USWS - Earnings call transcript Q2 2020

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Josh Shapiro

Thank you, operator, and good afternoon, everyone. We appreciate you joining us for the U.S. Well Services Conference Call and Webcast to review Second Quarter 2020 Results.

Joining us on the call this afternoon are Joel Broussard, Chief Executive Officer; and Kyle O'Neill, Chief Financial Officer.

Following their prepared remarks, the call will be opened for Q&A. U.S. evening, Yesterday its released XXXX earnings. Well second Services quarter on earnings at website can found release be the www.uswellservices.com. company's The The company also Form intends to file its the this XX-Q second SEC afternoon. with quarter XXXX speaks XXXX, and reading. listening time-sensitive the on information as Please be no or therefore, of of of note X, this transcript the information that time call, August today only longer reported accurate may as replay any

during the this within addition States conference may Services by the In These statements of comments management. contain the of laws. the securities management meaning reflect current United made federal forward-looking statements U.S. call forward-looking views Well

the listener However, or encouraged earnings today's Also contingencies. release. and measures non-GAAP and non-GAAP achievements uncertainties comparable contingencies expressed most to during to reference uncertainties understand the various measures. directly today's measures materially Reconciliations with release those certain risks, company's differ cause The our from those risks, earnings made will our is these included performance to in statements of in the review financial actual results, we the filings and SEC could to are management. call, by GAAP

Mr. to Now Well CEO, over the Joel Broussard. to turn Services' U.S. call I'd like

Joel Broussard

Thanks, Josh, good morning. and

the presented Second quarter ever the faced by oil severe of XXXX and most challenges modern industry. gas

across completions and have increase activity. crude collapsed. drilling to U.S. oil in the an effort gas COVID-XX, for pricing aggressively very to beginning down reduced only economies globe As in begun mid-March of oil shut and slowdown the recently demand spread operations producers and and

company across during down utilization us We have to Well and our historically better Services has provided through challenging value Our pricing customers been cycles. with always position U.S. stability environments. fleets strategy the that to market our at long-term with partnerships perform

our turmoil, proud in to in drop market. quarter. a of electric Currently the We was were are quarter, active am customer Throughout five new-generation our the of for operating fleet conventional how immune fleets. first electric Basin. saw performed new-generation business with one our quarter such X.X Permian fleets. work the to We three the fleets not count previous from I we a fourth of frac XX.X difficult the four through to in our the our recently deployed While working along business certainly fleet second active

we Permian, With in the two the this the fleet two addition and conventional in Ford. of one have fleets fleet electric electric fleets working the Northeast, Eagle in now

for when inactive equipment up. and ready back picks Our is demand work well-maintained

of only XX% so We nearly through of and estimates opportunities the have total needs of do continue to evaluate these Based job. pricing the quarter, working for frac may training number staffing, the if duration fulfill of the to work accounted required some but we'll justify fleets on market. capital fleets, redeploy the our to fleets and the

way isn't to partnerships this our maintain market want with utilization. are our the us the While share, that of grow we strength we pleased helped customers with

strong operating fully for the the reduced contracts challenged customers are Services steady basis, our million U.S. earnings utilization true our which and for is market team's quarter the rapidly ability demonstrates fleet. electric second power fleet, and fleets of generated frac our costs cut remains believe $XX today's we carbon On customer adjusted in utilized positive our We both approximately and value why to footprint, thanks in electric to EBITDA adjusted as environment. efficiency we of to form annualized fuel, savings, cost a demand posted per the frac which an deteriorated. even delivering of Well EBITDA

to are Competitors bring balance. helping U.S. Well accelerating market believe the the still rate, Services is downturn to challenging and equipment this as at the As has exiting closer for great. we market been, opportunity

companies their evolve well that program. E&P achieve impact as More of of the in awareness environmental and allows to they a costs importantly operate way lowering best-in-class technology of that proven well the goals, we have to they these completions them order goals as minimizing seen offer must We from growing suite meet proprietary market a the service.

is to the evolving in over company our this financial lead O'Neill results. such, well Kyle to As industry I that, positioned will With the discuss market. turn this call to

Kyle O'Neill

decreased XX% everyone. materials our million, $XX sequentially Joel as sharp active chemical Thanks, to well and in fleet sand, equipment Revenue to to and order in move morning first count. to continued costs. sales including the quarter. customers reduction and by self-sourcing to services decreased And a revenue good by XX% XX% driven compared Service consumables decreased trucking cut

cost sales million profit gross to quarter. of by quick XXXX, $X.X to as compared $X.X in costs. SG&A XX% initiatives and $X.X were reported our XXXX. These $X.X million in the relative or in QX of versus $XX approximately $X.X XX% EBITDA quarter quarter from our and attributable EBITDA second excluding QX, adjusted driven first resulting our of million compensation sequentially was for the a SG&A for in million, to the margin Adjusted fully the in implementation first the decreased XXXX. cost-cutting of improvements professional in of compares onetime The million Our the transaction for fees. per XX% reduction to cost-cutting second quarter largely a initiatives. XX% of U.S. utilized increasing million totaled million largely million. fleet second reduction to stock-based down $XX.X This $XX to decline was Well Services after quarter,

