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10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




	FORM 10-Q

(Mark One)

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

For the quarterly period ended September 30, 2021

 TRANSITION 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 

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  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 		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 

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 

The number of shares of the registrant’s Class A common stock outstanding on November 30, 2021 was 19,998,695.

The number of shares of the registrant’s Class B common stock outstanding on November 30, 2021 was 76,269.

TABLE OF CONTENTS




		Page
PART I.	FINANCIAL INFORMATION

Item 1.	Unaudited Condensed Consolidated Financial Statements and Notes	3
	Unaudited Condensed Consolidated Balance Sheets	3
	Unaudited Condensed Consolidated Statements of Operations	4
	Unaudited Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Unaudited Condensed Consolidated Statements of Cash Flows	7
	Unaudited Consolidated Statements of Changes in Stockholders' Equity (Deficit)	8
	Notes to Unaudited Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	40
Item 3.	Quantitative and Qualitative Disclosures about Market Risk	49
Item 4.	Controls and Procedures	50

PART II.	OTHER INFORMATION

Item 1.	Legal Proceedings	51
Item 1A.	Risk Factors	51
Item 2.	Sales of Unregistered Equity Securities and Use of Proceeds	51
Item 6.	Exhibits	52

SIGNATURES		53

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	September 30, 2021			December 31, 2020
Current assets:
Cash and cash equivalents	$	258,024		$	188,006
Accounts receivable, net of allowance for doubtful accounts of $585 and $24,629 at September 30, 2021 and December 31, 2020, respectively		174,065			158,516
Income taxes receivable		-			8,891
Prepaid expenses		26,881			31,793
Inventory		71,684			77,027
Other current assets		6,946			9,171
Investment in equity securities		18,684			-
Assets held for sale		87,922			242,104
Total current assets		644,206			715,508

Property, plant and equipment, net		403,473			408,107
Operating lease right-of-use assets		28,871			33,317
Goodwill		-			138,677
Notes receivable		75,564			72,129
Restricted cash		79,560			80,178
Intangible and other long-term assets, net		24,109			53,163
Total assets	$	1,255,783		$	1,501,079

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	56,500		$	50,330
Accrued expenses		109,054			114,777
Liabilities held for sale		23,241			46,376
Total current liabilities		188,795			211,483
Decommissioning liabilities		173,132			134,436
Operating lease liabilities		20,608			29,464
Deferred income taxes		32,396			5,288
Other long-term liabilities		70,355			123,261
Total non-current liabilities		296,491			292,449
Liabilities Subject to Compromise		-			1,335,794
Total liabilities		485,286			1,839,726

Stockholders’ equity (deficit):
Predecessor common stock $0.001 par value; Authorized - 25,000,000; 15,799,318 shares issued and 14,826,906 shares outstanding at December 31, 2020		-			16
Successor Class A common stock $0.01 par value; Authorized - 50,000,000 shares; 19,998,695 shares issued and outstanding at September 30, 2021		200			-
Successor Class B common stock $0.01 par value; Authorized - 2,000,000 shares; 113,840 shares issued and 76,269 shares outstanding at September 30, 2021		1			-
Class A Additional paid-in capital		902,486			2,756,889
Class B Additional paid-in capital		640			-
Predecessor Treasury stock at cost, 972,412 shares at December 31, 2020		-			(4,290	)
Accumulated other comprehensive loss, net		-			(67,947	)
Accumulated deficit		(132,830	)		(3,023,315	)
Total stockholders’ equity (deficit)		770,497			(338,647	)
Total liabilities and stockholders’ equity (deficit)	$	1,255,783		$	1,501,079

See accompanying notes to unaudited condensed consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Operations

(in thousands, except per share data)

(unaudited)


	Successor			Predecessor
	For the Three Months Ended September 30, 2021			For the Three Months Ended September 30, 2020
Revenues:
Services	$	85,667		$	67,213
Rentals		59,420			41,351
Product sales		33,496			27,412
Total revenues		178,583			135,976
Costs and expenses:
Cost of services		70,591			53,467
Cost of rentals		26,011			21,743
Cost of sales		28,371			11,864
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		124,973			87,074
Depreciation, depletion, amortization and accretion - services		28,426			13,670
Depreciation, depletion, amortization and accretion - rentals		19,717			8,814
Depreciation, depletion, amortization and accretion - sales		11,065			5,679
General and administrative expenses		33,671			51,440
Restructuring and other expense		4,712			25,746
Reduction in value of assets		-			2,929
Loss from operations		(43,981	)		(59,376	)
Other income (expense):
Interest income (expense), net		647			(24,800	)
Other expense		(6,224	)		(1,399	)
Loss from continuing operations before income taxes		(49,558	)		(85,575	)
Income tax benefit (expense)		9,518			(1,815	)
Net loss from continuing operations		(40,040	)		(87,390	)
Loss from discontinued operations, net of income tax		(5,161	)		(69,914	)
Net loss	$	(45,201	)	$	(157,304	)

Loss per share -basic and diluted
Loss from continuing operations	$	(2.00	)	$	(5.89	)
Loss from discontinued operations, net of income tax		(0.26	)		(4.72	)
Net loss	$	(2.26	)	$	(10.61	)

Weighted-average shares outstanding - basic and diluted		19,999			14,827

See accompanying notes to unaudited condensed consolidated financial statements.

