rnet-8k_20200508.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d)

of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): May 8, 2020

 

RigNet, Inc.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

001-35003

 

76-0677208

(State or other jurisdiction

of incorporation)

 

(Commission

file number)

 

(I.R.S. Employer

Identification No.)

 

15115 Park Row Blvd, Suite 300, Houston, Texas

 

77084-4947

(Address of principal executive offices)

 

(zip code)

 

(281) 674-0100

(Registrant’s telephone number, including area code)

 

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240-14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240-13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 240.12b-2 of this chapter).

 

Emerging growth company      ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.   ☐

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.001 par value per share

RNET

NASDAQ Global Select Market

 

 

 

 

 


 

Item   2.02  Results of Operations and Financial Condition

The following information is disclosed pursuant to Item 2.02—Results of Operations and Financial Condition:

On May 8, 2020, RigNet, Inc. issued a press release announcing its operating results for the three months ended March 31, 2020. The press release is attached as Exhibit 99.1.

In accordance with General Instruction B.2 of Form 8-K, the information in this Current Report on Form 8-K, including the exhibits, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act except as shall be expressly set forth by specific reference in such filing.

Item  9.01 — Financial Statements and Exhibits

(d)  Exhibits

 

Exhibit Number

 

Exhibit Description

99.1

 

Press release of RigNet, Inc. dated May 8, 2020, announcing its operating results for the three months ended March 31, 2020

 

 

 

2


 

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

RIGNET, INC.

 

 

 

By:

 

/s/ LEE AHLSTROM

Lee Ahlstrom

Senior Vice President and Chief Financial Officer

(Principal Financial Officer)

 

Date: May 8, 2020

 

3

rnet-ex991_6.htm

Exhibit 99.1

 

PRESS RELEASE

FOR IMMEDIATE RELEASE

 

 

RigNet Announces First Quarter 2020 Earnings Results

 

 

HOUSTON – May 8, 2020 – RigNet, Inc. (NASDAQ: RNET, the “Company”), a leading provider of ultra-secure, intelligent networking solutions and specialized applications, announced its results for the quarter ended March 31, 2020.

 

 

First quarter 2020 revenue of $58.8 million, net loss of $26.8 million or $1.34 per share

 

Revenue increased 2.2% to $58.8 million year-over-year; declined 8.3% compared to prior quarter

 

Quarterly results included a non-cash impairment of goodwill of $23.1 million or $1.15 per share

 

Adjusted EBITDA of $8.4 million essentially flat with $8.4 million in the prior year quarter; declined 30% compared to prior quarter

 

Increased Managed Communications Services (MCS) Sites served to 1,351, or 0.8% compared to the prior quarter; sites declined by 0.7% compared to the prior year quarter

 

Project backlog of $22.4 million

 

“RigNet’s first quarter results were negatively impacted by the dual impacts of COVID-19 and unprecedented oil prices on energy industry activity,” said Steven Pickett, Chief Executive Officer and President. “We are seeing some of our customers stacking rigs and others delaying decisions on new projects or services, and we expect the second quarter may prove more challenging than in the first. In the midst of this historically difficult environment, our team is focused on reducing costs and guarding liquidity while we ensure we are meeting our customers’ needs.”  

 

Quarterly revenue was $58.8 million, an increase of $1.3 million, or 2.2%, compared to $57.5 million in the first quarter 2019 and a decrease of $5.3 million, or 8.3%, compared to $64.1 million in the prior quarter. Compared to the prior year quarter, Systems Integration (SI) grew by $3.0 million, or 41.3%, primarily due to progress on certain large projects and Apps & IoT revenue grew by $0.7 million, or 9.1%, primarily due to Intelie. These increases were partially offset by a $2.4 million decrease in Managed Communications Services (MCS) revenue largely due to service and install which had substantial revenue in prior year quarter from the expansion of our LTE network in the Gulf of Mexico. Compared to the fourth quarter 2019, MCS revenue grew by $0.6 million, or 1.6%, primarily due to certain equipment sales. The increase was partially offset by a decrease in Apps & IoT revenue of $1.3 million, or 13.3%, primarily due to the suspension of a number of projects as a result of the current environment. SI revenue decreased by $4.6 million, or 31.4%, primarily due to substantial revenue on a prior quarter project.

