RigNet, Inc. (NASDAQ: RNET, the “Company”), a leading provider of
ultra-secure, intelligent networking solutions and specialized
applications, announced its results for the quarter
ended June 30, 2020.
- Second quarter 2020 revenue of $53.4 million, net loss of
$4.3 million or $0.21 per share
- Revenue decreased by 9.1% to $53.4 million compared to
prior quarter
- Adjusted EBITDA increased by 16.2% to $9.7 million
compared to prior quarter
- Managed Communications Services (MCS) Sites
served decreased 9.0% to 1,229 compared to the prior
quarter
- System Integration project backlog of $15.9 million
“RigNet’s team delivered strong second quarter
results despite the challenging oil and gas dynamics that impacted
our MCS business,” said Steven Pickett, Chief Executive Officer and
President. “While total revenue declined, the team’s discipline
around costs controls and continued contributions from our growing
Apps & IoT business contributed to an increase in Adjusted
EBITDA. During the quarter, offshore communications generally
performed ahead of our expectations while onshore declined as
anticipated due to reduced activity in the shale basins. Both Apps
& IoT and SI continue to generate opportunities, though as we
have previously discussed, we are seeing some delays in converting
the opportunities into revenue as our customers’ decision-making
processes have generally slowed. Looking ahead, we are focused on
capitalizing on our available opportunities across all of our
segments, further reducing costs, and ensuring we continue to
deliver the industry-leading quality of service for which we’re
known.”
Quarterly revenue was $53.4 million, a decrease
of $5.4 million, or 9.1%, compared to $58.8 million in the
prior quarter and a decrease of $6.9 million, or 11.5%,
compared to $60.3 million in the second quarter 2019. Compared
to the first quarter 2020, Apps & IoT revenue grew by $0.1
million, or 0.7%, primarily driven our value-added
applications. Systems Integration (SI) revenue grew by $0.3
million, or 3.2%, primarily due to the timing of projects. The
increase was offset by a decrease in Managed Communications
Services (MCS) revenue by $5.8 million, or 14.4%, due to
decrease in site count and lower equipment resale. Compared to the
second quarter of 2019, Apps & IoT revenue grew
by $0.8 million, or 10.0%, primarily due to the continued
strong performance of Intelie. The increase was offset by
a $7.1 million decrease in MCS revenue due to decreased site
counts, rig stacking, and lower equipment sales. SI
revenue decreased by $0.7 million or 6.0%, compared
to the second quarter of 2019 primarily due to differences in
progress on certain large projects.
Net loss attributable to common stockholders in
the second quarter 2020 was $4.3 million, or $0.21 per
share, compared to net loss attributable to common stockholders
of $26.8 million, or $1.34 per share, in the first
quarter of 2020 and net loss attributable to common stockholders
of $6.2 million, or $0.32 per share, in the second
quarter of 2019.
First quarter 2020 results include a non-cash
goodwill impairment of $23.1 million or $1.15 per share.
Excluding this charge, net loss attributable to common stockholders
in the first quarter 2020 was $3.7 million of $0.18 per share.
Adjusted EBITDA, a non-GAAP measure defined and
reconciled to GAAP net loss (as described below), was $9.7
million, an increase of 16.2% compared to $8.4 million in
the first quarter of 2020 and a decrease of 0.8% compared to $9.8
million in the second quarter 2019.
Capital expenditures for the three months ending
June 30, 2020 totaled $3.1 million compared to $3.7 million for the
three months ending March 31, 2020 and $4.6 million for the quarter
ending June 30, 2019. Capital expenditures for the six months
ending June 30, 2020 totaled $6.8 million compared to $11.7 million
for the six months ending June 30, 2019. After accounting for
accrued capital expenditures, capital expenditures on a cash basis
were $3.3 million and $5.3 million in the quarters ended June 30,
2020 and March 31, 2020, respectively. Capital expenditures on cash
basis was $8.6 million for the six months ended June 30, 2020.
