Earnings call transcript Q2 2023

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Operator

Greetings. Welcome to Enservco's Second 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] Please note this conference is being recorded.

the to turn Pfeiffer, host, now Relations. Investor will conference your over Jay I

begin. may You

Jay Pfeiffer

Chairman; welcome and Presenting company Murphy, Financial of call. XXXX on the Patterson, Executive Officer. Rich are Hello, today Enservco's behalf to second Mark Chief and quarter conference

reminder, today's call include As uncertainties subject Company's risks date from that and filings. matters is forward-looking as actual statements. and well in projections disclosed during as management's and certain on are based the estimates, discussed that in subject its company's assumptions statements most risks SEC this to a recent XX-K results may are other to as of those forward-looking business could cause differ materially to anticipated

because ability events. that available limited information. Enservco prohibits point after – disclosure out respond of to by also be which selective assumes this enservco.com material call today's obligation become of subsequent SEC update no call. I'll call management's to the will at questions forward-looking to a of non-public during statements FD, webcast is replay website Reg untrue A that

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

Rich, turn over the And with that, I'll ahead. to please Rich call Murphy. go

Rich Murphy

XXth, Thanks, call. the for second our to Yesterday, We're good and year-over-year quarter revenue. Jay, earnings to our and period of pleased ninth Form XX-Q consecutive quarter June morning, second we ended results quarter XXXX. and report welcome increased six-month filed announced our financial and

base a among safe has our we basins goes reliable credit whose high our across service of in the engendered to which usual, degree As all operate. loyalty and blue-chip customer teams delivery field

efficiently driving nine been reduced our year-over-year through higher have more operating efforts our consecutive In also quarters, to that costs profitability. for operate to improve addition instrumental in teams revenue

west further into in our the colder benefited that particularly the also We spring. from extended weather, heating season

to due off-season of heating keep are warmer QX sideline our traditionally and quarters As our equipment QX you on time. temperatures know, much slower the that the

a a weather addition weather we more was the of severe welcome and as the many weather year. beginning hope So this cooler prognosticators are winter predicting trend

in revenue of in year. Our profitability first quarters a the annual our business the is and majority and for given responsible heating fourth

we're customer for to accelerate coming services So will heating cautiously that optimistic demand continue in months.

quarter Back our to second results.

Our profit a were and just adjusted improvement up income into both Mark get also metrics will showed continued EBITDA net results year-over-year. the details as in moment.

further Our key compared shareholder us as focus enhance and a balance months plans the in reduction second we years quarter through and recent to value, for strengthened in was major XXXX year-end debt sheet, balance. a of long-term in our a element the XX% achieved to six

to I'm thoughts close I our have strategy. So some going Mark? numbers through go-forward of with Mark some the will before take with that, you on

Mark Patterson

revenue our improved was quarter $X.X Rich. EBITDA quarter million decision to QX was to services. last by production of you, X% a significant but $X.X more our strength year. Dakota $XXX,XXX our $X.X compared our substantially million revenue loss production second the primarily completion within operations, of was to loss decline by a Beginning operations. a profitable to in Thank decline of gains services million North same Texas services from in adjusted results, more in to that decline than million The XXX% with exit $X offset the increase QX a by revenue. year-over-year in increased offset X% related This on

business including basic impact quarter to loss the the share, million SG&A or revenue improved the diluted of to quarter a across combination Our quarter. decrease and notably attributable loss of $X.XX and was in million, loss most higher our of versus by XX% same the reduced net $X.X diluted The or $X.X in expense cost the last in year. a second in million, per of share, reductions net and net $X.XX per line bottom basic a $X.X

