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FTS International, Inc. (FTSI)
Q4Â 2019 Earnings Call
Feb 13, 2020, 10:00 a.m. ET
Contents:
- Prepared Remarks
- Questions and Answers
- Call Participants
Prepared Remarks:
Operator
Greetings, and welcome to the FTS International Fourth Quarter and Year-End 2019 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded, Thursday, February 13, 2020.
I would now like to turn the call over to Michael Messina. Please go ahead, sir.
Michael Messina -- Investor Relations
Thank you, and good morning, everyone. We appreciate you joining us for the FTS International conference call and webcast to review fourth quarter and full year 2019 results. As a reminder, this conference is being recorded for replay purposes. Presenting today's prepared remarks is Mike Doss, CEO, who will also be joined by Lance Turner, CFO; and Buddy Petersen, COO, for the Q&A portion of the call.
Before we begin, I would like to remind everyone that comments made on today's call that include management's plans, intentions, beliefs, expectations, anticipations or predictions for the future are forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that could cause the Company's actual results to differ materially from those expressed in any forward-looking statement.
These risks and uncertainties are discussed in the Company's annual report on Form 10-K and in other reports the Company files with the SEC. Except as required by law, the Company does not undertake any obligation to publicly update or revise any forward-looking statements. The Company's SEC filings may be obtained by contacting the Company and are available on the Company's website, ftsi.com, and on the SEC's website, sec.gov.
This conference call also includes discussions of non-GAAP financial measures. Our earnings release includes further information about these non-GAAP financial measures as well as reconciliations of these non-GAAP measures to their most directly comparable GAAP measure.
With that, I'll now turn the call over to Mike Doss, FTSI's CEO. Mike?
Michael J. Doss -- Chief Executive Officer
Thank you, and good morning, everyone. Despite the seasonal slowdown, our fourth quarter came in better than expected. This was the result of very strong operational efficiencies and tracking ahead of schedule on the $40 million of annualized cost reductions we discussed on our last call. Revenue was $142 million, down 23% sequentially, while our stage count was down 10%. The drop in revenue was due to the lower activity, more customers providing their own sand and lower pricing was declined about 5% during the quarter. Adjusted EBITDA was $22.7 million, up from $20.6 million in the third quarter. Annualized adjusted EBITDA per fleet was $5.5 million, compared to $4.2 million in the third quarter.
SG&A was $22.7 million, higher than in the third quarter due to $2.8 million of accelerated stock comp related to layoffs. Excluding stock comp, SG&A was $16.9 million in the fourth quarter, down from $18.2 million in the third quarter. For the first quarter, SG&A is expected to be about $19 million, including $3 million of stock comp. Net loss for the fourth quarter was $13 million, or $0.12 per share.
Capex was $14.9 million, up from $13 million in the third quarter with the increase driven by expenditures for dual-fuel conversion kits. We ended the year with five dual-fuel capable fleets and we'll have seven by the end of next month. For the full year, capex was $54.4 million and we expect about the same or approximately $55 million for 2020. Maintenance capex is expected to remain at $2.5 million per fleet.
Free cash flow was $19.1 million in the fourth quarter and for the full year, it was $69.5 million. Including asset sale proceeds totaling $34 million, we generated $103.5 million of cash during the year. As of year-end, we had $223 million of cash and our net debt was $237 million, a $93 million reduction for the year. We have a total of $460 million of outstanding debt, which consists of two pieces; a $90 million term loan due next year, and $370 million of term of senior notes due in 2022. We're maintaining significant liquidity to increase our optionality, while we evaluate possible liability management alternatives to extend maturities.
Our average active fleet count was 16.5 in the fourth quarter, compared to 19.8 in the third quarter. We ended the quarter with 16 fleets and currently have 17 working. Of those, nine are located in West Texas, four in South Texas, two in Mid-Con, one in the Northeast, and one in the East Texas. We completed 385 stages per fleet in the fourth quarter, an 8% increase over the third quarter, despite more seasonally driven white space in the calendar. We have steadily increased pumping hours per day and stages per fleet every single quarter in 2019.
