What changed in this filing

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Item 1. Financial Statements

2021-05-06 compared with 2020-10-23 · 106 added, 149 removed, 414 unchanged (38% of the section changed)

3 unchanged sentences

(in millions, except share amounts)

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Cash and cash equivalents $ 1.5 $ 2.8

25 unchanged sentences

50,000,000 shares authorized;

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

no shares issued or outstanding as of March 31, 2021 and December 31, 2020

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

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

9,329,306 shares issued and 8,777,478 shares outstanding as of March 31, 2021;

9,093,743 shares issued and 8,541,915 shares outstanding as of December 31, 2020

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

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

6,866,154 shares issued and outstanding as of March 31, 2021 and December 31, 2020

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

551,828 treasury shares as of March 31, 2021 and December 31, 2020

( 3.8 ) ( 3.8 )

9 unchanged sentences

(in millions, except share and per share amounts)

Three Months Ended Nine Months Ended

September 30, September 30,

2020 2019 2020 2019

Three Months Ended

High specification rigs $ 21.7 $ 34.9

16 unchanged sentences

Income (loss) before income tax expense ( 7.9 ) 2.9

Tax expense (benefit) ( 0.1 ) 1.1 — 1.7

Tax expense 0.4 0.1

Net income (loss) ( 8.3 ) 2.8

12 unchanged sentences

(in millions, except share amounts)

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

Three Months Ended March 31,

2021 2020 2021 2020

Quantity Amount Quantity Amount

Quantity Amount

Shares, Class A Common Stock

2 unchanged sentences

Shares withheld for taxes on equity transactions ( 97,513 ) ( 44,591 ) — —

Issuance of Class A Common Stock to related party — — — — — 206,897 — —

Balance, end of period 9,329,306 8,947,830 $ 0.1 $ 0.1

14 unchanged sentences

Shares withheld for taxes on equity transactions ( 0.5 ) ( 0.1 )

Issuance of Class A Common Stock to related party — — — 3.0

Benefit from reversal of valuation allowance — 0.6 — 1.2

Impact of transactions affecting noncontrolling interest 0.7 ( 2.2 )

5 unchanged sentences

Shares withheld for taxes on equity transactions ( 0.5 ) ( 0.1 )

Issuance of Class A Common Stock to related party — — — 3.0

Benefit from reversal of valuation allowance — 0.6 — 1.2

Repurchase of Class A Common Stock — ( 0.3 ) ( 3.1 ) ( 0.3 )

Impact of transactions affecting noncontrolling interest 0.7 ( 2.2 )

Repurchase of Class A Common Stock — ( 3.1 )

Balance, end of period $ 98.4 $ 110.0

2 unchanged sentences

Net income (loss) attributable to noncontrolling interest ( 3.7 ) 1.3

Equity based compensation amortization — 0.1 0.1 0.2

Impact of transactions affecting noncontrolling interest ( 0.7 ) 2.2

Equity based compensation amortization — 0.1

Balance, end of period $ 78.5 $ 93.4

4 unchanged sentences

Shares withheld for taxes on equity transactions ( 0.5 ) ( 0.1 )

Issuance of Class A Common Stock to related party — — — 3.0

Benefit from reversal of valuation allowance — 0.6 — 1.2

Repurchase of Class A Common Stock — ( 3.1 )

4 unchanged sentences

(in millions)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash Flows from Operating Activities

Net income (loss) $ ( 8.3 ) $ 2.8

Adjustments to reconcile net income to net cash provided by operating activities:

Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:

Depreciation and amortization 8.0 8.9

Equity based compensation 0.9 0.8

Gain on sale of property and equipment ( 0.4 ) —

Gain on debt retirement — ( 2.1 )

10 unchanged sentences

Other long-term liabilities 0.2 ( 0.6 )

Net cash provided by operating activities 27.3 36.3

Net cash (used in) provided by operating activities ( 1.9 ) 8.5

Cash Flows from Investing Activities

6 unchanged sentences

Principal payments on Encina Master Financing Agreement ( 2.5 ) ( 2.5 )

Principal payments on ESCO Note Payable ( 3.6 ) —

Payments on Installment Purchases ( 0.2 ) —

Proceeds from financing of sale-leaseback 3.5 —

Principal payments on financing lease obligations ( 0.8 ) ( 1.3 )

Repurchase of Class A Common Stock ( 3.1 ) ( 0.3 )

Shares withheld on equity transactions ( 0.5 ) ( 0.1 )

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

Decrease in Cash and Cash equivalents ( 3.5 ) 5.4

Repurchase of Class A Common Stock — ( 3.1 )

Principal payments on ESCO Note Payable — ( 3.7 )

Net cash provided by financing activities 0.6 0.6

Increase (decrease) in Cash and Cash equivalents ( 1.3 ) 4.5

Cash and Cash Equivalents, Beginning of Period 2.8 6.9

5 unchanged sentences

Additions to fixed assets through financing leases $ ( 0.2 ) $ ( 0.5 )

Early termination of financing leases $ 1.3 $ —

Initial operating lease right-of-use asset additions $ — $ ( 8.3 )

Issuance of Class A Common Stock to related party $ — $ 3.0

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

19 unchanged sentences

Recent Events

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.

