WTTR - Earnings call transcript Q2 2019 | Select Energy Services, Inc.

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Operator

Greetings. Welcome to Select Energy Services second quarter earnings conference call. [Operator Instructions].

As a reminder, this conference is being recorded.

It's now my pleasure to introduce your host, Chris George, Vice President, Investor Relations and Treasurer. you. Thank Mr. begin. may you George,

Chris George

With you, Officer. Chief operator, joining Call We you Senior and Ladhani, Quarter morning, Webcast our President John Executive Vice Chairman; Officer; and for the and good Holli Results. Second us XXXX Conference President review everyone. today Select are to Schmitz, and appreciate our our Thank Financial me Executive Energy and Swyka, Chief Services Nick

A at note as few Before information of I and over, call speaks information replay will for until items XXXX. as access available this today's reading. a replay the turn will call August today, that cover. of be may on I have accurate of this call and of The was available release. be information time housekeeping accessible the no to included replay a reported telephonic therefore, from only selectenergyservices.com. also X, the by in August also the replay XXXX, yesterday's be XX, time-sensitive transcript longer Please recorded webcast our or There earnings website

In current forward-looking within forward-looking meaning addition, this the management by laws. of securities States views the statements of United federal Select's statements the may call reflect the These made conference comments contain during management.

uncertainties in statements made the our risks, actual differ expressed those results, and cause various contingencies could to by However, from performance or materially achievements management.

those financial report earnings contingencies. yesterday for on to on is reports XX-Q quarter reconciliations quarterly announcement XX-K to our year Form annual and listener Also, our December of read for X-K our Form and our Form uncertainties refer XX, subsequent on non-GAAP released The second understand reports measures. encouraged to please ended the XXXX, risks, current

Holli like would CEO, Ladhani. now over And and to turn our call President to the I

Holli Ladhani

morning, Good us everyone, for joining you and today. Chris. thank Thanks,

uncertainty around quarter challenges, quarter ourselves. customers as volatility geopolitical and the presents of our the to tension. This prices during with $XXs the its swinging second economic WTI as The sort low from had macro clearly certainly for well $XXs high challenges and

activity allowing modestly and looking less more same the third-party for activity, to sequential completions point indicates the continued quarter. quarter, drill the wells in of to or efficiencies with fleet active are the And indications complete our flat frac at equipment. levels operational through Early alongside tracking decline count increasing data own a to in internal reduction though fleets the X% modest rig number customers

flow living Our customers budgets. remain prioritizing their to within cash and focused capital committed on are

to on efficiencies certain operational component continue assets, While on heavily our and companies service they decreasing with return are pricing of customers, focus concessions a costs for that. being

service last The year, the lease this experiencing into year. the in quarter of pricing half broader back first pressures of continued which space began

we'll receive quarter a our believe been the that's the to general off pricing to we since of accumulating trends continue during we weren't services, we time begin quarter, Services impact way segment. pressures experienced second While over that did of our haven't meaningful in able frame, primarily the We stave but third first in year. pricing to much the last see negative premium for Water our

were competitive during impacted areas in there quarter. Additionally, the also certain some dynamics that unusual our revenue

slowed For Water our count QX, of rig up declined example, which in revenue, completions and XX% approximately MidCon, the Services makes activity in XX% meaningfully.

exited forgo elected in Another to the the pressure transfer of to service and of pauses and market these the financially pursue number drastic number part recently major This necessary provide smaller distressed or a local pricing we was a current quality the of number a from bid following of recent competitors this shut in market environment, some to processes and downward activity We for quarter, see recent than by the of down in led competitors, have the some rapid operations participating during driven to of behavior entirely. region. consolidation basin E&P smaller operators tenders. scale of value-destructive or struggle compete flowback rather providers many

in In agreement response we for the transfer proactively with to basin some supporting a and quality operator actually technology year that over services the us would gets major them X-year request Select's this market a of water they behavior, to as had ensure team tighter. next have supply

of the downtime completions offer a service for and to recent as in that with a pricing term the competitive us in have X agreements uncertain contract recently been duration had pressures value to the well allows over more the fourth periods declines at some Given customer and sides. prioritizing the between dozen Avoiding make utilization creates least general, as year. of longer-term likely both we've quarter, success activity negotiating

