What changed in this filing

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Item 1. Financial Statements

2021-07-30 compared with 2021-05-06 · 164 added, 110 removed, 410 unchanged (40% of the section changed)

3 unchanged sentences

(in millions, except share amounts)

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Cash and cash equivalents $ 3.4 $ 2.8

5 unchanged sentences

Property and equipment, net 182.6 189.4

Goodwill 1.8 —

Intangible assets, net 8.1 8.5

5 unchanged sentences

Accrued expenses 9.9 9.3

Finance lease obligations, current portion 4.1 2.5

Other financing liability, current portion 2.6 —

Long-term debt, current portion 10.4 10.0

2 unchanged sentences

Operating leases, right-of-use obligations 5.0 5.2

Finance lease obligations 2.6 1.3

Other financing liability 13.4 —

Long-term debt, net 12.5 14.5

5 unchanged sentences

50,000,000 shares authorized;

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

no shares issued or outstanding as of June 30, 2021 and December 31, 2020

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

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

10,682,388 shares issued and 10,130,560 shares outstanding as of June 30, 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 March 31, 2021 and December 31, 2020

6,866,154 shares issued and outstanding as of June 30, 2021 and December 31, 2020

Class A Common Stock held in treasury at cost;

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

551,828 treasury shares as of June 30, 2021 and December 31, 2020

( 3.8 ) ( 3.8 )

9 unchanged sentences

(in millions, except share and per share amounts)

Three Months Ended

Three Months Ended Six Months Ended

June 30, June 30,

2021 2020 2021 2020

High specification rigs $ 29.0 $ 11.4 $ 50.7 $ 46.3

11 unchanged sentences

Total operating expenses 58.5 38.8 104.1 115.8

Operating income (loss) ( 7.3 ) 4.0

Operating loss ( 8.5 ) ( 8.1 ) ( 15.8 ) ( 4.1 )

Other expenses

1 unchanged sentence

Total other expenses 0.7 0.8 1.3 1.9

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

Tax expense 0.4 0.1

Net income (loss) ( 8.3 ) 2.8

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

Net income (loss) attributable to Ranger Energy Services, Inc.

Loss before income tax expense ( 9.2 ) ( 8.9 ) ( 17.1 ) ( 6.0 )

Tax (benefit) expense ( 0.1 ) — 0.3 0.1

Net loss ( 9.1 ) ( 8.9 ) ( 17.4 ) ( 6.1 )

Net loss attributable to noncontrolling interests ( 3.5 ) ( 4.0 ) ( 7.2 ) ( 2.7 )

Net loss attributable to Ranger Energy Services, Inc.

$ ( 5.6 ) $ ( 4.9 ) $ ( 10.2 ) $ ( 3.4 )

Earnings (loss) per common share

Loss per common share

Basic $ ( 0.59 ) $ ( 0.58 ) $ ( 1.13 ) $ ( 0.40 )

7 unchanged sentences

(in millions, except share amounts)

Three Months Ended March 31,

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

2021 2020 2021 2020 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 ( 26,590 ) ( 33,837 ) — — ( 124,103 ) ( 78,428 ) — —

Share issuance for acquisition 1,256,000 — — — 1,256,000 — — —

Balance, end of period 10,682,388 9,031,495 $ 0.1 $ 0.1 10,682,388 9,031,495 $ 0.1 $ 0.1

8 unchanged sentences

Balance, beginning of period $ ( 23.0 ) $ ( 6.6 ) $ ( 18.4 ) $ ( 8.1 )

Net income (loss) attributable to controlling interest ( 4.6 ) 1.5

Net loss attributable to controlling interest ( 5.6 ) ( 4.9 ) ( 10.2 ) ( 3.4 )

Balance, end of period $ ( 28.6 ) $ ( 11.5 ) $ ( 28.6 ) $ ( 11.5 )

3 unchanged sentences

Shares withheld for taxes on equity transactions ( 0.2 ) ( 0.2 ) ( 0.7 ) ( 0.3 )

