Ranger Energy Services, Inc. (NYSE: RNGR) (“Ranger” or the
“Company”) announced today its results for its fiscal quarter ended
June 30, 2019.
– Sequential operational improvements in
High-Spec Rigs, Other Services (ex. Wireline) and Processing
Solutions
– Customer high-grading impacts Wireline Q2
results
– Continued capital discipline and
line-of-sight cash flow creating strategic options
Consolidated Q2 2019 Financial Highlights
Revenues decreased 5% to $84.3 million, from $88.3 million in
Q1. Decline driven by Wireline's decision to reposition select
assets to more strategically aligned, blue-chip clients.
Net income decreased 50% or $1.8 million to $1.8 million from
$3.6 million in Q1. Net income impacted by lower revenue offset by
lower costs of services and general and administrative
expenses.
Adjusted EBITDA1 decreased 8% to $13.0 million, from $14.2
million in Q1. The Adjusted EBITDA decrease resulted from a revenue
decrease offset by a decrease in cost of services and general and
administrative expenses.
_____________________________
1
“Adjusted EBITDA” is not
presented in accordance with generally accepted accounting
principles in the United States (“GAAP”). Please see “Ranger Energy
Services, Inc. Supplemental Non-GAAP Financial Measures
(Unaudited)” at the end of this press release for a reconciliation
of the non-GAAP financial measure of Adjusted EBITDA to the most
directly comparable GAAP financial measure.
CEO Comments
“While our Q2 consolidated results did not meet our internal
expectations, I am highly optimistic about the direction of our
business. Operationally, EBITDA was sequentially up in all of our
individual business lines with the exception of our wireline
business where we made the decision to reposition a core set of
assets. While this decision created a temporary disruption to our
historically full utilization level, we are already realizing
tangible operational and financial benefits from the move.
Our High Specification Rigs business experienced increases in
both pricing and utilization. Here, we continue to focus on
high-grading our customer pool and deploying additional higher
margin completion and higher impact 24 hour work.
Our Permian wireline completions business averaged 11 working
units during the quarter, down from 13 in Q1. As mentioned, this
decline was the result of the proactive decision to high-grade our
customer base. We have redeployed these units on a dedicated basis
with two notable blue-chip customers. Our remaining smaller service
lines within our Completion and Other Services segment all
experienced sequential revenue and EBITDA growth.
Our Processing Solutions business results saw an increase in
EBITDA as installation revenue returned to historic run-rates along
with incremental gas cooler and Mechanical Refrigeration Unit
(“MRU”) deployments.
Last quarter, we announced a new, multi-year Permian Basin
contract with a global, integrated customer. We have spent much of
the second quarter successfully piloting that relationship with an
average of five effective rigs working during the quarter. We are
continuing efforts to expand our market share with this client as
well as pursuing additional long-term contractual relationships
with similar type customers. As with last quarter’s announcement,
we continue to reap the benefits of the significant work
integrating systems and processes that allow us to service an
increasingly high-graded customer base.
We continue to plan for minimal capital spend during the balance
of 2019 with significant cash flow generation and targeted debt
reductions. We added modest incremental growth capex during the
quarter. However, these additions were largely related to smaller,
new assets to be paired with our new integrated customer
contracts.
On the strategic front, Ranger has positioned itself to
participate in consolidation efforts. Our young purpose-build
fleet, efficient operations, low leverage and strong cash flow
places us in a unique position amongst our peers. Regardless of the
outcome of a number of potential strategic options, we continue to
believe our performance, market position and strategic direction
will benefit our shareholders.”
Business Segment Financial Results
High Specification Rigs
High Specification Rigs segment revenue increased 4%, or $1.4
million, to $33.1 million in Q2 from $31.7 million in Q1 2019. The
increase was driven by improved rig utilization, as measured by
average monthly hours per rig, to 147 from 142. Total rig hours
increased 3% to approximately 62,200 hours in Q2 from 60,100 in Q1.
Average hourly rig rates increased 2%, or $8, to $530 from $522 in
Q1.
Operating loss was reduced by $0.1 million to a loss of $0.4
million in Q2 from a loss of $0.5 million in Q1. Adjusted EBITDA
increased 2%, or $0.1 million, to $4.4 million in Q2 from $4.3
million in Q1. The reduction of the operating loss and increase in
Adjusted EBITDA was attributable to an increase in revenue,
partially offset by an increase in cost of services.
Completion and Other Services
Completion and Other Services segment revenue decreased 10%, or
$5.3 million, to $46.3 million in Q2 from $51.6 million in Q1 2019.
