RNGR - Earnings call transcript Q3 2020 | Ranger Energy Services, Inc.

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Operator

Good day and welcome to the Ranger Energy Third Quarter 2020 Conference Call. All participants will be in listen-only mode. [Operator Instructions] After today’s presentation, there will be an opportunity to ask questions. [Operator Instructions] Please note that this event is being recorded. I now like to turn the conference over to Darron Anderson, Chief Executive Officer. ahead. go Please

Darron Anderson

Good third operator. welcome Ranger to Thank XXXX morning earnings Services quarter conference Energy you, and call.

has in Joining me who moment. for comments CFO, continued improving Trend results early Blossman, Brandon successful across QX Ranger a each with today as will QX. always offer is been quarter a has month. our into his

with While to the risen the team flying our colors. has recent volatility organization, has and tested passed our occasion

easing efficient have divert to the exited addressing is this service focused, We and our to growing needs. to path more ramp us and up incrementally attention back our a customers which downturn, allowing full

the monitoring taken actions share with now time additional cost to new customer dividends Over attention on performance. and capturing our cash downturn and of of solid development, through and decisions management, data organizational efficiency, starting the to financial operations the improved combine two through increases footing past enhancement are but focus ongoing the pay been has our solely for real not The beyond and to quarters, gains. made include market

While a our in substantial revenue year-to-date off down each activity trough. the very of QX increase have we headcount approximately XX%, still and seen are

crews QX early our and improvements is rates, improvements. significantly rate along basins current with additional of and customers of opportunities revenue segments in headcount increases too a from add up scheduled we from XX% and bottom. trends growing increase XX% Our units, run in are solutions month-over-month or process positive bid Rig wireline contract High expected late These It Specification to group. within and to select backlog hours up frac but in a our XXXX, recovery, and opportunities within and active to point the experiencing early still is include broad market

detail Now Rigs. High for segment little Spec with more a starting level

X%. For the composite rig hours up and were quarter, XX% rate rig sequentially up

quarters the even dramatic. versus metrics up more quarter While full [month-to-month] are trajectory nicely QX, third was

For up versus with a with than versus low our six XX% on increase October within in low June monthly fourth a the double those hours into in our rate are months, to current and May trailing to run implies hours X% activity trough a averages. the XX% pricing increase momentum greater our rig in XX%. pricing quarter a QX That projected average pricing rig

we experiencing is are Another our our metric business work. positive growing rig in XX-hour

completion, rig weeks mix XX%. to QX, operation. For XX% was activity refrac XX-hour of over continued roughly XX-hour performing with at major October’s has greater [indiscernible] our recent in up That work activity than work or move

As mentioned in my opening our and comments, capturing data our focuses has time monitoring on system. one of been real

monitored this in data XX-hour the system performance a of success having implementations. the both considerably of our The our is work, drive spend thus being used are customer collected type our With to further activity higher with customers growth operations. and rig early with efficiencies we and and improving

We quarter today. dedicated Moving our truck at Services the on third Other six wireline Completion of count remain activity that segments. maintain units and to a and throughout level

continued have but offset completed efficiencies day measured cost stages QX, as to by further through erosion truck price with some and seen reductions. it have We increased by

decline but is nearly count, per X% by Our stage up on is being run that gain offset tracking October on stage. X% rate pricing

wireline base pleased customer Looking efforts within Permian. expand with forward, the our we're to our

weak across Processing near-term being finally, completion level. this are activity Basin service this declines. portion our offerings With results balance overall on continued call, possibilities. quarter contracting built fourth we will Solutions has about team deepest and of of bid of commodity longer was experienced and clearly new of immediate We basins these but yield be, has of a have definitely been Current nothing our the our a but of The of has backlog DJ supported to services not the quarterly process the management them segment our price And end where opportunities]. we a segments other environment their with the The results. are one majority performance simply focused, optimistic this our busy want rebound, midst decent not an in finalized but in-line Group. [bid reports weakness

