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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Nesco Holdings Inc | NYSE:NSCO | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
0.00 | 0.00% | 9.35 | 0 | 01:00:00 |
x
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
o
|
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Delaware
|
84-2531628
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
Common Stock, $0.0001 par value
|
NSCO
|
New York Stock Exchange
|
Redeemable warrants, exercisable for Common Stock, $0.0001 par value
|
NSCO.WS
|
New York Stock Exchange
|
Large accelerated filer
|
o
|
|
Accelerated filer
|
x
|
Non-accelerated filer
|
o
|
|
Smaller reporting company
|
o
|
|
|
|
Emerging growth company
|
x
|
PART I
|
|
FINANCIAL INFORMATION
|
|
Page Number
|
|
|
|
|
|
Item 1.
|
|
Unaudited Condensed Consolidated Financial Statements
|
|
|
|
|
Unaudited Condensed Consolidated Balance Sheets as of March 31, 2020 and December 31, 2019
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Comprehensive Loss for the Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
Unaudited Condensed Consolidated Statements of Stockholders' Deficit for the Three Months Ended March 31, 2020 and 2019
|
|
|
|
|
Notes to Unaudited Condensed Consolidated Financial Statements
|
|
|
Item 2.
|
|
Management's Discussion and Analysis of Financial Condition and Results of Operations
|
|
|
Item 3.
|
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
|
Item 4.
|
|
Controls and Procedures
|
|
|
|
|
|
|
|
PART II
|
|
OTHER INFORMATION
|
|
|
|
|
|
|
|
Item 1.
|
|
Legal Proceedings
|
|
|
Item 1A.
|
|
Risk Factors
|
|
|
Item 2.
|
|
Unregistered Sales of Equity Securities and Use of Proceeds
|
|
|
Item 3.
|
|
Defaults Upon Senior Securities
|
|
|
Item 4.
|
|
Mine Safety Disclosures
|
|
|
Item 5.
|
|
Other Information
|
|
|
Item 6.
|
|
Exhibits
|
|
|
|
|
SIGNATURES
|
|
(in $000s, except share data)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets
|
|
|
|
||||
Current Assets
|
|
|
|
||||
Cash
|
$
|
10,236
|
|
|
$
|
6,302
|
|
Accounts receivable, net of allowance of $4,685 and $4,654 respectively
|
70,282
|
|
|
71,323
|
|
||
Inventory
|
30,738
|
|
|
33,001
|
|
||
Prepaid expenses and other
|
5,251
|
|
|
5,217
|
|
||
Total current assets
|
116,507
|
|
|
115,843
|
|
||
Property and equipment, net
|
9,802
|
|
|
6,561
|
|
||
Rental equipment, net
|
380,053
|
|
|
383,420
|
|
||
Goodwill and other intangibles, net
|
308,014
|
|
|
308,747
|
|
||
Notes receivable
|
691
|
|
|
713
|
|
||
Total Assets
|
$
|
815,067
|
|
|
$
|
815,284
|
|
Liabilities and Stockholder's Deficit
|
|
|
|
||||
Current Liabilities
|
|
|
|
||||
Accounts payable
|
$
|
28,038
|
|
|
$
|
41,172
|
|
Accrued expenses
|
15,165
|
|
|
27,590
|
|
||
Deferred rent income
|
1,753
|
|
|
2,270
|
|
||
Current maturities of long-term debt
|
1,601
|
|
|
1,280
|
|
||
Current portion of capital lease obligations
|
7,430
|
|
|
5,451
|
|
||
Total current liabilities
|
53,987
|
|
|
77,763
|
|
||
Long-term debt, net
|
749,111
|
|
|
713,023
|
|
||
Capital leases
