Ranger Energy Services, Inc. (NYSE: RNGR) (“Ranger” or the
“Company”) announced today its results for the fourth quarter and
full year ended December 31, 2023.
Highlights
– Full year 2023 revenue of $636.6 million, a
5% increase from $608.5 million in 2022
– Full year 2023 net income of $23.8 million,
or $0.95 per fully diluted share, up from $15.1 million, or $0.65
per share in 2022
– Full year 2023 Adjusted EBITDA(1) of $84.4
million, a 6% increase from $79.5 million in 2022, resulting in a
13.3% Adjusted EBITDA margin
– Full year 2023 free cash flow(1) of $54.3
million or $2.21 per share representing 22% of the trailing 30 day
stock price(2)
– Executed a comprehensive capital allocation
strategy that included a full pay down of debt, along with the
initiation of a dividend and extensive share repurchases that
returned $21.7 million to shareholders in 2023, representing 40% of
free cash flow(1)
– Share repurchases of 1,805,500 shares
during 2023 with additional purchases year-to-date 2024(3) of
736,800 shares, the combined representing over 10% of the Company
with shares outstanding as of February 29, 2024 totaling
22,662,569
– Board approval of an additional $50 million
share repurchase program authorization, resulting in total share
repurchase capacity of $85 million
– Published first ever Ranger Energy
Services, Inc. Sustainability Report
____________________
1
“Adjusted EBITDA” and “Free Cash
Flow” are not presented in accordance with generally accepted
accounting principles in the United States (“U.S. GAAP”). A
Non-GAAP supporting schedule is included with the statements and
schedules attached to this press release and can also be found on
the Company's website at: www.rangerenergy.com.
2
Volume Weighted Average Price
(“VWAP”) of the Company’s share price is calculated at $10.20,
based on 30 consecutive trading days immediately preceding December
31, 2023.
3
Shares repurchased to date
include repurchases settled from January 1, 2024 through February
29, 2024 with total share repurchases under existing share
repurchase authorization of 2,542,300.
Management Comments
Stuart Bodden, Ranger’s Chief Executive Officer, commented, “We
are pleased to report the highest annual earnings in Ranger’s
history in 2023. Strong customer relationships, superior service
quality and our production cycle focus drove the Company to record
high revenue, despite a U.S. land rig count which was 20% below the
prior year. Ranger also reported record high EBITDA, Free Cash Flow
and Earnings per Share despite weaker than anticipated customer
activity. This year was pivotal for Ranger in not only proving our
investment thesis that the Company can weather drilling activity
declines with a resilient profile, but also in transforming the
financial profile of the Company through paying down our debt,
initiating a dividend and repurchasing a significant amount of our
outstanding shares to return meaningful value to our shareholders.
The Company’s first shareholder returns program, launched in the
second quarter, resulted in a distribution of $21.7 million to
shareholders, or 40% of free cash flow, through cash dividends and
share repurchases. Share repurchases have continued during the
first quarter of 2024 given the compelling value our shares present
today. All of these accomplishments were enabled by our committed
and resourceful team members, from top to bottom, that truly embody
what we term our OneRanger spirit.”
“Our fourth quarter was impacted by customer budget exhaustion
and holiday slowdowns. That said, our anchor high specification
rigs business showed stability, as it has throughout 2023. Our
wireline segment showed some weakness given frac slowdowns at
year-end along with more significant seasonality given the heavier
exposure to Northern basins. Pricing across segments improved or
remained resilient during the year and we remain bullish about the
longer-term opportunities for the Company and our ability to grow
with existing asset capacity,” continued Bodden.
“I am also proud to announce that Ranger has released its first
ever Sustainability Report today, which details the Company’s
efforts towards operating more safely and responsibly. Ranger has
always taken its environmental, social and governance obligations
seriously and we are delighted to share the results of our programs
and cast a vision for the future.”
“We begin 2024 from a position of strength. Ranger is debt free
with over $85 million of liquidity and confident in our ability to
navigate an uncertain environment. Our two strategic priorities in
2024 are to continue our profitable growth and provide meaningful
capital returns to shareholders. Our acquisition strategy includes
both smaller bolt-on type opportunities, as well as potentially
larger transactions, and we will target lower capital intensity
service lines, increased in-basin scale, and production cycle
focus. As it relates to shareholder returns, we remain fully
committed to our dividend and continuing to opportunistically
repurchase our shares during the year,” concluded Bodden.
REVIEWING 2023 ACCOMPLISHMENTS
Ranger’s stated four strategic pillars for creating shareholder
value are: maximizing cash flow, fortifying its balance sheet,
growing through acquisition, and returning meaningful capital to
shareholders. These pillars underpinned our success in 2023 and lay
the foundation for our path in 2024.
a.
Maximizing Cash Flow: The
Company’s focus on cash flow generation is enabled by its capital
efficient business model with strong operating leverage. During
2023, the Company generated $63.0 million of free cash flow(1),
after adjusting for the acquisition and related integration costs
of pumps in the third quarter. We previously communicated our
ability to convert at least 60% of our EBITDA to free cash flow and
2024 will be focused on delivering on that goal once more as we
continue to focus on expanding profit margins in our wireline
business.
b.
Fortifying the Balance
Sheet: The Company ended the fourth quarter with $0.1 million
of debt and $15.7 million of cash and cash equivalents and
liquidity in excess of $85 million. The Company believes, at its
current size and in consideration of industry dynamics, that
minimal debt is critical to its ability to maximize shareholder
returns through opportunistic investment and capital returns to
shareholders and will look to preserve and grow balance sheet
strength in the coming year looking only to use leverage in
acquisitions when there is a high degree of confidence in future
cash flows.
c.
Exploring Growth Through
Acquisition: During the third quarter of 2023, the Company
closed on its purchase of pump down assets and support equipment.
The Company remains highly engaged in evaluating opportunities and
ever disciplined in ensuring that any transactions are value
creating to shareholders.
d.
Returning Capital to
Shareholders: The Company has made and is reiterating its
commitment to return at least 25% of annual cash flows to
shareholders through both dividends and share repurchases. During
2023, the Company repurchased 1,805,500 shares with continued
repurchases in 2024 spending over $25 million since initiation a
year ago. The Board has approved an additional $50 million share
repurchase program authorization, resulting in a total share
repurchase capacity of $85 million. Furthermore, the Board is
declaring its quarterly dividend today, March 4, 2024, of $0.05 per
share of common stock, payable on April 5, 2024 to shareholders of
record as of March 15, 2024.
PERFORMANCE SUMMARY
For the fourth quarter of 2023, revenue was $151.5 million, a
decrease from $154.3 million in the prior year period, and a
decrease from $164.4 million in the prior quarter. Revenue
decreases from the prior year were attributable to reduced activity
in our wireline and processing and ancillary services segments.
Year-to-date revenue was $636.6 million, an increase of 5%, or
$28.1 million from $608.5 million in the prior year due to pricing
improvements across segments and increasing operating activity in
select service lines.
Cost of services for the fourth quarter of 2023 was $129.7
million, or 86% of revenue, compared to $127.8 million, or 83% of
revenue in the prior year period. The increase in cost of services
as a percentage of revenue from the prior year quarter was
primarily attributable to inflationary cost pressures and reduced
operating activity during the quarter due to year-end customer
activity declines and weather related issues. Year-to-date cost of
services was $531.7 million, or 84% of revenue, compared to $503.9
million or 83% of revenue in the prior year period attributable to
inflationary pressures on labor, rentals and repair costs with the
most significant increase noted medical costs per employee which
affected cost of services by $3.5 million in 2023 when compared to
2022.
