Ranger Energy Services, Inc. (NYSE: RNGR) (“Ranger” or the
“Company”) announced today its results for the second quarter ended
June 30, 2024.
Second Quarter 2024 Highlights
- Revenue of $138.1 million, with revenue increasing quarter over
quarter in High Specification Rig and Ancillary segments offsetting
declines in wireline completions activity
- High specification rig revenue of $82.7 million set another
segment record, and represents a 4% increase from $79.7 million in
the first quarter of 2024 and a 7% increase from $77.6 million in
second quarter of 2023
- Net income of $4.7 million, or $0.21 per fully diluted share,
representing an increase of $5.5 million from the first quarter
2023 net loss of $0.8 million and a decrease of $1.4 million from
$6.1 million, or $0.24 per share in second quarter of 2023
- Adjusted EBITDA(1) of $21.0 million representing an improvement
of 93% from $10.9 million reported in the first quarter of 2024 and
a 4% decrease from $21.9 million reported in second quarter of
2023
- Free Cash Flow(2) of $6.8 million, or $0.30 per share, with
year to date Free Cash Flow(2) of $12.3 million, or $0.55 per
share
- Share repurchases of 518,200 shares during the second quarter
of 2024 for a total value of $5.3 million, with year to date
repurchases totaling 1,365,100 shares for a value of $13.8 million,
and total repurchases since inception of 3,170,600 shares,
representing 14% of shares outstanding.
________________
1
“Adjusted EBITDA” is not presented in
accordance with generally accepted accounting principles in the
United States (“U.S. GAAP”). The Company defines Adjusted EBITDA as
net income or loss before net income expense, income tax provision
or benefit, depreciation and amortization, equity-based
compensation, acquisition-related, severance and reorganization
costs, gain or loss on disposal of property and equipment, and
certain other non-cash items that we do not view as indicative of
our ongoing performance. A Non-GAAP supporting schedule is included
with the statements and schedules attached to this press release
and can also be found on the Company's website at:
www.rangerenergy.com.
2
“Free Cash Flow” is not presented in
accordance with U.S. GAAP and should be considered in addition to,
rather than as a substitute for, net income as a measure of our
performance or net cash provided by operating activities as a
measure of our liquidity. The Company defines Free Cash Flow as net
cash provided by operating activities before purchase of property
and equipment. A Non-GAAP supporting schedule is included with the
statements and schedules attached to this press release and can
also be found on the Company's website at www.rangerenergy.com.
Management Comments
Stuart Bodden, Ranger’s Chief Executive Officer, commented, “We
are proud to report our second quarter results, which we feel
represent our OneRanger spirit. After a slow start to the year, the
Ranger team banded together and developed a strong recovery plan
that is proving to be successful. Despite rig count declines of
more than 20% from peak levels in 2023, our flagship high
specification rig business posted record top line numbers this
quarter with strong margins, while our ancillary segment had a
near-record quarter and showed strong resilience as well. As a
result of the challenging conditions within our wireline
completions service line, we have made some tough restructuring
decisions to further streamline this business and pivot to more
production related services. Our efforts, supported by a more
stable market backdrop, have resulted in increased margins in this
segment.
Mr. Bodden continued, “We have worked hard over the past couple
of years to create more cross-pollination and better collaboration
across service lines, and I am proud of how our leadership team has
supported this effort and each other. Our company-wide commitment
to flawless execution, safety and service quality continues to
benefit the Company with more opportunities to gain market share in
a fragmented industry. The best evidence of our success in this
area is not only our top line growth and resilience in several
service lines, but also our year-over-year margin expansion even in
the face of wireline revenue declines. Our second quarter EBITDA
margins of over 15% were the strongest they have been since the
third quarter of 2022. We have gained traction during the summer
months and are optimistic as we move into the second half of the
year.