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 2 of 11

 

Net loss attributable to common stockholders in the first quarter 2020 was $26.8 million, or $1.34 per share, compared to net loss attributable to common stockholders of $12.0 million, or $0.63 per share, in the first quarter of 2019 and net loss attributable to common stockholders of $0.5 million, or $0.03 per share, in the fourth quarter 2019.

 

First quarter 2020 results include a non-cash goodwill impairment charge of $23.1 million or $1.15 per share. Excluding this charge, net loss attributable to common stockholders in the first quarter 2020 was $3.7 million or $0.18 per share. Fourth quarter 2019 results include a gain on the sale of certain non-core assets of $4.2 million or $0.21 per share. Excluding this gain, net loss attributable to common stockholders in the fourth quarter 2019 was $4.8 million, or $0.24 per share.

 

Adjusted EBITDA, a non-GAAP measure defined and reconciled to GAAP net loss (as described below), remained flat compared to $8.4 million in the first quarter of 2019. Adjusted EBITDA was $11.9 million in the prior quarter.

 

Capital expenditures for the three months ending March 31, 2020 totaled $3.7 million compared to $7.1 million for the three months March 31, 2019 and $8.0 million for the quarter ending December 31, 2019. Additionally, in the fourth quarter of 2019, the Company vendor-financed $2.8 million of equipment in the Managed Communication Services segment, which was included in short and long-term liabilities on the December 31st balance sheet. In the first quarter of 2020, the Company finalized a long-term debt agreement for this vendor financing and as of March 31, 2020 this has been presented as short- and long-term debt on the balance sheet. After accounting for the accrued capital expenditures and vendor financed equipment, capital expenditures on a cash basis were $5.3 million and $5.6 million in quarter ended March 31, 2020 and December 31, 2019, respectively.

 

Contracting and Operational Update

 

In the first quarter of 2020, RigNet signed a long-term agreement with Northern Offshore to provide several solutions including VSAT Managed Communications Services, CrewFlix Video on Demand, CrewHotspot internet, and Enhanced Cyber Services (ECS) to their fleet of rigs in the Middle East. Furthermore, RigNet signed a 5-year agreement with U.S. General Service Administration (GSA) to provide Information Technology Professional Services. The contract includes three 5-year renewal periods for a potential contract term of 20 years. Through the GSA Information Technology Large Category - federal, state, and local governments now have access to RigNet’s state-of-the-art global networking solutions, enhanced cybersecurity, military-grade hardware encryption and real-time machine learning applications. Finally, our SI team received a contract award for a project in the Middle East with a value greater than $4.0 million.

 

During the first quarter of 2020, RigNet instituted a global work-from-home policy in response to the COVID-19 pandemic. Employees around the world have continued to serve our customers from their homes and in the field while following prescribed social distancing guidelines. With the exception of a singular service call in Iraq, where a government mandate forbade any travel, our technicians have met on-site customer needs as they arose in order to maintain their critical communications infrastructure. Mr. Pickett said, “I am extraordinarily pleased with the way our

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 3 of 11

 

employees have responded to this crisis. Their dedication and focus in difficult circumstances are a testament to why RigNet is one of the world’s premier digital transformation companies.”

 

MCS Site count in the first quarter 2020 was 1,351 compared to 1,360 in the first quarter 2019 and 1,340 in the fourth quarter 2019.

 

Project backlog (using percentage of completion accounting) was $22.4 million in the first quarter 2020 and $43.1 million in the first quarter 2019 and was $26.2 million fourth quarter 2019.

