NRC GROUP HOLDINGS CORP.

CIK:0001703038|SEC Filings

Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018	Sep. 30, 2019	Sep. 30, 2018
Income Statement [Abstract]
Operating revenue	$ 101,989	$ 99,982	$ 324,324	$ 252,906
Costs and expenses
Operating expenses, including cost of revenue (exclusive of depreciation and amortization)	74,196	65,676	229,129	168,524
General and administrative expenses	16,252	16,292	51,601	39,427
Depreciation and amortization	8,722	9,889	27,412	21,673
Management fees		595		1,395
Acquisition expenses	2,297	1,042	13,459	4,328
Change in fair value of contingent consideration	(957)		3,120
Other expense, net	354	531	2,167	2,871
Total costs and expenses	100,864	94,025	326,888	238,218
Operating income (loss)	1,125	5,957	(2,564)	14,688
Other income (expenses)
Interest expense	(8,585)	(6,041)	(22,924)	(13,674)
Foreign currency transaction gain (loss)	10	(67)	61	(26)
Loss on debt extinguishment				(2,720)
Other income (expense), net	(449)	4	(360)	(4)
Total other expenses, net	(9,024)	(6,104)	(23,223)	(16,424)
Loss before income taxes	(7,899)	(147)	(25,787)	(1,736)
Income tax expense (benefit)	2,286	731	2,973	(289)
Net loss	(10,185)	(878)	(28,760)	(1,447)
Foreign currency translation loss	(182)	(218)	(51)	(758)
Total other comprehensive loss	(182)	(218)	(51)	(758)
Comprehensive loss	(10,367)	(1,096)	(28,811)	(2,205)
Net loss	(10,185)	(878)	(28,760)	(1,447)
Less dividend on Series A convertible preferred stock	(1,838)		(5,513)
Net loss attributable to common shareholders	$ (12,023)	$ (878)	$ (34,273)	$ (1,447)
Net loss per share, basic and diluted	$ (0.32)	$ (0.04)	$ (0.91)	$ (0.07)
Weighted average common shares outstanding, basic and diluted	38,050,385	21,873,680	37,503,794	21,873,680
Dividends declared per Series A convertible preferred share	$ 1.75		$ 5.25

Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2019	Sep. 30, 2018
Cash flows from operating activities:
Net loss	$ (28,760)	$ (1,447)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation of property and equipment	21,396	17,314
Amortization of intangible assets	6,016	4,359
Accretion of asset retirement obligation	82	52
Amortization of deferred financing costs	1,300	1,237
Share-based compensation expense	2,526
Bad debt expense	3,657	423
Change in fair value of contingent consideration	3,120
Deferred income tax provision		68
Realized gain from equipment sales or retirements	356
Loss on extinguishment of debt		2,720
Non-cash OIT acquisition related expense	10,000
Changes in operating assets and liabilities, net of acquisitions:
Trade and other receivables	466	(1,054)
Inventories	(473)	102
Prepaid expenses	(471)	(60)
Other assets	(681)	62
Accounts payable and accrued expenses	(4,405)	(6,027)
Accrued wages and benefits	(42)	(44)
Deferred revenue	1,128	2,520
Other current liabilities including current income taxes	(135)	(2,043)
Other liabilities	(2,045)	(3,612)
Payment of contingent consideration in excess of acquisition date fair value	(1,837)
Net cash provided by operating activities	11,198	14,570
Cash flows from investing activities:
Acquisition of business, net of cash acquired	(5,805)	(27,288)
Capital expenditures	(36,648)	(15,838)
Net cash used in investing activities:	(42,453)	(43,126)
Cash flows from financing activities:
Borrowings from term loans		308,000
Principal payments on term loans	(2,574)	(197,927)
Borrowings from revolving credit facilities	47,000	10,983
Repayments of borrowing from revolving credit facilities		(13,494)
Principal payments on equipment loans	(1,353)	(1,056)
Principal payments on capital lease obligations	(2,752)
Payments of debt issuance costs		(9,660)
Dividend distribution to JFL		(86,543)
Capital contributions		22,817
Cash dividend paid	(5,187)
Payment of contingent consideration	(1,184)
Net cash provided by financing activities:	33,950	33,120
Effects of foreign exchange rates on cash and cash equivalents	(776)	(758)
Net increase in cash and cash equivalents	1,919	3,806
Cash and cash equivalents, beginning of period	18,365	10,570
Cash and cash equivalents, end of period	20,284	14,376
Supplemental Information:
Cash interest paid	22,647	8,840
Cash income taxes paid		463
Noncash investing and financing activities:
Equipment financed under capital lease obligations	19,292
Equipment financed under loans	2,942	103
Asset retirement obligation		650
Transfer from construction in progress to landfill permit intangible asset	4,318
Unpaid property and equipment	1,835
Issuance of common stock to JFL for OIT fee	10,000
Accrued and unpaid Series A convertible preferred stock dividend	$ 1,838

Consolidated Balance Sheets - USD ($) $ in Thousands	Sep. 30, 2019	Dec. 31, 2018
Current assets
Cash and cash equivalents	$ 20,284	$ 18,365
Receivables:
Trade, net of allowance for doubtful accounts of $3.8 million and $0.6 million, respectively	98,577	102,709
Other	1,231	1,112
Inventory	7,730	7,257
Prepaid expenses and other current assets	5,151	4,692
Total current assets	132,973	134,135
Property and equipment, net	158,976	122,565
Goodwill	53,003	51,417
Intangible assets, net of accumulated amortization of $40.6 million and $34.5 million, respectively	72,910	64,614
Other assets	3,940	3,396
Total assets	421,802	376,127
Current liabilities
Accounts payable	37,071	36,171
Accrued expenses	7,346	10,644
Accrued wages and benefits	4,816	4,858
Contingent consideration	7,514	2,470
Deferred revenue	2,327	1,199
Other current liabilities	4,247
Current portion of term loans	3,431	3,431
Current portion of equipment loan	1,237	737
Current portion of asset retirement obligation	658
Borrowings outstanding under revolving credit agreements	57,000	10,000
Accrued dividend on Series A convertible preferred stock	1,838	1,511
Total current liabilities	127,485	71,021
Contingent consideration, net of current portion	3,448	3,846
Term loans, net of current portion and deferred financing costs	328,681	330,104
Equipment loan, net of current portion	1,197	78
Asset retirement obligation	716	1,379
Other long-term liabilities	13,617	1,243
Total liabilities	475,144	407,671
Shareholders' Equity (Deficit)
Series A Convertible Preferred Stock, par value $0.0001; 5,000,000 shares authorized; 1,050,000 issued with a liquidation preference of $105,000 as of September 30, 2019 and December 31, 2018.	102,967	102,967
Common stock, par value $0.0001; 200,000,000 shares authorized; 38,050,385 and 36,902,544 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively.	4	4
Additional paid in capital	20,097	13,084
Accumulated deficit	(169,822)	(141,062)
Accumulated other comprehensive loss	(6,588)	(6,537)
Total shareholders' equity (deficit)	(53,342)	(31,544)
Total liabilities and shareholders' equity	$ 421,802	$ 376,127