HOUSTON, May 7, 2020 /PRNewswire/ -- Independence Contract
Drilling, Inc. (the "Company" or "ICD") (NYSE: ICD) today reported
financial results for the three months ended March 31, 2020.
First Quarter 2020 Highlights
- Net loss of $28.2 million, or
$7.53 per share.
- Adjusted net loss, as defined below, of $10.6 million, or $2.82 per share.
- Adjusted EBITDA, as defined below, of $5.1 million.
- Net debt, excluding finance leases and net of deferred
financing costs, of $128.9
million.
- Marketed fleet utilization of 66%.
- Fully burdened margin of $5,175
per day.
In the first quarter of 2020, the Company reported revenues of
$38.5 million, a net loss of
$28.2 million, or $7.53 per share, adjusted net loss (defined
below) of $10.6 million, or
$2.82 per share, and adjusted EBITDA
(defined below) of $5.1
million. These results compare to revenues of
$60.4 million, a net loss of
$2.4 million, or $0.63 per share, adjusted net income of
$2.9 million, or $0.76 per share, and adjusted EBITDA of
$15.8 million in the first quarter of
2019, revenues of $45.3 million, a
net loss of $35.0 million, or
$9.32 per share, an adjusted net loss
of $7.7 million, or $2.04 per share, and adjusted EBITDA of
$7.2 million in the fourth quarter of
2019.
Chief Executive Officer Anthony
Gallegos commented, "The COVID-19 pandemic began to impact
our operating rig count and results of operations late in the first
quarter of 2020. The historic declines in oil demand and prices
during March negatively impacted rig demand as evidenced by the
significant decline in active drilling rigs working in North America. The pandemic and its effects
are causing a rapid and substantial reduction in drilling activity
which we expect will continue to play out throughout the second
quarter of 2020 and beyond until economic activity rebounds and oil
supply and demand fundamentals improve. In line with this view, the
Company took actions beginning in March to reduce its cost
structure through reducing headcount, salary, and other elements of
compensation for all personnel and other initiatives including
reducing planned capital expenditures and elimination of executive
management and board positions.
As the impacts of the pandemic continue to play out, we
currently estimate that we will exit the second quarter of 2020
with six rigs contracted, and because we cannot estimate the
duration and ultimate impact of the COVID-19 pandemic, additional
reductions in our operating rig count are possible as contracts on
operating rigs expire during the back half of 2020. In this
uncertain environment, we are focused on the safety of our
workforce, exceeding our customers' expectations, and maximizing
our available financial liquidity opportunities."
Quarterly Operational Results
In the first quarter of 2020, the Company's marketed fleet
operated at 66% utilization and recorded 1,738 revenue days,
compared to 95% utilization and 2,728 revenue days in the first
quarter of 2019, and 77% utilization and 1,984 revenue days in the
fourth quarter of 2019.
Operating revenues in the first quarter of 2020 totaled
$38.5 million, compared to
$60.4 million in the first quarter of
2019 and $45.3 million in the fourth
quarter of 2019. Revenue per day in the first quarter of 2020
was $19,823, compared to $20,755 in the first quarter of 2019 and
$20,241 in the fourth quarter of
2019. Sequential revenue per day declines were driven by lower
dayrates on contract renewals.
Operating costs in the first quarter of 2020 totaled
$30.2 million, compared to
$39.3 million in the first quarter of
2019 and $33.9 million in the fourth
quarter of 2019. Fully burdened operating costs were $14,648 per day in the first quarter of 2020,
compared to $13,302 in the first
quarter of 2019 and $14,707 in the
fourth quarter of 2019. Sequential increases from the first quarter
of 2019 in per day operating cost were primarily attributable to
increased labor costs associated with inefficiencies and transitory
downtime resulting from rig releases and the reduction of operating
rigs during the first quarter of 2020.
Fully burdened rig operating margins in the first quarter of
2020 were $5,175 per day, compared to
$7,453 per day in the first quarter
of 2019 and $5,534 per day in the
fourth quarter of 2019.
Selling, general and administrative expenses in the first
quarter of 2020 were $3.8 million
(including $0.6 million of non-cash
stock-based compensation), compared to $4.5
million (including $0.4
million of non-cash stock-based compensation) in the first
quarter of 2019 and $4.7 million
(including $0.5 million of non-cash
stock-based compensation) in the fourth quarter of 2019.
Included in selling, general and administrative costs during the
fourth quarter of 2019 was a $0.5
million (or $0.01 per share)
charge associated with a bad debt reserve placed upon a receivable
relating to a 2018 contract for which the collection process has
not yet been completed. Excluding this charge, selling general and
administrative expenses in the fourth quarter of 2019 were
$4.2 million (including $0.5 million of non-cash stock-based compensation
expense). Sequential decreases in selling, general and
administrative expenses were associated with lower cash incentive
compensation accruals and lower travel, training and professional
fees in the first quarter of 2020.
Severance expenses of $1.1 million
were recorded in the first quarter of 2020 in connection with the
Company's cost reduction measures instituted in response to the
COVID-19 pandemic and current deteriorating market conditions.
Severance and merger-related expenses of $1.1 million were recorded in the first quarter
of 2019 primarily comprised of severance, professional fees and
other merger-related expenses.
Impairment Charge
During the first quarter of 2020, the Company recorded
impairments totaling $16.6 million
relating primarily to the remaining assets on rigs removed from our
marketed fleet, as well as certain other component equipment,
inventory and assets held for sale.
Drilling Operations Update
The Company exited the first quarter 2020 with 17 rigs earning
revenues under drilling contracts and expects to exit the second
quarter with six rigs earning revenues under drilling contracts.
The Company's backlog of drilling contracts with original terms of
six months or longer was $26.4
million as of March 31, 2020,
representing 3.58 rig years of activity. All of this backlog
is expected to be realized during the remainder of 2020.
Capital Expenditures and Liquidity Update
The Company's capital expenditure budget for 2020, before asset
sales and recoveries is $7.5 million,
representing a $2.7 million reduction
from its original annual budget. Cash outlays for capital
expenditures in the first quarter of 2020, net of asset sales and
recoveries, of $8.4 million, included
the cash flow impact of a $5.3
million reduction in accounts payable compared to year
end.
As of March 31, 2020, the Company
had cash on hand of $9.8 million, a
borrowing base of $20.1 million under
its revolving credit facility based upon eligible accounts
receivable with $8.6 million of
availability remaining, and $130
million principal amount outstanding under its term loan.
The term loan includes a committed $15
million accordion that remains undrawn and currently
available to the Company. Looking forward, the Company
expects availability under its revolving line of credit to
deteriorate during the remainder of 2020 with lower activity levels
reducing the eligible accounts receivable collateral balance that
is used to determine availability. The Company also expects
it will need to draw on its term loan accordion during 2020 to
support operations and fund other non-operating expenses. In
light of the unprecedented declines in industry conditions,
uncertain macro-economics, lack of capital market availability for
micro-cap companies in the U.S. land oil field services industry
and after assessing the Company's liquidity requirements and
available sources of liquidity to fund operations, on April 27, 2020, the Company applied for and
received a $10 million loan issued
pursuant to the Payroll Protection Program (PPP) under the CARES
Act, which will be used to fund permitted expenses under the CARES
Act.
Conference Call Details
A conference call for investors will be held today, May 7, 2020, at 11:00 a.m.
Central Time (12:00 p.m. Eastern
Time) to discuss the Company's first 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 10143627. The
replay will be available until May 14,
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
|
|
|
|
|
|
|
|
|
March 31,
2020
|
|
December 31,
2019
|
Assets
|
|
|
|
|
|
Cash and cash
equivalents
|
$
9,753
|
|
$
5,206
|
Accounts receivable,
net
|
26,893
|
|
35,834
|
Inventories
|
|
1,181
|
|
2,325
|
Assets held for
sale
|
5,014
|
|
8,740
|
Prepaid expenses and
other current assets
|
4,803
|
|
4,640
|
|
|
Total current
assets
|
|
|
|
47,644
|
|
56,745
|
Property, plant and
equipment, net
|
437,505
|
|
457,530
|
Other long-term
assets, net
|
2,754
|
|
2,726
|
|
|
Total
assets
|
|
|
|
$
487,903
|
|
$
517,001
|
Liabilities and
Stockholders' Equity
|
|
|
|
Liabilities
|
|
|
|
|
|
|
Current portion of
long-term debt (1)
|
$
3,268
|
|
$
3,685
|
|
Accounts
payable
|
14,981
|
|
22,674
|
|
Accrued
liabilities
|
12,958
|
|
16,368
|
|
Merger consideration
payable to an affiliate
|
2,932
|
|
3,022
|
|
Current portion of
contingent consideration
|
2,814
|
|
2,814
|
|
|
Total current
liabilities
|
|
|
|
36,953
|
|
48,563
|
|
Long-term debt
(2)
|
145,291
|
|
134,941
|
|
Deferred income
taxes, net
|
610
|
|
652
|
|
Other long-term
liabilities
|
1,198
|
|
1,249
|
|
|
Total
liabilities
|
|
|
|
184,052
|
|
185,405
|
Commitments and
contingencies
|
|
|
|
Stockholders'
equity
|
|
|
|
|
Common stock, $0.01
par value, 50,000,000 shares authorized; 3,888,137 and 3,876,196
shares issued, respectively, and 3,809,548 and 3,812,050
shares outstanding, respectively
|
38
|
|
38
|
|
Additional paid-in
capital
|
506,375
|
|
505,831
|
|
Accumulated
deficit
|
(198,649)
|
|
(170,426)
|
|
Treasury stock, at
cost, 78,589 shares and 64,146 shares, respectively
|
(3,913)
|
|
(3,847)
|
|
|
Total stockholders'
equity
|
|
|
|
303,851
|
|
331,596
|
|
|
Total liabilities and
stockholders' equity
|
|
|
|
$
487,903
|
|
$
517,001
|
|
|
(1)
|
Current portion of
long-term debt relates to the current portion of finance lease
obligations.
|
(2)
|
As of March 31, 2020,
and December 31, 2019, long-term debt includes $6.7 million and
$7.5 million, respectively, of long-term finance lease
obligations.
|
INDEPENDENCE
CONTRACT DRILLING, INC.
|
Unaudited
|
(in thousands,
except per share amounts)
|
|
CONSOLIDATED
STATEMENTS OF OPERATIONS
|
|
|
|
|
|
|
|
|
Three Months
Ended
|
|
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
|
|
|
|
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
38,494
|
|
$
60,358
|
|
$
45,292
|
Costs and
expenses
|
|
|
|
|
|
|
Operating
costs
|
30,229
|
|
39,333
|
|
33,881
|
|
Selling, general and
administrative
|
3,761
|
|
4,545
|
|
4,743
|
|
Severance and
merger-related expenses
|
1,076
|
|
1,081
|
|
10
|
|
Depreciation and
amortization
|
11,516
|
|
11,313
|
|
11,529
|
|
Asset impairment
(insurance recoveries), net
|
16,619
|
|
2,018
|
|
25,909
|
|
(Gain) loss on
disposition of assets, net
|
(46)
|
|
3,220
|
|
1,440
|
|
|
Total cost and
expenses
|
|
|
|
63,155
|
|
61,510
|
|
77,512
|
|
|
Operating
loss
|
|
|
|
(24,661)
|
|
(1,152)
|
|
(32,220)
|
Interest
expense
|
(3,604)
|
|
(3,761)
|
|
(3,502)
|
|
|
Loss before income
taxes
|
|
|
|
(28,265)
|
|
(4,913)
|
|
(35,722)
|
Income tax
benefit
|
(42)
|
|
(2,540)
|
|
(712)
|
|
|
Net loss
|
|
|
|
$
(28,223)
|
|
$
(2,373)
|
|
$
(35,010)
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss per
share:
|
|
|
|
|
|
|
Basic and
Diluted
|
$
(7.53)
|
|
$
(0.63)
|
|
$
(9.32)
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding:
|
|
|
|
|
|
|
Basic and
Diluted
|
3,750
|
|
3,785
|
|
3,755
|
INDEPENDENCE
CONTRACT DRILLING, INC.
|
Unaudited
|
(in
thousands)
|
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
Three Months Ended
March 31,
|
|
2020
|
|
2019
|
|
|
Cash flows from
operating activities
|
|
|
|
Net loss
|
$
(28,223)
|
|
$
(2,373)
|
Adjustments to
reconcile net loss to net cash provided by operating
activities
|
|
|
|
Depreciation and amortization
|
11,516
|
|
11,313
|
Asset impairment (insurance recoveries), net
|
16,619
|
|
2,018
|
Stock-based compensation
|
570
|
|
387
|
(Gain) loss on disposition of assets, net
|
(46)
|
|
3,220
|
Deferred income taxes
|
(42)
|
|
(2,540)
|
Amortization of deferred financing costs
|
204
|
|
203
|
Bad debt expense (recovery)
|
16
|
|
(45)
|
Changes in operating assets and liabilities
|
|
|
|
Accounts
receivable
|
8,925
|
|
(105)
|
Inventories
|
(27)
|
|
(45)
|
Prepaid
expenses and other assets
|
(462)
|
|
843
|
Accounts
payable and accrued liabilities
|
(5,959)
|
|
(5,271)
|
Net cash provided by operating activities
|
3,091
|
|
7,605
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
Purchases of
property, plant and equipment
|
(9,139)
|
|
(10,832)
|
Proceeds from the
sale of assets
|
628
|
|
536
|
Proceeds from
insurance claims
|
-
|
|
1,000
|
Collection of
principal on note receivable
|
145
|
|
-
|
Net cash used in investing activities
|
(8,366)
|
|
(9,296)
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
Borrowings under
Revolving Credit Facility
|
11,038
|
|
2,403
|
Repayments under
Revolving Credit Facility
|
(38)
|
|
-
|
Common stock issuance
costs
|
-
|
|
(177)
|
Purchase of treasury
stock
|
(66)
|
|
-
|
RSUs withheld for
taxes
|
(26)
|
|
-
|
Financing costs paid
under Term Loan Facility
|
-
|
|
(5)
|
Financing costs paid
under Revolving Credit Facility
|
-
|
|
(12)
|
Payments for finance
lease obligations
|
(1,086)
|
|
(216)
|
Net cash provided by financing activities
|
9,822
|
|
1,993
|
Net increase in cash and cash equivalents
|
4,547
|
|
302
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
Beginning of
period
|
5,206
|
|
12,247
|
End of
period
|
$
9,753
|
|
$
12,549
|
|
|
|
|
Supplemental
disclosure of cash flow information
|
|
|
|
Cash paid during the
period for interest
|
$
3,541
|
|
$
3,514
|
Supplemental
disclosure of non-cash investing and financing
activity
|
|
|
|
Change in property,
plant and equipment purchases in accounts payable
|
$
(5,285)
|
|
$
(1,753)
|
Additions to
property, plant and equipment through finance leases
|
$
55
|
|
$
520
|
Extinguishment of
finance lease obligations from sale of assets classified as finance
leases
|
$
(204)
|
|
$
-
|
Transfer of assets
from held and used to held for sale
|
$
-
|
|
$
(2,285)
|
The following table provides various financial and operational
data for the Company's operations for the three months ending
March 31, 2020 and 2019 and
December 30, 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
|
|
|
March
31,
|
|
March
31,
|
|
December
31,
|
|
|
2020
|
|
2019
|
|
2019
|
|
|
|
|
|
|
|
Number of marketed
rigs end of period(1)
|
|
29
|
|
32
|
|
29
|
Rig operating
days(2)
|
|
1,738
|
|
2,728
|
|
1,984
|
Average number of
operating rigs(3)
|
|
19.1
|
|
30.3
|
|
21.6
|
Rig utilization
(4)
|
|
66%
|
|
95%
|
|
77%
|
Average revenue per
operating day (5)
|
|
$
19,823
|
|
$
20,755
|
|
$
20,241
|
Average cost per
operating day(6)
|
|
$
14,648
|
|
$
13,302
|
|
$
14,707
|
Average rig margin
per operating day
|
|
$
5,175
|
|
$
7,453
|
|
$
5,534
|
|
|
(1)
|
Number of marketed
rigs as of March 31, 2020 decreased by three rigs as compared
to the number of marketed rigs as of March 31, 2019.
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 $4.0 million, $2.7 million
and $4.5 million during the three months ended March 31, 2020
and 2019, and December 30, 2019, respectively, and (ii)
revenues associated with the amortization of intangible revenue
acquired in the Sidewinder merger of $1.0 million during the
three months ended March 31, 2019.
|
(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 $4.0 million, $2.7
million and $4.5 million during the three months ended
March 31, 2020 and 2019, and December 30, 2019,
respectively and (ii) overhead costs expensed due to reduced rig
upgrade activity of $0.6 million and $0.3 million and zero during
the three months ended March 31, 2020 and 2019, and December 30,
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
"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) Income:
|
|
|
(Unaudited)
|
Three Months
Ended
|
|
March
31,
|
|
March
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2019
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
|
Amount
|
|
Per
Share
|
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$ (28,223)
|
|
$
(7.53)
|
|
$
(2,373)
|
|
$(0.63)
|
|
$(35,010)
|
|
$ (9.32)
|
Add back:
|
|
|
|
|
|
|
|
|
|
|
|
Asset impairment
(insurance recoveries), net (1)
|
16,619
|
|
4.43
|
|
2,018
|
|
0.52
|
|
25,909
|
|
6.90
|
(Gain) loss on
disposition of assets, net(2)
|
(46)
|
|
(0.01)
|
|
3,220
|
|
0.84
|
|
1,440
|
|
0.38
|
Intangible
revenue(3)
|
-
|
|
-
|
|
(1,033)
|
|
(0.27)
|
|
-
|
|
-
|
Severance and
merger-related expenses(4)
|
1,076
|
|
0.29
|
|
1,081
|
|
0.28
|
|
10
|
|
-
|
Adjusted net
(loss) income
|
$ (10,574)
|
|
$
(2.82)
|
|
$
2,913
|
|
$ 0.76
|
|
$
(7,651)
|
|
$ (2.04)
|
Reconciliation of
Net Loss to EBITDA and Adjusted EBITDA:
|
|
|
(Unaudited)
|
Three Months
Ended
|
|
March
31,
|
|
March
31,
|
|
December
31,
|
|
2020
|
|
2019
|
|
2019
|
(in
thousands)
|
|
|
|
|
|
Net loss
|
$
(28,223)
|
|
$
(2,373)
|
|
$
(35,010)
|
Add back:
|
|
|
|
|
|
Income tax
benefit
|
(42)
|
|
(2,540)
|
|
(712)
|
Interest
expense
|
3,604
|
|
3,761
|
|
3,502
|
Depreciation and
amortization
|
11,516
|
|
11,313
|
|
11,529
|
Asset impairment
(insurance recoveries), net(1)
|
16,619
|
|
2,018
|
|
25,909
|
EBITDA
|
3,474
|
|
12,179
|
|
5,218
|
(Gain) loss on
disposition of assets, net(2)
|
(46)
|
|
3,220
|
|
1,440
|
Stock-based
compensation
|
570
|
|
387
|
|
486
|
Intangible
revenue(3)
|
-
|
|
(1,033)
|
|
-
|
Severance and
merger-related expenses(4)
|
1,076
|
|
1,081
|
|
10
|
Adjusted
EBITDA
|
$
5,074
|
|
$
15,834
|
|
$
7,154
|
|
|
(1)
|
In the first quarter
of 2020, we recorded impairments totaling $16.6 million relating
primarily to 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 first quarter of 2019, we
recorded an impairment to assets held for sale of $2.0 million to
reflect the proceeds received when these assets were sold at
auction. In the fourth quarter of 2019, we recorded impairments
totaling $25.9 million relating primarily to our decision to remove
rigs from our marketed fleet, as well as a plan to sell or
otherwise dispose of rigs and related component equipment, much of
which was acquired in connection with the Sidewinder
merger.
|
(2)
|
In the first quarter
of 2020, and the fourth quarter of 2019, we recorded a gain and
loss, respectively, on the disposition of miscellaneous drilling
equipment in the respective quarter. In the first quarter of
2019 we recorded a loss on the disposition of assets of $3.2
million primarily related to the sale of certain surplus assets,
acquired in the Sidewinder merger, at auctions during the
quarter.
|
(3)
|
In the first quarter
of 2019 we amortized $1.0 million of intangible revenue related to
an unfavorable contract liability acquired in the Sidewinder
merger.
|
(4)
|
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. Severance and merger-related expenses of $1.1
million were recorded in the first quarter of 2019 primarily
comprised of severance, professional fees and other Sidewinder
merger-related expenses.
|
INVESTOR CONTACTS:
Independence Contract Drilling, Inc.
E-mail inquiries to: Investor.relations@icdrilling.com
Phone inquiries: (281) 598-1211
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SOURCE Independence Contract Drilling, Inc.