Additionally, we're efficiencies experiencing provides both our technology are market differentiated which for success our clear demand solutions, to and having and automated continued customer. us operational

cash efficiency in While second generate declines I team's to improve operational laser-focused continue improve in stay to sequential quarter. on the recent pricing real in margin -- headwinds us and ability allowed This our match during market to quarter manage with free and to continue to adjusted the our aggressively margin adjusting revenue, resulted EBITDA flow costs. our first We'll time was to continue over activity to the structure levels. meaningful pleased our the cost

of the cash confident prior sales this million, our range flow. of XXXX of gears to any proceeds. $XXX continue over year Shifting to million After reiterate cash free second We're these is cash half to flow $XX we'll flow proceeds, free divesture target unallocated $XX considering and to generate for $XX million the to million.

where it in opportunities. to long-lived productive core sheet and While opportunity highly investments and continue one infrastructure incremental Executing active areas compelling flexibility we coming a remains we us, for we and provides, investment strong our quarters. actively evaluate to be balance value debt-free hope the the

us to previous to half seeing, million, lower to returns $XXX the With leading of million the we're have to investments, from cycle the range. potential CapEx challenges around shorter our $XXX Water Services of forecast the on million reevaluated million and likely back $XXX year the pricing uncertainty we annual some near-term uncertain $XXX

the And customary chemical able year-to-date continue undrawn to to the water with proceeds tough businesses. subject to the contributed Wellsite were stands the facility, services divestitures post-closing These pleased the remaining the traditional operations million been don't create $XX proceeds quarter. material up that of and just ABL near approximately the divestiture We seller's a non-core of quarter, we forward sales value end while second of in finally, in resulting We is of market adjustments. during outstanding look of $XX Services total our which term wrap during expect additional quarter. which paydown companies, and it's also any for proceeds to the received I'm million, our balance remaining further at of our to over

the with in budgets. the facing operators year, of in their headwinds likely continued see do we stay as second look to reduce remaining the to ahead, line sector half activity Looking levels

the such, much performance in third to our the expect quarter overall. like As second quarter we look

for market ultimately position environment opportunities as However, will quarter, and seasonal believe we we positioned to current we pristine get marketplace to good factors, leading due well said, impacts operations sheet, holidays. That more feel fourth such and slow in significant to continue to through market and our generate. recent our preparing manage the dislocations the expect that as we're to with advantage we're about the take as budget exhaustion balance of

over quarter our performance it Nick With that, more through in financial to detail. hand to second I'll walk

Nicholas Swyka

and you, Thank Holli, good morning, everyone.

the flow exit cash our quarter or facility including million and $XX enabled quarter solid credit million balance repay net million generation the position. pre-divestitures, in of free us second a $XX of Our remaining $XX cash the to divestitures, entirety with

year-to-date $XX million the totaled have XX trailing Our debt over and paydowns million $XX months.

sheet as pertaining infrastructure potential balance us new returns provides as well unmatched fortified as flexibility evaluate and to Our shareholders. we especially investments, development with those to optionality

and tied In we of addition debt $XX during net quarter, project of CapEx the with to associated fixed which Delaware infrastructure funded $X building the to Northern million retiring no was the quarter. our revenue about million during cash,

Our budget fourth million unchanged. start remained a expectations project of a with date for quarter this $XX

an current exercising capital believe investment, that customers our discipline. prices there's oil question they're we return on While provide no their with attractive

every we'll justified. regularly for delaying forgoing plan until budgeted return in conditions initially orders adjust when we price which equipment certain we some for pressures our in and item this, be are profiles Given change. had areas or With business, our line reevaluate CapEx accordingly of

