ENSV - Earnings call transcript Q4 2020

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Operator

Good afternoon, ladies and gentlemen, and welcome to the Enservco 2020 Year-end Earnings Call. At this time, all participants have been placed on a listen-only mode.

We will open the floor for your questions and comments after the presentation. It is now my pleasure to turn the floor over to your host, Jay Pfeiffer, Investor Relations. Sir, the floor is yours.

Jay Pfeiffer

Enservco's quarter to conference full welcome call. and XXXX and fourth year Hello, of are company Chairman; on the Presenting behalf today Hargrave, and and President Rich CFO. Marjorie Executive Murphy,

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

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

Rich Murphy

the reflected and was space. that our call. customer the joining prices services tough thanks hand, and our that Thanks, quite results. by secret for everyone, in On And certainly players for was all a on made depressed year-over-year demand for reduced Jay. one financial in going a Welcome, XXXX oilfield it's pandemic no brought commodity year Enservco.

our was XXXX and the accomplish us remarkable. we've positive those developments, am overcome balance the strongest On is resilient enjoyed during in with in a our time. because company position, XX with at literally of came today what perspective had want at to a and of this unprecedented of to levels our let least hand, than together are nothing be that associated Where first over months part our team challenges, and have of achievements the a long to proud transformed from to I the such we have share able XXXX all more past off other the short organization of Enservco's quarter to and employees organization. and group be be sheet I

COVID-XX the some And serious structure. commodity undercapitalized. You'll recall prices low XXXX a had above and unsustainable were we and challenges load. the had entered that an cost with over burdensome we debt emerging pandemic. We We

plan earlier X-point the year, around raising debt So we in based and reductions capital. a cost restructuring, developed

clear the always on cornerstone fronts. all a to a we wasn't I'm our we've to effort. it that say had way, X of of Debt was and along hurdles easy, pleased While lot been successful restructuring

reduction XXXX of the the of As effort point. XXXX, $XX million two-thirds total range at represent will be was several expect second that debt of to components. highest what August quarter reduction since of the in nearly included total our debt we This

a wrote the and million way, million us revolver the exchange On by First, recently both And term X-year new October term loan, $XX million a extension. revolver. with our In ever. million is East bank, $XX our West with more shares adjusted than reversible one shares the aligned basis, this stock off write-off, East loan at term $X now a to XX, for $XX a our bank loan of Bank their leaving we shareholders, share. and to negotiated West XXXX. closely us are $X.XX interests on XXX,XXX warrant common and and million of issued purchase another more of largest we Bank X term per

component firm, total subordinated a $X took may Into will by industry more shareholder, with River another term debt debt I'm second operate public very loan accrued million about in and Enservco a debt Partners. restructuring interest I'll my minute. Cross apply down Enservco's million, of of another and held that just down of for River separate another paid to of our The be a Cross Enservco's given as investment. tell our transactions conversion proceeds a equity and involved year, in finally, our breakeven continues you can our in a and largest debt to and I this Then SBA us and rebounds. this us position that we recover talk take PPP million. happy the continues down that and February $XX two profitably $X our offering to receive puts we $X.X for which And economy lowered loan million with

$X.X The an balance third transaction potential as the for the used some said, which totaled $X market million, and us fourth the a ramp-up M&A $XX.X equity was offering, went way to XXXX, our activity. towards down I with million to $X.X we which, breathing season. element proceeds long of heating balanced additional reserve gross we our working raising pay up giving loan for quarter, raised million haven't in million the of sheet capital In of approximately room quarter These of S-X shoring time. raised term our plan we effort further of a our was and gross capital. additional raises, at first enjoyed support In an

further our rising now call over industry activity taking prices, advantage excited renewed transformation I'll that, So the of turn to turn results. Marjorie our attention completed, and economy. and With recap with a rebounding the of oil sheet our operations balance to financial to strengthening our we're to

Marjorie Hargrave

you, Thank Rich.

