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 | 45-2809926 |
(State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
Large accelerated filer ☐ | Accelerated filer ý | Non-accelerated filer ☐ | Smaller reporting company ☐ | Emerging Growth Company ý |
(do not check if a smaller reporting company) |
PAGE | ||
PART I | ||
ITEM 1. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
PART II | ||
ITEM 1. | ||
ITEM 1A. | ||
ITEM 2. | ||
ITEM 3. | ||
ITEM 4. | ||
ITEM 5. | ||
ITEM 6. | ||
June 30, 2018 | December 31, 2017 | ||||||
(unaudited) | |||||||
(in thousands, except share amounts) | |||||||
Assets | |||||||
Current assets: | |||||||
Cash and cash equivalents | $ | 1,745 | $ | 34,740 | |||
Restricted cash | — | 487 | |||||
Accounts receivable | 24,086 | 23,377 | |||||
Unbilled receivables | 4,907 | 1,192 | |||||
Inventories | 11,546 | 9,532 | |||||
Prepaid expenses and other current assets | 4,829 | 3,849 | |||||
Total current assets | 47,113 | 73,177 | |||||
Property, plant and equipment, net | 223,993 | 171,762 | |||||
Intangible assets, net | 19,686 | — | |||||
Goodwill | 16,892 | — | |||||
Deferred financing costs, net | 438 | 892 | |||||
Other assets | 3,360 | 971 | |||||
Total assets | $ | 311,482 | $ | 246,802 | |||
Liabilities and Stockholders’ Equity | |||||||
Current liabilities: | |||||||
Accounts payable | $ | 13,367 | $ | 26,123 | |||
Accrued and other expenses | 11,372 | 7,576 | |||||
Deferred revenue | 4,805 | — | |||||
Current portion of equipment financing obligations | 432 | 572 | |||||
Current portion of notes payable | — | 288 | |||||
Total current liabilities | 29,976 | 34,559 | |||||
Revolving credit facility, net | 44,654 | — | |||||
Deferred tax liabilities, long-term, net | 15,886 | 13,239 | |||||
Asset retirement obligation | 9,476 | 8,982 | |||||
Contingent consideration | 9,200 | — | |||||
Total liabilities | 109,192 | 56,780 | |||||
Commitments and contingencies (Note 18) | |||||||
Stockholders’ equity | |||||||
Common stock, $0.001 par value, 350,000,000 shares authorized; 40,639,837 issued and 40,529,182 outstanding at June 30, 2018; 40,474,085 issued and 40,393,033 outstanding at December 31, 2017 | 40 | 40 | |||||
Treasury stock, at cost, 110,655 and 81,052 shares at June 30, 2018 and December 31, 2017, respectively | (839 | ) | (666 | ) | |||
Additional paid-in capital | 160,428 | 159,059 | |||||
Retained earnings | 42,585 | 31,589 | |||||
Accumulated other comprehensive income | 76 | — | |||||
Total stockholders’ equity | 202,290 | 190,022 | |||||
Total liabilities and stockholders’ equity | $ | 311,482 | $ | 246,802 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except per share amounts) | |||||||||||||||
Revenues | $ | 54,448 | $ | 29,787 | $ | 97,076 | $ | 54,847 | |||||||
Cost of goods sold | 34,678 | 21,407 | 70,091 | 41,063 | |||||||||||
Gross profit | 19,770 | 8,380 | 26,985 | 13,784 | |||||||||||
Operating expenses: | |||||||||||||||
Salaries, benefits and payroll taxes | 2,790 | 2,167 | 5,362 | 3,864 | |||||||||||
Depreciation and amortization | 476 | 120 | 664 | 229 | |||||||||||
Selling, general and administrative | 3,595 | 2,283 | 6,696 | 4,317 | |||||||||||
Total operating expenses | 6,861 | 4,570 | 12,722 | 8,410 | |||||||||||
Operating income | 12,909 | 3,810 | 14,263 | 5,374 | |||||||||||
Other income (expenses): | |||||||||||||||
Interest expense, net | (500 | ) | (115 | ) | (680 | ) | (226 | ) | |||||||
Other income | 25 | 83 | 58 | 120 | |||||||||||
Total other expenses, net | (475 | ) | (32 | ) | (622 | ) | (106 | ) | |||||||
Income before income tax expense | 12,434 | 3,778 | 13,641 | 5,268 | |||||||||||
Income tax expense | 2,413 | 1,154 | 2,645 | 1,668 | |||||||||||
Net income | $ | 10,021 | $ | 2,624 | $ | 10,996 | $ | 3,600 | |||||||
Net income per common share: | |||||||||||||||
Basic | $ | 0.25 | $ | 0.07 | $ | 0.27 | $ | 0.09 | |||||||
Diluted | $ | 0.25 | $ | 0.06 | $ | 0.27 | $ | 0.09 | |||||||
Weighted-average number of common shares: | |||||||||||||||
Basic | 40,499 | 40,347 | 40,455 | 40,024 | |||||||||||
Diluted | 40,550 | 40,453 | 40,550 | 40,167 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands, except per share amounts) | (in thousands, except per share amounts) | ||||||||||||||
Net income | $ | 10,021 | $ | 2,624 | $ | 10,996 | $ | 3,600 | |||||||
Other comprehensive income: | |||||||||||||||
Foreign currency translation adjustment | 76 | — | 76 | — | |||||||||||
Comprehensive income | $ | 10,097 | $ | 2,624 | $ | 11,072 | $ | 3,600 |
Common Stock | Treasury Stock | Additional | Accumulated Other | Total | |||||||||||||||||||||||||
Outstanding Shares | Par Value | Shares | Amount | Paid-in Capital | Retained Earnings | Comprehensive Income | Stockholders' Equity | ||||||||||||||||||||||
(in thousands, except share amounts) | |||||||||||||||||||||||||||||
Balance at December 31, 2017 | 40,393,033 | $ | 40 | 81,052 | $ | (666 | ) | $ | 159,059 | $ | 31,589 | $ | — | $ | 190,022 | ||||||||||||||
Foreign currency translation adjustment | — | — | — | — | — | — | 76 | 76 | |||||||||||||||||||||
Vesting of restricted stock | 156,113 | — | — | — | — | — | — | — | |||||||||||||||||||||
Stock-based compensation | — | — | — | — | 1,260 | — | — | 1,260 | |||||||||||||||||||||
Employee stock purchase plan compensation | — | — | — | — | 38 | — | — | 38 | |||||||||||||||||||||
Employee stock purchase plan issuance | 9,639 | — | — | — | 71 | — | — | 71 | |||||||||||||||||||||
Restricted stock buy back | (29,603 | ) | — | 29,603 | (173 | ) | — | — | — | (173 | ) | ||||||||||||||||||
Net income | — | — | — | — | — | 10,996 | — | 10,996 | |||||||||||||||||||||
Balance at June 30, 2018 | 40,529,182 | $ | 40 | 110,655 | $ | (839 | ) | $ | 160,428 | $ | 42,585 | $ | 76 | $ | 202,290 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Operating activities: | |||||||
Net income | $ | 10,996 | $ | 3,600 | |||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Depreciation, depletion and accretion of asset retirement obligation | 7,359 | 3,412 | |||||
Amortization of intangible assets | 284 | — | |||||
Asset retirement obligation settlement | (1,783 | ) | — | ||||
Loss (gain) on disposal of assets | — | 157 | |||||
Amortization of deferred financing cost | 138 | 222 | |||||
Accretion of debt discount | 116 | — | |||||
Deferred income taxes | 2,647 | 4,158 | |||||
Stock-based compensation | 1,298 | 760 | |||||
Changes in assets and liabilities, net of effects of acquisitions: | |||||||
Accounts receivable | (597 | ) | (9,497 | ) | |||
Unbilled receivables | (3,715 | ) | 276 | ||||
Inventories | (315 | ) | 4,555 | ||||
Prepaid expenses and other assets | (2,975 | ) | (3,415 | ) | |||
Deferred revenue | 4,805 | (1,610 | ) | ||||
Accounts payable | (3,057 | ) | 13 | ||||
Accrued and other expenses | 3,636 | 5,091 | |||||
Income taxes payable | — | (7,058 | ) | ||||
Net cash provided by operating activities | 18,837 | 664 | |||||
Investing activities: | |||||||
Acquisition of businesses, net of cash acquired | (29,878 | ) | — | ||||
Purchases of property, plant and equipment | (66,841 | ) | (7,729 | ) | |||
Proceeds from disposal of assets | — | 14 | |||||
Net cash used in investing activities | (96,719 | ) | (7,715 | ) | |||
Financing activities: | |||||||
Repayments of notes payable | (288 | ) | (282 | ) | |||
Payments under equipment financing obligations | (140 | ) | (208 | ) | |||
Payment of deferred financing costs | (146 | ) | (193 | ) | |||
Proceeds from revolving credit facility | 59,000 | — | |||||
Repayment of revolving credit facility | (14,000 | ) | — | ||||
Proceeds from equity issuance | 71 | 26,251 | |||||
Payment of equity transaction costs | — | (2,083 | ) | ||||
Purchase of treasury stock | (173 | ) | (127 | ) | |||
Net cash provided by financing activities | 44,324 | 23,358 | |||||
Effect of exchange rate changes on cash, cash equivalents and restricted cash | 76 | — | |||||
Net (decrease) increase in cash, cash equivalents and restricted cash | (33,482 | ) | 16,307 | ||||
Cash and cash equivalents and restricted cash at beginning of year | 35,227 | 47,534 | |||||
Cash and cash equivalents and restricted cash at end of period | $ | 1,745 | $ | 63,841 | |||
Supplemental disclosure of cash flow information | |||||||
Cash paid for interest | $ | 650 | $ | 94 | |||
Cash paid for taxes | $ | 654 | $ | 7,596 | |||
Non-cash investing activities: | |||||||
Contingent consideration | $ | 9,200 | $ | — | |||
Asset retirement obligation | $ | 2,086 | $ | — | |||
Non-cash financing activities: | |||||||
Capitalized expenditures in accounts payable and accrued expenses | $ | 6,585 | $ | 3,006 |
Years | |
Land improvements | 10 |
Plant and buildings | 5-15 |
Real estate properties | 10-40 |
Railroad and sidings | 30 |
Vehicles | 3-5 |
Machinery, equipment and tooling | 3-15 |
Furniture and fixtures | 3-10 |
Deferred stripping costs | 3 |
• | Level 1—Inputs are unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access at the measurement date; |
• | Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active or other inputs corroborated by observable market data for substantially the full term of the assets or liabilities; and |
• | Level 3—Unobservable inputs that reflect the Company’s assumptions that market participants would use in pricing assets or liabilities based on the best information available. |
June 30, 2018 | Level 1 | Level 2 | Level 3 | |||||||||||||
Contingent consideration | $ | 9,200 | $ | — | $ | — | $ | 9,200 | ||||||||
Total liabilities | $ | 9,200 | $ | — | $ | — | $ | 9,200 |
Balance as of January 1, 2017 | $ | — | ||
Contingent consideration pursuant to acquisition | 9,200 | |||
Payment of contingent consideration | — | |||
Change in fair value of contingent consideration | — | |||
Balance as of June 30, 2017 | $ | 9,200 |
Three Months Ended June 30, 2018 | Six Months Ended June 30, 2018 | |||||||
Foreign currency translation adjustments | Foreign currency translation adjustments | |||||||
Beginning balance | $ | — | $ | — | ||||
Other comprehensive income before reclassifications | 76 | 76 | ||||||
Amounts reclassed from accumulated other comprehensive income | — | — | ||||||
Ending balance | $ | 76 | $ | 76 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||
Weighted average common shares outstanding | 40,499 | 40,347 | 40,455 | 40,024 | |||||||
Assumed conversion of restricted stock | 51 | 106 | 95 | 143 | |||||||
Diluted weighted average common stock outstanding | 40,550 | 40,453 | 40,550 | 40,167 |
Machinery, equipment and tooling | $ | 1,478 | |
Plant and building | 1,407 | ||
Railroad and sidings | 9,926 | ||
Land improvements | 2,738 | ||
Total assets acquired | $ | 15,549 |
Base price - cash | $ | 30,000 | |
Contingent consideration – earnout | 9,200 | ||
Working capital adjustment | (122 | ) | |
Total purchase consideration | $ | 39,078 |
Fair Value | Useful Life (in years) | |||||
Assets Acquired | ||||||
Accounts receivable | $ | 112 | ||||
Inventory | 1,700 | |||||
Prepaid expenses and other current assets | 126 | |||||
Total current assets acquired | $ | 1,938 | ||||
Property, plant and equipment | 740 | |||||
Customer relationships | 270 | 1 year | ||||
Developed technology | 18,800 | 6 years | ||||
Trade name | 900 | Indefinite | ||||
Goodwill | 16,935 | |||||
Other assets | 225 | |||||
Total non-current assets acquired | 37,870 | |||||
Total assets acquired | $ | 39,808 | ||||
Liabilities Assumed | ||||||
Accounts payable | $ | 331 | ||||
Accrued and other expenses | 399 | |||||
Other current liabilities | ||||||
Total liabilities assumed | 730 | |||||
Estimated fair value of net assets acquired | $ | 39,078 |
June 30, 2018 | December 31, 2017 | ||||||
Raw material | $ | 187 | $ | 298 | |||
Work in progress | 7,303 | 7,825 | |||||
Finished goods | 2,782 | 832 | |||||
Spare parts | 1,274 | 577 | |||||
Total inventory | $ | 11,546 | $ | 9,532 |
June 30, 2018 | December 31, 2017 | ||||||
Prepaid insurance | $ | 403 | $ | 551 | |||
Prepaid expenses | 1,576 | 1,112 | |||||
Prepaid income taxes | 1,751 | 1,382 | |||||
Rail rebate receivables | 502 | 776 | |||||
Other receivables | 597 | 28 | |||||
Total prepaid expenses and other current assets | $ | 4,829 | $ | 3,849 |
June 30, 2018 | December 31, 2017 | ||||||
Machinery, equipment and tooling | $ | 11,791 | $ | 7,802 | |||
Vehicles | 1,671 | 1,546 | |||||
Furniture and fixtures | 760 | 720 | |||||
Plant and building | 143,622 | 81,561 | |||||
Real estate properties | 4,441 | 4,432 | |||||
Railroad and sidings | 25,691 | 10,254 | |||||
Land improvements | 25,870 | 16,378 | |||||
Asset retirement obligation | 10,493 | 8,408 | |||||
Mineral properties | 9,879 | 9,878 | |||||
Deferred mining costs | 782 | 657 | |||||
Construction in progress | 22,527 | 56,493 | |||||
257,527 | 198,129 | ||||||
Less: accumulated depreciation and depletion | 33,534 | 26,367 | |||||
Total property, plant and equipment, net | $ | 223,993 | $ | 171,762 |
Estimated Useful Life (Years) | Gross Carrying Amount at December 31, 2017 | Assets Acquired Pursuant to Business Combination | Accumulated Amortization | Net Book Value at June 30, 2018 | ||||||||||||||
Developed technology | 6 | $ | — | $ | 18,800 | $ | 261 | $ | 18,539 | |||||||||
Customer relationships | 1 | — | 270 | 23 | 247 | |||||||||||||
Trade name | Indefinite | — | 900 | — | 900 | |||||||||||||
$ | — | $ | 19,970 | $ | 284 | $ | 19,686 |
2019 | $ | 3,381 | ||
2020 | 3,133 | |||
2021 | 3,133 | |||
2022 | 3,133 | |||
2023 | 3,133 | |||
Thereafter | 2,873 | |||
Total | $ | 18,786 |
Total Goodwill | ||||
Balance at January 1, 2018 | $ | — | ||
Goodwill attributable to Quickthree Solutions, Inc. acquisition | 16,892 | |||
Balance at June 30, 2018 | $ | 16,892 |
June 30, 2018 | December 31, 2017 | ||||||
Employee related expenses | $ | 2,568 | $ | 667 | |||
Accrued construction related expenses | 1,483 | 2,197 | |||||
Accrued legal expenses | 35 | 90 | |||||
Accrued professional fees | 500 | 529 | |||||
Accrued royalties | 1,068 | 206 | |||||
Accrued freight and delivery charges | 1,590 | 2,197 | |||||
Accrued real estate tax | 487 | — | |||||
Accrued utilities | 528 | 176 | |||||
Accrued interest | 166 | — | |||||
Sales tax liability | 268 | 19 | |||||
Deferred rent | 787 | 861 | |||||
Other accrued liabilities | 1,892 | 634 | |||||
Total accrued liabilities | $ | 11,372 | $ | 7,576 |
June 30, 2018 | December 31, 2017 | ||||||
Revolving credit facility | $ | 45,000 | $ | — | |||
Less: debt discount, net | (346 | ) | — | ||||
Revolving credit facility, net | $ | 44,654 | $ | — |
Balance at December 31, 2017 | $ | 8,982 | |
Additions and revisions of prior estimates | 2,086 | ||
Accretion expense | 191 | ||
Settlement of liability | (1,783 | ) | |
Balance at June 30, 2018 | $ | 9,476 |
2019 | $ | 3,349 | |
2020 | 2,301 | ||
2021 | 1,481 | ||
2022 | 595 | ||
$ | 7,726 |
Number of Shares | Weighted Average | |||||
Unvested, December 31, 2017 | 534 | $ | 11.27 | |||
Granted | 723 | $ | 10.78 | |||
Vested | (156 | ) | $ | (12.60 | ) | |
Forfeiture | (30 | ) | $ | (13.57 | ) | |
Unvested, June 30, 2018 | 1,071 | $ | 9.92 |
2019 | $ | 17,304 | |
2020 | 12,467 | ||
2021 | 9,973 | ||
2022 | 7,276 | ||
2023 | 5,072 | ||
Thereafter | 37,007 | ||
