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Item 8. Financial Statements and Supplementary Data

2024-03-05 compared with 2023-03-13 · 280 added, 377 removed, 547 unchanged (55% of the section changed)

2 unchanged sentences

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (BDO USA, LLP;

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ( Grant Thornton , LLP;

Houston, Texas;

PCAOB ID # 248 )

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM (BDO USA, P.C.;

Houston, Texas;

PCAOB ID #243 )

CONSOLIDATED BALANCE SHEETS

5 unchanged sentences

Note 2—Summary of Significant Accounting Policies

Note 3 — Business Combinations

Note 3 —Assets Held for Sale

11 unchanged sentences

Note 1 6 —Segment Reporting

Note 17—Subsequent Events

Report of Independent Registered Public Accounting Firm

3 unchanged sentences

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Ranger Energy Services, Inc.

(the “Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations, stockholders’ equity, and cash flows for each of the years then ended and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for the years then ended, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company's internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) and our report dated March 13, 2023 expressed an adverse opinion thereon.

We have audited the accompanying consolidated balance sheet of Ranger Energy Services, Inc.

(a Delaware corporation) and subsidiaries (the “Company”) as of December 31, 2023, the related consolidated statements of operations, stockholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in the 2013 Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”), and our report dated March 5, 2024 expressed an unqualified opinion.

Basis for opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical audit matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Section 382 Ownership Change

As described further in Note 12 to the consolidated financial statements, the Company concluded an ownership change occurred during the year as defined by Section 382 of the Internal Revenue Code of 1986 (“Section 382”).

Upon the occurrence of a Section 382 ownership change, there are limitations on the utilization of certain net operating loss carryforwards.

We identified the conclusion that an ownership change occurred under Section 382 as a critical audit matter.

The principal consideration for our determination that the conclusion that an ownership change occurring under Section 382 is a critical audit matter is that there are significant judgments required by management in interpreting and applying Section

382 to determine whether an ownership change has occurred.

This determination required challenging and complex auditor judgment and the need to involve tax specialists when performing audit procedures to evaluate management’s conclusion.

Our audit procedures related to the critical audit matter included the following, among others:

• We tested the effectiveness of controls over the review of the analysis and conclusion related to the Company’s determination of whether a change in ownership occurred under Section 382.

• We tested the mathematical accuracy of the calculations in management’s analysis.

• With the assistance of our tax specialists, we evaluated the Company’s analysis of whether a change in ownership occurred, including management’s process for interpreting Section 382.

/s/ Grant Thornton, LLP

We have served as the Company’s auditor since 2023.

Houston, Texas

March 5, 2024

Report of Independent Registered Public Accounting Firm

To the Board of Directors and the Stockholders of

Ranger Energy Services, Inc.

Houston, Texas

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Ranger Energy Services, Inc.

(the “Company”) as of December 31, 2022, and the related consolidated statements of operations, stockholders’ equity, and cash flows for the year then ended, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022, and the results of its operations and its cash flows for the year then ended , in conformity with accounting principles generally accepted in the United States of America.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing separate opinions on the critical audit matter or on the accounts or disclosures to which it relates.

Identification of a Section 382 Ownership Change

As discussed within Note 13 to the consolidated financial statements, Section 382 of the Internal Revenue Code of 1986, as amended (“Section 382”), generally imposes, upon the occurrence of an ownership change, an annual limitation on certain net operating losses that can be utilized.

We identified management’s assessment of the existence of a Section 382 ownership change as a critical audit matter because of the judgments required in interpreting the available information in making the determination as whether a Section 382

ownership change has occurred.

Testing management’s assessment required an increased extent of effort, including the need to involve our tax specialists.

The primary procedures we performed to address this critical audit matter included:

• Testing the completeness and accuracy of the underlying data used in making the determination as to the existence of a change in ownership.

• Utilizing professionals with specialized income tax knowledge and skills to assist in evaluating the accuracy of the conclusions reached by management related to a potential change in ownership.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provide a reasonable basis for our opinion.

/s/ BDO USA, LLP

We have served as the Company’s auditor since 2016.

We served as the Company’s auditor from 2016 to 2022.

Houston, Texas

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Long-term debt, current portion 0.1 6.8

Short-term lease liability 7.3 6.6

Other current liabilities 0.1 —

Total current liabilities 69.0 74.5

Operating leases, right-of-use obligations 9.6 5.8

Long-term lease liability 14.9 13.1

Other financing liability 11.0 11.6

Long-term debt, net — 11.6

Other long-term liabilities 8.1 5.0

Deferred tax liability 11.3 4.6

Total liabilities 106.2 115.4

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50,000,000 shares authorized;

no Series A shares issued and outstanding as of December 31, 2022;

6,000,001 shares issued and outstanding as of December 31, 2021

no Series A shares issued and outstanding as of December 31, 2023 and 2022

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

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Class A Common Stock held in treasury at cost;

551,828 treasury shares as of December 31, 2022 and 2021

2,357,328 treasury shares as of December 31, 2023 and 551,828 treasury shares as of December 31, 2022

( 23.1 ) ( 3.8 )

Retained earnings (accumulated deficit) 7.1 ( 8.0 )

Retained earnings 28.4 7.1

Additional paid-in capital 266.2 262.6

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Total operating expenses 599.7 588.8

Operating income (loss) 19.7 ( 40.5 )

Other income and expenses

Operating income 36.9 19.7

Other (income) expenses

Interest expense, net 3.5 7.3

Loss on debt retirement 2.4 —

Gain on bargain purchase, net of tax — ( 3.6 )

Total other income and expenses 3.7 ( 32.2 )

Income (loss) before income tax expense (benefit) 16.0 ( 8.3 )

Income tax expense (benefit) 0.9 ( 6.2 )

Net income (loss) 15.1 ( 2.1 )

Net loss attributable to non-controlling interests — ( 10.7 )

Net income attributable to Ranger Energy Services, Inc.

Earnings per common share

Total other (income) expenses 5.9 3.7

Income before income tax expense 31.0 16.0

Income tax expense 7.2 0.9

Net income 23.8 15.1

Income per common share

Basic $ 0.97 $ 0.66

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Balance, beginning of year — 6,000,001 $ — $ 0.1

Conversion of Series A Preferred Stock ( 6,000,001 ) 6,000,001 ( 0.1 ) 0.1

Shares converted to Class A Common Stock — ( 6,000,001 ) — ( 0.1 )

Balance, end of year — — $ — $ —

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Issuance of shares from Series A Preferred Stock conversion — 6,000,001 — 0.1

Issuance of shares in connection with acquisitions 100,000 2,156,000 — —

Issuance Class A Common Stock in connection with TRA Termination — 376,185 — —

Share redemption for Class A Common Stock from related party — 6,866,154 — 0.1

Balance, end of year 25,446,292 18,981,172 $ 0.3 $ 0.2

Shares, Class B Common Stock

Balance, beginning of year — 6,866,154 $ — $ 0.1

Share redemption to Class A Common Stock from related party — ( 6,866,154 ) — ( 0.1 )

Issuance in connection with acquisitions — 100,000 — —

Balance, end of year 25,756,017 25,446,292 $ 0.3 $ 0.3

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Balance, beginning of year ( 551,828 ) ( 551,828 ) $ ( 3.8 ) $ ( 3.8 )

Repurchase of Class A Common Stock ( 1,805,500 ) — $ ( 19.3 ) $ —

Balance, end of year ( 2,357,328 ) ( 551,828 ) $ ( 23.1 ) $ ( 3.8 )

Retained earnings (accumulated deficit)

Retained earnings

Balance, beginning of year $ 7.1 $ ( 8.0 )

Income attributable to controlling interest 15.1 8.6

Benefit from release of valuation allowance — 1.5

Tax step-up related to non-controlling interest exchange — 0.3

Net income 23.8 15.1

Dividends declared ( 2.5 ) —

Balance, end of year $ 28.4 $ 7.1

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Balance, beginning of year $ 262.6 $ 260.2

Issuance of Series A Preferred Stock — 41.9

Equity based compensation 4.6 3.6

Shares withheld for taxes on equity transactions ( 1.0 ) ( 1.2 )

Issuance of Class A Common Stock in connection with acquisitions — 16.4

Issuance of Class A Common Stock to related party — 3.8

Impact of transactions affecting non-controlling interest — 72.2

Balance, end of year $ 266.2 $ 262.6

Total controlling interest stockholders’ equity

Balance, beginning of year $ 248.7 $ 101.9

Net income attributable to controlling interest 15.1 8.6

Issuance of Series A Preferred Stock — 42.0

Equity based compensation 3.6 3.2

Shares withheld for taxes on equity transactions ( 1.2 ) ( 1.2 )

