Independence Contract Drilling, Inc. Reports Financial Results For The Fourth Quarter And Year Ended December 31, 2019 And Announces 1-For-20 Reverse Stock Split
HOUSTON, Feb. 28, 2020 /PRNewswire/ --Independence Contract Drilling, Inc. (the "Company" or "ICD") (NYSE: ICD) today reported financial results for the three and twelve months ended December 31, 2019.
Fourth Quarter 2019 Highlights
-- Net loss of $35.0 million, or $0.47 per share.
-- Adjusted net loss, as defined below, of $7.7 million, or $0.10 per
share.
-- Adjusted EBITDA, as defined below, of $7.2 million.
-- Net debt, excluding finance leases and net of deferred financing costs,
of $122.3 million.
-- Marketed fleet utilization of 77%.
-- Fully burdened margin of $5,534 per day.
In the fourth quarter of 2019, the Company reported revenues of $45.3 million, a net loss of $35.0 million, or $0.47 per share, adjusted net loss (defined below) of $7.7 million, or $0.10 per share, and adjusted EBITDA (defined below) of $7.2 million. These results compare to revenues of $62.8 million, a net loss of $8.6 million, or $0.11 per share, adjusted net income of $1.0 million, or $0.01 per share, and adjusted EBITDA of $16.0 million in the fourth quarter of 2018, revenues of $45.1 million, a net loss of $10.5 million, or $0.14 per share, an adjusted net loss of $7.9 million, or $0.10 per share, and adjusted EBITDA of $7.7 million in the third quarter of 2019.
For the year ended December 31, 2019, the Company reported revenues of $203.6 million, a net loss of $60.8 million, or $0.81 per share, an adjusted net loss of $18.1 million, or $0.24 per share, and adjusted EBITDA of $43.4 million. This compares to revenues of $142.6 million, a net loss of $20.0 million, or $0.42 per share, an adjusted net loss of $8.3 million, or $0.17 per share, and adjusted EBITDA of $31.9 million for the year ended December 31, 2018.
Chief Executive Officer Anthony Gallegos commented, "The fourth quarter of 2019 reflected a continued period of strategic market positioning for ICD. We successfully added drilling optimization software to three of our operating rigs during the quarter, completed two strategic rig upgrades, and exited the quarter enhancing our industry's efforts to address ESG concerns by utilizing bi-fuel systems on approximately half of our operating rigs. For the quarter, expected rig count gains and increasing momentum in the Permian were offset slightly by weakness in the Haynesville where depressed natural gas prices caused several key customers to alter planned drilling programs entering 2020.
As we enter 2020, I believe ICD is very well positioned notwithstanding the visibility challenges facing our industry. Strength in our Permian operations is allowing ICD to relocate and recontract rigs from the Haynesville gas plays, which despite creating some near-term choppiness for our operating rig count, allows us to continue high-grading our customer base and maintain contract utilization. Against this backdrop, our Board of Directors has approved a capital budget of $10.2 million for 2020, which reflects ICD's commitment to generating free cash flow, with a laser focus on costs and support infrastructure."
Quarterly Operational Results
In the fourth quarter of 2019, the Company's marketed fleet operated at 77% utilization and recorded 1,984 revenue days, compared to 96% utilization and 2,818 revenue days in the fourth quarter of 2018, and 76% utilization and 1,943 revenue days in the third quarter of 2019. During the third quarter of 2019, the Company removed three SCR rigs from its marketed fleet.
Operating revenues in the fourth quarter of 2019 totaled $45.3 million, compared to $62.8 million in the fourth quarter of 2018 and $45.1 million in the third quarter of 2019. Revenues in the fourth quarter 2019 and third quarter of 2019 included early termination revenues of $0.6 million and $0.3 million, respectively. Excluding this early termination revenue, revenue per day in the fourth quarter of 2019 was $20,241, compared to $20,433 in the fourth quarter of 2018 and $20,559 in the third quarter of 2019. Sequential revenue per day declines were driven by lower dayrates on contract renewals.
Operating costs in the fourth quarter of 2019 totaled $33.9 million, compared to $39.9 million in the fourth quarter of 2018 and $34.2 million in the third quarter of 2019. Fully burdened operating costs were $14,707 per day in the fourth quarter of 2019, compared to $12,932 in the fourth quarter of 2018 and $14,914 in the third quarter of 2019. Sequential decreases in per day operating cost were due to reduced transitory costs between rig contracts offset by higher repair and maintenance cost during the fourth quarter of 2019.
