Business Context and Reporting Period
Ranger Energy Services, Inc. (the "Company") filed a Current Report on Form 8-K dated June 22, 2018. The filing reports the entry into a material definitive agreement involving the Company and several of its subsidiaries (collectively, the "Borrowers").
Key Financial Metrics and Agreement Details
The Company entered into a Master Financing and Security Agreement with Encina Equipment Finance SPV, LLC (the "Lender"). Key terms include:
- Total Facility Size: Contemplated to be not less than $35 million and not to exceed $40 million.
- Initial Drawdown: Up to $22 million, designated for the acquisition of capital equipment.
- Repayment Term: Amounts outstanding are payable ratably over 48 months.
- Interest Rate: 8.00% plus LIBOR per annum.
- Covenants: The Company must maintain specific leverage ratios:
- 5.00 to 1.00 as of September 30, 2018.
- 3.50 to 1.00 as of December 31, 2018.
- 2.50 to 1.00 for periods thereafter.
This filing does not provide specific revenue, profit, cash flow, or existing debt figures for the Company.
Material Changes
The primary material change is the creation of a new direct financial obligation. The Borrowers have secured a new credit facility to fund capital equipment acquisitions, subject to the leverage covenants outlined above.
Guidance, Outlook, and Risks
The filing does not contain forward-looking guidance, management commentary on future performance, or a discussion of general risks beyond the specific financial covenants of the new agreement. The agreement requires the Company to adhere to strict leverage reduction targets over the next 18 months.
Investor Verification Checklist
- Verify the Company's current leverage ratio to assess compliance with the 5.00:1.00 covenant required by September 30, 2018.
- Confirm the specific capital equipment being acquired with the initial $22 million drawdown.
- Review the full text of the Master Financing and Security Agreement (Exhibit 10.1) for additional covenants or default provisions not summarized in the 8-K.
- Monitor subsequent filings for the timing and amount of any additional financings up to the $40 million cap.