We continue to see more customers focused on efficiency, which working together with us, allows us to achieve industry-leading performance with fleets that routinely pump 18 pumping hours or 19 pumping hours a day. With efficient moves between pads, these fleets are able to put away 250 plus stages per month, but that kind of performance is only possible due to our crews' complete dedication to service quality, highly effective operations leadership and our outstanding maintenance team.
In terms of sales activities, the last 18 months have been challenging, but current indications are that we are beginning to turn the corner. Over this 18-month period, natural gas prices have fallen and activity in gassy areas, where we had a big presence has declined. We went from 11 fleets in gas basins in mid-2018 to just two fleets today. We relocated several of those fleets to other areas primarily West Texas, but that came at a cost to margins as pricing for new work became increasingly competitive.
Also in late 2018, we began directing more of our sales resources toward solidifying longer term relationships instead of chasing transactional work. We've always had both types of works, but the heavier emphasis historically on transactional work has caused us to be more sensitive to market changes than some of our peers. By transactional work, I don't mean the distinction between dedicated and spots, transactional customers are those primarily focused on using the lowest cost provider rather than engaging in business partnerships that allow both parties to share in successes.
The change in sales strategy is beginning to bear fruit. Over the last six months, we have placed two fleets with strategic accounts that we view as long-term partners. In addition, we have converted one of our spot customers, which had used us as a swing provider to a more stable, highly efficient dedicated customer. While the frac market remains oversupplied overall, our operations calendar has firmed up for the first quarter and we are receiving more than usual RFPs for this time of year. It appears that some of our competitors are being more disciplined, which has resulted in some unexpected tightness in the spot market. While we do not yet have pricing power, this is a welcome development.
In terms of pricing, we lost about 5% on contracts that roll over to the new year. However, for new work, this year and going into the second quarter, we believe that pricing has stabilized. Despite slightly lower pricing, we kicked off the year on a stronger footing in terms of results, driven by further efficiency gains and sustained cost reductions. We currently expect to average about 17 fleets in the first quarter and end with 18 fleets or 19 fleets active. We also expect our annualized adjusted EBITDA to improve to between $6 million and $7 million per fleet in the first quarter.
Next, let me give you a brief technology update. Our automation project, which has been years in the making, is now live. Computer-assisted pump control can now automatically take action to shut down pumps that show indicators of probable failure. It will soon be able to seamlessly redistribute the load to other pumps. This innovation will allow us to get more reliable hours out of our equipment, reduce costly repairs caused by excessive damage accumulation and maintain more consistent stage performance for our customers.
Another project recently completed is a significant redesign of our blender, reflecting over 100 improvements, the new blender is considerably more durable, easier to operate and easier to maintain. This is a perfect example of one of the perks of being a manufacturer, where we can cost effectively and continually improve our equipment with operations in mind.
Lastly, on dual-fuel, I mentioned earlier that we'll have seven dual fuel capable fleets by the end of next month. We've seen significant interest from customers in dual-fuel over the last six months as a way to reduce fuel costs. We can convert a conventional Tier 2 fleet to dual-fuel for a capital outlay of only $1.5 million. We also have the capability to upgrade a fleet with the new Cat Tier 4 DGB engines. They have a higher displacement rate and a better emissions profile, but they involve a more significant outlay of about $10 million per fleet. We would need a firm commitment from a customer before proceeding. However, there is some interest in the initial field test results we have on the engines performance look really good.
That's all I have for prepared remarks. Operator, let's please go to Q&A.
Questions and Answers:
Operator
[Operator Instructions] Our first question comes from the line of Taylor Zurcher with Tudor, Pickering, Holt. You may proceed with your question.
Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst
Hey, good morning, and congrats on a great quarter. First question I had is just on the efficiency performance in Q4, and it sounds like embedded in the Q1 guide is some incremental efficiency as well, probably because there is some reduced white space in there. But could you just frame for us how much room there is left to go on the efficiency front moving forward? And to what extent maybe customer mix or geographic mix in Q4 played a role in the stages per quarter per fleet that you're able to do?
