RPC (RES) 23 Jan 192018 Q4 Earnings call transcript

Company Profile

Participants

Richard Hubbell	President and CEO
James Landers	Vice President, Corporate Finance
Ben Palmer	CFO
Marc Bianchi	Cowen
Chase Mulvehill	Bank of America Merrill Lynch
James Wicklund	Credit Suisse
Mike Urban	Seaport Global Securities
Ken Sill	SunTrust Robinson Humphrey
John Daniel	Simmons
Stephen Gengaro	Stifel
Connor Lynagh	Morgan Stanley
George O’Leary	Tudor, Pickering, Holt & Company
Blake Gendron	Wolfe Research
Chuck Minervino	Susquehanna
Brad Handler	Jefferies

Call transcript

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Operator

Good morning, and thank you for joining us for RPC Inc.'s Fourth Quarter 2018 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; and Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Finance. At this time, all participants are in a listen-only mode.

Following the presentation, we will conduct a question-and-answer session. at for provided up to be questions. for will that you time queue Instructions to that advise is like would I everyone being this recorded. call conference disclaimer. Jim get us by the will started forward-looking reading

James Landers

Thank you, morning. and good

call today, to a order our few Before we that about begin I to not that talk to remind going we're are want company, things in you mention facts. our historical

unknown and forward-looking be risks. in you press statements the this referring found on outline of those on of to of operating refer two XX-K, conference today's made known like risks, be at that public number I'd will website and and to to and can In nature release non-GAAP could www.rpc.net. measures along which XXXX Some filings reflect RPC's earnings issued a be performance. other be with all we'll that call our release today, of our call,

EBITDA because various to measure EBITDA. We're is a with of use as also first regard required without our periods performance performance, operating our compare report under credit changes to revolving to RPC capital The financial compliance to in facility. structure. us allows consistently uses EBITDA it covenants over

fourth non-GAAP us per to set presenting compare RPC’s of enables financial and net second performance diluted operating year our quarter results the earnings full XXXX XXXX our consistently. is The reform. Management and of impact share reform tax income impact the XXXX that excluding measures, tax believes without to during the operating

share, the GAAP review if how reconciliations net calculated. in and financial you’re to they Please release issued income are these of website today nearest per these earnings interested press and non-GAAP measures. disclosures seeing contains Our our are financial diluted measures which

Rick received I now CEO, reason, our release our If copy. the at website visit please www.rpc.net you've President turn call and will for Hubbell. to a any over our for not press

Richard Hubbell

our in quarter our unexpected This operations with of curtailing you. thank completion fourth fourth and holiday our pumping line. press RPC’s decline customers’ for impacted decline This pressure oil XXXX. constraints Jim, earnings most prices, slowdowns activities the release drilling December. was The morning in pronounced budgetary XXXX service and in during we issued many of

financial Palmer I'll after detail, will have comments. now a closing Our more review our CFO results few in Ben which

Ben Palmer

Thank you, Rick.

million fourth caused to in $XXX.X decreased the the prior For quarter last to EBITDA to quarter to customers. compared the $XX.X many year. million the $XXX.X year. was due same the by quarter $XXX.X prior revenues budget in end to prior period decreased year profit for among for Operating Revenues period the depletion million activity million in to million year for levels compared same fourth the $XX.X lower compared compared $XX.X to million year. decreased the

revenues per the of $X.XX or maintenance earnings XXXX XX% the revenues, decreased pumping excluding during share year, RPC’s year. of earnings expenses repair within $X.XX per effective the same as due the or last XX.X% prior compared diluted tax share in diluted impact XX% to Our quarter was during Cost rate fourth of reform. in was XXXX. revenues to RPC’s compared were compared in and of to expenses. million, lower lower of as supplies period XX.X% Cost line million $XXX.X and well to materials $XXX.X service revenues pressure tax

expenses the in pressure inefficiencies and of by administrative caused were As labor million $XX fourth pumping. a quarter to compared million last increased to general cost activity percentage of Selling, revenues, due year. within lower $XX revenues levels

short-term. year in X.X% of these the As due a these lower and percentage from costs the expenses increased prior revenues XX.X% to nature of the relatively to revenues, fixed during

increase the percentage and and general during compared in ‘XX, fourth X.X% amortization expense $XX.X to full year. XXXX. administrative For the million prior of an expenses were a was in selling, Depreciation XX% million $XX XX.X% as revenues compared of quarter the year of XXXX to

prior the operating lower Services same prior for segment compared quarter million, year. to to lines. the activity in were quarter Technical the within in $XX due lower revenues pumping These profit XX.X% and decreases pricing compared our decreased and the to year pressure decreased million Our to $XX.X service

