Nine(US:NINE)2023-05-09 16:58Financial Data and Key Metrics Changes - Revenue for Q1 2023 was $163.4 million, falling within the guidance of $160 million to $165 million [15] - Net loss for the quarter was $6.1 million, with adjusted EBITDA of $25 million, reflecting an adjusted EBITDA margin of 15% [17][82] - ROIC for the quarter was approximately 16.2% [17] - General and administrative expenses were reported at $19.7 million, with depreciation and amortization at $10.3 million [8] Business Line Data and Key Metrics Changes - Cementing revenue for Q1 was $62.5 million, a decrease of approximately 4% [18] - Wireline revenue was $29.6 million, a decrease of approximately 2% [18] - Completion Tool revenue increased by approximately 7% to $37.8 million, despite a decrease in stages completed by approximately 1% [6][85] - Coiled Tubing revenue decreased by approximately 7% to $33.5 million, with utilization at 64% [85] Market Data and Key Metrics Changes - The US rig count decreased by 24 rigs since the end of Q4 2022, with a nearly 10% decline in the Haynesville region [5] - EIA reported completions were down by approximately 3% quarter-over-quarter, and new wells drilled decreased by approximately 1% [16] - Average frac crew counts are estimated to be between 250 and 275 [16] Company Strategy and Development Direction - The company is focused on generating free cash flow and de-levering, with a CapEx guidance of $25 million to $35 million [10][12] - There is an emphasis on maintaining safety and service quality while adapting to market conditions [20] - The company is exploring environmentally friendly cement options, although cost competitiveness remains a concern [29][49] Management's Comments on Operating Environment and Future Outlook - Management remains optimistic about the energy sector despite current pricing pressures and market softness [9][71] - The outlook for Q2 is projected to be slightly down compared to Q1, with revenue guidance between $158 million to $166 million [20][61] - Management noted that the current market environment feels more stable compared to previous sharp declines or increases [61] Other Important Information - As of March 31, 2023, the company had cash and cash equivalents of $21.4 million and total liquidity of $47.4 million [36] - The average DSO for Q1 was 54.2 days, with CapEx spend for Q1 at $5 million [37] Q&A Session Summary Question: CapEx guidance and outlook - Management indicated that CapEx will likely be at the lower end of the guidance range due to market conditions [12][23] Question: Revenue expectations and market conditions - Management expects slightly down revenue in Q2, with potential for international orders to impact the top line [20][27] Question: Pricing pressures and customer conversations - Conversations with customers indicate a methodical approach to pricing, with no urgency despite lower gas prices [33][61] Question: Capital allocation strategy for 2023 - The focus will be on generating cash flow and de-levering, with a flat working capital outlook [59][61]