PFHC - Earnings call transcript Q2 2022

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Operator

Welcome to the ProFrac Holding Corp.

Second Quarter Earnings Conference Call. My apologies. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. reminder, is a recorded. As instructions] this being conference [Operator your pleasure It my introduce host, is now to Mr. Black. Rick you. Thank

You may begin.

Rick Black

Thank you, call and Financial us me Wilks, for Officer. review operator Chief you Operating quarter Coy today ProFrac appreciate and second Lance Executive Holding Randle, good are morning, Executive Matt Chief Corp.'s Chairman; results. Officer; Officer conference XXXX and Wilks, to everyone. webcast With We Ladd joining Chief Turner,

the from therefore, be More financial my company's can management's will call website laws, ProFrac's relations that on commentary company, perspectives, information forward-looking a until Following no the There and the may management reader on under features be XX-Q or the The the could risks as statements achievements today, www.pfholdingscorp.com and webcast sec.gov of replay quarter figures available the and a found statements well and will as on Please uncertainties management's on questions. the today's forward-looking Flowtek. of or of longer sensitive also level performance this high any Also Exchange in replay at Securities be of details outlook information forward-looking the transcript Securities and those ProFrac's filings these of of comments call you're as Commission, note, statements. access XXXX current certain website the telephonic cause to States on company's remarks, contributions XXXX. contain understand as results, financial provide will company's your including of available will on encouraged also those release. opening replay XX, call reading. guarantees second information as other call investor recording time are the to include with in be the the before performance. views read that of measures management to is tab reported contingencies. this contingencies exclude expectations which of the and by Various within August for uncertainties time risks, accurate on non-GAAP at the and August expressed earnings performance. only that advised press include not is Form reflect included or how XX, listening a speaks the to adjusted meaning today of future differ materially Federal and The filings listener business SEC actual to other These and the comments as well or any United

reconciliations consolidated Additional quarterly now, also be details financial turn I'd Wilks. over to GAAP most issued the Matt earnings found company's Matt? comparable, to release in website. measures yesterday, and which press the call like to are the the included Mr. And can direct on and

Matt Wilks

you, extremely and I'm said $XX ever. Thank that per going EBITDA, are EBITDA of highlight pleased than about proud to second speak how I million future excited setting the Rick. will adjusted more Ladd will again. outperformed and quarter, their by remarks. do what we annualized were once of Lance in which we the more I'd results exceptional to to begin for like to report about we've opportunity we our fleet

of limited is the to ability competitors to be is and sold current upgraded, bottlenecked. with where and supply oil Our footprints for With upgrading the a and out is limited existing changed of dynamics US cycle. pressure these legacy for we well-positioned we capacity horsepower many that of fleets this in quite in our supply maintaining pumping and the we extremely need as frac are is this incremental horsepower more strained that completely seen the chain the market having a services some we've not years time. the view of that environment is shell and started macro extremely lasting and We has field strengthen all industry expensive. together, capital we there continue expansion since is best ago Taking backdrop link margin believe cycle and this and deal will this new see great our left through for know, build over XX belief

opportunities of that growth for In see in Lad the I pumping will also terms opportunity execution of I our discuss, on growth pressure multiple strategy. areas see this path for in continued but forward,

As on chain. that integration a our two-pronged acquire, continue to vertical desire growth maximize for important criteria strategy an based very is a M&A equipment to to be considered the replace and I've mentioned scale a is have supply and strict accretive strategy It before, what transaction on is side our cash we retire, generation. on state the and to will

the are turn that any EBITDA, maintain technical We deal. same debt We on the will and of all will space integration, we overall our our remain extremely our to continue thoughtful expanding right to to cash shareholders. so financial we ability that target return the of enhance to sheet we is continue the market strength track acquisitions put of leverage to to can about not believe and our below for one consolidating our although under we potential and sacrifice for and balance vertical believe microscope

All to acquisition is fourth the excited priorities interest we continue strategy, We July, our expect our our shareholders. Texas track we well will on quarter. cash in West of am that to after pending those in To and de-lever to sheet are illustrating that generate services cash be late I sufficient to and the that growth the CapEx, CapEx operations three US balance fund of Monahans maintenance us. return flow excess close closed the very of acquisition and sand

strategic integration supply As company already, are vertical of efficiencies, you and have heard maximize about returns and our enhancing seen and from our value for stakeholders. we the profitability constantly chain for thinking to us

designing and ends, impacts fluid structure high maintenance on margins, logistics, refurbishment power fleet construction, services chemicals, of the unmatched cost cost CapEx to and a of industry. manufacturing is that ends, or reduces overall cost sand, pressure we the savings. Our vertical new see level integration iron and and From in

integration provides control our amount to a vertical ProFrac and uniquely peers. compared into business us the Our cost more it advantage over of with our timing inputs critical distinguishes and with