|
18,898
|
|
|
22,631
|
|
||
Deferred tax liabilities
|
12,940
|
|
|
12,288
|
|
||
Interest rate collar
|
7,671
|
|
|
1,709
|
|
||
Total long-term liabilities
|
788,620
|
|
|
749,651
|
|
||
|
|
|
|
||||
Commitments and contingencies (see Note 9)
|
|
|
|
||||
|
|
|
|
||||
Stockholders' Deficit
|
|
|
|
||||
Common stock - $0.0001 par value, 250,000,000 shares authorized, 49,033,903 shares issued and outstanding, at March 31, 2020 and December 31, 2019
|
5
|
|
|
5
|
|
||
Additional paid-in capital
|
433,136
|
|
|
432,577
|
|
||
Accumulated deficit
|
(460,681
|
)
|
|
(444,712
|
)
|
||
Total stockholders' deficit
|
(27,540
|
)
|
|
(12,130
|
)
|
||
Total Liabilities and Stockholders' Deficit
|
$
|
815,067
|
|
|
$
|
815,284
|
|
|
Three Months Ended March 31,
|
||||||
(in $000s, except share and per share data)
|
2020
|
|
2019
|
||||
Revenue
|
|
|
|
||||
Rental revenue
|
$
|
50,994
|
|
|
$
|
45,642
|
|
Sales of rental equipment
|
9,093
|
|
|
7,399
|
|
||
Sales of new equipment
|
7,577
|
|
|
2,350
|
|
||
Parts sales and services
|
14,079
|
|
|
6,101
|
|
||
Total Revenue
|
81,743
|
|
|
61,492
|
|
||
Cost of Revenue
|
|
|
|
||||
Cost of rental revenue
|
13,786
|
|
|
11,057
|
|
||
Depreciation of rental equipment
|
20,112
|
|
|
16,731
|
|
||
Cost of rental equipment sales
|
7,728
|
|
|
5,934
|
|
||
Cost of new equipment sales
|
6,654
|
|
|
1,806
|
|
||
Cost of parts sales and services
|
11,360
|
|
|
4,850
|
|
||
Major repair disposals
|
700
|
|
|
762
|
|
||
Total cost of revenue
|
60,340
|
|
|
41,140
|
|
||
Gross Profit
|
21,403
|
|
|
20,352
|
|
||
Operating Expenses
|
|
|
|
||||
Selling, general and administrative expenses
|
11,618
|
|
|
7,579
|
|
||
Licensing and titling expenses
|
821
|
|
|
653
|
|
||
Amortization and non-rental depreciation
|
716
|
|
|
770
|
|
||
Transaction expenses
|
736
|
|
|
2,510
|
|
||
Other operating expenses
|
716
|
|
|
150
|
|
||
Total Operating Expenses
|
14,607
|
|
|
11,662
|
|
||
Operating Income
|
6,796
|
|
|
8,690
|
|
||
Other Expense
|
|
|
|
||||
Interest expense, net
|
16,014
|
|
|
14,993
|
|
||
Other (income) expense, net
|
6,021
|
|
|
(13
|
)
|
||
Total other expense
|
22,035
|
|
|
14,980
|
|
||
Loss Before Income Taxes
|
(15,239
|
)
|
|
(6,290
|
)
|
||
Income Tax Expense
|
730
|
|
|
434
|
|
||
Net Loss
|
$
|
(15,969
|
)
|
|
$
|
(6,724
|
)
|
Loss per Share:
|
|
|
|
||||
Basic and diluted
|
$
|
(0.33
|
)
|
|
$
|
(0.31
|
)
|
Weighted-average-common shares outstanding:
|
|
|
|
||||
Basic and diluted
|
49,033,903
|
|
|
21,660,638
|
|
|
Three Months Ended March 31,
|
||||||
(in $000s)
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(15,969
|
)
|
|
$
|
(6,724
|
)
|
Other comprehensive loss
|
|
|
|
||||
Interest rate collar (net of taxes of $112 in 2019)
|
—
|
|
|
88
|
|
||
Other comprehensive loss
|
—
|
|
|
88
|
|
||
Comprehensive loss
|
$
|
(15,969
|
)
|
|
$
|
(6,636
|
)
|
|
Three Months Ended March 31,
|
||||||
(in $000s)
|
2020
|
|
2019
|
||||
Operating Activities
|
|
|
|
||||
Net (loss) income
|
$
|
(15,969
|
)
|
|
$
|
(6,724
|
)
|