Michael J. Doss -- Chief Executive Officer
Sure. So as it relates to the fourth quarter, the efficiency did tick up, even though we did have more white space. I think a lot of it has to do with just customer type. The type of work we're doing more zipper operations as opposed to single well. In a tighter time between locations and less time between stages, less NPT, it was really a lot of those factors that resulted in the net efficiency gain. For first quarter, the main driver for the efficiency gain is just less white space in the calendar. Fourth quarter, I think as everyone expected, was very gapping in terms of utilization just very typical and a lot of customers, for example, took off the last couple of months, couple of weeks rather of the quarter. And so we're going to see that tighten up in the first quarter, but very pleased with operations performance in the fourth quarter and they're continuing to do a great job.
Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst
Got it. And then as we think about 2020, clearly, the profitability is going to be higher in Q1 and not necessarily looking for guidance in 2020, but if Q1 sort of the status quo for the first couple of quarters of the year, any way to frame expectations for free cash flow in 2020? And within free cash flow, what sort of impact you think working capital might have over the course of 2020?
Michael J. Doss -- Chief Executive Officer
Sure, I'll make a few comments. And Lance, you can answer on the working capital. So there's always considerable uncertainty in the market. But like I said, we are starting off on a stronger footing, higher than we had expected a couple of months ago. I think second quarter and third quarter are going to be good quarters for us. I think second quarter, we may flex up another fleet just given the RFP activity currently going on reasonable to assume that sustains into the third quarter. Fourth quarter will probably be some measure of a repeat from last year. It's hard to know, but it does seem that, that's the way E&P companies tend to manage their capital budgets, it's that front load a bit and then really drop off at the end of the year. I'd like to change that, but that's what we're currently anticipating. So, I would think just a reasonable layout. First quarter better than fourth quarter of last year, second quarter and third quarter better, and then fourth quarter probably similar to the quarter that just passed.
Lance Turner -- Chief Financial Officer
Yes. In terms of cash flow, I think working capital year-over-year, I wouldn't expect a big impact. Intra-quarter, I think we'll have a usage in Q1. And then we usually have a release in Q4. So, I expect that to be the same this coming year. And then you -- obviously, you've got your interest in capex, and so the expectation is to produce a decent amount of cash.
Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst
Got it. Thanks, guys. I'll turn it back.
Operator
Our next question comes from the line of John Daniel with Simmons Energy. You may proceed.
John Daniel -- Simmons Energy -- Analyst
Hey, guys. Good quarter. [Indecipherable] comments. I just have a couple here. The first is, Mike, you mentioned you might flex up another fleet in Q2. Were you referring to potentially a fleet number 20 going out? You said you'd execute this quarter, 18 and 19.
Michael J. Doss -- Chief Executive Officer
Yes, potentially going to 20 by the end of the second quarter.
John Daniel -- Simmons Energy -- Analyst
Okay.
Michael J. Doss -- Chief Executive Officer
And that is a bit of a guess. We haven't secured that just yet, but given the momentum, that's a reasonable assumption.
John Daniel -- Simmons Energy -- Analyst
That's fine. And I mean, I guess the question we all wonder here is, when you activate 18, 19 and then potentially 20, presumably you're doing that at a rate, and EBITDA per fleet that would be an excess of where you are guiding for Q1. Is that fair?
Michael J. Doss -- Chief Executive Officer
I would say it's probably right in the middle of the guidance.
John Daniel -- Simmons Energy -- Analyst
Okay. And then as you do the reactivation, should we be building into the model any reactivation costs or no?
Michael J. Doss -- Chief Executive Officer
No, we just cover those through opex, I mean, they're, what $500,000, maybe $1 million per fleet, just the cost of doing business.
John Daniel -- Simmons Energy -- Analyst
Fair enough. And then the last one for me, not to sound like a jerk, but when you look at an operation and you've got one fleet as you do in, say, the Northeast or East Texas. Presumably, you guys are looking at, what -- does that make sense to have one fleet in a basin? At what point do you go to your customer and just say, hey, guys, this isn't working. We need a significantly different relationship here, otherwise, we have to pull out. How does that? Can you just walk me through that process?
