ENSV - Earnings call transcript Q1 2019

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Operator

Greetings, and welcome to the Enservco 2019 First Quarter Earnings Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to your host, Mr. High Pfeiffer of Pfeiffer Investor Relations. Jay Mr. you, Thank Pfeiffer.

You may begin.

Jay Pfeiffer

first and company Presenting call. to CFO. today XXXX welcome Enservco's quarter Bradford, on Dustin Ian CEO; conference Dickinson, Hello, are and behalf of the

those call discussed become that a to based respond today's risks anticipated uncertainties are obligation that estimates, today webcast date untrue during no As information. are because non-public management's is assumes to with which most questions available at could of the by management's certain matters disclosed of as this ability may to statements on SEC enservco.com filings I'll The call as include assumptions be limited XX-K and forward-looking subject A results call in projections and Company's actual out that statements. disclosure selected differ is that forward-looking will Regulation subsequent other after prohibits of and reminder, Enservco point recent statements to from the during FD, in update forward-looking subject Company's material replay events. its also to business the as today's of the well call. SEC. risks to cause materially

ahead. available In call over available to the webcast addition, or that, turn the telephone in With I'll go beginning replay replay today's for Ian accessing approximately be Ian, a two after are Instructions hours will call. the news please release. Dickinson.

Ian Dickinson

with our initiatives. thanks and for I'm after first growth talk close. everyone financial our the and XXXX release recap quarter we're the we progress then to Jay. Thanks, press our briefly highlights going making about today. results our Welcome joining call Today, financial issued market

EBITDA EBITDA growth $X.X growing and we'll to team million. $XX.X encountered $X.X increased the our kept our in XXX% year-over-year Enservco from rate. first to my gains and income proud a Adler of We're million. these of financial your recap adjusted acquisition a by the million adjusted net at across revenue, highlights will challenges questions. couple Following income Total quarter. Net inclusive a tremendous be and increased the the We Dustin revenue happy and grew reported in solid XX% take remarks, effort levels are of revenue which our of metrics, that quarter profitability faster all XX% of to result organization. to

but the first began with our customers many QX oil customers reramp our in two completion oil the sharply started recovered, operations, and their sharp decline of curtail When took price of January weeks First new a prices as it schedules towards because to year frac resumed year-end. activities.

two we So norm both revenue those extremely normally the a the and and the where weeks took underperformed quarter. busy bite first out that of for for us of year profitability are

event with overruns customer of for to and led project has news moved changes measures again. own water on our was in unit preventable emphasize $XXX,XXX. the Unfortunately, time. want a our that projects. forward a be to since the in XX% solid in the labor The event was second of executed I incurred happening completed growth transfer policy first due is thought Wyoming. say should $X equipment we third additional that challenge this the profit entered to nearly party overrun loss with approximate The this involves segment million this cost although freeze We out. on designed valued personnel have Unfortunately, our taken and good from rental while lines several suffered customer happy customer segment corrective us to revenue, achieved quarter resulted commitments profitability to we to the an and we in segment. in I'm that prevent line-freeze our in hire have miles

by effort results. contributed field tremendous utilization to our we've our solid and have In deployment the addition also to steps teams, optimized a increase fleet taken to

we unprofitable by that greater field eliminating to to burn XXXX, and equipment closed the operating These recall our EBITDA business in potential. contributed QX in water higher allowing also hauling to late and that us in You'll resulted us consolidated basins more reallocate efficiently. profitability moves with initiatives locations

XXs Those adjusted is Our supported today's higher could price prior Absent mentioned today. of QX downturn. QX EBITDA to the oil in basis EBITDA rates where $XX. margin the of the remember events And they was rates XX% margins year the XX.X%, were benefit XX.X% well I than XXX reached up from into $XXX a earlier, XX% ago. were offsetting around by adjusted pre-downturn margin had in range, we low which were points have to higher are billing to that these compared