Fully burdened rig operating margins in the fourth quarter of 2019 were $5,534 per day, compared to $7,501 per day in the fourth quarter of 2018 and $5,645 per day in the third quarter of 2019.
Selling, general and administrative expenses in the fourth quarter of 2019 were $4.7 million (including $0.5 million of non-cash stock-based compensation). 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). This compares to selling, general and administrative expenses of $5.0 million (including $0.2 million of non-cash stock-based compensation) in the fourth quarter of 2018 and $3.8 million (including $0.6 million of non-cash stock-based compensation) in the third quarter of 2019. Sequential increases in selling, general and administrative expenses were associated with higher incentive compensation accruals compared to third quarter 2019 levels.
Impairment Charge
During the fourth quarter of 2019, the Company recorded impairments totaling $25.9 million relating primarily to obsolete equipment and its plan to sell or otherwise dispose of legacy rigs and related component equipment acquired in the Sidewinder combination that will not be utilized in the Company's pad-optimal drilling fleet.
Drilling Operations Update
The Company exited the fourth quarter with 21 rigs earning revenues under drilling contracts and currently has 22 rigs under contract. The Company's backlog of drilling contracts with original terms of six months or longer was $51.5 million as of December 31, 2019, representing 6.9 rig years of activity. Approximately 100% of this backlog is expected to be realized during the remainder of 2020. The Company also has six rigs currently operating under short-term contracts not included in this reported backlog.
Capital Expenditures and Liquidity Update
The Company's capital expenditure budget for 2020, before asset sales and recoveries is $10.2 million. The Company had $5.9 million of assets classified as held for sale at December 31, 2019. During the fourth quarter of 2019, cash outlays for capital expenditures, net of asset sales and recoveries, were $2.2 million.
As of December 31, 2019, the Company had cash on hand of $5.2 million, no amounts drawn on its $40 million revolving credit facility, and $130 million principal amount outstanding under its term loan. The term loan includes a fully committed $15 million accordion that remains undrawn and fully available to the Company.
1-for-20 Reverse Stock Split
Following approval by the Company's stockholders, the Company's Board of Directors has approved a 1-for-20 reverse stock split of the Company's common stock. The reverse split will be effective at 5:00 p.m. Eastern Time on March 11, 2020 (the "Effective Time"), and the Company's common stock will begin trading on a split-adjusted basis on the New York Stock Exchange as of the market open on March 12, 2020. The reverse stock split reduces the number of issued and outstanding shares of the Company's common stock from approximately 77,523,973 and 76,241,045 shares, respectively to approximately 3,876,199 and 3,812,052 shares, respectively.
The reverse stock split affects all issued and outstanding shares of the Company's common stock and shares held in treasury, as well as the number of shares of common stock available for issuance under the Company's stock incentive plans and outstanding awards subject to those plans. The reverse stock split affects all stockholders uniformly and will not alter any stockholder's percentage interest in the Company's outstanding common stock, except for adjustments that may result from the treatment of fractional shares as described below.
No fractional shares will be issued as a result of the reverse stock split. The Company will pay to record holders cash in lieu of any fractional shares, which amount will be determined based on the average closing market price of the pre-split shares of ICD common stock on the New York Stock Exchange ("NYSE") (or if the pre-split shares of ICD common stock do not remain listed thereon, on the principal securities exchange or quotation service for the pre-split shares of ICD common stock, as determined by the Company's Board of Directors of ICD (the "Board")), for the ten trading days immediately preceding the day of the Effective Time, with payment for each whole post-split share of ICD common stock equal to 1/20th of the average closing price of one share of the pre-split shares of ICD common stock on the NYSE (or if the pre-split shares of ICD common stock do not remain listed thereon, on the principal securities exchange or quotation service for the pre-split shares of ICD common stock, as determined by the Board).
In connection with the reverse stock split, the Company's certificate of incorporation will also be amended to reduce the authorized number of shares of the Company's common stock from 200,000,000 shares to 50,000,000 shares.
