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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 March 31, 2021

or

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

None

N/A

None

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 ¨ No x

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 ¨

Non-accelerated filer x

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

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes ¨ No x

The number of shares of the registrant’s Class A common stock outstanding on September 28, 2021 was 19,998,695.

1


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Quarterly Report on Form 10-Q for

the Quarterly Period Ended March 31, 2021

TABLE OF CONTENTS

Page

PART I.

FINANCIAL INFORMATION

Item 1.

Unaudited Condensed Consolidated Financial Statements and Notes

Unaudited Condensed Consolidated Balance Sheets

3

Unaudited Condensed Consolidated Statements of Operations

5

Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)

5

Unaudited Condensed Consolidated Statements of Cash Flows

6

Unaudited Consolidated Statements of Changes in Stockholders' Equity (Deficit)

7

Notes to Unaudited Condensed Consolidated Financial Statements

8

Item 2.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

33

Item 3.

Quantitative and Qualitative Disclosures about Market Risk

42

Item 4.

Controls and Procedures

42

PART II.

OTHER INFORMATION

Item 1.

Legal Proceedings

44

Item 1A.

Risk Factors

44

Item 2.

Unregistered Sales of Equity Securities

44

Item 6.

Exhibits

45

SIGNATURES

46

 


2


PART I. FINANCIAL INFORMATION

Item 1. Unaudited Condensed Consolidated Financial Statements and Notes

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets

(in thousands, except share data)

(unaudited)

Successor

Predecessor

ASSETS

March 31, 2021

December 31, 2020

Current assets:

Cash and cash equivalents

$

197,307 

$

188,006 

Restricted cash - current

16,751 

-

Accounts receivable, net of allowance for doubtful accounts of $0 and $24,629 at

March 31, 2021 and December 31, 2020, respectively

182,519 

183,964 

Income taxes receivable

-

8,891 

Prepaid expenses

41,666 

36,651 

Inventory and other current assets

105,772 

96,141 

Assets held for sale

41,881 

47,635 

Total current assets

585,896

561,288 

Property, plant and equipment, net

612,597

542,090 

Operating lease right-of-use assets

45,965 

50,192 

Goodwill

-

138,677 

Notes receivable

73,677 

72,612 

Restricted cash

80,056 

80,178 

Intangible and other long-term assets, net

25,649

56,042 

Total assets

$

1,423,840

$

1,501,079 

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)

Current liabilities:

Accounts payable

$

61,543

$

55,873 

Accrued expenses

162,063

130,332 

Income taxes payable

1,561

-

Current portion of decommissioning liabilities

358 

3,765 

Liabilities held for sale

1,177 

4,079 

Total current liabilities

226,702

194,049 

Decommissioning liabilities

174,224

138,981 

Operating lease liabilities

29,416 

40,258 

Deferred income taxes

54,473

5,288 

Other long-term liabilities

72,969

125,356 

Total non-current liabilities

331,082

309,883 

Liabilities Subject to Compromise

-

1,335,794 

Total liabilities

557,784

1,839,726 

Stockholders’ equity (deficit):

Predecessor common stock $0.001 par value; Authorized - 25,000,000, Issued - 15,799,318, Outstanding - 14,826,906 at December 31, 2020

-

16 

Successor Class A common stock $0.01 par value; Authorized - 50,000,000 shares 19,995,581 shares issued and outstanding at March 31, 2021

200 

-

Additional paid-in capital

902,486

2,756,889 

Predecessor Treasury stock at cost, 972,412 shares at December 31, 2020

-

(4,290)

Accumulated other comprehensive loss, net

-

(67,947)

Accumulated deficit

(36,630)

(3,023,315)

Total stockholders’ equity (deficit)

866,056

(338,647)

Total liabilities and stockholders’ equity (deficit)

$

1,423,840

$

1,501,079 

See accompanying notes to unaudited condensed consolidated financial statements.