The reduction in revenue for the quarter was the result of our
Wireline's business decision to proactively end a customer
relationship and reposition assets with a set of more strategically
aligned customers. The decline was partially offset by increases in
other, non-wireline services within the segment. Operating income
decreased $2.5 million to $8.4 million in Q2 from $10.9 million in
Q1. Adjusted EBITDA decreased 18%, or $2.4 million, to $11.3
million in Q2 from $13.7 million in Q1. The decrease in operating
income and Adjusted EBITDA was driven by decreased Wireline
revenue, which was partially offset by a decrease in cost of
services.
Processing Solutions
Processing Solutions revenue saw a slight decrease of 2%, or
$0.1 million, to $4.9 million in Q2 from $5.0 million in Q1
2019.
Operating income increased $0.2 million to $2.5 million in Q2
from $2.3 million in Q1. Adjusted EBITDA increased 7%, or $0.2
million, to $3.0 million in Q2 from $2.8 million in Q1. The
increase in operating income and Adjusted EBITDA is attributable to
a reduction to cost of services.
Liquidity
We ended the quarter with $15.7 million of liquidity, consisting
of $14.0 million of capacity available on our revolving credit
facility and $1.7 million of cash.
The Q2 cash ending balance of $1.7 million compares to $5.7
million at the end of Q1 2019. We had an outstanding draw on our
revolving credit facility of $26.3 million, leaving $14.0 million
of capacity on a quarter end borrowing base of $40.3 million.
Working Capital
Use of working capital has increased $11.5 million year to date.
This increase was driven by two isolated receivable issues and a
build in wireline inventory during the second quarter. Subsequent
to quarter end, these issues have seen a partial reversal and we
see continued movements towards full resolution.
Capital Expenditures
Total capital expenditures recorded during the quarter were $5.4
million. Completion and Other Services segment expended $1.1
million primarily for wireline ancillary equipment. High
Specification Rigs segment incurred $0.4 million of capital
expenditures on ancillary equipment and Processing Solutions
segment incurred $2.4 million of capital expenditures for the
completion of ten contracted gas coolers and continued progress on
four previously committed MRU's and five Storage Tanks. Maintenance
capital expense for the quarter was $1.1 million.
Additions of new leased vehicles amounted to $0.3 million across
all segments.
Conference Call
The Company will host a conference call to discuss its Q2 2019
results on July 26, 2019 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 log in 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
10132702. 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 Completion and Other Services,
which provides services necessary to bring and maintain a well on
production.
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
June 30, 2019
March 31, 2019
Revenues
High specification rigs
$
33.1
$
31.7
Completion and other services
46.3
51.6
Processing solutions
4.9
5.0
Total revenues
84.3
88.3
Operating expenses
Cost of services (exclusive of
depreciation and amortization):
High specification rigs
28.7
27.4
Completion and other services
35.0
37.9
Processing solutions
1.9
2.2
Total cost of services
65.6
67.5
General and administrative
6.3
7.2
Depreciation and amortization
8.4
8.4
Total operating expenses
80.3
83.1
Operating income
4.0
5.2
Other expenses
Interest expense, net
1.9
(1.3
)
Total other expenses
1.9
(1.3
)
Income before income tax expense
2.1
3.9
Tax expense
0.3
0.3
Net income
1.8
3.6
Less: Net income attributable to
non-controlling interests
0.8
1.6
Net income attributable to Ranger Energy
Services, Inc.