So lower price is the again, clear efficiently. environment, we're this given more indication a operating

customers Wyoming for expansion of customer Platteville, of In the revenue you of XXXX River Powder the move travel sites. grew changes and of drill on XX% and start right subject was from operating a which a in derived which to of our quarter Rock wear couple which quarter of first is many River QX Wyoming, Douglas, the was the Powder efficiencies, will Powder with in distance On which is area us. are company This basin. Powder in yards. new servicing compete the in area the greatly and million million, In did we’re opened in of our business that's Springs, our enhance new and all revenue physical with additional River time, $X.X for equipment some location we just about Colorado our promising increased Each has heart a our XXX miles $X.X this Historically, locations. I'll me Niobrara let the growth tell our is Wyoming-based we while In the in basin, with long making been shy associated ability XX% number of the tear XXXX, that the to first XXXX. Basin. and Powder of for revenue costs reducing with serve servicing. the our existing in

is worth So lines, that our acidizing seeing oiling, hot noting water positive increased Douglas transfer. already in focus frac service heating, It's are and basin. four on of generating our yard also water all we revenue of this impact the

centrally location and will will facilities Colorado be relocating also to As to blue in facility that we our that benefits leveraging procurement of equipment location base bundling This our each chip Colorado noted located customer also strategy fuel on we in more form become focusing the We're nearby. the Adler are efficiencies. a by past, the also new new Platteville, costs closed. personnel home new three a and services to from our customer, customers

reiterate modest assets there real the consolidations, through gone process. the logistics be savings in these we've some of and cost While form speaking of from well very the we're has Adler, relationships this come with gained I'll may benefit And and the delighted customer integration that efficiencies. talent, will

we XXXX, focused of a fleet remainder management the Over are implementing solution. on

Specifically, to With highlights. and a integrated. enhance platform location, that system turn including electronic our our call Dustin truck geo maintenance a and invoicing, core we financial inventory, over I'll and This are Bradford installing reporting will and whereby safety, compliance, to our our dispatching system efficiencies accounting operating further of that, of for and view the technology key ability data the scale. will be form fully functions, will finance and and

Dustin Bradford

Thanks Dan.

to a the hauling XX% our walk the first reclassification of in The year those I'll quarter through water increased certain $XX.X Dillco results referenced from $XX.X as Accordingly, will discontinued year first reflect prior do results quarter by ago Total year differ of on in first past segment figures million calls. from quarter operations. revenue ago. the million,

The in As resumed in the to [ph]. had their swings frac rallying included enhancement operations we XX% a the the acidizing $X million quarter first range; earnest in quarter Well which was Ian year. of segment XX% to $XX.X which the and million QX, increase a income year. of hot ago of over same water start $X.X EMPs frac was slow generated well which price mentioned, million up the from $X.X to three XX% enhancement QX year $XXX,XXX flat oil same down last $XX.X from a is million; essentially of last XX% services, oiling, in million year-over-year heating, well the million quarter. when million were income up enhancement in $XX.X were QX The components XX.X in over quarter just million due to effect $XX.X and was from

performed acidizing, declined active reduction in As of quarter. is year's noted in our customers had in to few press in very a which for smallest release been our Wyoming Texas that line today, services primarily generating first revenue due and last business,

other basins the to equipment basins acidizing over the long-term. Kansas asset one Additionally, quarter where acidizing has and our been redeployed we expect since in to the to also closure the several locations, won of services, growth recently show fourth This segment business decline. contributed new we and previously provided of

direct across locations, our Our expenses to increased primarily disappointing million. Adler the as in $XXX,XXX. acquisition. last increased quarter It water should depreciation loss and same line-freeze the in to been have an in $X.X year. the previously first associated $XX.X quarter related activity Unfortunately, higher due turned first increased quarter positive segment costs transfer million income is service $XX revenue into variable to the issue $X.X Total segment what well million to increased XX% million the XX% referenced quarter a year-over-year from the cost as from with the lines operating of

issues. and general the cost of addition administrative due of our to from fleet. to $X.X million and expenses Depreciation to $X.X to growth our larger amortization organization equipment related increased primarily from year-over-year million $X.X in addition administrative the $X.X XX% the to due our overruns related water to Sales, to expense $X.X In of Adler million cost transfer business. million to million rose

to capital was grew sheet doubled in our Current share. $X.X $X.X XXX% at million. $X.X March with increased a XX% a grew income year-over-year I'll in balance per million. improvement Working XX $X.XX from million our $X.XX income fleet. operations $X.X from from on adjusted all close stats million. Earnings was million And to from from $X.X few to EBITDA million. Net $X to XX% ratio metrics, share X.X:X. profit from $XX.X Turning million

delevering few ratio equity focus on every Our maintaining million. sheet next remain and of years. business as mentioned quarter, goal our over equity debt stockholders’ the was to we X:X. I was And Total discipline our balance $X