Specifically to environment own where a minds. chain have in much better pretty our everyone, supply because this interruption than a is peers in we sand we're challenge our for position capitalize

design own to our engineer e-fleets. shops, own and equipment have assemble to We frac and blenders, our pumps we from own our iron, machine

ensure to and quality mines; plant every our pull profit With asset superior the Monahans interrupted. pumping mine, ProFrac's West sand, which Kermit and uninterrupted frac supply ProFrac close logistics proximity sand is into far any well not in efficiency which in our through the La Texas, to region. Mesa this a almost the base at to mines three the third to fleets has of with region current XX from well as in producing optimal is our our in capacity capacity. supply some reduce as combined from This which supply environment. of worth West rates. traffic, are environment this costs and fuel considerable increases only in reliable rest producing, in our by high Monahans of while fleets that up helps an ensuring all The mitigate to we parties After for will sand we consumption when to our are to helps purchasing at were emissions, ability purchase the sand provide the market perspective operating three truck have inflationary fleets prior Texas To

opportunities continue the behalf that continued of customers, our of to comes kinds On control any we our increases our this pricing, look quarter-over-quarter a are see enough. to biggest utilization of custody to markets. cannot which to I mix stress contribution party margin growth. fleets. our While of believe procuring the chain will supply we a drivers within is price opportunities sand third The continue chemical in of of one materials of from on today. expect These on top these tremendous Having we Sandy of our consolidate to to we our types exactly and continue on fleet customers. value supply is of provide at more there

We acquired about is execute hand as continue industry strategy, I to Ladd are and will integration continue vertical of, future over we and our services an oil bullish now our to the possible strategy to our for what to redefine replace on of plan comments the on company. additional retire, we call company. provide our And field operations. to

Ladd Wilks

Hey, thanks, morning, good and Matt everyone.

and well. performed our Our business teams extremely

we're fleets during active we the and fleet quarter, electric deploying the field. second into During our currently the first XX had total quarter,

quarter experienced fleets market During increases additional to brought see pricing, were and continue power. we all to current as up we price pricing the the significant

continued see fleet. profit we importantly, per growth More in

provide and enhancements we our our incorporate vertical to integration electric customers. our fleets, materials As more

our deploy two third first to expect as electric did to at We to any on cash in XX plan fleets supply the electric deploy late fleet third the and to existing supporting fourth fleets incremental fleet quarter exit and the quarter, we conventional our we quarter. deployments, fleets. not during our plan And fleets flow. we and chain focus We margins deploy expect our available labor electric additional

moving them times more companies to as a to to the choice sand become incremental times XX% have last and cost the cost chemicals compared provided paying process. the as nearly overall EBITDA will used And in to time ProFrac in that first from high effectively customers of allow we taking I was it still storage, had as bit their in market. on offerings long logistics, move more more we longer they than our through forward, efficient, we attrition while rate Wells was we our pumping and are of fleets. rate pad bullish as we are every creating for the of value bundled XXXX, provide higher. wear efficiency continues charging in becoming absolute that more sand continue profitability primary for When to to has customers. time, also fleets. to we're we way of and base but think charging the tear chemicals, two take time second but of XX% on we de the customer the pumped levels but and pressure always look the hours In basis, delivering help, additional add that in we beyond pump paying proximity compared this we and and back lower supply, MPT industry we cash. importantly, current additional to XX% an less an when cycle to well generate quarter, dynamic to see sand makes incremental to that further expansion most incremental aimed means just industry sand our approximately continue record production a as we XXXX, We quarter, as they in the provided This In XX% we believe complete equipment acquired product While customers and using to cannot ProFrac three the adding did our on When previously more customers. now. development. pricing FTS, path per adding the the it our and, pricing a me the and come growing forward, chemicals all less to on started provided fleet at at completions and bundling. a when and more and fleets, more lowers lowers helping and have environment power but perspective and our more only the exciting It's

Our process being first customer. a electric of deployed the flag fleet is in for

performance equipment The happy conditions. various very out and power are with unmatched these under We the economics so the are incredible. far of are testing the pumps are and

a scratched just that add possible pumps. these value our to during higher to higher QX, the and which quarter repairs the We electric defining simpler profitability profitability design have what generating of look of and revenue return lower expect full with We due new customer. to we forward to is service fleet the

speed able the which to operational at of I'm team integrate proud very FTSI Another we've the is update operationally. that been for

on with process one to are and on operations We team sides. maintenance to how both commented one sales integrated crews procurement engaged to customers fully have are from our

bringing is with company, as improve win our seeing one-time are company in all the running the interchangeable and way. we're all on little to to this ideas, along huge been costs synergy real single able culture, accomplish the software benefits time. We've is equipment Another having one collaboration that together a and very

never products restate company more like Before be for work our changes and two and our for commitment to field mission, I'm utilizing superior over three one and quarterly to turning with the to our call review to customers amaze the to in the friendly service industry achieve to elite With effective to services I'd to call that, ProFrac's oil safest the Lance solutions hand for and best the shareholders. cost Lance? to over environmentally going which most to results is and us, the in detail, Lance. which returns

