Q1 2024 KLX Energy Services Holdings Inc Earnings Call Transcript
Key Points
- KLX Energy Services Holdings Inc (KLXE) reported a strong operational performance with record-setting achievements in coiled tubing and thru-tubing, reaching unprecedented depths and lateral lengths.
- Despite a 10% sequential decline in total revenue, KLXE saw revenue increases in three product lines: coiled tubing, frac rental, and flowback.
- KLXE ended Q1 with $128 million in liquidity, demonstrating a robust financial position.
- The company has initiated several cost-cutting measures both on the fixed and variable sides of the cost structure, which are expected to improve margins in the second quarter and beyond.
- KLXE is well-positioned to benefit from the growing industry consolidation and has exposure to the largest, most active customers across its geographic regions.
- KLXE experienced a 10% sequential decrease in Q1 revenue, primarily due to increased white space and a shift in geographic and product service line mix.
- The company faced challenges such as severe weather conditions and non-KLX safety incidents which led to operational disruptions and deferred revenue.
- Natural gas price declines led to an 18% reduction in Haynesville rig count and activity declines in other gas-directed basins.
- The Rockies segment saw a significant 24% sequential decrease in revenue due to various factors including weather and safety standdowns.
- KLXE's first-quarter adjusted EBITDA was $12 million, reflecting challenges in maintaining profitability amid fluctuating market conditions.
Good day, ladies and gentlemen, and welcome to the KLX Energy Services first-quarter earnings conference call. (Operator Instructions)
At this time, it is my pleasure to turn the floor over to your host, Zach Vaughan.
Thank you, operator, and good morning, everyone. We appreciate you joining us for the KLX Energy Services conference call and webcast to review fourth quarter and full-year 2023 results. With me today are Chris Baker, KLX Energy's President and Chief Executive Officer; and Keefer Lehner, Executive Vice President and Chief Financial Officer.
Following my remarks, management will provide a high-level commentary on the financial details of the full year and fourth quarter and discuss the outlook for 2024 before opening the call for your questions. There will be a replay of today's call and will be available by webcast on the company's website at www.klx.com, and there will also be a telephonic recorded
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