General and administrative expenses were $6.8 million for the
fourth quarter of 2023 compared to $7.5 million in the prior year
period and $7.0 million in the prior quarter. General and
administrative expenses year-to-date totaled $29.5 million. This
compares to general and administrative expenses of $39.9 million in
2022. The decrease in general and administrative expenses was
primarily due to prior year elevated acquisition and integration
costs related to acquisitions.
Net income totaled $2.1 million for the fourth quarter of 2023
compared to $7.6 million in the prior year period and $9.4 million
in the third quarter of 2023. The decrease in net income from the
prior year and quarter periods is primarily attributable to
increasing costs as compared to the prior year, such as the
aforementioned medical costs. 2023 net income of $23.8 million
increased 58% from $15.1 million in 2022.
Fully diluted earnings per share was $0.09 for the fourth
quarter of 2023 compared to $0.30 in the prior year period and
$0.38 in the prior quarter. Fully diluted earnings per share for
2023 was $0.95 compared to $0.65 in the prior year.
Adjusted EBITDA of $18.4 million for the fourth quarter of 2023
decreased $3.2 million from $21.6 million in the prior year period
and decreased $5.6 million from $24.0 million in the prior quarter.
The decreases were driven by the aforementioned reduction in
wireline completions activity and certain ancillary service lines
as well as inflationary pressure on costs. 2023 Adjusted EBITDA was
$84.4 million, an increase of $4.9 million compared to the prior
year.
BUSINESS SEGMENT FINANCIAL RESULTS
High Specification Rigs
High Specification Rigs segment revenue was $79.0 million in the
fourth quarter of 2023, a increase of $6.4 million, or 9% relative
to the prior year period, and a decrease of $0.2 million relative
to the prior quarter revenue of $79.2 million. Rig hours decreased
by 4% to 107,900 from 112,400 in the prior quarter and decreased by
5% from 113,600 in the prior year period. Hourly rig rates
increased by 5% to $733 from $700 per hour in the prior quarter,
reflecting an slight increase in pricing quarter over quarter.
Segment revenue for the full year was $313.3 million, an increase
of $20.1 million, or 7% compared to 2022. Hourly rig rates
increased by 12% from $625 per hour in 2022 to $703 per hour in
2023.
Operating income was $10.0 million in the fourth quarter of
2023, an increase of $0.2 million, or 2% relative to $9.8 million
in the prior year period and a decrease of $0.6 million, or 6%
compared to $10.6 million in the prior quarter. Adjusted EBITDA was
$15.4 million in the fourth quarter, up from $15.2 million in the
prior year period and down from $15.7 million in the prior quarter.
Operating income was $44.0 million for year-to-date 2023, an
increase of $9.7 million, or 28% relative to $34.3 million for
year-to-date 2022. Adjusted EBITDA was $64.1 million in 2023, up
from $60.5 million in 2022.
Wireline Services
Wireline Services segment revenue was $41.5 million in the
fourth quarter of 2023, down $6.8 million, or 14% compared to $48.3
million in the prior year period and down $11.7 million, or 22%
compared to $53.2 million in the prior quarter. Our Completions
service line completed stage counts of 5,000, a decrease of 26%
compared to 6,800 in the prior year period and a decrease of 26%
compared to 6,800 for the prior quarter. Stage count pricing was
$8,400 for the current quarter as compared to $7,100 for the prior
year period and $7,800 for the prior quarter. The decrease in
revenue and increase stage count from the prior year period is
indicative of lower operational activity, offset by improvements
made in pricing. Full year segment revenue was $199.1 million, up
$2.1 million, or 1% compared to $197.0 million in 2022. Completed
stage counts decreased by 18% from 31,400 during 2022, to 25,600 in
2023.
Operating loss was $1.8 million in the fourth quarter, down $3.8
million, or 190% from operating income of $2.0 million in the prior
year period and down $6.1 million, or 142%, from operating income
of $4.3 million for prior quarter. Adjusted EBITDA was $2.8
million, down 40% from $4.7 million in the prior year period and
down 62% from $7.4 million for the prior quarter. Operating income
was $7.1 million, down $0.5 million, or 7% during 2023, from $7.6
million in 2022. Adjusted EBITDA was $20.1 million in 2023, up from
$18.6 million for year-to-date during 2022.