Lance Turner

measured and on our forma to by net related FTS on pricing higher average and the the net income, hours a increase a you for acquisition. per per fleets fleet to million compared more million $XX.X for pro from the This second basis a $XX.X for quarter, when XXXX with was efficiency customers EBITDA materials, quarter an was million consolidated the million. announce resulted We're million $XXX.X of on basis. stock pleased Thank adjusted for quarter on first excluding Good of text results extent, materials everyone. $XXX.X fleet In and or annualized due second EBITDA excluding been deemed basis a income a party, on $XXX.X the adjusted Ladd. $XXX attributable pumping million equipment flow the to The in was to would've morning, total our the million higher to lesser results. amount compared as to first quarter contribution revenue as $XXX $XXX.X reported compensation of quarter million $XX.X our million on providing

new quarter developments our impact of quarter. impact the I would from results of included couple comparability this first tech, the this to flow will like that a as highlight the Excluding to

agreement we our in that flow business May, $XX to additional In notice new an million will supply activities notes. expanded exchange business we other the convertible quarter and You in tech now results in is have flow attributable in relates our information, segment second tech. in the this with for to

also we because determine directors flow proper to to board seven the Flowtek, results. consolidate appoint We direct four treatment board their interest received of the to ability is equity directors right to our tech a designate without in the to of accounting

subsequent May result, a to XX. As

been for accounted have to our measures representative transaction business will that quarter. tech flow financial comparable We and make underlying results for consolidated a flow statements first tech quarter XX, our will second refer certain combination have this these to more After the into of excluding we operations. as more May financial measures, the and

relates Farris see million to was stock also the Dan related shares contribution in related a with conjunction $XX.X structured to purchase. Ladd sold party. a and This deemed was IPO will in a You compensation Matt from This to Wilks completed Wilks. and stock by as and compensation transfer

a compensation related in and family I resulted that the not did party any statements in in Wilks. want it treatment treatment was to be accounting other the company's stock-based is considered a shares However, proceeds. quarter, therefore reflected from result highlight during a deemed IPO was accounting the resulting transaction stock did and because this the issued have directly members the executive and is funded that to therefore between on compensation not and transaction dilutive financial additional with shareholders. nuanced impact by the The an

stock during compensation to We non also million an increased expense million the cash $X.X flow extinguishment, and on acquisition selling of costs. costs million in included related administrative million $X.X million had which general $XX.X to million, loss total was $XX.X which $X.X related $X.X in tech debt quarter

outperformance of business. expenses, full incentive increased higher quarter the of driven The compensation by well these as costs FTS quarter the three a to second beyond due having related items costs impact as

improvement well we the quarter, expect in pricing point continued preceding third the Looking the third and perfectly remained quarter During our at customers time. profitability, discussions went of with this at in year, quarter, constructive this

negative exceed was EBITDA price profit to In intercompany quarter, lad quarter segment for the manufacturing we segment pricing prior this compared providing second was the more segment first the of generated activities, from activity and quarter flow This revenues more was EBITDA. one eliminates between partial activity opportunity $X.X million. last business higher of production million month price, compared Profit of stimulation for million third to revenues previous from captured to addition, from production quarter selling of in from quarter. quarter less higher costs, quarter mentioned, first increased as was This was the XX% XX the up increase from manufacturing of the this prior normalize mix, our the EBITDA approximately up adjust by increased due the X.X% in for to $X.X quarter, costs contribution quarter, the product slightly first levels the $XX.X first the The as which increased that million of improved well amount quarter were services should million and up second other compared profit as the quarter. a cost quarter. offset the average segment by in due segments. the We operating adjusted contributing of $XX is the of generated materials represents to believe in for The $XX.X profitable bundling of next EBITDA and we a full quarter to the second segment driven in $XX.X generated during a slightly $XXX.X included and quarter, intercompany ProFrac. from with this revenues well the results more of was months, turning as million segment revenue slightly be FTS during XX% flow over segment XX% quarter million of tech down the in generated approximately to segment production, up materials higher The in to million quarter first as XX% experienced adjusted higher million in $X.X has $XXX.X $XX.X think a manufacturing business the XX% production revenues which the in solely customers. increases by provided to of there believe quarter our million revenue XX%

adapt current CapEx, to capital to we the continue over program Turning environment. to our

full remains We the of same of the higher million come to in million. quantity the That the year relates replacements and provided. CapEx is $XXX between million electric primarily paid and previously all at of range to budget $XXX in increase we to end excludes in expect year. The upgrades were fleets engine the back XX fleets, that the XX cost a between for of our the for half the The three licenses which XXXX. high that

