ENSV - Earnings call transcript Q3 2019

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Operator

Good day ladies and gentlemen, and welcome to the Enservco, Third Quarter Earnings Conference Call. All lines have been placed in a listen-only mode and the floor will be open for your questions and comments following the presentation. [Operator Instructions]

At this time it is my pleasure to turn the floor over to your host for today, Mr. Jay Pfeiffer of Pfeiffer High Investor Relations. yours. is floor the Sir,

Jay Pfeiffer

Thank you, Call. are Third Conference Enservco's, Dickinson, welcome on behalf to CFO. Presenting Hargrave, today and XXXX of CEO; Quarter Marjorie and the Ian company

SEC. XX-K, based filings this reminder, a include that company's projections date of matters the assumptions during and with to recent on As uncertainties call are disclosed estimates, management's in as subject discussed forward-looking other may statements as the well today's as and are risks most and

limited business to materially cause disclosure those Enservco subject company's out information. untrue of actual results management's update anticipated during respond statements. ability could by events. The of FD, to risks is questions SEC prohibits that become to which material also is because certain forward-looking statements Regulation obligation to from assumes subsequent non-public selected that forward-looking point differ that to no call I'll in this

of call. at today's available call be A webcast replay will the after enservco.com

replay beginning today's news In accessing replay in available a call. approximately are the webcast be for the after telephone release. Instructions addition, hours or two will available

that, the call over go ahead. to With I'll Dickinson. Ian, Ian turn please

Ian Dickinson

recap then quarter Welcome it press I’m issued joining Today for Thanks our the touch hand Margie and on month of to a release going numbers. both nine the today. and XXXX over for call everyone Jay. after periods thanks the closed. third and results we market highlights for some to

we the which cash we quarters majority when our a generate and quarter of the the up for performed our and production time for getting our you related first and and primarily teams know, our fourth quarter for we revenue also work heating of lot As year. year. customers The the season, our spent third historically and of our flows is is gear slowest encompasses maintenance equipment

still managed to was the revenue from third budgets buzz increase XX% the to customer in we in of around This acquisition influx depleted new capital achieve activity in Adler spite attributable efforts. organic and increase face economic an the Nevertheless, and customers of a market headwinds, declining our in the all in both quarter.

We saw we of losses. the $XX,XXX, generate that segment XX% combined income revenue our grew previous some water also improvement $X.X and million transfer generated two where following year-over-year segment, quarters in to in

We did the we QX last third revenue general One, industry year; an increase in quarter. the our factors relative headwinds were few our a experience we costs transition a disproportionate insurance increase quarter in two, in in management have third to the There at in resulted play in in quarter. didn't that cost here. incurred D&O increase

an reserve the was to in from unfavorable our to $XXX,XXX involved increase factor industry $XXX,XXX due bad conditions. Another debt

two accounts. Additionally approximately associated in write-offs XX,XXX we took with the customer quarter in

will to investments quarters. additional that coming and some made our also be We IT repeated this enhance not to nearly infrastructure in level

been Our solid. the Revenue bottom have more year-over-year financial water freeze anomalous significant. our were net in Absent achieved line first transfer the results a and improvement line $X year-to-date improvement we in our million quarter, loss. increased would XX%

redundant of providers eliminate water of physical duplicate although as position We locations. cement compensation, form lot nation's have million market acquisition business, to cost in provider the the a opportunities taking $X service also largest made approximately to our play costs share also out progress of of design the Adler services, primarily a was frac it presented in the heating and

more impact our facility. these coming existing in all latter, the Douglas and will Adler visible and frame Regarding have mid-year time the effect of into bulk we yards, synergies legacy took year. The into Wyoming in facilities their consolidated be our the

making regarding the in nicely believe the getting across we've been we're we our good of morale our and improvement blended buy has and direction into is team overall team our workforce business; Adler changes, The high. legacy process

better this and long financial customers fruits revenue, over reflected cost are share term. will a creating and We in to structure the believe designed labor more efficient results We the market be and adding of enhance improved our serve growing customers shareholder value.

over with And I'll Margie a to highlights. our that, financial for of turn the call Margie. review

Marjorie Hargrave

you, Ian. Thank

Dillco nine reminder, discontinued I'll a segments prior third months results As the be reflects of as of quarter year the operations. and covering results reclassification hauling our water

such, those year referenced calls. certain from figures were on different ago As past

to million. XX% in $X.X basis Total revenue segment last in $X.X QX million On million year-over-year enhancement increased third to $X.X well quarter services a the year. $X.X grew from XX% from approximately million revenue

Our Acidizing the and a flat was $X.X XX% generated well flat segment loss enhancement quarter, of frac heating water X% the way in versus hot year The growing service year-over-year million. to third $XXX,XXX flat oiling a essentially ago. led was up year-over-year.

in $X.X Out approximately generated water transfer loss $XXX,XXX Water through QX the QX and year from $XXX,XXX. of in first of generated in the XX% transfer year-over-year quarter, $XX,XXX this million segment two versus a revenue versus of last third up $XX,XXX quarters loss of income year.