“Over the past five quarters, rig count declines have provided
an opportunity for Ranger to test its investment proposition as a
resilient through-cycle service provider. Over this period and
through these declines, we have emerged stronger. We initiated a
dividend and have bought back over 14% of the company, deploying
cash flows in the best interest of our shareholders and
cumulatively returning almost $40 million of capital. Our future
prospects are strong and we remain optimistic about our business
moving forward. As always, I would like to thank all of the
employees of Ranger for their hard work and dedication to the
company and our customers,” concluded Mr. Bodden.
CAPITAL RETURNS UPDATE
Since the implementation of the capital returns framework,
Ranger has exceeded its commitment of returning at least 25% of
Free Cash Flow(2) to shareholders. Year to date, the Company has
repurchased 1,365,100 shares of stock for a total value of $13.8
million at an average price of $10.08 per share.
Since the share repurchase program’s inception in 2023 through
the end of the quarter, the Company has repurchased a total of
3,170,600 shares, representing over 14% of shares outstanding as of
June 30, 2024, for a total value of $32.8 million at an average
price of $10.36 per share.
On July 29, 2024, the Board of Directors declared a quarterly
cash dividend of $0.05 per share payable August 23, 2024 to common
stockholders of record at the close of business on August 9,
2024.
At recent share prices, the Company has a free cash flow yield
nearing 20% highlighting Ranger’s disciplined approach to capital
returns and underscoring its strong financial health and commitment
to delivering value to shareholders.
PERFORMANCE SUMMARY
For the second quarter of 2024, revenue was $138.1 million, a
decrease from $163.2 million in the prior year period and an
increase from the first quarter reported revenue of $136.9 million.
Year-to-date revenue was $275.0 million, a decrease of 14% from
$320.7 million in the prior year. Year over year revenue declines
are due to reduced activity in our Wireline Services segment driven
by deteriorating market conditions over the period and pricing
pressure in our wireline completions service line.
Cost of services for the second quarter of 2024 was $113.2
million, or 82% of revenue, compared to $136.3 million, or 84% of
revenue in the prior year period. The decrease in cost of services
as a percentage of revenue from the prior year quarter was
primarily attributable to restructuring activities undertaken to
adjust for reduced activity in the wireline segment and weaker
market activity. General and administrative expenses were $6.9
million for the second quarter of 2024 compared to $7.3 million in
the prior year period and $6.7 million in the prior quarter. The
decrease in general and administrative expenses was primarily due
to decreased employee costs and decreased legal expenses.
Net income totaled $4.7 million for the second quarter of 2024
compared to net income of $6.1 million in the prior year period and
net loss of $0.8 million in the prior quarter. Net income, on a
year to date basis, decreased from $12.3 million in 2023 to $3.9
million year to date in 2024.
Fully diluted earnings per share was $0.21 for the second
quarter of 2024 compared to earnings per share of $0.24 in the
prior year period and loss per share of $0.04 in the prior quarter.
Fully diluted earnings per share for year to date was $0.17
compared to a diluted earnings per share of $0.49 in the prior
year.
Adjusted EBITDA of $21.0 million for the second quarter of 2024
decreased $0.9 million from $21.9 million in the prior year period
and increased $10.1 million from $10.9 million in the prior
quarter. The year over year decreases were driven by reductions in
activity in Wireline Services and certain Ancillary Services lines
as well as inflationary pressure on costs. Quarter over quarter
increases were driven by increasing activity levels in several
service lines and margin improvements due to restructuring
efforts.
2024 OUTLOOK
Ranger expects modest further improvement in our third quarter
results on a consolidated basis and typical seasonality in the
fourth quarter, although year end customer behavior is
unpredictable in current market conditions. The High Specification
Rigs business is expected to grow revenues modestly year over year
despite operator activity levels that have continued to decline
during 2024. Our Processing and Ancillary Services segment is
expected to have a strong third quarter and Wireline segment
results have begun to stabilize over the past two months paving the
way for a modest improvement in third quarter results. Ranger has
deployed a significant amount of its expected annual capital
expenditures in the first half of 2024 and expects a declining
capital expenditure profile in the back half of the year.