Michael J. Doss -- Chief Executive Officer
Yes. I'll make a couple of comments, and I'll ask Buddy to comment as well. So I think up in the Northeast, obviously, gas prices are terrible and the outlook doesn't look particularly good at the moment. The customer that we are working for up there, of course, that's not their fault and so for me to apply pressure on them due to carry the district does it really make a lot of sense, but we are trying to get an additional fleet. I would say margins in that area are not very good. But just to have another fleet to absorb the overhead. We have really made the district very lean and thin as we possibly can in response to the -- having only one fleet currently. And so, we're just really trying to manage through. I really would rather not abandon the Northeast. I do think it's got a long-term potential. Historically, it had been a fantastic district for us. I think at one time, we had nine fleets working in the area, but obviously depressed today.
So, Buddy, do you have anything to add?
Buddy Petersen -- Chief Operating Officer
No, I concur with Mike. I mean, there are some social issues in both East Texas and in the Northeast, that we believe long-term has -- we again, I echo his sentiment, we don't want to pull out of that just because of the social piece. The East Texas having a one -- the flexibility with East Texas because the proximity of the Eagle Ford is close enough, really, the carry cost for the East Texas piece is in its highs, the Northeast would be.
John Daniel -- Simmons Energy -- Analyst
Okay. Thank you and good quarter again, guys.
Buddy Petersen -- Chief Operating Officer
Thanks.
Michael J. Doss -- Chief Executive Officer
Thanks, John.
Operator
Our next question comes from the line of Dustin Tillman with Wells Fargo. You may proceed.
Dustin Tillman -- Wells Fargo -- Analyst
Hey, guys. Thanks for taking the call. You mentioned liability management, how are you thinking about, you have bonds that are trading south of 60? Do you think about going into the market and repurchasing bonds, now that you see your cash position growing and stabilizing?
Michael J. Doss -- Chief Executive Officer
It's something that we are carefully considering and we've been looking at this for a couple of months. One thing we want to be mindful of is the term loan maturity next year. And so one possibility is just to pay off the term loan. But it is an attractive discount as far as repurchasing notes. And so we may consider doing a tender offer, but that's still under consideration. Lance, any?
Lance Turner -- Chief Financial Officer
I'd say all options are on the table at this point.
Dustin Tillman -- Wells Fargo -- Analyst
Is it fair to say that looking at the cash flow stability today versus where you were a quarter ago makes it more likely to purchase bonds?
Michael J. Doss -- Chief Executive Officer
Yes, I would think so. And so, but again, we want to make sure that we've got sound liquidity and that the term loan can be dealt with very comfortably. And so, just trying to balance all of that is really what's causing us to pause and just make sure that we are going down the right path.
Dustin Tillman -- Wells Fargo -- Analyst
Makes sense. Appreciate it.
Operator
Our next question comes from the line of Stephen Gengaro with Stifel. You may proceed with your question.
Stephen Gengaro -- Stifel -- Analyst
Thanks, good morning. Two things. One, just to follow up on the prior question. How do you think about how much cash you actually need to carry on your balance sheet?
Michael J. Doss -- Chief Executive Officer
Well, I think probably operating cash around $100 million, low-100s, probably quite sufficient to be able to handle working capital swings and rough patches in the business cyclically. So, carrying that plus $90 million for the term loan gets us around $200 million and we have a little bit higher than that today, but that's kind of broad thoughts on cash management.
Stephen Gengaro -- Stifel -- Analyst
Okay. Thanks. And then as we think about the first quarter guide and then sort of how you think about the rest of the year, I imagine based on your comments that the pricing that you mentioned the rolling over at about 5% down is already reflected in that 1Q guidance. Am I thinking about that properly?
Michael J. Doss -- Chief Executive Officer
Yes, absolutely. It is.
Stephen Gengaro -- Stifel -- Analyst
Okay. And then just finally, as you kind of looking at your crystal ball over the next 12 months, I mean, we've certainly seen some equipment removed from the fleet from the industry in total. How are you thinking about the market over? I know it's hard to sort of predict the demand side, but how are you thinking about the market over the next 12 plus months? And looking at sort of the -- sort of quality of some of the equipment, which is still in the mix, how do you think it plays out?