Issuance of Class A Common Stock in connection with acquisitions — 16.4

Issuance of Class A Common Stock to related party — 3.8

Benefit from release of valuation allowance — 1.5

Tax step-up related to non-controlling interest exchange for TRA Termination — 0.3

Impact of transactions affecting non-controlling interest — 72.2

Balance, end of year $ 266.2 $ 248.7

Non-controlling interest

Balance, beginning of year $ — $ 82.9

Net loss attributable to non-controlling interest — ( 10.7 )

Impact of transactions affecting non-controlling interest — ( 72.2 )

Balance, end of year $ — $ —

Total Stockholders’ Equity

Total stockholder’s equity

Balance, beginning of year $ 266.2 $ 248.7

Net income (loss) 15.1 ( 2.1 )

Issuance of Series A Preferred Stock — 42.0

Net income 23.8 15.1

Dividends declared ( 2.5 ) —

Equity based compensation 4.6 3.6

Shares withheld for taxes on equity transactions ( 1.0 ) ( 1.2 )

Issuance of Class A Common Stock in connection with acquisitions — 16.4

Issuance of Class A Common Stock to related party — 3.8

Tax step-up related to non-controlling interest exchange for TRA Termination — 1.5

Impact of transactions affecting non-controlling interest — 0.3

Repurchase of Class A Common Stock ( 19.3 ) —

Balance, end of year $ 271.8 $ 266.2

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Cash Flows from Operating Activities

Net income (loss) $ 15.1 $ ( 2.1 )

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

Net income $ 23.8 $ 15.1

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

Depreciation and amortization 39.9 44.4

Equity based compensation 4.8 3.8

Gain on disposal of property and equipment ( 1.8 ) ( 0.7 )

Impairment of fixed assets 0.4 1.3

Gain on bargain purchase, net of tax — ( 3.6 )

Deferred income tax expense (benefit) 0.4 ( 6.2 )

Share issuance to related party for termination of TRA — 3.8

Deferred income tax expense 6.6 0.4

Loss on debt retirement 2.4 —

Other expense, net 2.3 1.1

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

Changes in operating assets and liabilities

Accounts receivable 5.3 ( 10.7 )

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Other long-term liabilities ( 2.6 ) 3.7

Net cash provided by (used in) operating activities 44.5 ( 39.4 )

Net cash provided by operating activities 90.8 44.5

Cash Flows from Investing Activities

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Cash Flows from Financing Activities

Borrowings under Credit Facility 582.8 177.5

Principal payments on Credit Facility ( 608.4 ) ( 158.0 )

Borrowings under Eclipse M&E Term Loan — 12.5

Principal payments on Eclipse M&E Term Loan ( 2.1 ) —

Borrowings under Eclipse Term Loan B — 15.0

Principal payments under Eclipse Term Loan B ( 12.4 ) ( 2.6 )

Deferred financing costs on Eclipse — ( 2.5 )

Borrowings under Revolving Credit Facility 325.2 582.8

Principal payments on Revolving Credit Facility ( 327.7 ) ( 608.4 )

Principal payments on Eclipse M&E Term Loan Facility ( 10.4 ) ( 2.1 )

Principal payments under Eclipse Term Loan B Facility — ( 12.4 )

Deferred financing costs ( 0.7 ) —

Principal payments on Secured Promissory Note ( 6.2 ) ( 4.1 )

Principal payments on Encina Master Financing Agreement — ( 17.7 )

Payments on Installment Purchases ( 0.5 ) ( 0.6 )

Proceeds from financing of sale-leasebacks — 15.6

Payments on Other Installment Purchases ( 0.4 ) ( 0.5 )

Principal payments on financing lease obligations ( 5.4 ) ( 4.5 )

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Shares withheld on equity transactions ( 1.0 ) ( 1.2 )

Proceeds from series A Preferred Stock issuance — 42.0

Net cash provided by (used in) financing activities ( 52.7 ) 73.6

Increase (decrease) in Cash and Cash equivalents 3.1 ( 2.2 )

Dividends paid to Class A Common Stock stockholders ( 2.4 ) —

Repurchase of Class A Common Stock ( 19.3 ) —

Net cash used in financing activities ( 49.1 ) ( 52.7 )

Increase in Cash and Cash equivalents 12.0 3.1

Cash and Cash Equivalents, Beginning of Year 3.7 0.6

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Supplemental Disclosure of Non-cash Investing and Financing Activities

Capital expenditures $ 0.2 $ ( 1.5 )

Capital expenditures included in accounts payable and accrued liabilities $ ( 0.5 ) $ 0.2

Additions to fixed assets through installment purchases and financing leases $ ( 10.0 ) $ ( 5.5 )

Issuance of Class A Common Stock for acquisitions $ — $ ( 16.4 )

Secured Promissory Note $ — $ ( 11.4 )

Additions to fixed assets through asset trades $ ( 1.1 ) $ —

The accompanying notes are an integral part of these Consolidated Financial Statements.

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Ranger Energy Services, Inc.

(“Ranger, Inc.,” or the “Company”) is a provider of onshore high specification (“high-spec”) well service rigs and complementary services in the United States.

We provide an extensive range of well site services to leading U.S.

exploration and production (“E&P”) companies that are fundamental to establishing and enhancing the flow of oil and natural gas throughout the productive life of a well.

Our service offerings consist of well completion support, workover, well maintenance, wireline, fluid management, other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

(“Ranger, Inc.,” “Ranger,” “we,” “us,” “our” or the “Company”) is a provider of onshore high specification well service rigs, wireline services, and additional processing solutions and ancillary services in the U.S.

The Company provides an extensive range of well site services to leading U.S.

E&P companies that are fundamental to establishing and maintaining the flow of oil and natural gas throughout the productive life of a well.

Our service offerings consist of well completion support, workover, well maintenance, wireline, and other complementary services, as well as installation, commissioning and operating of modular equipment, which are conducted in three reportable segments, as follows:

• High Specification Rigs .

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

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

• Wireline Services .

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Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments.

These services include equipment rentals, plug and abandonment, logistics hauling, processing solutions, as well as snubbing and coil tubing.

We operate 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.

These services include equipment rentals, plug and abandonment, logistics, snubbing and coil tubing, and processing solutions.

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

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

Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services and Torrent Services’ business and consolidates the financial results of Ranger Services and Torrent Services and their subsidiaries.

In conjunction with the initial public offering of Class A Common Stock, par value $ 0.01 per share (“Class A Common Stock”), which closed on August 16, 2017 (the “Offering”), and the corporate reorganization Ranger Inc.

underwent in connection with the Offering, Ranger Inc.

became 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”), and the other subsidiaries through which it operates its assets.

Ranger LLC is the sole managing member of Ranger Services and Torrent Services, and is responsible for all operational, management and administrative decisions relating to Ranger Services, its subsidiaries, and Torrent Services’ business and consolidates the financial results of Ranger Services, its subsidiaries, and Torrent Services.

Note 2 — Summary of Significant Accounting Policies

Basis of Presentation

The accompanying audited Consolidated Financial Statements of the Company have been prepared in accordance with US GAAP and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (“SEC”).

The accompanying audited Consolidated Financial Statements of the Company have been prepared in accordance with U.S.

GAAP and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (the “SEC”).

In the opinion of management, all material adjustments, which are of a normal and recurring nature, necessary for the fair presentation of the financial results for all periods presented have been reflected.

All intercompany balances and transactions have been eliminated.

Investments in which the Company exercises control are consolidated and the noncontrolling interests of such investments, which were not attributable directly or indirectly to the Company, are presented as a separate component of net income or loss and equity in the accompanying Consolidated Financial Statements.

The Company’s ownership interests in Ranger LLC, which was consolidated within the Company’s Consolidated Financial Statements, was not wholly owned by the Company through October 1, 2021.

Pursuant to the TRA Termination Agreement (as defined herein) all noncontrolling interests in Ranger LLC ceased to exist.

Changes in the Company’s ownership interest in Ranger LLC, while it retains its controlling interest, are accounted for as equity transactions.

We have made certain reclassifications to our prior period operating expense amounts for year-over-year comparability purposes.

Other immaterial reclassifications have been made for comparability purposes.

None of these reclassifications have an impact on our consolidated operating results, cash flows or financial position.

We have made a certain reclassification to our prior period operating activities amount where Gain on disposal of property and equipment has been itemized separately from Other expense, net for year-over-year comparability purposes.

