Superior Drilling Products Announces Non-Cash Retrospective Write-Down of Tronco Loan
July 31 2019 - 4:30PM
Business Wire
To restate financial statements from
September 30, 2017 to March 31, 2019 to reflect
adjustment
Superior Drilling Products, Inc. (NYSE American: SDPI) (“SDP” or
the “Company”), a designer and manufacturer of drilling tool
technologies, today announced that, after review with the
Securities and Exchange Commission and the Company’s auditors, it
has restated its financial statements from the third quarter of
2017 through the first quarter of 2019, as it intends to write-down
the note receivable, or the “Tronco Loan”, as of September 30,
2017. The non-cash charge of $7.7 million primarily impacts the
balance sheet and the timing of recognition of investment income.
It does not impact revenue and operating costs, nor does it impact
total cash flows from operating, investing and financing.
Chris Cashion, Chief Financial Officer, stated, “After a
thorough review and interpretation of accounting standards that a
typical bank would use for the definition of an impaired loan and
the accounting of such, we came to the conclusion that it was
necessary to revise our financial statements to reflect the
write-down of the Tronco loan as of September 2017. The timing of
the write-down is related to the extension of payment terms at that
time. The recognition and application of this banking industry
accounting standard has no impact on the Company’s continuing
effort to collect on this note.”
He added, “The restatement of our financials does not reflect
any change in the underlying fundamentals of our business. We
believe we remain a leader in the design and production of unique
drilling tool technology that reduces the cost of drilling and
production for our end users. Importantly, our manufacturing
expertise is also demonstrated by the demand for our drill bit
refurbishment and other contract manufacturing services.”
The Tronco Loan History
The Tronco Loan began as a Note Purchase and Sale Agreement
entered into in January 2014, under which SDP agreed to purchase a
loan made to Tronco Energy Corporation (“Tronco”), a party related
to the Company through common control. That agreement provided
that, upon full repayment of the Tronco loan from the proceeds of
the Company’s initial public offering, the lender would assign all
of its rights under the Tronco loan, including all of the
collateral documents, to SDP. On May 30, 2014, the Company closed
on the Tronco loan purchase for a total of $8.3 million, which
included principal, interest, and early termination fees, making
SDP the senior secured lender for Tronco.
Second Quarter 2019 Preliminary Financial Results Reporting
Schedule as Planned
Separately today, the Company has released its unaudited,
preliminary financial results. The Company plans to host a
conference call on Thursday, August 1, 2019, at 10:00 a.m. Mountain
Time (12:00 p.m. Eastern Time), as originally planned.
The conference call can be accessed via telephone at (201)
689-8470 or via webcast at the Company’s website: www.sdpi.com. The
slides that will accompany the discussion will be available as well
on the website.
About Superior Drilling Products, Inc.
Superior Drilling Products, Inc. is an innovative, cutting-edge
drilling tool technology company providing cost saving solutions
that drive production efficiencies for the oil and natural gas
drilling industry. The Company designs, manufactures, repairs and
sells drilling tools. SDP drilling solutions include the patented
Drill-N-Ream® well bore conditioning tool and the patented
StriderTM oscillation system technology. In addition, SDP is a
manufacturer and refurbisher of PDC (polycrystalline diamond
compact) drill bits for a leading oil field service company. SDP
operates a state-of-the-art drill tool fabrication facility, where
it manufactures its solutions for the drilling industry, as well as
customers’ custom products. The Company’s strategy for growth is to
leverage its expertise in drill tool technology and innovative,
precision machining in order to broaden its product offerings and
solutions for the oil and gas industry.
Additional information about the Company can be found at:
www.sdpi.com.
Safe Harbor Regarding Forward Looking Statements
This release contains forward-looking statements, and any
statements other than statements of historical fact could be deemed
to be forward-looking statements. These forward-looking statements
include, among other things, statements regarding the Company’s
intent to restate its prior consolidated financial statements for
the Non-Reliance Periods, the estimated impact of adjustments to
the financial statements for the Non-Reliance Periods, the
anticipated timing for filing the Amended Form 10-Qs and the
Amended Form 10-Ks and related matters. These statements are
subject to risks and uncertainties, including the risk that the
process of preparing the restated consolidated financial statements
or other subsequent events would require the Company to make
additional adjustments to its financial statements and the time and
effort required to complete the restatement of its consolidated
financial statements and file the Amended Form 10-Qs and the
Amended Form 10-Ks, and actual results may differ materially from
these statements. The Company undertakes no obligation to revise or
update any forward-looking statements to reflect events or
circumstances after the date hereof.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190731006004/en/
Deborah K. Pawlowski Kei Advisors LLC (716) 843-3908
dpawlowski@keiadvisors.com
Superior Drilling Products (AMEX:SDPI)
Historical Stock Chart
From Mar 2024 to Apr 2024
Superior Drilling Products (AMEX:SDPI)
Historical Stock Chart
From Apr 2023 to Apr 2024