That SG&A million of Our million quarter. quarter compares to an average to run be in roughly range last $X.X reduction. $X.X of rate going will the per per XX% $XXX,XXX year, forward a

million Turning evidence to breakeven from offset the Adjusted pretty services, in $XX.X EBITDA $XX months six reflected that the a through six the production year. services. million to decline $X.X year. by our in million year-over-year of and well by positive X% very increased cost executing month year-over-year the months $X.X from solid XX% plan. results. we're growth in Revenue period reduction million increase prior on the in X% completion same six a improved nearly That's significant to negative last through The partially swing

loss in the same Net gain period in through months. of the million, million Also net or which and debt compared $X.X comparison. levels $X.XX diluted a basic the in was share, basic both booked significant skews or per second to six on $XXX,XXX, per six achieved ago through company reductions we share, quarter, the months period, year. operating cost and extinguishment, $X.XX year-over-year non-recurring loss corporate diluted and $X.X year Remember, the at a the last

relations, reduction our to to last the the projected revenue headcount personnel reducing company This and in Further real utilities, rates. as at effort issue the you level we productive during rents, legal, on included of reductions, quarter, align we're rent equipment investor our very cost repairs, rightsizing and our estate, including everything field costs, growth focused within business teams through lowering reducing intently and less else. costs season, cost told accounting has insurance public corporate with

the think savings restructuring and programs. annual limits, higher we better should completed with Regarding that insurance broader significant recently in coverages some insurance, result latter we've

back over Rich. that, to I'll the call with hand So

Rich Murphy

topics Executive to Chairman Thanks Mark. a I'll close comments as important very largest on as two with few me, both and Enservco's that shareholder. are

an improved emphasis business. our to the help with our aspect streams on is second augment the can first our reduce ongoing seasonal new services And balance is with businesses that year-round The of sheet. revenue our legacy dramatically us effort

balance we our QX, $X.X another long to $X.X debt said compared balance have in long-term few our million million earnings bringing XXXX. release, $XX our long-term over we debt, progress eliminated sheet compared years. and past in we made the delevering down tremendous As our our – period at to to in million $X.X peak total XXXX approximately at million year-end debt In

of rates, by sales, this combination for One, We the with But rechannelled more does importantly, debt equipment to translates surplus equity of through us. further have in funded River value. and effort savings. or refinance to lenders, The in convertible debt to a us more massive flow which in Partners into debt enhance Cross of restructuring reduction enable sale equity that cost equipment. things concessions lead it should millions our long-term loan will non-revenue-generating areas enormous will that service, reduction conversion be to it shareholder dollars couple an cash can a of favorable at held debt

number And revenue me the to streams existing that brings new two, ones. topic expanding and creating

scale organic Our plans expansion, service through share and the to wallet new potential activity. well acquisition That is are line customer growth. as as business M&A expansion

We have all underway initiatives fronts. on

letter in our depth position in if say provide able that reasons, we're we a of place our Although basin. add that non-binding the much management intent along consummated key transaction further not until we're one process, can in on the and would detail strengthen to to I for have competitive team

to any joining the you Operator? have. for again call take today. you be thank I'll that, questions with might So happy

Operator

At be Jeff, is And is from [Operator a the this live. line conducting question-and-answer Alliance Grampp first Partners. time today from we will your session. question Jeff Instructions] coming Global

Jeff Grampp

guys. morning Good

Rich Murphy

Jeff. morning, Good Hi.

Jeff Grampp

sheet maybe on start to the balance on M&A the related wanted Rich, a topic the last of side things. and point being point

have Or the that to guess, to point. M&A M&A reducing It crystal like wanted you to And So you're M&A, do view but as guys? Does I made the just that guys of delevered to the you you expand progress be impediment sufficiently that tremendous you longer obviously on on go no the sounds an you after lower? sheet balance feel would clear opportunities interest breadth the debt. be like opportunities? debt

Rich Murphy

we're from the is us. want don't expense the business want of $XX we Jeff. question, debt cyclical stuck sheet, if both proud I'm it's With a where debt having I'm be remarks, out any I and as to – million able somewhat little and Good we – doesn't out of for with on any debt of would I probably replace haul we have, be today, long to adverse seasonal getting debt debt at of an bit involved And support balance were seasonality in got we debt. at been because we currently those because would of we ideally, looking and in with to as really though steady-state of leverage. to – we'll zero coming this piece, restructuring with piece. said M&A, take banks seasonality the grow have that this the for we bode our kind work a The to yes, have. thankful currently and But of well a that we're everyone

talking no don't and buying about if your and debts. I know of question, So larger not I one refinancing as shareholder, shares that answers back debt ideally but a day, dream