This reclassification does not have an impact on our consolidated operating results, cash flows or financial position.

Use of Estimates

The preparation of 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 Consolidated Financial Statements and the reported amounts of revenue and expenses during the reporting period.

The preparation of 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 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.

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• Impairment of property and equipment and intangible assets;

• Revenue recognition;

• Income taxes;

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Before extending credit, the Company reviews a customer’s credit history and generally does not require collateral from its customers.

The allowance for doubtful accounts is established as losses are estimated and are recorded through a provision for bad debts.

The allowance for credit losses is established as losses are estimated and are recorded through a provision for bad debts.

Losses are charged against the allowance when management believes the uncollectibility of a receivable is confirmed.

Subsequent recoveries, if any, are credited to the allowance.

The allowance for doubtful accounts is evaluated on a regular basis by management and based on past experience and other factors, which, in management’s judgment, deserve current recognition in estimating possible bad debts.

Such factors include growth and composition of accounts receivable, the relationship of the allowance for doubtful accounts to accounts receivable and current economic conditions.

The allowance for doubtful accounts was $ 3.0 million and $ 2.8 million for the years ended December 31, 2022 and 2021, respectively.

The allowance for credit losses is evaluated on a regular basis by management and based on past experience and other factors, which, in management’s judgment, deserve current recognition in estimating possible bad debts.

Such factors include growth and composition of accounts receivable, the relationship of the allowance for credit losses to accounts receivable and current economic conditions.

The allowance for credit losses was $ 3.8 million and $ 3.0 million for the years ended December 31, 2023 and 2022, respectively.

Bad debt expense recorded for the years ended December 31, 2023 and 2022 was $ 0.9 million and $ 0.2 million, respectively.

Balance at Beginning of Year Charged to Operations Written Off Balance at End of Year

Allowance for Doubtful Accounts Receivable

Allowance for Credit Losses

2023 $ 3.0 $ 0.9 $ ( 0.1 ) $ 3.8

8 unchanged sentences

ROU assets also include any lease payments made and exclude lease incentives.

Lease terms do not include options to extend or terminate the

lease, as management does not consider them reasonably certain to exercise at this time.

Lease terms do not include options to extend or terminate the lease, as management does not consider them reasonably certain to exercise at this time.

Leases with terms of 12 months or less are considered short-term leases and therefore payments are recorded as an expense on a straight-line basis over the lease term.

2 unchanged sentences

The Company enters into operating leases, primarily for real estate, with terms that vary from less than 12 months to nine years , where certain of the leases contain escalation clauses.

The operating leases are included in Operating lease right-of-use assets, Other current liabilities and Operating lease right-of-use obligations in the Consolidated Balance Sheets.

Lease costs associated with our yards and field offices are included in Cost of Services and our executive offices are included in General and Administrative expenses in the Consolidated Statements of Operations.

The operating leases are included in Short-term lease liability and Long-term lease liability in the Consolidated Balance Sheets.

Lease costs associated with our yards and field

offices are included in Cost of Services and our executive offices are included in General and Administrative expenses in the Consolidated Statements of Operations.

Finance Leases

2 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, Other current liabilities and Other long-term liabilities in our Consolidated Balance Sheets.

The finance leases are included in Property and equipment, net, Short-term lease liability and Long-term lease liability in our Consolidated Balance Sheets.

Property and Equipment, net

4 unchanged sentences

Once placed in service, depreciation on property and equipment continues while being repaired, refurbished or between periods of deployment.

During the year ended December 31, 2022, the Company evaluated the useful lives and made adjustments, as needed, however such adjustments were not material to depreciation expense.

Long‑Lived Asset Impairment

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The carrying value reported for debt approximates fair value because the underlying instruments are at interest rates which approximate current market rates and is considered Level 3 in the fair value hierarchy The Company did not have any assets or liabilities that were measured at fair value on a recurring basis at December 31, 2023 and 2022.

See “Note 3 — Business Combinations,” for information regarding the estimated fair value of non-recurring items.

Revenue Recognition

6 unchanged sentences

The services of each segment are based on mutually agreed upon pricing with the customer prior to the services being performed and, given the nature of the services, do not include any warranty or right of return.

Pricing for services are offered at hourly or daily rates, where the rates are, in part, determined by when services are performed and the nature of the specific job, with consideration for the extent of equipment, labor and consumables needed.

Pricing for services are offered at hourly or daily rates, where the rates are, in part, determined by when services are performed and the nature of the specific

job, with consideration for the extent of equipment, labor and consumables needed.

Accordingly, the agreed-upon pricing is considered to be variable consideration.

7 unchanged sentences

The deferred costs are included within Prepaid assets on the Consolidated Balance Sheets as of December 31, 2023 and 2022.

During the years ended December 31, 2022 and 2021, the Company recognized expense of $ 0.7 million and $ 2.7 million, respectively.

During the years ended December 31, 2023 and 2022, the Company recognized deferred expenses of $ 0.8 million and $ 0.7 million, respectively.

All revenue transactions are presented on a net of sales tax in the Consolidated Statements of Operations.

8 unchanged sentences

Both positive and negative evidence, as well as the objectivity and verifiability of that evidence, is considered in determining the appropriateness of recording a valuation allowance on deferred tax assets.

Under US GAAP, the valuation allowance is recorded to reduce the Company’s 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.

GAAP, the valuation allowance is recorded to reduce the Company’s 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.

The ultimate realization of the deferred tax assets depends on the generation of sufficient taxable income.

The Company currently believes that it is reasonably possible to achieve a three-year cumulative level of profitability within the next 12 months, and as early as the first half of 2023.

As the Company continues to experience increasing profits and no longer has a trailing 3-year cumulative taxable loss, we currently believe that it is more likely than not to fully utilize all deferred tax assets including those associated with the net operating loss carry-forward.

Accordingly, the Company released all valuation allowances of $ 1.7 million previously recorded resulting in a discrete tax benefit for the year ended December 31, 2023.

Deferred tax expense or benefit is the result of changes in deferred tax assets and liabilities and associated valuation allowances during the period.

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In the event that the Company determines that a tax position meets the uncertainty criteria, an additional liability or benefit will result.

The amount of unrecognized tax benefit requires management to make significant assumptions about the expected outcomes of

certain tax positions included in filed or yet to be filed tax returns.

The amount of unrecognized tax benefit requires management to make significant assumptions about the expected outcomes of certain tax positions included in filed or yet to be filed tax returns.

As of December 31, 2023 and 2022, the Company did not have any uncertain tax positions.

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In the event our tax filings are audited, we may be subject to assessments of additional taxes that are resolved with the authorities or through the courts.

The Company records income tax-related interest and penalties, if applicable, as a component of tax expense.

However, there were no such amounts recognized in the consolidated statements of operations in 2022 and 2021.

Equity-Based Compensation

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Forfeitures of all equity-based compensation are recognized as they occur.

Recent Accounting Pronouncements

Recently issued accounting standards

New Accounting Pronouncements

Recently adopted accounting standards

In June 2016, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2016-13, Financial Instruments - Credit Losses, which replaces the incurred loss impairment methodology to reflect expected credit losses.

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ASU 2020-04 became effective as of March 12, 2020 and can be applied through December 31, 2022, recently amended by ASU 2022-06 which has delayed the application date through December 31, 2024.

On September 23, 2022, the Company entered into the Fourth Amendment to the Loan and Security Agreement (the Eclipse Loan and Security Agreement, as amended through and including the Fourth Amendment, the “Amended Loan Agreement”) with EBC and Eclipse Business Capital SPV, LLC where the Secured Overnight Financing Rate (“SOFR”) replaced LIBOR as the reference rate for interest on borrowings, effective October 1, 2022.

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 Consolidated Financial Statements.

Note 3 — Business Combinations

The Company completed three acquisitions during the year ended December 31, 2021, where all purchases were accounted for using the acquisition method of accounting under the FASB Accounting Standards Codification 805, Business Combinations (“ASC 805”).

The results of operations for each of the acquisitions are included in the accompanying Consolidated Statements of Operations from the respective date of each acquisition.

Under the acquisition method of accounting, the assets and liabilities have been recorded at their respective estimated fair values as of the date of completion of the acquisition and reported into Ranger’s Consolidated Balance Sheets.

The Company utilized valuation techniques consistent with the market approach to measure the fair value of the assets acquired and liabilities assumed in each of the business combinations.

The Company’s market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets.

The estimates of fair value required the use of significant unobservable inputs, representative of a Level 3 fair value measurement, including assumptions related to the future performance of the assets.