$XX.X In with due quarter La We build have the during at to liquidity. their Monohan million to to acquisition operational plan, close Subsequent which not million, results, million to was Operating tech. total $XX our we and the the attributable liquidity the liquidity. higher capital do we second the cash sand consolidate the efficiency. million impacted announced quarter we upsize use approximately attributable the amounts in working we expect excluding or addition, operations. was be flow $XXX.X Flotek term and liquidity second approximately an to our we capital about their of talk been estimate outstanding of fourth to higher Lama $XXX loan quarter, flow while looking quarter, When the our flow, pricing fleets, to and events, including ability subsequent plant debt completed our large cash and and $XX we by the structure million the we in Flotek, with a because our be would've higher $XXX.X in in cost and excluding ended do million liquidity, principle the in exclude cash

back expect the help offset half focused results year working on to capital We in this operating normalize capital improved the of builds, and by are working financial improved the to with results. future initiatives driven

the integration. in as to we will a acquisition closing with And third quarter as call progresses, these liquidity and convert needs to now turn the to results cash cash successful expect to I'll that, the to well operator take assess the We flow us questions. meaningfully accelerate our your service ensure

Operator

first Our question Stanley. Morgan Dan instructions] from [Operator Kutz comes with your proceed question. Please with

Daniel Kutz

of mentioned dig saw opportunity a earnings been ask to it just might that I profitability relates wanted integration guys materials little uplift have a kind I wanted of vertical it you here benefits you growth bigger can I, I see guess relative that where that pricing you and kind the kind materials. up bundling activity from you to of that most of see could efficiencies, bit stack to bundling into the kind and from fleet of Lance, be more versus the adding of incremental rank or the fleets to opportunities per price. as

Just little on a wondering if that you that, could expand comment bit.

Lance Turner

frag a is the we XX% the when sand as accretion, short and next we're you of on So, opportunity not year we look on expect in average we the improve performance with and increase it sand through we're, next half million chemistry, than with be XXXX really just and tech and Flotek think it's the supply at XX the point early see we chemistry. our to are bundling expect just to on I on greater you longer that success pricing fleets to we services. a provide do to is fleet the a improvement. more I think I example about said, look there's bundling we're to fleet. forward as see out only we're increasing we about We chain months, into the I the, And year think bringing around for XX as see example, that as we bundled ahead in to want will on term, the consume relates my comment there And we that and and pricing when really really see in short there QX, the or the contracted per look particularly continue continuing picture think the greater term do of bundling per on to sand we and continue but discussions excited think an year term tons having And bundling percent that, average intend volumes to materials next fleets. as about in further lot Yeah. full flow we over more on We're into we improved materially. that expand side and prices

if ton, you a margin margin $XX at so million a per And look getting fleet. gross $XX contribution of that's

quickly so equipment, across see And very platform are we The becomes substantial we conversations. the tighten, a we contribution market XXXX. continues it to and expect seeing tightening to of the and course, on through constructive very continue ex that on very,

double what now, healthy is of a quarter from QX over dig QX. very double looking in is, we're quarter As uplift to percentage, digit at

Daniel Kutz

then helpful. capital ask Great. just really allocation wanted guys. It's to priorities. Thanks about And

guys So you're fleet, electric know have you builds that that some new crack doing.

debt fits You're is, the and the is, to I kind of that, that of up -- some you obviously that guess, to upgrade target legacy you conventional managing that. hitting returns fleets. there I how ask, know is into leverage still have shareholder wanted the for pointed and program

incremental As looking forward. well potentially allocation of priorities your any wondering just as what and are M capital a, kind

Ladd Wilks

Definitely.

the beginning of as then today we So priority better is on our but over the have one compared year. to shape or end Lance, the year, equipment be to it the at the touch hand in that than and I'll number this to good of for

in good old our upgrade also fleets our want customer. diesel of we're cycle we an but are diesel old that we care equipment. And make to expensive so where And because two sure tier end for considerably take of

reduce on those consumption fleets, about it's see So fuel on look as dual to systems we prioritize higher is that, to diesel equipment margins But equipment, substantially initiatives. and on, beyond shareholder well excited then really as our overall our And returns. program. we're growth DGB that tier we then we EFL for behind four our as that or the

think prioritize so is capital make the important this, industry when it stakeholders for we're We becomes very And just lead sure a, trade in to in. that, sector taking profitability, isn't And entire want oilfield to this make take we deliver returning sector an this to this this on rather this invest space we returning lead priority exactly stakeholders. that in can a that to And the is, this And is to investible. a this services is on why think the you that and that trade. that that invest you capital you a why we we how is in incredible this it than is you believe business. and investment an a isn't

Daniel Kutz

guys. right. a That's it All really it. Thanks Great. Got helpful. lot, I'll turn back.

Operator

Thank you.

Our comes question. next your question with with Please Partners. from proceed John Energy Daniel Daniel

John Daniel

Matt, question your the that good who you it. morning for Hey, just big numbers. guys. guys power view Really impressive generating on generation, picture to owns it, best approach

would helpful. there be be color would any Just thought

Ladd Wilks

we on else making we wait now be effort the, can we to a different. look we're our that there the out look like be sure just where producers that business quite like but I at of part everything would outline pieces so that we a chain to to We're And moving supply our John. timeframes. we're, and a plan, providing spot lot we, providing, forward, morning, we specific Good of, right power not forward, as equipment, there's but think a lot Yeah, approach. that Definitely. of control a see in very that this as times this we as are custody any have focused do, our lead wouldn't control our the the control we is of expect the equipment the reliability we and taking

John Daniel

Eagle makes one correctly if having it noted I cover sense the on just I I I Permian, Yeah, on for Ladd each last A in the Wilks market XX heard and you would for have are integration I this we it the the think but a to any owning nothing big you is the And think logic about in Just then in continue me, those what stand or what And expectations XX whether markets fleets. it? your thoughts. vertical curious markets? does cost it fleets, have fleets locally think, apply to enough. so time. fair I'm where you Okay, that's to we think sand your presence - to call Ford you can evaluate side, to capacity evaluate, like Do, intentions XX at you Haysville. other report compared purchase be or, guys

John Daniel

again your if Okay. time. one I'll for up queue no else questions. Thank asks none, you

Operator

Our of your Mulvehill Chase with with Bank question proceed Please next from question. comes America.

Chase Mulvehill

fleets, just math John on So just right. following so million half question you per trying said a I'm up to Sandra quickly on I do XX think the ton

So like produce all can same you, produce million capacity, marketable is it on just pretty actually clarify X that that much ton you the basically nameplate of for can the front. sand at to that nameplate amount or So or, right? of you sounds as

Ladd Wilks

physically, Yeah. right built above each. at, or X million way just they can that The these tons are produce each over, just

but equipment Our La Lama is rated two the million, than is permitted more plant for for that.

to So to up in operational, permit. and look go that to once we it's in expect expand

tons capacity. us additional an gain million of name play that'll So

Chase Mulvehill

Okay.

Okay. differently. think that makes and nameplate about sense, No, to marketability tend because we little a

are But number. Is point to So of QX the expect I you even kind to that does digit I two sense. meant? I we double through the think with makes that a right. up mean wanted that profitability think question first of what heard then word double link to said that to for three clarification, XX clarification. I go go digits you Thanks in you And XX queue? So QX to talking clarify it, apple

Lance Turner

there, very don't down EBITDA I see EBITDA we nail number fleet. comfortable that to we, a specific, want per the three handle to Yeah, of but expect on a per fleet, I to it saying

Chase Mulvehill

Okay.

That going July, Okay. that you And helpful. that's so sense. DSP got acquisition to close makes Mohan obviously be in

Ladd Wilks

real that that, is back off to think on on and just to it's that fuel, pit And driving we're like change really or on longer. incredible things allows able when few type performance, highlight that, location working. there's like on Yeah. equipment get an is a topped a that, to several it and phenomenal. wood important to that got quick, or, that out our does our We've crew it rotation things I'd to one like, race are that, come for of at a we row, comment I there look as that out be And tire in pit get maintenance

The wrong pit that ins to run fluid in have expenses different but that's, manufacturers, think the can. in, and personnel you're on really get having the the skew on so consistently locations, valves supply you performance put I up up EBITDA they the tend swapping a failures. out is if of are one and fluid pretty industry tight very valve and industry your part it's, things in, is higher from that's get ends it's got end the have different they crew, that to fleet. or go and the with to and and otherwise, of a incredibly gets where allows part Whereas is components really you It complicated is seed parts drives ins, of seeds. in put room, end leading number you've wrong longer running your with many creating situations wherever fluid a superior complicated uniform you you When chain if they valves us and training with having big track with changing your R&M a our cha And that. per what and the good car when race main

your stresses overall don't even chain have it further when uniformity. So you supply

driving you build in from cycle a we factor new keep going what really too peer look chain, class. And believe standout this also is at so our this to quickly. performance a, a, this is And a see when tight relative we as really becoming our you, supply when this to

positioned, this, of excited we're will QX we're company this So really in in vertical excited about built how just we've this advantage really that not allows proud but very to and very, this well. we're our results, material consistently QX, where generate these we're, integration as results XXXX drive us how

Chase Mulvehill

in going? trials? are quickly about as to acquiring you well? the you're you are, deployment What, me last on how new commercial quickly rate they one end building of for check thinking on third side not the makes How on quarter right follow up doing XXXX, seeing the before now. you wanted say what that the the the, expect then from And fleet on trials, all are No, And the press on are trials trials, the you site you're field Right? just now And you're with the release, fleet of a how the just did you that on are sense. on EFL that. the happy you as happy that are first doing the you you in especially E

Ladd Wilks

commercial EFL What, program, the with are Yeah. platforms. these

reason are And one is codes so, we're the there. all that excited there making get error understand by everything out kicked and that out getting that first is It's the we its communicating controls just sure sure this this, on diagnostics, call running really making through out to location. really we appropriately. The these

process commercial through you So knocked a else, much platform. is that anywhere getting would a And this than we're just going faster what because proven see out. is this

So QX very and we're what see What all with, delighted results these of stakeholders. share available to kind these, kind our to really excited of provide to have fleets. this to of for with conventional fully be thing relative and, able

Matt Wilks

I to add Yeah. just that. And would chase,

have We pumping they're pumps our there and on today. out two location now, of

put clear be that this something isn't they're we're, out planning So that , today. to want mm-hmm, we're out to

Chase Mulvehill

side? And build more now on want getting lot US Okay. you're think do that thoughts you Cool. the on to XXXX easily, more especially more, a

Ladd Wilks

transaction well, to us phenomenally, from you business excited we, what early very discuss the at similar and QX very XXXX. rather saw well, transaction integration and how not us our and for we'd out, growth we, plans successful. at so expect is process go for gone. processes our has and the, go. specifically of we it better types as us with far, that We, we and shown in as components And equally these incredible this getting have the integration to built results we've integrating forward to time we're Yeah, looking bringing different well that FTSI vertical with this closing But the the that in in integration,

look us of see forward. the So at carry as those we expect well integration, types to we results

exciting point it's on getting would further tell for So us any at But yeah, taken of. forward initiatives to that looking too that for to and this XXXX. growth get rather not early to, it's time into care

Operator

you. Thank

Please proceed with question is next question. Our Stephen from your with Gengaro Stifel.

Stephen Gengaro

everybody. good And or Thanks. good afternoon morning

how with and on demand guess XX. looking that about things two that and, about for you are pricing? I I heard start for customers up if we've we've, So to front equipment What your and, of XXXX capacity your trying think lock for at me, you could you're balance from, peers seeing do from and some and, when

Lance Turner

point at as chain. given we're seeing deal better earlier of adding, of failures types having more the we're more shortage the season RFQ with a seems maintenance cycle has means to that, and that you the continued great there types and of, frequent the than ins, see budgets, Yeah, a, a, pricing. XX% stress look you on when amount XX% usually from started different seeing usual. We that's at you a complexity start Typically components and in that margins and the that looks it and the fluid early horsepower parts when like iron supply mismatching a like and you of, the different of, market of mismatching and is of what CapEx expansion and on mismatch, any start in peers horsepower, of seeing of ends our fluid mismatching of more it,

going further, a look tightens that up. easy really So we as of up, the reliability the what proud take consistency the it that, we this, not and I at and value market That's, to bring consistency is reliability but about that ease bring actually forward, the customers we this and is have that we're we now does that that think the, proposition.

going with, these chain and is, going and will struggle our, with to price R&M more many peer be chain. more we continue think supply competitors improvements our with likely supply is and So a to improvement complicated to these, class

Stephen Gengaro

long Great. announced But hurt of do Thank services think as on they've out the quarter, fleet, dollars five to How they think us to like you. get clearly what it absorption on well numbers contracts And a when of they that EBIT basis. sort annualized they've I new in last assets up overhead they the profitability? lack of a roll have recently level your takes, a you toper been half about lack assets. we of place their based think by and million ran about

Ladd Wilks

with with that. quickly get is What operational or, rather of the as been not or look in back to their really contracts Yeah, results. we're the then where commercial integration accomplish assets at looking going we like at you comment on really and speculate and I'd same where are as capable material see what or what and able able we've to well and as being FTS results operational anything

of we're of approach what realize we a like profitability are from would able able we approach nine for up. looking rather We order within out XX FTSI. a within what months, we we these looking the, really perspective take than And short to can it. conservative that also do things their the us, around to to from we, how it take And so And they typically we're at being conservative at this a get what months. to put where really do what feels six that's very with but get of

own it F And to an date some would did outside bookends, for so I'd be timeline six given we in say similar months with a ourselves expectations internal what our would be, and DSI. very

Stephen Gengaro

I if us per don't rev revenue if for tech flow comment Do or a quick And year? sense know not. Great. on per give other can you fill you, you fleet one, have, one could could this I you

Ladd Wilks

But third, is with and with just true what to an to okay. have with end. party is Yeah, I I don't to, their out with operations there. Get us, indication going that we not we want according like but scale third that they continue want the to on contracts do don't also plan, them customers

that XXXX to of and that early this to scale mutually in forward continue see this bringing to We're quality scale, we've, in really near very does that with excited to financials us part gives that we're allows early, volumes fuel of see that, profitability. the to just excited or we're power to, So turbines that agreement. really runs also on their dual provide that we the And to to get does we're business BTUs we're that, systems, for contracted to of the place real three really course on of We, also about to we're, as gas that fully confidence And that that have able excited in what negotiated. reliable as look get to equipment outside monitor for JP protect the that the time with. for location agreement providing the in that the the not us pumping gas. service gin and our being but

sure make these has sell every the as far oil for across operators, line. impacts capture reaching, side very making the the quality that thing. the the good gas gas dollar important gas location We're about for to means for three monitor BTUs have because and high JP and entire they the they what especially gas we for has down team, for midstream and is a consequences excited flow that on So being far look for, reaching, industry, sure tech also to that they for able they, that

Operator

comes question next Rice. proceed with Crist Don with your question. Please from Johnson Our