Share issuance for acquisitions 7.7 — 7.7 —

Impact of transactions affecting noncontrolling interest 6.1 0.1 6.8 ( 2.1 )

2 unchanged sentences

Balance, beginning of period $ 98.4 $ 110.0 $ 101.9 $ 113.2

Net income (loss) attributable to controlling interest ( 4.6 ) 1.5

Net loss attributable to controlling interest ( 5.6 ) ( 4.9 ) ( 10.2 ) ( 3.4 )

Equity based compensation amortization 0.9 0.9 1.8 1.6

Shares withheld for taxes on equity transactions ( 0.2 ) ( 0.2 ) ( 0.7 ) ( 0.3 )

Share issuance for acquisition 7.7 — 7.7 —

Impact of transactions affecting noncontrolling interest 6.1 0.1 6.8 ( 2.1 )

3 unchanged sentences

Balance, beginning of period $ 78.5 $ 93.4 $ 82.9 $ 89.8

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

Impact of transactions affecting noncontrolling interest ( 0.7 ) 2.2

Net loss attributable to noncontrolling interest ( 3.5 ) ( 4.0 ) ( 7.2 ) ( 2.7 )

Equity based compensation amortization — — — 0.1

Impact of transactions affecting noncontrolling interest ( 6.1 ) ( 0.1 ) ( 6.8 ) 2.1

Balance, end of period $ 68.9 $ 89.3 $ 68.9 $ 89.3

1 unchanged sentence

Balance, beginning of period $ 176.9 $ 203.4 $ 184.8 $ 203.0

Net income (loss) ( 8.3 ) 2.8

Net loss ( 9.1 ) ( 8.9 ) ( 17.4 ) ( 6.1 )

Equity based compensation amortization 0.9 0.9 1.8 1.7

Shares withheld for taxes on equity transactions ( 0.2 ) ( 0.2 ) ( 0.7 ) ( 0.3 )

Share issuance from acquisition 7.7 — 7.7 —

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

4 unchanged sentences

(in millions)

Three Months Ended March 31,

Six Months Ended June 30,

Cash Flows from Operating Activities

Net income (loss) $ ( 8.3 ) $ 2.8

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

Net loss $ ( 17.4 ) $ ( 6.1 )

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

Depreciation and amortization 16.2 18.4

Equity based compensation 1.8 1.7

Gain on sale of property and equipment ( 0.4 ) —

Gain on debt retirement — ( 2.1 )

Other costs, net 1.1 1.8

Changes in operating assets and liabilities

Changes in operating assets and liabilities, net effects of business combinations

Accounts receivable ( 6.8 ) 25.4

11 unchanged sentences

Proceeds from disposal of property and equipment 0.4 0.3

Purchase of business, net of cash received ( 3.5 ) —

Net cash used in investing activities ( 4.9 ) ( 5.5 )

4 unchanged sentences

Payments on Installment Purchases ( 0.3 ) —

Proceeds from financing of sale-leaseback 3.5 —

Proceeds from financing of sale-leasebacks 15.6 —

Principal payments on financing lease obligations ( 2.2 ) ( 2.6 )

Shares withheld on equity transactions ( 0.7 ) ( 0.3 )

Repurchase of Class A Common Stock — ( 3.1 )

Principal payments on ESCO Note Payable — ( 3.6 )

Net cash provided by financing activities 0.6 0.6

Repurchase of Class A Common Stock — ( 3.1 )

Net cash provided by (used in) financing activities 9.6 ( 19.6 )

Increase (decrease) in Cash and Cash equivalents 0.6 ( 0.9 )

6 unchanged sentences

Additions to fixed assets through financing leases $ ( 0.7 ) $ ( 1.0 )

Issuance of Class A Common Stock for acquisition $ ( 7.7 ) $ —

Early termination of financing leases $ — $ 0.7

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

30 unchanged sentences

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 natural gas liquids (“NGLs”) prices through the first quarter of 2021.

