Nine Energy Services (NINE) Misses Q4 EPS by 36c, Revenues Beat

March 8, 2021 6:32 AM EST
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Price: $2.10 -3.67%

EPS Growth %: +100.0%

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Nine Energy Services (NYSE: NINE) reported Q4 EPS of ($1.20), $0.36 worse than the analyst estimate of ($0.84). Revenue for the quarter came in at $62 million versus the consensus estimate of $56.55 million.

  • As of December 31, 2020, cash and cash equivalents of $68.9 million
  • Full year 2020 revenue, net loss and adjusted EBITDAA of $310.9 million, $(378.9) million and $(25.8) million, respectively
  • Revenue, net loss and adjusted EBITDA of $62.0 million, $(35.4) million and $(13.9) million, respectively, for the fourth quarter of 2020
  • Fourth quarter 2020 basic loss per share of $(1.18)

“As anticipated, holiday and weather shutdowns were not as pronounced as we have seen historically during the fourth quarter,” said Ann Fox, President and Chief Executive Officer, Nine Energy Service. “Activity improvements are reflected in our 25% increase in revenue quarter over quarter; however, a combination of continued pricing pressure, as well as one-off, non-cash items negatively affected net loss and adjusted EBITDA.”

“The market continues to face unparalleled uncertainty and heightened volatility. Throughout 2020, we were always balancing the short, medium, and long-term needs of the Company including making significant cost-reductions to preserve liquidity, but also maintaining key people, assets, and our footprint in order not to impede the future earnings of the Company. Although profitability was down year over year in conjunction with activity, we were able to demonstrate our ability to flex with the market and preserve liquidity through good working capital management and ended the year with a cash balance of $68.9 million and an undrawn ABL. We were also able to reduce our debt through opportunistic bond buybacks at approximately 27% of par value.”

“Operationally, our team once again demonstrated their ability to gain market share, growing our percentage of US stages completed from approximately 17% in 2019 to approximately 23% in 2020. We organically expanded our cementing service line into the Haynesville and continue to be pleased with the adoption of our dissolvable plugs, despite an unprecedented backdrop for commercializing new technology. Additionally, despite a year with new protocols and ways of working, Nine ended the year with the lowest TRIR in the Company’s history of 0.30.”

“While we have seen improvement in the market throughout Q4 2020, we are still anticipating a very challenging environment in 2021 and expect E&P capital spend will be down year over year. Q1 2021 is off to a slower start as customers finalize their 2021 activity plans and many completion schedules are delayed. Additionally, the inclement weather in Texas caused significant shutdowns within all service lines. Texas weather-related shutdowns in February aside, we anticipate the pace of Q1 activity and revenue will be better sequentially than Q4, but still expect to generate a net loss and negative adjusted EBITDA for the quarter. For Nine, we will continue to flex with the market and our strategy is unchanged. We are focused on building an asset-light business with high barriers to entry and will continue to differentiate through our service execution and leading technology.”

For earnings history and earnings-related data on Nine Energy Services (NINE) click here.

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