | $ (2,096) | $ 16,542 |
Change in foreign currency translation | (10,710) | (22,690) | 1,197 | (46,199) |
Gain (loss) on pension liability | (36) | 66 | (15) | 153 |
Comprehensive loss | $ (2,777) | $ (6,147) | $ (914) | $ (29,504) |
Condensed Consolidated Statements of Comprehensive Loss (Parenthetical) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Statement [Abstract] | ||||
Other comprehensive income (loss), tax | $ 0 | $ 0 | $ 0 | $ 0 |
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Trade accounts receivable allowance | $ 10,945 | $ 10,690 |
Common stock, par value (in USD per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 14,800,000 | 14,800,000 |
Common stock, shares issued (in shares) | 10,901,878 | 6,223,454 |
Treasury stock, common shares (in shares) | 708,900 | 570,247 |
Organization and Basis of Presentation |
9 Months Ended |
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Sep. 30, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation Forum Energy Technologies, Inc. (the “Company,” “FET,” “we,” “our,” or “us”), a Delaware corporation, is a global company serving the oil, natural gas, industrial and renewable energy industries. With headquarters located in Houston, Texas, FET provides value added solutions that increase the safety and efficiency of energy exploration and production. Basis of Presentation The Company's accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All intercompany transactions have been eliminated in consolidation. In management's opinion, all adjustments, consisting of normal recurring adjustments, necessary for the fair statement of the Company’s financial position, results of operations and cash flows have been included. Operating results for the three and nine months ended September 30, 2023 are not necessarily indicative of the results that may be expected for the year ending December 31, 2023 or any other interim period. These interim financial statements are unaudited and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) regarding interim financial reporting. Accordingly, they do not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete consolidated financial statements and should be read in conjunction with the audited consolidated financial statements for the year ended December 31, 2022, which are included in the Company’s 2022 Annual Report on Form 10-K filed with the SEC on February 28, 2023.
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Recent Accounting Pronouncements |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, which the Company adopts as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's consolidated financial statements upon adoption. Accounting Standard Adopted in 2023 Inflation Reduction Act of 2022. In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA, among other provisions, imposes a 15% corporate alternative minimum tax on the adjusted financial statement income of certain large corporations effective for tax years beginning after December 31, 2022 and a 1% excise tax on stock repurchases made by publicly traded U.S. corporations after December 31, 2022. The adoption of this standard did not have a material impact on our consolidated financial statements. Reference Rate Reform (Topic 848). In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, which provides temporary, optional practical expedients and exceptions to enable a smoother transition to the new reference rates which will replace the London Interbank Offered Rate (“LIBOR”) and other reference rates expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which expanded the scope to include derivative instruments impacted by the discounting transition. In December 2022, the FASB issued ASU 2022-06, which extended the temporary accounting rules from December 31, 2022 to December 31, 2024. Effective April 2023, the Company transitioned its Credit Facility from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
|
Revenue |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue | Revenue Revenue is recognized when control of the promised goods or services is transferred to our customers, in an amount that reflects the consideration we expect to be entitled to receive in exchange for those goods or services. For a detailed discussion of our revenue recognition policies, refer to the Company’s 2022 Annual Report on Form 10-K. Disaggregated Revenue Refer to Note 9 Business Segments for disaggregated revenue by product line and geography. Contract Balances Contract balances are determined on a contract by contract basis. Contract assets represent revenue recognized for goods and services provided to our customers when payment is conditioned on something other than the passage of time. Similarly, the Company records contract liability when we receive consideration, or such consideration is unconditionally due, from a customer prior to transferring goods or services to the customer under the terms of a sales contract. Such contract liabilities typically result from billings in excess of costs incurred on construction contracts and advance payments received on product sales. The following table reflects the changes in our contract assets and contract liabilities balances for the nine months ended September 30, 2023 (in thousands):
During the nine months ended September 30, 2023, our contract assets decreased by $7.6 million and our contract liabilities increased by $4.2 million primarily due to the timing of milestone billings for projects in our Subsea Technologies product line. During the nine months ended September 30, 2023, we recognized $12.6 million of revenue that was included in the contract liability balance at the beginning of the period. Substantially all of our contracts are less than one year in duration. As such, we have elected to apply the practical expedient which allows an entity to exclude disclosures about its remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less
