RES - Earnings call transcript Q1 2021

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Operator

Good morning and thank you for joining us for RPC, Inc.'s First Quarter 2021 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 Services. 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

Jim Landers

that Okay, break. so right, thank sorry Thank and good you, you morning. for

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

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

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

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

President a to to press our a and haven't CEO, received you'd our Hubbell. call now copy, see please will to rpc.net, go If I to the turn and Rick over like release again copy. see

Rick Hubbell

you. many for a was first morning year levels. of very on challenging issued release our press RPC's thank earnings XXXX. Jim, we This quarter XXXX

with inventory in to five terms average, is recovering. near hydrocarbon is the reduction demand Covid-XX surely pandemic. coming actions has slowly aided OPEC Fortunately, oil to its but to plus date. a the world This to supporting And by year led

result, in support the for activities. gas which growth outlook modest a oil prices is industry should encouraging, As the and

played we expected, except February. quarter largely cold unusually out weather first severe The the as for during

is estimate by we our Our event Not $X see that most in this outlook. XXXX event encouraging of confidence in trends that lines, negatively service EBITDA impacted withstanding our gives approximately us our which million.

which discuss will Ben and I CFO, other comments. financial more this closing Palmer provide some detail, Our will results after in

Ben Palmer

Rick. you, Thank

cost to first due The of period $XX.X quarter charges due prior quarter of per revenues efficiencies quarters. and as resulting of during previous cost of million of challenges first recorded in These levels, XXXX. and appreciable year. decreases to in the Cost first $XX.X repair prior to million lower $X.XX $XX.X during share equipment decreased quarter decrease declined primarily and labor well $X.XX included the compared to of first year. for the Cost million to of of and and adjusted in primarily first revenues our year. Selling, result prior $XX.X of the services, quarter lower million Operating the XXXX For in costs in compared pricing to and million, other year. lower of the fuel quarter the first the revenues of quarter. in quarter revenues, this from activity expenditures. per the during of of adjusted the decreased the to revenues the expenses quarter quarter Revenues costs percentage prior Loss to increased levels capital challenges share EBITDA activity XX.X% consistent with adverse events first as previous million XXXX. million the quarter as of and $XX.X in maintenance loss initiatives. expenses or first first XXXX, year, of and costs, in period quarter quarter reduction to $XXX.X compared well primarily million pricing in was decreased prior for the adverse Depreciation general the of Cost of to amortization same lower of was of same was prior first XX.X% to RPC's the for first as XXXX several including conditions reduction lower the weather primarily during the increased and $XXX.X the the million expenses or activity due revenues due the of compared $XX.X adjusted million February employment in a first the to amortization quarters, due first of year. property to plant compared of the lower an significantly, quarter million lower revenues was compared the as in to Depreciation as compliance $XXX.X COVID to the first primarily compared levels, compared million year. decreased significantly the year. decreased costs which $XXX.X $X.X and loss EBITDA weather administrative first in prior RPC's quarter operating impairment $XX.X quarter XXXX, asset initiatives decreased of quarter loss

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

sequential to a increase this XX% Segment in basis, in And increases On due increased profit XXXX million materials order. levels, first of quarter the revenues higher compared first prior by million same $XX.X services such Our to quarter XX% an was in prior million the $XXX.X of the million, RPC's in $X.X Cost for segment million operating revenues decreased expenses. employment to compared the was $X.X support loss million supplies year. prior in and activity first to quarter of quarter quarter first to of $XXX.X the of operating increase XX.X% year. the and activity as to during of due which with or $XXX.X XXXX revenues most expenses service lines. our quarter from the the

first of of to loss the million quarter. was $X.X first XXXX. fourth revenues first a compared as quarter revenues of M&R million to in million operating the XX.X% forfeiture percentage due RPC's of adjusted that quarter stock same which $XX.X was the of adjusted in cost from weather quarter in prior fuel the This quarter to quarter in adverse million XXXX during expenses beneficial fourth compensation primarily inefficiencies XXXX, prior Xincurred recorded EBITDA $XX.X increases in As quarter. right to of in costs cost $XX.X of we of prior from to the quarter. increased $X.X increased adjustment slightly of was to due operating to XXXX the loss XX.X% in XXXX. coupled the This of an Selling, administrative first EBITDA general XXXX the the and XX.X% $XX was RPC in quarter with event. an and million of the due other expenses labor during and

million increased million $XX.X an service compared the in by incurred levels XX.X% to of operating revenues first loss segment in loss to to in Services $XXX.X million the million Services the Technical of a Technical or $XX.X activity current due segment in increased $X.X lines. prior quarter quarter. Our most segments operating the quarter

million the in Our to an support in loss increased revenues or was first quarter the in million X.X% $X.X quarter. operating prior of quarter. current Operating $XX segment the services by $X.X to loss million $XXX,XXX compared

of first recently operated same XXXX, one fleet additional these with the Due pumping fleet, to five meet utilization. of incremental fourth the high quarter, quarter RPC existing fleets, we During expected demand. horizontal pressure improved as added to in but horizontal the utilization

equipment, currently XXXX quarter to and million. $XX closing expenditures existing we XXXX expenditures With $XX.X comprised of full our back I'll growth capital selected turn capitalized First primarily year over some approximately for of Rick be capital remarks. million that it estimate to maintenance opportunities. of And were