from Our Support primarily and same On in for increased decreased in of supplies, million revenues X.X%, levels Services lower to revenues revenues XX.X% lower improved Cost fourth Revenues including the $XX.X quarter maintenance. and activity operating to 'XX million a XX.X% fuel decreased pricing. last $X.X quarter the loss $X.X due RPC's decreased to the $XXX an costs, million to of decreases $XXX.X year. basis variable in quarter of million compared third and to sequential during segment the profit operating and million due quarter. or slightly fourth materials period

million employment percentage current revenues fourth third fixed during $XX.X percentage a general the to This cost increased to the of the during X.X% the to operating As quarter. in in the of expenses quarter short-term. was quarter. quarter. Selling, decreased from administrative million points costs XXXX revenues, quarter the due and XX.X% $XX.X during of compared in fourth X.X of third quarter primarily to by relatively XX.X% profit RPC's compared nature the the was prior

segment quarter profit Services Our million. quarter. XX.X% or current in in decreased $XX.X compared $XX.X Technical million Operating the to million EBITDA million million to decreased prior $XX.X from revenues prior million quarter. $XX.X $XXX $XX.X in was to the the

million was than of Support Our prior fourth prior or quarter operating Operating segment the higher to million the profit the generated fourth the quarter. of quarter X.X% compared million Services in $XX.X quarter. in $X.X revenues $X.X in profit

turn during remains $XX of I'll And currently it less comments. 'XX $XXX that, We were continue conditions to our $XXX.X if back cash approximately to and fleet quarter, capital outstanding expenditures were be over debt. fourth XXXX and for fourth expenditures of could that million the At couple be warrant. was end expenditures pumping million. but our million capital no hydraulic capital closing XXXX balance full Rick amount same the horsepower. quarter X,XXX,XXX the of year pressure estimate With will the at we Our approximately have a

Richard Hubbell

Thanks, Ben.

prices were XXXX market they budgets. early regarding require customers about cautious and our During notified XXXX conditions current coal their be current concerned the that outlook. us and This to reevaluating January us are several

However, we executing long-term. the on over focused remain

commitment we was to shareholders our through challenging, XXXX maintained share Although, our RPC’s dividends and repurchases.

this and the and questions. for Our uncertainties. open capital for will lines allow on strong conservative this conference this maximizing continue the balance to key always call sheet, on to us your management morning. time, metric near-term our Thank approach focused manage At for joining manage business. experience up to invested us RPC's through will you will use we We've

Operator

[Operator question Cowen. Marc And first we'll our Bianchi take Instructions] with from

Marc Bianchi

and I'd your quarter? like headed budgets customers best they're changing plans. the XXXX on where and to also What guess ask about the first comment these you and near-term in regarding before, were telling in customer here what's the

Ben Palmer

obviously they're like down, end carefully cautious like time the to how a in very they're manage lot shutting Marc, is course this difficult think their is price fell tremendously trying we're of little uncertainty that but minds. happen The at as and of managing just concerned or question. before during is The just quarter. they're still I Ben, about fourth this set they absolutely 'XX just Everybody the of a in there point our how It's aggressive more year. the not of business. begun to kind budgets those

they cautious would accordingly. to So all things and remain being start equal, react will

James Landers

is this fell that Marc, a of the believe customers' because Jim. time year season. prices oil budgeting difficult at our We of

the oil were they budgeting. So price as decline happened

uncertain are a is oil bit, up January extremely like. they little in about but XXXX looks Now what

Operator

We our Alright. next on move to question.

of Bank Merrill Chase Next Lynch. with we'll go to America Mulvehill

Chase Mulvehill

I a kind down kind replacement kind flattish. slowing the how or of equipment? more back scale that the kind coming if down maybe of environment flat newbuild kind environment guess Can kind to was CapEx to the CapEx, talk of of is much you about of of that and ability first, your talk or you’re about of in saying less

Ben Palmer

Chase, is to ability do some We this Ben. that manage have down.

in equipment time. something additional over take ordered long-term. is over comments, of we've pressure like the a pumping next we're decision year. it's manage middle that lightly, in some It's his indicated to things will didn't evaluated come trying towards have Rick we We the This

decision we time a think think return, still over will return, adequate it's shareholders. for right And and committed a provides as great we're So it the to good provide return our us us industry. the we for

about terms growth, million of will that be in what the and we're fleet. XX% next numbers, me And out $XXX Jim, also a addition we…? But year. million, terms -- saying we're and indicating, So in in CapEx maintenance to did of those help about $XXX

James Landers

to. need some or order as growth, orders XX%, probably it's have deploying Ben But some -- placing Probably on maintenance pumps. Chase. started back And moving for should there’s things, some we flexibility we indicated XX%

Chase Mulvehill

Okay. is or And net number? that XX% additional a gross that horsepower, a

Ben Palmer

additional it's Well, horsepower.