 

Additional Detail

 

In the first quarter 2020, the Company recorded a non-cash goodwill impairment charge of $23.1 million as result of the carrying amounts in two of our reporting units were in excess of their fair value as a result of the effect of COVID-19 and unprecedented oil and gas prices on the Company’s internal forecast. The charge primarily related to goodwill in MCS of $21.8 million and Systems Integration of $1.4 million. Additionally, the Company recorded $0.1 million in acquisition costs and $0.3 million in executive departure costs. As of March 31, 2020, the Consolidated Leverage Ratio was 3.00 and Consolidated Fixed Charge Coverage Ratio was 2.14. In the quarter ended March 31, 2019, the Company recorded $2.1 million in GX dispute Phase II costs. In addition, the company recorded $0.4 million in acquisition costs and $0.6 million in restructuring costs. In the fourth quarter 2019, the Company recorded $4.3 million in net gain on the sale of property plant and equipment, and a net $1.2 million increase in fair value of earn-outs / contingent consideration consisting of a $1.6 million increase in the fair value of the Intelie earn-out partially offset by a $0.4 million decrease in the Cyphre contingent consideration.

 

Earnings Call Information

 

An Earnings Call for investors will be held at 11:00 a.m. Eastern Time (10:00 a.m. Central Time) on Monday, May 11, 2020, to discuss RigNet’s first quarter 2020 results. The call may be accessed live over the telephone by dialing +1 (877) 845-0777, or, for international callers, +1 (760) 298-5090. Interested parties may also listen to a simultaneous webcast of the conference call by logging onto RigNet’s website at www.rig.net in the Investors – Webcasts and Presentations section.  A replay of the conference call webcast will also be available on our website for approximately thirty days following the call.

 

 

 


 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 4 of 11

 

About RigNet

 

RigNet (NASDAQ: RNET) delivers advanced software and communications infrastructure that allow our customers to realize the business benefits of digital transformation. With world-class, ultra-secure solutions spanning global IP connectivity, bandwidth-optimized OTT applications, IIoT big data enablement, and industry-leading machine learning analytics, RigNet supports the full evolution of digital enablement, empowering businesses to respond faster to high priority issues, mitigate the risk of operational disruption, and maximize their overall financial performance. RigNet is headquartered in Houston, Texas with operations around the world.

 

For more information on RigNet, please visit www.rig.net. RigNet is a registered trademark of RigNet, Inc.

 

Forward Looking Statements

 

This press release includes “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 – that is, statements related to future, not past, events. Opinions, expectations with respect to conditions in the oil and gas industry, customer perceptions of value, entry into new customer contracts, growth prospects, and the ultimate payout amount of any earnout / contingent consideration are examples of forward-looking statements in this press release. Forward-looking statements are based on current expectations and include any statement that does not directly relate to a current or historical fact. In this context, forward-looking statements often address our expected future business and financial performance, including the expected benefits of acquiring and integrating other businesses, and often contain words such as “anticipate,” “believe,” “intend,” “will,” “expect,” “plan” or other similar words. These forward-looking statements involve certain risks and uncertainties, including those risks set forth in Item 1A – Risk Factors of the Company’s most recent 10-K filing, and Item 1A- Risk Factors of the Company’s 10-Q filing for the quarter ended March 31, 2020, to be filed with the SEC on Monday, May 11, 2020, and ultimately may not prove to be accurate. Actual results and future events could differ materially from those anticipated in such statements. For further discussion of risks and uncertainties, individuals should refer to RigNet’s SEC filings. RigNet undertakes no obligation and does not intend to update these forward-looking statements to reflect events or circumstances occurring after this press release. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. All forward-looking statements are qualified in their entirety by this cautionary statement.

