U.S. Well Services, Inc.

Greetings and welcome to U.S. Wealth Services Fourth Quarter Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief 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. A reminder, this conference is being recorded. It is now my pleasure to introduce your host, Mr. Josh Shapiro. Thank you. You may begin.

Thank you, Operator, and good morning, everyone. We appreciate you joining us for the U.S. Wealth Services conference call and webcast to review the full year and fourth quarter 2021 results. Joining us on the call this morning are Joel Broussard, Chief Executive Officer, and Kyle O'Neill, Chief Financial Officer. Following the prepared remarks, the call will be open for Q&A. Yesterday evening, U.S. Wealth Services released its full year and fourth quarter 2021 earnings. The earnings release can be found on the company's website at uswealthservices.com. The company also filed its form 10 K with the SEC yesterday evening. Please note that the information reported on this call speaks only as of today, March 31st, 2022, and therefore time sensitive information may no longer be accurate as at the time of any replay listening or transcript reading. In addition, the comments made by management during this conference call may contain forward looking statements within the meeting of the United States federal securities laws. These forward looking statements reflect the current views of US oil services management. However, various risks, uncertainties, and contingencies could cause our actual results, performance, or achievements to differ materially from those expressed in the statements made by management. The listener is encouraged to review today's earnings release and the company's filings with the SEC to understand those risks, uncertainties, and contingencies. Also, during today's call, we will reference certain non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most directly comparable GAAP measures are included in our earnings release. And now I'd like to turn the call over to U.S. World Services CEO, Mr. Joel Broussard.

Thanks, Josh, and good morning, everyone. I'd like to start off by thanking our U.S. World Services team for all their hard work throughout the year. 2021 was a critical transition year for U.S. World Services, filled with significant change and challenges. Despite the distractions throughout the year, our dedicated team remained laser-focused in delivering safe and efficient operations for our customers. I'm incredibly proud of the many milestone successes our team achieved during the last 12 months, including generating $250 million of revenue for the year and $40 million of adjusted EBITDA, phasing out our conventional diesel fleet, which brought our active fleet count from 11 in Q1 to 5 by Q3, executing over 40 individual asset sales of our conventional equipment and power generating assets to raise approximately $120 million, Reduced our senior and secured term loan by $125.6 million during 2021 and repaid an additional $17.8 million so far in the first quarter, securing a 0% interest rate for Q1 2022 and a 1% cash interest rate for our term loan for the balance of 2022. Sold three licenses for our clean fleet technology, for $22.5 million, validating the value and quality of our IP portfolio. Designed the next clean fleet, the next generation of electric frack technology, and initiated construction of four of these new fleets. Won new contracts or extended existing contracts for all of our existing electric fleets and three of our four new builds. Expanded our operational footprint into the Rocky Mountains with the opening of our Vernal, Utah facility, executing multiple capital raises to boast our liquidity and fund our growth CapEx plans. While the results of these achievements did not show up in the fourth quarter results, we have strongly positioned the company to succeed in 2022 and beyond. Our results for the fourth quarter illustrate some of the difficulty we faced in undertaking the strategic transformation, as well as the macroeconomic headwinds felt by the entire industry. We continue to be impacted by our reduced fleet count during the period as a result of our transition away from diesel equipment. This allows fewer fleets to absorb field and corporate level overhead, impacting our profitability. However, we are expected to see greater overhead absorption as we begin to roll out our new fleet starting in Q2 of this year. We were impacted by typical seasonality with 4.1 fully utilized fleets active during the fourth quarter as compared to five in a third. Our operations were materially impacted by the both lack of truck drivers and inability of our customers to obtain all the sand and water required for their operations. During the quarter, we had 16.4 days of downtime per fully utilized fleet, or a total of 67 days due to these constraints. During the fourth quarter, we began to see green shoots with respect to the pricing environment for pressure pumping services. Despite the signs of improving pricing, the difficulties noted earlier continue to impact us through the first two months of 2022. However, beginning in March, we are starting to realize the benefits of our strategic moves and expect results to improve throughout the rest of the year. We are seeing an even greater demand from E&P companies for the next generations. solutions, such as electric clean fleets, and feel confident this momentum will continue to build. With this backdrop, U.S. Well Services are ideally positioned. We believe we have the most premium pressure pumping fleet in the market. Today, we have five all-electric fleets that offer industry-leading fuel cost savings and greenhouse gas emission reductions. And such commands premium pricing relative to both conventional and dual-fuel equipment. We continue to grow our fleet with the addition of four new NICS clean fleets, the first of which we deployed in Q2. Our value proposition is undeniable, and it drives the demand and premium pricing for our fleets relative to alternative technologies. This is further demonstrated by significant rise in diesel prices. The cost of diesel in the field has risen to over $5 per gallon from $3.50 per gallon in the fourth quarter, which means Our customers can save an additional $1.25 million per fleet per month. With that, I'll turn it over to Kyle to review our fourth quarter financial results.