Nine Energy Service, Inc. (NYSE:NINE) Q1 2020 Earnings Conference Call - Final Transcript
May 07, 2020 • 10:00 am ET
Greetings, and welcome to the Nine Energy Service First Quarter 2020 Earnings Call. [Operator Instructions].
It is now my pleasure to introduce your first speaker, Heather Schmidt, Vice President of Investor Relations. Thank you, Ms. Schmidt. You may begin.
Thank you. Good morning, everyone, and welcome to the Nine Energy Service earnings conference call to discuss our results for the first quarter of 2020. On the call with me today are Ann Fox, President and Chief Executive Officer; and Guy Sirkes, Chief Financial Officer. We appreciate your participation.
Some of our comments today may include forward-looking statements reflecting Nine's views 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 comments today also include non-GAAP financial measures. Additional details and a reconciliation to the most directly comparable GAAP financial measures are also included in the first quarter 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, Heather. Good morning, everyone, and thank you for joining us today to discuss our first quarter results for 2020. I want to begin by thanking all our current and former Nine employees for their dedication and sacrifice through these very difficult times. Many of them have been with us for close to a decade and have helped shaped the company into what it is today.
Additionally, I am happy to report that as of today, Nine has no known confirmed cases of the coronavirus within the organization. The health and safety of our employees and our community remains our highest priority and we will continue to closely follow CDC and federal and state guidelines to ensure we are not putting anyone at risk and are maintaining safe standards across the organization.
Now moving on to Q1; this quarter revenue, fell below management's original guidance and adjusted EBITDA fell within the range of management's original guidance. Revenue came in lower than original guidance due to rapidly deteriorating market conditions beginning in early March. As you all know, this has been an extremely volatile market with the energy industry suffering from both significant global crude demand reductions of 25 million to 30 million barrels or more related to the COVID-19 pandemic, as well as a flood of supply hitting the market from Saudi Arabia, causing crude prices to drop by over 65% by the end of March from the 2020 peak in January.
In response to this price decline, our customers quickly began further cuts to 2020 capex plans, dropping rigs and releasing frac crews as the current oil price is clearly not profitable or sustainable for North American