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Note 15 - Severance and Other Charges, Net
 9 Months Ended
Sep. 30, 2021
Notes to Financial Statements  
Restructuring and Related Activities Disclosure [Text Block]

Note 15—Severance and Other Charges, net

 

Frank's recognizes severance and other charges for costs associated with workforce reductions, facility closures, exiting or reducing its footprint in certain countries, asset impairments and the retirement of excess machinery and equipment based on economic utility. As a result of the downturn in the industry and its impact on Frank's business outlook, management continued to take actions to adjust Frank's operations and cost structure to reflect current and expected activity levels.

 

Severance and other charges, net are summarized below (in thousands):

 

  

Three Months Ended

  

Nine Months Ended

 
  

September 30,

  

September 30,

 
  

2021

  

2020

  

2021

  

2020

 

Severance and other costs

 $195  $3,444  $1,305  $8,776 

Mergers and acquisition expense

  2,763   —   12,121   — 

Fixed asset impairments and retirements

  —   105   171   15,584 

Inventory write-offs

  —   —   136   368 

Intangible asset impairments

  —   —   —   4,708 
  $2,958  $3,549  $13,733  $29,436 

 

Severance and other costs: Frank's incurred costs due to a continued effort to adjust its cost base, including reducing its workforce to meet the depressed demand in the industry.

 

Mergers and acquisition expense: During the three and nine months ended September 30, 2021, Frank's incurred $2.8 million and $12.1 million of costs, respectively, primarily related to legal and consulting services associated with the Merger.

 

Fixed asset impairments and retirements: During the nine months ended September 30, 2020, Frank's recognized $15.6 million primarily associated with construction in progress in the Cementing Equipment segment. During the nine months ended September 30, 2021, Frank's recognized a $0.2 million impairment associated with construction in progress in the Tubular Running Services segment. Please see Note 5—Property, Plant and Equipment for additional details.

 

Inventory write-offs: During the nine months ended September 30, 2020, certain inventories in the Cementing Equipment segment were determined to have costs that exceeded their net realizable values, resulting in a charge of $0.4 million. During the nine months ended September 30, 2021, certain inventories in the Tubular Running Services segment were determined to have costs that exceeded their net realizable values, resulting in a charge of $0.1 million.

 

Intangible asset impairments: During the nine months ended September 30, 2020, certain intangible assets were identified where the carrying value exceeded the fair value in the Cementing Equipment segment, resulting in an impairment charge of $4.7 million. No impairment was recorded during the three and nine months ended September 30, 2021. Please see Note 6—Goodwill and Intangible Assets for additional details.