Contracting and Operational Update
In July 2020, RigNet announced a collaboration
with CACI International Inc. on CACI’s Steelbox™ Secure Voice and
Text App for government users. CACI’s Steelbox combines
technologies from Microsoft Azure and from BlackBerry’s SecuSuite®
to deliver a government cloud-hosted, FedRAMP-certified, secure
mobile tenant environment. RigNet will provide telecommunications
interconnectivity throughout the United States, increasing the
utility and convenience to government entities.
In June 2020, Intelie achieved “co-sell ready”
status through the Microsoft One Commercial Partner Program.
Intelie’s real-time machine learning platform, Intelie Live, is now
available in the Microsoft Azure Marketplace and optimized to run
within Azure. Microsoft’s co-sell ready status allows RigNet
to work together with Microsoft’s sales organization, as well as
other Microsoft partners, to rapidly expand the reach and
deployment of Intelie Live running on Azure. Customers are able to
deploy Intelie Live on Azure or in a multi-cloud platform and with
an edge deployment model.
MCS Site count in the second quarter 2020
decreased by 9.0% to 1,229 compared to 1,351 in the first
quarter 2020 and decreased by 11.2% compared to 1,384 in the second
quarter 2019.
Project backlog (using percentage of completion
accounting) was $15.9 million in the second quarter 2020 and $22.4
million in the first quarter 2020 and was $37.1 million in the
second quarter 2019.
Additional Detail
In the second quarter 2020, the Company recorded
$3.9 million increase in the fair value of earn-out/contingent
consideration related to Intelie, $0.7 million in one-time costs
directly related to COVID-19 pandemic, such as costs associated
with cleaning, testing, quarantine of employees, and modifications
to our Gulf of Mexico microwave network, $0.3 million in
executive departure costs, and $0.1 million in merger and
acquisition costs. As of June 30, 2020, the Consolidated Leverage
Ratio was 3.03 and Consolidated Fixed Charge Coverage Ratio
was 2.32. In the first quarter 2020, the Company recorded a
non-cash goodwill impairment charge of $23.1 million as result
of the carrying amounts in two of our reporting units were in
excess of their fair value as a result of the effect of COVID-19
and unprecedented oil and gas prices on the Company’s internal
forecast. The charge primarily related to goodwill in MCS of $21.8
million and Systems Integration of $1.4 million.
Additionally, in the first quarter 2020, the company recorded
$0.1 million in merger and acquisition costs and $0.3 million
in executive departure costs. In the quarter ended June 30, 2019,
the Company recorded $2.2 million in GX dispute Phase II costs
and $1.3 million increase in the fair value of
earn-out/contingent consideration related to Intelie.
Earnings Call Information
An Earnings Call for investors will be held at
11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Friday, August
7, 2020, to discuss RigNet’s second quarter 2020 results. The call
may be accessed live over the telephone by dialing +1 (877)
845-0777, or, for international callers, +1 (760) 298-5090.
Interested parties may also listen to a simultaneous webcast of the
conference call by logging onto RigNet’s website at www.rig.net in
the Investors – Webcasts and Presentations section. A replay
of the conference call webcast will also be available on our
website for approximately thirty days following the call.
About RigNet
RigNet (NASDAQ: RNET) delivers advanced software
and communications infrastructure that allow our customers to
realize the business benefits of digital transformation. With
world-class, ultra-secure solutions spanning global IP
connectivity, bandwidth-optimized OTT applications, IIoT big data
enablement, and industry-leading machine learning analytics, RigNet
supports the full evolution of digital enablement, empowering
businesses to respond faster to high priority issues, mitigate the
risk of operational disruption, and maximize their overall
financial performance. RigNet is headquartered in Houston, Texas
with operations around the world.
For more information on RigNet, please visit
www.rig.net. RigNet is a registered trademark of RigNet, Inc.