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Inventories |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories The Company's significant components of inventory at September 30, 2023 and December 31, 2022 were as follows (in thousands):
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Intangible Assets |
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Intangible Assets | Intangible Assets Intangible assets consisted of the following as of September 30, 2023 and December 31, 2022, respectively (in thousands):
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Debt |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt | Debt Notes payable and lines of credit as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
2025 Notes In August 2020, we exchanged $315.5 million principal amount of our previous 6.25% unsecured notes due 2021 for new 9.00% convertible secured notes due August 2025 (the “2025 Notes”). The 2025 Notes pay interest at the rate of 9.00%, of which 6.25% is payable in cash and 2.75% is payable in cash or additional notes, at the Company’s option. The 2025 Notes are secured by a first lien on substantially all of the Company’s assets, except for Credit Facility priority collateral, which secures the 2025 Notes on a second lien basis. During the nine months ended September 30, 2023, $122.8 million or 48% of the principal amount of the 2025 Notes mandatorily converted into approximately 4.5 million shares of common stock. Credit Facility Our senior secured revolving credit facility (“Credit Facility”), which has a maturity date of September 2026, provides revolving credit commitments of $179.0 million (with a sublimit of up to $70.0 million available for the issuance of letters of credit for the account of the Company and certain of its domestic subsidiaries) (the “U.S. Line”), of which up to $20.0 million is available to certain of our Canadian subsidiaries for loans in U.S. or Canadian dollars (with a sublimit of up to $3.0 million available for the issuance of letters of credit for the account of our Canadian subsidiaries) (the “Canadian Line”). Availability under the Credit Facility is subject to a borrowing base calculated by reference to eligible accounts receivable in the U.S., Canada and certain other jurisdictions (subject to a cap) and eligible inventory in the U.S. and Canada. Such eligible accounts receivable and eligible inventory serve as priority collateral for the Credit Facility, which is also secured on a second lien basis by substantially all of the Company's other assets. The amount of eligible inventory included in the borrowing base is restricted to the lesser of $124.0 million (subject to a quarterly reduction of $0.5 million) and 80.0% of the total borrowing base. Our borrowing capacity under the Credit Facility could be reduced or eliminated, depending on future fluctuations in our receivables and inventory. As of September 30, 2023, our total borrowing base was $173.3 million, of which no amount was drawn and $18.5 million was used for security of outstanding letters of credit, resulting in remaining availability of $154.8 million. Borrowings under the U.S. Line are subject to an interest rate equal to, at the Company's option, either (a) the SOFR, subject to a floor of 0.00%, plus a margin of 2.25% to 2.75%, or (b) a base rate plus a margin of 1.25% to 1.75%, in each case based upon the Company's quarterly total net leverage ratio, with the U.S. Line base rate determined by reference to the greatest of (i) the federal funds rate plus 0.50% per annum, (ii) the one-month adjusted SOFR plus 1.00% per annum, and (iii) the rate of interest announced, from time to time, by Wells Fargo at its principal office in San Francisco as its prime rate, subject to a floor of 0.00%. Borrowings under the Canadian Line were subject to an interest rate during the reporting period equal to, our subsidiary's option, either (a) the Canadian Dollar Offered Rate (“CDOR”), subject to a floor of 0.00%, plus a margin of 2.25% to 2.75%, or (b) a base rate plus a margin of 1.25% to 1.75%, in each case based upon the Company's quarterly net leverage ratio. The Canadian line base rate is determined by reference to the greater of (i) the one-month CDOR plus 1.00% and (ii) the prime rate for Canadian dollar commercial loans made in Canada as reported by Thomson Reuters, subject to a floor of 0.00%. The weighted average interest rate under the Credit Facility was approximately 8.28% for the nine months ended September 30, 2023. The Credit Facility also provides for a commitment fee in the amount of (a) 0.375% on the unused portion of commitments if average usage of the Credit Facility is greater than 50% and (b) 0.500% on the unused portion of commitments if average usage of the Credit Facility is less than or equal to 50%. If excess availability under the Credit Facility falls below the greater of 12.5% of the borrowing base and $22.4 million, we will be required to maintain a fixed charge coverage ratio of at least 1.00:1.00 as of the end of each fiscal quarter until excess availability under the Credit Facility exceeds such thresholds for at least 60 consecutive days. Furthermore, the Credit Facility includes an obligation to prepay outstanding loans with cash on hand in excess of certain thresholds and includes a cross-default to the 2025 Notes. Deferred Loan Costs We have incurred loan costs that have been deferred and are amortized to interest expense over the term of the 2025 Notes and the Credit Facility. In connection with the September 2021 Credit Facility amendment, we deferred approximately $1.6 million of loan costs that will be amortized over the facility's remaining life. Other Debt Other debt consists primarily of various finance leases of equipment. Letters of Credit and Guarantees We execute letters of credit in the normal course of business to secure the delivery of product from specific vendors and also to guarantee our fulfillment of performance obligations relating to certain large contracts. The Company had $18.5 million and $21.8 million in total outstanding letters of credit as of September 30, 2023 and December 31, 2022, respectively.
