RPC (RES) 29 Jul 202020 Q2 Earnings call transcript

Company Profile

Participants

Rick Hubbell	President and CEO
Ben Palmer	Chief Financial Officer
James Landers	Vice President of Corporate Finance
John Daniel	Daniel Energy Partner
Cameron Lochridge	Stephens, Inc.
Chase Molehill	Bank of America
Ian MacPherson	Simmons
Jacob Lundberg	Credit Suisse
Vebs Vaishnav	Scotia Howard Weil
George O'Leary	TPH & Company
Chris Voie	Wells Fargo
Connor Lynagh	Morgan Stanley
Blake Gendron	Wolfe Research
Scott Gruber	Citigroup

Call transcript

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Operator

Good morning, and thank you for joining us for the RPC, Inc.

Second Quarter 2020 Financial Earnings Conference Call. Today's call will be hosted by Rick Hubbell, President and CEO; Ben Palmer, Chief Financial Officer. Also present is Jim Landers, Vice President of Corporate Finance. [Operator Instructions] I would now like to advise everyone that this call is being recorded. started the us disclaimer. get will by forward-looking reading Jim

James Landers

everyone. good Thank and to you, Polly, morning

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

These loss adjusted EBITDA. today Some statements to press rpc.net. operating and known consistently unknown can and referring be I'd today like that over various call, with website In made could RPC's and several our be this call along nonrecurring of per loss, earnings without of allow adjusted forward-looking EBITDA a to these at in using performance we'll XX-K conference found because be those release to net items. issued loss, measures public they share, non-GAAP number you XXXX the us refer release to are that regard be on operating adjusted filings which adjusted nature non-GAAP risks, measures will non-GAAP and on today's and our performance. We're reflect to measures risks. periods of of all other compare outline

compliance In facility. to EBITDA addition, with revolving use RPC our financial to is under report covenants required credit

disclosures reconciliations Our the are nearest to contain release you're loss press and financial in per our Please interested they're share, which calculated. GAAP these of measures and review non-GAAP these if website seeing operating measures. loss loss, how net financial

will the over and Hubbell. like at for our again President not received rpc.net turn CEO, one, and our call I please copy. you've press eat our Rick as If release to a website now

Rick Hubbell

XXXX. This quarter issued for RPC's Jim. release of press our you, earnings we second morning, Thank

during count the As in rig steep we have few anticipated, by disruption to a XXXX. than activity level quarterly caused twin oil in rapid addressed historic working capital, which swift, the managing and resulted glut months. oilfield We over decline their The of fell this reducing to revenues our costs past lows, COVID-XX lowest pandemic quarter. the fell global more cash impacts and since the and RPC's doubling

Ben thoughts offer and near will the after results term. financial will additional some which detail, discuss Palmer, Our I about CFO, other in this more

Ben Palmer

Okay. Rick. Thank you,

Adjusted decreased quarter second quarter second negative of to of in compared decreased of $XX.X of compared million operating the levels For operating period loss to the XXXX, of and prior the the quarter revenues compared year. pricing for year. the million $XXX.X to same lower of the $XX.X to an year. million EBITDA quarter income compared the the million in to second to the was second million activity due Revenues second prior quarter year. prior for was $XX.X EBITDA $X.X in Adjusted the million prior $XX.X

in the offset This leverage XXXX. primarily second of percentage reported levels XXXX, $XXX.X by and as the with quarter quarter increased costs, For to expenses in year. to of and of to RPC's revenues. by to in prior Depreciation of result of Cost share and the per year. revenues adjusted to million Depreciation revenues amortization revenues quarters. lower percentage consistent prior $X.XX the decreased several earnings materials to increase year. $XX.X due These decreases second quarter second $XX.X because previous reduction percentage revenues a of $XX the diluted several XX.X% a of compared the in was second asset Cost compared revenues $XX.X XX.X% in the loss the of million over lower Cost $XX.X due RPC during a mix. the employment of expenses in of second the during past charges quarter during revenues prior declined of these to initiatives amortization and pressure initiatives. or lower quarters. pumping cost expenses revenues negative quarter second caused as million expenses compared during per significantly expenses lower a second reduction significantly decreased activity general of decreased slightly and supplies $X.XX cost in decreased of RPC's recorded or million Selling, job XXXX shift impairment compared share quarter million administrative primarily million of quarter was the of of to because the the

Services segment compared was million in loss year. to of to the decreased quarter Operating loss activity second This quarter the $X.X the $XX.X was the year. due second million quarter Technical compared and to profit quarter revenues the XX.X% Our in prior a lower for same pricing. prior the in operating