Processing Solutions and Ancillary Services
Processing Solutions and Ancillary Services segment revenue was
$31.0 million in the fourth quarter of 2023, down $2.4 million, or
7% from $33.4 million for the prior year period and down $1.0
million, or 3% from $32.0 million for the prior quarter. The
decrease from the prior year and from the prior quarter was largely
attributable to reductions in operational activity within select
service lines. Segment revenue was $124.2 million during 2023, up
$5.9 million, or 5% from $118.3 million in 2022. The increase in
revenue was attributable to full year increases in operational
activity services lines such as coil tubing, plug and abandonment
services, and logistics services.
Operating income in this segment was $3.4 million in the fourth
quarter, down from $4.6 million in the prior year period and down
from $4.5 million in the prior quarter. Adjusted EBITDA was $5.3
million, down from $6.6 million in the prior period and down
compared to $6.5 million in the prior quarter.
BALANCE SHEET, CASH FLOW AND LIQUIDITY
As of December 31, 2023, the Company had $85.1 million of
liquidity, consisting of $69.4 million of capacity on its revolving
credit facility and $15.7 million of cash on hand. This compares to
$61.0 million of liquidity as of December 31, 2022, which consisted
of $57.3 million of capacity on its revolving credit facility and
$3.7 million of cash on hand.
The Company had total debt of $0.1 million compared to total
debt of $18.4 million at December 31, 2022, a reduction of 99%.
Year-to-date Cash provided by Operating Activities was $90.8
million, compared to $44.5 million over the same period in 2022.
The Company’s free cash flow(1) improved significantly year over
year to $54.3 million on a year-to-date basis compared to free cash
flow(1) of $30.7 million in the prior year. On a year-to-date
basis, the Company had capital expenditures of $36.5 million, which
includes $7.25 million for the pumping asset acquisition completed
during the third quarter.
2024 OUTLOOK
Ranger remains bullish on the long-term opportunities and growth
potential for its business; however, the Company expects that
operator activity levels are unlikely to grow meaningfully during
2024 while supply and demand dynamics and future global economic
activity remain uncertain. Against this backdrop, Ranger sees both
positive signals and challenges as it enters the year. We are
seeing activity begin to ramp in the back half of February after a
slow start to the year due to weather impacts and non-Ranger
related safety events and shutdowns. Ranger has also expanded work
with the key blue-chip customer agreement announced in 2023 and is
optimistic that additional growth opportunities will result from
this work and other opportunities. Ranger’s production focused
business model demonstrated its cyclical resilience in 2023 and
underpins a 2024 budget that includes modest growth year over year
dependent on operator behavior remaining stable. Converting 60% of
EBITDA to free cash flow(1) through efficient use of capital
expenditures will continue to allow Ranger to provide strong return
of capital to shareholders during the year.
Conference Call
The Company will host a conference call to discuss its results
from the fourth quarter of 2023 on Tuesday, March 5, 2024, at 10:00
a.m. Central Time (11:00 a.m. Eastern Time). To join the conference
call from within the United States, participants may dial
1-833-255-2829. To join the conference call from outside of the
United States, participants may dial 1-412-902-6710. When
instructed, please ask the operator to join the Ranger Energy
Services, Inc. call. Participants are encouraged to login to the
webcast or dial in to the conference call approximately ten minutes
prior to the start time. To listen via live webcast, please visit
the Investor Relations section of the Company’s website,
http://www.rangerenergy.com.
An audio replay of the conference call will be available shortly
after the conclusion of the call and will remain available for
approximately seven days. The replay will also be available in the
Investor Resources section of the Company’s website shortly after
the conclusion of the call and will remain available for
approximately seven days.
About Ranger Energy Services, Inc.