Total | $ | 89,099 |
• | the financial performance of our assets without regard to the impact of financing methods, capital structure or historical cost basis of our assets; |
• | the viability of capital expenditure projects and the overall rates of return on alternative investment opportunities; |
• | our ability to incur and service debt and fund capital expenditures; |
• | our operating performance as compared to those of other companies in our industry without regard to the impact of financing methods or capital structure; and |
• | our debt covenant compliance, as Adjusted EBITDA is a key component of critical covenants to the Facility. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Net income | $ | 10,021 | $ | 2,624 | $ | 10,996 | $ | 3,600 | |||||||
Depreciation, depletion and amortization | 4,296 | 1,693 | 7,456 | 3,360 | |||||||||||
Income tax expense | 2,413 | 1,154 | 2,645 | 1,668 | |||||||||||
Interest expense | 509 | 182 | 728 | 354 | |||||||||||
Franchise taxes | 109 | 10 | 329 | 238 | |||||||||||
EBITDA | $ | 17,348 | $ | 5,663 | $ | 22,154 | $ | 9,220 | |||||||
Loss on sale of fixed assets (1) | — | 194 | — | 157 | |||||||||||
Equity compensation (2) | 668 | 464 | 1,159 | 639 | |||||||||||
Acquisition and development costs (3) | 914 | — | 1,243 | — | |||||||||||
Cash charges related to restructuring and retention (4) | 270 | — | 363 | — | |||||||||||
Non-cash charges (5) | 57 | 20 | 191 | 40 | |||||||||||
Adjusted EBITDA | $ | 19,257 | $ | 6,341 | $ | 25,110 | $ | 10,056 |
(1) | Includes losses related to the sale and disposal of certain assets in property, plant and equipment. |
(2) | Represents the non-cash expenses for stock-based awards issued to our employees and employee stock purchase plan compensation expense. |
(3) | Represents costs incurred related to the business combinations and current development project activities. The three and six months ended June 30, 2018 includes $0.8 million and $1.2 million, respectively, of costs related to the acquisition of substantially all of the assets of Quickthree Solutions, Inc. |
(4) | Represents costs associated with the retention and relocation of employees. |
(5) | Represents accretion of asset retirement obligations. |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Revenue | $ | 54,448 | $ | 29,787 | $ | 97,076 | $ | 54,847 | |||||||
Cost of goods sold | 34,678 | 21,407 | 70,091 | 41,063 | |||||||||||
Gross profit | $ | 19,770 | $ | 8,380 | $ | 26,985 | $ | 13,784 | |||||||
Depreciation, depletion, and accretion of asset retirement obligations | 3,878 | 1,588 | 6,982 | 3,166 | |||||||||||
Contribution margin | 23,648 | 9,968 | 33,967 | 16,950 | |||||||||||
Contribution margin per ton | $ | 28.19 | $ | 18.77 | $ | 21.75 | $ | 15.56 | |||||||
Total tons sold | 839 | 531 | 1,562 | 1,089 |
Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
(in thousands) | (in thousands) | ||||||||||||||
Revenues | $ | 54,448 | $ | 29,787 | $ | 97,076 | $ | 54,847 | |||||||
Cost of goods sold | 34,678 | 21,407 | 70,091 | 41,063 | |||||||||||
Gross profit | 19,770 | 8,380 | 26,985 | 13,784 | |||||||||||
Operating expenses: | |||||||||||||||
Salaries, benefits and payroll taxes | 2,790 | 2,167 | 5,362 | 3,864 | |||||||||||
Depreciation and amortization | 476 | 120 | 664 | 229 | |||||||||||
Selling, general and administrative | 3,595 | 2,283 | 6,696 | 4,317 | |||||||||||
Total operating expenses | 6,861 | 4,570 | 12,722 | 8,410 | |||||||||||
Operating income | 12,909 | 3,810 | 14,263 | 5,374 | |||||||||||
Other income (expenses): | |||||||||||||||
Interest expense, net | (500 | ) | (115 | ) | (680 | ) | (226 | ) | |||||||
Other income | 25 | 83 | 58 | 120 | |||||||||||
Total other expenses, net | (475 | ) | (32 | ) | (622 | ) | (106 | ) | |||||||
Income before income tax expense | 12,434 | 3,778 | 13,641 | 5,268 | |||||||||||
Income tax expense | 2,413 | 1,154 | 2,645 | 1,668 | |||||||||||
Net income | $ | 10,021 | $ | 2,624 | $ | 10,996 | $ | 3,600 |
• | Sand sales revenue increased to $40.5 million for the three months ended June 30, 2018 compared to $16.9 million for the three months ended June 30, 2017 due to increased sales volumes, including in-basin volumes, and higher average selling prices. Tons sold increased by approximately 58% due to increased exploration and production activity in the oil and natural gas industry through the second quarter of 2018, compared to the same period in 2017. |
• | Average selling price per ton increased to $48.23 for the three months ended June 30, 2018 from $31.74 for the three months ended June 30, 2017 due to increased volumes, including in-basin volumes, and higher selling prices related to both increased spot prices and favorable price adjustments under certain of our take-or-pay contracts based upon the Average Cushing Oklahoma WTI Spot Prices. |
• | We had $0.7 million contractual shortfall revenue for the three months ended June 30, 2018 and $0.1 million for the three months ended June 30, 2017. Our customer contracts dictate whether customers are invoiced quarterly or at the end of their respective contract year for shortfall payments. We recognize revenue to the extent of the unfulfilled minimum contracted quantity at the shortfall price per ton as stated in the contract once payment is received or reasonably assured. |
• | Transportation revenue, which includes freight for certain mine gate sand sales and railcar rental, was approximately $13.3 million for the three months ended June 30, 2018 compared to $12.9 million for the three months ended June 30, 2017. The increase in transportation revenue was due to the increased sales volumes in the second quarter of 2018 as compared to the same period in 2017. |
• | Sand sales revenue increased to $69.4 million for the six months ended June 30, 2018 compared to $33.6 million for the six months ended June 30, 2017 due to increased sales volumes and higher average selling prices. Tons sold increased by approximately 43% due to increased exploration and production activity in the oil and natural gas industry through the first and second quarters of 2018, compared to the same period in 2017. |
• | Average selling price per ton increased to $44.42 for the six months ended June 30, 2018 from $30.85 for the six months ended June 30, 2017 due to increased volumes, including in-basin volumes, and higher selling prices related to both increased spot prices and favorable price adjustments under certain of our take-or-pay contracts based upon the Average Cushing Oklahoma WTI Spot Prices. |
• | We had $0.7 million contractual shortfall revenue for the six months ended June 30, 2018 and $0.1 million for the six months ended June 30, 2017, respectively. Our customer contracts dictate whether customers are invoiced quarterly or at the end of their respective contract year for shortfall payments. We recognize revenue to the extent of the unfulfilled minimum contracted quantity at the shortfall price per ton as stated in the contract once payment is received or reasonably assured. |
• | Transportation revenue, which includes freight for certain mine gate sand sales and railcar rental, was approximately $27.0 million for the six months ended June 30, 2018 compared to $21.2 million for the six months ended June 30, 2017. The increase in transportation revenue was due to the increased sales volumes in the six months ended June 30, 2018 as compared to the same period in 2017 as a result of increased exploration and production activity in the oil and natural gas industry. |
June 30, | December 31, | ||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Total current assets | $ | 47,113 | $ | 73,177 | |||
Total current liabilities | 29,976 | 34,559 | |||||
Working capital | $ | 17,137 | $ | 38,618 |
Six Months Ended June 30, | |||||||
2018 | 2017 | ||||||
(in thousands) | |||||||
Net cash (used in) provided by operating activities | $ | 18,837 | $ | 664 | |||
Net cash used in investing activities | $ | (96,719 | ) | $ | (7,715 | ) | |
Net cash provided by financing activities | $ | 44,324 | $ | 23,358 |
• | LIBOR plus an applicable margin of 3.00% - 4.00% depending on the leverage ratio; or |
• | ABR (as defined in the Credit Agreement), plus an applicable margin of 2.00% - 3.00%, depending on the leverage ratio. |
2.1 | ||
3.1 | ||
3.2 | ||
10.1 | ||
10.2 | ||
31.1* | ||
31.2* | ||
32.1*+ | ||
32.2*+ | ||
95.1* | ||
101.INS* | XBRL Instance Document | |
101.SCH* | XBRL Taxonomy Extension Schema | |
101.CAL* | XBRL Taxonomy Extension Calculation Linkbase | |
101.DEF* | XBRL Taxonomy Extension Definition Linkbase | |
101.LAB* | XBRL Taxonomy Extension Label Linkbase | |
101.PRE* | XBRL Taxonomy Extension Presentation Linkbase |
* | Filed Herewith. |
+ | This certification is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act of 1933, as amended, or the Exchange Act. |
Smart Sand Inc. | ||
August 9, 2018 | By: | /s/ Charles E. Young |
Charles E. Young, Chief Executive Officer | ||
(Principal Executive Officer) |
Smart Sand Inc. | ||
August 9, 2018 | By: | /s/ Lee E. Beckelman |
Lee E. Beckelman, Chief Financial Officer | ||
(Principal Financial Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Smart Sand, 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)) 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; and |
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. |
/s/ Charles E. Young | |
Charles E. Young, Chief Executive Officer (Principal Executive Officer) |
1. | I have reviewed this Quarterly Report on Form 10-Q of Smart Sand, 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)) 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; and |
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. |
/s/ Lee E. Beckelman | |
Lee E. Beckelman, Chief Financial Officer (Principal Financial Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Charles E. Young | |
Charles E. Young, Chief Executive Officer (Principle Executive Officer) |
(1) | The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
/s/ Lee E. Beckelman | |
Lee E. Beckelman, Chief Financial Officer (Principle Financial Officer) |
• | Section 104 S&S Citations: Citations received from MSHA under section 104 of the Mine Act for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard. |
• | Section 104(b) Orders: Orders issued by MSHA under section 104(b) of the Mine Act, which represents a failure to abate a citation under section 104(a) within the period of time prescribed by MSHA. This results in an order of immediate withdrawal from the area of the mine affected by the condition until MSHA determines that the violation has been abated. |
• | Section 104(d) Citations and Orders: Citations and orders issued by MSHA under section 104(d) of the Mine Act for an unwarrantable failure to comply with mandatory health or safety standards. |
• | Section 110(b)(2) Violations: Flagrant violations issued by MSHA under section 110(b)(2) of the Mine Act. |
• | Section 107(a) Orders: Orders issued by MSHA under section 107(a) of the Mine Act for situations in which MSHA determined an “imminent danger” (as defined by MSHA) existed. |
• | Pattern of Violations: A pattern of violations of mandatory health or safety standards that are of such nature as could have significantly and substantially contributed to the cause and effect of mine health or safety hazards under section 104(e) of the Mine Act. |
• | Potential Pattern of Violations: The potential to have a pattern of violations under section 104(e). |
• | Contest Proceedings: A contest proceeding may be filed by an operator to challenge the issuance of a citation or order issued by MSHA. |
• | Civil Penalty Proceedings: A civil penalty proceeding may be filed by an operator to challenge a civil penalty MSHA has proposed for a violation contained in a citation or order. The Partnership does not institute civil penalty proceedings based solely on the assessment amount of proposed penalties. Any initiated adjudications address substantive matters of law and policy instituted on conditions that are alleged to be in violation of mandatory standards of the Mine Act. |
• | Discrimination Proceedings: Involves a miner’s allegation that he or she has suffered adverse employment action because he or she engaged in activity protected under the Mine Act, such as making a safety complaint. Also includes temporary reinstatement proceedings involving cases in which a miner has filed a complaint with MSHA stating that he or she has suffered discrimination and the miner has lost his or her position. |
• | Compensation Proceedings: A compensation proceeding may be filed by miners entitled to compensation when a mine is closed by certain closure orders issued by MSHA. The purpose of the proceeding is to determine the amount of compensation, if any, due to miners idled by the orders. |
• | Temporary Relief: Applications for temporary relief are applications filed under section 105(b)(2) of the Mine Act for temporary relief from any modification or termination of any order. |
• | Appeals: An appeal may be filed by an operator to challenge judges’ decisions or orders to the Commission, including petitions for discretionary review and review by the Commission on its own motion. |
Mine (1) | Oakdale, WI |
Section 104 citations for violations of mandatory health or safety standards that could significantly and substantially contribute to the cause and effect of a mine safety or health hazard (#) | — |
Section 104(b) orders (#) | — |
Section 104(d) citations and orders (#) | — |
Section 110(b)(2) violations (#) | — |
Section 107(a) orders (#) | — |
Proposed assessments under MSHA (2) | $— |
Mining-related fatalities (#) | — |
Section 104(e) notice | No |
Notice of the potential for a pattern of violations under Section 104(e) | No |
Legal actions before the FMSHRC initiated (#) | — |
Legal actions before the FMSHRC resolved (#) | — |
Legal actions pending before the FMSHRC, end of period: | |
Contests of citations and orders referenced in Subpart B of 29 CFR Part 2700 (#) | — |
Contests of proposed penalties referenced in Subpart C of 29 CFR Part 2700 (#) | — |
Complaints for compensation referenced in Subpart D of 29 CFR Part 2700 (#) | — |
Complaints of discharge, discrimination or interference referenced in Subpart E of 29 CFR Part 2700 (#) | — |
Applications for temporary relief referenced in Subpart F of 29 CFR Part 2700 (#) | — |
Appeals of judges’ decisions or orders referenced in Subpart H of 29 CFR Part 2700 (#) | — |
Total pending legal actions (#) | — |
Document and Entity Information - shares |
6 Months Ended | |
---|---|---|
Jun. 30, 2018 |
Aug. 02, 2018 |
|
Document And Entity Information [Abstract] | ||
Document Type | 10-Q | |
Amendment Flag | false | |
Document Period End Date | Jun. 30, 2018 | |
Document Fiscal Year Focus | 2018 | |
Document Fiscal Period Focus | Q2 | |
Trading Symbol | SND | |
Entity Registrant Name | Smart Sand, Inc. | |
Entity Central Index Key | 0001529628 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Accelerated Filer | |
Entity Common Stock, Shares Outstanding | 41,600,108 |
CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Statement of Financial Position [Abstract] | ||