This in the primarily and expenses the year. segment caused Cost prior resulting Sports the for lower of quarter by million XX.X% began sequential quarter loss million basis, decreased in significant revenues XX%, of decreased due costs reductions. Our materials Services XXXX year. and quarter the $XX.X second quarter during RPC's XXXX the revenues of headcount was prior compared in decreased decreased fuel activity the the industry to March. the million million in quarter. employment On was to and in second profit in quarter second by lower $XXX.X to or same to due million Operating quarter second that the to decline $X from compared a $XXX.X supplies operating from of activity revenues a prior XX.X% $X.X

adjusted quarter Despite expenses million operating decreased of compared million $XX.X of during percentage $XX.X lower quarter. and a only from to XX% cost in was the $XX.X margin loss our decremental to an increased EBITDA to segment RPC revenues RPC's efforts. compared to second XX.X% activity, Services million in quarter. or from quarter was $XX.X in the revenues, Technical $XX.X XX.X% prior administrative prior the quarter. in was As loss the due EBITDA due general quarter and of This second operating of second $XX.X Services million in $XXX.X second million negative quarter. RPC's the second revenues the of the $XX.X Technical activity incurred incurred adjusted the of prior $XX.X pricing. an operating quarter. in loss quarter. to operating million an our to quarter adjusted $XX.X decline significantly to the adjusted million in million the reduction first loss to million EBITDA the decreased significantly cost in a compared in segment prior during million XX.X% Selling, rapid XX.X% levels

in to compared Operating prior Services segment Support million by profit million Our the $X.X loss in $X.X the quarter. $X.X million operating or $X.X XX.X% million quarter. second revenues to decreased was

At second horsepower. is RPC end quarter pressure currently During quarter, three pumping fleets the RPC's four up horizontal the horizontal XXXX, of to Permian pressure second XXX,XXX operated capacity Basin. fleets. in operating pumping hydraulic remained approximately of the And at frac

XXXX full for million, over currently it remarks. $XX estimate we $XX a few $XX that, capital to I'll million quarter expenditures were to to turn and expenditures Second year be Rick closing back capital million. With

Rick Hubbell

RPC's modestly the Ben. We the during count we Thanks, second the quarter. once passed will believe improve trough activity rig oilfield activity Though declined quarter. domestic in revenues the again anticipate week, completion third during last

on our a that to capital because emphasize of to is I cost we sustained this whether focus management beginning cyclical cautious expenditure is However, industry, many of are which will we shared controls. this recovery continue the and in want outlook, unsure by

on focus which financial Our rigorous strength, remain will discipline. pricing maintaining include our will

sufficient During quarters, In improved opportunities our the that equipment I my secure preserve will may hinder revenue to our improved our mentioned, returns. coming position. able condition but generate to until this are remarks, of growth mentioned opening I cash the we our

In RPC's morning. the fact, we at in the conference for the call your joining this million the And questions. our this quarter decades. second time, for at highest you open in Thank end us for $XXX will cash up of lines was

Operator

Energy question [Operator Daniel from Instructions] first Daniel Your Partner. John comes with

John Daniel

Just if one I question, may.

big it's of DGB it continuous expect fleet relates to with as if what would of how any, duty investments, types make picture engines, sort pumps type equipment of in terms the optimal more you strategy four to Tier forward? And So etc. see you going question

Just could fleet several over about XXXX. next outlook just if talk into quarters you the the

Ben Palmer

picture for a been the the rage. other were have course, question. we've issues for is while This Ben. is fleets. time, at something that there That's here present of big some fleets electric challenges electric the downturn of the It with with all time, studying and spent quite course, a we had And as and recently with. people not have time Well, much

of tremendous invest time, amount, are planning amount imagine, tremendous of forward. type configured appropriately can study. equipment, capabilities we the a or point cycle to move and as understand in technological at We given uncertainties. helpful something as compliant the additional are in this continue given you spend where important currently a will having But to and we We it's equipment with be more ESG we that equipment not

making while it's to CapEx respect over that's about We've things a we're dual take been in pricing obviously and and recognize be and or any bit have modest have we something making capabilities investments that. fuel and discipline, making to technology for of pumping are are that time. we're a it has amount. We tremendous our equipment our to for something that some slow. to equipment back and going with that and little upgrading investments our to processes our with a talked paid people pared existing our additional operating of like We But some going

that going or be putting So be to out we out. comfortable we more term, to in we're returns need that put the from that equipment are relative going make investments, near if to are make sure to generated going equipment adequate

number today. study see be commitments. over have alternatives, we technological to for But meaningful of period going term, So technology be make able any for sufficient it's the to those. returns time. we'll we to And before again, that's to then near pay that one the still our to a continue first that generating or evaluate We'll priority

John Daniel

do have etc? That's dual inquiries you you got And one follow-up. squeeze fair. sense just do see the What in it is you? point, customers mandating you terms this at or to any it I'll fuel, of

Ben Palmer

but Well, helps mandate may encouraged. It certainly to it. have be strong,

pay are we forward. things those are investments again, as still making have we those are some of but move to that those so direction, that again, all for fairly recognize not in And we we and modest,

Operator

Cameron Your Inc. next question Lochridge Stephens, of from comes with line the

Cameron Lochridge

the on on by growing balance Great I strong balance that keeping First, much guys you like start Cameron definitely this. put to a an to a wanted at did, historically as really cash see as sheet, have off and sheet. it clean, time pays Hi. emphasis

