ProFrac (US:ACDC)2022-03-31 18:31Financial Data and Key Metrics Changes - U.S. Well Services reported total revenue of $38.9 million for Q4 2021, down 31% from $56.5 million in Q3 2021, largely due to nonproductive time related to sand and water constraints [13][14] - Adjusted EBITDA for Q4 2021 was a loss of $7.9 million, with total liquidity at $20.2 million at year-end, which increased to $84.6 million after recent capital raises [15][16] - The company generated $250 million in revenue for the full year 2021, a modest increase from $244 million in 2020, with a net loss of $70.6 million compared to $229.3 million in 2020 [18][19] Business Line Data and Key Metrics Changes - The average active fleet count during Q4 was five, with a utilization rate of 82%, down from 89% in Q3 2021 [12][13] - Cost of sales in Q4 was $41.4 million, down 29% sequentially, attributed to a lower active fleet count and a 50% reduction in sand and consumables sold [14] - SG&A expenses decreased to $6.8 million in Q4 from $11.1 million in Q3, primarily due to reduced personnel costs [14] Market Data and Key Metrics Changes - The company faced significant operational challenges due to a lack of truck drivers and customers' inability to obtain necessary sand and water, resulting in 67 days of nonproductive time in Q4 [8][13] - Diesel prices rose to over $5 per gallon from $3.50 in Q4, leading to potential savings of $1.25 million per fleet per month for customers [10] Company Strategy and Development Direction - U.S. Well Services is transitioning away from conventional diesel fleets, reducing its active fleet count from 11 in Q1 to five by Q3, and is focusing on electric clean fleets [7][8] - The company plans to roll out four new Nyx Clean Fleets starting in Q2 2022, which are expected to command premium pricing due to their operational efficiencies [9][10] - Management believes the future is bright for the company, emphasizing the advantages of electric pressure pumping technology in terms of economics and environmental benefits [21] Management Comments on Operating Environment and Future Outlook - Management acknowledged the difficulties faced during the strategic transformation and macroeconomic headwinds but expressed confidence in improved results starting in Q2 2022 as new fleets are deployed [8][9] - There is an expectation of increased demand for next-generation solutions, such as electric clean fleets, which positions the company favorably in the market [9][10] Other Important Information - The company executed over 40 asset sales to raise approximately $120 million and reduced its senior secured term loan by $125.6 million during 2021 [7] - U.S. Well Services secured a 0% interest rate for Q1 2022 and a 1% cash interest rate for the remainder of the year, resulting in significant cash savings [17] Q&A Session Summary Question: Expected increase in profitability with fleet rollout - Management indicated that profitability is expected to increase as new fleets are deployed, with the first fleet going to work in Q2 and the last two fleets by Q4 [24][25] Question: Impact of frac sand and mine constraints - Management noted that benefits from new fleets are anticipated to begin in Q2, addressing inefficiencies caused by sand and water constraints [26][27]