as want working fellow We East Before now to the for us a and as I numbers, Bank the partnership a leader to again value throughout our refinancing I express get West into with shareholders. appreciation process. their

impact capital throughout as our to well due the legacy and customers also remained won to last the provided of down as offerings. We utilization. Enservco fresh difficult who equity and year investors new by our through the board our traditional come confidence on pursuing appreciate for $X.X our The loyal of of have full and revenue year, instrumental commodity in the belies a investors services who offerings same that QX prices filed increased to the refinancing numbers. various and The the reported Enservco York revenue American market in XXXX. In we've the resulted was been XX-K augment of listing, now And language non-oilfield quarter statements in removal lower we not Exchange the streams we but these and Form of our $X.X on it won business in from Stock New concern our in retention the today. only million we revenue COVID-XX million maximize industry. new year also revenue in to on QX share that some fact QX, fleet lower financial

we're to about $X.X declined segment $X.X For non-oilfield get Production we're services detailed too QX providing. competitive revenue Services million. reasons, going from the not to million

same our in a the was $XXX,XXX ago, our loss program. However, segment of of dramatic compared $X.X Again, the year $XXX,XXX QX of of our to fairly profit of to segment in revenue revenue the versus illustrates even reported initiatives. last cost from this $XX,XXX $XXX,XXX a profit importance cost-cutting $X Completion quarter of segment down impact a million a though a due Similarly, ago, year production reduction we million year. services segment $XXX,XXX of a Services generated loss

from represented per corporate from activity, lower $X.X quarter, $X.XX net million in of and $X.X $X.X same loss net down of share compared from last quarter in $X.X cost expenses lower $X.XX consolidation side, Approximately to the reductions quarter year. a in reduced to the a primarily On loss and loss the $XXX,XXX quarter was the million $X Total $XXX,XXX impairment equipment the Primarily or a SG&A $X.X the negative $X.X year QX million depreciation staffing of amortization. the fourth a the in XX% EBITDA Adjusted noncash we share compared $XX.X year. million declined net million, quarter. in same reduced savings per corporate last and with locations derived charge. million fourth ago was negative or million physical year-over-year quarter million operating fourth reflecting to due levels. expenses fourth to in

Turning million versus Total $XX.X XXXX, full revenue million results. $XX year December ended to for the year. was our XX, the prior full in year

profit impact expense reflecting $X million decreased for volumes operating a attributable XXXX. Production million in comments. of revenue $XX.X improved normal XXXX, services to million million year a segment million In the loss some generated to XXXX compared lower revenue quarter million and $XXX,XXX a it service loss loss million per than million completion $XX.X prices same reduction cost lower a SG&A year-over-year. the $X.X addition a of Completion pandemic. and of diluted XXXX. played decline. million was in $X.X prior to $X.X compared the to diluted $X.XX of large second Adjusted year. to a and negative commodity the The hand part of XXXX, work higher-margin in million the million EBITDA from $XXX,XXX for of due in sharp $XX.X due prices reduced XXXX. cost-cutting I'll resulting quarters to or of year $X.X impact, share for temperatures and back XXXX a during Depreciation activity to a for Rich $X.X COVID third program. a million reflected and restructuring million expenses million closing and commodity now per segment segment $X versus $X.X decline for quarter company's from were the year-over-year of in the to to lower share in a at loss in debt cuts. in our due assets largely were drilling generated the $X.X was to $XX.X to XXXX year-over-year, or to heating came disposal versus which frac the fourth amortization versus $X.XX million services profit in water on segment $X.X expenses was in first in gain Net from warmer compared million and segment $X.X from XXXX $X.X positive losses net the in the Total

Rich Murphy

Thanks, Marjorie.

and sheet working significantly balance going our So in our prospects bright. think With excited closing, a we we're are capital, ample prospects about deleveraged forward.

geographic We have and a strong great customers broad a a fleet, footprint, large team.

to capacity can operator, again utilization to we prior getting the on continues and back continued focus economy you all Enservco, questions. open Thank please enjoyed your up for the downturn. the support to we As rebound, for

Operator

Jeffrey Alliance And is Jeffrey your Instructions] line question is Global Partners. from from coming your [Operator Campbell live. first

