Ranger Energy Services, Inc. (NYSE: RNGR) (“Ranger” or the
“Company”) announced today its results for its fiscal quarter ended
March 31, 2020.
– Revenue, net income and Adjusted EBITDA
sequentially flat to up despite softening market
– Wireline recorded new peak period stage
count
– High Specification Rigs posted record rig
rates
– Aggressive cost cutting now taking place to
reflect current market conditions
Consolidated Financial Highlights
Revenues increased 1% to $81.0 million in Q1, from $80.2 million
in Q4. Our Completion and Other Services and High Specification
Rigs segments saw increases, partially offset by decreased revenues
attributable to our Processing Solutions segment.
Net income increased $2.9 million, from a loss of $0.1 million
in Q4, to income of $2.8 million in Q1. The increase in net income
was driven by a combination of increased revenues and a gain on
retirement of debt.
Adjusted EBITDA1 remained flat to Q4 results at $11.4
million.
1
“Adjusted EBITDA” is not presented in
accordance with generally accepted accounting principles in the
United States (“GAAP”). A Non-GAAP supporting schedule is included
with the statements and schedules attached to this press release
and can also be found on the Company's website at:
www.rangerenergy.com.
CEO Comments
“Our first quarter performance was highlighted by record
high-spec rig revenue per hour and wireline stage count which drove
consistent revenue and EBITDA performance. I believe the quarter's
results speak for themselves and reflect what was to be a strong
start to full year 2020. Unfortunately, market conditions have
quickly changed and we are aggressively taking the necessary steps
in response.
While we continue to experience relative out-performance versus
peers, on an absolute basis, the reduction in activity over the
last several weeks has been extraordinary. We’ve immediately
re-designed and right-sized our business to match these new
activity levels.
Our head count is currently down approximately 50% from
mid-March. These reductions span across every field location and up
to our corporate office. Additionally, we’ve implemented salary
reductions across the entire organization. Within the first few
weeks of implementing these difficult steps, our payroll expense
has been reduced 60%.
We have also begun to consolidate our operating locations and
expect other costs such as repair and maintenance to be down
materially on both an absolute and per-unit basis.
These actions, along with several other operational, travel and
organizational expense reductions to date, will result in more than
$100 million of annual cost savings.
On the capital spending front for 2020, all new growth CAPEX has
been eliminated. While our maintenance CAPEX has historically been
extremely low due the quality of our asset base, for the remainder
of the year we expect an absolute minimal amount of spend.
Although our industry is facing unprecedented challenges, we
look for forward to relying on our incredible team members, the
strengths of our organization and a sound balance sheet to allow us
to excel when others cannot.”
Business Segment Financial Results
High Specification Rigs
High Specification Rigs segment revenue slightly increased by
$0.1 million, to $34.9 million in Q1 from $34.8 million in Q4 2019.
The increase in revenues was driven by a 4%, or $24, increase in
hourly rig rates, to $558 from $534 in Q4. This increase was
partially offset by a 3% reduction in total rig hours to
approximately 62,400 hours in Q1 from 64,400 in Q4.
Operating loss decreased by $0.5 million to a loss of $0.3
million in Q1 from income of $0.2 million in Q4. Adjusted EBITDA
decreased 7%, or $0.4 million, to $5.0 million in Q1 from $5.4
million in Q4. The decrease in operating loss and Adjusted EBITDA
was attributable to the increase in cost of services during Q1.
Completion and Other Services
Completion and Other Services segment revenue increased 5%, or
$2.2 million, to $43.3 million in Q1 from $41.1 million in Q4 2019.
The increase in revenue for the quarter was the net impact of an
increase in our Wireline revenue, which was partially offset by
declines in other, non-Wireline services within the segment.
Operating income increased $2.1 million to $8.9 million in Q1
from $6.8 million in Q4. Adjusted EBITDA increased 21%, or $2.0
million, to $11.6 million in Q1 from $9.6 million in Q4. The
increase in operating income and Adjusted EBITDA was driven by the
increased revenues, partially offset by reductions in the cost of
services related to our Wireline services.