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.

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

Various containment measures, which includes the quarantining of cities, regions and countries, while aiding in the prevention of further outbreak, have resulted in a severe drop in general economic activity and a resulting decrease in energy demand.

Various containment measures, which include the quarantining of cities, regions and countries, while aiding in the prevention of further outbreak, have resulted in a severe drop in general economic activity and a resulting decrease in energy demand.

In addition, the global economy has experienced a significant disruption to global supply chains.

2 unchanged sentences

The full extent to which the COVID-19 outbreak may affect the Company’s financial conditions, results of operations or liquidity subsequent to the issuance of these Condensed Consolidated Financial Statements is uncertain.

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

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.

In addition to the impact of the COVID-19 outbreak, in March 2020, OPEC, Russia and certain other oil producing states, commonly referred to as “OPEC Plus,” failed to agree on a plan to cut production of oil and natural gas.

In addition to the impact of the COVID-19 outbreak, in March 2020, the Organization of the Petroleum Exporting Countries (“OPEC”), Russia and certain other oil producing states, commonly referred to as “OPEC Plus,” failed to agree on a plan to cut production of oil and natural gas.

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 third 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

however, on July 15, 2020, OPEC Plus agreed to increase production by 1.6 million barrels per day starting in August 2020.

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.

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.

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 and may continue to 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 or may 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;

3 unchanged sentences

If prolonged, such factors may also negatively affect the carrying values of the Company’s property and equipment and intangible assets.

At the close of the first quarter, the Company initiated cost reductions throughout the organization, including a reduction in the workforce and salary reductions.

At the close of the first quarter of 2020, the Company initiated cost reductions throughout the organization, including a reduction in the workforce and salary reductions.

Additionally, various other operational, travel and organizational expense reductions will continue to manage costs to preserve liquidity through the downturn.

We believe these actions will provide sufficient liquidity to finance our operations for twelve months post issuance of these consolidated financial statements.

We believe these actions will provide sufficient liquidity to finance our operations for twelve months post issuance of these condensed consolidated financial statements.

During the first quarter of 2021, increased activity can be attributed to stay-at-home orders and other restrictions being lifted in certain geographical areas, however any future containment measure could curtail such growth.

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.

9 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 nine months ended September 30, 2020.

There have been no changes in such policies or the application of such policies during the three months ended March 31, 2021.

Use of Estimates

32 unchanged sentences

Estimated Useful Life

(years) September 30, 2020 December 31, 2019

(years) March 31, 2021 December 31, 2020

High specification rigs 20 $ 127.3 $ 127.2

$ 127.2 $ 127.2

High specification rigs machinery and equipment 5 - 10

7 unchanged sentences

Property and equipment, net $ 182.8 $ 189.4

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.

Depreciation expense was $ 7.8 million and $ 8.7 million for the three months ended March 31, 2021 and 2020, respectively.

Note 4 — Intangible Assets

1 unchanged sentence

Estimated Useful Life

(years) September 30, 2020 December 31, 2019

(years) March 31, 2021 December 31, 2020

Customer relationships 10 - 18

2 unchanged sentences

Intangible assets, net $ 8.3 $ 8.5

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 was $ 0.2 million and $ 0.2 million for the three months ended March 31, 2021 and 2020, respectively.

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

For the twelve months ending September 30, Amount

For the twelve months ending March 31, Amount

Thereafter 4.7

1 unchanged sentence

Accrued expenses include the following (in millions):

September 30, 2020 December 31, 2019

March 31, 2021 December 31, 2020

Accrued payables $ 4.0 $ 2.7

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 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

Lease costs and other information related to operating leases for the three months ended March 31, 2021 and 2020, are as follows (in millions):

Three Months Ended March 31,

Short-term lease costs $ 0.3 $ 0.8

4 unchanged sentences

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

For the twelve months ending September 30, Total

For the twelve months ending March 31, Total

Thereafter 1.4

3 unchanged sentences

current portion of operating lease obligations ( 0.7 )

Long-term portion of operating lease obligations $ 4.2

Long-term portion of finance lease obligations $ 5.0

Finance Leases

The Company leases certain assets, primarily automobiles, under finance leases with terms that are generally three to four years .

The Company leases certain assets, primarily automobiles, under finance leases with terms that are generally three to five years .