year-over-year operating increased $X.X for million related activity in Total customer the variable increased million. $X.X accounted quarter $X.X or increase. million Higher $X third of costs to expenses the XX% XX% from million supporting to

due infrastructure quarter year, reserve $X.X bad million increase IT an In $X.X general as processes. administrative addition, totaling XX% in last hike debt D&O and $XXX,XXX, mentioned, and and third write-off million in expense increased a sales, to investments insurance premium Ian a our at to and in the from

million million no $XX,XXX costs ago in the transition from to grew In such expense Depreciation we QX. in addition, versus during costs $X.X fleet to and amortization year the side. quarter due the incurred increased XX% $X.X

from third operating $X.X QX from per loss our million year. $X.X last net in to loss diluted $X.X QX an quarter quarter increased of $X.XX EBITDA the last million XX% $X.X or loss loss of Adjusted million the of in increased a $X.X million diluted share million loss third the increased per $X.XX in or year. year. $X.X in last to Net operating quarter loss million result, a share As same to from

to $XX comparable the our nine XX% year-to-date, year-end $XX.X period $XX.X results Well enhancement to to – up million from up financial last increased our year. X% results. in grew months well million to million. $X.X Total million from year-over-year XX% sorry, XX% $X.X million. million enhancement revenues $XX.X services million; oiling acidizing from water financial Turning frac million heating to through hot $X.X $XX.X XX% $XX.X $X.X million segment The million; from to down from included

revenue loss quarter the $X.X The first same to in $X.X increase compared of months, loss The in over to well of of a million enhancement million same last transfer income from rate XX% generated year-to-date the $X.X increase $X.X in segment to Water income year. million nine reported period increased $X.X This year. year. attributable $XX,XXX XX% million the a previously this in in year. a our of first last generated the launch period segment million was

water inclusive million last increased nine transfer quarter the first from same $XX.X cost $XX.X costs, transfer of $X in expenses, the XX% year. the first period in water in operating Total overrun months to million

investments million related primarily to Higher infrastructure. increased Sale, activity to IT for from costs $X.X and hire direct associated overhead year, to XX% general due increase. the expenses variable million accounted increased with and of in administrative last million or $X.X and Adler $X.X $X.X acquisition personnel the XX% million

in Ian the should in Adler related benefit acquisition $X early had annualized reflected noted to overhead earlier, future be and by as third we of that quarter eliminated However, the million quarters. more than

amortization and larger million increased million expense $X.X Depreciation XX% our $X.X due fleet. from to to

to from year $X.X for Our improved million settlement EPS Adler. operating a the a to XX% loss months $X.X ago. increased to the related loss Diluted XX% million. Net of million with $X.XX year-over-year improvement versus loss nine a That sellers loss $X.X $X.X was to first includes from a gain agreement $X.X million $X.XX of million.

last $X.X will million in cash flat year. maintenance related primarily from $X anticipate at in was range $X.X year-to-date, million million. year-to-date for CapEx $X.X we operations foreseeable $X.X generated represents same in over a QX EBITDA capital spending the the the future to million be XX% annually. to of Enservco be and Adjusted which increase, million period

in next in allow for us have one credit The to interest in would to liquidity rate which six West our March rate, the increase tapers to raise and ramp-up the higher required in removal equipment, ratio, to debt over gears, down to I'm Enservco before the a weeks more its go status XXXX. approximately our-all-in East is allow requirement been business to fixed process provide month. the advance and to of is liquidity minor currently some below removed the amendment advance one against over for to winter charge coverage season, XX, X.X the a which pleased for we subordinated our a for the Enservco, Switching Bank announce

subordinated inform to debt our to to we the the for debt shareholder XX, loaned you debt, $XXX,XXX under June company XXXX subordinated to need happy Partners Cross in today further terms comparable are subordinated of XXXX. company November the largest As River loan that

a Before listing $X.XX price. see the an XX The they period. us reported rise six which in stock an notification I in I our requirements have a again for the two The yesterday. to in stock we during affect given as falls call is reverse the Exchange notification cure regarding address has price would procedure received over York cases New basically where we day period, extended remain We price notification standard turn to in the there case Stock to you, be one, and we want two, to the York to New month compliance; back period, over back X-K $X.XX Stock relate stock for Exchange a from options: below this split. which stock filed

the one option scenario. be Obviously optimal would

Stock extension we To the Exchange clear, necessary, the they with secure expressed shareholder split the cure Exchange period, potential indicated a that. if Stock extension that to give were stock New up in of time strong York require to evidence has reverse a such an New cure become us approval, period this approval. would and interest the and to in it has period think consider to lengthy is case a York keeping However, be

for So with to that, the we’ll over turn the operator Operator? call questions.