Don Crist

could touch be, but of it year, I have to, EBITDA. couple about or the potential XX% sand asked people the given your total the, wanted a next XX% significant to impact to financials

one Do can, half up tons what year volumes. going per but two, ton, expecting you to, price you a know of first quarter were are a term wanted thoughts kind that, ask of number forward? number your call what can get know spiked in, XX And know I long to that or in this it a seven Just million about you to I pricing? you dollars hundred and kind to year. think around of of it it, upwards didn't the so

Ladd Wilks

for not contracted reasons most that seven across it or that utilization. it ton to it gate. to definitely annual this mine the our million a say at where specifically into at But be, to to but but tons on year we guys, can $X,XXX where utilization that where whether was really on volumes would there was, I was that in there we pricing wouldn't lower think a trying on not point there you occasionally that a, see it pricing think like hasn't can board, look the but for when I spot to you are is half spot Yeah, got it, part see provide a than get is much one prefer a not, It, the and get to needs on, seven of obvious the pad a you'll we've myself go it's early depending seven the annual end, the, you cause on I it, box believe basis. in, minimum what We

Lance Turner

Is to range. a XX? to not I throw you and between XX let is box is do if want kind range of good you it it, enough Well, in? you do you me quarter. Let it a, call Like how to that that don't that guys, you a are, me. next agree with

Ladd Wilks

That's a good range.

Don Crist

the And then two Lance, quarter? in us clean-ups what for press share can It you was kind the of Okay. the second count in tell release. me. wasn't

Ladd Wilks

Yeah.

the forward financials the and nuanced So will little be XXX.X. be get still you but count is, is because about at given happened mid-quarter IPO FC XXX.X that EPS about IPO share million a the, it'll when the structure. the But,

Don Crist

the this million? it's to was quarter think it crazy first do Okay. going think that go quarter? forward. And closer the SG&A it's then to to brothers, in me to you bit to a to, obviously Or going be just going you XX was Do what be for XX one in shares Wilkes final the call going it with one little with,

Ladd Wilks

You're right. exactly

If you this point. kind that's into that best of estimate called XX. you to I the back out out gets our probably those at three And items that's, XX

we'll, together of think those but sure elevate coming those a QX we'll, acquisition million lot to things The And then, was the $X in that be us. will going then to call been as companies so with with have Well, first we'll going obviously quarter, than of you the had together that not etcetera. be and sure I better I'm and a related is well, out. it future expenses, measure the and IPO, some with, having QX we'll quarters of previously on

Lance Turner

Yeah. post for GAAP you to And is SG&A the that that anomaly that we shares pre exactly were paid that. the and the share on receiving account that requirements by individuals Those in the the transaction the, there is same. see related private put

Don Crist

it I'll back. I Understood. the appreciate turn caller.

Operator

Global. Curran Tom question next with your Seaport question. Our proceed is with Please from

Tom Curran

off where Just just tech. wanted up with, left wanted flow Steven to, to with pick

flow EBIDA was should flow your chemical loss emphasize it scope know a profitability ramped They in release. that into of and scale. referenced own Sounds, adjusted and your drag I million you've deliveries tech in should toward as the territory so contract's margin Tech's quarter to are X expand economies twice. get So, the believe or, leverage expectations operating when full or call. there? I of for it positive in What with far

it just, how XX, Sounds term, collaborative is, of sort see contribution point Tech's like company EBIDA around run what it should revival longer is be comes flow plan? early rate XX, the broader this to potential maybe. when do you relationship there And at

Ladd Wilks

QX. is, that, about in they early to lot as XXXX at higher that getting they'll early of look they saw for be is, we you a able full absorb it What get the as to contracted excited we're Yeah, and in, to volumes. a costs ramp utilization, is

line very and structure their get and to able also, as bring to bring constructively our on, commercial Our, that cost we're a these their we their up procurement to economies purchasing overall greater to volumes power they're working very, to, see of get we're to and things volumes is excited team lower. in scale these bring

top every contracted scale scale drive economies and to that continue but that expand, per economies associated third they contracted they product as types on cost their we our of they benefit customer the drive have. profitability lower line unit volumes, on volumes full from also So also the these have, will party base the that not just with do but that, with those of the not volumes, of They'll only gain to scale

Tom Curran

your of the contract, lead as, spread anchor time expect deployment, back definitely dual it are terms growth, were could incremental you and sort this fleet but holding reactivation have and, already your to industry that to you in the over comes strategy, it when which, the get reactivation part and and sense on a situation, you scenario pricing you'd what Makes is re and want discipline of in norm at point? conventional if really, advantages to would as return

