RigNet, Inc. (NASDAQ:RNET) Q1 2020 Earnings Conference Call - Final Transcript

May 11, 2020 • 11:00 am ET

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RigNet, Inc. (NASDAQ:RNET) Q1 2020 Earnings Conference Call - Final Transcript

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Presentation
Executive
Steve Pickett

includes a $23.1 million or about $1.15 per share non-cash charge for impairment of goodwill. Adjusting to this net loss for the quarter was $3.7 million or $0.18 per share. Revenue increased by 2.2% versus the prior year quarter and was lower by 8.3% compared to the fourth quarter mostly due to a particularly busy end of year on a few projects in our SI segments.

Adjusted EBITDA, a non-GAAP measure we define in our press release in one of our key performance metrics was $8.4 million for the first quarter. Adjusted EBITDA was essentially flat compared to the prior year quarter and down 30% from a particularly strong fourth quarter. Lee will provide some more color on the financials.

It's only been two short months since we provided our last update. But the world has changed dramatically. The oil industry in particular has been hit not only by the demand reduction caused by COVID-19 quarantine, but also by the ensuing price war between the Saudis and Russia. As we've seen, even with the historic supply cuts agreed to by OPEC plus in April, we're still in an oversupply situation with depressed commodity prices, which we believe is likely to lead to reduce energy activity throughout at least 2020. Although, we are optimistic that is the global economy reopens, you will begin to see demand rebound and that will get us closer to a supply demand balance with some price support.

How is RigNet responding to this new environment? As you'll see on Slide 7 of our new investor deck, we've had three primary areas of focus. First and foremost, we are safeguarding our employees to make sure certain that they are able to continue working as normally as possible. Fortunately, we're a technology company. In the transition to work from home environments globally has been smooth and active. Our IT department has done an outstanding job to ensure we are all connected and able to carry on.

In terms of workflows are moved to the cloud over the last two years, it certainly helped us feel more effectively with this situation. We're actively but cautiously evaluating when we will return to our offices, but even in the event that doesn't occur soon, we are confident that the organization will continue to respond in a positive and highly effective manner. Our next area of focus is to continue to deliver our customary outstanding service to our customers. And of course, to look for opportunities to grow the business, as our customers are constantly looking for new services that can help improve their cost structure. And we have a number of such solutions that can be turned up quickly to help our customers do just that. From our adaptive video intelligence service, AVI, to our Intelie AI-backed real time machine learning solutions.

In terms of overall service delivery, our biggest challenge has been with respect to our workshop spaces in Aberdeen and Lafayette. These are areas within our facilities will just