Ranger is one of the largest providers of high specification
mobile rig well services, cased hole wireline services, and
ancillary services in the U.S. oil and gas industry. Our services
facilitate operations throughout the lifecycle of a well, including
the completion, production, maintenance, intervention, workover and
abandonment phases.
Cautionary Statement Concerning Forward-Looking
Statements
Certain statements contained in this press release constitute
“forward-looking statements” within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934. These forward-looking statements represent
Ranger’s expectations or beliefs concerning future events, and it
is possible that the results described in this press release will
not be achieved. These forward-looking statements are subject to
risks, uncertainties and other factors, many of which are outside
of Ranger’s control that could cause actual results to differ
materially from the results discussed in the forward-looking
statements.
Any forward-looking statement speaks only as of the date on
which it is made, and, except as required by law, Ranger does not
undertake any obligation to update or revise any forward-looking
statement, whether as a result of new information, future events or
otherwise. New factors emerge from time to time, and it is not
possible for Ranger to predict all such factors. When considering
these forward-looking statements, you should keep in mind the risk
factors and other cautionary statements in our filings with the
Securities and Exchange Commission. The risk factors and other
factors noted in Ranger’s filings with the SEC could cause its
actual results to differ materially from those contained in any
forward-looking statement.
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in millions, except share and
per share amounts)
Three Months Ended September
30,
Three Months Ended December
31,
Year Ended December
31,
2023
2023
2022
2023
2022
Revenue
High specification rigs
$
79.2
$
79.0
$
72.6
$
313.3
$
293.2
Wireline services
53.2
41.5
48.3
199.1
197.0
Processing solutions and ancillary
services
32.0
31.0
33.4
124.2
118.3
Total revenue
164.4
151.5
154.3
636.6
608.5
Operating expenses
Cost of services (exclusive of
depreciation and amortization):
High specification rigs
63.5
63.6
57.4
249.2
232.7
Wireline services
45.8
40.4
43.6
180.7
178.4
Processing solutions and ancillary
services
25.5
25.7
26.8
101.8
92.8
Total cost of services
134.8
129.7
127.8
531.7
503.9
General and administrative
7.0
6.8
7.5
29.5
39.9
Depreciation and amortization
10.6
10.6
10.6
39.9
44.4
Impairment of fixed assets
0.4
—
—
0.4
1.3
Gain on sale of assets
(0.1
)
(0.2
)
(0.7
)
(1.8
)
(0.7
)
Total operating expenses
152.7
146.9
145.2
599.7
588.8
Operating income
11.7
4.6
9.1
36.9
19.7
Other (income) expenses
Interest expense, net
0.7
0.7
1.6
3.5
7.3
Loss on debt retirement
—
—
—
2.4
—
Gain on bargain purchase, net of tax
—
—
—
—
(3.6
)
Total other (income) expenses, net
0.7
0.7
1.6
5.9
3.7
Income before income tax expense
11.0
3.9
7.5
31.0
16.0
Income tax (benefit) expense
1.6
1.8
(0.1
)
7.2
0.9
Net income
9.4
2.1
7.6
23.8
15.1
Income per common share:
Basic
$
0.38
$
0.09
$
0.31
$
0.97
$
0.66
Diluted
$
0.38
$
0.09
$
0.30
$
0.95
$
0.65
Weighted average common shares
outstanding
Basic
24,500,607
24,129,081
24,887,249
24,600,151
22,969,623
Diluted
24,887,275
24,537,046
25,381,539
24,991,494
23,370,598
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(in millions, except share and
per share amounts)
December 31, 2023
December 31, 2022
Assets
Cash and cash equivalents
$
15.7
$
3.7
Accounts receivable, net
85.4
91.2
Contract assets
17.7
26.9
Inventory
6.4
5.9
Prepaid expenses
9.6
9.2
Assets held for sale
0.6
3.2