The assets and liabilities under finance leases are recorded at the lower of the present value of the minimum lease payments or the fair value of the assets.

1 unchanged sentence

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 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

During the three months ended March 31, 2021, the Company entered into an agreement to sell certain of the fixed assets and subsequently leased back such assets and received cash of $ 3.5 million to be paid over 18 to 60 months.

This transaction did not qualify for sale accounting.

Lease costs and other information related to finance leases for the three months ended March 31, 2021 and 2020, are as follows (in millions):

Three Months Ended March 31,

Amortization of finance leases $ 0.8 $ 1.4

4 unchanged sentences

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

For the twelve months ending September 30, Total

For the twelve months ending March 31, Total

Total future minimum lease payments 7.2

5 unchanged sentences

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

September 30, 2020 December 31, 2019

ESCO Notes Payable $ — $ 5.8

March 31, 2021 December 31, 2020

Credit Facility $ 8.3 $ 7.2

Encina Master Financing Agreement 14.9 17.3

Installment Purchases 0.8 —

Total Debt 24.0 24.5

1 unchanged sentence

Long term-debt, net $ 13.7 $ 14.5

ESCO Notes Payable

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 nine months ended September 30, 2020.

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

During the year ended December 31, 2018, the Company provided notice to ESCO that the Company sought to be indemnified for breach of contract.

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.

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

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 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”).

On August 16, 2017, Ranger Services, entered into a $ 50.0 million senior secured 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.

The Credit Facility includes cash dominion provisions that permits the Administrative Agent to sweep cash daily from the Company’s bank accounts into an account of the Administrative Agent to repay the Company’s obligations under the Credit Facility.

Such dominion is triggered when excess availability is less than the greater of $ 6.25 million and 12.5 % of the lesser of (x) the maximum revolver amount and (y) the borrowing base as of such date of determination.

When the Company is subject to dominion, for 30 consecutive days it is required to either (a) maintain excess availability in excess of the greater of $ 6.25 million and 12.5 % of the lesser of (x) the maximum revolver amount and (y) the borrowing base as of such date of determination and no event of default has occurred and is continuing or (b) have no revolver drawings and available cash of at least $ 20.0 million for dominion to revert back to the Company.

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 September 30, 2020, as the Company was not subject to dominion.

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

The Company’s eligible accounts receivable serves as collateral for the borrowings under the Credit Facility and is scheduled to mature in August 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 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 applicable margins for the LIBOR loan was 2.1 % and the Base Rate loan was 4.3 % as of March 31, 2021.

The weighted average interest rate for the borrowings under the Credit Facility was 2.5 % for the three months ended March 31, 2021.

Under the Credit Facility, the total loan capacity was $ 19.8 million, which was based on a borrowing base certificate in effect as of March 31, 2021.

The Company had outstanding borrowings of $ 8.6 million under the Credit Facility, leaving a residual $ 11.2 million available for borrowings as of March 31, 2021.

The Company was in compliance with the Credit Facility covenants as of March 31, 2021.

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 September 30, 2020 was $ 0.3 million.

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

Unamortized debt issuance costs as of March 31, 2021 was $ 0.3 million.

Encina Master Financing and Security Agreement

5 unchanged sentences

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

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

As of March 31, 2021, the aggregate principal balance outstanding under the Financing Agreement was $ 15.2 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 September 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 March 31, 2021.

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 September 30, 2020.

The Company was in compliance with the covenants under the Financing Agreement as of March 31, 2021.

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 September 30, 2020 was $ 0.5 million.

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

Unamortized debt issuance costs as of March 31, 2021 was $ 0.3 million.

Other Installment Purchases

During the three months ended March 31, 2021, the Company entered into various Installment and Security Agreements (collectively, the “Installment Agreements”) in connection with the purchase of certain ancillary equipment, where such assets are being held as collateral.

As of March 31, 2021, the aggregate principal balance outstanding under the Installment Agreements was $ 0.8 million and each balance is payable ratably over 36 months from the time of each purchase.

The monthly installment payments contain an imputed interest rate that are consistent with the Company’s incremental borrowing rate and is not significant to the Company.

ESCO Notes Payable

These notes included a note for $ 5.8 million, which was settled in March 2020.

During the three months ended March 31, 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.

Debt Obligations and Scheduled Maturities

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

As of March 31, 2021, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending March 31, Total

Note 8 — Equity

2 unchanged sentences

2017 Long Term Incentive Plan (the “2017 Plan”).

The Company has granted shares of restricted stock (“restricted shares”) and performance-based restricted stock units (“performance stock units”) under the 2017 Plan.

The Company has granted shares of restricted stock (“restricted shares” or “RSAs”) and performance-based restricted stock units (“performance stock units” or “PSUs”) under the 2017 Plan.