I to last to $X $X.X Our in related Adler to to higher it way, QX disclosed million with get the price will say million be following than CapEx million. I acquisition. the $XX.X pleased the primarily to was range X $XX.X units the discussion capital we with into aggregate continue April value but will maintenance filing, with won't the of in details are came do we anticipate in of is That in as XX the the to and amended seller. due for to reduced of with Adler range the nothing the we that outcome. X-K be By year spending and million Adler’s of circumstances, had consideration the annual assets addition

those concessions operator turn in and are second in treatment to complete We by obligations the We will Operator? accounting With with agreed for for financial terms the that no seller payment be amendment have granted statements. questions. accordance over did reflected that, assessing the in the the upon April to the and call those I'll further quarter the seller. final of our

Operator

Our the Global. Please of first the [Operator Instructions] with your question. you. of Bhakti Alliance comes from proceed Pavani line Thank question

Bhakti Pavani

questions. my guys. afternoon taking Good for you Thank

Ian Dickinson

Hi, Bhakti.

Dustin Bradford

are How you?

Bhakti Pavani

you actually was know want quarter. in Well I the an on and for that margin I Good. a to results should surprise your nice revenues I the because congratulate improvement gross low, the honest say, to would but really slightly mentioned were be profitability

Dustin Bradford

Well, you. thank

Ian Dickinson

very a strong had finish the we Yes, to quarter.

Bhakti Pavani

last I mean it's – best I the since think is four XX% quarters. Yes your been

I So nice was surprise. a really it think

and changes forward? business translating the expectation? was, talk bottom the do What The to making other changes maybe you your line you you really it's thing improve efficiency. are see profitability going is all into hear about Could how nice to the the or

Dustin Bradford

that enhancements of been We've of process what our an the and improvement. has way would this lines. out we different made day continuous across a operate Well, I in, day in service lot ongoing locations call

that We inventory maintenance script, different the and will to platform are, integrate dispatch, across software and as these in to I fleet mentioned areas, process allow from of the functional implementing management, so us in invoicing, on. a management

a are really you I've we down. business before, break largely As it when mentioned logistics

driving that to assets, way be And important our more in our are and our to so revenue bit assets, assets efficient ability margins. more the we're efficient profit we ultimately be will the resources, that a and human in allow most way deploy us

give have a right heavily paper I'll ticket on is the, of you an which that we one example, So dynamics system. the one still of now

the should revolver in able where moving our us. on that reduce principle generate to do overall interest so and we flows And for balance savings electronic expense increase reduce DSOs be will we're can cash That experiencing. ticketing our

So that front. I will to efficient there be in is some maintenance the us in and savings allow in our But it deployment along of think a general more fleet.

Bhakti Pavani

great color. cash because of I the quarter, on liquidity, you at and not my there That's end question any you significant Good. the had receivables. Actually, answered was noticed,

So I forward? your you are wondering, manage was how going going to guys liquidity

Ian Dickinson

balance build I low a payrolls phase a as and we through to June, as end a is our liquidity sit time was fold strong low that Yes, to timing possible. question, with try QX through into working capital. as then move borrowing maintain convert up We dynamic a the point collection This we keep as appreciate today. at a QX the in we AR we to what that in bit cash kind us. July of balance and revolver position that we’re for we’re pattern a but should month typical frame how the of minimum That of

position you strong used And the see if DSOs, that today. is earlier and to back decrease collections invoices. this with historically, we like expense but of in and balance of associated, the we’re we’re that sit would interest go we look the so reduce And accelerate kind principal reduce that liquidity pattern as a to,

Bhakti Pavani

the color. for you so much Thank Perfect.

hot slow you in acidizing on the business are I the the and the talk oiling feed utilization standpoint? Could Moving is know, line? I business think second which kind period, quarter, how business, moving do about of that? you mean, opportunities you into rate where to maybe from