BUSINESS SEGMENT FINANCIAL RESULTS
High Specification Rigs
High Specification Rigs segment revenue was $82.7 million in the
second quarter of 2024, an increase of $5.1 million, or 7% relative
to the prior year period, and an increase of $3.0 million relative
to the prior quarter revenue of $79.7 million. Rig hours increased
by 2% to 113,100 from 111,000 in the prior quarter and flat
compared to the prior year period. Hourly rig rates increased by 2%
to $732 from $718 per hour in the prior quarter, due to customer
and asset mix reflecting relatively consistent pricing and
operating levels quarter over quarter. Hourly rig rates increased
by 6% from $687 in the prior year period. Segment revenue year to
date was $162.4 million, an increase of $7.3 million, or 5%
relative to year to date 2023. Rig hours decreased by 1% from
225,700 for year to date 2023 to 224,100 for year to date 2024.
Hourly rig rates increased by 5% from $688 per hour for the year to
date 2023 to $725 per hour for year to date 2024.
Operating income was $11.8 million in the second quarter of
2024, an increase of $0.3 million, or 3% compared to $11.5 million
in the prior year period and an increase of $4.0 million, or 51%
compared to $7.8 million in the prior quarter. Adjusted EBITDA was
$18.7 million in the second quarter, up from $15.6 million in the
prior year period and from $13.6 million in the prior quarter.
Operating income was $19.6 million for year to date 2024, a
decrease of $3.8 million, or 16% relative to $23.4 million for year
to date 2023. Adjusted EBITDA was $32.3 million for year to date
2024, down from $33.0 million year to date 2023.
Wireline Services
Wireline Services segment revenue was $24.5 million in the
second quarter of 2024, down $30.0 million, or 55% compared to
$54.5 million in the prior year period and down $8.3 million, or
25% compared to $32.8 million in the prior quarter. Our Completions
service line reported completed stage counts of 1,700, a decrease
of 77% compared to 7,400 in the prior year period and a decrease of
50% compared to 3,400 for the prior quarter. Year to date segment
revenue was $57.3 million, down $47.1 million or 45% year to date
2024, compared to $104.4 million for the comparable period in 2023.
Completed stage counts decreased by 63% from 13,800 for the 2023
year to date period, compared to 5,100 for the year to date 2024
period.
Revenue Breakdown by Service Line, in millions:
Service Line
FY 2022 Revenue
FY 2023 Revenue
Q1 2024 Revenue
Q2 2024 Revenue
Wireline Completions
$143.6
$134.7
$17.3
$7.5
Wireline Production
36.8
42.2
10.4
11.9
Wireline Pump Down
16.6
22.2
5.1
5.1
Total Wireline Segment Revenue
$197.0
$199.1
$32.8
$24.5
The decrease in revenue and stage count from the prior year and
quarter periods is indicative of lower operational activity
reflecting the Company's decision to pursue only work with
appropriate margins and a shift in activity from completions work
to production.
Operating loss was $2.6 million in the second quarter, down $5.4
million, or 193% from operating income of $2.8 million in the prior
year period and up $0.3 million, or 10%, from operating loss of
$2.9 million for the prior quarter. Adjusted EBITDA was $0.4
million, down 93% from $5.7 million in the prior year period but up
100% from $0.2 million for the prior quarter. Operating loss for
year to date 2024 was $5.5 million, down $10.1 million, or 220%
from operating income of $4.6 million for year to date 2023.
Adjusted EBITDA was $0.6 million for year to date 2024, down from
$9.9 million for year to date 2023.
