SEC Filing | Superior Energy Services

View:

Download DOC

Download PDF

Download XLS

Download XBRL

spnx-20200930x10q

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 September 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 (1)	Name of each exchange on which registered (1)
Common Stock, $.001 par value	SPNX	NONE

(1) On September 17, 2020, our common stock was suspended from trading on the New York Stock Exchange (the NYSE). On September 18, 2020, our common stock began trading on the OTCQX Marketplace maintained by the OTC Markets Group, Inc. under the symbol “SPNX.” On October 2, 2020, the NYSE filed a Form 25 with the Securities and Exchange Commission (the SEC) to delist our common stock from trading on the NYSE and to remove it from registration under Section 12(b) of the Securities Exchange Act of 1934, as amended (the Exchange Act). The delisting became effective 10 days after the filing of the Form 25. In accordance with Rule 12d2-2 of the Exchange Act, the de-registration of our common stock under Section 12(b) of the Exchange Act will become effective 90 days, or such shorter period as the SEC may determine, from the date of the Form 25 filing.

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 November 3, 2020 was 14,826,906.
‎

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q for

the Quarterly Period Ended September 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	24
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	32
Item 4.	Controls and Procedures	33

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	34
Item 1A.	Risk Factors	34
Item 2.	Unregistered Sales of Equity Securities	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	40

‎

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)
	September 30, 2020		December 31, 2019
ASSETS
Current assets:
Cash and cash equivalents	$	207,781	$	272,624
Accounts receivable, net of allowance for doubtful accounts of $18,414 and $12,156 at ‎September 30, 2020 and December 31, 2019, respectively		181,666		332,047
Income taxes receivable		4,119		740
Prepaid expenses		42,465		49,132
Inventory and other current assets		108,639		117,629
Assets held for sale		51,748		216,197
Total current assets		596,418		988,369

Property, plant and equipment, net of accumulated depreciation and depletion of ‎$2,184,340 and $2,214,116 at September 30, 2020 and December 31, 2019, respectively		574,588		664,949
Operating lease right-of-use assets		56,198		80,906
Goodwill		137,142		137,695
Notes receivable		71,472		68,092
Restricted cash		80,175		2,764
Intangible and other long-term assets, net of accumulated amortization of $24,675 ‎and $23,199 at September 30, 2020 and December 31, 2019, respectively		58,253		50,455
Total assets	$	1,574,246	$	1,993,230

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	60,042	$	92,966
Accrued expenses		159,395		182,934
Current portion of decommissioning liabilities		3,735		3,649
Liabilities held for sale		5,760		44,938
Total current liabilities		228,932		324,487

Long-term debt, net		1,289,288		1,286,629
Decommissioning liabilities		137,315		132,632
Operating lease liabilities		38,649		62,354
Deferred income taxes		3,599		3,247
Other long-term liabilities		126,199		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 - 15,799,318, Outstanding - 14,826,906 at September 30, 2020		16		16
Authorized - 25,000,000, Issued - 15,689,463, Outstanding - 14,717,051 at December 31, 2019
Additional paid-in capital		2,756,031		2,752,859
Treasury stock at cost, 972,412 shares at September 30, 2020 and December 31, 2019, respectively		(4,290)		(4,290)
Accumulated other comprehensive loss, net		(72,534)		(71,927)
Accumulated deficit		(2,928,959)		(2,627,085)
Total stockholders’ equity (deficit)		(249,736)		49,573
Total liabilities and stockholders’ equity (deficit)	$	1,574,246	$	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 September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Revenues:
Services	$	97,001	$	211,540	$	367,846	$	689,248
Rentals		42,562		99,771		196,006		282,819
Product sales		27,365		45,274		108,426		117,230
Total revenues		166,928		356,585		672,278		1,089,297
Costs and expenses:
Cost of services		81,535		162,469		303,134		510,075
Cost of rentals		22,879		39,119		83,904		119,656
Cost of sales		11,819		30,339		69,684		71,781
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		116,233		231,927		456,722		701,512
Depreciation, depletion, amortization and accretion - services		20,400		26,646		61,584		96,594
Depreciation, depletion, amortization and accretion - rentals		9,145		15,500		32,633		46,958
Depreciation, depletion, amortization and accretion - sales		5,627		3,016		19,096		9,224
General and administrative expenses		54,966		60,866		178,543		203,015
Restructuring expense		25,746		-		27,033		-
Reduction in value of assets		2,929		9,571		19,451		17,128
Income (loss) from operations		(68,118)		9,059		(122,784)		14,866

Other income (expense):
Interest expense, net		(24,794)		(24,505)		(74,677)		(74,275)
Other income (expense):		(1,399)		(3,353)		(4,810)		(4,476)
Loss from continuing operations before income taxes		(94,311)		(18,799)		(202,271)		(63,885)
Income taxes		4,990		1,708		(11,772)		7,707
Net loss from continuing operations		(99,301)		(20,507)		(190,499)		(71,592)
Loss from discontinued operations, net of income tax		(58,003)		(17,934)		(111,375)		(85,604)
Net loss	$	(157,304)	$	(38,441)	$	(301,874)	$	(157,196)

Basic and diluted loss per share:
Net loss from continuing operations	$	(6.70)	$	(1.31)	$	(12.87)	$	(4.60)
Loss from discontinued operations		(3.91)		(1.15)		(7.53)		(5.49)
Net loss	$	(10.61)	$	(2.46)	$	(20.40)	$	(10.09)

Weighted average shares outstanding		14,827		15,657		14,795		15,581


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

	Three Months Ended September 30,				Nine Months Ended September 30,
	2020		2019		2020		2019
Net loss		(157,304)		(38,441)		(301,874)		(157,196)
Change in cumulative translation adjustment, net of tax		4,216		(2,967)		(607)		(3,810)
Comprehensive loss	$	(153,088)	$	(41,408)	$	(302,481)	$	(161,006)

See accompanying notes to condensed consolidated financial statements.

‎


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

	Nine Months Ended September 30,
	2020		2019
Cash flows from operating activities:
Net loss	$	(301,874)	$	(157,196)

Adjustments to reconcile net loss to net cash provided by operating ‎ activities:
Depreciation, depletion, amortization and accretion		113,313		225,044
Deferred income taxes		352		-
Reduction in value of assets		19,451		40,952
Reduction in value of assets held for sale		109,591		-
Right-of-use assets amortization		14,738		16,341
Stock-based compensation expense		6,074		14,155
Other reconciling items, net		(3,537)		(9,340)
Changes in operating assets and liabilities:
Accounts receivable		126,439		68,239
Prepaid expenses		352		(20,012)
Inventory and other current assets		15,380		(19,966)
Accounts payable		(35,828)		(8,221)
Accrued expenses		(26,409)		(25,054)
Income taxes		(3,114)		3,314
Other, net		(16,331)		(11,752)
Net cash provided by operating activities		18,597		116,504

Cash flows from investing activities:
Payments for capital expenditures		(37,408)		(105,393)
Proceeds from sales of assets		44,097		90,696
Net cash provided by (used in) investing activities		6,689		(14,697)

Cash flows from financing activities:
Delayed draw term loan commitment fee		(11,700)		-
Tax withholdings for vested restricted stock units		(208)		(1,677)
Other		(432)		621
Net cash used in financing activities		(12,340)		(1,056)
Effect of exchange rate changes on cash		(378)		(1,857)
Net change in cash, cash equivalents, and restricted cash		12,568		98,894
Cash, cash equivalents, and restricted cash at beginning of period		275,388