The supplemental unaudited pro forma information presented below is being provided for information purposes only and may not necessarily reflect the future results of operations of the Company or what the results of operations would have been had the Company owned and operated the assets since January 1, 2021.

There were no material non-recurring pro forma adjustments present.

Patriot Well Solutions (“Patriot”) Acquisition

On May 14, 2021, the Company acquired all of the outstanding stock of Patriot, a provider of wireline evaluation and intervention services that operate in the Permian, Denver-Julesburg and Powder River Basins and Bakken Shale.

As consideration for the Patriot Acquisition, 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.

Following the acquisition of Patriot, the Company significantly expanded its scale and scope of the existing wireline business.

The financial results of Patriot are included within the Wireline Services reporting segment.

The pro forma results of operations for the year ended December 31, 2021 for the Patriot Acquisition are not presented because the pro forma effects, individually and in the aggregate, are not material to the Company’s consolidated results of operations.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

PerfX Wireline Services (“PerfX”) Acquisition

On July 8, 2021, the Company acquired all of the assets of PerfX, a provider of wireline services that operate in Williston, North Dakota and Midland, Texas.

Following the acquisition of PerfX, the Company significantly expanded its scale and scope of the existing wireline business.

The financial results of PerfX are included within the Wireline Services reporting segment.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

The aggregate consideration paid was $ 20.1 million, which included 1.0 million shares of Class A Common Stock and a Secured Promissory Note of $ 11.4 million.

The Class A Common Stock issuance includes 100,000 shares that were issued by the Company on July 8, 2022, the 12-month anniversary of the acquisition date.

The Secured Promissory Note bears an interest rate of 8.5 % per annum and holds certain assets as collateral through the scheduled maturity date of January 31, 2024.

Refer to “Note 10 — Debt” for further details related to the Secured Promissory Note.

The PerfX purchase price includes a warrant to acquire a 30 % ownership in the XConnect Business (“XConnect”), which expires on July 8, 2031.

XConnect is the manufacturer of a perforating gun system developed by the PerfX sellers alongside the PerfX wireline service business.

The warrant requires the Company to maintain a specific minimum level of purchases of XConnect’s manufactured products.

Should the Company fail to maintain the specified minimum level of purchases, a forfeiture event would occur;

however, the Company may elect to cure the forfeiture event through a cash payment to XConnect.

If the Company elects not to cure the forfeiture event, if one should occur, the ownership percentage would reduce to 15 %.

Upon the occurrence of a second uncured forfeiture event, the warrant is deemed to be cancelled.

The value assigned to the warrant by the Company is negligible as of December 31, 2022.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):

Accounts receivable 4.6

Inventory 2.4

Prepaid and other current assets 0.1

Operating leases, right-of-use asset 1.1

Property and equipment 18.4

Total assets acquired 27.6

Accounts payable 5.4

Accrued expenses 1.0

Operating lease right-of-use obligation 1.1

Total liabilities assumed 7.5

Purchase price $ 20.1

The following unaudited pro forma financial results considers that the PerfX Acquisition occurred as of January 1, 2021 (in millions, exception per share amounts):

Year Ended December 31, 2021

Revenue $ 348.0

Operating loss $ ( 41.6 )

Net loss $ ( 3.1 )

Basic earnings per share $ 0.70

Diluted earnings per share $ 0.60

The supplemental pro forma information presented above is being provided for information purposes only and may not necessarily reflect what the results of operations would have been had the Company owned and operation the PerfX assets since January 1, 2021.

The financial results of PerfX are included in the Wireline Services reporting segment.

The Company reported revenue and an operating loss during the year ended December 31, 2021 of approximately $ 55.5 million and $ 1.5 million, respectively.

The transaction costs related to the PerfX Acquisition approximated $ 0.7 million and were included as part of General and administrative expense.

Basic Energy Services, Inc.

(“Basic”) Acquisition

On September 15, 2021, Ranger Acquisitions entered into an Asset Purchase Agreement for certain assets of Basic and certain of its subsidiaries (the “Basic Sellers”), which closed on October 1, 2021.

Ranger Acquisitions purchased assets associated with Basic’s well servicing, fishing and rental, coiled tubing operations, and rolling stock assets required to support the operating assets being purchased and real property locations inclusive of, but not limited to, real property owned in New Mexico, North Dakota, Oklahoma, and Texas.

All assets associated with the Basic Acquisition, were recorded at their fair value.

The Company used the market approach as of the closing date, October 1, 2021, to apply fair values to the assets purchased based on the selling price of similar assets.

As a result of comparing the purchase price to the fair value of the assets acquired, the Company realized a $ 40.8 million bargain purchase gain, net of tax.

The bargain purchase gain is primarily attributable Basic’s distressed financial position and lack of financing options available to avoid liquidation.

While the Company uses its best estimates and assumptions as part of the purchase price allocation process to accurately value assets acquired and liabilities assumed as of the closing date, the estimates and assumptions are inherently uncertain and subject to refinement.

As a result, during the measurement period, which may be up to one year from the closing date, the Company recorded adjustments to the assets acquired and liabilities assumed, with the corresponding offset to the bargain purchase.

Subsequent to the measurement period, any adjustment to assets acquired or liabilities assumed is included in the operating results in the period in which the adjustment is identified.

As of the date of this report, the Company has finalized the purchase price allocation in the fourth quarter of 2022.

During the year ended December 31, 2022, adjustments were made within the permitted measurement period that resulted in an increase to the bargain purchased recognized of $ 3.6 million, net of tax, due to updated information regarding facts and circumstances which existed as of the date of the business combination.

The measurement period adjustments primarily impacted the bargain purchase gain and property and equipment.

The following table presents the fair value of assets acquired and liabilities assumed in accordance with ASC 805 (in millions):

Property and equipment $ 93.5

Total assets acquired 93.5

Finance lease obligations 3.9

Bargain purchase deferred tax liability 11.7

Total liabilities assumed 15.6

Net assets acquired 77.9

Bargain purchase 40.8

Purchase Price $ 37.1

The following unaudited pro forma financial results considers that the Basic Acquisition occurred as of January 1, 2021 (in millions, except per share amounts):

Year Ended December 31, 2021

Revenue $ 423.2

Operating loss $ ( 41.2 )

Net loss $ ( 3.0 )

Basic earnings per share $ 0.68

Diluted earnings per share $ 0.59

The financial results of Basic are included in the High Specification Rigs and Processing Solutions and Ancillary Services reporting segments.

The Company reported revenue and an operating loss during the year ended December 31, 2021 that included approximately $ 38.0 million and $ 8.0 million, respectively.

The transaction costs related to the Basic Acquisition approximated $ 7.1 million and were included as part of General and administrative expense.

On September 23, 2022, the Company entered into the Fourth Amendment to the Loan and Security Agreement (the Eclipse Loan and Security Agreement, as amended through and including the Fourth Amendment, the “Amended Loan Agreement”) with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC where the Secured Overnight Financing Rate (“SOFR”) replaced LIBOR as the reference rate for interest on borrowings, effective October 1, 2022.

On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo, NA.

with SOFR as the reference rate for interest on borrowings.

Recent Accounting Pronouncements Not Yet Adopted

In November 2023, the FASB issued Accounting Standards Update No.

2023-07, “Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures” (“ASU 2023-07”), which is intended to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The guidance is to be applied retrospectively to all prior periods presented in the financial statements.

Upon transition, the segment expense categories and amounts disclosed in the prior periods should be based on the significant segment expense categories identified and disclosed in the period of adoption.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

In December 2023, the FASB issued Accounting Standards Update No.

2023-09, “Income Taxes (Topic 740):

Improvements to Income Tax Disclosures” (“ASU 2023-09”), which modifies the rules on income tax disclosures to require entities to disclose (1) specific categories in the rate reconciliation, (2) the income or loss from continuing operations before income tax expense or benefit (separated between domestic and foreign) and (3) income tax expense or benefit from continuing operations (separated by federal, state and foreign).

ASU 2023-09 also requires entities to disclose their income tax payments to international, federal, state and local jurisdictions, among other changes.

The guidance is effective for annual periods beginning after December 15, 2024.

Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance.

ASU 2023-09 should be applied on a prospective basis, but retrospective application is permitted.

We are currently evaluating the potential impact of adopting this new guidance on our consolidated financial statements and related disclosures.

Note 3 — Assets Held for Sale

Assets held for sale include the net book value of assets the Company plans to sell within the next 12 months and are primarily related to excess assets acquired from the Basic Acquisition.