Michael J. Doss -- Chief Executive Officer
Yes. Well, this is of course just my opinion. But I think the announced attrition is very healthy. I think equipment does need to leave the markets. Can't really comment on the quality of the equipment. But I would imagine it's probably the lesser quality, or it's just companies that just aren't quite as competitive and just unable to generate sufficient returns in today's market. I really see the market feel kind of stable, maybe slightly better in the second half and that's just intuition, not really based on any careful analysis of macro factors, or anything of that nature. But I mentioned earlier on the call, I think we are seeing some more disciplined behavior, particularly among some of our larger competitors. And so I think that's a very healthy thing for the industry and that's probably more impactful than the attrition story today.
Stephen Gengaro -- Stifel -- Analyst
Great. Thank you for your color.
Operator
Our next question comes from the line of Chris Voie with Wells Fargo. You may proceed with your question.
Chris Voie -- Wells Fargo -- Analyst
Good morning, guys.
Michael J. Doss -- Chief Executive Officer
Good morning.
Chris Voie -- Wells Fargo -- Analyst
Just wanted to check on the visibility that I have for the first quarter and anything beyond that. Can you give some kind of guidance on how much of the calendar is full in the first quarter and then whether you have visibility into the second quarter and third quarter?
Michael J. Doss -- Chief Executive Officer
Well, so this first quarter, I mean, we've got a really good read on that. The calendar is firm at this point and filled out. And so I don't think we have any remaining space for the rest of the quarter. And so right now, we're building the second quarter, I mean, many of our -- much of our work is just going to continue evergreen are dedicated. There is some bids that we're currently working on that could result in additional fleets for the second quarter, but full for our first quarter, so I'm not sure, if that was exactly your question, but that's where we are.
Chris Voie -- Wells Fargo -- Analyst
Yes, yes. I was just trying to get a handle on how much the length of the visibility that you have. I guess the follow-up, revenue per stage is down 15%. There might be a mix shift in there in terms of the size of stages in the basins as well, obviously, 5% on pricing. You mentioned a shift in sand. Can you give a little color on how much shift there was in customers providing sand in the quarter?
Michael J. Doss -- Chief Executive Officer
Yes, quite a bit actually. So for the fourth quarter, only 8% of the stages we pump is using sand that we provided. And so customers provided 92%, which is a high, I think the highest ever. What was it, Lance, in third quarter and second quarter?
Lance Turner -- Chief Financial Officer
I think it was getting closer to 20%. So, it was a pretty big, big shift down, also fuel continued. We didn't have -- we didn't provide fuel for hardly any customers for the quarter.
Michael J. Doss -- Chief Executive Officer
Yes. So these materials have -- definitely have an impact on revenue, especially looking at revenue per stage, but it's just revenues and cost of sales, we don't put much if any of a markup on the materials these days. So, it doesn't really matter in the big picture.
Chris Voie -- Wells Fargo -- Analyst
Got it. Okay. Maybe just squeeze in one more. So, it sounds like you're ahead of schedule on the cost savings, are all those cost savings going to be complete within the first quarter guide, or is there a tailwind in the second quarter?
Michael J. Doss -- Chief Executive Officer
There's a little bit of a tailwind in the second quarter. I wouldn't say it's material in terms of the estimates and they are largely realized in the first quarter. Some of the G&A reduction will bleed into the second quarter. Just takes time to get all those cost reductions pushed through.
Chris Voie -- Wells Fargo -- Analyst
Okay, great. I'll turn it back. Thanks.
Operator
[Operator Instructions] Our next question comes from the line of Veb Vaishnav with Scotiabank. You may proceed with your question.
Veb Vaishnav -- Scotiabank -- Analyst
Hey, good morning and congratulations on a good quarter. I guess we have already spoken about efficiency, but just trying to think about -- can you help us frame like, over the last 12 months to 18 months, how much efficiency gains have we seen? And if we go -- move forward from here, what do you think efficiency gains could be over the next 12 months to 18 months?
Michael J. Doss -- Chief Executive Officer
Over the last 12 months to 18 months, we're looking at 12 months, 20%; 18 months, larger than that. I think one of the big factors for us is the zipper wells. We had a high zipper well percentage back in '17, that number came down in '18, and now it's come back up in '19. And so that's a big driver of this.