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.

The Company cannot predict whether, or when, the global supply and demand imbalance will be resolved or whether, or when, oil and natural gas production and economic activities will return to normalized levels.

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:

5 unchanged sentences

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.

However, during the second quarter of 2021 certain employee salaries were reinstated.

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 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.

During the first half 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, as a result of the emergence of new strains or variants of COVID-19 or otherwise, 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 three months ended March 31, 2021.

There have been no changes in such policies or the application of such policies during the six months ended June 30, 2021.

Use of Estimates

29 unchanged sentences

With the exception of the standards above, there have been no new accounting pronouncements not yet effective that have significance, or potential significance, to the Company’s condensed consolidated financial statements.

Note 3 — Business Combinations

Patriot Well Solutions (“Patriot”) Acquisition

On May 14, 2021, the Company and certain of its subsidiaries completed the acquisition of Patriot (the “Patriot Acquisition”), a provider of wireline evaluation and intervention services that operate in the Permian, Denver-Julesburg and Powder River Basins and Bakken Shale.

The purchase was accounted for using the acquisition method of accounting under FASBs Accounting Standards Codification 805, Business Combinations (“ASC 805”).

The results of operations for the acquisition are included in the accompanying condensed consolidated statements of operations from the date of acquisition.

As consideration for the Patriot Acquisition, pursuant to the Membership Interest Purchase Agreement, the Company paid an aggregate of $ 11.0 million, which included 1.3 million shares of Class A Common Stock and cash payments of $ 3.3 million, net of cash acquired.

The financial results of Patriot are included in the Completion and Other Services reporting segment.

The pro forma results of operations for the Patriot Acquisition is not presented because the pro forma effects, individually and in the aggregate, are not material to the Company’s consolidated results of operations.

Note 4 — Property and Equipment, Net

1 unchanged sentence

Estimated Useful Life

(years) March 31, 2021 December 31, 2020

(years) June 30, 2021 December 31, 2020

High specification rigs 20 $ 127.0 $ 127.2

8 unchanged sentences

Property and equipment, net $ 182.6 $ 189.4

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

Depreciation expense was $ 8.0 million and $ 9.3 million for the three months ended June 30, 2021 and 2020, respectively, and $ 15.8 million and $ 18.0 million for the six months ended June 30, 2021 and 2020, 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 the macroeconomic environment 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 Company’s policy of testing long-lived assets for impairments.

Note 5 — Goodwill and Intangible Assets

During the three and six months ended June 30, 2021, the Company recognized $ 1.8 million of goodwill in connection with the Patriot Acquisition.

Definite lived intangible assets are comprised of the following (in millions):

Estimated Useful Life

(years) March 31, 2021 December 31, 2020

(years) June 30, 2021 December 31, 2020

Customer relationships 10 - 18

2 unchanged sentences

Intangible assets, net $ 8.1 $ 8.5

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

Amortization expense was $ 0.2 million for both of the three months ended June 30, 2021 and 2020, and $ 0.4 million for both of the six months ended June 30, 2021 and 2020.

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

For the twelve months ending March 31, Amount

For the twelve months ending June 30, Amount

Thereafter 4.6

1 unchanged sentence

Accrued expenses include the following (in millions):

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Accrued payables $ 3.9 $ 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 months ended March 31, 2021 and 2020, are as follows (in millions):

Three Months Ended March 31,

Lease costs and other information related to operating leases for the three and six months ended June 30, 2021 and 2020, are as follows (in millions):

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

2021 2020 2021 2020

Short-term lease costs $ 0.5 $ 0.6 $ 0.8 $ 1.4

4 unchanged sentences

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

For the twelve months ending March 31, Total

For the twelve months ending June 30,

Thereafter 1.2

8 unchanged sentences

The assets are amortized over the shorter of the estimated useful lives or over the lease term.

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.

