Enservco Corporation

Greetings. Welcome to the Inservco 2024 First Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. Please note this conference is being recorded. And I will now turn the conference over to your host, Wes Harris, Investor Relations for Inservco. Wes, you may begin.

Well, good morning and thank you, operator. We welcome everyone to Servco's 2024 first quarter earnings conference call. Presenting on behalf of the company today are Rich Murphy, our executive chairman, and Mark Patterson, our chief financial officer. As a reminder, matters discussed during this call may include forward-looking statements that are based on management estimates, projections, and assumptions as of today's date and are subject to risks and uncertainties disclosed in the company's most recent 10-K as well as other filings with the SEC. The company's business is subject to certain risks that could cause actual results to differ materially from those anticipated in its forward-looking statements. And Servco assumes no obligation to update forward-looking statements that become untrue because of subsequent events. I'll also point out that management's ability to respond to questions during this call is limited by SEC Regulation FD, which prohibits selective disclosure of material nonpublic information. This conference call also includes references to certain non-GAAP financial measures. Reconciliations of these non-GAAP financial measures to the most directly comparable measure under GAAP are contained in our earnings release. A webcast replay of today's call will be available after the call. Instructions for accessing the webcast are available in the earnings release. So with that, I'll turn the call over to Rich Murphy. Rich?

Thanks, Wes. Good morning, everyone. We appreciate you joining us for today's call. We began 2024 with solid first quarter results that outperformed last year on a number of key financial metrics, including revenues, segment and operating profit, and net earnings, as well as 125% year-over-year increase in adjusted EBITDA. Significantly benefiting this year's first quarter was substantial profit growth in our completion services segment that is primarily comprised of our frack water heating business, As a reminder, this business is highly seasonal with any potential profits focused on the first and fourth quarters. Financial success during those periods is dictated by winter weather. The colder for longer, the better. As such, we were pleased to take advantage of the colder winter weather on average for this year's first quarter versus the same quarter last year. The first quarter of 2024 also benefited from our concerted efforts over the past couple of years to drive increased efficiency across the businesses. These efforts have been multifaceted, including shutting down our North Dakota operations in 2023 and reallocating assets to more productive operating areas that offered increased potential for revenue and profit growth. In addition to these efforts, we executed on several opportunities to right-size and take costs out of the business. The success of our combined efforts contributed to a 10% increase in our quarterly gross profit margins. In addition, the first quarter benefits from an 18% year-over-year decrease in G&A expense, primarily due to lower legal costs. We continue to focus on ways to improve margins and deliver consistent profitability as we focus on improving the pricing environment and gaining market share in the basins where we operate. While improved seasonal conditions benefited for our frack water heating services business in the first quarter, this does not overshadow another key highlight of the first quarter. That being the announcement, our intention to complete the acquisition of Buckshot Trucking by the end of next month. As we discussed in our last call, our focus on deleveraging the balance sheet and improving market share and margins in the basins in which we operate has enabled us to begin the growth phase of the company's turnaround. We view Buckshot as a great first step in transitioning the company towards a more consistent cash flow generator. As important, we believe adding Buckshot to our existing business will prove transformational as it helps us transition away from a primarily seasonal business subject to commodity risk to a logistics business that generates strong year-round cash flow with significant growth prospects. I would note the transition will not require substantial new overhead or capital. So with that, I'm going to have Mark take you through some of the quarterly numbers before I provide a few closing statements. Mark.