some is We is our environment of a modest our XX% wins Ranger's is chosen shows the approximately continues of focus our and point performance that change OFS can't segment. which portion month term continues strengthen QX low in of to our call a that organization late sustainability sheet strategic Rangers up, results, macro are XX business to and even has We're say for balance the materially improving with million done, a of partner is who enough the optimistic position on customers, Every clearly that have the to and path. challenge that contract while performance to I numbers. the fact work this small has customers market. debt, will turn us allowing our our now wrap up performance, I different To to Brandon our yielded the on during will consolidated details this options. the of about companies, liquidity solid footing, from difficult the proud on QX. about team over with of

Brandon Blossman

Darron and the on you, good morning Thank phone. to everybody right. All

sure of walkthrough quick a numbers. we the all any the miss do third of quarter details Let's that don't and make

Consolidated X.X million, was as the the rates moving X.X to Darron rig The segment up relative a reminder million revenues in period on moved adjusted level million and of million first, from rig XX% to up down spec $XX while to $X moving basis, XX.X% and from consolidated now to was moving mentioned. million effect going or million. XX.X%. with QX’s High a XX% hours up $X XX% or And last revenue. starting numbers, EBITDA an from combined million, XX XX up up X.X revenue were rig margins adjusted EBITDA of quarter, from million, or to So to million. $XX composite increase

rig segment Here hours, increased to rates million Completion up well revenue those of rig from the from by In an moving in or an were million. our $XX hours Services the or to was moving Composite $XXX $XX all those, hour other hour. up $X XX% $XX and and wireline increases hours moving those from quarter. X% million, to declines an of non-wireline With increased XX,XXX up Other hourly in or X,XXX X% partially offset $XXX business XX,XXX hour posting majority services. the increases,

offset segment reduction pricing. and Processing The the decrease MRU XX% was our $XXX,XXX, stage along driven largely services, other a as composite drop period increase weakness Basin Specifically, market. XX% Darron mix by with a in a of XX% wireline revenues. moving count, in the non-wireline up package some million revenues off XX% to in X.X by of sequentially, or was were revenues finally, down were partially And which lower mentioned one driven continued here service DJ net X.X from at Solutions million by

which quarter-over-quarter moving completion [X.X million offset EBITDA of by EBITDA and partially and XXX,XXX, margins. Overall level with increase from a to to and decline processing G&A segment or XX% before EBITDA. Rigs High Now, segment X.X this in increases, corporate were segment and level an is Spec services moving saw seeing million] other EBITDA, adjusted solutions

numbers to XX%. line, EBITDA margins some or XX.X% moving X.X X% moving $XXX,XXX processing were with up million also flat moving here to level, from million to adjusted a High margins was saw to the down those adjusted year-over-year roughly segment again again million. up G&A up Rig, expense And adjusted quarter-over-quarter. XX% G&A now EBITDA as were Margins was segment X.X EBITDA $XXX,XXX G&A consolidated decrease before adjusted at and XX.X%. segment, front, segment $X XX%. up X.X On here XX%, X.X million, The margins and from disaggregate were million other On XX%. flat up to of from the at was the segment again around here completion to Spec down XX%, margin from services $X.X moving XX% to while solution expense million, At corporate

in we've a sequential impact QX rate million, rate on income reported adjusted of primarily million $X.X and a QX’s a The an efforts quarter, should decrease catch EBITDA G&A to is For from QX for on loss million. beyond driven our now up run the EBITDA. we saw with $X.X $X.X from as per fully resizing QX level was we return $X.X healthcare net that improvement we on by of QX, before the reduced down just expense third finally the That loss That last and capita $X.X moving what net benefit the million does quarter-over-quarter X% million. $X.X we over quarter of so. on here over a This administrative of more the increase million. depreciation decrease along seen some to reflect note normalized adjusted impacts. basis. after severance side, some some expense the And be a along to Net run QX’s with or balance half forward expect sheet to depreciation a move differences and go loss

lower the the net that earlier take the in associated EBITDA, move X.X. let's way, EBITDA result bonus the unadjusted as partially year $X.X on flow. is the an one-time sheet note period of million adjusted which of costs was private of release With is number impact accrual, balance reduced the earlier the offset and This of than adjusted out which response. reduction You'll QX by with the cash of of that our to the

QX, our $XX year-to-date like ending QX’s note combined of the which allowed this to asset that million offset $X.X during the a net That down brings by nearly That results to I'd vehicle our $XXX,XXX flow, partially balance. $X.X leases That's we at ending just debt, balance million million $X.X our the million QX lease at $XX.X of that balance. reduction from million. the spend net us at $XX from reduce end flow down of cash saw debt by vehicle decrease million stood $XXX,XXX from QX. sequentially. CapEx cash total debt of at QX, quarter, $XXX,XXX million. disposals with was At down from of $XX And of $XX So, net year-end operations. and cash term end debt usual to inclusive half down million, returns, XXXX’s the stood of of

prepped down business total $XXX,XXX recorded relates] solutions of $XXX,XXX [XXX our our liquidity business our consisting wireline of The payments on cash in lines. of and liquidity. increase finally CapEx one $X.X is being be that comments. design And gas for last was for higher of XX,XXX to than should borrowing we ramp of processing million by the rigs million post This million bit CapEx. unit I you. spread in tier million across $XX.X to the think ended The it on XXX,XXX driven to processing of up, breaks maintenance as up for quarter CapEx has net prototype of a my the which work, that's balances to new into hand upgrades back equipment from new QX’s of on $XX a revolver. upgrades, Moving balance accounts less receivable trough. all quarter I'll from million capacity base segment. on liquidity, That back $XX with and Darron, all $X And an

Darron Anderson

I'll Brandon. up comments brief now. you, wrap with Thank few

ahead have with the on have fourth great and While the started us, quarter of optimistic momentum. feature road long are to we still pleased a we

the in of overall For by of the year, reactivity, see the continued growth expect primarily maintenance the driven market. balance to a increasing we demand

year my services our of model Processing potential impact and operating XQ related a Solutions as remain contracting earlier in-bound completion XXXX our early as in on In modest regards activity processes. could the increases continues in group prove our initiatives, number to participated and in start considerable meaningful bidding stable our active has performance XXXX. And very have customer of successful with to a across to the demonstrated current which through comment, I mentioned strategic programs, for XXXX. positive Our margin should consistent efficient based

implementation capturing continued drive along data systems our within of XX-hour will back to will office select service customers completion the programs rig take beginning across We like continue monitoring our pilot efficiencies place to [well-ahead].The and with offerings. from activities,

high growing ahead Our with focus digital contracts a us. opportunities revenue on yielding stream top tier clients is of quality

the here small a commercial opportunity award program] recently pilot refrac program a been multinational the upon [refrac The While XXXX new awarded pilot real well of scale, at four operator. the the of with program. was we've success conditioned

five our our ramp Additionally, with rig rigs from we've basin The relationship we've the into and our a existing historically ILC consolidation a merchant to is existing an and expanded provided rich. not continues discussed to end finally, current plan acquisition [indiscernible] we focus. working where The remains customer environment the opportunity to one services. by of first that quarter. quarter in current be have And consistently new each interest

disciplined However, minimal we focuses our clear risk continue to our strong approach value on to sheet. take a to shareholders delivering that balance and

transaction have future. remarks. something While open a to work will this continue the expect prepared for And not to Operator, we to announce we front quarter, concludes our did now diligently this and in to share questions. this have the call on we

Operator

[Operator Rice. our Please Daniel Instructions] today from first Burke question Johnson And go comes ahead. with

Daniel Burke

guys. Hey, good morning,

Darron Anderson

Daniel. morning, Good

Daniel Burke

appreciate around activity trough. from the how continued levels Let's the to quantification Darron, come see. all have up

and of could you is incremental – speak expect Do a from headed pretty is about was get all tempo typically of October activity this different little activity interest particularly month any you know, seasonally the this But a kind see You can years. or year, But I advances? QX bit I talk if good year as the wondering activity the you'd other just the into for you tail-off XXXX. maybe indications QX of within year? of