Conference Call Details
A conference call for investors will be held today, February 28, 2020, at 10:00 a.m. Central Time (11:00 a.m. Eastern Time) to discuss the Company's fourth quarter and year end 2019 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 10138717. The replay will be available until March 6, 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
December 31, 2019
December 31, 2018
Assets
Cash and cash equivalents $5,206 $12,247
Accounts receivable, net 35,834 41,987
Inventories 2,325 2,693
Assets held for sale 8,740 19,711
Prepaid expenses and other current assets 4,640 8,930
Total current assets 56,745 85,568
Property, plant and equipment, net 457,530 496,197
Goodwill 1,627
Other long-term assets, net 2,726 1,470
Total assets $517,001 $584,862
Liabilities and Stockholders' Equity
Liabilities
Current portion of long-
term debt (1) $3,685 $587
Accounts payable 22,674 16,312
Accrued liabilities 16,368 29,219
Merger consideration payable
to an affiliate 3,022 -
Current portion of
contingent consideration 2,814 -
Total current liabilities 48,563 46,118
Long-term debt (2) 134,941 130,012
Contingent consideration - 15,748
Deferred income taxes, net 652 774
Other long-term liabilities 1,249 677
Total liabilities 185,405 193,329
Commitments and contingencies
Stockholders' equity
Common stock, $0.01 par
value, 200,000,000 shares
authorized;
77,523,973 and 77,598,806
shares issued,
respectively, and
76,241,045 and 77,078,252
shares outstanding,
respectively 762 771
Additional paid-in capital 505,107 503,446
Accumulated deficit (170,426) (109,638)
Treasury stock, at cost,
1,282,928 and 520,554
shares, respectively (3,847) (3,046)
Total stockholders' equity 331,596 391,533
Total liabilities and
stockholders' equity $517,001 $584,862
(1) Current portion of long-term
debt relates to the current
portion of finance and capital
lease obligations.
(2) As of December 31, 2019, long-
term debt includes $7.5 million
of long-term finance lease
obligations. As of December 31,
2018, long-term debt included
$0.6 million of long-term
capital lease obligations.
INDEPENDENCE CONTRACT DRILLING, INC.
Unaudited
(in thousands, except per share amounts)
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended Twelve Months Ended
December 31,
September 30, December 31,
2019 2018 2019 2019 2018
Revenues $45,292 $62,789 $45,073 $203,602 $142,609
Costs and expenses
Operating costs 33,881 39,908 34,246 144,913 95,220
Selling, general and
administrative 4,743 5,030 3,755 16,051 15,907
Merger-related expenses 10 11,270 320 2,698 13,646
Depreciation and
amortization 11,529 10,890 11,154 45,367 30,891
Asset impairment, net 25,909 (371) 1,966 35,748 25
Loss (gain) on
disposition of assets,
net 1,440 (65) 265 4,943 (740)
Other expense - 122 377
Total cost and expenses 77,512 66,662 51,828 250,097 154,949
Operating loss (32,220) (3,873) (6,755) (46,495) (12,340)
Interest expense (3,502) (4,513) (3,560) (14,415) (7,562)
---
Loss before income taxes (35,722) (8,386) (10,315) (60,910) (19,902)
Income tax (benefit) expense (712) 211 232 (122) 91
---
Net loss $(35,010) $(8,597) $(10,547) $(60,788) $(19,993)
Loss per share:
Basic and Diluted $(0.47) $(0.11) $(0.14) $(0.81) $(0.42)
Weighted average number of common shares outstanding:
Basic and Diluted 75,094 75,692 75,405 75,471 47,580
INDEPENDENCE CONTRACT DRILLING, INC.