Assets held for sale include the net book value of assets the Company plans to sell within the next 12 months and are related to excess assets acquired from the Basic Energy Services, In.

(“Basic”) acquisition.

Long-lived assets that meet the held for sale criteria are held for sale and reported at the lower of their carrying value or fair value less estimated costs to sell.

The Company intends to sell the excess assets to fund the repayments under the Eclipse Loan and Security Agreement.

Refer to “Note 10 — Debt” for further details.

As of December 31, 2022, the Company classified land and buildings within our High Specification Rigs and Processing Solutions and Ancillary Services segments, which are being actively marketed, as held for sale.

During the year ended December 31, 2022, the Company recorded an impairment of $ 1.3 million to assets held for sale as the carrying value exceeded the fair value less estimated costs to sell.

Assets held for sale at December 31, 2022 consisted of the following (in millions):

December 31, 2022

Land and buildings $ 2.2

Other property and equipment 1.0

Assets held for sale $ 3.2

As of March 1, 2023, the Company sold $ 0.9 million and $ 1.0 million land and buildings and other property and equipment, respectively, that were classified as held for sale as of December 31, 2022.

As of December 31, 2023, the Company classified $ 0.6 million of land and buildings within our High Specification Rigs segment as held for sale as they are being actively marketed.

For the year ended December 31, 2023, the Company recognized a gain on assets previously classified as held for sale of $ 1.9 million and recognized a loss on the sale of assets previously held in Property and equipment, net of $ 0.1 million, which nets to the $ 1.8 million gain on sale of assets on the Consolidated Statements of Operations.

Note 4 — Property and Equipment, Net

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Property and equipment, net $ 226.3 $ 221.6

On August 9, 2023, pursuant to an asset purchase agreement dated August 4, 2023, the Company acquired certain fixed assets from Pegaso Energy Services, LLC (“Pegaso acquisition”) for consideration of $ 7.3 million paid in cash.

The fixed assets acquired from Pegaso were primarily engaged in pump down services for its customers.

Under ASC 805 Business Combination, the Company accounted for the Pegaso acquisition as an asset acquisition.

The consideration paid is similar to the fair value of the assets acquired and the Company allocated the consideration paid to each of the assets following the cost accumulation model.

As of December 31, 2023, eight of the fifteen acquired pumps are in service.

As of December 31, 2023, all acquired assets are classified as construction in progress.

The Company is completing repairs on these assets prior to transfer to depreciable fixed asset accounts.

Depreciation expense was $ 39.2 million and $ 43.7 million for the years ended December 31, 2023 and 2022, respectively.

The Company had assets under finance leases of $ 11.7 million and $ 12.3 million for the years ended December 31, 2022 and 2021, respectively.

For the year ended December 31, 2022, the Company modified the estimated useful life of high specification rigs from 20 years to 15 years and determined the impact on depreciation was immaterial.

A change in useful life is treated as a change in accounting estimate and is applied prospectively.

During the year ended December 31,

2022, the Company reclassified $ 9.0 million of property and equipment to Assets held for sale and disposed of $ 19.2 million of assets mostly acquired from the Basic Acquisition with a recognized Gain on sale of assets of $ 0.7 million.

Note 6 — Intangible Assets

The Company had assets under finance leases of $ 12.4 million and $ 11.7 million for the years ended December 31, 2023 and 2022, respectively.

The Company reclassified $ 0.6 million and $ 9.0 million of property and equipment to Assets held for sale for the years ended December 31, 2023 and 2022, respectively.

Impairment expense on fixed assets consists of non-cash impairment charges relating to long-lived assets.

Impairments are determined using management’s judgment about our anticipated ability to continue to use fixed assets in-service and under development, current economic and market conditions and their effects based on information available as of the date of these unaudited interim condensed financial statements.

During the years ended December 31, 2023 and 2022, the Company recognized a fixed assets impairment charge of $ 0.4 million and $ 1.3 million, respectively, to reduce the carrying value of the property to estimated net realizable value.

Note 5 — Intangible Assets, Net

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

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The Company has operating leases, primarily for real estate and equipment, with terms that vary from one to nine years , included in operating lease costs in the table below.

The operating leases are included in Operating leases, right-of-use assets, Other current liabilities and Operating leases, right-of-use obligations in the Consolidated Balance Sheets.

The operating leases are included in Short-term lease liability and Long-term lease liability in the Consolidated Balance Sheets.

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 Consolidated Statements of Operations.

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For the years ending December 31, Total

Thereafter 0.2

Total future minimum lease payments 11.3

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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, Other current liabilities and Other long-term liabilities in the Consolidated Balance Sheets.

The finance leases are included in Property and equipment, net, Short-term lease liability and Long-term lease liability in the Consolidated Balance Sheets.

Lease costs and other information related to finance leases are as follows (in millions):

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Note 8 — Other Financing Liabilities

During the year ended December 31, 2021, the Company entered into an agreement to sell a parcel of land and a building attached thereto, and subsequently entered into a lease agreement to lease such property.

The Company received cash of $ 12.1 million from the sale of the land and building.

The lease contains a 15-year term and rent escalations of two percent per annum.

During the year ended December 31, 2021, the Company entered into an agreement to sell certain of other fixed assets and subsequently entered into a lease agreement to lease such fixed assets.

The Company received cash of $ 3.5 million from the sale of the fixed assets.

The leased assets are to be paid over 18 to 60 months.

These sales did not qualify for sale accounting, therefore the leases were classified as other financing liabilities and no gain or loss was recorded.

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

The Company has sale, lease-back agreements for land and certain other fixed assets with terms that vary from 18 months to 13 years.

The sales 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 the year ended December 31, 2023, aggregate future lease payments of the financing liabilities are as follows (in millions):

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

Wells Fargo Revolving Credit Facility $ — $ —

Eclipse Revolving Credit Facility $ — $ 1.4

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Installment Purchases 0.1 0.5

Eclipse Term Loan B — 11.9

Total Debt 0.1 18.4

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Long term-debt, net $ — $ 11.6

Wells Fargo Bank, N.A.

Credit Agreement

On May 31, 2023, the Company entered into a Credit Agreement with Wells Fargo Bank, N.A., providing the Company with a secured credit facility (“Wells Fargo Revolving Credit Facility”) in an aggregate principal amount of up to $ 75.0 million.

Debt under the Credit Agreement is secured by a lien on substantially all of the Company’s assets.

The Company was in compliance with the Credit Agreement covenant by maintaining a fixed charge coverage ratio of greater than 1.0 as of December 31, 2023.

In addition, on September 25, 2023, the Company entered into an agreement with Wells Fargo Bank, N.A.

which designated an additional Letter of Credit in the amount of $ 1.6 million as part of incremental collateral requirements for the Company’s 2023 insurance renewal.

This line of credit falls under the Wells Fargo Revolving Credit Facility aggregate principal amount and matures on September 25, 2024.

The interest rate for this Letter of Credit was approximately 1.8 % for the month ended December 31, 2023.

The Wells Fargo Revolving Credit Facility was drawn in part on May 31, 2023, to repay the Revolving Credit Facility, M&E Term Loan Facility, and the Secured Promissory Note.

The undrawn portion of the Wells Fargo Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other-permitted uses, including the financing of permitted investments and restricted payments, such as dividends and share repurchases.

The Wells Fargo Revolving 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.

The Company’s eligible accounts receivable serve as collateral for the borrowings under the Wells Fargo Revolving Credit Facility, which is scheduled to mature on May 31, 2028.

The Wells Fargo Revolving Credit Facility includes an acceleration clause and cash dominion provisions under certain circumstances that permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Wells Fargo Revolving Credit Facility.

The borrowings of the Wells Fargo Revolving Credit Facility, therefore, will be classified as Long-term debt, current portion on the Condensed Consolidated Balance Sheet.

Under the Wells Fargo Revolving Credit Facility, the total loan capacity is $ 72.6 million, which is based on a borrowing base certificate in effect as of December 31, 2023.

The Company did not have any borrowings under the Wells Fargo Revolving Credit Facility.

The Company does have a $ 3.2 million in Letters of Credit open under the facility, leaving a residual $ 69.4 million available for borrowings as of December 31, 2023.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 1.75 % to 2.25 % in excess of SOFR and 0.75 % to 1.25 % in excess of the Base Rate, dependent on the average excess availability.

The weighted average interest rate for the loan was approximately 7.0 % for the year ended December 31, 2023.