fleets year. up of taking We in the are additional two middle coming it as the

Chase Mulvehill

two okay, macro, should with alright. Okay, then pay you and cover around cash need the And net uncertainty we free if and we the fleets, with we just and to dividend cash cash it -- dividend think about about free as think CapEx or the dividend, how do alright. you then debt. we the won’t move And plus

do of how we just it? about the sustainability dividend think generally So

Ben Palmer

that dividend forth. Well maintained conservative and out. that’s believe we balance believe have point it’s XXXX or sustainable which simply react this in I been some that our see will ‘XX eventually managing mean so quickly. roll but we unfolds in indication we've how how you we obviously will Historically, and at the sheet time, We’ve

have us. levers available to We those

decisions them. it’s point And intact don't we I we don’t believe so sustained. it’s here that make time, confer and Board, the at And will -- don’t detail, we -- but obviously this with too in early we for

Operator

James to go our question will Suisse. next Credit with Wicklund We

James Wicklund

XX% kind guys pricing was review slightly Halliburton -- kind put and Can with some is in down rest XX% hinted lower in knows, and already like that have could short-term, around looking down of who I QX. what what you pressure is and slightly happens wondering expectation kind short-term, of lower of XX QX course the the in of were but we what year activity another noticed like because QX essentially and were us point down to just from it the think all Schlumberger prices be QX at pumping? -- in pricing of what the numbers you that looks the

James Landers

the between than fourth based is just and pumping. Jim, easier and QX declined quarter X% answer our lot answer. this a is The on in that believe pricing our We pressure discounts, price Jim. third book QX sequentially

activity So more. a lot declined

balance by But decline we right taking figuring to now first sales get utilization. to in quarter an those known absolutely need who needs that and was mix EBITDA between right us find down to now December. anomaly shut our quarter the test the doing people pricing to in our environment pricing pricing trying to How we of optimal is utilization. had as out of are away, not we would the much current mix We’re find speak, our now, market, things because we of Fourth optimizing that that right marketing seasonal finding the is. where level mix to kind just teams in which

have So a we number. don’t

James Wicklund

early We’re about but in month yet, no indicators a okay.

James Landers

Yes.

James Wicklund

a Okay. talk talk in discipline follow-up but what just the return what is you it I is metrics gives you're as a cost not determine, generated And kind and guys invested because and do a how return that should you capital could, of about a consistent it on chance scramble. Can going I’m be your of returns what returns, about to while, about for think on you around industry just my bit? invested positive bit you nobody to just focused if hurdle? what you about everybody at look those will capital capital. make talk Can -- on type that so and or a this little But big be? little Just deal

James Landers

without a flexible a look as we market In cap business had the with this leverage that to the almost December when use our is were it's again. as market things was of that? a low which on we years be been former that teens. not pursue possible. given our manufacturing for And that did of very as month cost that that's is feel Jim company X of We’ve is years almost publicly in cost risky our a We our from our up the We shame Friday both capital us or but that Potentially XX almost because March cap goal and hurdle a XXs better spun-off the plans Jim, for and try we we Group. calculate almost parent can XXXX, times company aren't could traded XX of traditionally cap is we as boat in ago. market times earn look all risk-adjusted our XX it somewhere business. and to long-term and and capital individually low we the for

fairly we So the worked and that well. over long-term that have managed

As but high cycle the be the on capitals. it's appear parts and to cycles that to of potentially return have be tend shorter, be shallower watching to to going keep we always the

continue So how that's to going we're the to manage business.

James Wicklund

having higher XX this in a than is accomplishment so Well congratulations. cap ago years market Group, Thanks, an guys.

Operator

to go Securities. next Mike Urban And Global Seaport with we'll

Mike Urban

fleets? if on where you versus could wondering Just terms spot you us in of dedicated update stand

Ben Palmer

different congratulated. little in yesterday or I’d our and it everybody look of This much we've our is out of Ben. time. our level lots there opportunity that they're our some very that terms of But there's a peers a There bit have That's and businesses competitors. quite same at demonstrates be one our hasn't a in fleets out for regard. pre-announced had the of just to knows that we over putting and success as And impressive. people -- lot their we've about operating results while say confirms dedicated of been got are than probably change that,

more steps we to be to I we really as gain, and it's of it Jim returns able customers even generate that result activity figure be cash able us on to this sure I talked some the and environment. able of the between more level and flows of and just And us take increase be get the the pricing we're need to the But and to So not market be give our strategy. give will activity a to need right we activity that in able earlier, and believe out balance about the expect than to level we of level -- we make have figure dedication that's share how expect business. to we the the the revenues will out to types in

doing here us, we guarantee all dedicated think can that and better do to better folks our are have what we operations including So recently. than of we

Mike Urban

like is to it dedicated sounds toward fleet. move continue a So the preference more to

that the to between just be we’re market at shorter a any was in of in a continuing follow-up. might think that mouth? I be terms -- hopefully was to I on it's as kind to some even given was -- opportunity that point price are that If kind and sitting preference a that my is, sounds want sitting guess guess but capture of utilization? striking words utilization strategy I going have It pause upon there for recovers. of term your And there basis low question the upside like in more put you I don't balance to market,

