|
The Netherlands
|
|
98-1107145
|
|
|
(State or other jurisdiction of
incorporation or organization)
|
|
(IRS Employer
Identification number)
|
|
|
|
|
|
|
|
Mastenmakersweg 1
|
|
|
|
|
1786 PB Den Helder, The Netherlands
|
|
Not Applicable
|
|
|
(Address of principal executive offices)
|
|
(Zip Code)
|
|
Large accelerated filer
|
þ
|
Accelerated filer
|
¨
|
Non-accelerated filer
|
¨
(Do not check if a smaller reporting company)
|
Smaller reporting company
|
¨
|
|
|
Emerging growth company
|
¨
|
FRANK'S INTERNATIONAL N.V.
|
|||||||
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|||||||
(In thousands, except share data)
|
|||||||
|
|
|
|
||||
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Assets
|
(Unaudited)
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
233,338
|
|
|
$
|
319,526
|
|
Short-term investments
|
60,598
|
|
|
—
|
|
||
Accounts receivables, net
|
140,906
|
|
|
167,417
|
|
||
Inventories
|
132,961
|
|
|
139,079
|
|
||
Assets held for sale
|
3,792
|
|
|
—
|
|
||
Other current assets
|
6,893
|
|
|
14,027
|
|
||
Total current assets
|
578,488
|
|
|
640,049
|
|
||
|
|
|
|
||||
Property, plant and equipment, net
|
497,784
|
|
|
567,024
|
|
||
Goodwill and intangible assets, net
|
247,699
|
|
|
256,146
|
|
||
Deferred tax assets
|
—
|
|
|
79,309
|
|
||
Other assets
|
33,344
|
|
|
45,533
|
|
||
Total assets
|
$
|
1,357,315
|
|
|
$
|
1,588,061
|
|
|
|
|
|
||||
Liabilities and Equity
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Short-term debt
|
$
|
87
|
|
|
$
|
276
|
|
Accounts payable
|
21,172
|
|
|
16,081
|
|
||
Deferred revenue
|
9,035
|
|
|
18,072
|
|
||
Accrued and other current liabilities
|
75,094
|
|
|
64,950
|
|
||
Total current liabilities
|
105,388
|
|
|
99,379
|
|
||
|
|
|
|
||||
Deferred tax liabilities
|
254
|
|
|
20,951
|
|
||
Other non-current liabilities
|
28,190
|
|
|
156,412
|
|
||
Total liabilities
|
133,832
|
|
|
276,742
|
|
||
|
|
|
|
||||
Commitments and contingencies (Note 15)
|
|
|
|
|
|
||
|
|
|
|
||||
Stockholders' equity:
|
|
|
|
||||
Common stock, €0.01 par value, 798,096,000 shares authorized, 223,906,195 and 223,161,356 shares issued and 223,061,559 and 222,401,427 shares outstanding
|
2,810
|
|
|
2,802
|
|
||
Additional paid-in capital
|
1,048,498
|
|
|
1,036,786
|
|
||
Retained earnings
|
215,793
|
|
|
317,270
|
|
||
Accumulated other comprehensive loss
|
(30,510
|
)
|
|
(32,977
|
)
|
||
Treasury stock (at cost), 844,636 and 759,929 shares
|
(13,108
|
)
|
|
(12,562
|
)
|
||
Total equity
|
1,223,483
|
|
|
1,311,319
|
|
||
Total liabilities and equity
|
$
|
1,357,315
|
|
|
$
|
1,588,061
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
|||||||||||||||
(In thousands, except per share data)
|
|||||||||||||||
(Unaudited)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
$
|
92,547
|
|
|
$
|
85,698
|
|
|
$
|
272,402
|
|
|
$
|
312,132
|
|
Products
|
15,536
|
|
|
19,416
|
|
|
64,071
|
|
|
67,414
|
|
||||
Total revenue
|
108,083
|
|
|
105,114
|
|
|
336,473
|
|
|
379,546
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenues, exclusive of depreciation and amortization
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
60,981
|
|
|
57,307
|
|
|
178,865
|
|
|
189,965
|
|
||||
Products
|
10,750
|
|
|
16,029
|
|
|
45,162
|
|
|
51,446
|
|
||||
General and administrative expenses
|
39,963
|
|
|
39,677
|
|
|
125,107
|
|
|
138,586
|
|
||||
Depreciation and amortization
|
30,650
|
|
|
26,545
|
|
|
92,700
|
|
|
84,278
|
|
||||
Severance and other charges
|
1,648
|
|
|
14,534
|
|
|
2,386
|
|
|
18,858
|
|
||||
Gain on sale of assets
|
(829
|
)
|
|
(46
|
)
|
|
(2,091
|
)
|
|
(1,095
|
)
|
||||
Operating loss
|
(35,080
|
)
|
|
(48,932
|
)
|
|
(105,656
|
)
|
|
(102,492
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Derecognition of the tax receivable agreement liability
|
122,515
|
|
|
—
|
|
|
122,515
|
|
|
—
|
|
||||
Other income (expense), net
|
(384
|
)
|
|
984
|
|
|
348
|
|
|
2,145
|
|
||||
Interest income, net
|
1,019
|
|
|
646
|
|
|
2,170
|
|
|
1,050
|
|
||||
Mergers and acquisition expense
|
—
|
|
|
—
|
|
|
(459
|
)
|
|
—
|
|
||||
Foreign currency gain (loss)
|
1,839
|
|
|
(1,696
|
)
|
|
3,184
|
|
|
(5,907
|
)
|
||||
Total other income (expense)
|
124,989
|
|
|
(66
|
)
|
|
127,758
|
|
|
(2,712
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income tax expense (benefit)
|
89,909
|
|
|
(48,998
|
)
|
|
22,102
|
|
|
(105,204
|
)
|
||||
Income tax expense (benefit)
|
87,613
|
|
|
(6,800
|
)
|
|
72,419
|
|
|
(15,311
|
)
|
||||
Net income (loss)
|
2,296
|
|
|
(42,198
|
)
|
|
(50,317
|
)
|
|
(89,893
|
)
|
||||
Net loss attributable to noncontrolling interest
|
—
|
|
|
(5,216
|
)
|
|
—
|
|
|
(20,741
|
)
|
||||
Net income (loss) attributable to Frank's International N.V.
|
2,296
|
|
|
(36,982
|
)
|
|
(50,317
|
)
|
|
(69,152
|
)
|
||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Net income (loss) available to Frank's International N.V.