Jeff Grampp

sense shift of guess, are? results? Can equipment that. when how the due like trying pro much deployed equipment And year-over-year. moving of give us you was a that of it was was the some like That's a maybe a helpful. of to they press on don't sounded on downtime for was down some in areas I forma understood. QX that appreciate presumably like ultimately, just release, the and you currently then equipment just bit there. Yes, guys business, all based I know, headwind evaluating production And services some of little It QX that the to the assess I

Rich Murphy

It's kind that the in said misnomer because the I've of of at numbers past. Texas a business – is bit little terms looking of in booming. it's our a

work. we a took I out enough with over lot a gets If because couldn't type tough to Texas, in a lot customer to business. do the is it reservation shut a revenue big bids, couldn't need know quarter up you obviously basis. winning a on netted just how – XX% it's we safety, is – of have there But to Where Indian just North to you you I to we regard place have just but operations through out – – don't Dakota North that moved different of go of a have Texas, our up world it's equipment Dakota

turn not business. prices And first a to dark. go great the do when just it's So oil down, that's usually place to place

this I decision particularly a hot Texas. So are say, better to utilized the made in equipment, hey, strategic oilers

a we versus North Dakota. also in did hauling the metrics. not anymore. have and actually revenue work, construction it last quarter the it's the And as that last in Dakota in we well some end certain zero – then – of So profit unprofitable to QX an that North If a we're last number, doesn't profit meet dirt second This in comparing profit – year, we're bigger I Colorado basically, in just QX revenue that even do is in though put anniversary number, gross percent basin. to going work last because

the thing shutting really So offset on those that's positive down going two in Texas.

Jeff Grampp

And last really bigger just helpful. question. tandem with here kind down for speaking. it. then picture Got trended of have a commodity Rig me, prices in one broadly counts That's

but guys to thinking in. to really be guys and share presumably, results for of bit when are work, maybe there's a restoring half little market or back also in trying going at markets headwind margins you half made we're XXXX, I some a the capturing both strong think you also just back there, have looking results know So about

kind in wondering, field? with and takes of how big to levels just think you activity the the picture, relative broader you are about achieving what do So guys guys industry gives

Rich Murphy

We I that, it's consolidated Texas for talked is we Colorado, And us. so right? about Colorado when talked – three a so fascinating and we PA now. mean about basins, because about basin talked

in pricing I – knocking basin have but strong you really left. very say I'm on that wood That basin, versus would as right last I five year. four So is it, or big now players

tend very we're matter and they fact the the – is fact drop the as by So the not smaller And as of players, the Chevrons OXY, that rigs encouraged to the the of guys. big world that. quickly Civitas's the to

hot those and that, robust. through market they oiling continues have demand plans and the to they're heating They going don't for to – from determined. we're Texas be and they're PA usually strong So, with be seeing players. season The very start PA until pricing market September. That's the five-year

got we we're there. some things So we'll wait, but optimistic going about very on

Jeff Grampp

guys. Thanks the for great. Okay, time

Operator

there back And closing Instructions] [Operator Rich Jeff. Murphy now were you, no remarks. like Thank other hand to time. call Okay. this for would I to questions the at

Rich Murphy

who on the to future this this end Paul. It's couldn't last say deleveraging whole employees, you it We're this I just throughout the ride just has everyone who process thank effort. to the in for tail of Thanks, now. make about long. and I And at to want excited current be our grinded years of have this couple work. been more been

to So period who've shareholders, and thank I'm to this of stuck brighter employees me our time, ahead. a our forward you and times with looking during

QX. to again thanks Take forward catching after So care. and with look up everyone

Operator

Thank conference. does today's you. conclude This

disconnect time. Thank your lines may You participation. you this your at for

Enservco (ENSV) 15 Aug 232023 Q2 Earnings call transcript