Ben Palmer

appropriate the more we're at activity of Well, think it's for but I a level balance, always striving pricing.

on. we're So focused that's what

Operator

Okay. go Ken to Robinson SunTrust Humphrey. Sill we'll The with next

Ken Sill

horse beat more. a on that little bit wanted I to

and service at rather So interested lower Halliburton lip to both equipment then idea that and Schlumberger down, in not we chasing rates. they're at paying stack work least they'd the pricing had

here it in of your months of or the bottom kind given You guys “Look not you I part to and you few commentary walk a do equipment then willing their low expect to to before, last in return; guys QX QX history, away.” kind have pricing do that of year too said work at can layout how here? mean and So going we’re were our you next we're think

Ben Palmer

And we best that's again This our if at our not -- at a look a low us the for the margins you hopefully is among though, that's better, margins, hopeful are are Well, I'm Ben. our point. and peers. of

of some talk the right we about unit if get we lower ability if on opportunity So you that price have per of amount have price volume. a work, to we the

amount margins lower willing So of the right with to accept volume. increased we're

what So trying right trying we achieve, we're we and to believe can we're the that's results. strike, improve again what that's with our to balance

Ken Sill

you do just in And breakout housekeeping Support Services? then can over I'll a to the and done revenues kind somebody of if else ask to Technical like the you’ve past And it Services questions. question guys in of turn Okay.

James Landers

Sure, Ken, absolutely.

I'm the to line percentage numbers service the for our as RPC fourth of quarter. are give about a So revenues revenues consolidated

So tools of revenues it's was tubing the of was pumping quarter revenues, X.X% of was revenues, of rental not solutions nitrogen the and tubing The thru was year. pressure X.X% XX.X% XX.X% coiled of revenues. was X.X% revenues,

Operator

And next we'll with Daniel go to John Simmons.

John Daniel

guess question at X,XXX,XXX, you you capacity? horsepower how of first look effect the frac I marketed characterize Jim, the total would when

James Landers

fleets XX have manned now. We

John Daniel

XX.

Okay. QX, trough that right And where the is now? trough in did that or

James Landers

be the trough. would That

John Daniel

is Okay. The of anything you're relative ordering, two brought what those the design there which you’ve fleets recently? fleets different to in

Ben Palmer

We’ve got duty. they’re -- heavy

James Landers

duty. heavy Yes,

Ben Palmer

nothing differences and slight more ability a the but much beefier. and we more or ordered higher The intensely that Maybe so, even were last significant. group same these little capacity little maybe to are work

John Daniel

Okay.

in more So efficient. theory,

James Landers

Yes.

John Daniel

or relative here just and that talked pricing in assessment? of the to a fleets, trough the decline and this And mid the would sorry to press more in Jim, into presently chain work in I’m dial also starting again, off seem is on QX fair to quarter. and that QX or could be than QX the compression the trying faster it revenue But if the teens lack terms going that is at about you’re QX be white call. of space ball release

James Landers

John. a is view that Well

Ben Palmer

It’s a view. reasonable

James Landers

view. And it’s reasonable a

-- oils the issues. quarter don’t We test have XXs, see first acceptable other articulated. starting holidays the much now low than that and fruit, no thus in in that Also higher XX. far market And the working weather be we at could get On how the revenues upper just higher can we margins. and utilization right side, we to bears are assuming you’ve

So And could those we a first not higher in drive things, had more was. quarter better quarter first I a -- quarter I of wish fourth while revenue wish huge, what view had we looks than like. certain

John Daniel

wish in But look as you at of you I the XX anything end your I manned right? January, going fleets to fleets see when do out XX you is at we’re did have would mean and I say you too. do guess a I manned right now, look that count I rise? calendar concrete on February, fleet mean

James Landers

of that know personally not I right now. do

Ben Palmer

to of fleets. There increase utilization is opportunity lot our of existing the

James Landers

That’s right.

John Daniel

to this point rebound I’m you utilization What the in mean is but of is, at I QX to in Who we some based feel had guess pricing? I right? slightly trying hell just not like and But -- do think prices still I get off of bottom oil terms knows, the great.

Ben Palmer

QX the potential there’s be bottom. Well, that could

James Landers

Yes.

