KLX Energy Services(US:KLXE)2022-05-13 20:15Revenue Performance - For the quarter ended March 31, 2022, total revenue was $152.3 million, an increase of $61.5 million or 67.7% compared to the prior year period[95]. - Revenue from the Rocky Mountains segment increased by $19.0 million, or 78.2%, while the Southwest segment revenue increased by $13.9 million, or 36.6%[95]. - Northeast/Mid-Con segment revenues saw a significant increase of $28.6 million, or 100.4%, primarily due to a large increase in frac activity in the region[95]. - Drilling, completion, production, and intervention services contributed approximately 28.2%, 50.5%, 11.7%, and 9.6% to total revenue, respectively[96]. Market Conditions - The U.S. rig count increased to 670, reflecting a 14.3% rise since December 31, 2021, driven by rising oil prices and increased drilling activity[84]. - West Texas Intermediate (WTI) prices increased by 33.5% from January 1 to March 31, 2022, contributing to heightened demand for drilling and completion services[84]. - The Producer Price Index increased by 3.9%, leading to higher costs for goods and increased competition for labor in the industry[85]. Cost Management and Profitability - For the quarter ended March 31, 2022, cost of sales was $135.0 million, representing 88.6% of sales, a decrease from 97.7% in the prior year period due to improved pricing[97]. - Selling, general and administrative (SG&A) expenses were $15.0 million, or 9.8% of revenues, down from 16.4% in the prior year, as revenue increased by 67.7%[98]. - The total operating loss for the quarter was $11.5 million, a significant improvement from a loss of $28.9 million in the prior year, driven by higher pricing and activity[99]. - Net loss for the quarter was $19.9 million, compared to $36.8 million in the prior year, attributed to improving industry conditions[102]. Liquidity and Capital Expenditures - As of March 31, 2022, total available liquidity was $54.6 million, consisting of $19.4 million in cash and cash equivalents and $35.2 million available under the ABL Facility[103]. - Capital expenditures for the three months ended March 31, 2022, were $5.8 million, up from $2.2 million in the prior year, with expectations of $25.0 to $30.0 million for the full year 2022[120]. - The company had total outstanding long-term indebtedness of $275.1 million as of March 31, 2022, with $30.0 million outstanding under the ABL Facility[106]. - The effective interest rate under the ABL Facility was approximately 5.0% as of March 31, 2022[111]. Financing Activities - The company entered into an Equity Distribution Agreement allowing for the sale of up to $50.0 million of common stock through an ATM offering[121]. - Cash flow used in operating activities was approximately $6.2 million for the three months ended March 31, 2022, an improvement from $11.3 million used in the same period in 2021[131]. - Net cash provided by financing activities was $0.8 million for the three months ended March 31, 2022, compared to net cash used of $1.8 million in the same period in 2021[133]. - The Company plans to use net proceeds from the ATM Offering for general corporate purposes, including refinancing outstanding indebtedness and funding acquisitions[124]. Challenges and Strategic Initiatives - The ongoing volatility in oil prices due to the COVID-19 pandemic and geopolitical factors may impact the Company's ability to access capital[125]. - The Company is focused on building a leaner and more profitable set of service offerings, which has positively impacted revenue, operating margins, and cash flows[86]. - The company continues to evaluate strategic consolidation opportunities to strengthen its competitive positioning and drive efficiencies[73]. - The Company is currently evaluating the impact of proposed SEC climate-related disclosure rules expected to take effect in December 2022[137].