Forward Looking Statements
This press release includes “forward-looking
statements” within the meaning of the safe harbor provisions of the
United States Private Securities Litigation Reform Act of 1995 –
that is, statements related to future, not past, events. Opinions,
expectations with respect to conditions in the oil and gas
industry, customer perceptions of value, entry into new customer
contracts, growth prospects, and the ultimate payout amount of any
earnout / contingent consideration are examples of forward-looking
statements in this press release. Forward-looking statements are
based on current expectations and include any statement that does
not directly relate to a current or historical fact. In this
context, forward-looking statements often address our expected
future business and financial performance, including the expected
benefits of acquiring and integrating other businesses, and often
contain words such as “anticipate,” “believe,” “intend,” “will,”
“expect,” “plan” or other similar words. These forward-looking
statements involve certain risks and uncertainties, including those
risks set forth in Item 1A – Risk Factors of the Company’s most
recent 10-K filing, and Item 1A- Risk Factors of the Company’s 10-Q
filing for the quarter ended March 31, 2020, filed with the SEC on
Monday, May 11, 2020, and ultimately may not prove to be accurate.
Actual results and future events could differ materially from those
anticipated in such statements. For further discussion of risks and
uncertainties, individuals should refer to RigNet’s SEC filings.
RigNet undertakes no obligation and does not intend to update these
forward-looking statements to reflect events or circumstances
occurring after this press release. You are cautioned not to
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. All
forward-looking statements are qualified in their entirety by this
cautionary statement.
Non-GAAP Financial Measure
This press release contains the non-GAAP measure
Adjusted EBITDA, a measure we believe is useful to investors as a
supplemental measure to evaluate overall operating performance and
is an integral component of financial covenant ratios in our credit
agreement. Adjusted EBITDA is a financial measure that is not
calculated in accordance with generally accepted accounting
principles, or GAAP. We refer you to the Company’s Annual Report on
Form 10-K for the year ended December 31, 2019, filed with the SEC
on Wednesday, March 11th, 2020, for a more detailed discussion of
the uses and limitations of Adjusted EBITDA.
We define Adjusted EBITDA as net loss plus
interest expense; income tax expense (benefit); depreciation and
amortization; impairment of goodwill, intangibles, property, plant
and equipment; (gain) loss on sales of property, plant and
equipment, net of retirements; change in fair value of earn-outs
and contingent consideration; stock-based compensation; mergers and
acquisitions costs; executive departure costs; restructuring
charges; the GX dispute; the GX dispute Phase II costs, one-time
costs directly related to COVID-19 pandemic one-time costs directly
related to COVID-19 pandemic, such as costs associated with
cleaning, testing, quarantine of employees, and modifications to
our Gulf of Mexico microwave network, and non-recurring items
A reconciliation of net loss to Adjusted EBITDA
is found in the table below.