Common stock, par value (in dollars per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized (in shares) | 350,000,000 | 350,000,000 |
Common stock, shares issued (in shares) | 40,639,837 | 40,474,085 |
Common stock, shares outstanding (in shares) | 40,529,182 | 40,393,033 |
Treasury stock, shares (in shares) | 110,655 | 81,052 |
CONDENSED CONSOLIDATED INCOME STATEMENTS (UNAUDITED) - USD ($) shares in Thousands, $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Income Statement [Abstract] | ||||
Revenues | $ 54,448 | $ 29,787 | $ 97,076 | $ 54,847 |
Cost of goods sold | 34,678 | 21,407 | 70,091 | 41,063 |
Gross profit | 19,770 | 8,380 | 26,985 | 13,784 |
Operating expenses: | ||||
Salaries, benefits and payroll taxes | 2,790 | 2,167 | 5,362 | 3,864 |
Depreciation and amortization | 476 | 120 | 664 | 229 |
Selling, general and administrative | 3,595 | 2,283 | 6,696 | 4,317 |
Total operating expenses | 6,861 | 4,570 | 12,722 | 8,410 |
Operating income | 12,909 | 3,810 | 14,263 | 5,374 |
Other income (expenses): | ||||
Interest expense, net | (500) | (115) | (680) | (226) |
Other income | 25 | 83 | 58 | 120 |
Total other expenses, net | (475) | (32) | (622) | (106) |
Income before income tax expense | 12,434 | 3,778 | 13,641 | 5,268 |
Income tax expense | 2,413 | 1,154 | 2,645 | 1,668 |
Net income | $ 10,021 | $ 2,624 | $ 10,996 | $ 3,600 |
Net income per common share: | ||||
Basic (in dollars per share) | $ 0.25 | $ 0.07 | $ 0.27 | $ 0.09 |
Diluted (in dollars per share) | $ 0.25 | $ 0.06 | $ 0.27 | $ 0.09 |
Weighted-average number of common shares: | ||||
Basic (in shares) | 40,499 | 40,347 | 40,455 | 40,024 |
Diluted (in shares) | 40,550 | 40,453 | 40,550 | 40,167 |
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Statement of Comprehensive Income [Abstract] | ||||
Net income | $ 10,021 | $ 2,624 | $ 10,996 | $ 3,600 |
Other comprehensive income: | ||||
Foreign currency translation adjustment | 76 | 0 | 76 | 0 |
Comprehensive income | $ 10,097 | $ 2,624 | $ 11,072 | $ 3,600 |
Organization and Nature of Business |
6 Months Ended |
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Jun. 30, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Nature of Business | Organization and Nature of Business Smart Sand, Inc. and its subsidiaries (collectively, the “Company”) are headquartered in The Woodlands, Texas. The Company was incorporated in July 2011, and is engaged in the excavation, processing and sale of industrial sand, or proppant, for use in hydraulic fracturing operations for the oil and gas industry. The Company completed construction of the first phase of its primary facility in Oakdale, Wisconsin and commenced operations in July 2012, subsequently expanded its operations in 2014 and 2015 and completed the expansion of annual processing capacity to approximately 5.5 million tons in May 2018. The Company has recently expanded its business to provide its customers frac sand logistics solutions from the minesite to the wellhead. On March 15, 2018, the Company acquired the rights to operate a unit train capable transloading terminal in Van Hook, North Dakota to service the Bakken Formation. The Company paid consideration of $15,549 to acquire certain assets at the Van Hook terminal, and entered into a long-term lease agreement in connection with the transaction. On June 1, 2018, the Company acquired substantially all of the assets of Quickthree Solutions, Inc., a manufacturer of portable vertical frac sand storage solution systems at the wellsite. The consideration consisted of approximately $30,000 of cash paid at closing and up to $12,750 in potential earn-out payments, which are to be paid as system components are built and made available for sale or lease over a three-year period. |
Basis of Presentation |
6 Months Ended |
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Jun. 30, 2018 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements (“interim statements”) of the Company have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), issued by the SEC. Accordingly, they do not include all the information and footnotes required by GAAP for complete financial statements. In the opinion of management, all adjustments and disclosures necessary for a fair presentation of these interim statements have been included. The results reported in these interim statements are not necessarily indicative of the results that may be reported for the entire year. The consolidated balance sheet as of December 31, 2017 was derived from the audited consolidated financial statements as of and for the year ended December 31, 2017. These interim statements should be read in conjunction with the Company’s consolidated financial statements for the year ended December 31, 2017. |
Summary of Significant Accounting Policies |
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Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to, the sand reserves and its impact on calculating the depletion expense under the units-of-production method, the depreciation associated with property and equipment, purchase price allocation for businesses acquired, impairment considerations of assets (including impairment of identified intangible assets, goodwill and other long-lived assets), estimated cost of future asset retirement obligations, stock-based compensation, recoverability of deferred tax assets, inventory reserve, contingent consideration and collectability of receivables and certain liabilities. Actual results could differ from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. Revenue Recognition On January 1, 2018, the Company adopted new accounting standard Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” and all the related amendments (“ASC 606”) in relation to all contracts that were not completed or expired as of January 1, 2018, using the modified retrospective method. There was no adjustment made to the opening balance of retained earnings as a result of applying the new revenue standard. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while the comparative information is not restated and will continue to be reported under the accounting standards in effect for those periods. With the adoption of the standard, the consolidated financial statements are supplemented by new disclosure requirements. Areas of focus and updated presentation requirements include disclosures surrounding contracts with customers, disaggregation of revenue, contract balances, performance obligations, significant judgments used in the application of the guidance and transaction price allocation to remaining performance obligations. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, the amount of which reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sand Sales Revenue The Company derives its sand revenue by mining and processing sand. Its revenues are primarily a function of the price per ton realized and the volumes sold. The Company’s sales are generally free carrier (“FCA”), payment made at the origination point at the Company’s facility, with title passing as the product is loaded into railcars hired by the customer or provided by the Company and revenue being recognized when title transfers at the Company’s facility. For sand delivered in-basin to certain contract and spot-rate customers, the Company recognizes the revenue when title passes at the destination. The amount invoiced reflects product, transportation and any other additional handling services, such as storage or transloading the product from rail car to truck. Prices under the Company's long-term agreements with customers are generally indexed to the Average Cushing Oklahoma WTI Spot Prices and contain provisions allowing for adjustments including: (i) annual percentage price increases; and/or (ii) market factor adjustments, including a natural gas surcharge/reduction and a propane surcharge/reduction which are applied if the Average Natural Gas Price or the Average Quarterly Mont Belvieu TX Propane Spot Price, respectively, as listed by the U.S. Energy Information Administration, are above or below the applicable benchmark set forth in the contract for the preceding calendar quarter. Shortfall Payments The Company’s shortfall revenues are based on negotiated contract terms and are recognized when rights of use are expired. The Company recognizes revenue to the extent of the unfulfilled minimum contracted quantity at the shortfall price per ton as stated in the contract once payment is received or probable. For the three and six months ended June 30, 2018 and 2017, the Company recognized $668 and $74, respectively, of revenue for shortfall payments relating to minimum commitments under take-or-pay contracts. Railcar Rental Railcar rental consists of revenue derived from the leasing of the Company’s railcars to customers under long-term contracts or on an as-used basis. Based on the customer contract, the Company either recognizes revenue on the leasing of railcars based on when the terms of the agreement state that the railcar is available to the customer for use, or based on a specified price per ton shipped. The Company recognizes revenue from leasing in accordance with ASC 840, “Leases,” as leasing revenue does not meet the criteria of ASC 606. For the three months ended June 30, 2018 and 2017, the Company recognized $2,073 and $1,900, respectively, of railcar revenue. For the six months ended June 30, 2018 and 2017, the Company recognized $3,892 and $3,583, respectively, of railcar revenue. Transportation Revenue Transportation revenue consists primarily of railway transportation and revenue to deliver products to customers. The Company’s transportation revenue fluctuates based on many factors, including the volume of product it transports and the distance between its plant and customers. Revenue generated from transportation was $11,240 and $11,018, respectively, for the three months ended June 30, 2018 and 2017. Revenue generated from transportation was $23,133 and $17,622, respectively, for the six months ended June 30, 2018 and 2017. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables and deferred revenue on the consolidated balance sheet. For the Company’s sand sales, amounts are billed as sand is loaded on the railcars to fill customer orders for free carrier origination point sales or when sand is received at the destination for free carrier destination point sales and recorded as accounts receivable. For the Company’s freight revenue, amounts billed depend on the shipping terms and are recorded as receivables accordingly. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. In addition, the Company sometimes receives shortfall payments from its customers and recognizes the revenue once the rights of use are expired. Changes in the contract asset and liability balances during the three and six months ended June 30, 2018 were not materially impacted by any other factors. Deferred Revenues The Company receives advance payments from certain customers in order to secure and procure a reliable provision and delivery of product. The Company classifies such advances as current or noncurrent liabilities depending upon the anticipated timing of delivery of the supplied product. Revenue is recognized upon the delivery of the product. The Company may receive an advance payment from a customer, based on the terms of the customer’s long-term contract, for a certain volume of product to be delivered. Revenue is recognized as product is delivered and the deferred revenue is reduced. Revenue recognized for the six months ended June 30, 2018 that was included in the deferred revenue balance at the beginning of the year was $0. The deferred revenue balance at June 30, 2018 and December 31, 2017 was $4,805 and $0, respectively, and classified as a current liability in the accompanying condensed consolidated balance sheets. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in accordance with ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Generally, the Company’s contracts include a single performance obligation that is separately identifiable, and therefore, distinct. Under ASC 606, the allocation of transaction price is not necessary if only one performance obligation is identified. The Company expects to recognize approximately 24% of this remaining performance obligation as revenue throughout the remainder of 2018 and expects to recognize the remaining 76% as revenue by 2022. Revenue from sand sales are recognized at a point in time, either upon shipment or upon delivery, and accounted for 74% and 57% of the Company’s revenue for the three months ended June 30, 2018 and 2017, respectively, and for 71% and 35% of the Company’s revenue for the six months ended June 30, 2018 and 2017, respectively. Revenue from railcar rental and transportation is recognized at a point in time, upon shipment, and accounted for 24% and 43% of revenue for the three months ended June 30, 2018 and 2017, respectively, and for 28% and 39% of revenue for the six months ended June 30, 2018 and 2017, respectively. Significant Judgments Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue, costs and satisfaction of performance obligation. The Company satisfies its performance obligation and subsequently recognizes revenue, at a point in time, upon shipment of the products as the customer obtains control over the goods once the sand is loaded into the railcars or sand is delivered to the customer’s destination. In the case of frac sand being delivered to customers, the transaction price is variable in nature and is directly tied to the Average Cushing Oklahoma WTI Spot Prices per barrel. There were no changes to the significant judgments used by the Company to determine the timing of satisfaction of the performance obligation under ASC 606. Costs to Obtain or Fulfill Contract The Company’s costs to fulfill or obtain contracts with customers primarily consist of commissions and legal costs. Under take-or-pay contracts, the Company provides sales team members with commissions at set per ton prices. These commissions are paid on a monthly basis, when and if the sand is taken by the customer. Although sales commissions are incremental in nature and are only incurred when a contract is obtained, there is no up-front commission paid on the satisfactory obtainment of a contract, resulting in no sales commissions being capitalized at June 30, 2018. The Company also incurs legal costs relating to the drafting and negotiating of contracts with select customers. Because legal costs are not incremental in nature and are incurred regardless of whether a contract is ultimately obtained, there were no legal costs capitalized as of June 30, 2018. As a result, the Company did not record amortization of costs incurred to obtain the contract or any impairment losses for the period ended June 30, 2018. Accounts Receivable and Unbilled Receivables Accounts receivable represents customer transactions that have been invoiced as of the balance sheet date; unbilled receivables represent customer transactions that have not yet been invoiced as of the balance sheet date. Accounts receivable are due within 30 days from the date of invoice, or in accordance with terms agreed upon with customers, and are stated at amounts due from customers net of any allowance for doubtful accounts. The Company considers accounts outstanding longer than the payment terms are past due. The Company determines the allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, the customer’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Accounts receivable are written off when they are deemed uncollectible, and payments subsequently received on such receivables are credited to bad debt expense. As of June 30, 2018 and December 31, 2017, the Company determined no allowance for doubtful accounts was necessary. As of June 30, 2018 and December 31, 2017, no portion of unbilled revenue represents transactions included in deferred revenue. Transportation Transportation costs are classified as cost of goods sold. Transportation costs consist of railway transportation and transload costs to deliver products to customers. Cost of sales generated from transportation was $16,168 and $10,852 for the three months ended June 30, 2018 and 2017, respectively. Cost of sales generated from transportation was $30,483 and $18,154 for the six months ended June 30, 2018 and 2017, respectively. Inventories The Company’s sand inventory consists of raw material (sand that has been excavated but not processed), work-in-progress (sand that has undergone some but not all processing) and finished goods (sand that has been completely processed and is ready for sale). The spare parts inventory consists of critical spare parts. Sand inventory is stated at the lower of cost or net realizable value using the average cost method. For the three and six months ended June 30, 2018 and 2017, the Company had no write-down of inventory as a result of any lower of cost or net realizable value assessment. Costs applied to the inventory include direct excavation costs, processing costs, overhead allocation, depreciation and depletion, transportation and additional service costs, as applicable. Stockpile tonnages are calculated by measuring the number of tons added and removed from the stockpile. Costs are calculated on a per ton basis and are applied to the stockpiles based on the number of tons in the stockpile. The Company performs monthly physical inventory measurements to verify the quantity of inventory on hand. Due to variation in sand density and moisture content and production processes utilized to manufacture the Company’s products, physical inventories will not necessarily detect all variances. To mitigate this risk, the Company recognizes a yield adjustment on its inventories. Spare parts inventory is accounted for on a first-in, first-out basis at the lower of cost or net realizable value. Deferred Financing Charges Direct costs incurred in connection with the Facility (as defined below) have been capitalized and are being amortized using the straight-line method, which approximates the effective interest method, over the term of the debt. Fees attributable to the lender and third parties of $1,372 were presented as components of deferred financing charges since there was no outstanding balance on the Facility as of December 31, 2017. As of June 30, 2018, fees attributable to the lender of $698 are presented as a discount to the carrying value of the debt and the unamortized amount is presented as a reduction of long-term debt on the consolidated balance sheets. Amortization expense of the deferred financing charges of $78 and $117 is included in interest expense for the three months ended June 30, 2018 and 2017, respectively. Amortization expense of the deferred financing charges of $138 and $222 is included in interest expense for the six months ended June 30, 2018 and 2017, respectively. Accretion of debt discount costs of $60 and $0 is included in interest expense for the three months ended June 30, 2018 and 2017, respectively. Accretion of debt discount costs of $116 and $0 is included in interest expense for the six months ended June 30, 2018 and 2017, respectively. Financial Instruments The carrying value of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates their fair value due to the short maturity of such instruments. Financial instruments also consist of debt for which fair value approximates carrying values as the debt bears interest at a variable rate which is reflective of current rates otherwise available to the Company. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. Property, Plant and Equipment Property, plant and equipment are recorded at cost. Costs related to researching, surveying, drilling, and related activities are recorded at cost and capitalized once a determination has been made that the Company’s property has proven and probable reserves. Capitalized mining costs are depleted using the units-of-production method. Construction in progress is primarily comprised of machinery and equipment which has not been placed in service and is not depreciated until the related assets or improvements are ready to be placed in service. Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment, which are:
Expenditures for maintenance and repairs are charged against income as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized in the consolidated income statements. Acquisitions In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, contingent considerations and any non-controlling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. Long-Lived Assets, Including Definite Intangible Assets Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of developed technology and customer relationships. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. Goodwill and Other Indefinite-Lived Intangible Assets The Company conducts its evaluation of goodwill and tradename impairment at the reporting unit level on an annual basis as of December 31, and more frequently if events or circumstances indicate that the carrying value of a reporting unit exceeds its fair value. Prior to performing an impairment test, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment determines that an impairment is more likely than not, we perform a quantitative comparison of the fair value with the carrying amount, including goodwill. If this comparison reflects impairment, then the loss would be measured as the excess of recorded goodwill, or other intangible assets with indefinite lives, over its implied fair value. Fair Value Measurements The Company’s financial assets and liabilities are to be measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows:
Contingent Consideration The Company’s contingent consideration is measured at fair value on a recurring basis and is comprised of payments for production of silos and related equipment during the three-year period after the Quickthree acquisition (Note 4). Contingent liabilities are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs according to fair value measurement accounting. The Company estimates the fair value of contingent liabilities using a Monte Carlo simulation-based, real option pricing methodology implementation of the Income Approach. This approach utilizes inputs including market comparable information and management assessments regarding potential future scenarios, then discounts the liabilities to present value. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. The fair value of the Company’s financial instruments carried at fair value were as follows:
The following table provides a summary of changes in the fair value of the Company’s Level 3 financial instruments for the six months ended June 30, 2018:
Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, “Compensation-Stock Compensation” (“ASC 718”), which requires the recognition of expense related to the fair value of stock-based compensation awards in the consolidated income statements. For restricted stock issued to employees and members of the board of directors of the Company (the “Board”) for their services on the Board, the Company estimates the grant date fair value of each share of restricted stock at issuance. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense, net of estimated forfeitures, equal to the grant date fair value of the award on a straight-line basis over the requisite service period, which is generally the vesting term. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense using the straight-line recognition method when it is probable that the performance condition will be achieved. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Share-based payments issued to non-employees are recorded at their fair values, and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and ASC 505, “Equity.” Once the Company’s shares became publicly traded on November 4, 2016, the Company began to use the actual market price of its shares as the grant date fair value for restricted stock awards. Income Taxes On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”, given the amount and complexity of the changes in tax law resulting from the Tax Reform Act, the Company has not finalized the accounting for the income tax effects of the Tax Reform Act. This includes the re-measurement of deferred taxes. The impact of the Tax Reform Act may differ from this estimate during the one-year measurement period due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and future actions the Company may take as a result of the Tax Reform Act. As a result of the Tax Reform Act, the Company recorded a tax benefit of approximately $8.5 million due to a re-measurement of deferred tax assets and liabilities in the fourth quarter of 2017. The Company applies the provisions of ASC 740, “Income Taxes” (“ASC 740”), which principally utilizes a balance sheet approach to provide for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of net operating loss carryforwards and temporary differences between the carrying amounts and the tax bases of assets and liabilities. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The impact of an uncertain income tax position on the income tax returns must be recognized at the largest amount that is more-likely-than-not to be required to be recognized upon audit by the relevant taxing authority. This standard also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting for interim periods, disclosure and transition issues with respect to tax positions. The Company includes interest and penalties as a component of income tax expense in the consolidated income statements. For the periods presented, no interest and penalties were recorded. Environmental Matters The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. Management has established procedures for the ongoing evaluation of the Company’s operations, to identify potential environmental exposures and to comply with regulatory policies and procedures. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future revenue generation are expensed as incurred. Liabilities are recorded when environmental costs are probable, and the costs can be reasonably estimated. The Company maintains insurance which may cover in whole or in part certain environmental expenditures. As of June 30, 2018 and December 31, 2017, there were no probable environmental matters. Comprehensive Income Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income represents foreign currency translation adjustments. The following table presents the changes in accumulated other comprehensive income during the three and six months ended June 30, 2018.
Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the Chief Executive Officer view the Company’s operations and manage its business, including the recently acquired logistics assets and last mile solutions business, as one operating segment. Substantially all long-lived assets of the Company reside in the United States. Basic and Diluted Net Income Per Share of Common Stock Basic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of restricted stock outstanding during the period calculated in accordance with the treasury stock method, although restricted stock is excluded if their effect is anti-dilutive. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 670 and 10 for each of the three months ended June 30, 2018 and 2017, respectively. The number of shares underlying equity-based awards that were excluded from the calculation of diluted earnings per share as their effect would be anti-dilutive was 670 and 246 for each of the six months ended June 30, 2018 and 2017, respectively. The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share:
Reclassification Certain 2017 balance sheet items have been reclassified to conform to the current financial statement presentation. These reclassifications have no effect on previous reported net income. Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities”. ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The guidance is effective for the Company beginning after December 15, 2018, although early adoption is permitted. The Company is currently evaluating the effects of ASU 2017-12 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted this standard on January 1, 2018. The adoption of this guidance did not have a material effect on the Company's financial position, results of operation or cash flows. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero-coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The guidance is effective for the Company beginning after December 15, 2017. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operation or cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases”(ASC 842) (“ASU 2016-02”), which replaces the existing guidance in ASC 840, “Leases.” ASU 2016-02 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right of use assets. The new lease standard does not substantially change lessor accounting. The new standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. In April and May 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers - Identifying Performance Obligations and Licensing”, ASU 2016-11, “Revenue Recognition and Derivatives and Hedging - Recession of SEC Guidance”, ASU 2016-12, “Revenue from Contracts with Customers - Narrow-Scope Improvements and Practical Expedients”, and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. These ASUs each affect the guidance of the new revenue recognition standard in ASU 2014-09 and related subsequent ASUs. The new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017 for public companies. The Company adopted this standard on January 1, 2018. |
Acquisitions |
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Business Combinations [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Acquisitions | Acquisitions Asset Acquisition - Van Hook Crude, LLC The acquisition of the assets of Van Hook Crude, LLC occurred on March 15, 2018. The Company acquired all of the rights, title, and interest in certain properties and assigned contracts (collectively, the “Assets”) for a total consideration of $15,549 in cash. The acquisition cost has been allocated over the assets as set forth below.