Secondly, we've just got more customers focused on efficiency than ever before. 12 months ago, 18 months ago, you had the leading-edge customers focused on efficiency. And now, more and more customers are more focused and they also realize what is possible in achieving those efficiencies. And so, as we look forward, hard to say, I think the zipper well probably maximizes in Q1. The zipper well effect and I think you're starting to see saturation in the industry from that as a driver as well. And so, I expect some improvement in Q1 and maybe modest improvement past Q1, but it's hard to say at this point.
Veb Vaishnav -- Scotiabank -- Analyst
So besides Zipper frac, are there any other things like we can shave off 10 minutes to 15 minutes here and there on a stage or something like that, that can still continue through next year?
Michael J. Doss -- Chief Executive Officer
Yes, I mean, I think right now, what we're looking at is time between stages. So you're exactly right. Can you shave 10 minutes to 15 minutes off the time between stages. And as we go to zipper wells, that shrinks. And I think there is a natural limit to how small that transition period can be. We think we've hit it on a number of our crews, but we're still focused on it.
Veb Vaishnav -- Scotiabank -- Analyst
Got it. And then I just wanted to get clarification on the guidance. I may not have written it as fast. So, my understanding is you guys are thinking that there will be 17 active fleet -- 17 working fleets with 18 to 19 being active. And the $6 million to $7 million of annualized EBITDA per fleet, that $6 million to $7 million, is that based on the 17 fully utilized fleets, or is it 18 to 19?
Michael J. Doss -- Chief Executive Officer
Yes, I can clarify that. So the 17 is the quarterly average. And so we started that with fewer fleets, and we're going to end with 18 or 19 and just the blended average is 17. So, that 17 would be what you would multiplied by the $6 million to $7 million.
Veb Vaishnav -- Scotiabank -- Analyst
Okay. That's very helpful. Thank you for taking questions.
Michael J. Doss -- Chief Executive Officer
Sure. You're welcome.
Operator
Our next question comes from the line of Matt Dushkin with Bank of America Merrill Lynch. You may proceed with your question.
Matt Dushkin -- Bank of America Merrill Lynch -- Analyst
Hey, guys. Just regarding the two incremental fleets going to work this quarter. Are these going out on dedicated contracts? Are these on spot? And can you speak to the pricing difference between the two markets?
Michael J. Doss -- Chief Executive Officer
Yes. So this would be for our dedicated fleets. And so the pricing would be starting now, probably in the middle of our guide range for adjusted EBITDA per fleet. But we do think there is room for improvement in terms of efficiency once we get into a groove with the customer and possibly some pricing relief in the second half depending on where the market goes. So, good quality additions in terms of customers this quarter.
Matt Dushkin -- Bank of America Merrill Lynch -- Analyst
Okay, thank you. And then I guess just sticking on pricing between markets. Are you seeing any bifurcation between the pricing potential to your dual-fuel fleets, or I mean do you expect the market to give you one at some point?
Michael J. Doss -- Chief Executive Officer
No, it would be nice if there was a greater gap on that, but it's largely we give the dual-fuel conversions away for kind of a minimal uplift in the stage rates just allow us to recover our capital cost over say 12 months or so. In other cases, if it's helpful and that's getting access to a new customer, a customer that we want to partner with, we just throw it in as an addition, with really no additional cost to them. Like I said, it's a minimal capital outlay for us. So maybe that gives us a bit of an advantage in some bidding situations.
Matt Dushkin -- Bank of America Merrill Lynch -- Analyst
I appreciate the color. I'll turn it back.
Operator
Our next question comes from the line of Stan Manoukian with Independent Credit Research. You may proceed with your question.
Stan Manoukian -- Independent Credit Research -- Analyst
Good morning, gentlemen, and congratulations on the remarkable quarter. My question is about what is your representation of average sort of working capital demand per each redeployed fleet?
Michael J. Doss -- Chief Executive Officer
So, I would estimate incremental working capital to be in the $2 million to $3 million range per fleet.
Stan Manoukian -- Independent Credit Research -- Analyst
So this $225 million of cash that you carry on balance sheet with $100 million of real needs, I mean, that leads to sort of the immediate conclusion of some more efficient sort of capital utilization potential, right and you have alluded to this previously, it's just how sensitive do you think you are sort of to the timing and to the visibility of the second quarter, or you have to do something more serious with the balance sheet?
