ENSV - Earnings call transcript Q1 2020

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Operator

Good day, ladies and gentlemen and welcome to your Enservco First Quarter 2020 Earnings Call. [Operator Instructions] At this time, it is my pleasure to turn the floor over to your host, Jay Pfeiffer. Sir, the floor is yours.

Jay Pfeiffer

Hello and welcome to Enservco’s 2020 first quarter conference call. Presenting on behalf of the company today are Ian Dickinson, CEO and Margie Hargrave, CFO.

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

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

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

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

Ian Dickinson

some joining our press over today. the provide as Jay. thanks call am going QX overview a Today, Welcome, a results of financial well XXXX. the on quarter the will events to brief of issued for recent the the on will for be as performance focused and what for turn of then we release I closed. to first I our remainder macro and Margie everyone call we market comments numbers. Thanks, after XXXX recap

and weathering particular are of begin saying you state. of impact by are I the to want well social all I your shutdown distancing hope whatever in facing mandates and you

to waters no And our learning doing time least at living at an that governments, individuals You are on exception. instruction lifetimes. are navigate in best uncharted are manual this absent and is times fly their the Enservco pandemic certainly businesses, extraordinary in for

virus are and Fortunately, remarkably our for by and been grateful we that. workforce the unscathed have staff

observing am happy have customers and we social to about field I corporate interacting and to returning have the distancing and back with when best remotely part for most our are our safety slowly working the been colleagues. Our staff practices. office been personnel vigilant say corporate

first the we provides mission-critical severe of reduced Nevertheless, essential most our the work and by doing business to impact The drilling of oil has country’s mix revenue economic leading in interrupted contributor shutdown along it’s and component the orders. on gas been slowdown earlier are Enservco quarter which the activity, work our Because our pandemic is caused oil price producers, services amount the customers. completions not deemed by the we the to being an largest and and metrics. profit are collapse largest our our is for with

Oklahoma On an unseasonably Pennsylvania, top winter in decline of into heating services we had a in translated those and warm sharp locations. that, which in

same million the As reported quarter net QX quarter from to year. XX% typically revenues what of $X.X a loss result, most $XX.X million our last $X.X $X.X in is the same a of million million net year, profitable a we versus profit of quarter year. last In declined the

But not something times. as EBITDA are We possible also extraordinary we X said, reported ago. months we would I adjusted even have of in living negative thought

regarding to our industry services is a now There specifically nothing created peers right war. in Saudi-Russia weakness due can price downturn price The entire are is oilfield macro do demand these the to by in facing economic unprecedented trends. plummeting headwinds oil related we the pandemic – difficulty both and the

the related upside we are position when and exercise focused on market over market So further control we the our returns. the eventually can’t strengthen to leadership things

foremost, the First taking are and to of drive steps business. additional we cost out

related million to redundant Hot of we costs XXXX, that in $X.X You in Oil will half recall Adler the our second eliminated acquisition.

location. have we XXXX business our transfer alone. EBITDA in contributed in $X facility taken We $X.X of burn Oklahoma after closed additional that We across million have serving downturn. in organization. in annualized facilities, workforce and in from operations those last instituted had reduced our benefits favor year also water customers scaled two nearly We Thus remotely we out our back closed the costs. excess XXXX, We Colorado pay our million And due far capacity reductions other XX%. where total by to the we

In $XXX,XXX. addition, by maintenance CapEx approximately we have budget reduced our

some us primarily major made development. Another area through area and year, our have is We momentum of focus the Adler into first last in quarter. this carried for customer of strides that acquisition new

We couple these hasn’t areas are customers in It us. Texas and smaller for are that significant competitive in and advantage are customer and the that discussions we particularly water and geographic and largest remind nation’s the have heating broad of one North will new our a our door frac several coverage a of I us. has struggling of oiling fleet that work hot size you is heard our services provider prospects, Dakota. with promising with in additional competitors opened the for

our mentioned we is a outside business afternoon, hopeful conjunction say, provide options done earnings prepared in and and they are our positive further at we very details time. forward. with not our continue field difficult our administrative by not key this to time, to running discussions outcome moving I debt keeping for who in These to and to forward that extraordinary all remarks up going on able this ongoing but As an lender this my debt. a our restructure will during and priority result to challenging for and am job we close work will concerns. are personnel again Suffice in us advisors reduction have our with release I

call turn of our the a highlights. And Margie? that, will to review financial I over Margie so with for

Margie Hargrave

you, Ian. Thank

be discontinued results operations. water quarter year will prior I reclassification as our of of The today reflect first discussing transfer segment the results

As ago from calls. on such, certain differ will year referenced past those figures

in generates profit water first quarter year. profit quarter, of first million which of to services million down services down million production last year $X.X the oiling, same The the Production total generated As frac XX% to $XXX,XXX the acidizing $X.X from Completion loss Completion earlier, hot $X.X $X.X ago. a first segment in heating from revenue $XX.X year. of segment $XX.X services $X.X million revenue million. $XXX,XXX profit consisting generated declined $X.X in of last quarter in declined quarter Production in $XXX,XXX $X.X was included segment for Ian which QX from million in from mentioned the $XXX,XXX. $X.X to a declined million, the year-over-year million quarter a compared to services to segment from year. from revenue first the a of million XX% down prior a million, services in segment

bad services. general expenses from declined year-over-year in and XX% $XX.X operating first professional expenses $X.X increased due elimination who cost lower fees advisers of for debt from our associated to working administrative Sales, Total primarily the Adler year-over-year the of increases related the reserve third-party higher XX% million $X.X to due quarter redundant These with and debt on offset are $XX.X costs initiatives. partially costs by million to acquisition. providing completion restructuring two million to million were to

loss in operating or the diluted QX used the down per of in share from operations a quarter $X negative year. in $X.X quarter EBITDA Adjusted in an year. or $X.XX year. million in $X.X income $X.X first the versus first positive in per cash net operating cash Net the from same $X.X to an Enservco million down of quarter diluted last compared the share quarter operations million same in in first million $X.X loss $X.XX in reported in last last income of was year. million $X.X used last the in was million million same $XXX,XXX, quarter a same the quarter from We quarter,

operator over questions. the Operator? will now That the remarks. concludes for our to prepared I turn call

Operator

[Operator you. ahead. Instructions] Bhakti Our Pavani Please Global Alliance comes with Partners. from Thank first question go

Bhakti Pavani

the development percentage on second hot given Good your how first afternoon I the shutting guys for know am of of to acidizing laying impact business market months you guess of currently what just what you the wells is your E&Ps question the oiling rates Thank kind with last is down given utilized? question. my kind drill of being the is activity guess in are and couple feeding recent fleet curious I taking I or over guys. existing question

Ian Dickinson

blue storage for our very as production with capacity feeling the the some of some term anticipate chip of and and the impacts price. Yes heads they their active is that of shut near turn for tension and work we still and of the question. in of driver the so many what E&Ps overpaying pandemic of chip to in are terms terms to larger are though the them normal are services progresses what right Bhakti, which recover levels we primary of close in we are managing to are now hedge so the the price the shutdown thanks customers blue the to might that activity many we our their E&Ps back most summer of

primarily they're what managing just completions related the level business hope being production water a customer levels broadly the in QX. of we to service storage related having that QX and too services of We months. one those different right normal conversations as completions frac QX of what’s in a a we've on services based more to related appears the busiest really now across don't see to the it important capacity is clarify and right So it’s deliver base been QX It's coming as in heating basements return should production we. is factors the that that number production the that and in and across

Bhakti Pavani

Thank That’s very you. hopeful.

Operator

Ascendiant from with comes Ed Capital. question sir. next Our Please ahead Woo go

Ed Woo

do saw quarter any Thanks was wondering you seen quarter for that the second and just taking trends in there think bottom have you now? you my we trends also any question. were rock I hit in

Ian Dickinson

to related see heating that should exactly the in production we down draw returning more I should of and got see normalized work activity to season our sense here then return a to a answer that’s summer. completions I levels at question for And we the approach mean It's predict a but through to are move as see levels. in question think. which happens very what in what we've here the that Yes response some quarter. would in inventory’s production have that our hard the how we hopefully is my to wait see Bhakti’s pandemic we is, this we'll and I plays to return drilling next activity is those people What out are begin My activity with difficult fourth to as mentioned that sense as looking business. we

to XXs. level to turn to back it's So prices went mid oil an then predict very and unprecedented negative difficult obviously the

as good we'll mine. seems of futures oil at expectation there the your in is be you to price the look If that as but see guess improvement

