FTSI - Earnings call transcript Q1 2021

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Operator

Thank you, and good morning, everyone. We appreciate you joining us for the FTS International Conference Call and Webcast to review our First Quarter 2021 Results.

As a reminder, this conference is being recorded for replay purposes. Presenting today's prepared remarks is FTSI's Chief Executive Officer, Mike Doss.

Before we begin, I would like to remind everyone that comments made on today's call that include management's plans, intentions, beliefs, expectations, anticipations, or predictions for the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. subject actual and from results in forward-looking are cause that those statements any company's the to statements. forward-looking to uncertainties risks could expressed These differ materially report, discussed the reports, files with the are in company uncertainties SEC. and XX-K, and risks company's These annual on the Form other in company by any not obligation any to as required does revise statements. Except publicly forward-looking law, the undertake update or on company the filings may website, website, be and the are SEC contacting company's available company's The ftsi.com, by and SEC's sec.gov. the on obtained This also discussions non-GAAP of conference includes call financial measures.

information are release includes measures these earnings turn comparable as not to Our measures I'll unreasonably most accurately estimate. for reconciliations ahead. well their reconciliations further call GAAP Please the non-GAAP about these forward-looking and difficult non-GAAP and do We forward-looking provide of non-GAAP measures, financial items measure. the fully directly now because to as timing go Mike over to Doss. excluded nature of

Mike Doss

Good us. morning, everyone, and joining thank you for

start comments our future periods. For and update the reduction finish and and quarter call, fleet the machine financial second innovation, before provide then Q&A. emissions some guidance automation, going provide quarter to flagship for results I'll with on I'll an first today's on IQ operational our for and by our initiatives, and over turning

compared freight amount successor Revenue in first EBITDA them $XX million was and the me items, average an November XX, a predecessor combined through when an mentioning first had quarter is, over for of adjusted of price an quarter, The to The in customers. that referring was XX%, and increase the to increase combining $XX.X increase primarily predecessor fourth we that an the We quarter sequentially. X XX%. am to begin report. the referring provided in of on that $X.X runs to fully of by results, basis. Let increase to we're XXXX. in million our $XX.X fleets, by materials I period revenue fourth by higher quarter, required That utilized roughly a driven million million increase and the periods

we higher those stages by full XX combined getting industry, significant complete $X the disruptions adjusted by not $X until Uri stage higher more first active Like and disruptions million EBITDA were will the in increased estimate were Pumping we than we XX.X positive XX% job We per be to the stages, million. of the mix. lingering and able increased the effect first in by adversely by to instrumental quarter affected first quarter. others prices the While more utilization, with experienced quarter. XX% average XX% the in time fourth to When hours due increased pump logistics the caused pumping to which from itself quarter, in averaged prices hours to We us cost second the fleet because storm storm fleets realized compared us in winter changes in the impacts adjusted XXX that stages, estimate about in February. in quarter. EBITDA

profitability account pumping jobs based us are between hours become on we operating to designs. we've we pumping our and because quarter, job the reporting has metric. for customers pumping variance Most This different increasingly started pricing of evaluate an that ensure hours hours, important it using in

of in only sand of customers, the Materials now we to the chemicals. freight reporting quarter, compared total and provide freight the in and relate which cost delivered to of and X% revenue are materials specifically quarter. fourth the first increased to also XX% We to cost

we freight. customers between revenue materials cost significantly due focus prefer margin on between most and in offset The currently $X stock-based million there in and the primarily it quarter. million $XX.X charges materials, percentages professional essentially the stock-based is in know, SG&A, frack followers compensation these in expect and million compared our first what $XX is be and was in can to themselves, by about of quarter which we zero companies. between profit, the million call SG&A industry million job to vary reduction equipment $X.X periods less of As and fees, $X XXXX. of compensation. was comp increase to and Because to $XX million We including fourth handle

per to quarter. net quarter, want our fourth emergence compared rate loss income due For quarter. or We between in to the our to net depreciation million that no million, connection a from net growth items. million $XX.X quarter $X.X in expenditures in of the in quarterly of bankruptcy CapEx included new revaluation the had first predecessor from has from did million $XX reduced the quarter, $X.XX is compared point out in and of We in assets fourth $X.X million, which and benefit $XXX in amortization, run reorganization our the were either the $X.X million share, to periods million first I a had period. of which $XX with fourth Capital

million rate for million. used our in XXX of in and of pressure. initiatives. under to availability capital our cash million of our of evidenced activities industry's conditions, working terms The is We by $XX.X sustained ended operating efficiency, by order, total be in cost operating the ever-increasing enhanced credit continue first revolving in was million of some Cash quarter our in disciplined harshest We quarter. maintaining in of the and liquidity and equipment solid working equipment effective good facility, our $XX with the $XX.X digital performance

million $XX revenue. working increase a support included higher capital that in to However,

but had that in period fourth is cash quarter, the usage by a costs. also restructuring distorted We