Unaudited
(in thousands)
CONSOLIDATED STATEMENTS OF CASH FLOWS
Twelve Months Ended December 31,
2019 2018
---
Cash flows from operating activities
Net loss $(60,788) $(19,993)
Adjustments to reconcile net loss to net cash provided by operating
activities
Depreciation and
amortization 45,367 30,891
Asset impairment, net 35,748 25
Stock-based
compensation 1,871 4,829
Loss (gain) on
disposition of
assets, net 4,943 (740)
Amortization of
deferred rent 105
Deferred income taxes (122) 91
Amortization of
deferred financing
costs 814 492
Write-off of deferred
financing costs 856
Bad debt expense 459 22
Changes in operating assets and liabilities
Accounts receivable 5,695 (1,022)
Inventories (349) 250
Prepaid expenses and
other assets 1,473 (4,681)
Accounts payable and
accrued liabilities (7,190) 5,010
Net cash provided by
operating activities 27,921 16,135
---
Cash flows from investing activities
Cash acquired in
Sidewinder Merger 10,743
Purchases of property,
plant and equipment (38,320) (37,550)
Proceeds from
insurance claims 1,000 257
Proceeds from the sale
of assets 8,951 1,303
Net cash used in
investing activities (28,369) (25,247)
---
Cash flows from financing activities
Borrowings under Term
Loan Facility 130,000
Borrowings under
Revolving Credit
Facilities 4,511 55,732
Repayments under
Revolving Credit
Facilities (7,077) (101,707)
Repayment of
Sidewinder debt (58,512)
Common stock issuance
costs (177)
Purchase of treasury
stock (809) (1,180)
RSUs withheld for
taxes (34) (710)
Financing costs paid
under Term Loan
Facility (5) (3,371)
Financing costs paid
under Revolving
Credit Facilities (22) (790)
Payments for finance
and capital lease
obligations (2,980) (636)
Net cash (used in)
provided by financing
activities (6,593) 18,826
---
Net (decrease)
increase in cash and
cash equivalents (7,041) 9,714
Cash and cash equivalents
Beginning of year 12,247 2,533
End of year $5,206 $12,247
Supplemental disclosure of cash flow information
Cash paid during the
year for interest $13,974 $3,202
Supplemental disclosure of non-cash investing and financing activity
Change in property,
plant and equipment
purchases in accounts
payable $1,607 $1,175
Additions to property,
plant and equipment
through finance and
capital leases $13,143 $601
Transfer of assets
from held and used to
held for sale $(18,506)
$ -
Transfer from
inventory to fixed
assets $(406)
$ -
Extinguishment of
finance lease
obligations from sale
of assets classified
as finance leases $(249)
$ -
Additions to property,
plant and equipment
through tenant
allowance on
leasehold improvement
$ - $694
Sidewinder Merger
consideration
$ - $231,617
The following table provides various financial and operational data for the Company's operations for the three months ending December 31, 2019 and 2018 and September 30, 2019, and the twelve months ending December 31, 2019 and 2018. 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 Twelve Months Ended
December 31,
December 31,
September 30,
December 31,
December 31,
2019 2018 2019 2019 2018
Number of marketed rigs end of
period(1) 29 32 29 29 32
Rig operating days(2) 1,984 2,818 1,943 8,985 6,687
Average number of operating
rigs(3) 21.6 30.6 21.1 24.6 18.3
Rig utilization (4) 77% 96% 76% 83% 98%
Average revenue per operating
day (5) $20,241 $20,433 $20,559 $20,628 $20,001
Average cost per operating
day(6) $14,707 $12,932 $14,914 $14,202 $13,053
Average rig margin per
operating day $5,534 $7,501 $5,645 $6,426 $6,948
(1) Number of marketed rigs as of
December 31, 2019 decreased by three
rigs as compared to the number of
marketed rigs as of December 31,
2018. 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 $4.5
million, $3.2 million and $4.8
million during the three months
ended December 31, 2019 and 2018,
and September 30, 2019,
respectively, and $15.8 million and
$6.8 million during the twelve
months ended December 31, 2019 and
2018, respectively, (ii) revenues
associated with the amortization of
intangible revenue acquired in the
Sidewinder Merger of $1.1 million
during the twelve months ended
December 31, 2019, and $2.0 million
and $2.0 million during the three
and twelve months ended December 31,
2018, respectively, and (iii) early
termination revenues of $0.6 million
and $0.3 million during the three
months ended December 31, 2019, and
September 30, 2019, respectively,
and $1.4 million during the twelve
months ended December 31, 2019. The
three and twelve months ended
December 31, 2018 did not include
any early termination revenues.