Lowering make our business, $XXX still us target million in targets. infrastructure large hitting automation to and the while cash year all flow CapEx Water to to our comprehensively Services our enables $XXX asset and margin-enhancing in our maintain targeted million continue our investments, for investing growth efforts existing other and base

the non-core Revenue by adjusting Moving quarter the operations. to of after $XX our for or impact $XX million million results. for sale of the quarterly declined

part what fundamental and grow protect we're However, our taking regardless cycle decisive our the action business to strategy of is margin in. market to of

aggressively our In XX%, was divestitures, our recent by expectations, combined again, by total the our meet of favorably in efforts. to of and and quarter-over-quarter. control SG&A much cost revenue points not revenue did EBITDA our with sales X.X by margins this when this managed and, our line we our While percentage adjusted quickly of able reduction, also cost with benefits in which, reduced the XX%, costs impacted were addition by continued we to we improve technology, investments

million The $X.X of second to revenue charges from material million and totaling $X.X do during currently recur sales charges, majority quarter, Total nonrecurring the those EBITDA expect and the revenue we for repeat million don't that noncash of also quarter, during not any $XXX led the divested this our processes of number comprise addbacks next businesses quarter. quarter fashion. to quarter. We the a which to includes expect in

in sequentially compared second generated to amortization margin profit $XX the quarterly quarter million headwind. appears second Water of pricing the to and move IR with detailed have that a efficiency our you million on have to X% trends Services quarter. I segments, to I'd decline we XXXX million quarter find a segment from the first given to table quarter-over-quarter, results, segment in modestly in helpful stronger revenues decreased the before a from also $XXX Segment increased on which the new to million to $XX of realigned proved frac quarter, might depreciation first XX%. a website, our be containing posted recent gross Though presentation $XXX activity completions and gross of As discussing resegmentation. reflecting our the XX% our in section the results note

discussed, the the pricing current of vigorous environment improve. through should margins second unlikely competitive the to the year, half with Holli pressures stay Given

quarter, Water $XX the The for $XX due revenues declining before profit costs million from the absence segment QX second million in to quarter-on-quarter, increased however, million along of several $XX planned million $XX meaningful XX% efforts. D&A, seasonal quarter. of some from the to deferred posted Gross of the Infrastructure a with we're while our quarter, Bakken into remains volume margin high-XX% for third as of pipeline focused little QX, cost Gross the the were management from a pipelines sales targeting, below high-margin our improvement first.

to of forecast XXXX. XX% into startup Pipeline we Mexico closer heading the New system However, the margins following

While also gross $XX the during revenues facility, for half. by XX% Oilfield of continued Chemicals freight optimization of Midland first production second D&A believe we million. modestly proprietary million, to improvement lines. product in for continued lower total leading to and million was low- to cost X the our to the margins million from maintain driven $XX percentage profit of The segment margin can of quarter a before generated in $X friction our the $X reducer and expansion We mid-teens basin additional segment point declined

The to Other attributable in of million quarter, from segments, to of and significant slightly second million, down QX D&A divestments. which of negative versus million $X revenue $X contributed will $XX continue variance gross and contribution before Corporate positive profit revenue anticipate, beyond don't produced QX. is generate impact the in the

our that were expectation noted, with cash of we've As previously additional we'll the XX, of net balance the ABL cash $XX of year. at outstanding free million generate the paid a flow at in June down position and half second an

for our quarters, some of highest Over return, are will to build to that long-lived level as of the prepared high continue consider the we cash our sheet to accumulate flow, cash in on and powder the investments term and we'll exploit short best next we balance capital, on opportunities. use unallocated uniquely we focus dry few these the as options with

calls. more are investment and to number sharing a evaluate on look to We continuing future of forward details alternatives

complete also returns We'll no debt priority, to given announced we required New further are reductions evaluating to the project. infrastructure a effectively and longer shareholders that have additional prefunded previously be capital the Mexico

to philosophy the of flow prioritize we that Our regard in same, remains that will versus shareholders returns out borrowing. cash

remarks. back some concluding With that, I'll hand Holli it for to

Holli Ladhani

sheet balance up, wrap To Select here with Nick. a Thanks, it's ever stronger than today sits had.

is to With and financial coming we strength cash the flexibility generate our months, expect which only we the expect flow the market given the balance expect improve coming and in the in debt-free we to in free that our sheet, volatility important quarters.

sheet's a options will the consider while real provide are on Our flexibility balance others us to and value-enhancing asset sidelines. the investment

the growth provide disciplined XX-plus was last leads with and and mind, in our solutions customers always dedication years with our customers. built over company This innovate to to for the us which

discipline deliver we transactions, timing only us consistent will accretive ensure but the right, long-term when shareholder deliver positioning Our to value. is

things So can't market strong service, we we'll while remain the balance capital control can sheet. behavior, and customer discipline control: maintaining we and costs, focused sentiment on a

questions. back the With I'll Operator? over turn it that, take we'll and your to operator,