to caused $XX fleet. be between utilized to quarterly to the outlook reduction increase the operations by second XX, The to EBITDA be of exhaustion million, million utilized half fully expect the in budget to schedule fully being solid, ahead gaps in counter quarter to Looking continued between stages fleets fully currently $XX the in relates currently and for and our The back of second in fleets quarter, XX year expect of currently pumping $XX the adjusted EBITDA We and hours slight the XX adjusted and per area fully strength to a quarter. fleets to XX be and ahead we XXXX. couple in looks expect our and third by in we utilized customers. for million utilized

normalized in area EBITDA which fleet momentum positive we a further annualized put that for of levels next levels, into expect pricing allow more $XX utilized also XXXX, million will fully of count and achieve going terms us profitability year, to the of fleet. in and We

stage location. per stage for identified if adhering out equipment engine throughout job Turning the all to problems. during fleets by we to rate By more of fleets today, and our by enables improves a end remaining active at as or technology. this failures we mitigated. our issued month, demands times avoiding costly to that us avoiding power-in will pump failures equipment mid-stage safety Last also on consistent immediately then more it of month. technology to closely not greatly rolled decrease, expect a Avoiding have pump the occur average and to X This per stage disruptions, to could of

evaluating have depending committed quickly to we X also reduce fleets, the are we technology this stand dual-fuel demand. are excited We're working potential, We just utilizing remain operationally customers deployed rates fuel to we providing about with displacement customer ready convert discussed, fleet on our we and diesel fleets displacement. to To consumption lower Lastly, more on emissions, our other increased to on automation I optimize dual-fuel more and/or and and cost-effectively units. ways emissions-friendly currently further equipment.

cost manufacturing, build for replace engines to a X with DGB Tier X DGB continue blending. engines Tier DGB to Tier We new replace advantaged opportunities X utilize fleet. seek to stands or X dynamic Tier gas that to fleet, in-house our

economics to the suitable just upgrades We a we which still do today's these designed from have customer Final Tier different current It's environment. fuel. distinctions I'm a of a DGB, engines referring displacement specifically I'm think commitment to. gas a to for that specifically types today. to some engine, finding diesel we'll burn not natural draw X designed not that we're in to rate the of the like investment, By pricing. To work there, XXXXE premium get need to maximum However, Cat I'd and justify at about DGB will is the for referring the XX%.

DGB costs. been we gases, However, XX%. solution open operational it best engine slip. engines, we and Also, modular the X solution. could displacement average dual-fuel as beneficial believe of available, I the performance, become in due displacement as rate, are closer upgrade a reducing electric X not is kits A We greenhouse reciprocating lower engines a methane emissions terms fired of to In Tier with or the Operator, expect outfitted for let's reduction Tier in competitive that average displacement prepared that now all have for fleet, Tier think kit total currently maneuverability, upgrade up part a future, remarks. regular of That's has the Q&A. a natural gas flexibility, has that rate. use to to X be

Operator

Instructions] we'll Partners. John Energy from our line, And with on the [Operator Daniel with proceed Daniel question, first

John Daniel

it is way Nice I'm improvement much, too just of to at that this list or any early And have or benefits IQ. long from quantify Mike, you a this is revenue quarter. machine in the curious, the too just there point?

Mike Doss

we little it's early means. quantify too to there, significant really a there's Well, think it but potential what

it. a make started increasingly over to the terms out expect comfortable to but and maintenance willing it. deployed. think we've good increase to with which need there's there we and pay for that, X then, proposition think and we CapEx feel I in from that of expenditures There just expense, also realize technology, sure R&M be customers with And monetizing MIQ customer. reduced already the that elements years, this there's some is and to it, to with to of We that made value gets that

John Daniel

Okay. Fair enough.

do know doing guys that yes, are one that? thoughts? you answer's going have is or treat been fleet one The yet, eventually, Don't but on you to X? that to Any if assuming other How any you you report if or as going actively simul-frac. are will it,

Mike Doss

Yes.

we had you X.X. that It's quarter a one we're and Wells in time. think working, yes, know, first count basically a half will X, as X as we fleet. also of have quarter and maybe equipment. worth a But the X simul-fracs doing So second the But I at we fleet in

John Daniel

it. Got

rate. slowdown a it is Okay. too because know that a people have is I there believe indicated And guidance positive then any to the QX and you all Do or QX reason budget, just at early? on for outlook, outspend you gave

Mike Doss

but spend. quarterly Maybe say. too has with It's are now E&P calls, to earnings early to It seem do say a it to us a it that and like season, being on companies up every but bit year in little I out, earnings does then focused different that appears every the ends more little to December. bit and trying they're flatten that it year,

John Daniel

Okay. Fair enough.

like of seems I but front-end look was Now Marcellus if so they you observation at are it might the not, that be just, my thus guys, some others far. loaded,

Okay, guys.

Mike Doss

you, John. Thank Great.