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Income Taxes |
9 Months Ended |
---|---|
Sep. 30, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For interim periods, our income tax expense or benefit is computed based on our estimated annual effective tax rate and any discrete items that impact the interim periods. For the three and nine months ended September 30, 2023, the Company recorded a tax expense of $1.5 million and $6.2 million, respectively. For the three and nine months ended September 30, 2022, the Company recorded a tax expense of $1.4 million and $4.9 million, respectively. The estimated annual effective tax rates for all periods were impacted by losses in jurisdictions where the recording of a tax benefit is not available. Furthermore, the tax expense or benefit recorded can vary from period to period depending on the Company’s relative mix of earnings and losses by jurisdiction. Finally, the Company believes that it is reasonably possible that a decrease of approximately $1.5 million of noncurrent unrecognized tax benefits may occur by the end of 2023 as a result of a lapse of the statute of limitations.We have deferred tax assets related to net operating loss and other tax carryforwards in the U.S. and in certain states and foreign jurisdictions. We recognize deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax-planning and recent operating results. As of September 30, 2023, we do not anticipate being able to fully utilize all of the losses prior to their expiration in the following jurisdictions: the U.S., the U.K., Germany, Singapore, China and Saudi Arabia. As a result, we have certain valuation allowances against our deferred tax assets as of September 30, 2023. |
Fair Value Measurements |
9 Months Ended |
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Sep. 30, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company had no borrowings outstanding under the Credit Facility as of September 30, 2023. The Credit Facility incurs interest at a variable interest rate, and therefore, the carrying amount approximates fair value. The fair value of the debt is classified as a Level 2 measurement because interest rates charged are similar to other financial instruments with similar terms and maturities. The fair value of our 2025 Notes is estimated using Level 2 inputs in the fair value hierarchy and is based on quoted prices for those or similar instruments. At September 30, 2023, the fair value and the carrying value of our 2025 Notes approximated $130.1 million and $127.0 million, respectively. At December 31, 2022, the fair value and the carrying value of our 2025 Notes approximated $272.8 million and $237.9 million, respectively. There were no other significant outstanding financial instruments as of September 30, 2023 and December 31, 2022 that required measuring the amounts at fair value on a recurring basis. We did not change our valuation techniques associated with recurring fair value measurements from prior periods, and there were no transfers between levels of the fair value hierarchy during the nine months ended September 30, 2023.
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Business Segments |
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Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Segments | Business Segments The Company reports results of operations in the following three reporting segments: Drilling & Downhole, Completions, and Production. The amounts indicated below as “Corporate” relate to costs and assets not allocated to the reportable segments. Summary financial data by segment follows (in thousands):
A summary of consolidated assets by reportable segment is as follows (in thousands):
The following table presents our revenues disaggregated by product line (in thousands):
The following table presents our revenues disaggregated by geography (in thousands):
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Commitments and Contingencies |
9 Months Ended |
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Sep. 30, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies In the ordinary course of business, the Company is, and in the future could be, involved in various pending or threatened legal actions, some of which may or may not be covered by insurance. Management has reviewed such pending judicial and legal proceedings, the reasonably anticipated costs and expenses in connection with such proceedings, and the availability and limits of insurance coverage, and has established reserves that are believed to be appropriate in light of those outcomes that are believed to be probable and can be estimated. The reserves accrued at September 30, 2023 and December 31, 2022, respectively, are immaterial. In the opinion of management, the Company’s ultimate liability, if any, with respect to these actions is not expected to have a material adverse effect on the Company’s financial position, results of operations or cash flows. In October of 2017, one of our subsidiaries, Global Tubing LLC (“Global Tubing”), filed suit against Tenaris Coiled Tubes, LLC and Tenaris, S.A. (together “Tenaris”) in the United States District Court for the Southern District of Texas seeking a declaration that its DURACOILTM products do not infringe certain Tenaris patents related to coiled tubing. Tenaris filed counterclaims against Global Tubing alleging DURACOILTM products infringe three patents. Tenaris sought unspecified damages and a permanent injunction. In response, Global Tubing alleged that its products do not infringe and the Tenaris patents are invalid and unenforceable. On March 20, 2023, the court agreed with Global Tubing, finding all patents unenforceable and dismissing all Tenaris infringement claims. Global Tubing intends to seek an award of its attorneys’ fees and costs incurred as a result of the litigation. Tenaris has appealed the final judgment and Global Tubing has filed a cross-appeal. For further disclosure regarding certain litigation matters, refer to Note 12 of the notes to the consolidated financial statements included in Item 8 of the Company’s 2022 Annual Report on Form 10-K filed with the SEC on February 28, 2023.