Darron Anderson

Yes.

different in be, of to opinion, a bit a going probably my year. it's think I little

for contracting the material and You what for across the low, as for work hard What in activity in even particularly late-December. seeing as into so up and the room quarters really materially far September were start will ramp opportunities because level is occurring, the imagine up It's second year. November December, and is seen we've third activity not reduce the been that's this know, in-bound October as and to or in especially months. to January that going operators that backing us declines we're

be strong year the the it'd you we've declines. a seen think typical what seasonal in unique that won't I from So, past get

and from just which the of puts more some little the only quarter the improving from had we is outside see would think fourth the how be. acceptable] that throughout contribution nice, weather operations, our momentum continue that, tough [a weather I stronger year. our nice, coming from be to But than think performance we the concern typically standpoint, north. our We've can would weather, Northern

Daniel Burke

market. case where way there get you're seeing be explore fleets incremental mean, approaching further to is Got interest Darron, in the the thanks. back And from to then, wireline XXXX, it, company in any demand this could a you full Mallard you're maybe seeing depth into units of frac Permian we I guys to for a as utilization?

Darron Anderson

Yes.

to approach think is utilization I full still a bar. tough

or seeing to with have we're three operators be frac two. now, what add, we spread think one right are I go that frac frac may up early it, possibility year-end, one with at that running to spread XXXX, call relationship spreads four looking to

full have a adding right don't So, see utilization from in it's would nice a in you But that to know, type It to those to going near-term horizon. which, we back say of to fleets again, units business, benefit six a our is increases, the getting business few us. there. strong now,

Daniel Burke

helpful. that's Okay,

I'll Don't query two but interesting that there or processing, here. frequently one ask opportunity an see, there. was more like on sounded Let's

convert word return I again, type that you if think cash flow you far? tenders. the of too Could some of to stretching a you used Or meaningful XXXX run these that is rate business? in could

Darron Anderson

off and in a type one what this on bidding again, that team. think I relative our Again, management to our we process. brought does process is we to contracting well-head upside based it, greater a again, have And that’s some upstream services. longer No, have new

again, been has to last XXXX. of to months [indiscernible] that fruition to four of of early over part latter lot the QX come the kind a So, with

not in you be I And kind the to and add get we're to know, again, level, of guaranteed we'll you to opinion. with But, know of backlog. Brand, of XXXX wins. the So it's successful those a projects some material could my want that? back performance

Brandon Blossman

assets business repair are mean, in new. there to today. that relatively that good and is The be all I No. I clearly upside plenty of continue all in think

where going the XXXX think XXXX was the there's, relatively on in going the was know, So, side and it it effort from opportunities backlog. in to commercial the you on easy where to is yes, hindrance commercialization just sorry, is there past, and out we to and based probably plenty that is in there's not the or path is it to, That sole it back that early are and backlog the business running of where a conversations to that was. up that

Daniel Burke

it. Got

morning. time for thank Okay, you the this guys,

Darron Anderson

the for Daniel. Thanks questions,

Brandon Blossman

Daniel. Thanks,

Operator

Instructions] [Operator

Darron Anderson

Operator, think we probably… I can

Operator

This concludes…

Darron Anderson

Yes, go ahead.

Operator

back concludes This session. Anderson closing to Mr. the for to I’d you turn question-and-answer remarks. conference like the just any over

Darron Anderson

for just everyone you. well concludes joining our season team This difficult to to a want close and I thank call for the and especially to of the I Thank you. great enter midst thank the done want job holiday safe everyone the out we thank Great, as a health market. wishes No. today call. Best in and XXXX.

Operator

conference you the has concluded. presentation. And for attending today's now Thank

You this disconnect at time. lines now your may

Ranger Energy Services (RNGR) 23 Oct 202020 Q3 Earnings call transcript