What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2020-10-23 compared with 2020-07-28 · 107 added, 106 removed, 456 unchanged (32% of the section changed)

3 unchanged sentences

(in millions, except share amounts)

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Cash and cash equivalents $ 3.4 $ 6.9

25 unchanged sentences

50,000,000 shares authorized;

no shares issued or outstanding as of June 30, 2020 and December 31, 2019

no shares issued or outstanding as of September 30, 2020 and December 31, 2019

Class A Common Stock, $ 0.01 par value, 100,000,000 shares authorized;

9,031,495 shares issued and 8,479,668 shares outstanding as of June 30, 2020 and 8,839,788 shares issued and 8,725,851 shares outstanding as of December 31, 2019

9,080,589 shares issued and 8,528,762 shares outstanding as of September 30, 2020;

8,839,788 shares issued and 8,725,851 shares outstanding as of December 31, 2019

Class B Common Stock, $ 0.01 par value, 100,000,000 shares authorized;

6,866,154 shares issued and outstanding as of June 30, 2020 and December 31, 2019

Class A Common Stock held in treasury, at cost ( 551,827 shares as of June 30, 2020 and 113,937 as of December 31, 2019)

6,866,154 shares issued and outstanding as of September 30, 2020 and December 31, 2019

Class A Common Stock held in treasury, at cost;

551,827 treasury shares as of September 30, 2020;

113,937 treasury shares as of December 31, 2019

( 3.8 ) ( 0.7 )

9 unchanged sentences

(in millions, except share and per share amounts)

Three Months Ended Six Months Ended

June 30, June 30,

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

17 unchanged sentences

Income (loss) before income tax expense ( 5.8 ) 0.2 ( 11.8 ) 6.2

Tax expense — 0.3 0.1 0.6

Tax expense (benefit) ( 0.1 ) 1.1 — 1.7

Net income (loss) ( 5.7 ) ( 0.9 ) ( 11.8 ) 4.5

12 unchanged sentences

(in millions, except share amounts)

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019 2020 2019 2020 2019

54 unchanged sentences

(in millions)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash Flows from Operating Activities

28 unchanged sentences

Shares withheld on equity transactions ( 0.3 ) ( 0.3 )

Net cash (used in) provided by financing activities ( 19.6 ) 0.4

Net cash used in financing activities ( 25.2 ) ( 11.9 )

Decrease in Cash and Cash equivalents ( 3.5 ) 5.4

19 unchanged sentences

• High Specification Rigs .

Provider of high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

Provides high-spec well service rigs and complementary equipment and services to facilitate operations throughout the lifecycle of a well.

• Completion and Other Services .

Provider of wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of a well.

Provides wireline completion services necessary to bring a well on production and other ancillary services often utilized in conjunction with the high-spec rig services to enhance the production of a well.

• Processing Solutions .

Provider of proprietary, modular equipment for the processing of natural gas.

Provides proprietary, modular equipment for the processing of natural gas.

The Company’s operations take place in most of the active oil and natural gas basins in the United States, including the Permian Basin, Denver-Julesburg Basin, Bakken Shale, Eagle Ford Shale, Haynesville Shale, Gulf Coast, South Central Oklahoma Oil Province and Sooner Trend Anadarko Basin Canadian and Kingfisher Counties plays.

was incorporated as a Delaware corporation in February 2017.

is a holding company, the sole material assets of which consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”).

is a holding company, and its sole material assets consist of membership interests in RNGR Energy Services, LLC, a Delaware limited liability company (“Ranger LLC”).

Ranger LLC owns all of the outstanding equity interests in Ranger Energy Services, LLC (“Ranger Services”) and Torrent Energy Services, LLC (“Torrent Services”), the subsidiaries through which it operates its assets.

1 unchanged sentence

Recent Events

The outbreak of the novel coronavirus (“COVID-19”) has spread across the globe and has been declared a public health emergency by the World Health Organization and a National Emergency by the President of the United States.

The COVID-19 pandemic has resulted, and is likely to continue to result, in significant economic disruption and has, and is likely to continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas.