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,

The finance leases are included in Property and equipment, net, Other current liabilities and Other long-term liabilities in the Condensed Consolidated Balance Sheets.

Lease costs and other information related to finance leases for the three and six months ended June 30, 2021 and 2020, are as follows (in millions):

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

2021 2020 2021 2020

Amortization of finance leases $ 0.8 $ 1.4 $ 1.6 $ 2.8

4 unchanged sentences

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

For the twelve months ending March 31, Total

For the twelve months ending June 30, Total

Total future minimum lease payments 4.1

3 unchanged sentences

Long-term portion of finance lease obligations $ 1.5

Note 8 — Other Financing Liabilities

During the three and six months ended June 30, 2021, the Company entered into an agreement to sell a parcel of land and a building attached thereto, and subsequently leased back the property.

The Company received cash of $ 12.1 million from the sale and the lease has a 15 year term with an annual rent escalation of two percent per annum.

During the six months ended June 30, 2021, the Company entered into an agreement to sell certain of other fixed assets and subsequently leased back such assets and received cash of $ 3.5 million to be paid over 18 to 60 months.

The sale of the fixed assets during the three and six months ended June 30, 2021, did not qualify for sale accounting, therefore these leases were classified as finance leases and no gain or loss was recorded.

The net book value of the assets remained in property and equipment, net and are depreciating over their original useful lives.

As of June 30, 2021, aggregate future lease payments of the financing liabilities are as follows (in millions):

For the twelve months ending June 30, Total

Thereafter 9.9

Total future minimum lease payments $ 16.0

Note 9 — Debt

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

March 31, 2021 December 31, 2020

June 30, 2021 December 31, 2020

Credit Facility $ 9.5 $ 7.2

1 unchanged sentence

Installment Purchases 1.0 —

Promissory Note — —

Total Debt 22.9 24.5

6 unchanged sentences

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 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 applicable margins for the LIBOR loan was 2.1 % and the Base Rate loan was 4.3 % as of June 30, 2021.

The weighted average interest rate for the borrowings under the Credit Facility was 2.6 % for the six months ended June 30, 2021.

The applicable margin for the LIBOR and Base Rate loans will decrease to 1.75 % and 0.75 % effective July 1, 2021 due to an increase in the average availability.

Under the Credit Facility, the total loan capacity was $ 22.5 million, which was based on a borrowing base certificate in effect as of June 30, 2021.

The Company had outstanding borrowings of $ 9.7 million under the Credit Facility, leaving a residual $ 12.8 million available for borrowings as of June 30, 2021.

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

Unamortized debt issuance costs as of June 30, 2021 was $ 0.2 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 March 31, 2021, the aggregate principal balance outstanding under the Financing Agreement was $ 15.2 million.

As of June 30, 2021, the aggregate principal balance outstanding under the Financing Agreement was $ 12.7 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 March 31, 2021.

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, 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 March 31, 2021.

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

Unamortized debt issuance costs as of June 30, 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.

During the three and six months ended June 30, 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 June 30, 2021, the aggregate principal balance outstanding under the Installment Agreements was $ 1.0 million and 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.

2 unchanged sentences

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.

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.

Debt Obligations and Scheduled Maturities

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

As of June 30, 2021, aggregate future principal payments of total debt are as follows (in millions):

For the twelve months ending June 30, Total

Note 10 — Equity

5 unchanged sentences

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.

During the three and six months ended June 30, 2021, the Company granted 500,073 restricted shares with an aggregate value of $ 3.0 million.

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

As of June 30, 2021, there was an aggregate $ 4.7 million of unrecognized expense related to restricted shares issued which are expected to be recognized over a weighted average period of 1.9 years.

Performance Stock Units

The performance criteria applicable to performance stock units that have been granted by the Company are based on relative total shareholder return, which measures the Company’s total shareholder return as compared to the total shareholder return of a designated peer group, and absolute total shareholder return.

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

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.

