RNGR - Earnings call transcript Q1 2022 | Ranger Energy Services, Inc.

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Operator

Good morning, and welcome to the Ranger Energy Services First Quarter 2022 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, this event is being recorded. I would now like to turn the conference over to Stuart Bodden, Chief Executive Officer. ahead. go Please

Stuart Bodden

Good Gary. Thank morning, you, everyone.

first said, and exited President Gary this business Brandon about Brand Ranger's results. to and Stuart Analyst Energy this Bodden, of first are Ranger particular, Blossman, the welcome And the very and is you I CEO CFO, XXXX Energy Call. by Ranger Services we much as the excited As very are morning this quarter Services. joined to forward We're looking excited velocity in the of about we with very speaking morning. our quarter. QX I'm

dive to commentary, I reiterate we would moment objective. the strategic a take Before numbers Ranger's into like and to

flow to leading three build is Our through and this goal cycle. cash the completions underlying There strategic are service company intent. pillars production-oriented to the that sustainable generates

leading second, scale; M&A. promote to and First, sheet conservative create selected back-office building deliver balance efficient in third, world-class creating to functions enable operations opportunistic customer resilience service; and and a cost-effectively basins in-basin positions maintaining financial field to

QX QX are to in track on goals bottom suggests against the and performance these to well bring deliver early and we line. meaningful Our cash indications

acquisitions, been significant efficient the team QX, management our have lines. each of diligently in strides operations we has Ranger integrate to recent in During building and and made working rightsized our service

our quarter improve excess we launched and to sale capital a assets, also in have of on effort the focused We first the remained balance. concerted working

with run $XXX and corporate February, margin into All issues January supply Despite finished of and as and move QX experiencing chain-related of we out of these efforts QX. million a QX rate and paying are EBITDA particularly revenue off, during XX%. of quarterly Ranger seasonal

and flat a year. QX the continues to of Spec increased result largely relatively quarter-over-quarter. to slow margins Rig well High Ancillary the start relative in QX, Our was Services was revenue which very perform and segment to

move as into QX. However, already we growth experiencing are we

pricing our call, to our quarter flexibility. As primarily a last challenging QX, we Wireline and analyst in have structural expected segment indicated on issues of labor was result the

addressed positive However, QX. seeing are aggressively from we as have move these Wireline and into we issues contribution

have pricing our also day and in in rates per-stage staffing or either with also this customers, to adding rates in in of unbillable our made reduce standby we segment. been We Wireline most model changes successful increasing and labor have to

and increased $X.X revenue $XX.X QX January. in million in $XXX.X for $XX.X in of For particularly decreased in and customers, million in with to QX delays sand EBITDA the quarter. decreased in $X.X The million, million the segment frac and $XXX.X QX from the early increased in QX segment QX disruptions $XX.X million. from to results, primary for million. Wireline million million was $X.X million our EBITDA from reason is to some QX. for from Adjusted Spec the million weather related and in positive from revenue At up revenue from $X.X key company million supply decline for $X Revenue in to to EBITDA negative QX Rigs $XX.X for the $XX.X modestly million chain-related despite improved High QX level, to

$X.X and more while over EBITDA a segment million. to to now our million, and I'll modestly $XX.X million detail. discuss results increased turn KPIs on trajectory. above, in the Wireline $X.X to the Ancillary million positive for Revenue quarter to it $XX.X revenue indicated and EBITDA As from Processing decreased exited from Brandon Services

Brandon Blossman

on good to and morning everybody Stuart, Thank the you, call.

color go the add into numbers dive Let's to several of will incremental wherever details the through here, and endeavor I and appropriate. some

income. net with start let's So

of sequential income we booked purchase million the gain after-tax the colored the the last change is quarter, on $XX discussion with the in net As basic that by assets. of

down moved a income of the million from $X of QX, a reported $XX million. gain net loss to For

gain with attributable items a being However, million expense net $XX and or QX at that number. other adjusting expenses, the $X a were income net non-operating in million to leave showing acquisition-related settlement $XX delta million $X QX's QX primarily left million TRA QX out loss, is improvement. That included income

Now the QX's reported net bridging EBITDA. $X.X adjusted income million from to of

Here are items quarter. the for unique the

And finally, excess sale add-back with offset to out of took the included first taper these QX. hit out adjusted basic These categories with a expenses. of by two a continue $X this we that $XXX,XXX This and expected gain related million were sales settlement off now net the had out. partially expenses during EBITDA. in associated backing remaining the first million asset being the place on we $X.X but adjusted income, continued will being of that quickly in We The to G&A QX capital transition to see a legal of QX million in through in segments. or processes that G&A the the the a transaction $X quarter from moving to majority move increase million to did we costs asset $X.X raise sequential with And note expenses QX. transaction-related the in associated before small are the Also, EBITDA. integration expense being the this cost on cost sales with residual material half the adjust year of

call, to as include we year cost, does last on incremental absolute expecting this some year. are higher number rate a run QX earnings of G&A the to this the we While noted beginning move

process for as any related target year tandem Starting last number approaching increase with our driven Rigs, from QX come to EBITDA optimization in the continue revenue XXX, moving This preparation quarter-over-quarter. future to XXX of or and to to X% was million, segments. basis, in to $XX X% purposes, from now on modeling Spec moving quarter now QX. up the down sizing up tandem Average from For in by And pass. efforts completed working which systems decreased XX% in rigs revenue to million, acquisitions desire XX may acquisitions that the $XX is the is for three XXXX. a were margins with to our High and $X.X is and with XX% during sequential on or XX% quarter-over-quarter a always, million segment moving rigs

day November, note this does rig were. the However, strengthening skewed backdrop, encounter one our was in last and QX anticipated the running running low immediately year. held we And quickly to was forecasted all that has of November post Basic October, rigs the XXX more on projected Basic starting heavily so the rig macro all our decrease average we higher acquisition significantly count way or over rig by that count was rigs rigs XXXs through to did running run or a that moved our late than count. of in while then, working We the QX. since end that took Basic working and

Composite QX. to QX rate or up revenue from a hours X% QX's sequential As rigs. moved flat rig just by or holding rigs to $XXX worked hour, we sit hour. currently in was hours. moving X% We hour XXX,XXX which from in $XXX up day, per an increase of running an here XXX,XXX The offset hours better sequentially, resulted hour decrease $XXX than revenue today, working segment in rate in this in $XX period an per revenue XXX at QX we an XXX moving exited are QX at period hours in hours

Importantly, QX rate hour. $XXX that has pre-basic XXX run acquisition our of exceeded an now

expense the revenue or On labor up X% unit side, were sequentially. rig per costs hour per

costs basis. were overhead However, expenses, reduced by those per a near offset unit fully fixed again, on

and minimal increase increases increases, combination and million from of rate sequential EBITDA. top a adjusted an that the in $X.X resulted in sequential margin for million, line absolute growth the segment to the EBITDA $XX.X in XX% EBITDA healthy So expenses unit per very moving segment

to the stand-alone This are reporting second Now Wireline. on is moving we Wireline segment. quarter a

of reminder, work a integrated largely and this and related plug perf production As completion, segment Wireline pumping. comprises Wireline services, three work,

past, the this continue to to provide will revenue. XX% completion Wireline segment's of in have operating we for the still continues business, metrics up about As which make we

moved the $X XX%. million segment to decline on for or Wireline. $XX KPIs a of Overall, from $XX Moving to million, million revenue down

quarter-over-quarter the with driver being However, sequential primary revenue month-to-month decline. January trend does of the this mask trajectory the

intra-quarter from business, million a million levels that the skewed revenue revenue, of Adjusted balance in reduction And a essentially loss $X.X for showed down operating combined the with of above efficiencies print. quarterly revenue this in November, a segment, to on December truck striking of positive changes or million For related the side $X the a in completion trucks losses quarter moved XX% March's was more $X.X average count period decline. results. a X% Like with the Similar XX% in was to into XX% also January's a down XX% to [ph] January revenue, That, combined less QX stage the and in working quarter completion EBITDA breakeven completions. here EBITDA metrics day resulted entry or the line. QX. to EBITDA reduction were to this from decline the a when above per XX%, for completion being

to from completed. stages X,XXX down Moving completions QX's QX X,XXX

As Solutions chain an now offsetting similar a segment, sequentially. builds drop $X,XXX to decline and stage, drivers off. of in activity moved at the And we supply a Stuart that from that which to well Services. Partially third activity saw per this increase stage, increase mentioned, issues Ancillary on X% both rate in was weather revenue increase and the a Processing were $X,XXX site sequential QX our

non-service Ancillary also, this As legacy Torrent constituted Ranger businesses our the businesses, recently gas group non-rig rig business, quarter acquired a of reporting is second along from businesses, with processing Basic. reminder, includes this the our which

direction by the both was Wireline business. $XX to were margins revenues with and moved opposite million driven margins $X.X QX from at in the coiled to above or moved XX% QX million, X%, in Here, EBITDA X% January, to margins or averages. to and moving primarily $X.X to reduction while down EBITDA million and tubing particularly weak margin million XX%. up March similar from or a $XX $XXX,XXX segment growth in from February with EBITDA The attributable

the growth CapEx sheet, CapEx this Now lines. for CapEx totaled CapEx the spread the maintenance-related was moving to quarter. $X.X on quarter, was our balance spend with Maintenance no all starting service There and of million. our across for

Moving to debt.

both improvements transaction. ultimately net sales, QX two post moved with materially consolidated drivers the debt our excess been mentioned, the have Stuart balances capital close, tied As Basic being to asset working and the

First, a at to full and planned and the the liquidity excess excess related facility drawn assets at facility the value close, up more down Loan B the million was we sales our needs running assets finance our would absolute expense quantity was close, The the be reminder its at to was and face asset at that of quantity, quick close higher transaction. Term debt. excess due to paid assets of Relative The with Loan sell. transaction-related B Term actually Basic $XX that reduces drawn expectations, closed the on to are at the our sales. our available both than asset the of basic more planned the activity and that, than the the original expectation levels,

real in there there our with that However, Loan included plan dispositions the relative values of Currently, a quantity of portfolio amount rapid ramp. focused in and of the AR subset capital, we basic those are on and offset B that but $X the that at is expect million now the remapping effort The be worth to a $X revenue that paying focused and pending, to On net year, of sell-down of balance by marketed $X Loan Term efforts and represents stands million Stuart on realized estate sold as That the million being our noted, having us been that a better higher has original in reduction million total in in of Also that assets value. QX phase reduction processes been a with sheet. date largely - $XX Term reflected balance fully we that real assets currently of of basis, to the balance, actively are in estate $XX million for our working complete. sales in outstanding no currently included accommodate that the smaller leaving capital earlier already payment cycle, in note of later this the is effort to the stages debt. assets balance. off initial ending not working fully is ahead effort no material several decrease significant B

to drive working our now in to service are paydown customer B. and a million our This balance with of - million ultimately X. QX, lines. just Term Loan the already additional in moving our all back of We sorry, And capital balance B end $X total, a reductions approximately of our term $XX which systems extending balance hand coverage consisted of these A our will ticketing balance successful down and debt down ending needs. million, of from account the front-end comments, Term focus up my the increasing a further $X at now Term our Loan $XX To $XX to perfect further debt at of of I'll and is wrap systems, in up, over internal enhancements is that Loan systems million, takes million integration which XX stood with That the balance Stuart. debt QX it million the on that, acquisition wraps term and over balance QX to $XX currently, into

Stuart Bodden

Great. Thanks, Brandon.

continue increasing business the setting along operational improvements very to demand in for Ranger the year. all half QX, of pricing and up service are Moving we've been second the which, constructive in the quarter into second see lines, a across with we discussing, environment that strong

northern XX% $XXX million expect We in between be weather-related early have corporate experienced EBITDA QX and but between operations, April, million to with revenue $XXX margins we in but our delays to XX%. ranging

full we EBITDA $XXX million million, $XXX year XX%. guidance increasing for between revenue are year to For full and margins with to our XX% of be XXXX,

and by coupled XXXX, by XX% we million cash in of debt to build positive also conditions dividends. additional paying the of net in performance We a either Ranger questions. and early remarks, on continue and $XX April our Brandon to that up the target strong revolver accretive Concludes market business, cash in preparation draw it open balance. will or on $XX to Depending term now year-end. we availability for prepared discussed, the expect have we deals, reserves consider debt Based M&A EBITDA intend improvement we'll no million, of margins for will with

Operator

first Our Johnson Crist Instructions] Don ahead. question with is Please from [Operator go Rice.

Don Crist

and morning, Brandon. today? are Stuart Good you And how

Stuart Bodden

good. We're

Brandon Blossman

Don. Hey,

Don Crist

see drill on to rigs to a or of year? you're today is of kind talk a to moving more it out on across there's but little demand down it sounds back where significant in continuing go half holding just deploying where bit Can wanted that of margin and I XX the general demand up. back like little XX demand. It kind about in you industry the and the you there, bit keep

Stuart Bodden

start I'll chime in, and Sure. Brandon obviously.

on Don, as services. barrels. So say, across I all think you demand operators, said, incremental side particularly a we are seeing I'd cheapest of are their just for barrels increasing well some of servicing workover the because And lot

So that demand. seeing we are

now rigs of we're XXX the As kind Brandon expect that to starts through indicated, we number running would up. that, trend year and

deploy pretty being we and but diligent think additional we maintaining are We margins. maintain in margins, can do rigs

Don Crist

hiring an are pains asset you having you've like was kind that kind I assets. growing it that, how done it it's smooth, people the any forward? But on more a purchased. of gone make of back-office sounds And or should as details any going in job we Good. and but very seems Basic to that's kind integrating, know efficiencies any if of particularly see fantastic like - integration, on stuff going that any

Stuart Bodden

back sort things. on the I'd a of chime say couple Again, of Yeah. office. I in mean

has team I I work, very, a lot. done. enough gone a it integration mean the First been hard all, they've can't off lot really There's thank just of paid the of has very what but well. for

structure consolidation the and think yards, I consolidating the lot org from As much far is pretty as of sort complete. efforts efficiencies, a simplifying of into

there. a of bit fine-tuning to do think I little there's

most AR back around scale. of has the the processes, given effort office, added We've just the headcount there. really new been the On

we'll have I that any We gone well. finding changed pretty problem to processes, it's we're people. but don't think And having think I muscle, build then but continue

Brandon Blossman

remarkably Yeah. Not its you as pointed successful, Don, out.

ago, that second effort. six of we of probably integration it think way I I this is weeks into kind conceptualize shifted phase the the

was doing first all very successful. deck, could on make long the part was that hours, sure whatever it So to hands they everybody

work has that of done. been all So

is we've through sure being process work have we square mapping efficient with continue lot the The back done second that that making phase here possible efficiencies. everything where headcount go and that in one of the and sure we're can of as and make improvement here sure done making as systems possibly we possible. everything and to continuous phase we terms we come that do a There's to process kind and of get

So as that the in but of we will would the it's year. terms in order much whether of office, capture field incremental magnitude the in expect be through and synergies the we incremental year, go corporate out as move efficiencies small gains through we this or I smaller

Don Crist

company see Yes. that I having doubling more hiccups, any, you very from if than few outside. of the commend the size for can and we the

And me. on that. quick question bravo So one just for more

On and had still you divestiture Or done side, sale know are malls the assets whatnot. through rid that all you all the perspective, of, as a [ph] acquired? is lot trucks the From pretty basic a that? got you lot initially of I with Basic much there to more work asset that of go you

Stuart Bodden

Don. Yeah,

So of the have $XX year. of the what sales million through modeled is end we asset another

So to I there's go. more still think

physical properties. As of Brandon starts move that indicated, a lot to into

everything hasn't those marketed being do of properties, to So some date large. fairly real but and included are some we have

again, year end of have through kind additionally. the of the So we XX-ish modeled

Don Crist

and turn quarter Keep color all great and guidance. I'll it Okay. work. back. I good great appreciate the up the

Stuart Bodden

Don. Thanks, Yeah.

Operator

question Capital. ahead. John is with go Please [Operator Dialectic next Our Barton Instructions] from

John Barton

Stuart. are you? How Hi,

Stuart Bodden

How morning. John? Good are you

John Barton

you me left to given. you've the get and what in answered margin contract just the Or what understand help two last that? question, on there of the know the I a assuming you you on has spots if Can and work side guidance think see sand that that time, more? almost a might questions. particular, pipe I in labor each with I'd Is bright if improving thanks. that lot can bit I love lines to be little also, the to that you Wireline baked but be in done you there's to guidance? happen can in to giving is renewals? little to Can business Good, – any bit to of that just touch understand you're a in but think want with on able And bottleneck. hire to

Stuart Bodden

Yeah.

So I'll of first through your segments go the kind each question. of on

expect. I that segment performing think XX% start we that continue think really And do rigs of what to going we the Obviously, the will think EBITDA I trend about business, very I forward. well. margins earlier, talked market. model some we up similarly on mean, activity do just we rigs - put have just additional as And as the into I really kind

On really the a Wireline side, couple things. there's of

stage in either in it components no day so sort on of a is of through it, rates, rates And about So that disruptions, stuck are with absolute we're one to we talked a putting day. revenue there's QX. standby or pricing go per supply to really that also not and starting the pricing lot early two basis then chain into there effect if

focused of really line. on, on top the what we're that's So kind

labor, several ahead non lot address On it's calling talked had slow demand. has what Wireline, In bottom non-billable easing A last it had on to that time are line, been a where bit. materialize. which we there efforts feel labor, hired particular, - up of the in to demand little direct of over we does like we're

have forward. organization So basically that rightsized going we

see our tubing on so... So P&A, we and services, coiled I then demand. across are across would continue that's that's Processing also that's we business say well, and to fishing where And increasing as Ancillary And that. in

John Barton

Great…

Stuart Bodden

that Does that? Yeah, you answer bet.

Operator

would any This like I the concludes over our turn conference back Stuart remarks. question-and-answer Bodden for session. to to closing

Stuart Bodden

speaking how morning. Have Again, everyone. day, We're you, a call couple are on Gary. QX to everybody really Thank going, about great to getting excited in things appreciate look a about Great. of the months. and this forward we you I

Operator

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

disconnect. now may You

Ranger Energy Services (RNGR) 29 Apr 222022 Q1 Earnings call transcript