Processing Solutions and Ancillary Services
Processing Solutions and Ancillary Services segment revenue was
$30.9 million in the second quarter of 2024, down $0.2 million, or
1% from $31.1 million for the prior year period and up $6.5
million, or 27% from $24.4 million in the prior quarter. The
increase from the prior quarter was largely attributable to
increased operational activity. Segment revenue was $55.3 million
for year to date 2024, down $5.9 million, or 10% from $61.2 million
for year to date 2023. The decrease in revenue was primarily
attributable to the decrease in operational activity within the
coil tubing services in the first quarter of 2024.
Operating income in this segment was $5.2 million in the second
quarter, up from $4.2 million in the prior year period and up from
$0.5 million in the prior quarter. Adjusted EBITDA was $7.3
million, up from $5.6 million in the prior year period and up
compared to $2.5 million in the prior quarter. Operating income was
$5.7 million for year to date 2024, down from $7.6 million in the
prior year period. Adjusted EBITDA was $9.8 million for year to
date 2024, compared to $10.6 million in the prior year period.
BALANCE SHEET, CASH FLOW AND LIQUIDITY
As of June 30, 2024, the Company had $72.2 million of liquidity,
consisting of $63.5 million of capacity on its revolving credit
facility and $8.7 million of cash on hand. This compares to the
prior year period end of June 30, 2023 when the Company had $69.1
million of liquidity, consisting of $62.7 million of capacity on
its revolving credit facility and $6.4 million of cash on hand.
Cash provided by Operating Activities for year to date 2024 is
$34.1 million, compared to $40.9 million over the same period in
2023. The Company’s Free Cash Flow(2) of $12.3 million for year to
date 2024 compares to Free Cash Flow(2) of $28.0 million in the
prior year period primarily due to heavier capital expenditures
during 2024 in support of expanding customer relationships.
The Company had capital expenditures of $21.8 million, compared
to $12.9 million over the same period in 2023. Year to date, the
Company has deployed approximately $8 million toward growth capital
expenditures on more modern equipment that is more marketable at
better pricing, updates to technology offerings or expanded service
offerings with new customer contracts previously announced. Many of
these investments are the result of specific customer requests and
will strengthen our customer relationships and provide for improved
returns and better pricing in future periods.
Conference Call
The Company will host a conference call to discuss its results
from the second quarter of 2024 on Tuesday, July 30, 2024, at 8:00
a.m. Central Time (9:00 a.m. Eastern Time). To join the conference
call from within the United States, participants may dial
1-833-255-2829. To join the conference call from outside of the
United States, participants may dial 1-412-902-6710. When
instructed, please ask the operator to join the Ranger Energy
Services, Inc. call. Participants are encouraged to login to the
webcast or dial in to the conference call approximately ten minutes
prior to the start time. To listen via live webcast, please visit
the Investor Relations section of the Company’s website,
www.rangerenergy.com.
An audio replay of the conference call will be available shortly
after the conclusion of the call and will remain available for
approximately seven days. The replay will also be available in the
Investor Relations section of the Company’s website shortly after
the conclusion of the call and will remain available for
approximately seven days.
About Ranger Energy Services, Inc.
Ranger is one of the largest providers of high specification
mobile rig well services, cased hole wireline services, and
ancillary services in the U.S. oil and gas industry. Our services
facilitate operations throughout the lifecycle of a well, including
the completion, production, maintenance, intervention, workover and
abandonment phases.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other
than statements of historical fact included in this press release,
regarding our strategy, future operations, financial position,
estimated revenue and losses, projected costs, prospects, plans and
objectives of management are forward-looking statements. When used
in this press release, the words “may,” “should,” “intend,”
“could,” “believe,” “anticipate,” “estimate,” “expect,” “outlook,”
“project” and similar expressions are intended to identify
forward-looking statements, although not all forward-looking
statements contain such identifying words. These forward-looking
statements represent Ranger’s expectations or beliefs concerning
future events, and it is possible that the results described in
this press release will not be achieved. These forward-looking
statements are subject to risks, uncertainties and other factors,
many of which are outside of Ranger’s control. Should one or more
of these risks or uncertainties described occur, or should
underlying assumptions prove incorrect, our actual results and
plans could differ materially from those expressed in any
forward-looking statements.