Jeffrey Campbell

just this new I great congratulations the work you in recent Rich, wondered performed in understand capabilities? business. whether if equipment are all these you can get financial current any tasks could on or if investment I requires non-oilfield first of this don't I of on to in any personnel all, broadly kind -- be months. new comment But or the want that with understand

Rich Murphy

equipment. is of lost revenues to to -- of recession -- answer is new the no real a stuff. new. And and actually, refocus that business drop we we've The there And something lot do -- it, come from has that This issue the there is prior energy kind low-hanging X% or well past. has we've of what off oil it. fruit on out one-off found allowed is is dust isn't to not had than The us in what to less we've non-oilfield energy

it. industry the our the it So at stuff, and to can into do our stuff than talk trust we we without customers specific pretty cheaper what getting do they're know rate way that a can that and doing excited, currently we're

as we key value So can a point. that's -- add

Jeffrey Campbell

And be just when you that this to follow think on do share you'll to more up, effort? able

Rich Murphy

that guys that in or we be want or to we to of we're that -- going It's we have revenue. get outline That got when going But -- real that's would we over obviously, did happens. quarters we X to, before. X a -- comfortable, detail. just saying strategy It's for it's X something is to would we've that not XX% We have probably solid and you to a go.

Jeffrey Campbell

Okay. That's hope all. and I works. look that, it We'll forward to

world the You've in have in for politicians. sell-side the X people analysts talked past, this previous the are

I've more So X for. I got got question

serve franchise. You've talked oil and grow to wanting about those

questions. some here So are

does additional First, of about fleet? units? is more utilization increasing growth existing the Or it require this

Rich Murphy

by. need don't the we Increased for I space. utilization for additional we probably non-oilfield we then units, And go and the energy out could it's get want If units. them. space, the mean, the the additional don't them. I to It's little -- It's business isn't it's with world come not hard units. very in operators good the metal bring way secret that's in who

we us geographic beauty broad the footprint. have of a So is,

get is X goes advantage he's comes do small true X more a mom-and-pop oilers. able with better for And us. how hot to work So a with is us. that he to probably -- for hours. work to if And He or strategic

And that hot grow the -- so can business. these once with all our oilers and now, as equipment we're side. we can But at and recruit we're finding get we our retain probably look of We equipment. and

know, you to in As revenue. used million $XX we do

So you it year, that to saw our number. close fourth wasn't

it there's room number, going focused stuff our that never So was forward. as to for that It company. plenty us will utilization. of put -- And to be

about. something we're that So excited that's

Jeffrey Campbell

is recovery? see share a more the that's Enservco do No, share maintaining more that about Okay. Or additional market taking expansion, services the an helpful. more And you a static and and environment. thinking well it expanding about

Rich Murphy

taking not just the to the our has companies services. all the downturn It's a think because a it's Oilfield improvement. board, We've it. taken I across pricing pricing E&P our taken share. services hit during demanded

Our clients reversing now are that. And player. leader because a the we price we're biggest are

So push prices can starting those we because equipment to and we're that. operators, and do more we have up,

improvement. equation, of if flow to lead margin the will which part so improvement, So that's cash

at I think $XX As said rather in do I'd million margin I the care X% a don't million margin. -- revenue to a team, at and $XX I XX% if

lever. focused So we get right utilization And on pricing, push is we'll we're flow. that totally the right, the when cash

Jeffrey Campbell

attract was labor I ask what is business anything and to you said Okay. have just you to -- think like missing? And versus sounds just ago, it from what of perhaps minute but advantages competitors, you that biggest going it your the else size I'm you the a sounds like the your advantage. best the ability Was

Rich Murphy

guarantee like operator this, -- to can below business a X focus you you can't to have have alive. on as -- to downturn the in X companies I lot just mean, X big are safety, particularly the guys to cost focus stay small you a -- Safety. the I a X a of pricing to

be so And give and Give leg been able it have safety. sheet given balance we've of let becomes smaller to call us a focus footprint. even think a little business, a tertiary. size -- a I a I so safety on and we'll we -- But the our of up on -- us And operators. our geographic safety now secondary our lot wouldn't and

Jeffrey Campbell

And here Okay. last to my actually is one gears. shift

was this oil the heating I changes I material that So frac with water of the wondering hot focus franchise, wonder side in on growing the any if business?

