HOUSTON, Aug. 4, 2020 /PRNewswire/ -- INDEPENDENCE
CONTRACT DRILLING, INC. (the "Company" or "ICD") (NYSE: ICD) today
reported financial results for the three months ended June 30, 2020.
Second Quarter 2020 Highlights
- Net loss of $10.1 million, or
$2.52 per share.
- Adjusted net loss, as defined below, of $11.0 million, or $2.73 per share.
- Adjusted EBITDA, as defined below, of $4.0 million.
- Net debt, excluding finance leases and net of deferred
financing costs, of $119.5
million.
- Marketed fleet utilization of 32%.
- Fully burdened margin of $7,000
per day.
In the second quarter of 2020, the Company reported revenues of
$21.4 million, a net loss of
$10.1 million, or $2.52 per share, adjusted net loss (defined
below) of $11.0 million, or
$2.73 per share, and adjusted EBITDA
(defined below) of $4.0
million. These results compare to revenues of
$52.9 million, a net loss of
$12.9 million, or $3.40 per share, adjusted net loss of
$5.5 million, or $1.45 per share, and adjusted EBITDA of
$12.8 million in the second quarter
of 2019, and revenues of $38.5
million, a net loss of $28.2
million, or $7.53 per share,
an adjusted net loss of $10.6
million, or $2.82 per share,
and adjusted EBITDA of $5.1 million
in the first quarter of 2020.
Chief Executive Officer Anthony
Gallegos commented, "Oil and gas demand destruction caused
by the COVID-19 pandemic impacted the U.S. land rig count and as a
result our operating rig count declined dramatically throughout the
quarter. Nevertheless, cost initiatives favorably impacted
the quarter, permitting us to lower operating costs to below
$13,000 per day and to expand our
operating margins in spite of the historic decline in operating
activity. Efforts to expand our liquidity profile during the
quarter were also successful, as we increased our cash balances and
expanded our financial liquidity to over $40
million. Although forward visibility is very limited, we
expect the third quarter to be the trough for ICD's operating rig
count, and continue to work constructively with existing and
potential new customers on opportunities for late third quarter and
fourth quarter reactivations."
Quarterly Operational Results
In the second quarter of 2020, the Company's marketed fleet
operated at 32% utilization and recorded 834 revenue days, compared
to 84% utilization and 2,330 revenue days in the second quarter of
2019, and 66% utilization and 1,738 revenue days in the first
quarter of 2020.
Operating revenues in the first quarter of 2020 totaled
$21.4 million, compared to
$52.9 million in the second quarter
of 2019 and $38.5 million in the
first quarter of 2020. Included in operating revenues were
$2.2 million of early termination
revenue recognized during the quarter. Excluding the impacts
from early termination revenue, revenue per day in the second
quarter of 2020 was $19,741, compared
to $20,868 in the second quarter of
2019 and $19,823 in the first quarter
of 2020.
Operating costs in the second quarter of 2020 totaled
$14.1 million, compared to
$37.5 million in the second quarter
of 2019 and $30.2 million in the
first quarter of 2020. Fully burdened operating costs were
$12,741 per day in the second quarter
of 2020, compared to $14,155 in the
second quarter of 2019 and $14,648 in
the first quarter of 2020.
Excluding the impact from early termination revenues and
decommissioning costs, fully burdened rig operating margins in the
second quarter of 2020 were $7,000
per day, compared to $6,713 per day
in the second quarter of 2019 and $5,175 per day in the first quarter of
2020. Sequential improvements were primarily the result of
cost reduction initiatives that impacted the entire second quarter
of 2020, as well as favorable group and workers compensation
insurance items.
Selling, general and administrative expenses in the second
quarter of 2020 were $3.5 million
(including $0.3 million of non-cash
stock-based compensation), compared to $3.0
million (including $0.4
million of non-cash stock-based compensation) in the second
quarter of 2019 and $3.8 million
(including $0.6 million of non-cash
stock-based compensation) in the first quarter of 2020.
Sequential decreases in selling, general and administrative
expenses were associated with cost cutting initiatives that
impacted the entire second quarter, offset by furlough costs and
professional fees associated with the various amendments to the
Company's existing term loan facility and merger consideration
payment schedule and related matters of $1.0
million.
