Nine Energy Service, Inc. (NYSE:NINE) Q4 2019 Earnings Conference Call - Final Transcript

Mar 09, 2020 • 10:00 am ET


Nine Energy Service, Inc. (NYSE:NINE) Q4 2019 Earnings Conference Call - Final Transcript


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Greetings and welcome to the Nine Energy Service Fourth Quarter 2019 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. [Operator Instructions] Please note this conference call is being recorded. I would now like to turn the call over to your host, Mr. Guy Sirkes. Thank you. You may begin.

Guy Sirkes

Thank you. Good morning everyone and welcome to the Nine Energy Service earnings conference call to discuss our results for the fourth quarter and full year of 2019. With me today are Ann Fox, President and Chief Executive Officer and Clinton Roeder, Chief Financial Officer. We appreciate your participation.

Some of our comments today may include forward-looking statements reflecting Nine's view about future events. Forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control. These risks and uncertainties can cause actual results to differ materially from our current expectations. We advise listeners to review our earnings release and the risk factors discussed in our filings with the SEC. We undertake no obligation to revise or update publicly any forward-looking statements for any reason.

Our statements today also include non-GAAP financial measures. Additional details and a reconciliation to the most directly comparable GAAP financial measures, also included in our fourth quarter and full year press release and can be found in the Investor Relations section of our website. I will now turn the call over to Ann Fox.

Ann G. Fox

Thank you, Guy. Good morning, everyone. Thank you for joining us today to discuss our fourth quarter and full year results for 2019. I want to start off and congratulate Heather Schmidt, our VP of IR on her soon-to-arrive new baby. She will be out on maternity leave but Guy Sirkes, our VP of Strategic Development will be filling in for her during this time and he can be reached through the Investor Relations contact information on the website.

Despite a very tough market this past year, I am happy with the execution of our strategic initiatives that have uniquely positioned Nine for Completion tool market share growth. At the beginning of 2018, we put a plan in place to better align our business portfolio with our strategy of being an asset light Completions focused company with higher barriers to entry around our business lines. This strategy would facilitate higher margins, stronger cash generation and better through cycle returns. To do this, we wanted to shift more of our top-line revenue derivation towards Completion tools, while simultaneously shedding non-accretive service lines and geographies. We also wanted to properly and successfully integrate Magnum and Frac Technologies into Nine to propel the development and commercialization of our new downhole technologies for both the near and long term.

During Q3, we successfully completed the sale of our Production Solutions segment and closed down Wireline operations in Canada, which will be accretive to ROIC, adjusted EBITDA margins and cash flow generation. We also reduced our capital