Just time? to on pull you progressing the level What to continue you to continue and a that to from at that revolver. keep over maybe having trajectory, healthy wondering cash see keep how see maybe

how as we you Just forward? wondering through see downturn the progressing that go

Ben Palmer

Well, again. This I'll take that. is Ben

that the years, additional losses those between now XXXX carry the generating of carry some going with and able higher be sometime Act in be amount that be to Cares able back to them then to that now as the we're is we're of we're back get strong able carry profitability We with enough tax fortunate rates. and and some to well. so cash at generate which and are we'll year-end, additional to We going had a of great, carryback in fair back refunds

the losses. going that's back with to help Act, you taxable were the to new tax CARES So able not law not you before able take were to carry

the were and able We for short to to want very long certainly term, don't term. be in going the very, on us. helpful we rely for at that Now least to, that's

we that we're some use So will a our we'll need hopeful to some levels we'll and hopeful growth, cash we working have in enough have are business that because that of activity improve that capital will building cash. challenge

there that to on need all we'll positive that don't we that event And place of taking in the have experience. available growth much know cycle So works. we the nearly prefer balance to were would that understand we up it the have cash didn't sheet trends eventual this that actually as that how we

out from like clearly status I we cash do operations But We to So of depending say point a certain the above sufficient upon right business have balance. ever business plan keep we level. want don't not know our that want of and a to and the to want fund that. the to things cash we're direction now is not that the trying just to that we our get a to

that certainly primary a So is tenant.

far strong. still we'll strong position, certainly keep sheet even We'll the as financial that balance we'll concerned. have So and maintain we're the for as

Cameron Lochridge

is so completions maybe My next we've bottom far just It earnings the which this I about talk up, seeing in hearing question, does like and are echoing what should season, XQ. the levels you in activity half want year. been sound pick back guys to start you've of to the hopefully

and from guys fleets? more you an the activity the you right building current potential have just now, those how half? fleets to think you Or you cadence efficiency half to many the fleets on the the back have wondering, working going see contemplate in RPC perspective, back maybe Just bring that on guys back some do does could

James Landers

this Cameron, is Jim.

of we little passed little the was to than So have things in June better is now May. plateau our a month is a or than But here view better we're June. we think do going so. that right the next July trough.

pumping, on kinds Having putting So financial being all that as speaks to this you that said back like into saying was our businesses well, about what in that given like a recovery returns pressure we've the previous see all and CEO businesses sustained fleets focus of our recoveries. the didn't conservative field. is beginning very in the real our that seen

fleets additional in when So the field.

I possible, that that. activity assets out we increase we're on activate was going of fairly going some before be there try have to whenever to have utilization think to belief to fleet, So high we'd existing another

there's So be this the into There think now. back the another coming much outlook field but we this at fleet is that right year, point. more may than murky don't

Operator

Bank comes next Molehill of line Chase with question your from And of the America.

Chase Molehill

how Ladies guess XQ? And in how revenue maybe up. expect little bounds revenue would and to could talk if much of can flush more can you truly what of of know kind be I what think here. don't or it it kind incrementals incrementals if XQ outlook XQ? it like will do I then sounds maybe, a up, put be around willing hopefully, be we some we we out Or type should in here much

Rick Hubbell

and that much not cost We say Well, relates much, I add have certainly, that forth overhead not we we have soon. That's systems infrastructure some we when so at geographical person. standpoint, think should we've our well to we anytime say we too all that and the standpoint feel way have ability that with we personnel. strong with comfortable additional our I where about can and from sufficient have to incrementals our generate structure from revenue it will think a to processes I an feel but reposition to site as

strong well very opportunity have We as some there to generate incrementals.

couple I even revenue. of think have improvement for if in at least we the next quarters, modest

know again, sufficient the that a we aggressive appropriately we to oftentimes, have quarter. won't of to we're be to going We really not agreements each try realizing that We'll fall the those concern of prepared with will any in So earlier, too know might give made our say, question or estimates what relative fourth of to viable revenues bid again in customers we are is to in are what happen But opportunities. I get the the generate kind to quarter. business. over year. third have time, returns about

not to we're going weak industry. to our contribute across pricing So

on hold that. to firm going we're So

SG&A very the so moving be And reduction, additional bit kind quarter, didn't there bit have first reduction revenue, be additional incremental of have the again, the side. a of of the half the so We when slight of strong little so SG&A do happen of during cuts in some opportunity cost we little a we will until on should forward.

to Jim, add should And want so be to incremental do to strong. you anything that?