common shareholders |
$
|
2,296
|
|
|
$
|
(36,982
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(69,153
|
)
|
|
|
|
|
|
|
|
|
||||||||
Dividends per common share
|
$
|
0.075
|
|
|
$
|
0.075
|
|
|
$
|
0.225
|
|
|
$
|
0.375
|
|
|
|
|
|
|
|
|
|
||||||||
Income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.01
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.43
|
)
|
Diluted
|
$
|
0.01
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.43
|
)
|
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares outstanding:
|
|
|
|
|
|
|
|
||||||||
Basic
|
223,056
|
|
|
177,125
|
|
|
222,847
|
|
|
162,656
|
|
||||
Diluted
|
223,581
|
|
|
177,125
|
|
|
222,847
|
|
|
162,656
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
|
|||||||||||||||
(In thousands)
|
|||||||||||||||
(Unaudited)
|
|||||||||||||||
|
|
|
|
|
|
|
|
||||||||
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
2,296
|
|
|
$
|
(42,198
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(89,893
|
)
|
Other comprehensive income (loss):
|
|
|
|
|
|
|
|
||||||||
Foreign currency translation adjustments
|
1,488
|
|
|
74
|
|
|
2,809
|
|
|
1,824
|
|
||||
Marketable securities:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain (loss) on marketable securities
|
(101
|
)
|
|
(50
|
)
|
|
(105
|
)
|
|
1,066
|
|
||||
Reclassification to net income
|
—
|
|
|
—
|
|
|
(395
|
)
|
|
—
|
|
||||
Deferred tax asset / liability change
|
—
|
|
|
(5
|
)
|
|
158
|
|
|
(465
|
)
|
||||
Unrealized gain (loss) on marketable securities, net of tax
|
(101
|
)
|
|
(55
|
)
|
|
(342
|
)
|
|
601
|
|
||||
Total other comprehensive income
|
1,387
|
|
|
19
|
|
|
2,467
|
|
|
2,425
|
|
||||
Comprehensive income (loss)
|
3,683
|
|
|
(42,179
|
)
|
|
(47,850
|
)
|
|
(87,468
|
)
|
||||
Less: Comprehensive loss attributable to noncontrolling interest
|
—
|
|
|
(5,264
|
)
|
|
—
|
|
|
(20,180
|
)
|
||||
Add: Transfer of Mosing Holdings, LLC ("Mosing Holdings") interest to FINV attributable to comprehensive loss
|
—
|
|
|
(8,203
|
)
|
|
—
|
|
|
(8,203
|
)
|
||||
Comprehensive income (loss) attributable to Frank's International N.V.
|
$
|
3,683
|
|
|
$
|
(45,118
|
)
|
|
$
|
(47,850
|
)
|
|
$
|
(75,491
|
)
|
FRANK'S INTERNATIONAL N.V.
|
||||||||||||||||||||||||||||||
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
|
||||||||||||||||||||||||||||||
(In thousands)
|
||||||||||||||||||||||||||||||
(Unaudited)
|
||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Nine Months Ended September 30, 2016
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|
Non-
|
|
Total
|
|||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Treasury
|
|
controlling
|
|
Stockholders'
|
|||||||||||||||||
|
Shares
|
|
Value
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Stock
|
|
Interest
|
|
Equity
|
|||||||||||||||
Balances at December 31, 2015
|
155,146
|
|
|
$
|
2,045
|
|
|
$
|
712,486
|
|
|
$
|
531,621
|
|
|
$
|
(25,555
|
)
|
|
$
|
(9,298
|
)
|
|
$
|
240,127
|
|
|
$
|
1,451,426
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(69,152
|
)
|
|
—
|
|
|
—
|
|
|
(20,741
|
)
|
|
(89,893
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
1,443
|
|
|
—
|
|
|
381
|
|
|
1,824
|
|
|||||||
Change in marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
421
|
|
|
—
|
|
|
180
|
|
|
601
|
|
|||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
12,356
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,356
|
|
|||||||
Distributions to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(8,027
|
)
|
|
(8,027
|
)
|
|||||||
Common stock dividends ($0.375 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,333
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(62,333
|
)
|
|||||||
Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
|||||||
Transfer of Mosing Holdings interest to FINV
|
—
|
|
|
—
|
|
|
238,367
|
|
|
—
|
|
|
(8,203
|
)
|
|
—
|
|
|
(211,920
|
)
|
|
18,244
|
|
|||||||
Common shares issued on conversion of Series A preferred stock ("Preferred Stock")
|
52,976
|
|
|
597
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
597
|
|
|||||||
Common shares issued upon vesting of restricted stock units
|
1,569
|
|
|
18
|
|
|
(18
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Tax receivable agreement ("TRA") and associated deferred taxes
|
—
|
|
|
—
|
|
|
(74,788
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(74,788
|
)
|
|||||||
Common shares issued for employee stock purchase plan ("ESPP")
|
76
|
|
|
1
|
|
|
972
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
973
|
|
|||||||
Treasury shares withheld
|
(225
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,046
|
)
|
|
—
|
|
|
(3,046
|
)
|
|||||||
Balances at September 30, 2016
|
209,542
|
|
|
$
|
2,661
|
|
|
$
|
889,375
|
|
|
$
|
400,135
|
|
|
$
|
(31,894
|
)
|
|
$
|
(12,344
|
)
|
|
$
|
—
|
|
|
$
|
1,247,933
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
Nine Months Ended September 30, 2017
|
|||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
Additional
|
|
|
|
Other
|
|
|
|
Non-
|
|
Total
|
|||||||||||||||
|
Common Stock
|
|
Paid-In
|
|
Retained
|
|
Comprehensive
|
|
Treasury
|
|
controlling
|
|
Stockholders'
|
|||||||||||||||||
|
Shares
|
|
Value
|
|
Capital
|
|
Earnings
|
|
Income (Loss)
|
|
Stock
|
|
Interest
|
|
Equity
|
|||||||||||||||
Balances at December 31, 2016
|
222,401
|
|
|
$
|
2,802
|
|
|
$
|
1,036,786
|
|
|
$
|
317,270
|
|
|
$
|
(32,977
|
)
|
|
$
|
(12,562
|
)
|
|
$
|
—
|
|
|
$
|
1,311,319
|
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,317
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,317
|
)
|
|||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
2,809
|
|
|
—
|
|
|
—
|
|
|
2,809
|
|
|||||||
Change in marketable securities
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
|
—
|
|
|
—
|
|
|
(342
|
)
|
|||||||
Equity-based compensation expense
|
—
|
|
|
—
|
|
|
11,458
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11,458
|
|
|||||||
Common stock dividends ($0.225 per share)
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,424
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(50,424
|
)
|
|||||||
Common shares issued upon vesting of restricted stock units
|
694
|
|
|
7
|
|
|
(7
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||||
Common shares issued for ESPP
|
50
|
|
|
1
|
|
|
511
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
512
|
|
|||||||
Treasury shares issued upon vesting of restricted stock units
|
4
|
|
|
—
|
|
|
(84
|
)
|
|
—
|
|
|
—
|
|
|
66
|
|
|
—
|
|
|
(18
|
)
|
|||||||
Treasury shares issued for ESPP
|
106
|
|
|
—
|
|
|
(166
|
)
|
|
(736
|
)
|
|
—
|
|
|
1,642
|
|
|
—
|
|
|
740
|
|
|||||||
Treasury shares withheld
|
(193
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,254
|
)
|
|
—
|
|
|
(2,254
|
)
|
|||||||
Balances at September 30, 2017
|
223,062
|
|
|
$
|
2,810
|
|
|
$
|
1,048,498
|
|
|
$
|
215,793
|
|
|
$
|
(30,510
|
)
|
|
$
|
(13,108
|
)
|
|
$
|
—
|
|
|
$
|
1,223,483
|
|
FRANK'S INTERNATIONAL N.V.