Ben Palmer

for than so impact it seasonal Huge us, peers. many more than more our of appears, so

there but seasonal the is back. don’t hopefully, track. somewhat of So normal bounce a have We

John Daniel

about QX out, no commentary is have accelerate work up is The you price that likely lower scenario could you on there to more guarantee lower. pricing you any of If the and your the you’re and kind If more plays way that work. downside characterized pick not in right? necessarily

James Landers

Yes knows, but the at I I don’t not we’re helm who see us asleep -- John like here. mean lowering, it's

John Daniel

not congratulations crazy trying there I’m really going to am new on make addition fleets, sure here, be and that’s welcome all okay. sure will just I the I got. Well I’m too

Operator

Gengaro go next Stifel. we'll to And with Stephen

Stephen Gengaro

things. quick Two

is I versus the XQ? up in drop that you when referenced other in into pumping. pressure imagine is lines pricing XQ and first at was the biggest How XQ holding the XQ, product The looked you off

Ben Palmer

pricing seeing many pressure Actually We've lines recent significant and seen pretty at point flat would service not pressure some in of in I other probably. our firmness say this time. any -- and in well.

Stephen Gengaro

obviously pressure can was the we in do drop decrementals off the largely profitability here the And pumping on side? math, so just Okay.

Ben Palmer

That's correct.

Stephen Gengaro

tell, as but second but this now, to bottom, clearly the just XXXX, I is it's think the that's to you point? look I when tough know trajectory, hard you do sounds a do it then a And lower about you Services it is out think like make margin you Good. to guess question at XQ want mean right Technical

Ben Palmer

in oil of price that we'll answer and the April question. us tell Stephen,

Stephen Gengaro

That's out. helpful. for get I'll Okay. Thanks in I just figure the back line. and color it

Operator

Connor And Morgan to next we'll go with Lynagh Stanley.

Connor Lynagh

here. wondering up build Just sort I was could of of getting if off John at what

get true active to of require fourth get numbers. and But quarter quarter you're be I that's So working obviously based the terms color I color is sort of on correct feel what's to guess can some number. in see I Any utilization could all utilized sitting that improve for some had give wrong. in would your sort lower what fence from on versus next understand there a us how probably first be what mean one for if the aggregate in you relative saying horsepower I'm you me will what the actually to give was? the might of pricing working that quarter trying helpful? we to you saying to you're

Ben Palmer

Pricing change much. didn’t

off, falls utilization So right?

James Landers

and you sands so pumped third Yes, a fourth basin there could we of the negative in runs were a the that few P&L. talk more revenue. than through all quarter to on We Connor. has things quarter in impact how sort know We other did that utilization, the

Ben's from So declined of too. third it utilization mean fourth that's right, quarter. to part quarter I But

have quarter actually question crews mentioned around plus -- some view get peers more lower we we crews earlier can resource. skilled if relatively that utilization than would manned of in now. work your can We layoffs we fleets about I the fungible right have to. mentioned something so first we think quarter, had and many but in be to, are our need move part we XX our fourth labor you need of And we that not if

to we model possible. remember So and try flexible as as operational do have

Connor Lynagh

average, fourth think today, was trough the activity what saying have exit in your were words are quarter seems correct? than you you I was like at -- where Is trying you other mean here right. to it rate a I get is that your That's is, in fair, lower I that

James Landers

December exit which the very in was week is rate the was low. last that right, Well, but

big now. we is the was quarter. exit major see the first than variable the right pricing as yes, utilization That's So lower seek that. uncertainty in pickup And does some we work The balance how average. the our rate

Connor Lynagh

a understood. Right, higher Maybe level one.

mean that there if balance will will obviously you are concern the the strongly it the market a pumping guys view lot and that you're capacity. I it adding if certainly market So pressure in is of around seems of

So just you’re how sort …? of are supply how industry seeing oversupplied demand, when we

Ben Palmer

we're That's share our question But -- strategy seek it's that and being opportunity we but will quarters not level market of to couple out. is at, the us we to quarter lots first a the for all turn fair have results. improve view characterization. there lots our how beginning increase given again that our the don't -- year But of should equal of opportunity there to out things in next

Operator

we'll Tudor, Holt & Company. George with Next Pickering, O’Leary go to

George O’Leary

little a a different you have a of I you guesstimate us, be. could when a your of privates. bit about and But kind believe trying Take historically, as bit towards the guys remind not to skewed base percentage been talk tact little just -- the just of might more bottom customer

of a As or of the private XX% rig E&P. plus is rig percentage count minus count

versus can you or customer a you sat quarter So the remind you where public just from today sit fourth where perspective? in us private

Ben Palmer

what at in think It know And have significantly. results. don’t our available didn’t that's fingertips think -- illustrated it I I our readily and that I that change -- here.

and around the levels it reduced activity holidays. here how we've And years working more on likely talked significantly the to we're are and their that just seen find And So turns in that the a you as that. I will experienced if I we’ve to activity it fact that out about two couple think and of that diversify, right last now that years the spread to balance mean we need privates we And more row. we highlights between it pricing. out. need