Total current assets
135.4
140.1
Property and equipment, net
226.3
221.6
Intangible assets, net
6.3
7.1
Operating leases, right-of-use assets
9.0
11.2
Other assets
1.0
1.6
Total assets
$
378.0
$
381.6
Liabilities and Stockholders'
Equity
Accounts payable
31.3
24.3
Accrued expenses
29.6
36.1
Other financing liability, current
portion
0.6
0.7
Long-term debt, current portion
0.1
6.8
Short-term lease liability
7.3
6.6
Other current liabilities
0.1
—
Total current liabilities
69.0
74.5
Long-term lease liability
14.9
13.1
Other financing liability
11.0
11.6
Long-term debt, net
—
11.6
Deferred tax liability
11.3
4.6
Total liabilities
$
106.2
$
115.4
Commitments and contingencies
Stockholders' equity
Preferred stock, $0.01 per share;
50,000,000 shares authorized; no shares issued and outstanding as
of December 31, 2023 and December 31, 2022
—
—
Class A Common Stock, $0.01 par value,
100,000,000 shares authorized; 25,756,017 shares issued and
23,398,689 shares outstanding as of December 31, 2023; 25,446,292
shares issued and 24,894,464 shares outstanding as of December 31,
2022
0.3
0.3
Class B Common Stock, $0.01 par value,
100,000,000 shares authorized; no shares issued or outstanding as
of December 31, 2023 and December 31, 2022
—
—
Less: Class A Common Stock held in
treasury at cost; 2,357,328 treasury shares as of December 31, 2023
and 551,828 treasury shares as of December 31, 2022
(23.1
)
(3.8
)
Retained earnings
28.4
7.1
Additional paid-in capital
266.2
262.6
Total controlling stockholders' equity
271.8
266.2
Total liabilities and stockholders'
equity
$
378.0
$
381.6
RANGER ENERGY SERVICES,
INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
(in millions)
Year Ended December 31,
2023
Cash Flows from Operating
Activities
Net income
$
23.8
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization
39.9
Equity based compensation
4.8
Gain on disposal of property and
equipment
(1.8
)
Impairment of fixed assets
0.4
Deferred income tax expense
6.6
Loss on debt retirement
2.4
Other expense, net
2.3
Changes in operating assets and
liabilities
Accounts receivable
5.3
Contract assets
9.2
Inventory
(0.9
)
Prepaid expenses and other current
assets
(0.4
)
Other assets
2.1
Accounts payable
6.6
Accrued expenses
(7.2
)
Other current liabilities
0.3
Other long-term liabilities
(2.6
)
Net cash provided by operating
activities
90.8
Cash Flows from Investing
Activities
Purchase of property and equipment
(36.5
)
Proceeds from disposal of property and
equipment
6.8
Net cash provided by (used in)
investing activities
(29.7
)
Cash Flows from Financing
Activities
Borrowings under Revolving Credit
Facility
325.2
Principal payments on Revolving Credit
Facility
(327.7
)
Principal payments on Eclipse M&E Term
Loan Facility
(10.4
)
Principal payments on Secured Promissory
Note
(6.2
)
Principal payments on financing lease
obligations
(5.4
)
Principal payments on other financing
liabilities
(0.8
)
Dividends paid to Class A Common Stock
shareholders
(2.4
)
Shares withheld on equity transactions
(1.0
)
Payments on Other Installment
Purchases
(0.4
)
Repurchase of Class A Common Stock
(19.3
)
Deferred financing costs on Wells
Fargo
(0.7
)
Net cash used in financing
activities
(49.1
)
Increase in cash and cash
equivalents
12.0
Cash and cash equivalents, Beginning of
Period
3.7
Cash and cash equivalents, End of
Period
$
15.7
Supplemental Cash Flow
Information
Interest paid
$
1.4
Supplemental Disclosure of Non-cash
Investing and Financing Activities
Capital expenditures included in accounts
payable and accrued liabilities
$
(0.5
)
Additions to fixed assets through
installment purchases and financing leases
$
(10.0
)
Additions to fixed assets through asset
trades
$
(1.1
)
RANGER ENERGY SERVICES, INC.
SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES
(UNAUDITED)
Note Regarding Non‑GAAP Financial Measure
The Company utilizes certain non-GAAP financial measures that
management believes to be insightful in understanding the Company’s
financial results. These financial measures, which include Adjusted
EBITDA and Free Cash Flow, should not be construed as being more
important than, or as an alternative for, comparable U.S. GAAP
financial measures. Detailed reconciliations of these Non-GAAP
financial measures to comparable U.S. GAAP financial measures have
been included below and are available in the Investor Relations
sections of our website at www.rangerenergy.com. Our presentation
of Adjusted EBITDA and Free Cash Flow should not be construed as an
indication that our results will be unaffected by the items
excluded from the reconciliations. Our computations of these
Non-GAAP financial measures may not be identical to other similarly
titled measures of other companies.
Adjusted EBITDA
We believe Adjusted EBITDA is a useful performance measure
because it allows for an effective evaluation of our operating
performance when compared to our peers, without regard to our
financing methods or capital structure. We exclude the items listed
below from net income or loss in arriving at Adjusted EBITDA
because these amounts can vary substantially within our industry
depending upon accounting methods, book values of assets, capital
structures and the method by which the assets were acquired.
Certain items excluded from Adjusted EBITDA are significant
components in understanding and assessing a company’s financial
performance, such as a company’s cost of capital and tax structure,
as well as the historic costs of depreciable assets, none of which
are reflected in Adjusted EBITDA.
We define Adjusted EBITDA as net income or loss before net
interest expense, income tax provision or benefit, depreciation and
amortization, equity‑based compensation, acquisition-related,
severance and reorganization costs, gain or loss on disposal of
assets, and certain other non-cash items that we do not view as
indicative of our ongoing performance.
The following tables are a reconciliation of net income or loss
to Adjusted EBITDA for the respective periods, in millions:
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Three Months Ended December
31, 2023
Net income (loss)
$
10.0
$
(1.8
)
$
3.4
$
(9.5
)
$
2.1
Interest expense, net
—
—
—
0.7
0.7
Income tax expense
—
—
—
1.8
1.8
Depreciation and amortization
5.4
2.9
1.9
0.4
10.6
EBITDA
15.4
1.1
5.3
(6.6
)
15.2
Equity based compensation
—
—
—
1.2
1.2
Gain on disposal of property and
equipment
—
—
—
(0.2
)
(0.2
)
Severance and reorganization costs
—
1.7
—
—
1.7
Acquisition related costs
—
—
—
0.5
0.5
Adjusted EBITDA
$
15.4
$
2.8
$
5.3
$
(5.1
)
$
18.4
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Three Months Ended September
30, 2023
Net income (loss)
$
10.6
$
4.3
$
4.5
$
(10.0
)
$
9.4
Interest expense, net
—
—
—
0.7
0.7
Income tax expense
—
—
—
1.6
1.6
Depreciation and amortization
5.1
3.1
2.0
0.4
10.6
EBITDA
15.7
7.4
6.5
(7.3
)
22.3
Impairment of fixed assets
—
—
—
0.4
0.4
Equity based compensation
—
—
—
1.3
1.3
Gain on disposal of property and
equipment
—
—
—
(0.1
)
(0.1
)
Acquisition related costs
—
—
—
0.1
0.1
Adjusted EBITDA
$
15.7
$
7.4
$
6.5
$
(5.6
)
$
24.0
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Year Ended December 31,
2023
Net income (loss)
$
44.0
$
7.1
$
15.5
$
(42.8
)
$
23.8
Interest expense, net
