Ranger Energy Services, Inc. Announces Q4 2017 Results

HOUSTON, TX--(March 6, 2018) – Ranger Energy Services, Inc. (NYSE: RNGR) (“Ranger” or the “Company”) announced today its results for its fiscal quarter ended December 31, 2017.

The highlights for Q4 2017 were:

Financial highlights for Q4 2017 were:

Darron Anderson, Ranger’s CEO, commented:

“We experienced another dynamic quarter despite normal, year-end customer budget constraints and seasonal weather impact.  Since the beginning of the year, we are seeing demand strengthening broadly across all basins. We remain focused on our strategy to be the premier, solutions-focused, high-spec rig provider of choice for horizontal completions and producing wells. During the quarter, we took delivery of six new high-spec rigs and launched our completions-focused wireline business in the Permian Basin.  Subsequent to the quarter we purchased 15 well testing spreads to support our horizontal drill-out solution and further our expansion into the completions space. The ESCO integration is progressing well and we are seeing continued rig hour growth from that portion of our fleet thus far in 2018.  With demand improving, we continue to increase pricing and remain optimistic as the market is still significantly below 2014 levels.”

Financial Results

Revenues

During the quarter, revenues increased to $50.1 million from $41.1 million in Q3. The increase was primarily attributable to the increased number of rig hours in the Well Services segment, representing the first full quarter following the ESCO Acquisition, and the startup of our new Permian Basin wireline business.  The results by segment were as follows:

Operating Loss and Net Loss

During the quarter, the operating loss increased to $5.2 million from $4.8 million in Q3. The $0.4 million increase was mainly due to higher depreciation and amortization expenses which were driven by the additional capital expenditures and represents a full quarter of results for the assets acquired in the ESCO Acquisition.

During the quarter, net loss decreased by $3.9 million to $5.6 million from $9.5 million in Q3. The decrease was principally due to lower interest expense from related party debt which was converted to equity in connection with the Company’s initial public offering (the “IPO”), partly offset by depreciation and amortization expense.

Adjusted EBITDA

Adjusted EBITDA increased to $3.8 million in Q4 from $3.0 million in Q3. The increase was mainly due to increased revenues offset by start-up costs for our new wireline activities, adjustments related to insurance and the seasonal slowdown. 

Liquidity and Balance Sheet

Operating Activities: Net cash used in operating activities was $17.3 million for the year ended December 31, 2017.

Investing Activities: Net cash used in investing activities was $68.9 million for the year ended December 31, 2017. This includes $47.7 million used for the ESCO Acquisition. Not included in these numbers were assets worth $24.5 million for non-cash additions and $10.7 million in assets purchased via capital lease financing during the year ended December 31, 2017.

Financing Activities: Net cash provided by financing activities was $89.9 million for the year ended December 31, 2017, comprised of $80.8 million of net proceeds from the IPO, $21.0 million in borrowings from related parties that were converted to equity as described below and $4.0 million of contributions from the Company’s previous parent, partially offset by repayment of long-term debt of $12.0 million.

Not included in the numbers above are the following non-cash transactions. In connection with the IPO, the Company settled its related party debt of $21.0 million with the issuance of shares of its Class A and Class B common stock and a $3.0 million long-term liability payable to a related party that can be settled with Class A common stock. In connection with the ESCO Acquisition, the Company issued $5.0 million in shares of its Class A common stock and entered into notes payable to the seller with a principal amount of $7.0 million.

In addition, the Company entered into a $50 million revolving credit facility in conjunction with the IPO. The current borrowing capacity, based on eligible accounts receivable, is approximately $22 million as of December 31, 2017.

Presentation

This press release presents historical results, (i) for the period prior to August 16, 2017, of Ranger Energy Services, LLC, and Torrent Energy Services, LLC, the predecessor of Ranger Energy Services, Inc. for financial reporting purposes and (ii) for the period subsequent to August 16, 2017, of Ranger Energy Services, Inc. and its consolidated subsidiaries. These historical results do not purport to reflect what the results of operations of Ranger would have been had the IPO and related transactions occurred prior to such periods. For example, certain of these historical results do not reflect the attribution of net income to non-controlling interests or the provision for corporate income taxes on the income attributable to Ranger that Ranger expects to recognize in future periods.

Conference Call

The Company will host a conference call to discuss its fourth quarter 2017 results on March 7, 2018 at 9:00 a.m. Central Time (10:00 a.m. Eastern Time). To join the conference call from within the United States, participants may dial 1-866-807-9684. To join the conference call from outside of the United States, participants may dial 1-412-317-5415. When instructed, please ask the

operator to join the Ranger Energy Services, Inc. call. Participants are encouraged to log in 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. It can be accessed by dialing 1-877-344-7529 within the United States or 1-412-317-0088 outside of the United States. The conference call replay access code is 10113927. 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 Energy Services, Inc. is an independent provider of well service rigs and associated services in the United States, with a focus on unconventional horizontal well completion and production operations.

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 from time to time with the SEC. 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.

Company Contact:

Robert S. Shaw Jr.

Chief Financial Officer

(713) 935-8900

robert.shaw@rangerenergy.com 

RANGER ENERGY SERVICES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in millions, except per share amounts)

RANGER ENERGY SERVICES, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in millions, except share and per share amounts)

RANGER ENERGY SERVICES, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in millions) 

RANGER ENERGY SERVICES, INC.

SUPPLEMENTAL NON-GAAP FINANCIAL MEASURES

(UNAUDITED)

Adjusted EBITDA is not a financial measure determined in accordance with GAAP. We define Adjusted EBITDA as net loss before interest expense, net, tax expense (benefit), depreciation and amortization, equity‑based compensation, acquisition‑related and severance costs, impairment of goodwill, costs incurred for IPO-related services and certain other items that we do not view as indicative of our ongoing performance.

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 above from net loss in arriving at Adjusted EBITDA because these amounts can vary substantially within our industry depending upon accounting methods and book values of assets, capital structures and the method by which the assets were acquired. Adjusted EBITDA should not be considered as an alternative to, or more meaningful than, net loss determined in accordance with GAAP. 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. Our presentation of Adjusted EBITDA should not be construed as an indication that our results will be unaffected by the items excluded from Adjusted EBITDA. Our computations of Adjusted EBITDA may not be identical to other similarly titled measures of other companies. The following table presents reconciliations of net income (loss) to Adjusted EBITDA, our most directly comparable financial measure calculated and presented in accordance with GAAP. 

The following table is a reconciliation of net income (loss) to Adjusted EBITDA for the three months ended December 31, 2017 and September 30, 2017, in millions: