RNGR - Earnings call transcript Q2 2021 | Ranger Energy Services, Inc.

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Operator

Good day, and welcome to the Ranger Energy Services Second Quarter 2021 Conference Call. At this time, all participants will be in a listen-only mode. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Bill Austin, Chief Executive Officer. Please go ahead.

Bill Austin

operator. you, Thank welcome Earnings and Energy Second Services Good Call. to XXXX Conference Quarter morning, Ranger This and the Bill Interim is Austin, CEO morning you and as this Chairman of Ranger I'm Board. speaking to

comments is Brandon CFO, offer Joining me in Blossman, moment. today a who our will his

quarter noted quarter's this I pivotal one strategically and press As a release, for in operationally, this was Ranger.

quarter delivered historic two, along with that which matched peaks. Our revenue given gains growth built are and High third margin for business we revenue fourth across Spec expecting additional our strong sequential quarter. Rig in momentum And segment and that margin performance, the rig

Our wireline in growth revenue see business some modest quarter two. did

executed PerfX, equipment, broaden in fleet face to our However, here, high-quality low continues expanding with margin Patriot newer, footprint geographic of the service performance and more two offerings. our on acquisitions: Strategically, wireline recently, completion strengthening and underperform we our industry-wide pricing levels.

our are currently and the integrating experiencing process are of We companies in synergies early cross-selling existing already successes. business cost and into these

We forward to in in of fleet remarks. that expanded come, more looking quarters bit earnings the to little newly I'll the this and additional power of talk demonstrating a are

platform to M&A cover. in energy we operations industry and pending an finish a gain a acquisitions, clean balance pursue the I'll reflect announcement further On we'll with But my results ground bit efficient is first flow-focused theme of have structure preserve cash to that right low-cost, today and change. meantime, corporate overhead, market positive to our fair front, on Ranger's these comments -- consolidation. touch this the prepared acknowledgment we again, impacts of as on further the to begin two expect combination the of sheet

questions the this bat. that like to As importantly, our results point, transition, our you and But should there's off there to overall acquisitions, change our the quarter see On plenty right I'd strategy. to talk outlook. I address I are about no with expect CEO also about said, so most Ranger's

we the transactions beginning by wireline for strategic CEO continue expect and same strategic the two thanks see seat. groundwork just path in a are last now to to many is as move the team, We, and Board of Darron With the to Darron, closed, to forward along management that. three years of led of regardless result who the

On search evaluation conclusion internal current to expect through reach the planned and the I quarter. this process Board frankly, is and is along specifically, time process within considering a both This CEO working and an moving its external is candidates. line,

our strategy. Now talking about

we As outline a in reality practical with is when all a acknowledge our operational to This it's two a that But cost a our clean revenue our of our the are about allocate to minds, capital design the concern. we of burden, rate, recent of which we systems, strategy, through maximize Two, higher lens bottom run revenue there $XX that rate SG&A outweighs an approximately capital million is at sheet. to point, of made. the a forecasted take returns sheet. spend. group X% G&A this which we acquisitions, our an half decisions sitting unlevered cycle dollar We expense, processes focus XXXX be far $XXX at sustainable spends. the an of distress on balance three, allocation people a what and million compare bullets And theoretical balance of peer efficient are articulate to cash that structure. have the with low-cost G&A of and with each deploy value Note SG&A to We towards Ranger. clear working the as long-term, are possible flow. One, on minute I'll

a remains leverage zero. target Our net debt

simple. and Additionally, our been acquisition has fixed strategy

potential assets on best-in-class who focusing service top-tier counterparties are reputation have quality. We a for with

our core We that bolt-ons service and complementary are service our extend lines offerings. lines to service existing at looking current both

in said And and be we what believe to have time time the we be run time. right cycle before, the the As tactically, the counter thinking we before, each as decision There's to a have consensus in noted opportunistic. acquisitive. in long proves wrong is a often at being to timing right

benefit, base. unsustainable and some innovative, quarters a to transactions, note provide skills with and results, about market. Now asset scale two nimble with quality, people with scope technical we've inherited PerfX also the our of Consistent more top-tier we acquisitions. spoken and underlying before -- of low Frankly, To spend strategic these talking added I'll on multiple acquisitions intent deep increase background unsustainability along for The on segment about a reputation few a in to wireline our as teams cultures. have of these seen service pricing existing best-in-class that the both have quarter's for we've I'd business. our the Patriot recent strategy, like was both minutes the acquisition exceptional an wireline

cost, Some to margin, proportionately to structure. organization competitors work midsized bid a near to little carrying at consolidation for opportunities. high cost still G&A support looking and continue have management even to been actively variable structures no are small Excellent

our our or detail release, scale We were pleased press the to cost our of also expanded we've I we operating note I all two in in some add technology, risen with Again, efficient from choice thoughts. diversity dramatically accomplish With our incremental that exceptional value its business add acquisitions, to transactions and repeat won't shared for want the existing to to efforts Our proven these those XX and to platform. consolidating these do we wireline structure across geographical we around three organizations. efficient a participating would but success to Basin that spectrum. be points. able are at recent partner has Mallard be base customer the greater Permian consolidation streamlined, in

has $XXX purchase and two PerfX per cost to about XXXX. wireline at a of perf business. in truck million of million truck in combined XX% per current organically million. was price $XXX,XXX of create spent approximately rate The cost. Patriot and or now plug $XXX we It For $X.X for run Mallard The came example, combined newbuild a of platforms revenue these wireline

While XX% cost some we as and through change in to activity year. return that see step levels price a moving to move next into we both to levels need would very we increases a XXXX is pricing believe do revenue, margin back and of savings to achievable segment modest level those

acquisition. single, and increasing to are The the PerfX is with XXX XX%, adoption goal our the creating some note processes a with Combined, fully by a and from risk of multibasin is with along the systems We such, integrated, incremental new incremental system. from incremental underway platform. combining asset integration second XConnect balance both lower-cost the wireline and almost we headcount to customers plug customer of the driving Ranger across gun is the did wireline largely price expense $XX.X In -- do these we second synergies, are not base, on and well companies cross-selling. as almost G&A sheet. perf to PerfX and post per-stage the million anticipating rationalization balance of onboarded This we more potential see synergies intervention the the is work as this any coming moving this field-level fully from revenue have addition nicely. I'll we than employees, collateralized and bring debt by

announced did April, acquisition in discussed In wireline, our in with a call. we our we PerfX. Now May, Patriot let's which bit busy just acquisition quarter the little July, transaction about In DJ was that, quarter Basin two and one because announced it we the one. of million the we a leaseback facility, $XX about close earnings talking talk outside sale second quarter of early a the

willing the we the Rig expense our pricing. groundwork a about the talk laying the is both customer business to hours indicating pricing and or of the back the lowest not At increases, supports return over our service pricing that level, is three good Sustainable of Spec providers. than acceptable of continued again, segments. the high-grading just to undercutting rather manifestation at last is bit clients the this quality top-tier But been customer pay let's to maintenance service see that the continues have Now levels quality Rather growth in rate. industry, and E&P segment entire quarter. quoted little seeking for to our base and training, are coming that the years combination competitor High those for both

we interruptions weather was however, first rig in in high-spec two. the not the the repeated quarter, saw a in quarter growth. the pause, That With pause

hours revenue end We per are of resulting the had second of deployed in increase. type rigs, to and worked more XX% more us towards sequential quarter pricing growth seeing saw The year. a last the gains, rates that rig we returning

seen Our IPO per rig have basis rig hour a in we rates on our number the post-XXXX configuration. posted highest

While we rig-only rig higher well the the off of rates rather this last any result record level is dramatic the increase have of deployed rate more at increased trough, equipment seen rate. in site an year's being ancillary move than base

were the the of high-end As activity. little ramp, a seven. trajectory the At for running two, increased investment pricing we running At acceptable, side again rig two is quarter. we rates -- metric current At associated as end -- bare last for economic last quarter incremental are expense of rig quarter the the operating to are to year, XX, rates end rig I XX. during make-ready note, at with while we continue rigs. we we And currently market is rationale up for the our in want side one, year-end, $XXX,XXX believe rate-only move sector. The with there full saw activity plenty -- the we and of costs provide the totaling were highlight return on two, expense quarter on our to the ongoing quarter of XX-hour package the were between XX-hour five at

June incremental to came it's in while Here XX%. interesting the make-ready a no costs saw quarter margins and for that first occurred April Segment reasonable at expenses. May, those note in increased

costs, the make-ready the gross or we is repeat of strive forecast, a our running which printed that will I we to This in -- months However, coming through in XX% say. current currently absence but months, a the June, should result are margin. with one

legacy segment. Mallard to Services on business. Now Other our with moving and wireline Starting Completion

