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spn-20200630x10q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



	FORM 10-Q

(Mark One)

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2020

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Transition Period from to

Commission File No. 001-34037

Commission Company Name: SUPERIOR ENERGY SERVICES INC

SUPERIOR ENERGY SERVICES, INC.

(Exact name of registrant as specified in its charter)


	Delaware		75-2379388
	(State or other jurisdiction of		(I.R.S. Employer
	incorporation or organization)		Identification No.)

	1001 Louisiana Street, Suite 2900		77002
	Houston, TX		(Zip Code)
	(Address of principal executive offices)

Registrant’s telephone number, including area code: (713) 654-2200

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $.001 par value	SPN	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes x No ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large Accelerated filer ¨		Accelerated Filer x
Non-accelerated filer ¨		Smaller reporting company ¨
		Emerging growth company ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The number of shares of the registrant’s common stock outstanding on August 5, 2020 was 14,826,627.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q for

the Quarterly Period Ended June 30, 2020

TABLE OF CONTENTS



		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements and Notes	3
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	20
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	28
Item 4.	Controls and Procedures	28

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	29
Item 1A.	Risk Factors	29
Item 2.	Unregistered Sales of Equity Securities	30
Item 3.	Defaults Upon Senior Securities	30
Item 4.	Mine Safety Disclosures	30
Item 5.	Other Information	30
Item 6.	Exhibits	31

‎

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements and Notes


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands, except share data)
(unaudited)
	June 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	278,409	$	272,624
Accounts receivable, net of allowance for doubtful accounts of $12,381 and $12,156 at June 30, 2020 and December 31, 2019, respectively		219,410		332,047
Income taxes receivable		32,648		740
Prepaid expenses		42,893		49,132
Inventory and other current assets		118,309		117,629
Assets held for sale		116,163		216,197
Total current assets		807,832		988,369

Property, plant and equipment, net of accumulated depreciation and depletion of ‎$2,169,809 and $2,214,116 at June 30, 2020 and December 31, 2019, respectively		599,114		664,949
Operating lease right-of-use assets		71,376		80,906
Goodwill		136,006		137,695
Notes receivable		70,350		68,092
Restricted cash		2,774		2,764
Intangible and other long-term assets, net of accumulated amortization of $23,894 ‎and $23,199 at June 30, 2020 and December 31, 2019, respectively		46,988		50,455
Total assets	$	1,734,440	$	1,993,230

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	64,604	$	92,966
Accrued expenses		147,304		182,934
Current portion of decommissioning liabilities		3,706		3,649
Liabilities held for sale		7,252		44,938
Total current liabilities		222,866		324,487

Long-term debt, net		1,288,663		1,286,629
Decommissioning liabilities		135,677		132,632
Operating lease liabilities		54,087		62,354
Deferred income taxes		2,531		3,247
Other long-term liabilities		125,743		134,308

Stockholders’ equity (deficit):
Preferred stock of $0.01 par value. Authorized - 5,000,000 shares; none issued		-		-
Common stock of $0.001 par value
Authorized - 25,000,000, Issued - 15,799,039, Outstanding - 14,826,627 at June 30, 2020		16		16
Authorized - 25,000,000, Issued - 15,689,463, Outstanding - 14,717,051 at December 31, 2019
Additional paid-in capital		2,757,552		2,752,859
Treasury stock at cost, 972,412 shares at June 30, 2020 and December 31, 2019, respectively		(4,290)		(4,290)
Accumulated other comprehensive loss, net		(76,750)		(71,927)
Accumulated deficit		(2,771,655)		(2,627,085)
Total stockholders’ equity (deficit)		(95,127)		49,573
Total liabilities and stockholders’ equity (deficit)	$	1,734,440	$	1,993,230

See accompanying notes to condensed consolidated financial statements.



SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share data)
(unaudited)

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Revenues:
Services	$	90,609	$	238,435	$	270,845	$	477,708
Rentals		53,339		92,011		153,444		183,048
Product sales		39,905		36,992		81,061		71,956
Total revenues		183,853		367,438		505,350		732,712
Costs and expenses:
Cost of services		81,400		168,881		221,599		347,606
Cost of rentals		20,982		38,850		61,025		80,537
Cost of sales		26,421		21,801		57,865		41,442
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		128,803		229,532		340,489		469,585
Depreciation, depletion, amortization and accretion - services		18,025		33,326		41,184		69,948
Depreciation, depletion, amortization and accretion - rentals		10,668		15,795		23,488		31,458
Depreciation, depletion, amortization and accretion - sales		8,093		2,150		13,469		6,208
General and administrative expenses		59,707		71,038		124,864		142,150
Reduction in value of assets		-		7,556		16,522		7,556
Income (loss) from operations		(41,443)		8,041		(54,666)		5,807

Other income (expense):
Interest expense, net		(24,749)		(24,650)		(49,883)		(49,771)
Other income (expense):		821		490		(3,411)		(1,122)
Loss from continuing operations before income taxes		(65,371)		(16,119)		(107,960)		(45,086)
Income taxes		(6,508)		2,322		(16,762)		5,999
Net loss from continuing operations		(58,863)		(18,441)		(91,198)		(51,085)
Loss from discontinued operations, net of income tax		(6,243)		(52,609)		(53,372)		(67,670)
Net loss	$	(65,106)	$	(71,050)	$	(144,570)	$	(118,755)

Basic and diluted loss per share:
Net loss from continuing operations	$	(3.97)	$	(1.18)	$	(6.18)	$	(3.29)
Loss from discontinued operations		(0.42)		(3.37)		(3.61)		(4.35)
Net loss	$	(4.39)	$	(4.55)	$	(9.79)	$	(7.64)

Weighted average shares outstanding		14,826		15,600		14,767		15,538


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Loss

	Three Months Ended June 30,				Six Months Ended June 30,
	2020		2019		2020		2019
Net loss		(65,106)		(71,050)		(144,570)		(118,755)
Change in cumulative translation adjustment, net of tax		(285)		(1,916)		(4,823)		(843)
Comprehensive loss	$	(65,391)	$	(72,966)	$	(149,393)	$	(119,598)

See accompanying notes to condensed consolidated financial statements.

‎


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(in thousands)
(unaudited)

	Six Months Ended June 30,
	2020		2019
Cash flows from operating activities:
Net loss	$	(144,570)	$	(118,755)

Adjustments to reconcile net loss to net cash provided by operating ‎ activities:
Depreciation, depletion, amortization and accretion		78,141		157,657
Deferred income taxes		(716)		-
Reduction in value of assets		16,522		31,381
Reduction in value of assets held for sale		49,361		-
Right-of-use assets amortization		9,943		11,286
Stock-based compensation expense		7,293		13,507
Other reconciling items, net		(1,906)		(7,005)
Changes in operating assets and liabilities:
Accounts receivable		88,182		67,506
Prepaid expenses		(8)		(16,953)
Inventory and other current assets		5,668		(13,680)
Accounts payable		(27,250)		(21,931)
Accrued expenses		(38,137)		(28,089)
Income taxes		(31,677)		-
Other, net		(11,419)		(6,094)
Net cash provided by (used in) operating activities		(573)		68,830

Cash flows from investing activities:
Payments for capital expenditures		(30,518)		(79,136)
Proceeds from sales of assets		39,445		84,557
Net cash provided by investing activities		8,927		5,421

Cash flows from financing activities:
Tax withholdings for vested restricted stock units		(208)		(1,677)
Other		-		651
Net cash used in financing activities		(208)		(1,026)
Effect of exchange rate changes on cash		(2,351)		(102)
Net change in cash, cash equivalents, and restricted cash		5,795		73,123
Cash, cash equivalents,