Adjustments to reconcile net (loss) income to net cash from operating activities:
|
|
|
|
|
|
||
Depreciation
|
20,377
|
|
|
16,996
|
|
||
Amortization - intangibles
|
691
|
|
|
724
|
|
||
Amortization - financing costs
|
711
|
|
|
677
|
|
||
Provision for losses on accounts receivable
|
777
|
|
|
692
|
|
||
Share-based payments
|
559
|
|
|
128
|
|
||
Gain on sale of rental equipment and parts
|
(2,213
|
)
|
|
(1,977
|
)
|
||
Gain on insurance proceeds - damaged equipment
|
(120
|
)
|
|
(452
|
)
|
||
Major repair disposal
|
700
|
|
|
762
|
|
||
Change in fair value of derivative
|
5,963
|
|
|
—
|
|
||
Deferred tax (benefit) expense
|
652
|
|
|
271
|
|
||
Changes in assets and liabilities:
|
|
|
|
|
|
||
Accounts receivable
|
1,207
|
|
|
1,823
|
|
||
Inventory
|
176
|
|
|
(4,299
|
)
|
||
Prepaid expenses and other
|
(34
|
)
|
|
(3,413
|
)
|
||
Accounts payable
|
(3,352
|
)
|
|
10,297
|
|
||
Accrued expenses and other liabilities
|
(12,427
|
)
|
|
(8,163
|
)
|
||
Unearned income
|
(517
|
)
|
|
(3,437
|
)
|
||
Net cash flow from operating activities
|
(2,819
|
)
|
|
3,905
|
|
||
Investing Activities
|
|
|
|
||||
Purchase of equipment - rental fleet
|
(33,347
|
)
|
|
(13,704
|
)
|
||
Proceeds from sale of rental equipment and parts
|
9,960
|
|
|
7,628
|
|
||
Insurance proceeds from damaged equipment
|
365
|
|
|
797
|
|
||
Purchase of other property and equipment
|
(4,168
|
)
|
|
(1,656
|
)
|
||
Net cash flow from investing activities
|
(27,190
|
)
|
|
(6,935
|
)
|
||
Financing Activities
|
|
|
|
|
|
||
Borrowings under revolving credit facilities
|
35,680
|
|
|
15,000
|
|
||
Repayments under revolving credit facilities
|
—
|
|
|
(9,000
|
)
|
||
Repayments of notes payable
|
—
|
|
|
(183
|
)
|
||
Capital lease payments
|
(1,737
|
)
|
|
(1,166
|
)
|
||
Finance fees paid
|
—
|
|
|
20
|
|
||
Net cash flow from financing activities
|
33,943
|
|
|
4,671
|
|
||
Net Change in Cash
|
3,934
|
|
|
1,641
|
|
||
Cash at Beginning of Period
|
6,302
|
|
|
2,140
|
|
||
Cash at End of Period
|
$
|
10,236
|
|
|
$
|
3,781
|
|
|
|
|
|
||||
Supplemental Cash Flow Information
|
|
|
|
||||
Cash paid for interest
|
$
|
24,977
|
|
|
$
|
23,570
|
|
Cash paid for income taxes
|
76
|
|
|
136
|
|
||
Non-Cash Investing and Financing Activities
|
|
|
|
||||
Transfer of parts inventory to leased equipment
|
2,087
|
|
|
1,470
|
|
||
Rental equipment and property and equipment purchases in accounts payable
|
11,861
|
|
|
20,868
|
|
||
Rental equipment sales in accounts receivable
|
5,627
|
|
|
3,050
|
|
||
Insurance recoveries accrued in accounts receivable
|
—
|
|
|
424
|
|
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Deficit
|
|||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
(in $000s, except share data)
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2019
|
49,033,903
|
|
|
$
|
5
|
|
|
$
|
432,577
|
|
|
$
|
(444,712
|
)
|
|
$
|
—
|
|
|
$
|
(12,130
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(15,969
|
)
|
|
—
|
|
|
(15,969
|
)
|
|||||
Share-based payments
|
—
|
|
|
—
|
|
|
559
|
|
|
—
|
|
|
—
|
|
|
559
|
|
|||||
Balance, March 31, 2020