Drilling Operations Update
The Company exited the second quarter of 2020 with six rigs
earning revenues under drilling contracts. The Company expects its
operating rig count to reach a trough at three to four rigs during
the third quarter of 2020, with current rig reactivation
opportunities existing for reactivations late during the third
quarter of 2020 and the fourth quarter of 2020. The Company's
backlog of drilling contracts with original terms of six months or
longer was $14.9 million as of
June 30, 2020, representing 2.24 rig
years of activity. Approximately 84% of this backlog is
expected to be realized during the remainder of 2020.
Capital Expenditures and Liquidity Update
Cash outlays for capital expenditures in the second quarter of
2020, net of asset sales and recoveries, was $2.6 million, including payments of $2.1 million for prior period deliverables.
As of June 30, 2020, the Company
had cash on hand of $17.4 million, an
undrawn revolving line of credit with availability of $9.2 million based upon eligible accounts
receivable, $130 million principal
amount outstanding under its term loan, and $10 million outstanding under a loan issued under
the Payroll Protection Program ("PPP") under the CARES Act.
The term loan includes a committed $15
million accordion that remains undrawn.
During the quarter, the Company instituted an at-the-market
("ATM") common stock offering with a maximum approved offering
amount of $11 million. During
the second quarter of 2020, the Company issued 1,192,566 shares of
common stock pursuant to this program at a weighted average gross
selling price of $6.15 per share,
resulting in gross proceeds to the Company of $7.3 million. During the second quarter,
the Company amended its term loan to permit in the future the
one-time payment of one quarters' interest on a payment-in-kind
("PIK") basis, as well as extended the payment terms on
approximately $2.9 million of certain
merger consideration payments until June 30,
2022 that were originally scheduled for payment during the
second quarter of 2020.
Conference Call Details
A conference call for investors will be held today, August 4, 2020, at 11:00
a.m. Central Time (12:00 p.m. Eastern
Time) to discuss the Company's second quarter 2020
results.
The call can be accessed live over the telephone by dialing
(855) 239-3115 or for international callers, (412) 542-4125.
A replay will be available shortly after the call and can be
accessed by dialing (877) 344-7529 or for international callers,
(412) 317-0088. The passcode for the replay is
10146504. The replay will be available until August 11, 2020.
Interested parties may also listen to a simultaneous webcast of
the conference call by logging onto the Company's website at
www.icdrilling.com in the Investor Relations section. A
replay of the webcast will also be available for approximately 30
days following the call.
About Independence Contract Drilling, Inc.
Independence Contract Drilling provides land-based contract
drilling services for oil and natural gas producers in the United States. The Company constructs,
owns and operates a fleet of pad-optimal ShaleDriller rigs that are
specifically engineered and designed to accelerate its clients'
production profiles and cash flows from their most technically
demanding and economically impactful oil and gas properties. For
more information, visit www.icdrilling.com.
Forward-Looking Statements
This news release contains certain forward-looking statements
within the meaning of the federal securities laws. Words such as
"anticipated," "estimated," "expected," "planned," "scheduled,"
"targeted," "believes," "intends," "objectives," "projects,"
"strategies" and similar expressions are used to identify such
forward-looking statements. However, the absence of these words
does not mean that a statement is not forward-looking.
Forward-looking statements relating to Independence Contract
Drilling's operations are based on a number of expectations or
assumptions which have been used to develop such information and
statements but which may prove to be incorrect. These statements
are not guarantees of future performance and involve certain risks,
uncertainties and assumptions that are difficult to predict, and
there can be no assurance that actual outcomes and results will not
differ materially from those expected by management of Independence
Contract Drilling. For more information concerning factors that
could cause actual results to differ materially from those conveyed
in the forward-looking statements, please refer to the "Risk
Factors" section of the Company's Annual Report on Form 10-K, filed
with the SEC and the information included in subsequent amendments
and other filings. These forward-looking statements are based on
and include our expectations as of the date hereof. Independence
Contract Drilling does not undertake any obligation to update or
revise such forward-looking statements to reflect events or
circumstances that occur, or which Independence Contract Drilling
becomes aware of, after the date hereof.
