Ranger Industries, Inc. (NYSE: RNGR) reported Q2 EPS of ($0.58), $0.05 worse than the analyst estimate of ($0.53). Revenue for the quarter came in at $30.7 million versus the consensus estimate of $39.88 million.

CEO Comments

“Despite the speed and intensity of the recent downturn, our management team’s extraordinary efforts allowed us to deliver Q2 results that featured both positive EBITDA and positive cash flow alongside near stable sequential segment margins.

As discussed last quarter, when market conditions changed late Q1, our team aggressively took the difficult, yet necessary steps in response. We immediately downsized our organization to match the requirements of current activity levels. Our revenue decreased 62%, we reduced our staffing levels by 60% and total payroll expense by 70% when including the full impact of our salary and wage cuts for all current employees.

Although our decline in activity was significant, I am very pleased with our performance relative to the overall OFS market. As our customers have contracted their operations, we have several examples of being the sole service provider for their remaining work resulting in market share percentage gains. Our Q2 results are a reflection of our high quality operations and disciplined cost management. We maintained positive adjusted EBITDA and cash flow through each month of the quarter. Our two largest business lines; High Spec Rigs and Wireline were able to hold segment level margins at pre-downturn levels. An exceptional achievement reflecting the success of our management team’s efforts through this downturn.

Reducing costs in real-time against the revenue decline allowed us to reap the full benefit of a reduction in working capital. As a result, we were able to reduce our net debt by $15.1 million over the course of the quarter.

As we look forward, what we had already thought of as a lean, efficient organization is now even more so. Maintaining our new level of efficiency and increasing market share will pay dividends as we ramp our operations back to higher activity levels.

While still too early to call a recovery underway, our High Spec Rig and Wireline businesses did see activity move higher off of a late May trough.

With much of the heavy lifting of internal restructuring now complete, our attention has fully moved back externally with a focus on both further development of new customer relationships and ongoing consolidation efforts.

On the new customer front, we have seen incremental Wireline deployments with a new customer, made progress on a new contractual agreement with a High Spec Rig customer along with the potential for a meaningfully expanded Processing solutions customer base.

As to consolidation, historically we have taken a particularly disciplined approach to merger and acquisition opportunities and do not expect that mindset to change. However, we do note that the opportunity set today is a multiple of what it was at the beginning of the year and post downturn feel that the likelihood of executing an attractive transaction has materially increased.

While we continue to work through an extraordinarily challenging period in our industry, our team members are up for this challenge and we expect to consolidate our position of strength as we move toward an industry recovery.”

For earnings history and earnings-related data on Ranger Industries, Inc. (RNGR) click here.