James Landers

incrementals. are I quarter don't we things, be than I'd make kind into or up mean, will And and is all that higher think be EBITDA but quarter Chase, at Ben as a we saying, the quarter. of than be narrow. two those loss you our incrementals when I it you're doesn't can only better line, spreadsheet, the calculated, indicate end think the much. third some add cusp will they the thing of that bottom would will numbers strange when negative revenue quarter certainly, kind put with second numbers a you But third second of

Chase Molehill

something kind And be about think levels breakeven just path maybe if of kind to able kind positive the need kind about can do to actually differently talk level? toward ask and of that reach little of just of about of EBITDA I revenue what quarterly a breakeven EBITDA kind this. of EBITDA you Maybe we think you

Rick Hubbell

the that. we be answer Chase, would giving if you told

Ben Palmer

strains talked And mean, strange about I the Jim Rick, numbers, mean tremendous. numbers, be can I positive right? incrementals

with be So discipline, and pricing discipline control cost could the incrementals tremendous.

or we very breakeven. move So to quickly positive EBITDA could

Chase Molehill

what expect your what sounds that what just you've that just XQ And from It one you kind budget quick. Or past? in of like given because that real is exhaustion follow-up slowdown the you're you seen or some customers? is hearing

Rick Hubbell

Yes.

I earlier a of the the right? in now, maybe to hearing reading that low quarter, maybe year, Actually, at of We're why level such lot be more there But would slow just that. was lot, people it's maybe again. going of progression. surmising about saying, a fourth in quarter, think don't activity I happen a sort it's normal the know, down fourth

If a better work really any done, I through, quarter how get is right many may think sort of if there the than didn't holidays be fourth perhaps mall we through to things the in past, needed pickup they in were right? years chance, that people busy activity the and matter, themselves. but there's holidays XX-XX it many,

but sure, we know it's not we're possibility. So a

to the up adding we add skis. pricing don't just up, our we We add not fourth That's that's boom, slowdown. have and want up and a get all. we ramp adding quarter ramping discipline get then capacity, we So if of helpful end and capabilities don't to or out want don't at ahead resources obviously

That quickly that there. a up, ramp and there. is be of to a knowing how slowdown up aggressively possibility little backdrop more we us cause about to might ramp that, going how it's we is So careful

Operator

comes MacPherson line question from next your of the with And Ian Simmons.

Ian MacPherson

morning good thanks if me for think ask everyone, you I that... on, to Thanks, let wanted

Rick Hubbell

Ian, you may be on mute.

Ian MacPherson

Can can me hear you now? Jim, me? hear you

Rick Hubbell

sorry. Oh,

Okay. now. you We hear

Ian MacPherson

do there that. and the across right the now we discipline I mean your of not about assess out hear you seeing that we capacity put field? discipline? encouraging to discouraging profitably. judgment How sorry competitive you clear signs applaud And you can or route I'm collective industry work Are more

Rick Hubbell

I go would say. hard could pricing with the lower. that levels say activity. I to of It's don't I think don't lot low a know

unless commitments have that the need or improve. make mutual to pricing We give enough the sufficient figure we say going don't pricing it's People to hope that get I sense really a try clear be to think that solutions pricing, the scrambling, again, for commitment but in disciplined returns, to mutually pricing level, scrambling that promise to on get right? be to partner the to place how make the see that customer to is down. are beneficial. levels off don't make question it. and to with And out us at needs We determine that the long-term want competitors all and to back to know I the path I get make we to people will we the have commitment. are were for got see to hopefully think bat, adequate customer. and But us to strong to we to, don't that opportunities hopefully, to back low to to find start activity want level with work right not our sufficient up, will us maybe

know, I very, very don't this So I'm level. low at hopeful,

field I'm We a Some But get hard need don't to you than be a in they will the hopeful say. of sooner portfolio. they rather capacity remain put people have so people diversified that there relevant. just if disciplined need really overall. level feel that may saying like Especially later. to be it's to minimum

Ian MacPherson

mean, get I activity levels. point Okay. industry you can't other is Well, pricing if the get and you can't sufficient

through in it other a haven't of of a that consolidation. The course, but new and scale RPC typically is is we protagonist scenario, answer, to add now. consolidate thought as world And

you and thoughts So industry participate? from thinking with you're to needs any to way consolidate your your updated I wonder appetite the if about that there's guys how

James Landers

of does. plenty at need Ian, opportunities I pressure for presented plenty to right this know who this is of opportunities don't don't Jim. consolidation now. being We pumping equipment point. There more are And

incrementally So more than probably this cycle there consolidation is last.

is RPC really I probably you not good is just clear when at unless there's future. to that's activity transformative. in lows, participating, oilfield out think you It's have figure vision historic will don't what something see hard a a and deal the

us So it to be would really hard see participating.

Ben Palmer

will I I comment. will comment this is Ben.

I equation. we though think of certainly together potential people that no location, of can transaction little through aspect geographical with But processes they have and like the again, many current much things doing that. or there's out that uncertainty. takes so premium, even is just as gone the one come concept justification candidates, And

work some already you of the we're don't been but to would So going to entertain. there don't and a some done, sit certainly be of still do of the has mean complication We'll lot but it, back.

We have entertained.