(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 $4.5
million, $3.2 million and $4.8
million during the three months
ended December 31, 2019 and 2018,
and September 30, 2019,
respectively, and $15.8 million and
$6.8 million during the twelve
months ended December 31, 2019 and
2018, respectively, (ii) new crew
training costs of $0.2 million, zero
and $0.1 million during the three
months ended December 31, 2019 and
2018, and September 30, 2019,
respectively, and $0.3 million and
$0.1 million during the twelve
months ended December 31, 2019 and
2018, respectively, (iii)
construction overhead costs expensed
due to reduced rig construction
activity of zero, $0.3 million and
$0.2 million during the three months
ended December 31, 2019 and 2018,
and September 30, 2019,
respectively, and $1.1 million and
$1.0 million during the twelve
months ended December 31, 2019 and
2018, respectively, and (iv) rig de-
commissioning costs associated with
stacking deactivated rigs of zero,
zero and $0.2 million during the
three months ended December 31, 2019
and 2018, and September 30, 2019,
respectively, and $0.2 million and
zero during the twelve months ended
December 31, 2019, and 2018,
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)
(Unaudited)
---
Three Months Ended
Twelve Months Ended
---
December 31, December 31, September 30, December 31, December 31,
2019 2018 2019 2019 2018
Amount Per Amount Per Amount Per Amount Per Amount Per
Share Share Share Share Share
---
(in thousands)
Net loss $(35,010) $(0.47) $(8,597) $(0.11) $(10,547) $(0.14) $(60,788) $(0.81) $(19,993) $(0.42)
Add back:
Asset
impairment,
net (1) 25,909 0.35 (371) (0.01) 1,966 0.04 35,748 0.47 25 -
Loss (gain) on
disposition of
assets, net(2) 1,440 0.02 (65) 265 4,943 0.07 (740) (0.02)
Intangible
revenue(3) - (2,044) (0.03) (1,079) (0.01) (2,044) (0.04)
Merger-related
expenses(4) 10 11,270 0.15 320 2,698 0.04 13,646 0.29
Write-off of
deferred
financing
costs(5) - 856 0.01 856 0.02
Other expense - 122 377
Adjusted net
(loss) income $(7,651) $(0.10) $1,049 $0.01 $(7,874) $(0.10) $(18,101) $(0.24) $(8,250) $(0.17)
===
Reconciliation of Net Loss to EBITDA and Adjusted EBITDA:
(Unaudited)
(Unaudited)
---
Three Months Ended Twelve Months Ended
---
December 31,
December 31,
September 30,
December 31,
December 31,
2019 2018 2019 2019 2018
(in thousands)
Net loss $(35,010) $(8,597) $(10,547) $(60,788) $(19,993)
Add back:
Income tax (benefit)
expense (712) 211 232 (122) 91
Interest expense 3,502 4,513 3,560 14,415 7,562
Depreciation and
amortization 11,529 10,890 11,154 45,367 30,891
Asset impairment,
net(1) 25,909 (371) 1,966 35,748 25
EBITDA 5,218 6,646 6,365 34,620 18,576
Loss (gain) on
disposition of
assets, net(2) 1,440 (65) 265 4,943 (740)
Stock-based
compensation 486 240 582 1,871 2,438
Intangible
revenue(3) - (2,044) (1,079) (2,044)
Merger-related
expenses(4) 10 11,270 320 2,698 13,646
Other expense - 122 377
Adjusted EBITDA $7,154 $16,047 $7,654 $43,430 $31,876
===
(1) In the fourth quarter of 2019, we
recorded impairments totaling
$25.9 million relating primarily
to our decision to remove two rigs
from our marketed, or to-be-
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. In the third
quarter of 2019, we impaired 100%
of the goodwill recorded in
connection with the Sidewinder
Merger. In the fourth quarter of
2018, we recorded insurance
recoveries, net of impairments of
$0.6 million on the Galayda
facility water damage incurred
during Hurricane Harvey after
receiving a proof of loss letter
from our insurance carrier, offset
by an increased impairment of $0.2
million related to increased
estimated costs to sell the
Galayda facility.
(2) In the fourth quarter of 2019, and
2018 and the third quarter of
2019, we recorded a loss, gain and
loss, respectively, of $1.4
million, $0.1 million and $0.3
million, respectively, on
disposition of assets primarily
due to a loss or gain on the sale
or disposition of miscellaneous
drilling equipment in the
respective quarter.
(3) We amortized $1.1 million of
intangible revenue related to an
unfavorable contract liability
acquired in the Sidewinder Merger
for the year ended December 31,
2019, and $2.0 million for the
three months and the year ended
December 31, 2018.
(4) For all periods presented, we
incurred costs directly associated
with the Sidewinder Merger. These
costs were primarily comprised of
severance, professional fees and
other merger integration 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.