The outbreak of the novel coronavirus (“COVID-19”) in the first quarter of 2020 and its continued spread across the globe in the second and third quarters of 2020 has resulted, and is likely to continue to result, in significant economic disruption and has, and is likely to continue to, adversely affect the operations of the Company’s business, as the significantly reduced global and national economic activity has resulted in reduced demand for oil and natural gas.

Federal, state and local governments mobilized to implement containment mechanisms to minimize impacts to their populations and economies.

5 unchanged sentences

At the time of this filing, cases of COVID-19 in the U.S.

were increasing rapidly, particularly in Texas, where we conduct significant operations.

remain high, including in Texas, where we conduct significant operations.

The severe drop in economic activity, travel restrictions and other restrictions due to COVID-19 have had a significant negative impact on the demand for oil and gas.

1 unchanged sentence

Subsequently, Saudi Arabia announced plans to increase production to record levels and reduce the prices at which they sell oil and, in turn, Russia responded with threats to also increase production.

Collectively, these events created an unprecedented global oil and natural gas supply and demand imbalance, reduced global oil and natural gas storage capacity, caused oil prices to decline significantly and resulted in continued volatility in oil, natural gas and NGLs prices into the second

quarter of 2020.

On April 12, 2020, OPEC Plus agreed to cut oil production by 9.7 million barrels per day in May and June

1 unchanged sentence

With the combined effects of the increased production levels earlier in 2020, the recent increase in production and the reduction in demand caused by COVID-19, the global oil and natural gas supply and demand imbalance persists and continues to have a significant adverse effect on the oil and gas industry.

OPEC Plus is scheduled to meet again in the fourth quarter of 2020 and it is possible OPEC Plus may decide to further production increases.

Due to the significantly reduced demand for oil and natural gas as a result of the COVID-19 pandemic and the current oversupply of oil and natural gas in the market, available storage and capacity for the Company’s customers’ production may be limited or completely unavailable in the future, which may further negatively impact the price of oil.

1 unchanged sentence

In the absence of additional reductions to global production, oil, natural gas and NGLs prices could remain at current levels, or decline further, for an extended period of time.

Factors deriving from the COVID-19 response, as well as the oil oversupply, that have or may negatively impact sales, liquidity and gross margins in the future include, but are not limited to:

Factors deriving from the COVID-19 response, as well as the oil oversupply, that have and may continue to negatively impact sales, liquidity and gross margins in the future include, but are not limited to:

limitations on the ability of the Company’s customers to conduct business, which would result in a decrease in demand for services and lower utilization of the Company’s assets;

7 unchanged sentences

We will continue to actively monitor the situation and may take further actions that alter business operations as may be required by federal, state or local authorities, or that we determine are in the best interests of the Company’s employees, customers and stakeholders.

On March 12, 2020, the Company received a non-binding offer from CSL Capital Management, L.P.

(“CSL”) and Bayou Holdings, proposing to acquire all of the outstanding shares of common stock of the Company not owned by CSL, Bayou Holdings and T.

Rowe Price Associates, Inc.

in a cash merger transaction for $ 6.00 per share (the “Take Private Proposal”).

On May 11, 2020, CSL announced their decision to not pursue the possible acquisition of shares outstanding of Ranger at this time and abandoned the Take Private Proposal.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The consolidated balance sheet as of December 31, 2019 has been derived from audited financial statements and the unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“US GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X.

GAAP”) for interim financial information and the Securities and Exchange Commission’s (the “SEC”) instructions to Form 10-Q and Article 10 of Regulation S-X.

Accordingly, certain notes and other information have been condensed or omitted.

4 unchanged sentences

The Company’s significant accounting policies are disclosed in Note 2 — Summary of Significant Accounting Policies of the Annual Report.

There have been no changes in such policies or the application of such policies during the six months ended June 30, 2020.

There have been no changes in such policies or the application of such policies during the nine months ended September 30, 2020.

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with US GAAP 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

The preparation of condensed consolidated financial statements in conformity with U.S.

GAAP 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 condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting period.

Management uses historical and other pertinent information to determine these estimates.

7 unchanged sentences

Emerging Growth Company Status and Smaller Reporting Company Status

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

The Company is an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012.

The Company will remain an emerging growth company until the earlier of (1) the last day of its fiscal year (a) following the fifth anniversary of the completion of its initial public offering (“IPO”), (b) in which its total annual gross revenue is at least $1.07 billion, or (c) in which the Company is deemed to be a large accelerated filer, which means the market value of the Company’s common stock that is held by non-affiliates exceeds $700.0 million as of the last business day of its most recently completed second fiscal quarter, or (2) the date on which the Company has issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.

1 unchanged sentence

The Company has irrevocably opted out of the extended transition period and, as a result, the Company will adopt new or revised accounting standards on the relevant dates on which adoption of such standards is required for other public companies.

The Company is also a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act.

The Company is also a “smaller reporting company” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as Amended.

Smaller reporting company means an issuer that is not an investment company, an asset-back issuer, or a majority-owned subsidiary of a parent that is not a smaller reporting company and that has (i) market value of common stock held by non-affiliates of less than $250 million;

15 unchanged sentences

Estimated Useful Life

(years) June 30, 2020 December 31, 2019

(years) September 30, 2020 December 31, 2019

High specification rigs 20

9 unchanged sentences

Property and equipment, net $ 197.9 $ 218.9

Depreciation expense was $ 9.3 million and $ 8.2 million for the three months ended June 30, 2020 and 2019, respectively, and $ 18.0 million and $ 16.5 million for the six months ended June 30, 2020 and 2019, respectively.

During the three and six months ended June 30, 2020, the Company noted a sustained decline in stock price due to the reduced demand and oversupply of oil and natural gas, which was an indication that the fair value of the Company’s long-lived assets could have fallen below their carrying values.

As a result, an impairment analysis was performed and it was determined that no impairment existed.

Please see “Note 1 — Organization and Business Operations—Recent Events” for additional information regarding reduced demand and oversupply of oil and “Part I, Item 8.

Financial Statements and Supplementary Data — Note 2 — Summary of Significant Accounting Policies — Significant Accounting Policies — Long-Lived Asset Impairment” of the Annual Report for the policy of testing long-lived assets for impairment.

Depreciation expense was $ 8.2 million and $ 8.9 million for the three months ended September 30, 2020 and 2019, respectively, and $ 26.2 million and $ 25.4 million for the nine months ended September 30, 2020 and 2019, respectively.

Note 4 — Intangible Assets

1 unchanged sentence

Estimated Useful Life

(years) June 30, 2020 December 31, 2019

(years) September 30, 2020 December 31, 2019

Customer relationships 10 - 18

2 unchanged sentences

Intangible assets, net $ 8.7 $ 9.3

Amortization expense was $ 0.2 million and $ 0.2 million for the three months ended June 30, 2020 and 2019, respectively and $ 0.4 million and $ 0.3 million for the six months ended June 30, 2020 and 2019, respectively.

Amortization expense was $ 0.2 million and $ 0.2 million for the three months ended September 30, 2020 and 2019, respectively and $ 0.6 million and $ 0.5 million for the nine months ended September 30, 2020 and 2019, respectively.

Amortization expense for the future periods is expected to be as follows (in millions):

For the twelve months ending June 30, Amount

For the twelve months ending September 30, Amount

Thereafter 5.1

1 unchanged sentence

Accrued expenses include the following (in millions):

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

Accrued payables $ 3.2 $ 8.3

8 unchanged sentences

Lease costs associated with yard and field offices are included in cost of services and executive offices are included in general and administrative costs in the Condensed Consolidated Statements of Operations.

Lease costs and other information related to operating leases for the three and six months ended June 30, 2020 and 2019, are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Lease costs and other information related to operating leases for the three and nine months ended September 30, 2020 and 2019, are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

5 unchanged sentences

Aggregate future minimum lease payments under operating leases are as follows (in millions):

For the twelve months ending June 30, Total

For the twelve months ending September 30, Total

Thereafter 1.7

9 unchanged sentences

The finance leases are included in Property and equipment, net, Finance lease obligations, current portion and Finance lease obligations in the Condensed Consolidated Balance Sheets.

Lease costs and other information related to finance leases for the three and six months ended June 30, 2020 and 2019, are as follows (in millions):

Three Months Ended June 30, Six Months Ended June 30,

Lease costs and other information related to finance leases for the three and nine months ended September 30, 2020 and 2019, are as follows (in millions):

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

5 unchanged sentences

Aggregate future minimum lease payments under finance leases are as follows (in millions):

For the twelve months ending June 30, Total

For the twelve months ending September 30, Total

Total future minimum lease payments 5.1

5 unchanged sentences

The aggregate carrying amounts, net of issuance costs, of the Company’s debt consists of the following (in millions):

June 30, 2020 December 31, 2019

September 30, 2020 December 31, 2019

ESCO Notes Payable $ — $ 5.8

6 unchanged sentences

In connection with the IPO and the ESCO Leasing, LLC (“ESCO”) acquisition, both of which occurred on August 16, 2017, the Company issued $ 7.0 million of Seller’s Notes as partial consideration for the ESCO acquisition.

These notes included a note for $ 1.2 million, which was paid in August 2018 and a note for $ 5.8 million, which was settled during the six months ended June 30, 2020.

These notes included a note for $ 1.2 million, which was paid in August 2018 and a note for $ 5.8 million, which was settled during the nine months ended September 30, 2020.

Both of these notes bore interest at 5.0 %, payable quarterly until their respective maturity dates.

2 unchanged sentences

Interest on the outstanding principal balance was accrued through the maturity date of the Note Payable.

During the six months ended June 30, 2020, the Company paid $ 3.8 million to settle the note and any unpaid interest, in full, and recognized a gain on the retirement of debt of $ 2.1 million, which is included in the Condensed Consolidated Statement of Operations within General and administrative expenses.

During the nine months ended September 30, 2020, the Company paid $ 3.8 million to settle the note and any unpaid interest, in full, and recognized a gain on the retirement of debt of $ 2.1 million, which is included in the Condensed Consolidated Statement of Operations within general and administrative expenses.

Please see Note 12 — Commitments and Contingencies for further details.

Credit Facility

On August 16, 2017, Ranger Energy Services, LLC, (“Ranger, LLC”) entered into a $ 50.0 million senior unsecured revolving credit facility (the “Credit Facility”) by and among certain of Ranger’s subsidiaries, as borrowers, each of the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent (the “Administrative Agent”).

The Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the value of the Company’s eligible accounts receivable less certain reserves.

On August 16, 2017, Ranger Services, entered into a $ 50.0 million senior unsecured revolving credit facility (the “Credit Facility”) by and among certain of Ranger’s subsidiaries, as borrowers, each of the lenders party thereto and Wells Fargo Bank, N.A., as administrative agent (the “Administrative Agent”).

The Credit Facility is subject to a borrowing base that is calculated based upon a percentage of the Company’s eligible accounts receivable less certain reserves.

Such calculation is submitted, in the form of a borrowing base certificate, to the Administrative Agent within ten business days of the preceding month end.

3 unchanged sentences

During the three months ended March 31, 2020, the Company borrowed against the Credit Facility causing dominion to revert to the Administrative Agent, however after the 30 consecutive day period, as defined above, dominion reverted back to the Company in April 2020.

The borrowings under the Credit Facility, and related issuance costs, were included in long-term debt, net in the Condensed Consolidated Balance Sheets as of June 30, 2020, as the Company was not subject to dominion.

The borrowings under the Credit Facility, and related issuance costs, were included in long-term debt, net in the Condensed Consolidated Balance Sheets as of September 30, 2020, as the Company was not subject to dominion.

The Credit Facility is scheduled to mature on August 16, 2022.

The applicable margin for the LIBOR loans ranges from 1.5 % to 2.0 % and the applicable margin for Base Rate loans ranges from 0.5 % to 1.0 %, in each case, depending on Ranger LLC’s average excess availability under the Credit Facility.

The applicable margin for the LIBOR loan was 1.75 % and the applicable margin for Base Rate loans was 0.75 % as of June 30, 2020.

The weighted average interest rate for the borrowings under the Credit Facility was 3.1 % for the six months ended June 30, 2020.

Under the Credit Facility, the total loan capacity was $ 15.8 million, which was based on a borrowing base certificate in effect as of June 30, 2020.

The Company had outstanding borrowings of $ 5.0 million under the Credit Facility, leaving a residual $ 10.8 million available for borrowings as of June 30, 2020.