Business Combination - Quickthree Solutions Inc. On June 1, 2018, the Company acquired substantially all of the assets of Quickthree Solutions, Inc., a manufacturer of portable vertical frac sand storage solution systems at the wellsite. The aggregate purchase price consists of approximately $30,000 paid at closing, subject to adjustment based upon Quickthree's closing date working capital, and up to $12,750 in potential earn-out payments over a three-year period after closing. Payment of the earn-out is based upon the production of silos and related equipment during the earn-out period. The closing portion of the purchase price was, and the Company expects the earn-out portion of the purchase price to be, paid using cash on hand, equipment financing options available to the Company and advances under the Company's Facility. Goodwill in this transaction is attributable to planned expansion into the last mile storage solution market, and is fully deductible for tax purposes. The Company’s preliminary allocation of the purchase price in connection with the acquisition was calculated as follows. The working capital adjustment may be adjusted to determine the final allocation of the purchase price.
Total acquisition costs for the Quickthree Solutions acquisition incurred during the three and six months ended June 30, 2018 were $843 and $1,159, respectively, which amounts are included in selling, general and administrative expense in the Company’s condensed consolidated income statements. The Company determined the fair value of the contingent consideration to be $9,200 at June 1, 2018, the acquisition date and recorded it as a liability in the Company’s unaudited condensed consolidated balance sheets. As of June 30, 2018, the Company recorded no change in fair value of contingent consideration. The Company will continue to assess earn-out calculations related to the contingent consideration in future periods. |
Cash, Cash Equivalents and Restricted Cash |
6 Months Ended |
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Jun. 30, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Restricted Cash | Cash, Cash Equivalents and Restricted Cash Cash The Company considers all highly liquid money market instruments to be cash equivalents. Cash is maintained at financial institutions and, at times, balances may exceed federally insured limits of $250 at each financial institution. The Company has not experienced any losses related to these balances. Restricted Cash Restricted cash represents cash held as collateral relating to an outstanding short-term bond assuring performance under an agreement with a pipeline common carrier. As of April 13, 2018, the Company no longer had any restrictions on cash. |
Inventories |
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Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventories | Inventories Inventories consisted of the following:
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Prepaid Expenses and Other Current Assets |
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Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expenses and Other Current Assets | Prepaid Expenses and Other Current Assets Prepaid expenses and other current assets were comprised of the following:
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Property, Plant and Equipment, net |
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Property, Plant and Equipment, net | Property, Plant and Equipment, net Net property, plant and equipment consisted of:
Depreciation expense was $3,994 and $1,688 for the three months ended June 30, 2018 and 2017, respectively, and $7,151 and $3,350 for the six months ended June 30, 2018 and 2017, respectively. Depletion expense was $18 and $5 for the three months ended June 30, 2018 and 2017, respectively, and $20 and $10 for the six months ended June 30, 2018 and 2017, respectively. The Company capitalized no interest expense associated with the construction of new property, plant and equipment for the three and six months ended June 30, 2018 and 2017. |
Intangible Assets, Net and Goodwill |
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Intangible Assets, Net and Goodwill | Intangible Assets, Net and Goodwill The following table summarizes the Company’s intangible assets as of June 30, 2018 and December 31, 2017:
The Company uses the straight-line method to determine the amortization expense for its definite lived intangible assets. The weighted-average remaining useful life for the intangible assets is 5.9 years. Amortization expense related to the purchased intangible assets was $284 for the three and six months ended June 30, 2018. The table below reflects the future estimated amortization expense for amortizable intangible assets as of June 30, 2018.
Goodwill represents the excess of the cost of businesses acquired over the fair market value of identifiable net assets at the dates of acquisition. The following table summarizes the Company’s Goodwill as of June 30, 2018:
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Accrued and Other Expenses |
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Accrued and Other Expenses | Accrued and Other Expenses Accrued and other expenses were comprised of the following:
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Credit Facility |
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Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Credit Facility | Credit Facility On December 8, 2016, the Company entered into a $45 million three-year senior secured revolving credit facility (the “Facility”) under a revolving credit agreement with Jefferies Finance LLC as administrative and collateral agent (the “Credit Agreement”). Substantially all of the assets of the Company are pledged as collateral under the Facility. The Facility expires on December 8, 2019. On April 8, 2018, the Facility was amended to increase the Company's total borrowing capacity under the Facility to $60 million. The amendment was considered a modification of the Facility. On July 13, 2018, the Facility was amended to (i) increase the limit on the Company's ability to sell, transfer or dispose of assets, subject to certain considerations from an aggregate amount of $25 million to $55 million, (ii) increase the limit on the Company's ability to incur capital lease obligations from an aggregate principal amount of $15 million to $30 million and (iii) exclude certain current and future earn-out obligations from the definition of indebtedness in the Credit Agreement. The Facility contains various reporting requirements, negative covenants and restrictive provisions and requires maintenance of financial covenants, including a fixed charge coverage ratio and a leverage ratio (each as defined in the Credit Agreement). As of June 30, 2018 and December 31, 2017, $45 million and $0, respectively, were outstanding under the Facility and the Company was in compliance with all covenants. As of June 30, 2018, the total undrawn availability was $15 million. As of June 30, 2018, fees attributable to the lender of $698 are presented as a discount to the carrying value of the debt and the unamortized amount is presented as a reduction of long-term debt on the balance sheet.
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Equipment Lease Obligations |
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Jun. 30, 2018 | |
Leases [Abstract] | |
Equipment Lease Obligations | Equipment Lease Obligations The Company entered into various lease arrangements to lease equipment. Equipment cost of $1,484 has been capitalized and included in the Company’s property, plant and equipment as of June 30, 2018 and December 31, 2017, respectively. Depreciation expense under lease assets was approximately $54 and $73 for the three months ended June 30, 2018 and 2017, respectively. Depreciation expense under lease assets was approximately $109 and $146 for the six months ended June 30, 2018 and 2017, respectively. As of June 30, 2018, the remaining minimum lease payment for equipment lease obligations is $432, which is due within one year. |
Asset Retirement Obligation |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||
Asset Retirement Obligation | Asset Retirement Obligation The Company had a post-closure reclamation and site restoration obligation of $9,476 as of June 30, 2018. The following is a reconciliation of the total reclamation liability for asset retirement obligations:
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Stock-Based Compensation |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-Based Compensation | Stock-Based Compensation Equity Incentive Plan In May 2012, the Board approved the 2012 Equity Incentive Plan (“2012 Plan”), which provides for the issuance of equity awards of up to a maximum of 440 shares of the Company’s common stock to employees, non-employee members of the Board, and consultants of the Company. During 2014, the 2012 Plan was amended to provide for the issuance of equity awards of up to 880 shares of the Company’s common stock. The awards can be issued in the form of incentive stock options, non-qualified stock options or restricted stock, and have expiration dates of 5 or 10 years after issuance, depending on whether the recipient already holds above 10% of the voting power of all classes of the Company’s shares. The exercise price will be based on the fair market value of the share on the date of issuance; vesting periods will be determined by the board upon issuance of the equity award. Subsequent to the Company’s initial public offering, no additional equity awards were made under the 2012 Plan. In November 2016, in connection with its initial public offering, the Company adopted the 2016 Omnibus Incentive Plan (“2016 Plan”) which provides for the issuance of equity awards of up to a maximum of 3,911 shares of the Company’s common stock to employees, non-employee members of the board and consultants of the Company. Together the 2012 Plan and the 2016 Plan are referenced to as the "Plans". During the six months ended June 30, 2018 and 2017, 723 and 336 shares of restricted stock were issued under the Plans, respectively. The grant date fair value per share of all the outstanding restricted stock was $3.03 - $19.00. The shares vest over one to five years from their respective grant dates. For equity awards issued under the 2016 Plan, the grant date fair value was either the actual market price of the Company’s shares or an adjusted price using a Monte Carlo simulation for awards subject to the Company’s performance as compared to a defined peer group. For equity awards issued under the 2012 Plan, the grant date fair value was calculated based on a weighted analysis of (i) publicly-traded companies in a similar line of business to the Company (market comparable method)—Level 2 inputs, and (ii) discounted cash flows of the Company—Level 3 inputs. The Company recognized, in operating expenses on the consolidated income statements, $670 and $585 of compensation expense for the restricted stock during the three months ended June 30, 2018 and 2017, respectively. The Company recognized, in operating expenses on the consolidated income statements, $1,260 and $760 of compensation expense for the restricted stock during the six months ended June 30, 2018 and 2017, respectively. At June 30, 2018, the Company had unrecognized compensation expense of $7,726 related to granted but unvested stock awards, which is to be recognized as follows:
The following table summarizes restricted stock activity under the Plans from December 31, 2017 through June 30, 2018:
Employee Stock Purchase Plan Shares of the Company’s common stock may be purchased by eligible employees under the Company’s 2016 Employee Stock Purchase Plan in six-month intervals at a purchase price equal to at least 85% of the lesser of the fair market value of the Company’s common stock on either the first day or the last day of each six-month offering period. Employee purchases may not exceed 20% of their gross compensation during an offering period. |
Income Taxes |
6 Months Ended |
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Jun. 30, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The Company calculates its interim income tax provision in accordance with ASC 740. At the end of each interim period, the Company makes an estimate of the annual expected effective tax rate and applies that rate to its ordinary year to date earnings or loss. In addition, the effect of changes in enacted tax laws, rates or tax status is recognized in the interim period in which the change occurs. For the three months ended June 30, 2018 and 2017, the effective tax rate was approximately 19.4% and 30.5%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. For the six months ended June 30, 2018 and 2017, the effective tax rate was approximately 19.4% and 31.7%, respectively, based on the annual effective tax rate net of discrete federal and state taxes. The Company’s effective tax rate for the three and six months ended June 30, 2018 benefited from the decrease in the U.S. statutory tax rate from 35.0% in the prior year to 21.0% in the current period as a result of the Tax Reform Act that was enacted on December 22, 2017. The computation of the effective tax rate includes modifications from the statutory rate such as depletion deduction and tax credits among other items. The difference in the effective tax rate relative to the statutory rate was primarily due to the change in the forecasted pretax income between quarters relative to the projected modifications to the tax rate during the three and six months ended June 30, 2018 and a benefit related to the domestic production activities deduction and stock-based compensation during the three and six months ended June 30, 2017. The Company has evaluated its tax positions taken as of June 30, 2018 and December 31, 2017 and believes all positions taken would be upheld under examination from income taxing authorities. Therefore, no liability for the effects of uncertain tax positions has been recorded in the accompanying consolidated balance sheets as of June 30, 2018 and December 31, 2017. The Company is open to examination by taxing authorities since incorporation. |
Concentrations |
6 Months Ended |
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Jun. 30, 2018 | |
Risks and Uncertainties [Abstract] | |
Concentrations | Concentrations As of June 30, 2018, four customers accounted for 65% of the Company’s total accounts receivable. As of December 31, 2017, three customers accounted for 49% of the Company’s total accounts receivable. During the three months ended June 30, 2018, 64% of the Company’s revenues were earned from four customers. During the three months ended June 30, 2017, 79% of the Company’s revenues were earned from four customers. During the six months ended June 30, 2018, 65% of the Company’s revenues were earned from four customers. During the six months ended June 30, 2017, 76% of the Company’s revenues were earned from four customers. As of June 30, 2018, three vendors accounted for 31% of the Company’s accounts payable. As of December 31, 2017, two vendors accounted for 28% of the Company’s accounts payable. During the three months ended June 30, 2018, one supplier accounted for 31% of the Company’s cost of goods sold. During the three months ended June 30, 2017, two suppliers accounted for 90% of the Company’s cost of goods sold. During the six months ended June 30, 2018, one supplier accounted for 34% of the Company’s cost of goods sold. During the six months ended June 30, 2017, two suppliers accounted for 62% of the Company’s cost of goods sold. Currently, the Company’s inventory and operations are primarily located in Wisconsin. There is a risk of loss if there are significant environmental, legal or economic changes to this geographic area. The Company currently primarily utilizes one third-party rail company to ship its products to customers from its plant. There is a risk of business loss if there are significant impacts to this third party’s operations. |
Related Party Transactions |
6 Months Ended |
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Jun. 30, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company reimbursed Clearlake Capital Partners II (Master), L.P. $3 and $39 for the three months ended June 30, 2018 and 2017, respectively, and $23 and $39 for the six months ended June 30, 2018 and 2017, respectively, for certain out of pocket and other expenses in connection with certain management and administrative support services provided. |
Commitments and Contingencies |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies | Commitments and Contingencies Leases The Company is obligated under certain operating leases, minimum royalty payments for our leased properties in West Texas, and rental agreements for railcars, office space, and other equipment. Future minimum annual commitments under such operating leases at June 30, 2018 are as follows:
Expense related to operating leases and rental agreements was $3,363 and $2,092 for three months ended June 30, 2018 and 2017, respectively. Expense related to operating leases and rental agreements was $6,693 and $4,068 for the six months ended June 30, 2018 and 2017, respectively. Lease expense related to rail cars is included in cost of goods sold in the condensed consolidated income statements. Litigation The Company is periodically involved in litigation and claims incidental to its operation. Management believes that any pending litigation will not have a material impact the Company’s financial position. Required Capital As of June 30, 2018, the Company has commitments related to its Oakdale facility as well as future expansion projects of approximately $29,217. Consulting Agreements On August 1, 2010, the Company entered into a consulting agreement related to the purchase of land with a third party. The third party acted as an agent for the Company to obtain options to purchase certain identified real property in Wisconsin, as well as obtain permits and approvals necessary to open, construct and operate a sand mining and processing facility on such real property. The third party’s compensation, which continues indefinitely, consists of reimbursement of certain expenses and $1,000 per each acre purchased as a closing fee. For the three months ended June 30, 2018 and 2017, the Company incurred no closing costs and expense reimbursements. For the six months ended June 30, 2018 and 2017, the Company incurred $60 and $16 of closing costs and expense reimbursements, respectively. The closing costs have been capitalized in property and equipment in the accompanying consolidated balance sheets when they relate to the acquisition of land. In addition to the aforementioned fees, the third-party agreement provides for tonnage fees based upon mining operations. The payment of $0.50 per sold ton of certain grades of sand that have been mined and sold from the properties acquired under the consulting agreement continues indefinitely. The minimum annual tonnage fee is $200 per contract year, which runs from August 1 to July 31. During the three months ended June 30, 2018 and 2017, the Company incurred $204 and $113 related to tonnage fees, respectively. During the six months ended June 30, 2018 and 2017, the Company incurred $368 and $229 related to tonnage fees, respectively. These costs are presented as operating expenses in the condensed consolidated income statement. Bonds The Company entered into a performance bond with Jackson County, Wisconsin and Monroe County, Wisconsin for $4,400 and $900, respectively. The Company provided a performance bond to assure performance under the reclamation plan filed with each respective county. The Company entered into permit bonds amounting to $1,350 with certain towns and counties in which it operates to use designated town and county roadways. The Company provided these permit bonds to assure maintenance and restoration of the roadways. The Company has an outstanding $1,943 bond to assure performance under its agreement with a pipeline common carrier. As of June 30, 2018 and December 31, 2017, $0 and $487, respectively, of cash is being held as collateral related to the bond and is presented as restricted cash on the consolidated balance sheets. As of April 13, 2018, the Company no longer had any restrictions on cash. |
Subsequent Events |
6 Months Ended |
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Jun. 30, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events The Company has evaluated events and transactions subsequent to the balance sheet date and through the date the condensed consolidated financial statements were available to be issued. Based on this evaluation, except as disclosed in Note 11 above, the Company is not aware of any other events or transactions that occurred subsequent to June 30, 2018 that would require recognition or disclosures in the consolidated financial statements. |
Summary of Significant Accounting Policies (Policies) |
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Jun. 30, 2018 | |||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||
Use of Estimates | Use of Estimates The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates used in the preparation of these financial statements include, but are not limited to, the sand reserves and its impact on calculating the depletion expense under the units-of-production method, the depreciation associated with property and equipment, purchase price allocation for businesses acquired, impairment considerations of assets (including impairment of identified intangible assets, goodwill and other long-lived assets), estimated cost of future asset retirement obligations, stock-based compensation, recoverability of deferred tax assets, inventory reserve, contingent consideration and collectability of receivables and certain liabilities. Actual results could differ from management’s best estimates as additional information or actual results become available in the future, and those differences could be material. |
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Revenue Recognition | Revenue Recognition On January 1, 2018, the Company adopted new accounting standard Accounting Standards Codification (“ASC”) 606, “Revenue from Contracts with Customers” and all the related amendments (“ASC 606”) in relation to all contracts that were not completed or expired as of January 1, 2018, using the modified retrospective method. There was no adjustment made to the opening balance of retained earnings as a result of applying the new revenue standard. Results for reporting periods beginning after January 1, 2018 are presented under ASC 606, while the comparative information is not restated and will continue to be reported under the accounting standards in effect for those periods. With the adoption of the standard, the consolidated financial statements are supplemented by new disclosure requirements. Areas of focus and updated presentation requirements include disclosures surrounding contracts with customers, disaggregation of revenue, contract balances, performance obligations, significant judgments used in the application of the guidance and transaction price allocation to remaining performance obligations. Revenue Recognition Revenues are recognized when control of the promised goods or services is transferred to our customers, the amount of which reflects the consideration the Company expects to be entitled to in exchange for those goods or services. Sand Sales Revenue The Company derives its sand revenue by mining and processing sand. Its revenues are primarily a function of the price per ton realized and the volumes sold. The Company’s sales are generally free carrier (“FCA”), payment made at the origination point at the Company’s facility, with title passing as the product is loaded into railcars hired by the customer or provided by the Company and revenue being recognized when title transfers at the Company’s facility. For sand delivered in-basin to certain contract and spot-rate customers, the Company recognizes the revenue when title passes at the destination. The amount invoiced reflects product, transportation and any other additional handling services, such as storage or transloading the product from rail car to truck. Prices under the Company's long-term agreements with customers are generally indexed to the Average Cushing Oklahoma WTI Spot Prices and contain provisions allowing for adjustments including: (i) annual percentage price increases; and/or (ii) market factor adjustments, including a natural gas surcharge/reduction and a propane surcharge/reduction which are applied if the Average Natural Gas Price or the Average Quarterly Mont Belvieu TX Propane Spot Price, respectively, as listed by the U.S. Energy Information Administration, are above or below the applicable benchmark set forth in the contract for the preceding calendar quarter. Transportation Revenue Transportation revenue consists primarily of railway transportation and revenue to deliver products to customers. The Company’s transportation revenue fluctuates based on many factors, including the volume of product it transports and the distance between its plant and customers. Significant Judgments Accounting for long-term contracts involves the use of various techniques to estimate total contract revenue, costs and satisfaction of performance obligation. The Company satisfies its performance obligation and subsequently recognizes revenue, at a point in time, upon shipment of the products as the customer obtains control over the goods once the sand is loaded into the railcars or sand is delivered to the customer’s destination. In the case of frac sand being delivered to customers, the transaction price is variable in nature and is directly tied to the Average Cushing Oklahoma WTI Spot Prices per barrel. There were no changes to the significant judgments used by the Company to determine the timing of satisfaction of the performance obligation under ASC 606. Costs to Obtain or Fulfill Contract The Company’s costs to fulfill or obtain contracts with customers primarily consist of commissions and legal costs. Under take-or-pay contracts, the Company provides sales team members with commissions at set per ton prices. These commissions are paid on a monthly basis, when and if the sand is taken by the customer. Contract Balances The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables and deferred revenue on the consolidated balance sheet. For the Company’s sand sales, amounts are billed as sand is loaded on the railcars to fill customer orders for free carrier origination point sales or when sand is received at the destination for free carrier destination point sales and recorded as accounts receivable. For the Company’s freight revenue, amounts billed depend on the shipping terms and are recorded as receivables accordingly. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. In addition, the Company sometimes receives shortfall payments from its customers and recognizes the revenue once the rights of use are expired. Railcar Rental Railcar rental consists of revenue derived from the leasing of the Company’s railcars to customers under long-term contracts or on an as-used basis. Based on the customer contract, the Company either recognizes revenue on the leasing of railcars based on when the terms of the agreement state that the railcar is available to the customer for use, or based on a specified price per ton shipped. The Company recognizes revenue from leasing in accordance with ASC 840, “Leases,” as leasing revenue does not meet the criteria of ASC 606. Performance Obligations A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in accordance with ASC 606. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. Generally, the Company’s contracts include a single performance obligation that is separately identifiable, and therefore, distinct. Under ASC 606, the allocation of transaction price is not necessary if only one performance obligation is identified. Deferred Revenues The Company receives advance payments from certain customers in order to secure and procure a reliable provision and delivery of product. The Company classifies such advances as current or noncurrent liabilities depending upon the anticipated timing of delivery of the supplied product. Revenue is recognized upon the delivery of the product. The Company may receive an advance payment from a customer, based on the terms of the customer’s long-term contract, for a certain volume of product to be delivered. Revenue is recognized as product is delivered and the deferred revenue is reduced. Shortfall Payments The Company’s shortfall revenues are based on negotiated contract terms and are recognized when rights of use are expired. The Company recognizes revenue to the extent of the unfulfilled minimum contracted quantity at the shortfall price per ton as stated in the contract once payment is received or probable. |
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Accounts Receivable and Unbilled Receivables | Accounts Receivable and Unbilled Receivables Accounts receivable represents customer transactions that have been invoiced as of the balance sheet date; unbilled receivables represent customer transactions that have not yet been invoiced as of the balance sheet date. Accounts receivable are due within 30 days from the date of invoice, or in accordance with terms agreed upon with customers, and are stated at amounts due from customers net of any allowance for doubtful accounts. The Company considers accounts outstanding longer than the payment terms are past due. The Company determines the allowance by considering a number of factors, including the length of time trade accounts receivable are past due, previous loss history, the customer’s current ability to pay its obligation, and the condition of the general economy and the industry as a whole. Accounts receivable are written off when they are deemed uncollectible, and payments subsequently received on such receivables are credited to bad debt expense. |
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Transportation | Transportation Transportation costs are classified as cost of goods sold. Transportation costs consist of railway transportation and transload costs to deliver products to customers. |
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Inventories | Inventories The Company’s sand inventory consists of raw material (sand that has been excavated but not processed), work-in-progress (sand that has undergone some but not all processing) and finished goods (sand that has been completely processed and is ready for sale). The spare parts inventory consists of critical spare parts. Sand inventory is stated at the lower of cost or net realizable value using the average cost method. For the three and six months ended June 30, 2018 and 2017, the Company had no write-down of inventory as a result of any lower of cost or net realizable value assessment. Costs applied to the inventory include direct excavation costs, processing costs, overhead allocation, depreciation and depletion, transportation and additional service costs, as applicable. Stockpile tonnages are calculated by measuring the number of tons added and removed from the stockpile. Costs are calculated on a per ton basis and are applied to the stockpiles based on the number of tons in the stockpile. The Company performs monthly physical inventory measurements to verify the quantity of inventory on hand. Due to variation in sand density and moisture content and production processes utilized to manufacture the Company’s products, physical inventories will not necessarily detect all variances. To mitigate this risk, the Company recognizes a yield adjustment on its inventories. Spare parts inventory is accounted for on a first-in, first-out basis at the lower of cost or net realizable value. |
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Deferred Financing Charges | Deferred Financing Charges Direct costs incurred in connection with the Facility (as defined below) have been capitalized and are being amortized using the straight-line method, which approximates the effective interest method, over the term of the debt. |
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Financial Instruments | Financial Instruments The carrying value of the Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, approximates their fair value due to the short maturity of such instruments. Financial instruments also consist of debt for which fair value approximates carrying values as the debt bears interest at a variable rate which is reflective of current rates otherwise available to the Company. Unless otherwise noted, it is management’s opinion that the Company is not exposed to significant interest, currency or credit risks arising from these financial instruments. |
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Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment are recorded at cost. Costs related to researching, surveying, drilling, and related activities are recorded at cost and capitalized once a determination has been made that the Company’s property has proven and probable reserves. Capitalized mining costs are depleted using the units-of-production method. Construction in progress is primarily comprised of machinery and equipment which has not been placed in service and is not depreciated until the related assets or improvements are ready to be placed in service. Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment, which are:
Expenditures for maintenance and repairs are charged against income as incurred; betterments that increase the value or materially extend the life of the related assets are capitalized. Upon sale or disposition of property and equipment, the cost and related accumulated depreciation and amortization are removed from the accounts and any resulting gain or loss is recognized in the consolidated income statements. |
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Acquisitions and Contingent Consideration | Acquisitions In accordance with the guidance for business combinations, the Company determines whether a transaction or other event is a business combination, which requires that the assets acquired and liabilities assumed constitute a business. Each business combination is then accounted for by applying the acquisition method. If the assets acquired are not a business, the Company accounts for the transaction or other event as an asset acquisition. Under both methods, the Company recognizes the identifiable assets acquired, the liabilities assumed, contingent considerations and any non-controlling interest in the acquired entity. In addition, for transactions that are business combinations, the Company evaluates the existence of goodwill or a gain from a bargain purchase. The Company capitalizes acquisition-related costs and fees associated with asset acquisitions and immediately expenses acquisition-related costs and fees associated with business combinations. Contingent Consideration The Company’s contingent consideration is measured at fair value on a recurring basis and is comprised of payments for production of silos and related equipment during the three-year period after the Quickthree acquisition (Note 4). Contingent liabilities are valued using significant inputs that are not observable in the market, which are defined as Level 3 inputs according to fair value measurement accounting. The Company estimates the fair value of contingent liabilities using a Monte Carlo simulation-based, real option pricing methodology implementation of the Income Approach. This approach utilizes inputs including market comparable information and management assessments regarding potential future scenarios, then discounts the liabilities to present value. The Company believes its estimates and assumptions are reasonable, however, there is significant judgment involved. |