Our future results will depend upon various other risks and
uncertainties, including, but not limited to, those detailed in our
current and past filings with the U.S. Securities and Exchange
Commission (“SEC”). These documents are available through our
website or through the SEC’s Electronic Data Gathering and Analysis
Retrieval system at www.sec.gov. These risks include, but are not
limited to, the risks described under “Part I, Item 1A, Risk
Factors” in our Annual Report on 10-K filed with the SEC on March
5, 2024, and those set forth from time-to-time in other filings by
the Company with the SEC.
All forward looking statements, expressed or implied, included
in this press release are expressly qualified in their entirety by
this cautionary statement. This cautionary statement should also be
considered in connection with any subsequent written or oral
forward-looking statements that we or persons acting on our behalf
may issue. Except as otherwise required by applicable law any
forward-looking statement speaks only as of the date on which is it
made. We disclaim any duty to update any forward-looking
statements, all of which are expressly qualified by the statements
in this cautionary statement, to reflect events or circumstances
after the date of this press release.
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and
per share amounts)
Three Months Ended March
31,
Three Months Ended June
30,
Six Months Ended June
30,
2024
2024
2023
2024
2023
Revenue
High specification rigs
$
79.7
$
82.7
$
77.6
$
162.4
$
155.1
Wireline services
32.8
24.5
54.5
57.3
104.4
Processing solutions and ancillary
services
24.4
30.9
31.1
55.3
61.2
Total revenue
136.9
138.1
163.2
275.0
320.7
Operating expenses
Cost of services (exclusive of
depreciation and amortization):
High specification rigs
66.3
65.3
62.0
131.6
122.1
Wireline services
32.6
24.2
48.8
56.8
94.5
Processing solutions and ancillary
services
21.9
23.7
25.5
45.6
50.6
Total cost of services
120.8
113.2
136.3
234.0
267.2
General and administrative
6.7
6.9
7.3
13.6
15.7
Depreciation and amortization
11.2
11.0
8.7
22.2
18.7
Gain on sale of assets
(1.3
)
(0.3
)
(0.5
)
(1.6
)
(1.5
)
Total operating expenses
137.4
130.8
151.8
268.2
300.1
Operating income (loss)
(0.5
)
7.3
11.4
6.8
20.6
Other expenses
Interest expense, net
0.8
0.6
0.9
1.4
2.1
Loss on debt retirement
—
—
2.4
—
2.4
Total other expenses, net
0.8
0.6
3.3
1.4
4.5
Income (loss) before income tax expense
(benefit)
(1.3
)
6.7
8.1
5.4
16.1
Income tax expense (benefit)
(0.5
)
2.0
2.0
1.5
3.8
Net income (loss)
(0.8
)
4.7
6.1
3.9
12.3
Income (loss) per common share:
Basic
$
(0.04
)
$
0.21
$
0.25
$
0.17
$
0.49
Diluted
$
(0.04
)
$
0.21
$
0.24
$
0.17
$
0.49
Weighted average common shares
outstanding
Basic
22,738,286
22,364,422
24,840,569
22,363,364
24,890,178
Diluted
22,738,286
22,480,448
25,188,123
22,488,177
25,249,026
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions, except share and
per share amounts)
June 30, 2024
December 31, 2023
Assets
Cash and cash equivalents
$
8.7
$
15.7
Accounts receivable, net
70.2
85.4
Contract assets
22.0
17.7
Inventory
6.5
6.4
Prepaid expenses
6.4
9.6
Assets held for sale
0.6
0.6
Total current assets
114.4
135.4
Property and equipment, net
230.0
226.3
Intangible assets, net
6.0
6.3
Operating leases, right-of-use assets
8.3
9.0
Other assets
0.9
1.0
Total assets
$
359.6
$
378.0
Liabilities and Stockholders'
Equity
Accounts payable