George O’Leary

follow space players be And is strategy think pull of XX% or part mid-cap -- as like public spend then private the those sponsors which and the And and This are anxiety and talk could more the of private and somewhat E&P to particularly roping something is D&C IOCs. with then direct caps to behave estimate up what's feels potentially of us, like nature, that the we than kind they're we and E&P things in it down express for large customer those audience to I likely that that budgets, year-over-year going the like and customers? is, you of that we regards larger the XXXX, folks. parcel for to more could worried is about for cut

James Landers

have of to way, sight hadn’t of smaller we -- more that but George. going have And a formulating when as ways to workforce. Yes, this who We're E&P say question. but there also who And fact of of lot it let’s winner space of line in We're are consolidation have out workforce only logistics lined mindful great It's who and some the customers well we loser those can a do they’re want be actually define business in appears happens. approach the strategy not scenarios, now. been processes can that to at that certainly combination or potential yet there us fact the looking in a side. impacted other we we’ve but have be neither certainly to be

that not Let’s and have forget job all inefficiencies everybody played delays long. operational year with

but So logistical may have not the Exchange ticker, in New processes. may a York fact or customer really have right Stock may sometimes good

as at that we So look well.

Operator

with we go Blake Next will to Research. Wolfe Gendron

Blake Gendron

back potentially large be is question. This So chopping your just spreads might private XXXX around. that maybe your of a and horsepower of there half we’ve capacity and several heard utilization this preemptive given first can both public existing purveyors improve but

it’s additional plug-and-play to to would horsepower in you some put order to kind that viable is price organic secondly, these the then have of trigger need on growth? If it? such capital And seen be is need this into see that RPC potential it of deals, what potentially there pull or

James Landers

and and Blake, hey, XX,XXX it’s deals, a get more foot speak we have More companies any your who reliability in from just and who and gets that need that are Jim. your not bigger more level. Can’t have more our seen fleet I’d and to so we speak maybe as of anecdotally have to bigger from uniformity whether know or have fleets consistency configurations issue. some ours important, friends you than

rather So equipment premium then well then has through coming our return done And with organic how tell on been. of you better invested traditionally paying can't assets. to issue a acquisitions there's also back capital and growth metric, the intangible for we’ve maintained than

We’re the going turn to value.

if believe, lot doing people like out high can do that environment. So we good even we operate ourselves, intensity and in the see in buying of of XXXX, that I these significantly equipment improves which new spec mood are service anything the or in us don't more environment tremendously

probably on we’re not you amount of for So good someone insight that. has who

Blake Gendron

I That’s in to follow-up backing of understood. some the or commentary is helpful. those are year off there like my a dedicated you the be to price you you think cut customer around, receptivity of PerPetro business quarter-to-quarter fairly several want your they would in and arrangements And about month-to-month nimble? among PerPetro willing to XXXX then XXXX, maybe how visibility take has? that you to customer model, other be from then seems just strategy or for go Okay, potential lock as lock other you in opportunities departing such guess the And the term, incremental stay and approach and

Ben Palmer

work have have more for a and the would price. results to qualify Ben. love and utilization, no doubt a cut? it revenues unit of Is is I volume significantly the to to the of time per mean period price cut the more This and would of we we over

the capital to cash is the you the we to So the at volume cut kind from we're end it's responsive. there improve We will, sort get of a invested that day dynamic this but your relative to price But and for. will of flow are opportunities our to it's if of -- looking a think formula to relative we know again, performance. recent evaluation metric have

returns doubt pricing to trying at, to would we strike work balance balance something would get the that's -- and that we volumes between the have our reduce no to and So looking try expect we are would returns would again pricing of improve. to higher our much but volume that --

Blake Gendron

receptivity E&Ps? of germinating just thoughts this to your idea of early I terms arrangement the is the in approaching with you guess still or it of part fairly Are type guess similar days with rephrase customers the I on understood, Okay, question. on

James Landers

multiyear Regarding now. not we those right kind are having discussions of arrangements

visibility. right Our on closer customer discuss. is customers have view topic or to offer alliances a based for good to us close valid topic, The a of a now that early to too offer don't forecast It alliances. it's kind idea is very of really a

Ben Palmer

I think experience again customers want based volatility our we. given multiyear would doubt And mean is -- of to a a I and recognize neither and commitments industry the all would the in historical our the pricing, would variables of there lot we volatility to lot I commit on industry of in there.

you can mean -- know we additional with to it's of obviously precipitously, shorter usually be customer timeframe are asking multiyear. help oil of always for a much falls about price subject they're some to I and you arrangements, those So relationship the historically have a change. going making probably if being terms that it's talking great equal. things all in than It's

today I’d can equipment. a our with where think of But I a relatively to that whole go we options low available. gears is lot So happens, the there's customer have going options where not say level so is at about and

won't multiyear commitments those So probably happen.