 

Non-GAAP Financial Measure

 

This press release contains the non-GAAP measure Adjusted EBITDA, a measure we believe is useful to investors as a supplemental measure to evaluate overall operating performance and is an integral component of financial covenant ratios in our credit agreement. Adjusted EBITDA is a financial measure that is not calculated in accordance with generally accepted accounting

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 5 of 11

 

principles, or GAAP. We refer you to the Company’s Annual Report on Form 10-K for the year ended December 31, 2019, filed with the SEC on Wednesday, March 11th, 2020, for a more detailed discussion of the uses and limitations of Adjusted EBITDA.

 

We define Adjusted EBITDA as net loss plus interest expense; income tax expense (benefit); depreciation and amortization; impairment of goodwill, intangibles, property, plant and equipment; (gain) loss on sales of property, plant and equipment, net of retirements; change in fair value of earn-outs and contingent consideration; stock-based compensation; acquisition costs; executive departure costs; restructuring charges; the GX dispute; the GX dispute Phase II costs and non-recurring items.

 

A reconciliation of net loss to Adjusted EBITDA is found in the table below.

 

Media / Investor Relations Contact

 

Lee M. Ahlstrom, SVP & CFO

Tel:  +1 (281) 674-0699

RigNet, Inc.

investor.relations@rig.net

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 6 of 11

 

RIGNET, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

2020

 

 

December 31,

2019

 

 

March 31,

2019

 

 

 

(in thousands, except per share amounts)

 

Unaudited Consolidated Statements of

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive Loss Data:

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

58,761

 

 

$

64,096

 

 

$

57,510

 

Expenses:

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenue (excluding depreciation and amortization)

 

 

37,950

 

 

 

41,116

 

 

 

36,456

 

Depreciation and amortization

 

 

6,931

 

 

 

7,366

 

 

 

8,912

 

Impairment of goodwill

 

 

23,141

 

 

 

-

 

 

 

-

 

Change in fair value of earn-out/contingent consideration

 

 

-

 

 

 

1,215

 

 

 

-

 

Gain on sales of property, plant and

   equipment, net of retirements

 

 

-

 

 

 

(4,240

)

 

 

-

 

Selling and marketing

 

 

2,812

 

 

 

2,701

 

 

 

3,793

 

General and administrative

 

 

13,829

 

 

 

10,325

 

 

 

16,470

 

Total expenses

 

 

84,663

 

 

 

58,483

 

 

 

65,631

 

Operating income (loss)

 

 

(25,902

)

 

 

5,613

 

 

 

(8,121

)

Other expense, net

 

 

(1,849

)

 

 

(1,173

)

 

 

(1,166

)

Income (loss) before income taxes

 

 

(27,751

)

 

 

4,440

 

 

 

(9,287

)

Income tax (expense) benefit

 

 

980

 

 

 

(4,877

)

 

 

(2,666

)

Net loss

 

$

(26,771

)

 

$

(437

)

 

$

(11,953

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Net Loss Per Share - Basic and Diluted

 

 

 

 

 

 

 

 

 

 

 

 

Net loss attributable to RigNet, Inc.

     common stockholders

 

$

(26,841

)

 

$

(523

)

 

$

(11,983

)

Net loss per share attributable to

     RigNet, Inc. common stockholders, basic

 

$

(1.34

)

 

$

(0.03

)

 

$

(0.63

)

Net loss per share attributable to

     RigNet, Inc. common stockholders, diluted

 

$

(1.34

)

 

$

(0.03

)

 

$

(0.63

)

Weighted average shares outstanding, basic

 

 

20,081

 

 

 

19,975

 

 

 

18,949

 

Weighted average shares outstanding, diluted

 

 

20,081

 

 

 

19,975

 

 

 

18,949

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Unaudited Non-GAAP Data:

 

 

 

 

 

 

 

 

 

 

 

 

Adjusted EBITDA

 

$

8,351

 

 

$

11,929

 

 

$

8,386

 

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 7 of 11

 

RIGNET, INC.