Operator

Instructions]. [Operator

from question with is Hallead first RBC Our Capital Markets. Kurt

Kurt Hallead

play. update the at perspectives appreciate I the dynamics on and your the and market on commentary color

you the there the to Infrastructure the on quarter, the trying of calibrate to When look in the quarter expectation the going we dynamics prospect fourth this kind third forward, Chemicals to kind perspective business continue of know is business, look flat to the guidance that individual around the third. that and fourth of would I kind drop it and quarter that the of was pieces seem will relative we the planning I me growth with guess, is for, revenue. being just I context, probably second have As quarter provided some at to

the year, Water quarter swing you probably looks front. thoughts into that as and us? to Services with me on help your great. of head be calibrate going Can factor, be the So calibrate That your it's would like you the fourth

Holli Ladhani

Yes, Kurt, well. I it think you actually summarized

being a don't view soft And flat to we way through budgets. fairly of those being to capital we that we QX operators does As that about activity-wise, them XX% step think QX. certainly and expect customer we the back their us the for the our budgets base, QX given increase as year, leave

that least for We was system, infrastructure, how of had levels, point. And with we've the recovery this differ so our But at were in the some utilization year. business. of to Bakken does the it that's seeing down in QX of the your starting because plan here we're the highest we're by segment, July -- activity of QX. had which already the one going months to in pipeline Actually, revenues

we pricing revenue, the course, pricing feel is there, good So we momentum and and market solid margins similar story, our the think, similar about to in infrastructure A the more outlook. with so general that saw, with and stable. opportunities there business, you increased I being stable just of chemicals, margins and

pretty have staying positions to manage that to us well which ahead things a changes, we And our that cost significant be going there's where one structure manage Services, around such able is most given to in is Water on structure, always portion these laser-focused probably we're that. have managing markets, the volatile of the cost -- then we'll challenges, of high that of our our and but difficult variable, those to is be

that And had though thing eliminate while the doesn't it arrangements our some some entering into to we've success any the completely in in exposure on, working other means, longer-term good by with we customers lock work. been

things other execution, we're to that be going think fairly to tough and year. certainly there are will half help but the a focused what's that going out very on and in operations we a back few us also of So disciplined be there

Kurt Hallead

had of end pressure, discussion some with oil but impression on of generally to help that me service potentially, that. desiring out Kind contracts longer-term else, there. having about and signing business. commentary of quality Great, in that of us scale Water -- everything on up you under you might have I customer your you contracts. your Can But of the pricing size some your and was with So commentary, pricing dots was that? picked prepared about pricing companies the type and less And I talked issue, I the with And had help the you given some kind for work kind of pressure, in X-year appreciate referenced here? base. an companies not you nuance Services kind connect then that can your some

Holli Ladhani

aren't interested we they're to they're that to it. one landscape provide, And our to and work have looking that a us. we prepared enabled that forward, provide year going can allows And want they as of customers I'd remarks, more technology of and a to pricing us a to mentioned imagine, is these we into distress obviously, to of a pulling I space when the it's our the well handful to some the we customers ensure they year like and gotten as Sure. QX immune there to means, of the and be competitive you last that, with have that that have it's service on not conversations. to up ahead, the of quarter it might I but that bring of quality and to have started has eventually out hit efficient. a is note the see that customers, longer-term some thing testing the companies pretty the the want we service with. transfer And But out Those did see of in us ensure Yes, But of hard support, right point that think these plan lot in bear, that that, entering Kurt, we're the access that that water completely large Select companies, numbers some in here pressure of QX. of What by with third we larger were quality that of customers QX, they of able starting in proved people is types market. arrangements. and and any because forces the and catch these company can avoid

So our can cost just structure even them margins able maybe similar better. though be better we're very a our managing to price, because we're provide

So it those really win-win be can one of situations.