23.8
31.3
Accrued expenses
28.7
29.6
Other financing liability, current
portion
0.6
0.6
Long-term debt, current portion
—
0.1
Short-term lease liability
7.9
7.3
Other current liabilities
0.5
0.1
Total current liabilities
61.5
69.0
Long-term lease liability
14.5
14.9
Other financing liability
10.6
11.0
Deferred tax liability
12.5
11.3
Total liabilities
$
99.1
$
106.2
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 per share;
50,000,000 shares authorized; no shares issued and outstanding as
of June 30, 2024 and December 31, 2023
—
—
Class A Common Stock, $0.01 par value,
100,000,000 shares authorized; 26,087,524 shares issued and
22,365,096 shares outstanding as of June 30, 2024; 25,756,017
shares issued and 23,398,689 shares outstanding as of December 31,
2023
0.3
0.3
Class B Common Stock, $0.01 par value,
100,000,000 shares authorized; no shares issued or outstanding as
of June 30, 2024 and December 31, 2023
—
—
Less: Class A Common Stock held in
treasury at cost; 3,722,428 treasury shares as of June 30, 2024 and
2,357,328 treasury shares as of December 31, 2023
(36.9
)
(23.1
)
Retained earnings
30.0
28.4
Additional paid-in capital
267.1
266.2
Total controlling stockholders' equity
260.5
271.8
Total liabilities and stockholders'
equity
$
359.6
$
378.0
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Six Months Ended June
30,
2024
2023
Cash Flows from Operating
Activities
Net income
$
3.9
$
12.3
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
22.2
18.7
Equity based compensation
2.7
2.4
Gain on disposal of property and
equipment
(1.6
)
(1.5
)
Deferred income tax expense
1.2
3.8
Loss on debt retirement
—
2.4
Other expense, net
0.6
0.9
Changes in operating assets and
liabilities
Accounts receivable
15.1
15.8
Contract assets
(4.3
)
(4.2
)
Inventory
(0.1
)
(1.8
)
Prepaid expenses and other current
assets
3.2
2.0
Other assets
0.7
0.9
Accounts payable
(7.4
)
(2.3
)
Accrued expenses
(1.3
)
(7.2
)
Other current liabilities
(1.2
)
(0.1
)
Other long-term liabilities
0.4
(1.2
)
Net cash provided by operating
activities
34.1
40.9
Cash Flows from Investing
Activities
Purchase of property and equipment
(21.8
)
(12.9
)
Proceeds from disposal of property and
equipment
1.5
4.7
Net cash used in investing
activities
(20.3
)
(8.2
)
Cash Flows from Financing
Activities
Borrowings under Revolving Credit
Facility
11.4
298.6
Principal payments on Revolving Credit
Facility
(11.4
)
(301.1
)
Principal payments on Eclipse M&E Term
Loan Facility
—
(10.4
)
Principal payments on Secured Promissory
Note
—
(6.2
)
Principal payments on financing lease
obligations
(2.6
)
(2.7
)
Principal payments on other financing
liabilities
(0.3
)
(0.5
)
Dividends paid to Class A Common Stock
shareholders
(2.3
)
—
Shares withheld for equity
compensation
(1.7
)
(0.9
)
Payments on Other Installment
Purchases
(0.1
)
(0.2
)
Repurchase of Class A Common Stock
(13.8
)
(5.9
)
Deferred financing costs on Wells
Fargo
—
(0.7
)
Net cash used in financing
activities
(20.8
)
(30.0
)
Increase (decrease) in cash and cash
equivalents
(7.0
)
2.7
Cash and cash equivalents, Beginning of
Period
15.7
3.7
Cash and cash equivalents, End of
Period
$
8.7
$
6.4
Supplemental Cash Flow
Information
Interest paid
$
0.9
$
0.6
Supplemental Disclosure of Non-cash
Investing and Financing Activities
Capital expenditures included in accounts
payable and accrued liabilities
$
0.1
$
—
Additions to fixed assets through
