WTTR - Earnings call transcript Q1 2020 | Select Energy Services, Inc.

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Greetings, and welcome to the Select Energy First Quarter Conference Call. [Operator Instructions].

It is now my pleasure to introduce your host, Chris George, Vice President, IR and Treasurer. Thank you.

You may begin, sir.

Chris George

good and operator, you, morning, everyone. Thank you conference call appreciate operational for of joining our us Services Energy results XXXX. quarter first Select the the and and for financial We webcast review to Ladhani, Holli Swyka, Nick President are today Vice me our and Officer; Senior Officer. Chief Financial Chief President and and Executive With

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

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

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

I current to XXXX, listener encouraged the our CEO, subsequent of earnings our released Also, Holli uncertainties reports to yesterday Form our on XX, refer quarter like President for the please quarterly our and reconciliations turn now, financial And to ended annual Ladhani. read and year non-GAAP report Form announcement over and to first X-K, our The December call is those reports measures. risks, contingencies. for would on Form to XX-K on understand XX-Q

Holli Ladhani

today. Thanks, world. for morning, for for momentous, certainly have and industry been Chris. us our last entire not joining just everyone, of The couple but months thanks Good the

our support continuing during watershed our on customers' event. people this safe First to we've keeping focused been foremost, critical and while operations

challenges and first actions and execution, of execution, I'll of let discipline, While to review marked efforts Nick liquidity we're crisis solid operational a terms the today's cash generation with to remarks maintaining and operationally we and both the taking the continuation I'll of and on quarter, our results market. no quarter's continued in focus entered my our successful philosophy capital financial meet this Thanks ample debt. the

not activity industry We and on no to unprecedented using our taken balance requires the a our have team. are our structure. strong speed already of decline not take in sheet transformational, incremental action by the being of intention scale as cost actions The solutions, swift reason and these

opportunities protecting the other severance SG&A, and centers XX% for top decisions. the We The attacking of Cost and board. and started the already over fourth core mid-March. can on cost the on nonrecurring seen side a and and impact decisions is position across will we these costs. liquidity requires was in of in aggressively and there. in downward priority down after quarter the be our to to expect our The Doing so capitalize emerging of balance sheet manage strategy downturn this difficult on strong far-reaching our quarter first from immediate speed it which be mitigation adjusting we're

update vein, targets. March you our on that and press our items follow-up XX In like from actions I'd the of latest some to on and release

CapEx and run fourth $XX more target consist no maintenance annualized XX% We're capital. and we be target of will to to annualized SG&A the lowering this relative increased to rate rate further XXXX XX% relative million our overwhelmingly XXXX XXXX third quarter to savings expect million, than the down and our quarter total. First, down our $XX run net

relative to that's in and fine most almost served our decisions are April by reduced time. was put the context end that customers' our activity include quarter. To company first XX% These workforce the of many the Our people. more effort, headcount in peak difficult to employee X,XXX as of people to to always in We're ably who our commitment real align the resolute, and however, the professionally.

reduced with least and XX% by nearly Board for of We've Directors. executive our pay reductions across at that beyond board, the further management

and remove these to parts several programs We've our reductions, silos. adjustments In business for individual structures we addition concentrating effort. consolidate but more to to services leases housing integrated made number facilities. and and of terms yards and reporting eliminating our a across across of shared This our dozens for a terminated enables comprehensive all not facilities payment support we're and our and have organization. furlough operations layers just of reduction We've further as while leased sales streamline segments cost units instituting renegotiated restructuring

the third-party current As negotiated terms environment. providers, and and dollars it pertains discounts service we've vendors to pricing adjusted our millions in reflect to of

sacrifice difficult decisions, partnership have and our not these initiate actions and just been throughout here. develop shared appreciate but and certainly to of oftentimes rise these challenge see an many spirit humbled such shown implement to incredibly the organization We independently. I've leaders honored and the tough