Restricted Stock Awards

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.

The Company has granted RSAs, which generally vest in three equal annual installments beginning on the first anniversary date of the grant.

As of March 31, 2021, there was an aggregate $ 2.5 million of unrecognized expense related to restricted shares issued which are expected to be recognized over a weighted average period of 1.2 years.

Performance Stock Units

1 unchanged sentence

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

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.

As of March 31, 2021, there was an aggregate $ 0.8 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 1.5 years.

Share Repurchases

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.

During the three months ended March 31, 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.

2 unchanged sentences

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.

During the three months ended March 31, 2020, the Company repurchased 93,063 shares of the Company’s Class A Common Stock for an aggregate $ 0.7 million.

Note 9 — Risk Concentrations

Customer Concentrations

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.

For the three months ended March 31, 2021, one customer, EOG Resources, accounted for 24 % of the Company’s consolidated revenues.

As of March 31, 2021, approximately 12 % of the net accounts receivable balance was due from this customer.

For the three months ended March 31, 2020, two customers, EOG Resources and Concho Resources, Inc., accounted for 18 % and 17 %, respectively, of the Company’s consolidated revenues.

As of March 31, 2020, approximately 28 % 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 nine months ended September 30, 2020 and 2019 was ( 0.8 )% and 24.2 %, respectively.

federal income tax rate applicable to the Company for the three months ended March 31, 2021 and 2020 was ( 5.4 )% and 5.9 %, 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.

2 unchanged sentences

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.

Total income tax expense for the three months ended March 31, 2021 and 2020 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 September 30, 2020, the Company has no current tax years under audit.

As of March 31, 2021, 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 2019, 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 September 30, 2020, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

Therefore, as of March 31, 2021, 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 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.

For the three months ended March 31, 2021, 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 $ 1.9 million as of March 31, 2021, where 50% of the deferral is due by December 31, 2021.

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 September 30, Nine Months Ended September 30,

2020 2019 2020 2019

Three Months Ended March 31,

Income (loss) (numerator):

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Diluted income (loss) per share $ ( 0.54 ) $ 0.15

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.

During the three months ended March 31, 2021, the Company excluded approximately 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 three months ended March 31, 2020, the Company excluded 0.7 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.

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During the year ended December 31, 2018, the Company provided notice to ESCO that the Company sought to be indemnified for breach of contract.

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 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.

The Company exercised the 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 three months ended March 31, 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.

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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.

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.

The Company’s high-spec rigs are designed to support growing U.S.

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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 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):

Segment information as of March 31, 2021 and December 31, 2020 and for the three months ended March 31, 2021 and 2020 is as follows (in millions):

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended September 30, 2020

Revenues $ 14.5 $ 18.9 $ 1.2 $ — $ 34.6

Cost of services 12.3 14.0 0.3 — 26.6

Depreciation and amortization 4.6 2.7 0.7 0.4 8.4

Operating income (loss) ( 2.4 ) 2.2 0.2 ( 5.0 ) ( 5.0 )

Interest expense, net — — — 0.8 0.8

Net income (loss) ( 2.4 ) 2.2 0.2 ( 5.7 ) ( 5.7 )

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

Nine Months Ended September 30, 2020

Three Months Ended March 31, 2021

Revenues $ 21.7 $ 15.5 $ 1.1 $ — $ 38.3

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Capital expenditures $ 1.0 $ 0.2 $ — $ — $ 1.2

As of September 30, 2020

As of March 31, 2021

Property and equipment, net $ 111.8 $ 28.8 $ 37.1 $ 5.1 $ 182.8

1 unchanged sentence

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended September 30, 2019

Revenues $ 32.5 $ 45.3 $ 6.3 $ — $ 84.1

Cost of services 29.3 34.6 2.8 — 66.7

Depreciation and amortization 5.3 2.9 0.6 0.3 9.1

Operating income (loss) ( 2.1 ) 7.8 2.9 ( 7.0 ) 1.6

Interest expense, net — — — 1.4 1.4

Net income (loss) ( 2.1 ) 7.8 2.9 ( 9.5 ) ( 0.9 )

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

Nine Months Ended September 30, 2019

Three Months Ended March 31, 2020

Revenues $ 34.9 $ 43.3 $ 2.8 $ — $ 81.0

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Total assets $ 154.3 $ 41.1 $ 38.4 $ 6.8 $ 240.6

Note 14 — Subsequent Events

On April 9, 2021, the Company, through certain of its subsidiaries, entered into a sale-leaseback agreement for operational facilities in Colorado.

The sales price of the facility was $ 13.0 million, and the cash proceeds from the transaction have provided the Company with additional liquidity.

The lease has a 15 year term with a two percent annual escalation in rental payments.

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