During six number. one the change average business wireline averaged little from slightly saw trucks, in revenue line. down the which quarter, is our X.X quarter We

little these a of see bit inventory average, quarter. productive perforating trucks sequential in decrease accounting increase on by I'll artifact note in a gun in We the did increase change gun driven largely price X% was more rather change. per in structural gun margin, price than this revenue expense. However, sequential that an resulting were largely a a second

and Patriot from contribution contribution of from month as X.X no include results post occurred close PerfX quarter. reported Our that

of However, a XX%, $XX.X both business, one look we if combined is margin. PerfX to as million a rate moving stand-alone revenue, XX% were quarter a run run gross and holding from rate were roughly $XX that of a at businesses, up and at Patriot, to million quarter their

segment as non-wireline have Our much seen. are of not recovery basins other businesses we've focused, other Basin the seen in such, this and as DJ a

that Here, from quarter revenue different quarter X's and materially one. not margins were of

has to our to our up let know change. call Moving contracted utilization and slightly in MRU somewhat little units, units, much in seen and each I to but the Brandon. are turn in Brandon? terms mechanical some more Process had the margin. cyclical Solutions. is moving we do, Renewal rate. in or business, on month. just recontracting units want originally change corporate to revenue again, over of XX% either nature handful I quarter-over-quarter to into and have our fleet, our lot, This I grow a the XXXX MRU the to quarter me press previously our revenue was been gas as frac on structure than that's a business and We the a of do developing have lower saw had with than we line I of service expected. rates. rates for refrigeration Process work closing fleet Solutions remarks, continue a bit slower we have about talk up With In success cooler

Brandon Blossman

thank right. Bill, very good All morning you on call. everybody and much, Well, the to

walk-through details second and do standard and go the ahead numbers. of Let's quarter the

QX's Bill quarter's quarter, And associated $XX revenue that, First, that loss. up and $XX.X as expenses, EBITDA $X.X for rig reducing upgrades. in consolidated also was noted, that incremental million in came is with flat. this XX% QX's as and make-ready and make-ready was recap, the million $XX like reactivations the million of high-spec That's numbers. $XXX,XXX. to Adjusted up consolidated note from $X EBITDA at or again, again, QX's first is embedded million, compared $XXX,XXX And To million. in

on revenue million hours Now rates. million the result from Rig of both moving High or details the composite up increase the Spec moving XX% revenue. rig on the million, to in segment was to $X.X second $XX.X up in $XX increase an and rig in quarter,

of though this pricing watermark rate as That essentially a of in significant full makeup Ranger $XXX or Specifically, back of X.X QX rig $XX QX's a not is rigs work, up incremental larger incremental rather result business. a on rig XX-hour of the rigs. in average the XX-hour XX% moving hours I'll again, packaged mix hours hour Bill XX,XXX moving rig the rig quarterly then was towards, hourly as by rates, QX revenue a was on from Bill's the high the XX% was rate total cadence to rig from And bare ancillary shift about that is high about to rigs. to hourly hours hour since Bill about noted, to, talk QX. our a increase. increase rig but in comments add a that watermark, up to the of inception XX-hour sorry. the increased Bill of $XXX XX-hour mentioned, an that kind rigs. XX,XXX attributable to talked an or -- is QX. from higher XX in rigs the And hour XX work And That's packages, count average composite for record X%, in per customer rate, increases,

number over three interruptions. total last XX%, weather the quarters, rig that XX-hour to just going driven moved February's In So in QX, hours. down XX% work QX, up of by the made

tied quarter QX, where we However, in XX-hour a moved to that is in here And And XX% QX, from today ended July. approximately hours having work. of average of XX% in quarter for March, sits average to that up full the rig that XX%. it

to QX, saw on Services Revenue QX. $X.X the moving segment. from Other and Completion $XX.X million just XX% increase million or in $XX to of an Now in up under here million

However, was at increase, the that between that lines of segment, with quarter-over-quarter, spread mid-quarter million $X.X revenue Mallard million million. from $XXX,XXX, acquisition, the up Patriot services and to balance increase increase $X.X came other and from revenue was majority modest modest moving The non-wireline legacy were our acquisition. And revenue Again, -- some Patriot of million showing with business, of acquisition. $X million both that Processing Solutions revenue a revenue of $X.X of finally, $X.X business here increase. our a those came

increase came adjusted EBITDA segment-level is Rigs and Solutions Overall, gains segment partially That's by EBITDA, million. Now million strong segment moving print. from showed $X.X the up always, this Services level XX% an segment. $X.X corporate gains, moving to before G&A, High and margins. as in or or of at in and -- the offset Completion declines Spec Other Processing million million, $X.X QX's $XX those

historic the EBITDA. other typically that's or peak don't now in margins, consolidated nonperiodic decrease corporate to first-of-the-year million front, And the margin the associated moved with from XX% as QX. largely that million G&A QX line G&A, million up $X.X the print sequential adjusted QX employment year. before reoccur up was QX. segment rest XX% QX tax segment $X.X QX with down in This the and in in to from in in $X.X On level of expenses, showing at a expense for in and again, expenses

XX% increased million a QX, million from For High Rigs, $X.X in in up $X.X or million up $X to margins EBITDA moving with XX%. number QX, from Spec to segment XX%

Bill amounts As noted the quarter, those with of I that quarters costs noted, as totaled make-ready and the $XXX,XXX. of growth, within customer-requested last costs. couple quarter second upgrades reactivation of material of In and related the saw to spending other rigs we earlier make-ready

in Services, to expense steady-state-type segment back that If and levels million would $X a to XX% segment our a At get the $X.X moving result here $XXX,XXX, were range. down very Completion was EBITDA, results top a end X% million. incremental from X%. from Margins margin, EBITDA rank at to Other $X.X to again, of historic to that add to million you'd like the EBITDA and that down more just

talked down XX%. in pricing. about, down we've mark $XXX,XXX down QX, that of margins As finally, QX. to here is in result this was $XXX,XXX completion were the Processing Solutions $XXX,XXX moving continued from EBITDA weak to Segment And

income. net to on Moving

loss loss in $X.X and fees transaction is was legal a our million loss not of For of QX, of note incremental obviously related Also That in $XXX,XXX partially offset $XXX,XXX QX's reoccur $X.X second reported benefit which two out loss an by EBITDA a recapture, of and the this $X.X benefit million. adjusted we've adjusted reported quarter. acquisitions. our versus loss that the to Embedded in was the QX did net million. other forfeiture a of XXX

leaseback of million net or Now proceeds moving over million the capital Net move moving X $X.X $XX largely time, was the QX's from of build second transaction, increase. offset items. from balance million by which of $XX try debt the the effect one of Q-over-Q $XX the with was term facility million XXX balance more let -- me net ending quarter. the This partially XX% associated $XX million million cash working sale revenue on at our end to dropped to sheet QX, --

really significantly higher at again, Spec $X.X reduced Maintenance segment with during debt largely asset quarter, ending majority rate. this million. ancillary to QX down the quarter, the $XXX,XXX timing another was term our balance a we equipment in $XXX,XXX the our recent usual, coming bringing related Rig phenomenon versus As CapEx of million and, CapEx. The to associated a this is run base. High $XX.X

been low was numbers, most relative to so a this running So of CapEx bit maintenance We've that is this timing. a $XXX,XXX run catch-up very of rate.

that up high-spec and this we note would of go field, number high we that being to we expect fleet. as move CapEx all this ancillary bit maintenance equipment the in in the utilization forward essentially of of quarter, our because little running go we'll However, forward a of asset with and levels equipment as ancillary out

was tools $X.X our and side, was our actually, purchased incremental some the Patriot incremental was spend intervention high-spec $XXX,XXX. rigs. of the wireline fleet, on to pickup growth of trucks for cash downhole our -- was almost new equipment On CapEx million. ancillary That the for that some spending side, also added there majority some we acquisition, Also, pieces

However, this basis. is leased on a noncash,

on the and our of million million of on Moving liquidity. million of capacity $X.X ended available $XX of with quarter to $XX liquidity. revolver We That consists cash.

ending As that it hand and million that, liquidity. comments a was million earlier, $XX my -- noted QX, to uptick back that of million $X from With I'll $X end Bill.

Bill Austin

do I in trajectories the Brandon. to rigs and about talk more Thanks, the want high-spec a bit Okay. little quarter.