For thank all employees. this, I'd our to say you to of like

diversified many opportunities sheet, this lead disciplined model, business our it's such presence our While balance to comprehensive many strengths, of has reinforced market geographic challenges, will and ahead. which also as

to Our life technology the in the national across and environment. years proving full all investments current recent water in cycle our significant be our exposure advantageous are in footprint,

what to prices up will The best last earnings franchises leading have certainly decline technology to by we're holding activity in negative our we strong solutions. get XXXX on year. fairly gassier impact oil material noneconomic customers these including and a are to Our rapid well today, able driven ensure basins offer, the our and areas have to and relative of continue

revenue today the continuing drop SG&A visibility of serve at real and in difficult preservation control, lack control, this make and and forward-looking this offer so swiftness our margin and We'll to is challenging, safely time. customers it deep we CapEx period. factors are through driven The make our as cuts much which said, there. financial our makes within by The many outlined extraordinarily committed outside to of magnitude largely guidance time. effectively cost while we've we're delivering the to do That reductions even

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

Nicholas Swyka

Thank you, Holli, and good morning, everyone.

system focused for Holli entirely certainly of we and environment emerging in different As we're in driving out outlined, first were this quarter. sheet of an downturn our costs We're on today with the the from than balance and much intact. capabilities relentlessly

supply which of than influence. I educated that from I'll an do perspective current more are cover detailed mind, the in complexity our to on, the With this provide any Our frankly much many offering financial given ability results factors globally demand that refrain for side, and quarter's ability impaired ordinarily of in outside and forecast of subsequent work market guidance less to on is both the quarters. succinctly

Our shares. a still and under our the CapEx perspective, cash flow revolver. of on our $XX the hand repurchase million kept to challenging over of buying on of little net having back the $X over to cash at million first continue free worth We a a debt X million quarter working $XXX share million a fully quarter, execute capital while $X restrained in been that's increased from program, to historically quarter, end undrawn and

entry to of total of point While free of the we XX% cash million flow, $XX XXXX million cash this of over represents this the economic uncertainty. initial are guidance our target $XXX withdrawing given flow free current

will priorities balance However, and remain a that maintaining influence every make free to time. continue strong positive rest our sheet during assured cash core and decision we flow this

in million quarter's first revenue total quarter, $XXX the generated $XXX increase of a over slight the Select million. fourth

the in the face the quarter, overall and impact breakdown of and January in OPEC+ we before recovery March Within solid saw faltered of a COVID-XX. the February

were full the water due a an Our revenue perspective, stable Mexico New generally increase from with quarter segments pipeline. a of from to infrastructure in operations

severance were yard margins closure costs, challenges asset-specific with However, along gross some in infrastructure. and by water impacted

bad were from value Adjusted million. $XX of $XXX was million debt the by EBITDA, balance additional quarter the quarter, under in gross as million an tangible million. quarter of fourth accrual little Adjustments as most trademark to a margin a in and the goodwill notably impacted $X of our intangible declines the another of comparably impairment decreased these of over $X $X this $XX well just significant, which with first the impairment of totality connected asset an impairment million, million

first expenses the mostly special from Water Services the severance included revenues yard $XXX of in quarter. a depreciation segment from along led reductions segment loss Other late $X special quarter some generated workforce a to $X.X the million The million additional gross expense $XXX amortization decreased million quarter the in $XX gross to connected quarter segment's the for items in the by compared million X% of severance $XXX of to and million sequentially to net costs, and fourth, first before the of in million. for pressure $XX driven during These yard with closure XX%, accruals. in profit pricing closure quarter XX% expenses in to reflecting decline million margin the and fourth. quarter

the quarter The in $XX in XX% the fourth million by quarter. Water Infrastructure million first segment saw from to increase $XX revenues

revenue, the full million operations quarter quarter. Gross declines volume but the decreased pipeline Bakken million D&A D&A through New gross overall high-margin to XX% fourth boosted decreased in profit impacted quarter-on-quarter, before XX% during A margins. to March and $XX pipeline overall the from before Mexico certainly of $XX from margin our from first in quarter

with also gross to X relating lowered to combined when write-down noncash nonrecurring points. a severance $X before water D&A expenses certain million rights, other by and We about accelerating costs, took percentage margin relation in

quarter, manufacturing before steady pricing acquired some Chemicals The in that Oilfield of following step $XX of segment, of the elsewhere inefficiencies business revenue a quarter and fourth operational challenges forward in some took absorbing WCS big in of million hit March, with a impact gross XX% $XX with and from along gross decreased from D&A fourth held its arrived recently margin utilization with the costs. seen million. profit The severance integration, before at segment D&A the

