FTS International, Inc. (NYSE:FTSI) Q3 2019 Earnings Conference Call Transcript

Nov 05, 2019 • 10:00 am ET

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FTS International, Inc. (NYSE:FTSI) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Greetings and welcome to the FTS International Third Quarter 2019 Earnings Call. During the presentation all participants will be in a listen-only mode. [Operator Instructions] As a reminder, this conference is being recorded Tuesday, November 5, 2019.

I would now like to turn the conference over to Michael Messina, please go ahead.

Executive
Michael Messina

Thank you and good morning everyone. We appreciate you joining us for the FTS International conference call and webcast to review third quarter 2019 results. Presenting today's prepared remarks is Mike Doss, CEO; who will also be joined by Lance Turner, CFO; and Buddy Petersen COO for the Q&A portion of the call.

Before we begin, I would like to remind everyone that comments made on today's call that include management's plans, intentions, beliefs, expectations, anticipations or predictions for the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause the company's actual results to differ materially from those expressed in any forward-looking statements.

These risks and uncertainties are discussed in the company's Annual Report on Form 10-K and in other reports that Company files with the SEC. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements. The Company's SEC filings may be obtained by contacting the Company and are available on the Company's website, ftsi.com, and on the SEC's website, sec.gov. This conference call also includes discussions of non-GAAP financial measures. Our earnings release includes further information about these non-GAAP financial measures as well as reconciliations of these non-GAAP measures to their most directly comparable GAAP measures.

I'll now turn the call over to Mike Doss, FTSI's CEO. Mike?

Executive
Michael J. Doss

Thank you. Good morning, everyone. Overall, the third quarter was a challenging quarter. Our fleet count and stages came in as we expected earlier in the quarter, however pricing concessions to retain work were higher than we had expected. Despite that we have free cash flow positive and reduced our net debt by $58 million during the quarter.

Frac market remains oversupplied and ultra-price competitive as a result of lower activity driven by a combination of increased completion efficiencies and E&P capital discipline. Revenue was $186 million in the third quarter, down 18% sequentially, while our stage count was down only 2.5%. The decrease in revenue was due to more customers, supply under own sand and lower service pricing.

Our average active fleet count was $19.8 compared to $21 in the second quarter. We ended the quarter with 18 fleets, of those 11 were active in West Texas, three in South Texas, two in Mid-Con, one in the Northeast and one that is splitting this time in East Texas and South Texas. We continue to see a significant amount of white space on the calendar, which resulted in our active fleets, being only 83% utilized. Therefore on a fully utilized basis our fleet count would have been three fleets fewer.