|
49,033,903
|
|
|
$
|
5
|
|
|
$
|
433,136
|
|
|
$
|
(460,681
|
)
|
|
$
|
—
|
|
|
$
|
(27,540
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
|
|
|
|
|
Additional Paid-in Capital
|
|
Accumulated Deficit
|
|
Accumulated Other Comprehensive Loss
|
|
Total Stockholders' Deficit
|
|||||||||||
|
Common Stock
|
|
|
|
|
|||||||||||||||||
|
Shares
|
|
Amount
|
|
|
|
|
|||||||||||||||
Balance, December 31, 2018
|
21,660,638
|
|
|
$
|
2
|
|
|
$
|
259,298
|
|
|
$
|
(417,660
|
)
|
|
$
|
(396
|
)
|
|
$
|
(158,756
|
)
|
Net loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(6,724
|
)
|
|
—
|
|
|
(6,724
|
)
|
|||||
Share-based payments
|
—
|
|
|
—
|
|
|
128
|
|
|
—
|
|
|
—
|
|
|
128
|
|
|||||
Interest rate collar
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
88
|
|
|
88
|
|
|||||
Balance, March 31, 2019
|
21,660,638
|
|
|
$
|
2
|
|
|
$
|
259,426
|
|
|
$
|
(424,384
|
)
|
|
$
|
(308
|
)
|
|
$
|
(165,264
|
)
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
(in $000s)
|
Topic 840
|
|
Topic 606
|
|
Total
|
|
Topic 840
|
|
Topic 606
|
|
Total
|
||||||||||||
Rental:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Rental revenue
|
$
|
48,913
|
|
|
$
|
—
|
|
|
$
|
48,913
|
|
|
$
|
43,641
|
|
|
$
|
—
|
|
|
$
|
43,641
|
|
Shipping and handling
|
—
|
|
|
2,081
|
|
|
2,081
|
|
|
—
|
|
|
2,001
|
|
|
2,001
|
|
||||||
Total rental revenue
|
48,913
|
|
|
2,081
|
|
|
50,994
|
|
|
43,641
|
|
|
2,001
|
|
|
45,642
|
|
||||||
Sales and services:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Sales of rental equipment
|
—
|
|
|
9,093
|
|
|
9,093
|
|
|
—
|
|
|
7,399
|
|
|
7,399
|
|
||||||
Sales of new equipment
|
—
|
|
|
7,577
|
|
|
7,577
|
|
|
—
|
|
|
2,350
|
|
|
2,350
|
|
||||||
Parts and services
|
—
|
|
|
14,079
|
|
|
14,079
|
|
|
—
|
|
|
6,101
|
|
|
6,101
|
|
||||||
Total sales and services
|
—
|
|
|
30,749
|
|
|
30,749
|
|
|
—
|
|
|
15,850
|
|
|
15,850
|
|
||||||
Total revenue
|
$
|
48,913
|
|
|
$
|
32,830
|
|
|
$
|
81,743
|
|
|
$
|
43,641
|
|
|
$
|
17,851
|
|
|
$
|
61,492
|
|
(in $000s)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Parts, tools and accessories inventory
|
$
|
29,382
|
|
|
$
|
30,174
|
|
Equipment inventory
|
1,356
|
|
|
2,827
|
|
||
Inventory
|
$
|
30,738
|
|
|
$
|
33,001
|
|
(in $000s)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Rental equipment
|
$
|
668,220
|
|
|
$
|
658,564
|
|
Less: accumulated depreciation
|
(288,167
|
)
|
|
(275,144
|
)
|
||
Rental equipment, net
|
$
|
380,053
|
|
|
$
|
383,420
|
|
(in $000s)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Property and equipment
|
$
|
10,411
|
|
|
$
|
10,082
|
|
Less: accumulated depreciation
|
(7,389
|
)
|
|
(7,168
|
)
|
||
Construction in progress
|
6,780
|
|
|
3,647
|
|
||
Property and equipment, net
|
$
|
9,802
|
|
|
$
|
6,561
|
|
|
Three Months Ended March 31,
|
|
Three Months Ended March 31,
|
||||||||||||||||||||
|
2020
|
|
2019
|
||||||||||||||||||||
((in $000s)
|
ERS
|
|
PTA
|
|
Total
|
|
ERS
|
|
PTA
|
|
Total
|
||||||||||||
Rental revenue(1)(2)
|
$
|
47,053
|
|
|
$
|
3,941
|
|
|
$
|