|
|||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|||||||
(In thousands)
|
|||||||
(Unaudited)
|
|||||||
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(50,317
|
)
|
|
$
|
(89,893
|
)
|
Adjustments to reconcile net loss to cash provided by operating activities
|
|
|
|
||||
Derecognition of the TRA liability
|
(122,515
|
)
|
|
—
|
|
||
Depreciation and amortization
|
92,700
|
|
|
84,278
|
|
||
Equity-based compensation expense
|
11,458
|
|
|
12,356
|
|
||
Amortization of deferred financing costs
|
267
|
|
|
123
|
|
||
Deferred tax provision (benefit)
|
12,824
|
|
|
(25,772
|
)
|
||
Reversal of deferred tax assets associated with the TRA
|
49,775
|
|
|
—
|
|
||
Provision for bad debts
|
358
|
|
|
10,410
|
|
||
Gain on sale of assets
|
(2,091
|
)
|
|
(1,095
|
)
|
||
Changes in fair value of investments
|
(2,009
|
)
|
|
(1,061
|
)
|
||
Realized loss on sale of investment
|
478
|
|
|
—
|
|
||
Unrealized loss on derivatives
|
49
|
|
|
296
|
|
||
Other
|
(1,187
|
)
|
|
—
|
|
||
Changes in operating assets and liabilities
|
|
|
|
||||
Accounts receivable
|
23,917
|
|
|
82,042
|
|
||
Inventories
|
6,146
|
|
|
20,032
|
|
||
Other current assets
|
7,097
|
|
|
5,990
|
|
||
Other assets
|
1,948
|
|
|
(4
|
)
|
||
Accounts payable
|
(962
|
)
|
|
474
|
|
||
Deferred revenue
|
(9,039
|
)
|
|
(29,479
|
)
|
||
Accrued and other current liabilities
|
9,272
|
|
|
(28,556
|
)
|
||
Other non-current liabilities
|
(3,584
|
)
|
|
(12,295
|
)
|
||
Net cash provided by operating activities
|
24,585
|
|
|
27,846
|
|
||
|
|
|
|
||||
Cash flows from investing activities
|
|
|
|
||||
Purchases of property, plant and equipment
|
(18,604
|
)
|
|
(29,777
|
)
|
||
Proceeds from sale of assets
|
10,690
|
|
|
2,235
|
|
||
Proceeds from sale of investments
|
11,499
|
|
|
11,101
|
|
||
Purchase of investments
|
(60,764
|
)
|
|
(921
|
)
|
||
Other
|
(64
|
)
|
|
—
|
|
||
Net cash used in investing activities
|
(57,243
|
)
|
|
(17,362
|
)
|
||
|
|
|
|
||||
Cash flows from financing activities
|
|
|
|
||||
Repayments of borrowings
|
(190
|
)
|
|
(7,120
|
)
|
||
Proceeds from borrowings
|
—
|
|
|
318
|
|
||
Costs of Preferred Stock conversion to common stock
|
—
|
|
|
(595
|
)
|
||
Dividends paid on common stock
|
(50,424
|
)
|
|
(62,333
|
)
|
||
Dividends paid on Preferred Stock
|
—
|
|
|
(1
|
)
|
||
Distribution to noncontrolling interest
|
—
|
|
|
(8,027
|
)
|
||
Net treasury shares withheld for taxes
|
(2,272
|
)
|
|
(3,046
|
)
|
||
Proceeds from the issuance of ESPP shares
|
1,252
|
|
|
973
|
|
||
Net cash used in financing activities
|
(51,634
|
)
|
|
(79,831
|
)
|
||
Effect of exchange rate changes on cash
|
(1,896
|
)
|
|
(3,162
|
)
|
||
Net decrease in cash and cash equivalents
|
(86,188
|
)
|
|
(72,509
|
)
|
||
Cash and cash equivalents at beginning of period
|
319,526
|
|
|
602,359
|
|
||
Cash and cash equivalents at end of period
|
$
|
233,338
|
|
|
$
|
529,850
|
|
|
Three Months Ended September 30, 2016
|
|
Nine Months Ended September 30, 2016
|
||||||||||||||||||||
|
As previously reported
|
|
Reclassifications
|
|
As currently reported
|
|
As previously reported
|
|
Reclassifications
|
|
As currently reported
|
||||||||||||
Condensed Consolidated Statements of Operations
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Cost of revenues, exclusive of depreciation and amortization
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Equipment rentals and services
|
$
|
47,002
|
|
|
$
|
10,305
|
|
|
$
|
57,307
|
|
|
$
|
155,367
|
|
|
$
|
34,598
|
|
|
$
|
189,965
|
|
Products
|
13,237
|
|
|
2,792
|
|
|
16,029
|
|
|
42,594
|
|
|
8,852
|
|
|
51,446
|
|
||||||
General and administrative expenses
|
52,774
|
|
|
(13,097
|
)
|
|
39,677
|
|
|
182,036
|
|
|
(43,450
|
)
|
|
138,586
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
|
September 30, 2016
|
||||||
Net loss
|
|
$
|
(42,198
|
)
|
|
$
|
(89,893
|
)
|
Add: Net loss after Mosing Holdings contributed interest to FINV
(1)
|
|
18,355
|
|
|
18,355
|
|
||
Add: Provision (benefit) for U.S. income taxes of FINV
(2)
|
|
3,078
|
|
|
(10,414
|
)
|
||
Less: Loss of FINV
(3)
|
|
97
|
|
|
23
|
|
||
Net loss subject to noncontrolling interest
|
|
(20,668
|
)
|
|
(81,929
|
)
|
||
Noncontrolling interest percentage
(4)
|
|
25.2
|
%
|
|
25.2
|
%
|
||
Net loss attributable to noncontrolling interest
|
|
$
|
(5,216
|
)
|
|
$
|
(20,741
|
)
|
|
|
|
(1)
|
Represents net loss after August 26, 2016, when Mosing Holdings transferred its interest to FINV.