INDEPENDENCE
CONTRACT DRILLING, INC.
Unaudited
(in thousands,
except par value and share data)
|
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
|
|
|
|
|
|
June 30,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
17,396
|
|
$
5,206
|
Accounts receivable,
net
|
14,088
|
|
35,834
|
Inventories
|
|
1,170
|
|
2,325
|
Assets held for
sale
|
1,700
|
|
8,740
|
Prepaid expenses and
other current assets
|
2,990
|
|
4,640
|
|
|
|
|
|
Total current
assets
|
37,344
|
|
56,745
|
Property, plant and
equipment, net
|
429,317
|
|
457,530
|
Other long-term
assets, net
|
2,664
|
|
2,726
|
|
|
|
|
|
Total
assets
|
$
469,325
|
|
$
517,001
|
Liabilities and
Stockholders' Equity
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current portion of
long-term debt (1)
|
$
7,768
|
|
$
3,685
|
|
Accounts
payable
|
5,331
|
|
22,674
|
|
Accrued
liabilities
|
10,344
|
|
16,368
|
|
Merger consideration
payable to an affiliate
|
-
|
|
3,022
|
|
Current portion of
contingent consideration
|
-
|
|
2,814
|
|
|
|
|
|
Total current
liabilities
|
23,443
|
|
48,563
|
|
Long-term debt
(2)
|
139,571
|
|
134,941
|
|
Merger consideration
payable to an affiliate
|
2,902
|
|
-
|
|
Deferred income
taxes, net
|
599
|
|
652
|
|
Other long-term
liabilities
|
2,040
|
|
1,249
|
|
|
|
|
|
Total
liabilities
|
168,555
|
|
185,405
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock, $0.01
par value, 50,000,000 shares authorized;
|
|
|
|
|
|
5,081,687 and
3,876,196 shares issued, respectively, and
|
|
|
|
|
|
5,003,109 and
3,812,050 shares outstanding, respectively
|
50
|
|
38
|
|
Additional paid-in
capital
|
513,402
|
|
505,831
|
|
Accumulated
deficit
|
(208,769)
|
|
(170,426)
|
|
Treasury stock, at
cost, 78,589 shares and 64,146 shares, respectively
|
(3,913)
|
|
(3,847)
|
|
|
|
|
|
Total stockholders'
equity
|
300,770
|
|
331,596
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
$
469,325
|
|
$
517,001
|
|
|
(1)
|
As of June 30, 2020,
and December 31, 2019, current portion of long-term debt includes
$3.4 million and $3.7 million, respectively, of finance lease
obligations. As of June 30, 2020, current portion of
long-term debt also includes $4.4 million related to current
portion of PPP Loan.
|
|
|
(2)
|
As of June 30, 2020,
and December 31, 2019, long-term debt includes $7.1 million and
$7.5 million, respectively, of long-term finance lease
obligations. As of June 30, 2020, long-term debt also
includes $5.6 million related to the PPP
Loan.
|
INDEPENDENCE
CONTRACT DRILLING, INC.