—
—
—
3.5
3.5
Income tax expense
—
—
—
7.2
7.2
Depreciation and amortization
20.1
11.3
6.9
1.6
39.9
EBITDA
64.1
18.4
22.4
(30.5
)
74.4
Impairment of fixed assets
—
—
—
0.4
0.4
Equity based compensation
—
—
—
4.8
4.8
Loss on retirement of debt
—
—
—
2.4
2.4
Gain on disposal of property and
equipment
—
—
—
(1.8
)
(1.8
)
Severance and reorganization costs
—
1.7
—
0.4
2.1
Acquisition related costs
—
—
—
2.1
2.1
Adjusted EBITDA
$
64.1
$
20.1
$
22.4
$
(22.2
)
$
84.4
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Three Months Ended December
31, 2022
Net income (loss)
$
9.8
$
2.0
$
4.6
$
(8.8
)
$
7.6
Interest expense, net
—
—
—
1.6
1.6
Income tax benefit
—
—
—
(0.1
)
(0.1
)
Depreciation and amortization
5.4
2.7
2.0
0.5
10.6
EBITDA
15.2
4.7
6.6
(6.8
)
19.7
Equity based compensation
—
—
—
1.0
1.0
Gain on disposal of property and
equipment
—
—
—
(0.7
)
(0.7
)
Acquisition related costs
—
—
—
1.4
1.4
Legal fees and settlements
—
—
—
0.2
0.2
Adjusted EBITDA
$
15.2
$
4.7
$
6.6
$
(4.9
)
$
21.6
High Specification
Rigs
Wireline Services
Processing Solutions and
Ancillary Services
Other
Total
Year Ended December 31,
2022
Net income (loss)
$
34.3
$
7.6
$
20.2
$
(47.0
)
$
15.1
Interest expense, net
—
—
—
7.3
7.3
Income tax expense
—
—
—
0.9
0.9
Depreciation and amortization
26.2
11.0
5.3
1.9
44.4
EBITDA
60.5
18.6
25.5
(36.9
)
67.7
Impairment of fixed assets
—
—
—
1.3
1.3
Equity based compensation
—
—
—
3.8
3.8
Gain on disposal of property and
equipment
—
—
—
(0.7
)
(0.7
)
Bargain purchase gain, net of tax
—
—
—
(3.6
)
(3.6
)
Severance and reorganization costs
—
—
—
1.6
1.6
Acquisition related costs
—
—
—
7.9
7.9
Legal fees and settlements
—
—
—
1.5
1.5
Adjusted EBITDA
$
60.5
$
18.6
$
25.5
$
(25.1
)
$
79.5
Free Cash Flow
We believe free cash flow is an important financial measure for
use in evaluating the Company’s financial performance, as it
measures our ability to generate additional cash from our business
operations. Free cash flow should be considered in addition to,
rather than as a substitute for, net income as a measure of our
performance or net cash provided by operating activities as a
measure of our liquidity. Additionally, our definition of free cash
flow is limited and does not represent residual cash flows
available for discretionary expenditures due to the fact that the
measure does not deduct the payments required for debt service and
other obligations or payments made for business acquisitions.
Therefore, we believe it is important to view free cash flow as
supplemental to our entire statement of cash flows.
The following table is a reconciliation of consolidated
operating cash flows to free cash flow for the respective periods,
in millions:
Three Months Ended
Year Ended
December 31, 2023
December 31, 2023
December 31, 2022
Net cash provided by operating
activities
$
37.7
$
90.8
$
44.5
Purchase of property and equipment
(8.6
)
(36.5
)
(13.8
)
Free cash Flow
$
29.1
$
54.3
$
30.7
Add back:
Purchase of property and equipment related
to asset acquisition
1.5
8.7
Modified Free cash Flow
$
30.6
$
63.0
EBITDA
$
18.4
$
84.4
$
79.5
Free cash Flow conversion -
Free cash flow as a percentage of
EBITDA
158
%
64
%
39
%
Modified Free cash Flow conversion
-
Modified Free cash Flow as a percentage
of EBITDA
166
%
75
%
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240304189183/en/
Melissa Cougle Chief Financial Officer (713) 935-8900
InvestorRelations@rangerenergy.com
Ranger Energy Services (NYSE:RNGR)
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