Nine(US:NINE)2021-11-06 20:59Financial Data and Key Metrics Changes - Q3 revenue was $92.9 million, slightly below management's guidance of $95 million to $103 million, but a 9% increase from Q2 2021 [7][8] - Adjusted gross profit for Q3 was $14 million, representing a 71% increase quarter-over-quarter [24] - The company reported net cash used in operating activities of negative $1.8 million for the quarter [29] Business Line Data and Key Metrics Changes - Cementing revenue increased by approximately 8% to $29.5 million, with 758 jobs completed, an 18% increase from Q2 [25] - Coiled tubing revenue rose by approximately 18% to $17.1 million, driven by a mix of price and activity increases [28] - Wireline revenue increased by approximately 3% to $19.2 million, with 4,793 stages completed, a 3% increase from Q2 [26] - Completion tool revenue was $26.9 million, a 10% increase, attributed to a larger mix of dissolvable plugs and higher-priced tools sold [27] Market Data and Key Metrics Changes - U.S. completed wells increased approximately 6% quarter-over-quarter, while new wells drilled rose by approximately 14% [10] - Active frac crews in the U.S. decreased by approximately 2% from August, but increased by approximately 5% quarter-over-quarter [11] Company Strategy and Development Direction - The company is focused on gaining market share and implementing price increases across service lines through technology and well site execution [38] - The completion tool business is seen as critical for growth, requiring little to no capital commitment or additional labor [19][39] - The company anticipates that pricing for drill-out services will continue to rise as activity levels increase into 2022 [20] Management's Comments on Operating Environment and Future Outlook - Management noted that labor shortages will continue to be a significant challenge across business lines and the oilfield services industry [9] - The company expects North American CapEx to increase meaningfully year-over-year in 2022, but supply chain constraints, especially labor, are anticipated to worsen [36] - Commodity prices are supportive and expected to remain so, with significant growth drivers in basins like the Permian and Haynesville [37] Other Important Information - The company has a total liquidity position of $85.4 million as of September 30, 2021 [22] - Capital expenditures for Q3 were $2.1 million, with guidance remaining unchanged at $15 million to $20 million [30] Q&A Session Summary Question: Allocation of severance costs between G&A and OpEx - The majority of severance costs were allocated to OpEx, with further breakdown available off-line [42] Question: Revenue and EBITDA guidance for Q4 - The company is not guiding adjusted EBITDA but provided a revenue range of $92 million to $100 million for Q4 [43] Question: Delay in passing on costs to customers - There is typically a 30 to 45-day delay in passing on costs to customers [46] Question: Labor market conditions in different regions - The Bakken is facing severe labor issues, while the Permian is experiencing significant poaching challenges [75][77] Question: Interest in electric wireline technology - There is strong demand for electric wireline technology, which significantly reduces diesel usage and emissions [81][82]