|
Media / Investor Relations Contact |
|
|
Lee M. Ahlstrom, SVP & CFO |
Tel: +1 (281) 674-0699 |
|
RigNet, Inc. |
investor.relations@rig.net |
| RIGNET,
INC. |
| CONDENSED
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
| |
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
| |
|
(in thousands,
except per share amounts) |
|
Unaudited Consolidated Statements of |
|
|
|
|
|
|
|
|
|
|
|
Comprehensive Loss Data: |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
53,391 |
|
|
$ |
58,761 |
|
|
$ |
60,332 |
|
|
$ |
112,152 |
|
|
$ |
117,842 |
|
|
Expenses: |
|
|
|
|
|
|
|
|
|
|
|
Cost of revenue (excluding depreciation and amortization) |
|
|
33,687 |
|
|
|
37,950 |
|
|
|
36,519 |
|
|
|
71,637 |
|
|
|
72,975 |
|
|
Depreciation and amortization |
|
|
6,913 |
|
|
|
6,931 |
|
|
|
7,679 |
|
|
|
13,844 |
|
|
|
16,591 |
|
|
Impairment of goodwill |
|
|
- |
|
|
|
23,141 |
|
|
|
- |
|
|
|
23,141 |
|
|
|
- |
|
|
Change in fair value of earn-out/contingent consideration |
|
|
3,916 |
|
|
|
- |
|
|
|
1,284 |
|
|
|
3,916 |
|
|
|
1,284 |
|
|
Selling and marketing |
|
|
2,207 |
|
|
|
2,812 |
|
|
|
2,952 |
|
|
|
5,019 |
|
|
|
6,745 |
|
|
General and administrative |
|
|
9,453 |
|
|
|
13,829 |
|
|
|
14,458 |
|
|
|
23,282 |
|
|
|
30,928 |
|
|
Total expenses |
|
|
56,176 |
|
|
|
84,663 |
|
|
|
62,892 |
|
|
|
140,839 |
|
|
|
128,523 |
|
|
Operating loss |
|
|
(2,785 |
) |
|
|
(25,902 |
) |
|
|
(2,560 |
) |
|
|
(28,687 |
) |
|
|
(10,681 |
) |
|
Other expense, net |
|
|
(1,338 |
) |
|
|
(1,849 |
) |
|
|
(1,362 |
) |
|
|
(3,187 |
) |
|
|
(2,528 |
) |
|
Loss before income taxes |
|
|
(4,123 |
) |
|
|
(27,751 |
) |
|
|
(3,922 |
) |
|
|
(31,874 |
) |
|
|
(13,209 |
) |
|
Income tax (expense) benefit |
|
|
(129 |
) |
|
|
980 |
|
|
|
(2,204 |
) |
|
|
851 |
|
|
|
(4,870 |
) |
|
Net loss |
|
$ |
(4,252 |
) |
|
$ |
(26,771 |
) |
|
$ |
(6,126 |
) |
|
$ |
(31,023 |
) |
|
$ |
(18,079 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
Net Loss Per Share - Basic and Diluted |
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to RigNet, Inc. common stockholders |
|
$ |
(4,322 |
) |
|
$ |
(26,841 |
) |
|
$ |
(6,156 |
) |
|
$ |
(31,163 |
) |
|
$ |
(18,139 |
) |
|
Net loss per share attributable to RigNet, Inc. common
stockholders, basic |
|
$ |
(0.21 |
) |
|
$ |
(1.34 |
) |
|
$ |
(0.32 |
) |
|
$ |
(1.54 |
) |
|
$ |
(0.95 |
) |
|
Net loss per share attributable to RigNet, Inc. common
stockholders, diluted |
|
$ |
(0.21 |
) |
|
$ |
(1.34 |
) |
|
$ |
(0.32 |
) |
|
$ |
(1.54 |
) |
|
$ |
(0.95 |
) |
|
Weighted average shares outstanding, basic |
|
|
20,510 |
|
|
|
20,081 |
|
|
|
19,082 |
|
|
|
20,295 |
|
|
|
19,016 |
|
|
Weighted average shares outstanding, diluted |
|
|
20,510 |
|
|
|
20,081 |
|
|
|
19,082 |
|
|
|
20,295 |
|
|
|
19,016 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
