20210331 Q1 10-Q

10-Q 1 ncsm-20210331x10q.htm 10-Q 20210331 Q1 10-Q

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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, 2021

☐ Transition Report Pursuant to Section 13 or 15(d) of

the Securities Exchange Act of 1934

For the transition period from ______ to ______

Commission file number: 001-38071

NCS Multistage Holdings, Inc.

(Exact name of registrant as specified in its charter)


	Delaware		46-1527455
	(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification number)

	19350 State Highway 249, Suite 600
	Houston, Texas		77070
	(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (281) 453-2222

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value	NCSM	NASDAQ Capital Market

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 ☑ No ☐

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 ☑ No ☐

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	☐	Accelerated filer	☐
Non-accelerated filer	☑	Smaller reporting company	☑
		Emerging growth company	☑

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

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☑

As of May 3, 2021, there were 2,379,265 shares of common stock outstanding.

Table of Contents

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Loss	5
	Condensed Consolidated Statements of Stockholders’ Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	18

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	30

Item 4.	Controls and Procedures	30

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	32

Item 1A.	Risk Factors	32

Item 6.	Exhibits	33

Signatures		34

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM 1. Financial Statements

NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except share data)

(Unaudited)



	March 31,		December 31,
	2021		2020
Assets
Current assets
Cash and cash equivalents	$	11,962	$	15,545
Accounts receivable—trade, net		22,106		21,925
Inventories, net		34,578		34,871
Prepaid expenses and other current assets		2,878		2,975
Other current receivables		9,045		8,358
Total current assets		80,569		83,674
Noncurrent assets
Property and equipment, net		23,903		24,435
Goodwill		15,222		15,222
Identifiable intangibles, net		6,246		6,413
Operating lease assets		4,806		5,170
Deposits and other assets		3,501		3,559
Deferred income taxes, net		207		205
Total noncurrent assets		53,885		55,004
Total assets	$	134,454	$	138,678
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable—trade	$	5,720	$	4,943
Accrued expenses		3,343		3,347
Income taxes payable		851		653
Operating lease liabilities		1,779		1,826
Current maturities of long-term debt		1,379		1,347
Other current liabilities		1,391		2,768
Total current liabilities		14,463		14,884
Noncurrent liabilities
Long-term debt, less current maturities		4,302		4,442
Operating lease liabilities, long-term		3,651		3,989
Other long-term liabilities		1,920		1,864
Deferred income taxes, net		67		13
Total noncurrent liabilities		9,940		10,308
Total liabilities		24,403		25,192
Commitments and contingencies (Note 9)
Stockholders’ equity
Preferred stock, $0.01 par value, 10,000,000 shares authorized, no shares issued and outstanding at
March 31, 2021 and December 31, 2020		—		—
Common stock, $0.01 par value, 11,250,000 shares authorized, 2,396,042 shares issued
and 2,378,879 shares outstanding at March 31, 2021 and 2,371,992 shares issued
and 2,359,918 shares outstanding at December 31, 2020		24		24
Additional paid-in capital		433,971		432,801
Accumulated other comprehensive loss		(81,487)		(81,780)
Retained deficit		(260,025)		(256,628)
Treasury stock, at cost; 17,163 shares at March 31, 2021 and 12,074 shares
at December 31, 2020		(1,000)		(809)
Total stockholders’ equity		91,483		93,608
Non-controlling interest		18,568		19,878
Total equity		110,051		113,486
Total liabilities and stockholders' equity	$	134,454	$	138,678

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

(Unaudited)



	Three Months Ended
	March 31,
	2021		2020
Revenues
Product sales	$	20,174	$	39,430
Services		8,340		15,120
Total revenues		28,514		54,550
Cost of sales
Cost of product sales, exclusive of depreciation and amortization expense shown below		13,921		23,448
Cost of services, exclusive of depreciation and amortization expense shown below		4,357		7,166
Total cost of sales, exclusive of depreciation and amortization expense shown below		18,278		30,614
Selling, general and administrative expenses		12,784		20,835
Depreciation		937		1,452
Amortization		167		1,133
Impairment		—		50,194
Loss from operations		(3,652)		(49,678)
Other income (expense)
Interest expense, net		(168)		(322)
Other income, net		341		158
Foreign currency exchange gain, net		150		10
Total other income (expense)		323		(154)
Loss before income tax		(3,329)		(49,832)
Income tax expense (benefit)		128		(925)
Net loss		(3,457)		(48,907)
Net (loss) income attributable to non-controlling interest		(60)		2,642
Net loss attributable to NCS Multistage Holdings, Inc.	$	(3,397)	$	(51,549)
Loss per common share
Basic loss per common share attributable to NCS Multistage Holdings, Inc. (1)	$	(1.43)	$	(21.92)
Diluted loss per common share attributable to NCS Multistage Holdings, Inc. (1)	$	(1.43)	$	(21.92)
Weighted average common shares outstanding
Basic (1)		2,380		2,352
Diluted (1)		2,380		2,352

_______________

(1)

Amounts in 2020 have been retrospectively adjusted for the 1-for-20 reverse stock split that was effective on December 1, 2020.

The accompanying notes are an integral part of these condensed consolidated financial statements.

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NCS MULTISTAGE HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

(Unaudited)



	Three Months Ended
	March 31,
	2021		2020
Net loss	$	(3,457)	$	(48,907)
Foreign currency translation adjustments, net of tax of $0		293		(5,249)
Comprehensive loss		(3,164)		(54,156)
Less: Comprehensive (loss) income attributable to non-controlling interest		(60)		2,642
Comprehensive loss attributable to NCS Multistage Holdings, Inc.	$	(3,104)