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 September 30, 2021			For the Period January 1, 2021 through February 2, 2021			For the Nine Months Ended September 30, 2020
Revenues:
Services	$	209,133		$	19,234		$	230,935
Rentals		143,972			14,434			182,436
Product sales		97,213			12,260			108,426
Total revenues		450,318			45,928			521,797
Costs and expenses:
Cost of services		166,069			15,080			176,334
Cost of rentals		60,960			5,876			71,977
Cost of sales		69,391			8,817			69,702
Cost of revenues (exclusive of depreciation, depletion, amortization and accretion)		296,420			29,773			318,013
Depreciation, depletion, amortization and accretion - services		73,174			3,500			39,501
Depreciation, depletion, amortization and accretion - rentals		50,558			2,627			31,080
Depreciation, depletion, amortization and accretion - sales		34,524			2,231			18,471
General and administrative expenses		84,417			11,052			164,957
Restructuring and other expenses		20,533			1,270			27,033
Reduction in value of assets		-			-			19,451
Loss from operations		(109,308	)		(4,525	)		(96,709	)
Other income (expense):
Interest income (expense), net		1,394			202			(74,698	)
Reorganization items, net		-			335,560			-
Other expense		(6,499	)		(2,105	)		(4,810	)
Income (loss) from continuing operations before income taxes		(114,413	)		329,132			(176,217	)
Income tax (expense) benefit		15,550			(60,003	)		12,345
Net income (loss) from continuing operations		(98,863	)		269,129			(163,872	)
Loss from discontinued operations, net of income tax		(33,967	)		(352	)		(138,002	)
Net income (loss)	$	(132,830	)	$	268,777		$	(301,874	)

Income (loss) per share -basic
Net income (loss) from continuing operations	$	(4.94	)	$	18.13		$	(11.08	)
Loss from discontinued operations, net of income tax		(1.70	)		(0.02	)		(9.32	)
Net income (loss)	$	(6.64	)	$	18.11		$	(20.40	)

Income (loss) per share - diluted:
Net income (loss) from continuing operations	$	(4.94	)	$	18.06		$	(11.08	)
Loss from discontinued operations, net of income tax		(1.70	)		(0.03	)		(9.32	)
Net income (loss)	$	(6.64	)	$	18.03		$	(20.40	)

Weighted-average shares outstanding - basic		19,997			14,845			14,795
Weighted-average shares outstanding - diluted		19,997			14,905			14,795

See accompanying notes to unaudited condensed consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Comprehensive Income (Loss)

(in thousands)

(unaudited)


	Successor			Predecessor
	For the Three Months Ended September 30, 2021			For the Three Months Ended September 30, 2020
Net loss	$	(45,201	)	$	(157,304	)
Change in cumulative translation adjustment, net of tax		-			4,216
Comprehensive loss	$	(45,201	)	$	(153,088	)


	Successor			Predecessor
	For the Period February 3, 2021 through September 30, 2021			For the Period January 1, 2021 through February 2, 2021		For the Nine Months Ended September 30, 2020
Net income (loss)	$	(132,830	)	$	268,777	$	(301,874	)
Change in cumulative translation adjustment, net of tax		-			67,947		(607	)
Comprehensive income (loss)	$	(132,830	)	$	336,724	$	(302,481	)

See accompanying notes to unaudited condensed consolidated financial statements.

SUPERIOR ENERGY SERVICES, INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Cash Flows

(in thousands)

(unaudited)


	Successor			Predecessor
	For the Period February 3, 2021 through September 30, 2021			For the Period January 1, 2021 through February 2, 2021			For the Nine Months Ended September 30, 2020
Cash flows from operating activities:
Net income (loss)	$	(132,830	)	$	268,777		$	(301,874	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation, depletion, amortization and accretion		189,758			10,499			113,313
Deferred income taxes		(27,126	)		54,322			352
Reduction in value of assets		-			-			19,451
Reduction in value of assets held for sale		26,905			-			109,591
Right-of-use assets amortization		6,145			1,372			14,738
Stock based compensation expense		2,126			935			6,074
Reorganization items, net		-			(354,279	)		-
Bad debt		(5,303	)		(210	)		-
Gain on sale of assets and businesses		(16,304	)