Operator

Our from B. Tom next FBR. Curran is with Riley question

Thomas Curran

And has whatever peak, or Services, want weighted-average its look declined whether XQ, to for it a from monthly on Water basis in you for the at XXXX how Holli, quarter from peaked pricing much to pricing the it? you of rest that current to to in? however does the for how month, to basins the Permian in ongoing high compared the define want you then operate pressures drop

Holli Ladhani

Sure.

keep So sort that of say technical QX, high building specific pricing a we don't pricing of that up last tell last would environment, mind to of And year for have one pricing in reduction the you, I'll thing and -- to but something spreadsheet, a QX. of year. was quarter QX-ish that, digits single is And can is I that's over say, do we're on to that peak. pricing, since QX thing the I of have the we'll one probably us degradation QX,

more but get QX, a going through help that defend hopefully we'll where that's full us Services bit those cost in or have in Water protect initiatives line you are So that of a margins. flow to of sight quarter when we have some to

It's necessarily basin competitive, remarks. that other most expectation and right not But will is a business I briefly should and was interestingly from for we think, of still absolutely wanted in year long going still is the the term, Services. the We highlight So mentioned get enough, high-XXs other aspect the and think one to. for water is, competitive. where prepared points to that be the perspective, is Water margin low-XXs this the to Permian

discussions, in some and at of created the look negotiations, region large cadence MidCon where a some like that pauses had their completions. merger You operators of your you

other smaller region. you've that then with public And some issues private your of or had in operators

we the so not of there, so returns that not is the you things tenders completion pricing, the activities like able use that quickly chose participate impact revenue to our which more more to impacted just equipment passed we revenue, other some just outright that decline And and would you pricing the those on saw saw to in is like of it so but regions, on earn, be and our that, pass actually that. there we putting not one reduced than pricing again, on because you felt kind actually we when jobs only and impact of generate margin

the And I gassier going I that say, MidCon it'll forward, most more competitive. we be have as the become would the as I Northeast, is that back suspect and we the think of half we'll But behave the may competitive more through look well. another go -- differently as region, was region year, slightly to

Thomas Curran

Water helpful. just That's a X-part And Services, question. sticking then with

contracts points margin the to remaining comes implementing you for might efficiency second How the to And seeing you've investments of for? we counteract are revenue improve percentage technology able end X-year to whatever increase might experience half? you further been a degradation water it and transfer, remaining realize? of initiatives, these over on your counting profitability pricing structurally for when specifically account high be First, you water expansion there. how to transfer that And many then ultimately basis up might

Holli Ladhani

We'll to second back on to you get Tom. one, Yes. have that

a through that that. we targeted to to thinking specific start but actually there, it's haven't probably need time that we'd get that percentage like We

a in and you you cons cycle the much locked because want that's under pricing there that's As up are don't at pros have relatively know, low. to too point

of leave to are. we I going to some math those. to we're where So done would add I of there. to want amount tell haven't fair expect we you But would the continue a to But that of out spot

think you the the that investments the to As will that our our get our about to this there's margin gross term, for ability and to through there's margin high-XXs margin, near-term to investments, right? And technology. a protect long-term think impact in a impact, take longer we as business,

that again, think expectation. we the is long-term So right high-XXs

of a have will is the what in here that. really think I And plate. be defending what's part our term, protecting we absolutely near technology and the on margin

Operator

Instructions]. [Operator

Moll Stephens Our Inc. Tommy with question from next is

Thomas Moll

it start the I investment fairly pipeline sounds like where robust. on still wanted is infrastructure, to

out acquisitions. we wondered comment acquisitions this the called could the you potential things the companies market? flows? Or versus, as I of in of is more players you signaling more release was consolidation say, the the potential or operating that for assets And if interpret One in for of various there? cash Should

Holli Ladhani

think question, about the consolidation, I we larger If large-scale like the that consolidation we scale it that we feel our customers today, the basins that best we the services us. not scope Sure. may we touch, have be and that serve, the offer, path forward for

acquisitions So to us our we're to advance tuck-ins on or more helps technology in focused and add way a some services. that differentiate that continue will

markets And so this, always just these I don't always dislocation the opportunities. We're want for things. that and We're to creates that created in gets the I overstate. think -- market. looking like

infrastructure also could like there's some our It's worth actually be and someone more in And really single-operator and if -- an But we'll to We approach execute more organic that those assets and that a systems that news -- value-enhancing proposition it's find it's And the side, are looking. includes to find hands certainly accretive the is so position business. acquisition on targets so an in it. could continue that's time, services small our today. active be we'll transaction be where than feel in the the of we right else's. that right good also we