The Company made a cash payment of $ 5.0 million on the Credit Facility in July 2020, such that there were no borrowings under the Credit Facility as of July 22, 2020.

The Company was in compliance with the Credit Facility covenants as of June 30, 2020.

The applicable margin for the LIBOR loan was 1.75 % and the applicable margin for Base Rate loans was 0.75 % as of September 30, 2020.

The weighted average interest rate for the borrowings under the Credit Facility was 3.2 % for the nine months ended September 30, 2020.

Under the Credit Facility, the total loan capacity was $ 13.4 million, which was based on a borrowing base certificate in effect as of September 30, 2020.

The Company had outstanding borrowings of $ 3.0 million under the Credit Facility, leaving a residual $ 10.4 million available for borrowings as of September 30, 2020.

The Company was in compliance with the Credit Facility covenants as of September 30, 2020.

The Company capitalized fees of $ 0.7 million associated with the Credit Facility, which are included in the Condensed Consolidated Balance Sheets as a discount to the Credit Facility.

Such fees will be amortized through maturity and are included in Interest Expense, net on the Condensed Consolidated Statement of Operations.

Unamortized debt issuance costs as of June 30, 2020 was $ 0.4 million.

Encina Master Financing and Security Agreement ( “ Financing Agreement ” )

On June 22, 2018, the Company entered into a Financing Agreement with Encina Equipment Finance SPV, LLC (the “Lender”).

Unamortized debt issuance costs as of September 30, 2020 was $ 0.3 million.

Encina Master Financing and Security Agreement

On June 22, 2018, the Company entered into a Master Financing and Security Agreement (the “Financing Agreement”) with Encina Equipment Finance SPV, LLC (the “Lender”).

The amount available to be provided by the Lender to the Company under the Financing Agreement was contemplated to be not less than $ 35.0 million, and not to exceed $ 40.0 million.

3 unchanged sentences

The Financing Agreement is secured by a lien on certain high-spec rig assets.

As of June 30, 2020, the aggregate principal balance outstanding under the Financing Agreement was $ 22.7 million.

As of September 30, 2020, the aggregate principal balance outstanding under the Financing Agreement was $ 20.2 million.

The total borrowings under the Financing Agreement were borrowed in three tranches, where the amounts outstanding are payable ratably over 48 months from the time of each borrowing.

The three tranches mature in July 2022, November 2022 and January 2023.

Borrowings under the Financing Agreement bear interest at a rate per annum equal to the sum of 8.0 % plus LIBOR, which was 1.5 % as of June 30, 2020.

Borrowings under the Financing Agreement bear interest at a rate per annum equal to the sum of 8.0 % plus LIBOR, which was 1.5 % as of September 30, 2020.

Under the terms of the Financing Agreement, in no event will LIBOR fall below 1.5 % and it requires the Company to maintain a leverage ratio of 2.5 to 1.0.

The Company was in compliance with the covenants under the Financing Agreement as of June 30, 2020.

The Company was in compliance with the covenants under the Financing Agreement as of September 30, 2020.

The Company capitalized fees of $ 0.9 million associated with the Financing Agreement, which are included in the Condensed Consolidated Balance Sheets as a discount to the long term debt.

Such fees will be amortized through maturity and are included in Interest Expense, net in the Condensed Consolidated Statements of Operations.

Unamortized debt issuance costs as of June 30, 2020 was $ 0.5 million.

Unamortized debt issuance costs as of September 30, 2020 was $ 0.5 million.

Debt Obligations and Scheduled Maturities

As of June 30, 2020, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending June 30, Total

As of September 30, 2020, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending September 30, Total

Note 8 — Equity

4 unchanged sentences

Restricted Stock Awards

During the three and six months ended June 30, 2020, the Company granted 465,304 restricted shares with an aggregate value of $ 2.0 million.

During the six months ended June 30, 2019, the Company granted 495,750 restricted shares with an aggregate value of $ 3.9 million.

As of June 30, 2020, there was an aggregate $ 4.5 million of unrecognized expense related to restricted shares issued which is expected to be recognized over a weighted average period of 2.0 years.