installment purchases and financing leases
$
(3.7
)
$
(3.4
)
Additions to fixed assets through asset
trades
$
(4.2
)
$
(1.1
)
RANGER ENERGY SERVICES, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Note Regarding Non‑GAAP Financial Measure
The Company utilizes certain non-GAAP financial measures that
management believes to be insightful in understanding the Company’s
financial results. These financial measures, which include Adjusted
EBITDA and Free Cash Flow, should not be construed as being more
important than, or as an alternative for, comparable U.S. GAAP
financial measures. Detailed reconciliations of these Non-GAAP
financial measures to comparable U.S. GAAP financial measures have
been included below and are available in the Investor Relations
sections of our website at www.rangerenergy.com. Our presentation
of Adjusted EBITDA and Free Cash Flow should not be construed as an
indication that our results will be unaffected by the items
excluded from the reconciliations. Our computations of these
Non-GAAP financial measures may not be identical to other similarly
titled measures of other companies.
Adjusted EBITDA
We believe Adjusted EBITDA is a useful performance measure
because it allows for an effective evaluation of our operating
performance when compared to our peers, without regard to our
financing methods or capital structure. We exclude the items listed
below from net income or loss in arriving at Adjusted EBITDA
because these amounts can vary substantially within our industry
depending upon accounting methods, book values of assets, capital
structures and the method by which the assets were acquired.
Certain items excluded from Adjusted EBITDA are significant
components in understanding and assessing a company’s financial
performance, such as a company’s cost of capital and tax structure,
as well as the historic costs of depreciable assets, none of which
are reflected in Adjusted EBITDA.
We define Adjusted EBITDA as net income or loss before net
interest expense, income tax provision or benefit, depreciation and
amortization, equity‑based compensation, acquisition-related,
severance and reorganization costs, gain or loss on disposal of
property and equipment, and certain other non-cash items that we do
not view as indicative of our ongoing performance.
The following tables are a reconciliation of net income or loss
to Adjusted EBITDA for the respective periods, in millions:
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Three Months Ended June 30,
2024
Net income (loss)
$
11.8
$
(2.6
)
$
5.2
$
(9.7
)
$
4.7
Interest expense, net
—
—
—
0.6
0.6
Income tax expense
—
—
—
2.0
2.0
Depreciation and amortization
5.6
2.9
2.0
0.5
11.0
EBITDA
17.4
0.3
7.2
(6.6
)
18.3
Equity based compensation
—
—
—
1.4
1.4
Gain on disposal of property and
equipment
—
—
—
(0.3
)
(0.3
)
Severance and reorganization costs
0.7
0.1
0.1
0.1
1.0
Acquisition related costs
0.1
—
—
—
0.1
Legal fees and settlements
0.5
—
—
—
0.5
Adjusted EBITDA
$
18.7
$
0.4
$
7.3
$
(5.4
)
$
21.0
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Three Months Ended March 31,
2024
Net income (loss)
$
7.8
$
(2.9
)
$
0.5
$
(6.2
)
$
(0.8
)
Interest expense, net
—
—
—
0.8
0.8
Income tax benefit
—
—
—
(0.5
)
(0.5
)
Depreciation and amortization
5.6
3.1
2.0
0.5
11.2
EBITDA
13.4
0.2
2.5
(5.4
)
10.7
Equity based compensation
—
—
—
1.2
1.2
Gain on disposal of property and
equipment
—
—
—
(1.3
)
(1.3
)