Reconciliation of Net Loss to Adjusted EBITDA

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

2020

 

 

December 31,

2019

 

 

March 31,

2019

 

 

 

(in thousands)

 

Reconciliation of Net Loss to Adjusted EBITDA:

 

 

 

 

 

 

 

 

 

 

 

 

Net loss

 

$

(26,771

)

 

$

(437

)

 

$

(11,953

)

Interest expense

 

 

1,528

 

 

 

1,667

 

 

 

1,238

 

Depreciation and amortization

 

 

6,931

 

 

 

7,366

 

 

 

8,912

 

Impairment of goodwill

 

 

23,141

 

 

 

-

 

 

 

-

 

(Gain) loss on sales of property, plant and equipment, net of retirements

 

 

282

 

 

 

(4,259

)

 

 

(7

)

Stock-based compensation

 

 

3,854

 

 

 

1,489

 

 

 

4,458

 

Restructuring costs

 

 

-

 

 

 

-

 

 

 

573

 

Change in fair value of earn-out/contingent

   consideration

 

 

-

 

 

 

1,215

 

 

 

-

 

Executive departure costs

 

 

298

 

 

 

-

 

 

 

-

 

Acquisition costs

 

 

68

 

 

 

11

 

 

 

350

 

GX dispute Phase II costs

 

 

-

 

 

 

-

 

 

 

2,149

 

Income tax expense (benefit)

 

 

(980

)

 

 

4,877

 

 

 

2,666

 

Adjusted EBITDA (non-GAAP measure)

 

$

8,351

 

 

$

11,929

 

 

$

8,386

 

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 8 of 11

 

RIGNET, INC.

Segment Information

(Unaudited)

 

 

 

Three Months Ended

 

 

 

March 31,

2020

 

 

December 31,

2019

 

 

March 31,

2019

 

 

 

(in thousands)

 

Managed Communications Services

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

39,896

 

 

$

39,264

 

 

$

42,333

 

Cost of revenue

 

 

25,502

 

 

 

24,235

 

 

 

26,985

 

Depreciation and amortization

 

 

4,659

 

 

 

5,042

 

 

 

6,264

 

Impairment of goodwill

 

 

21,755

 

 

 

-

 

 

 

-

 

Selling, general and administrative

 

 

2,807

 

 

 

2,842

 

 

 

3,797

 

Operating income (loss)

 

$

(14,827

)

 

$

7,145

 

 

$

5,287

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Applications and Internet-of-Things

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

8,743

 

 

$

10,083

 

 

$

8,015

 

Cost of revenue

 

 

4,561

 

 

 

4,264

 

 

 

4,497

 

Depreciation and amortization

 

 

1,182

 

 

 

1,217

 

 

 

1,231

 

Impairment of goodwill

 

 

-

 

 

 

-

 

 

 

-

 

Selling, general and administrative

 

 

1,620

 

 

 

1,552

 

 

 

565

 

Operating income

 

$

1,380

 

 

$

3,050

 

 

$

1,722

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Systems Integration

 

 

 

 

 

 

 

 

 

 

 

 

Revenue

 

$

10,122

 

 

$

14,749

 

 

$

7,162

 

Cost of revenue

 

 

7,887

 

 

 

12,618

 

 

 

4,974

 

Depreciation and amortization

 

 

164

 

 

 

171

 

 

 

662

 

Impairment of goodwill

 

 

1,386

 

 

 

-

 

 

 

-

 

Selling, general and administrative

 

 

404

 

 

 

372

 

 

 

1,124

 

Operating income

 

$

281

 

 

$

1,588

 

 

$

402

 

NOTE: Consolidated balances include the segments above along with corporate activities and intercompany eliminations.

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 9 of 11

 

RIGNET, INC.

CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

March 31,

 

 

December 31,

 

 

 

 

2020

 

 

 

2019

 

 

 

(in thousands, except share amounts)

 

ASSETS

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,614

 

 

$

12,941

 

Restricted cash

 

 

40

 

 

 

42

 

Accounts receivable, net

 

 

63,529

 

 

 

67,059

 

Costs and estimated earnings in excess of billings on uncompleted

   contracts (CIEB)

 

 

15,848

 

 

 

13,275

 

Prepaid expenses and other current assets

 

 

6,046

 

 

 

6,500

 

Total current assets

 

 

99,077

 

 

 

99,817

 

Property, plant and equipment, net

 

 

57,297

 

 

 

60,118

 

Restricted cash

 

 

1,523

 

 

 

1,522

 

Goodwill

 

 

20,464

 

 

 

46,792

 

Intangibles, net

 

 

26,871

 

 

 

30,145

 

Right-of-use lease asset

 

 

6,660

 

 

 

6,829

 

Deferred tax and other assets

 

 

5,702

 

 

 

5,757

 

TOTAL ASSETS

 

$

217,594

 

 

$

250,980

 

LIABILITIES AND EQUITY

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

23,252

 

 

$

28,517

 

Accrued expenses

 

 

17,635

 

 

 

16,660

 

Current maturities of long-term debt

 

 

8,747

 

 

 

10,793

 

Income taxes payable

 

 

2,420

 

 

 

2,649

 

GX dispute accrual

 

 

750

 

 

 

750

 

Deferred revenue and other current liabilities

 

 

11,966

 

 

 

11,173

 

Total current liabilities

 

 

64,770

 

 

 

70,542

 

Long-term debt

 

 

105,087

 

 

 

96,934

 

Deferred revenue

 

 

853

 

 

 

855

 

Deferred tax liability

 

 

2,034

 

 

 

2,672

 

Right-of-use lease liability - long-term portion

 

 

6,166

 

 

 

6,329

 

Other liabilities

 

 

22,614

 

 

 

26,771

 

Total liabilities

 

 

201,524

 

 

 

204,103

 

 

 

 

 

 

 

 

 

 

Equity:

 

 

 

 

 

 

 

 

Stockholders' equity

 

 

 

 

 

 

 

 

Preferred stock - $0.001 par value; 10,000,000 shares authorized; no

   shares issued or outstanding at March 31, 2020 and December 31, 2019

 

 

-

 

 

 

-

 

Common stock - $0.001 par value; 190,000,000 shares authorized;

   20,454,705 and 19,979,284 shares issued and outstanding at

   March 31, 2020 and December 31, 2019, respectively

 

 

20

 

 

 

20

 

Treasury stock - 432,432 and 203,756 shares at March 31, 2020 and

   December 31, 2019, respectively, at cost

 

 

(3,271

)

 

 

(2,693

)

Additional paid-in capital

 

 

188,425

 

 

 

184,571

 

Accumulated deficit

 

 

(142,514

)

 

 

(115,673

)

Accumulated other comprehensive loss

 

 

(26,659

)

 

 

(19,502

)

Total stockholders' equity

 

 

16,001

 

 

 

46,723

 

Non-redeemable, non-controlling interest

 

 

69

 

 

 

154

 

Total equity

 

 

16,070

 

 

 

46,877

 

TOTAL LIABILITIES AND EQUITY

 

$

217,594

 

 

$

250,980

 

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 10 of 11

 

RIGNET, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

 

 

Three Months Ended March 31,

 

 

 

2020

 

 

2019

 

 

 

(in thousands)

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net loss

 

$

(26,771

)

 

$

(11,953

)

Adjustments to reconcile net loss to net cash provided by operations:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

6,931

 

 

 

8,912

 

Impairment of goodwill

 

 

23,141

 

 

 

-

 

Stock-based compensation

 

 

3,854

 

 

 

4,458

 

Amortization of deferred financing costs

 

 

93

 

 

 

61

 

Deferred taxes

 

 

(626

)

 

 

2,469

 

Accretion of discount of contingent consideration payable for acquisitions

 