Processing Solutions
Processing Solutions revenue decreased 35% or $1.5 million, to
$2.8 million in Q1 from $4.3 million in Q4 2019. The decrease was
driven by a reduction in MRU rental revenue within the segment.
Operating income decreased $0.7 million to $0.7 million in Q1
from $1.4 million in Q4. Adjusted EBITDA decreased 35%, or $0.7
million, to $1.3 million in Q1 from $2.0 million in Q4. The
decrease in operating income and Adjusted EBITDA is attributable to
a decrease in rental revenue, partially offset by a decrease in
cost of services.
Liquidity
We ended the quarter with $21.6 million of liquidity, consisting
of $10.2 million of capacity available on our revolving credit
facility and $11.4 million of cash. The Q1 cash ending balance of
$11.4 million compares to $6.9 million at the end of Q4 2019.
Debt
We ended Q1 with aggregate net debt of $43.1 million, down $2.5
million as compared to $45.6 million at the end of Q4.
We had an outstanding draw on our revolving credit facility of
$21.3 million at the end of Q1 compared to $10.0 million at the end
of Q4. During the quarter, we borrowed $16.9 million, partially
offset by payments of $5.6 million on the principal credit facility
balance.
During Q1, we paid an aggregate $3.7 million to settle the Esco
Note Payable balance of $5.8 million and recognized a gain on the
retirement of debt of $2.1 million.
We had an outstanding balance on our Encina Financing Agreement
of $27.7 million at the end of Q4 and we made aggregate payments of
$2.5 million during Q1, leaving a principal balance of $25.2
million at the end of Q1.
Capital Expenditures
Capital expenditures recorded during the quarter were $5.5
million. High Specification Rigs segment incurred $3.8 million of
capital expenditures on ancillary equipment related to our new and
existing integrated customer contracts. Completion and Other
Services segment incurred $1.2 million related to two new wireline
trucks and other equipment. Maintenance capital expense for the
quarter was $0.5 million.
Also, across all segments, $0.5 million of leased vehicles were
added during the quarter.
Conference Call
The Company will host a conference call to discuss its Q1 2020
results on May 1, 2020 at 9:00 a.m. Central Time (10:00 a.m.
Eastern Time). To join the conference call from within the United
States, participants may dial 1-833-255-2829. To join the
conference call from outside of the United States, participants may
dial 1-412-902-6710. When instructed, please ask the operator to
join the Ranger Energy Services, Inc. call. Participants are
encouraged to login to the webcast or dial in to the conference
call approximately ten minutes prior to the start time. To listen
via live webcast, please visit the Investor Relations section of
the Company’s website, http://www.rangerenergy.com.
An audio replay of the conference call will be available shortly
after the conclusion of the call and will remain available for
approximately seven days. It can be accessed by dialing
1-877-344-7529 within the United States or 1-412-317-0088 outside
of the United States. The conference call replay access code is
10142038. The replay will also be available in the Investor
Resources section of the Company’s website shortly after the
conclusion of the call and will remain available for approximately
seven days.
About Ranger Energy Services, Inc.
Ranger is an independent provider of well service rigs and
associated services in the United States, with a focus on
unconventional horizontal well completion and production
operations. Ranger also provides services necessary to bring and
maintain a well on production. The Processing Solutions segment
engages in the rental, installation, commissioning, start-up,
operation and maintenance of MRUs, Natural Gas Liquid stabilizer
and storage units and related equipment.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements represent
Ranger’s expectations or beliefs concerning future events, and it
is possible that the results described in this press release will
not be achieved. These forward-looking statements are subject to
risks, uncertainties and other factors, many of which are outside
of Ranger’s control that could cause actual results to differ
materially from the results discussed in the forward-looking
statements.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, Ranger does not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Ranger to predict all such factors. When considering
these forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in our filings with the
Securities and Exchange Commission. The risk factors and other
factors noted in Ranger’s filings with the SEC could cause its
actual results to differ materially from those contained in any
forward-looking statement.