Eclipse Loan and Security Agreement

On September 27, 2021, the Company entered into a loan and security agreement with Eclipse Business Capital LLC (“EBC”) and Eclipse Business Capital SPV, LLC, as administrative agent providing the Company with a senior secured credit facility in an aggregate principal amount of $ 77.5 million (the “EBC Credit Facility”), consisting of (i) a revolving credit facility in an aggregate principal amount of up to $ 50.0 million (the “Revolving Credit Facility”), (ii) a machinery and equipment term loan facility in an aggregate principal amount of up to $ 12.5 million (the “M&E Term Loan Facility”) and (iii) a term loan B facility in an aggregate principal amount of up to $ 15.0 million (the “Term Loan B Facility”).

The Company capitalized fees of $ 2.7 million associated with the EBC Credit Facility, which are included in the Consolidated Balance Sheets within Other Assets.

Such fees will continue to be amortized through maturity and are included in interest expense, net on the Consolidated Statements of Operations.

The Company was in compliance with the Eclipse Loan and Security Agreement covenants as of December 31, 2022.

On January 7, 2022, the Company entered into the First Amendment to Loan and Security Agreement with EBC and Eclipse Business Capital SPV, LLC, which increased the Maximum Revolving Credit Facility Amount (as defined in the Amended Loan Agreement (as defined below)) to $ 65 million, among other things.

On September 23, 2022, the Company entered into the Fourth Amended Loan and Security Agreement with the EBC Lenders, which, among other things, designated the change in reference rate from LIBOR to SOFR and designated a Letter of Credit in the amount of $ 1.6 million to be utilized for working capital and general corporate purposes, as needed.

Revolving Credit Facility

The Revolving Credit Facility was drawn, in part, on September 27, 2021, to repay the indebtedness under the existing EBC Credit Facility, which was terminated in connection with such repayment, and to pay for the fees, costs and expenses incurred in connection with the EBC Credit Facility.

The undrawn portion of the Revolving Credit Facility is available to fund working capital and other general corporate expenses and for other permitted uses, including the financing of permitted investments and restricted payments.

The Revolving 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.

The Company’s eligible accounts receivable serves as collateral for the borrowings under the Revolving Credit Facility and is scheduled to mature in September 2025.

The Revolving Credit Facility includes a subjective acceleration clause and cash dominion provisions that

permits the administrative agent to sweep cash daily from certain bank accounts into an account of the administrative agent to repay the Company’s obligations under the Revolving Credit Facility.

The borrowings of the Revolving Credit Facility, therefore, are classified as current maturities of long-term debt on the Consolidated Balance Sheet.

Under the Revolving Credit Facility, the maximum borrowing capacity was $ 60.3 million, which was based on a borrowing base certificate in effect as of December 31, 2022.

The Company had outstanding borrowings of $ 1.4 million under the Revolving Credit Facility and a $ 1.6 million Letter of Credit, leaving a residual $ 57.3 million available for borrowings as of December 31, 2022.

Borrowings under the Revolving Credit Facility bear interest at a rate per annum ranging from 4.5 % to 5.0 % in excess of SOFR and 3.5 % to 4.0 % in excess of the Base Rate, dependent on the fixed cost coverage ratio, through January 1, 2023.

The weighted average applicable margin for the loan was 6.6 % for the year ended December 31, 2022.

The Company capitalized fees of $ 1.8 million associated with the Revolving Credit Facility, which are included in Other Assets in the Consolidated Balance Sheets.

Such fees will be amortized through maturity.

Unamortized debt issuance costs as of December 31, 2022 were $ 1.3 million.

M&E Term Loan Facility

Under the M&E Term Loan Facility, the Company had outstanding borrowings of $ 10.4 million as of December 31, 2022, where the monthly installments of $ 0.2 million commenced on March 1, 2022.

Borrowings under the M&E Term Loan Facility bear interest at a rate per annum equal to 8 % in excess of SOFR and 7 % in excess of the Base Rate.

The weighted average interest rate for the loan was 9.9 % for the year ended December 31, 2022.

The M&E Term Loan Facility is secured by a lien on certain high-spec rig assets and is scheduled to mature in September 2025.

Principal amounts repaid are not available to be reborrowed.

The Company capitalized fees on $ 0.3 million associated with this M&E Term Loan Facility, which are included in the Consolidated Balance Sheets as a discount to the long-term debt, net.

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

Unamortized debt issuance costs as of December 31, 2022 were $ 0.2 million.

On October 1, 2021, Term Loan B was finalized in connection with the closing of the Basic Acquisition and was drawn in full to repay borrowings under the Revolving Credit Facility.

Borrowings under Term Loan B bore interest at a rate per annum equal to 12 % in excess of the LIBOR Rate and 11 % in excess of the Base Rate.

The weighted average interest rate for Term Loan B was 13.0 % through the maturity date of August 16, 2022.

The Company capitalized fees of $ 0.6 million associated with Term Loan B, which were included in the Consolidated Balance Sheets as a discount to the long-term debt, current portion.

Such fees were amortized through maturity and are included in Interest expense, net on the Consolidated Statement of Operations.

On August 16, 2022, the remaining balance of the loan was $ 0.3 million, which was paid utilizing funds from the Revolving Credit Facility.

At the time, the Company had capitalized fees associated with Term Loan B of $ 0.1 million, which was charged to interest expense on the Consolidated Statement of Operations.

On May 31, 2023, the Company extinguished the Eclipse Revolving Credit Facility and Eclipse M&E Term Loan Facility, paying the remaining principal amount of $ 10.4 million associated with the Eclipse M&E Term Loan Facility for the five months ended May 31, 2023.

Of this amount, $ 8.4 million was outstanding at the time of debt extinguishment, and repaid utilizing funds from the Wells Fargo Revolving Credit Facility.

The Company recognized a loss on the retirement of debt of $ 2.4 million in connection with the initiation of the Wells Fargo Revolving Credit Facility.

For the nine months ended September 30, 2022, the Company made principal payments totaling $ 12.4 million towards the Eclipse Term Loan B Facility, which was fully repaid on August 16, 2022, and $ 1.5 million towards the Eclipse M&E Term Loan Facility

Secured Promissory Note

In connection with the PerfX Acquisition, on July 8, 2021, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger Services, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired.

Certain of the assets acquired serve as collateral under the Secured Promissory Note.

As of December 31, 2022, the aggregate principal balance outstanding was $ 6.1 million.

Borrowings under the Secured Promissory Note bear interest at a rate of 8.5 % per annum and are scheduled to mature in January 2024.

On July 8, 2021, the Company acquired the assets of PerfX Wireline Services (“PerfX”), a provider of wireline services that operated in Williston, North Dakota and Midland, Texas.

In connection with the PerfX acquisition, Bravo Wireline, LLC, a wholly owned subsidiary of Ranger, entered into a security agreement with Chief Investments, LLC, as administrative agent, for the financing of certain assets acquired.

Borrowings under the Secured Promissory Note bear interest at a rate of 8.5 % per annum and was scheduled to mature in January 2024.

For the five months ended May 31, 2023, the Company made principal payments to the Secured Promissory Note totaling $ 6.2 million, of which $ 5.4 million was related to the debt extinguishment and was repaid utilizing funds from the Wells Fargo Revolving Credit Facility.

Other Installment Purchases

1 unchanged sentence

As of December 31, 2023, the aggregate principal balance outstanding under the Installment Agreements was $ 0.1 million and is payable ratably over 36 months from the time of each purchase.

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

For the year ended December 31, 2023, the Company paid down the Installment Agreements by $ 0.4 million.

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.

Debt Obligations and Scheduled Maturities

As of December 31, 2022, aggregate principal repayments of total debt for the next five years are as follows (in millions):

For the years ending December 31, Total

As of December 31, 2023, the $ 0.1 million aggregate future principal repayments of total debt is scheduled to mature in 2024.

Note 10 — Equity

Series A Preferred Stock

On September 10, 2021, the Company consummated the private placement under the Securities Purchase Agreement, with certain accredited investors of 6.0 million newly issued shares of Series A Convertible Preferred Stock, par value $ 0.01 per share, in exchange for cash consideration in an aggregate amount of $ 42.0 million.

The transaction closed on October 1, 2021, and during the year ended December 31, 2022, the Preferred Stock automatically converted into shares of the Company’s Class A Common Stock, on April 18, 2022, upon effectiveness of a registration statement filed on Form S-1 by the Company on March 31, 2022 (File No.

001-699-039).

Class A Common Stock

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Subsequent to such measurement period, the vesting of PSUs is subject to certification by the Board of Directors.

As defined in the respective PSU agreements, the performance criteria applicable to these awards is relative and absolute total shareholder return (“TSR”).