50,994
|
|
|
$
|
42,896
|
|
|
$
|
2,746
|
|
|
$
|
45,642
|
|
Sales of rental equipment
|
9,093
|
|
|
—
|
|
|
9,093
|
|
|
7,399
|
|
|
—
|
|
|
7,399
|
|
||||||
Sales of new equipment
|
7,577
|
|
|
—
|
|
|
7,577
|
|
|
2,350
|
|
|
—
|
|
|
2,350
|
|
||||||
Parts sales and services
|
—
|
|
|
14,079
|
|
|
14,079
|
|
|
—
|
|
|
6,101
|
|
|
6,101
|
|
||||||
Total revenues
|
63,723
|
|
|
18,020
|
|
|
81,743
|
|
|
52,645
|
|
|
8,847
|
|
|
61,492
|
|
||||||
Cost of revenue
|
27,320
|
|
|
12,908
|
|
|
40,228
|
|
|
18,654
|
|
|
5,755
|
|
|
24,409
|
|
||||||
Depreciation of rental equipment
|
18,976
|
|
|
1,136
|
|
|
20,112
|
|
|
15,661
|
|
|
1,070
|
|
|
16,731
|
|
||||||
Gross Profit
|
$
|
17,427
|
|
|
$
|
3,976
|
|
|
$
|
21,403
|
|
|
$
|
18,330
|
|
|
$
|
2,022
|
|
|
$
|
20,352
|
|
|
Three Months Ended March 31,
|
||||||
(in $000s)
|
2020
|
|
2019
|
||||
Gross profit
|
$
|
21,403
|
|
|
$
|
20,352
|
|
Selling, general and administrative expenses
|
11,618
|
|
|
7,579
|
|
||
Licensing and titling expenses
|
821
|
|
|
653
|
|
||
Amortization and non-rental depreciation
|
716
|
|
|
770
|
|
||
Transaction expenses
|
736
|
|
|
2,510
|
|
||
Other operating expenses
|
716
|
|
|
150
|
|
||
Other (income) expense
|
6,021
|
|
|
(13
|
)
|
||
Interest expense, net
|
16,014
|
|
|
14,993
|
|
||
Loss before income taxes
|
$
|
(15,239
|
)
|
|
$
|
(6,290
|
)
|
(in $000s)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Assets:
|
|
|
|
||||
United States
|
$
|
804,649
|
|
|
$
|
802,516
|
|
Canada
|
7,159
|
|
|
8,152
|
|
||
Mexico
|
3,259
|
|
|
4,616
|
|
||
|
$
|
815,067
|
|
|
$
|
815,284
|
|
(in $000s)
|
Three Months Ended March 31, 2019
|
||
Total revenue
|
$
|
72,505
|
|
Net loss
|
(6,415
|
)
|
|
Basic and diluted net loss per share
|
(0.30
|
)
|
|
March 31,
|
|
December 31,
|
|
March 31,
|
|
December 31,
|
||||||
(in $000s)
|
2020
|
|
2019
|
|
2020
|
|
2019
|
||||||
2019 Credit Facility
|
$
|
285,680
|
|
|
$
|
250,000
|
|
|
3.2
|
%
|
|
4.2
|
%
|
Senior Secured Notes due 2024
|
475,000
|
|
|
475,000
|
|
|
10.0
|
%
|
|
10.0
|
%
|
||
Notes Payable
|
3,543
|
|
|
3,525
|
|
|
|
|
|
||||
Total debt outstanding
|
764,223
|
|
|
728,525
|
|
|
|
|
|
||||
Deferred finance fees
|
(13,511
|
)
|
|
(14,222
|
)
|
|
|
|
|
||||
Net debt
|
750,712
|
|
|
714,303
|
|
|
|
|
|
||||
Less current maturities
|
(1,601
|
)
|
|
(1,280
|
)
|
|
|
|
|
||||
Long-term debt
|
$
|
749,111
|
|
|
$
|
713,023
|
|
|
|
|
|
(in $000s)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Goodwill
|
$
|
238,153
|
|
|
$
|
238,195
|
|
Nesco trade name
|
28,000
|
|
|
28,000
|
|
||
Other intangible assets:
|
|
|
|
||||
Trade names
|
1,030
|
|
|
1,030
|
|
||
Non-compete agreements
|
380
|
|
|
380
|
|
||
Customer relationships
|
52,880
|
|
|
52,880
|
|
||
|
82,290
|
|
|
82,290
|
|
||
Less: accumulated amortization
|
(12,429
|
)
|
|
(11,738
|
)
|
||
Intangible assets, net
|
69,861
|
|
|
70,552
|
|
||
Goodwill and intangible assets
|
$
|
308,014
|
|
|
$
|
308,747
|
|
|
Three Months Ended March 31,
|
||||||
|
2020
|
|
2019
|
||||
Net loss (in $000s)
|
$
|
(15,969
|
)
|
|
$
|
(6,724
