UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549 ______________________________________________
FORM 10-Q
______________________________________________
(Mark one)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2020 or
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number: 1-8182
PIONEER ENERGY SERVICES CORP.
(Exact name of registrant as specified in its charter) ____________________________________________
DELAWARE | 74-2088619 |
(State or other jurisdiction | (I.R.S. Employer |
of incorporation or organization) | Identification Number) |
1250 N.E. Loop 410, Suite 1000 | |
San Antonio, Texas | 78209 |
(Address of principal executive offices) | (Zip Code) |
Registrant's telephone number, including area code: (855) 884-0575
Securities registered pursuant to Section 12(b) of the Act
Title of each class
Trading Symbol(s) Name of each exchange on which registered
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer | o | Accelerated filer | o |
Non-accelerated filer | x | Smaller reporting company | x |
Emerging Growth Company | o |
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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes x No ☐
As of June 15, 2020, there were 1,048,185 shares of common stock, par value $0.001 per share, of the registrant outstanding.
EXPLANATORY NOTE
As previously disclosed in the Current Report on Form 8-K filed by Pioneer Energy Services Corp. (the "Company") on March 2, 2020, the Company commenced a voluntary restructuring under Chapter 11 of the U.S. Bankruptcy Code on March 1, 2020. The Company has had to devote a significant amount of time, resources and administrative support to simultaneously support managing the Company and managing its restructuring, while also monitoring how these ongoing processes may affect the disclosures to be included in this Form 10-Q and other reports; all of which were made more difficult due to the coronavirus ("COVID-19") pandemic and disruptions associated with the COVID-19 pandemic. The Company was unable to file this Form 10-Q by the original deadline due to the outbreak of, and local, state and federal governmental responses to, the COVID-19 pandemic. Office closures limited access to the Company's facilities by the Company's financial reporting and accounting staff, as well as other advisors involved in the preparation of this Form 10-Q, led to communications and similar delays among such persons, and impacted our ability to fulfill required preparation and review processes and procedures with respect to this Form 10-Q, thus additional time was required to complete this Form 10-Q. As previously disclosed in the Current Report on Form 8-K filed by the Company on May 15, 2020, the Company announced that it was delaying the filing of its Quarterly Report on Form 10-Q for the quarter ended March 31, 2020 for the foregoing reasons in reliance on an order (Release No. 34-88465) issued by the Securities and Exchange Commission that provides conditional relief to public companies that are unable to timely comply with a filing deadline due to circumstances related to the COVID-19 pandemic.
As previously disclosed in the Current Report on Form 8-K filed by the Company on June 2, 2020, the Company announced that it had emerged from Chapter 11 (the "Emergence 8-K"). As more fully described in the Emergence 8-K, pursuant to the Chapter 11 plan of reorganization approved by the Bankruptcy Court, on May 29, 2020, among other things:
• the Company converted from a Texas corporation to a Delaware corporation;
• all the outstanding common stock was canceled, and holders thereof received an aggregate of 5.75% of the proforma common equity (subject to dilution from the convertible notes and new management incentive plan), at a conversion rate of 0.0006849838 new shares for each old share;
• the $300 million principal amount of the Company's Senior Notes due 2022 was canceled in exchange for 94.25% of the proforma common equity (subject to dilution from the convertible notes and new management incentive plan);
• the amounts outstanding under the Company's debtor-in-possession credit facility were repaid and the existing term loan was repaid with proceeds from the issuance of the senior secured notes and convertible notes referenced below;
• the Company entered into a $75 million senior secured asset-based revolving credit agreement;
• the Company issued $78,125,000 of its floating rate senior secured notes due 2025; and
• the Company issued $129,771,000 aggregate principal amount of its 5% convertible senior unsecured pay-in-kind notes due 2025, which are convertible into 75 shares of Common Stock per $1,000 principal amount of the convertible notes, subject to customary anti-dilution adjustments, which notes have the right to vote together with the common stock on an "as-converted" basis on all matters to be voted on by the Company's stockholders.
TABLE OF CONTENTS
Page
PART I
Item 1. | Financial Statements and Supplementary Data | 4 |
Condensed Consolidated Balance Sheets | 4 | |
Condensed Consolidated Statements of Operations | 5 | |
Condensed Consolidated Statements of Stockholders' Equity | 6 | |
Condensed Consolidated Statements of Cash Flow | 7 | |
Notes to Unaudited Condensed Consolidated Financial Statements | 8 | |
Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 29 |
Item 3. | Quantitative and Qualitative Disclosures about Market Risk | 45 |
Item 4. | Controls and Procedures | 45 |
Item 1. | 46 | |
Item 1A. | 46 | |
Item 2. | 48 | |
Item 3. | 48 | |
Item 4. | 49 | |
Item 5. | 49 | |
Item 6. | 50 |
PART II
Legal Proceedings Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds Defaults Upon Senior Securities
Mine Safety Disclosures
Other Information Exhibits
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES (DEBTOR IN POSSESSION)
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
Current assets:
Cash and cash equivalents Restricted cash Receivables:
Trade, net of allowance for doubtful accounts Unbilled receivables
Insurance recoveries Other receivables
Inventory
Assets held for sale
Prepaid expenses and other current assets Total current assets
Property and equipment, at cost
Less accumulated depreciation
Net property and equipment Deferred income taxes Operating lease assets Other noncurrent assets
$
64,836 79,135
12,01512,590
22,379 22,873
3,6938,928
21,619 22,453
1,8253,447
8,129 7,869
150,9511,083,512 643,558
439,954 471,170
9,26411,540
7,972 7,264
7,5931,068
Total assets
March 31, | December 31, |
2020 | 2019 |
(unaudited) | (audited) |
(in thousands, except share data)
15,457$ 24,619
998 998
$
615,734
182,9121,119,546 648,376
$
673,954
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable Deferred revenues Commitment premium Debtor in possession financing Accrued expenses:
Employee compensation and related costs Insurance claims and settlements Insurance premiums and deductibles Interest
Other
Total current liabilities
Long-term debt, less unamortized discount and debt issuance costs Noncurrent operating lease liabilities
Deferred income taxes
Other noncurrent liabilities
Total liabilities not subject to compromise Commitments and contingencies (Note 12) Liabilities subject to compromise Stockholders' equity:
Preferred stock, 10,000,000 shares authorized; none issued and outstanding
Common stock $.10 par value; 200,000,000 shares authorized; 79,579,571 and 79,202,216 shares outstanding at March 31, 2020 and December 31, 2019, respectively
Additional paid-in capital
Treasury stock, at cost; 1,041,565 and 877,047 shares at March 31, 2020 and December 31, 2019, respectively Accumulated deficit
Total stockholders' equity
Total liabilities and stockholders' equity
$
28,774
9971,339
9,584 4,000
10,30013,781
22,239 22,873
5,8315,940
107 5,452
11,1969,645
$ 32,551
- -
93,028 91,581
170,921467,699
6,434 5,700
3,2564,417
383 274,022
481 569,878
306,419
-
-
-
8,062 8,008
553,484553,210
(5,097) (5,090)
(521,156)(452,052)
35,293
104,076
See accompanying notes to condensed consolidated financial statements.
4
PIONEER ENERGY SERVICES CORP. AND SUBSIDIARIES (DEBTOR IN POSSESSION)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
(in thousands, except per share data)Three months ended March 31,2020
2019
Revenues
$
114,322
$
146,568
Costs and expenses:
Operating costs Depreciation
General and administrative Pre-petition restructuring charges Impairment
Bad debt expense, net
Gain on dispositions of property and equipment, net
Total costs and expenses
Loss from operations
Other income (expense):
Interest expense, net of interest capitalized Reorganization items
Other income (expense), net
Total other expense, net
92,022108,585
21,984 22,653
14,65519,758
17,074
17,853
727
(717)
163,598
-
1,046
62
(1,075)
151,029
(49,276)(4,461)
(8,651) (9,885)
(6,663)(5,545)
-684
(20,859)(9,201)
Loss before income taxes Income tax (expense) benefit Net loss
Loss per common share - Basic
Loss per common share - Diluted
Weighted average number of shares outstanding-Basic
Weighted average number of shares outstanding-Diluted
$ $ $
78,75378,311
78,75378,311
See accompanying notes to condensed consolidated financial statements.
5
(70,135)(13,662)
1,031 (1,453)
(69,104)$ (15,115)
(0.88)$ (0.19)
(0.88)$ (0.19)
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Disclaimer
Pioneer Energy Services Corp. published this content on 29 June 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 01 July 2020 17:13:04 UTC