Ian Dickinson

Well, about hot let’s talk Yes. oiling.

environment, cold are in see do oilers for hot due of steam aspect that’s down-hole a is oiling weather that’s with big oiling is right So deal in some we where our lines, the There we’ve that that’s or applications and that more seasonality with frozen to the oil fleet of There heating hot tanks. hot addressing part you’re maintenance. work some and directed work. really whether outs, year-round to associated a

expanding in doing territories. looking, work the in oilers our deploying northern optimizing. a see We will fleet. that south Texas customer a Oklahoma, we’re ensure a levels many our areas fleet in find there’s the of to increases base the to that that see with utilization and And of mentioned work. focus their continue But at of and as current maintenance most those the of lot hot kind rates we’re we utilization of way across on the slowdown in that’s we’re I’ve ongoing some We’ll as team utilization times natural of

units So, we units brought some on down additional we’ve demand units additional more Texas moved demand Wyoming into south that is moved a increased. customers. some few moved as increased. in to Oklahoma as that We’ve the We’ve is as

hot put be summer. utilization, where position winter fleet moves in maximize the in we or whether we’ll can so season to continue that to oil the the our And make a

Bhakti Pavani

it. Got

you Okay. Thank very much.

water frac QX think heating to of line? point? do expect on business, to at that should see mean about how Moving business into you a I revenues spillover this we

Ian Dickinson

period of heating company the those the it’s who the where the where – plays primary we the is start Well, I revenue think where revenue, so are a the and familiar frac or QX weather I’m seeing with as role. sorry, where year slowdown

really quarter, terms we give of effectively heating and zero middle don’t guidance see for that as here of timeframe. in drop summer is the was close begin frac off So get timeframe the it which move to into but obviously, revenue to the expectations in we

Bhakti Pavani

That’s Alright. Thank you much. my very it from side.

Ian Dickinson

Thanks, Bhakti.

Operator

Please [Operator Instructions] Woo proceed from question. question Capital. comes your Ed line Our of the next with of Ascendiant

Ed Woo

your of hearing are confident on near of customers just out the over congratulations this you the the Yes, My term? what how from oil profitability business quarter. terms they for is are question and the outlook in for on overall

Ian Dickinson

conversations the – relatively sure, from it’s prices. would perspective customers, had sense I a the had think the that sources a There I’ve question. should that knows Clearly in can we’ve with but that at remain they’re we general see thanks But remainder there’s through nobody mood is will probably least I tell better for for stable for prices general company’s seems XXXX. I to be stable here in this. exhaustive, oil conversations Yes, say not of you and the certainly and the

Ed Woo

the Great. with the look And you at opportunity you have opportunities? that capacity feel in are now guys terms do happy guys other pretty acquisitions, of Adler you M&A to that

Ian Dickinson

our for opportunities. the over long other of accretive strategy look Part to growth term Yes. is M&A

the opportunities predominantly company opportunities organically. have will incremental that through But will focused for either this are on services there’s our bear potentially can be acquisition, opportunistic to we think We we customers executing expansion basins. with and bring fleet growth We on we to that for we today. other and through for into expand look

So we to looking market to will business. at keep a the continue for the keen opportunities scale eye

Ed Woo

can And that industry bit the right be Great. Basins are business for and you now. attention what your most then there? in of seems a How Permian about talk little doing and that you is activity important guys to getting the more down

Ian Dickinson

have any operations in Permian currently We don’t Basin.

amount We’re that do region. We from the south get basin, calls Texas in Texas more from the fair a in west Ford. of Eagle that

We up chase a those point opportunities decision sharp. have to and made this set not at

eye So general at activity, basins just right time. on exposure any now, market but have and this don’t we the all we an keep

Ed Woo

Okay. Well, and thank my questions answering you good luck. for

Ian Dickinson

Ed. Thanks,

Operator

portion now to I management remarks. audio the over the conference of questions closing would further no for to turn are over there like the time, back this At conference.

Ian Dickinson

look again the call talking attention care. to and your Well, you as We always, appreciate with Take today. we forward near future. the on time in

Enservco (ENSV) 15 May 192019 Q1 Earnings call transcript