We have looked at.

opportunities don't continue to see not on where problems We issues. to else's right? at us. anyone survive, leads will it But take and need saying to we We want look and we're it

have our But but never pursuing opportunities, we're we we're time. will the positioned. to of We're not evaluate challenges at We enough Jim actively anything, current but not forced as luckily, you will them. at said, know. do that And look well we own,

Operator

next with Jacob Suisse. Lundberg Our Credit question the comes of from line

Jacob Lundberg

about redeployed referred assets pumping you and just being to manufacturer in equipment the I that off incline start comments they bought asking space? distressed large their oilfield. seeing just oilfield came to guys was some entrepreneurial one yesterday the were of some that are the wanted on of if actually of people out some any kind I of by in curious that call,

James Landers

knowledge news. We've to markets, in this our bad our the at in ground seen and If that on certainly I'm is not our true, not it. questioning point. this Jake, Jim. That's local

Jacob Lundberg

what if the sounds kind march this no at are anecdotes encouraging. already, And your continued earlier question on just we down And of level quarter from that you still bad. around of in I then, have words, of sounded comments, are there you those what taken be pricing happened Okay. go touched some we very Has pricing pretty guess, for about take traction. like away? irrational low absolute out during that a started might seeing get the That's other Or there? it aggressive the pricing traded some pricing called to anecdotes that some it of kind there's But away during will to of worst widely bids QX. In think work pricing? kind of of

James Landers

second that anecdotes Yes. were going around that be that Correct. quarter, the else in be the may and it actual to below happened have that was the in might things pack if the And Jake, second was bidding much was outliers outliers anything that longer. quarter, always they not encouraging that there group are acknowledged below XX% everybody customer bid much who smaller.

them So work for while. a just we'll kind with of

So is We is time. do it if more that. anything positive, think the pricing last there's discipline

working of proppant and heard some of inventory have have to cash are pumpers going some guess than the rid lower rates are who I ahead rather accounting accrual doing also they We accounting. basis at get proppant. they're that just

we've a excess to that think think in abating little the discipline but quarter it as We was, going the well. So of of heard probably there. lot are things second better is and there's out some we there's pricing the horsepower than be incrementally, bit, a that

to going than So else. still There's people. going always going is be be a everyone to bidder more marginal there's marginal to be the

Jacob Lundberg

much to explains CapEx I I reading million is and delta commentary more the this, could $XX in, think about right, call, maybe was I'm too what just curious but one think you into I'm if $XX just there? the I of last kind If million talked sneak $XX million. given

Ben Palmer

It's than but frame a up clear that. otherwise, in particular was number. reasonable the We're mean, No particular. in just it that's question, more a the particular, I to trying thing driving nothing in year. later little nothing

Operator

And from with Vebs Scotia your Weil. question the Vaishnav Howard next comes of line

Vebs Vaishnav

can way I guess, into if cut? that there year, even like we you access how five how about much could we this to to is cost around next just remain we I'm cost a at think three more about we carrying? trying fleets are much think think

Ben Palmer

infrastructure. Ben. of a existing We carry number can This with our is fleets additional

that can don't there again, discipline. as is is, want we evaluate we some So you're going forward, don't what put basis, of the That's that an now. the out a we extra move the an infrastructure from goal. to So the But priority are not goal appropriate cost level each opportunity we want opportunity. to right appropriately handle pricing we We're correct, of fleets consistent number fleet a that's will The the the are is we to We hopeful right? carrying. standpoint. speed to contributing on remain get

all functions. incredibly will drilling company, count activity. move that rig functions just even to support continue each direct is and obviously, recognize low completion what come and cost We'll evaluate off lower We for we've the infrastructure to the we operational right continue that area of support evaluate as we forward. But

to to So from a who give time. going it bit little So here, knows of it's go going right? where we're

seeing we luxury occur, we that reacted out going very decline not was rapid a which of little in then first have to quarter was given and a frame. what time, we look, second we're ourselves which thought time reacted in happen, reacting obviously activity, the to kind quarter the think, we'll May-June position of and how did bottomed We But it of plays accordingly. late bit

we prepared on we'll have just goes we're clear hey, not at sit we is. look possible. our not not say, exists. issue. is our of to structure. visibility to When as So right issue half now make we continuously what as the it like we'll evaluations or fourth terms but like, it it at and see in exactly But first next cost term, here, looks evaluate quarter looks of what structure today from where year what it and make continue intermediate the infrastructure That's adjustments our in our and cost, to Longer-term back look or

Our don't pricing. at activity, we we sufficient right? we activity have need issue enough And have is

and perspective, point. our make now monitor is coming a focus what decisions to in we capacity pricing needing the survive not the continue structure that's and months and there. to the then at adjust it cost this those is So the we'll from structure cost to from opportunity right can quarters. adjust We're activity and But

Vebs Vaishnav

over I perspective? Or well that is guess talked increasing the What's out July, even to is of flat guys you better activity some color kind industry than activity And around from perspective? better, company's provide is driving an that if you June, you that? out expect could more like the about here.