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Long-Lived Assets, Including Definite Intangible Assets | Long-Lived Assets, Including Definite Intangible Assets Long-lived assets, other than goodwill and other indefinite-lived intangibles, are evaluated for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable through the estimated undiscounted future cash flows derived from such assets. Definite-lived intangible assets primarily consist of developed technology and customer relationships. For long-lived assets used in operations, impairment losses are only recorded if the asset’s carrying amount is not recoverable through its undiscounted, probability-weighted future cash flows. The Company measures the impairment loss based on the difference between the carrying amount and the estimated fair value. When an impairment exists, the related assets are written down to fair value. |
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Goodwill and Other Indefinite-Lived Intangible Assets | Goodwill and Other Indefinite-Lived Intangible Assets The Company conducts its evaluation of goodwill and tradename impairment at the reporting unit level on an annual basis as of December 31, and more frequently if events or circumstances indicate that the carrying value of a reporting unit exceeds its fair value. Prior to performing an impairment test, the Company assesses qualitative factors to determine whether the existence of events or circumstances leads to a determination that is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the qualitative assessment determines that an impairment is more likely than not, we perform a quantitative comparison of the fair value with the carrying amount, including goodwill. If this comparison reflects impairment, then the loss would be measured as the excess of recorded goodwill, or other intangible assets with indefinite lives, over its implied fair value. |
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Fair Value Measurements | Fair Value Measurements The Company’s financial assets and liabilities are to be measured using inputs from the three levels of the fair value hierarchy, of which the first two are considered observable and the last unobservable, which are as follows:
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Stock-Based Compensation | Stock-Based Compensation The Company accounts for stock-based compensation in accordance with the provisions of ASC 718, “Compensation-Stock Compensation” (“ASC 718”), which requires the recognition of expense related to the fair value of stock-based compensation awards in the consolidated income statements. For restricted stock issued to employees and members of the board of directors of the Company (the “Board”) for their services on the Board, the Company estimates the grant date fair value of each share of restricted stock at issuance. For awards subject to service-based vesting conditions, the Company recognizes stock-based compensation expense, net of estimated forfeitures, equal to the grant date fair value of the award on a straight-line basis over the requisite service period, which is generally the vesting term. For awards subject to both performance and service-based vesting conditions, the Company recognizes stock-based compensation expense using the straight-line recognition method when it is probable that the performance condition will be achieved. Forfeitures are required to be estimated at the time of grant and revised, if necessary, in subsequent periods if actual forfeitures differ from those estimates. Share-based payments issued to non-employees are recorded at their fair values, and are periodically revalued as the equity instruments vest and are recognized as expense over the related service period in accordance with the provisions of ASC 718 and ASC 505, “Equity.” Once the Company’s shares became publicly traded on November 4, 2016, the Company began to use the actual market price of its shares as the grant date fair value for restricted stock awards. |
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Income Taxes | Income Taxes On December 22, 2017, the U.S. Tax Cuts and Jobs Act (the “Tax Reform Act”) was signed into law. Pursuant to the Securities and Exchange Commission Staff Accounting Bulletin No. 118, “Income Tax Accounting Implications of the Tax Cuts and Jobs Act”, given the amount and complexity of the changes in tax law resulting from the Tax Reform Act, the Company has not finalized the accounting for the income tax effects of the Tax Reform Act. This includes the re-measurement of deferred taxes. The impact of the Tax Reform Act may differ from this estimate during the one-year measurement period due to, among other things, further refinement of the Company’s calculations, changes in interpretations and assumptions the Company has made, guidance that may be issued and future actions the Company may take as a result of the Tax Reform Act. As a result of the Tax Reform Act, the Company recorded a tax benefit of approximately $8.5 million due to a re-measurement of deferred tax assets and liabilities in the fourth quarter of 2017. The Company applies the provisions of ASC 740, “Income Taxes” (“ASC 740”), which principally utilizes a balance sheet approach to provide for income taxes. Under this method, deferred tax assets and liabilities are recognized for the expected future tax consequences of net operating loss carryforwards and temporary differences between the carrying amounts and the tax bases of assets and liabilities. ASC 740 clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements. The impact of an uncertain income tax position on the income tax returns must be recognized at the largest amount that is more-likely-than-not to be required to be recognized upon audit by the relevant taxing authority. This standard also provides guidance on de-recognition, measurement, classification, interest and penalties, accounting for interim periods, disclosure and transition issues with respect to tax positions. The Company includes interest and penalties as a component of income tax expense in the consolidated income statements. For the periods presented, no interest and penalties were recorded. |
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Environmental Matters | Environmental Matters The Company is subject to various federal, state and local laws and regulations relating to the protection of the environment. Management has established procedures for the ongoing evaluation of the Company’s operations, to identify potential environmental exposures and to comply with regulatory policies and procedures. Environmental expenditures that relate to current operations are expensed or capitalized as appropriate. Expenditures that relate to an existing condition caused by past operations and do not contribute to current or future revenue generation are expensed as incurred. Liabilities are recorded when environmental costs are probable, and the costs can be reasonably estimated. The Company maintains insurance which may cover in whole or in part certain environmental expenditures. |
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Comprehensive Income | Comprehensive Income Comprehensive income is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. Other comprehensive income represents foreign currency translation adjustments. |
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Segment Information | Segment Information Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance. The Company’s chief operating decision maker is the Chief Executive Officer. The Company and the Chief Executive Officer view the Company’s operations and manage its business, including the recently acquired logistics assets and last mile solutions business, as one operating segment. Substantially all long-lived assets of the Company reside in the United States. |
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Basic and Diluted Net Income Per Share of Common Stock | Basic and Diluted Net Income Per Share of Common Stock Basic net income per share of common stock is computed by dividing net income attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, excluding the dilutive effects of restricted stock. Diluted net income per share of common stock is computed by dividing the net income attributable to common stockholders by the sum of the weighted-average number of shares of common stock outstanding during the period plus the potential dilutive effects of restricted stock outstanding during the period calculated in accordance with the treasury stock method, although restricted stock is excluded if their effect is anti-dilutive. |
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Reclassification | Reclassification Certain 2017 balance sheet items have been reclassified to conform to the current financial statement presentation. These reclassifications have no effect on previous reported net income. |
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Recent Accounting Pronouncements | Recent Accounting Pronouncements In August 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2017-12 “Derivatives and Hedging (Topic 815) Targeted Improvements to Accounting for Hedging Activities”. ASU 2017-12 eliminates the requirement to separately measure and report hedge ineffectiveness and generally requires the entire change in the fair value of a hedging instrument to be presented in the same income statement line as the hedged item. The guidance also eases certain documentation and assessment requirements and modifies the accounting for components excluded from the assessment of hedge effectiveness. The guidance is effective for the Company beginning after December 15, 2018, although early adoption is permitted. The Company is currently evaluating the effects of ASU 2017-12 on its consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, “Business Combinations (Topic 805) Clarifying the Definition of a Business”. The amendments in this update is to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The definition of a business affects many areas of accounting including acquisitions, disposals, goodwill, and consolidation. The guidance is effective for annual periods beginning after December 15, 2017, including interim periods within those periods. The Company adopted this standard on January 1, 2018. The adoption of this guidance did not have a material effect on the Company's financial position, results of operation or cash flows. In August 2016, the FASB issued ASU 2016-15, “Statement of Cash Flows (Topic 230) Classification of Certain Cash Receipts and Cash Payments” (“ASU 2016-15”). ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments for debt prepayment or extinguishment costs, the maturing of a zero-coupon bond, the settlement of contingent liabilities arising from a business combination, proceeds from insurance settlements, distributions from certain equity method investees and beneficial interests obtained in a financial asset securitization. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The guidance is effective for the Company beginning after December 15, 2017. The Company adopted this guidance effective January 1, 2018. The adoption of this guidance did not have a material effect on the Company’s financial position, results of operation or cash flows. In February 2016, the FASB issued ASU 2016-02, “Leases”(ASC 842) (“ASU 2016-02”), which replaces the existing guidance in ASC 840, “Leases.” ASU 2016-02 requires lessees to recognize most leases on their balance sheets as lease liabilities with corresponding right of use assets. The new lease standard does not substantially change lessor accounting. The new standard is effective for interim and annual reporting periods beginning after December 15, 2018, with early adoption permitted. The Company is currently in the process of evaluating the impact of the adoption on its consolidated financial statements. In May 2014, the FASB issued ASU 2014-09, “Revenue from Contracts with Customers” (“ASU 2014-09”). The objective of ASU 2014-09 is to establish a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and will supersede most of the existing revenue recognition guidance, including industry specific guidance. The core principle of ASU 2014-09 is that an entity recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. In applying the new guidance, an entity will: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the contract’s performance obligations; and (5) recognize revenue when (or as) the entity satisfies a performance obligation. ASU 2014-09 applies to all contracts with customers except those that are within the scope of other topics in the FASB ASC. In April and May 2016, the FASB issued ASU 2016-10, “Revenue from Contracts with Customers - Identifying Performance Obligations and Licensing”, ASU 2016-11, “Revenue Recognition and Derivatives and Hedging - Recession of SEC Guidance”, ASU 2016-12, “Revenue from Contracts with Customers - Narrow-Scope Improvements and Practical Expedients”, and ASU 2016-20, “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers”. These ASUs each affect the guidance of the new revenue recognition standard in ASU 2014-09 and related subsequent ASUs. The new guidance is effective for annual reporting periods (including interim periods within those periods) beginning after December 15, 2017 for public companies. The Company adopted this standard on January 1, 2018. |
Summary of Significant Accounting Policies (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of useful lives of property, plant and equipment | Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment, which are:
The acquisition cost has been allocated over the assets as set forth below.
Net property, plant and equipment consisted of:
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Schedule of contingent consideration | The fair value of the Company’s financial instruments carried at fair value were as follows:
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Fair value, liabilities measured on recurring basis, unobservable input reconciliation | The following table provides a summary of changes in the fair value of the Company’s Level 3 financial instruments for the six months ended June 30, 2018:
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Schedule of accumulated other comprehensive income (loss) | The following table presents the changes in accumulated other comprehensive income during the three and six months ended June 30, 2018.
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Reconciliation of weighted-average common shares outstanding used in the calculation of basic and diluted net income (loss) per share | The following table reconciles the weighted-average common shares outstanding used in the calculation of basic net income per share to the weighted average common shares outstanding used in the calculation of diluted net income per share:
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Acquisitions (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Business Combinations [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of useful lives of property, plant and equipment | Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment, which are:
The acquisition cost has been allocated over the assets as set forth below.
Net property, plant and equipment consisted of:
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Schedule of assets acquired and liabilities assumed |
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Schedule of consideration transferred | The Company’s preliminary allocation of the purchase price in connection with the acquisition was calculated as follows. The working capital adjustment may be adjusted to determine the final allocation of the purchase price.
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Inventories (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Inventory Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Inventories | Inventories consisted of the following:
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Prepaid Expenses and Other Current Assets (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Prepaid Expense and Other Assets [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of prepaid expenses and other current assets | Prepaid expenses and other current assets were comprised of the following:
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Property, Plant and Equipment, net (Tables) |
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Property, Plant and Equipment [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of net property, plant and equipment | Depreciation is calculated using the straight-line method over the estimated useful lives of the property, plant and equipment, which are:
The acquisition cost has been allocated over the assets as set forth below.
Net property, plant and equipment consisted of:
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Intangible Assets, Net and Goodwill (Tables) |
6 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of finite-lived intangible assets | The following table summarizes the Company’s intangible assets as of June 30, 2018 and December 31, 2017:
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Schedule of future amortization of finite lived intangible assets | The table below reflects the future estimated amortization expense for amortizable intangible assets as of June 30, 2018.
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Schedule of goodwill | Goodwill represents the excess of the cost of businesses acquired over the fair market value of identifiable net assets at the dates of acquisition. The following table summarizes the Company’s Goodwill as of June 30, 2018:
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Accrued and Other Expenses (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Payables and Accruals [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of Accrued and Other Expenses | Accrued and other expenses were comprised of the following:
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Credit Facility (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||
Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||
Schedule of line of credit facilities | As of June 30, 2018, fees attributable to the lender of $698 are presented as a discount to the carrying value of the debt and the unamortized amount is presented as a reduction of long-term debt on the balance sheet.