Ed Woo

discussions some of there are got shut-ins. maybe people will heard XX of any even high that? West Texas reversing There XX seen that you out start that if the to any Have or

Ian Dickinson

steps and have shut one worked. have wells effort railroad a heard that were what to to there is we Well, some to in – that in an dictate the from proactive avoid seems some commission

from think we those radius I of of in benefiting outside were shut-ins that our are some the fact Texas. of service

same Some have don’t really to smaller the way. the folks of the option shut-in in

will the to customers and been produce, increase mean is some To returned expectations that so to and are this we least hopeful environment it’s is early it’s be as and activity. a challenging back prepared levels important. to right very that continue what So, from for oil at at they progresses flows to normal from an cash still too in are but now, we are What of extent, hearing driving the stage summer talk. I we production that that some more producing hearing we

Ed Woo

of either last is you of on bankrupt was that withdrawals then Great. people or your out you couple significant smaller my competitors were industry And landscape seen struggling, going quitting question competitive a yet mentioned for that the just there competitors? have this

Ian Dickinson

get in available prepared us. of We or are want been I remarks, any to we mentioned that certain into the are who seeing have lines from stepping opening some competitors not historically I up basins away specifics, have opportunities don’t in that. to certain either as service but

for we just we to for shift controlling really cost drive And I control. very dividends think acquisition benefit aggressive share I yes, opportunity customer the So, will in think long to being run. I the mentioned no is between competitive will the this impacts. kind side, so are not those pay is have things be this reaching And and it things the for I for business. focused on here. is downturn landscape year there think This way the long-term some on of going take But and as that business to far though there additional the that is that to us going market

Ed Woo

Well, question my Great. of luck. thanks and answering for best

Ian Dickinson

Ed. Thanks.

Operator

And we Global ahead. Partners. Pavani Alliance have another Instructions] Bhakti [Operator with question go from do Please

Bhakti Pavani

Thank you, guys.

Sorry, I have off. I couple more dropped guess questions. I

Ian Dickinson

Sure.

Bhakti Pavani

situation, current a small the PPP program about being Fed wondering the you Given the announced thought just loan utilizing that and benefit? has business am I have

Ian Dickinson

will Maybe answer Yes. I that Margie let question.

Margie Hargrave

Sure.

did and is on receive April we amount So, – apply and approximately for the we we did PPP which $X.X actually the million. loan for applied X

We do. on depends have received allowed is it should the we rents we allowed remaining to that we far and on weeks any as it may as for feels to April to we are are for the bank for X it payroll, now it’s etcetera. that that sense be XX it we extent used of there will pay back, and utilizing And what what utilize sort the

advantage So, took of we that. definitely

Bhakti Pavani

because kind reductions kind but have we are of cost, the you Perfect. remarks, guess the which to you missed did and am have some that guess any your have and would of I from great, flow will say which I million some currently, work normal? cost the they markets I when reallocating if save think impact done been were $X there I but that I to think of back fleet. just And apologize That’s help wondering business the primarily do standpoint great. due you comes production acquisition really do savings you of they earlier

Ian Dickinson

in cash market very We on eliminate Bhakti. taking a that that the we effort to thoughtful mitigate I ensuring we or close kept in are recovers. a we costs to are eye extensive mean, respond front, the in but cuts to are burn, when position also very

heating clear it both place Oklahoma respond our to a market million so prepared the significant on X we of frac mentioned in number just recovers. to have remotely as annualized in our when still in services reductions at to as ability I be basis have able and facility. accomplish we the shutdown in an I think And Colorado been delivered cost The remarks, past to leaving

will heating able place. to the we next that that so still have be believe that, And locations Besides we in other left do season. in we the

the will recovers. be We but ready down have skinnied operations to downturn, respond when during this we market

Bhakti Pavani

guys. helpful. you guys. you, Thank very to That’s Good luck

Ian Dickinson

Thanks, Bhakti.

Operator

questions [Operator Instructions] And there at appear to be this time. no further

Ian Dickinson

attention as we second safe. look Have on the be the forward quarter. appreciate today. always, take Well, again and call to We nice and time and your following talking our care close afternoon of a

Jay Pfeiffer

Thank you.

Margie Hargrave

you. Thank

Operator

Ladies conclude participation. and gentleman, does We this for you your thank today’s teleconference.

your You a at have disconnect this day. time great lines may and

Enservco (ENSV) 15 May 202020 Q1 Earnings call transcript