|
)
|
Weighted-average basic and diluted shares outstanding
|
49,033,903
|
|
|
21,660,638
|
|
||
Basic and diluted net loss per share
|
$
|
(0.33
|
)
|
|
$
|
(0.31
|
)
|
•
|
Level 1 - Unadjusted quoted prices for identical assets and liabilities in active markets;
|
•
|
Level 2 - Quoted prices for similar assets and liabilities in active markets (other than those included in Level 1) which are observable for the asset or liability, either directly or indirectly; and
|
•
|
Level 3 - Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
|
|
Carrying Value
|
|
Fair Value
|
||||||||||||
(in $000s)
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||||||
March 31, 2020
|
|
|
|
|
|
|
|
||||||||
2019 Credit Facility
|
$
|
285,680
|
|
|
$
|
—
|
|
|
$
|
285,680
|
|
|
$
|
—
|
|
Senior Secured Notes due 2024
|
475,000
|
|
|
—
|
|
|
427,500
|
|
|
—
|
|
||||
Notes Payable
|
3,543
|
|
|
—
|
|
|
3,543
|
|
|
—
|
|
||||
Derivative
|
7,671
|
|
|
—
|
|
|
7,671
|
|
|
—
|
|
||||
|
|
|
|
|
|
|
|
||||||||
December 31, 2019
|
|
|
|
|
|
|
|
||||||||
2019 Credit Facility
|
$
|
250,000
|
|
|
$
|
—
|
|
|
$
|
250,000
|
|
|
$
|
—
|
|
Senior Secured Notes due 2024
|
475,000
|
|
|
—
|
|
|
494,000
|
|
|
—
|
|
||||
Notes Payable
|
3,525
|
|
|
—
|
|
|
3,650
|
|
|
—
|
|
||||
Derivative
|
1,709
|
|
|
—
|
|
|
1,709
|
|
|
—
|
|
|
Liability Derivatives
|
||||||
(in $000s)
|
March 31, 2020
|
|
December 31, 2019
|
||||
Derivative instruments:
|
|
|
|
||||
Interest rate collar
|
$
|
7,671
|
|
|
$
|
1,709
|
|
Total derivative instruments
|
$
|
7,671
|
|
|
$
|
1,709
|
|
(in $000s)
|
Three Months Ended March 31, 2020
|
% of revenue
|
Three Months Ended March 31, 2019
|
% of revenue
|
||||
Rental revenue
|
$
|
50,994
|
|
62.4%
|
$
|
45,642
|
|
74.2%
|
Sales of rental equipment
|
9,093
|
|
11.1%
|
7,399
|
|
12.0%
|
||
Sales of new equipment
|
7,577
|
|
9.3%
|
2,350
|
|
3.8%
|
||
Parts sales and services
|
14,079
|
|
17.2%
|
6,101
|
|
9.9%
|
||
Total Revenue
|
81,743
|
|
100.0%
|
61,492
|
|
100.0%
|
||
Cost of revenue
|
40,228
|
|
49.2%
|
24,409
|
|
39.7%
|
||
Depreciation of rental equipment
|
20,112
|
|
24.6%
|
16,731
|
|
27.2%
|
||
Gross Profit
|
21,403
|
|
26.2%
|
20,352
|
|
33.1%
|
||
Operating expenses
|
14,607
|
|
|
11,662
|
|
|
||
Operating Income
|
6,796
|
|
|
8,690
|
|
|
||
Other Expense
|
22,035
|
|
|
14,980
|
|
|
||
Loss Before Income Taxes
|
(15,239
|
)
|
|
(6,290
|
)
|
|
||
Income Tax Expense
|
730
|
|
|
434
|
|
|
||
Net Loss
|
$
|
(15,969
|
)
|
|
$
|
(6,724
|
)
|
|
|
Three Months Ended March 31,
|
|||||||||||||
(in $000s, except fleet count and rate per day)
|
2020
|
|
2019
|
|
change
|
|
(%)
|
|||||||
Adjusted EBITDA (a)
|
$
|
32,061
|
|
|
$
|
30,434
|
|
|
$
|
1,627
|
|
|
5.3
|
%
|
Average equipment on rent (b)
|
$
|
499,756
|
|
|
$
|
452,146
|
|
|
$
|
47,610
|
|
|
10.5
|
%
|
Average fleet count
|
4,627
|
|
|
3,913
|
|
|
714
|
|
|
18.2
|
%
|
|||
Average fleet utilization (c)
|
75.9
|
%
|
|
82.2
|
%
|
|
(6.3
|
)%
|
|
(7.7
|
)%
|
|||
Average rental rate per day (d)
|
$
|
137.77
|
|
|
$
|
137.46
|
|
|
$
|
0.31
|
|
|
0.2
|
%
|