cash and increased approximately sequential increase from in CapEx Importantly, $XX QX. EBITDA Capital first attributable balance our a versus in the million operations million, million was CapEx collections. use for $X maintenance margins, and QX. the for which interest was towards growth expense improved quarter. totaled directed The reduced was to margins quarter adjusted for is carryover expenditures that to XX% $X.X Cash as of the to of from the improved an XX% compared was $XX million, quarter second

million. among COVID-XX we options To and pandemic, of we to customers allow XX the onset previously Since of which fleet priorities programs margins the of our XX, coronavirus June during our have of as employee's, total to end, amortization for manage employer I'll top of various well-being which and the As downturn. security this safety the remarks. continue company the profitability had and net for through increased of higher in such call for over Program, reduction and and and the the been quarter; Protection applied and to credit Paycheck all to liquidity Joel facilities $XX.X relief the our to amending this will deferral for relief our liquidity things exploring resulted closing announced historic carryback the we in taxes, back late include, received losses us cost interest exhaust these to initiatives, operating social provide Examples of bolster have vendors. some months; With that, turn other and July.

Joel Broussard

Thanks, Kyle.

we customer our there oversupplied is Services, Well behind recover our demand horsepower believe to for Although frac The services improving the once and begin U.S. dedication is worst continues only that to will work doubt no I normalize. and be position efficiency quality, conditions us, such us continued remain. the service our technological At the time. to in with market on U.S. challenges economic relentless everyone differentiation dedication Services investors. to our safety want the team this a to deliver to and ensuring think are and value of Well long-term their thank we relationships will operations and difficult tireless to for fully

to Now, I'll it over turn questions. operator for

Operator

you. Thank

& Johnson question We Rice Daniel have We will Company. be session. a a now Burke from question-and-answer conducting of [Operator Instructions]

Daniel Burke

guys. Hey, Good morning.

Joel Broussard

Hey, good morning, Daniel.

Kyle O'Neill

Good morning, Daniel.

Daniel Burke

the of us I you've the the the Hey, just Can new-gen some fleet? was maybe fleet. the the – on curious deployment you remaining on duration news of secured good electric color program that for on work give

Joel Broussard

will that – next the the XX% full of it feel time work and the year the rest XX% We of year about XX% to of year. Yes. rest

Daniel Burke

same the bridging with client that's And into year? next Okay.

Joel Broussard

to it client contract. think that has our of – No a we one other for already another go fleets will

Daniel Burke

fleet – of Okay. the call? I tossed achieve on economics similar second on sort that in for the Joel you think are fleets to we year last the hurdles sort your the you'll That helps. And electric here the of of can that assume the out half earnings

Joel Broussard

our be in fleets with correct, earning today It this on are quarter. line should

Daniel Burke

to That's really And financial I great. was the the then other on hear. one maybe only That's just had good side. Okay.

Given in QX, in the experienced of the you net continue year? to be working won't is be capital will position, Or likely QX? to that the I'd of assume remainder half the through funds all the capital of clear Kyle, working a it working second But source in release just neutral capital be more there year. the

Kyle O'Neill

have we've down stabilized levels. kind Obviously, neutral. think it's that depends that on capital slope expect working more and I be to to kind But it neutral. come of think be likely so of activity I

Daniel Burke

what one maybe probability with incremental like? you And that fleet? you for talk sure more then. that economic year-end just What then a little But last you level making fleet the meet about side? sensible. are is see of is clients? of terms will opportunity And the just landscape an on I your Understood. think in deployments What maybe can before an on diesel guess I your just diesel the bit having open-ended hurdles discussions of what's comments the finding Joel,

Joel Broussard

flow. on you to and on going mean what EBITDA have does when flow, fleets of not all of do negative we're it. consider oil CapEx, cash slightly cash And negative not if Even EBITDA, maintenance if the positive it's it's we're depends or I price that work course. to diesel negative going

see flow. getting of coming going see back have are of can even companies issues. having or – cash these either lot of lot market. away year And at done bidding last you companies financial of negative mid we it is doing equipment were you As happened They've the some what's this. in they're think A out to a out that

bids up, sum job guess is to So negative were up work highest it seeing a sum we're on flow we we're a we as cash and I XX bid to for of To a with of – at fleets we bids. out going cash lot negative it client the not flow. diesel that and

Daniel Burke

that I mean And it sums capital again, there. discipline. the it think that’s – compliments guys well. and me. up leave I for it I’ll on

Joel Broussard

it. you, Appreciate Thank Daniel.

Operator

this to like no it would I remarks. further for closing to questions have at Josh time. hand I back

Josh Shapiro

Thanks, everybody.

Joel Broussard

good a Appreciate Bye. Have everybody. you, Thank it. day.

Operator

This participation. today's thank does gentlemen, your and for teleconference. you conclude Ladies

You disconnect your lines. may now

U.S. Well Services (USWS) 9 Aug 202020 Q2 Earnings call transcript