Unaudited Non-GAAP Data: |
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
|
$ |
9,701 |
|
|
$ |
8,351 |
|
|
$ |
9,775 |
|
|
$ |
18,052 |
|
|
$ |
18,161 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| RIGNET,
INC. |
|
Reconciliation of Net Loss to Adjusted EBITDA |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
| |
|
(in thousands) |
|
Reconciliation of Net Loss to Adjusted
EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Net loss |
|
$ |
(4,252 |
) |
|
$ |
(26,771 |
) |
|
$ |
(6,126 |
) |
|
$ |
(31,023 |
) |
|
$ |
(18,079 |
) |
|
Interest expense |
|
|
1,325 |
|
|
|
1,528 |
|
|
|
1,269 |
|
|
|
2,853 |
|
|
|
2,507 |
|
|
Depreciation and amortization |
|
|
6,913 |
|
|
|
6,931 |
|
|
|
7,679 |
|
|
|
13,844 |
|
|
|
16,591 |
|
|
Impairment of goodwill |
|
|
- |
|
|
|
23,141 |
|
|
|
- |
|
|
|
23,141 |
|
|
|
- |
|
|
(Gain) loss on sales of property, plant and equipment, net of
retirements |
|
|
(166 |
) |
|
|
282 |
|
|
|
18 |
|
|
|
116 |
|
|
|
11 |
|
|
Stock-based compensation |
|
|
832 |
|
|
|
3,854 |
|
|
|
1,170 |
|
|
|
4,686 |
|
|
|
5,628 |
|
|
Restructuring costs |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
573 |
|
|
Change in fair value of earn-out/contingent consideration |
|
|
3,916 |
|
|
|
- |
|
|
|
1,284 |
|
|
|
3,916 |
|
|
|
1,284 |
|
|
Executive departure costs |
|
|
255 |
|
|
|
298 |
|
|
|
- |
|
|
|
553 |
|
|
|
- |
|
|
Mergers and Acquisitions costs |
|
|
78 |
|
|
|
68 |
|
|
|
60 |
|
|
|
146 |
|
|
|
410 |
|
|
COVID-19 Costs |
|
|
671 |
|
|
|
- |
|
|
|
- |
|
|
|
671 |
|
|
|
- |
|
|
GX dispute Phase II costs |
|
|
- |
|
|
|
- |
|
|
|
2,217 |
|
|
|
- |
|
|
|
4,366 |
|
|
Income tax expense (benefit) |
|
|
129 |
|
|
|
(980 |
) |
|
|
2,204 |
|
|
|
(851 |
) |
|
|
4,870 |
|
| Adjusted
EBITDA (non-GAAP measure) |
|
$ |
9,701 |
|
|
$ |
8,351 |
|
|
$ |
9,775 |
|
|
$ |
18,052 |
|
|
$ |
18,161 |
|
| |
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| RIGNET,
INC. |
| Segment
Information |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
Three Months Ended |
|
Six Months Ended |
|
|
|
June 30, 2020 |
|
March 31, 2020 |
|
June 30, 2019 |
|
June 30, 2020 |
|
June 30, 2019 |
| |
|
(in thousands) |
|
Managed Communications Services |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
34,136 |
|
$ |
39,896 |
|
|
$ |
41,205 |
|
$ |
74,032 |
|
|
$ |
83,538 |
|
Cost of revenue |
|
|
22,985 |
|
|
25,502 |
|
|
|
25,019 |
|
|
48,487 |
|
|
|
52,004 |
|
Depreciation and amortization |
|
|
4,843 |
|
|
4,659 |
|
|
|
5,059 |
|
|
9,502 |
|
|
|
11,323 |
|
Impairment of goodwill |
|
|
- |
|
|
21,755 |
|
|
|
- |
|
|
21,755 |
|
|
|
- |
|
Selling, general and administrative |
|
|
2,436 |
|
|
2,807 |
|
|
|
3,346 |
|
|
5,243 |
|
|
|
7,143 |
|
Operating income (loss) |
|
$ |
3,872 |
|
$ |
(14,827 |