 

134

 

 

 

94

 

(Gain) loss on sales of property, plant and equipment, net of retirements

 

 

30

 

 

 

(7

)

Changes in operating assets and liabilities, net of effect of acquisition:

 

 

 

 

 

 

 

 

Accounts receivable, net

 

 

2,490

 

 

 

(6,777

)

Costs and estimated earnings in excess of billings on uncompleted contracts (CIEB)

 

 

(3,000

)

 

 

1,439

 

Prepaid expenses and other assets

 

 

213

 

 

 

85

 

Right-of-use lease asset

 

 

169

 

 

 

-

 

Accounts payable

 

 

(2,689

)

 

 

4,058

 

Accrued expenses

 

 

1,147

 

 

 

(38

)

Deferred revenue

 

 

861

 

 

 

3,074

 

Right-of-use lease liability

 

 

(231

)

 

 

-

 

Other liabilities

 

 

(2,195

)

 

 

(1,227

)

Net cash provided by operating activities

 

 

3,551

 

 

 

4,648

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Capital expenditures

 

 

(5,337

)

 

 

(4,814

)

Proceeds from sales of property, plant and equipment

 

 

-

 

 

 

66

 

Net cash used in investing activities

 

 

(5,337

)

 

 

(4,748

)

 

 

 

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Issuance of common stock upon the exercise of stock options and the vesting of restricted stock

 

 

-

 

 

 

1

 

Stock withheld to cover employee taxes on stock-based compensation

 

 

(578

)

 

 

(1,407

)

Subsidiary distributions to non-controlling interest

 

 

(155

)

 

 

(135

)

Proceeds from borrowings

 

 

3,750

 

 

 

-

 

Repayments of long-term debt

 

 

(41

)

 

 

(1,295

)

Payment of financing fees

 

 

(485

)

 

 

(250

)

Net cash provided by (used in) financing activities

 

 

2,491

 

 

 

(3,086

)

Net change in cash and cash equivalents

 

 

705

 

 

 

(3,186

)

 

 

 

 

 

 

 

 

 

Cash and cash equivalents including restricted cash:

 

 

 

 

 

 

 

 

Balance, January 1,

 

 

14,505

 

 

 

23,296

 

Changes in foreign currency translation

 

 

(33

)

 

 

91

 

Balance, March 31,

 

$

15,177

 

 

$

20,201

 

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net


 

Page 11 of 11

 

RIGNET, INC.

Selected Operational Data

MCS Site Count

(Unaudited)

 

 

1st Quarter

 

 

4th Quarter

 

 

3rd Quarter

 

 

2nd Quarter

 

 

1st Quarter

 

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

 

2019

 

Selected Operational Data:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Offshore drilling rigs (1)

 

 

192

 

 

 

185

 

 

 

184

 

 

 

182

 

 

 

185

 

Offshore Production

 

 

386

 

 

 

385

 

 

 

384

 

 

 

375

 

 

 

368

 

Maritime

 

 

177

 

 

 

171

 

 

 

184

 

 

 

183

 

 

 

180

 

Other sites (2)

 

 

596

 

 

 

599

 

 

 

634

 

 

 

644

 

 

 

627

 

Total

 

 

1,351

 

 

 

1,340

 

 

 

1,386

 

 

 

1,384

 

 

 

1,360

 

Project Backlog (in thousands)

 

$

22,380

 

 

$

26,178

 

 

$

35,855

 

 

$

37,116

 

 

$

43,058

 

 

(1)

Includes jack up, semi-submersible and drillship rigs

(2)

Includes U.S. and International land sites, completion sites, man-camps, remote offices, and supply bases and offshore-related supply bases, shore offices, tender rigs and platform rigs

 

###

 

15115 PARK ROW BLVD, SUITE 300, HOUSTON, TEXAS 77084-4947 PHONE 281.674.0100 FAX 281.674.0101 http://www.rig.net