Operator

we'll take a Chuck from And Minervino with next Susquehanna. question

Chuck Minervino

little there to split maintenance touch the relative to that level bit is kind just heard wanted and I you high a fairly imply growth, like revenue XX-XX for 'XX. Just the on expectations of If seems more. still maintenance of correctly I think CapEx, a kind to

at the further. mean taken curious is of CapEx anticipate flex kind things You've process there. if down levels, can kind CapEx where way the you've lower, you where thought just that I here stay was it seen these staying you that of years or even do

Just wanted baseline to what the kind hear there was? of view

James Landers

the utilization. is function capital pressure of there, are really pumping, this Maintenance concentrated no Chuck, Jim. expenditures in and are surprise

general equipment capital utilization however, that, well. a rule be financials pressure one that is lower maintenance as wishes So pumping define lower, to is will if in

scenario in maintenance than Ben So but lower quoted. we expenditures we in has capital what in low a would scenario not that XXXX, have utilization a be are forward, looking our which

Richard Hubbell

purchased if more our may out ago. the off a this point was and I memory. the took to has And quarters fleet is It but past to like I'd we delivery so year The refresh scenario over is old, of and a Also is couple component. that equipment or per everybody’s better. maintenance new than continuous capitalized it year lower

and indicator of function is maintenance a utilization. is control also is another of that So that again CapEx under

think you. best have of kind for I So that's we would answer

Chuck Minervino

the here. a earlier And then kind know a you have made I bit you that are testing of comment market just guys little

stay I You can every customers contracts advantage I at more acceptable to in lower a of or pricing, was kind seeing you differently And looking to approaching there thoughts go that get us? that to the they would that are just relate are different? is you of kind bigger be, you're things Are approach margin. more concede just it point. approach. there at XXXX seems want any looking to not different contracts this picture, you whether are we if to I take any curious the was they guess spot, dedicated cycle, It willing like was that enter as curious of if on customers kind would can and see work of pricing

Richard Hubbell

benefited which increased to the XX ability year in of too market, to equipment. And customers' that them. the aware of work due to large certainly is early part see any differences our now It's has They and between efficiencies better oversupply a the behavior compared discernable day to XXXX. agreement with hours are our in

the they in pricing knows, yet year. long because out aren't still terms, it’s they But is for think going again who early So bottomed.

Chuck Minervino

kind at a mean things then stay last manned. fleets demand, at have it like XX curious I this sounds stay of kind of And now, you you kind do If one. level just of the of to equipment fleets? you kind manned utilization see you up what manned to would and Do or fleets at those drive look today? stack of more of XX you stay like

Ben Palmer

This is Ben.

we're have fleet. I no that in But to is decrease active we today additional see to here constantly increase of to tremendously this and to volumes can it. continue patience level mean going plans revaluating. I we'll the revisit we're point, but there think at to generate then okay we'll be what with some or terms

Operator

with to Global go Mike Urban Seaport Securities. we'll Next

Mike Urban

the I part indeed to I schedule you rolling had just kind had did just quarter early and questions. units couple of believe of this ordered were you How out supposed have of here kind a equipment? those the housekeeping or many year. startup some are of rollout something coil for those that first in and of the

James Landers

Mike, it’s they Jim. year. in, the the be the half end when first of Still will of it come looking probably towards

Mike Urban

question shifted So it’s to of of more or the to And midyear you similar expect guess point deployed? get midyear need at sense frac might market somewhat that do timeframe. kind we on that delivery, new a this then I clearer a see when have kind the on dependent

James Landers

things. of working the We are interchangeable pricing spec too. is a lot we components right the to get sure we know components, on on wanting there the right still and We to the different frankly to you working some make of get are components want as

pressure and for service that So hard new in we putting don't of delivery equipment. date pumping have a

half for a put of of date end the say Let's on to the just year just -- first it.

Mike Urban

And the and one could pumping? you have me. if from Did you last snubbing fluid revenue from

James Landers

we but fairly recently. Yes. Those under disclosed They small bigger each fluid X%. haven’t pumping are bit they are -- both snubbing than is those are so two actually a

Operator

Brad next Handler to And go we with Jefferies. will

Brad Handler

come of are just order discussed back is to side certainly I your ordering you that's a wondering new any to else few -- anything point part help -- in the guess coiled this equipment? capabilities? think are on first, that you you -- other units to around add but questions, at XXXX’s I CapEx call but you as the Can’t we on would had new the capital budget are

Ben Palmer

Nothing of significance.

James Landers

We that’s and told it. pressure you pumping, our coil about snubbing, so

Brad Handler

ask that to just snubbing I CapEx, the and into, shouldn’t say XXXX they talking, falling and coil But into be snubbing you may the I should coil following -- are are opposed unit? they actually as

James Landers

given, that’s Yes, that probably are. a clarification yes. they we Yes, have should

Brad Handler

how many trying And I’m May be this, units am are many? get to sorry, you coil really now adding? how I

James Landers

coiled looks It the tubing units like this at point Brad. large four of diameter

Ben Palmer

there or to of And investments units well. increase we’re are some the so as another trying four capacity

Brad Handler

customers you? in little dropping like work December just your side. down what work, get the I a very a fall and back from to few on happened out shutting Then drop In for December, XQ did a on on spectrum bit many doing -- there's where of pumping spectrum that customers very, little of to

Ben Palmer

a larger my qualitative It on part. just was number judgment customers of probably call smaller that’s Brad, a

Brad Handler

Customers dropping more significantly, and certainly …?

