Ranger Energy Services(US:RNGR)2024-10-28 20:24Revenue Performance - Total revenue for Q3 2024 decreased by $11.4 million, or 7%, to $153.0 million compared to $164.4 million in Q3 2023[79] - Revenue from High Specification Rigs increased by $7.5 million, or 9%, to $86.7 million, driven by a 6% increase in average revenue per rig hour to $741[79] - Wireline Services revenue decreased by $22.9 million, or 43%, to $30.3 million, primarily due to a 63% decrease in completed stage counts to 2,500[79] - Processing Solutions and Ancillary Services revenue increased by $4.0 million, or 13%, to $36.0 million, attributed to growth in rentals, plugging and abandonment, logistics, and coil tubing[79] - High Specification Rigs revenue increased by $14.8 million, or 6%, to $249.1 million for the nine months ended September 30, 2024, with an average revenue per rig hour up 5% to $730[83] - Wireline Services revenue decreased by $70.0 million, or 44%, to $87.6 million for the nine months ended September 30, 2024, driven by a 63% decrease in completed stage counts[83] - Processing Solutions and Ancillary Services revenue decreased by $1.9 million, or 2%, to $91.3 million for the nine months ended September 30, 2024, with a recovery in coil tubing activity noted in Q3 2024[84] - Total revenue for the nine months ended September 30, 2024 decreased by $57.1 million, or 12%, to $428.0 million from $485.1 million in the prior year[83] Income and Expenses - Operating income for Q3 2024 was $12.9 million, an increase of $1.2 million from $11.7 million in Q3 2023[79] - General and administrative expenses for Q3 2024 were $7.1 million, slightly up from $7.0 million in Q3 2023[79] - Net income for Q3 2024 was $8.7 million, a decrease of $0.7 million from $9.4 million in Q3 2023[79] - Net income for the nine months ended September 30, 2024 decreased by $9.1 million, or 42%, to $12.6 million from $21.7 million in the prior year, primarily due to reduced activity in the Wireline Services segment[84] - General and administrative expenses decreased by $2.0 million, or 9%, to $20.7 million for the nine months ended September 30, 2024, attributed to lower personnel costs[84] - Depreciation and amortization increased by $4.0 million, or 14%, to $33.3 million for the nine months ended September 30, 2024, due to increased capital expenditures[84] - Interest expense, net decreased by $0.7 million, or 25%, to $2.1 million for the nine months ended September 30, 2024, resulting from reduced borrowings and refinancing[84] Adjusted EBITDA - Adjusted EBITDA for Q3 2024 increased by $1.1 million to $25.1 million compared to $24.0 million in Q3 2023[91] - High Specification Rigs segment saw Adjusted EBITDA rise by $3.5 million to $19.2 million, driven by a revenue increase of $7.5 million[91] - Wireline Services segment's Adjusted EBITDA decreased by $4.7 million to $2.7 million due to a revenue decline of $22.9 million[91] - Processing Solutions and Ancillary Services Adjusted EBITDA increased by $2.3 million to $8.8 million, supported by a revenue increase of $4.0 million[91] - For the nine months ended September 30, 2024, total Adjusted EBITDA was $51.5 million, with High Specification Rigs contributing $34.0 million[94] - Adjusted EBITDA for the nine months ended September 30, 2024 decreased by $9.0 million to $57.0 million from $66.0 million for the same period in 2023[97] - High Specification Rigs Adjusted EBITDA increased by $2.8 million to $51.5 million, primarily due to increased operating levels during Q3 2024[97] - Wireline Services Adjusted EBITDA decreased by $14.0 million to $3.3 million, attributed to significant decreases in operating activity within the completions service line[97] Liquidity and Capital Management - Total liquidity as of September 30, 2024 was $86.1 million, consisting of $14.8 million in cash and $71.3 million available under the Wells Fargo Revolving Credit Facility[98] - Net cash provided by operating activities decreased by $1.3 million to $51.8 million for the nine months ended September 30, 2024[101] - Net cash used in investing activities increased by $4.2 million to $27.2 million for the nine months ended September 30, 2024[102] - The company repurchased Class A Common Stock, with a total share repurchase program authorization of $85.0 million[112] - The company paid dividend distributions totaling $3.4 million for the nine months ended September 30, 2024, compared to $1.2 million for the same period in 2023[112] - Working capital remained relatively flat at $66.2 million as of September 30, 2024, compared to $66.4 million as of December 31, 2023[105] - The weighted average interest rate for borrowings under the Wells Fargo Revolving Credit Facility was approximately 7.2% for the nine months ended September 30, 2024[108] - As of September 30, 2024, the Company had no borrowings under the Wells Fargo Revolving Credit Facility, indicating minimal interest rate exposure[116] Market Outlook and Risks - The company anticipates stable demand for services due to OPEC+ production cuts and projected oil demand increases of 2.11 million barrels per day in 2024[71] - The company expects favorable long-term preferences from larger organizations due to consolidation in the energy industry[71] - Geopolitical events and the U.S. election cycle are expected to impact the industry, influencing commodity prices and operational conditions[71] - OPEC+ expects oil demand to rise by approximately 2.11 million barrels per day in 2024 and by 1.78 million barrels per day in 2025[115] - Geopolitical events, particularly regarding China and Russia, are expected to impact the macroeconomic backdrop and commodity prices[115] - Fluctuations in oil and natural gas prices could significantly impact the activity levels of E&P customers and, consequently, the demand for the Company's services[118] Credit and Receivables Management - The top three trade receivable balances represented approximately 21%, 11%, and 11% of consolidated net accounts receivable as of September 30, 2024[117] - In the High Specification Rig segment, the top three trade receivable balances accounted for 28%, 15%, and 12% of total net accounts receivable[117] - The top three trade receivable balances in the Wireline Services segment represented 18%, 10%, and 9% of total net accounts receivable[117] - The Company performs credit evaluations and monitors customer payment patterns to mitigate credit risk[117] - The Company does not currently intend to hedge its indirect exposure to commodity price risk, which could affect demand for its services[118] - A hypothetical 1.0% increase or decrease in the weighted average interest rate would change interest expense by less than $0.1 million per year[116]