to exit in we full gains rigs of equipment we our an high-spec over It's their the those that performance. revenues and in an incremental our XX%, segment just utilizing are deployment margins our full XX% margin June revenue rigs five equipment a quarter million expanding primary running quarter. The XX was quarter of margins. is two revenue the currently run quarter Well, average rate above two of It's $XX here incremental ancillary on XX%. while and the with average, quarter of had net XXX there approximately packages. trajectory with the high-spec of So driver of the while to Rig was two, respectively, packages deployed essentially note High Spec all positive and to important and across margin are rates additional

spending Moving on segment, pricing bare but full to spend. both we are the of for and activity which smaller market additional not rig cards, modest we will to High which which in in packages. move share gains packages, forward, out we drive revenue some Rig utilization the the CapEx gains, expect ancillary pricing both modest this some we Net-net be CapEx is dynamic assuming base seeing. growth, have, the ongoing sending growth we believe and Spec and likely Incremental for are need to set our without up,

attention behind on focus expect a it M&A turn primary us, to As front. on two the our transaction with near-term rig acquisitions would service to topic, note as final this us reasonable be wireline to our

wireline to and quickly. With revenue are on expect recent Moving successes we time. seeing work, some in do early growth over we our incremental acquisitions, cross-selling

primary margin objective expansion. is Our near-term driving

lever needs of levels, with customers. has move near-term Completion largest moves to here with that with there's the up some select Our be XX% the just mid-single-digit But more done. off started is per-stage XXXX much bottom prices pricing at pricing. to

to see at providers medium-sized As we out, levels, pricing survive. must service stand-alone and flow continue to point to pricing current are higher negative small- cash

our competitiveness. will to share acquisitions down preferring individual price sector Our further philosophically, activity relative while market appropriate of we will to But overhead and pushing levels. costs, margin, have drive enhancing demand at levels pricing our expense the drive our not chase

forward noted looking reporting of I wireline this showing growth has at larger quarters return earlier, a margin to footprint, historically. we full partial with revenue sector the modest a least are XX% As seen along new, to

e-fleet ESG to fuel the in both newer mandate side, use we to supply. and an our capture customers' On and fracturing expect traditional uptick Processing dual-fuel drive continue the Solutions gas generation flare

stronger We have continue tailwinds pricing, regulation as but and all electric fleet success adoption for pilot to the and fuel Processing have tuned Solutions supply emission incremental yet contract. dual flare are on commodity sign elusive fuel to our here projects, Stay gas, segment. program build-out of long-term frac and that

on work in we the currently or We, course, I have M&A what On to opening year. half team be one to has the at But outcomes this year working if surprised announce the the the of do handicap are of as And second the wouldn't on. front. reasonably two announcements more can't to of significant anything moment. alluded not M&A, we I in continue my the do comments, I

have teased somewhat opening comments, on in regarding conclude structure. equity comments, to a our share nevertheless, exciting structure. comment corporate but I prepared my but I my to technical, Finally, this

know, you B put was of As shares place A in our and or tax a with a receivable Ranger associated which classes has with shares IPO. B at the agreement, shares, stock: TRA, being two

final currently terminate TRA within to to are a B and to discussions days have the agreement the and A We in shares. convert expect common to outstanding shares share

driven position to note, this not any little by to ourselves to position, operator of largest simplify but know been desire I'll for reduce but equity I remarks our structure to prepared with it further Importantly consolidation. our desire hand our joint I've my is by rather a shareholders their close for and Operator? that, bit the questions. to long-winded, and over any better

Operator

[Operator question Jason with Instructions] from The Bandel first Evercore ISI. comes

Jason Bandel

for helpful. That remarks. all detailed really in was prepared the commentary your Thanks

start me Let wireline side. the on

case you Just And have and industry about a competitive you you in multiple play? wireline landscape on also, the how margins improve to kind remains the the you talk at following competitive Can evolving can touch here at hope obviously in the that larger business to your the exposure the for strategy trucks it's you the in presence two levels to market much acquisitions now pricing today? role see here, of basins. XX and with

Bill Austin

a wireline in small -- business, look, a there large lot and interesting an That's competitors of the ones. still of couple is

return. more the They things and other our think PPP. efficiencies keep good As throw in can here We small get brought everyone again, but don't we died there's many them not have now. and Look, priced the price we of And And such we're dollars. on are to of on we front, and think and these players a the We trade all presence them that a more we the to and us the will think signaling, are there, to these some by to players than that alive of many larger people as this is want cost activity we for We as signaling we smaller our think -- operators, our bring consolidate. that's and to -- think I not we see remarks, try players will we said we big with size a well. way front. be from there'll believe, to good size on a such that bring a ERPs. some momentum Oracle consolidation, there's so to prepared lifeline have frankly, because lived mean, will -- that over press look, we SG&A and price have the people. the high-priced out we on cost that need think these and systems the think high help here look, our number, all when alone that quality, levels We

mom-and-pop in can can systems that's that -- We We newbuild activity. frankly, back to they can both the generate that us we that that wireline effort we what this business demands. company. handle, in matter, what rig and have train the wireline a very will don't that bring We public world, people simple think build, some pricing company on going pricing, like help the to for returns. give That's rig the is think can high-spec get are or Look, screen. and want high-spec run the to or