 

3


SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)

Successor

Predecessor

For the period February 3, 2021 through March 31,

For the Period January 1, 2021 through February 2,

Three Months Ended March 31,

2021

2021

2020

Revenues:

Services

$

69,801

$

30,189

$

180,236

Rentals

32,915

15,123

100,105

Product sales

26,379

11,335

41,156

Total revenues

129,095

56,647

321,497

Costs and expenses:

Cost of services

58,473

25,182

140,199

Cost of rentals

14,280

6,724

40,043

Cost of sales

16,945

8,056

31,444

Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)

89,698

39,962

211,686

Depreciation, depletion, amortization and accretion - services

28,516

5,564

23,159

Depreciation, depletion, amortization and accretion - rentals

13,466

2,834

12,820

Depreciation, depletion, amortization and accretion - sales

10,825

2,100

5,376

General and administrative expenses

20,937

12,164

65,157

Restructuring and other expenses

8,383

1,270

-

Reduction in value of assets

-

-

16,522

Loss from operations

(42,730)

(7,247)

(13,223)

Other income (expense):

Interest income (expense), net

215

204

(25,134)

Reorganization items, net

-

335,560

-

Other income (expense):

(2,845)

(2,104)

(4,232)

Income (loss) from continuing operations before income taxes

(45,360)

326,413

(42,589)

Income tax (expense) benefit

7,852

(59,901)

10,254

Net income (loss) from continuing operations

(37,508)

266,512

(32,335)

Income (loss) from discontinued operations, net of income tax

878

2,265

(47,129)

Net income (loss)

$

(36,630)

$

268,777

$

(79,464)

Income (loss) per share -basic

Net income (loss) from continuing operations

$

(1.87)

$

17.96

$

(2.18)

Income (loss) from discontinued operations

0.04

0.15

(3.18)

Net income (loss)

$

(1.83)

$

18.11

$

(5.36)

Income (loss) per share - diluted:

Net income (loss) from continuing operations

$

(1.87)

$

17.88

$

(2.18)

Income (loss) from discontinued operations

0.04

0.15

(3.18)

Net income (loss)

$

(1.83)

$

18.03

$

(5.36)

Weighted-average Class A shares outstanding - basic

19,996

14,845

14,809

Weighted-average Class A shares outstanding - diluted

19,996

14,905

14,809

See accompanying notes to condensed consolidated financial statements.


4


 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)

Successor

Predecessor

For the period February 3, 2021 through March 31, 2021

For the Period January 1, 2021 through February 2, 2021

Three Months Ended March 31, 2020

Net income (loss)

(36,630)

268,777

(79,464)

Change in cumulative translation adjustment, net of tax

-

67,947

(4,538)

Comprehensive income (loss)

$

(36,630)

$

336,724

$

(84,002)

See accompanying notes to unaudited condensed consolidated financial statements.

 


5


 

 

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)

Successor

Predecessor

For the period February 3, 2021 through March 31, 2021

For the Period January 1, 2021 through February 2, 2021

Three Months Ended March 31, 2020

Cash flows from operating activities:

Net income (loss)

$

(36,630)

$

268,777

$

(79,464)

Adjustments to reconcile net loss to net cash provided by
  operating activities:

Depreciation, depletion, amortization and accretion

52,807

10,498

41,355

Deferred income taxes

(5,051)

54,322

3,882

Amortization of debt acquisition costs

82

-

16,522

Reduction in value of assets held for sale

-

(2,654)

46,358

Assets held for sale

(71)

-

-

Right-of-use assets amortization

2,544

1,372

4,373

Reorganization items, net

-

(354,279)

-

Retirement and deferred compensation plans expense, net

(2,007)

260

3,584

Bad debt

(4,398)

(210)

-

Gain on sale of assets and businesses

(2,673)

58

-

Other reconciling items, net

(710)

(307)

1,776

Changes in operating assets and liabilities:

Accounts receivable

2,414

3,602

(3,448)

Prepaid expenses

(4,625)

(340)

4,129

Inventory and other current assets