During the nine months ended September 30, 2020 and 2019, the Company granted 649,039 and 580,091 restricted shares, respectively, and the aggregate value of the restricted shares granted was $ 2.5 million and $ 4.4 million, respectively.

As of September 30, 2020, there was an aggregate $ 4.1 million of unrecognized expense related to restricted shares issued which are expected to be recognized over a weighted average period of 1.8 years.

Performance Stock Units

1 unchanged sentence

Generally, the performance stock units are subject to a three-year performance period.

During the three and six months ended June 30, 2020, the Company granted 121,262 target shares of market based performance stock units at a relative and absolute grant date fair value of approximately $ 6.33 per share and $ 3.62 per share, respectively, which are expected to vest on April 3, 2023.

During the six months ended June 30, 2019, the Company granted 105,920 target shares of market based performance stock units at a relative and absolute grant date fair value of approximately $ 11.96 per share and $ 9.50 per share, respectively, which are expected to vest on March 21, 2022.

As of June 30, 2020, there was an aggregate $ 1.3 million of unrecognized compensation cost related to performance stock units which is expected to be recognized over a weighted average period of 1.9 years.

During the nine months ended September 30, 2020, the Company granted 121,262 target shares of market based performance stock units at a relative and absolute grant date fair value of approximately $ 6.33 per share and $ 3.62 per share, respectively, which are expected to vest on April 3, 2023.

During the nine months ended September 30, 2019, the Company granted 105,920 target shares of market based performance stock units at a relative and absolute grant date fair value of approximately $ 11.96 per share and $ 9.50 per share, respectively, which are expected to vest on March 21, 2022.

As of September 30, 2020, there was an aggregate $ 1.1 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 1.6 years.

Share Repurchases

During the six months ended June 30, 2020, the Company repurchased 344,827 shares of the Company’s Class A Common Stock for an aggregate $ 2.4 million in a privately negotiated transaction with ESCO.

Please see Note 12 — Commitments and Contingencies for further details.

During the nine months ended September 30, 2020, the Company repurchased 344,827 shares of the Company’s Class A Common Stock for an aggregate $ 2.4 million in a privately negotiated transaction with ESCO.

See Note 12 — Commitments and Contingencies for further details.

In June 2019, the Board of Directors approved a share repurchase program, authorizing the Company to purchase up to 10 % of the outstanding Class A Common Stock held by non-affiliates, not to exceed 580,000 shares or $ 5.0 million in aggregate value.

Share repurchases may take place from time to time on the open market or through privately negotiated transactions.

The duration of the share repurchase program was 12 months and could have been accelerated, suspended or discontinued at any time without notice.

During the six months ended June 30, 2020, the Company repurchased 93,063 shares of the Company’s Class A Common Stock for an aggregate $ 0.7 million.

Refer to “Part II, Item 2.

Unregistered Sales of Securities” for further information.

Share repurchases may have taken place from time to time on the open market or through privately negotiated transactions.

The duration of the share repurchase program was 12 months and therefore ended in June 2020.

During the nine months ended September 30, 2020 and 2019, the Company repurchased 93,063 and 47,474 shares of the Company’s Class A Common Stock for an aggregate $ 0.7 million and $ 0.3 million, respectively.

Share Issuance to Related Party

In connection with the IPO, we entered into a master reorganization agreement (the “Master Reorganization Agreement”) under which the parties thereto effected a series of restructuring transactions.

Under the Master Master Reorganization Agreement, an aggregate $ 3.0 million liability was settled by the Company and CSL Energy Holdings I, LLC during the nine months ended September 30, 2019.

At the Company’s discretion, the liability was settled through the issuance of 206,897 Class A Common Stock.

Note 9 — Risk Concentrations

Customer Concentrations

For the three months ended June 30, 2020, two customers, EOG Resources and Concho Resources, Inc., accounted for 23 % and 18 %, respectively, of the Company’s consolidated revenues.

For the six months ended June 30, 2020, the same two customers each accounted for 19 % of the Company’s consolidated revenues.

As of June 30, 2020, approximately 18 % of the accounts receivable balance was due from these customers.

For the three months ended June 30, 2019, two customers, EOG Resources and Concho Resources, Inc., accounted for 17 % and 15 %, respectively, of the Company’s consolidated revenues.

