Enservco(US:ENSV)2020-05-16 02:27Financial Data and Key Metrics Changes - Total revenue for Q1 2020 declined 62% to $9.4 million from $24.8 million in the same quarter last year [8][14] - Net loss in Q1 2020 was $2.8 million or $0.05 per diluted share, compared to a net income of $4.3 million or $0.08 per diluted share in the same quarter last year [16] - Adjusted EBITDA in Q1 2020 was negative $503,000, down from positive $7.9 million in the same quarter last year [16] Business Line Data and Key Metrics Changes - Production services revenue decreased 22% year-over-year to $3.2 million from $4.1 million, with hot oiling revenue declining to $2.9 million from $3.6 million [14] - Completion services revenue, primarily from frac water heating, fell 70% to $6.2 million from $20.7 million, with segment profit dropping to $1.2 million from $8.7 million [14] Market Data and Key Metrics Changes - The oilfield services industry is facing unprecedented challenges due to the economic downturn and oil price weakness caused by the pandemic and the Saudi-Russia price war [9] - The company noted a significant decline in drilling and completions activity, which is the largest component of its revenue mix [7] Company Strategy and Development Direction - The company is focused on driving additional cost reductions, having eliminated $2 million in annualized costs in 2020 [10] - New customer development is a priority, with promising discussions ongoing with potential customers in Texas and North Dakota [11] - Debt reduction is a key priority, with ongoing discussions with lenders regarding debt restructuring [12] Management's Comments on Operating Environment and Future Outlook - Management expressed hope for a recovery in production levels as summer progresses, despite the current challenges [18] - The company anticipates that the competitive landscape will shift, providing opportunities to gain market share as some competitors struggle [22] Other Important Information - The company applied for and received a PPP loan of approximately $1.9 million to support payroll and other expenses during the pandemic [26] Q&A Session Summary Question: Impact of market activity on business - Management acknowledged near-term impacts from the pandemic but expects a return to normal production levels as summer progresses [18] Question: Trends observed in the quarter and predictions for Q2 - Management indicated that while it is difficult to predict, there is hope for a return to production-related activity as the summer progresses [19] Question: Competitive landscape and industry withdrawals - Management confirmed that some competitors are struggling, which may open up opportunities for the company to gain market share [22] Question: Utilization of PPP loan benefits - The company confirmed it applied for and received a PPP loan, which is being utilized for payroll and other allowed expenses [26] Question: Impact of cost reductions on future business acquisitions - Management stated that while significant cost reductions are being made, they are also ensuring readiness to respond when the market recovers [28]