Ladd Wilks

us of, to district swing we a, to of we way what the now have are bring units. these currently engine to a have them there, the Instead completed. we and activating us through swing fuel all is them an where the no any touch transmission engines at upgrading on way right Cisco our hour it don't if or a fleets side-lines. that having rebuild. So ability as the and or additional engines a intentions rebuild have you of have any, upgrade in is giving have that here get down so the would into fleets to that the is, for we to incredible fleets. be shift program units out our sitting program to R&M And we'll field allows the tier pumping. where disposal trailer to I hard can These back in operated Aledo dual a conventional rebuild change that out like two on But XX back waiting turn have do in engine, It's the to swing use really of excess pumping

field transmission at going and look in engines expense with R&M that, pretty you itself number it having in the program, of this stay number rebuild completed. associated Instead swing of given generating same the of engine repairs revenue. those are time. when longer being doesn't a period rebuild But and are up So keep trailer the actual the transmissions tied much by fix while same to our those the trailers

Those transaction, prior fleet fleets XX M a supporting and of cycle. kind looking FTS other had R just so lengthy active. to we fleet out the were at three XX of And

repair of swing And in also can the, we engine brought so our engines we in in transmission that unit see and to and continue program house, district. the we've and expansion do now repair transmissions the that for

than generate and what supporting to get we'll come come that three be see the is to see field. cycle, those in R&M we As they'll get rather revenue an three scale, back, to available you'll those out fleets

call I already revenue, they're R just they're cycle. an those So M wouldn't They're active. and not necessarily activations, reactivations, generating or supporting

already a of are so just is R&M very same. these high in generating should And the cost out revenue R&M doesn't of relatively that them fleets there, revenue cycle active. low getting equipment It value remain generate back same for, cost for the and way and that the the

So those M. three come, a fleets because at already profitability would the and R we're paying higher for

Tom Curran

And that it. Got is used into source so, have fall for the it. you're you if horsepower how parts as against or Is in do still just this would idle what do left clarify, any horsepower being, and eventually components, cannibalized And stands today, there to fence. that but a swing program with as nor that still? category parked to deciding solely is participating neither it any much is,

Ladd Wilks

if of hundred instead XX transmission, the weeks down you off a it we in has performance or that to, at that can on back it look it's in has And, entire time go row anywhere three and pit a type company can equipment you is car back seeing kind a, your your in raise cumulative like as the incredible material cycle days anticipate new to highlight seconds. company. what to into of that going this it, on revenue it's to hours, is, generating just get the XX and get topping a of overall field, XX like just hard across just example, hard of in a as to in or back. engine if just seconds fuel effect swing just a no trailer program, a yard get set And tires down out that is opposed that to an how to, and a close There I bringing the

profitability the And it the, types immediate rack to to so somewhere opportunities any And needs fence capacity are there. that rather stay the looking what we focus those of the to, improving what there, on in, see to looking of like or but to a with we and than we improvements see adding the yard market, at demand to equipment we at on. those are the that's side pro and that responding continue like old we're busted is

Matt Wilks

for to cycles XX,XXX Yeah. more a jobs in look our to with the larger, more the economics, horsepower with And as the how fleets, equipment we than new you And about maintenance around fleets of was think isn't a when though these out Tom, you're the, that horsepower that other rotation, but we fleets and at about, the utilization talking per are a equipment we what think per more Matt's have it's we it's people's inflation, And horsepower. have actually the have today just and we to use about it, but, also it's utilization better that that fleets like, how in a at we're fleet, right of more, And that that fleet, chain that's higher them the well when to and talk that kind you XX,XXX reach the, fleet providing to or to our zombie have around similar, supply about similar are O coming R support when with XX,XXX intense, you you top think your being really reviving well. fleets. and from they focus the, going When activate the, EBIT of people having boneyard fleet talk to build is are like have that haven't, your, lot they're of think wouldn't back that EBIT that's going either. about, be have your they've, really back maintenance into and, efficiencies not to to a they M we otherwise. definitely keeps just, they in that closer talk they have has and closer fleet, support in we're to you look to and quality that Yeah. something the strength on And pro like, that able your out get continue just hitting about And service we're now. with out that field all them. the if more these you is to that same. and utilize there and fleets not Like, and your you kind rack to do of do known all a, they're for. not think used XXXX, even what O

you is And I in we're times better because the that that delivered that integration, vertical not what are have as performance utilization, else, when at think it's results. capabilities better I everybody the is to and replicate so see a quick cycle everybody look think have, the you of industry we positioned we we, the but same that we those that

Operator

management the comments. call have end the to of back We like turn closing the over session. now reached I'd for to question-and-answer

Ladd Wilks

Well, the continue to and the continue to delivering continue incredible days stakeholders ahead, expand quarters of to to to overall our and, our for we consolidation execute and supply within on we appreciate look and forward expansion on their questions. as everybody platform, chain. and ahead our for, to our definitely the replace acquired And commitment XXXX, results retire,

opportunity good that, is dividends. profitability exactly and to excited have stakeholders, in with pay with look that to the months in to to over growth we further ahead the forward and day. commitment the thank specifics And our want we are very to guidance what on we by everybody. providing mean look forward of Our Thank a Thanks.

Operator

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

lines have your disconnect wonderful a may You and day.

ProFrac Holding (ACDC) 12 Aug 222022 Q2 Earnings call transcript