Thomas Moll

there's investment like fully should gave guidance the is the benefit looks Makes about in made? new to should now to follow-up, term, next and about hitting quarter we model XQ Chemicals. more If about for you a that think XQ, facility do as we as for the And of to continue you you your I think benefits us. sense. room based the wanted are on longer realizing margins? It there talk the run the Or of think that -- chemicals margins

Holli Ladhani

Yes.

that costs that mix. it be just is at and how we've fairly to there that's out about manufacturing sometimes majority big it's the the lines. it's away finding are team think our the moving giving capacity area on you multiple has majority our and the capability, the been inventory. opportunity. ways size, good on gains larger improvements the manage a or the Midland, increasing sometimes there in left they've opportunities there you vast your at, of invest of in list been -- improve would think our to higher-margin of vessel higher It's because area. done executing I like buckets. your bucket then starting we sort volumes was absolutely other our the reducers about manufacturing around ticking that more Chemicals complete into some feel opportunities you and third in And business, margins of of And look and there's in team One some to the And other product had FRs, front. has was and success, in product another of that of shifting team we're that friction say, transportation when proprietary can go that I efficiency how one captured initiatives But -- margin that's some If

we stable forward. back the be we've landscape the that, half pricing continues over look looking that to this I year And half for opportunities and eke I'll at think mid-teens it that low- are But probably there continue going and the near towards. also say, back is to I some to year. this that out. But to for working So longer though continue, be opportunity, the fairly what XXXX the we're us will to business, going had think beyond, term, -- that what is are margins we way we're think an of of for term, for

think deliver can we continue XX%, to to more that it You're bit to that there's but move not going I a there up on.

Operator

Sean Meakim Our next with question is JPMorgan. from

Sean Meakim

any value curious perceived about Holli, Bakken? a a of risk And versus maybe on into little what just second into bit we end? bit as exiting in the those volumes, the to explain the quarter their misplaced. XQ think I some you that Are the you shortfall that consistency think was learn about of saw contrast Does drove infrastructure but the XQ? and of segment, July? leave was does seeing in the maybe contracted assets little E&Ps I'm the manage more I that quarter activity

Holli Ladhani

stepping about up of the the contracts when structure just of mutual And Yes. the Bakken, interests. you back, in are think areas there

established. acreage. supplied water way is is if that the water customer price cost acreage, that completing for the us, there's and is on that a the that that water well the the is going be delivered already defined to then water for our So works and And in by side

there's pipeline, the the of anyway. back. we be to if to is within pipeline, the were us. few generally is happens found is able outside no doesn't what caused But quarter. that going solution months to there mean most and completions -- that's second buy be certain there serve. already our the a there within what It But commitment activity a But away distance is activity the longer that moves is when the we we're activity water what AMI, our the where of in economical activity reduced that is from water utilization moved a from We're that that wouldn't seeing

of it was little was I utilization -- think July as almost ago, on our right line. almost I tied with bit the a highest month mentioned at just

looking QX line as to normal us. back we normal quarter back then and And half say, I'll for very well, and customers should year, the be programs development working QX, at based and conditions. feel with sight on to a good of operating the our And their it's continue visibility. So of about over

Sean Meakim

I Staying context, in helpful That's appreciate it. infrastructure that. Got then.

statement, incurring the to there I'm just projects, don't associated mentioned between the you and But income through any that on where be schedule. curious revenue? You Delaware so that tied CapEx costs online target have the you're are that also are everything's Delaware may suggest first not as it wide maybe expected at today comes XX% can gap that once versus the glance? because as looks the

Holli Ladhani

it's negotiated, being we up the There's at not around going is right back be already majority costs we're now to facility going we its Yes. a and that's year, that spending online spots we're But vast what what certainly have capital some is half in that The find there to the sales not to Mexico actual lot New this of bring as in that's being of capitalized. of where full efficiency. charged the P&L.