) |
|
$ |
7,781 |
|
$ |
(10,955 |
) |
|
$ |
13,068 |
| |
|
|
|
|
|
|
|
|
|
|
|
Applications and Internet-of-Things |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
8,805 |
|
$ |
8,743 |
|
|
$ |
8,005 |
|
$ |
17,548 |
|
|
$ |
16,020 |
|
Cost of revenue |
|
|
3,221 |
|
|
4,561 |
|
|
|
4,387 |
|
|
7,782 |
|
|
|
8,884 |
|
Depreciation and amortization |
|
|
1,154 |
|
|
1,182 |
|
|
|
1,226 |
|
|
2,336 |
|
|
|
2,457 |
|
Selling, general and administrative |
|
|
1,563 |
|
|
1,620 |
|
|
|
835 |
|
|
3,183 |
|
|
|
1,400 |
|
Operating income |
|
$ |
2,867 |
|
$ |
1,380 |
|
|
$ |
1,557 |
|
$ |
4,247 |
|
|
$ |
3,279 |
| |
|
|
|
|
|
|
|
|
|
|
|
Systems Integration |
|
|
|
|
|
|
|
|
|
|
|
Revenue |
|
$ |
10,450 |
|
$ |
10,122 |
|
|
$ |
11,122 |
|
$ |
20,572 |
|
|
$ |
18,284 |
|
Cost of revenue |
|
|
7,481 |
|
|
7,887 |
|
|
|
7,113 |
|
|
15,368 |
|
|
|
12,087 |
|
Depreciation and amortization |
|
|
157 |
|
|
164 |
|
|
|
639 |
|
|
321 |
|
|
|
1,301 |
|
Impairment of goodwill |
|
|
- |
|
|
1,386 |
|
|
|
- |
|
|
1,386 |
|
|
|
- |
|
Selling, general and administrative |
|
|
302 |
|
|
404 |
|
|
|
570 |
|
|
706 |
|
|
|
1,694 |
|
Operating income |
|
$ |
2,510 |
|
$ |
281 |
|
|
$ |
2,800 |
|
$ |
2,791 |
|
|
$ |
3,202 |
| |
|
|
|
|
|
|
|
|
|
|
| NOTE: Consolidated
balances include the segments above along with corporate activities
and intercompany eliminations. |
| RIGNET,
INC. |
| CONSOLIDATED
BALANCE SHEETS |
|
(Unaudited) |
|
|
|
|
|
|
|
June
30, |
|
December
31, |
|
|
|
2020 |
|
|
|
2019 |
|
| |
(in thousands,
except share amounts) |
|
ASSETS |
|
Current assets: |
|
|
|
|
Cash and cash equivalents |
$ |
15,591 |
|
|
$ |
12,941 |
|
|
Restricted cash |
|
- |
|
|
|
42 |
|
|
Accounts receivable, net |
|
69,960 |
|
|
|
67,059 |
|
|
Costs and estimated earnings in excess of billings on uncompleted
contracts (CIEB) |
|
13,030 |
|
|
|
13,275 |
|
|
Prepaid expenses and other current assets |
|
6,437 |
|
|
|
6,500 |
|
|
Total current assets |
|
105,018 |
|
|
|
99,817 |
|
| Property,
plant and equipment, net |
|
54,163 |
|
|
|
60,118 |
|
| Restricted
cash |
|
1,500 |
|
|
|
1,522 |
|
|
Goodwill |
|
20,134 |
|
|
|
46,792 |
|
| Intangibles,
net |
|
25,626 |
|
|
|
30,145 |
|
| Right-of-use
lease asset |
|
6,175 |
|
|
|
6,829 |
|
| Deferred tax
and other assets |
|
5,417 |
|
|
|
5,757 |
|
|
TOTAL ASSETS |
$ |
218,033 |
|
|
$ |
250,980 |
|
| LIABILITIES
AND EQUITY |
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
23,670 |
|
|
$ |
28,517 |
|
|
Accrued expenses |
|
17,523 |
|
|
|
16,660 |
|
|
Current maturities of long-term debt |
|
8,792 |
|
|
|
10,793 |
|
|
Income taxes payable |
|
2,464 |
|
|
|
2,649 |
|
|
GX dispute accrual |
|
750 |
|
|
|
750 |
|
|
Deferred revenue and other current liabilities |
|
7,440 |
|
|
|
11,173 |
|
|
Total current liabilities |
|