|
(2)
|
Represents income tax expense (benefit) of entities outside of FICV, as well as income tax attributable to our proportionate share of the U.S. operations of our partnership interests in FICV as of August 26, 2016.
|
(3)
|
Represents results of operations for entities outside of FICV as of August 26, 2016.
|
(4)
|
Represents the economic interest in FICV held by Mosing Holdings before the preferred stock conversion on August 26, 2016. This percentage changed as additional shares of FINV common stock were issued. Effective August 26, 2016, Mosing Holdings delivered its economic interest in FICV to us.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||
|
September 30, 2016
|
||||||
Revenue
|
$
|
120,902
|
|
|
$
|
431,962
|
|
Net loss applicable to common shares
|
(41,686
|
)
|
|
(82,650
|
)
|
||
Loss per common share:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.22
|
)
|
|
$
|
(0.47
|
)
|
|
Preliminary purchase price allocation
|
|
Purchase price adjustments
|
|
Final purchase price allocation
|
||||||
Current assets, excluding cash
|
$
|
23,626
|
|
|
$
|
—
|
|
|
$
|
23,626
|
|
Property, plant and equipment
|
45,091
|
|
|
55
|
|
|
45,146
|
|
|||
Other long-term assets
|
3,139
|
|
|
—
|
|
|
3,139
|
|
|||
Intangible assets
|
41,972
|
|
|
153
|
|
|
42,125
|
|
|||
Assets acquired
|
$
|
113,828
|
|
|
$
|
208
|
|
|
$
|
114,036
|
|
Current liabilities assumed
|
11,132
|
|
|
185
|
|
|
11,317
|
|
|||
Other long-term liabilities
|
542
|
|
|
—
|
|
|
542
|
|
|||
Liabilities assumed
|
$
|
11,674
|
|
|
$
|
185
|
|
|
$
|
11,859
|
|
Fair value of net assets acquired
|
102,154
|
|
|
23
|
|
|
102,177
|
|
|||
Total consideration transferred
|
294,563
|
|
|
—
|
|
|
294,563
|
|
|||
Goodwill
|
$
|
192,409
|
|
|
$
|
(23
|
)
|
|
$
|
192,386
|
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Trade accounts receivable, net of allowance of $13,907 and $14,337, respectively
|
$
|
96,034
|
|
|
$
|
89,096
|
|
Unbilled revenue
|
24,464
|
|
|
30,882
|
|
||
Taxes receivable
|
13,987
|
|
|
42,870
|
|
||
Affiliated
(1)
|
895
|
|
|
717
|
|
||
Other receivables
|
5,526
|
|
|
3,852
|
|
||
Total accounts receivable
|
$
|
140,906
|
|
|
$
|
167,417
|
|
|
|
|
(1)
|
Amounts represent expenditures on behalf of non-consolidated affiliates and receivables for aircraft charter income.
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Pipe and connectors
|
$
|
88,982
|
|
|
$
|
102,360
|
|
Finished goods
|
16,063
|
|
|
14,257
|
|
||
Work in progress
|
8,644
|
|
|
7,099
|
|
||
Raw materials, components and supplies
|
19,272
|
|
|
15,363
|
|
||
Total inventories
|
$
|
132,961
|
|
|
$
|
139,079
|
|
|
Estimated
Useful Lives
in Years
|
|
September 30,
2017 |
|
December 31,
2016 |
||||
Land
|
—
|
|
$
|
16,491
|
|
|
$
|
15,730
|
|
Land improvements
|
8-15
|
|
9,346
|
|
|
9,379
|
|
||
Buildings and improvements
(1)
|
39
|
|
119,971
|
|
|
73,211
|
|
||
Rental machinery and equipment
|
7
|
|
930,443
|
|
|
933,667
|
|
||
Machinery and equipment - other
|
7
|
|
56,321
|
|
|
60,182
|
|
||
Furniture, fixtures and computers
|
5
|
|
26,280
|
|
|
19,073
|
|
||
Automobiles and other vehicles
|
5
|
|
32,621
|
|
|
36,796
|
|
||
Aircraft
|
7
|
|
—
|
|
|
16,267
|
|
||
Leasehold improvements
(1)
|
7-15, or lease term if shorter
|
|
9,870
|
|
|
8,027
|
|
||
Construction in progress - machinery
and equipment and buildings
(1)
|
—
|
|
68,066
|
|
|
120,937
|
|
||
|
|
|
1,269,409
|
|
|
1,293,269
|
|
||
Less: Accumulated depreciation
|
|
|
(771,625
|
)
|
|
(726,245
|
)
|
||
Total property, plant and equipment, net
|
|
|
$
|
497,784
|
|
|
$
|
567,024
|
|
|
|
|
(1)
|
See Note 12 - Related Party Transactions for additional information.