As defined in the respective PSU agreements, the performance criteria applicable to these awards is relative and absolute total stockholder return (“TSR”).

Achievement with respect to the relative TSR criteria is determined by the Company’s TSR compared to the TSR of the defined peer group during the measurement period.

Achievement with respect to the absolute TSR criteria is based on a measurement of the Company’s stock price growth during the measurement period.

The PSUs that were granted during the years ended December 31, 2022 and 2021 will cliff vest, subject to the achievement of applicable performance criteria and certification by the Board of Directors, on April 23, 2023, March 15, 2024, and December 31, 2024, respectively.

The PSUs that were granted during the years ended December 31, 2023 and 2022 will cliff vest, subject to the achievement of applicable performance criteria and certification by the Board of Directors, on March 15, 2024, December 31, 2024 and December 31, 2025, respectively.

As of December 31, 2023, there was an aggregate of $ 2.5 million of unrecognized compensation cost related to PSUs.

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Granted 87,176 $ 15.08 2.8 years 85,573 $ 12.08 2.8 years

Forfeited ( 35,777 ) ( 35,776 )

Vested ( 11,659 ) ( 10,056 )

Unvested at December 31, 2023 177,221 1.2 years 177,222 1.2 years

Issuance of shares in Connection with Acquisitions

As consideration for the Patriot Acquisition, the Company paid an aggregate of $ 11.0 million, which included 1.3 million shares of Class A Common Stock.

As consideration for the PerfX Acquisition, aggregate consideration paid was $ 20.1 million, which included 1.0 million shares of Class A Common Stock.

The Class A Common Stock issuance includes 100,000 shares that were issued by the Company on July 8, 2022, the 12-month anniversary of the acquisition date.

See “Note 3 — Business Combinations” for further details related to the acquisitions of Patriot and PerfX.

Issuance of shares to a Related Party

During the year ended December 31, 2021, the Company entered into a definitive agreement with affiliates of CSL Capital Management (“CSL”) and Bayou Holdings (“Bayou”) to terminate the Tax Receivable Agreement (the “TRA Termination Agreement”).

In consideration of the TRA Termination Agreement, the Company issued an aggregate of 376,185 shares of Class A Common Stock of the Company to affiliates of CSL Capital Management and Bayou Holdings.

Class B Common Stock

During the year ended December 31, 2021, in connection with the TRA Termination Agreement, Ranger LLC redeemed CSL’s and Bayou’s outstanding units in Ranger LLC and the corresponding shares of its Class B Common Stock for an equivalent number of shares of Class A Common Stock.

Following this redemption, no shares of Class B Common Stock were issued or outstanding.

Share Repurchases

On March 7, 2023, the Company announced a share repurchase program allowing the Company to purchase Class A Common Stock held by non-affiliates, not to exceed $ 35.0 million in aggregate value.

Share repurchases may take place in any transaction form as allowable by the Securities and Exchange Commission.

Approval of the program by the Board of Directors of the Company is specific for the next 36 months.

During the year ended December 31, 2023, the Company repurchased 1,806,000 shares of the Company’s Class A Common Stock for an aggregate $ 19.3 million, net of tax on the open market.

The Company has accrued stock repurchase excise tax of $ 0.2 million for the year ended December 31, 2023.

On March 4, 2024, the Company announced that its Board of Directors approved for a new share repurchase program authorization not to exceed $ 50.0 million in aggregate value.

Share repurchases may take place in any transaction form as allowable by the Securities and Exchange Commission.

Approval of the program by the Board of Directors of the Company is specific for the next 36 months.

On August 7, 2023, the Company’s Board of Directors declared a cash dividend of $ 0.05 per share of Class A Common Stock.

On September 8, 2023, the Company paid dividend distributions totaling $ 1.2 million to stockholders of record as of the close of business on August 18, 2023.

The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.

On October 31, 2023, the Company’s Board of Directors declared a cash dividend of $ 0.05 per share of Class A Common Stock.

On December 1, 2023, the Company paid dividend distributions totaling $ 1.2 million to stockholders of record as of the close of business on November 13, 2023.

The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.

Warrant from PerfX Acquisition

The PerfX acquisition purchase price included a warrant to acquire a 30 % ownership in the XConnect Business (“XConnect”), which expires on July 8, 2031.

XConnect is the manufacturer of a perforating gun system developed by the PerfX sellers alongside the PerfX wireline service business.

The warrant requires the Company to maintain a specific minimum level of purchases of XConnect’s manufactured products.

Should the Company fail to maintain the specified minimum level of purchases, a forfeiture event would occur;

however, the Company may elect to cure the forfeiture event through a cash payment to XConnect.

If the Company elects to not cure the forfeiture event, the ownership percentage would reduce to 15 %.

Upon the occurrence of a second uncured forfeiture event, the warrant is deemed to be cancelled.

The value of the warrant by the Company is negligible as of December 31, 2023.

The Company finalized the purchase price allocation in the fourth quarter of 2021.

Note 11 — Risk Concentrations

Customer Concentrations

During the year ended December 31, 2022, one customer, accounted for approximately 10 % of the Company’s consolidated revenue.

As of December 31, 2022, approximately 9 % of the consolidated accounts receivable balance was due from this customer.

For the year ended December 31, 2021, two customers accounted for approximately 15 % and 10 % of the Company’s consolidated revenue.

As of December 31, 2021, approximately 15 % of the consolidated accounts receivable balance, in aggregate, was due from these customers.

During the year ended December 31, 2023, two customers, accounted for approximately 10 % each of the Company’s consolidated revenue.

As of December 31, 2023, approximately 20 % of the consolidated accounts receivable balance was due from these customers.

For the year ended December 31, 2022, one customer accounted for approximately 10 % of the Company’s consolidated revenue.

As of December 31, 2022, approximately 9 % of the consolidated accounts receivable balance, in aggregate, was due from this customer.

Note 12 — Income Taxes

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Total income tax expense for the year ended December 31, 2023 differed from amounts computed by applying the U.S.

federal statutory tax rate of 21% primarily due to the change in Valuation allowance of $ 1.5 million and Bargain purchase gain of $ 0.8 million and for the year ended December 31, 2021 primarily due to a non-taxable bargain purchase gain.

The Company has recorded a valuation allowance against the realizable value of the loss carryforwards.

Management continues to assess the need for a valuation allowance, the analysis of which is subject to change based on numerous factors, including projections of future taxable income, which continues to be assessed based on available information each reporting period.

A subsequent increase or decrease in the valuation allowance would results in a corresponding increase or decrease to the net deferred tax assets and an increase or decrease to income tax expense in the period in which change occurs.

federal statutory tax rate of 21% primarily due to the impact of state income taxes as well as certain non-deductible expenses offset by the benefit from the release of a previously recorded valuation allowance against deferred tax assets and for the year ended December 31, 2022 primarily due to the change in valuation allowance of $ 1.5 million and bargain purchase gain of $ 0.8 million.

Historically, utilization of a portion of the Company's net operating loss carryforwards has been subject to limitations of utilization under Section 382 of the Internal Revenue Code of 1986 (“Section 382”), as amended.

The Company incurred an ownership change, triggering another Section 382 loss limitation, during the three months ended June 30, 2023.

Accordingly, the Company released all valuation allowances previously recorded resulting in a discrete tax benefit for the period ended September 30, 2023.

Years Ended December 31,

Current expense (benefit)

Current expense

Federal $ 0.1 $ —

Total current expense (benefit) 0.5 —

Deferred expense (benefit)

State 0.2 0.5

Total current expense 0.3 0.5

Deferred expense

Federal 5.6 0.2

State 1.3 0.2

Total deferred expense (benefit) 0.4 ( 6.2 )

Income tax expense (benefit) $ 0.9 $ ( 6.2 )

A reconciliation of the expected income tax expense (benefit) on income (loss) before income taxes using the statutory federal income tax rate of 21% for 2022 and 2021 to income tax expense (benefit) follows (in millions):

Income (loss) before income taxes $ 16.0 $ ( 8.3 )

Total deferred expense 6.9 0.4

Income tax expense $ 7.2 $ 0.9

A reconciliation of the expected income tax expense on income before income taxes using the statutory federal income tax rate of 21% for 2023 and 2022 to income tax expense follows (in millions):

Income before income taxes $ 31.0 $ 16.0

Statutory rate 21 % 21 %

Income tax expense (benefit) computed at statutory rate $ 3.4 $ ( 1.7 )

Income tax expense computed at statutory rate $ 6.5 $ 3.4

Reconciling items

State income taxes, net of federal tax benefit 1.2 0.7

Nontaxable income allocated to non-controlling interest — 2.2

Bargain purchase gain — ( 0.8 )

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Non-deductible expenses and other 0.5 ( 0.9 )

Income tax expense (benefit) $ 0.9 $ ( 6.2 )

As of December 31, 2022, the Company has net operating loss carryforwards of approximately $ 69.5 million, consisting of $ 6.9 million of section 382 limited losses expiring beginning in 2034, an estimated $ 9.9 million of non-section 382 limited losses expiring beginning in 2037 and $ 52.7 million of non-section 382 limited losses which carryforward indefinitely.