Acquisition related costs
0.2
—
—
0.1
0.3
Adjusted EBITDA
$
13.6
$
0.2
$
2.5
$
(5.4
)
$
10.9
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Three Months Ended June 30,
2023
Net income (loss)
$
11.5
$
2.8
$
4.2
$
(12.4
)
$
6.1
Interest expense, net
—
—
—
0.9
0.9
Income tax expense
—
—
—
2.0
2.0
Depreciation and amortization
4.1
2.9
1.4
0.3
8.7
EBITDA
15.6
5.7
5.6
(9.2
)
17.7
Equity based compensation
—
—
—
1.2
1.2
Loss on retirement of debt
—
—
—
2.4
2.4
Gain on disposal of property and
equipment
—
—
—
(0.5
)
(0.5
)
Severance and reorganization costs
—
—
—
0.2
0.2
Acquisition related costs
—
—
—
0.9
0.9
Adjusted EBITDA
$
15.6
$
5.7
$
5.6
$
(5.0
)
$
21.9
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Six Months Ended June 30,
2024
Net income (loss)
$
19.6
$
(5.5
)
$
5.7
$
(15.9
)
$
3.9
Interest expense, net
—
—
—
1.4
1.4
Income tax expense
—
—
—
1.5
1.5
Depreciation and amortization
11.2
6.0
4.0
1.0
22.2
EBITDA
30.8
0.5
9.7
(12.0
)
29.0
Equity based compensation
—
—
—
2.6
2.6
Gain on disposal of property and
equipment
—
—
—
(1.6
)
(1.6
)
Severance and reorganization costs
0.7
0.1
0.1
0.1
1.0
Acquisition related costs
0.3
—
—
0.1
0.4
Legal fees and settlements
0.5
—
—
—
0.5
Adjusted EBITDA
$
32.3
$
0.6
$
9.8
$
(10.8
)
$
31.9
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Six Months Ended June 30,
2023
Net income (loss)
$
23.4
$
4.6
$
7.6
$
(23.3
)
$
12.3
Interest expense, net
—
—
—
2.1
2.1
Income tax expense
—
—
—
3.8
3.8
Depreciation and amortization
9.6
5.3
3.0
0.8
18.7
EBITDA
33.0
9.9
10.6
(16.6
)
36.9
Equity based compensation
—
—
—
2.3
2.3
Loss on retirement of debt
—
—
—
2.4
2.4
Gain on disposal of property and
equipment
—
—
—
(1.5
)
(1.5
)
Severance and reorganization costs
—
—
—
0.4
0.4
Acquisition related costs
—
—
—
1.5
1.5
Adjusted EBITDA
$
33.0
$
9.9
$
10.6
$
(11.5
)
$
42.0
Free Cash Flow
We believe Free Cash Flow is an important financial measure for
use in evaluating the Company’s financial performance, as it
measures our ability to generate additional cash from our business
operations. Free Cash Flow should be considered in addition to,
rather than as a substitute for, net income as a measure of our
performance or net cash provided by operating activities as a
measure of our liquidity. Additionally, our definition of Free Cash
Flow is limited and does not represent residual cash flows
available for discretionary expenditures due to the fact that the
measure does not deduct the payments required for debt service and
other obligations or payments made for business acquisitions.
Therefore, we believe it is important to view Free Cash Flow as
supplemental to our entire statement of cash flows.
The following table is a reconciliation of consolidated
operating cash flows to Free Cash Flow for the respective periods,
in millions:
Six Months Ended
June 30, 2024
June 30, 2023
Net cash provided by operating
activities
$
34.1
$
40.9
Purchase of property and equipment
(21.8
)
(12.9
)
Free Cash Flow
$
12.3
$
28.0
EBITDA
$
31.9
$
42.0
Free cash Flow conversion - Free cash
flow as a percentage of EBITDA
39
%
67
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240729385474/en/
Melissa Cougle Chief Financial Officer (713) 935-8900
InvestorRelations@rangerenergy.com
Ranger Energy Services (NYSE:RNGR)
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Ranger Energy Services (NYSE:RNGR)
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