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

During the three and six months ended June 30, 2021, the Company granted 145,270 target shares of market based performance stock units at a relative and absolute grant date fair value of approximately $ 9.24 and $ 7.45 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on March 15, 2024.

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 $ 6.33 per share and $ 3.62 per share, respectively, which are expected to vest (if at all) following the completion of the applicable performance period on April 3, 2023.

As of June 30, 2021, there was an aggregate $ 1.8 million of unrecognized compensation cost related to performance stock units which are expected to be recognized over a weighted average period of 1.9 years.

Share Repurchases

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.

During the six months ended June 30, 2020, the Company repurchased 344,828 shares of the Company’s Class A Common Stock for an aggregate $ 2.4 million in a privately negotiated transaction with ESCO.

See Note 14 — 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 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.

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.

Note 11 — Risk Concentrations

Customer Concentrations

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.

For the three months ended June 30, 2021, two customers, EOG Resources and ConocoPhillips, accounted for 20 % and 14 %, respectively, of the Company’s consolidated revenues.

For the six months ended June 30, 2021, the same two customers accounted for 22 % and 12 %, respectively, of the Company’s consolidated revenues.

As of June 30, 2021, approximately 28 % of the net accounts receivable balance was due from these customers.

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.

Note 12 — Income Taxes

2 unchanged sentences

The effective U.S.

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.

federal income tax rate applicable to the Company for the six months ended June 30, 2021 and 2020 was ( 1.7 )% and 0.0 %, 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 months ended March 31, 2021 and 2020 differed from amounts computed by applying the U.S.

Total income tax expense for the three and six months ended June 30, 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.

3 unchanged sentences

the United States and Texas.

As of March 31, 2021, the Company has no current tax years under audit.

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

Therefore, as of June 30, 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 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.

For the three and six months ended June 30, 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 June 30, 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.

Treasury Department, the Internal Revenue Service and others.

Note 11 — Earnings (Loss) per Share

Earnings (loss) per share is based on the amount of net income (loss) allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock.

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 March 31,

Income (loss) (numerator):

Net income (loss) attributable to Ranger Energy Services, Inc.

Note 13 — Loss per Share

Loss per share is based on the amount of net loss allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of Common Stock.

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

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

2021 2020 2021 2020

Net income (loss) attributable to Class A Common Stock $ ( 4.6 ) $ 1.5

Net income (loss) attributable to Ranger Energy Services, Inc.

Loss (numerator):

Net loss attributable to Ranger Energy Services, Inc.

$ ( 5.6 ) $ ( 4.9 ) $ ( 10.2 ) $ ( 3.4 )

Effect of noncontrolling interest, net of tax — 0.9

Net income (loss) attributable to Class A Common Stock $ ( 4.6 ) $ 2.4

Net loss attributable to Class A Common Stock $ ( 5.6 ) $ ( 4.9 ) $ ( 10.2 ) $ ( 3.4 )

Net loss attributable to Ranger Energy Services, Inc.

$ ( 5.6 ) $ ( 4.9 ) $ ( 10.2 ) $ ( 3.4 )

Net loss attributable to Class A Common Stock $ ( 5.6 ) $ ( 4.9 ) $ ( 10.2 ) $ ( 3.4 )

Weighted average shares (denominator):

Weighted average number of shares - basic 9,523,127 8,474,077 9,055,077 8,545,925

Effect of share-based awards — 65,749

Effect of noncontrolling interest, net of tax — 6,866,154

Weighted average number of shares - diluted 9,523,127 8,474,077 9,055,077 8,545,925

Basic income (loss) per share $ ( 0.54 ) $ 0.17

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

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.

Basic loss per share $ ( 0.59 ) $ ( 0.58 ) $ ( 1.13 ) $ ( 0.40 )

Diluted loss per share $ ( 0.59 ) $ ( 0.58 ) $ ( 1.13 ) $ ( 0.40 )

During the three and six months ended June 30, 2021 and 2020, the Company excluded approximately 1.3 million and 0.9 million of equity-based awards, respectively.

