The accompanying notes are an integral part of these consolidated financial statements
The accompanying notes are an integral part of these consolidated financial statements
The accompanying notes are an integral part of these consolidated financial statements
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 – NATURE OF OPERATIONS
Aly Energy Services, Inc., ("Aly Energy" or "the Company"), together with its subsidiaries provides oilfield services, including surface equipment rental, solids control services and directional drilling services to exploration and production companies. Throughout this report, we refer to Aly Energy and subsidiaries as "we", "our" or "us". We operate in select oil and natural gas basins of the contiguous United States.
On October 26, 2012, we acquired all of the stock of Austin Chalk Petroleum Services Corp. ("Austin Chalk"). Austin Chalk provides surface rental equipment as well as roustabout services which include the rig-up and rig-down of equipment and the hauling of equipment to and from the customer's location.
On April 15, 2014, we acquired the equity interests of United Centrifuge, LLC ("United") as well as certain assets used in United's business that were owned by related parties of United (collectively the "United Acquisition"). In connection with the United Acquisition, United merged with and into Aly Centrifuge Inc. ("Aly Centrifuge"), a wholly-owned subsidiary of Aly Energy. United operates within the solids control and fluids management sectors of the oilfield services and rental equipment industry, offering its customers the option of renting centrifuges and auxiliary solids control equipment without personnel or the option of paying for a full-service solids control package which includes operators on-site 24 hours a day.
On July 1, 2014, we acquired all of the issued and outstanding stock of Evolution Guidance Systems Inc. ("Evolution"), an operator of Measurement-While-Drilling ("MWD") downhole tools.
Aly Energy has three wholly-owned subsidiaries, Aly Operating Inc. ("Aly Operating), Aly Centrifuge and Evolution. Austin Chalk is a wholly-owned subsidiary of Aly Operating. We operate as one business segment which services customers within the United States.
NOTE 2 – LIQUIDITY
The industry in which we operate has been negatively impacted by the price of oil and natural gas and, as a result, the drilling rig count has dropped steadily since the end of 2014. Our activity is tied directly to the rig count and, even though we instituted cost cutting measures, we were unable to cut costs enough to match the decline in our business and have incurred losses in 2015. As a result, at December 31, 2015, we were not in compliance with certain financial covenants set forth in our credit agreement and we anticipate that we are unlikely to be in compliance with such covenants for the first quarter ending March 31, 2016. Therefore, on March 31, 2016, we completed the execution and delivery of a forbearance agreement and amendment to the credit agreement.
Among other provisions, the lenders have agreed to forbear from exercising their remedies under the credit agreement until the earlier of July 10, 2016 or the date on which forbearance is terminated due to specified events, including (i) the occurrence of other defaults under the credit agreement, (ii) our failure to hire an independent financial advisor prior to April 10, 2016 or (iii) our failure to present a detailed plan for asset sales or equity capital acceptable to the lenders yielding net cash proceeds to us of at least $2.5 million by May 25, 2016. We hired an independent financial advisor and such advisor commenced the engagement prior to the deadline of April 10, 2016. In conjunction with agreeing to forbear from exercising their remedies under the credit agreement, the lenders reduced the revolving credit portion of the credit facility to zero thereby eliminating our ability to borrow additional funds under the existing credit facility.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We are currently in discussions with various stakeholders and advisors to develop and execute a plan to satisfy the requirements of the forbearance agreement. There can be no assurance that our actions will be deemed sufficient by the lender to extend the forbearance agreement and, if our actions are deemed insufficient, our outstanding debt will become immediately due and payable. If the debt becomes due and payable, we do not have sufficient liquidity to repay all of the outstanding debt to the lender (approximately $20.1 million at December 31, 2015) and we might need to file for protection under Chapter 11 of the U.S. Bankruptcy Code.
These consolidated financial statements are prepared on a going concern basis of accounting, which contemplates that we will be able to operate in the normal course of business. The concerns around our liquidity raise substantial doubt about our ability to continue to operate as a going concern These consolidated financial statements do not include any adjustments that may relate to the going concern uncertainty. We have classified our indebtedness under the credit agreement as a current liability as the forbearance agreement remedies our breach for less than one year.
NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation and Principles of Consolidation
: The consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") and include the accounts of Aly Energy and its subsidiaries on the consolidated balance sheets as of December 31, 2015 and 2014 and the related consolidated statements of operations, stockholders' equity, and cash flows for the years then ended. All significant intercompany transactions and account balances have been eliminated upon consolidation.
Reverse Stock Split:
On June 19, 2015, the Company effected a 1-for-20 reverse stock split of its common stock ("Reverse Split"), as approved by its board of directors and stockholders. All information in this Annual Report on Form 10-K relating to the number of shares, price per share and per share amounts has been retroactively restated to give effect to the Reverse Split.
Revenue Recognition
: We generate revenues primarily from renting equipment at per-day rates. In connection with certain of our solids control operations and in connection with our directional drilling and MWD operations, we also provide personnel to operate our equipment at the customer's location at per-day or per-hour rates. In addition, we may provide equipment transportation and rig-up/rig-down services to the customer at flat rates per job or at an hourly rate. Revenue is recognized when it is realized or realizable and earned and when collectability is reasonably assured.
We present our revenues net of any sales tax charged to our customers which is required to be remitted to local or state governmental taxing authorities. Reimbursements for the purchase of supplies, equipment, personnel services, shipping and other services provided at the request of our customers are recorded as revenue when incurred. The related costs are recorded as operating expenses when incurred.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Cash and Cash Equivalents:
For purposes of the consolidated statement of cash flows, cash is defined as cash on-hand and balances in operating bank accounts. We consider all highly liquid investments purchased with an original maturity of three months or less to be cash equivalents. We maintain our cash in various financial institutions where at times our deposits may exceed federally insured limits.
Accounts Receivable, Unbilled Receivables and Allowance for Doubtful Accounts
: Accounts receivable and unbilled receivables are stated at the amount which has been or will be billed to customers. Once billed, customer payments are typically due within 30 days. We provide an allowance for doubtful accounts based upon a review of outstanding receivables, historical collection information and existing economic conditions. Provisions for doubtful accounts are recorded when it is deemed probable that the customer will not make the required payments.
Inventory:
Inventory is recorded at the lower of cost or market and consists primarily of supplies used in our operations.
Property and Equipment
: Property and equipment are recorded at cost less accumulated depreciation and amortization. Maintenance and repairs, which do not improve or extend the life of the related assets, are charged to expense when incurred. Refurbishments and renewals are capitalized when the value of the equipment is enhanced for an extended period. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation account are relieved, and any gain or loss is included in operating income.
The cost of property and equipment currently in service is depreciated, on a straight-line basis, over the estimated useful lives of the related assets, which range from one to 20 years. A residual value of 20% is used for asset types deemed to have a salvage value. Typically, these assets contain a large amount of iron in their construction. Major classifications of property and equipment and their respective useful lives are as follows (in thousands):
|
|
Estimated
|
|
December 31,
|
|
|
|
Useful Lives
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
|
|
Machinery and Equipment
|
|
1-20 years
|
|
$
|
55,553
|
|
|
$
|
55,353
|
|
Vehicles, Trucks & Trailers
|
|
5-7 years
|
|
|
5,789
|
|
|
|
5,243
|
|
Office Furniture, Fixtures and Equipment
|
|
3-7 years
|
|
|
835
|
|
|
|
366
|
|
Leasehold Improvements
|
|
Remaining Term of Lease
|
|
|
217
|
|
|
|
180
|
|
Buildings
|
|
20 years
|
|
|
212
|
|
|
|
-
|
|
|
|
|
|
|
62,606
|
|
|
|
61,142
|
|
Less: Accumulated Depreciation and Amortization
|
|
|
|
|
(9,086
|
)
|
|
|
(5,615
|
)
|
|
|
|
|
|
53,520
|
|
|
|
55,527
|
|
Assets Not Yet Placed In Service
|
|
|
|
|
202
|
|
|
|
957
|
|
Property and Equipment, Net
|
|
|
|
$
|
53,722
|
|
|
$
|
56,484
|
|
On August 15, 2014, we completed a bulk equipment purchase (the "Saskatchewan Equipment Purchase"), consisting of centrifuges, shakers, service vehicles and other associated equipment, for total consideration of $10.3 million.
Our property and equipment includes the value of vehicles, trucks, trailers and mud pump equipment financed through capital leases. The gross amount of equipment held under capital leases was $3.6 million and $2.3 million as of December 31, 2015 and 2014, respectively. Accumulated depreciation of that same equipment held under capital leases was $1.0 million and $0.4 million as of December 31, 2015 and 2014, respectively.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In connection with our periodic review of the estimated useful lives of property and equipment, we determined that the economic useful life of certain assets we expect to use is longer than the remaining originally estimated useful lives. We completed our evaluation in the third quarter of 2014 and revised our estimated useful lives as follows:
|
-
|
A change in useful life from a historical estimate of 7 years to a revised estimate of 12 years for machinery and equipment, including containment berms, cellar pumps, centrifugal mud pumps, electric mud pumps, electric transfer pumps, floating pumps, light towers and water meters;
|
|
|
|
|
-
|
A change in useful life from a historical estimate of 12 years to a revised estimate of 20 years for machinery and equipment, including tanks, flare lines, gas busters, mixing tanks, pipe racks, skimming systems, catwalks and containment stairs and,
|
|
|
|
|
-
|
A change in useful life from a historical estimate of 5 years to a revised estimate of 7 years for trucks and trailers.
|
In determining the change in estimated useful lives, we, with input from management and operations, considered our experience with using these types of equipment. We concluded that, with proper maintenance, the types of equipment listed above still operate effectively up to the revised estimates for useful lives. Under the accounting standard related to changes in accounting estimates, the change in the estimated useful lives of certain of our property and equipment was accounted for as a change in accounting estimate on a prospective basis effective July 1, 2014.
Depreciation and amortization expense related to property and equipment for the years ended December 31, 2015 and 2014 was approximately $4.7 million and $3.5 million, respectively.
Impairment of Long-Lived Assets
: Long-lived assets, which include property and equipment and intangible assets with finite lives, are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recorded in the period in which it is determined that the carrying amount is not recoverable. The determination of recoverability is made based upon the estimated undiscounted future net cash flows, excluding interest expense. The impairment loss is determined by comparing the fair value with the carrying value of the related assets. We determined that the drop in pricing and utilization that we experienced in 2015 constituted a triggering event. As a result of the triggering event, a recoverability test was performed where our estimated undiscounted net cash flow exceeded the carrying amount of the assets, and as such no impairment loss was recognized during 2015. We recorded no impairment for the years ended December 31, 2015 and 2014.
Goodwill:
The carrying amount of goodwill is tested annually for impairment in the fourth quarter and whenever events or circumstances indicate its carrying value may not be recoverable. Impairment testing is conducted at the reporting unit level which is one level below our reporting segment level.
Our detailed impairment testing involves comparing the fair value of our reporting units to their respective carrying values, including goodwill. Fair value reflects the price a market participant would be willing to pay in a potential sale. If the fair value exceeds carrying value, then it is concluded that no goodwill impairment has occurred. If the carrying value exceeds the fair value, a second step is required to measure possible goodwill impairment loss. The second step includes valuing our tangible and intangible assets and liabilities as if we had been acquired in a business combination. Then, the implied fair value of our goodwill is compared to the carrying value of that goodwill. If the carrying value of our goodwill exceeds the implied fair value of the goodwill, we recognize an impairment loss in an amount equal to the excess, not to exceed the carrying value.
Our detailed impairment analysis involves the use of discounted cash flow models. Significant management judgment is necessary to evaluate the impact of operating and macroeconomic changes on our business. Critical assumptions include projected revenue growth, gross profit margins, selling, general and administrative expenses, working capital fluctuations, capital expenditures, discount rates and terminal growth rates. We use the capital asset pricing model to estimate the discount rates used in the discounted cash flow models.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We complete the annual goodwill impairment testing during the fourth quarter. Due to an industry downturn in 2015 resulting from sustained price depression for oil and natural gas, our activity and pricing was negatively impacted our activity and pricing. We believe we will continue to face significant challenges over the next twelve to eighteen months due to depressed and uncertain market conditions. Therefore, our cash flow model utilized in our detailed impairment analysis indicated that our carrying value was in excess of our fair value, and we determined that goodwill was impaired. All of the goodwill associated with the Austin Chalk and United was impaired in 2015. No impairment was recorded in 2014.
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Beginning Balance
|
|
$
|
11,407
|
|
|
$
|
8,834
|
|
Acquisitions
|
|
|
-
|
|
|
|
2,573
|
|
Impairment
|
|
|
(11,143
|
)
|
|
|
-
|
|
Ending Balance
|
|
$
|
264
|
|
|
$
|
11,407
|
|
Intangible Assets
: Intangible assets consist of the following (in thousands):
|
|
Customer Relationships
|
|
|
Tradename
|
|
|
Non-
Compete
|
|
|
Sales
Contract
|
|
|
Supply
Agreements
|
|
|
Total
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Estimated Useful Lives
|
|
2 - 10 years
|
|
|
4 - 10 years
|
|
|
4 - 5 years
|
|
|
4 - 10 years
|
|
|
4 years
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
$
|
5,441
|
|
|
$
|
2,355
|
|
|
$
|
2,586
|
|
|
$
|
524
|
|
|
$
|
1,686
|
|
|
$
|
12,592
|
|
Accumulated Amortization
|
|
|
(1,485
|
)
|
|
|
(592
|
)
|
|
|
(1,157
|
)
|
|
|
(225
|
)
|
|
|
(720
|
)
|
|
|
(4,179
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value
|
|
$
|
3,956
|
|
|
$
|
1,763
|
|
|
$
|
1,429
|
|
|
$
|
299
|
|
|
$
|
966
|
|
|
$
|
8,413
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost
|
|
$
|
5,441
|
|
|
$
|
2,355
|
|
|
$
|
2,586
|
|
|
$
|
524
|
|
|
$
|
1,686
|
|
|
$
|
12,592
|
|
Accumulated Amortization
|
|
|
(855
|
)
|
|
|
(334
|
)
|
|
|
(535
|
)
|
|
|
(94
|
)
|
|
|
(299
|
)
|
|
|
(2,117
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Book Value
|
|
$
|
4,586
|
|
|
$
|
2,021
|
|
|
$
|
2,051
|
|
|
$
|
430
|
|
|
$
|
1,387
|
|
|
$
|
10,475
|
|
Total amortization expense for the years ended December 31, 2015 and 2014 was approximately $2.1 million and $1.5 million, respectively.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Estimated amortization expense for the next five years and thereafter is as follows (in thousands):
Year Ending December 31,
|
|
|
|
|
|
|
|
2016
|
|
$
|
1,983
|
|
2017
|
|
|
1,967
|
|
2018
|
|
|
1,114
|
|
2019
|
|
|
750
|
|
2020
|
|
|
750
|
|
Thereafter
|
|
|
1,849
|
|
|
|
$
|
8,413
|
|
Deferred Loan Costs
: Costs incurred to obtain financing are capitalized and amortized on a straight-line basis over the term of the loan, which approximates the effective interest method. The net effect of the new amendment and reduction in borrowing base resulted in a negligible change to deferred loan costs. These costs are classified within interest expense on the accompanying consolidated statements of operations and are approximately $0.4 million and $0.3 million for the years ended December 31, 2015 and 2014, respectively.
Estimated future amortization expense relating to deferred loan costs is as follows (in thousands):
Year Ending December 31,
|
|
|
|
|
|
|
|
2016
|
|
$
|
322
|
|
2017
|
|
|
81
|
|
|
|
$
|
403
|
|
Deferred loan costs are included in other assets on our consolidated balance sheet. Deferred loan costs and accumulated amortization were approximately $1.0 million and $0.6 million, respectively, as of December 31, 2015. Deferred loan costs and accumulated amortization were $1.3 million and $0.5 million, respectively, as of December 31, 2014.
Income Taxes
: We account for income taxes utilizing the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or expense in the period that includes the enactment date.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The ultimate realization of deferred tax assets is dependent upon the generation of future taxable income during the periods in which those temporary differences become deductible. In assessing the likelihood and extent that deferred tax assets will be realized, consideration is given to projected future taxable income and tax planning strategies. A valuation allowance is recorded when, in the opinion of management, it is more-likely-than-not that some portion or all of the deferred tax assets will not be realized.
We recognize the financial statement effects of a tax position when it is more-likely-than-not, based on the technical merits, that the position will be sustained upon examination. A tax position that meets the more-likely-than-not recognition threshold is measured as the largest amount of tax benefit that is greater than 50% likely of being realized upon ultimate settlement with a taxing authority. Previously recognized tax positions are reversed in the first period in which it is no longer more-likely-than-not that the tax position would be sustained upon examination.
Income tax related interest and penalties, if applicable, are recorded as a component of the provision for income tax expense. However, there were no amounts recognized relating to interest and penalties in the consolidated statements of income for the years ended December 31, 2015 and 2014. We had no uncertain tax positions as of December 31, 2015 and 2014.
Fair Value of Financial Instruments
: Financial instruments consist of cash and cash equivalents, accounts receivable, unbilled receivables, accounts payable, accrued expenses, and a liability for contingent payments. The carrying values of cash and cash equivalents, accounts receivable, unbilled receivables, accounts payable, and accrued expenses approximate fair value due to their short-term nature.
We measure our liability for contingent payments at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability (i.e., exit price) in an orderly transaction between market participants at the measurement date. Additionally, we are required to provide disclosure and categorize assets and liabilities measured at fair value into one of three different levels depending on the assumptions (i.e., inputs) used in the valuation. Level 1 provides the most reliable measure of fair value while Level 3 generally requires significant management judgment. Financial assets and liabilities are classified in their entirety based on the lowest level of input significant to the fair value measurement. The fair value hierarchy is defined as follows:
Level 1—Valuations are based on unadjusted quoted prices in active markets for identical assets or liabilities.
Level 2—Valuations are based on quoted prices for similar assets or liabilities in active markets, or quoted prices in markets that are not active for which significant inputs are observable, either directly or indirectly.
Level 3—Valuations are based on prices or valuation techniques that require inputs that are both unobservable and significant to the overall fair value measurement. Inputs reflect management's best estimate of what market participants would use in valuing the asset or liability at the measurement date.
Our liability for contingent payments represents the fair value of estimated additional cash payments related to the United Acquisition. The payments are subject to the achievement of certain financial performance goals. The fair value of the liability for contingent payments represents the present value of required payments based upon our internal model and projections. Due to the industry downturn as a result of the drop in oil and natural gas prices, we are now modeling lower revenue which resulted in a lower fair value being recognized for the year ended December 31, 2015. Cash payments are due on May 31, 2015, 2016, and 2017.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table provides a roll forward of the fair value of our liability for contingent payments which includes Level 3 measurements (in thousands):
|
|
For the Years Ended December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Fair Value, Beginning of Period
|
|
$
|
3,109
|
|
|
$
|
-
|
|
Additions
|
|
|
-
|
|
|
|
3,517
|
|
Changes in Fair Value
|
|
|
(1,065
|
)
|
|
|
(408
|
)
|
Payments
|
|
|
(862
|
)
|
|
|
-
|
|
Fair Value, End of Period
|
|
$
|
1,182
|
|
|
$
|
3,109
|
|
Use of Estimates
: The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Recent Accounting Pronouncements:
In May 2014, the FASB issued Accounting Standards Update No. 2014-09,
Revenue from Contracts with Customers
(ASU 2014-09), which supersedes nearly all existing revenue recognition guidance under U.S. GAAP. The core principle of ASU 2014-09 is to recognize revenues when promised goods or services are transferred to customers in an amount that reflects the consideration to which an entity expects to be entitled for those goods or services. ASU 2014-09 defines a five step process to achieve this core principle and, in doing so, more judgment and estimates may be required within the revenue recognition process than are required under existing U.S. GAAP. In August 2015, the FASB issued ASU 2015-14,
Revenue from Contracts with Customers
which deferred the effective date of ASU 2014-09 for all entities by one year with the standard now effective for annual reporting periods beginning after December 15, 2017, and interim periods within annual periods beginning after December 15, 2018. The guidance allows either of the following transition methods: (i) a full retrospective approach reflecting the application of the standard in each prior reporting period with the option to elect certain practical expedients, or (ii) a retrospective approach with the cumulative effect of initially adopting ASU 2014-09 recognized at the date of adoption (which includes additional footnote disclosures). Early adoption is permitted. We are still evaluating the impact, if any, from this guidance and has not yet selected a method of transition.
In June 2014, the FASB issued Accounting Standards Update No. 2014-12,
Compensation — Stock Compensation (Topic 718), Accounting for Share-Based Payments When the Terms of an Award Provide That a Performance Target Could Be Achieved after the Requisite Service Period (a consensus of the FASB Emerging Issues Task Force)
. The guidance applies to all reporting entities that grant their employees share-based payments in which the terms of the award provide that a performance target that affects vesting could be achieved after the requisite service period. The amendments require that a performance target that affects vesting and that could be achieved after the requisite service period is treated as a performance condition. For all entities, the amendments in this Update are effective for annual periods and interim periods within those annual periods beginning after December 15, 2015. Earlier adoption is permitted. The effective date is the same for both public business entities and all other entities. The adoption of this guidance is not expected to have a material impact on our consolidated financial statements.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In August 2014, the FASB issued ASU 2014-15,
Presentation of Financial Statements – Going Concern (Subtopic 205-40): Disclosure of Uncertainties about an Entity's Ability to Continue as a Going Concern
, which defines management's responsibility to evaluate whether there is substantial doubt about the company's ability to continue as a going concern and provides guidance on the related footnote disclosure. Management should evaluate whether there are conditions or events that raise substantial doubt about the company's ability to continue as a going concern within one year after the date the annual or interim financial statements are issued. The amendments are effective for the year ending December 31, 2016, and for interim periods beginning the first quarter of 2017, with early application permitted. We plan to adopt these provisions in the first quarter of 2016 and will provide such disclosures as required if there are conditions and events that raise substantial doubt about our ability to continue as a going concern. We currently do not expect the adoption to have a material impact on our consolidated financial statements.
In November 2014, the FASB issued ASU 2014-16,
Determining Whether the Host Contract in a Hybrid Financial Instrument Issued in the Form of a Share Is More Akin to Debt or to Equity
, which clarifies how to evaluate the economic characteristics and risks of a host contract in a hybrid financial instrument that is issued in the form of a share. Specifically, the ASU requires that an entity consider all relevant terms and features in evaluating the nature of the host contract and clarifies that the nature of the host contract depends upon the economic characteristics and the risks of the entire hybrid financial instrument. An entity should assess the substance of the relevant terms and features, including the relative strength of the debt-like or equity-like terms and features given the facts and circumstances, when considering how to weight those terms and features. The ASU is effective for public businesses for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2015, with early adoption permitted. We are currently evaluating the impact of the adoption of this standard on our consolidated financial statements.
In February 2015, the FASB issued ASU No. 2015-02,
Consolidation (Topic 810): Amendments to the Consolidation Analysis,
which changes the guidance with respect to the analysis that a reporting entity must perform to determine whether it should consolidate certain types of legal entities. Companies have an option of using either a full retrospective or modified retrospective adoption approach. The updated guidance is effective for annual reporting periods beginning after December 15, 2015, including interim periods within those annual periods. Early adoption is permitted. We are currently evaluating the impact of the new guidance on our consolidated financial statements.
In April 2015, the FASB issued ASU 2015-03,
Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs.
The amendments in the ASU change the balance sheet presentation requirements for debt issuance costs by requiring them to be presented as a direct reduction to the carrying amount of the related debt liability. The amendments are effective for financial statements issued for fiscal years beginning after December 15, 2015, and interim periods within those fiscal years. Early adoption is permitted. Transitioning to the new guidance requires retrospective application. We plan to make the required change to the presentation of our debt issuance costs in the first quarter of fiscal year 2016, but we do not believe such change will have a material impact to our consolidated financial statements.
In July 2015, the FASB issued ASU 2015-11,
Inventory (Topic 330) – Simplifying the Measurement of Inventory
. The amendments in the ASU require entities that measure inventory using the first-in, first-out or average cost methods to measure inventory at the lower of cost and net realizable value to more closely align the measurement of inventory in U.S. GAAP with International Financial Reporting Standards. Net realizable value is defined as estimated selling price in the ordinary course of business less reasonably predictable costs of completion and disposal. The amendments are effective on a prospective basis for fiscal years, and for interim periods within those fiscal years, beginning after December 15, 2016, with earlier application permitted. We do not believe the adoption of this standard will have a material impact on our consolidated financial statements.
In August 2015, the FASB issued ASU 2015-15,
Interest - Imputation of Interest: Presentation and Subsequent Measurement of Debt Issuance Costs Associated with Line-of-Credit Arrangements
, which adds comments from the Securities and Exchange Commission (SEC) addressing ASU 2015-03, as discussed above, and debt issuance costs related to line-of-credit arrangements. The SEC commented it would not object to an entity deferring and presenting debt issuance costs as an asset and subsequently amortizing the deferred debt issuance costs ratably over the term of the line-of-credit arrangement, regardless of whether there are any outstanding borrowings on the line-of-credit arrangement. We plan to adopt ASU 2015-15 in connection with its adoption of ASU 2015-03 effective January 1, 2016. We do not anticipate the adoption of ASU 2015-15 will have a material impact on our financial condition or results of operations.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In September 2015, the FASB issued ASU 2015-16,
Business Combinations: Simplifying the Accounting for Measurement-Period Adjustments
, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. The amendments in the ASU require that the acquirer record, in the same period's financial statements, the effect on earnings of changes in depreciation, amortization, or other income effects, if any, as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The amendments are effective for annual reporting periods beginning after December 15, 2015. We are currently in the process of evaluating the impact of adoption of this standard on our financial statements.
In November 2015, the FASB issued ASU 2015-17,
Income Taxes: Balance Sheet Classification of Deferred Taxes
, which eliminates the existing requirement for organizations to present deferred tax assets and liabilities as current and noncurrent in a classified balance sheet and now requires that all deferred tax assets and liabilities be classified as noncurrent. The ASU is effective for annual periods beginning after December 15, 2016, with early application permitted. We elected to early adopt the provisions of this ASU and classified our deferred tax balances as a non-current liability as of December 31, 2015 and 2014.
In February 2016, the FASB issued ASU 2016-02 –
Leases
. This guidance attempts to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. The main difference between previous GAAP and this new guidance is the recognition on the consolidated balance sheets lease assets and lease liabilities by lessees for those leases classified as operating leases under previous GAAP. The amendments in this ASU are effective for fiscal years beginning after December 15, 2018, including interim periods within those fiscal years. Early application is permitted. We are currently in the process of evaluating the impact of adoption of this standard on our financial statements.
Reclassifications:
Certain reclassifications, including a reclassification related to the adoption of ASU 2015-17,
Income Taxes: Balance Sheet Classification of Deferred Taxes
, have been made to prior period consolidated financial statements to conform to the current period presentations. These reclassifications had no effect on our consolidated financial position, results of operations or cash flows.
NOTE 4 – BUSINESS COMBINATION
United Acquisition
On April 15, 2014, we acquired all of the equity interests of United as well as certain assets used in United's business that were owned by related parties of United. The acquisition expanded our service offering by adding solids control services and expanded our geographical footprint into the Northeast. Total consideration for the United Acquisition was approximately $24.5 million, comprised of the following (in thousands):
Cash Consideration Paid, Net of Cash Acquired
|
|
$
|
15,063
|
|
Fair Value of Aly Centrifuge Redeemable Preferred Stock Issued
|
|
|
5,101
|
|
Fair Value of Contingent Consideration
|
|
|
3,517
|
|
Accounts Payable - Affiliates
|
|
|
821
|
|
Total Consideration
|
|
$
|
24,502
|
|
The cash portion of the consideration was $15.1 million, net of cash acquired of $0.6 million. Redeemable preferred stock issued as consideration in the United Acquisition ("Aly Centrifuge Redeemable Preferred Stock") consists of 5,000 shares with an estimated fair value of $5.1 million (See Note 10). The contingent consideration consists of up to three future cash payments to the sellers in an amount equal to 5% of the gross revenues of the business acquired for each of the 12 month periods ending on March 31, 2015, 2016 and 2017; provided, however, that the aggregate contingent consideration will not exceed $5.0 million. On May 31, 2015, we made the first cash payment in the amount of $0.9 million, or 5% of the gross revenues of the business acquired for the twelve months ended March 31, 2015.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The business combination was accounted for using the acquisition method of accounting and the purchase price was allocated to the net assets acquired at their estimated fair value. The final purchase price was allocated to the net assets acquired upon their estimated fair value as follows (in thousands):
Current Assets
|
|
$
|
2,981
|
|
Property and Equipment
|
|
|
18,170
|
|
Intangible Assets
|
|
|
6,105
|
|
Goodwill
|
|
|
2,309
|
|
|
|
|
|
|
Total Assets Acquired
|
|
|
29,565
|
|
|
|
|
|
|
Liabilities Assumed
|
|
|
2,401
|
|
Deferred Tax Liabilities
|
|
|
2,662
|
|
|
|
|
|
|
Total Liabilities Assumed
|
|
|
5,063
|
|
|
|
|
|
|
Net Assets Acquired
|
|
$
|
24,502
|
|
Goodwill, which is not deductible for tax purposes, was assigned a total value of $2.3 million at the time of acquisition. This goodwill was totally impaired as a result of the 2015 goodwill testing (See Note 3). Other intangible assets have a total value of $6.1 million with a weighted average amortization period of 7 years. Other intangible assets consist of customer relationships of $2.2 million, amortizable over 10 years, trade name of $1.1 million, amortizable over 10 years, a non-compete agreement of $1.1 million, amortizable over 4 years, and a supply agreement of $1.7 million, amortizable over 4 years. Included within liabilities assumed is $0.3 million of capital leases.
We incurred approximately $0.1 million of transaction costs associated with the United Acquisition, primarily consisting of professional services fees, which are included in selling, general and administrative expenses during the year ended December 31, 2014. Selling, general and administrative expenses also include approximately $22,000 of expense related to working capital adjustments and approximately $41,000 of expense related to settlements of pre-acquisition claims.
During the years ended December 31, 2015 and 2014, the United Acquisition contributed $15.1 million and $12.6 million, respectively, in revenues to our consolidated financial results. The United Acquisition contributed approximately $0.3 million and $1.1 million of net income available to common stockholders, prior to any allocation of our financing costs and corporate expenses, to our consolidated financial results for the years ended December 31, 2015 and 2014, respectively.
Pro Forma Combined Financial Information
The following unaudited pro forma combined financial information reflects the consolidated statements of income of the Company as if the United Acquisition had occurred as of January 1, 2013. The pro forma information includes adjustments primarily related to the elimination of a revenue sharing arrangement, depreciation expense on fixed assets acquired, amortization of intangible assets acquired, interest expense associated with the expansion of the credit facility to finance the United Acquisition, and the dividends and amortization associated with the issuance of the Aly Centrifuge Redeemable Preferred Stock. The pro forma combined financial information is not necessarily indicative of the results of operations as they would have been had the transaction been effected on the assumed date (in thousands, except per share data):
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
|
|
For the Year Ended December 31, 2014
|
|
|
|
|
|
Revenues
|
|
$
|
47,285
|
|
|
|
|
|
|
Net Income Available to Common Stockholders
|
|
$
|
2,543
|
|
|
|
|
|
|
Basic and Diluted Net Income per Common Share
|
|
$
|
0.40
|
|
Evolution Acquisition
On July 1, 2014, we acquired all of the issued and outstanding stock of Evolution. The acquisition expanded our service offering by adding MWD services. Total consideration was approximately $2.0 million, comprised of the following (in thousands):
Fair Value of Common Stock Issued
|
|
$
|
1,650
|
|
Accounts Payable - Affiliates
|
|
|
340
|
|
Total Consideration
|
|
$
|
1,990
|
|
Common stock issued as consideration for the acquisition of Evolution consists of 150,000 shares with an estimated fair value of $1.7 million as of the date of the acquisition.
The business combination was accounted for using the acquisition method of accounting and the purchase price was allocated to the net assets acquired at their estimated fair value. The final purchase price was allocated to the net assets acquired upon their estimated value as follows (in thousands):
Current Assets
|
|
$
|
902
|
|
Property and Equipment
|
|
|
62
|
|
Intangible Assets
|
|
|
1,758
|
|
Goodwill
|
|
|
264
|
|
|
|
|
|
|
Total Assets Acquired
|
|
|
2,986
|
|
|
|
|
|
|
Liabilities Assumed
|
|
|
398
|
|
Deferred Tax Liabilities
|
|
|
598
|
|
Total Liabilities Assumed
|
|
|
996
|
|
Net Assets Acquired
|
|
$
|
1,990
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Goodwill, which is not tax deductible, has a value of $0.3 million and is primarily attributable to the cross-selling opportunities that Evolution could provide to our existing operations. Other intangible assets have a total value of $1.8 million with a weighted average amortization period of 4 years. Other intangible assets consist of customer relationships of $0.1 million, amortizable over 1.5 years, trade name of $0.2 million, amortizable over 4.5 years, a sales contract of $0.5 million, amortizable over 3.5 years, and a non-compete agreement of $1.0 million, amortizable over 4 years.
We incurred approximately $30,000 of transaction costs associated with the acquisition of Evolution, primarily consisting of professional services fees, which are included in selling, general and administrative expenses during the year ended December 31, 2014.
During the years ended December 31, 2015 and 2014, Evolution contributed $3.6 million and $5.6 million, respectively, of revenues to our consolidated financial results. Subsequent to the date of acquisition, Evolution generated a net loss of approximately $2.1 million and $0.3 million, prior to any allocation of our financing costs and corporate expenses, which is included in our consolidated financial results during the years ended December 31, 2015 and 2014, respectively.
NOTE 5 – LONG-TERM DEBT
Long-term debt consists of the following (in thousands):
|
|
December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Credit Facility
|
|
|
|
|
|
|
Term Loan
|
|
$
|
15,573
|
|
|
$
|
21,250
|
|
Delayed Draw Term Loan
|
|
|
4,500
|
|
|
|
5,000
|
|
Subordinated Note Payable
|
|
|
1,500
|
|
|
|
2,000
|
|
Equipment Financing and Capital Leases
|
|
|
2,389
|
|
|
|
1,963
|
|
|
|
|
23,962
|
|
|
|
30,213
|
|
Less: Current Portion
|
|
|
(20,765
|
)
|
|
|
(6,758
|
)
|
Long-Term Debt, Net of Current Portion
|
|
$
|
3,197
|
|
|
$
|
23,455
|
|
Credit Facility: Term Loan, Delayed Draw Term Loan, and Revolving Credit Facility
On April 15, 2014, in connection with the United Acquisition, we entered into an Amended and Restated Credit Agreement with a maturity date of April 30, 2017. The new agreement increased the size of our credit facility to $30.0 million, consisting of a $25.0 million term loan and a revolving credit facility with a maximum availability of $5.0 million.
On November 26, 2014, we entered into Amendment No. 1 to the Amended and Restated Credit Agreement in order to, among other things, provide for a $5.0 million delayed draw term loan to be added to the credit facility. The delayed draw term loan was used in full to finance capital expenditures during the year ended December 31, 2014.
On October 13, 2015, we entered into Amendment No. 2 to the existing credit facility ("Amendment") which had an effective date of September 30, 2015. In connection with the execution of the Amendment, we used proceeds of $3.4 million from our private offering to make the regularly scheduled principal payments of $1.5 million on September 30, 2015 and to make a prepayment of $1.9 million on the term loan on October 13, 2015.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The Amendment modified multiple components of the credit facility including, but not limited to, the terms listed below. The Amendment:
|
(i)
|
waived our covenant default as of June 30, 2015;
|
|
|
|
|
(ii)
|
defers all further principal payments on outstanding borrowings under the credit facility until March 31, 2017;
|
|
|
|
|
(iii)
|
revised certain financial covenants to facilitate our compliance with such covenants during the current downturn in the oilfield services industry; and,
|
|
|
|
|
(iv)
|
reduced the size of the revolving credit facility to $1.0 million.
|
There were no outstanding borrowings under the revolving credit facility as of December 31, 2015 and 2014.
The obligations under the agreement are guaranteed by all of our subsidiaries and secured by substantially all of our assets. The credit agreement contains customary events of default and covenants including restrictions on our ability to incur additional indebtedness, make capital expenditures, pay dividends or make other distributions, grant liens and sell assets.
Borrowings under the credit facility bear interest at the annual base rate which is (i) the greatest of Wells Fargo's Prime Rate, the Federal Funds Rate plus 0.5% and the one-month LIBOR rate on such day plus 1.00%, plus (ii) a margin of 1.75%. For the years ended December 31, 2015 and 2014, interest rates on our borrowings under the credit facility ranged from 4.24% to 5.75% and 3.75% to 4.75%, respectively.
Due to the significant downturn in the oilfield services industry throughout 2015, at December 31, 2015, we were not in compliance with certain financial covenants set forth in our credit agreement due to our poor financial results. We anticipate that we are unlikely to be in compliance with such covenants for the first quarter ending March 31, 2016. Therefore, on March 31, 2016 we completed the execution and delivery of a forbearance agreement and amendment to the credit agreement.
Among other provisions, the lenders have agreed to forbear from exercising their remedies under the credit agreement until the earlier of July 10, 2016 or the date on which forbearance is terminated due to specified events, including (i) the occurrence of other defaults under the credit agreement, (ii) our failure to hire an independent financial advisor prior to April 10, 2016 or (iii) our failure to present a detailed plan for asset sales or equity capital acceptable to the lenders yielding net cash proceeds to us of at least $2.5 million by May 25, 2016. We hired an independent financial advisor and such advisor commenced the engagement prior to the deadline of April 10, 2016. In conjunction with agreeing to forbear from exercising their remedies under the credit agreement, the lenders reduced the revolving credit portion of the credit facility to zero thereby eliminating our ability to borrow additional funds under the existing credit facility.
We are currently in discussions with various stakeholders and advisors to develop and execute a plan to satisfy the requirements of the forbearance agreement. There can be no assurance that our actions will be deemed sufficient by the lender to extend the forbearance agreement and, if our actions are deemed insufficient, our outstanding debt will become immediately due and payable. Therefore, we have classified our indebtedness under the credit agreement as a current liability.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Subordinated Note Payable
On August 15, 2014, we completed a bulk equipment purchase (the "Saskatchewan Equipment Purchase"), consisting of centrifuges, shakers, service vehicles and other associated equipment, for total consideration of $10.3 million of which $2.0 million was in the form of a Subordinated Note Payable.
On March 18, 2015, the Subordinated Note Payable was amended to extend the final maturity date to June 30, 2017 and to increase the interest rate to 10% per annum. Subsequent to an aggregate principal and interest payment of approximately $0.6 million on March 31, 2015, additional payments of interest and principal are not required until June 30, 2017. Interest and principal payments may be paid in amounts determined by our board of directors on any date or dates prior to June 30, 2017, subject to approval of both our board of directors and our lenders. The Subordinated Note Payable is generally subordinated in right of payment to our indebtedness to its lenders.
Future maturities of long-term debt, including the term loan, the delayed draw term loan, and the subordinated note payable, as of December 31, 2015 are as follows (in thousands):
Year Ending December 31,
|
|
|
|
2016
|
|
$
|
20,073
|
|
2017
|
|
|
1,500
|
|
|
|
$
|
21,573
|
|
Equipment Financing and Capital Leases
We finance the purchase of certain vehicles and equipment using long-term equipment loans and using non-cancelable capital leases. Repayment occurs over the term of the loan or lease, typically three to five years, in equal monthly installments which include principal and interest. At December 31, 2015 and December 31, 2014, we had $2.4 million and $2.0 million outstanding under equipment loans and capital leases, respectively.
Payments under equipment loans and capital leases for the next five years, as of December 31, 2015, are as follows (in thousands):
Year Ending December 31,
|
|
|
|
2016
|
|
$
|
788
|
|
2017
|
|
|
744
|
|
2018
|
|
|
593
|
|
2019
|
|
|
290
|
|
2020
|
|
|
189
|
|
Total Payments
|
|
|
2,604
|
|
Less: Amount Representing Interest
|
|
|
(215
|
)
|
Present Value of Minimum Lease Payments
|
|
|
2,389
|
|
Less: Current Portion of Capital Leases
|
|
|
(692
|
)
|
Long-Term Capital Lease Obligations, Net of Current Portion
|
|
$
|
1,697
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 – SIGNIFICANT CUSTOMERS
During the year ended December 31, 2015, approximately $8.8 million or 30.1% of our revenues were derived from three customers. One of those customers accounted for 13.7% of our revenue. Amounts due from these customers included in accounts receivable and unbilled receivables at December 31, 2015 are approximately $1.0 million.
During the year ended December 31, 2014, approximately $12.3 million or 29.3% of our revenues were derived from three customers. Amounts due from these customers included in accounts receivable and unbilled receivables at December 31, 2014 are approximately $2.7 million.
NOTE 7 – COMMITMENTS AND CONTINGENCIES
Litigation
We are subject to certain claims arising in the ordinary course of business. Management does not believe that any claims will have a material adverse effect on our financial position or results of operations.
On February 3, 2015, multiple plaintiffs filed a proposed collective action against us under the Fair Labor Standards Act, in the Western District of Texas, San Antonio Division. On February 20, 2015, a proposed collective action alleging overtime violations under the Fair Labor Standards Act and Pennsylvania law, in the Southern District of Texas, Houston Division, was amended to include us as a defendant. Both actions were consolidated within the Southern District of Texas, Houston Division. We have settled this matter for business purposes, with no admission of liability. The settlement amount was fully accrued at December 31, 2015 and the case was fully paid and dismissed with prejudice, by the end of January 2016.
Contractual Commitments
We have numerous contractual commitments in the ordinary course of business including debt service requirements and operating leases. We lease land, facilities and equipment from non-affiliates. Certain of these leases extend to 2020.
Operating Leases
We lease certain property and equipment under non-cancelable operating leases. The term of the operating leases generally range from one to five years. Lease expense under all operating leases totaled approximately $0.6 million and $0.3 million for the years ended December 31, 2015 and 2014, respectively. As of December 31, 2015, the future minimum lease payments under non-cancelable operating leases were as follows (in thousands):
Year Ending December 31,
|
|
|
|
2016
|
|
$
|
372
|
|
2017
|
|
|
317
|
|
2018
|
|
|
165
|
|
2019
|
|
|
88
|
|
2020
|
|
|
7
|
|
|
|
$
|
949
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 –
RELATED PARTY TRANSACTIONS
One of our directors, who was appointed March 3, 2015, was one of the sellers of United to us in April 2014. Part of the acquisition price is payable in contingent consideration of which $0.9 million was paid in 2015. Of that amount approximately $0.1 million is attributable to that director. At December 31, 2015, we estimate the fair value of future payments to be $1.2 million of which approximately $0.2 million would be attributable to that same director.
Rent expense paid to an affiliate was approximately $23,000 and $66,000 for the years ended December 31, 2015 and 2014, respectively. The related party retired effective May 1, 2015.
During the years ended December 31, 2015 and 2014, we agreed to issue 3,434 and 79,215 shares of our common stock, respectively to one of our directors in respect of his arrangement of transactions to raise equity for us from non-U.S. investors. As of December 31, 2014, we had not issued these shares to our director, but the obligation in the amount of $0.6 million was recognized on the consolidated balance sheet in accounts payable - affiliates. All shares were issued during 2015.
NOTE 9 – INCOME TAXES
The provision for income taxes consists of the following (in thousands):
|
|
For the Years Ended December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Current Provision:
|
|
|
|
|
|
|
Federal
|
|
$
|
-
|
|
|
$
|
-
|
|
State
|
|
|
(99
|
)
|
|
|
208
|
|
|
|
|
|
|
|
|
|
|
Total Current Provision
|
|
|
(99
|
)
|
|
|
208
|
|
|
|
|
|
|
|
|
|
|
Deferred (Benefit) Expense:
|
|
|
|
|
|
|
|
|
Federal
|
|
|
(3,001
|
)
|
|
|
1,650
|
|
State
|
|
|
(441
|
)
|
|
|
148
|
|
Total Deferred (Benefit) Expense
|
|
|
(3,442
|
)
|
|
|
1,798
|
|
Provision for Income Taxes
|
|
$
|
(3,541
|
)
|
|
$
|
2,006
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table reconciles the statutory tax rates to our effective tax rate:
|
|
For the Years Ended December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Federal Statutory Rate
|
|
|
34.00
|
%
|
|
|
34.00
|
%
|
State Taxes, Net of Federal Benefit
|
|
|
1.26
|
%
|
|
|
5.86
|
%
|
Goodwill impairment
|
|
|
-19.49
|
%
|
|
|
0.00
|
%
|
Other
|
|
|
2.45
|
%
|
|
|
3.58
|
%
|
Effective Income Tax Rate
|
|
|
18.22
|
%
|
|
|
43.44
|
%
|
We currently project a taxable loss for the year ended December 31, 2015, for federal income tax purposes and in certain state income tax jurisdictions. At December 31, 2015, we had a gross net operating loss ("NOL") for U.S. federal income tax purposes of approximately $16.2 million. This NOL will begin to expire in 2033 if not utilized. We will carryforward the net federal NOL of approximately $5.5 million. We also have state NOLs that will affect state taxes of approximately $0.5 million at December 31, 2015. State NOLs begin to expire in 2034. Carryback provisions are not allowed by all states, accordingly the state NOLs also give rise to a deferred tax asset.
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income taxes. Components of our deferred income taxes as of December 31, 2015 and 2014 are as follows (in thousands):
|
|
For the Years Ended December 31,
|
|
|
|
2015
|
|
|
2014
|
|
|
|
|
|
|
|
|
Deferred Tax Assets:
|
|
|
|
|
|
|
Allowance for Doubtful Accounts
|
|
$
|
152
|
|
|
$
|
57
|
|
Net Operating Loss
|
|
|
5,514
|
|
|
|
646
|
|
Foreign Tax Credit
|
|
|
-
|
|
|
|
81
|
|
Start-Up Costs
|
|
|
18
|
|
|
|
21
|
|
State Net Operating Loss, Net of Federal Benefit
|
|
|
360
|
|
|
|
9
|
|
Accrued Compensation
|
|
|
103
|
|
|
|
-
|
|
Charitable Contributions and Other
|
|
|
17
|
|
|
|
17
|
|
Total Deferred Tax Assets
|
|
|
6,164
|
|
|
|
831
|
|
|
|
|
|
|
|
|
|
|
Deferred Tax Liabilities:
|
|
|
|
|
|
|
|
|
Prepaid Assets
|
|
|
28
|
|
|
|
58
|
|
Property and Equipment
|
|
|
12,014
|
|
|
|
9,728
|
|
Intangibles
|
|
|
2,354
|
|
|
|
3,182
|
|
State Deferreds, Net of Federal Benefit
|
|
|
463
|
|
|
|
-
|
|
Total Deferred Tax Liabilities
|
|
|
14,859
|
|
|
|
12,968
|
|
|
|
|
|
|
|
|
|
|
Net Deferred Tax Liabilities
|
|
$
|
8,695
|
|
|
$
|
12,137
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
We place a threshold for recognition of deferred tax assets based on whether it is more likely than not that these assets will be realized. A valuation allowance is established for assets not meeting the criteria. We have not recorded a valuation allowance as of December 31, 2015 and 2014.
We follow accounting guidance under ASC 740-10
Income Taxes
related to uncertainty in income tax positions, which clarifies the accounting and disclosure requirements for uncertainty in tax positions. We assessed our filing positions in all significant jurisdictions where we are required to file income tax returns for all open tax years and determined no liability existed or there was no liability for uncertain positions. Our major taxing jurisdictions include the U.S. federal income taxes and the Texas franchise tax. Our federal tax returns remain open for tax years 2012 forward and our state tax returns remain open for tax years 2011 forward. None of our federal or state income tax returns are currently under examination by the Internal Revenue Service or state authorities.
NOTE 10 – REDEEMABLE PREFERRED STOCK
Two of our subsidiaries have redeemable preferred stock outstanding as of December 31, 2015. Aly Operating issued redeemable preferred stock in connection with the acquisition of Austin Chalk ("Aly Operating Redeemable Preferred Stock") and Aly Centrifuge issued the Aly Centrifuge Redeemable Preferred Stock in connection with the United Acquisition.
Aly Operating Redeemable Preferred Stock
As part of the acquisition of Austin Chalk, Aly Operating agreed to issue up to 4 million shares of Aly Operating Redeemable Preferred Stock, with a par value of $0.01, to the seller, with a fair value and liquidation value of $3.8 million and $4.0 million, respectively. The preferred stock was valued as of the date of acquisition by discounting the sum of (i) the liquidation value at issuance and (ii) the future cumulative accrued dividends as of the date of optional redemption for a lack of marketability. The first tranche of 2 million shares was issued on December 31, 2012 and the second tranche of 2 million shares was issued on March 31, 2013.
The Aly Operating Redeemable Preferred Stock is entitled to a cumulative paid-in-kind dividend of 5% per year on its liquidation preference, compounded quarterly. Aly Operating is not required to pay cash dividends.
The holder of the Aly Operating Redeemable Preferred Stock and Aly Operating can, at either's option, require the other party to redeem the preferred stock for cash at different times around the fourth anniversary of the closing date of the sale or October 26, 2016. However, there is no requirement for either party to redeem the preferred stock.
The rights of the preferred stock also include the right to redeem the preferred stock for cash upon a liquidity event, as defined in the agreement. If we transact an initial public offering, as defined in the agreement, the preferred stock can be converted into common stock or redeemed. The conversion ratio, determined by a calculation defined in the agreement of which the components include trailing twelve-month financial performance and magnitude of investment in new equipment, is undeterminable until the Aly Operating Redeemable Preferred Stock becomes exchangeable into common shares.
The Aly Operating Redeemable Preferred Stock is classified outside of permanent equity in our consolidated balance sheet because the settlement provisions provide the holder the option to require Aly Operating to redeem the Aly Operating Redeemable Preferred Stock at the liquidation price plus any accrued dividends.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The following table describes the changes in Aly Operating Redeemable Preferred Stock (in thousands, except for shares):
|
|
Carrying
Value of Aly
Operating Redeemable Preferred Stock
|
|
|
Number of Outstanding Aly Operating Redeemable Preferred Shares
|
|
|
Liquidation
Value of Aly Operating Redeemable Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2014
|
|
$
|
4,132
|
|
|
|
4,000,000
|
|
|
$
|
4,245
|
|
Accrued Dividends
|
|
|
213
|
|
|
|
-
|
|
|
|
213
|
|
Accretion
|
|
|
37
|
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
|
4,382
|
|
|
|
4,000,000
|
|
|
|
4,458
|
|
Accrued Dividends
|
|
|
227
|
|
|
|
-
|
|
|
|
227
|
|
Accretion
|
|
|
38
|
|
|
|
-
|
|
|
|
-
|
|
December 31, 2015
|
|
$
|
4,647
|
|
|
|
4,000,000
|
|
|
$
|
4,685
|
|
Aly Centrifuge Redeemable Preferred Stock
On April 15, 2014, as part of the United Acquisition, Aly Centrifuge issued 5,000 shares of Aly Centrifuge Redeemable Preferred Stock, with a par value of $0.01, to the sellers in the transaction, with a fair value and liquidation value of $5.1 million and $5.0 million, respectively. The preferred stock was valued as of the date of acquisition by discounting the sum of (i) the value of the preferred stock without a conversion option using the option pricing method and (ii) the value of the conversion option using the Black-Scholes option pricing model for a lack of marketability. In 2015, Aly Centrifuge asserted an indemnification claim of 124 shares against shares that were subject to an 18-month holdback for general indemnification purposes pursuant to the purchase agreement.
On August 15, 2014, in connection with the Saskatchewan Equipment Purchase, Aly Centrifuge issued an additional 4,000 shares of Aly Centrifuge Redeemable Preferred Stock, with a par value of $0.01, to the sellers in the transaction, with a fair value and liquidation value of $4.3 million and $4.0 million, respectively. The preferred stock was valued as of the date of the equipment purchase by discounting the sum of (i) the value of the preferred stock without a conversion option using the option pricing method and (ii) the value of the conversion option using the Black-Scholes option pricing model for a lack of marketability.
The Aly Centrifuge Redeemable Preferred Stock is entitled to a cumulative paid-in-kind dividend of 5% per year on its liquidation preference, compounded quarterly. Aly Centrifuge is not required to pay cash dividends.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The holder of the Aly Centrifuge Redeemable Preferred Stock and Aly Centrifuge can, at either's option, require the other party to redeem the preferred stock for cash on or after December 31, 2016. However, there is no requirement for either party to redeem the preferred stock.
Aly Centrifuge Redeemable Preferred Stock also includes the right to exchange into shares of our common stock on any date, from time to time, at the option of the holder, into the number of shares equal to the quotient of (i) the sum of (A) the liquidation preference plus (B) an amount per share equal to accrued but unpaid dividends not previously added to the liquidation preference on such share of preferred stock, divided by (ii) 1,000, and (iii) multiplied by the exchange rate in effect at such time. The exchange rate currently in effect is 71.4285 or $14.00 per share of our common stock.
The Aly Centrifuge Redeemable Preferred Stock is classified outside of permanent equity in our consolidated balance sheet because the settlement provisions provide the holder the option to require Aly Centrifuge to redeem the Aly Centrifuge Redeemable Preferred Stock at the liquidation price plus any accrued dividends.
The following table describes the changes in the Aly Centrifuge Redeemable Preferred Stock (in thousands, except for shares, and per share amounts):
|
|
Carrying Value of Aly Centrifuge Redeemable Preferred Stock
|
|
|
Number of Outstanding Aly Centrifuge Redeemable Preferred Shares
|
|
|
Liquidation
Value of Aly
Centrifuge Redeemable Preferred Stock
|
|
|
|
|
|
|
|
|
|
|
|
January 1, 2014
|
|
$
|
-
|
|
|
|
-
|
|
|
$
|
-
|
|
Issuance
|
|
|
9,424
|
|
|
|
9,000
|
|
|
|
9,000
|
|
Accrued Dividends
|
|
|
254
|
|
|
|
-
|
|
|
|
254
|
|
Amortization
|
|
|
(94
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2014
|
|
|
9,584
|
|
|
|
9,000
|
|
|
|
9,254
|
|
Holdback adjusment
|
|
|
(124
|
)
|
|
|
(124
|
)
|
|
|
(124
|
)
|
Accrued Dividends
|
|
|
460
|
|
|
|
-
|
|
|
|
460
|
|
Amortization
|
|
|
(165
|
)
|
|
|
-
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2015
|
|
$
|
9,755
|
|
|
|
8,876
|
|
|
$
|
9,590
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 – EARNINGS PER SHARE
Basic earnings per share is based on the weighted average number of shares of common stock outstanding during the applicable period. Diluted earnings per share is computed based on the weighted average number of common shares outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to outstanding stock options and restricted stock or other convertible instruments, as appropriate.
For the year ended December 31, 2015, the effect of incremental shares is antidilutive so the diluted earnings per share will be the same as the basic earnings per share. The calculations of basic and diluted earnings per share for the year ended December 31, 2014 is shown below:
|
|
For the Year
Ended
December 31,
|
|
|
|
2014
|
|
|
|
|
|
Numerator:
|
|
|
|
Net Income/(Loss)
|
|
$
|
2,613
|
|
Less: Aly Operating Redeemable Preferred Stock Dividends
|
|
|
(213
|
)
|
Less: Aly Operating Redeemable Preferred Stock Accretion
|
|
|
(37
|
)
|
Numerator for Diluted Earnings per Share
|
|
|
2,363
|
|
Less: Aly Centrifuge Redeemable Preferred Stock Dividends
|
|
|
(254
|
)
|
Plus: Aly Centrifuge Redeemable Preferred Stock Amortization
|
|
|
94
|
|
Numerator for Basic Earnings per Share
|
|
$
|
2,203
|
|
|
|
|
|
|
Denominator:
|
|
|
|
|
Weighted Average Shares Used in Basic Earnings per Share
|
|
|
5,155,204
|
|
Effect of Dilutive Shares:
|
|
|
|
|
Aly Centrifuge Redeemable Preferred Stock
|
|
|
362,426
|
|
Weighted Average Shares Used in Diluted Earnings per Share
|
|
|
5,517,630
|
|
|
|
|
|
|
Basic Earnings per Share
|
|
$
|
0.43
|
|
Diluted Earnings per Share
|
|
$
|
0.43
|
|
(1)
|
The exchange of Aly Operating Redeemable Preferred Stock into Common Shares is not considered within the calculation of the numerator or denominator of diluted earnings per share because, as of December 31, 2014, the Aly Operating Redeemable Preferred Stock was not exchangeable into Common Shares.
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Securities excluded from the computation of basic and diluted earnings per share are shown below:
|
|
For the Year
Ended
December 31,
|
|
|
|
2014
|
|
Basic Earnings per Share:
|
|
|
|
Unvested Stock Options
(1)
|
|
|
338,474
|
|
Exchange of Aly Operating Redeemable Preferred Stock
(2)
|
|
|
-
|
|
(1)
|
The stock options vest upon the occurrence of certain events as defined in the Omnibus Incentive Plan.
|
|
|
(2)
|
The Aly Operating Redeemable Preferred Stock becomes exchangeable upon the occurrence of certain events, as defined in the Aly Operating Redeemable Preferred Stock Agreement. Upon occurrence of such events, the Aly Operating Redeemable Preferred Stock may, at the holder's option, be converted into Common Shares. The conversion ratio, determined by a calculation defined in the agreement of which the components include trailing twelve month financial performance and magnitude of investment in new equipment, is undeterminable until the Aly Operating Redeemable Preferred Stock becomes exchangeable into Common Shares.
|
As of December 31, 2015, the stock options were unvested and the Aly Operating Redeemable Preferred Stock was not exchangeable into common stock.
NOTE 12 – STOCK-BASED COMPENSATION
Share-Based Payments
We issued 15,625 shares of our stock during the year ended December 31, 2015 as part of compensation to one of our former employees in accordance with his employment agreement. In connection with this issuance, we recognized share-based compensation expense of approximately $100,000 for the year ended December 31, 2015.
Stock Options
We have a stock-based compensation plan available to grant incentive stock options, non-qualified stock options and restricted stock to employees and non-employee members of the board of directors.
The Omnibus Incentive Plan (the "Plan") was approved by the board of directors on May 2, 2013. On May 2, 2013, we granted 338,474 common shares under the Plan, which was the maximum number authorized. On June 5, 2015, a majority of our stockholders approved an amendment to our Plan to increase the maximum authorized shares to 750,000 common shares.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The option contract term is 10 years and the exercise price is $4.00. The options vest and are exercisable if a "Liquidity Event" occurs and certain conditions are met. A Liquidity Event is defined as an IPO or a change of control, as defined in the plan. Pursuant to the plan, an IPO is defined as an underwritten public offering of shares. If the first Liquidity Event is an IPO, then the options vest and are exercisable immediately if the IPO is effected at a price of $8.00 per share or greater. If the IPO is effected at a price less than $8.00 per share, but the stock price post-IPO reaches $8.00 per share during the six month period immediately following the IPO, then the options vest and are exercisable. If the IPO is effected at a price less than $8.00 per share and the share price does not reach $8.00 per share prior to the sixth month anniversary of the IPO, the options do not vest and expire. If the first Liquidity Event to occur is a change of control, then the options vest if the change of control takes place at a price of at least $8.00 per share. If such change in control occurs at a price less than $8.00 per share, the options do not vest and expire.
The fair value of each option award granted under the Plan is estimated on the date of grant using the Monte Carlo simulation method. The same Monte Carlo simulation method is used to determine the derived service period of five years. In addition, expected volatilities have been based on comparable public company data, with consideration given to our limited historical data. We make estimates with respect to employee termination and forfeiture rates of the options within the valuation model. The risk-free rate is based on the approximate U.S. Treasury yield rate in effect at the time of grant. For options granted prior to the Share Exchange, the calculation of our stock price involved the use of different valuation techniques, including a combination of an income and/or market approach. Determination of the fair value was a matter of judgment and often involved the use of significant estimates and assumptions.
At December 31, 2015 and 2014, options to purchase 338,474 common shares under the Plan were outstanding and there is approximately $0.5 million of total unrecognized compensation cost related to non-vested stock option awards. Such amount will be recognized in the future upon occurrence of a Liquidity Event that results in a vesting of the options. No options were granted during the years ended December 31, 2015 and 2014. No options were vested at December 31, 2015 and 2014.
NOTE 13 – STOCKHOLDERS' EQUITY
On July 1, 2014, in connection with the acquisition of Evolution, we issued 150,000 shares of common stock to the sellers of Evolution.
During the year ended December 31, 2014, we issued an aggregate of 859,137 shares of common stock to 14 investors at a weighted average price of $11.00 per share. The proceeds were used for growth capital expenditures and general working capital requirements.
We agreed to issue 3,434 and 79,215 shares of our common stock during the years ended December 31, 2015 and 2014, respectively, to one of our directors in respect of his arrangement of certain of these issuances of common stock. These shares were issued during 2015.
On January 12, 2015, we issued 50,000 shares of our common stock in a private placement at a price of $11.00 per share for gross proceeds of approximately $0.6 million.
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
On June 19, 2015, we effected the Reverse Split, a 1-for-20 reverse stock split of our common stock, as approved by our board of directors and stockholders. Under the terms of the Reverse Split, each 20 shares of common stock, issued and outstanding as of such effective date, was automatically reclassified and changed into one share of common stock without any further action by the stockholder. Fractional shares were rounded up to the nearest whole share. All share and per share amounts in this Annual Report on Form 10-K have been retroactively restated to reflect the Reverse Split.
On June 24, 2015, we initiated a private offering to accredited investors. On September 30, 2015, we closed the offering and issued 1,047,424 shares of common stock to multiple accredited investors at a price of $3.20 per share.
NOTE 14 – SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental cash flows and non-cash investing and financing activities are as follows (in thousands):
|
|
Years Ended December 31,
|
|
|
|
2015
|
|
|
2014
|
|
Supplemental Disclosure of Cash Flow Information
|
|
|
|
|
|
|
Cash Paid for Interest
|
|
$
|
1,591
|
|
|
$
|
808
|
|
Cash Paid for State and Federal Income Taxes
|
|
|
109
|
|
|
|
133
|
|
|
|
|
|
|
|
|
|
|
Non-Cash Investing Activities in Connection with United Acquisition
|
|
|
|
|
|
|
|
|
Issuance of Aly Centrifuge Preferred Stock
|
|
$
|
-
|
|
|
$
|
5,101
|
|
Issuance of Liability for Contingent Payment
|
|
|
-
|
|
|
|
3,517
|
|
Accounts Payable - Affiliates
|
|
|
-
|
|
|
|
821
|
|
Non-Cash Investing Activities in Connection with Acquisition of Evolution Guidance Systems
|
|
|
|
|
|
|
|
|
Issuance of Common Stock
|
|
$
|
-
|
|
|
$
|
1,650
|
|
Accounts Payable - Affiliates
|
|
|
-
|
|
|
|
340
|
|
Non-Cash Investing Activities in Connection with Saskatchewan Equipment Purchase
|
|
|
|
|
|
|
|
|
Issuance of Aly Centrifuge Preferred Stock
|
|
$
|
-
|
|
|
$
|
4,323
|
|
Issuance of Subordinated Note Payable
|
|
|
-
|
|
|
|
2,000
|
|
Non-Cash Investing and Financing Activities
|
|
|
|
|
|
|
|
|
Purchase of Equipment through Capital Lease Obligations
|
|
$
|
1,068
|
|
|
$
|
1,086
|
|
Accretion (Amortization) of Preferred Stock Liquidation Preference, Net
|
|
|
(127
|
)
|
|
|
(57
|
)
|
Paid-in-Kind Dividends on Preferred Stock
|
|
|
687
|
|
|
|
467
|
|
Liability for Transaction Cost of Equity Raise
|
|
|
-
|
|
|
|
590
|
|
Common Shares Issued for Transaction Cost of Equity Raise
|
|
|
590
|
|
|
|
-
|
|
ALY ENERGY SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 15 – QUARTERLY FINANCIAL DATA (unaudited)
Summarized quarterly financial data for the years ended December 31, 2015 and 2014 are presented below (in thousands, except per share amounts):
|
|
Quarters Ended
|
|
|
|
March 31,
2015
|
|
|
June 30,
2015
|
|
|
September 30,
2015
|
|
|
December 31,
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
8,996
|
|
|
$
|
7,148
|
|
|
$
|
6,936
|
|
|
$
|
6,022
|
|
Operating Loss
|
|
|
(1,546
|
)
|
|
|
(1,934
|
)
|
|
|
(1,495
|
)
|
|
|
(12,497
|
)
|
Net Loss Before Income Taxes
|
|
|
(2,037
|
)
|
|
|
(2,389
|
)
|
|
|
(1,954
|
)
|
|
|
(13,055
|
)
|
Net Loss
|
|
|
(1,439
|
)
|
|
|
(1,572
|
)
|
|
|
(1,033
|
)
|
|
|
(11,850
|
)
|
Net Loss Available to Common Stockholders
|
|
|
(1,581
|
)
|
|
|
(1,718
|
)
|
|
|
(1,176
|
)
|
|
|
(11,979
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Loss per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.28
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(1.99
|
)
|
Diluted
|
|
$
|
(0.28
|
)
|
|
$
|
(0.30
|
)
|
|
$
|
(0.21
|
)
|
|
$
|
(1.99
|
)
|
|
|
Quarters Ended
|
|
|
|
March 31,
2014
|
|
|
June 30,
2014
|
|
|
September 30,
2014
|
|
|
December 31,
2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
5,282
|
|
|
$
|
9,078
|
|
|
$
|
13,491
|
|
|
$
|
14,653
|
|
Operating Income
|
|
|
922
|
|
|
|
1,365
|
|
|
|
2,109
|
|
|
|
1,540
|
|
Net Income Before Income Taxes
|
|
|
752
|
|
|
|
1,020
|
|
|
|
1,733
|
|
|
|
1,114
|
|
Net Income
|
|
|
460
|
|
|
|
546
|
|
|
|
1,112
|
|
|
|
495
|
|
Net Income Available to Common Stockholders
|
|
|
398
|
|
|
|
442
|
|
|
|
1,005
|
|
|
|
358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income per Common Share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|
Diluted
|
|
$
|
0.09
|
|
|
$
|
0.09
|
|
|
$
|
0.18
|
|
|
$
|
0.07
|
|