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Earnings (Loss) Per Share |
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Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings (Loss) Per Share | Earnings (Loss) Per Share The calculation of basic and diluted earnings per share for each period presented was as follows (dollars and shares in thousands, except per share amounts):
The calculation of diluted earnings per share excluded approximately 46 thousand shares that were anti-dilutive for the three months ended September 30, 2023. For the nine months ended September 30, 2023, we excluded all potentially dilutive restricted shares and stock options in calculating diluted earnings per share as the effect was anti-dilutive due to net losses incurred for the period. For the three months and nine months ended September 30, 2022, the diluted earnings per share calculation excluded approximately 54 thousand and 95 thousand shares, respectively. Diluted earnings per share was calculated using treasury stock method for the restricted shares and stock options; and if-converted method for the convertible notes.
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Stockholders' Equity |
9 Months Ended |
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Sep. 30, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders' Equity Stock-based compensation During the nine months ended September 30, 2023, the Company granted 86,912 time-based restricted stock units to employees that vest ratably over three years. In addition, during the nine months ended September 30, 2023, the Company granted 86,912 performance restricted stock units to employees (assuming target performance) that vest based upon the total shareholder return of the Company's common stock as compared to a group of peer companies over three different performance periods. The performance periods run from January 1, 2023 through December 31, 2023, January 1, 2023 through December 31, 2024 and January 1, 2023 through December 31, 2025, and 1/3 of each award is allocated to each performance period. The performance restricted stock units may settle for between 0% and 200% of the target units granted in shares of the Company’s common stock.
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Related Party Transactions |
9 Months Ended |
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Sep. 30, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company has sold and purchased inventory, services and fixed assets to and from various affiliates of certain directors. The dollar amounts of these related party activities are not significant to the Company’s unaudited condensed consolidated financial statements. |
Subsequent Events |
9 Months Ended |
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Sep. 30, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events On November 1, 2023, the Company and its wholly owned subsidiary entered into a purchase agreement with Variperm Holdings Ltd. ("Variperm") and its shareholders to acquire all of the issued and outstanding common shares of Variperm. The Company expects the transaction to close during January 2024. Variperm, headquartered in Canada, is a manufacturer of downhole technology solutions, providing sand and flow control products for heavy oil applications. Total consideration for the acquisition includes approximately $150.0 million of cash and 2.0 million shares of the Company's common stock, subject to customary purchase price adjustments set forth in the purchase agreement. The purchase agreement was filed in the Company's Current Report on Form 8-K on November 3, 2023. On November 1, 2023, the Company entered into an amendment to the Credit Facility that, among other things, permits the acquisition of Variperm, permits the incurrence of either new secured notes in an amount not to exceed $200.0 million or other financing, extends the maturity date of the Credit Agreement to September 8, 2028, increases the aggregate revolving commitments to $250.0 million from $179.0 million, and updates the CDOR provisions with Canadian Overnight Repo Rate Average.