Ben Palmer

Yes.

Brad Handler

customers they XXXX how you same trying are are now stutter kind with stepping or that to Are broader is out figure the that they approach and a set?

James Landers

or other they're in people down doing who shut Brad, may really random out fairly not seems It figuring what in may be XXXX. words December in

budget that again time November season. December prices just comment, yet because we lot October, not for budgets a people know were to fall So and that's and their your bad to gotten of have oil

So other that, exceptions plans we that there we things firm and that, set don’t than believe to that budgets our customers things had not know. are made yet their

Operator

Marc with go we'll to Bianchi Cowen. next And

Marc Bianchi

to are think made I fleets just Hey thanks, year. I saying extra and coming that pressure these a in wanted XXXX? you next to clarify not XXXX that's pumping clarify just Jim want comment

Ben Palmer

That’s right, XXXX. mid

James Landers

we call, Sorry, is earnings Marc. know XXXX you, it's thank this but a XXXX

Marc Bianchi

In on sounds I really what do haven't terms you the December but of uncertainty for will January, have ground, way there's for of in you exit the that with activity? market was sort seen in is so the activity if it quarter your pretty first testing lot know far of seen flat of what the kind a where it

Ben Palmer

a seasonal better as than traditionally January is have, the do we after better, We early have late slowdown January is exit we do December. in

Marc Bianchi

they're XX was Could and you only positioned geographic for the where And I how RPC broadly is on in exposure more quarter? fleets. then fourth then other one had the the about geographically talk the overall

James Landers

of mean and probably flexible. in to is RPC well We capacity hit did they're center Permian moved home I try brush that as you Kilgore the MidContinent pumping a half pressure everything that's Eagle sort and of as is of teens did the equipment there. way our Bakken equipment the us sure to move terms We East less be issue the the X%. not Permian. going go around going Then back out Texas during help in Marc, there, Ford, of very take work assets people so than Permian, are too. anticipated transparent around the broad the or other Basin, and know didn't exposure to fleets X of XXXX away is stayed a out that's us, then take We any the little the other in which in low and gravity you

pressure motors we So the coiled lines area that's including and in distribution today XXXX. start other tubing downhaul in our service thru service tubing as much fourth Shale of We the function pumping quarter do as solutions and and -- but don't pretty that our or tools geographic the Utica operate lines Marcellus in well. many

Operator

Ken from SunTrust with Instructions] take Robinson next [Operator Sill question We'll our Humphrey.

Ken Sill

What in of out. you XX, fleets flat XX wanted just XX I average ask, XX? were to QX number it active the was was and there started

James Landers

to it or valid was look, of -- XX question. It call XX, hard split probably XX it Ken wasn't a It's XX? it’s

Ken Sill

And XX hour doing have talked many vertical And you have a are how few guys about, fleets still straight work. on then you versus before fleets days?

James Landers

third our of quarter activity was compared Yes, of work sure. activity XX% quarter. to the the hour in XX% in XX fourth

Operator

next we'll Simmons. with question move And John for Daniel our

John Daniel

a embarrassed going is could to mark me. of and QX referring QX I you to but back this am almost -- forth When the whether are or ask this talking guys for questions about EBITDA? Jim, revenue or point were bottom, clarification we

James Landers

pricing related between revenue. revenue. lot we to talking finding context referring We're A to utilization. the our of think dialogue. about what on balance smart. that were And referring of and John, you're back We’re

definitely were related certainly to margins we so pricing. we if was lower And revenue. would that one that imply and utilization But discussion lower having our the increase

Ben Palmer

not peers. getting smart here. on I'm model I'm if my my at as get still confused looking we .... as And But

Richard Hubbell

say so. don’t as know far that as you about People

John Daniel

seems are could EBITDA down. revenues slightly. the like It So up be

You’ve of anything stuff. am all reset I taxes mean there? payroll that I accruals, your missing

Ben Palmer

realm the possibility. outside is not It of

Richard Hubbell

correct. is That

Operator

remarks. for additional I'm queue. or I the we turn to And back to call showing like have no Jim questions Landers any comments the in further closing over

James Landers

Thank Okay, everybody soon. We a listening thank hour us. has everyone and with spending see you. good thank day. you. this hope you we will We in And for

Operator

www.rpc.net will We at two you within call. available replay following the for completion A thank today's be your participation. hours of

may now You disconnect.

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