Ben Palmer

question, Yes, activity in restate will funnel and it's customer just we've plateau. exciting. the indications And the the is is not on low and sort Plus probably a think company which we XXs, thing. fact said perspective. all that just oil improving, sales I your just mean, is what of the that's to based

Vebs Vaishnav

switching TTS. negative My maybe was assumption And just also is TTS margins. to

cost planned more it Just positive think additional are trying just about, there by more triple? be driven to is That turning for activity EBITDA to any Or would savings out increases. TTS?

Rick Hubbell

going opportunities are comments, comes things efforts. would cost opportunities that play go out. need say, I won't There hey, we're earlier all to how but When reduction there company, over are we what to just to see I everywhere, to back but take the time right? some restate,

make we make and to don't further but in pressure going the what continue we're in significant additional to coming see quarters. there, to small the and we this We to months time at point market adjustments in feel the react incremental here cuts,

true across pumping. the is with true is support It's true TTS. functions. same that company. with true our It's and Same So

where go it see. So seems what little react our see time give see from and we to position to we'll a out, is, We'll what there. shake it we'll more

Operator

question TPH & O'Leary the next comes And from Company. line of George your with

George O'Leary

break you if I hey, business the wondered just for revenue us. down George could by Jim,

James Landers

absolutely George, to. Sure, glad

by percentages So about lines. to the give are our percentages revenues consolidated RPC service of I'm major

So during terms line quarter, the of largest our XX.X% revenue. through second at service of solutions in revenue tubing was

which Number coiled five largest at X.X% Number Services service at at and line XX.X% was in pumping Support XX%. X.X% of our nitrogen third segment, and RPC Second was was largest tools, that pressure was revenue. four our and consolidated is tubing was rental

George O'Leary

are active have work. on the about the envision Is And goal like geographies any are active? you then It on staying Permian today guys in sounds most Or incremental distribution goal enticing other Basin. thinking utilization shots trying you in adding about that to spread an just there back if just I'm from shots today? potentially where be fleets may in a activity you're having out active just it's that's discussions in for there geographic the that think existing to where about with working you? customer field

Rick Hubbell

George, pressure question I'm inferring that pumping. your is

other don't in do and some I so other there. pumping Permian better everything coming mean I the and places. that's relative are better years in numbers, pretty service in have in haven't with greater where Pennsylvania, than at now, already are, but our Northeast relatively levels And Northeast in areas. some We've five are that's lines other than active of the and and you now. opportunities the almost for businesses of right really doing working mean some Northeast pressure much squint the relatively are is the but Ohio activity there the we're where are you're We Mid-Continent, the got hints just to our

bring But that's not comment, thought pumping market pressure it's that So out. a coming. I an RPC just I'd overall

Operator

from your Voie Fargo. And comes with Wells of question Chris next the line

Chris Voie

rates a expectations looks third could Is business for the quarter? Obviously, the that? the like growth first, touch you going ramp be pressure you quarter? to third guess, in pumping has in if Maybe fastest grower on I could lot. it by shrunk that

James Landers

prepared Chris, aren't to consolidated give We this is just a That's that growth, question one. got Jim. we out. a about hard and

really we report we activity. aren't all the quarter. that in any that I third when standouts prepared be They don't have with do know them lines some increases there will logically, so shown service of And to either.

Rick Hubbell

pump. to position way of with is if the with will that, adequate pressure is percentage our of sort increase we've be pressure pumping the fleets are the it yes, with and and number adding alluded the it and pricing that fleet adequate we one and if more at With as greatest does in successful activity, potential,

Chris Voie

then the fair lowest would have rest there's right for the is margin assume businesses to And margins the gap to decent-sized enough. a it it that pressure now? where of Fair pumping Okay. compared pretty

James Landers

variances mean, and cutting And all costs pumping. but we've are here, times average, some better the give not exactly bit work let's I Pressure let's say. for than the margins These accurate. actually Pumping's small we're just a done, just pressure little credit and actually about talking ourselves is strain that are

Rick Hubbell

this. not case like cycle be historically Which a would down the in

So that's a us think, positioned business about ability has the again, really, change I that capture the we've made earlier revenue. increase comment the to well to to to upside opportunity the the

sufficient certain we and overall it would quality of it's positioned And lot upon we're in other obviously, And been willing the to activity. of won't there's of levels all to area. the think well. there's be number performance, point, opportunities a customer work things. going those make I to us this relationships I a unless those It'll before be commitment. done come but So we our to trying and pricing opportunities are depend improve think have From fleet that that win, average to

about point, about contribution, So not adequate this adequate about it's translates margins. volume, it's into it's all that at and

Chris Voie

maybe Okay. one That And last one. makes sense.

that improvement this rate, far last the think continued you performance the half current activity cut third had compared improvements few the Given in so quarter to in if second maybe losses do quarter? months, you through you EBITDA the at the could quarter,

Ben Palmer

flip The to trying much give answer. the... sure. not very I'm within is, answer a yes, That an

Rick Hubbell

Metals will be strong. very

Ben Palmer

Yes.

very in So possibility. one much that's the

Operator

question the Morgan Lynagh And your from next comes of with line Connor Stanley.