Unaudited
(in thousands,
except per share amounts)
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
|
|
|
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
21,381
|
|
$
52,879
|
|
$
38,494
|
|
$
59,875
|
|
$
113,237
|
Costs and
expenses
|
|
|
|
|
|
|
|
|
|
|
Operating
costs
|
14,095
|
|
37,453
|
|
30,229
|
|
44,324
|
|
76,786
|
|
Selling, general and
administrative
|
3,544
|
|
3,008
|
|
3,761
|
|
7,305
|
|
7,553
|
|
Severance and
merger-related expenses
|
-
|
|
1,287
|
|
1,076
|
|
1,076
|
|
2,368
|
|
Depreciation and
amortization
|
11,055
|
|
11,371
|
|
11,516
|
|
22,571
|
|
22,684
|
|
Asset impairment,
net
|
-
|
|
5,855
|
|
16,619
|
|
16,619
|
|
7,873
|
|
(Gain) loss on
disposition of assets, net
|
(836)
|
|
18
|
|
(46)
|
|
(882)
|
|
3,238
|
|
Other
expenses
|
-
|
|
255
|
|
-
|
|
-
|
|
255
|
|
|
|
|
|
Total cost and
expenses
|
27,858
|
|
59,247
|
|
63,155
|
|
91,013
|
|
120,757
|
|
|
|
|
|
Operating
loss
|
(6,477)
|
|
(6,368)
|
|
(24,661)
|
|
(31,138)
|
|
(7,520)
|
Interest
expense
|
(3,654)
|
|
(3,592)
|
|
(3,604)
|
|
(7,258)
|
|
(7,353)
|
|
|
|
|
|
Loss before income
taxes
|
(10,131)
|
|
(9,960)
|
|
(28,265)
|
|
(38,396)
|
|
(14,873)
|
Income tax (benefit)
expense
|
(11)
|
|
2,898
|
|
(42)
|
|
(53)
|
|
358
|
|
|
|
|
|
Net loss
|
$
(10,120)
|
|
$
(12,858)
|
|
$
(28,223)
|
|
$
(38,343)
|
|
$
(15,231)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
$
(2.52)
|
|
$
(3.40)
|
|
$
(7.53)
|
|
$
(9.87)
|
|
$
(4.02)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
Basic and
Diluted
|
4,018
|
|
3,785
|
|
3,750
|
|
3,884
|
|
3,785
|
INDEPENDENCE
CONTRACT DRILLING, INC.
Unaudited
(in
thousands)
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Six Months Ended
June 30,
|
|
2020
|
|
2019
|
|
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(38,343)
|
|
$
(15,231)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
|
|
|
Depreciation and amortization
|
22,571
|
|
22,684
|
Asset impairment, net
|
16,619
|
|
7,873
|
Stock-based compensation
|
860
|
|
803
|
(Gain) loss on disposition of assets, net
|
(882)
|
|
3,238
|
Deferred income taxes
|
(53)
|
|
358
|
Amortization of deferred financing costs
|
431
|
|
406
|
Bad debt expense (recovery)
|
149
|
|
(42)
|
Changes in operating assets and liabilities
|
|
|
|
Accounts
receivable
|
22,622
|
|
6,167
|
Inventories
|
(16)
|
|
(61)
|
Prepaid
expenses and other assets
|
1,319
|
|
2,751
|
Accounts
payable and accrued liabilities
|
(16,258)
|
|
(8,953)
|
Net cash provided by operating activities
|
9,019
|
|
19,993
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of
property, plant and equipment
|
(12,126)
|
|
(23,344)
|
Proceeds from the
sale of assets
|
1,002
|
|
3,912
|
Proceeds from
insurance claims
|
-
|
|
1,000
|
Collection of
principal on note receivable
|
145
|
|
-
|
Net cash used in investing activities
|
(10,979)
|
|
(18,432)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Borrowings under
Revolving Credit Facility
|
11,038
|
|
2,511
|
Repayments under
Revolving Credit Facility
|
(11,038)
|
|
(5,077)
|
Borrowings under PPP
Loan
|
10,000
|
|
-
|
Proceeds from
issuance of common stock
|
7,333
|
|
-
|
Common stock issuance
costs
|
(532)
|
|
(177)
|
Purchase of treasury
stock
|
(66)
|
|
-
|
RSUs withheld for
taxes
|
(79)
|
|
-
|
Financing costs paid
under Term Loan Facility
|
-
|
|
(5)
|
Financing costs paid
under Revolving Credit Facility
|
-
|
|
(12)
|
Payments for finance
lease obligations
|
(2,506)
|
|
(770)
|
Net cash provided by (used in) financing activities
|
14,150
|
|
(3,530)
|
Net increase (decrease) in cash and cash equivalents
|
12,190
|
|
(1,969)
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
Beginning of
period
|
5,206
|
|
12,247
|
End of
period
|
$
17,396
|
|
$
10,278
|
|
|
|
|
Supplemental
disclosure of cash flow information
|
|
|
|
Cash paid during the
period for interest
|
$
7,021
|
|
$
7,047
|
Supplemental
disclosure of non-cash investing and financing
activity
|
|
|
|
Change in property,
plant and equipment purchases in accounts payable
|
$
(7,412)
|
|
$
591
|
Additions to
property, plant and equipment through finance leases
|
$
2,434
|
|
$
2,223
|
Extinguishment of
finance lease obligations from sale of assets classified as finance
leases
|
$
(599)
|
|
$
-
|
Transfer of assets
from held and used to held for sale
|
$
-
|
|
$
(4,028)
|
Transfer from
inventory to fixed assets
|
$
-
|
|
$
(311)
|
The following table provides various financial and operational
data for the Company's operations for the three months ending
June 30, 2020 and 2019 and
March 31, 2020, and the six months
ending June 30, 2020 and 2019.
This information contains non-GAAP financial measures of the
Company's operating performance. The Company believes this
non-GAAP information is useful because it provides a means to
evaluate the operating performance of the Company on an ongoing
basis using criteria that are used by our management.
Additionally, it highlights operating trends and aids analytical
comparisons. However, this information has limitations and
should not be used as an alternative to operating income (loss) or
cash flow performance measures determined in accordance with GAAP,
as this information excludes certain costs that may affect the
Company's operating performance in future periods.
OTHER FINANCIAL
& OPERATING DATA
Unaudited
|
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
|
June
30,
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
Number of marketed
rigs end of period(1)
|
|
29
|
|
30
|
|
29
|
|
29
|
|
30
|
Rig operating
days(2)
|
|
834
|
|
2,330
|
|
1,738
|
|
2,572
|
|
5,058
|
Average number of
operating rigs(3)
|
|
9.2
|
|
25.6
|
|
19.1
|
|
14.1
|
|
27.9
|
Rig utilization
(4)
|
|
32%
|
|
84%
|
|
66%
|
|
49%
|
|
89%
|
Average revenue per
operating day (5)
|
|
$
19,741
|
|
$
20,868
|
|
$
19,823
|
|
$
19,796
|
|
$
20,807
|
Average cost per
operating day(6)
|
|
$
12,741
|
|
$
14,155
|
|
$
14,648
|
|
$
14,030
|
|
$
13,695
|
Average rig margin
per operating day
|
|
$
7,000
|
|
$
6,713
|
|
$
5,175
|
|
$
5,766
|
|
$
7,112
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
Marketed rigs exclude
idle rigs that will not be reactivated until upgrades or
conversions are complete.
|
|
|
(2)
|
Rig operating days
represent the number of days our rigs are earning revenue under a
contract during the period, including days that standby revenues
are earned.
|
|
|
(3)
|
Average number of
operating rigs is calculated by dividing the total number of rig
operating days in the period by the total number of calendar days
in the period.
|
|
|
(4)
|
Rig utilization is
calculated as rig operating days divided by the total number of
days our marketed drilling rigs are available during the applicable
period.
|
|
|
(5)
|
Average revenue per
operating day represents total contract drilling revenues earned
during the period divided by rig operating days in the
period. Excluded in calculating average revenue per operating
day are revenues associated with the reimbursement of (i)
out-of-pocket costs paid by customers of $2.7 million, $3.7 million
and $4.0 million during the three months ended June 30, 2020 and
2019, and March 31, 2020, respectively, and $6.8 million and $6.4
million during the six months ended June 30, 2020 and 2019,
respectively, (ii) revenues associated with the amortization of
intangible revenue acquired in the Sidewinder merger of $46
thousand and $1.1 million during the three and six months
ended June 30, 2019, respectively, and (iii) early termination
revenues of $2.2 million and $0.5 million during the three months
ended June 30, 2020 and 2019, respectively, and $2.2 million
and $0.5 million during the six months ended June 30, 2020 and
2019. The three and six months ended June 30, 2020 did not
include any intangible revenue.
|
|
|
(6)
|
Average cost per
operating day represents operating costs incurred during the period
divided by rig operating days in the period. The following
costs are excluded in calculating average cost per operating day:
(i) out-of-pocket costs paid by customers of $2.7 million, $3.7
million and $4.0 million during the three months ended June 30,
2020 and 2019, and March 31, 2020, respectively, and $6.8 million
and $6.4 million during the six months ended June 30, 2020 and
2019, respectively, (ii) overhead costs expensed due to reduced rig
upgrade activity of $0.4 million, $0.7 million and $0.6 million
during the three months ended June 30, 2020 and 2019, and March 31,
2020, respectively, and $1.0 and $1.0 million during the six months
ended June 30, 2020 and 2019, respectively, and (iii) rig
de-commissioning costs associated with stacking deactivated rigs of
$0.3 million and $0.1 million during the three months ended June
30, 2020 and 2019, respectively, and $0.3 million and $0.1 million
during the six months ended June 30, 2020 and 2019,
respectively.
|
Non-GAAP Financial Measures
Adjusted net (loss) income, EBITDA and adjusted EBITDA are
supplemental non-GAAP financial measures that are used by
management and external users of our financial statements, such as
industry analysts, investors, lenders and rating agencies. In
addition, adjusted EBITDA is consistent with how EBITDA is
calculated under our credit facility for purposes of determining
our compliance with various financial covenants. We define
"adjusted net (loss) income" as net (loss) income before: asset
impairment, net; (gain) loss on disposition of assets, net;
intangible revenue; severance and merger-related expenses; and
other adjustments. We define "EBITDA" as earnings (or loss)
before interest, taxes, depreciation, and amortization, and we
define "adjusted EBITDA" as EBITDA before stock-based compensation,
non-cash asset impairments, gains or losses on disposition of
assets, and other non-recurring items added back to, or subtracted
from, net income for purposes of calculating EBITDA under our
credit facilities. Neither adjusted net (loss) income, EBITDA
or adjusted EBITDA is a measure of net income as determined by U.S.
generally accepted accounting principles ("GAAP").
Management believes adjusted net (loss) income, EBITDA and
adjusted EBITDA are useful because they allow our stockholders to
more effectively evaluate our operating performance and compliance
with various financial covenants under our credit facility and
compare the results of our operations from period to period and
against our peers without regard to our financing methods or
capital structure or non-recurring, non-cash transactions. We
exclude the items listed above from net income (loss) in
calculating adjusted net (loss) income, EBITDA and adjusted EBITDA
because these amounts can vary substantially from company to
company within our industry depending upon accounting methods and
book values of assets, capital structures and the method by which
the assets were acquired. None of adjusted net (loss) income,
EBITDA or adjusted EBITDA should be considered an alternative to,
or more meaningful than, net income (loss), the most closely
comparable financial measure calculated in accordance with GAAP, or
as an indicator of our operating performance or liquidity. Certain
items excluded from adjusted net (loss) income, EBITDA and adjusted
EBITDA are significant components in understanding and assessing a
company's financial performance, such as a company's return on
assets, cost of capital and tax structure. Our presentation of
adjusted net (loss) income, EBITDA and adjusted EBITDA should not
be construed as an inference that our results will be unaffected by
unusual or non-recurring items. Our computations of adjusted
net (loss) income, EBITDA and adjusted EBITDA may not be comparable
to other similarly titled measures of other companies.
Reconciliation of
Net Loss to Adjusted Net Loss:
|
|
(Unaudited)
|
|
(Unaudited)
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$ (10,120)
|
|
$
(2.52)
|
|
$(12,858)
|
|
$(3.40)
|
|
$(28,223)
|
|
$ (7.53)
|
|
$(38,343)
|
|
$
(9.87)
|
|
$ (15,231)
|
|
$ (4.02)
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment, net
(1)
|
-
|
|
-
|
|
5,855
|
|
1.55
|
|
16,619
|
|
4.43
|
|
16,619
|
|
4.28
|
|
7,873
|
|
2.08
|
(Gain) loss on
disposition of assets, net(2)
|
(836)
|
|
(0.21)
|
|
18
|
|
-
|
|
(46)
|
|
(0.01)
|
|
(882)
|
|
(0.23)
|
|
3,238
|
|
0.86
|
Intangible
revenue(3)
|
-
|
|
-
|
|
(46)
|
|
(0.01)
|
|
-
|
|
-
|
|
-
|
|
-
|
|
(1,079)
|
|
(0.29)
|
Severance and
merger-related expenses(4)
|
-
|
|
-
|
|
1,287
|
|
0.34
|
|
1,076
|
|
0.29
|
|
1,076
|
|
0.28
|
|
2,368
|
|
0.62
|
Other
expense
|
-
|
|
-
|
|
255
|
|
0.07
|
|
-
|
|
-
|
|
-
|
|
-
|
|
255
|
|
0.07
|
Adjusted net
loss
|
$ (10,956)
|
|
$
(2.73)
|
|
$
(5,489)
|
|
$(1.45)
|
|
$(10,574)
|
|
$ (2.82)
|
|
$(21,530)
|
|
$
(5.54)
|
|
$
(2,576)
|
|
$ (0.68)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of
Net Loss to EBITDA and Adjusted EBITDA:
|
|
(Unaudited)
|
|
(Unaudited)
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June
30,
|
|
June
30,
|
|
March
31,
|
|
June
30,
|
|
June
30,
|
|
2020
|
|
2019
|
|
2020
|
|
2020
|
|
2019
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
(10,120)
|
|
$
(12,858)
|
|
$
(28,223)
|
|
$
(38,343)
|
|
$
(15,231)
|
Add back:
|
|
|
|
|
|
|
|
|
|
Income tax (benefit)
expense
|
(11)
|
|
2,898
|
|
(42)
|
|
(53)
|
|
358
|
Interest
expense
|
3,654
|
|
3,592
|
|
3,604
|
|
7,258
|
|
7,353
|
Depreciation and
amortization
|
11,055
|
|
11,371
|
|
11,516
|
|
22,571
|
|
22,684
|
Asset impairment,
net(1)
|
-
|
|
5,855
|
|
16,619
|
|
16,619
|
|
7,873
|
EBITDA
|
4,578
|
|
10,858
|
|
3,474
|
|
8,052
|
|
23,037
|
(Gain) loss on
disposition of assets, net(2)
|
(836)
|
|
18
|
|
(46)
|
|
(882)
|
|
3,238
|
Stock-based
compensation
|
290
|
|
416
|
|
570
|
|
860
|
|
803
|
Intangible
revenue(3)
|
-
|
|
(46)
|
|
-
|
|
-
|
|
(1,079)
|
Severance and
merger-related expenses(4)
|
-
|
|
1,287
|
|
1,076
|
|
1,076
|
|
2,368
|
Other
expense
|
-
|
|
255
|
|
-
|
|
-
|
|
255
|
Adjusted
EBITDA
|
$
4,032
|
|
$
12,788
|
|
$
5,074
|
|
$
9,106
|
|
$
28,622
|
|
|
(1)
|
We did not record any
asset impairment during the second quarter of 2020. In the
first quarter of 2020, we recorded an impairment of $16.6 million
to reflect the remaining assets on rigs removed from our marketed
fleet, as well as certain other component equipment, inventory and
assets held for sale. In the second quarter of 2019, we
recorded an impairment of $5.9 million to reflect (i) a $3.1
million impairment of non-marketable SCR drilling equipment, (ii) a
$1.1 million impairment of drilling assets sold at auction, (iii) a
$0.2 million impairment of real property acquired in the Sidewinder
merger and (iv) a $1.2 million impairment of miscellaneous drilling
equipment previously held for sale, but deemed unsalable in the
current market environment.
|
|
|
(2)
|
In the first and
second quarters of 2020, we recorded a gain on the disposition of
miscellaneous drilling equipment.
|
|
|
(3)
|
In the first and
second quarters of 2019, we amortized intangible revenue related to
an unfavorable contract liability acquired in the Sidewinder
merger.
|
|
|
(4)
|
Severance and
merger-related expenses were recorded in the first and second
quarters of 2019 primarily comprised of severance, professional
fees and other Sidewinder merger-related expenses. Severance
expenses of $1.1 million were recorded in the first quarter of 2020
in connection with our cost reduction measures instituted in
response to the COVID-19 pandemic and current deteriorating market
conditions. We did not record any severance expense during
the second quarter of 2020.
|
INVESTOR CONTACTS:
Independence Contract Drilling, Inc.
E-mail inquiries to: Investor.relations@icdrilling.com
Phone inquiries: (281) 598-1211
View original content to download
multimedia:http://www.prnewswire.com/news-releases/independence-contract-drilling-inc-reports-financial-results-for-the-second-quarter-ended-june-30-2020-301105198.html
SOURCE Independence Contract Drilling, Inc.