Rich Murphy

cherry No, more say, of let's top, completion of a margin where year we a that run could a us. tough more businesses revenue X months season, off that have that run I of that oil at how prefer that get we we the the becomes the anything. a The operates cold get months business, way years margin business I good It's heating see And than that the is Colorado, longer -- generator it could think weather. if very utilization nice off XX that can big just nice the can a talks a a if of businesses -- than very seasonality for rate, And we then get year just Dakota be good North -- a -- -- of that's I too. it, it. are more about on but than, it's obviously, it's running

to that you're picks going So as really weight, is see -- start pull more its that up, but activity business maintenance. to

to I'm better That's kind just night heating. referring sleep in if change -- at business, will. fundamental a it's you a what of versus So it's

Operator

next [Operator Instructions] line live. from question from Woo Ascendiant Capital. coming Ed Ed your Your is is

Ed Woo

had Congratulations year. on all you the done last work that

are hearing the cautious? activity? in you from price very people they Or sustainable? oil they think it customers? more of With drilling rebounding, a you as see still interest are what Do Are getting your that lot

Rich Murphy

the Good our Is they're we actually time, whatever they're a question -- first What exactly getting guys. X% it. today, for when they're we're or asking price down business from question. call the getting It's priced right. you're oils and development a they're for had tough seeing today getting

a sign. that's really So encouraging

gone caution guys, I to XXXXs, since but the XX. understand it price the the that we're -- is see energy that's from it's recession and do they from encouraging to Now buy we going probably them, with to worst E&P try partners Oil has the best we them. XX can

it. long for to willing little as afford do we job high-quality and safety the they're a service, can right, they on-time more -- pay So provide as real good and

Ed Woo

pricing the to think take it's before Do that long you going do time? Or a a return back you way was the anticipate it downturn? to

Rich Murphy

It won't into more are basin, I and depends basins others. specific competitive on basin the little certain get basin, a but than by

more I just, baseball -- the in the think we're inning. on to there's run say, room probably much third pricing. Not in I would

Our price. now We're we're guiding to starting ask for and pricing, it. -- so that just

be -- -- But understand fans customers. obviously, we're they to a want we too. of it's So our to a on have huge, make margin don't we love them. -- our the business, We huge

So economy opinion, price I customers. sweet oil from a spot, $XX in is and my for this would the both our great say

Ed Woo

people, this is took your Obviously, get And of capitalized landscape. like a said, a out on lot under the then final my customers. you of recession lot mom-and-pop Great. competitive smaller question lot to probably of a

back going Will do out there normal, resumes? competitors activity everybody once look back does just Or come there? is to how come the less like? things lot to be As competitive a landscape think you

Rich Murphy

should the in services to we're goes price. we bigger on if provide, Like first I leaders. price think it question your we so player be a back again, --

dollars done. you're if a doesn't getting not service, hour for if your $XXX matter still getting is barrel, it you're you're X price, an If oil

start labor, rates be you lot that a to -- think all there. can quite the a mitigating got to you smaller frankly, in the out they the give the for It factor they of at our come us the And won't them livelihood. steel back. good rebound and You good -- steel. will There's this to won't be get be our for hours? seeing especially I It's So start all going Can of get day. hourly people. guys, in

do So that. to able we're

Operator

[Operator Instructions] questions We have further queue. no in

Rich Murphy

to and the quarter. want get all call joining to weeks team. want to work are. to first on you for guys and at corporate everyone thank I update thank Marjorie, their us I hard wait Well, the I can't Enservco the everyone everyone we today. on where couple on us for of a our to in And

again, rest day. enjoy thanks of So the and the

Marjorie Hargrave

Thank you.

Operator

Thank does you, gentlemen. ladies This call. conference and today's conclude

You this your at day. for phone have Thank you wonderful a may lines disconnect your participation. and time,

Enservco (ENSV) 23 Mar 212020 Q4 Earnings call transcript