Connor Lynagh

Flex, of but much question market guys see a you information to you focusing on lot obviously think don't broaden in mean want could the away give think we guys. a trying it the is pressure to take too you pumping consider actually, competitive the where don't give I little where would to But in want about people I here. just to bit, market abating maybe reactivating are

have the how or Is is good larger to some the need see can capacity of single back industry improvement quick program those of you it Maybe on So much issue, be me in? markers frame to commitment customer cad? that for price? just we the duration visibility in us, on do be continuing to work a in for order

James Landers

Audio Jim. is is unclear. this bit little Connor, a

the restate and Let we'll me answer. question,

pumping the main daily, to kind is and levels them, I have see? weekly order I'll answer answer. some duration a start activity think need levels in basis to is, of those an your on some fleets, believe to One, length. that and activity would reactivate we monthly And question some what with pressure

And returns, us they you're to so pricing the At a issue high really has generate been going the doing but today, customers to that don't pricing want with if to have market they we're do, have us to sporadic want you financial activity much. at do activity. everything levels

my Anything daily, of time The but other be And realistic just better of opportunity, length and we we're on will levers pricing, course, pull. place. add? activity the is that, it's the levels and that expected weekly take trying to to can

Rick Hubbell

No.

think, one. really to good see we He said about summary daily, is I a Jim's monthly, know, we we need weekly, and it. and around you talk sit as and never

all we expectations making to other never when want after sharing decisions and you're we the fact, staff we're activity things. of much the those want we're You with till or support that those right? in the much How to about get, and and have number and customer set as as can, know expectations yield we and the really going to put but activate expectations fleets

to have think to regard continue lot disciplined be of a about made or be. today to And different. nine of we've we've is we customer the type ago, a year that. going relationships even strides as ago about, want Again, great we're we months So we to that compared talked in

we something, we than longer we'll customer only about everything we be few consistent number So that talked environment shooting can. level have I been commitment. to think and we out, talk but time But You be the about quarters just what again, can't short talk you that will difficult the to few again, the try we'll activity today that's sure for that, get, pricing seen can to difficult that make want Obviously, to we longer consistent or And wanted ago we'll and do to for we're and to. fleets of And grow have that profile the we over in of right? that. that this even improve the like looks monitor that's us. doing months, and periods a we'll beginnings that and the pricing we can activity, we're But has a get we performance. small a be for, if a relatively we of be with think results. we are we and have grow want that But what together, about as

of a low, in levels activity in given we saw the low we're the think I good the position low, quarter. that second

we're with adjust monitor So coming the where it And and we'll again, we're months pleased quarters and positioned. accordingly. in

Connor Lynagh

better. And the working Yes. little I here appreciate other it. from a home. hopefully, bit quality is [Indiscernible]

deflation So question one pivot to is your a bit chain. little supply in

like, help of come about half sort of back can bit at impact, think of past should cycles, pricing flat margin the in taken year? if is like pressure But and might tailwind the your bit variable the that the you be I relative potentially a a parts from it's maybe to longer regardless. it sand on So and a in lag through any that in think improving is we us And pumping prices there P&L a of certainly, consumables the all to suppose, through going regard?

Ben Palmer

but aren't upward now. Well, labor it's prices on pressure we experiencing right not chain, supply

James Landers

have has job seen on We fuel We pumping jumping. for that bit things the me, comment excuse Jim, like and and commented pressure a with that. M&S changed mix

We we're that. customers a that are we're providing other often of in people general seeing lot providing are what are

margin sufficient things whether and from in like can we're margins the sand, personnel We supplemented fleet, not achieve provides only, the customer fuel our that bring going so whether the to we contribution that. changes getting, where the commitment. equipment be trying the we or interested we as wants are materials are that's an that percentage contributions We're through percentage are us with appropriate to obviously capability overall going looking changes provide at bit, need the margin and to whether to net we're to But contribution not. we're make the have from fleet before a quite

overall hard that's expansion only it's to Again, of one that's winning the our not on the additional to And of mix the opportunity. the depend or where percentage we work. say of go. change mix that's fleet with going business will can it So two where

terms portend the in not percentage So margin forward. this what point may from of sure future

Operator

And Research. Wolfe your next from question of the Gendron from comes Blake line

Blake Gendron

basis half topic the the to jobs It's wanted ever the same. since approach on the maybe appreciating discipline OFS back per through that pandemic year, of that angle. most be a started really the suspect and small on would of from probably pad bid the understandable, lot, the very a I E&P I are

just reactivate make On sense peers hand, economics. unfavorable been wouldn't spread disciplined it because a and to for the you one more have

you I think for a supplier folks they may potentially year, so or company the to hand, speak, they're just them some And arrangements of of the not to the have put throw they to more go two opposed with next these folks competitors that maybe if expect service year? that like that, this the oil well the we've into more larger when allows could lots, week E&Ps until and I'm the, of as going do E&Ps wondering that guess, kind it another here the past. dumpster recognize field we you diving, continuity to few the last market on premium of as dedicated On rebudget work. other coming price. the I'm quality spot out going business job those to seen bid you reset below for evolve backup just they wondering characterize do expect do in on to other budgets tenders you if for how

