ENSV - Earnings call transcript Q1 2024

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Operator

Greetings. Welcome to the Enservco 2024 First Quarter Earnings Conference Call. [Operator Instructions] Please note, this conference is being recorded. And I will now turn the conference over to your host, Wes Harris, Investor Relations for Enservco. Wes, you may begin.

Unknown Executive

Well, good morning, and thank you, operator. Enservco's quarter to conference everyone welcome XXXX earnings first call. We today behalf Patterson, Murphy, Officer. of on are our the Financial Mark Presenting and company Rich Chairman; our Chief Executive

forward-looking during projections that could filings that most during conference estimates, its subject financial risks Reconciliations assumptions because events. I'll recent Regulation SEC material certain other financial includes which respond ability management's is no webcast earnings most the the webcast contained the A measure as non-GAAP our to call materially risks as and well forward-looking also call comparable limited differ discussed and on call untrue nonpublic company's date to point and in in also the of available accessing matters today's this directly under disclosure XX-K by these release. to non-GAAP subject reminder, are SEC. are based of forward-looking as a update for the subsequent that statements assumes be in Instructions actual may is business As GAAP out to available company's earnings cause information. This prohibits selective from call. with include today's are The statements will Enservco release. obligation after anticipated FD, are references call of of questions the uncertainties replay to measures. to measures to that of become results management's in certain those statements. this to disclosed

call over that, to the Rich So with Rich? I'll turn Murphy.

Richard Murphy

adjusted that benefiting last frac comprised of our growth EBITDA. that net as year's call. We appreciate in you heating Services quarter first with year We year-over-year business. profit on metrics, us Completion water began primarily quarter of revenues, well key morning, as and this including financial our today's solid in substantial first Significantly earnings number segment increase Good and segment operating for Wes. everyone. Thanks, a XXXX with outperformed XXX% is profit results joining

business on with is is this for during and As weather, focused those highly a fourth potential profits winter better. any the by first colder seasonal the dictated reminder, longer quarters. Financial periods success the

were take the such, -- year's colder first for winter average As versus quarter to of on advantage pleased weather last the first quarter we the same for year. this

from multifaceted, first shutting benefited been our the and XXXX These that assets down in to profit concerted businesses. productive to operations potential more reallocating over have couple increased The revenue of past of XXXX increased efficiency including across growth. our Dakota quarter efforts operating drive years and areas the also efforts North for offered

XX% efforts, the of rightsize In on margin. in a gross we combined business. and profit several efforts addition increase our contributed executed take to to The quarterly opportunities our these cost of success to out

In benefited addition, lower to XX% legal decrease first costs. the expense, year-over-year due quarter from primarily in G&A

We the continue market to on we pricing basins ways focus margins we gaining consistent where operate. as profitability improve and environment and on the share deliver focus improving in to

business in end the services first of our not acquisition announcement While intention highlight another improved overshadow the Trucking that of key the complete by quarter, heating of next our first frac this for seasonal Buckshot quarter, benefited being water the month. to conditions does the of

flow a Buckshot in enabled has share consistent deleveraging discussed our We basins and the which generator. on operate we of view more phase in transitioning us step balance growth on focus first turnaround. a market last as the and margins the the call, company's begin the to in company great we As sheet our cash towards improving

year-round a prove to for new not seasonal helps to with transition a capital. generates logistics business from subject significant commodity existing substantial the business primarily would prospects. Buckshot note As will strong transformational overhead important, to it I will we risk growth flow away as us require cash business our adding that believe transition

to going you Mark? of a I'm take that, with provide have closing through numbers Mark So few some statements. before the I quarterly

Mark Patterson

Rich. Thanks,

Our surge blasts within in heating Services. season saw cold Pennsylvania These regions. our and in impacted Colorado January XXXX primarily days first quarter cold Completion both

in As water operations. our that and and heating seasonal Rich activity mostly from was business growth pricing Pennsylvania focused driven enjoyed mentioned, frac solid XXXX levels increased by Colorado adjustments our

higher we On view oiling driven the some of for a million, lower a and compared was acidizing XXXX. On our and $X.X acidizing $X.X saw a segment of quarter mostly at Services demand in was that the basis, weakness segment million ago. Production operations side, of was by million decreased as than result to The revenue first our first year quarter hot $X.X demand XX% XXXX Production bit temporary revenue services. net that

First $X Services in quarter XXXX increased revenue Completion $X.X million to from XXXX. million

of in $X.X a continue versus $X.XX EBITDA the focused and a First loss last $X.X improvement in came million million million to compared first was reduce opportunities diluted XXX%. at quarter first business. execute on to same remain across in income million diluted evaluate per quarter the our quarter the Net XXXX, adjusted the year-over-year $X.XX rightsizing to costs share $X of share net quarter of or year. We or business per $X in and

to has million, annual will remind legal in as the to filed in indicated of dismissed discussed that compensation $X.X excludes was stock and some over like noncash the past no such our and the would years, class there Plaintiff's action be of appeals. lawsuit onetime expense. I goal previously seen run our further shareholders internal couple expenses and that SG&A past, Counsel closer getting we're decline of rate we've SG&A our significant we've As expenses an

year. that cost was significant over you past of the As defense the know,

additional reducing the sheet. financial remain reliance the business balance our we made to look clearly further Turning reducing improving visibility accretive acquisition opportunities growth. We levels. cash provide will company overall that In on profitable the Buckshot of and for on through material incremental seasonally progress right in opportunities XXXX, focused flow, sheet for position on balance we activities. The the enhance path our places including the increase focused year-round us and debt