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
|||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|||||||||
Equipment rentals and services
|
|
$
|
25,663
|
|
|
$
|
23,870
|
|
|
$
|
78,558
|
|
|
$
|
76,023
|
|
Products
|
|
1,278
|
|
|
989
|
|
|
3,838
|
|
|
3,081
|
|
||||
General and administrative expenses
|
|
3,709
|
|
|
1,686
|
|
|
10,304
|
|
|
5,174
|
|
||||
Total
|
|
$
|
30,650
|
|
|
$
|
26,545
|
|
|
$
|
92,700
|
|
|
$
|
84,278
|
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
Cash surrender value of life insurance policies
(1)
|
$
|
29,671
|
|
|
$
|
36,269
|
|
Deposits
|
2,193
|
|
|
2,343
|
|
||
Other
|
1,480
|
|
|
6,921
|
|
||
Total other assets
|
$
|
33,344
|
|
|
$
|
45,533
|
|
|
|
|
(1)
|
See Note 10 – Fair Value Measurements
|
|
September 30,
|
|
December 31,
|
||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Accrued compensation
|
$
|
18,758
|
|
|
$
|
10,854
|
|
Accrued property and other taxes
|
19,781
|
|
|
19,740
|
|
||
Accrued severance and other charges
|
2,040
|
|
|
6,150
|
|
||
Income taxes
|
11,012
|
|
|
6,857
|
|
||
Accrued purchase orders
|
8,174
|
|
|
2,083
|
|
||
Other
|
15,329
|
|
|
19,266
|
|
||
Total accrued and other current liabilities
|
$
|
75,094
|
|
|
$
|
64,950
|
|
|
Quoted Prices
in Active
Markets
|
|
Significant
Other
Observable
Inputs
|
|
Significant
Unobservable
Inputs
|
|
|
||||||||
|
(Level 1)
|
|
(Level 2)
|
|
(Level 3)
|
|
Total
|
||||||||
September 30, 2017
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
—
|
|
|
$
|
132
|
|
|
$
|
—
|
|
|
$
|
132
|
|
Investments:
|
|
|
|
|
|
|
|
||||||||
Cash surrender value of life insurance policies - deferred compensation plan
|
—
|
|
|
29,671
|
|
|
—
|
|
|
29,671
|
|
||||
Marketable securities - other
|
131
|
|
|
—
|
|
|
—
|
|
|
131
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
—
|
|
|
35
|
|
|
—
|
|
|
35
|
|
||||
Deferred compensation plan
|
—
|
|
|
27,659
|
|
|
—
|
|
|
27,659
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2016
|
|
|
|
|
|
|
|
||||||||
Assets:
|
|
|
|
|
|
|
|
||||||||
Derivative financial instruments
|
$
|
—
|
|
|
$
|
146
|
|
|
$
|
—
|
|
|
$
|
146
|
|
Investments:
|
|
|
|
|
|
|
|
||||||||
Cash surrender value of life insurance policies - deferred compensation plan
|
—
|
|
|
36,269
|
|
|
—
|
|
|
36,269
|
|
||||
Marketable securities - other
|
3,692
|
|
|
—
|
|
|
—
|
|
|
3,692
|
|
||||
Liabilities:
|
|
|
|
|
|
|
|
||||||||
Deferred compensation plan
|
—
|
|
|
30,307
|
|
|
—
|
|
|
30,307
|
|
|
|
September 30, 2017
|
||||||
Derivative Contracts
|
|
Notional Amount
|
|
Contractual Exchange Rate
|
|
Settlement Date
|
||
Canadian dollar
|
|
$
|
5,740
|
|
|
1.2194
|
|
12/15/2017
|
Euro
|
|
5,982
|
|
|
1.1963
|
|
12/15/2017
|
|
Euro
|
|
2,399
|
|
|
1.1993
|
|
10/13/2017
|
|
Norwegian krone
|
|
5,338
|
|
|
7.8675
|
|
12/15/2017
|
|
Pound sterling
|
|
7,961
|
|
|
1.3268
|
|
12/15/2017
|
|
|
December 31, 2016
|
||||||
Derivative Contracts
|
|
Notional Amount
|
|
Contractual Exchange Rate
|
|
Settlement Date
|
||
Canadian dollar
|
|
$
|
4,553
|
|
|
1.3179
|
|
3/14/2017
|
Euro
|
|
4,753
|
|
|
1.0563
|
|
3/14/2017
|
|
Euro
|
|
2,558
|
|
|
1.0659
|
|
1/13/2017
|
|
Norwegian krone
|
|
3,643
|
|
|
8.5101
|
|
3/14/2017
|
|
Pound sterling
|
|
3,908
|
|
|
1.2607
|
|
3/14/2017
|
Derivatives not Designated as Hedging Instruments
|
|
Consolidated Balance Sheet Location
|
|
September 30, 2017
|
|
December 31, 2016
|
||||
Foreign currency contracts
|
|
Accounts receivable, net
|
|
$
|
132
|
|
|
$
|
146
|
|
Foreign currency contracts
|
|
Accrued and other current liabilities
|
|
(35
|
)
|
|
—
|
|
|
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
|
|
|
September 30,
|
|
September 30,
|
||||||||||||
Derivatives not Designated as Hedging Instruments
|
|
Location of Gain (Loss) Recognized in Income on Derivative Contracts
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Unrealized gain (loss) on foreign currency contracts
|
|
Other income (expense), net
|
|
$
|
681
|
|
|
$
|
(615
|
)
|
|
$
|
(49
|
)
|
|
$
|
(296
|
)
|
Realized gain (loss) on foreign currency contracts
|
|
Other income (expense), net
|
|
(1,794
|
)
|
|
511
|
|
|
(2,346
|
)
|
|
(1,068
|
)
|
||||
Total net loss on foreign currency contracts
|
|
|
|
$
|
(1,113
|
)
|
|
$
|
(104
|
)
|
|
$
|
(2,395
|
)
|
|
$
|
(1,364
|
)
|
|
|
Derivative Asset Positions
|
|
Derivative Liability Positions
|
||||||||||||
|
|
September 30, 2017
|
|
December 31, 2016
|
|
September 30, 2017
|
|
December 31, 2016
|
||||||||
Gross position - asset / (liability)
|
|
$
|
239
|
|
|
$
|
181
|
|
|
$
|
(142
|
)
|
|
$
|
(35
|
)
|
Netting adjustment
|
|
(107
|
)
|
|
(35
|
)
|
|
107
|
|
|
35
|
|
||||
Net position - asset / (liability)
|
|
$
|
132
|
|
|
$
|
146
|
|
|
$
|
(35
|
)
|
|
$
|
—
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
2,296
|
|
|
$
|
(42,198
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(89,893
|
)
|
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
5,216
|
|
|
—
|
|
|
20,741
|
|
||||
Less: Preferred stock dividends
|
—
|
|
|
—
|
|
|
—
|
|
|
(1
|
)
|
||||
Net income (loss) available to common shareholders
|
$
|
2,296
|
|
|
$
|
(36,982
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(69,153
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Basic weighted average common shares
|
223,056
|
|
|
177,125
|
|
|
222,847
|
|
|
162,656
|
|
||||
Restricted stock units
(1)
|
525
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Diluted weighted average common shares
(1)
|
223,581
|
|
|
177,125
|
|
|
222,847
|
|
|
162,656
|
|
||||
Income (loss) per common share:
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.01
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.43
|
)
|
Diluted
|
$
|
0.01
|
|
|
$
|
(0.21
|
)
|
|
$
|
(0.23
|
)
|
|
$
|
(0.43
|
)
|
|
|
|
|
|
|
|
|
|
||||
(1)
|
Approximate number of shares of potentially convertible preferred stock to common stock up until the time of conversion on August 26, 2016, unvested restricted stock units and stock to be issued pursuant to the ESPP have been excluded from the computation of diluted income (loss) per share as the effect would be anti-dilutive when the results from operations are at a net loss position.