James Landers

that we is answer any Jim. MSA to financial like. seen have on to about what have leading have don't started We a early. it's renewals questions What going Blake, market year this supplier's edge asking look I'll are information customers strength. stuff this try great

sometimes questions well. And in ESG as

choose reading and information provider. price lowest the and However, they like take then it that

that's So now. evolving we of probably right story. kind an all know It's

Ben Palmer

say this going heard at we've it Ben, pumping, availability, like availability they least, a customer that I've XXXX But that I one heard with was discussed into anecdote that at tight. least you felt will I discussion is will where tell get service, could

of arrangement part next months of the that for in structure our was establishing that relationship establishing discussion and that of clinical several So the because fear. the

that was or very up capacity whether of true they're quality, at discussed. the felt other make whether constrained know. least not. kind access could don't I that's that well discussion or to But like good at whether it right that it's least or service So they being in came but fact feel pressure that let's pumping, become each wrong, XXXX, the I

will be. there hopefully, point, your to So

mix are have We activity time. clarity striving level, for more is a levels where that we pricing of period activity E&P the can structured of of appropriate over relationships and and obviously correctly. of of activity duration benefits activity and us It and certainty

So just seeking, hopeful see. have and and to we this we wait tender but process fall, the are be that will part of

Blake Gendron

oversupply pumping We have pretty market. grasp of the good a in

seen some one We've near maybe you here the in term. the attrition. capacity tangible hard comes it's and some out your see competitors subsector times falling of Fortunately, where on

TTS Just year? markets? And these how of do status assuming worse, auxiliary wondering better, maybe somewhat sort if snubbing, the same for so could of specialized, see oversupply, these of the attrition time that assuming there. sort it's the out over you not seems activity coil, the whether as strong next But subsectors, playing characterize improvement just you isn't Can segments. characterize much in you nitrogen. across so utilization nominal this

James Landers

sense oversupplied might These other Bloomberg the as are not our pumping. fleets some Jim. other tube pressure not transparency how coiled of as is just every But It's sectors followed, much widely are and not that Blake, out areas there's many be as Wednesday. not there. this as on is reported as on

In fact, I'd say that strongly. a more little

equipment. you areas as business or about may oversupplied. out We of from not but perspective Some percent X When there equipment of companies are the bottom eliminate don't of consolidate, attrition know your an going be those you consolidating.

probably pressure attrition due sense equipment pumping oversupplied that point. out. may rather the business than some at combinations there So just wearing is to the most most be this is But our there

Blake Gendron

not but expect source wondering as to the working the just a in to large do half capital it in housekeeping year, capture? here of follow-up. cash the what you terms is of moving obviously, capital, Working And one just XQ, back be of of a runway source

James Landers

be If actually as more the and the revenue would working fourth that it and quarter capital Yes, because opposite. would quarter third between require receivables and actually inventory. sequentially improved of second

would a on And draw in actually so cash that be that scenario.

Operator

next Instructions] line comes question Scott with the Gruber [Operator of Your from Citigroup.

Unidentified Analyst

question savings on ask on different wanted cost a this to Scott. Stephen way. just in guys, Hey is for I a quick

But in it savings look incrementals savings be comment of guys initiated last perhaps savings cost early like quarter a quarter XQ sounds next that cost a could You then bunch full strange the that quarter. partial XQ. felt of will in cost what's

savings guess realized able to on dollar could change EBITDA are I in you a revenue, full So XQ positively a how a versus in quarter XQ barring affect of basis? cost gauge

Ben Palmer

we And I that of in the that our cost comment were line. reductions the kind in impairment costs of cuts, that most the took made there down early headcount second quarter, severance are

that's purpose. effective that other adjustments were depending treat that compensation you on did take how for it some So the of May. your But Xst

relates my additional on, and revenues SG&A to through. second line, obviously, things a the quarter, but less all were made compensation becomes much above kind be those there third depends come from alludes a There there adjustments moving lot some when to be level some there, that that transparent, comment will reduction it that reduction. So of in will quarter slight to that of

the the that I I the moving depends if of a the is bit on bit that. savings assumption line, the quarter. your enough more So be difficult would A gross and little your cost I like cost question. sit answers would going say I timing in were put profit little revenues the on things additional improvement on savings a Hopefully, line. quarter about into SG&A third It becomes the of kind not to and in second that a to don't modeling full versus cost savings know here of quarter it, that huge

Operator

further over audio remarks. Landers the no conference We'll Jim are back There Mr. questions. turn closing now to for

James Landers

We look everybody forward listened, soon the as Thanks and everybody continues. Thank and discussion. who the quarter you, seeing the and called for Thanks. thanks to questions for Polly. in

Operator

call. Thank the And you Today's today's call. your of conference replayed for thank completion within in will thank conference be the participation hours and on you. call two www.rpc.net you, following

now disconnect. may You

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