Ranger Energy Services Inc (NYSE:RNGR) Q4 2018 Earnings Conference Call - Final Transcript
Mar 06, 2019 • 10:00 am ET
Good morning, and welcome to the Ranger Energy Fourth Quarter 2018 Conference Call. All participants will be in listen-only mode. (Operator Instructions) After today's presentation, there will be an opportunity to ask questions. (Operator Instructions) Please note that this event is being recorded.
I would now like to turn the conference over to Darron Anderson, President and CEO. Please go ahead.
Darron M. Anderson
Thank you, operator. Good morning, and welcome to Ranger Energy Services fourth quarter 2018 earnings conference call. Joining me today is Brandon Blossman, our CFO, who will offer his comments in a moment.
On the last quarterly call, I characterized Q3 as improving metrics across all aspects of our business. This quarter's results not only demonstrate improving metrics but also the strength and diversity of our portfolio to deliver its performance during a seasonal low activity period and declining oil prices.
I would like to start up the call this morning by bringing your attention to some of the more significant events of the quarter. First, modification to segment reporting. As you probably read in our press release last night, we modified our reporting by adding a third segment. Today and going forward our reporting segments are, High Specification Rigs, Completion and Other Services and Processing Solutions. This change was driven by the growth and material contribution of select service offerings focused on completion related activity, which is now being captured with our new Completion and Other Services segment.
Next, High Spec Rig rates. Our service rig rates continued a modest rise despite our 24 hour completion rig activity which generally carries a -- produces a higher ROE revenue rate, experiencing a decline in ROE across the second half of the quarter. Another great event for the quarter is our Completion and Other Services performance. Activity remained strong here specifically within our Mallard wireline business where we continue to gain market share as validated through a 17% growth in stage count for the quarter.
Next, our Processing Solutions. This long-term production related segment experienced higher rates, greater utilization and unit count additions, all leading to considerable revenue and gross profit growth. SG&A reduction, proactive management of our SG&A cost with a continued focus on back office (ph) efficiency contributed to the overall success of the quarter.
And finally, our Q4 results established as a strong launching point for 2019 cash flow generation. We are pleased to have grown revenue and EBITDA during a challenging quarter for the market. Our focus on continued performance trend, the conclusion of our 2018 growth capital program and expected minimal maintenance CapEx spend considerably opens up our free cash flow generation in 2019.
Now to give a little more detail on the quarter. Revenue for the quarter increased 44% to $85 million from $82 million in Q3. Within our High Spec Rig segment rate continued up with a 4% increase for the quarter. However, those rate increases were offset by a 13% sequential decrease in rig hours. A reduction in rig hours is typically expected