$XXX,XXX at X% SG&A during Looking our quarter. increased the corporate Headline other by about costs. or

However, nonrecurring or million $X.X adjusting other accrued by XX% and $X.X paid during of or SG&A costs quarter, decreased out the million. severance

to ultimately these our reduction. In a We run this XX% entering the rate expect and target reduction expecting to will annualized relation third SG&A, reach to of relative terms XXXX. of in XXXX full second quarters, to third rate represent in year run quarter our savings XX% grow by a our the

depreciation Below a during tax the declined benefit accrued while $X million. slight about by line, QX, we

our see to time. decline to forecast this while XXXX modestly, rate effective at expect CapEx the We tax made, reductions depreciation given continue is to difficult

from the legacy Act the payroll of XXXX deferral the we beyond taxes. CARES our minimal believe Given net be NOLs, cash benefit will

as million of We have XX. zero enjoying while to bank debt and net March that $XXX continue, position anticipate cash a of

free also positive We second quarter. during anticipate generating the cash flow

continue share first flow deploy the back cash worth million quarter, During to approximately we of free $X towards repurchases, shares. buying

is our to While within uncertain. an cash are from of will capital flow less we during so shareholders times cash so management more philosophy, do returning flow our part to inclined and positive important is free do

posted for the positive are free the core cost drive free to quarters merger. resource maintaining sheet cash balance Rockwater will our reduction approach now regardless flow of flow imperative strong and We've to to cash allocation. this Generating consecutive environment. X This a continue since and philosophy our

turn With your up wraps take remarks. over Holli and some that, with operator, we'll before concluding the it I'll Operator? to questions

Operator

Instructions]. [Operator

comes first Citi. J.B. question from Lowe with Our

J.B. Lowe

optimization I is pretty guess activity are appreciate any Water think clarity just lines to trying completely business guys opaque. well. curious if and shutting about was recovery all your I on restarting are there's contemplating side that portfolio in? I doing strategy. kicks down kind any you you there that Hope guess the once on I Services the are of Just -- not

Holli Ladhani

tell to operating. that service the J.B. we're regions and I Sure, committed would in you our What lines which we're is

back be for Now have operations activity to be to consolidated to the prepare region. again opportunities scale done to basins and the decision have particular and together clearly frankly, service lower that going regions ourselves term. some low the cost doesn't you're fairly are going to to key we've in What manage providing revenue there there service are levels, that which near regional the mean is for that is position we we lines depend going in a us because, out on opportunity is structure, -- and does brought won't that in

a by nationwide help should that keep need be a where diverse lines our keeping we're is us. them. benefit margins field So going important those consolidating keeping that to to of now. service seeing But offerings, we the footprint, And of set

it's but it's resilient. the be not most Northeast a to months helping we certainly do position XX was basin, up X, And bit a the a loved there. gassier example, continuing to an region as have us As ago, prove as today strong more

footprint. So I'd to say and committed service lines, we're the we're the to committed

J.B. Lowe

side. your forward? anchor pull Permian Okay. they Great. pipeline? bit you there. other And on tiny question just if was given significant what -- my Can the visibility seeing their more from how through Maybe indications contract walk And work customer moving extent? a the they to any infrastructure were that Have to intentions on the would activity you're of back a

Holli Ladhani

Sure.

So move that falloff -- March X we a And you have did visibility half get contract. X/X some to worked of April. the obligation. first up end year there's we the the take on obligation quite plans we see and expected, XX under volumes didn't contract in a get didn't have of the of million in I'd volume the to currently the of under through to do down given that months, off April the barrel as the that system the volumes year back contract. might we But in say

nothing obviously, this is guaranteed. Now particular push, can and jobs in environment,

actual were would to And happen, the quarter in to the settle $XX contract the get the is will shortfall there's work volumes to if that up a commitment. million year, you'll of end way first you'll cash. we that relative the delivered So the in of XXXX, if the measure

the won't water. the is book until to we earnings delivered though, thing while cash, keep One we've we would mind, in the that receive actually

have liability deferred So books. on we our a would

year. if So get XXXX, the -- of don't wouldn't able will But take-or-pay -- we to any cash of in we volumes QX up shortfall when benefit settle the under cash XXXX -- won't be the year actually we in basis delivered we in the will on the next show this only volumes. a the deliver

J.B. Lowe

great was Okay. one on for Last detail. Perfect. the Bakken me That's just system.

activity in Bakken to extent. really have Your back pulled the -- significant some pretty customers large a

any know, ideas volumes Bakken? But in much XQ, on window outlook. obviously, out in XQ, -- the Just of I down see we is XQ terms how probably the could

Holli Ladhani

expecting quarter We're Bakken. size volumes in the Yes. any the up of in second not

be doesn't it putting the the pricing on seen those make just You've for oil differentials, market. sense to producers

the So QX. do improve. not we'll we cost down we're activity the again, meaningful down our in so that Bakken. We'll planning any structure bridge to hunker can protect we're And forecasting there. in until levels position drive volumes But

Operator

question comes RBC. next with from Kurt Our Hallead

Kurt Hallead

Hope and everybody your respective in families are healthy well.

on play When least was business, understand would decremental address us decremental maybe earnings post-cost insights Water difficult I any of Holli, just hoping it's give to infrastructure So help a where kind and this on appreciate through top the water, can us But of dynamics visibility on you pre-cost curious individual end, take some to in at the savings that you decremental the on and dynamics. at progression. to line am of that margins handle right? go I and sort sense other maybe color can about of as provide And great. look at kind Services, front, us progression estimates businesses, think a the you context We'll process. some maybe and chemicals, this can be how if as you but I we give our savings maybe decrementals, the and that a the

Holli Ladhani

all XX%. of but oriented, production talking Yes. so in top are our directionally it's We have point, directionally, you can completions exposure to adjustments. Maybe XX% do your the businesses certainly, that of your segments, on make each to line, highly some

from fixed When upon -- the to Nick we about and little months of the me have a business, through incrementals clean a were then X the here frankly, of So business, of through last were like first that is leverage I'd And obviously piece. basis what up we about if up of seeing think there. couple incrementals out improve operating think decrementals, think and the the manufacturing bit. our this in year. the this, decrementals the the can stand continuing it you will back year, higher say you half downturn you But can over margins that because chemicals which but cost business of higher and

And lower that the because talking partially front, then the also were also cost do of associated about, those. take-or-pay the pipeline have just operating on on higher margins infrastructure just your we but with systems, you

So that sorry, higher incrementals. higher line lower forecasting for to side lead example, not meaningful I'm of -- volumes Charleston across that Bakken the we're again, lower decrementals, margins. to that, any on other But will

Nicholas Swyka

course, taking we've of push fill and of a lot lower at or certain for kind And cost level, the absolute why amount can closed educated cash guidance the estimate running with we're cash of renegotiated to portion important think think the revenue overhead decrementals reduce on least a of leases is and there. there a Yes. I maintaining that's both payments at a actions the yards, of to in us headcount insurance. to payments, the is yards, reductions the able reductions, operations, the you yard of and compensation and consolidated out on you field offer be fixed But there to really

Kurt Hallead

Okay. one step I maybe that And again, you're take any not guidance. that providing And I I if appreciate further. appreciate it dynamic. specific

directionally and expect on positive basis? would year be EBITDA and full here, free So just generally a flow you to cash

Holli Ladhani

goal I'll how will again, remain it levels Kurt. can positive, on start, depend go. to Nick but and on, is tack clearly, our maybe But EBITDA activity low

costs you, company, public daily we to we basis requirements, you yard fixed and I'll sorts at up taxes as every with. match to But then, obviously, a those deal gets tell and leases, that with on scrutinized. facility costs our managing some and are mentioned, And of absolutely have other things. a have trying just levels. legally, activity of have have we level, a regulatory or Nick property obviously, that As And dollar spend commitments we certain

and given no relative about the months year, free to So have have on over track we, low the back levels. first up cash to that to will how revenues we to maintaining go positive. this by in were that to we neutral obviously, balance. add cash strong means, print When But think a to confident EBITDA flow quarter, X we'll see the activity we of cash flow, able are

And so we and to to the swift essentially sheet that create, action so important be expect sure hard it's -- we defend to it's balance us. just incredibly us make to going that you work from should

Operator

next question Our comes Thomas with from B. Curran FBR. Riley

Thomas Curran

expressing want in wishes just and sentiments to echo I ones. to you your my loved peers my the of well all

For Water systems of pipeline percentage account network? each of what the GRR as What did the revenue percentage for line? top shares Infrastructure were in XQ, in those the Bakken a of

Nicholas Swyka

separate some of infrastructure the Yes, may a sourcing systems. each and GRR interdependent and Bakken difficult kind when about then each on to you that Tom, great those a to extent, there, off Mexico accounts connected When in general that each systems may asset directly off cases little one's, the be the network, or transfers pretty That those for infrastructure other. transfers individual systems think, there. But the bucket not you're of include it's -- out XX% of overall, talking the system to New I the about the those there. then pipeline,

Thomas Curran

for the division? that for Bakken just a geographic in about its as then market How entirety

Nicholas Swyka

as said, was definitely Bakken, pretty steep March a there. Yes. in Holli took decline -- The

of quarter. So about XX% from that to down think you XX% last can as

Thomas Curran

down amount Sequentially, in Bakken so that XQ entirety relative its XQ? to for the

Nicholas Swyka

Correct.

Thomas Curran

Infrastructure, sticking acquisition on growing versus Darwinian investment post-frac pre-frac rivals, then your the how deal of attractiveness you inorganic divestiture versus And and struggling and also set standard given financially characterize prospects? Water dynamics you side, would bolt-on opportunity landscape for evolution compare opportunities and distressed customer the the number one? with the your flow how of your would And there competitive Great. to out just

Holli Ladhani

Yes.

taking that are will providers. this infrastructure have maybe the maybe as just they to is the downturn -- internally and are the that looking versus thinking through work obviously, their of -- on through you expertise, this those. the going clearly about differently And operators bit. is is leading efforts operators when the core manage to through particular, back so water world of being on, the variable of one in we rock and their drilling few. more deep and think look certainly see past and new were a downturn, starting up creating cuts Tom, think And I and they the focusing we than what ancillary little actually I'll that it's those which have costs And of understanding service trend like. services, into less implications Operators more more that out their were one production to some

And in in managing we internally we really and making costs they the for happened what's some how about with making very that trying the manage business. think to in everybody not of our its conversations is I those were can drive and totality think customers. in moves obvious help parts and focused advancing progress good looking strategic out Obviously, just market how at today,

I in there. no there coming assets out of a to on also think that to the water there's just market downturn, lot of speak the buyers infrastructure were

that dried up. has So market

systems changing in up near we us again. the But are to remarks, see we managed, prepared see water my term. I changes were in and to very when you these is be of incremental They managed Because are transformational pick on to how mentioned those. be think expect industry. water in don't I one going was aren't to how starting the that momentum as I really back will markets going to hand come the in think I see that So to the do start

Thomas Curran

Agreed. Yes. No.

like later. react me, re-queue. then strategically reassessing for and sounds I'll it first then rationalized portfolio one operationally, So Last

year-over-year how Services, pricing down temporary much transfer and XQ? Water For sequentially was in

Holli Ladhani

pressure. it, if In starts obviously have but don't on an not has the will desperate. to number been strained, landscape environment this, an tell exact I get I pricing competitive you like there

pricing closing however, out that discipline is What their themselves eventually see, price not we've of already up falling And shops. started or has those either regionally totality will there. folks and of out, competitors been seeing we'll the business, in so

is pretty something we think then, do will different the quarter its X back until of to probably But on this. take the But are to this landscape going run competitive I So course. or continue to that pressure, a really looks pricing deliver only have positive that our that carefully us at look level the continue ensure level requires can which very not the field at to structure, cost to to we but corporate question and field margins. side

say us what able allows some of has I eliminate than technology ticket of similar and don't And our is goes That to one lower, providing positions being would competitors automation helped is, our right, say, services. technology. have who again, us, a the where at that able execute our by in I'll some that us to to this be labor to

Nicholas Swyka

Tom, past March of to year-on-year year. lines majority and solid pricing last but a XX% January from perspective, to bit, took the then a February probably most decrease began the and year-on-year, that place of that XX% there. crack have of in the were come on but would

Operator

with comes Our MacPherson question from next Ian Simmons.