For all periods presented in the table above, the Company excluded 6.9 million shares of Common Stock issuable upon conversion of the Company’s Class B Common Stock in calculating diluted loss per share.

These items were excluded from the calculation of the loss per share, as the effect was anti-dilutive.

Note 14 — Commitments and Contingencies

4 unchanged sentences

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.

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.

Please see “Note 9 — Debt” and “Note 10 — Equity” for further details of the debt and equity settlements.

8 unchanged sentences

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.

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

Segment information as of June 30, 2021 and December 31, 2020 and for the three and six months ended June 30, 2021 and 2020 is as follows (in millions):

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended March 31, 2021

Three Months Ended June 30, 2021

Revenues $ 29.0 $ 19.8 $ 1.2 $ — $ 50.0

5 unchanged sentences

Capital expenditures $ 1.4 $ 0.9 $ — $ — $ 2.3

As of March 31, 2021

Six Months Ended June 30, 2021

Revenues $ 50.7 $ 35.3 $ 2.3 $ — $ 88.3

Cost of services 43.0 33.8 1.4 — 78.2

Depreciation and amortization 9.5 4.7 1.3 0.7 16.2

Operating income (loss) ( 1.8 ) ( 3.2 ) ( 0.4 ) ( 10.4 ) ( 15.8 )

Interest expense, net — — — 1.3 1.3

Net income (loss) ( 1.8 ) ( 3.2 ) ( 0.4 ) ( 12.0 ) ( 17.4 )

Capital expenditures $ 2.4 $ 1.1 $ — $ — $ 3.5

As of June 30, 2021

Property and equipment, net $ 108.6 $ 32.8 $ 36.3 $ 4.9 $ 182.6

1 unchanged sentence

High Specification Rigs Completion and Other Services Processing Solutions Other Total

Three Months Ended March 31, 2020

Three Months Ended June 30, 2020

Revenues $ 11.4 $ 17.7 $ 1.6 $ — $ 30.7

5 unchanged sentences

Capital expenditures $ ( 0.3 ) $ 0.5 $ 0.2 $ 0.3 $ 0.7

Six Months Ended June 30, 2020

Revenues $ 46.3 $ 61.0 $ 4.4 $ — $ 111.7

Cost of services 40.0 45.0 1.9 — 86.9

Depreciation and amortization 10.5 5.3 1.9 0.7 18.4

Operating income (loss) ( 4.2 ) 10.7 0.6 ( 11.2 ) ( 4.1 )

Interest expense, net — — — 1.9 1.9

Net income (loss) ( 4.2 ) 10.7 0.6 ( 13.2 ) ( 6.1 )

Capital expenditures $ 4.3 $ 1.7 $ 0.4 $ 0.3 $ 6.7

As of December 31, 2020

2 unchanged sentences

Note 16 — 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.

PerfX Wireline Services, LLC (“PerfX”) Acquisition

On July 8, 2021 (the “Acquisition Date”), the Company and certain of its subsidiaries, entered into an Asset Purchase Agreement (the “Asset Purchase Agreement”) with PerfX Wireline Services, LLC, a Nevada limited liability company (the “PerfX Acquisition”).

As consideration for the assets acquired pursuant to the Asset Purchase Agreement, the Company issued 1,000,000 shares of Class A Common Stock, in addition to a Secured Promissory Note of $ 11.4 million, which bears an interest rate of 8.5 % per annum and holds certain assets as collateral through the scheduled maturity date of January 31, 2024.

The PerfX Acquisition will be accounted for using the acquisition method of accounting in accordance with ASC 805.

The results of operations for the acquisition will be included in the accompanying condensed consolidated statements of operations from the Acquisition Date.

The initial accounting for the PerfX Acquisition has not yet been completed, however management expects to finalize during the year ending December 31, 2021.

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