|
Three Months Ended March 31,
|
||||||
(in $000s)
|
2020
|
|
2019
|
||||
Net loss
|
$
|
(15,969
|
)
|
|
$
|
(6,724
|
)
|
Interest expense
|
16,014
|
|
|
14,993
|
|
||
Income tax expense
|
730
|
|
|
434
|
|
||
Depreciation expense
|
20,377
|
|
|
16,996
|
|
||
Amortization expense
|
691
|
|
|
724
|
|
||
EBITDA
|
21,843
|
|
|
26,423
|
|
||
Adjustments:
|
|
|
|
||||
Non-cash purchase accounting impact (1)
|
917
|
|
|
611
|
|
||
Transaction and process improvement costs (2)
|
2,079
|
|
|
2,510
|
|
||
Major repairs (3)
|
700
|
|
|
762
|
|
||
Share-based payments (4)
|
559
|
|
|
128
|
|
||
Change in fair value of derivative (5)
|
5,963
|
|
|
—
|
|
||
Adjusted EBITDA
|
$
|
32,061
|
|
|
$
|
30,434
|
|
|
Three Months Ended March 31,
|
||||||
(in $000s)
|
2020
|
|
2019
|
||||
Adjusted EBITDA
|
$
|
32,061
|
|
|
$
|
30,434
|
|
Adjustments:
|
|
|
|
||||
Change in fair value of derivative (5)
|
(5,963
|
)
|
|
—
|
|
||
Share-based payments (4)
|
(559
|
)
|
|
(128
|
)
|
||
Major repairs (3)
|
(700
|
)
|
|
(762
|
)
|
||
Transaction and process improvement costs (2)
|
(2,079
|
)
|
|
(2,510
|
)
|
||
Non-cash purchase accounting impact (1)
|
(917
|
)
|
|
(611
|
)
|
||
EBITDA
|
21,843
|
|
|
26,423
|
|
||
Add:
|
|
|
|
||||
Interest expense
|
(16,014
|
)
|
|
(14,993
|
)
|
||
Income tax benefit (expense)
|
(730
|
)
|
|
(434
|
)
|
||
Amortization - financing costs
|
711
|
|
|
677
|
|
||
Share-based payments
|
559
|
|
|
128
|
|
||
Loss (gain) on sale of rental equipment and parts
|
(2,213
|
)
|
|
(1,977
|
)
|
||
Gain on insurance proceeds - damaged equipment
|
(120
|
)
|
|
(452
|
)
|
||
Major repair disposal
|
700
|
|
|
762
|
|
||
Change in fair value of derivative
|
5,963
|
|
|
—
|
|
||
Deferred tax (benefit) expense
|
652
|
|
|
271
|
|
||
Bad debt expense, net of recoveries
|
777
|
|
|
692
|
|
||
Changes in assets and liabilities:
|
|
|
|
||||
Accounts receivable
|
1,207
|
|
|
1,823
|
|
||
Inventory
|
176
|
|
|
(4,299
|
)
|
||
Prepaid expenses and other
|
(34
|
)
|
|
(3,413
|
)
|
||
Accounts payable
|
(3,352
|
)
|
|
10,297
|
|
||
Accrued expenses
|
(12,427
|
)
|
|
(8,163
|
)
|
||
Deferred rental income
|
(517
|
)
|
|
(3,437
|
)
|
||
Net cash from operating activities
|
$
|
(2,819
|
)
|
|
$
|
3,905
|
|
|
Three Months Ended March 31,
|
|
|
|
|
|||||||||
(in $000s)
|
2020
|
|
2019
|
|
$ change
|
|
% change
|
|||||||
Rental revenue
|
$
|
3,941
|
|
|
$
|
2,746
|
|
|
$
|
1,195
|
|
|
43.5
|
%
|
Parts sales and services
|
14,079
|
|
|
6,101
|
|
|
7,978
|
|
|
130.8
|
%
|
|||
Total revenues
|
18,020
|
|
|
8,847
|
|
|
9,173
|
|
|
103.7
|
%
|
|||
Cost of revenue
|
12,908
|
|
|
5,755
|
|
|
7,153
|
|
|
124.3
|
%
|
|||
Depreciation of rental equipment
|
1,136
|
|
|
1,070
|
|
|
66
|
|
|
6.2
|
%
|
|||
Gross Profit
|
$
|
3,976
|
|
|
$
|
2,022
|
|
|
$
|
1,954
|
|
|
96.6
|
%
|
|
|
Three Months Ended March 31,
|
||||||
(in $000s)
|
|
2020
|
|
2019
|
||||
Net cash flow from operating activities
|
|
$
|
(2,819
|
)
|
|
$
|
3,905
|
|
Net cash flow from investing activities
|
|
(27,190
|
)
|
|
(6,935
|
)
|
||
Net cash flow from financing activities