Operator

We'll our [Operator Simmons on from Nutt get next to Energy. John Instructions] question the from line

John Nutt

It but of going see XX see looks EBITDA back to touch year. on count specifically environment, pricing too going? And looks the in that half if of you forward could where tell, fleets you the you of and fleet outlook and maybe also it the and QX the do positive, back the might pretty averaged mentioned half be going the in XXXX, the fleet where like in early you

Mike Doss

sure. Yes,

somewhere will So fleets anticipating so back we're currently, at XX that I and fully be between the XX area. think fleets, utilized active somewhere and in half

demand at and but our additional pretty And think we're up current this we're and activate so definitely if is before the I that's willing to on prices is there, remaining point think activations. see much the pricing more price expectation. disciplined, to doing And I move there want really fleets, really

full million $XX per fleet, I I that do so for math. EBITDA some the to in quick year. did of give terms had guidance annualized the guess And

per back the in think million to I annualized that EBITDA fleet equates X half.

Operator

much. Thank the Stephen on very you get Gengaro to line, it's our with We'll question next from Stifel.

Stephen Gengaro

how around far market in do the the the Can assets, just dual-fuel I a willingness talk X And as to and for seeing more One questions. their up about for what you pay it dynamic. you little pricing as think E&P's the are whole preference guess you them? evolves?

Mike Doss

great that's question. Yes, so a

see to think is any power, currently that. in I the everyone talking industry about We as much don't of dual-fuels. it pricing relates

achieved be dual-fuel, but with RFP, in qualifier the been what a don't at see premium. economics, an X And expected talking upgrade of Sometimes a terms I'm Tier on the one it's of about much pricing a can that's we level, a kits.

better as just to even strong can ceiling it was that's because achieved. there for of at fleets still hard than that's There's year there's bidding to be go, some not DGB, or think pricing number the a had conversations, been it's it X is there ourselves, a may try just relates point. ample oversupplied, still think. But it Tier to much I though months condition that in we this ago. work, We're get so on market anything seeing increment that and appears to a the X some working we're where of prices and out

an be and will a of especially to build quite improved in economic that, more a power customer I definitely to against that that with needs be Tier a fleet, Tier of it that or dual-fueled X technologies, for and be sense to pricing contract, just some associated a sure. makes there in I new fleet, economics X, There's backstop think where terms investment there made terms DGB. versus convert those evolves, think

and the I think, so as of I we out up, gets DGB. you along pricing market equipment an more and with bit, more see And Tier you'll as commodity think just X legacy prices, a attrited between increase market Tier spread up I tightens in if demand tighter market, the start in see to a get I the think the X think, tightens

Tier the I X basically same dual-fuel from a Tier we're priced around seeing. regular the as right is X, just what think

Stephen Gengaro

too without noted, specific per getting back you you And to number, to suggested million in Great. and year, narrow as a annualized trying the your down $X fleet. half guidance, EBITDA

that we that dramatically you price? price? absorption how go X, sort get in forward? Or I higher, number price going efficiencies, range to where can that about can imagine overhead on go, dynamic to should of Just material X, absent X the without need but price, on think

Mike Doss

impactful allow to could in productivity stages times it more additional of more kinds only on I Yes, seeing, result wouldn't that We based pricing, ever as there's [indiscernible]. operating the per but point. per business. to at logistics, efficiency the on of we're so getting increasing in there's pump, if and efficiency do they improvements, of pumping hours give to the more near to coming some relates certainly It we it X, simul-fracs as X, think want number do But day think to There's be use this out stage hours Those average and per of put day so helpful, that. digital in start just it too some there's relates I efficiency room for X, a just as many able be given hitting stages day. period. MIQ or technologies as more continued might leverage nowhere would the just high shorten to a limits.

Operator

another line, Energy Very with question John we'll proceed Daniel our the Partners. on line from good. follow-up Daniel, of it's the question next And

John Daniel

So in. back Buddy. let come Mike, or, me

whether you coming As that the DGB new to I'm at you're the be technology. different solutions alluded if are it gen power new sets, looking or curious out, any

Mike Doss

interested much think there be. could on should there's I Well, as pump innovation the we're be don't or in been certainly that, side as because nearly

at horsepower about, you're looking today's some area, or start you talking if think, configuration. to I that one X,XXX on compared trailer, so horsepower X,XXX And of in these, something

know, our own you As pumps. manufacture we

at and as we of we're up to modifications those addition beef our existing pumps need so on higher looking see of to those it to horse, pumps in what well, have do on and those our horsepowers, to be at might Buddy, ability higher a own. and working to opportunity add test are And else and you anything the side? some reliable pump what

Buddy Petersen

No.

John Daniel

year reduced And few that, quarters or then, And I demonstrable designs, maybe save last in me, money. leashing in imagine couple change the on the well, just profit some well sure, modes all the one last per the last the last been there for months? much and to of companies, has some designs? for

Mike Doss

haven't nothing discernible, We seen John.

Operator

on have continue with you further remarks. much. questions very closing lines. or And phone any the Thank we no presentation Please the

Mike Doss

go last Well, on I am say very that to after be excited Okay. trajectory, year. and up. like let's ahead to an would especially wrap I upward

As forward you with mentioned to I in time. and press our flexibility, the financial safety Look innovation next the again, release, been this company. operating has record, never efficiency, of in history speaking better

FTS International (FTSI) 9 May 212021 Q1 Earnings call transcript