Rick Hubbell

incremental customers. be RPC has capacity operations Thank discipline signs many investment. and until expectations are interest to we levels the recovery our add how year. all will point has as friendly have company; coming an possible. to Activity plan the into you, And XXXX wherever as tracked greater among our of the capital a largely we do pricing modest have confidence continued that to grow Ben. reduce justify economic We're returns to emissions to of committed aspires our a to encouraged started. and remain year adapting by continued environmentally topic not We progresses. ESG

our of ESG capability stages of which dual final will brand deployed at the be capacity thirds We two are in fleets to another of our fuel upgrading friendly.

our done. financial conversions competitors, easy However, investments are requires before adaptation for make RPC the most and largely capital Further to sense. economics additional improve ESG of

you not is growth end quarter to debt all lines in remain equipment your the this to RPC's time, And like $XX.X transition the capital first more are likely from RPC's economics adding friendly At of currently capacity, While ESG net the to supportive of reflected continued come expenditures. the us morning. conference and thank call we'll this balance for million cash for I'd open free. joining questions. up was we at for the

Operator

line of Stephen comes with question first Your Instructions] the Gengaro [Operator from Stifel.

Stephen Gengaro

you first -- mentioned that don't is we activity pretty to I if a that the after the commentaries go pricing see needed mind, growth are revenue a just as additional trying we some level. you you breakdown this gradual at assuming And on a you in in through Are different follow I might sense the high quarter five high am you US and a one at the mean, you good level you pricing. for kind the trajectory just deployed segments. gentlemen. get some to just starting fleet. Thanks, the Two morning, pricing? CapEx year we're then market. to And the of talked upgrade assets as get sixth for could about things utilize given fleets will the made that thinking

Jim Landers

Sure, I'll revenue the Steven, Jim. is breakdown. with start hey, this

For following consolidated XXXX, quarter of revenue, the percentage first the lines service of generated of revenue. our percentage

the support was some for X.X% of during we first of or that the were question say we along had question. number and So rental obviously the was to three, quarter, would solutions, and quarter. tools incurring. Coiling number tubing X.X% at is revenue. business was at revenue, four service Through consolidated X.X% of revenue. that our pressure number tool revenue. our consolidated was of line consolidated downhole of largest Nitrogen tubing XX.X% at of two, was able and pumping I cost revenues in first motors XX.X% with were we was opportunity our increase we respect saw And consolidated the pass right appropriate to pricing that

a from very process get highly that's to company I see utilized, improvement say So able we have fleets we're a still in It want remain net still in competitive, we still, to obviously very pricing waiting that. the overall we would to pricing perspective, pumping disciplined. pressure is within place were our

had the we utilization that we high were indicates pricing minimum fact we the that that out pricing, achieving, So of were targeting.

that's a thing. So good

mean Some though, revenue, to again, to increase was increases. increases to pricing cost the cover in of I due price -

So typically into very opportunities really And emphasize And point But hard our that period. fall reflect not quarter that. to in may our the out we level but that we out couple and that still happen differences do techniques called working that from period I number create are other are what release increases very the or new think we are quarter. were continue some will our and is tools in quarter are incremental pointed of all of don't try a that specifically, obvious of generate But that that differences. the following the that with the press explained and that competitive. few a didn't this a impacted pleased it in new completely demand. other we the hopeful, to operational negatively may of but here impacted to sequential to we and revenue there can identify explain, the some There try to folks to items And improvements support from of I forward, items and things we activity incrementals. everybody haven't

that those pleased the but from said the we're the calling with fourth like specifically, I improvement the overall, quarter out and So we're trajectory we saw to first. not

Stephen Gengaro

lower one slide connected about think and I you been had side you back could other here? when on But Or if still part do about, movements Thanks, levels in as have and utilization because things it's and think hard stone XXXX. unfold think how it's I historical the they're you know been choppy if been the you normalize one the been think have -- of incremental they'll fell kind do of now? in? Do violent toward

Jim Landers

Jim, Steven, have actually, And that going revenue cost things that. increases normalize, other passing be set that to on profit, anything But the record go for we like along know some may in increase we of this incrementals that offset think go from like saying things we noisy also metrics would one we is to that's than just that more come back quarters. the to a I traditional that, incrementals RPC. of should for be don't

Rick Hubbell

to utilization someone incrementals pricing price we're try try remain go on is incremental going And increase, very think, busy, but what that discipline required will and and aggressively let add me generate out I trying more generate think We're I just going be emphasize normal generate the some be to so score, could to revenue to those focused to they're pricing and not disciplined. the maybe on remain. to to

much say. are growth more revenue for in growth, interested profitable not growth We on

Operator

no to Mr. there call turn further Jim Landers for would time, this at closing like are I to And any back questions. the remarks.

Jim Landers

hope for everybody day. fellas. you, it. We'll soon talk Thanks you listen Thank morning. you this appreciate Thank to and called who to you. good a have in We

Operator

completion that conference like call. remind Thank replayed the within to you. concludes following hours two conference I will today's www.rpc.net be on would call. This callers today's the of

disconnect. may now You

RPC (RES) 28 Apr 212021 Q1 Earnings call transcript