Ranger Energy Services, Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; unaudited. Ranger provides onshore well-service rigs, wireline, processing and ancillary services to U.S. oil and gas customers.
Financial performance
Amounts are in millions of dollars except per-share data and operating metrics.
| Metric | Q1 2024 | Q1 2023 |
|---|---|---|
| Revenue | $136.9 | $157.5 |
| Operating income (loss) | $(0.5) | $9.2 |
| Net income (loss) | $(0.8) | $6.2 |
| Diluted earnings (loss) per share | $(0.03) | $0.25 |
| Adjusted EBITDA (non-GAAP) | $10.9 | $20.1 |
| Cash from operating activities | $12.0 | $17.4 |
Revenue fell 13% year over year. Cost of services was $120.8 million, or 88% of revenue, compared with $130.9 million, or 83%, in the prior-year quarter. Operating margin was approximately negative 0.4% versus 5.8%; net margin was approximately negative 0.6% versus 3.9%.
By segment, High Specification Rigs revenue rose 3% to $79.7 million; Wireline Services revenue fell 34% to $32.8 million; and Processing Solutions and Ancillary Services revenue fell 19% to $24.4 million. Segment operating income (loss) was $7.8 million, $(2.9) million and $0.5 million, respectively.
Cash, debt and capital
- Cash was $11.1 million at March 31, down from $15.7 million at December 31, 2023. Working capital was $58.5 million, versus $66.4 million at year-end.
- Net cash used in investing activities was $5.7 million, including $6.5 million of property and equipment purchases; financing activities used $10.9 million, including $8.5 million for share repurchases. Cash declined by $4.6 million during the quarter.
- The company reported no borrowings under its Wells Fargo revolver and $55.4 million available after letters of credit, for reported total liquidity of $66.5 million including cash. The borrowing base capacity was $58.6 million. Ranger reported compliance with its fixed-charge coverage covenant.
- Ranger repurchased 846,900 shares for $8.5 million under its buyback program and expanded the authorization to $85 million. The board declared a $0.05-per-share quarterly dividend; the March-quarter dividend was paid April 5. A further $0.05 dividend was declared May 7, payable May 31.
Changes, outlook and risks
Management attributed the weaker results mainly to lower wireline completion activity and reduced ancillary-service activity, alongside seasonal effects and competition. Wireline stage counts fell 47% to 3,400. The company said it closed its South-region completions service line, shifted focus toward production work, and made cost reductions in Wireline. High Specification Rigs revenue was broadly steady, but downtime, weather, rig transitions, labor and repair costs pressured profitability. Management said coil-tubing activity began recovering in April.
Management described the outlook for most business lines as stable and expects a constructive demand backdrop if the global economy and commodity prices remain stable. It anticipates activity recovery in some service lines, but noted uncertainty around E&P consolidation, competition, seasonality and geopolitical developments. The filing provides no numerical revenue or earnings guidance.
Key risks include oil and gas price and customer-spending volatility, customer concentration, competition, labor availability, safety and environmental incidents, weather, regulation, insurance adequacy, and interest-rate and liquidity exposure. Four customers each represented approximately 10%–12% of Q1 revenue and together accounted for about 43% of net receivables. Ranger reported no material litigation and no material off-balance-sheet arrangements. Disclosure controls were assessed as effective.
Important facts for investors to verify
- Whether the reported recovery in activity after quarter-end, particularly in coil tubing and other ancillary lines, continued and improved margins.
- Whether Wireline restructuring and cost reductions offset the impact of lower stage counts and intense regional competition.
- How sustained downtime, weather impacts, labor and medical costs affect High Specification Rigs profitability.
- Availability under the asset-based revolver, borrowing-base changes, covenant compliance and the effect of share repurchases and dividends on liquidity.
- The share-purchase disclosure distinguishes 846,900 program repurchases from 921,173 total shares purchased, the latter including 74,273 shares withheld for employee tax obligations.