Lance Turner -- Chief Financial Officer
Well, I think -- yeah, certainly this year, that is a priority, and how sensitive are we to the outlook. I think liquidity is a pretty important function of the outlook, but I think in terms of priorities, it's one of the top corporate priorities that we expect to make progress on this year in terms of the capital structure. I'm not sure, if I caught the full question. But...
Michael J. Doss -- Chief Executive Officer
Yes, I can add on a little bit. Stan, I think we're just trying to be prudent and take the best course of action. Like I said, one option is just to -- just pay off the term loan, just straight, which is something that we may well do. But we're just talking to advisors, just wanted to make sure we optimize the situation. The end goal is to maintain strong liquidity and then push the maturities out, a number of years, and I think that would be a more comfortable structure for us.
Stan Manoukian -- Independent Credit Research -- Analyst
So at this point, it is clear that you are continuously and sort of more energetically working for the interest of your shareholders despite your sort of obviously, very low price of the stock? And in this regard, my question is more sort of about the change of your marketing strategy, obviously, you have been able sort of to redeploy two more fleets and -- to a dedicated contractor -- dedicated contracts. And then the question is, how successful the condition of your equipment? And how competitive is your equipment today to meet demands sort of the -- they'll continue changing this year, making the shift in marketing strategy toward more with longer term dedicated contracts from the spot market that was your previous focus. Do you think that your equipment is competitive? What do you think is sort of -- what are the drivers at this point except the price sort of to increase the utilization of your fleet in your opinion?
Michael J. Doss -- Chief Executive Officer
Well, I guess there is three or four things there to unpack. So the first is the condition of the equipment in our ability to move forward into the future. Our fleets are absolutely well-maintained and ready to tackle anything that we have, as alluded in several calls over the last several years, we've talked about the robustness of our equipment based on our genesis, starting and working in the Haynesville. So, being vertically integrated allows us to continue to keep meeting the customers' demands and continue to push the technology window, which we're doing with our automation that gives us additional life and additional advantages that some of the others coming into the market wouldn't necessarily have.
As far as anything other than price, well, the reality is, the efficiencies that our customers are achieving today through rig lock and zipper and some of the other things, we've worked hand-in-hand moving forward to help them achieve those efficiencies. And so, we don't necessarily believe that we're disadvantaged at all on anything other than the overall market conditions. So, we're going to continue to keep pushing efficiencies. We're going to continue to keep pushing and leveraging our customers, the blue-chip customers that give us long-term features. And I think we're going to be successful in that strategy.
Stan Manoukian -- Independent Credit Research -- Analyst
That's very helpful. And lastly, I was curious if you can disclose, if you're strategic shareholders are holders of your bonds?
Lance Turner -- Chief Financial Officer
I think you'd have to ask them that, I'm not -- I don't know the answer to that question.
Michael J. Doss -- Chief Executive Officer
Yes, not aware of any significant.
Stan Manoukian -- Independent Credit Research -- Analyst
Fair enough. Good luck. Congratulations, again.
Michael J. Doss -- Chief Executive Officer
Thank you, Stan.
Operator
There are no further questions at this time. I will now turn the call back to you.
Michael J. Doss -- Chief Executive Officer
All right. Well, thank you for your interest in FTSI. And we look forward to speaking with you again next quarter.
Operator
[Operator Closing Remarks]
Duration: 37 minutes
Call participants:
Michael Messina -- Investor Relations
Michael J. Doss -- Chief Executive Officer
Lance Turner -- Chief Financial Officer
Buddy Petersen -- Chief Operating Officer
Taylor Zurcher -- Tudor, Pickering, Holt & Co. -- Analyst
John Daniel -- Simmons Energy -- Analyst
Dustin Tillman -- Wells Fargo -- Analyst
Stephen Gengaro -- Stifel -- Analyst
Chris Voie -- Wells Fargo -- Analyst
Veb Vaishnav -- Scotiabank -- Analyst
Matt Dushkin -- Bank of America Merrill Lynch -- Analyst
Stan Manoukian -- Independent Credit Research -- Analyst