60,639 |
|
|
|
70,542 |
|
| Long-term
debt |
|
106,161 |
|
|
|
96,934 |
|
| Deferred
revenue |
|
764 |
|
|
|
855 |
|
| Deferred tax
liability |
|
1,955 |
|
|
|
2,672 |
|
| Right-of-use
lease liability - long-term portion |
|
5,830 |
|
|
|
6,329 |
|
| Other
liabilities |
|
30,440 |
|
|
|
26,771 |
|
|
Total liabilities |
|
205,789 |
|
|
|
204,103 |
|
| |
|
|
|
|
Equity: |
|
|
|
|
Stockholders' equity |
|
|
|
|
Preferred stock - $0.001 par value; 10,000,000 shares authorized;
no shares issued or outstanding at June 30, 2020 and December 31,
2019 |
|
- |
|
|
|
- |
|
|
Common stock - $0.001 par value; 190,000,000 shares authorized;
20,551,153 and 19,979,284 shares issued and outstanding at June 30,
2020 and December 31, 2019, respectively |
|
21 |
|
|
|
20 |
|
|
Treasury stock - 445,525 and 203,756 shares at June 30, 2020 and
December 31, 2019, respectively, at cost |
|
(3,281 |
) |
|
|
(2,693 |
) |
|
Additional paid-in capital |
|
189,251 |
|
|
|
184,571 |
|
|
Accumulated deficit |
|
(146,836 |
) |
|
|
(115,673 |
) |
|
Accumulated other comprehensive loss |
|
(27,050 |
) |
|
|
(19,502 |
) |
|
Total stockholders' equity |
|
12,105 |
|
|
|
46,723 |
|
|
Non-redeemable, non-controlling interest |
|
139 |
|
|
|
154 |
|
|
Total equity |
|
12,244 |
|
|
|
46,877 |
|
|
TOTAL LIABILITIES AND EQUITY |
$ |
218,033 |
|
|
$ |
250,980 |
|
| |
|
|
|
| RIGNET,
INC. |
| CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
(Unaudited) |
|
|
|
|
|
|
| |
|
Six Months Ended June 30, |
| |
|
|
2020 |
|
|
|
2019 |
|
| |
|
(in thousands) |
| Cash
flows from operating activities: |
|
|
|
|
|
Net loss |
|
$ |
(31,023 |
) |
|
$ |
(18,079 |
) |
|
Adjustments to reconcile net loss to net cash provided by
operations: |
|
|
|
|
|
Depreciation and amortization |
|
|
13,844 |
|
|
|
16,591 |
|
|
Impairment of goodwill |
|
|
23,141 |
|
|
|
- |
|
|
Stock-based compensation |
|
|
4,686 |
|
|
|
5,628 |
|
|
Amortization of deferred financing costs |
|
|
189 |
|
|
|
153 |
|
|
Deferred taxes |
|
|
(624 |
) |
|
|
4,838 |
|
|
Change in fair value of earn-out/contingent consideration |
|
|
3,916 |
|
|
|
1,284 |
|
|
Accretion of discount of contingent consideration payable for
acquisitions |
|
|
266 |
|
|
|
183 |
|
|
(Gain) loss on sales of property, plant and equipment, net of
retirements |
|
|
116 |
|
|
|
11 |
|
|
Changes in operating assets and liabilities, net of effect of
acquisition: |
|
|
|
|
|
Accounts receivable, net |
|
|
(4,078 |
) |
|
|
(488 |
) |
|
Costs and estimated earnings in excess of billings on uncompleted
contracts (CIEB) |
|
|
(199 |
) |
|
|
(1,644 |
) |
|
Prepaid expenses and other assets |
|
|
73 |
|
|
|
(6 |
) |
|
Right-of-use lease asset |
|
|
654 |
|
|
|
- |
|
|
Accounts payable |
|
|
(2,027 |
) |
|
|
7,564 |
|
|
Accrued expenses |
|
|
1,195 |
|
|
|