For the six months ended June 30, 2019, two customers, EOG Resources and Concho Resources, Inc., accounted for 17 % and 14 %, respectively, of the Company’s consolidated revenues.

As of June 30, 2019, approximately 19 % of the accounts receivable balance was due from these customers.

For the three months ended September 30, 2020, two customers, EOG Resources and Concho Resources, Inc., accounted for 24 % and 16 %, respectively, of the Company’s consolidated revenues.

For the nine months ended September 30, 2020, the same two customers accounted for 20 % and 18 % of the Company’s consolidated revenues, respectively.

As of September 30, 2020, approximately 27 % of the net accounts receivable balance was due from these customers.

For the three months ended September 30, 2019, two customers, EOG Resources and Concho Resources, Inc., accounted for 19 % and 14 %, respectively, of the Company’s consolidated revenues.

For the nine months ended September 30, 2019, the same two customers accounted for 17 % and 13 %, respectively, of the Company’s consolidated revenues.

As of September 30, 2019, approximately 25 % of the accounts receivable balance was due from these customers.

Note 10 — Income Taxes

2 unchanged sentences

The effective U.S.

federal income tax rate applicable to the Company for the six months ended June 30, 2020 and 2019 was 0.0 % and 11.3 %, respectively.

federal income tax rate applicable to the Company for the nine months ended September 30, 2020 and 2019 was ( 0.8 )% and 24.2 %, respectively.

The Company is subject to the Texas Margin Tax that requires tax payments at a maximum statutory effective rate of 0.75 % on the taxable margin of each taxable entity that does business in Texas.

As a result of the IPO and subsequent reorganization, the Company recorded a deferred tax asset;

however, a full valuation allowance has been recorded to reduce the Company’s net deferred tax assets to an amount that is more likely than not to be realized and is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.

Total income tax expense for the three and six months ended June 30, 2020 and 2019 differed from amounts computed by applying the U.S.

federal statutory tax rates to pre-tax income or loss primarily due to changes in the valuation allowance related to pre-tax book income or loss and the impact of permanent differences between book and taxable income or loss attributable to noncontrolling interest.

As a result of the initial public offering and subsequent reorganization, the Company recorded a deferred tax asset.

However, a full valuation allowance (“VA”) has been recorded to reduce the Company’s net deferred tax assets to an amount that is more likely than not to be realized.

The VA is based upon the uncertainty of the realization of certain federal and state deferred tax assets related to net operating loss carryforwards and other tax attributes.

Total income tax expense for the three and nine months ended September 30, 2020 and 2019 differed from amounts computed by applying the U.S.

federal statutory tax rates to pre-tax income or loss primarily due to changes in the valuation

allowance related to pre-tax book income or loss and the impact of permanent differences between book and taxable income or loss attributable to noncontrolling interest.

The effective tax rate includes a rate benefit attributable to the fact that Ranger LLC operates as a limited liability company treated as a partnership for federal and state income tax purposes and as such, is not subject to federal and state income taxes, except for the State of Texas for which Ranger LLC files with the Company.

2 unchanged sentences

the United States and Texas.

As of June 30, 2020, the Company has no current tax years under audit.

As of September 30, 2020, the Company has no current tax years under audit.

The Company remains subject to examination for federal income taxes and state income taxes for tax years 2018, 2017 and 2016.

The Company has evaluated all tax positions for which the statute of limitations remains open and believes that the material positions taken would more likely than not be sustained upon examination.

Therefore, as of June 30, 2020, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

Therefore, as of September 30, 2020, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

The Coronavirus, Aid, Relief and Economic Security Act (the “CARES Act”), which was enacted on March 27, 2020 in the U.S., includes measures to assist companies, including temporary changes to income and non-income-based tax laws.

For the three and six months ended June 30, 2020, there were no material tax impacts to the condensed consolidated financial statements as it relates to COVID-19 measures, although, the Company has deferred payroll tax payments through December 31, 2020.

For the three and nine months ended September 30, 2020, there were no material tax impacts to the condensed consolidated financial statements as it relates to COVID-19 measures.

However, the Company has deferred payroll tax payments of $ 1.2 million as of September 30, 2020.