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and
per share amounts)
Three Months Ended
March 31, 2020
December 31, 2019
Revenues
High specification rigs
$
34.9
$
34.8
Completion and other services
43.3
41.1
Processing solutions
2.8
4.3
Total revenues
81.0
80.2
Operating expenses
Cost of services (exclusive of
depreciation and amortization):
High specification rigs
29.9
29.4
Completion and other services
31.7
31.5
Processing solutions
1.5
2.3
Total cost of services
63.1
63.2
General and administrative
5.0
6.5
Depreciation and amortization
8.9
8.9
Total operating expenses
77.0
78.6
Operating income
4.0
1.6
Other expenses
Interest expense, net
1.1
1.2
Total other expenses
1.1
1.2
Income before income tax expense
2.9
0.4
Tax expense
0.1
0.5
Net income (loss)
2.8
(0.1
)
Less: Net income attributable to
non-controlling interests
1.3
—
Net income (loss) attributable to Ranger
Energy Services, Inc.
$
1.5
$
(0.1
)
Income (loss) per common share
Basic
$
0.17
$
(0.01
)
Diluted
$
0.15
$
(0.01
)
Weighted average common shares
outstanding
Basic
8,617,781
8,761,291
Diluted
15,549,684
8,761,291
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions, except share and
per share amounts)
March 31, 2020
December 31, 2019
Assets
Cash and cash equivalents
$
11.4
$
6.9
Accounts receivable, net
42.2
41.5
Contract assets
3.7
1.2
Inventory
4.1
3.8
Prepaid expenses
3.3
5.3
Total current assets
64.7
58.7
Property and equipment, net
216.1
218.9
Intangible assets, net
9.1
9.3
Operating leases, right-of-use assets
5.9
6.5
Other assets
0.5
0.1
Total assets
$
296.3
$
293.5
Liabilities and Stockholders'
Equity
Accounts payable
13.2
13.8
Accrued expenses
19.6
18.4
Finance lease obligations, current
portion
4.9
5.1
Long-term debt, current portion
31.6
15.8
Other current liabilities
1.7
2.0
Total current liabilities
71.0
55.1
Operating leases, right-of-use
obligations
4.4
4.5
Finance lease obligations
2.9
3.6
Long-term debt, net
13.9
26.6
Other long-term liabilities
0.7
0.7
Total liabilities
$
92.9
$
90.5
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 per share;
50,000,000 shares authorized; no shares issued or outstanding as of
March 31, 2020 and December 31, 2019
—
—
Class A Common Stock, $0.01 par value,
100,000,000 shares authorized; 8,947,830 shares issued and
8,396,003 shares outstanding as of March 31, 2020 and 8,839,788
shares issued and 8,725,851 shares outstanding as of December 31,
2019
0.1
0.1
Class B Common Stock, $0.01 par value,
100,000,000 shares authorized; 6,866,154 shares issued and
outstanding as of March 31, 2020 and December 31, 2019
0.1
0.1
Less: Class A Common Stock held in
treasury, at cost (551,827 shares)
(3.8
)
(0.7
)
Accumulated deficit
(6.6
)
(8.1
)
Additional paid-in capital
120.2
121.8
Total controlling stockholders' equity
110.0
113.2
Non-controlling interest
93.4
89.8
Total stockholders' equity
203.4
203.0
Total liabilities and stockholders'
equity
$
296.3
$
293.5
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Three Months Ended
March 31, 2020
Cash Flows from Operating
Activities
Net income
$
2.8
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
8.9
Equity based compensation
0.8
Gain on retirement of debt
(2.1
)
Other costs, net
0.1
Changes in operating assets and
liabilities
Accounts receivable
(0.7
)
Contract assets
(2.5
)
Inventory
(0.3
)
Prepaid expenses
2.0
Operating leases, right-of-use assets
0.6
Other assets
(0.4
)
Accounts payable
(1.3
)
Accrued expenses
1.2
Other long-term liabilities
(0.6
)
Net cash provided by operating
activities
8.5
Cash Flows from Investing
Activities
Purchase of property and equipment
(4.7
)
Proceeds from disposal of property and
equipment
0.1
Net cash used in investing
activities
(4.6
)
Cash Flows from Financing
Activities
Borrowings under Credit Facility
16.9
Principal payments on Credit Facility
(5.6
)
Principal payments on Encina Master
Financing Agreement
(2.5
)
Principal payments on ESCO Note
Payable
(3.7
)
Principal payments on financing lease
obligations
(1.3
)
Repurchase of Class A Common Stock
(3.1
)
Shares withheld on equity transactions
(0.1
)
Net cash provided by financing
activities
0.6
Increase in Cash and Cash
equivalents
4.5
Cash and Cash Equivalents, Beginning of
Year
6.9
Cash and Cash Equivalents, End of Year
$
11.4
Supplemental Cash Flows
Information
Interest paid
$
1.0
Supplemental Disclosure of Non-cash
Investing and Financing Activity
Capital expenditures
$
(0.8
)
Fixed asset additions through financing
leases
$
(0.5
)
RANGER ENERGY SERVICES, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Adjusted EBITDA is not a financial measure determined in
accordance with GAAP. We define Adjusted EBITDA as net income
(loss) before net interest expense, income tax provision (benefit),
depreciation and amortization, equity-based compensation,
acquisition-related and severance costs, impairment of goodwill,
gain or loss on sale of assets and certain other items that we do
not view as indicative of our ongoing performance.