|
—
|
|
|
32,977
|
|
|
624
|
|
|
47,273
|
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Segment Adjusted EBITDA:
|
|
|
|
|
|
|
|
||||||||
International Services
|
$
|
11,151
|
|
|
$
|
4,532
|
|
|
$
|
25,459
|
|
|
$
|
31,752
|
|
U.S. Services
(1)
|
(11,322
|
)
|
|
(5,995
|
)
|
|
(27,775
|
)
|
|
(13,018
|
)
|
||||
Tubular Sales
|
(1,333
|
)
|
|
165
|
|
|
1,736
|
|
|
1,343
|
|
||||
Blackhawk
|
3,477
|
|
|
—
|
|
|
7,653
|
|
|
—
|
|
||||
|
1,973
|
|
|
(1,298
|
)
|
|
7,073
|
|
|
20,077
|
|
||||
Interest income, net
|
1,019
|
|
|
646
|
|
|
2,170
|
|
|
1,050
|
|
||||
Depreciation and amortization
|
(30,650
|
)
|
|
(26,545
|
)
|
|
(92,700
|
)
|
|
(84,278
|
)
|
||||
Income tax (expense) benefit
|
(87,613
|
)
|
|
6,800
|
|
|
(72,419
|
)
|
|
15,311
|
|
||||
Gain on sale of assets
|
829
|
|
|
46
|
|
|
2,091
|
|
|
1,095
|
|
||||
Foreign currency gain (loss)
|
1,839
|
|
|
(1,696
|
)
|
|
3,184
|
|
|
(5,907
|
)
|
||||
Derecognition of the TRA liability
(2)
|
122,515
|
|
|
—
|
|
|
122,515
|
|
|
—
|
|
||||
Charges and credits
(3)
|
(7,616
|
)
|
|
(20,151
|
)
|
|
(22,231
|
)
|
|
(37,241
|
)
|
||||
Net income (loss)
|
$
|
2,296
|
|
|
$
|
(42,198
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(89,893
|
)
|
|
|
(1)
|
Amounts previously reported as Corporate and other of
$159
and
$361
for the three and nine months ended September 30, 2016, respectively, have been reclassified to U.S. Services to conform to the current presentation.
|
(2)
|
Please see Note 12 - Related Party Transactions for further discussion.
|
(3)
|
Comprised of Equity-based compensation expense (for the three months ended
September 30, 2017
and
2016
:
$2,342
and
$3,828
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$11,458
and
$12,356
, respectively), Mergers and acquisition expense (for the three months ended
September 30, 2017
and
2016
:
none
and
none
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$459
and
none
, respectively), Severance and other charges (for the three months ended
September 30, 2017
and
2016
:
$1,648
and
$14,534
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$2,386
and
$18,858
, respectively), Unrealized and realized (losses) (for the three months ended
September 30, 2017
and
2016
:
$(1,123)
and
$(10)
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$(2,819)
and
$(973)
, respectively) and Investigation-related matters (for the three months ended
September 30, 2017
and
2016
:
$2,503
and
$1,779
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$5,109
and
$5,054
, respectively).
|
|
International
Services
|
|
U.S.
Services
|
|
Tubular Sales
|
|
Blackhawk
|
|
Eliminations
|
|
Total
|
||||||||||||
Three Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from external customers
|
$
|
53,742
|
|
|
$
|
29,065
|
|
|
$
|
7,701
|
|
|
$
|
17,575
|
|
|
$
|
—
|
|
|
$
|
108,083
|
|
Inter-segment revenue
|
3
|
|
|
4,062
|
|
|
3,111
|
|
|
33
|
|
|
(7,209
|
)
|
|
—
|
|
||||||
Operating loss
|
(2,647
|
)
|
|
(25,453
|
)
|
|
(3,967
|
)
|
|
(3,013
|
)
|
|
—
|
|
|
(35,080
|
)
|
||||||
Adjusted EBITDA
|
11,151
|
|
|
(11,322
|
)
|
|
(1,333
|
)
|
|
3,477
|
|
|
—
|
|
|
*
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Three Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from external customers
|
$
|
51,028
|
|
|
$
|
34,057
|
|
|
$
|
20,029
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105,114
|
|
Inter-segment revenue
|
(1
|
)
|
|
3,641
|
|
|
5,036
|
|
|
—
|
|
|
(8,676
|
)
|
|
—
|
|
||||||
Operating loss
|
(17,697
|
)
|
|
(30,415
|
)
|
|
(820
|
)
|
|
—
|
|
|
—
|
|
|
(48,932
|
)
|
||||||
Adjusted EBITDA
(1)
|
4,532
|
|
|
(5,995
|
)
|
|
165
|
|
|
—
|
|
|
—
|
|
|
*
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2017
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from external customers
|
$
|
153,851
|
|
|
$
|
89,936
|
|
|
$
|
40,787
|
|
|
$
|
51,899
|
|
|
$
|
—
|
|
|
$
|
336,473
|
|
Inter-segment revenue
|
18
|
|
|
12,890
|
|
|
10,350
|
|
|
105
|
|
|
(23,363
|
)
|
|
—
|
|
||||||
Operating loss
|
(19,140
|
)
|
|
(73,092
|
)
|
|
(782
|
)
|
|
(12,642
|
)
|
|
—
|
|
|
(105,656
|
)
|
||||||
Adjusted EBITDA
|
25,459
|
|
|
(27,775
|
)
|
|
1,736
|
|
|
7,653
|
|
|
—
|
|
|
*
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Nine Months Ended September 30, 2016
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Revenue from external customers
|
$
|
191,440
|
|
|
$
|
119,955
|
|
|
$
|
68,151
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
379,546
|
|
Inter-segment revenue
|
45
|
|
|
11,691
|
|
|
15,053
|
|
|
—
|
|
|
(26,789
|
)
|
|
—
|
|
||||||
Operating loss
|
(25,834
|
)
|
|
(74,722
|
)
|
|
(1,936
|
)
|
|
—
|
|
|
—
|
|
|
(102,492
|
)
|
||||||
Adjusted EBITDA
(1)
|
31,752
|
|
|
(13,018
|
)
|
|
1,343
|
|
|
—
|
|
|
—
|
|
|
*
|
|
|
(1)
|
Amounts previously reported as Corporate and other of
$159
and
$361
for the three and nine months ended September 30, 2016, respectively, have been reclassified to U.S. Services to conform to the current presentation.
|
|
For the Nine Months Ended September 30,
|
||||||
|
2017
|
|
2016
|
||||
|
|
|
|
||||
Non-cash transactions:
|
|
|
|
||||
Change in accounts payable and accrued expenses related to capital expenditures
|
$
|
3,983
|
|
|
$
|
1,086
|
|
Conversion of Preferred Stock
|
—
|
|
|
56,056
|
|
||
Tax receivable agreement liability
|
—
|
|
|
(124,646
|
)
|
||
Deferred tax impact of tax receivable agreement
|
—
|
|
|
68,590
|
|
•
|
our business strategy and prospects for growth;
|
•
|
our cash flows and liquidity;
|
•
|
our financial strategy, budget, projections and operating results;
|
•
|
the amount, nature and timing of capital expenditures;
|
•
|
the availability and terms of capital;
|
•
|
competition and government regulations; and
|
•
|
general economic conditions.
|
•
|
the level of activity in the oil and gas industry;
|
•
|
further or sustained declines in oil and gas prices, including those resulting from weak global demand;
|
•
|
the timing, magnitude, probability and/or sustainability of any oil and gas price recovery;
|
•
|
unique risks associated with our offshore operations;
|
•
|
political, economic and regulatory uncertainties in our international operations;
|
•
|
our ability to develop new technologies and products;
|
•
|
our ability to protect our intellectual property rights;
|
•
|
our ability to employ and retain skilled and qualified workers;
|
•
|
the level of competition in our industry;
|
•
|
operational safety laws and regulations; and
|
•
|
weather conditions and natural disasters.
|
•
|
International Services.