The Company will continue to monitor additional guidance issued by the U.S.

3 unchanged sentences

The numerator and denominator used to compute earnings (loss) per share were as follows (in millions, except share and per share data):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2020 2019 2020 2019

14 unchanged sentences

Diluted income (loss) per share $ ( 0.38 ) $ ( 0.06 ) $ ( 0.77 ) $ 0.25

During the three and six months ended June 30, 2020, the Company excluded 0.9 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share, as the effect was anti-dilutive.

During the three and nine months ended September 30, 2020, the Company excluded approximately 1.3 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share.

During the three months ended September 30, 2019, the Company excluded 0.9 million of equity-based awards and 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share.

During the nine months ended September 30, 2019, the Company excluded 0.9 million of equity-based awards.

These items were excluded from the calculation of earnings (loss) per share, for the respective periods, as the effect was anti-dilutive.

Note 12 — Commitments and Contingencies

4 unchanged sentences

The Company exercised its right to stop payments of the remaining principal balance of $ 5.8 million on the Seller's Notes and any unpaid interest, pending resolution of certain indemnification claims.

During the six months ended June 30, 2020, the Company paid an aggregate of $ 6.2 million to ESCO, of which $ 3.8 million was paid to settle the Seller’s Note, and any unpaid interest, and $ 2.4 million was paid to repurchase shares of the Company’s Class A Common Stock.

During the nine months ended September 30, 2020, the Company paid an aggregate of $ 6.2 million to ESCO, of which $ 3.8 million was paid to settle the Seller’s Note, and any unpaid interest, and $ 2.4 million was paid to repurchase shares of the Company’s Class A Common Stock.

Please see “Note 7 — Debt” and “Note 8 — Equity” for further details of the debt and equity settlements.

Note 13 — Segment Reporting

The Company’s operations are all located in the United States and organized into three reportable segments:

The Company’s operations are located in the United States and organized into three reportable segments:

High Specification Rigs, Completion and Other Services and Processing Solutions.

4 unchanged sentences

High Specification Rigs.

The Company’s High Specification Rigs facilitate operations throughout the lifecycle of a well, including (i) completion, (ii) workover, (iii) well maintenance and (iv) decommissioning.

The Company’s high-spec rigs facilitate operations throughout the lifecycle of a well, including (i) completion, (ii) workover, (iii) well maintenance and (iv) decommissioning.

The Company provides these advanced well services to E&P companies, particularly to those operating in unconventional oil and natural gas reservoirs and requiring technically and operationally advanced services.

7 unchanged sentences

The Company incurs costs, indicated as Other, that are not allocable to any of the operating segments or lines of business and include corporate general and administrative expenses as well as depreciation of office furniture and fixtures and other corporate assets.

Segment information as of June 30, 2020 and December 31, 2019 and for the three and six months ended June 30, 2020 and 2019 is as follows (in millions):

Segment information as of September 30, 2020 and December 31, 2019 and for the three and nine months ended September 30, 2020 and 2019 is as follows (in millions):

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended June 30, 2020

Three Months Ended September 30, 2020

Revenues $ 14.5 $ 18.9 $ 1.2 $ — $ 34.6

5 unchanged sentences

Capital expenditures $ 0.2 $ 0.3 $ 0.1 $ — $ 0.6

Six Months Ended June 30, 2020

Nine Months Ended September 30, 2020

Revenues $ 60.8 $ 79.9 $ 5.6 $ — $ 146.3

5 unchanged sentences

Capital expenditures $ 4.5 $ 2.0 $ 0.5 $ 0.3 $ 7.3

As of June 30, 2020

As of September 30, 2020

Property and equipment, net $ 120.9 $ 33.3 $ 38.4 $ 5.3 $ 197.9

1 unchanged sentence

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended June 30, 2019

Three Months Ended September 30, 2019

Revenues $ 32.5 $ 45.3 $ 6.3 $ — $ 84.1

5 unchanged sentences

Capital expenditures $ 3.2 $ 0.5 $ 1.2 $ — $ 4.9

Six Months Ended June 30, 2019

Nine Months Ended September 30, 2019

Revenues $ 97.3 $ 143.2 $ 16.2 $ — $ 256.7

9 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements