WTTR - Earnings call transcript Q3 2020 | Select Energy Services, Inc.

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Operator

[00:00:02] Greetings and welcome to the Select Energy Services third quarter earnings conference call. At this time, all participants are in listen only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad.

As a reminder, this conference is being recorded. pleasure your my Chris now is to host, introduce George. It ahead. go Please

Chris George

Officer. call review Swyka Thank morning, for me the are Officer, us Conference good operator, the Executive Select and Chief Holli Vice webcast We Services [XX:XX:XX] President twenty and and today joining third everyone. quarter you, twenty. operational financial Chief our and appreciate Senior of you Financial Energy Ladhani, Nick and results President to With and for our

made Twenty may only twenty, time replay. speaks November reading, time Listening of was note until I reported comments XXth. or replay longer over, United in forward also management of of federal items call be accurate call of The webcast Before call statements meaning no sensitive within There the telephonic the laws. during the to cover of forward call, the website this that the contain by may will by on will a These housekeeping the yesterday's this current transcript a Twenty November few recorded Dotcom. our reflect earnings release. as as included looking the therefore looking and to turn have be also management. statements addition securities of views available States in this today, information Please conference Select access from select a today's available Xth, and Energy replay twenty. at information for information replay accessible be

A for XXst, year materially could Form statements in from annual to or uncertainties results, to However, made listener differ XXXX. the performance XXK read encouraged the contingencies on and our actual expressed December our is report risks, ended various by management. cause those achievements

CEO now non-GAAP our I on call released And to turn to of please yesterday for to Form Our the and reconciliations Holli subsequent those current our and uncertainties Ladhani. Also, reports over Tinku understand refer financial quarter X-K contingencies. and earnings third risks, on to reports would our measures. like president Form quarterly announcement

Holli Ladhani

[XX:XX:XX] Twenty oil quarter have Thanks, the increasing quarter. put since challenges, the good customers which and in the bottomed morning, Most second the for course steadying thanks to made our prices, and but continues progress back of slow us we've through today. Good third in its over everyone, the economies opening, to oil Chris. joining path began demand work. market twenty resulting

over QX which less the wide traditional and Given improvement completions. frac sources, metrics in has month increased some various revenue quarter, in for growth industry reported others during month, quarter, the month our over counts sequential QX. reported is the services to meaningful third this data an of led clear steep a in, across XX the are quarter, this activity decline including course What comparisons activity crew resulting in downward month of up, a demand unusually trajectory showing notable while quarterly being over well, solid is the range percent

the growth segment our are recovery water overcome percent. believe note, increasing next pressures stands as As revenues also dislocations programs On continued by market enough being with our resulting five infrastructure, are we stabilize significant delivered over the steadily results, improvement, driven current the of distress segment. third with out, course revenues and quite for federal QX near drove quarters brighter dynamics activity market by a few particularly when a Bakken services particularly segment the the exhausted. water support activity if look forty pricing recent over we in landscape, to of pipelines and flat segment are competitive quarter [XX:XX:XX] expect pricing significant to This slope and revenues. chemical our decline, wasn't however, increased We relatively combined increased at the that across

Importantly, company, XX us we've the implemented the the across in with savings combined QX. measures deliver these of percent to businesses, incremental allowed cost leverage operating gross margins

We of third cash our third one of this flow at the total during strengthen our million, million and generating free increasing one cash to year-to-date position free the continue five balance total and and quarter, XX sheet, flow to also quarter. cash hundred takes our seventeen to million end hundred eighty the

activity of forward, look early before October and the challenge QX impact slowdown continuing always to November we and As but the around potential predict anticipated November a December. an see to we're increase seasonality, holidays late it's in

currently off continued of in and further counts one, levels. QX average twenty look twenty anticipate towards growth BRAC activity, the improvements we we year As next

By crews remains consideration While this likely in year. downturn require from activity outlook around five between which would modest our in revenues improvements a seventy of and early during fair forecasts stage, dollars support flattish hundred to risk year covid-XX of levels twenty one QX amount one fifty basis, U.S. forty would five forty to there outlook average and at year near-term is be twenty fairly party hundred third would of uncertainty indicating pandemic this crude to on on frac one oil certainly this one. twenty relative require production conversations many to date. the a a to and overall somewhere with estimates, for even appear over levels, strength pre [XX:XX:XX] after us customer of These our current twenty consistent

On steadily grow in the year, our we're the given course business we're we've the all, next twenty of confident revenues can solid implemented measures margins deliver months, over flat positioned to XX months. last the even next as twenty a environment well over and margins cost six in incremental production savings Additionally, one well.

in our months. some improving, confident the believe course earlier, will players recent quarters the of landscape many challenged referenced in We've on in we looking expect will space water to in ahead. improved our continue mergers competitors expectations at consistent dollar and the towards seen programs, continue should our to and [XX:XX:XX] continue already been more announced. industry This a one, has customers. We've as impacted already this pricing pricing efficient, a particularly with competitive the of improvement these consolidation we consolidation with twenty number with has looks fairly historically key our remains trend we're in struggle the industry to support will be much by upstream support multibillion and We smaller having segment, expect with As reductions. industry from The able our could landscape federal drive to of be consolidators near-term service shale shuttered as I and effect led a and the acquisitions services have over will of survive scalable customers. today, to believe and in is this an competitive to sustainable right development benefit That even the see of we're efficiency Ultimately, model. the seen well but likely the this lines, which clearer the the consolidators. supplemental needs but landscape positioned timing be what multiregional an capex number twenty capital of regional services

also chemicals and long and efficient, solutions will our only water but effective in help goals their Our will support and term provide of safer and lifecycle not pursuit full for them the cost ESG initiatives initiatives. more customers, around technology management

strategy We'll capitalize significant downturn. liquidity, to remains areas customers, to we our assess it core opportunities opportunities. investments the I'll and and to optimistic my balance pursue to far to through And sheet we growth. strategy hand support flexibility committed and third through grow all I in to our and evaluate technology expect over to the walk Our and premier protecting thus Nick on disciplined organically, that these available our this provide while we'll be find continued that detail. focus With more on our will performance acquisitions maintaining quarter centered solutions continue on continuing to strong patient in remain financial on opportunities appreciate us. attractive that, to accretive team's execute I'm of

Nicholas Swyka

you, Thank and good everyone. [XX:XX:XX] Holly, morning,

was a water fundamentals. eighty leverage gross our fifty and operating we service environment, focus five hundred decline. in no incremental generated with cash quarter, consecutive have the XXth eight our of difficult in Holly one and positive on in of these quarter Targets robust with to million chest we and the doubt headwinds, the strong decremental, a on the relentless The second flow free are our on we contrast. a one infrastructure margins. Well, an from percent war dollars as to chemical third hand. improving improving percent segment, cost savings. seeing Despite progress built XX seen to especially efficiency reference with customer cash led a realized quarter solid Even continue

dollars. to Another under one million over million point quarter just seven quarter XX

accruals and primarily the a legacy related that note one one legal million non of of ordinary debt of would other I related point this However, previously course to million includes to acquired businesses. settlement claims costs, half

lower XX under Espina million business push quarter the expenses to to returns. expect in reins we tight as while maintain even on We fourth

dollars million generated of covid-XX full cash provided emergence a has exceeded flow the target beginning the downturn. year-to-date year of the free at year XXX the we of Our before sharp

generated demonstrates pipeline of fourth has, relating quarter non-recurring throttling quarter to in million a second, of to much a tax previously non-recurring the the sales trending three point revenue margins during from environment. businesses, second to believe XX was DNA, of one twenty gross fourth point key uptick, our QX the oil also negative one before. million yard by recovery more and Below depreciation two and point third our second carrying revenue XX however, higher, outperformed segment in costs. in difficult cash revenues quarter, or two in one pressures the stable, second one third. back for accruals the negative market before EBITDA to all Adjusted from million four million before XX WCF profit increase seven and loss is that on dollars in million greatly second Gross one the million quarter today's in six and the the of for Note, EBITDA flow point quarter. four quarter well detail, acquired the share of DNA million in million segment million revenue DNA included volatility audit improved percent point expense, dating philosophy expect point eight fifteen from roughly This decisive one benefited revenue in and million activity one million leverage been That seven million modestly with depreciation digit twenty quarter quarter in twenty XXs impacted our and accruals hold from second nine six both competitive with and third one point five disciplined with of anticipate higher we low second expect amortization this quarter. however, one buckin the benefit non million the point compensation chemicals liquidity, XX third point periods the million as The in non-cash Buchen quarter. the seven essentially two of revenue a quarter percent, three assets, million dollars increased sale of quarter three While third one million two the moving six audit percent the said, quarter. third the amortization select percent. some debt margin the Asia-Pac nine business, quarter dollars. of adjustments third three with non-cash businesses, of volumes Significantly second slight of second adjusted point to the volumes from water quarter in these of run margins million and operating challenging, profit third to likely extremely margins amortization during higher other percent tax segment adjustments. one The and profit in of Turning from lower this results financial system slightly environment, return up nine from loss million quarter line, strongest the the into point by revenue quarter. remains rapidly quarter, to million depreciation higher for mid bad to in point impairments at gross from point forecast effectively a The course five before three the had chemicals six decreased the ordinary single We not pipeline ability segments, benefited third to September while due pricing, Gross total point over of margin quarter in flat to completion. collections in services and from the on dollars than three point versus tracking million the third segment water as quarter, the manufacturing expense highest dollars point and made to net third. the on for as in saw percent third five point high in flight seasonal third third. [XX:XX:XX] will regional in included of back fourth in for rebounding and million face nimble segment. fifty thirty seven six a net accrued one the and two quarter well million our The improved second by chemicals the higher the course, we were four lack the crosscuts in trend improved of spending, of the further second compared more our million to declined DNA modestly one that in capacity, revenues [XX:XX:XX] to close to the quarter point The thirty hundred of percent fourth flat segment of Aschiana dollars million increased million our eight ninety the closure six in from slightly the dollars the We gross and to I high the second six positive to during one relatively to by a sequentially before loss as infrastructure into a approximately Gross in to differentiator Gross it margins, negative quarter month. throughout forty segment in to stay quarter, during relatively before fifty field severance point in quarter. our three due driven twenty margins fifty four [XX:XX:XX] generated the costs gross million percent the improved we third pipeline completions, one and quarter. system, quarter. the margins tax and in four segment

expect to capex DNA modestly decline continue coming giving We year. see to in this spend the quarters, in the meaningful reductions

enjoy hundred We and continue a bank to of September of zero cash million net have five position eighty as XXth. debt one dollars

in fourth the are slight flow cash quarter. capital further to a could on This free year, with XXX many improve ability provides at our million us to financial That have we year has the position the generating dislocation. opportunities. working exceeded free face unique success Our cash We to position limit likely during believe QX. a headwind strong in date flow a of Despite considerable market challenges, time this we expectations.

while strength. turn concluding before over With your with I'll the Operator, it those thank some questions operator preserving take the to and evaluate you. will remarks. we'll wraps Holly that, We up

Operator

conducting [XX:XX:XX] question session. will now We and be a answer

in If like your your is confirmation Press a ask you indicate tone line A question, would keypad. queue. to on question star please. the one telephone will

press star two. You may

the speaker before up from for pick the it queue remove be equipment, necessary pressing may to question If would like handset to you your participants Saki's. using your

Our with first please from go ahead. comes Lowe question Citi, J.B.

J.B. Lowe

activity? looking into sense had Twenty out before two one? decent you can the on we you even was what that you break would activity but What [XX:XX:XX] next in to we at you that incrementals question given to, do And do that consider the the one. guys know? twenty back for capital think? I you were do do get I prepared reasonable curious the everyone. Any hopefully were, activity twenty I what quarter, And be increase expect, make be Twenty think laid about you increases questions What Good in on then could think more you what incremental working what as you I think remarks? What you do do morning, and mean, your you know, guys to a do

Holli Ladhani

[XX:XX:XX] fairly volumes for infrastructure their seen as business the that's to depending the on potentially make weigh the I'll as and can Sure, and maybe in our of a can capital, is we I incrementals we've see of concept business, about changes, structure, higher that cost normalize and on competitive it incrementals, will the said than landscape obviously, we across in the most where incrementals our we'll and that made pipeline on XX but clear we bit about the on start to which that's that incrementals, some be working a on meaningful going torque, a in more recovery alluded in know, clearly think earlier little that from think But business the services, the general in out. And to if for pricing the chemicals on line, to operational that mix at pressure think year, across pricing driver historical leverage you water of our our the how bogey. as course a normal. I particularly depending see also given percent, some script XX that you infrastructure is, the the takes little of it looking difference on really the and we've next have on across a JB, we long service product think the

happening confident fairly twenty get does pricing. itself, of to a predict, capital landscape the course resolve harder, that working some That bit see more rational and but we the competitive little with their. to So twenty what one's that that are some in one, over back we we harder

You hit on that.

Nicholas Swyka

discussions J.B. the But much [XX:XX:XX] and that flow twenty didn't working that's capital we'll For on view of twenty one reviewing months and build. million we that eighty capital commentary of try twenty a we going handle our few back twenty where five know, you to can number the to can with our like the industry kind most cash paradoxically, with certainly on feel as concrete and them about Twenty there Know, working upside next leads budgets certainly will our hand, extent a on regardless a understand give give for good twenty, our that are But of that's director. and capital we can before better, to But, and well. any to one. over cash kind having hundred one of hold better is be we working customers

J.B. Lowe

on second on great. expect [XX:XX:XX] the great also on in volumes Great. just how volumes And specifically to My the New those infrastructure permanent for do question twenty Mexico one, into and of those your acquisition both was line Mexico New are, how twenty you just and Permian, the trend Q the

Holli Ladhani

in Sure, because even break that we there to require, then on production actually put system expect maintaining and a the look of continued probably is look outlook we're you base we [XX:XX:XX] utilization little customer the those see one that having improvement QX driver in it's will just And similar [XX:XX:XX] we that And on Permian we be twenty we apart uptick forward. QX. to activity new look twenty the is and it's as the together There we've that would the the much. pretty system. just feeds our clearly them in and would of when at hard place, flat one would have. so say at QX in to I some our was But what somewhat expecting infrastructure probably would that an those too to

J.B. Lowe

thanks so [XX:XX:XX] All right, much.

Holli Ladhani

Next [XX:XX:XX] Please is Simmons. Macpherson question Thanks. go with [XX:XX:XX] ahead. Ian

Ian Macpherson

Good morning, [XX:XX:XX] Holly, and morning.

been know be with been it now patience And capital until have just allocation I pressured. your cash redeploying cash know, analysts relative M&A cap you now. harvesting balance about are to discounted free get your continued your you than obviously capital market know, has your or is the both in ears more think you from been has is shareholders and You into it to and and, valuations flow business, all rarely has about wise

your business it some a rational quarters that said or your with landscape on portfolio and and time, players cash, Are think to your narrowing you a operator takes point more this smaller consolidating there content time? to clean footing be could think patient maybe for bit. up services do water remain you window probably something to a to as do few little you a with So find sit in at you transformational the

Holli Ladhani

mantra appreciate the fact and when you'll know we you'll that hear patients, at that I Yeah, would but much times you say it's [XX:XX:XX] to that continue pressure, so because highlighted us. there's hard from obviously there least to and multiple couple capital find look front, to on through then of think And at ways at the buckets. continue acquisitions deploy that organic. opportunities. is I a There's organic we

of that recycling technology allows area. their but Some but help us around can operators recycling for to could at about in frac that optimistic is actually to we're a that particular that of project help one I'm all on customers initiated This constructive them reuse, efficiency. a help small, reuse some where by goals. the opportunity a the Permian They're other in be contract. It's facility. pretty It our in technologies us. looking that potentially pretty strategic. emissions, we invest Again, with technologies key several with underpinned We've relatively for is small, that have water serve with we

making and out that So a or success on of good we we'll quarter right some that have When the something the and again, projects two return value. active next and the they're opportunities to just stay understand what lot are. delivers still there that's sure and that's delivering metrics. we M&A in there we are going think singles is think accretive sure find I key the the deliver making And we we front, be

organic only the certainly There that But create that'll that. on value. we're not on the we that'll stay So say it's opportunities way to I smaller execute that are would doesn't radar. continuing can that the

Nicholas Swyka

capital returning shareholders The [XX:XX:XX] the for remains core to priority us.

and the a current what we're the are. see, our remain market certainly returns term we opportunities evaluation shareholder But pursuing long With of core vision. dislocation to the more comprehensive

Ian Macpherson

great, That's both thank that. [XX:XX:XX] you for

it sounds has one me, the time It as water services Just to the pricing on headwind me but stabilized sounds bleeding we misinterpreted like may averaging it one will this. still maybe a like maybe more for to correct QX. get I close QX last if bottom, in that by have side, is

your if then for with total year to about proves it? water right revenue that accurate, outlook So market pretty activity the well for and volumes expect to proves that pretty, activity. would services your be way next think correlated you Is

Holli Ladhani

to it fair. that's about I going bottom think that you're on point again at that think when a right, just we're we found not we're I bit to go the guess we're and is have longer, price [XX:XX:XX] And that's I away. that. for And there do but a customer they lower. that going and that understands [XX:XX:XX] subsidized our can labor base can are go people bid

part going into a just basins. expect because the year. their ratably fairly part of the deployed they more way from think third businesses, that, you about a quarter gassier and the in our fourth first think described fairly One of I those as it. bit representation water is we slow business water note, services, some good would And over I our the services know, to the quarter nuance, down second So quarter strong the the they to of for you had do services is capital

of seasonality more like we will being the in like oilier versus basin some muted historical be levels So the in get we're expecting that will basins.

activity, But that for is in does tying it. go a perspective, about least way a good think change particular to frac bit So forward for your services. point crews water from to starting a it at

Ian Macpherson

for the Thanks [XX:XX:XX] insights. Appreciate it.

Holli Ladhani

Sure. [XX:XX:XX]

Operator

Next go Kurt C, with please Hallead ahead. [XX:XX:XX] question, B RBC

Kurt Hallead

Hey, great on next morning. but going quarter, good on that for views the into not thanks. and Hey, color year. your only next Thanks for [XX:XX:XX] perspective

us guess, that at Holly, gave from the outlook kind I of provided, look look right, sit where around. at the context you So I

use has what production of operating mean that course basis around year. potential crews frac more be year terms guess the the overall may context of you're know, a going US for year and would You been what flat, on what for to be activity down little next number could be of bit I a the year. average in a Right. frac on And throughout could I still

get my could of one head versus water kind to hard water around solutions, up, twenty. how be say services let's it's So twenty

So I chemical infrastructure know deep on how a by be you year in bit guess driven more about should that, would around revenue talked basis would services. to on a I be context up more soak year would little by water and

So maybe you calibrate can help me that.

Holli Ladhani

twenty quarter [XX:XX:XX] Sure, it's challenged one probably in if compare fifty trying third levels, have as quarter we've probably the I frac count below hundred twenty and is part one second activity know even three of hundred, and struggled it that is average that hundred it, to part you that we that were to range. gets it's crew But forty you think saw. [XX:XX:XX] as about we volatility the and and

see optimistic. build grow. heavily and and to have It's that's And one five to, [XX:XX:XX] pretty So [XX:XX:XX] twenty, hundred at a and hundred pricing I we're seventy then twenty that other you the start to revenues QX. and QX for way is in average, then thing when how running that, services, water its you one look in would pressure fifty, one through there the started ability

pricing be more of know, twenty that one the I know but And help expect half to summer, twenty normalized. would also next will if back it's don't top the certainly the You line.

Kurt Hallead

out sure you least Ok. [XX:XX:XX] the that make for know, here, And to Ok, then, that so point just at that's with that's just correct context, so message, the on sure. call fourth the quarter. clarity of of appreciate for everybody helpful comes

positive So fourth be quarter, your guidance. to expect everything the given in

Nicholas Swyka

for we can That's but more, end think that's Thank me. where I segment can All we you'll guidance you through it know, our you if and up, walk do, with that's little take the a segments OK? great. likely we a Yes, [XX:XX:XX] right. along those That's you. rest, on basis

Operator

question, [XX:XX:XX] like your Once to one telephone press star a you on if ask keypad. would again, please,

with comes Our Curran ahead. Riley. from next Please B. question go Thomas

Thomas Curran

morning. average XX high resilient offerings, pricing water your pricing Good the respectively? and is segments, [XX:XX:XX] from XX for services Down. On proven its and down how pricing where much of across most that fragile, is Division six then

Holli Ladhani

our materials move it challenging lens fixed the make as structure, we as like But across from. a to on to that is does right than XX bit [XX:XX:XX] XX cost Clearly, seen, and think water the side, cost by the to would that XX to degradation the our XX definitely service think you're of is it business, because business, you raw to to costs is as our just I what margins does lines, manage we've chemicals better a it things the reduction the world, with looking that some services the range become than percent think regional little I adjustments labor view little When more obviously you our the after right percent through Yeah, I margin it. say the have think about to line. but about probably [XX:XX:XX] others. aren't impacted in infrastructure our sources, find pricing But our the tend that held what structure, at we perspective. a

Nicholas Swyka

been go and than the on of chemicals the as [XX:XX:XX] that have element And services kind the think we challenged the infrastructure. the hit far more ahead, I

Thomas Curran

segments which most the which you least? it, been as hit within would And having and highlight [XX:XX:XX] the

Holli Ladhani

it say, the that regional allows of and frankly nondiscriminatory our up the would we fall provider levels is we've it something they where, to I provide when impacted we're we against. of aren't of you to level I'll with that [XX:XX:XX] ourselves, or still these we're unfortunately, essentially, close. a that federal away from And competitors the sustain. the know, like, to much it's require. it's walk something some in lines, service And before. level we set layer again, to activity that programs who certain fairly service it And suspect do core our going not customers the levels. we have that to But know it's type premium that's service to that work it's find funding that a find of you they're price. his going to it here, be pricing we pretty a say have, And our And seen that's lines, plenty that it expect sense [XX:XX:XX] while smaller all that there's even service led paying just not they we're then essentially is predatory when

Thomas Curran

more for assets these under? go to how to and acquisition on up then start are following opportunities repurchases? And of from on private it that deciding evolving, means set making Ian's with interested open cash liquidations the chest already with smaller be you're some about or aggressive capital what here allocation process is And participate share then become Ok. in expecting of where picking priorities question you is with players and your You moving to forward when it comes and a know, is [XX:XX:XX] your that struggling with that your would to anticipating? in war [XX:XX:XX] criteria the is when up decision when to auctions

Holli Ladhani

meet needing not those needs start also because we in guys hundred seventy at of We're One to you our next one demand certainly our little have there'll and fleet, go just stepping we small more are I'll but the looking The equipment. auctions to at dynamics. the [XX:XX:XX] supply like but field add market. we're take finds as out its required that be look hope way aware strain first investments and So some most the that are the year. know, fifty things of thinking our these, frac [XX:XX:XX] are of look say Sure, out at amount along we crew older, starts help while It will put to scrapped will there, needs, forward today I'd occur, on tremendous way. pretty our do to that capital to five [XX:XX:XX] sure equipment worn manage a a market. through and equipped fleet for with, our hundred looking but well the a that manage auctions these these companies of just is back, make when the oftentimes that, review.

coming that serve needed very will are customers. going not we're be to again, of probably assets a And that, the are with to that sort to So of future be are assets lot selective. needs market the the of

assess things on the our on value the able more said, value to think of to Nic to of accretive and shareholders. these in we growth, we continue broadly deliver As clearly determine is, returning allocation try to best multiple being that its ways the investing if buybacks, additive is table dividends, capital we value, have shareholders its of and means doing of that that to are all the

Thomas Curran

for questions. Thanks [XX:XX:XX] fielding my

Operator

comes You go Sean [XX:XX:XX] next question ahead. JPMorgan. Meakim Please from with

Sean Meakim

Hey, you. morning. Thank good [XX:XX:XX]

Holli Ladhani

[XX:XX:XX] Morning.

Sean Meakim

question into water year, [XX:XX:XX] on is and high experience pumpers taking advantage services next volume much and revenue pressure lower fleet fourth, cost per the in lower are of itself. seen the stand XQ we've in So who

in cheap different are water? they're how versus in performing terms you're to terms broader Obviously, among how volumes your But to thanks of the sourcing Source markets. sand the you water completions sand market. in impacting pricing in spot Is and behavior of sourcing shifts market? that seeing customers

Holli Ladhani

Not shift brackish using They side. is in provide. other produced down probably much activity really in their using weren't water sourcing as were would start went did the that sources QX? as levels we back on I typically what change we'll would [XX:XX:XX] QX would much to they they because say water. our And not showing as customers, What that did,

what volumes used. did as type margin we what ways, what some market of piece and sourcing But impacted much. in as Keep water of fell, in lower change that's smaller what do. we were So water the is the the being mind, our

way. go to expect we trend back a that's the So other

which capabilities, think So our the again, higher of produced volumes level itself to service, of treatment apply water, chemistries our lends to that. can we I complex more

probably trend more to more I think the watch. that's

Sean Meakim

for thank operating also leverage cost experienced then pressure. It's was And to services. [XX:XX:XX] more margin the a of that's and the of for historically appreciate back lower component that. area you coming I Ok, biggest pricing that cogs, that's the you. variable question for business the is

to in twenty gross business working How margin looking the eighteen. mid if take previously digit at we're ahead, you've troughing say, cost low XXs You're But single for out. a picked, you're path do to if from driven And much you the for how where volume look of is are there, the versus business? here that normalized think we about pricing? gross margins you at

Holli Ladhani

I'll [XX:XX:XX] Yeah, quantitative but both. it, more, great but wish a question, had I we answer to say, it's precise absolutely and

I have point, labor, near we we add yard. term, to another yes, So business, to need add add don't but in think to we your when the

bigger as So across not operating But across does but one. through the there we as chemicals as way our and leverage we our is as will it twenty through exist. obviously, work that be business, lever likely strong, infrastructure, pricing twenty, the

Sean Meakim

mind, across just up give you versus about breakdown we people. on you if could if And think [XX:XX:XX] scale? able maybe to that, follow relative a that us would for segments, are business sex variable helpful to It the rough be costs,

Holli Ladhani

water be range. of in those to that the XX low more whereas are probably [XX:XX:XX] our that infrastructure incrementals find at Maybe incrementals end and chemicals higher the of end to at our the The range, that on back range the that easier services it are XX. services, way that answer is going you to to water of the is is,

Sean Meakim

Very it. Thank sir. good. you, Got [XX:XX:XX]

Operator

[XX:XX:XX] to closing comments. management I over turn floor for would like to the

Holli Ladhani

to taking was maybe to in bit recognize listen morning no [XX:XX:XX] all this it morning, to thank start of makes information. Thanks. I little our but first, and And a And a people a certainly a that lot you to conclusions, with time chaotic want information the digest, harder. pretty for our group job for that

fluids powering generating that to position, nobody's confident life unique and our full cadence we the field play is of improvement when close that think to cycle economies is oil as I critical fact the in had we timing in going about improvement, will continue gas now. in activity we I just leading world. see sit offering, be of what our market can the say and around that that the you visibility terms But this do what's And debt sheet the So from maybe do of going has this while immune [XX:XX:XX] what activity well remain from I will more business. And that all and that's today. levels have to balance a the proven that as we right going improve. today. position about to And cash to to be on the we that, flow as that, led free And is would to where indicated, role an do with wish in oil what I a I on

So, have again, day. joining thanks us today a for good and

Operator

teleconference. today's concludes This [XX:XX:XX]

your time. participation. may for at You And this lines disconnect you thank your

Select Energy Services (WTTR) 4 Nov 202020 Q3 Earnings call transcript