that. fact, we In our wouldn't think But of returns us equipment and we certainly can on count on much more now. right do it base adequate give

packages again, or run-off. expect want to that pricing. pricing rig We've newbuild same margins. true there. rig precise that our pricing that smaller the more big packages value is Look, you on back think rig we high-spec got I particular have the Brandon, there can Do price increases thing a the bit people little are answer anything But to but signal. to frankly, the bare that what So answer? better return to showing value is PP&E. seen And know And signals frankly, in to newbuild of out get I to don't We starting got existing certainly, we've market. exactly with market. that's great that customers. think they're we're we've And a want, the I to some get not their are out fair so long-winded the go trying you to add

Brandon Blossman

make but couple think vocal we support they will I can through You industry a either that pricing the a answer, here get competitors been a attrition mean, or One, I industry. of pretty the so therefore, we've longer it about in does fleet things. I'll support actually our smaller hit reasonable-sized E&P will we Jason, away structurally, that, for that the not go pricing wireline think and,

for level tough pricing. us it this be of So at would continue our to analysis, along, in

will survive does, it and set up outlast the if the we particularly smaller competitor be competitors. base, However, to

So...

Bill Austin

And here money make we now.

Brandon Blossman

-- make we And yes.

Bill Austin

just It's enough. not

Brandon Blossman

here. money money make our company trucks. We of We That's post count. what incremental SG&A you acquisitions smaller-sized company is be. wireline XX because -- And our our a would structure fraction a here said make

available work we a So total XX of now trucks field. have in right to out the

that variables costs. then only -- by problem is and is certain-sized labor SG&A there's the So management the costs pricing. One here. offset a spread It associated out is gets gun structure, costs It four the over fleet.

it in certainly possibility. of the of labor is that gun full things. solve far system that immediately wireline so So a we've a pricing fleet, build because don't ourselves pricing. pull there's all those our structure been down. business to -- given two not for If need for Hopefully, for We to need done system. QX earnest. We a XXXX artifact Labor certainly, we right but gun over lower-priced trigger, now, We've relative of an be costs costs. can't recovery option will to we -- SG&A pull of an a we is the not that management will

then to will straight left put pricing. [pricing]. And be that that's will labor all is tied to So be variable costs a

Bill Austin

to would I add. And going keep here. We're going

we what have up day. and about we our But here we've of seen already every basins people. trucks, almost personnel opened trucks work, moved talk -- and types some equipment, our of to You we've because our different different exposure

We We too great narrow. was Before were with but had on few in Mallard, it Permian. performance too Mallard, customers. the

As I remarks, our many customers. we have more in said

people. We've cross-selling some to opportunities move have had We successes.

But to mandate. enough I to that's Is long the to move advantage trucks we'd course, think, going Jason? but ability up. basins, utilization much have -- people the to us Of like and here. give like a you, is around equipment for our needed the and keep not We'd that

Jason Bandel

all appreciate and detail, I Bill more. got Brandon. I the

mid-single-digit know me and about work with time you've too. Let select pricing quarter kind with that doing basin drove -- seen customers, quarter that of here bit were it What that the pricing the ask last drove cases improvement that guys a bottoming. we're you're you select In that? in then spent talking Was seeing the this you differently, that signs improvement? it I in? little what is improvements where the

Brandon Blossman

or Jason, are you wireline just overall? asking about

Jason Bandel

About yes. wireline,

Brandon Blossman

What drove weeks, pricing improvement in the last Is months? few that...

Jason Bandel

that? Yes. that pricing Examples, drove said select had improvement. What customer a small you

Bill Austin

got to... Well first, you

Brandon Blossman

price. asking Try for

Bill Austin

paycheck other mobile. We've in price, going think sheet. ask. a the can to get a is when got what that activity this can with like gather stable a some we wireline, -- And We First, we you I to thing attractive the true that the we attract company. people. to that's and and got a people And not, rigs attract But look, We're think got levels balance and in that people the whatever. or people really know in other side. Friday we've them the good think the lot an region, it the we're good of getting every people believe you justifies place across fact, we We -- or can field asking And with great -- for. to got and work. they're are attracting think

Brandon Blossman

times, is across we the pricing side in wireline are increases ask. a terms we it the this I dedicated the But calls the implemented struggling price and bit contractual for terms. fleets, industry. when gets of And the on you've little per But a this on quarter's of a a think, heard increase there between actually on couple agreement lag