We currently provide our services in approximately 60 countries on six continents. Our customers in these international markets are primarily large exploration and production companies, including integrated oil and gas companies and national oil and gas companies.
|
•
|
U.S. Services.
We service customers in the offshore areas of the U.S. Gulf of Mexico. In addition, we have a presence in the active onshore oil and gas drilling regions in the U.S., including the
Permian Basin,
Eagle Ford Shale, Haynesville Shale, Marcellus Shale, DJ Basin and Utica Shale.
|
•
|
Tubular Sales.
We design, manufacture and distribute large OD pipe, connectors and casing attachments
and sell large OD pipe originally manufactured by various pipe mills.
We also provide specialized fabrication and welding services in support of offshore projects, including drilling and production risers, flowlines and pipeline end terminations, as well as long-length tubulars (up to 300 feet in length) for use as caissons or pilings.
This segment also designs and manufactures proprietary equipment for use in our International and U.S. Services segments.
|
•
|
Blackhawk.
We provide well construction and well intervention rental equipment, services and products, in addition to cementing tool expertise, in the U.S. and Mexican Gulf of Mexico, onshore U.S. and other select international locations.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss)
|
$
|
2,296
|
|
|
$
|
(42,198
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(89,893
|
)
|
Interest income, net
|
(1,019
|
)
|
|
(646
|
)
|
|
(2,170
|
)
|
|
(1,050
|
)
|
||||
Depreciation and amortization
|
30,650
|
|
|
26,545
|
|
|
92,700
|
|
|
84,278
|
|
||||
Income tax expense (benefit)
|
87,613
|
|
|
(6,800
|
)
|
|
72,419
|
|
|
(15,311
|
)
|
||||
Gain on sale of assets
|
(829
|
)
|
|
(46
|
)
|
|
(2,091
|
)
|
|
(1,095
|
)
|
||||
Foreign currency (gain) loss
|
(1,839
|
)
|
|
1,696
|
|
|
(3,184
|
)
|
|
5,907
|
|
||||
Derecognition of the TRA liability
(1)
|
(122,515
|
)
|
|
—
|
|
|
(122,515
|
)
|
|
—
|
|
||||
Charges and credits
(2)
|
7,616
|
|
|
20,151
|
|
|
22,231
|
|
|
37,241
|
|
||||
Adjusted EBITDA
|
$
|
1,973
|
|
|
$
|
(1,298
|
)
|
|
$
|
7,073
|
|
|
$
|
20,077
|
|
Adjusted EBITDA margin
|
1.8
|
%
|
|
(1.2
|
)%
|
|
2.1
|
%
|
|
5.3
|
%
|
|
|
(1)
|
Please see Note 12 - Related Party Transactions in the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
|
(2)
|
Comprised of Equity-based compensation expense (for the three months ended
September 30, 2017
and
2016
:
$2,342
and
$3,828
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$11,458
and
$12,356
, respectively), Mergers and acquisition expense (for the three months ended
September 30, 2017
and
2016
:
none
and
none
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$459
and
none
, respectively), Severance and other charges (for the three months ended
September 30, 2017
and
2016
:
$1,648
and
$14,534
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$2,386
and
$18,858
, respectively), Unrealized and realized losses (for the three months ended
September 30, 2017
and
2016
:
$1,123
and
$10
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$2,819
and
$973
, respectively) and Investigation-related matters (for the three months ended
September 30, 2017
and
2016
:
$2,503
and
$1,779
, respectively, and for the
nine months ended September 30, 2017
and
2016
:
$5,109
and
$5,054
, respectively).
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
|
(Unaudited)
|
||||||||||||||
Revenues:
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
|
$
|
92,547
|
|
|
$
|
85,698
|
|
|
$
|
272,402
|
|
|
$
|
312,132
|
|
Products
|
15,536
|
|
|
19,416
|
|
|
64,071
|
|
|
67,414
|
|
||||
Total revenue
|
108,083
|
|
|
105,114
|
|
|
336,473
|
|
|
379,546
|
|
||||
|
|
|
|
|
|
|
|
||||||||
Operating expenses:
|
|
|
|
|
|
|
|
||||||||
Cost of revenues, exclusive of depreciation and amortization
|
|
|
|
|
|
|
|
||||||||
Equipment rentals and services
(1)
|
60,981
|
|
|
57,307
|
|
|
178,865
|
|
|
189,965
|
|
||||
Products
(1)
|
10,750
|
|
|
16,029
|
|
|
45,162
|
|
|
51,446
|
|
||||
General and administrative expenses
(1)
|
39,963
|
|
|
39,677
|
|
|
125,107
|
|
|
138,586
|
|
||||
Depreciation and amortization
|
30,650
|
|
|
26,545
|
|
|
92,700
|
|
|
84,278
|
|
||||
Severance and other charges
|
1,648
|
|
|
14,534
|
|
|
2,386
|
|
|
18,858
|
|
||||
Gain on sale of assets
|
(829
|
)
|
|
(46
|
)
|
|
(2,091
|
)
|
|
(1,095
|
)
|
||||
Operating loss
|
(35,080
|
)
|
|
(48,932
|
)
|
|
(105,656
|
)
|
|
(102,492
|
)
|
||||
|
|||||||||||||||
Other income (expense):
|
|
|
|
|
|
|
|
||||||||
Derecognition of the TRA liability
(2)
|
122,515
|
|
|
—
|
|
|
122,515
|
|
|
—
|
|
||||
Other income (expense), net
|
(384
|
)
|
|
984
|
|
|
348
|
|
|
2,145
|
|
||||
Interest income, net
|
1,019
|
|
|
646
|
|
|
2,170
|
|
|
1,050
|
|
||||
Mergers and acquisition expense
|
—
|
|
|
—
|
|
|
(459
|
)
|
|
—
|
|
||||
Foreign currency gain (loss)
|
1,839
|
|
|
(1,696
|
)
|
|
3,184
|
|
|
(5,907
|
)
|
||||
Total other income (expense)
|
124,989
|
|
|
(66
|
)
|
|
127,758
|
|
|
(2,712
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Income (loss) before income tax expense (benefit)
|
89,909
|
|
|
(48,998
|
)
|
|
22,102
|
|
|
(105,204
|
)
|
||||
Income tax expense (benefit)
|
87,613
|
|
|
(6,800
|
)
|
|
72,419
|
|
|
(15,311
|
)
|
||||
Net income (loss)
|
2,296
|
|
|
(42,198
|
)
|
|
(50,317
|
)
|
|
(89,893
|
)
|
||||
Less: Net loss attributable to noncontrolling interest
|
—
|
|
|
(5,216
|
)
|
|
—
|
|
|
(20,741
|
)
|
||||
|
|
|
|
|
|
|
|
||||||||
Net income (loss) attributable to Frank's International N.V.
