Q2 2024 KLX Energy Services Holdings Inc Earnings Call Transcript
Key Points
- KLX Energy Services Holdings Inc (KLXE) reported a strong second quarter with $180 million in revenue and $27 million in adjusted EBITDA, achieving a 15% adjusted EBITDA margin.
- The company returned to positive leveraged free cash flow of $10 million, indicating improved financial health.
- Revenue per rig increased by approximately 10% sequentially and 27% compared to Q2 2022, reflecting successful market share capture.
- KLXE implemented $16 million in annualized cost savings, benefiting both cost of sales and G&A, with a full quarterly impact realized in Q2.
- The company achieved all-time low HSE records across key metrics, demonstrating a strong commitment to safety and operational excellence.
- Despite strong Q2 results, KLXE faced a 7% decline in rig count and continued drilling and completion volatility, indicating persistent industry challenges.
- The Northeast Mid-Con segment experienced an 18% sequential decrease in revenue due to reduced regional gas-focused activity.
- KLXE's Q1 2024 results were negatively impacted by nonrecurring items and transitory issues, highlighting potential volatility in performance.
- The company is operating in a challenging environment with episodic basin-by-basin schedules, making it difficult to backfill spot work with margin.
- KLXE's ABL and senior secured notes mature in the fall of 2025, necessitating strategic refinancing efforts in the near future.
Greetings and welcome to KLX Energy Services second quarter 2024 earnings conference call. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Ken Dennard. Thank you, Mr. Dennard, you may begin.
Thank you, operator, and good morning, everyone. We appreciate you joining us for the KLX Energy Services conference call and webcast to review second quarter 2024 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 second quarter and outlook before opening the call for your questions. There will be a replay of today's call will be available by webcast on the company's website and at klx.com. And there will be a telephonic recorded replay available until August 22, 2024. For more information on how to access these
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