Bill Austin

We're working it. on

Operator

[Operator Rice. Daniel Instructions] next question from Our with comes Johnson Burke

Daniel Burke

I are do there? capital high-quality kind Let's you the so even guess, capacity on wanted to packages or high to out. pretty make a see. What bolster about can problem I you of forward XX your sold business the guys. think rig returns, in encouraging a months guess, ask over to wanted commitments the I what's to you But see problem. -- not going for rig

Brandon Blossman

I'm answer happy that. to

know we is, So yet. honest don't answer the

-- are was don't up know ago. that I activity well, we that this problem model three we quickly. a XX-hour of I So actually fairly -- think that months this didn't came level

out high-spec we're that honestly. our little bit fact of is the on sold So a full wrap packages surprise us, a to

a we rigs the have variables two considering, with... to answer we're can don't incremental out put that. we So And fully that vetted

Bill Austin

numbers. In modest

Brandon Blossman

and... packages skinnier yes, Skinnier,

Bill Austin

do that there. well what's And on on based out quite

Brandon Blossman

not but Yes, absolutely. those -- -- still very attractive has attractive, returns reasonable on packages. well, And have very

down so That's be -- or Now that's easy to make. or per-hour our pretty continues our reduce -- that home a to in market ultimately, margins where composite gross an labor and a constraint. a is run a lower not constraint bring still a rig decision would rate

I'm that Hooker that So choose to to investment high-spec incremental, is and the of going room answer would wrap, we here right. rig nod, to ballpark sounds in a the $XXX,XXX be that getting full to here. degree the looking -- your going I'm to an that copy question per we packages, so Mr. add incremental specifically, at. to look say, kind I'm

at equipment. that, choose to for rather be incremental said new will we that packages, we near-new path going high-spec for the likely and looking path preferred and brand wrap, manufacturers -- will full first that going prices. having looking out if auctions equipment than put be low And to Now to our

equipment well not As nice I'm there pretty sure nice, a there's but everybody new looking home. some is nice out for at so auction of the pretty and plenty houses aware,

Bill Austin

-- purchase And here, of head are question more putting your doing High of our to our has orders. we Spec that. the who's Rigs excited over some salivating And

in some we got we So do room. that, will the some of meantime, still but

we've that, it's think packages. to do modest-sized goes some can going we with do the the of we we got rig that, go, some pricing room bare too. Before And if where heck,

Daniel Burke

it. Got

Ranger, other think, acquisitions the QX you Is make sure were I've mean, wanted I at Completion it here make low look that with sure digits. I sense. understand just in kind Brandon. margins of single got to through the without for But building completion of and an in price appropriately makes margins as mention Services really might comfortable? versus -- one been in an in integrate. the sorry, QX. here -- what's gross we apples-for-apples of in trying this sort I or one I kind existing you That of be could there Bill, at and to market percentage changing Other term Okay. the kind compare? guess what you flow just I you And could out flow through mean late. margins the that of is near companies, of right the expectation I'm in to XX the on feathering heard I'm business acquired the on I together

Brandon Blossman

include EBITDA fair segment The doesn't little Yes. a field-level field-level the No, it's a EBITDA of And -- a margin the And those administrative margin -- that that overhead number oranges. Mallard does businesses. is question. acquired and the kind it include obviously, the regional, bit of for very XX% costs. any business, gross apples is overhead of two

acquisitions. and Services at terms to apples businesses gross margins Other oranges is of our reported Completion the it So the in and

take for roll overhead own what you the probably those However, terms model. that need to two we into acquired and make of assumptions could about businesses your in new

the those and that results Ranger QX. contributed been have able had Ideally, of you be that support So they view. in to would margin show I QX is think probably in help QX more XX% gross businesses that what QX we'll indicative and of part

Bill Austin

of that much not speak is, some And we're SG&A so... bringing over

Brandon Blossman

He's here. subtle

Bill Austin

on subtlety is even lost His me.

SG&A. So we're not a of bringing lot

So...