Operator

first Instructions]. [Operator at Management. to Barry go Money Mendel you. We’ll Mendel Thank

Barry Mendel

Yeah you've $X you from is, your breakeven. thanks. costs synergies you by that about mentioned Question that to but doesn't still cut get million,

at to even? break is your to get but we the been do good, how get growth breakeven? plan what to has least Now So revenue

Ian Dickinson

for is Ian. this Thanks Barry, hi the Yeah, question.

have in as are the in probably the bulk and a QX we revenue third I of remarks, slowest. business and cash quarter generate typically and so and our our seasonal prepared we you familiar, when As QX mentioned flows is

So XXXX again XXXX and here positive XXXX. in and will we've EBITDA generated in

know line bottom as add that year the we us more operate we to into So synergies reductions and the help cost we move drove will this drove, you XXXX. efficiently

Operator

from We’ll our question Bhakti Global Alliance to Partners. next at go Pavani

Bhakti Pavani

questions. my Good afternoon taking guys. Thanks for

Ian Dickinson

Bhakti. Thanks

Bhakti Pavani

the on follow-up a previous caller's of kind question. Just

are I You know synergies? synergy, mean where you would areas or be materialize identified have synergies what you what be of where to with regards if you to extent obtain - any there know – you quantify those and have further can additional would the you

Ian Dickinson

really quarter, wind the our We’ve third were on completed come the with taken the consolidation most that took to quarter. actions reached so in season of of second synergy the opportunities the mind second unable we final we being we in really that until in beginning those heating tackle down Bhakti, work Keep of in those the steps quarter facilities.

the opportunity for cost reductions. related see additional don't synergy I significant

continue team bulk areas in we’ll quarter. drive in of of to out Adler’s synergies, we But costs, specific management the here we’ve on all the can a as and efficiency of, on unnecessary are executed efficient be second that and terms looking third that. do for an more so where We always

Bhakti Pavani

you. Fair enough, thank

the you last through to way half extended the with with are Adler? How the you know regards began quarter. already know has the fleet and compared beginning to heating season from of season You as last year the

Ian Dickinson

a basins. of the which saw So, noted, mid-November September, season customers we're added October heading of significant the XX number has in We new a swing and down the low down into last timeframe, allowed high some activity of prices oil heading this in through to steep that. range, mid-XXs. XX, our as into to combat kind completions the we’ve is share in generally we season, market us across But

mid-XXs, budget. their the our You and know prices lot a some have a exhausted of we this entered of barrel, in season with CapEx oil customers $XX

softer little done we've share expanding we a all cross job basins of in. our market market, it’s participate really So the and again good a but

Bhakti Pavani

are than your better standpoint, currently opportunity you geographical with obtaining? Got it. are comfortable in are from areas And will do the the you you currently you or fleet an plan you much area to guys to which that provide consolidate

Ian Dickinson

we’ve Wyoming as area market and opened been executing opened this but in a past up will are us we foothold We’ve Douglas opportunities here for again allow in to today, of expand. on kind basins is mentioned that's the previous years, like we the No, us. additional facility and couple we new calls over of that in that a

see So to there I continue further that work try in. and to that basins know our several and in us allowed has South do to growth the acquisition Texas north, Dakota primarily like our do grow continue in Adler presence seen the and South we’re region, on to fronts. the up you North We’ve to we

with entire that to know footprint. you and basins try the in, But across again, our we’ll we’re we’re grow continue happy to

Bhakti Pavani

have been negotiations I just in and East active Bank. one West it, Got last one. you with that mentioned know you

additional to are so talking a third that position credit any banks kind Just in trying in obtain any currently not the have other in, quarter. of been to you you facilities, and that you wondering, are

Ian Dickinson

– been that we've with primary been the know our the bank, have referenced. Margie through So, working conversations you amendment

that's As is anything of we at I know business, optimize and capital options of would course touch add to there and so Margie. our structure, part our to a markets efforts. you are ongoing the normal with if looking capital don’t that our in constantly

Marjorie Hargrave

I No, think accurate. that’s

Bhakti Pavani

Okay, thank side. that's it from you very my much,

Ian Dickinson

Thanks Bhakti. it. I appreciate

Operator

move So Capital. Woo Ascendiant we’ll Instructions] to [Operator at Ed

Ed Woo

my up talk for taking like it well, Can thanks question. is your activities is, Yeah, drilling outlook oil seems for you like but oil. that? question lower. My seems is about It relatively holding

Ian Dickinson

prices mid-XX’s. in seen we’ve I the oil think stability in relative Yeah,

within on we're seeing what down EMPs with is flows of know maybe or base doubling living keeping the customer the cash mantra. mantra and You that

can’t price the more of It and living be know general flows. levels that cash activity what to profits, And small we what's swings oil to know be of generate you so, of oil. it's discipline where not down are prices the access and you a that capital today would seems within driving doubling in

Ed Woo

the you. color Great! Well, for luck. thanks Thank and good

Ian Dickinson

Thanks appreciate Ed. the question. I

Operator

With for I'll remarks. other or back management holding, questions closing no the turn to conference additional any

Ian Dickinson

and thanks questions you, the Thank for again.

As to again attention appreciate look forward Take I care call time. always, fourth with you and following today. quarter. we appreciate time talking the our on and We your the

Operator

conference. Ladies and for gentleman, We that today's participation. thank you will conclude your

You time may have day! and a disconnect at this great

Enservco (ENSV) 13 Nov 192019 Q3 Earnings call transcript