|
|
33,943
|
|
|
4,671
|
|
||
Net change in cash
|
|
$
|
3,934
|
|
|
$
|
1,641
|
|
•
|
the risks associated with cyclical demand for our services and vulnerability to industry downturns and regional and national downturns;
|
•
|
the risk associated with the COVID-19 health pandemic on our business operations and the global economy in general;
|
•
|
fluctuations in our revenue and operating results;
|
•
|
unfavorable conditions or further disruptions in the capital and credit markets;
|
•
|
our ability to generate cash, service our indebtedness and incur additional indebtedness;
|
•
|
competition from existing and new competitors;
|
•
|
our relationships with equipment suppliers and dependence on key suppliers to obtain adequate or timely equipment;
|
•
|
increases in the cost of new equipment and our ability to procure such equipment in a timely fashion;
|
•
|
our ability to pass on increased operating costs related to the aging of our fleet;
|
•
|
our ability to integrate any businesses we acquire;
|
•
|
our ability to recruit and retain experienced personnel;
|
•
|
the effect of disruptions in our information technology systems, including our customer relationship management system;
|
•
|
risks related to legal proceedings or claims, including liability claims;
|
•
|
our dependence on third-party contractors to provide us with various services;
|
•
|
a need to recognize additional impairment charges related to goodwill, identified intangible assets and fixed assets;
|
•
|
our ability to obtain additional capital on commercially reasonable terms;
|
•
|
laws and regulatory developments that may fail to result in increased demand for our services;
|
•
|
safety and environmental requirements that may subject us to unanticipated liabilities; and
|
•
|
other factors discussed under “Risk Factors” herein and in our Annual Report on Form 10-K for the year ended December 31, 2019.
|
Exhibit No.
|
|
Description
|
10.1
|
|
Secured Asset Based Loan Credit Agreement, dated as of July 31, 2019, among Capitol Investment Merger Sub 2, LLC, JPMorgan Chase Bank, N.A., Fifth Third Bank, Morgan Stanley Senior Funding, Inc., Deutsche Bank AG New York Branch, Deutsche Bank AG Cayman Island Branch, and Citigroup Global Markets Inc. (incorporated by reference from Exhibit 10.1 to the Company's Form 8-K filed on March 12, 2020)
|
31.1 +
|
|
|
31.2 +
|
|
|
32 +
|
|
|
101.INS +
|
|
XBRL Instance Document
|
101.SCH +
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL +
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF +
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB +
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE +
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
||
|
|
|
|
|
NESCO HOLDINGS, INC.
(Registrant)
|
|
|
|
Date:
|
5/7/2020
|
/s/ Lee Jacobson
|
|
|
Lee Jacobson, Chief Executive Officer
|
|
|
|
Date:
|
5/7/2020
|
/s/ Bruce Heinemann
|
|
|
Bruce Heinemann, Chief Financial Officer
|
1 Year Nesco Chart |
1 Month Nesco Chart |
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