Daniel Burke

And congrats those on guys, Those Company. Look, say comments. certainly I for the those closing appreciate I deals. should are meaningful

Operator

Management]. comes question [William The from Asset next Kim] with [CDS

Unidentified Analyst

closes question's actually. couple acquisitions related those to on more quarters past the here. in of deal Congrats the My

say is it that were mostly fair transaction, as given are by more viewed paid those stock? that a for they So to acquisitions deleveraging

Bill Austin

Look, Well, something $XX debt. We that's very like say I deleverage. modest. wouldn't took of our million is worth leverage on

really So deleveraging, base. it's exactly it but not broadens our

we've got very wireline look now, back is we on we've Solution a too was at we flexibility around got two segments. have when to burgeoning two narrow robust business, wireline enough And strong to have. But in move just the to to So and with business frankly, you segments. its And we hope here. we've and stand historic performance. it weren't the that rigs going to get in got broad certain good But money and old that legs make things Process our

look wouldn't deleveraging, we it EBITDA, standpoint, and a It's an that more EBITDA it I a have from to as should I at lower to guess, lot you refer EBITDA But... but to Will. if -- going will add So so -- leverage.

Brandon Blossman

will we of the wireline all ability a terms we I'll deleveraging would here sit in of today. maintenance to push point it's business drops and, CapEx-light Yes. aggressively say, is therefore, that Bill's of particularly I flow flow line. back forward, it in cash down as almost terms EBITDA think, note over that that, not we time, therefore, very cash to organization. a if into as lot leverage of the to move deliver be, the And the

Bill Austin

right. yes, . -- that's that's Look,

Unidentified Analyst

for what pro sure what I looking provide And structure the correctly. like? share Could sense. debt as wanted you the far for capital would of count be Yes, that forma I'm makes A the as pro transactions, transaction, B shares? make at inclusive these this the forma looks forma to and pro And your

Brandon Blossman

Yes.

million the total count -- So XX A is and just the so B share under currently.

it's X.XX an the forma million. to we versus incremental shares. I $XX.X pro what think be be million at exited -- debt is And QX XX.XX going million -- then will

Bill Austin

million. terminate small. it's us some we be and But convert It'll this share push TRA to over when pretty there'll XX Bs the count incremental And As.

Unidentified Analyst

Okay.

And the that from that? of would what exercised? Okay. Or options is be being cause

Bill Austin

modest but We issuing Yes. a handshake. shares the basically -- how Basically, how are be disclosed we've would number. say, I TRA, it, execute early relatively we much, got a, need as I haven't a it's it's that. when the we but termination on negotiating of some to do for

Unidentified Analyst

revenue Okay. to you want And right? current I you million I Is sure, correctly. $XXX are a Earlier, run heard make of seeing rate annualized. that Bill, of

Bill Austin

correct. That's

Unidentified Analyst

target the recent and the questioning Because the through statement, bit sure, business in margin flow that seemed still something that would mind? acquisitions kind there. wanted that's to they free with make your a Is acquisitions you at a just a and that little cash press release XX%. of look that combined mentioned previous we of based to in on if I as different flow a with So number,

Bill Austin

if the exiting going We're I for know don't enhancements is The in the It's know not don't you quarter, high-spec I the will the and margin rigs over be expect in said fourth target. feather good I I rig, that think in second third said high-spec quarter. quarter third should will I third do a segments. said than across the actually both wireline what I certainly, several target. -- if higher at I all And from start the in the in, but some happen to darn margin quarters, next quarter. feathering rig.

Unidentified Analyst

Got it. you. for question I final guess a

do business? structure look XConnect own do to XX% the business? On in think Who have that you is that business. And at How other you worth? warrant gun what of a owner so the guys that's the system, you

Brandon Blossman

going also It's of the kind PerfX And business. continue the it as be based about or share an those to market supplies acquired the seller customer on we the the owner that. forward. of of acceptance The that guns forward. gun majority option PerfX kind we guns will explicit XConnect that the business. is manufacturing That to for move how consumption our likely is increase of business of And have obvious of business for

in that looking market are terms of acceptance guns. in not meaningful success a very we aligned their looking And they but to them of joint and from sell-through. see we have terms -- it's process are as So source of venture, fully for manufacturing the their as of a us -- certainly

Bill Austin

have to we operator? three How we access are basically, doing, But guns.

Operator

Yes.

to over Austin Bill to back would I done conference like remarks. all questions. I think any the closing turn for we're with

Bill Austin

next Talk me will wife I actually chair call. for some of sorts little else having on things in company. think you a my enough participating. to actually this We're bit putting but to All Bye. doing call, want you I all thank And good but Thanks. I've forward I'm this having said the fun for somebody shoot I here. of I'm at fun. soon. look right. this saying all to that, for

Brandon Blossman

Thank you.

Operator

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

disconnect. now may You

Ranger Energy Services (RNGR) 31 Jul 212021 Q2 Earnings call transcript