$
1.0
$
2.0
Earnings per common share
Basic
$
0.12
$
0.24
Diluted
$
0.11
$
0.21
Weighted average common shares
outstanding
Basic
8,514,495
8,448,719
Diluted
9,491,684
9,730,710
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions, except share and
per share amounts)
June 30, 2019
December 31, 2018
Assets
Cash and cash equivalents
$
1.7
$
2.6
Accounts receivable, net
54.0
45.4
Contract assets
6.0
3.1
Inventory
7.7
4.9
Prepaid expenses
3.7
5.1
Total current assets
73.1
61.1
Property and equipment, net
227.7
229.8
Intangible assets, net
9.7
10.0
Operating lease right-of-use assets
6.7
—
Other assets
0.7
1.6
Total assets
$
317.9
$
302.5
Liabilities and Stockholders'
Equity
Accounts payable
$
15.0
$
17.2
Accrued expenses
19.8
18.5
Finance lease obligations, current
portion
4.8
4.4
Long-term debt, current portion
15.8
15.8
Other current liabilities
2.5
3.0
Total current liabilities
57.9
58.9
Operating lease right-of-use
obligations
4.6
—
Finance lease obligations
4.8
6.6
Long-term debt, net
47.8
44.7
Other long-term liabilities
0.7
0.3
Total liabilities
115.8
110.5
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 per share;
50,000,000 shares authorized; no shares issued or outstanding as of
June 30, 2019 and December 31, 2018
—
—
Class A Common Stock, $0.01 par value,
100,000,000 shares authorized; 8,717,026 and 8,448,527 shares
issued and outstanding as of June 30, 2019 and December 31, 2018,
respectively
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 June 30, 2019 and December 31, 2018
0.1
0.1
Accumulated deficit
(6.9
)
(9.9
)
Additional paid-in capital
119.9
111.6
Total stockholders' equity
113.2
101.9
Non-controlling interest
88.9
90.1
Total stockholders' equity
202.1
192.0
Total liabilities and stockholders'
equity
$
317.9
$
302.5
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Six Months Ended
June 30, 2019
Cash Flows from Operating
Activities
Net income
$
5.4
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
16.8
Equity based compensation
1.5
Gain on sale of property, plant and
equipment
(0.3
)
Other costs, net
0.3
Changes in operating assets and
liabilities, net of effect of acquisitions
Accounts receivable
(8.6
)
Contract assets
(2.9
)
Inventory
(2.8
)
Prepaid expenses
1.4
Other assets
0.9
Accounts payable
(0.6
)
Accrued expenses
2.0
Other long-term liabilities
1.1
Net cash provided by operating
activities
14.2
Cash Flows from Investing
Activities
Purchase of property, plant and
equipment
(16.0
)
Proceeds from sale of property, plant and
equipment
0.5
Net cash used in investing
activities
(15.5
)
Cash Flows from Financing
Activities
Borrowings under line of credit
facility
25.1
Principal payments on line of credit
facility
(17.3
)
Principal payments on Encina Master
Financing Agreement
(4.8
)
Principal payments on financing lease
obligations
(2.2
)
Shares withheld on equity transactions
(0.4
)
Net cash provided by financing
activities
0.4
Decrease in Cash and Cash
equivalents
(0.9
)
Cash and Cash Equivalents, Beginning of
Period
2.6
Cash and Cash Equivalents, End of
Period
$
1.7
Supplemental Cash Flows
Information
Interest paid
$
2.3
Supplemental Disclosure of Non-cash
Investing and Financing Activity
Non-cash capital expenditures
$
(2.3
)
Non-cash additions to fixed assets through
financing leases
$
(0.8
)
Initial non-cash operating lease
right-of-use assets
$
(8.3
)
Issuance of Class A Common Stock to
related party
$
3.0
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 interest expense, net, 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 table presents reconciliations of net
income (loss) to Adjusted EBITDA, our most directly comparable
financial measure calculated and presented in accordance with
GAAP.
The following table is a reconciliation of net income to
Adjusted EBITDA for the three months ended June 30, 2019 and March
31, 2019, in millions:
Three Months Ended June 30,
2019
High Specification
Rigs
Completion and Other
Services
Processing Solutions
Other
Total
(in millions)
Net income (loss)
$
(0.4
)
$
8.4
$
2.5
$
(8.7
)
$
1.8
Interest expense
—
—
—
1.7
1.7
Tax expense (benefit)
—
—
—
0.3
0.3
Depreciation and amortization
4.8
2.9
0.5
0.2
8.4
EBITDA
4.4
11.3
3.0
(6.5
)
12.2
Equity based compensation
—
—
—
0.9
0.9
Gain on property, plant and equipment
—
—
—
(0.1
)
(0.1
)
Adjusted EBITDA
$
4.4
$
11.3
$
3.0
$
(5.7
)
$
13.0
Three Months Ended March 31,
2019
High Specification
Rigs
Completion and Other
Services
Processing Solutions
Other
Total
(in millions)
Net income (loss)
$
(0.5
)
$
10.9
$
2.3
$
(9.1
)
$
3.6
Interest expense
—
—
—
1.5
1.5
Tax expense (benefit)
—
—
—
0.3
0.3
Depreciation and amortization
4.8
2.8
0.5
0.3
8.4
EBITDA
4.3
13.7
2.8
(7.0
)
13.8
Equity based compensation
—
—
—
0.6
0.6
Gain on property, plant and equipment
—
—
—
(0.2
)
(0.2
)
Adjusted EBITDA
$
4.3
$
13.7
$
2.8
$
(6.6
)
$
14.2
View source
version on businesswire.com: https://www.businesswire.com/news/home/20190725005897/en/
J. Brandon Blossman Chief Financial Officer (713) 935-8900
Brandon.Blossman@rangerenergy.com
Ranger Energy Services (NYSE:RNGR)
Historical Stock Chart
From Jun 2024 to Jul 2024
Ranger Energy Services (NYSE:RNGR)
Historical Stock Chart
From Jul 2023 to Jul 2024