we say, that, when what we're to expect full-blown operating, and XXXX. the is efficiency margin over the year, quarter, course but So expect we at we of part our in I'll that you reoccur. had anything, of be to did place as QX, seasonal and infrastructure to with associated very already I'll had more some, system, the look finding we'll in had, we'll occur our New than have there startup not progression not reoccur that, Mexico its -- first this costs general But don't that pipeline it the say, costs in some

parts to and say, the was from QX to other that to we'll Mexico think though we high-XXs. that help than all be efficiencies that New results particular on from of big segment. segment of uplift an be bring some to be, will continue of segment expecting the that be we're -- to total But I'll So pull the cylinders that perspective what a QX, efficiency some higher margin firing the margin will in it the up system a high the part QX, we'll there's that other won't at still even

Operator

Ian with from is question next Our Simmons Co. & MacPherson

Ian MacPherson

revenue we in that I to completions pricing my XX% about QX about good Is modest I think way the price so Services I'm X% I result or that also the if sorry for perhaps if Services? line looking, decline activity dropped into from seen in down your Water for contemplating, for a fleet just we're pressure hit minute, would a QX, tracker. expect of we missed if to this, was contemplating averaging in thinking the I'm Have QX, the a it? of glebe should sequential compression revenue something most of Water already further apologize.

Holli Ladhani

Yes.

I think, QX we that things the be QX. think relatively one activity will of relative levels to really, flat Ian, that --

on we a revenue. share of that the We all Services as in But feel that like full our able would, Water there's we're pricing other to an able will market areas compression be relative our we're in have business today. -- And where in -- quarter to underrepresented revenue is objective some that well. the maintain take maybe to impact certainly, balance QX of that isolation, to is to be QX, going to so have some

Ian MacPherson

contracts XX-ish-percent aspiring are for contracts these of referenced, within about near margins to longer-term, spectrum? Okay. clarification high-XXs, where when these them. would that to regarding we falling margins, volume term long-term think been understand, the to get back say longer-term embedded you a helpful of questions already That's wanted then. also you some scale There that the I the had just the

Holli Ladhani

different be But service to They're region, us probably is going they're be pricing. region I going supportive to from with us versus towards that today ultimate line. to service -- to sit moving would goal say they're to current we what where down that of line pinning

Operator

Urban next Global. question with Seaport Our from Michael is

Scott McCrery

in the Mike revenue steady been over standing other last McCrery Urban. fairly in ones. has Chemicals the some for quarters Oilfield of Scott comparison is few This to

enter a this top line story? are improvement is opportunities segment? As to margin the that XXXX, we of there Or in still increase more

Holli Ladhani

the it's think I some on still, team's talked goal you and we're both, can can of to share ways And increase from just we more market we there's actually. line, objective. the certainly the margin. the perspective, a that's as But top penetrate. that Again,

well completion, can only And be market correlated the through we to business not grow share. business is that Chemicals more going actually so taking to

Scott McCrery

When flow follow-up, to how Okay. shareholders, increasingly deciding profile. Great. value dividend? at And or whether cash to pretty you stable in do a just shareholders, have seems to as free value terms of looking a a to a returning use the buyback returning company look versus at then you're stable,

Nicholas Swyka

Scott. Yes,

priority Obviously, that position. to optionality we the that become side efficient our debt. capital of versus does of have in want more the elevated do all on a So, err we shareholders the now returns We've structure on stock. the what our shareholders, ultimate to think of drives it any return I what value want given and day. prefer, on and But understand value as stay to we agnostic pretty shareholders we is the how the far an net having more as cash here, retired that mechanism overall,

the I dividend be table. believe think I near the don't likely XXXX, term in will that a for on

returns. lean are probably and we around feedback the listen towards So the what's investment certainly we'll into that's buybacks. program shareholder and go share we'll infrastructure to as to priorities fit best what and understand evaluate But something more our that XXXX, for

Operator

Thank This over would call. like the concludes to back our call portion Holli I the for you. of to Q&A turn closing comments.

Holli Ladhani

Thanks.

to leave guys. focused cash going Just our going want call managing which business, focus stay back on before a pretty how on continuing on with we'll thoughts and that be focused of to quickly, before in going judicious serving of we're flow, drop to we're a and a off to means customers, it. We're I we to simple. we you we're couple on It's you we're to be our final on the with disciplined deliver things that costs, run obviously allocate ready today,

joining So today. thanks us for

Operator

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

You may and day. wonderful disconnect lines have your a

Select Energy Services (WTTR) 7 Aug 192019 Q2 Earnings call transcript