The tax effects of the cumulative temporary differences resulting in the net deferred income tax liability, which are shown in Other Long-Term Liabilities on the consolidated balance sheet, are as follows (in millions):

Income tax expense $ 7.2 $ 0.9

As of December 31, 2023, the Company has net operating loss carryforwards of approximately $ 57.9 million, all of which are subject to section 382 limitations.

Of this amount, $ 51.5 million of losses carryforward indefinitely with the remaining loss carried forward expiring beginning in 2034.

The tax effects of the cumulative temporary differences resulting in the net deferred income tax liability, which are shown in Deferred tax liability on the consolidated balance sheet, are as follows (in millions):

Deferred income tax assets

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Net deferred income tax liability $ ( 11.3 ) $ ( 4.6 )

Other tax matters

The Company is subject to the following material taxing jurisdictions:

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The Company remains subject to examination for federal income taxes and state income taxes for tax years 2020 through 2023.

In August 2022, President Biden signed the Inflation Reduction Act of 2022 (“IRA 2022”) (Public Law Number 117-169) into law.

This legislation is not expected to have a material impact on our financial statements.

Other tax matters

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.

As of December 31, 2022, the Company had deferred payroll tax payments of $ 0.9 million and is disclosed in Accounts payable on the Consolidated Balance Sheet;

however, there were no other material tax impacts to the Consolidated Financial Statements as it related to COVID-19 measures.

The deferred payroll tax payment was paid in January 2023.

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 December 31, 2023, the Company had not established any reserves for, nor recorded any unrecognized benefits related to, uncertain tax positions.

Note 13 — Earnings per Share

Earnings per share is based on the amount of earnings allocated to the shareholders and the weighted average number of shares outstanding during the period for each class of common stock.

Earnings per share is based on the amount of earnings allocated to the stockholders and the weighted average number of shares outstanding during the period for each class of common stock.

Diluted earnings, or loss, per share is computed giving effect to all potentially dilutive shares.

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Income attributable to Ranger Energy Services, Inc.

$ 23.8 $ 15.1

Net income attributable to Class A Common Stock $ 23.8 $ 15.1

Income attributable to Ranger Energy Services, Inc.

$ 23.8 $ 15.1

Net income attributable to Class A Common Stock $ 23.8 $ 15.1

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Equity compensation awards 391,343 400,975

Conversion of Series A Preferred Stock — 1,500,000

Weighted average number of shares - diluted 24,991,494 23,370,598

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Diluted earnings per share $ 0.95 $ 0.65

During the year ended December 31, 2021, the Company excluded 0.2 million of equity-based awards, as the effect was anti-dilutive.

Note 14 — Commitments and Contingencies

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From time to time, the Company is involved in various legal matters arising in the normal course of business.

The Company does not believe that the ultimate resolution of these matters will have a material adverse effect on its consolidated financial position or results of operations.

The Company does not believe that the ultimate resolution of these currently pending matters will have a material adverse effect on its consolidated financial position or results of operations.

Note 15 — Related Party Transactions

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Among other things, the Stockholders’ Agreement provides CSL and Bayou Wells Holdings Company, LLC (“Bayou Holdings”) with the right to designate nominees to Ranger’s Board of Directors (each, as applicable, a “CSL Director” or “Bayou Director”) as follows:

• for so long as CSL beneficially owns at least 50 % of Ranger’s common stock, at least three members of the Board of Directors shall be CSL Directors and at least two members of the Board of Directors shall be Bayou Directors (which may include Richard Agee, Brett Agee or any other person that may be designated by Bayou Holdings in accordance with the terms of the Stockholders’ Agreement);

• for so long as CSL beneficially owns at least 50 % of Ranger’s common stock, at least three members of the Board of Directors shall be CSL Directors and at least two members of the Board of Directors shall be Bayou Directors (which may include Brett Agee or any other person that may be designated by Bayou Holdings in accordance with the terms of the Stockholders’ Agreement);

• for so long as CSL beneficially owns less than 50 % but at least 30 % of Ranger’s common stock, at least three members of the Board of Directors shall be CSL Directors;

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In the event the size of Ranger’s Board of Directors is increased or decreased at any time to other than eight directors, CSL’s nomination rights will be proportionately increased or decreased, respectively, rounded up to the nearest whole number.

Tax Receivable Agreement (“TRA”) Termination and Class B Common Stock Redemption

During the year ended December 31, 2021, the Company entered into a definitive agreement with affiliates of CSL and Bayou to terminate the TRA.

In consideration of the TRA Termination Agreement, the Company issued an aggregate of 376,185 shares of Class A Common Stock of the Company to affiliates of CSL Capital Management and Bayou Holdings.

Following this redemption, no shares of Class B Common Stock were issued or outstanding.

Registration Rights Agreement

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Therefore, the net property and equipment values have been removed from the segment data presented below.

Additionally, as a result of three business combinations, coupled with executive management changes, the Company reevaluated the reportable segments accordingly during the fourth quarter of 2021 and bifurcated the legacy Completion and Other Services segment into Wireline Services, with the remaining business added to the Processing Solutions and Ancillary Services.

The following is a description of the reporting segments as updated during the fourth quarter of 2021:

• High Specification Rigs .

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

• Wireline Services .

Provides services necessary to bring and maintain a well on production and consists of our wireline completion, wireline production, and pump down lines of business.

• Processing Solutions and Ancillary Services .

Provides other services often utilized in conjunction with our High Specification Rigs and Wireline Services segments.

These services include equipment rentals, plug and abandonment, logistics hauling, processing solutions, as well as snubbing and coil tubing.

The Company incurs costs, indicated as Other, that are not allocable to any of the operating segments and includes mostly corporate general and administrative expenses as we all as depreciation of office furniture and fixtures and other corporate assets.

Segment information for the years ended December 31, 2023 and 2022 is as follows (in millions):

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Interest expense, net — — — 3.5 3.5

Income tax expense (benefit) — — — 0.9 0.9

Gain on bargain purchase, net of tax — — — ( 3.6 ) ( 3.6 )

Income tax expense — — — 7.2 7.2

Loss on debt retirement — — — 2.4 2.4

Net income (loss) $ 44.0 $ 7.1 $ 15.5 $ ( 42.8 ) $ 23.8

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Depreciation and amortization 26.2 11.0 5.3 1.9 44.4

Impairment of fixed assets — — — 1.3 1.3

Gain on sale of assets — — — ( 0.7 ) ( 0.7 )

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Interest expense, net — — — 7.3 7.3

Income tax expense (benefit) — — — ( 6.2 ) ( 6.2 )

Income tax expense — — — 0.9 0.9

Gain on bargain purchase, net of tax — — — ( 3.6 ) ( 3.6 )

1 unchanged sentence

Capital expenditures $ 8.2 $ 4.4 $ 6.5 $ — $ 19.1

Note 17 — Subsequent Events

In 2020, the U.S.

government enacted the Coronavirus Aid, Relief and Security Act (the “CARES Act”) as a response to the COVID-19 pandemic, aiming to offer certain reliefs.

Among the stimulus measures included in the CARES Act is a provision for an Employee Retention Credit (“ERC”), a refundable tax credit for employers who retained employees on the payroll during the pandemic.

We are currently in the process of finalizing claims and anticipate receiving payment from the United States Internal Revenue Service with respect to the ERC in 2024.

In 2024, the Company has continued repurchasing shares in the open market.

Total shares repurchased through February 29, 2024 amounts to 736,800 shares of the Company’s Class A Common Stock for an aggregate $ 7.3 million.

On March 4, 2024, the Company announced that its Board of Directors approved for a new share repurchase program authorization not to exceed $ 50.0 million in aggregate value.

Additionally, the Board of Directors declared a quarterly cash dividend of $ 0.05 per share payable April 5, 2024 to common stockholders of record at the close of business on March 15, 2024.

The declaration of any future dividends is subject to the Board of Directors’ discretion and approval.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosures

1 unchanged sentence

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-K

Item 8. Financial Statements and Supplementary Data