Nine(US:NINE)2022-05-09 14:25Financial Data and Key Metrics Changes - The company reported revenue of $116.9 million for Q1 2022, exceeding guidance of $108 million to $116 million, representing an 11% increase quarter-over-quarter [6] - Adjusted EBITDA was $12.2 million, reflecting a 168% increase quarter-over-quarter, with an adjusted EBITDA margin of 10% [6][13] - The net loss for the quarter was $6.9 million, with a basic earnings per share of negative $0.23 [13] Business Line Data and Key Metrics Changes - Cementing revenue increased by approximately 31% quarter-over-quarter to $45.2 million, with a 14% increase in completed jobs [16] - Wireline revenue decreased by approximately 2% to $21.4 million, despite a 7% increase in completed stages [17] - Coiled tubing revenue increased by approximately 11% to $21.6 million, driven by an 18% increase in average blended day rates [18] Market Data and Key Metrics Changes - U.S. completions increased approximately 3% and new wells drilled increased by approximately 15% [7] - The average frac crew count increased approximately 6% to 8% over Q4, equating to 14 to 16 additional frac crews [6] Company Strategy and Development Direction - The company aims to capture market share through superior technology and service, particularly in the dissolvable plug market, which is expected to grow significantly [10][26] - The company is optimistic about revenue growth across all service lines in Q2, projecting revenue of $130 million to $140 million [27] Management's Comments on Operating Environment and Future Outlook - Management noted challenges in labor and equipment availability, which may impact the ability to increase production [25] - The company expects continued price increases across service lines due to inflationary pressures [25][27] Other Important Information - The company had a liquidity position of $74.6 million as of March 31, 2022, with $19.9 million in cash and cash equivalents [15] - CapEx for Q1 2022 was $2.4 million, with guidance of $20 million to $30 million for the full year [20] Q&A Session Summary Question: Impact of dissolvable market share growth on financial results - Management indicated that increased market share in the dissolvable market would significantly impact revenue, with a high free cash flow conversion rate [30][31] Question: Revenue decline in wireline and completion tools - Management attributed the decline to weather delays and sand shortages but expressed optimism for Q2 [39][40] Question: Active units for cementing, wireline, and coiled tubing - Management noted tight labor markets affecting crew availability, impacting service line capacity [41] Question: CapEx for additional equipment amidst labor tightness - Management confirmed that equipment orders are expected to be delayed due to labor and equipment market challenges [42] Question: Normalized incremental margins for Q2 - Management indicated that incremental margins would be lower than the previous quarter's 65% but did not provide specific guidance [43][44]