Ian MacPherson

thrust your upon a applications? push of that's obviously theme water customers. of Holli, recovery, but generated the recycled side you more do for will more and ultimately between also How programs, with smaller into integrating impact mix time. the might We've seen that's market in look some frac on recycling and towards topic a think that things being the other and on the fresh secular how

the -- of will scarce those mean, But freshwater this. much both side now, of other I on presumably less

need year mix that you versus modified freshwater do asset to respect your footprint So today look of from recycled is sourcing be how may -- with think that a will now? to

Holli Ladhani

opportunity interesting and is versus use used. one It's a leverage obviously stream one would on very or I or our to brackish water. make maybe all industrial of behalf good using to things ability but is clarification other customers That's is of the over different But the really large the seldom of being freshwater next some volumes waste water. freshwater, make very that's Ian. Certainly, challenging question, of it produced that the year will produced from that,

I'll more the of spots. water and in a challenging it's Just to completion sync, it's program, it's right when prepare, more make have sure is your out more to haphazard, all challenging say, you bit

we'll enough, will just different that -- more needs interestingly so be the satisfying accessing the water term, I be And little way support probably their that customers we'll than in by water. sources think near produced a their other our our in

So think have any however, near we in maximizing don't be amount continued longer go the the I water water the I term. down. the do to a it's produced water possible use operators total of as that committed the utilized of to see of that's percentage could term, believe, that reason aren't over produced to

are not I the our think New when that so And movable. in have water completion Bakken and obviously, in we footprint, about we Mexico our systems that use to deliver

near think our large needs water rights have, to quite and the able those term. of they're assets out, and we satisfy of spread we rest inventory those to a you about be when the But the have in

will the of or about the long meaningful frankly, produced you term to in in the So I don't strategically the that near near here industry a volume think is probably term. in the But how or see utilize term. see adjustments we able footprint-wise, any water it to shift

Ian MacPherson

cash a with the I sense. makes levers. regard wanted follow-up to just That of you, Nick, flow to ask

aspiration and you've QX. the good You flow capital working another cash working free had provided for and -- you almost capital few first quarter, the positive of release guidance is ultimately, one in

about think think require two level CapEx need -- is we should be a second CapEx when deferred spending we half, that maintenance that in we quarters? within that that level low year, your when at you an at reduced the that look catch-up look for what CapEx will But will do this the next is sustainable? Or as from some your artificially rate exit

Nicholas Swyka

Ian. Sure,

is enjoying within it an with a move to that's So our this environment sustainable then environment, recovery, would higher. need CapEx

order intensive, fixed business, an dollar need think of we lot in recovery than and assets those asset, of to business, money ensure have that you in return. capital to when would heavy you items money discrete, on more business. attractive that. software drilling they're thing this working you In systems type do spend about I packages things typically, more significant about integrated small talk and when a a often That's like a

are that maintain they're and generally lower a when costs lighter dollar to than in less state. assets and storage Our

spending waiting up rolled to, lay week not yard, it prime in for in for job. keep order example, every you flat you're So the that hose when the working money have next

not more that a in that but higher. then that an We're years, we'll you for expect and to like January to lot that pay this yes, environment need CapEx is sustainable move extra February, coming of would looks environment. deferring So in maintenance

Operator

Our Sean next with comes JPMorgan. Meakim question from

Sean Meakim

is topic but the this market. somewhat broader for the capital, related to of maintenance So

desperation supply industry You drive with late are that inventory will see that mentioned the falling goes. Or Do out the or the looks flat competitors what state side? factors even basins shrink? of what like the where the we the I'm of capacity of on competitors, of some your altogether. of other curious current irrespective

Holli Ladhani

Yes.