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Asset Retirement Obligation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||
Asset Retirement Obligation Disclosure [Abstract] | |||||||||||||||||||||||||||||
Reconciliation of total reclamation liability for asset retirement obligations | The following is a reconciliation of the total reclamation liability for asset retirement obligations:
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Stock-Based Compensation (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Unrecognized compensation expense is expected to be recognized | At June 30, 2018, the Company had unrecognized compensation expense of $7,726 related to granted but unvested stock awards, which is to be recognized as follows:
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Summary of restricted stock activity | The following table summarizes restricted stock activity under the Plans from December 31, 2017 through June 30, 2018:
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Commitments and Contingencies (Tables) |
6 Months Ended | ||||||||||||||||||||||||||||||||||||
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Jun. 30, 2018 | |||||||||||||||||||||||||||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||
Schedule of Future Minimum Annual Commitments Under Operating Leases | Future minimum annual commitments under such operating leases at June 30, 2018 are as follows:
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Organization and Nature of Business (Detail) $ in Thousands, T in Millions |
Jun. 01, 2018
USD ($)
|
May 31, 2018
T
|
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Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Anticipated processing capacity upon completion of expansion | T | 5.5 | |
Quickthree Solutions | ||
Business Acquisition [Line Items] | ||
Purchase agreement amount | $ 30,000 | |
Potential earn out | $ 12,750 | |
Lease term | 3 years |
Summary of Significant Accounting Policies - The Fair Value of Financial Instruments Carried at Fair Value (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Business Acquisition [Line Items] | |
Contingent consideration | $ 9,200 |
Total liabilities | 9,200 |
Level 1 | |
Business Acquisition [Line Items] | |
Contingent consideration | 0 |
Total liabilities | 0 |
Level 2 | |
Business Acquisition [Line Items] | |
Contingent consideration | 0 |
Total liabilities | 0 |
Level 3 | |
Business Acquisition [Line Items] | |
Contingent consideration | 9,200 |
Total liabilities | $ 9,200 |
Summary of Significant Accounting Policies - Summary of Changes in the Fair Value of the Company’s Level 3 Financial instruments (Details) - Quickthree Technology LLC - Contingent Consideration $ in Thousands |
6 Months Ended |
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Jun. 30, 2018
USD ($)
| |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward] | |
Balance as of January 1, 2017 | $ 0 |
Contingent consideration pursuant to acquisition | 9,200 |
Payment of contingent consideration | 0 |
Change in fair value of contingent consideration | 0 |
Balance as of June 30, 2017 | $ 9,200 |
Summary of Significant Accounting Policies - Schedule of Comprehensive Income (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended |
---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Foreign currency translation adjustments | ||
Beginning balance | $ 190,022 | |
Ending balance | $ 202,290 | 202,290 |
Foreign currency translation adjustments | ||
Foreign currency translation adjustments | ||
Beginning balance | 0 | 0 |
Other comprehensive income before reclassifications | 76 | 76 |
Amounts reclassed from accumulated other comprehensive income | 0 | 0 |
Ending balance | $ 76 | $ 76 |
Summary of Significant Accounting Policies - Reconciliation of Weighted-Average Common Shares Outstanding Used in the Calculation of Basic Net Income (Loss) Per Share and Diluted Net Income (Loss) Per Share (Detail) - shares shares in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Accounting Policies [Abstract] | ||||
Weighted average common shares outstanding (in shares) | 40,499 | 40,347 | 40,455 | 40,024 |
Assumed conversion of restricted stock (in shares) | 51 | 106 | 95 | 143 |
Diluted weighted average common stock outstanding (in shares) | 40,550 | 40,453 | 40,550 | 40,167 |
Acquisitions - Narrative (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 01, 2018 |
Mar. 15, 2018 |
Jun. 30, 2018 |
Jun. 30, 2018 |
|
Business Acquisition [Line Items] | ||||
Payments to acquire assets | $ 15,549 | |||
Contingent consideration | $ 9,200 | $ 9,200 | ||
Quickthree Solutions | ||||
Business Acquisition [Line Items] | ||||
Purchase agreement amount | $ 30,000 | |||
Consideration transferred, adjustment | $ 12,750 | |||
Adjustment period | 3 years | |||
Acquisition costs | $ 843 | $ 1,159 | ||
Contingent consideration | $ 9,200 |
Acquisitions - Van Hook Crude Acquisition Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Mar. 15, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Total assets acquired | $ 257,527 | $ 15,549 | $ 198,129 |
Machinery, equipment and tooling | |||
Business Acquisition [Line Items] | |||
Total assets acquired | 11,791 | 1,478 | 7,802 |
Plant and buildings | |||
Business Acquisition [Line Items] | |||
Total assets acquired | 143,622 | 1,407 | 81,561 |
Railroad and sidings | |||
Business Acquisition [Line Items] | |||
Total assets acquired | $ 25,691 | 9,926 | $ 10,254 |
Land improvements | |||
Business Acquisition [Line Items] | |||
Total assets acquired | $ 2,738 |
Acquisitions - Schedule of Consideration Transferred (Details) - USD ($) $ in Thousands |
Jun. 01, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Business Acquisition [Line Items] | |||
Contingent consideration – earnout | $ 9,200 | $ 0 | |
Quickthree Solutions | |||
Business Acquisition [Line Items] | |||
Base price - cash | $ 30,000 | ||
Contingent consideration – earnout | 9,200 | ||
Working capital adjustment | (122) | ||
Total purchase consideration | $ 39,078 |
Acquisitions - Schedule of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Thousands |
Jun. 01, 2018 |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|---|
Assets Acquired | |||
Goodwill | $ 16,892 | $ 0 | |
Quickthree Solutions | |||
Assets Acquired | |||
Accounts receivable | $ 112 | ||
Inventory | 1,700 | ||
Prepaid expenses and other current assets | 126 | ||
Total current assets acquired | 1,938 | ||
Property, plant and equipment | 740 | ||
Goodwill | 16,935 | ||
Other assets | 225 | ||
Total non-current assets acquired | 37,870 | ||
Total assets acquired | 39,808 | ||
Liabilities Assumed | |||
Accounts payable | 331 | ||
Accrued and other expenses | 399 | ||
Other current liabilities | |||
Total liabilities assumed | 730 | ||
Estimated fair value of net assets acquired | 39,078 | ||
Trade name | Quickthree Solutions | |||
Assets Acquired | |||
Goodwill | 900 | ||
Customer relationships | Quickthree Solutions | |||
Assets Acquired | |||
Intangibles | $ 270 | ||
Liabilities Assumed | |||
Useful Life (in years) | 1 year | ||
Developed technology | Quickthree Solutions | |||
Assets Acquired | |||
Intangibles | $ 18,800 | ||
Liabilities Assumed | |||
Useful Life (in years) | 6 years |
Inventories - Schedule of Inventories (Detail) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Inventory Disclosure [Abstract] | ||
Raw material | $ 187 | $ 298 |
Work in progress | 7,303 | 7,825 |
Finished goods | 2,782 | 832 |
Spare parts | 1,274 | 577 |
Total inventory | $ 11,546 | $ 9,532 |
Prepaid Expenses and Other Current Assets - Schedule of Prepaid Expenses and Other Current Assets (Detail) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Prepaid Expense and Other Assets [Abstract] | ||
Prepaid insurance | $ 403 | $ 551 |
Prepaid expenses | 1,576 | 1,112 |
Prepaid income taxes | 1,751 | 1,382 |
Rail rebate receivables | 502 | 776 |
Other receivables | 597 | 28 |
Total prepaid expenses and other current assets | $ 4,829 | $ 3,849 |
Property, Plant and Equipment, Net - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Property, Plant and Equipment [Line Items] | ||||
Depreciation expenses | $ 3,994,000 | $ 1,688,000 | $ 7,151,000 | $ 3,350,000 |
Depletion expense | 18,000 | 5,000 | 20,000 | 10,000 |
Construction in progress | ||||
Property, Plant and Equipment [Line Items] | ||||
Interest expense capitalized | $ 0 | $ 0 | $ 0 | $ 0 |
Intangible Assets, Net and Goodwill (Details) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |
---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Estimated Useful Life (Years) | 5 years 10 months 24 days | ||
Amortization of intangible assets | $ 284 | $ 284 | $ 0 |
Intangible Assets, Net and Goodwill - Schedule of future amortization expense of intangible assets (Details) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Goodwill and Intangible Assets Disclosure [Abstract] | |
2019 | $ 3,381 |
2020 | 3,133 |
2021 | 3,133 |
2022 | 3,133 |
2023 | 3,133 |
Thereafter | 2,873 |
Total | $ 18,786 |
Intangible Assets, Net and Goodwill - Schedule of Goodwill (Details) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Total Goodwill | |
Balance at January 1, 2018 | $ 0 |
Goodwill attributable to Quickthree Solutions, Inc. acquisition | 16,892 |
Balance at June 30, 2018 | $ 16,892 |
Accrued and Other Expenses - Schedule of Accrued and Other Expenses (Detail) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Payables and Accruals [Abstract] | ||
Employee related expenses | $ 2,568 | $ 667 |
Accrued construction related expenses | 1,483 | 2,197 |
Accrued legal expenses | 35 | 90 |
Accrued professional fees | 500 | 529 |
Accrued royalties | 1,068 | 206 |
Accrued freight and delivery charges | 1,590 | 2,197 |
Accrued real estate tax | 487 | 0 |
Accrued utilities | 528 | 176 |
Accrued interest | 166 | 0 |
Sales tax liability | 268 | 19 |
Deferred rent | 787 | 861 |
Other accrued liabilities | 1,892 | 634 |
Total accrued liabilities | $ 11,372 | $ 7,576 |
Credit Facility - Schedule of Credit Facility (Details) - USD ($) |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Line of Credit Facility [Line Items] | ||
Revolving credit facility, net | $ 44,654,000 | $ 0 |
Senior Secured Revolving Credit Facility | ||
Line of Credit Facility [Line Items] | ||
Revolving credit facility | 45,000,000 | 0 |
Less: debt discount, net | (346,000) | 0 |
Revolving credit facility, net | $ 44,654,000 | $ 0 |
Equipment Lease Obligations - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Capital Leased Assets [Line Items] | |||||
Remaining minimum lease payment due within one year | $ 432 | $ 432 | |||
Equipment | |||||
Capital Leased Assets [Line Items] | |||||
Assets under equipment leases, gross | 1,484 | 1,484 | $ 1,484 | ||
Leased assets, depreciation expense | $ 54 | $ 73 | $ 109 | $ 146 |
Asset Retirement Obligation - Additional Information (Detail) - USD ($) $ in Thousands |
Jun. 30, 2018 |
Dec. 31, 2017 |
---|---|---|
Asset Retirement Obligation Disclosure [Abstract] | ||
Post-closure reclamation and site restoration obligation | $ 9,476 | $ 8,982 |
Asset Retirement Obligation - Reconciliation of Total Reclamation Liability for Asset Retirement Obligations (Detail) $ in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
USD ($)
| |
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward] | |
December 31, 2017 | $ 8,982 |
Additions and revisions of prior estimates | 2,086 |
Accretion expense | 191 |
Settlement of liability | (1,783) |
June 30, 2018 | $ 9,476 |
Stock-Based Compensation - Summary of Restricted Stock Activity (Detail) - Restricted Stock shares in Thousands |
6 Months Ended |
---|---|
Jun. 30, 2018
$ / shares
shares
| |
Number of Shares | |
Unvested, December 31, 2017 (in shares) | shares | 534 |
Granted (in shares) | shares | 723 |
Vested (in shares) | shares | (156) |
Forfeiture (in shares) | shares | (30) |
Unvested, June 30, 2018 (in shares) | shares | 1,071 |
Weighted Average | |
Unvested, December 31, 2017 (in dollars per share) | $ / shares | $ 11.27 |
Granted (in dollars per share) | $ / shares | 10.78 |
Vested (in dollars per share) | $ / shares | (12.60) |
Forfeiture (in dollars per share) | $ / shares | (13.57) |
Unvested, June 30, 2018 (in dollars per share) | $ / shares | $ 9.92 |
Income Taxes - Additional Information (Detail) - USD ($) |
3 Months Ended | 6 Months Ended | |||
---|---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
Dec. 31, 2017 |
|
Income Tax Disclosure [Abstract] | |||||
Statutory tax rate | 19.40% | 30.50% | 19.40% | 31.70% | |
Liability for uncertain tax position | $ 0 | $ 0 | $ 0 |
Related Party Transactions - Additional Information (Detail) - USD ($) $ in Thousands |
3 Months Ended | 6 Months Ended | ||
---|---|---|---|---|
Jun. 30, 2018 |
Jun. 30, 2017 |
Jun. 30, 2018 |
Jun. 30, 2017 |
|
Clearlake Capital Partners II (Master) L.P. | Management and Administrative Support Services | ||||
Related Party Transaction [Line Items] | ||||
Reimbursed out-of-pocket and other expenses | $ 3 | $ 39 | $ 23 | $ 39 |
Commitments and Contingencies - Schedule of Future Minimum Annual Commitments Under Operating Leases (Detail) $ in Thousands |
Jun. 30, 2018
USD ($)
|
---|---|
Commitments and Contingencies Disclosure [Abstract] | |
2019 | $ 17,304 |
2020 | 12,467 |
2021 | 9,973 |
2022 | 7,276 |
2023 | 5,072 |
Thereafter | 37,007 |
Total | $ 89,099 |
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