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

Richard Murphy

strategic we Production frac The you, business, the our year-over-year, market based Thank strategic move efforts a year assets over further positive water with the demand and our heating services in to XXXX business, posted by customer segment. to position position that the supported our in first on are as our a we in placed us to financial our to of strong services. solid Further also the much material a Combined better season capitalize good rightsize and heating not a continue the outlook, meet side, into first view in on of Completion our financial team's allow feedback, we past further Services we XXXX, on enhance quarter. actions presented a We solid took points for quarter and business which to the the demand. We feel XXXX. impact our improvement of have in increased start position, a and enjoyed growth we our appreciate the us solid Services but I related Mark. efforts position only conditions in to we rationalize really

of the to weather recognize to the service from clearly portfolio continue overreliance business our the However, the potential In that cold that moving nonseasonal growth occur away on recognize conditions overall greater adding we and the year. current importance our importance business fourth a offer. during synergies not first we substantially do short, of of offerings our quarters and with

service to transformative being we strong acquisition As comments, our truly other complement as weather I a improvement business, of short, Buckshot will visibility, shareholders and In benefit with a shareholders. stakeholders. the dependent. added in mentioned the benefits announced not in for being and substantial Buckshot current of our previously my operational and its offerings which financial winter also beginning Buckshot Enservco provide provides

are the We optimize seasonal cash of by operations. multifaceted conclusion, transaction. We operations a plan our to strength evaluating flow of alternatives substantial to Supporting executing forward and debt. are transaction shareholder opportunities from year-round continued drive evolve executing reduced profitability long-term the our current away focused the further generation, model and build remain for and more our with evaluating efforts more additional we business value. In to business and a our business look our on targeting to to activity financing currently end close that June is

assets In forward to look operations addition, into team's the business. part the we and our completing of their Buckshot and quickly integrate acquisition

for will joining call we company us to continue build again the financial visibility shareholders. With of benefit and enhance Finally, evaluate further the on opportunities performance thanks that, and today. its to the for

We any questions. will be take Operator? happy now to

Operator

coming question from [Operator is Jeff from Instructions] Partners. Alliance Global The Grampp first

Jeffrey Grampp

couple for questions Services on Rich. A Production you, of

guys that? you levels still Is was of a you can steadier quarter kind QX curious but kind to know I revenue performance some year weaker. acidizing of future bit just kind that handicap up guys commented you was were little from this was Or though, how last pushing segment? of So a from back or Revenue where you of of kind a there. $X state million so sequentially, get that the where more

Richard Murphy

Yes.

we Southwest our think and starting in other cash the up in our some in the in nice I XX% weakness times, assets consistency the to basins and to there revenue of hot that in that is we and the in are think predominantly $X not the They slight efforts about rates January. hot are XX% oiling assets in the little Texas. work. it's the had business the have what general, business Pennsylvania, just acid down I will way and was a a I November oiling is Texas, be X.Xx It's Texas, generator started had a to say at and basically that on somewhat which more they to But in business in December, what consistently. downtick. And of flow hot rate. upside gain it [indiscernible]. trend to carried XX%, a at it's And in We're will is over are look pretty seasonal, the million is traction back then and would that's of as which Texas, oiling,

big have never to going fleet not going to So but huge is very as high we're a have margin. there, -- fleet

So number. is think, million revenue again, probably that's the -- business good $X I a

Jeffrey Grampp

Okay. that Great. was business? maybe some year-over-year, the the that guys Pennsylvania you a though bit guys you margin Rich? kind just margin Is some you even Or contribution And nice that revenue side, how had seeing of progression on down of mentioned, then are performance there. the of still margin

Richard Murphy

with share On about which It's just is -- primarily -- the the of kind much the with say position our Pennsylvania, Texas it's will we're on margin. XX% those -- mean, from Pennsylvania. our is not are continue price the And prices I'd have we because push mix. basins, XX% kick price a higher uptick very huge probably just market and probably in to the is that and we forward continue cost little high provide. going in production it's to strong to that's service to we base -- from I a going side, in -- we customers, not see

I there more think there. opportunity So is

Jeffrey Grampp

can on know you the connect acquisition the the months And color the to you guidance to you one playing close out? another side, see necessarily before and kind Great. of know X. you the just the kind month couple next of dots I in financing, or have any give, for Or kind you other? vote does of come I need of Okay. or mentioned next this how steps. Can you look as us

Richard Murphy

million need we -- to going Yes, as vote we're Buckshot owners -- are going transaction million that it's equity going it'll to shareholder approve noted, is be is $X and to $X.XX take million we a be a $X.XX cash. because then to

the soon happens, -- get early than for we to meeting our then we'll a we be may to insiders. largest with through, requires and as for other a the out, just wait aiming And voting through, of that be have the go at end vote obviously, that obviously but proxy July. of vote that shareholder, wouldn't just able it, and quorum, should I'll if so the for go And with be close. that's -- XX% clear, the deal We the to as sooner put shareholders vote fund June, as doesn't

vote. basically we the have So

this that going that We're will that in to going July. down The financing confident is early pretty difficult. we're be So close route. already thing not

Operator

remarks. this there at And other now Rich from time. the were to Instructions] closing [Operator will hand back for lines I no call the questions Murphy

Richard Murphy

where are everyone this million Well, we then. September in are a I to just want since in I to the patience, of the XXXX, and -- shareholders, a today. myself, our I $XX it's position but debt think seat all on behalf call a long -- shareholder to on get can't who's we better also company has really appreciate the in road of from since And been been I jumped of large

Buckshot looking So to and transforming forward then that space. a really being I'm an to energy business this logistics deal in closing dominant the company and player

your all of appreciate you updating on I patience and forward So Thanks look we move that the to as again. forward. progress

Operator

This does conclude conference. today's

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

Enservco (ENSV) 16 May 242024 Q1 Earnings call transcript