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Recent Accounting Pronouncements (Policies) |
9 Months Ended |
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Sep. 30, 2023 | |
Accounting Policies [Abstract] | |
Recent Accounting Pronouncements | Recent Accounting Pronouncements From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board, which the Company adopts as of the specified effective date. Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company's consolidated financial statements upon adoption. Accounting Standard Adopted in 2023 Inflation Reduction Act of 2022. In August 2022, the Inflation Reduction Act of 2022 (“IRA”) was signed into law. The IRA, among other provisions, imposes a 15% corporate alternative minimum tax on the adjusted financial statement income of certain large corporations effective for tax years beginning after December 31, 2022 and a 1% excise tax on stock repurchases made by publicly traded U.S. corporations after December 31, 2022. The adoption of this standard did not have a material impact on our consolidated financial statements. Reference Rate Reform (Topic 848). In March 2020, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2020-04, which provides temporary, optional practical expedients and exceptions to enable a smoother transition to the new reference rates which will replace the London Interbank Offered Rate (“LIBOR”) and other reference rates expected to be discontinued. In January 2021, the FASB issued ASU 2021-01, which expanded the scope to include derivative instruments impacted by the discounting transition. In December 2022, the FASB issued ASU 2022-06, which extended the temporary accounting rules from December 31, 2022 to December 31, 2024. Effective April 2023, the Company transitioned its Credit Facility from LIBOR to the Secured Overnight Financing Rate (“SOFR”). The adoption of this standard did not have a material impact on the Company's consolidated financial statements.
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Revenue (Tables) |
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Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Changes in Contract Assets and Contract Liabilities | The following table reflects the changes in our contract assets and contract liabilities balances for the nine months ended September 30, 2023 (in thousands):
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Inventories (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventory | The Company's significant components of inventory at September 30, 2023 and December 31, 2022 were as follows (in thousands):
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Intangible Assets (Tables) |
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Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Intangible Assets | Intangible assets consisted of the following as of September 30, 2023 and December 31, 2022, respectively (in thousands):
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Debt (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Debt | Notes payable and lines of credit as of September 30, 2023 and December 31, 2022 consisted of the following (in thousands):
|
Business Segments (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Segment Reporting [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Financial Data by Segment and Assets by Reportable Segment | Summary financial data by segment follows (in thousands):
A summary of consolidated assets by reportable segment is as follows (in thousands):
|
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Schedule of Revenue from External Customers by Products and Services | The following table presents our revenues disaggregated by product line (in thousands):
|
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Schedule of Revenue Disaggregated by Geography | The following table presents our revenues disaggregated by geography (in thousands):
|
Earnings (Loss) Per Share (Tables) |
9 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Sep. 30, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Earnings Per Share [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Earnings Per Share, Basic and Diluted | The calculation of basic and diluted earnings per share for each period presented was as follows (dollars and shares in thousands, except per share amounts):
|
Revenue - Schedule of Changes in Contract Assets and Contract Liabilities (Details) - USD ($) $ in Thousands |
9 Months Ended | |
---|---|---|
Sep. 30, 2023 |
Dec. 31, 2022 |
|
Contract with Customer, Asset, after Allowance for Credit Loss [Abstract] | ||
Accrued revenue | $ 771 | $ 665 |
Costs and estimated profits in excess of billings | 8,440 | 15,139 |
Contract assets - current | 9,211 | 15,804 |
Contract assets - noncurrent | 1,637 | 2,638 |
Contract assets | 10,848 | 18,442 |
Increase (decrease) in contract with customer assets | $ (7,594) | |
Increase (decrease) in contract with customer assets (as percent) | (41.00%) | |
Contract with Customer, Liability [Abstract] | ||
Deferred revenue | $ 14,140 | 14,401 |
Billings in excess of costs and profits recognized | 4,739 | 305 |