didn't the fairly have I thing just mind capital in keep to probably over think last one now. disciplined is constrained the of people year. course It been or that start

more we the more we or use completions at size XX-inch, see be of the that, will becoming that equipment look the there assets XX-inch little that were complex, thing that -- when think needs other getting services the these anymore. all these is in or is the Sean, right older we the were size it what a And getting probably integrated, fact testing our of that, undersized, back happen, tooth assets supply, we changing. That that on been larger, doesn't lives are or the across various sense will hose we or equipment separators test have a the my necessarily it the of was the remaining you're in X-inch, be the asset that units areas I in So space some is various well it make and longer little recovery. smaller, into seeing to as

other less the capacity I expect side. there So be would on to

Sean Meakim

point good -- describe capacity take and it, a changing. versus of, from of mix the about favorable would the industry? favorable, make is Well, how a overall your the smaller, Could within just larger, less that stab there how maybe mix call at I the think you inventory you give distinguished more you us

Holli Ladhani

a it's of and cash else's everybody feel our speak that. other than like some upsize looks more harder investments the last what couple because to been support have anecdotally have like aggressively upgrade years, than, the over maybe little we inventory had to say making more I'll to to that capacity flow I we

our very in was right of at were the executing last look I we fleet, when year way kind confident And the I with equipment.

business provides So we year and right-sized if on level perspective advanced that to some were with w our fully last support you able of equipment. the

unutilized have look a today, So levels we when meaningful that activity but at amount you equipment. of right-sized

Operator

question with next comes Our Tommy Moll from Stephens.

Thomas Moll

there. catch you the all Nick, I about to to a XX% I a wanted quite to XX% comment Services for details didn't back double decline Water pricing. made

that through run just could you again. if And then... So

Nicholas Swyka

pricing That not Yes. Tommy, year-on-year today. was in relation first. one to we'll take that pricing specifically,

XXXX how I deteriorated then. it since question much think was has to of the first pricing and back the quarter take to

Thomas Moll

Okay.

So that's versus XQ 'XX XQ 'XX?

Nicholas Swyka

Correct.

Thomas Moll

And range it then other your other the less the your then lot any could pricing if that Services lines. reason peak-to-trough service that a of worse remind us better for completion-oriented you was Can than there comment. looked would might is or you that And But is volatile Water time around? be it also, Okay. that going the to be anticipate us, be helpful. in for frame last I this downturn? And answer what think can if like you and segments, to

Holli Ladhani

downturn, XX% out our 'XX, At addition a seen last the in would we then different in given of and I 'XX, would of little infrastructure. through have bottoming mix is Tommy, sort would across that some a to a I of the the level, high say business. say today reduction the XX% pricing the

given reaching a in -- that we of really it would that oriented today further there's however, a we're a point, I going say see much that and be have amount support. not that's protected. to We similar we way our production pricing, willing that would business But

protect providers lead market. the service are becomes certain today, service go where driving that of will Just And we're and because, to regions to below field in that of in you probably lines. materially earlier, mentioned out going we course, if I margins. untenable the certainly positive And certain as then,

And will that can't sustain I it. people think, level, any so because pricing at temporary be

internally to as obviously, then to And we costs. to the operators, maybe I for one looking looking think as through whole that is they're think earlier, I of out mentioned service costs, drive this, in silver lining industry addition sorts

it in a to think more this -- So be this I will that contributor solution the through than downturn was downturns. that, prior of be larger

Nicholas Swyka

Tommy, that starting much much than we margins, industry in downturn had to higher the pricing this entered out reduce point point I'd XXXX, with. from a which higher

that think of expect perspective from the level to it's same So pricing also decrease. I unrealistic

Operator

This closing like Q&A Ms. to comments. concludes to I session. Ladhani would it for back turn our Holli

Holli Ladhani

I take hope from position than allowing in on is enhance priority it you. that but Thank sheet us in industry, is rather flexibility breed all I to debt-free And balance a tough we've Select and what built. large to our protect going complacency. and be terms of do the level Obviously, year is that unique cash this you some us is believe the of somehow to of our away

going going commitment to businesses match And companies. are to the position act the to who industry that ourselves of But be best the current market the in also have that we're to are companies belong challenging, you those transform efficient, that we the future most to and we're stay state the in. lead coming to that. we to take every quarters, action fastest that is capitalized group companies going won't this and the they're that And know the know our forever. that their And to operating

us morning, this So for joining good thanks again day. have and guys you a

Operator

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

disconnect a have your day. lines, may wonderful and You

Select Energy Services (WTTR) 9 May 202020 Q1 Earnings call transcript