(1,574 |
) |
|
GX Dispute payment |
|
|
- |
|
|
|
(45,000 |
) |
|
Deferred revenue |
|
|
(7,459 |
) |
|
|
1,334 |
|
|
Right-of-use lease liability |
|
|
(779 |
) |
|
|
- |
|
|
Other liabilities |
|
|
5,138 |
|
|
|
(2,052 |
) |
| Net
cash provided by (used in) operating activities |
|
|
7,029 |
|
|
|
(31,257 |
) |
| |
|
|
|
|
| Cash
flows from investing activities: |
|
|
|
|
|
Capital expenditures |
|
|
(8,597 |
) |
|
|
(11,868 |
) |
|
Proceeds from sales of property, plant and equipment |
|
|
26 |
|
|
|
112 |
|
| Net
cash used in investing activities |
|
|
(8,571 |
) |
|
|
(11,756 |
) |
| |
|
|
|
|
| Cash
flows from financing activities: |
|
|
|
|
|
Issuance of common stock upon the exercise of stock options and the
vesting of restricted stock |
|
|
1 |
|
|
|
4 |
|
|
Stock withheld to cover employee taxes on stock-based
compensation |
|
|
(594 |
) |
|
|
(1,406 |
) |
|
Subsidiary distributions to non-controlling interest |
|
|
(155 |
) |
|
|
(135 |
) |
|
Proceeds from borrowings |
|
|
6,750 |
|
|
|
40,000 |
|
|
Proceeds from Paycheck Protection Program Loan |
|
|
6,298 |
|
|
|
- |
|
|
Repayments of long-term debt |
|
|
(8,354 |
) |
|
|
(6,083 |
) |
|
Payment of financing fees |
|
|
(485 |
) |
|
|
(486 |
) |
| Net
cash provided by financing activities |
|
|
3,461 |
|
|
|
31,894 |
|
| Net
change in cash and cash equivalents |
|
|
1,919 |
|
|
|
(11,119 |
) |
| |
|
|
|
|
| Cash
and cash equivalents including restricted cash: |
|
|
|
|
|
Balance, January 1, |
|
|
14,505 |
|
|
|
23,296 |
|
|
Changes in foreign currency translation |
|
|
667 |
|
|
|
265 |
|
|
Balance, June 30, |
|
$ |
17,091 |
|
|
$ |
12,442 |
|
| |
|
|
|
|
| RIGNET,
INC. |
| Selected
Operational Data |
| MCS Site
Count |
|
(Unaudited) |
| |
|
|
|
|
|
|
|
|
|
|
| |
|
2nd
Quarter |
|
1st
Quarter |
|
4th
Quarter |
|
3rd
Quarter |
|
2nd
Quarter |
| |
|
2020 |
|
2020 |
|
2019 |
|
2019 |
|
2019 |
|
Selected Operational Data: |
|
|
|
|
|
|
|
|
|
|
| Offshore
drilling rigs (1) |
|
|
193 |
|
|
196 |
|
|
185 |
|
|
184 |
|
|
182 |
| Offshore
Production |
|
|
337 |
|
|
386 |
|
|
385 |
|
|
384 |
|
|
375 |
|
Maritime |
|
|
161 |
|
|
177 |
|
|
171 |
|
|
184 |
|
|
183 |
| Other sites
(2) |
|
|
538 |
|
|
592 |
|
|
599 |
|
|
634 |
|
|
644 |
|
Total |
|
|
1,229 |
|
|
1,351 |
|
|
1,340 |
|
|
1,386 |
|
|
1,384 |
|
Project Backlog (in thousands) |
|
$ |
15,856 |
|
$ |
22,380 |
|
$ |
26,178 |
|
$ |
35,855 |
|
$ |
37,116 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
| (1) Includes jack up,
semi-submersible and drillship rigs |
| (2) Includes U.S. and
International land sites, completion sites, man-camps, remote
offices, and supply bases and offshore-related supply bases, shore
offices, tender rigs and platform rigs |
| |
|
|
|
|
|
|
|
|
|
|
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