|
$
|
2,296
|
|
|
$
|
(36,982
|
)
|
|
$
|
(50,317
|
)
|
|
$
|
(69,152
|
)
|
|
|
|
(1)
|
For the
three months ended September 30, 2016
,
$10,305
and
$2,792
have been reclassified from general and administrative expenses to equipment rentals and services and products, respectively, and
$34,598
and
$8,852
, respectively, for the
nine months ended September 30, 2016
. See Note 1 - Basis of Presentation in the Notes to Unaudited Condensed Consolidated Financial Statements.
|
(2)
|
Please see Note 12 - Related Party Transactions in the Notes to the Unaudited Condensed Consolidated Financial Statements for further discussion.
|
|
Three Months Ended
|
|
Nine Months Ended
|
||||||||||||
|
September 30,
|
|
September 30,
|
||||||||||||
|
2017
|
|
2016
|
|
2017
|
|
2016
|
||||||||
Revenue:
|
|
|
|
|
|
|
|
||||||||
International Services
|
$
|
53,742
|
|
|
$
|
51,028
|
|
|
$
|
153,851
|
|
|
$
|
191,440
|
|
U.S. Services
|
29,065
|
|
|
34,057
|
|
|
89,936
|
|
|
119,955
|
|
||||
Tubular Sales
|
7,701
|
|
|
20,029
|
|
|
40,787
|
|
|
68,151
|
|
||||
Blackhawk
|
17,575
|
|
|
—
|
|
|
51,899
|
|
|
—
|
|
||||
Total
|
$
|
108,083
|
|
|
$
|
105,114
|
|
|
$
|
336,473
|
|
|
$
|
379,546
|
|
|
|
|
|
|
|
|
|
||||||||
Segment Adjusted EBITDA
(2)
:
|
|
|
|
|
|
|
|
||||||||
International Services
|
$
|
11,151
|
|
|
$
|
4,532
|
|
|
$
|
25,459
|
|
|
$
|
31,752
|
|
U.S. Services
(1)
|
(11,322
|
)
|
|
(5,995
|
)
|
|
(27,775
|
)
|
|
(13,018
|
)
|
||||
Tubular Sales
|
(1,333
|
)
|
|
165
|
|
|
1,736
|
|
|
1,343
|
|
||||
Blackhawk
|
3,477
|
|
|
—
|
|
|
7,653
|
|
|
—
|
|
||||
|
$
|
1,973
|
|
|
$
|
(1,298
|
)
|
|
$
|
7,073
|
|
|
$
|
20,077
|
|
|
|
|
(1)
|
Amounts previously reported as Corporate and other of $159 and $361 for the three and nine months ended September 30, 2016, respectively, have been reclassified to U.S. Services to conform to the current presentation.
|
(2)
|
Adjusted EBITDA is a supplemental non-GAAP financial measure that is used by management and external users of our financial statements, such as industry analysts, investors, lenders and rating agencies. (For a reconciliation of our Adjusted EBITDA, see "Adjusted EBITDA and Adjusted EBITDA Margin").
|
|
Nine Months Ended
|
||||||
|
September 30,
|
||||||
|
2017
|
|
2016
|
||||
Operating activities
|
$
|
24,585
|
|
|
$
|
27,846
|
|
Investing activities
|
(57,243
|
)
|
|
(17,362
|
)
|
||
Financing activities
|
(51,634
|
)
|
|
(79,831
|
)
|
||
|
(84,292
|
)
|
|
(69,347
|
)
|
||
Effect of exchange rate changes on cash
|
(1,896
|
)
|
|
(3,162
|
)
|
||
Net decrease in cash and cash equivalents
|
$
|
(86,188
|
)
|
|
$
|
(72,509
|
)
|
(a)
|
Evaluation of Disclosure Controls and Procedures.
|
(b)
|
Change in Internal Control Over Financial Reporting.
|
|
|
|
FRANK'S INTERNATIONAL N.V.
|
|
|
|
|
Date: November 2, 2017
|
|
By:
|
/s/ Kyle McClure
|
|
|
|
Kyle McClure
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|
|
|
(Principal Financial Officer)
|
Exhibit
Number
|
Description
|
3.1
|
Deed of Amendment to Articles of Association of Frank's International N.V., dated May 19, 2016 (incorporated by reference to Exhibit 3.1 to the Current Report on Form 8-K (File No. 001-36053), filed on May 25, 2017).
|
Frank's International N.V. 2013 Long-Term Incentive Plan Employee Restricted Stock Unit Agreement (Supplemental Grant Form).
|
|
Employment Offer Letter for Michael C. Kearney effective as of September 26, 2017.
|
|
Separation Agreement by and between Douglas G. Stephens, Frank’s International, LLC and Frank’s International N.V., dated October 5, 2017.
|
|
Certification of Chief Executive Officer pursuant to Rule 13a-14 (a) under the Securities Exchange Act of 1934.
|
|
Certification of Chief Financial Officer pursuant to Rule 13a-14(a) under the Securities Exchange Act of 1934.
|
|
Certification by Chief Executive Officer pursuant to 18 U.S.C. Section 1350.
|
|
Certification by Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
|
|
*101.INS
|
XBRL Instance Document.
|
*101.SCH
|
XBRL Taxonomy Extension Schema Document.
|
*101.CAL
|
XBRL Taxonomy Calculation Linkbase Document.
|
*101.DEF
|
XBRL Taxonomy Definition Linkbase Document.
|
*101.LAB
|
XBRL Taxonomy Extension Label Linkbase Document.
|
*101.PRE
|
XBRL Taxonomy Extension Presentation Linkbase Document.
|
|
|
|
†
|
Represents management contract or compensatory plan or arrangement.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
Title:
|
Supervisory Director and Chairman of the Compensation Committee
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (this “report”) of Frank’s International N.V. (the “registrant”);
|
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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) 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.
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q (this “report”) of Frank’s International N.V. (the “registrant”);
|
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)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) 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.
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 2, 2017
|
|
/s/ Michael C. Kearney
|
|
|
|
Michael C. Kearney
|
|
|
|
Chairman, President and Chief Executive Officer
|
|
1.
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
|
2.
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
November 2, 2017
|
|
/s/ Kyle McClure
|
|
|
|
Kyle McClure
|
|
|
|
Senior Vice President and Chief Financial Officer
|
|