Contract liabilities | 18,879 | $ 14,706 |
Increase (decrease) in contract with customer liabilities | $ 4,173 | |
Increase (decrease) in contract with customer liability (as percent) | 28.00% |
Revenue - Narrative (Details) $ in Thousands |
9 Months Ended |
---|---|
Sep. 30, 2023
USD ($)
| |
Revenue from Contract with Customer [Abstract] | |
Increase (decrease) in contract with customer assets | $ (7,594) |
Increase (decrease) in contract with customer liabilities | 4,173 |
Revenue recognized | $ 12,600 |
Contract with customer, contract duration (less than) | 1 year |
Inventories (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw materials and parts | $ 98,100 | $ 94,182 |
Work in process | 31,529 | 27,489 |
Finished goods | 211,035 | 187,448 |
Total inventories | 340,664 | 309,119 |
Less: inventory reserve | (38,360) | (39,291) |
Inventories, net | $ 302,304 | $ 269,828 |
Debt - Schedule of Long-Term Debt (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Debt Instrument [Line Items] | ||
Unamortized debt discount | $ (5,785) | $ (15,314) |
Debt issuance cost | (1,420) | (3,759) |
Total debt | 129,613 | 239,910 |
Less: current portion | (1,076) | (782) |
Long-term debt, net of current portion | 128,537 | 239,128 |
2025 Notes | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 134,208 | 256,970 |
Credit Facility | 2017 Credit Facility | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | 0 | 0 |
Other debt | ||
Debt Instrument [Line Items] | ||
Long-term debt, gross | $ 2,610 | $ 2,013 |
Income Taxes (Details) - USD ($) $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Income Tax Disclosure [Abstract] | ||||
Income tax expense | $ 1,477 | $ 1,370 | $ 6,154 | $ 4,939 |
Unrecognized tax benefits, reduction resulting from lapse of applicable statute of limitations | $ 1,500 |
Fair Value Measurements (Details) - USD ($) |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Fair value of financial assets amount outstanding | $ 0 | $ 0 |
Credit Facility | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Debt instrument, carrying value | 0 | |
2025 Notes | Fair Value, Inputs, Level 2 | ||
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
Debt instrument, carrying value | 127,000,000 | 237,900,000 |
Fair value | $ 130,100,000 | $ 272,800,000 |
Business Segments - Narrative (Details) |
9 Months Ended |
---|---|
Sep. 30, 2023
segment
| |
Segment Reporting [Abstract] | |
Number of reportable segments | 3 |
Business Segments - Assets by Segment (Details) - USD ($) $ in Thousands |
Sep. 30, 2023 |
Dec. 31, 2022 |
---|---|---|
Segment Reporting Information [Line Items] | ||
Assets | $ 828,871 | $ 834,757 |
Operating Segments | Drilling & Downhole | ||
Segment Reporting Information [Line Items] | ||
Assets | 347,503 | 340,819 |
Operating Segments | Completions | ||
Segment Reporting Information [Line Items] | ||
Assets | 357,174 | 366,771 |
Operating Segments | Production | ||
Segment Reporting Information [Line Items] | ||
Assets | 100,149 | 95,089 |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Assets | $ 24,045 | $ 32,078 |
Commitments and Contingencies (Details) |
1 Months Ended |
---|---|
Oct. 31, 2017
patent
| |
Tenaris Litigation | |
Loss Contingencies [Line Items] | |
Loss contingency, patents allegedly infringed, number | 3 |
Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands |
3 Months Ended | 9 Months Ended | ||
---|---|---|---|---|
Sep. 30, 2023 |
Sep. 30, 2022 |
Sep. 30, 2023 |
Sep. 30, 2022 |
|
Earnings Per Share [Abstract] | ||||
Net income (loss) - basic | $ 7,969 | $ 16,477 | $ (2,096) | $ 16,542 |
Interest on dilutive convertible notes due 2025 | 0 | 2,762 | 0 | 8,286 |
Net income (loss) - diluted | $ 7,969 | $ 19,239 | $ (2,096) | $ 24,828 |
Weighted average shares outstanding - basic (in shares) | 10,235 | 5,778 | 10,208 | 5,736 |
Dilutive effect of stock options and restricted stock (in shares) | 158 | 227 | 0 | 206 |
Dilutive effect of convertible notes due 2025 (in shares) | 0 | 4,547 | 0 | 4,547 |
Weighted average shares outstanding - diluted (in shares) | 10,393 | 10,552 | 10,208 | 10,489 |
Earnings (loss) per share | ||||
Basic (in USD per share) | $ 0.78 | $ 2.85 | $ (0.21) | $ 2.88 |
Diluted (in USD per share) | $ 0.77 | $ 1.82 | $ (0.21) | $ 2.37 |
Anti-dilutive shares excluded (in shares) | 46 | 54 | 95 |
Subsequent Events (Details) - USD ($) shares in Millions |
Nov. 01, 2023 |
Sep. 30, 2023 |
---|---|---|
Revolving Credit Facility | Secured Debt | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Face amount | $ 200,000,000 | |
Revolving Credit Facility | Credit Facility | ||
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | $ 179,000,000 | |
Revolving Credit Facility | Credit Facility | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Line of credit facility, maximum borrowing capacity | 250,000,000 | |
Variperm Holdings Ltd | Subsequent Event | ||
Subsequent Event [Line Items] | ||
Business combination, consideration transferred | $ 150,000,000 | |
Number in shares in acquisition (in shares) | 2.0 |
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