We believe Adjusted EBITDA is a useful performance measure
because it allows for an effective evaluation of our operating
performance when compared to our peers, without regard to our
financing methods or capital structure. We exclude the items listed
above from net income or loss in arriving at Adjusted EBITDA
because these amounts can vary substantially within our industry
depending upon accounting methods and book values of assets,
capital structures and the method by which the assets were
acquired. Adjusted EBITDA should not be considered as an
alternative to, or more meaningful than, net income or loss
determined in accordance with GAAP. Certain items excluded from
Adjusted EBITDA are significant components in understanding and
assessing a company’s financial performance, such as a company’s
cost of capital and tax structure, as well as the historic costs of
depreciable assets, none of which are reflected in Adjusted EBITDA.
Our presentation of Adjusted EBITDA should not be construed as an
indication that our results will be unaffected by the items
excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA
may not be identical to other similarly titled measures of other
companies. The following tables present reconciliations of net
income (loss) to Adjusted EBITDA, our most directly comparable
financial measure calculated and presented in accordance with
GAAP.
The tables are a reconciliation of net income to Adjusted EBITDA
for the three months ended March 31, 2020 and December 31, 2019, in
millions:
Three Months Ended March 31,
2020
High Specification
Rigs
Completion and Other
Services
Processing Solutions
Other
Total
(in millions)
Net income (loss)
$
(0.3
)
$
8.9
$
0.7
$
(6.5
)
$
2.8
Interest expense
—
—
—
1.1
1.1
Tax expense
—
—
—
0.1
0.1
Depreciation and amortization
5.3
2.7
0.6
0.3
8.9
EBITDA
5.0
11.6
1.3
(5.0
)
12.9
Equity based compensation
—
—
—
0.8
0.8
Gain on retirement of debt
—
—
—
(2.1
)
(2.1
)
Gain on disposal of property and
equipment
—
—
—
(0.2
)
(0.2
)
Adjusted EBITDA
$
5.0
$
11.6
$
1.3
$
(6.5
)
$
11.4
Three Months Ended December
31, 2019
High Specification
Rigs
Completion and Other
Services
Processing Solutions
Other
Total
(in millions)
Net income (loss)
$
0.2
$
6.8
$
1.4
$
(8.5
)
$
(0.1
)
Interest expense
—
—
—
1.2
1.2
Tax expense
—
—
—
0.5
0.5
Depreciation and amortization
5.2
2.8
0.6
0.3
8.9
EBITDA
5.4
9.6
2.0
(6.5
)
10.5
Equity based compensation
—
—
—
0.9
0.9
Gain on retirement of debt
—
—
—
—
—
Gain on disposal of property and
equipment
—
—
—
—
—
Adjusted EBITDA
$
5.4
$
9.6
$
2.0
$
(5.6
)
$
11.4
View source
version on businesswire.com: https://www.businesswire.com/news/home/20200430006018/en/
J. Brandon Blossman Chief Financial Officer (713) 935-8900
Brandon.Blossman@rangerenergy.com
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